DEED OF LEASE
BETWEEN
LIBERTY PROPERTY LIMITED PARTNERSHIP
AND
DENDRITE INTERNATIONAL, INC.
Project: Liberty Executive Park
Building: Dendrite Building I
Tenant: Dendrite International, Inc.
Location: Executive Boulevard
Chesapeake, Virginia
DEED OF LEASE
INDEX
ss. Section Page
- --- ------- ----
1. Summary of Terms and Certain Definitions................................................
2. Premises................................................................................
3. Construction of Premises................................................................
4. Use; Compliance.........................................................................
5. Term....................................................................................
6. Minimum Annual Rent.....................................................................
7. Operation of Property; Payment of Expenses..............................................
8. Signs...................................................................................
9. Alterations and Fixtures................................................................
10. Mechanic's Liens........................................................................
11. Landlord's Right of Entry...............................................................
12. Damage by Fire or Other Casualty........................................................
13. Condemnation............................................................................
14. Non-Abatement of Rent...................................................................
15. Indemnification.........................................................................
16. Waiver of Claims........................................................................
17. Quiet Enjoyment.........................................................................
18. Assignment and Subletting...............................................................
19. Subordination; Mortgagee's Rights.......................................................
20. Recording; Tenant's Certificate.........................................................
21. Surrender; Abandoned Property...........................................................
22. Curing Defaults.........................................................................
23. Defaults - Remedies.....................................................................
24. Representations.........................................................................
25. Liability of Landlord...................................................................
26. Interpretation; Definitions.............................................................
27. Notices.................................................................................
28. Security Deposit........................................................................
29. Commission..............................................................................
30. Option to Extend Term (Fixed Amount Rental Increase)....................................
31. Phase III Building Option...............................................................
32. Naming Rights...........................................................................
33. Parking.................................................................................
34. Rooftop Communications Equipment........................................................
35. Tenant Credits..........................................................................
36. Phase II Building.......................................................................
37. Cross-Defaults..........................................................................
38. Consents................................................................................
THIS DEED OF LEASE is made by and between LIBERTY PROPERTY LIMITED
PARTNERSHIP, a Pennsylvania limited partnership ("LANDLORD") with its address at
12 South Third Street, Richmond, Virginia 23219 and DENDRITE INTERNATIONAL,
INC., a corporation organized under the laws of Delaware ("TENANT") with its
address at 1200 Mt. Kemble Avenue, Morristown, New Jersey 07960 and is dated as
of the date on which this lease has been fully executed by Landlord and Tenant.
1. Summary of Terms and Certain Definitions.
(a) "PREMISES": shall mean the entire Building and the Property
located at the intersection of Executive Boulevard and Volvo
Parkway, Chesapeake, Virginia, more particularly described on
Exhibit A attached hereto, upon which the Building is to be
constructed in accordance with the terms hereof.
(b) "BUILDING": shall mean a 49,870 square foot two-story Class A
Suburban Office Building also described herein as the "PHASE I
BUILDING" as depicted on Exhibit A-1, to be constructed on the
Property in accordance with the terms of this lease.
(c) "TERM": shall mean the initial term of this lease being one
hundred twenty (120) months, plus any partial month from the
Commencement Date until the first day of the first full
calendar month during the term.
(i) "COMMENCEMENT DATE": shall mean the date upon which
Substantial Completion, as defined below, has
occurred with regard to the Premises. The
Commencement Date for the Building is anticipated to
be on February 15, 2001, subject to the terms hereof.
(ii) "EXPIRATION DATE": shall be as defined in Section 5
hereof, as extended pursuant to Section 36 hereof.
(d) "MINIMUM ANNUAL RENT" and "ANNUAL OPERATING EXPENSES".
(i) Minimum Annual Rent for the Building shall
mean the annual rent payable in monthly installments
and increased according to the following schedule:
Lease Year Annual Monthly
---------- ------ -------
1 $710,647.50 $59,220.63
2 $730,190.31 $60,849.19
3 $750,270.54 $62,522.55
4 $770,902.98 $64,241.92
5 $792,102.81 $66,008.57
6 $813,885.64 $67,823.80
7 $836,267.50 $69,688.96
8 $859,264.66 $71,605.41
9 $882,894.62 $73,574.55
10 $907,174.22 $75,597.85
(ii) Annual Operating Expenses shall be as defined in
Section 7(a), calculated using no core factor,
payable in monthly installments and adjusted as noted
in Section 7 hereof. The Annual Operating Expenses
for the Building is estimated to be $263,313.60 (Two
Hundred Sixty-Three Thousand Three Hundred Thirteen
and 60/100 Dollars) payable in monthly installments
of $21,942.80 (Twenty-One Thousand Nine Hundred
Forty-Two and 80/100 Dollars).
(e) "PROPORTIONATE SHARE": shall mean the ratio of the approximate
rentable square footage in the Building leased by Tenant to
the approximate total rentable square footage in the Building,
which hereunder shall be 100%.
(f) "USE": shall mean general office purposes and a high-end
technical data center, excluding any "place of public
accommodation".
(g) "CONTENTS": This lease consists of the Index, pages 1 through
11 containing Sections 1 through 38 and the following, all of
which are attached hereto and made a part of this lease:
Exhibits: "A" - Legal Description "A-1" - Building Site Plan
"B" - Commencement Certificate Form "C" - Park Building Rules
"D" - Office Park Expenses "E" - Estoppel Certificate Form
"F" - Phase I Construction Documents "G" - Remaining Improvements and Removables
"H" - Memorandum
2. Premises. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Premises as shown on attached Exhibit "A" and "A-l" and the lot on
which it is located (the "PROPERTY"). Such obligation shall be contingent upon
Landlord acquiring title to the Property.
3. Initial Construction and Fit Out of Premises. Landlord shall complete the
construction of the Building as follows:
(a) Construction of the Phase I Building. At Landlord's sole cost and
expense (except as noted herein) Landlord shall construct the Phase I Building
in accordance with the plans and specifications, which have been approved by
Tenant including without limitation the items noted in the Memorandum, as
defined below (the "Phase I Construction Documents" or the "Approved
Construction Documents"). Such specifications and a list of such plans are
attached as Exhibit "F". Construction of the Phase I Building shall begin as
soon as reasonably possible following the full execution of this lease.
Notwithstanding the foregoing, following Substantial Completion and completion
of the punch list items, Tenant may use its contractors for additional
improvements made to the Premises in accordance with the terms hereof.
(b) Tenant Improvements; Tenant's Cost. Upon Landlord's written
approval of and consent to any plans and specifications for additional work or
other changes to the Approved Construction Documents requested by Tenant, which
approval and consent shall be in Landlord's sole but reasonable judgment and
which does not impair or diminish the ability of Landlord to release the
Building following the conclusion of this lease (each a "Tenant Improvement").
Landlord shall: (1) if necessary to implement such Tenant Improvement, cause the
Architect for the Building to prepare the appropriate drawings reflecting such
Tenant Improvement and (2) obtain from the General Contractor the amount of
Tenant's Cost, as defined below, for such Tenant Improvement and the additional
time required to implement the requested change, which Landlord shall provide to
Tenant in the form of a written proposed change order. If Tenant wishes to
implement the proposed change order it must sign and return the proposed change
order form to the Landlord. If Landlord does not receive said form within five
(5) business days of the date of which it was received by the Tenant, or if
Landlord receives a change order form marked to note Tenant's disapproval, the
change order shall be deemed disapproved by Tenant. Upon Landlord's receipt of
Tenant's written approval of the proposed change order and of the cost
associated with same, the Tenant Improvement described in such change order
shall then be part of the Approved Construction Documents, and the additional
time required to implement the requested change shall be considered a delay
beyond Landlord's control. Following such approval, Landlord shall complete the
Tenant Improvement at Tenant's sole expense. "Tenant's Cost" shall mean the sum
equal to the aggregate of all costs, expenses and fees incurred by or on behalf
of Landlord in connection with a Tenant Improvement, including without
limitation (i) architectural, engineering, space planning and design costs, (ii)
the direct cost charged to Landlord by Landlord's general contractor (the
"General Contractor") and all subcontractors for performing such construction,
(iii) the cost of any change order, as noted below, (iv) all permits, approvals
and licenses, (v) overhead of the General Contractor, (vi) a fee to the General
Contractor equal to five percent (5%) of the Tenant's Cost (excluding such fee),
and (vii) general conditions of the General Contractor which shall not include
overhead of the General Contractor. Tenant agrees to pay to Landlord, upon
submission, all invoices for Tenant's Cost incurred in connection with the
Tenant Improvements.
(c) Substantial Completion. The Premises shall be Substantially
Completed on or before February 15, 2001, subject to the provisions of paragraph
(d) of this Section. All construction shall be done in a good and workmanlike
manner, materially in accordance with the Approved Construction Documents and
shall comply at the time of completion with all applicable laws and requirements
of the governmental authorities having jurisdiction. "Substantial Completion" of
the Premises shall mean, with regard to the Premises and the Tenant
Improvements: (i) Landlord's architect (the "Architect") has issued a
certificate stating that all work except punchlist items have been completed
materially in accordance with the Approved Construction Documents and (ii) a
temporary certificate of occupancy has been issued by the City of Chesapeake,
Virginia for the subject Building, other than with respect to the installation
of the Tenant's Work and subject to punch list items. Landlord, Tenant and the
General Contractor shall in conjunction with the Commencement Date do a "walk
thru" inspection of the Premises to determine a punch list and a reasonable date
for the completion of such items, not to exceed sixty (60) days. Landlord will
diligently pursue the open items in the temporary certificate of occupancy in
order to obtain a final certificate of occupancy at the earliest practicable
date after completion of the Tenant Improvements. Tenant's occupancy of the
Building shall constitute acceptance thereof for purposes of the commencement of
the Payment of Rent and other than as to open items determined by the parties
upon such occupancy. Tenant shall have thirty (30) days after its occupancy of
the Premises to notify and discuss supplementary punch list items it believes
require correction or repair with Landlord.
(d) Delivery Date. If the Premises have not reached Substantial
Completion on or before April 15, 2001 (the "Delivery Date") the following shall
apply until Substantial Completion:
(i) From April 16, 2001 until May 14, 2001 Landlord shall have
a grace period within which to Substantially Complete the Premises.
(ii) For each day of delay from May 15, 2001, until June 14,
2001, Landlord shall pay Tenant a sum equal to the per diem Minimum Annual Rent
due hereunder during the first lease year ("First Year Rent") or Tenant may
alternatively receive a credit against Rent, all at Landlord's option.
(iii) For each day of delay from June 15, 2001 and thereafter,
Landlord shall pay Tenant the sum equal to twice the per diem First Year Rent or
Tenant may alternatively receive a credit against Rent, all at Landlord's
option.
(iv) From August 1, 2001, (the "Termination Deadline") until
Substantial Completion, Tenant, at its option, may terminate this lease.
(v) Notwithstanding the foregoing, for each day a Force
Majeure Event, as defined below, delays Substantial Completion, all dates noted
in this Section (d), including without limitation the Delivery Date and the
Termination Deadline, shall be extended one day (two days for a Tenant Delay, as
defined below). The Termination Deadline, however, may only be extended (other
than due to a Tenant Delay for which the Termination Deadline may be extended
indefinitely) until March 1, 2002. A "Force Majeure Event" when used herein
shall mean an act of god, flood, storm, explosion, fire or other weather related
occurrence, labor trouble, strike or stoppage, a disruption or other
interference with sources of materials, insurrection, riot, act of the public
enemy, or federal, state or local law, order, rule or regulation, which inhibit,
impede, delay or prevent a party from complying with any condition or
requirement. When used herein, a Tenant Delay shall mean any delay attributable
substantially to the acts or omissions of Tenant, its agents or contractors, if
any (a "Tenant Delay").
(vi) Tenant shall pay to Landlord on the Commencement Date, in
addition to Rent due from the Commencement Date and thereafter, a sum equal to
per diem First Year Rent for each day of Tenant Delay if Substantial Completion
occurs following April 15, 2001. If a Tenant Delay occurs, Landlord shall notify
Tenant promptly of such event.
(vii) In the event the Premises are not delivered to Tenant on
or before the Delivery Date, Landlord, at Tenant's option, shall provide Tenant
with up to 1,000 square feet of office space for its use, at the rate of $14.25
per square foot plus operating expenses, until Substantial Completion.
(viii) Landlord shall sufficiently complete the shell of the
Building on or before February 15, 2001, in order to permit Tenant to install
its telephones, computer and other communications lines and cables, as noted
below.
(e) Authorized Representatives.
(i) Tenant's Authorized Representative. Tenant appoints
Richard Casserly and George Robson as Tenant's authorized representatives for
all issues related to the Approved Construction Documents (each individually
known as a "Tenant's Authorized Representative"). Landlord shall deliver to
Tenant's Authorized Representatives all notices, plans, approvals and/or other
submittals pursuant with this Section. Only a Tenant's Authorized Representative
shall be authorized to sign any change order, or disbursement request for any
allowance, receipt of other document on behalf of Tenant related to the Approved
Construction Documents, Tenant Improvements or change orders, and without the
signature of a Tenant's Authorized Representative, no such document shall be
binding on Tenant. Tenant may from time to time change any of its Tenant's
Authorized Representative or the location designated for Tenant's Authorized
Representative to receive notices, plans, and other submittals by giving
Landlord written notice of such change.
(ii) Landlord's Authorized Representative. Landlord appoints
Alan T. Lingerfelt and Dana Dame as Landlord's authorized representatives for
all issues related to the Approved Construction Documents (each individually
known as a "Landlord's Authorized Representative"). Tenant shall deliver to
Landlord's Authorized Representatives all notices, plans, approvals, and/or
other submittals pursuant to this Section. Only a Landlord's Authorized
Representative shall be authorized to sign any document on behalf of Landlord
related to the Approved Construction Documents, Tenant Improvements or change
orders, and without the signature of a Landlord's Authorized Representative, no
such document shall be binding on Landlord. Landlord may from time to time
change any of its Landlord's Authorized Representatives or the location
designated for Landlord's Authorized Representatives to receive notices, plans,
and other submittals by giving Tenant written notice of such change.
(iii) Construction Meetings. A Tenant Authorized
Representative and a Landlord Authorized Representative shall endeavor to meet
at least once every two weeks during the construction of the Building to discuss
the progress of such construction and any related issues. Such meetings may be
in person or via telephonic conference call and may include, as appropriate, the
General Contractor, the Architect and any other relevant parties.
(f) Tenant's Work.
(i) All work not within the scope of the Approved Construction
Documents, including without limitation delivery, furnishing and installation
of: (A) telephone or other communications lines, cables and equipment; (B)
computer or office equipment and the cabling associated with same; (C) furniture
or fixtures of the Tenant; and (D) security equipment, shall be considered
"Tenant's Work" and shall be furnished and installed by Tenant at Tenant's
expense.
(ii) Tenant and its agents shall have the right, at Tenant's
own risk, expense and responsibility, subject to the terms of Section 3(d)
hereof, to enter the Building: (i) not later than February 15, 2001 (or earlier
if the Building is completed to the extent necessary to permit such entry), for
the purpose of furnishing and installing telephone, computer or other
communications lines and cables and (ii) not less than twenty (20) days prior to
the Delivery Date for the purpose of installing its fixtures and equipment (the
construction of the Building shall have reasonably progressed toward Substantial
Completion such that the Tenant may reasonably initiate such installations and
such construction shall continue reasonably so as to permit Tenant's completion
of such installations); provided the Tenant does not interfere with or delay the
work to be performed by Landlord, Tenant uses contractors and workers compatible
with the contractors and workers engaged by Landlord, and Tenant obtains
Landlord's prior written consent and. if such entry is prior to the Commencement
Date, such entry shall be subject to all the terms and conditions of this lease,
except the payment of Rent. Further, Tenant's Work shall be subject to the
following conditions:
(1) At least ten (10) days prior to commencement of
Tenant's Work, Tenant shall deliver to Landlord a certificate of insurance for
each of Tenant's contractors evidencing adequate insurance coverage naming
Landlord and Landlord's agent as additional insureds.
(2) In addition to the right of Landlord and its
Agents to inspect the Premises set forth in Section 11 of this lease, Landlord
and its Agents shall have the right to conduct a walk-through inspection of the
Premises as completed by Tenant.
(3) The warranties from Tenant's contractor(s) shall
be for the benefit of Landlord as well as Tenant and Tenant shall deliver such
warranties to Landlord upon receipt.
(4) All construction shall be done in a good and
workmanlike manner and shall comply at the time of completion with all Laws and
Requirements. Tenant shall deliver to Landlord copies of all certificates of
occupancy, permits and licenses required to be issued by any authority in
connection with Tenant's construction.
(g) Architect's Determination. The parties agree that in the event of a
dispute concerning the design or construction of or the improvements to the
Building, the undersigned shall each select an architect who together shall
select a third architect (the "3rd Architect"). The 3rd Architect shall be the
final arbiter as to such matters, including without limitation, as to a
determination of Substantial Completion, and his decision shall be deemed final
and binding.
(h) Measurement of the Premises. Upon Substantial Completion,
Landlord's architect shall certify, by its review of the Approved Construction
Documents and its examination of the Building, the Building's square footage
(the "BSQ"). If such measurement is less than 49,870 square feet, the Minimum
Annual Rent shall be recalculated by multiplying the BSQ times $14.25, which
rent shall be escalated annually at the rate of 2.75%.
4. Use: Compliance.
(a) Permitted Use. Tenant shall occupy and use the Premises for and
only for the Use specified in Section 1(f) above and in such a manner as is
lawful, reputable and will not create any nuisance or otherwise interfere with
the management of the Building. Without limiting the foregoing, such Use shall
exclude any use that would cause the Premises or the Property to be deemed a
"place of public accommodation" under the Americans with Disabilities Act (the
"ADA") as further described in the Building Rules (defined below).
(b) Compliance. From and after the Commencement Date, Tenant shall
comply promptly, at its sole expense, (including making any alterations or
improvements) with all laws (including the ADA), ordinances, notices, orders,
rules, regulations and requirements regulating the Property during the Term
which impose any duty upon Landlord or Tenant with respect to Tenant's use or
alteration of, or Tenant's installations in or upon, the Property including the
Premises, (as the same may be amended. the "LAWS AND REQUIREMENTS") and the
building rules attached as Exhibit "C", as amended by Landlord from time to time
in Landlord's reasonable discretion and so long as such rules are not
inconsistent with this lease (the "BUILDING RULES"). Provided, however, that
Tenant shall not be required to comply with the Laws and Requirements with
respect to the footings, foundations, structural steel columns and girders
forming a part of the Property unless the need for such compliance arises out of
Tenant's use, occupancy or alteration of the Property, or by any act or omission
of Tenant or any employees, agents, contractors, licensees or invitees
("AGENTS") of Tenant. Landlord hereby represents and warrants that the Premises
will be in strict compliance with all Laws and Requirements as of the
Commencement Date and Landlord shall be responsible for: (i) all costs and
expenses in connection with bringing the Premises into compliance with all Laws
and Requirements as they exist on the Commencement Date other than those which
arise out of Tenant's use or alteration of the Building and (ii) defects in the
Building.
(c) Environmental. Tenant shall comply, at its sole expense, with all
Laws and Requirements as set forth above, all manufacturers' instructions and
all requirements of insurers relating to the treatment, production, storage,
handling, transfer, processing, transporting, use, disposal and release of
hazardous substances, hazardous mixtures, chemicals, pollutants, petroleum
products, toxic or radioactive matter (the "RESTRICTED ACTIVITIES"). Tenant
shall deliver to Landlord copies of all Material Safety Data Sheets or other
written information prepared by manufacturers. importers or suppliers of any
chemical and all notices, filings, permits and any other written communications
from or to Tenant and any entity regulating any Restricted Activities.
(d) Notice. If at any time during or after the Term (if such inquiry
results from any act or omission of Tenant or its Agents), Tenant becomes aware
of any inquiry, investigation or proceeding regarding the Restricted Activities
or becomes aware of any claims, actions or investigations regarding the ADA,
Tenant shall give Landlord written notice, within 5 days after first learning
thereof. providing all available information and copies of any notices.
5. Term. The Term of this lease shall commence on the Commencement Date and
shall end at 11:59 p.m. on the last day of the Term (the "EXPIRATION DATE"),
without the necessity for notice from either party, unless sooner terminated in
accordance with the terms hereof Landlord and Tenant shall confirm the
Commencement Date and Expiration Date by executing a lease commencement
certificate in the form attached as Exhibit "B."
6. Minimum Annual Rent. Tenant agrees to pay to Landlord the Minimum Annual Rent
in equal monthly installments in the amount set forth in Section l(d) (as
increased at the beginning of each lease year as set forth in Section 1(d)), in
advance, on the first day of each calendar month during the Term, without
notice, demand or setoff except as otherwise provided herein, at Landlord's
address designated at the beginning of this lease unless Landlord designates
otherwise; provided that rent for the first full month shall be paid at the
signing of this lease. If the Commencement Date falls on a day other than the
first day of a calendar mouth, the rent shall be apportioned pro rata on a per
diem basis for the period from the Commencement Date until the first day of the
following calendar month and shall be paid on or before the Commencement Date.
As used in this lease, the term "lease year" means the period from the
Commencement Date through the succeeding 12 full calendar months (including for
the first lease year any partial month from the Commencement Date until the
first day of the first full calendar month) and each successive 12 month period
thereafter during the Term.
7. Operation of Property; Payment of Expenses.
(a) Payment of Operating Expenses. Tenant shall pay to Landlord the
Annual Operating Expenses in equal monthly installments in the amount set forth
in Section l(d) (prorated for any partial month), from the Commencement Date and
continuing throughout the Term on the first day of each calendar month during
the Term, as additional rent, without notice, demand or setoff, except as
otherwise provided herein. Landlord shall apply such payments to the Annual
Operating Expenses to Landlord of operating and maintaining the Property during
each calendar year of the Term. The amount of the Annual Operating Expenses set
forth in Section 1(d), represents Landlord's estimate of Tenant's share of the
estimated Annual Operating Expenses during the first calendar year of the Term
on an annualized basis; from time to time Landlord may adjust such estimated
amount if the estimated operating costs increase or decrease. The Annual
Operating Expenses, as set forth in Section l(d) will be adjusted to reflect as
newly as possible the actual Annual Operating Expenses for the Premises as and
when such expenses become known. Tenant's obligation to pay the Annual Operating
Expenses pursuant to this Section 7 shall survive the expiration or termination
of this lease. The calculation and payment of Annual Operating Expenses shall be
as follows:
(i) As used herein, the term "Annual Operating Expenses" shall
mean the actual costs to Landlord (net of discounts, credits, rebates or
reimbursements from insurance or payments from any party) of operating and
maintaining the Premises during each calendar year of the Term computed on an
accrual basis. Annual Operating Expenses shall be determined according to
generally accepted accounting principles which shall be consistently applied,
and shall include: (a) "impositions" (defined in Section 7(b); provided,
however, that if, by law, any assessment of impositions may be divided and paid
in installments, then, for the purposes of this subsection 7(a)(i), (x) such
assessment shall be deemed to have been so divided, (y) such assessment shall be
deemed payable in the maximum number of installments permitted by law, and (z)
there shall be deemed included in Annual Operating Expenses for each calendar
year the installment(s) of such assessment becoming payable during such calendar
year, together with interest payable during such calendar year on such
installment(s) and on all installments thereafter becoming due as provided by
law, all as if such assessment had been so divided; (b) charges or fees for, and
taxes on, the furnishing of water, sewer service, gas, fuel or other utility
services to the Building; (c) a management fee in an amount not to exceed the
prevailing market rate charged for owner managed buildings, but in no event
exceeding three and three-fourths percent (3.75%) of the Annual Minimum Rent per
lease year, (d) premiums for hazard, liability, rent insurance, workmen's
compensation or similar insurance upon the Building or portions thereof; (e)
costs arising under service contracts with independent contractors for services
provided to the Building; (f) maintenance and cleaning, sanitary control, snow
removal and trash, garbage and other refuse removal, including costs related to
trash compactors; (g) repair, maintenance and painting of sidewalks, pavements,
light fixtures, signs; (h) repair, maintenance and painting of the Building; (i)
pest control; (j) general repairs; (k) fire protection; (l) costs of
replacements of any portion of the Property; however, if the cost of any item is
greater than $25,000 in any lease year, such cost shall be included in Annual
Operating Expenses for the year in which the costs are incurred and subsequent
years, appropriately allocated to such years on a straight-line basis, to the
extent that such items are amortized over the average of the range of useful
life for such item as quoted by its manufacturer, with an interest factor equal
to the Prime Rate as hereinafter defined; and (m) maintenance and repair of
utility systems servicing the Building.
(ii) Notwithstanding anything in subsection 7(a)(i) to the
contrary, Annual Operating Expenses shall not include (a) the costs of repairs,
alterations, capital improvements and other items which under generally accepted
accounting principles are properly classified as capital expenditures; (b)
repairs arising from defects in the initial construction of the Building; (c)
repairs necessitated by the negligence of Landlord or required to cure
violations of Laws and Requirements in effect on the Commencement Date; (d)
interest and amortization of indebtedness or any costs of financing or
refinancing, depreciation or ground rent; (e) management fees in excess of the
amount permitted under subsection 7(a)(i); (f) compensation paid to general
partners, officers or executives of Landlord (other than the management fee
referred to in subsection 7(a)(i); (g) leasing commissions, advertising and
promotional expenses; (h) legal fees or accounting fees; (i) taxes, other than
as described in subsection 7(b); (i) any amounts payable by Landlord by way of
indemnity or for damages or which constitute a fine, interest or penalty; (j)
any improvement installed or work performed or any other cost or expense
incurred by Landlord in order to comply with the requirements for obtaining any
permanent or temporary certificate of occupancy for the Building or any space
therein or the renewal of any temporary certificate of occupancy; (k) any cost
representing an amount paid for services or materials to a person, firm, or
entity related in any manner to Landlord or any affiliate of Landlord to the
extent such amount exceeds the amount that would be paid for such services or
materials at the then-existing market rates to an unrelated person, firm or
corporation; (l) costs for which Landlord actually receives reimbursement from
insurance, condemnation awards or any other source and expenses for repairs and
other work caused by fire, windstorm or other casualty required to be insured
under this Lease; (m) any expenses incurred by Landlord as a result of asbestos
or other hazardous materials in the Building or on or about the Property or
suspected to be in the Building or on or about the Property other than as a
result of the acts or omissions of Tenant, its contractors, invitees or agents;
(n) any costs of Landlord in acquiring the Property or in constructing the
Building; (o) costs incurred for the purchase of tools and operating equipment
(other than tools purchased solely for the Building); (p) repairs or other work
(including rebuilding) occasioned by fire, windstorm or other casualty or
condemnation; (q) fines, penalties, late payments and costs incurred by Landlord
due to violations of law or permits, leases or contracts pertaining to the
Building (unless due to violations caused by Tenant which Tenant shall pay in
full but which shall not be included in the Annual Operating Expenses); and (r)
repair of construction items reimbursed through warranty coverage.
(iii) If only part of any calendar year falls within the Term,
the Annual Operating Expenses shall be pro-rated in proportion to the portion of
such calendar year falling within the Term. Any reasonable common area expense
which is incurred by the office park of which the Building is a part, including
without limitation, those items noted on Exhibit D, shall be allocated
proportionately between the buildings of the office park based upon the square
footage of each building, but in no event shall Tenant's share of the expenses
for the office park exceed 20% of the total of such costs. Tenant's share of the
office park costs shall be added to and paid in the same manner as Annual
Operating Expenses.
(iv) By April 30th of each year (and as soon as practical
after the expiration or termination of this lease or at any time in the event of
a sale of the Property), Landlord shall provide Tenant with a statement of the
actual amount of such annual operating costs for the preceding calendar year or
part thereof ("Operating Costs Statements"). Landlord or Tenant shall pay to the
other the amount of any deficiency or overpayment then due from one to the other
or, at Landlord's option, Landlord may credit Tenant's account for any
overpayment. Tenant shall have the right to inspect the books and records used
by Landlord in calculating the annual operating costs within 120 days of receipt
of the statement during regular business hours after having given Landlord at
least 48 hours prior written notice; provided, however, that Tenant shall make
all payments of additional rent without delay, and that Tenant's obligation to
pay such additional rent shall not be contingent on any such right. If as a
result of such examination, Tenant disputes the Operating Costs Statement,
Tenant shall notify Landlord that it disputes such Operating Costs Statement
setting forth the reasons therefor (a "Notice of Dispute"). If Landlord and
Tenant do not agree on the proper amount for Tenant's Operating Costs Statement
within thirty (30) days after Tenant's Notice of Dispute to Landlord, Tenant, at
its sole cost may have such statement audited by an auditing firm (paid on an
hourly basis) selected as agreed by Tenant and Landlord. If such audit reveals
that Tenant's Annual Operating Expenses shall have been overstated by more than
five percent (5%) of the total Annual Operating Expenses, Landlord shall
reimburse Tenant for the reasonable cost of the auditor's examination of
Landlord's records.
(v) At least ninety (90) days prior to each calendar year
Landlord shall submit to Tenant and budget and estimate of the Annual Operating
Expenses for such year. If the budgeted cost of any expense in the control of
Landlord (which costs specifically exclude, without limitation, utilities and
insurance), which is provided by a service contractor of Landlord, exceeds the
previous year's cost by more than 10%, Landlord shall obtain Tenant's prior
consent for the service contract for the budgeted year, which consent shall not
be unreasonably withheld, delayed or denied. If such consent is not given,
Landlord shall obtain three (3) bids for such service and shall select the
lowest cost provider to perform the service. Notwithstanding the foregoing,
Tenant shall have the right to notify Landlord of its dissatisfaction with a
third party service provider (other than utilities or other sole source
providers) hired by Landlord, and Landlord shall, following discussions with
Tenant, hire a new service provider to provide such service to the Property.
(b) Impositions. As used in this lease the term "impositions" refers to
all real estate taxes or their equivalents (including sales taxes and gross
receipt taxes) and assessments, which are applicable to the Term, and which are
imposed by any authority or under any law, ordinance or regulation thereof, or
pursuant to any recorded covenants or agreements, and the reasonable cost of
contesting any of the foregoing upon or with respect to the Property or any part
thereof, or any improvements thereto. Tenant shall pay to Landlord with the
monthly payment of Minimum Annual Rent any imposition imposed directly upon this
lease or the Rent (defined in Section 7(g)) or amounts payable by any subtenants
or other occupants of the Premises, or against Landlord because of Landlord's
estate or interest herein.
(i) Nothing herein contained shall be interpreted as requiring
Tenant to pay any income, excess profits or corporate capital stock tax imposed
or assessed upon Landlord, unless such tax or any similar tax is levied or
assessed in lieu of all or any part of any imposition or an increase in any
imposition.
(ii) If it shall not be lawful for Tenant to reimburse
Landlord for any of the impositions, the Minimum Annual Rent shall be increased
by the amount of the portion of such imposition allocable to Tenant, unless
prohibited by law.
(iii) Tenant may, in good faith, but without delaying or
obviating its responsibility to timely pay such expenses (which expenses shall
be paid a if Tenant did not intend to exercise its right to so contest such
charge), and at its sole expense and risk, contest any tax payable under this
Section 7(b).
(c) Insurance.
(i) Property. Landlord shall keep in effect insurance against
loss or damage to the Building and the Property by fire, flood (if the Property
is located in a flood zone for which flood insurance is normally and customarily
required) and such other casualties as may be included within fire, extended
coverage and special form insurance covering the full replacement cost of the
Building (but excluding coverage of Tenant's personal property in, and any
alterations by Tenant to, the Premises), and such other insurance as Landlord
may reasonably deem appropriate or as may be required from time-to-time by any
mortgagee, provided in all such instances that such insurance is commercially
reasonably and is the type which is normally required for similar type
properties in Hampton Roads, Virginia.
(ii) Liability and Tenant's Property. Tenant, at its own
expense, shall keep in effect commercial general liability insurance with
respect to the Premises and the Property, including contractual liability
insurance, with such limits of liability for bodily injury (including death) and
property damage as reasonably may be required by Landlord from time-to-time,
provided in all such instances that such insurance is commercially reasonably
and is the type which is normally required for similar type properties in
Hampton Roads, Virginia, but not less than a $1,000,000 per occurrence and a
general aggregate limit of not less than $2,000,000 (which aggregate limit shall
apply separately to each of Tenant's locations if more than the Premises);
however, such limits shall not limit the liability of Tenant hereunder. Further,
with respect to Tenant's equipment, fixtures, inventory improvements, and other
property of any nature or kind located at the Premises, Tenant shall maintain at
its sole cost and expense, Special Form insurance (including without limitation,
perils of flood - if the Property is located in a flood zone for which flood
insurance is normally and customarily required) with Replacement Cost Valuation
on an Agreed Amount Basis, which policies shall insure, without limitation,
Tenant's business contents and business personal property, including without
limitation, coverage for Electronic Data Processing Equipment and Media,
Improvements and Betterments, Stock, Business Interruption and Extra Expense,
Rental Value, Leasehold Interest, and Property of Others in their Care, Custody
and Control, further including without limitation, differing variations and
forms of such coverages as they evolve over time. The above policies of
insurance also shall name Landlord as an additional insured with respect to the
Premises, shall be written on an "occurrence" basis and not on a "claims made"
basis, shall provide that it is primary with respect to any policies carried by
Landlord and that any coverage carried by Landlord shall be excess insurance,
shall provide that it shall not be cancelable or reduced without at least 30
days prior written notice to Landlord and shall be issued in form reasonably
satisfactory to Landlord. The insurer shall be a responsible insurance carrier
which is authorized to issue such insurance and licensed to do business in the
state in which the Property is located and which has at all times during the
Term a rating of no less than A- in the most current edition Best's Insurance
Reports. Tenant shall deliver to Landlord on or before the Commencement Date,
and subsequently, renewals of, a certificate of insurance evidencing such
coverage and the waiver of subrogation described below.
(iii) Waiver of Subrogation. Landlord and Tenant shall have
included in their respective property insurance policies waivers of their
respective insurers' right of subrogation against the other party. If such a
waiver should be unobtainable or unenforceable, then such policies of insurance
shall state expressly that such policies shall act be invalidated if, before a
casualty, the insured waives the right of recovery against any party responsible
for a casualty covered by the policy.
(iv) Increase of Premiums. Tenant agrees not to do anything or
fail to do anything which will increase the cost of Landlord's insurance or
which will prevent Landlord from procuring policies (including commercial
general liability) from companies and in a form satisfactory to Landlord. If any
breach of the preceding sentence by Tenant causes the rate of fire or other
insurance to be increased, Tenant shall pay the amount of such increase as
additional rent promptly upon being billed.
(d) Repairs and Maintenance; Building Management.
(i) Tenant at its sole expense shall maintain the Premises in
a neat and orderly condition.
(ii) Landlord shall make all necessary repairs to the Premises
and any other improvements located on the Property, including without
limitation, responsibility for and repairs and maintenance to the roof and
elevators of the Building, and, provided that Landlord shall have no
responsibility to make any repair until Landlord has received written notice of
the need for such repair. Landlord shall operate, manage and maintain the
Premises and any paved or unpaved areas appurtenant to the Property in a first
class manner consistent with a Class A office building. Landlord shall maintain
and enforce all warranties and guaranties in connection with the Premises. Costs
for maintaining the electrical, HVAC for the data center of the Building and
security system of the Building shall not be part of Annual Operating Expenses
but shall be maintained in a first-class manner by and paid for by Tenant.
Tenant shall have access to the roof in accordance with the terms of this lease
to perform such maintenance. The cost and responsibility for maintenance and
repair of structural components, foundation and exterior walls of the Building
shall be Landlord's and shall not be included in Annual Operating Expenses
unless the need for such repairs is caused by Tenant.
(iii) Notwithstanding anything herein to the contrary, repairs
and replacements to the Property including the Premises made necessary by
Tenant's use, occupancy or alteration of, or Tenant's installation in or upon
the Property or by any act or omission of Tenant or its Agents shall be made at
the sole expense of Tenant to the extent not covered by any applicable insurance
proceeds paid to Landlord. Tenant shall not bear the expense of any repairs or
replacements to the Property arising out of or caused by any other tenant's use,
occupancy or alteration of, or any other tenant's installation in or upon, the
Property or by any act or omission of any other tenant or any other tenant's
Agents.
(iv) With respect to Tenant's obligations as to the Property,
at Landlord's option and at Tenant's expense, and after all applicable notice
and cure periods have expired, Landlord may comply with any repair, replacement
or other construction requirements of the Laws and Requirements and Tenant shall
pay to Landlord all costs thereof as additional Rent.
(e) Utilities and Services. Landlord will furnish the Premises with
electricity, heating and air conditioning, elevator service and water and sewer
consistent with Tenant's special and usual requirements as they relate to
general Class A offices and a data center operating twenty-four (24) hours a
day, three hundred sixty-five (365) days a year (including all holidays and
weekends) in accordance with the Approved Construction Documents. Landlord shall
not be responsible or liable for any interruption in utility service, nor shall
such interruption affect the continuation or validity of this lease.
Notwithstanding the foregoing, in the event of an interruption in utility
service, which (i) is caused solely by Landlord or (ii) is the responsibility of
Landlord hereunder, and is within Landlord's sole control, and if such service
is not restored within two (2) business days after Landlord's actual notice of
such interruption, Tenant's payment of Rent shall abate until the utility
service is restored and Tenant may exercise its rights under ss.22(b).
(f) Janitorial Services. Landlord will provide Tenant with trash
removal and janitorial services pursuant to a cleaning schedule attached as
Exhibit "D"; however, Tenant, at its option and cost, may provide its own
janitorial services for the Premises so long as the Premises are kept in
accordance with the standards noted in Section 7(d)(ii), in which event,
Landlord's costs for such service shall be excluded from Annual Operating
Expenses.
(g) Rent. The term "RENT" as used in this lease means the Minimum
Annual Rent, Annual Operating Expenses and any other additional rent or sums
payable by Tenant to Landlord pursuant to this lease, all of which shall be
deemed rent for purposes of Landlord's rights and remedies with respect thereto.
Tenant shall pay all Rent to Landlord within 30 days after Tenant is billed,
unless otherwise provided in this lease, and interest shall accrue on all sums
due but unpaid.
(h) Security Services. Tenant shall provide security services for the
Building and no cost for Building security shall be included in Annual Operating
Expenses.
8. Signs. At Tenant's sole cost, Tenant may place signage upon the Building. At
Tenant's sole cost, Tenant may place interior signage within the Building. Any
and all exterior signage shall be in full accord with Landlord's standard
graphic program for the office park of which the Building is a part and
applicable zoning ordinances and other governmental regulations. All signs
installed by Tenant shall be maintained by Tenant in good condition and Tenant
shall remove all such signs at the termination or expiration of this lease and
shall repair any damage caused by such installation, existence or removal.
Landlord will place (i) monument signs at the entrance to the office park of
which the Building is a part and (ii) appropriate directional signs so as to
identify the Building, all in accordance with applicable governmental
ordinances.
9. Alterations and Fixtures.
(a) Subject to Section 10, Tenant shall have the right to install its
trade fixtures in the Premises, provided that no such installation or removal
thereof shall affect any structural portion of the Property or any utility
lines, communications lines, equipment or facilities in the Building. At the
expiration or termination of this lease and at the option of Landlord or Tenant,
Tenant shall remove such installation(s) and, in the event of such removal;
Tenant shall repair any damage caused by such installation or removal;
notwithstanding the foregoing, if Tenant, with Landlord's written consent, given
either at the time such items are installed or at the conclusion or termination
of this lease, elects not to remove such installation(s) at the expiration, or
termination of this lease, all such installations shall remain on the Property
and become the Property of Landlord without payment by Landlord.
(b) Except for non-structural changes, which do not exceed $20,000 per
item and $250,000 in the aggregate in any consecutive twelve (12) month period,
Tenant shall not make or permit to be made any alterations to the Premises
without Landlord's prior written consent, which shall not be unreasonably
withheld, conditioned or delayed. All such alterations shall be made in a first
class manner consistent with a Class A office building. Tenant shall pay the
costs of any required architectural/engineering reviews in connection with any
alteration. In making any alterations, (i) Tenant shall deliver to Landlord the
plans, specifications and necessary permits, together with certificates
evidencing that Tenant's contractors and subcontractors have adequate insurance
coverage naming Landlord and Landlord's agent as additional insureds, at least
10 days prior to commencement thereof and to extent reasonably practicable,
incorporate any comments of Landlord to such plans into this alteration, (ii)
such alterations shall not impair the structural strength of the Building or any
other improvements or reduce the value of the Property or affect any utility
lines, communications lines, equipment or facilities in the Building, (iii)
Tenant shall comply with Section 10 and (iv) the occupants of any adjoining
property shall not be disturbed thereby. All alterations to the Premises by
Tenant shall be the property of Tenant until the expiration or termination of
this lease; at that time all such alterations shall remain on the Property and
become the property of Landlord without payment by Landlord unless Landlord or
Tenant gives written notice to the other party for the removal of same, in which
event Tenant will remove such alterations and repair any resulting damage and
restore the Building to its normal useable Class A condition. At Tenant's
request prior to Tenant making any alterations, Landlord shall notify Tenant in
writing, whether Tenant is required to remove such alterations at the expiration
or termination of this lease. If Landlord fails to respond to such request
within ten (10) days of its receipt, such request shall be deemed disapproved by
Landlord such that the alterations shall be removed at Landlord's option at the
conclusion or termination of this lease. Notwithstanding the foregoing or any
other provision contained herein to the contrary, Tenant may re-carpet and
repaint the Premises without Landlord's consent as often as it desires and
without limitation on expense provided that the carpet is of a grade and quality
equal to or better than that originally installed in the Premises. No such
carpet, if of a quality and installation like or better than that installed by
Landlord, shall be required to be removed by Tenant at the conclusion of this
lease.
(c) Landlord agrees that the items noted on Exhibit G, following its
review and approval of the specifications therefor, may remain at the Premises
or shall be removed, as so noted on the exhibit, at the expiration or
termination of this lease.
10. Mechanic's Liens. Tenant shall pay promptly any contractors and materialmen
who supply labor, work or materials to Tenant at the Property and shall take all
steps permitted by law in order to avoid the imposition of any mechanic's lien
upon all or any portion of the Property. Should any such lien or notice of lien
be filed for work performed for Tenant other than by Landlord, Tenant shall bond
against escrow twice the amount claimed with Landlord's title company or
mortgagee or discharge the same within 10 business days after Tenant has notice
that the lien or claim is filed regardless of the validity of such lien or
claim. Nothing in this lease is intended to authorize Tenant to do or cause any
work to be done or materials to be supplied for the account of Landlord, all of
the same to be solely for Tenant's account and at Tenant's risk and expense.
Throughout this lease the term "mechanic's lien" is used to include any lien,
encumbrance or charge levied or imposed upon all or any portion of, interest in,
or income from the Property on account of any mechanic's, laborer's,
materialman's or construction lien or arising out of any debt or liability to or
any claim of any contractor, mechanic, supplier, materialman, or laborer and
shall include any mechanic's notice of intention to file a lien given to
Landlord or Tenant, any stop order given to Landlord or Tenant, any notice of
refusal to pay naming Landlord or Tenant and any injunctive or equitable action
brought by any person claiming to be entitled to any mechanic's lien.
11. Landlord's Right of Entry. Tenant shall permit Landlord and its Agents to
enter the Premises at all reasonable times following reasonable notice (except
in the event of an emergency), for the purpose of inspection, maintenance or
making repairs, alterations or additions as well as to exhibit the Premises for
the purpose of sale or mortgage and, during the last 6 months of the Term, to
exhibit the Premises to any prospective tenant. Landlord will make reasonable
efforts not to inconvenience Tenant in exercising the foregoing rights, but
shall not be liable for any loss of occupation or quiet enjoyment thereby
occasioned. Notwithstanding the foregoing, during such entry to the Premises,
Landlord and its Agents shall be accompanied by a representative of Tenant
(except in the case of emergency); however, Tenant warrants to make such a
representative available to Landlord at all reasonable times and following
reasonable notice; however, in the event of an emergency, Landlord and its
Agents may enter the Premises at their option, but will take reasonable efforts
to notify Tenant and to be accompanied by a representative of Tenant. Landlord
shall comply with Tenant's reasonable security procedures during such entry of
the Building.
12. Damage by Fire or Other Casualty.
(a) If the Premises or Building shall be damaged or destroyed by fire
or other casualty, Tenant promptly shall notify Landlord and Landlord, subject
to the conditions set forth in this Section 12, shall repair such damage and
restore the Premises to substantially the same condition in which they were
immediately prior to such damage or destruction, but not including the repair,
restoration or replacement of the fixtures, upgrades or alterations installed by
Tenant. Landlord shall notify Tenant in writing, within 30 days after the date
of the casualty, if Landlord anticipates that the restoration will take more
than 180 days from the date of the casualty to complete in such event, Tenant
may terminate this lease effective as of the date of casualty by giving written
notice to Landlord within 10 days after Landlord's notice. Further, if a
casualty occurs during the last year of the Term or any extension thereof (and
the cost of the repair for such casualty exceeds $500,000), Landlord may cancel
this lease unless Tenant has the right to extend the Term for at least 3 more
years and does so within 30 days after the date of the casualty.
(b) If the Premises shall be damaged or shall be rendered untenantable
as a result of a fire or casualty during the term and Tenant shall not have
exercised its right to terminate this Lease pursuant to Section 12(a) above,
unless otherwise expressly provided herein, Landlord agrees to repair and
restore the Premises in accordance with the terms hereof. If the Premises shall
be damaged and rendered untenantable as a result of a fire or casualty during
the Term and Tenant shall not have exercised its right to terminate this Lease
pursuant to Section 12(a) above, and if Landlord fails to or determines it will
be unable to repair that damage to or otherwise restore (other than the
Building's facade) the Premises that Landlord is obligated to repair or restore
pursuant to the provisions of this lease within six (6) months after the date of
the casualty (the "Repair Period"); then, within ten (10) days following the
earlier of such determination or the expiration of the Repair Period, Landlord
shall send to Tenant a notice ("Landlord's Completion Notice") of Landlord's
reasonable estimate as to the time when such repairs will be completed. Tenant
may elect to terminate this Lease by notice (the "Casualty Termination Notice")
to Landlord given not later than ten (10) days following Tenant's receipt of any
Landlord's Completion Notice and ten (10) days following the conclusion of the
Repair Period if Landlord has not completed its repair or restoration. If Tenant
shall fail to timely deliver Casualty Termination Notice to Landlord or shall
elect not to terminate this Lease, then Tenant shall be deemed to have waived
its right to terminate for such event Landlord shall proceed to complete the
repairs required to be performed by Landlord, and Landlord shall periodically
deliver to Tenant reports as to Landlord's progress with respect to such
repairs, which repairs Landlord shall diligently pursue. If Landlord fails to
complete the repairs required to be performed by Landlord above, within the time
period specified in any Landlord's Completion Notice, then within five (5) days
following the expiration of such time period, Landlord shall again send Tenant a
Landlord's Completion Notice and Tenant again may elect to terminate this Lease
by sending to Landlord a Casualty Termination Notice. If Landlord has not
provided a Landlord's Completion Notice within five (5) days of Tenant's notice
to Landlord that it has failed to provide such notice, Tenant may terminate this
lease. The provisions of this paragraph shall be applicable to every instance
where the Landlord shall fail to complete the repairs required to be performed
by Landlord pursuant to this subsection within the time period specified in any
of Landlord's Completion Notice and Tenant shall have elected not to terminate
this Lease.
(c) If, as the result of any fire or other casualty, the Premises or
any portion thereof are rendered untenantable for ninety (90) or more days,
Tenant shall be entitled to an abatement of Rent on a day-to-day basis from the
date the Premises or any portion thereof became untenantable (which abatement
shall be calculated on a prorated basis as to the portion of the Premises
rendered untenantable) until such are once again tenantable or, in the event
that the Premises was substantially damaged and Tenant is required to
substantially re-equip and re-furnish the Premises, until Tenant re-opens for
business in such space but in no event later than one hundred twenty (120) days
after such space is delivered by Landlord to Tenant fully restored in accordance
with this Lease.
(d) Landlord shall maintain a 12-month rental coverage endorsement or
other comparable form of coverage as part of its fire, extended coverage and
special form insurance. Tenant will receive an abatement of its Minimum Annual
Rent and Annual Operating Expenses to the extent the Premises an rendered
untenantable.
13. Condemnation.
(a) Termination. If (i) all of the Premises are taken by a condemnation
or otherwise for any public or quasi-public use, (ii) twenty-five percent (25%)
or more of the Building or the parking spaces for the Building (to the extent
Landlord is unable to restore such items) is so taken and the remainder thereof
is insufficient for the reasonable operation of Tenant's business in Tenant's
sole but reasonable discretion or (iii) any of the Property is so taken and the
condemnation proceeds are insufficient to restore the remainder of the Property,
then this lease shall terminate and all unaccrued obligations hereunder shall
cease as of the day before possession is taken by the condemnor by the party or
parties and under the circumstances noted as follows: at either party's option
if the event described in (i) above occurs, at Tenant's option if the event
described (ii) above occurs or at Landlord's option if the event described in
(iii) occurs; provided, however, if item (iii) above occurs and Tenant or
Landlord pays the difference needed to restore, Landlord shall restore the
Building.
(b) Partial Taking. If there is a condemnation and this lease has not
been terminated pursuant to this Section, (i) Landlord shall restore the
Building and the improvements which are a part of the Premises to a condition
and size as nearly comparable as reasonably possible to the condition and size
thereof immediately prior to the date upon which the condemnor took possession
and (ii) the obligations of Landlord and Tenant shall be unaffected by such
condemnation except that there shall be an equitable abatement of the Minimum
Annual Rent according to the rental value of the Premises before and after the
date upon which the condemnor took possession and/or the date Landlord completes
such restoration.
(c) Award. In the event of a condemnation affecting Tenant, Tenant
shall have the right to make a claim against the condemnor for moving and
business dislocation damages to the extent that such claim does not reduce the
sums otherwise payable by the condemnor to Landlord. Except as aforesaid and
except as set forth in (d) below, Tenant hereby assigns all claims against the
condemnor to Landlord.
(d) Temporary Taking. No temporary taking of the Premises shall
terminate this lease or give Tenant any right to any rental abatement. Such a
temporary taking will be treated as if Tenant had sublet the Premises to the
condemnor and had assigned the proceeds of the subletting to Landlord to be
applied on account of Tenant's obligations hereunder. Any award for such a
temporary taking during the Term shall be applied first, to Landlord's costs of
collection and, second. on account of sums owing by Tenant hereunder, and if
such amounts applied on account of sums owing by Tenant hereunder should exceed
the entire amount owing by Tenant for the remainder of the Term, the excess will
be paid to Tenant.
14. Non-Abatement of Rent. Except as otherwise expressly provided as to damage
by fire or other casualty in Section 12(b) and as to condemnation in Section
13(b) and as otherwise specifically noted in this lease, there shall be no
abatement or reduction of the Rent for any cause whatsoever, and this lease
shall not terminate, and Tenant shall not be entitled to surrender the Premises.
15. Indemnification.
(a) Tenant Indemnification. Subject to Section 7(c)(iii) and 16, Tenant
will protect, indemnify and hold harmless Landlord and its Agents from and
against any and all claims, actions, damages, liability and expense (including
reasonable fees of attorneys, investigators and experts) in connection with loss
of life, personal injury or damage to property in or about the Premises and
caused by Tenant or its Agents or arising out of the occupancy or use of the
Premises by Tenant or its Agents or occasioned wholly or in part by any act or
omission of Tenant or its Agents except to the extent such loss, injury or
damage was caused by the negligence of Landlord or its Agents. In case any
action or proceeding is brought against Landlord and/or its Agents by reason of
the foregoing, Tenant, at its expense, shall resist and defend such action or
proceeding, or cause the same to be resisted and defended by counsel (reasonably
acceptable to Landlord and its Agents) designated by the insurer whose policy
covers such occurrence or by counsel designated by Tenant and approved by
Landlord and its Agents. Tenant's obligations pursuant to this Section 15 shall
survive the expiration or termination of this lease.
(b) Landlord Indemnification. Subject to Sections 7(c)(iii) and 16,
Landlord will protect, indemnify and hold harmless Tenant and its Agents from
and against any and all claims, actions, damages, liability and expense
(including fees of attorneys, investigators and experts) in connection with loss
of life, personal injury or damage to property caused to any person in or about
the Premises occasioned wholly or in part by any act or omission of Landlord or
its Agents, except to the extent such loss, injury or damage was caused by the
negligence of Tenant or its Agents. In case any action or proceeding is brought
against Tenant and/or its Agents by reason of the foregoing, Landlord, at its
expense, shall resist and defend such action or proceeding, or cause the same to
be resisted and defended by counsel (reasonably acceptable to Tenant and its
Agents) designated by the insurer whose policy covers such occurrence or by
counsel designated by Landlord and approved by Tenant and its Agents. Landlord's
obligations pursuant to this Section 15 shall survive the expiration or
termination of this lease.
16. Waiver of Claims. To the extent any claim of a party hereto for recovery
against the other for any loss or damage which may be inflicted upon the
property of such party: (i) is covered by insurance, (ii) is required hereunder
to be covered by insurance or (iii) arises other than solely due to the gross
negligence of willful misconduct of Landlord or Tenant, as the case may be,
Landlord and Tenant each hereby waive any and all such claims even if such loss
or damage shall be brought about by the fault or negligence of the other party
or its Agents; provided, however, that such waiver by Landlord shall not be
effective with respect to any liability of Tenant described in Section 4(c).
17. Quiet Enjoyment. Landlord covenants that Tenant, upon performing all of its
covenants, agreements and conditions of this lease, shall have quiet and
peaceful possession of the Premises as against anyone claiming by or through
Landlord, subject, however, to the exceptions, reservations and conditions of
this lease.
18. Assignment and Subletting.
(a) Limitation. Tenant shall not transfer this lease, voluntarily or by
operation of law. without the prior written consent of Landlord which shall not
be withheld, conditioned or delayed unreasonably. However, Landlord's consent
shall not be required in the event of any transfer by Tenant to an affiliate of
Tenant and provided Tenant delivers to Landlord the instrument described in
Section (c)(iii) below. Any transfer not in conformity with this Section 18
shall be void at the option of Landlord, and Landlord may exercise any or all of
its rights under Section 23. A consent to one transfer shall not be deemed to be
a consent to any subsequent transfer. "Transfer" shall include any sublease,
assignment, license or concession agreement, mortgage or hypothecation of this
lease or Tenant's interest therein or in all or a portion of the Premises.
Notwithstanding anything to the contrary contained herein, without the consent
of Landlord, this lease may be assigned to (i) an entity created by a merger,
reorganization or recapitalization of or with Tenant, or (ii) a purchaser of
substantially all of Tenant's assets or stock, provided, in case of both clauses
(i) and (ii), (A) Landlord shall receive notice of such assignment from Tenant,
and (B) the Assignee and Tenant execute and deliver to Landlord an assumption of
lease pursuant to which such Assignee assumes all of Tenant's obligations under
this lease and Tenant agrees to remain liable hereunder if Tenant exists
following such event, (C) such Assignment is for a valid business purpose and
not to avoid any obligation under this lease, and (D) the not worth of the
surviving entity, purchaser or assignee and its annual gross revenues at the
time of such assignment as both equal to or greater than the net worth and the
annual gross revenues of Tenant as of the date of this lease or on the date of
such assignment, whichever is the lessor.
(b) Conditions. Notwithstanding the above, the following shall apply to
any transfer, with or without landlord's consent.
(i) As of the date of any transfer, Tenant shall not be in
default under this lease nor shall any act or omission have occurred which would
constitute a default with the giving of notice and/or the passage of time.
(ii) No transfer shall relieve Tenant of its obligation to pay
the Rent and to perform all its other obligations hereunder. The acceptance of
Rent by Landlord from any person shall, not be deemed to be a waiver by Landlord
of any provision of this lease or to be a consent to any transfer.
(iii) Each transfer shall be by a written instrument in form
and substance satisfactory to Landlord which shall (A) include an assumption of
liability by any transferee of all Tenant's obligations and the transferee's
ratification of and agreement to be bound by all the provisions of this lease,
(B) afford Landlord the right of direct action against the transferee pursuant
to the same remedies as are available to Landlord against Tenant and (C) be
executed by Tenant and the transferee.
(iv) Tenant shall pay, within 10 days of receipt of an invoice
which shall be no less than $250, Landlord's reasonable attorneys' fees and
costs in connection with the review, processing and documentation of any
transfer for which Landlord's consent is requested.
19. Subordination; Mortgagee's Rights.
(a) This lease shall be subordinated to any first mortgage or other
primary encumbrance now or hereafter affecting the Premises, provided that
Landlord's mortgages or other encumbering party provides Tenant an SNDA, in a
form reasonably acceptable to the parties. Although the subordination is
self-operative within 10 days after written request, Tenant shall execute and
deliver any further reasonable instruments confirming such subordination of this
lease and any further instruments of attornment required by any such mortgagee.
including without limitation, any subordination, non-disturbance and attornment
agreement ("SNDA"), but such SNDA shall not materially alter or be inconsistent
with or contravene the terms of this lease; however, any mortgagee may at any
time subordinate its mortgage to this lease, without Tenant's consent, by giving
written notice to Tenant, and thereupon this lease shall be deemed prior to such
mortgage without regard to their respective dates of execution and delivery;
provided, however, that such subordination shall not affect any mortgagee's
right to condemnation awards, casualty insurance proceeds, intervening liens or
any right which shall arise between the recording of such mortgage and the
execution of this lease if such mortgagee is recorded prior to the Effective
Date of this lease. Landlord agrees that it shall obtain an SNDA from its
mortgagee in favor of Tenant, as noted above within 30 days from the date
requested.
(b) It is understood and agreed that any mortgagee shall not be liable
to Tenant for any funds paid by Tenant to Landlord unless Landlord actually has
transferred such funds to such mortgagee.
20. Recording; Tenant's Certificates. Tenant shall not record this lease but
Landlord and Tenant shall execute a memorandum thereof in recordable form, which
may be recorded at either party's request and expense. At the conclusion or
expiration of this lease, Tenant shall, within 5 business days of a request from
Landlord, execute a release of the aforesaid memorandum. In the event Tenant
fails to execute such document, Tenant hereby grants Landlord a limited power of
attorney and hereby appoints Landlord its attorney-in-fact solely for the
purpose of executing a document whose sole purpose is to release such memorandum
of record. Within 7 business days after Landlord's or Tenant's written request
from time to time:
(a) Landlord and Tenant shall execute, acknowledge and deliver to the
other party a written statement certifying the Commencement Date and Expiration
Date of this lease, that this lease is in full force and effect and has not been
modified and otherwise as set forth in the form of estoppel certificate attached
as Exhibit "E" or with such modifications as may be necessary to reflect
accurately the stated facts and/or such other certifications as may be requested
by Tenant, Landlord or a mortgagee or purchaser of Landlord.
(b) In the event Tenant ceases to be publicly traded, Tenant shall
furnish to Landlord, Landlord's mortgagee, prospective mortgagee or purchaser
reasonably requested financial information.
21. Surrender, Abandoned Property.
(a) Subject to the terms of Sections 9(b), 12(a), 13(b) and Exhibit G,
at the expiration or termination of this lease, Tenant promptly shall yield up
in the same condition, order and repair in which they are required to be kept
throughout the Term, the Premises and all improvements thereto, and all fixtures
and equipment servicing the Building, ordinary wear and tear and casualty
excepted.
(b) Upon or prior to the expiration or termination of this lease,
Tenant shall remove any personal property from the Property. Any personal
property remaining thereafter shall be deemed conclusively to have been
abandoned, and Landlord, at Tenant's expense, may remove, store, sell or
otherwise dispose of such property in such manner as Landlord may see fit and/or
Landlord may retain such property as its property. If any part thereof shall be
sold, then Landlord may receive and retain the proceeds of such sale and apply
the same, at its option, against the expenses of the sale, the cost of moving
and storage and any Rent due under this lease.
(c) If Tenant, or any person claiming through Tenant, shall continue to
occupy the Premises after the expiration or termination of this lease or any
renewal thereof, such occupancy shall be deemed to be under a month-to-month
tenancy under the same terms and conditions set forth in this lease, except that
the monthly installment of the Minimum Annual Rent during such continued
occupancy shall be 150% the amount Applicable to the last month of the Term if
Tenant has given Landlord at least ninety (90) days prior written notice if it
intends to holdover and in such event it may holdover for sixty (60) days at
such rate. Thereafter, or in the event such prior written notice is not given,
the Minimum Annual Rent during any holdover shall be double the amount
applicable to the last month of the term. Anything to the contrary
notwithstanding, any holding over by Tenant without Landlord's prior written
consent shall constitute a default hereunder and shall be subject to all the
remedies available to Landlord.
22. Curing Defaults.
(a) If Tenant shall be in default, beyond any applicable notice and
cure period, in the performance of any of its obligations hereunder, Landlord,
without any obligation to do so, in addition to any other rights it may have in
law or equity, may elect to cure such default on behalf of Tenant after ten (10)
days written notice (except in the case of emergency or waste to the Building)
to Tenant. Tenant shall reimburse Landlord upon demand for any sums paid or
costs incurred by Landlord in curing such default, including interest thereon on
the respective dates of Landlord's incurring such costs, which sums and costs
together with interest shall be deemed additional rent.
(b) If Landlord shall default in the performance or observance of any
agreement or condition in this lease contained on its part to be performed or
observed, and Landlord shall not cure such default within thirty (30) days or
sooner period in the event of an emergency after notice from Tenant specifying
the default, or, if such default is not able to be cured within such thirty (30)
day period, Landlord has not during such thirty (30) day period commenced to
cure such default and thereafter diligently and continuously pursues curing such
default, Tenant may, at any time thereafter, cure such default for the account
of Landlord, and all reasonable amounts paid or all reasonable contractual
liabilities incurred by Tenant in so doing shall be deemed paid or incurred for
the account of Landlord, and Landlord agrees to reimburse Tenant within ten (10)
days of demand therefore; provided that Tenant may, without waiving any claim
for damages on account of such breach, cure any such default as aforesaid prior
to the expiration of said thirty (30) day period, if the curing of such default
prior to the expiration of said thirty (30) day period is reasonably necessary
to protect the Premises or Tenant's interest therein, or to prevent injury or
damage to persons or property so long as Tenant first uses reasonable efforts to
notify Landlord of the need for such repair and permits Landlord a reasonable
opportunity to cure such default.
(c) In the event Landlord fails to perform any repair obligations under
Section 7(d)(ii) hereof, Tenant shall send Landlord written notice of such
failure. If Landlord fails to initiate and diligently pursue such repair within
thirty (30) days of such notice, Tenant shall send Landlord is second written
notice of such failure. If and only if Landlord fails to initiate and diligently
pursue such repair within fifteen (15) days of such second notice, Tenant may
make such repair pursuant to its rights noted in Section 22(b) above and shall
send Landlord a notice of such event. Landlord and Tenant shall then each select
an institutional third party property manager who shall together select a third
institutional third party property manager (the "Evaluator"). The Evaluator
shall determine and/or engage other professionals to assist in the
determination, within thirty (30) days of its engagement, all at the sole cost
of Tenant whether Landlord should have performed the requested repair pursuant
to the terms of this lease. The parties agree that Tenant shall bear the burden
to document the need for such repair and any such failure shall be construed
against Tenant. The determination by the Evaluator shall not be evidence of
whether such repair is required hereunder and shall be of no affect, except to
permit Tenant to take the actions noted in this Section 22(c) and shall in no
way limit Landlord's right to bring an action against Tenant for such nonpayment
of Rent, its costs incurred pursuant to such action and interest thereon, and
including without limitation, attorney's fees and costs. If the Evaluator
determines that Landlord should have performed such repair, Tenant may offset
the commercially reasonable cost of such repair against Rent due hereunder. If,
however, the Evaluator determines that the repair was not required hereunder,
then, without limiting Tenant's right to bring an action for the payment of the
reasonable cost of such repair if required to be made by Landlord hereunder, its
costs incurred pursuant to such action and interest thereon, and including
without limitation, attorney's fees and costs, Tenant may not offset as noted
above and shall pay all sums due hereunder as they become due.
23. Defaults - Remedies.
(a) Defaults. It shall be an event of default:
(i) If Tenant does not pay in full when due any and all Rent;
(ii) If Tenant fails to observe and perform or otherwise
breaches any other provision of this lease;
(iii) If Tenant abandons the Premises, which shall be
conclusively presumed if the Premises remain unoccupied for more than 10
consecutive days, or removes at attempts to remove Tenant's goods or property
other than in the ordinary course of business; or
(iv) If Tenant becomes insolvent or bankrupt in any sense or
makes a general assignment for the benefit of creditors or offers a settlement
to creditors, or if a petition in bankruptcy or for reorganization or for an
arrangement with creditors under any federal or state law is filed by or against
Tenant, or a bill in equity or other proceeding for the appointment of a
receiver for any of Tenant's assets is commenced, or if any of the real or
personal property of Tenant shall be levied upon; provided, however, that any
proceeding brought by anyone other than Landlord or Tenant until any bankruptcy,
insolvency, receivership or similar law shall not constitute a default under
such proceeding has continued unstayed for more than 60 consecutive days.
(b) Remedies. Then, and in any such event, Landlord shall have any and
all of the following rights:
(i) To charge a late payment fee equal to the greater of $100
or 5% of any amount owed to Landlord pursuant to this lease which is not paid
within 5 days after the due date.
(ii) To enter and repossess the Premises and remove all
persons and all or any property therefrom, by action at law or otherwise,
without being liable for prosecution or damages therefor, and Landlord may, at
Landlord's option, make alterations and repairs in order to relet the Premises
and relet all or any parts of the Premises for Tenant's account. Tenant agrees
to pay to Landlord on demand any deficiency that may arise by reason of such
reletting. In the event of reletting without termination of this lease, Landlord
may at any time thereafter elect to terminate this lease for such previous
breach.
(iii) Without limiting any other right or remedy of Landlord
pursuant to this lease, or at law or in equity, to elect to collect one of the
following: (x) the amount (the "Deficiency") by which (A) the Rent reserved
under this Lease until the stated expiration date of the then current Term
exceeds (B) the amount of rent, if any, that Landlord shall receive during the
same period from others to whom the Premises may be rented or (y) an amount
equal to the present worth (as of the date of such termination) of Rent which,
but for the termination of this lease, would have become due during the
remainder of the Term, less the fair rental value of the Premises for the
remainder of the Term, payable to Landlord in one lump sum on demand. For the
purposes of this subparagraph, "present worth" shall be computed by discounting
such amount to present worth at a discount rate equal to one percentage point
above the discount rate then in effect at the Federal Reserve Bank nearest to
the location of the Premises.
(iv) To terminate this lease and the Term without any right on
the part of Tenant to save the forfeiture by payment of any sum due or by other
performance of any condition, term or covenant broken.
(c) Grace Period. Notwithstanding anything hereinabove stated, neither
party will exercise any available right because of any default of the other,
except those remedies contained in subsection (b)(i) of this Section, unless
such party shall have first given 10 days written notice thereof to the
defaulting party, and the defaulting party shall have failed to cure the default
within such period; provided, however, that:
(i) Notwithstanding anything to the contrary herein, if Tenant
fails to comply with the provisions of Sections 10 (in which case ten (10) days
prior written notice shall be required) or 20(a) (in which case ten (10) days
prior written notice shall be required) and in the case of emergency as set
forth in Section 22 or in the event of any default enumerated in subsections
(a)(iii) and (iv) of this Section (in which case no prior written notice shall
be required), the notice periods contained in this Section shall not apply.
(ii) Landlord shall not be required to give such 10 days
notice more than 2 times during any 12 month period.
(iii) If the default consists of something other than the
failure to pay money which cannot reasonably be cured within 15 days, neither
party will exercise any right if the defaulting party begins to cure the default
within the 15 days and continues actively and diligently in good faith to
completely cure said default.
(iv) Tenant agrees that any notice given by Landlord pursuant
to this Section which is served in compliance with Section 27 shall be adequate
notice for the purpose of Landlord's exercise of any available remedies.
(d) Non-Waiver; Non-Exclusive. No waiver by Landlord of any breach by
Tenant shall be a waiver of any subsequent breach, nor shall any forbearance by
Landlord to seek a remedy for any breach by Tenant be a waiver by Landlord of
any rights and remedies with respect to such or any subsequent breach. Efforts
by Landlord to mitigate the damages caused by Tenant's default shall not
constitute a waiver of Landlord's right to recover damages hereunder. No right
or remedy herein conferred upon or reserved to Landlord is intended to be
exclusive of any other right or remedy provided herein or by law, but each shall
be cumulative and in addition to every other right or remedy provided herein or
by law, but each shall be cumulative and in addition to every other right or
remedy given herein or now or hereafter existing at law or in equity. No payment
by Tenant or receipt or acceptance by Landlord of a lesser amount than the total
amount due Landlord under this lease shall be deemed to be other than on
account, nor shall any endorsement or statement on any check or payment be
deemed an accord and satisfaction, and Landlord may accept such check or payment
without prejudice to Landlord's right to recover the balance of Rent due, or
Landlord's right to pursue any other available remedy.
(c) Costs and Attorneys' Fees. If either party commences an action
against the other party arising out of or in connection with this lease, the
prevailing party shall be entitled to have and recover from the losing party
reasonable attorneys' fees, costs of suit, investigation expenses and discovery
costs, including costs of appeal.
24. Representations.
(a) Tenant represents to Landlord and agrees that:
(i) The word "Tenant" as used herein includes the Tenant named
above as well as its successors and assigns, each of which shall be under the
same obligations and liabilities and each of which shall have the same rights,
privileges and powers as it would have possessed had it originally signed this
lease as Tenant. Each and every of the persons named above as Tenant shall be
bound jointly and severally by the terms, covenants and agreements contained
herein. However, no such rights, privileges or powers shall inure to the benefit
of any assignee of Tenant immediate or remote, unless Tenant has complied with
the terms of Section 18 and the assignment to such assignee is permitted or has
been approved in writing by Landlord. Any notice required or permitted by the
terms of this lease may be given by or to any one of the persons named above as
Tenant, and shall have the same force and effect as if given by or to all
thereof.
(ii) If Tenant is a corporation, partnership or any other form
of business association or entity, Tenant is duly formed and in good standing,
and has full corporate or partnership power and authority, as the case may be,
to enter into this lease and has taken all corporate or partnership action, as
the case may be, necessary to carry out the transaction contemplated herein, so
that when executed, this lease constitutes a valid and binding obligation
enforceable in accordance with its terms. Tenant shall provide Landlord with
corporate resolutions or other proof in a form acceptable to Landlord,
authorizing the execution of this lease at the time of such execution.
(b) Landlord hereby represents to Tenant and agrees that Landlord is a
duly formed limited partnership and in good standing and has full partnership
power and authority to enter into this Lease and had taken all partnership
action necessary to carry out the transactions contemplated herein so that when
executed this Lease constitutes a valid and binding obligation enforceable in
accordance with its terms.
25. Liability of Landlord. The word "Landlord" as used herein includes the
Landlord named above as well as its successors and assigns, each of which shall
have the same rights, remedies, powers, authorities and privileges as it would
have had it originally signed this lease as Landlord. Any such person or entity,
whether or not named herein, shall have no liability hereunder after it ceases
to hold title to the Premises except for obligations already accrued (and, as to
any unapplied portion of Tenant's Security Deposit, Landlord shall be relieved
of all liability therefor upon transfer of such portion to its successor in
interest) and Tenant shall look solely to Landlord's successor in interest for
the performance of the covenants and obligations of the Landlord hereunder which
thereafter shall accrue. Neither Landlord nor any principal of Landlord nor any
owner of the Property, whether disclosed or undisclosed, shall have any personal
liability with respect to any of the provisions of this lease or the Premises,
and if Landlord is in breach or default with respect to Landlord's obligations
under this lease or otherwise, Tenant shall look solely to the equity of
Landlord in the Property for the satisfaction of Tenant's claims. No mortgagee
or ground lessor succeeding to the interest of Landlord hereunder (either in
terms of ownership or possessory rights) shall be (a) liable for any previous
act or omission of a prior landlord, (b) subject to any rental offsets, except
as provided herein or (c) bound by payment by Tenant of Minimum Annual Rent in
advance in excess of one monthly installment.
26. Interpretation: Definitions.
(a) Captions. The captions in this lease are for convenience only and
are not a put of this lease and do not in any way define, limit, describe or
amplify the terms and provisions of this lease or the scope or intent thereof.
(b) Entire Agreement. This lease represents the entire agreement
between the parties hereto and there are no collateral or oral agreements or
understandings between Landlord and Tenant with respect to the Premises or the
Property. No rights, easements or licenses are acquired in the Property or any
land adjacent to the Property by Tenant by implication or otherwise except as
expressly set forth in the provisions of this lease. This lease shall not be
modified in any manner except by an instrument in writing executed by the
parties. The masculine (or neuter) pronoun and the singular number shall include
the masculine, feminine and neuter genders and the singular and plural number.
The word "including" followed by any specific items) is deemed to refer to
examples rather than to be words of limitation. Both parties having participated
fully and equally in the negotiation and preparation of this lease, this lease
shall not be more strictly construed, nor any ambiguities in this lease
resolved, against either Landlord or Tenant.
(c) Covenants. Each covenant, agreement, obligation, term, condition or
other provision herein contained shall be deemed and construed as a separate and
independent covenant of the party bound by, undertaking or making the same, not
dependent on any other provision of this lease unless otherwise expressly
provided. All of the terms and conditions set forth in this lease shall apply
throughout the Term unless otherwise expressly set forth herein.
(d) Interest. Wherever interest is required to be paid hereunder, such
interest shall be at the highest rate permitted under law but not in excess of
12.5% per annum.
(e) Severability; Governing Law. If any provisions of this lease shall
be declared unenforceable in any respect, such unenforceability shall not affect
any other provision of this lease, and each such provision shall be deemed to be
modified, if possible, in such a manner as to render it enforceable and to
preserve to the extent possible the intent of the parties as set forth herein.
This lease shall be construed and enforced in accordance with the laws of the
state in which the Property is located.
(f) "Mortgage" and "Mortgagee." The word "mortgage" as used herein
includes any lien or encumbrance on the Premises or the Property or on any part
of or interest in or appurtenance to any of the foregoing, including without
limitation any ground rent or ground lease if Landlord's interest is or becomes
a leasehold estate. The word "mortgagee" as used herein includes the holder of
any mortgage, including any ground lessor if Landlord's interest is or becomes a
leasehold estate. Wherever any right is given to a mortgagee, that right may be
exercised on behalf of such mortgagee by any representative or servicing agent
of such mortgagee.
(g) "Person." The word "person" is used herein to include a natural
person, a partnership, a corporation, an association and any other form of
business association or entity.
27. Notices. Any notice or other communication under this lease shall be in
writing and addressed to Landlord or Tenant at their respective addresses
specified at the beginning of this lease, (or to such other address as either
may designate by notice to the other) with a copy to any mortgagee or other
party designated by Landlord. Each notice or other communication shall be deemed
given if sent by prepaid overnight delivery service or by certified mail, return
receipt requested, postage prepaid or in any other manner, with delivery in any
case evidenced by a receipt, and shall be deemed received on the day of actual
receipt by the intended recipient or on the business day delivery is refused.
The giving of notice by Landlord's attorneys, representatives and agents under
this Section shall be deemed to be the acts of Landlord; however, the foregoing
provisions governing the date on which a notice is deemed to have been received
shall mean and refer to the date on which a party to this lease, and not its
counsel or other recipient to which a copy of the notice may be sent, is deemed
to have received the notice.
28. Security Deposit. RESERVED
29. Commission.
(a) Tenant and Landlord represent and warrant to each other that Porter
Realty, Inc. and The Garibaldi Group are the only outside brokers or finders
that each has had any dealings, negotiations or consultations with relating to
the Premises or this transaction on behalf of Tenant and that no other broker or
finder called the Premises to Tenant's attention for lease or took any part in
any dealings, negotiations or consultations relating to the Premises or this
lease on Tenant's behalf.
(b) Landlord shall pay a commission to Porter Realty, Inc. and The
Garibaldi Group pursuant to the terms of a separate agreement.
(c) Tenant agrees to be responsible for, indemnify, defend and hold
harmless Landlord from and against all costs, fees (including, without
limitation, attorneys' fees), expenses, liabilities and claims incurred or
suffered by Landlord arising from any breach by Tenant of Tenant's foregoing
representation and warranty. Landlord agrees to be responsible for, indemnify,
defend and hold harmless Tenant from and against all costs, fees (including,
without limitation, attorneys' fees), expenses, liabilities and claims incurred
or suffered by Tenant arising from any breach by Landlord of Landlord's
foregoing representation and warranty.
30. Option To Extend Term (Fixed Amount Rental Increase). Provided that Landlord
has not given Tenant notice of default more than two (2) times in the year
preceding the Expiration Date, that there then exists no event of default by
Tenant under this law nor any event that with the giving of notice and/or the
passage of time would Constitute a default, and that Tenant is the sole occupant
of at least fifty percent (50%) of the Premises, Tenant shall have the right and
option to extend the Term for the Building for two (2) additional periods of
sixty (60) months each, exercisable by giving Landlord prior written notice, at
least one (1) year in advance of the Expiration Date of the then current Term as
to such Building, of Tenant's election to extend the Term; it being agreed that
time is of the essence and that this option is personal to Tenant but is
transferable to any permitted assignee or sublessee (regardless of whether any
such assignment or sublease was made with or without Landlord's consent) or
other party. Landlord and Tenant agree that this option shall not expire until
ten (10) day s after Landlord has given Tenant written notice that Tenant has
failed to exercise or waive such option. Such extensions shall be under the same
terms and conditions as provided in this lease except as follows:
(a) each additional period shall begin on the Expiration Date and
thereafter the Expiration Date shall be deemed to be the fifth anniversary
thereof;
(b) all references to the Term in this lease shall be deemed to mean
the Term as extended pursuant to this Section;
(c) Tenant's right and option to extend the Term for two (2) additional
periods as described above shall decrease by one (1) additional period for each
such additional period that Tenant extends the Term;
(d) the Minimum Annual Rent payable by Tenant for the Phase I Building
during each additional period shall be as follows:
Additional Period 1:
Lease Year Annual Monthly
- ---------------- ------------------ -------------------
11 $ 932,121.51 $77,676.79
12 $ 957,754.85 $79,812.90
13 $ 984,093.11 $82,007.76
14 $1,011,155.67 $84,262.97
15 $1,038,962.45 $86,580.20
Additional Period 2:
Lease Year Annual Monthly
- ---------------- ------------------ -------------------
11 $1,067,533.92 $88,961.16
12 $1,096,891.10 $91,407.59
13 $1,127,055.61 $93,921.30
14 $1,158,049.64 $96,504.14
15 $1,189,896.01 $99,158.00
31. Phase III Building Option. Tenant shall have a first right (the "First Offer
Right") to have a building (the "Phase III Building") built on the parcel noted
on Exhibit A as Phase III (the "Phase III Parcel"). As of the date thirty (30)
days after the date Landlord notifies Tenant that it is prepared to construct
the Phase III Building, which notice may not be given earlier than March 1,
2001, Tenant shall commence the payment to Landlord of a monthly fee of $10,850
for Landlord's cost to carry the Phase III Parcel. Such fee shall continue until
Tenant notifies Landlord that it is interested in leasing the Phase III
Building, and Landlord and Tenant shall then initiate discussions regarding the
terms of a lease for the Phase III Building. Landlord and Tenant acknowledge and
agree that such a lease shall be contingent upon the parties' executing a final
lease document for the Phase III Building. Notwithstanding anything to the
contrary contained herein, at any time and at such party's option, either Tenant
may notify Landlord or Landlord may notify Tenant that it does not wish to
proceed with a lease of the Phase III Building with the other party (a
"Termination Notice"), and the First Offer Right and the fee noted in this
Section shall then terminate and be of no further force and effect. If, however,
the Termination Notice is sent by Landlord, Landlord agrees that it shall not
enter into discussions with any tenant other than Tenant for ten (10) days after
its giving a Termination Notice regarding a lease for the Phase III Building to
allow Tenant and Landlord to negotiate such a lease. Thereafter, if Landlord
constructs the Phase III Building as a "spec building" - meaning that Landlord
has not entered into negotiations with any tenant for a lease of a portion of
the Phase III Building - Landlord shall grant Tenant a right of first offer to
lease the Phase III Building on such terms as noted by Landlord in such offer.
32. Naming Rights. Landlord intends to name the project encompassing the
Building the "Liberty Executive Center"; however, Landlord reserves the right to
alter such names until Substantial Completion, at its option.
33. Parking. The Premises shall contain at least two hundred seventy-five (275)
parking spaces.
34. Rooftop Communications Equipment. Tenant shall have the right, at its sole
cost and expense, which right shall not be exclusive, to install and maintain an
antenna or satellite dish or other communications receiving/sending equipment
(the "Equipment") on the roof of the Building, subject to the terms and
conditions of this paragraph. Further, such work shall be aesthetically
pleasing, not visible to the extent reasonably required by Landlord and of a
first-class nature. The roof shall be resealed and repaired following the
installation of such equipment. In the event Tenant desires to install and
operate the Equipment, Tenant shall provide prior written notice thereof to
Landlord, which notice shall include the plans and specifications (the "Plans")
for the Equipment prepared by qualified engineers showing all aesthetic,
structural, mechanical, and electrical details thereof and of the necessary
structural and other changes to the Building required to accommodate the same.
Tenant shall not install or operate the Equipment unless and until Landlord
shall have approved the Plans, which approval will not be unreasonably withheld,
conditioned or delayed. Any and all structural, electrical or other mechanical
changes to the Building and any and all roof or wall penetrations must be
specifically approved in writing by the Landlord and shall be performed by a
contractor or contractors approved in writing by Landlord. The Equipment shall
be installed and operated in accordance with the approved Plans, in a good and
workmanlike manner and in compliance with all applicable federal, state, and
local laws, statutes, codes and ordinances and shall be properly licensed by all
applicable governmental authorities. Tenant shall be solely responsible and
liable for the maintenance of the Equipment, including the rooftop area it is
installed on, during the Term. Tenant shall be responsible for any damage to
said roof or other parts of the Building due to the installation, inspection,
maintenance, or operation of such Equipment. Tenant's installation, operation
and maintenance of the Equipment shall not in any way impair Landlord's roof
warranty. Upon the expiration or earlier termination of this Lease, Tenant shall
immediately remove the Equipment from the Building, and Tenant shall repair any
damage caused by the removal thereof and shall restore the portions of the
Building affected by the Equipment to the condition existing prior to the
installation thereof (ordinary wear and tear, other than as caused by the
equipment, excepted). In the event Tenant fails to so remove the Equipment and
repair and restore the Building and dispose of the Equipment, Landlord may do
so, at the sole risk and expense of Tenant, and Tenant shall reimburse Landlord
for all costs and expenses incurred in connection therewith upon thirty (30)
days written notice.
35. Tenant Credits. Attached hereto as Exhibit H is a Memorandum, dated July 18,
2000, from Hourigan Martone Construction Corp. to Richard Casserly, Dendrite
International (the "Memorandum"). The Memorandum sets forth five categories for
which Tenant desires upgrades in the work in the Premises and for which Landlord
and Tenant will negotiate in good faith to determine the amount and cost of such
upgraded systems and equipment (the "Upgrade Costs"). Landlord shall perform
such agreed work as part of the Approved Construction Documents. Tenant shall
pay to Landlord the Upgrade Costs, minus the allowances sets forth in the
Memorandum, within ten (10) days after the Commencement Date. In the event
Tenant obtains a waiver for Landlord of any construction fees included in
Landlord's budget for the construction of the Building, including without
limitation, for the City of Chesapeake and the Hampton Roads Sanitation District
water and/or sewer connection fees, the sum so not expended by Landlord shall be
a credit to Tenant applied against the cost of any Tenant's Work, or if not so
applied, against the Minimum Annual Rent.
36. Phase II Building. This lease shall be contingent upon Landlord and Tenant
executing a lease for the property adjacent to the Property shown on Exhibit A
as Phase II (the "Phase II Building"). Upon the commencement of the term of
Tenant's lease for the Phase II Building (the "Phase II Lease"), the Expiration
Date shall be extended until the date noted in the Phase II Lease as the
"Expiration Date".
37. Cross-Default. At the sole option of Landlord, a default under this lease
shall be deemed a default under the Phase II Lease, and/or a default under the
Phase II Lease shall be deemed a default hereunder.
38. Consents. When either Landlord's or Tenant's consent is required or provided
for in this lease, unless otherwise specifically noted herein, such consent
shall not be unreasonably withheld, conditioned delayed or denied.
IN WITNESS WHEREOF, and in consideration of the mutual entry into this
lease and for other good and valuable consideration, and intending to be legally
bound, Landlord and Tenant have executed this lease.
Date signed: Landlord:
LIBERTY PROPERTY LIMITED
9/5/00 PARTNERSHIP
- ------------------- By: Liberty Property Trust,
Sole General Partner
By: ALAN T. LINGERFELT
-----------------------
Name: Alan T. Lingerfelt
Title: Senior Vice
President
By:
-----------------------
Name:
Title:
Date signed: Tenant:
9/1/00 DENDRITE INTERNATIONAL, INC.
- ------------------
Attest:
MARYBETH CURTIS By: JOHN E. BAILYE
- --------------------------- ---------------------------
Name: Marybeth Curtis Name: John E. Bailye
Title: Executive Assistant Title: Chairman and Chief
Executive Officer