EXHIBIT 10.16
CORPORATE CAMPUS @ LOUDOUN TECH CENTER
DEED OF LEASE
BY AND BETWEEN
WILLOWBROOK HOLDINGS, INC., AS LANDLORD
AND
HEALTHSCRIBE, INC., AS
TENANT
as of Apri1 27, 2003
TABLE OF CONTENTS
PAGE
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ARTICLE I. BASIC LEASE PROVISIONS................................... 1
ARTICLE II.......................................................... 2
Section 2.1 Premises........................................... 2
Section 2.2 Term............................................... 2
Section 2.3 Use................................................ 3
Section 2.4 Renewal Term....................................... 3
ARTICLE III......................................................... 5
Section 3.1 Rental Payments.................................... 5
Section 3.2 Additional Rent.................................... 7
Section 3.3 Security Deposit/Letter of Credit Contingency...... 11
Section 3.4 Tenant's Review Right.............................. 13
ARTICLE IV.......................................................... 14
Section 4.1 Services........................................... 14
Section 4.2 Keys and Locks..................................... 15
Section 4.3 Signs.............................................. 16
ARTICLE V........................................................... 16
Section 5.1 Occupancy of Premises.............................. 16
Section 5.2 Entry for Repairs and Inspection................... 17
Section 5.3 Hazardous Materials................................ 17
ARTICLE VI.......................................................... 19
Section 6.1 Leasehold Improvements............................. 19
Section 6.2 Repairs by Landlord................................ 21
Section 6.3 Repairs by Tenant.................................. 21
Section 6.4 Liens.............................................. 22
Section 6.5 Indemnification.................................... 22
ARTICLE VII......................................................... 23
Section 7.1 Condemnation....................................... 23
Section 7.2 Force Majeure...................................... 24
Section 7.3 Fire or Other Casualty Damage...................... 24
Section 7.4 Insurance.......................................... 26
Section 7.5 Waiver of Subrogation Rights....................... 27
ARTICLE VIII........................................................ 27
Section 8.1 Default by Tenant.................................. 27
Section 8.2 Landlord's Remedies................................ 28
Section 8.3 Waiver of Duty to Relet or Mitigate................ 30
Section 8.4 Reentry............................................ 30
Section 8.5 Rights of Landlord in Bankruptcy................... 31
Section 8.6 Waiver of Certain Rights........................... 31
Section 8.7 Non Waiver......................................... 31
Section 8.8 Holding Over....................................... 31
Section 8.9 Abandonment of Personal Property................... 32
ARTICLE IX.......................................................... 32
Section 9.1 Transfers.......................................... 32
Section 9.2 Assignment by Landlord............................. 34
Section 9.3 Limitation of Landlord's Liability................. 35
ARTICLE X........................................................... 35
Section 10.1 Subordination...................................... 35
Section 10.2 Estoppel Certificate or Three-Party Agreement...... 36
Section 10.3 Notices............................................ 36
ARTICLE XI.......................................................... 37
Section 11.1 [Intentionally Omitted.]........................... 37
Section 11.2 Rights and Remedies Cumulative..................... 37
Section 11.3 Legal Interpretation............................... 38
Section 11.4 Tenant's Authority................................. 38
Section 11.5 Brokers............................................ 39
Section 11.6 Consents by Landlord............................... 39
Section 11.7 Joint and Several Liability........................ 39
Section 11.8 Independent Covenants.............................. 39
Section 11.9 Attorneys' Fees and Other Expenses................. 39
Section 11.10 Recording.......................................... 40
Section 11.11 Disclaimer; Waiver of Jury Trial................... 40
Section 11.12 Parking............................................ 40
Section 11.13 No Accord or Satisfaction.......................... 41
Section 11.14 Acceptance......................................... 41
Section 11.15 Waiver of Counterclaim............................. 41
Section 11.16 Time Is of the Essence............................. 41
Section 11.17 Counterparts....................................... 41
Section 11.18 Quiet Environment.................................. 41
Section 11.19 Tenant Expansion Option............................ 41
Section 11.20 Satellite Dish/Antenna............................. 43
EXHIBITS
Exhibit A Land
Exhibit B Corporate Campus Plan
Exhibit C Floor Plan of Premises
Exhibit D Commencement Date Agreement
Exhibit E Work Letter Agreement Exhibit E-l Landlord's Work
Exhibit F Rules and Regulations
Exhibit G Letter of Credit
Exhibit H Janitorial Services
DEED OF LEASE
THIS DEED OF LEASE (this "Lease") is made and entered into as of the 27th
day of April, 2003, by and between WILLOWBROOK HOLDINGS, INC., a Delaware
corporation ("Landlord"), whose address is c/o West World Management, Inc., 4
Manhattanville Road, Purchase, New York 10577, and HEALTHSCRIBE, INC., a
Delaware corporation ("Tenant"), whose address is 403 Glenn Drive, # 10,
Sterling, VA, 20164. Subject to all of the terms, provisions, covenants and
conditions of this Lease, and in consideration of the mutual covenants,
obligations and agreements contained in this Lease, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Landlord and Tenant agree as follows:
ARTICLE I.
BASIC LEASE PROVISIONS
Landlord hereby demises and leases to Tenant, and Tenant hereby hires and
takes from Landlord, the Premises (as defined below), subject to all matters
hereinafter set forth and upon and subject to the covenants, agreements, terms,
provisions and conditions of this Lease for the term hereinafter stated. For
purposes of this Lease, the following terms shall have the meanings ascribed to
them below:
Applicable Rate shall mean the lesser of (a) the rate per annum equal to
the Prime Rate plus two (2) percentage points per annum and (b) the maximum
nonusurious rate of interest then permitted by the applicable law of the
Commonwealth of Virginia or the United States of America, whichever shall permit
the higher rate.
Base Rate shall mean the Prime rate announced from time to time by
Citibank, N.A. in New York, New York (or any successor thereto) as its Prime
rate, each change therein to be effective upon announcement.
Delivery Date shall mean the later of the (i) the first business day after
Tenant receives a fully executed Lease from the Landlord or (ii) the first
business day after Landlord tenders possession of the Premises to Tenant, in
broom clean condition and free of encumbrances with Landlord's Work completed
and ready for the Tenant Improvements, but in no event later than the date of
this Lease.
Commencement Date shall mean August 8, 2003, as adjusted pursuant to
Section 2.2.
Corporate Campus shall mean the three building development to be known as
Corporate Campus @ Loudoun Tech Center as shown on Exhibit B attached hereto..
Land shall mean that certain tract of land situated in Loudoun County,
Virginia and more particularly described on Exhibit A attached hereto and hereby
made a part hereof.
Lease Year shall mean each consecutive twelve (12) month period during the
Term commencing with the Commencement Date; provided, however, if the
Commencement Date shall be other than the first day of a month, the first Lease
Year shall include the balance of the
calendar month in which the Commencement Date occurs and the succeeding twelve
(12) complete calendar months.
Premises shall mean the 23,407 rentable square feet in the building B
(which building is outlined in Exhibit B attached hereto and shall hereafter be
referred to as the "Building") which is part of the development known as
Corporate Campus @ Loudoun Tech Center, said building containing the Premises
located at 21670 Ridgetop Circle, Loudoun, County of Loudoun, Commonwealth of
Virginia, 20166, as the same may from time to time hereafter be expanded or
modified.
Project shall mean the Premises, together with the Land; the Building, the
parking area serving the Premises; and all other improvements situated on the
Land or within the Corporate Campus that directly benefit the Premises; and all
additional facilities or improvements directly benefiting the Premises that may
be constructed on the Land or within the Corporate Campus in subsequent years.
Requirements shall mean all statutes, laws, sales, orders, permits,
licenses, regulations, ordinances, decrees and directions of all Federal, state
and local governmental authorities, whether now or hereinafter enacted or in
force, foreseen and unforeseen, applicable to the Premises, all covenants,
agreements, restrictions and encumbrances affecting the Premises or the Land and
all terms and conditions of all insurance policies covering or related to the
Premises. Tenant acknowledges receipt of the Cross-Easement, Covenants and
Restrictions Agreement, dated December 13, 1985, as amended by amendments dated
March 26, 1986, October 20, 1989 and April 26, 1995, covering Loudoun Tech
Center.
ARTICLE II.
SECTION 2.1 Premises. The Premises demised by this Lease consist of 23,407
rentable square feet in Building B as indicated on the Corporate Campus plan
attached hereto as Exhibit B, the floor plan for which is attached hereto as
Exhibit C. All square footage utilized in this Lease shall be measured in
accordance with "Standard Method for Measuring Floor Area in Office Buildings",
published by the Secretariat, Buildings Owners and Managers Association
International (ANSUBOMA Z65.1 - 1996), approved June 7, 1996 (the "Standard
Measure"). Unless otherwise specifically designated, all references to square
footage or square feet in this Lease are to rentable square footage or rentable
square feet.
SECTION 2.2 Term. The term of this Lease shall begin on the Commencement
Date and shall expire on the day prior to the ten year and four month
anniversary of the Commencement Date or, if the Commencement Date is not the
first day of a month, on the day prior to the ten year and four month
anniversary of the first day of a calendar month next succeeding the
Commencement Date, unless extended pursuant to Section 2.4 or sooner terminated
by laws or in accordance with the provisions of this Lease (the "Term"). After
the occurrence of the Commencement Date, Tenant and Landlord shall execute a
certificate in the form attached as Exhibit D stipulating and agreeing to the
Commencement Date and the Expiration Date, as defined therein, and, if
applicable, any adjustment to the square footage of the Premises and the Base
Rent. If the Commencement Date should be changed for any reason, including a
change
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pursuant to the terms of Exhibit E hereto, Landlord shall not be liable or
responsible for any claims, damages or liabilities in connection therewith or by
reason thereof.
SECTION 2.3 Use. The Premises are to be used only for general office
purposes, specifically including (without being the sole use): training rooms,
computer laboratories and data operations; and for no other business or purpose
without the prior written consent of Landlord. No act shall be done in or about
the Premises that violates any Requirement or that will increase the existing
rate of insurance on the Premises. In the event of a breach of this covenant,
Landlord shall provide verbal or written notice to Tenant and Tenant shall
immediately cease (a) the performance of the unlawful act and (b) with respect
to acts that will or has increased the existing rate of insurance, Tenant shall
either cease such act that is increasing or has increased the existing rate of
insurance (and pay for any such increases thereafter charged to Landlord) or
shall pay to Landlord any and all increases in insurance premiums resulting from
such acts. Tenant shall not commit or allow to be committed any waste upon the
Premises, or any public or private nuisance or other act or thing which disturbs
the quiet enjoyment of any other tenant in the Corporate Campus. Tenant shall
not, without Landlord's prior consent which consent shall not be unreasonably
withheld, install any equipment, machine, device, tank or vessel, which is
subject to any permitting Requirement. Tenant, at its expense, shall comply with
all Requirements governing the installation, operation and removal of any such
equipment, machine, device, tank or vessel. Landlord shall comply with all
Requirements relating to the Building, the Project, the Land and the Corporate
Campus. Tenant, at its expense, shall comply with all Requirements relating to
its use, operation or occupancy of the Premises and shall observe such
reasonable and non-discriminatory rules and regulations as may be adopted and
made available to Tenant by Landlord from time to time for the safety, care and
cleanliness of the Premises, the Project or the Corporate Campus and for the
preservation of good order therein. The current rules and regulations for the
Premises are attached hereto as Exhibit F. Without limiting the foregoing,
Tenant agrees to be wholly responsible at Tenant's sole cost and expense for any
accommodations or alterations which need to be made to the Premises to comply
with the provisions of the Americans With Disabilities Act of 1990, as amended
(the "ADA") and like Requirements relating to accessibility; provided however,
that Landlord warrants and represents that the building shell (as described in
Exhibit E) and common areas comply with the provisions of ADA and like
Requirements relating to accessibility as of the date of this Lease. Further,
Landlord shall remain responsible for compliance with the ADA provisions in
regard to the common areas, the expense of compliance in the common areas being
an Operating Expense.
SECTION 2.4 Renewal Term.
(a) Provided Tenant is in possession of the Premises at the time of the
exercise, Tenant shall have the option to renew the Term (a "Renewal Option")
for one (1) consecutive five (5) year renewal term, upon and subject to the
terms and conditions of this Section 2.4 (the "Renewal Term"), upon the same
terms and conditions contained in this Lease except for those solely applicable
to the initial Term and except that the Base Rental for the Renewal Term shall
be ninety five (95%) percent of the then-prevailing Fair Market Rate (as defined
below), (on a Net, Net, Net basis) for a lease of equivalent term, in a similar
style, age and quality to the Building and inclusive of consideration of
then-current market concessions (including, without limitation, refurbishment
allowances and rent abatement available to renewing tenants), within a five (5)
mile radius of the Building, (the "Fair Market Rate"); provided, that at and as
of the
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commencement of the Renewal Term and the exercise of the Renewal Option (i)
Tenant is not in an Event of Default under this Lease beyond any applicable
notice and cure period provided for in this Lease, and (ii) this Lease is in
full force and effect. Tenant shall have no right to extend the Term beyond the
Renewal Term.
(b) Tenant must exercise the Renewal Option, if at all, by written notice
to Landlord (the "Renewal Notice") given at least two hundred seventy (270) days
prior to the expiration of the initial Term (the "Expiration Date"). Failure to
give the Renewal Notice in a timely fashion shall be deemed a waiver of Tenant's
Renewal Option. Landlord shall, within ten (10) days following Landlord's
receipt of Tenant's Renewal Notice, notify Tenant in writing of Landlord's
determination of the Fair Market Rate and Tenant shall, within the next ten (10)
days following receipt of Landlord's determination of the Fair Market Rate,
notify Landlord in writing of Tenant's acceptance or rejection of Landlord's
determination of the Fair Market Rate. If Tenant timely notifies Landlord of
Tenant's acceptance of Landlord's determination of the Fair Market Rate, this
Lease shall be extended as provided herein and Landlord and Tenant shall enter
into an amendment to this Lease to reflect the extension of the Term for the
Renewal Term and change to the Base Rent.
(c) If (i) Tenant timely notifies Landlord in writing of Tenant's rejection
of Landlord's determination of the Fair Market Rate or (ii) Tenant does not
notify Landlord in writing of Tenant's acceptance or rejection of Landlord's
determination of the Fair Market Rate within such ten (10) day period, Landlord
and Tenant will promptly attempt to agree on the Fair Market Rate. If Landlord
and Tenant cannot agree within ten (10) days of Tenant's rejection in clause (i)
hereinabove or the expiration of the ten (10) day period referred to in clause
(ii) hereinabove, then either Landlord or Tenant may, by written notice to the
other, refer the determination of the Fair Market Rent to arbitration, in which
case within ten (10) days after such notice, Landlord and Tenant shall each
select a qualified real estate broker or appraiser (who need not be independent
or impartial) with at least ten (10) years experience in leasing or appraising
office buildings in the Loudoun, Virginia area to act as arbitrators in the
determination of the Fair Market Rate. If either party shall fail to appoint its
arbitrator within said ten (10) day period, the single arbitrator shall
determine the Fair Market Rate. If the values determined by the arbitrators are
less than five percent (5%) apart, the average of the values determined by them
shall be deemed the Fair Market Rate for the Premises. If the arbitrators do not
agree, and if their determinations are more than five percent (5%) apart, then
on or before ninety (90) days prior to the commencement of the Renewal Term, the
two arbitrators shall select a third independent, impartial arbitrator of like
qualification who shall, within thirty (30) days following his or her
appointment, select which of the Fair Market Rate values determined by the
original two arbitrators is closest to the Fair Market Rate value determined by
the third arbitrator and such value shall be the Fair Market Rate for the
Renewal Term. The determination pursuant to this arbitration shall be binding on
the parties. Except as provided herein, the arbitration shall be conducted in
accordance with the rules of the American Arbitration Association (or its
successor) applicable to expedited commercial arbitrations. Each party shall pay
the fees and expenses of its arbitrator, and the fees and expenses of the third
arbitrator shall be shared equally between Landlord and Tenant.
If, for any reason, the Fair Market Rate is not determined prior to the
commencement of a Renewal Term, then Tenant shall pay as Base Rent the average
of the Fair Market Rates
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determined by Landlord's arbitrator and Tenant's arbitrator until the Fair
Market Rate is determined. If the Fair Market Rate shall be less than the Base
Rent then being paid by Tenant, Landlord shall, within thirty (30) days
thereafter, pay to Tenant the excess of the Base Rent paid by Tenant over the
Fair Market Rate, and, if the Fair Market Rate shall be more than the Base Rent
then being paid by Tenant, Tenant shall, within thirty (30) days thereafter, pay
to Landlord the excess of the Fair Market Rate over the Base Rate being paid by
Tenant. Upon determination of the Fair Market Rate, Tenant shall, at Landlord's
request, enter into an agreement confirming the commencement and expiration
dates for the Renewal Term and the Base Rent payable during the Renewal Term.
ARTICLE III.
SECTION 3.1 Rental Payments.
(a) Base Rent. Commencing on the Commencement Date, Tenant shall pay the
Base Rent described in this subsection, which is due and payable each Lease Year
during the Term in twelve (12) equal installments on the first (1st) day of each
calendar month during the Term, and Tenant shall pay such installments to
Landlord at Landlord's address specified in this Lease (or such other address as
may be designated in writing by Landlord from time to time) monthly in advance
as follows:
Base Rent Per
Lease Year Rentable Square Foot Base Rent Annually Base Rent Monthly
- ---------- -------------------- ------------------ -----------------
1 $13.82 $323,484.74 $26,957.06
2 $14.23 $333,081.61 $27,756.80
3 $14.66 $343,146.62 $28,595.55
4 $15.10 $353,445.70 $29,453.81
5 $15.55 $363,978.85 $30,331.57
6 $16.02 $374,980.14 $31,248.35
7 $16.50 $386,215.50 $32,184.63
8 $17.00 $397,919.00 $33,159.92
9 $17.51 $409,856.57 $34,154.71
10 $18.04 $422,262.28 $35,188.52
11 (4 mos) $18.58 $434,902.06 $36,241.18
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provided, however, that Tenant shall pay the first month's Base Rent and
Operating Expenses (as hereafter defined) in the amount of $34,778.90 upon the
execution of this Lease, which amount shall be applied as full payment of Base
Rent and Additional Rent for the fourth (4th) full month of the Lease Term.
Notwithstanding anything in this Lease to the contrary, Tenant shall not be
required to pay Base Rent, Operating Expenses and Real Estate Taxes for the
first three (3) full months of the Term, the thirteenth (13th) month of the
Term., and one half of the fourteenth (14th) month of the Term.
(b) Partial Month. If the Commencement Date is other than the first (1St)
day of a calendar month or if this Lease expires on a day other than the last
day of a calendar month, then the installments of Base Rent for such month or
months shall be prorated based upon multiplying the applicable monthly Base Rent
by a fraction, the numerator of which shall be the number of days of the Term
occurring during said commencement or expiration month, as the case may be, and
the denominator of which shall be the number of days in such month.
(c) Payment. The Base Rent, the Additional Rent (hereinafter defined), and
any and all other payments which Tenant is obligated to make to Landlord under
this Lease shall constitute and are sometimes hereinafter collectively referred
to as "Rent". Tenant agrees to pay all Rent and other sums of money as shall
become due from and payable by Tenant to Landlord in lawful money of the United
States of America at the times and in the manner provided in this Lease, without
demand, deduction, abatement, setoff, counterclaim or prior notice.
(d) Late Charge; Past Due Rate. Tenant hereby acknowledges that late
payment to Landlord of Rent or other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. If any Rent or other sum due from Tenant is
not received on or before its due date, then Tenant shall pay to Landlord
immediately upon Landlord's demand therefor, in addition to such overdue amount,
a late charge in an amount equal to five percent (5%) of such overdue amount,
plus any reasonable attorneys' fees and costs incurred by Landlord by reason of
Tenant's failure to pay Rent and other charges when due hereunder. However such
late charge shall not be incurred unless Tenant fails to make such payment
within ten (10) days after written notice from Landlord to Tenant that such
amount is overdue. Landlord and Tenant agree however that Landlord shall not be
required to provide such notice more than twice in any twelve (12) consecutive
month period. Once such notices have been provided, then, upon the third late
payment in the twelve (12) consecutive month period, the late charge shall be
incurred without any further notice or cure requirements. Additionally, all Rent
under this Lease shall bear interest from the date due until paid at the
Applicable Rate, such interest being in addition to and cumulative of any other
rights and remedies which Landlord may have with regard to the failure of Tenant
to make any such payments under this Lease
(e) Lockbox. Landlord may, by notice to Tenant, direct Tenant to pay Base
Rent and/or Additional Rent to a "lockbox" or other depository whereby Base Rent
and/or Additional Rent is initially received and disbursed by a person or entity
other than Landlord (albeit on Landlord's authority). In such event, Landlord
shall be considered to have received such payment if (and only if) within ten
(10) days after receipt at such lockbox or other depository
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Landlord shall not have refunded such payment to Tenant. Landlord hereby directs
Tenant, until further notified, to make such payments to the following lockbox:
Willowbrook Holdings, Inc.-Loudoun Tech, P.O. Box 7247-7373, Philadelphia, PA,
19170-7373.
SECTION 3.2 Additional Rent.
(a) Definitions:
(i) "Operating Expenses" means all customary expenses, costs and
disbursements of every kind and nature relating to or incurred or paid in
connection with the ownership and operation of the Project, computed on an
accrual basis in accordance with generally accepted accounting principles
consistently applied, as such principles are generally applied in the real
estate industry ("GAAP"), net of any discounts, credits or rebates including but
not limited to the following:
(A) wages and salaries of all persons engaged in the operation,
maintenance, cleaning, security or access control of the Project, including all
taxes, insurance and benefits relating thereto, provided that no such amounts
are allowed for any employee above the level of building manager or building
engineer;
(B) the cost of all supplies, tools, equipment and materials used in the
operation and maintenance of the Project, including rental fees for the same;
(C) the cost of all utilities for the common areas of the Project,
including but not limited to the cost of water and power (excluding electrical
and gas utilities with which Tenant shall directly contract and pay for such
services);
(D) the cost of all maintenance and service agreements for the Project and
the equipment therein, including but not limited to alarm service, security
service, access control, landscaping, window cleaning, pest control, sprinkler
and life safety service contracts, and janitorial service;
(E) the cost of repairs and general maintenance of the Project including
the proportionate share of all costs of repairs and maintenance of the parking
area;
(F) the cost of all repairs of and replacement to the Premises and the
Project not arising out of defects due to the design or construction of
Landlord's Work (as defined in Exhibit E-l)which are considered to be capital
expenditures under GAAP, and which are either (i) capital expenditures which are
intended to reduce operating costs of the Project or the Premises, (ii) capital
expenditures related to compliance with Requirements or (iii) capital
expenditures intended to promote safety or maintain or enhance the Project, in
each case which cost shall be amortized over the actual useful life of the
capital item as determined by Landlord at an interest rate equal to the Base
Rate; or, if the item is leased and not purchased, the annual rental cost
thereof;
(G) the cost of all insurance relating to the Project, including, but not
limited to, the cost of property insurance, casualty, rental loss and liability
insurance applicable to the Project and Landlord's personal property used in
connection therewith and the amount of commercially
7
reasonable deductibles paid on claims made by Landlord;
(H) Landlord's and/or Landlord's managing agent's reasonable accounting and
audit costs relating to Operating Expenses and not to ownership and reasonable
attorneys' fees applicable to the Project;
(I) all property management fees for the Project, provided that such fees
shall not exceed three percent (3%) of gross receipts for the Project;
all taxes, assessments and governmental charges imposed against the Building,
the land or the Project, whether or not directly paid by Landlord, whether
federal, state, county or municipal and whether they are imposed by taxing
districts or authorities currently taxing the Project or by others subsequently
created or otherwise, and any other taxes and assessments, assessed against or
attributable to the Project or its operation, together with the reasonable cost
(including attorneys, consultants and appraisers) of any negotiation, contest or
appeal pursued by Landlord in an effort to reduce any such tax, assessment or
charge, and all of Landlord's administrative costs in relation to the foregoing
excluding, however, (i) federal and state taxes on income, death taxes,
franchise taxes and any taxes imposed or measured on or by the income of
Landlord from the operation of the Project and (ii) transfer taxes or fees
imposed in connection with any change of ownership of the Project ("Real Estate
Taxes"); provided, that if at any time during the Term the present method of
taxation or assessment shall be so changed that the whole or any part of the
taxes, assessments, levies, impositions or charges now levied, assessed or
imposed on real estate and the improvements thereof shall be changed and as a
substitute therefor, or in lieu of or in addition thereto, taxes, assessments,
levies, impositions or charges shall be levied, assessed or imposed wholly or
partially as a capital levy or otherwise on the rents received from the Project
or the rents reserved herein or any part thereof, then such substitute or
additional taxes, assessments, levies, impositions or charges, to the extent so
levied, assessed or imposed, shall be deemed to be included within the Real
Estate Taxes to the extent that such substitute or additional tax would be
payable if the Project were the only property of the Landlord subject to such
tax. If the Premises and one or more other buildings comprising the Corporate
Campus are assessed together, then Real Estate Taxes for the Premises shall be a
proportionate portion thereof based on the ratio of the square footage of the
Premises to the square footage of the buildings assessed together. Likewise if
common areas or parking areas of the Corporate Campus are separately assessed
for purposes of Real Estate Taxes, then a proportionate portion thereof, based
upon the ratio of the square footage of the Premises and the square footage of
all buildings constituting the Corporate Campus (the "Project Ratio") shall
constitute an Operating Expense. Landlord and Tenant acknowledge and agree that
Tenant's proportionate share of any jointly assessed buildings or common or
parking areas shall be 18.62% (23,407sf/125,728sf). In no event shall Operating
Expenses exceed one hundred percent (100%) of the actual Operating expenses
incurred by Landlord regarding the operation and maintenance of the Building and
the Project as set forth in this Lease.
Landlord agrees that any costs or expenses directly attributable to, or
benefiting a particular building in the Corporate Campus shall be allocated to
the particular building, as the case may be, and Landlord shall adjust the
Operating expenses accordingly.
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Notwithstanding the foregoing provisions of this Section 3.2(a)(i),
Operating Expenses shall not include any of the following:
(1) repairs or replacements made to rectify or correct any defect in the
design, materials or workmanship of any portion of the building shell or
Landlord's Work;
(2) costs incurred in connection with damage or repairs which are covered
or are required to be covered hereunder under any insurance policy carried or
required to be carried hereunder by Landlord in connection with the Project
(except for commercially reasonable deductibles);
(3) expenses for repair or replacement paid by condemnation awards;
(4) costs associated with damage or repairs to the Project necessitated by
the negligence or willful misconduct of Landlord or Landlord's employees,
agents, contractors or invitees;
(5) Landlord's general overhead expenses, including any costs and expenses
of administration and management of the ownership entity constituting Landlord,
including travel and entertainment;
(6) all (x) principal, interest, loan fees, prepayment fees and penalties
and other carrying costs related to any mortgage or deed of trust encumbering
the Project and all rental and other payables due under any ground or underlying
lease, (y) costs relating to any mortgage or deed of trust financing or
refinancing, or the making or modifying of any ground lease and (z) all costs
relating to the sale of any interest in the Premises;
(7) costs associated with leasing space or selling any interest in the
Project or within the Corporate Campus, including without limitation,
advertising and marketing, commissions or any amounts paid for or on behalf of
any tenants such as space planning, construction and renovation allowances,
moving costs, rental and other tenant concessions;
(8) for costs of electricity sold to any tenant by Landlord or any other
special service provided to the tenants or service in excess of that furnished
to Tenant whether or not Landlord receives reimbursement from such tenants as an
additional charge;
(9) costs of repairs incurred by reason of fire or other casualty or
condemnation to the extent Landlord receives compensation therefor through
proceeds of insurance or condemnation awards;
(10) costs of renovating or otherwise improving space for new tenants or in
renovating space vacated by any tenant;
(11) costs for any interest, late fees or principal payments due under any
security interest encumbering the Project or the Corporate Campus;
(12) costs of depreciation or amortization of the construction of the
Project or the Corporate Campus;
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(13) costs for legal expenses for disputes with tenants; legal and auditing
fees, other than those legal and auditing fees necessarily and reasonably
incurred in connection with the maintenance and operation of the Project or the
Corporate Campus;
(14) any expense for which Landlord is reimbursed by any tenant, warranty,
insurance or condemnation award;
(15) any ground rent;
(16) any fines, penalties or interest for failure to make any tax payment
in a timely fashion, unless such failure is due to Tenant's failure to remit tax
payments due to Landlord in a timely fashion; and
(17) costs incurred to contain, abate, remove or otherwise clean up the
Project, the Corporate Campus or the Land required as a result of the presence
of Hazardous Materials in, about or below the buildings or land to the extent
caused by Landlord or another tenant.
(18) the costs for any utilities provided to tenant's premises or vacant
spaces in any of the buildings in the Corporate Campus;
(19) Costs of bearing walls, foundations and other structural components,
and roofs, except as such costs may be included as Operating Expenses under
Section 3.2(a)(i)(F);
(20) Costs incurred in the original construction of the Building or
Project;
If and to the extent the Project is operated as part of a complex of
buildings with associated parking, streets and landscaping, then Operating
Expenses shall include a proportionate portion, based upon the "Proportionate
Share" (as set forth below), of the common "Operating Expenses" for such complex
of buildings.
(b) Payment by Tenant. Tenant shall pay to Landlord as additional rent (the
"Additional Rent") its Proportionate Share of all Operating Expenses during the
Term. For purposes of this section 3.2, Tenant's "Proportionate Share" shall
mean (i) with respect to any Operating Expenses allocable to the Building, a
percentage equal to a fraction, the numerator of which shall be the number of
rentable square feet of the Premises, and the denominator of which shall be the
number of rentable square feet of the Building; and (ii) with respect to any
Operating Expenses allocable to the Project/Corporate Campus as a whole, the
percentage equal to a fraction, the numerator of which is the number of rentable
square feet of the Premises and the denominator of which is the number of
rentable square feet of the Project/Corporate Campus. Tenant's initial
Proportionate Share for Operating Expenses allocable to the Building equals
71.36% (23,407 rsf/32,801 rsf); and for Operating Expenses allocable to the
Project/Corporate Campus equals 18.62% (23,407/125,728 rsf).
(c) Manner of Payment.
(i) Landlord shall give Tenant notice of Landlord's estimate of
amounts payable under this Section 3.2 for each calendar year falling in whole
or in part during the Term. By the first day of each month during the calendar
year, or portion thereof falling within the
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Term, Tenant shall pay Landlord one-twelfth (1/12th) of the estimated amount. If
for any reason the estimate is not given before a calendar year begins, Tenant
shall continue to pay on the basis of the previous year's estimate, if any,
until the month after the new estimate is given and shall, within thirty (30)
days after the issuance of such new estimate, pay the amount due for any prior
months during the current calendar year, less the amounts actually paid to
Landlord in respect thereof. Likewise, the Landlord shall credit the Tenant's
next installment (s) of monthly Base Rent then coming due as a result of any
decrease in the Landlord's monthly estimate from the payments actually made by
the Tenant for the calendar year to date. Landlord shall endeavor to provide
Tenant with its estimate for the next succeeding calendar year by January 1 of
each calendar year falling within the Term. Landlord and Tenant acknowledge and
agree that the estimate for the first Lease Year of the Term for Operating
Expenses (inclusive of Real Estate Taxes and exclusive of Tenant electricity and
gas) is $4.01 per rentable square foot of the Premises (or $7,821.84 per month).
(ii) Within ninety (90) days after each calendar year ends, Landlord
shall give Tenant a statement (the "Statement") showing the: (A) Tenant's
Proportionate Share of the actual Operating Expenses for the calendar year; (B)
the amount, if any, paid by Tenant during such calendar year in respect of
Operating Expenses; and (C) the amount Tenant owes Landlord for such calendar
year, or the amount Landlord owes Tenant as a refund. Delay by Landlord in
providing to Tenant any Statement shall not relieve Tenant from the obligation
to pay any Operating Expenses upon the rendering of such Statement.
Notwithstanding the foregoing, any Operating Expenses (other than Real Estate
Taxes) not billed to Tenant within twenty four (24) months of the end of any
calendar year falling within the Term in which the Operating Expenses were
incurred shall be forever waived by Landlord and Tenant shall have no further
liability for payment thereof.
(iii) If the Statement shows that an amount is owed to Tenant for the
calendar year, Landlord shall pay the difference (the "Overpayment") to Tenant.
If the Statement shows that an amount is owed by Tenant for such calendar year,
Tenant shall pay the difference (the "Underpayment"). The Overpayment or
Underpayment shall be paid within thirty (30) days after the Statement is
delivered to Tenant.
(iv) If this Lease is not in effect for a complete calendar year,
unless it was terminated due to an Event of Default (as defined herein),
Tenant's obligation for Additional Rent shall be prorated by multiplying the
Operating Expenses for the calendar year by a fraction expressed as a
percentage, the numerator of which is the number of days of the calendar year
included in the Term and the denominator of which is 365.
SECTION 3.3 Security Deposit/Letter of Credit Contingency. Landlord and
Tenant acknowledge and agree that Tenant will, within five (5) days of the full
execution of this Lease and in accordance with this Section 3.3., as security
for the performance by Tenant of Tenant's covenants and obligations under this
Lease, cause, at Tenant's sole cost, to be delivered to Landlord, a one-year
irrevocable standby letter of credit (in substantially the form attached hereto
as Exhibit "G") in the amount of Two Hundred Sixty Five Thousand and 00/100 U.
S. Dollars ($265,000.00), to be issued by Silicon Valley Bank or another
comparable senior debt lender ("Issuer") in favor of Landlord (which letter of
credit as modified from time to time in accordance with this Lease, is herein
referred to as "Letter of Credit"). All of Tenant's rights and
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all of Landlord's obligations hereunder are strictly contingent on Tenant's
causing the Letter of Credit to remain in full force and effect in accordance
with this Lease during the entire Lease Term; provided, however, that the Letter
of Credit shall be reduced as follows:
Time of Reduction Amount of Reduction
----------------- -------------------
3rd Anniversary of Commencement Date $ 65,000.00
4th Anniversary of Commencement Date $100,000.00
5th Anniversary of Commencement Date $ 65,000.00
provided however, as an express condition to any reduction in the face
amount of the Letter of credit, no Event of Default (as defined in Section 8.1
of this Lease) shall have occurred or any event which, with notice or the
passage of time, would constitute an Event of Default.
For purposes hereof, each of the following events is herein individually
referred to as a "Draw Event", and are herein collectively referred to as "Draw
Events":
(i) The failure of Tenant, within ten (10) business days following
Issuer's election not to renew the Letter of Credit for an additional one (1)
year period beyond the expiration date of the Letter of Credit then in effect,
to cause the Letter of Credit to be re-issued, at Tenant's sole cost, by a
domestic bank satisfactory to Landlord, in Landlord's reasonable discretion,
which re-issued Letter of Credit shall satisfy all of the requirements of the
initial Letter of Credit as set forth in this Section 3.3. and Exhibit "G"
attached hereto; or
(ii) The occurrence of any Event of Default under this Lease.
Immediately upon, and at any time or from time to time after, the occurrence of
any one or more of the Draw Events, Landlord shall have the unconditional right
to draw on the Letter of Credit, the amount or amounts necessary to cure any
Event of Default or otherwise pay to Landlord any amount to which Landlord is
entitled as its remedies for an Event of Default as set forth in this Lease, as
reasonably determined by Landlord in accordance with this Section 3.3. and
Exhibit "G" attached hereto. Upon the payment to Landlord of the proceeds of any
such draw or draws under the Letter of Credit (the "Draw Proceeds"), Landlord
shall use the Draw Proceeds to make good any arrearages of Rent, and to pay to
Landlord any and all amounts to which Landlord is entitled in connection with
its remedies for an Event of Default as set forth in this Lease. It is expressly
understood that the Draw Proceeds shall not be considered a measure of
Landlord's damages resulting from any Event of Default hereunder (past, present
or future). Tenant shall pay to Landlord on demand the cash amount so applied in
order to restore the Draw Proceeds to the amount thereof immediately prior to
such application. Upon the expiration or earlier termination of this Lease, and
provided that there then exist no Events of Default hereunder, any remaining
balance of the Draw Proceeds (including, without limitation, any and all
interest accrued thereon) and the Letter of Credit shall be returned by Landlord
to Tenant.
Anything in this Lease to the contrary notwithstanding, Tenant shall not
take any action, or cause or permit any person or entity to take any action to
enjoin, interfere with, restrict or limit, in any way whatsoever, any demand or
draw by Landlord or any payment to Landlord
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under the Letter of Credit. If Tenant, or any person or entity on Tenant's
behalf or at Tenant's discretion, brings any proceeding or action to enjoin,
interfere with restrict or limit, in any way whatsoever, any one or more draws,
demands or payments under the Letter of Credit, Tenant shall be liable for any
and all damages resulting therefrom or arising in connection therewith,
including, without limitation, reasonable attorneys' fees and costs.
If Landlord transfers its interest in the Premises during the Lease Term,
Landlord may assign the Letter of Credit and any and all Draw Proceeds then held
by Landlord to the transferee and, provided the transferee confirms such
assignment in writing to Tenant, the Landlord shall thereafter shall have no
further liability with respect to the Letter of Credit or the Draw Proceeds,
including, without limitation, any liability for the return of the Letter of
Credit, or the Draw Proceeds.
SECTION 3.4 Tenant's Review Right. Within one hundred twenty (120) days
following the delivery to Tenant of a Statement, Tenant shall have the right to
dispute items on such Statement by written notice to Landlord stating in
reasonable detail the items in dispute. In such event, Landlord and Tenant will
consult in a good faith effort to resolve the dispute within thirty (30) days
after Landlord receives notice of such dispute. In the event that such
consultations within such thirty (30) day period do not resolve the matter,
Tenant shall be entitled, provided that Tenant shall have paid to Landlord the
amounts shown on such Statement as due from Tenant, to have an independent
certified public accounting firm hired by Tenant and reasonably approved by
Landlord review the books, receipts and records pertaining to such disputed
items for such calendar year. The accounting firm cannot be compensated on a
contingent fee basis. The results of any such review shall be provided
simultaneously to Landlord and Tenant by the accounting firm. If within thirty
(30) days thereafter Landlord and Tenant cannot resolve any items of adjustment
raised by such accounting firm, then either party may, by written notice to the
other, request that Landlord's regular accounting firm and the accounting firm
selected by Tenant retain a third independent and impartial accounting firm to
review any items of adjustment which remain unresolved and make a determination
with regard thereto, such determination to be binding upon Landlord and Tenant.
In the event that any such review reveals a net underpayment or overpayment with
respect to Operating Expenses, the applicable party shall pay to the other,
within thirty (30) business days following the determination thereof, the amount
necessary to effect the appropriate adjustments. In the event an overpayment
exceeds five percent (5%) of the total Operating Expenses, Landlord shall pay
the costs of the review of the accounting firm selected by Tenant, not to exceed
$3,500.00. Landlord and Tenant shall equally share the cost of the third
accounting firm, if relevant. No more than one such review may be conducted with
respect to any calendar year. Tenant shall keep all information gained in
connection with any review or inspection of Landlord's records, and all
information contained in any Statement, confidential and shall not disclose it
to third parties except to carry out the purposes of this Section and except as
required by law.
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ARTICLE IV.
SECTION 4.1 Services.
(a) Services Provided. Landlord shall furnish to Tenant while Tenant is
occupying the Premises:
(i) Capacity for electric, gas and water service per Exhibit E.
(ii) Electric lighting service for areas of the Project outside of the
Premises in the manner and to the extent deemed by Landlord to be standard.
(iii) Janitorial service on a five (5) day week basis in a manner
considered by Landlord to be standard for similar projects in the area and in
accordance with Exhibit H attached hereto; provided, however, if Tenant's floor
coverings or other improvements require special care or if Tenant requires any
other or additional services, Tenant shall pay the additional cleaning cost
attributable thereto upon demand.
(iv) Sufficient electrical capacity to operate (i) incandescent
lights, typewriters, modem office equipment, calculating machines, photocopying
machines and other machines of similar voltage electrical consumption (120/220
volts), provided that the total rated electrical design load for said lighting
and machines of low electrical voltage shall not exceed four and one half (4.5)
watts per square foot of rentable area; and (ii) lighting and equipment of high
voltage electrical consumption (277/480 volts), provided that the total rated
electrical design load for said lighting and equipment of high electrical
voltage shall not exceed two (2.00) watts per square foot of rentable area (each
such rated electrical design load to be hereinafter referred to as the "Building
standard rated electrical design load").
(v) prompt removal of snow and ice from sidewalks, driveways and
parking areas;
(vi) refuse removal services at the Building (to include locations for
Dumpsters areas; and Dumpster pulls on a regular basis as needed;
(vii) semi-annual exterior and interior window cleaning;
(viii) vermin and pest control;
(ix) replacement, as necessary, of all lamps, ballasts and bulbs in
all building standard light fixtures;
(x) maintenance of landscaping, inclusive of lawn mowing;
(xi) repairs and maintenance to the parking lot, curbs and gutters in
the Project; and
(xii) repairs and maintenance to the Building and common areas
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Should Tenant's fully connected electrical design load exceed the Building
standard rated electrical design load for either low or high voltage electrical
consumption, or if Tenant's electrical design requires low voltage or high
voltage circuits in excess of the building standard circuits, Landlord will (at
Tenant's expense) install such additional high voltage panels and/or low voltage
panels with associated transformer as shall be reasonably required, provided,
space is available. Tenant shall not install or operate equipment or lighting
which exceeds the safe capacity of the electrical system of the Premises. The
design and installation of any additional electrical equipment required by
Tenant shall be subject to the prior approval of Landlord (which approval shall
not be unreasonably withheld). All reasonable expenses incurred by Landlord in
connection with the review and approval of any additional electrical equipment
shall also be reimbursed to Landlord by Tenant.
(b) Services Not Provided. Tenant acknowledges that Landlord will not be
providing any of the following services:
(i) Subject to Section 4.1(a)(i), any electric, gas, or other utility
service for the Premises.
(ii) Any security or access control service for the Premises or the
Corporate Campus. Landlord shall have no responsibility to prevent, and shall
not be liable to Tenant for, any liability or loss to Tenant, its agents,
employees and visitors arising out of losses due to theft, burglary, or damage
or injury to persons or property caused by persons gaining access to the
Premises, and Tenant, other than in cases of gross negligence or willful
misconduct by Landlord or its employees, hereby releases Landlord from all
liability for such losses, damage or injury. Tenant may, subject to Landlord's
approval, install, at its sole cost and expense, its own security system in the
Premises, subject to the following: a) Tenant shall remove such security system
at the expiration or earlier termination of the Lease Term and repair any damage
caused by such removal, ordinary wear and tear excepted, and b) Tenant shall
provide Landlord with access information (or an access card if so controlled) so
that Landlord will have access to the Premises, pursuant to the terms of this
Lease, or in the event of an emergency.
(c) Cessation of Services. Tenant recognizes that Landlord has no
responsibility to secure or provide to Tenant any HVAC or any electric, gas and
water or other service supplied by public utilities. Cessation of any such
service shall not, unless such failure was caused by the gross negligence or
willful misconduct of Landlord, or of Landlord's employees, agents and
contractors, (i) render Landlord in default hereunder or liable in any respect
for damages to either person or property, or (ii) be construed as an eviction of
Tenant, or (iii) work an abatement of Rent, or (iv) relieve Tenant from
fulfillment of any covenant or agreement hereof. In addition to the foregoing,
should any of the equipment or machinery which Landlord is responsible to
maintain hereunder break down, cease to function properly for any cause other
than the negligence or willful misconduct of Landlord or Landlord's employees,
agents or contractors or be intentionally turned off for testing or maintenance
purposes, Tenant shall have no claim for abatement or reduction of Rent on
account of an interruption in service occasioned thereby or resulting therefrom.
SECTION 4.2 Keys and Locks. Subject to the terms and provisions of this
Lease, Tenant shall have access to the Premises 24 hours a day, 7 days a week.
Tenant shall provide its own
15
access control and security system and shall provide Landlord, at no cost to
Landlord, a reasonable number of master card keys or keys for the doors serving
the Premises. Upon termination or expiration of this Lease or a termination of
possession of the Premises by Tenant, Tenant shall surrender to Landlord any
keys to any locks on doors entering or within the Premises. Landlord, however,
other than in cases of gross negligence or willful misconduct by Landlord or its
employees, shall have no liability to Tenant, its employees, agents, invitees or
licensees for any loss, damage or injury of any kind or nature caused by or as a
result of the presence of any unauthorized person in the Premises or the
Project, including without limitation any loss, damage or injury due to theft,
burglary or other criminal conduct by any person, nor shall Landlord be required
to insure against any such loss, damage or injury
SECTION 4.3 Signs. Tenant shall have the non-exclusive right, at it sole
cost and expense, subject to Landlord's reasonable approval, to install one (1)
exterior sign bearing Tenant's name or logo, on the upper portion of the
Building on the facade of the Building. With Landlord's approval and subject to
code and statutory compliance, the sign shall be sized so as to prominently
display Tenant's name and logo to be no less than fifty (50%) percent of the
allowable size permitted under the statutes, laws, regulations and code
requirements governing such signs on the Building. All such signs shall be in
building standard graphics and shall comply with all Requirements, all covenants
and restrictions affecting the Land and Landlord's signage program. Landlord
shall not be liable for any inconvenience or damage occurring as a result of any
error or omission in any graphics. No signs, numerals, letters or other graphics
shall be used or installed by Tenant on the exterior of, or which may be visible
from outside, the Premises, unless approved in writing by Landlord. The design,
size, placement, style, lighting, colors and materials of such sign shall
require Landlord's prior approval, which approval will not be unreasonably
withheld and will be subject further to Tenant's obtaining approval from the
Loudoun Tech Center association and applicable governmental authorities. Upon
the expiration or earlier termination of this Lease, Tenant shall remove all
such signage and/or graphics and repair any and all damage caused by or
resulting from the installation, maintenance, operation and/or removal of such
signage or graphics at Tenant's sole cost and expense.
ARTICLE V.
SECTION 5.1 Occupancy of Premises. Tenant shall throughout the Term, at its
own expense, maintain the Premises and all improvements therein and keep them
free from waste, damage or nuisance, and shall deliver up the Premises in a
clean and sanitary condition at the expiration or termination of this Lease or
the termination of Tenant's right to occupy the Premises by Tenant, in good
repair and condition, reasonable wear and tear excepted. In the event Tenant
should neglect to maintain (after notice to Tenant and a reasonable opportunity
to cure, except in cases of an emergency in which event no notice shall be
necessary) and/or return the Premises in such manner at any time, Landlord shall
have the right, but not the obligation, to cause repairs or corrections to be
made, and any reasonable costs therefor shall be payable by Tenant to Landlord
within ten (10) days of demand therefor by Landlord. Upon the expiration or
termination of this Lease or the termination of Tenant's right to occupy the
Premises by Tenant, Landlord shall have the right to reenter and resume
possession of the Premises. No act or thing done by Landlord or any of
Landlord's agents during the Term shall be deemed an acceptance of a surrender
of the Premises, and no agreement to accept a surrender of the Premises shall be
16
valid unless the same be made in writing and executed by Landlord. Tenant shall
notify Landlord at least ten (10) days prior to vacating the Premises and shall
arrange to meet with Landlord for a joint inspection of the Premises. If Tenant
fails to give such notice or to arrange for such inspection, then Landlord's
inspection of the Premises shall be deemed correct for the purpose of
determining Tenant's responsibility for repair and restoration of the Premises.
SECTION 5.2 Entry for Repairs and Inspection. Tenant shall permit Landlord
and its agents to enter the Premises (provided Landlord gives Tenant reasonable
prior notice of at least one (1) business day (except that no prior notice shall
be necessary in the event of an emergency) and Tenant has the option to have a
representative accompanying Landlord during such entry provided such
representative is provided in a timely basis) at all reasonable times to inspect
the same; to show the Premises to prospective tenants within nine (9) months of
the expiration of the Term of this Lease (provided however that Tenant has
chosen not to exercise its option to renew this Lease as provided for herein),
or interested parties such as prospective lenders and purchasers; to exercise
its rights under this Lease; to clean the Premises; to repair, alter or improve
the Premises as may be required of Landlord hereunder, to discharge Tenant's
obligations when Tenant has failed to do so within the time required under this
Lease which failure is not cured within a reasonable period of time after notice
from Landlord (except that in an emergency Landlord may act immediately in such
circumstances, but shall use reasonable efforts to provide Tenant with verbal
notification of the actions taken by Landlord); to post notices of
non-responsibility and similar notices and "For Sale" signs at any time and to
place "For Lease" signs upon or adjacent to the Premises at any time within
twelve (12) months of the expiration of the term of this Lease ( provided
however that Tenant has not chosen to exercise its option to renew this Lease as
provided for herein). Landlord and its agents shall be permitted to enter the
Premises at any time in the event of an emergency, whether or not a Tenant
representative is available. In such event Landlord shall use reasonable efforts
to notify Tenant that it has entered the Premises and the reason for the
emergency. When reasonably necessary, Landlord may temporarily close entrances,
doors, corridors or other facilities without liability to Tenant by reason of
such closure, provided at least one means of ingress and egress to the Premises
will be available at all times. Landlord shall use reasonable efforts (which
shall not include the use of overtime labor unless Tenant shall agree to
reimburse Landlord for the cost thereof) to not materially or adversely affect
Tenant's use or access to the Premises in connection with Landlord's entry
pursuant to this Section.
SECTION 5.3 Hazardous Materials.
(a) As used in this Lease, the term "Hazardous Materials" shall mean and
include any substance that is or contains petroleum, asbestos, polychlorinated
biphenyls, lead, or any other substance, material or waste which is now or is
hereafter classified or considered to be hazardous or toxic under any
Requirement relating to pollution or the protection or regulation of human
health, natural resources or the environment (collectively "Environmental Laws")
or poses or threatens to pose a hazard to the health or safety of persons on the
Premises or any adjacent property. Landlord represents and warrants that to the
best of Landlord's actual knowledge, there are no Hazardous Materials located on
the Land, and Landlord has received no written notices concerning violation of
any Requirements relating to Hazardous Materials with respect to the Land. If
Hazardous Materials are discovered on the Land after the Commencement Date and
17
were not caused or permitted by Tenant or Tenant's employees, assignees agents
or invitees, then Landlord will be responsible for all costs and expenses (which
shall not constitute an Operating Expense) associated with Environmental Laws to
eliminate any violations of law resulting from such presence and Landlord shall
indemnify, defend, and hold Tenant and Tenant's employees, assignees, agents and
invitees harmless from any and all claims, costs, liabilities or expenses
associated with such Hazardous Materials.
(b) Tenant agrees that during its use and occupancy of the Premises it will
not permit Hazardous Materials to be present on or about the Premises except in
a manner and quantity necessary for the ordinary performance of Tenant's
business and that it will comply with all Environmental Laws relating to the
use, storage or disposal of any such Hazardous Materials.
(c) If Tenant's use of Hazardous Materials on or about the Premises results
in a release, discharge or disposal of Hazardous Materials on, in, at, under, or
emanating from, the Premises or the Land, Tenant agrees to investigate, clean
up, remove or remediate such Hazardous Materials in full compliance with (i) the
requirements of (x) all Environmental Laws and (y) any governmental agency or
authority responsible for the enforcement of any Environmental Laws; and (ii)
any additional requirements of Landlord that are reasonably necessary to protect
the value of the Premises or the Land. Landlord shall also have the right, but
not the obligation, to take whatever action with respect to any such Hazardous
Materials that it deems reasonably necessary to protect the value of the
Premises or the Land. All costs and expenses paid or incurred by Landlord in the
exercise of the right set forth in this Section 5.3(c) shall be payable by
Tenant upon demand. Tenant shall have no obligation to remove Hazardous
Materials brought onto the Premises by Landlord or that existed on the Land
prior to the Commencement Date. Tenant shall not be required to cure any
violation of any Environmental Law caused by Landlord or that existed as of the
Commencement Date and was not caused by Tenant or Tenant's employees, agents or
contractors.
(d) Upon reasonable advance written notice (at least one (1) day) to
Tenant, except in the event of an emergency, Landlord may, at its sole cost and
expense, inspect the Premises for the purpose of determining whether there
exists on the Premises any Hazardous Materials or other condition or activity
that is in violation of the requirements of this Lease or of any Environmental
Laws. The right granted to Landlord herein to perform inspections shall not
create a duty on Landlord's part to inspect the Premises, or liability on the
part of Landlord for Tenant's use, storage or disposal of Hazardous Materials,
it being understood that Tenant shall be solely responsible for all liability in
connection therewith.
(e) Tenant shall surrender the Premises to Landlord upon the expiration or
earlier termination of this Lease free of debris, waste or Hazardous Materials
placed on or about the Premises by Tenant or its agents, employees, contractors
or invitees, and in a condition which complies with all Environmental Laws.
(f) Tenant agrees to indemnify, defend and hold harmless Landlord and
Landlord's employees, assignees, agents and invitees from and against any and
all claims, losses (including, without limitation, loss in value of the Premises
or the Land), liabilities and expenses (including reasonable attorney's fees)
sustained by Landlord attributable to (i) any Hazardous Materials placed on or
about the Premises by Tenant or its agents, employees, contractors or invitees
or (ii)
18
Tenant's breach of any provision of this Section 5.3.
(g) The provisions of this Section 5.3 shall survive the expiration or
earlier termination of this Lease.
ARTICLE VI.
SECTION 6.1 Leasehold Improvements.
(a) Acceptance of Premises. Tenant has made a complete inspection of the
Land and, except as set forth in this Section 6.1 and Exhibit E, shall accept
the Premises and the Project in their "AS IS," "WHERE IS," and "WITH ALL FAULTS"
condition on the Commencement Date without recourse to Landlord, subject to the
terms of Exhibit E attached hereto and hereby made a part hereof. Except as
expressly provided in this Lease, Landlord shall have no obligation to furnish,
equip or improve the Premises or the Project. The taking of possession of the
Premises by Tenant shall be, except as set forth in this Section 6.1 and Exhibit
E, conclusive evidence against Tenant that (i) Tenant accepts the Premises and
the Project as being suitable for its intended purpose and, except for latent
defects and punchlist items related to Landlord's Work which need to be
completed but do not affect Tenant's lawful ability to take possession of the
Premises, in a good and satisfactory condition, (ii) acknowledges that the
Premises and the Project comply fully with Landlord's covenants and obligations
under this Lease and (iii) waives any defects in the Premises and its
appurtenances and in all other parts of the Project. Notwithstanding the
foregoing, Landlord agrees that upon the Delivery Date, the Premises and all
central mechanical, electrical and plumbing systems will be in good working
order, condition and repair, and the building shell will be in compliance with
all Requirements in effect at the Delivery Date (subject to Tenant's performance
of the Tenant Work). In the event of a material breach of the covenant contained
in the preceding sentence, Landlord shall promptly after receipt of written
notice from Tenant setting forth the nature and extent of such material breach,
rectify same at Landlord's cost and expense, as Tenant's sole remedy therefor.
After the Commencement Date, Tenant will be responsible for the costs of
compliance with Requirements with respect to the Premises.
(b) Improvements and Alterations. After completion of the Tenant's
Improvements in accordance with Exhibit E attached hereto, Tenant shall not make
or allow to be made (except as otherwise provided in this Lease) any
improvements, alterations or physical additions (including fixtures) in or to
the Premises or the Project, without first obtaining the written consent of
Landlord, which approval shall not be unreasonably withheld, conditioned or
delayed, (except in the case of structural changes, changes to the exterior of
the Premises or Building, or to areas outside thereof or changes to any building
system (other than the HVAC system), in which case Landlord may withhold such
approval in its sole discretion), including Landlord's written approval of
Tenant's contractor(s) and of the plans, working drawings and specifications
relating thereto (none of which shall be unreasonably withheld, conditioned or
delayed, except in the case of structural changes, changes to the exterior of
the Premises or to areas outside thereof or changes to any building system
(other than the HVAC system), in which case Landlord may withhold such approval
in its sole discretion). Approval by Landlord of any of Tenant's drawings and
plans and specifications prepared in connection with any alterations,
improvements,
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modifications or additions to the Premises or the Project shall not constitute a
representation or warranty of Landlord as to the adequacy or sufficiency of such
drawings, plans and specifications, or alterations, improvements, modifications
or additions to which they relate, for any use, purpose or conditions, but such
approval shall merely be the consent of Landlord as required hereunder. Except
as otherwise expressly provided in Exhibit E attached hereto, any and all
furnishing, equipping and improving of or other alteration and addition to the
Premises shall be: (i) made at Tenant's sole cost, risk and expense, and Tenant
shall pay for Landlord's reasonable costs incurred in connection with and as a
result of such alterations or additions; (ii) performed in a good and
workmanlike manner with labor and materials of such quality as are consistent
with the Tenant's improvements performed in accordance with Exhibit E; (iii)
constructed in accordance with all plans and specifications approved in writing
by Landlord prior to the commencement of any such work and in accordance with
all Requirements; (iv) prosecuted diligently and continuously to completion so
as to minimize interference with the normal business operations of other tenants
in the Corporate Campus, the perfonnance of Landlord's obligations under this
Lease or any mortgage or ground lease covering or affecting all or any part of
the Premises or the Land and any work being done by contractors engaged by
Landlord with respect to or in connection with the Premises; and (v) performed
by contractors approved in writing by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed. Tenant shall have no (and hereby
waives all) rights to payment or compensation for any such item. Tenant shall
notify Landlord upon completion of such alterations, improvements, modifications
or additions and Landlord shall inspect same for workmanship and compliance with
the approved plans and specifications. Tenant and its contractors shall comply
with all commercially reasonable requirements Landlord may impose on Tenant or
its contractors with respect to such work (including but not limited to,
insurance and indemnity requirements), and shall deliver to Landlord a complete
copy of the "as-built" or final plans and specifications marked for field
changes for all alterations or physical additions so made in or to the Premises
within thirty (30) days of completing the work. Such plans shall be on CADD if
requested by Landlord. Tenant shall not place safes, vaults, filing cabinets or
systems, libraries or other heavy furniture or equipment within the Premises
which exceed allowable floor load specifications, without Landlord's prior
written consent, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing provisions of this Section 6.1(b), Tenant
shall provide at least five (5) days prior written notice to Landlord of, but
shall not be obligated to obtain Landlord's prior consent for, any
non-structural decorative alteration entirely within the Premises which costs
less than $15,000.00 and does not affect the building systems.
(c) Title to Alterations. All alterations, physical additions,
modifications or improvements in or to the Premises (including fixtures) shall,
when made, become the property of Landlord and shall be surrendered to Landlord
upon termination or expiration of this Lease or termination of Tenant's right to
occupy the Premises, whether by lapse of time or otherwise, without any payment,
reimbursement or compensation therefor; provided., however, that (i) Tenant
shall retain title to and shall remove from the Premises movable equipment,
trade fixtures or furniture owned by Tenant, (ii) Tenant shall repair any damage
caused by a removal pursuant to Section 6.1(c)(i), and (iii) Tenant returns the
Premises to their condition existing immediately prior to removal (with respect
to a removal of an improvement pursuant to Section 6.1(c)(i) only). Landlord may
also require Tenant to remove all alterations, additions or improvements to
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the Premises that are other than building standard including, without
limitation, any cabling or other computer, satellite or telecommunications
equipment or hardware located in the Premises upon the expiration or earlier
termination of this Lease or the termination of Tenant's right to possession of
the Premises and restore the same to building standard condition, reasonable
wear and tear excepted. If Tenant fails to remove any movable equipment, trade
fixtures or furniture or any alterations, additions or improvements that are
other than the building standard, then Landlord may remove such items, at
Tenant's sole cost and expense. The rights conferred to Landlord under this
Section 6.1(c) shall be in addition to (and not in conflict with) any other
rights conferred on Landlord by this Lease, in equity or at law. Notwithstanding
the foregoing, Tenant shall have no obligation or responsibility for removing
those alterations, additions, improvements or other items in Tenant's Premises
unless Landlord so advises Tenant at the time of review of such Tenant's Plans
that such additions, improvements or other items must be removed at the end of
the term.
(d) Personal Property Taxes; Sales, Use and Excise Taxes. Tenant shall be
responsible for and shall pay ad valorem taxes and other taxes, assessments or
charges levied upon or applicable to Tenant's personal property, the value of
Tenant's leasehold improvements in the Premises in excess of building standard
(and if the taxing authorities do not separately assess Tenant's leasehold
improvements, Landlord may make a reasonable allocation of the taxes assessed on
the Project to give effect to this Section 6.1(e)) and all license fees and
other fees or charges imposed on the business conducted by Tenant on the
Premises before such taxes, assessments, charges or fees become delinquent.
SECTION 6.2 Repairs by Landlord. Except (x) as expressly allocated to
Tenant under this Lease, (y) arising from any act or omission of Tenant,
including the making of any repair, alterations, improvement or addition, or (z)
as relates to any alteration, improvement or addition made by Tenant, Landlord
shall maintain, repair or replace (as necessary and as an Operating Expense
except as expressly excluded therefrom) the elements and components of
Landlord's Work (being the foundation, roof, exterior walls, structural columns,
the stand pipe and water line to the Premises, waste water and sanitary lines
from the Building, the exterior windows and glass, the driveways, parking areas,
Corporate Campus roads, sidewalks and landscaping) in good condition and repair
in accordance with standards for similar projects in the area of the Project.
All repairs, alterations or additions that affect the Premises' structural
components or systems shall be made by Landlord or its contractors only, (making
use of the benefits of any existing warranties on such components or systems)
and, in the case of any damage to such components or systems caused the
negligence or willful misconduct of Tenant or Tenant's agents, shall be paid for
by Tenant in an amount equal to Landlord's costs plus twelve percent (12%) as an
overhead expense. Unless otherwise provided herein, Landlord shall not be
required to make any improvements to or repairs of any kind or character to the
leasehold improvements located in the Premises during the Term.
SECTION 6.3 Repairs by Tenant. Subject to Section 6.2 of this Lease, Tenant
shall be responsible, at its own cost and expense, for all repair or replacement
of any damage to the leasehold improvements in the Premises (unless such damage
is caused by the negligence or willful misconduct of Landlord or Landlord's
employees, agents or contractors), together with any damage to the Project or
any part thereof caused by Tenant or any of Tenant's agents. Except insofar as
Landlord is expressly obligated under this Lease to maintain and repair the
Premises,
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in addition to the maintenance and repair obligations of Tenant otherwise
expressly set forth in this Lease, Tenant is also obligated to perform, at
Tenant's own cost and expense and risk, all other maintenance and repairs
necessary or appropriate to cause the Premises to be maintained in good
condition and suitable for Tenant's intended commercial purpose reasonable wear
and tear excepted.
SECTION 6.4 Liens. Tenant shall keep the Premises free from any liens,
including but not limited to liens filed against the Premises by any
governmental agency, authority or organization, arising out of any work
performed, materials ordered or obligations incurred by or on behalf of Tenant,
and Tenant hereby agrees to indemnify, defend and hold Landlord, its agents,
employees, independent contractors, officers, directors, members, partners, and
shareholders harmless from any liability, cost or expense associated with any
lien caused by Tenant. Tenant shall cause any lien imposed as a result of
Tenant's actions or inaction to be bonded by a reputable insurance carrier
within ten (10) days after notice thereof to Tenant and released of record by
payment or posting of the proper bond with the applicable court within thirty
(30) days after written request by Landlord, but in any event prior to any lien
foreclosure action. After the initial Tenant's Improvements in accordance with
Exhibit E Tenant shall give Landlord written notice of Tenant's intention to
perform any future work on the Premises which might result in any claim of lien,
at least ten (10) days prior to the commencement of such work to enable Landlord
to post and record a notice of non-responsibility or other notice deemed proper
before commencement of any such work. If Tenant fails to remove any lien within
the prescribed ten (10) day period, then Landlord may do so at Tenant's expense
and Tenant's reimbursement to Landlord for such amount, including reasonable
attorneys' fees and costs, shall be deemed Additional Rent. Tenant shall have no
power to do any act or make any contract which may create or be the foundation
for any lien, mortgage or other encumbrance upon the reversion or other estate
of Landlord, or of any interest of Landlord in the Premises. Tenant shall not be
responsible for removing liens arising from any work performed, materials
ordered or obligations incurred by or on behalf of Landlord.
SECTION 6.5 Indemnification.
(a) Subject to Section 7.5 Tenant shall indemnify, defend and hold harmless
Landlord, its agents, employees, officers, directors, members, partners and
shareholders ("Landlord's Related Parties") from and against any and all
liabilities, judgments, demands, causes of action, claims, losses, damages,
costs and expenses, including reasonable attorneys' fees and costs, arising out
of the use, occupancy, conduct, operation, or management of the Premises by, or
the acts or omissions of Tenant, its officers, contractors, licensees, agents,
servants, employees, guests, invitees, or visitors in or about the Premises or
arising from any accident, injury or damage, howsoever and by whomsoever caused,
to any person or property, occurring in or about the Premises. This
indemnification shall survive termination or expiration of this Lease. This
provision shall not be construed to make Tenant responsible for loss, damage,
liability or expense resulting from injuries to third parties caused by the
negligence or willful misconduct of Landlord, or its officers, contractors,
licensees, agents, employees, or invitees.
(b) Subject to Section 7.5, Landlord shall indemnify, defend and hold
harmless Tenant, its agents, employees, officers, directors, members, partners
and shareholders ("Tenant's Related Parties") from and against all liabilities,
judgments, demands, causes of action, claims,
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losses, damages, costs and expenses, including reasonable attorney's fees and
costs arising out of the use, conduct, operation or management of the Premises
by, or the acts or omissions of Landlord's Related Parties in or about the
Premises or arising from any accident, injury or damage, howsoever or by
whomsoever caused, to any person or property, occurring in or about the
Premises; provided, however, that, in the event that both Landlord's Related
Parties and Tenant's Related Parties are named as defendants in any action or
proceeding falling under the indemnities in this Section 6.5, then Tenant agrees
that its indemnity in subsection (a) shall be the primary indemnity. This
indemnity shall survive termination or expiration of this Lease. This provision
shall not be construed to make Landlord responsible for loss, damage, liability
or expense resulting from injuries to third parties caused by the negligence or
willful misconduct of Tenant's Related Parties.
ARTICLE VII.
SECTION 7.1 Condemnation.
(a) Total Taking. In the event of a taking or damage related to the
exercise of the power of eminent domain, by any agency, authority, public
utility, person, corporation or entity empowered to condemn property (including
without limitation a voluntary conveyance by Landlord in lieu of such taking or
condemnation) (individually, a "Taking") of (i) the entire Premises, (ii) so
much of the Premises as to prevent or substantially impair its use by Tenant
during the Term or (iii) portions of the Premises or Project required for
reasonable access to, or reasonable use of, the Premises including, without
limitation, material portions of the parking areas (individually, a "Total
Taking"), the rights and obligations of Tenant under this Lease and the
leasehold estate of Tenant in and to the Premises shall cease and terminate as
of the date upon which title to the property taken passes to and vests in the
condemnor, or the effective date of any order for possession if issued prior to
the date title vests in the condemnor ("Date of Taking").
(b) Partial Taking. In the event of a Taking of only a part of the Premises
or of a part of the Project which does not constitute a Total Taking during the
Term (individually, a "Partial Taking"), this Lease shall continue and a
proportionate adjustment to the Base Rent and Additional Rent (excepting Real
Estate Taxes) shall be made based upon the reduced area of the Premises. However
should more than twenty five (25%) percent of the Premises be taken for the
balance of the term either Landlord or Tenant may terminate this Lease upon one
hundred twenty (120) days written notice given to the other party within thirty
(30) days after such Taking.
(c) Rent Adjustment. If this Lease is terminated pursuant to this Section
7.1, Landlord shall refund to Tenant any prepaid unaccrued Rent and any other
sums due and owing to Tenant (less any sums then due and owing Landlord by
Tenant), and Tenant shall pay to Landlord any remaining sums due and owing
Landlord under this Lease, each prorated as of the Date of Taking where
applicable.
(d) Repair. If this Lease is not terminated as provided for in this Section
7.1, then Landlord at its expense shall promptly repair and restore the Project
and/or the Premises, if required, to a reasonable condition, taking into account
the Taking, ordinary wear and tear
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excepted (and Landlord shall have no obligation to repair or restore Tenant's
improvements to the Premises or Tenant's Property), so as to render the Premises
as complete an architectural unit as practical, but only to the extent of the
condemnation award received by Landlord for the damage. If Landlord fails to
repair and restore the Project and/or the Premises as stated in this subsection
(d) within twelve (12) months of the date of the Taking, then Tenant may
terminate this Lease upon ten (10) days written notice and this Lease shall
thereupon expire as if that date were the Expiration date set forth in this
Lease.
(e) Awards and Damages. Except as expressly provided below, Landlord
reserves all rights to damages and awards paid because of any Partial or Total
Taking of the Premises or the Project. So long as it does not reduce the amount
of the award payable to Landlord, Tenant shall have the tight to make a separate
claim in any condemnation proceeding for the taking of the unamortized or
undepreciated value of the improvements and alterations owned by Tenant which
Tenant may remove at the expiration or earlier termination of this Lease,
reasonable removal and relocation costs for any improvements Tenant has the
right to remove and elects to remove, relocation costs, the claim for which
Tenant may pursue by separate action independent of this Lease. Tenant shall
have the right to negotiate directly with the condemnor for the recovery of the
portion of the award that Tenant is entitled to under this subsection. Tenant
shall not make any further claims against Landlord or the condemning authority
for damages.
(f) If a temporary taking of part of the Premises or a portion of the
Project which prevents Tenant's use or occupancy of all or a material portion of
the Premises occurs through (a) the exercise of any government power (by legal
proceedings or otherwise) by condemnor or (b) a voluntary sale or transfer by
Landlord to any condemnor, either under threat of exercise of eminent domain by
a condemnor or while legal proceedings for condemnation are pending, Rent shall
abate during the time of such taking in proportion to the portion of the
Premises taken. The entire award relating to the temporary taking shall be and
remain the property of Landlord. Tenant irrevocably assigns and transfers to
Landlord all rights to and interest in such award and fully releases and
relinquishes any claim to, right to make a claim on, and any other interest in
the award, excepting however, claims reserved for Tenant under applicable
condemnation laws which do not reduce the claims of Landlord in regard to such
Taking.
SECTION 7.2 Force Majeure. Neither Landlord nor Tenant (other than the
obligation for the payment of Rent by Tenant) shall be required to perform any
term, provision, agreement, condition or covenant in this Lease so long as such
performance is delayed or prevented by "Force Majeure", which shall mean acts of
God, strikes, injunctions, lockouts, material or labor restrictions by any
governmental authority, civil riots, floods, fire, theft, public enemy,
insurrection, war, court order, requisition or order of governmental body or
authority or the unavailability of labor or materials, and any other cause not
reasonably within the control of Landlord or Tenantand which by the exercise of
due diligence Landlord or Tenant is unable, wholly or in part, to prevent or
overcome. Neither Landlord nor any mortgagee shall be liable or responsible to
Tenant, and Tenant shall not be liable or responsible to Landlord and any
mortgagee, for any loss or damage to any property or person occasioned by any
Force Majeure, or for any damage or inconvenience which may arise through repair
or alteration of any part of the Project as a result of any Force Majeure.
SECTION 7.3 Fire or Other Casualty Damage.
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(a) Damage. If any portion of the Premises shall be destroyed or damaged by
fire or any other casualty, Tenant shall immediately give notice thereof to
Landlord. Within thirty (30) days of the date of Tenant's notice, Landlord shall
provide Tenant with a reasonable written estimate, calculated in good faith, of
the number of days that it will take to restore the base building components and
systems of the Premises to the condition existing on the Commencement Date
(excluding Tenant's specialty items not paid out of the Tenant Improvement
Allowance as defined In Exhibit E), (the "Restoration Estimate"). If the
Restoration Estimate is greater than 180 days, both Landlord and Tenant shall
have the right to terminate this Lease effective on the date of Fire or other
Casualty Damage by giving written notice to the other within twenty (20) days
after receiving the Restoration Estimate. If the period in the Restoration
Estimate is less than 180 days, Landlord shall promptly commence and diligently
pursue through completion the restoration of the base building components and
systems of the Premises and the tenant improvements which existed on the
Commencement Date (excluding Tenant's specialty items not paid out of the Tenant
Improvement Allowance as defined in exhibit E), and this Lease shall continue in
full force and effect. If, however, the cost of the restoration exceeds the
insurance proceeds Landlord reasonably expects to receive due to the casualty
(provided, however, that the insurance required to be carried by Landlord by
this Lease was in effect on the date of the casualty) or Landlord's lender
demands that such insurance proceeds be paid to it, Landlord may terminate the
Lease, subject to Tenant's right to propose keeping the Lease in effect by
Tenant's paying for the restoration. If Tenant elects to do so, Tenant shall
notify Landlord within ten (10) business days of receiving Landlord's notice of
termination of the Lease, and the parties shall engage in good faith
negotiations to determine the terms of Tenant's election to pay for the
restoration; provided, that, if the parties do not reach agreement to keep this
Lease in effect within ten (10) business days after Tenant delivers such written
notice to Landlord, then this Lease shall terminate as of the date set forth in
Landlord's notice of termination. Following a casualty, Tenant's obligation to
pay Rent shall be abated in proportion to the interference caused to its use and
occupation of the Premises provided that Tenant no longer occupies or uses in
any manner such affected Premises.
(b) End of Term. Notwithstanding the terms of the foregoing subsection, if
the casualty occurs in the last year of the Term and materially affects Tenant's
use or occupation of the Premises (i.e., more than 25% of the Premises has been
damaged, or the cost to repair is reasonably estimated by Landlord to exceed
$250,000), either Landlord or Tenant may elect to terminate this Lease by giving
the other party 30 days prior written notice. Notwithstanding the provisions of
the immediately preceding paragraph to the contrary, if Landlord elects .to
terminate this Lease as a result of such casualty occurring in the last year of
the Term, Tenant shall not have the right to keep this Lease in effect by paying
for the restoration.
(c) Repair. If Landlord is obligated to repair and restore the Premises,
such repairs will be made as promptly as is commercially reasonable, subject to
receipt of required governmental permits and approvals and insurance proceeds.
Should the repairs, despite Landlord's use of commercially reasonable efforts,
not be completed by the date of the Restoration Estimate, as extended by Force
Majeure, both Landlord and Tenant shall each have the option of terminating this
Lease by written notice given within 30 days thereafter. If this Lease is
terminated as herein permitted, Landlord shall refund to Tenant any prepaid Rent
(unaccrued as of the date of damage or destruction) and any other slims due and
owing by Landlord to Tenant (less any sums then due and owing Landlord by
Tenant) and any remaining
25
sums due and owing by Tenant to Landlord shall be paid to Landlord. If Landlord
restores the Premises and/or the Project as stated above, the Term will be
extended for a time equal to the period from the occurrence of such damage to
the completion of such restoration. If Landlord restores the Premises and/or the
Project, Landlord shall only be obligated to restore the base building
components and systems and building standard tenant improvements to
approximately the same condition as existed immediately prior to the casualty
and shall not be required to rebuild, repair or replace any part of Tenant's
Property or Tenant's above building standard leasehold improvements. If Landlord
shall restore the Premises and/or the Project pursuant to this Section 7.3, in
no event shall Landlord be required to expend any amount in excess of the
proceeds actually received from the insurance carried by Landlord pursuant to
Section 7.4(a) of this Lease. Landlord shall not be liable for any inconvenience
or annoyance to Tenant or injury to the business of Tenant resulting in any way
from such damage or destruction or the disregard of the repair thereof.
(d) Negligence of Tenant. Notwithstanding the provisions of Sections
7.3(a) and 7.3(b) of this Lease, if the Premises, the Project or any portion
thereof, are damaged by fire or other casualty resulting from the gross
negligence or willful misconduct of Tenant or any of Tenant's agents, the Rent
under this Lease will not be abated during the repair of that damage, and Tenant
will be liable to Landlord for the cost and expense of the repair and
restoration of the Premises, the Project or any part thereof, caused thereby to
the extent that cost and expense is not covered by insurance proceeds (including
without limitation the amount of any insurance deductible).
SECTION 7.4 Insurance.
(a) Landlord shall maintain, or cause to be maintained, standard fire and
extended coverage insurance on the Premises and building standard tenant
improvements (excluding leasehold improvements by Tenant in excess of building
standard and Tenant's Property) and on the Building, the Project and the
Corporate Campus, including "all risk" and general liability insurance in
amounts considered by Landlord to be reasonable and customary, but in an amount
no less than the replacement value. The insurance required to be obtained by
Landlord may be obtained by Landlord through blanket or master policies insuring
other entities or properties owned or controlled by Landlord.
Tenant shall, at its sole cost and expense, procure and maintain during the
Term (and during any period prior to the Commencement Date in which Tenant is
performing work in any portion of the Premises) comprehensive general liability
insurance (including personal injury liability, premises/operation, property
damage, independent contractors and broad form contractual coverage in support
of the indemnifications of Landlord by Tenant under this Lease) in amounts of
not less than a combined single limit of $2,000,000 with an umbrella coverage of
$5,000,000; property insurance with respect to all leasehold improvements,
alterations and additions in excess of building standard, to be written on an
"all risk" basis for full replacement cost; and worker's compensation as
required by law. Such insurance shall be maintained on standard forms and, as
relevant, shall be endorsed to include Landlord and Landlord's managing agent
and mortgagee or ground lessor (if its or their names are provided to Tenant) as
an additional insured. The insurer must be licensed to do business in the state
in which the Premises are located and rated at least "XIII" and "A" by Best's
(or its successor). Tenant, and not
26
Landlord, will be liable for any costs or damages in excess of the statutory
limit for which Tenant would, in the absence of worker's compensation, be
liable. In the event that Tenant fails to take out or maintain any policy
required by this Section 7.4 to be maintained by Tenant, such failure shall be a
defense to any claim asserted by Tenant against Landlord by reason of any loss
sustained by Tenant that would have been covered by such policy, notwithstanding
that such loss may have been proximately caused solely or partially by the
negligence or willful misconduct of Landlord or any of Landlord's Related
Parties. If Tenant does not procure insurance as required, Landlord may, upon
advance written notice to Tenant, cause this insurance to be issued and Tenant
shall pay to Landlord the premium for such insurance within ten (10) days of
Landlord's demand, plus interest at the Applicable Rate until repaid by Tenant.
All policies of liability insurance required to be maintained by Tenant shall
specifically make reference to the indemnifications by Tenant in favor of
Landlord under this Lease and shall provide that Landlord shall be given at
least thirty (30) days' prior written notice of any cancellation or nonrenewal
of any such policy. A certificate evidencing each such policy shall be deposited
with Landlord by Tenant on or before the Commencement Date, and a replacement
certificate evidencing each subsequent policy shall be deposited with Landlord
at least thirty (30) days prior to the expiration of the preceding such policy.
All insurance policies obtained by Tenant shall be written as primary policies
(primary over any insurance carried by Landlord), not contributing with and not
in excess of coverage which Landlord may carry, if any.
SECTION 7.5 Waiver of Subrogation Rights. With the exception of Worker's
Compensation Insurance each party hereto waives all rights of recovery, claims,
actions or causes of actions arising in any manner in its (the "Injured
Party's") favor and against the other party for loss or damage to the Injured
Party's property located within or constituting a part or all of the Project, to
the extent the loss or damage: (a) is covered by the Injured Party's insurance;
or (b) would have been covered by the insurance the Injured Party is required to
carry under this Lease, whichever is greater, regardless of the cause or origin,
including the sole, contributory, partial, joint, comparative or concurrent
negligence of the other party. This waiver also applies to each party's
directors, officers, employees, shareholders, members, partners, representatives
and agents. All insurance carried by either Landlord or Tenant covering the
losses and damages described in this Section 7.5 shall provide for such waiver
of rights of subrogation by the Injured Party's insurance carrier to the maximum
extent that the same is permitted under the laws and regulations governing the
writing of insurance within the state in which the Premises are located. Both
parties hereto are obligated to obtain such a waiver and provide evidence to the
other party of such waiver. The waiver set forth in this Section 7.5 shall be in
addition to, and not in substitution for, any other waivers, indemnities or
exclusions of liability set forth in this Lease.
ARTICLE VIII.
SECTION 8.1 Default by Tenant. The occurrence of any one or more of the
following events shall constitute an "Event of Default" by Tenant under this
Lease:
(a) Tenant shall fail to pay to Landlord any Rent or any other monetary
charge due from Tenant hereunder as and when due and payable and such failure is
not cured within five (5) days after written notice from Landlord of such
failure, provided, that, if Landlord shall give two (2) such notices within any
twelve (12) consecutive months, Landlord shall not be required to
27
give any such notice until Tenant has made timely payments for the succeeding
twelve (12) consecutive months and during such period, an Event of Default shall
arise after the five (5) day grace period provided in this subsection (a) has
elapsed;
(b) Tenant breaches or fails to comply with any term, provisions,
conditions or covenant of this Lease, other than as described in Section 8.1(a),
or with any of the building rules and regulations now or hereafter established
to govern the operation of the Project, which breach or failure continues
uncured for a period of thirty (30) days after Landlord notifies Tenant in
writing of such breach or failure; provided that, if such breach or failure is
reasonably susceptible of being cured but not within such thirty (30) day
period, then Tenant shall have such longer period of time (not to exceed ninety
(90) days) as is reasonably necessary to cure such breach or failure provided
Tenant promptly commences to cure such breach or failure and proceeds with
diligence and continuity, in good faith, to cure the same;
(c) A Transfer (hereinafter defined) shall occur, without the prior written
approval of Landlord;
(d) The interest of Tenant under this Lease shall be levied on under
execution or other legal process;
(e) Any petition in bankruptcy or other insolvency proceedings shall be
filed by or against Tenant, or any petition shall be filed or other action taken
to declare Tenant a bankrupt or to delay, reduce or modify Tenant's debts or
obligations or to reorganize or modify Tenant's capital structure or
indebtedness or to appoint a trustee, receiver or liquidator of Tenant or of any
property of Tenant, or any proceeding or other action shall be commenced or
taken by any governmental authority for the dissolution or liquidation of Tenant
and, within thirty (30) days hereafter, Tenant fails to secure a discharge
thereof;
(f) Tenant shall become insolvent, or Tenant shall make an assignment for
the benefit of creditors, or Tenant shall make a transfer in fraud of creditors,
or a receiver or trustee shall be appointed for Tenant or any of its properties;
(g) Tenant shall desert or abandon the Premises or any substantial portion
thereof for any reason other than destruction or condemnation of the Premises
and does not continue to pay all Rent as due under the terms of this Lease; or
(h) Tenant shall do or permit to be done anything which creates a lien upon
the Premises or the Project and fails to remove or bond same in accordance with
Section 6.4 of this Lease.
SECTION 8.2 Landlord's Remedies. Upon occurrence of any Event of Default by
Tenant under this Lease, Landlord shall have the option to do and perform any
one or more of the following in addition to, and not in limitation of, any other
remedy or right permitted it by law or in equity by this Lease:
(a) Continue this Lease in full force and effect, and this Lease shall
continue in full force and effect as long as Landlord does not terminate this
Lease, and Landlord shall have the right to collect Rent, Additional Rent and
other charges when due.
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(b) Terminate this Lease, and Landlord may forthwith repossess the Premises
and be entitled to recover as damages a sunk of money equal to the total of (i)
the cost of recovering the Premises, (ii) the cost of removing and storing
Tenant's or any other occupant's property, (iii) the unpaid Rent and any other
sums accrued hereunder at the date of termination, (iv) a sum equal to the
amount, if any, by which the present value of the total Rent and other benefits
which would have accrued to Landlord under this Lease for the remainder of the
Term, if the terms of this Lease had been fully complied with by Tenant,
discounted at a rate per annum equal to the then rate applicable to U.S.
Government securities of like tenor exceeds the total fair market rental value
of the Premises for the balance of the Term, discounted at the same rate (it
being the agreement of the parties hereto that Landlord shall receive the
benefit of its bargain), (v) the cost of any attempted reletting or reletting
and the collection of rent accruing from such reletting, (vi) the cost of any
brokerage fees or commission payable by Landlord in connection with any
reletting or attempted reletting, (vii) any other costs incurred by Landlord in
connection with any such reletting or attempted reletting, (viii) any increase
in insurance premiums caused by the vacancy of the Premises and (ix) any other
sum of money or damages owed by Tenant to Landlord at law, in equity or
hereunder. In the event Landlord shall elect to terminate this Lease, Landlord
shall at once have all the rights of reentry upon the Premises, without becoming
liable for damages, or guilty of trespass.
(c) Terminate Tenant's right of occupancy of the Premises and reenter and
repossess the Premises by entry, forcible entry or detainer suit or otherwise,
without demand or notice of any kind to Tenant and without terminating this
Lease, without acceptance of surrender of possession of the Premises, and
without becoming liable for damages or guilty of trespass, in which event
Landlord may, but shall be under no obligation to, relet the Premises or any
part thereof for the account of Tenant (nor shall Landlord be under any
obligation to relet the Premises before Landlord relets or leases any other
portion of the Project or any other property under the ownership or control of
Landlord) for a period equal to or lesser or greater than the remainder of the
Term of the Lease on whatever terms and conditions Landlord, at Landlord's sole
discretion, deems advisable. Tenant shall be liable for and shall pay to
Landlord all Rent payable by Tenant under this Lease (plus interest at the
Applicable Rate if in arrears) plus an amount equal to (i) the cost of
recovering possession of the Premises, (ii) the cost of removing and storing any
of Tenant's or any other occupant's property left on the Premises or the Project
after reentry, (iii) the cost of decorations, repairs, changes, alterations and
additions to the Premises and the Project, (iv) the cost of any attempted
reletting or reletting and the collection of the rent accruing from such
reletting, (v) the cost of any brokerage fees or commissions payable by Landlord
in connection with any reletting or attempted reletting, (vi) any other costs
incurred by Landlord in connection with any such reletting or attempted
reletting, (vii) the cost of any increase in insurance premiums caused by the
termination of possession of the Premises, (viii) the amount of any unamortized
improvements to the Premises paid for by Landlord, (ix) the amount of any
unamortized brokerage commissions or other costs paid by Landlord in connection
with the leasing of the Premises and (x) any other sum of money or damages owed
by Tenant to Landlord at law, in equity or hereunder, all reduced by any sums
received by Landlord through any reletting of the Premises; provided, however,
that in no event shall Tenant be entitled to any excess of any sums obtained by
reletting over and above Rent provided in this Lease to be paid by Tenant to
Landlord. For the purpose of such reletting Landlord is authorized to decorate
or to make any repairs, changes, alterations or additions in or to the Premises
that may be necessary. Landlord may file suit to recover any sums falling due
under the terms of this
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Section 8.2(c) from time to time, and no delivery to or recovery by Landlord of
any portion due Landlord hereunder shall be any defense in any action to recover
any amount not theretofore reduced to judgment in favor of Landlord. No
reletting shall be construed as an election on the part of Landlord to terminate
this Lease unless a written notice of such intention is given to Tenant by
Landlord. Notwithstanding any such reletting without termination, Landlord may
at any time thereafter elect to terminate this Lease for such previous default
and/or exercise its rights under Section 8.3(b) of this Lease.
(d) Enter upon the Premises and do whatever Tenant is obligated to do under
the terms of this Lease; and Tenant agrees to reimburse Landlord on demand for
any expenses which Landlord may incur in effecting compliance with Tenant's
obligations under this Lease twelve percent (12%) of such cost to cover overhead
plus interest at the past due rate provided in this Lease, and Tenant further
agrees that Landlord shall not be liable for any damages resulting to Tenant
from such action. No action taken by Landlord under this Section 8.2(d) shall
relieve Tenant from any of its obligations under this Lease or from any
consequences or liabilities arising from the failure to perform such
obligations.
(e) Exercise any and all other remedies available to Landlord in this
Lease, at law or in equity.
SECTION 8.3 Waiver of Duty to Relet or Mitigate. Tenant agrees that
Landlord shall not be liable, nor shall Tenant's obligations hereunder be
diminished, because of Landlord's failure to relet the Premises or collect rent
due with respect to such reletting. Furthermore, Tenant hereby waives any and
all rights to plead such failure of Landlord to mitigate damages as affirmative
defense in any proceeding based on any default by Tenant under this Lease.
Notwithstanding the foregoing Landlord shall agree to do the following: (a) post
a "For Lease" sign on the Premises; (b) advise Landlord's leasing agent of the
availability of the Premises; (c) advise at least one outside commercial
brokerage entity of the availability of the Premises; and (d) ensure that the
listing is placed in a commonly used multiple listing service for commercial
properties, if one exists, such as, for example, "Costar" or another commonly
used medium, if one exists, provided, however, that Landlord shall not be
obligated to relet the Premises before leasing any other unoccupied portions of
the Project and any other property under the ownership or control of Landlord.
If Landlord receives any payments from the reletting of the Premises, any such
payment shall first be applied to any costs or expenses incurred by Landlord as
a result of Tenant's Default under this Lease.
SECTION 8.4 Reentry. If Tenant fails to allow Landlord to reenter and
repossess the Premises, Landlord shall have full and free license to enter into
and upon the Premises with or without process of law for the purpose of
repossessing the Premises, expelling or removing Tenant and any others who may
be occupying or otherwise within the Premises, removing any and all property
therefrom and changing all door locks of the Premises. Landlord may take these
actions without being deemed in any manner guilty of trespass, eviction or
forcible entry or detainer, without accepting surrender of possession of the
Premises by Tenant, and without incurring any liability for any damage resulting
therefrom, including without limitation any liability arising under applicable
state law and without relinquishing Landlord's right to Rent or any other right
given to Landlord hereunder or by operation of law or in equity, Tenant hereby
waiving any right to claim damage for such reentry and expulsion, including
without limitation
30
any rights granted to Tenant by applicable state law.
SECTION 8.5 Rights of Landlord in Bankruptcy. Nothing contained in this
Lease shall limit or prejudice the right of Landlord to prove for and obtain in
proceedings for bankruptcy or insolvency, by reason of the expiration or
termination of this Lease or the termination of Tenant's right of occupancy, an
amount equal to the maximum allowed by any statute or rule of law in effect at
the time when, and governing the proceedings in which, the damages are to be
proved, whether or not the amount be greater, equal to, or less than the amount
of the loss or damages referred to in this Section 8.5. In the event that under
applicable law, the trustee in bankruptcy or Tenant has the right to affirm this
Lease and continue to perform the obligations of Tenant hereunder, such trustee
or Tenant shall, in such time period as may be permitted by the bankruptcy court
having jurisdiction, cure all defaults of Tenant hereunder outstanding as of the
date of the affirmance of this Lease and provide to Landlord such adequate
assurances as may be necessary to ensure Landlord of the continued performance
of Tenant's obligations under this Lease.
SECTION 8.6 Waiver of Certain Rights. Tenant hereby waives any and all
liens (whether statutory, contractual or constitutional) it may have or acquire
as a result of a breach by Landlord under this Lease. Tenant also waives and
releases any statutory lien and offset rights it may have against Landlord,
including without limitation the rights conferred upon applicable state law.
SECTION 8.7 Non Waiver. Failure on the part of Landlord to complain of any
action or non-action on the part of Tenant, no matter how long the same may
continue, shall not be deemed to be a waiver by Landlord of any of its rights
under this Lease. Further, it is covenanted and agreed that no waiver at any
time of any of the provisions hereof by Landlord shall be construed as a waiver
of any of the other provisions hereof and that a waiver at any time of any of
the provisions hereof shall not be construed as a waiver at any subsequent time
of the same provisions. The consent or approval by Landlord to or of any action
by Tenant requiring Landlord's consent or approval shall not be deemed to waive
or render unnecessary Landlord's consent or approval to or of any subsequent
similar act by Tenant.
SECTION 8.8 Holding Over. In the event Tenant remains in possession of the
Premises after the expiration or termination of this Lease without the execution
of a new lease, then Tenant, at Landlord's option, shall be deemed to be
occupying the Premises as a tenant at will at a base rental equal to one hundred
twenty five percent (125%) of the then applicable Base Rent, for the first three
(3) months of such holdover and at one hundred fifty percent (150%) of the then
applicable current Base Rent thereafter and shall otherwise remain subject to
all the conditions, provisions and obligations of this Lease insofar as the same
are applicable to a tenancy at will, including without limitation the payment of
all other Rent; provided, however., nothing contained herein shall require
Landlord to give Tenant more than thirty (30) days prior written consent to
terminate Tenant's tenancy-at-will. Tenant shall indemnify Landlord against all
claims for damages by any other tenant to whom Landlord may have leased all or
any part of the Premises and for all other losses, costs and expenses, including
reasonable attorneys' fees, incurred by reason of such holding over.
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SECTION 8.9 Abandonment of Personal Property. Any personal property left in
the Premises or any personal property of Tenant left about the Project at the
expiration or termination of this Lease or upon the termination of Tenant's
right to occupy the Premises, shall be deemed abandoned by Tenant and may, at
the option of Landlord, be immediately removed from the Premises or such other
space by Landlord and stored by Landlord at the full risk, cost and expense of
Tenant. Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. In the event Tenant does not reclaim any such personal
property and pay all costs for any storage and moving thereof within thirty (30)
days after the expiration or termination of this Lease or the termination of
Tenant's right to occupy the Premises, Landlord may dispose of such personal
property in any way that it deems proper. If Landlord shall sell any such
personal property, it shall be entitled to retain from the proceeds the amount
of any Rent or other expenses due Landlord, together with the cost of storage
and moving and the expense of the sale. Notwithstanding anything contained
herein to the contrary, in addition to the rights provided herein with respect
to any such property, Landlord shall have the option of exercising any of its
other rights or remedies provided in the Lease or exercising any rights or
remedies available to Landlord at law or in equity.
ARTICLE IX.
SECTION 9.1 Transfers.
(a) Except as expressly provided herein to the contrary, Tenant shall not,
by operation of law or otherwise, (a) assign, transfer, mortgage, pledge,
hypothecate or otherwise encumber this Lease, the Premises or any part of or
interest in this Lease or the Premises, (b) grant any concession or license
within the Premises, (c) sublet all or any part of the Premises or any right or
privilege appurtenant to the Premises, or (d) permit any other party to occupy
or use all or any part of the Premises (collectively, a "Transfer"), without the
prior written consent of Landlord, which shall not be unreasonably withheld,
conditioned or delayed. Landlord shall be deemed to have reasonably withheld its
consent to any sublease or assignment if the refusal is based on (i) Landlord' s
determination (in its sole discretion) that such assignee or subtenant does not
have the financial stability or is not of the character or quality of a tenant
to whom Landlord would generally lease space of the Building, (ii) the fact that
such assignment or sublease is not in form and of substance reasonably
satisfactory to Landlord, (iii) such assignment or sublease conflicts in any
manner with this Lease, including, but not limited to, the Permitted Use, (iv)
the proposed assignee or subtenant is a tenant of the Corporate Campus or
Landlord is negotiating with the proposed assignee or subtenant to become a
tenant of the Corporate Campus, (v) the subtenant or assignee is a governmental
entity or a medical office, (vi) the subtenant' s or assignee' $ primary
business is prohibited by any non-compete clause then affecting the Corporate
Campus or (vii) the assignment or sublease would cause Landlord to breach any
covenants or contractual obligations to which the Corporate Campus or Landlord
is subject. This prohibition against a Transfer includes, without limitation,
(i) any subletting or assignment which would otherwise occur by operation of
law, merger, consolidation, reorganization, transfer or other change of Tenant's
corporate or proprietary structure; (ii) an assignment or subletting to or by a
receiver or trustee in any federal or state bankruptcy, insolvency, or other
proceedings; (iii) the sale, assignment or transfer of all or substantially all
of the assets of Tenant, with or without specific assignment of Lease; (iv) the
direct or indirect change in control of Tenant; or (v) conversion of
32
Tenant to a limited liability entity. If Tenant converts to a limited liability
entity without obtaining the prior written consent of Landlord: (i) the
conversion shall be null and void for purposes of the Lease, including the
determination of all obligations and liabilities of Tenant and its partners to
Landlord; (ii) all partners of Tenant immediately prior to its conversion to a
limited liability shall be fully liable, jointly and severally, for obligations
of Tenant accruing under this Lease pre-conversion and post-conversion, and all
members and other equity holders in Tenant post-conversion shall be fully liable
for all obligations and liabilities of Tenant accruing under the Lease after the
date such members and other equity holders are admitted to the limited liability
entity as if such person or entity had become a general partner in a
partnership; and (iii) Landlord shall have the option of declaring Tenant in
default under this Lease.
(b) If Tenant requests Landlord's consent to any assignment or subletting,
then Tenant shall provide Landlord with a written description of all terms and
conditions of the proposed assignment or subletting, copies of the proposed
documentation, and the following information about the proposed transferee: name
and address; reasonably satisfactory information about its business and business
history; its proposed use of the Premises; a copy of the proposed sublease or
assignment agreement; banking, financial and other credit information; and
general references sufficient to enable Landlord to determine the proposed
transferee's creditworthiness and character.
(c) Landlord's consent to an assignment of this Lease shall not release
Tenant from performing its obligations under this Lease, but rather Tenant's
assignee shall assume all of Tenant's obligations under this Lease in a writing
satisfactory to Landlord, and Tenant and its assignee shall be jointly and
severally liable therefor. Landlord's consent to any Transfer shall not waive
Landlord's rights as to any subsequent Transfer. While the Premises or any part
thereof are subject to a sublease, Landlord may collect directly from the
subtenant all rents or other sums relating to the Premises becoming due to
Tenant or Landlord and apply such rents and other sums against the Rent and any
other sums payable hereunder. If the aggregate rental, bonus or other
consideration paid by any unrelated assignee or subtenant for any such space
exceeds the sum of (y) Tenant's Rent to be paid to Landlord for such space
during such period and (z) Tenant's costs and expenses actually incurred in
connection with such assignment or subletting, including reasonable brokerage
fees, reasonable costs of finishing or renovating the space affected and
reasonable cash rental concessions, which costs and expenses are to be
recognized as and when incurred, then fifty percent (50%) of such excess shall
be paid to Landlord within thirty (30) days after such amount is earned by
Tenant. Such overage amounts in the case of a sublease shall be calculated and
adjusted (if necessary) on a Lease Year (or partial Lease Year) basis, and there
shall be no cumulative adjustment (or carryover of a loss or overage from one
Lease Year to the next), for the Term. Landlord, at Landlord's expense, shall
have the right to review and inspect Tenant's books and records relating to the
assignment or subletting. Upon an Event of Default Tenant authorizes its
transferees to make payments of rent and any other sums due and payable,
directly to Landlord upon receipt of notice from Landlord to do so. Any
attempted Transfer by Tenant in violation of the terms and covenants of this
Article IX shall be void and shall constitute a default by Tenant under this
Lease. In the event that Tenant requests that Landlord consider a Transfer
hereunder, Tenant shall pay Landlord's reasonable attorneys' fees and costs
incurred by Landlord in connection with the consideration of such request up to
a maximum of $1,500, (said maximum amount to be increased by three percent
33
(3%) per annum on the first day of each Lease Year over the applicable amount as
of the preceding day).
(d) If Tenant shall provide Landlord with the information required by
subsection (b) above and if no default shall exist and be continuing hereunder,
Landlord will not unreasonably withhold, condition or delay its consent to a
proposed assignment of this Lease or subletting of all or a portion of the
Premises.
(e) Notwithstanding the foregoing provisions of this Article or any other
provisions of this Lease, Tenant shall have the right to assign Tenant's right,
title and interest under this Lease or to enter into a sublease of all or
substantially all of the Premises, without the consent of the Landlord but upon
notice (the "Permitted Transfer Notice") to Landlord ten (10) business days
prior to such assignment or sublease becomes effective, if such assignment or
sublease is made to (i) any corporation or entity under common control with
Tenant, (ii)any corporation, a majority of whose voting stock is owned by
Tenant, (iii) any corporation in which or with which Tenant, its corporate
successors or assigns, is merged or consolidated, or (iv) any corporation,
person or entity acquiring all or substantially all (meaning not less than sixty
percent [60%] of such outstanding shares of stock) of the outstanding shares of
stock of Tenant; so long as (A) the obligations of Tenant under this Lease are
assumed by the surviving corporation, person or entity or by the corporation
created by such merger or consolidation,(B) the net worth of the surviving
corporation, person or entity, or of the entity created by such merger or
consolidation, is in excess of the Tenant's net worth as of the date of this
Lease or the date of the merger or consolidation, whichever is greater,
determined in accordance with "Generally Accepted Accounting Principles."; (C)
The Tenant, in any subletting, or if surviving following an assignment as set
forth herein, shall remain liable under the terms of the Lease; and (D) no Event
of Default shall then be continuing uncured. Concurrently with delivery of the
Permitted Transfer Notice Tenant shall provide Landlord with such corporate
resolutions and documentation evidencing the authority of and the assumption of
Lease obligations by such assignee or subtenant, financial statements verifying
the net worth of the surviving tenant and satisfactory evidence of compliance
with the applicable subsections (i)-(iv) above. Tenant shall remain liable under
this Lease for all obligations. The foregoing subletting, assignment and/or
transfer of Tenant's rights and interests under this Lease are referred to
herein as a "Permitted Transfer." In addition, the selling or trading of the
shares in Tenant on any national securities exchange (as defined in the
Securities Exchange Act of 1934, as amended), the transfer of shares in Tenant
between then-existing shareholders of Tenant, and the transfer of shares in
Tenant between family members (whether by means of creating a trust, probate,
inheritance, gift or otherwise) shall not be deemed an assignment, subletting or
transfer of Tenant's rights or interests under this Lease requiring Landlord's
consent.
SECTION 9.2 Assignment by Landlord. Landlord shall have the right at any
time to sell, transfer or assign, in whole or in part, by operation of law or
otherwise, its rights, benefits, privileges, duties, obligations or interests in
this Lease or in the Premises, the Land, the Project and all other property
referred to herein, without the prior consent of Tenant, and such sale, transfer
or assignment shall be binding on Tenant provided that (i) Tenant is notified of
the transfer and (ii) such transferee shall assume, in writing, all obligations
of Landlord under this Lease arising or accruing from and after the effective
date of such transfer (including all applicable obligations, if any, to provide
an SNDA). After such sale, transfer or assignment,
34
Tenant shall attorn to such purchaser, transferee or assignee, and Landlord
shall be released from all liability and obligations under this Lease accruing
after the effective date of such sale, transfer or assignment.
SECTION 9.3 Limitation of Landlord's Liability. Any provisions of this
Lease to the contrary notwithstanding, Tenant hereby agrees that no personal,
partnership or corporate liability of any kind or character (including, without
limitation, the payment of any judgment) whatsoever now attaches or at any time
hereafter under any condition shall attach to Landlord or any of Landlord's
Related Parties or any mortgagee for payment of any amounts payable under this
Lease or for the performance of any obligation under this Lease. The exclusive
remedies of Tenant for the failure of Landlord to perform any of its obligations
under this Lease shall be to proceed against the interest of Landlord in and to
the Premises and the Building and/or the proceeds of insurance or condemnation.
The provision contained in the foregoing sentence is not intended to, and shall
not, limit any right that Tenant might otherwise have to obtain injunctive
relief against Landlord or Landlord's successors in interest or any suit or
action in connection with enforcement or collection of amounts which may become
owing or payable under this Lease or on account of insurance maintained by
Landlord. In no event shall Landlord be liable to Tenant, or any interest of
Landlord in the Premises be subject to execution by Tenant, for any indirect,
special, consequential or punitive damages.
ARTICLE X.
SECTION 10.1 Subordination. This Lease shall be subject and subordinated at
all times to
(a) all ground or underlying leases which may hereinafter be executed
affecting the Project, and
(b) the lien or liens of all mortgages and deeds of trust in any amount or
amounts whatsoever hereafter placed on the Project or Landlord's interest or
estate therein or on or against such ground or underlying leases and to all
renewals, modifications, consolidations, replacements and extensions thereof and
to each advance made or hereafter to be made thereunder. Landlord represents and
warrants that, as of the date of this Lease, there is no mortgagee or holder of
a deed of trust on the Project. Landlord shall use its best efforts to provide
Tenant with a subordination, non-disturbance and attornment agreement from any
future lender that holds a deed of trust against the Premises on such future
lender's standard form (the "SNDA"). However the foregoing shall not require
Landlord to incur any expense in connection with such agreement nor require
Landlord to obtain financing only from a lender willing to provide such an
agreement to Tenant.
Tenant shall execute and deliver within ten (10) business days any
instruments, releases or other commercially reasonable documents requested by
any lessor or mortgagee for the purpose of subjecting and subordinating this
Lease to such ground leases, mortgages or deeds of trust, subject to the SNDA.
Tenant shall attorn to any party succeeding to Landlord's interest in the
Premises, whether by purchase, foreclosure, deed in lieu of foreclosure, power
of sale, termination of lease or otherwise, only upon such party's request and
at such party's sole discretion but not otherwise. Notwithstanding such
attornment, Tenant agrees that any such
35
successor in interest shall not be (a) liable for any act or omission of, or
subject to any rights of setoff, claims or defenses otherwise assertable by
Tenant against, any prior owner of the Project (including without limitation,
Landlord), (b) bound by any rents paid more than one (1) month in advance to any
prior owner, (c) be liable for the payment of any money to Tenant or the
performance of any work for Tenant and (d) bound by any modification, amendment,
extension, surrender or cancellation of the Lease not consented to in writing by
such mortgagee or ground lessor. Further, Tenant agrees for the benefit of each
such lessor or mortgagee not to execute any such amendment, extension, surrender
or cancellation of this Lease without such lessor's or mortgagee's prior
approval. Tenant shall execute all such commercially reasonable agreements
confirming such attornment as such party may reasonably request. Tenant shall
not seek to enforce any remedy it may have for any default on the part of
Landlord without first giving written notice by certified mail, return receipt
requested, specifying the default in reasonable detail, to any mortgagee or
lessor under a lien instrument or lease covering the Premises whose address has
been given to Tenant in writing, and affording such mortgagee or lessor a
reasonable opportunity to perform Landlord's obligations hereunder.
Notwithstanding the generality of the foregoing, any mortgagee or ground lessor
may at any time subordinate any such deeds of trust, mortgages, other security
instruments or ground leases to this Lease on such terms and conditions as such
mortgagee or ground lessor may deem appropriate. Tenant shall execute any such
subordination or attornment documents as described herein within ten (10) days
after demand therefor.
SECTION 10.2 Estoppel Certificate or Three-Party Agreement. Tenant agrees
within ten (10) business days following written request therefor by Landlord (a)
to execute, acknowledge and deliver to Landlord and any other persons specified
by Landlord, a certificate or three-party agreement among Landlord, Tenant
and/or any third party dealing with Landlord, certifying (i) that this Lease is
unmodified and in full force and effect, or, if modified, stating the nature of
such modification (ii) the date to which the Rent and other charges are, (iii)
that there are not, to Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder, or so specifying such defaults, if any, as are claimed
and/or (iv) any other matters as such third party may reasonably require in
connection with the business dealings of Landlord and/or such third party and
(b) to deliver to Landlord current financial statements of Tenant or Tenant's
parent, including a balance sheet and a profit and loss statement for at least
two (2) years, all prepared in accordance with generally accepted accounting
principles consistently applied. Tenant's failure to deliver such certificate or
three-party agreement within such ten (10) business day period shall be
conclusive upon Tenant (x) that this Lease is in full force and effect without
modification except as may be represented by Landlord, (y) that to Tenant's
knowledge there are no uncured defaults in Landlord's performance, and (z) that
no Rent has been paid in advance except as set forth in this Lease. Should
Tenant fail to execute an Estoppel Certificate or Three Party Agreement within
the aforesaid ten (10 ) business day period, Landlord is hereby appointed by
Tenant, as Tenant's attorney in fact, to execute any such document on Tenant's
behalf.
SECTION 10.3 Notices. Any Notice, demand, request, consent, approval,
disapproval or certificate ("Notice") required or desired to be given under this
Lease shall be in writing and given by certified mail, return receipt requested,
by personal delivery or by Federal Express or a similar nationwide, reputable
over-night delivery service providing a receipt for delivery. Notices may not be
given by facsimile. Any written notice given under this lease shall be deemed
given on the date said notice id deposited with Federal Express or a similar
reputable
36
overnight delivery service, or on the date delivered in case of personal
delivery, or three (3) days after deposit with the U.S. Mail. Any written notice
whose receipt is refused by either Landlord or Tenant shall be deemed given on
the date that such written notice is refused. All notices, demands, requests,
consents, approvals, disapprovals, or certificates shall be addressed as
follows:
To Landlord:
Willowbrook Holdings, Inc.
c/o West World Management, Inc.
4 Manhattanville Road, 2nd Floor
Purchase, NY 10577
Tel: 914-694-5900
With a copy to:
Trammell Crow Company
1660 International Drive Suite 550
McLean, Virginia
Attn: Thomas E. Finan .
Tel: 703-288-2545
Prior to Commencement Date:
Healthscribe, Inc.
403 Glenn Drive, #10
Sterling, VA, 20164
Tel: 703-480-3000
After the Commencement Date:
At the Premises
Either party may change its address by giving notice of same in accordance with
the methods described in this paragraph reasonably in advance.
ARTICLE XI.
SECTION 11.1 [INTENTIONALLY OMITTED.]
SECTION 11.2 Rights and Remedies Cumulative. The rights and remedies of
Landlord under this Lease shall be nonexclusive and each right or remedy shall
be in addition to and cumulative of all other rights and remedies available to
Landlord under this Lease or at law or in equity. Pursuit of any right or remedy
shall not preclude pursuit of any other rights or remedies provided in this
Lease or at law or in equity, nor shall pursuit of any right or remedy
constitute a forfeiture or waiver of any Rent due to Landlord or of any damages
accruing to Landlord by reason of the violation of any of the terms of this
Lease.
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SECTION 11.3 Legal Interpretation. This Lease and the rights and
obligations of the parties hereto shall be interpreted, construed and enforced
in accordance with the laws of the state or commonwealth in which the Premises
are located and the United States. The determination that one or more provisions
of this Lease is invalid, void, illegal or unenforceable shall not affect or
invalidate any other provision of this Lease, and this Lease shall be construed
as if such invalid, illegal or unenforceable provision had never been contained
in this Lease, and, so far as is reasonable and possible, effect shall be given
to the intent manifested by the portion held invalid or inoperative. All
obligations of either party hereunder not fully performed as of the expiration
or termination of the Term of this Lease shall survive the expiration or
termination of the Term of this Lease and shall be fully enforceable in
accordance with those provisions pertaining thereto. Article and section titles
and captions appearing in this Lease are for convenient reference only and shall
not be used to interpret or limit the meaning of any provision of this Lease. No
custom or practice which may evolve between the parties in the administration of
the terms of this Lease shall waive or diminish the right of Landlord to insist
upon the performance by Tenant in strict accordance with the terms of this
Lease. This Lease is for the sole benefit of Landlord and Tenant, and, without
the express written consent thereto, no third party shall be deemed a third
party beneficiary hereof. Tenant agrees that this Lease supersedes and cancels
any and all previous statements, negotiations, arrangements, brochures,
agreements and understandings, if any, between Landlord and Tenant with respect
to the subject matter of this Lease or the Premises and that this Lease,
including written extrinsic documents referred to herein, is the entire
agreement of the parties, and that there are no other representations,
understandings, stipulations, agreements, warranties or promises (express or
implied, oral or written) between Landlord and Tenant with respect to the
subject matter of this Lease or the Premises. It is likewise agreed that this
Lease may not be altered, amended, changed or extended except by an instrument
in writing signed by both Landlord and Tenant. The terms and provisions of this
Lease shall not be construed against or in favor of a party hereto merely
because such party is the "Landlord" or the "Tenant" hereunder or because such
party or its counsel is the draftsman of this Lease. All references to days in
this Lease and any Exhibits or Addenda hereto mean calendar days, not working or
business days, unless otherwise stated.
SECTION 11.4 Tenant's Authority. Both Tenant and the person executing this
Lease on behalf of Tenant warrant and represent unto Landlord that (a) Tenant is
a duly organized and validly existing legal entity, in good standing and
qualified to do business in the stateor commonwealth in which the Premises are
located, with no proceedings pending or contemplated for its dissolution or
reorganization, voluntary or involuntary, (b) Tenant has full right, power and
authority to execute, deliver and perform this Lease, (c) the person executing
this Lease on behalf of Tenant is authorized to do so, and (d) upon execution of
this Lease by Tenant, this Lease shall constitute a valid and legally binding
obligation of Tenant.
Both Landlord and the person executing this Lease on behalf of Landlord
warrant and represent unto Tenant that (a) Landlord is a duly organized and
validly existing legal entity, in good standing and qualified to do business in
the state or commonwealth in which the Premises are located, with no proceedings
pending or contemplated for its dissolution or reorganization, voluntary or
involuntary, (b) Landlord has full right, power and authority to execute,
deliver and perform this Lease, (c) the person executing this Lease on behalf of
Landlord is authorized to do so, and (d) upon execution of this Lease by
Landlord, this Lease shall constitute a valid and legally binding obligation of
Landlord.
38
SECTION 11.5 Brokers. Landlord and Tenant warrant and represent to the
other that it has not dealt with any real estate broker and/or salesman (other
than Trammell Crow Real Estate Services, Inc., which represented Landlord, and
Julien J. Studley, Inc., which represented Tenant) in connection with the
negotiation or execution of this Lease and no other broker or salesman has been
involved in connection with this Lease, and each party agrees to defend,
indemnify and hold harmless the other party from and against any and all costs,
expenses, attorneys' fees or liability for any compensation, commission and
charges claimed by any real estate broker and/or salesman (other than the
aforesaid brokers) due to acts of such party or such party's representatives.
Landlord shall pay the brokers identified above pursuant to separate agreements.
SECTION 11.6 Consents by Landlord. In all circumstances under this Lease
where the prior consent or permission of Landlord is required before Tenant is
authorized to take any particular type of action, such consent must be in
writing and unless the provision specifically states that the consent or
approval will not be unreasonably withheld, the matter of whether to grant such
consent or permission shall be within the sole and exclusive judgment and
discretion of Landlord, and it shall not constitute any nature of breach by
Landlord under this Lease or any defense to the performance of any covenant,
duty or obligation of Tenant under this Lease that Landlord delayed or withheld
the granting of such consent or permission, whether or not the delay or
withholding of such consent or permission was prudent or reasonable or based
upon good cause.
With respect to any provision of this Lease which provides that Landlord
shall not unreasonably withhold any consent or any approval, Tenant, in no
event, shall be entitled to make nor shall Tenant make any claim for, and Tenant
hereby waives any claim for money damages; nor shall Tenant claim any money
damages by way of setoff, counterclaim or defense, based upon any claim or
assertion by Tenant that Landlord has unreasonably withheld any consent or
approval; but Tenant's sole remedy shall be an action or proceeding to enforce
any such provision, or for specific performance, injunction or declaratory
judgment.
SECTION 11.7 Joint and Several Liability. If there is more than one Tenant,
then the obligations hereunder imposed upon Tenant shall be joint and several.
SECTION 11.8 Independent Covenants. The obligation of Tenant to pay Rent
and other monetary obligations provided to be paid by Tenant under this Lease
and the obligation of Tenant to perform Tenant's other covenants and duties
under this Lease constitute independent, unconditional obligations of Tenant to
be performed at all times provided for under this Lease, save and except only
when an abatement thereof or reduction therein is expressly provided for in this
Lease and not otherwise, and Tenant acknowledges and agrees that in no event
shall such obligations, covenants and duties of Tenant under this Lease be
dependent upon the condition of the Premises or the Project, or the performance
by Landlord of its obligations hereunder.
SECTION 11.9 Attorneys' Fees and Other Expenses. In the event either party
hereto defaults in the faithful performance or observance of any of the terms,
covenants, provisions, agreements or conditions contained in this Lease, the
party in default shall be liable for and shall pay to the non-defaulting party
all reasonable expenses incurred by such party in enforcing any of its remedies
for any such default, and if the non-defaulting party places the enforcement of
all
39
or any part of this Lease in the hands of an attorney, the party in default
agrees to pay the non-defaulting party's reasonable attorneys' fees in
connection therewith.
SECTION 11.10 Recording. Neither Landlord nor Tenant shall record this
Lease, but a short-form memorandum hereof may be recorded at the request of
Landlord and Landlord shall pay all recording and subsequent release costs.
SECTION 11.11 Disclaimer; Waiver of Jury Trial. LANDLORD AND TENANT
EXPRESSLY ACKNOWLEDGE AND AGREE, AS A MATERIAL PART OF THE CONSIDERATION FOR
LANDLORD'S ENTERING INTO THIS LEASE WITH TENANT, THAT, EXCEPT AS OTHERWISE SET
FORTH IN THIS LEASE, (a) LANDLORD HAS MADE NO WARRANTIES TO TENANT AS TO THE USE
OR CONDITION OF THE PREMISES OR THE PROJECT, EITHER EXPRESS OR IMPLIED, AND (b)
LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES OR
THE PROJECT ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL PURPOSE OR ANY OTHER
WARRANTY (EXPRESS OR IMPLIED) REGARDING THE PREMISES OR THE PROJECT. EXCEPT AS
EXPRESSLY SET FORTH IN THIS LEASE, LANDLORD AND TENANT EXPRESSLY AGREE THAT
THERE ARE NO, AND SHALL NOT BE ANY, IMPLIED WARRANTIES OF MERCHANTABILITY,
HABITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER KIND ARISING OUT OF
THIS LEASE, ALL SUCH OTHER EXPRESS OR IMPLIED WARRANTIES IN CONNECTION HEREWITH
BEING EXPRESSLY DISCLAIMED AND WAIVED.
LANDLORD AND TENANT WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS LEASE. THIS
WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY TENANT AND TENANT
ACKNOWLEDGES THAT NEITHER LANDLORD NOR ANY PERSON ACTING ON BEHALF OF LANDLORD
HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR
IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. TENANT FURTHER ACKNOWLEDGES THAT IT
HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE
SIGNING OF THIS LEASE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL. TENANT FURTHER ACKNOWLEDGES THAT IT HAS READ
AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION AND AS
EVIDENCE OF SAME HAS EXECUTED THIS LEASE.
SECTION 11.12 Parking. Tenant's occupancy of the Premises shall include, at
no additional cost, the use of 4.8 parking spaces per 1,000 rentable square feet
of the Premises, up to a maximum of 112 parking spaces, which shall be used in
common with other tenants, invitees and visitors to the Premises. Tenant may
designate up to ten (10) such parking spaces, near Tenant's main suite entrance,
with Landlord's reasonable approval as to location, as "reserved". The cost of
designating such parking spaces as reserved shall be borne by Landlord. Tenant
agrees not to overburden the parking facilities, to cooperate with Landlord and
other tenants in use of the parking facilities and that neither it nor shall any
of its employees, agents or invitees
40
park any vehicles overnight in the parking facilities, without express written
approval of Landlord. If Tenant's use of the parking facility exceeds its
allocated spaces, Tenant shall immediately take such steps as Landlord may
reasonably require to reduce such excess usage. Further Landlord may allocate
and reassign parking spaces among Tenant and other tenants and may reconfigure
the parking area and modify the existing ingress to and egress from the parking
area as Landlord shall deem reasonably appropriate provided that Tenant
continues to have use of and access to the number of parking spaces provided for
in this Section.
SECTION 11.13 No Accord or Satisfaction. No payment by Tenant or receipt by
Landlord of a lesser amount than the Rent and other sums due hereunder shall be
deemed to be other than on account of the earliest Rent or other sums due, nor
shall any endorsement or statement on any check or accompanying 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 such
Rent or other sum and to pursue any other remedy provided in this Lease.
SECTION 11.14 Acceptance. The submission of this Lease by Landlord does not
constitute an offer by Landlord or other option for, or restriction of, the
Premises, and this Lease shall only become effective and binding upon Landlord,
upon full execution hereof by Landlord and delivery of a signed copy to Tenant.
SECTION 11.15 Waiver of Counterclaim. Tenant hereby waives the right to
interpose any counterclaim of whatever description, other than compulsory
counterclaims, in any summary proceeding.
SECTION 11.16 Time Is of the Essence. Time is of the essence of this Lease.
Unless specifically provided otherwise, all references to terms of days or
months shall be construed as references to calendar days or calendar months,
respectively.
SECTION 11.17 Counterparts. This Lease may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but such counterparts shall together constitute one and the same instrument.
SECTION 11.18 Quiet Environment. Provided this Lease is in full force and
effect and Tenant is not in default, Tenant may peaceably and quietly hold the
Premises without disturbance by Landlord or any person lawfully claiming through
Landlord, subject to the terms and conditions of this Lease.
SECTION 11.19 Tenant Expansion Option. Tenant shall have an ongoing right
of first offer to lease all or a portion of any rentable space that may become
available in the Building during the Term of the Lease and any Renewal Option
Period (if exercised). This Tenant Expansion Option is contingent upon:
(a) such office space not being encumbered by the rights of any existing
tenant in the Building;
(b) Landlord not being contractually or otherwise obligated to make such
space available to Tenant during the last twenty four (24) months of the Lease
or any Renewal Option Period (if exercised);
41
(c) Tenant agreeing to a lease term for such space not longer than the
balance of the Term of the Lease for the Premises but in no event less than
three (3) years;
(d) Landlord shall notify Tenant in writing on each occasion of:
(i) Landlord becoming aware that space will become available; or
(ii) within one hundred eighty (180) days of the scheduled expiration
date of any applicable lease concerning such space; collectively the "Landlord's
Notice".
(e) After receiving Landlord's Notice, Tenant will respond to Landlord
within ten (10) business days, in writing, of its intent to lease such available
space. If Tenant fails to respond within such ten (10) business day period, time
being of the essence, Landlord shall be free to lease such available space to
any third party.
(f) Should Tenant elect to let such available space, the Basic Rent shall
be the Fair Market Rate.
(i) Market Rent Rate. The "Fair Market Rent Rate" as used herein,
shall mean the fair market rental rate then being charged and the renovation
allowance then being provided for like space with a like "Use" as set forth in
the Lease, similarly situated in single story office buildings of similar age
and quality within a five (5) mile radius of the Building. Landlord shall give
Tenant written notice of the proposed rental rate. If Tenant shall dispute the
proposed rental rate and if the parties cannot agree upon the rental rate with
thirty (30) days, then either party, by ten (10) days written notice to the
other party, ( the "Arbitration Notice") may refer such dispute to arbitration
in accordance (except as may otherwise be set forth herein) with the rules of
the American Arbitration Association then prevailing. Landlord and Tenant shall
each select a qualified, independent real estate broker or appraiser with at
least ten (10) years experience in leasing or appraising office buildings ion
the Loudoun, Virginia area to act as arbitrators in the determination of the
Fair Market Rent Rate. If either party shall fail to appoint its arbitrator
within ten (10) days after receipt of the Arbitration Notice the single
arbitrator shall determine the Fair Market Rent Rate. If the values determined
by the arbitrators are less than five (5%) percent apart, the average of the
values determined by them shall be deemed the Fair Market Rent Rate for the
Premises. If the arbitrators do not agree and if their determinations are more
than five (5%) percent apart, then the two arbitrators shall select a third
independent, impartial arbitrator of like qualification, who shall, within
thirty (30) days following appointment, determine which of the Fair Market Rent
Rates determined by the original two arbitrators is closest to the Fair Market
Rent Rate determined by the third arbitrator. The closest Fair Market Rent Rate
to the third arbitrator's Fair Market Rent Rate shall be used and the
determination of the third arbitrator shall control and be binding upon the
parties. Each party shall pay the fees and expenses of its arbitrator and the
fees an expenses of the third arbitrator shall be shared equally between
Landlord and Tenant. If such arbitration shall not be concluded prior to the
commencement of the renewal term, then the initial rent for the renewal term
shall be the rate proposed by Landlord in the Rental Notice (or, if lower, such
rate as Landlord shall have proposed in the arbitration), which rate shall
remain in effect until a ruling is reached in arbitration, and if the
arbitration shall result in a lower rent, Tenant shall be entitled to a credit
against the next succeeding installments of rent due hereunder for such
overpayment as it shall
42
have theretofore made. If the arbitration shall result in a higher rent, Tenant
shall within thirty (30) days thereafter pay to Landlord the amount of the
underpayment. Upon the determination of the matters referred in this Article,
Landlord and Tenant shall enter into an agreement supplementary to the Lease, as
amended, setting forth the applicable rent for the Option Space.
SECTION 11.20 Satellite Dish/Antenna. Tenant shall have the right to
install, operate, maintain, repair, replace and remove a satellite dish or
antenna (the "Dish") and all necessary related equipment on the roof of the
Building subject to the following terms, conditions and limitations: (i) the
location, size and installation of the Dish and all related equipment shall be
as approved by Landlord, and Tenant shall obtain Landlord's prior written
approval with regard to the plans and specifications of the Dish and the related
equipment; (ii) the Dish and all related equipment shall be in compliance with
all governmental, statutory, code and regulatory requirements, (iii) all costs
of installation, operation, maintenance, repair, replacement and removal of the
Dish and related equipment (including but not limited to repair of the roof) and
any and all attendant costs shall be the sole responsibility of Tenant; (iv) if
required by Landlord or law or regulation, Tenant shall screen the Dish by
providing fencing or screening material reasonably satisfactory to Landlord; (v)
Tenant's installation or operation of the Dish shall not materially interfere
with the operation or any other transmission or receiving device at the Building
or at the Corporate Campus present at the time of installation; (vi) at the
expiration or earlier termination of the Lease, Tenant shall, upon Landlord's
request, remove the Dish and repair any and all damage caused by such removal;
(vii) Tenant assumes all responsibility for any losses, damages or injures which
may occur as a result of the Dish except to the extent caused by the gross
negligence or willful misconduct of Landlord or its agents; (viii) the Tenant
shall incur any costs associated with relocation or re-calibration of the Dish
due to re-roofing, roof maintenance purposes, or for any reason; and (ix) there
shall be no charge or rental due Landlord by Tenant for the Dish.
IN TESTIMONY WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.
LANDLORD TENANT:
By: /s/ Charles Schouten By: /s/
-------------------------------- -------------------------------------
Charles Schouten, President Name:
-----------------------------------
Title:
----------------------------------
WILLOWBROOK HOLDINGS, INC., A HEALTHSCRIBE, INC., a Delaware
Delaware Corporation Corporation
Attest:
By: /s/ Carmen Taveras Cruz
--------------------------------
Carmen Taveras Cruz
Secretary
Tax Identification No.:
------------
43
EXHIBIT A
LEGAL DESCRIPTION OF LAND
PORTION OF THE LAND OF PARCEL D-2, SECTION 3 LOUDOUN TECH CENTER
GUILFORD ELECTION DISTRICT, LOUDOUN COUNTY, VIRGINIA
SEPTEMBER 2, 1988
Beginning at a corner common to Glenn and Nokes and Kettler and Scott, Inc.
Thence, departing Glenn and Kettler and Scott, Inc., and running with the
northerly line of Nokes, S 79 degrees 54' 00" W, 231.28 feet to a point; and N
81 degrees 15' 31" W, 757.19 feet to a point.
Thence, departing Nokes and running through the land of Parcel D-2, Section
3, Loudoun Tech Center and running 357.99 feet along the arc of a curve to the
right, whose radius is 1041.74 feet (delta 19 degrees 41' 22"; tangent 180.78;
chord bearing N 57 degrees 28' 09" E; chord 356.23 feet) to a point.
Thence, N 67 degrees 18' 50" E, 193.84 feet to a point.
Thence, running 408.44 feet along the arc of a curve to the left whose
radius is 1041.74 feet (delta 22 degrees 27' 52"; tangent 206.88 feet; chord
bearing N 56 degrees 04' 54" E; chord 405.83 feet) to a point in the westerly
line of said Kettler and Scott, Inc.
Thence, running with said Parcel D-2, Section 3, Loudoun Tech Center and
the westerly line of Kettler and Scott, Inc., S 15 degrees 45' 47" E, 589.47
feet to the point of beginning.
CONTAINING 6.7472 ACRES OF LAND MORE OR LESS
44
EXHIBIT E
WORK LETTER AGREEMENT ("WORK AGREEMENT")
The following provisions shall govern the preparation and approval process
for the drawings and specifications for the build-out of the Premises and terms
and conditions relating to contractors and subcontractors in connection with the
build-out of the Premises.
A. Description of Landlord's Work. Subject to the terms and conditions of
this Work Agreement, Landlord agrees to construct, at its sole cost and expense,
a building shell in accordance with Exhibit E-1 hereto ("Landlord's Work").
B. General Matters regarding Plans and Specification. Tenant shall cause
its architect and/or engineer to prepare "Tenant's Space Plans", the "Working
Drawings" and the "Final Plans" (as such terms are defined below) for Tenant's
Work. The fees of Tenant's architect and engineer shall be paid by Landlord from
the "Tenant Improvement Allowance", as defined below.
C. Tenant Improvement Work. (1) Tenant shall submit to Landlord for
Landlord's approval a space plan for the build-out of the Premises ("Tenant's
Space Plans") prepared by Tenant's architect showing the interior layout of the
Premises and its integration with building systems, core areas and the building
shell improvements in sufficient detail to permit Landlord a reasonable
opportunity to review and provide preliminary approval or comments regarding
Tenant's proposed interior design. Landlord shall review and approve or
disapprove of Tenant's Space Plans within ten (10) business days after receipt
of same, which approval shall not be unreasonably withheld, conditioned or
delayed, except or to the extent such plans affect the structure of the Premises
or the Building, the exterior of the Premises or the areas outside thereof or
the building systems (exclusive of the HVAC system), in which case, Landlord may
withhold such approval in its sole discretion. If Landlord disapproves, either
in whole or in part, of Tenant's Space Plans, Landlord shall provide to Tenant
with reasonable specificity Landlord's reasons for its disapproval. Tenant shall
promptly correct or otherwise address all disapproved items identified by
Landlord. The work shown in Tenant's Spare Plans shall be deemed "Tenant
Improvement Work."
(2) Tenant's Space Plans, Working Drawings and Final Plans shall be
prepared by The M Group, an architect hereby approved by Landlord, or such other
licensed architect as Tenant shall select and Landlord shall approve, such
approval not to be unreasonably withheld, conditioned or delayed.
(3) Tenant's Improvement Work shall include a HVAC system meeting
specifications reasonably acceptable to Landlord.
(4) Tenant shall remove any "raised" floor installed by it at the
expiration or sooner termination of the Lease.
D. Working Drawings and Final Plans. Tenant shall cause its architects
and/or engineers to prepare and Tenant shall submit to Landlord complete
preliminary architectural plans, construction drawings, mechanical, electrical
and plumbing drawings and specifications
49
for the Premises (the "Working Drawings"), including those base building
improvements (such as HVAC and sprinkler distribution and the like) which are
interior to the Premises or otherwise need to be coordinated with Landlord's
Work in order to be performed properly, which approval shall not be unreasonably
withheld, conditioned or delayed (except as provided in paragraph C above). The
Working Drawings shall be submitted to Landlord in form sufficient for the
permitting and construction of the Premises, and the bidding of Tenant's
Improvement Work (that is, in such form so that, if approved by Landlord without
revision, the same would be sufficient for the permitting and construction of
the Premises, and the bidding of Tenant's Improvement Work). Within five (5)
business days Landlord or its designated contractor shall provide Tenant with
its written approval of the Working Drawings or with a written a list of its
objections, modifications, deletions or qualifications to the same along with
proposed reasonable changes so as to meet Landlord's approval. Tenant shall
cause Tenant's architect and engineer to prepare final drawings, plans and
specifications (the "Final Plans"), based on the Working Drawings but conforming
to Landlord's objections, modifications, deletions or qualifications and
proposed changes (or substitutions reasonably acceptable to Landlord) within ten
(10) business days. No plans and specifications shall constitute the Final Plans
hereunder unless and until the same have been approved in writing by both
Landlord and Tenant. Landlord agrees to respond to Tenant within five (5)
business days of Tenant's written request for Landlord's approval. If Landlord
fails to respond with the five (5) business days period, Tenant may deliver a
second request for approval; if Landlord does not respond within five (5)
business days of delivery of such second notice, then Landlord's approval shall
be deemed granted.
E. Construction. Following the preparation and approval of Tenant's Space
Plans and the Working Drawings, the Premises shall be built-out in accordance
with the Final Plans with such field changes as are consistent with sound
construction practices and such other changes as are approved by Tenant and
Landlord (Landlord's approval not to be unreasonably withheld, conditioned or
delayed except to the extent provided in paragraph C above). Tenant shall have
the right to hire its own Project Manager and/or General Contractor, subject to
Landlord's reasonable approval. If Tenant elects to have Landlord select the
General Contractor or manage the construction, Landlord or its Project Manager
shall act as construction manager ("Construction Manager") and shall supervise
the construction of Tenant's Improvement Work, for a fee equal to three percent
(3%) of the total hard cost of Tenant's Improvement Work, such fee to be payable
monthly in arrears based upon the total costs of Tenant's Improvement Work
incurred through the prior month less the amount of any fee previously paid. In
the event Tenant elects to use its own Project Manager to select the General
Contractor and manage the construction of the Premises, Landlord, or its agent,
shall not be entitled to any construction oversight fee but will be entitled to
reimbursement of reasonable and customary third-party costs incurred in the
review of plans and specifications. In the event that the Tenant elects to have
the Landlord select the General Contractor, then the Landlord shall solicit bids
from three (3) general contractors. The form of contract shall be a fixed price,
lump sum contract. Landlord shall award the contract to the lowest qualified
bidder unless otherwise agreed to in writing by Tenant. Construction Manager
shall direct the bidding process.
F. Tenant Improvement Allowance. (1) Landlord agrees to provide to Tenant
an allowance with respect to the Premises in the sum of Fifty Dollars ($50.00)
per square foot (the "Tenant Improvement Allowance") (i.e., a tentative total of
23,407 sf x $50.00 psf = One Million One Hundred Seventy Thousand Three Hundred
Fifty Dollars ($1,170,350.00), which shall be
50
used by Tenant to construct the interior of the Demised Premises, including in
its reasonable discretion: hard costs, soft costs such as planning, permitting
and managing construction, security installations and related equipment,
telecom/data requirements, specialty equipment and furniture ( inclusive of the
management fee stated in Subsection E above, if applicable), hereafter the
"Allowable Costs"). Tenant may apply up to Five Dollars ($5.00) per square foot
or One Hundred Seventeen Thousand Thirty Five Dollars ($117,035.00) of the
Tenant Improvement Allowance for moving costs of Tenant's furniture and fixtures
(the "Moving Allowance"). The Moving Allowance shall be paid to Tenant within
thirty (30) days after Landlord's receipt of all documentation evidencing such
moving costs.
(2) Upon Tenant's submission, not more frequently than once a month,
Landlord shall pay directly to Tenant's contractor(s) amounts up to the sum of
the Tenant Improvement Allowance, for any Allowable Costs. Tenant shall submit
with such request for payment: a)copies of contractor's invoices, b) Tenant's
authorization for payment of said invoices, c) contractor release of mechanic's
lien claims, d) architect's certificates for periodic payment and/or substantial
completion and e) such other documentation as Landlord may reasonably request
(collectively the "Payment Documents"). Landlord shall make payment within
thirty (30) days following receipt of all of the above items. Tenant may also
pay certain Allowable Costs directly and upon doing so, may submit a request
along with copies of paid invoices to Landlord for reimbursement out of the
Tenant Improvement Allowance, within thirty (30) days following receipt of
Tenant's request for payment and the Payment Documents.
(3) Except for expenses paid in accordance with section (F) (2) above,
Tenant shall, subject to the Tenant Improvement Allowance and subparagraph (3)
below, pay promptly in cash and so as to avoid the imposition of any mechanic's
or materialman's lien against the Land or the Premises all costs and expenses of
Tenant's Improvement Work, Tenant's fit-out and furniture, fixtures and
equipment in the Premises, including all costs for permits and other
governmental approvals required for Tenant's Improvement Work. Landlord shall
not be required to pay any of such costs and expenses except for the Tenant
Improvement Allowance.
(4) Within one hundred eighty (180) days following Substantial Completion
of the Premises (as defined in Section L below) Landlord and Tenant shall
provide to each other a final accounting and reconciliation of Allowable Costs
incurred by the Parties. If any amount is due from one party to the other
pursuant to such computation, that party shall pay the amount owed to the other
within ten (10) days thereafter.
G. Changes to Tenant Plans. Tenant shall have the right to request changes
in the Final Plans and any such change shall be initiated by Tenant's architect
and approved by Landlord, which approval shall not be unreasonably withheld
(except for changes which affect the structure of the Premises, the exterior of
the Premises or the areas outside thereof or the building systems in which case
Landlord may withhold its consent in its sole discretion) and reasonably
approved by the general contractor. Further, if changes are made by Tenant to
the Final Plans after Landlord's approval, and should these changes to Tenant's
Final Plans cause postponement of Substantial Completion of the Premises or
delay the Commencement Date, then Landlord shall have the right to refuse to
permit the making of such changes unless Tenant shall make the payment that
would be due Landlord pursuant to paragraph G above based upon such
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Tenant Delay (subject to adjustment after completion of such work and foal
determination of the amount of delay).
H. Tenant's Work. Tenant shall be responsible for all work, construction
and installation in the Premises which is not designated as Landlord's Work and
Tenant Improvement Work (including but not limited to all fixtures, equipment
and other office installations) or part of the base building condition. Such
work shall be referred to as "Tenant's Work," and shall be at Tenant's sole cost
and expense subject to the application of the Tenant Improvement Allowance.
Tenant's Work shall be considered an alteration for purposes of this Lease, and
shall be subject to the provisions of Section 6.1 thereof. Prior to commencing
any Tenant's Work, Tenant shall submit drawings and specifications for Tenant's
Work to Landlord, showing all aspects of such work, to Landlord for Landlord's
review and approval, which approval as to matters which do not affect the
structure of the Premises, the exterior of the Premises or the area outside
thereof or the building systems shall not be unreasonably withheld.
I. Permits, Certificate of Occupancy. Except as provided below, Tenant
shall obtain all necessary permits in connection with the Tenant Improvement
Work (at Tenant's expense). Subject to the application of the Tenant Improvement
Allowance. Tenant shall be responsible for applying for and obtaining all
permits required for Tenant to perform the Tenant's Improvement Work, and for
obtaining the fmal fire inspection approval after installation of Tenant's Work,
if any.
J. Notice. Tenant and Landlord shall, by notice to the other in writing,
designate a single individual who Tenant or Landlord agrees shall be available
to meet and consult with the other at the Premises as Tenant's or Landlord's
representative respecting the matters which are the subject of this Exhibit and
who, as between Landlord and Tenant, shall have the power to legally bind Tenant
and Landlord, in making requests for changes, giving approval of plans or work,
giving directions to Tenant and Landlord or the like, under this Exhibit (each
of these representatives shall be a "Construction Representative").
K. Substantial Completion. For purposes of this Lease, "Substantially
Complete" or "Substantial Completion" means full completion of Landlord's Work
and Tenant Improvement Work, and that the Premises are in compliance with all
Requirements, except for minor or insubstantial details of construction,
decoration or installation such that would not materially interfere with the use
and occupancy of the Premises for the conduct of Tenant's business therein, as
the case may be, and except for the completion of items of work which must, in
accordance with good construction practices, be performed after the completion
of other work to be performed by Tenant and Landlord, or the designated
contractor, has received a temporary certificate of occupancy or non-residential
use permit for the Premises, which issuance shall be conclusive evidence of
Substantial Completion) permitting Tenant's occupancy of the Premises for normal
business operations and all parking is available.
L. Permits; Compliance with Laws. The Tenant's Space Plans shall be in a
form in which building permits can be readily obtained and shall comply with all
Requirements, and Tenant's Improvement Work shall comply with all Requirements
and shall be such as will permit all governmental permits and approvals,
including a Certificate of Occupancy, to be obtained in due course as relevant
upon the commencement, performance and completion of Tenant's
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Improvement Work. Tenant's architect shall certify to Landlord and Tenant that
Tenant's Space Plans comply with the Americans with Disabilities Act of 1990
("ADA") and all Requirements.
M. Default. The failure by Landlord or Tenant to comply with the provisions
of this Exhibit E shall constitute a default by that respective entity under the
Lease and the non-defaulting party shall have the benefit of all remedies
provided for in the Lease.
N. No Liability. Notwithstanding the review and approval by Landlord of
Tenant's Space Plans and specifications, Landlord shall have no responsibility
or liability in regard to the safety, sufficiency, adequacy or legality thereof
and Tenant shall be solely responsible for the compliance of such plans and
specifications with all Requirements, the architectural completeness and
sufficiency thereof and other matters relating thereto, except to the extent a
valid construction permit is issued therefore.
O. Code Compliance. Landlord shall construct the base building so that it
is in compliance with all Requirements, including the ADA.
P. Access. Effective as of the Delivery Date, Landlord shall grant Tenant
and its agents reasonable access to the Premises for the purposes of taking
measurements and reviewing the performance of Landlord's Work and for performing
the Tenant's Improvement Work; provided that such access shall be under such
conditions as Landlord may impose to avoid any interference with the prosecution
of Landlord's Work.
Q. Disputes. In the event that either party shall have any claim or dispute
under this Exhibit E, both parties agree that such claim or dispute shall be
decided by arbitration in accordance with the Construction Industry Rules of the
American Arbitration Association. Both parties irrevocably submit to such
arbitration. Both parties further agree that any decision so rendered through
that arbitration shall be fmal and binding on both parties hereto and may be
entered in any court of competent jurisdiction.
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EXHIBIT E-1
LANDLORD'S WORK
BUILDING SPECIFICATIONS STRUCTURAL:
Structural reinforced concrete slab on grade designed for 150-pound live
load. Steel beams and columns with steel deck with economical steel bar joist
framing for roof structure. Typical bay spacing is 30'-O" by 43'-8". Overall
building depth is 115'-0". Brick and block knee wall system.
Exterior:
Three colors of modular face brick with ground and split face accent bands
supported by structural box beam and steel stud support framing for the veneer.
Kynar coated aluminum glazing system with 1 1/4" reinforced laminated insulated
gray tint lites with storefront glass at major building entry points.
Interior:
The interior knee wall to include studs.
Column Spacing:
Typical column spacing is 30'-O" by 43'-8" with variations at isolated
locations to accommodate the site.
Roof:
Ballasted EPDM (ethylene propylene diene material) roof membrane by
Carlisle with 10-year warranty over R-19 insulation with internal roof drains
provided. A five-foot roof screen with 18" bottom clear space for snow loading
provides for an effective screen of 6'-6" screening along the length of the
building for roof top units. Such roof screen enclosure is provided to shield
future roof top units.
Finished Ceiling/Clear Heights:
Finished ceiling heights of 10'-O" provided with 13'-6" clearance to the
underside of the lowest portion of the structure.
Mechanical Systems:
Per tenant design (from TI allowance). Will consist of screened rooftop
mounted package units that will be utilized for both heating and cooling.
Electrical Systems:
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5.0 watts/sf is available for 120v receptacles on the tenant floors and 2.0
watts/sf is available for 277v lighting on floor. Single electrical service
entrance with single 2000 amp pad mounted transformer outside of Premises. A
480v distribution with step down dry type transformer for 120/208v for tenant
power distribution. Building will have complete site lighting including parking
lot, soffit and loading areas.
Life Safety:
Fire standpipe and base building fire alarm systems are provided per code.
[Vertical sprinkler riser for distribution through the Premises and sprinkler
loop with upturned heads that provides a 20'-O" by 20'-O" sprinkler grid with
each head having a 10'-O" radius spray pattern.] Sprinkler system flow and
tamper devices are tied into a central monitoring station on site for off site
monitoring capabilities.
Water Connections:
A 1" valved cold-water source will be provided for future connections and
an 8" sanitary line the full length of the building will provide for building
restrooms, etc.
Window Coverings:
1" horizontal mini blinds will be furnished for all exterior windows.
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