IMPORTANT NOTE: CERTAIN MATERIAL, INDICATED BY [***], HAS BEEN OMITTED FROM THIS
DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
DEED OF LEASE
BETWEEN
11720 Sunrisecorp., L.L.C., a Maryland limited liability company
as Landlord,
AND
PATHNET, INC. a Delaware corporation
as Tenant.
Dated: November 1, 1999
For Premises Located
At: 11720 Sunrise Valley Drive
Reston, Virginia
Terrace, First and Second Floors
DEED OF LEASE
THIS DEED OF LEASE (this "Lease") is made as of the 1st day of
November, 1999 (the "Date of Lease"), by 11720 Sunrisecorp., L.L.C., a Maryland
limited liability company ("Landlord"), and Pathnet, Inc. a Delaware corporation
("Tenant").
Landlord and Tenant, intending legally to be bound, hereby covenant and
agree as set forth below.
ARTICLE I
BASIC LEASE PROVISIONS
The following terms, when used herein, shall have the meanings set
forth below.
1.1 PREMISES. For purposes of this Lease, the rentable square footage
of the Premises shall be deemed to be 39,103 square feet, on the Ground Floor,
First Floor and Second Floor of the Building (hereafter defined) as outlined on
Exhibit A-1 attached hereto and made a part hereof. For purposes of this Lease,
the Premises shall consist of two (2) portions, the first ("Space A") consisting
of approximately 10,157 rentable square feet located on the ground floor of the
Building as shown on EXHIBIT A-1, attached hereto and incorporated herein by
reference, and the second ("Space B") consisting of approximately 28,946
rentable square feet on the first and second floors of the Building as shown on
EXHIBIT A-1. During the period between the Space A Commencement Date (as defined
below) and the Space B Commencement Date (as defined below), the Premises shall
be deemed to consist solely of Space A. After the Space B Commencement Date, the
Premises shall be deemed to consist of Space A and Space B. Applicable
provisions of this Lease shall be construed accordingly, to give effect to such
phased delivery of the Premises. The Premises shall include the exclusive use of
the loading dock that is adjacent to (and connected to) Space A.
1.2 BUILDING. The building containing approximately 68,771 rentable
square feet shown on EXHIBIT A-2 attached hereto and made a part hereof, and all
alterations, additions, improvements, restorations or replacements now or
hereafter made thereto, with an address of:
11720 Sunrise Valley Drive
Reston, Virginia
The Premises and Building have been measured prior to the Date of Lease using
the BOMA standard method of measurement, and the square footages set forth
herein are hereby stipulated by the parties.
1.3 TERM. Commencing on the Space A Commencement Date (with respect to
Space A) and on the Space B Commencement Date (with respect to Space B) and
ending on the Expiration Date.
1.4 COMMENCEMENT DATE. With respect to Space A, November 22, 1999 (the
"Space A Commencement Date"). Except as specifically provided to the contrary in
EXHIBIT B, with respect to Space B, March 15, 2000.
1.5 EXPIRATION DATE. The last day of the [***] Lease Year, as such term
is defined below.
l.6 BASE RENT.
(a) A total of [***] for the first Lease Year payable in equal monthly
installments of [***]. The Base Rent shall be increased annually commencing on
the first day of the second Lease Year in accordance with the following
schedule:
LEASE YEAR TOTAL ANNUAL BASE RENT MONTHLY INSTALLMENT
- ------------------- ------------------------------------------------
[***] [***] [***]
Except as hereafter provided, the above rent schedule shall take effect on the
first day of the first Lease Year, which shall be April 1, 2000 unless the Space
B Commencement Date is deferred past April 1, 2000 pursuant to the express terms
of EXHIBIT B, in which event the first day of the First Lease Year shall be the
Space B Commencement Date unless the Space B Commencement Date is a day other
than the first day of a calendar month, in which case the first day of the first
Lease Year shall be the first day of the calendar month occurring immediately
after the Space B Commencement Date. In addition to Base Rent payable under the
above rent schedule, Tenant shall make a payment to Landlord on April 1, 2000 in
respect of its use and occupancy of Space A in the amount of [***] (for the
period prior to and including March 31, 2000). If the Space B Commencement Date
is for any reason deferred past April 1, 2000 pursuant to the express terms of
EXHIBIT B, Tenant will beginning on April 1, 2000, pay Monthly Base Rent for
Space A at a rate of [***] per month for Space A, until the first day of the
first Lease Year, at which time the above rent schedule shall apply to the
Premises as a whole. In addition, on the Space B Commencement Date, Tenant shall
pay Base Rent for Space B for the period between the Space B Commencement Date
and the first day of the first Lease Year at the same per square foot rental
rate as in effect for the first Lease Year, calculated for Space B on a PER DIEM
basis. By way of example, if the Space B Commencement Date is March 15, 2000,
Tenant will, in addition to the [***] payment for Space A which is due on April
1, 2000, and the Base Rent payment of [***] which is due on April 1, 2000 under
the above rent schedule, make a payment of Base Rent for Space B in the amount
of [***], for the 17-day period from March 15, 2000 to March 31, 2000,
inclusive, which payment will be due and payable on March 15, 2000.
1.7 SECURITY DEPOSIT. Initially, the Security Deposit shall be [***].
Landlord agrees that, provided Tenant has not committed a Default under this
Lease (after giving effect to all applicable notice and cure periods) which is
then continuing, and has not committed more than [***] Defaults (after giving
effect to all applicable notice and cure periods) within the [***] month period
prior to the date of such reduction (even if the same are not then continuing),
the Security Deposit shall be subject to reduction on an annual basis, in
accordance with the following schedule:
REDUCTION DATE AMOUNT OF SECURITY DEPOSIT
- ---------------------------------------------------------------------------
[***] [***]
After the first day of the [***] Lease Year, there will be no further reduction
of the Security Deposit, which will remain at [***] for the balance of the Term
(as the same may be extended). In addition, if Tenant commits more than [***]
Defaults under this Lease (after giving effect to all applicable notice and cure
periods) in any [***] period, there shall thereafter be no further reductions of
the Security Deposit.
1.8 BASE YEAR. The Base Year for calculation of Operating Expenses and
Real Estate Taxes shall be Calendar Year 2000 (E.G., January 1, 2000 to December
31, 2000).
1.9 TENANT'S PROPORTIONATE SHARE OF OPERATING EXPENSES. 56.86% of the
Operating Expenses.
1.10 TENANT'S PROPORTIONATE SHARE OF REAL ESTATE TAXES 56.86% of Real
Estate Taxes .
1.11 PARKING SPACE ALLOCATION. 3.3 spaces per 1,000 square feet of
rentable area, which shall be in unreserved, non-exclusive parking spaces
available in the Parking Facilities.
1.12 PERMITTED USE. Tenant may use the Premises for general office uses
and any other use permitted as a matter of right under applicable zoning
regulations which is not a "Prohibited Use", as hereafter defined. Landlord
agrees that the term "Permitted Use" shall include any other use permitted as a
matter of right under applicable zoning regulations which is appropriate and
incidental to the operation of a telecommunications provider, including a
network operating center, testing facilities for electronic equipment, network
interconnection space, and training facilities. The foregoing notwithstanding,
Tenant agrees that the following uses shall be prohibited, even if permitted as
a matter of right under applicable zoning regulations or related to Tenant's
business as a telecommunications provider (each being referred to herein as a
"Prohibited Use"): (i) Any retail use; (ii) Any industrial use; (iii) Any use
which would involve the storage, disposal, use or processing of Hazardous
Materials (other than Permitted Materials which are specifically allowed
herein); (iv) any use involving unreasonable safety risks or concerns (including
any significant risk of bodily injury or property damage); (v) any use which
would increase the rates charged for property and casualty insurance applicable
to the Building; and (vi) any use which is not consistent with the operation of
a first class office property, as determined by Landlord in its reasonable
discretion. Any use or activity which is not a Permitted Use is expressly
prohibited by this Lease.
1.13 TENANT'S TRADE NAME. Pathnet
1.14 BROKER(S). Landlord's: Julien J. Studley, Inc.
Tenant's: Trammell Crow Real Estate Services, Inc.
1.15 LANDLORD'S ADDRESS.
Prior to November 12, 1999: c/o Penzance Properties, L.L.C.
1719 Hoban Road, N.W.
Washington, D.C. 20007
November 12, 1999 and after: c/o Penzance Properties, L.L.C.
5627 Potomac Avenue, N.W.
Washington, D.C. 20016
With a copy to: McShea Management, Inc.
One Bank Street, Suite 300
Gaithersburg, Maryland 20878
Attention: Property Manager
- 11720 Sunrise Valley Drive
And a copy to: Mark S. Tenenbaum, Esq.
Tenenbaum & Saas, P.C.
4330 East-West Highway
Suite 1150
Bethesda, MD 20814
1.16 TENANT'S ADDRESS.
Before Occupancy: Pathnet, Inc.
1015 31st Street, N.W.
Washington, D.C. 20007
Attn: General Counsel
After Occupancy: Pathnet, Inc.
11720 Sunrise Valley Drive
Reston, VA [ZIP]
Attention: General Counsel
1.17 GUARANTOR AND GUARANTOR'S ADDRESS. Not Applicable.
ARTICLE 2
DEFINITIONS
The following terms, when used herein, shall have the meanings set
forth below.
2.1 ADDITIONAL RENT. As defined in Section 5.3.
2.2 AGENTS. Officers, partners, directors, employees, agents,
licensees, customers, contractors and invitees.
2.3 ALTERATIONS. Alterations, additions or improvements of any kind or
nature to the Premises or the Building, whether structural or non-structural,
interior, exterior or otherwise except that, with respect to any of the
foregoing items proposed to be made for or by Tenant, Alterations shall be
deemed to exclude (i) decorations of a cosmetic nature which do not impact the
structure or operation of the base building systems of the Building and will not
be readily apparent and visible from the exterior of the Building (e.g.,
carpeting, wall coverings, painting), (ii) Tenant's equipment, furniture and
demountable wall panels (but Alterations shall not exclude Landlord's right of
review over the integration of such equipment, furniture and/or demountable wall
panels to any Building utility system or structural elements), and (iii) any
Tenant Improvements constructed by Landlord pursuant to EXHIBIT B.
2.4 CALENDAR YEAR. A period of twelve (12) months commencing on each
January 1 during the Term, except that the first Calendar Year shall be that
period from and including the Commencement Date through December 31 of that same
year, and the last Calendar Year shall be that period from and including the
last January 1 of the Term through the earlier of the Expiration Date or date of
Lease termination. Notwithstanding the foregoing, the Calendar Year for the Base
Year shall be not more than, and not less than, one (1) year.
2.5 COMMON AREA. All areas, improvements, facilities and equipment from
time to time designated by Landlord for the common use or benefit of Tenant,
other tenants of the Building and their Agents, including, without limitation,
roadways, entrances and exits, landscaped areas, open areas, park areas,
exterior lighting, service drives, loading areas, pedestrian walkways,
sidewalks, atriums, courtyards, concourses, stairs, ramps, washrooms,
maintenance and utility rooms and closets, exterior utility lines, hallways,
lobbies, elevators and their housing rooms, common window areas, common walls,
common ceilings, common trash areas and Parking Facilities.
2.6 EVENT OF DEFAULT. As defined in Article 22.
2.7 HEREIN, HEREAFTER, HEREUNDER AND HEREOF. Under this Lease,
including, without limitation, all Exhibits and any Riders.
2.8 INCLUDING AND/OR INCLUDES. Including, but not limited to, and/or
includes, without limitation. The term "including" and like terms used herein to
identify particular items as being related to (or examples of) a descriptive
term, phrase or provision shall, unless where expressly indicated to the
contrary, be viewed as non-exclusive, and the identification of particular
items, or use of such examples, shall not limit any other item or example which
fits within the particular descriptive term, phrase or provision.
2.9 INTEREST RATE. Per annum interest rate listed as the base rate on
corporate loans at large U.S. money center commercial banks as published from
time to time under "Money Rates" in the WALL STREET JOURNAL plus three percent
(3 %). but in no event greater than the maximum rate permitted by law. In the
event the WALL STREET JOURNAL ceases to publish such rates, Landlord shall
choose at Landlord's sole discretion a similar publication which publishes such
rates.
2.10 LAND. The piece or parcel of land described in EXHIBIT A-2 and all
rights, easements and appurtenances thereunto belonging or pertaining, or such
portion thereof as shall be allocated by Landlord to the Building.
2.11 LEASE YEAR. Each consecutive twelve (12) month period elapsing
after (i) the Space B Commencement Date, if the Space B Commencement Date occurs
on the first day of a month, or (ii) the first day of the month following the
Space B Commencement Date, if the Space B Commencement Date does not occur on
the first day of a month.
2.12 MORTGAGE. Any mortgage, deed of trust, security interest or title
retention interest affecting the Building or the Land.
2.13 MORTGAGEE. The holder of any note or obligation secured by a
mortgage, deed of trust, security interest or title retention interest affecting
the Building or the Land, including, without limitation, lessors under ground
leases, sale-leasebacks and lease-leasebacks.
2.14 OPERATING EXPENSES. As defined in Section 7.2.
2.15 PARKING FACILITIES. All parking areas now or hereafter made
available by Landlord for use by tenants, including, without limitation,
open-air parking, parking decks and parking areas under or within the Building,
whether reserved, exclusive, non-exclusive or otherwise.
2.16 REAL ESTATE TAXES As defined in Article 8.
2.17 RENT. Base Rent and Additional Rent.
2.18 RULES AND REGULATIONS. The rules and regulations set forth in
EXHIBIT C attached hereto and made a part hereof, as the same may be amended or
supplemented from time to time.
2.19 SUBSTANTIAL COMPLETION. As defined in the Work Agreement attached
hereto and made a part hereof as EXHIBIT B.
2.20 SUBSTANTIAL PART. More than fifty percent (50%) of the rentable
square feet of the Premises or the Building, as the case may be.
2.21 WORK AGREEMENT. As set forth in EXHIBIT B attached hereto and made
a part of
ARTICLE 3
THE PREMISES
3.1 LEASE OF PREMISES. In consideration of the agreements contained
herein, Landlord hereby leases the Premises to Tenant, and Tenant hereby leases
the Premises from Landlord, for the Term and upon the terms and conditions
hereinafter provided. As an appurtenance to the Premises, Tenant shall have the
non-exclusive right, together with other tenants of the Building and their
Agents, to use the Common Area. Landlord shall retain absolute dominion and
control over the Common Area and shall operate and the Common Area in such
manner as Landlord, in its sole discretion, shall determine; provided, however,
such exclusive right shall not operate to prohibit or materially interfere with
Tenant's Permitted Use and quiet enjoyment of the Premises. Landlord expressly
reserves the right permanently to change, modify or eliminate, or temporarily to
close, any portion of the Common Area, provided Landlord will not make any
permanent (or long term) modifications which materially interfere with Tenant's
access to the Premises, with Tenant's business operations in the Premises, or
with Tenant's other rights under this Lease. The Premises are leased subject to,
and Tenant agrees not to violate, all present and future covenants, conditions
and restrictions of record which affect the Building and Land.
3.2 LANDLORD'S RESERVATIONS. In addition to the other rights of
Landlord under this Lease, Landlord reserves the right (i) to change the street
address and/or name of the Building, (ii) to install, erect, use, maintain and
repair mains, pipes, conduits and other such facilities to serve the Building's
tenants in and through the Premises, (iii) to grant to anyone the exclusive
right to conduct any particular business or undertaking in the Building, (iv) to
establish a condominium regime for the Building, the Land and/or the Common Area
and to include the Premises therein, (v) subject to Section 29.2, below, to
control the use of the roof and exterior ways of the Building for any purpose,
and (vi) to modify the size and configuration of the Common Area, including the
construction of temporary or permanent structures or improvements therein,
provided Landlord will not make any permanent (or long term) modifications which
materially interfere with Tenant's access to the Premises, with Tenant's
business operations in the Premises, or with Tenant's other rights under this
Lease. Subject to the foregoing limitations, Landlord may exercise any or all of
the foregoing rights without being deemed to be guilty of an eviction, actual or
constructive, or a disturbance or interruption of the business of Tenant or
Tenant's use or occupancy of the Premises.
ARTICLE 4
TERM
The Term shall commence on the Space A Commencement Date (with respect
to Space A) and on the Space B Commencement Date (with respect to Space B) and
shall expire at midnight on the Expiration Date. If requested by Landlord,
Tenant shall within fifteen (15) days of such request sign a declaration
acknowledging the Commencement Date and the Expiration Date in the form attached
hereto and made a part hereof as EXHIBIT D.
ARTICLE 5
RENT
5.1 BASE RENT. Tenant shall pay to Landlord the Base Rent as specified
in Section 1.6.
5.2 PAYMENT OF BASE RENT. Base Rent for each Lease Year shall be
payable in monthly installments, in advance, without demand, notice, deduction,
offset or counterclaim, on or before the first day of each and every calendar
month during the Term, subject however, to the provisions of Section 1.6, above
in relation to Base Rent payable for the period between the Space A Commencement
Date and the first day of the first calendar month after the Space B
Commencement Date. Tenant shall pay the Base Rent and all Additional Rent, by
good check, made payable to Landlord or in lawful currency of the United States
of America, to Landlord at c/o McShea Management, Inc., One Bank Street, Suite
300, Gaithersburg, Maryland 20878, or to such other address or in such other
manner as Landlord from time to time specifies by written notice to Tenant. Any
payment made by Tenant to Landlord on account of Base Rent may be credited by
Landlord to the payment of any late charges then due and payable and to any Base
Rent or Additional Rent then past due before being credited to Base Rent
currently due.
5.3 ADDITIONAL RENT. All sums payable by Tenant under this Lease, other
than Base Rent, shall be deemed 'Additional Rent,' and, unless otherwise set
forth herein, shall be payable in the same manner as set forth above for Base
Rent.
5.4 ACCEPTANCE OF RENT. If Landlord shall direct Tenant to pay Base
Rent or Additional Rent to a 'lockbox' or other depository whereby checks issued
in payment of Base Rent or Additional Rent (or both, as the case may be) are
initially cashed or deposited by a person or entity other than Landlord (albeit
on Landlord's authority), Tenant agrees to make such payments in a timely
fashion in accordance with such direction from Landlord.
ARTICLE 6
SECURITY DEPOSIT
6.1 GENERAL. Simultaneously with the execution of this Lease, Tenant
shall deposit in the form of an irrevocable letter of credit the Security
Deposit with Landlord, which shall be held by Landlord as security for the
performance of Tenant's obligations and covenants under this Lease. It is
expressly understood and agreed that such deposit is not an advance rental
deposit or a measure of Landlord's damages in case of an Event of Default.
6.2 SECURITY AFTER HAVING BEEN CONVERTED INTO CASH. If Landlord shall
draw upon any letter of credit provided by Tenant as and for its Security
Deposit in accordance with this Lease, thereby converting such letter of credit
into cash, the terms of this Section 6.2 shall apply. If an Event of Default
shall occur or if Tenant fails to surrender the Premises in the condition
required by this Lease, Landlord shall have the right (but not the obligation),
and without prejudice to any other remedy which Landlord may have on account
thereof, to apply all or any portion of the Security Deposit to cure such
default or to remedy the condition of the Premises. If Landlord so applies the
Security Deposit or any portion thereof before the Expiration Date or earlier
termination of this Lease, Tenant shall deposit with Landlord, upon demand, the
amount necessary to restore the Security Deposit to its original amount. If
Landlord shall sell or transfer its interest in the Building, Landlord shall
have the right to transfer the Security Deposit to such purchaser or transferee,
and upon such transfer, Tenant shall look solely to the new landlord for the
return of the Security Deposit, and Landlord thereupon shall be released from
all liability to Tenant for the return of the Security Deposit. Whether held in
the form of cash or in the form of a letter of credit, any remaining balance of
the Security Deposit shall be returned to Tenant within thirty (30) days after
the Expiration Date or earlier termination of this Lease, less any amounts
retained or permitted to be held thereafter by Landlord pursuant to the terms of
this Lease pending the satisfaction of Tenant's obligations under this Lease.
Any portion of the Security Deposit that is held in cash or other liquid funds
(as opposed to in the form of a letter of credit) shall be maintained by
Landlord in an account with a third-party bank or financial institution at which
Landlord normally conducts its banking (or as designated by Landlord's
mortgagee), shall be invested only in direct obligations of the federal
government, in an escrow account segregated from Landlord's other funds, and any
interest earned thereon shall be deemed to have been added to and to form a part
of the Security Deposit (and shall be reflected as income to Tenant for income
tax reporting purposes), PROVIDED Tenant shall have the right to request (and
receive) a disbursement of such interest on a quarterly basis (as of the end of
each calendar quarter) so long as it is not in Default hereunder (beyond
expiration of applicable notice and cure periods). Tenant's EIN for purposes of
federal income tax reporting is _____________.
6.3 SECURITY IN THE FORM OF AN IRREVOCABLE LETTER OF CREDIT. If the
Security Deposit is posted in the form of a letter of credit, such letter of
credit (i) shall be unconditional and irrevocable, (ii) shall name as the
beneficiary Landlord and any party reasonably designated by Landlord (including
Landlord's mortgagee), either of whom may act without joinder of the other, and
shall be fully assignable by the beneficiary, (iii) shall permit multiple draws,
(iv) shall be issued by a commercial bank reasonably acceptable to Landlord with
branches in the Washington, D.C. metropolitan area, (v) shall be payable at
sight upon presentment to a local branch of the issuer in in the Washington,
D.C. metropolitan area, of a simple sight draft signed by any one beneficiary
accompanied by a certificate signed by such beneficiary stating that the
Landlord is permitted to draw upon such Letter of Credit under the express terms
of this Lease, either because the Tenant is in Default hereunder, or has failed
to satisfy the requirements of clause (vii) of this Section 6.3, below, and
setting forth the amount that is permitted to be drawn in such instance, (vi)
shall have a term of not less than one (1) year; and (vii) shall, at least
thirty (30) days prior to the then-current expiration date of such Letter of
Credit, either (a) be renewed (or automatically and unconditionally extended)
for another period of not less than one year, continuing throughout the Term, so
that the same is maintained in full force and effect through the thirtieth
(30th) day after expiration of the Lease Term), or (b) replaced with cash in the
amount of the Security Deposit. In the event of Default by Tenant hereunder
(E.G., after expiration of applicable notice and cure periods), or a failure to
renew or extent the Letter of credit or supply a cash Security Deposit in place
thereof pursuant to clause (vii), above, Landlord shall have the right to redeem
or draw upon all or any portion of such letter of credit in order to cure such
default (including satisfaction of any sums due and owing from Tenant under this
Lease) by submitting a sight draft to the financial institution issuing such
letter of credit indicating the amount sought to be drawn, and stating that
Landlord is permitted to draw upon the letter of credit pursuant to the terms of
this Lease in the amount indicated. Notwithstanding anything in this Lease to
the contrary, any grace period or cure periods which are otherwise applicable
under Section 24, hereof, shall not apply to Tenant's failure to comply with the
requirements of clause (vii), above, or if the Letter of Credit is set to expire
under circumstances where Landlord is permitted to continue to hold the Security
Deposit under Section 6.5, below past such expiration date, and in such event,
Landlord shall have the immediate right to draw upon the Letter of Credit in
full and hold the proceeds thereof as a cash Security Deposit in accordance with
the terms hereof. In the event any portion of such letter of credit has been
redeemed or drawn upon by Landlord, Tenant shall be required to restore such
letter of credit to its full amount as provided herein. Any failure or refusal
of the issuer to honor the Letter of Credit shall be at Tenant's sole risk and
shall not relieve Tenant of its obligations hereunder with respect to the
Security Deposit. Within thirty (30) days after the expiration of the Term,
Landlord shall return such letter of credit to Tenant, subject to Landlord's
right to draw sums thereunder to secure the completion of any unperformed
obligations of Tenant under this Lease, as more fully set forth below. If
Landlord shall sell or transfer its interest in the Building, Landlord shall
have the right to obligate Tenant to amend said letter of credit so that it is
payable to such purchaser or transferee, in which event Tenant shall look solely
to such purchaser or transferee for the return of the letter of credit, and
Landlord thereupon shall be released from all liability to Tenant for the return
of the Security Deposit.
6.4 POST MOVE-OUT INSPECTION. Landlord and Tenant shall conduct a "Post
Move-Out Inspection" of the Premises at a time reasonable scheduled by Landlord
and Tenant within fifteen (15) days after the Expiration Date or earlier
termination of this Lease, but in any event prior to reentry by Landlord for the
purpose of preparing the Premises for relet. Failure on Tenant's part to attend
the Post Move-Out Inspection, after notice from Landlord of the exact date(s)
thereof, within said fifteen (15) day period shall be deemed an acceptance by
Tenant of Landlord's assessment of the condition of the Premises.
6.5 RETENTION OF SECURITY DEPOSIT AFTER EXPIRATION OR EARLIER
TERMINATION OF LEASE. Landlord generally agrees to return the Security Deposit
to Tenant within thirty (30) days after the Expiration Date (or date of earlier
termination of this Lease). The foregoing notwithstanding: (i) if this Lease is
terminated due to a Default by Tenant, Landlord may continue to hold (and as
necessary, apply) the Security Deposit until such time as all of Tenant's
obligations under this Lease have been satisfied, at which time Landlord will
return any remaining amount of the Security Deposit within thirty (30) days
after the final satisfaction of such obligations, and (ii) if Tenant is in
breach of any of its covenants and/or obligations under this Lease as of or
after the Expiration Date (or earlier termination of this Lease), including
without limitation any of Tenant's removal and/or restoration obligations, and
any of Tenant covenants under Article 24, Article 26, Section 29.2 and/or 29.3,
hereof, and Landlord either notified Tenant of such breach prior to the
Expiration Date (or date of such earlier termination) or notifies Tenant thereof
within the thirty (30) day period after the Expiration Date (or date of such
earlier termination), then in such event, Landlord may continue to hold (and, as
applicable, apply) the Security Deposit (or such portion thereof, up to the
whole) as Landlord estimates may be necessary to compensate Landlord for damages
associated with such breach or to perform such obligations on Tenant's behalf,
such amount to be held until such time as all of Tenant's obligations under this
Lease have been satisfied, at which time Landlord will return any remaining
amount of the Security Deposit within thirty (30) days after the final
satisfaction of such obligations. To the extent the Security Deposit is being
held in the form of a letter of credit at such time, Landlord will have the
right to draw upon the letter of credit in such amount prior to the expiration
date thereof, and to hold the amount so drawn as a cash Security Deposit
pursuant hereto.
ARTICLE 7
OPERATING EXPENSES
7.1 TENANT'S PROPORTIONATE SHARES OF OPERATING EXPENSES. Tenant shall
pay to Landlord throughout the Term, as Additional Rent, Tenant's Proportionate
Share of the amount by which the Operating Expenses during each Calendar Year
exceed the Operating Expenses during the Base Year. In the event that the
Commencement Date or the Expiration Date are other than the first day of a
Calendar Year then Tenant's Proportionate Shares of Operating Expenses shall be
adjusted to reflect the actual period of occupancy during the Calendar Year.
7.2 OPERATING EXPENSES DEFINED. As used herein, the term "Operating
Expenses" shall mean all expenses and costs which Landlord incurs because of or
in connection with the ownership, maintenance, management and operation of the
Building and Land. In no event will any gross-up and allocation provisions set
forth herein be construed or implemented in order to allow Landlord to recover
from the tenants of the Building more than the amounts expended by Landlord for
the items in question, and such provisions shall be interpreted equitably to
ensure that the costs and services which make up the Operating Expenses of the
Building are properly allocated among the parties benefiting therefrom.
Operating Expenses shall include, without limitation, all costs, expenses and
disbursements incurred or made in connection with the following:
(i) Wages and salaries of all employees, including without
limitation an on-site management agent and staff, whether employed by Landlord
or the Building's management company (but, if employed by the management
company, only to the extent such expense is passed through to Landlord under the
property management agreement for the Building), engaged in the operation and
maintenance or security of the Building and all costs related to or associated
with such employees or the carrying out of their duties, including uniforms and
their cleaning, taxes, auto allowances and insurance and benefits (including,
without limitation, customary contributions to pension and/or profit sharing
plans and vacation or other paid leave as customary for such employees in the
Northern Virginia employment market), PROVIDED that no wages, salaries and or
related benefits and costs will be included for any employee at or above the
rank of Vice President, and any such items payable to or with respect to
employees (whether on-site or off-site) who do not devote their full time to the
Building will be included only to the extent such employees are reasonably
allocable to the Building, as determined by the Landlord in its reasonable
discretion.
(ii) All supplies and materials, including janitorial and
lighting supplies, used directly in the operation and maintenance of the
Building;
(iii) All utilities, including, without limitation,
electricity, telephone, water, sewer, power, gas, heating, lighting and air
conditioning for the Building, except to the extent such utilities are charged
or chargeable directly to, or paid or payable directly by or on behalf of, a
tenant of the Building or other third party;
(iv) All insurance purchased by Landlord or Landlord's
management company relating to the Building and any equipment or other property
contained therein or located thereon including, without limitation, casualty,
liability, rental loss, sprinkler and water damage insurance;
(v) All maintenance to the Building (excluding repairs paid
for by the proceeds of insurance or by Tenant or other third parties) including
interior, exterior, structural or non-structural, and regardless of whether
foreseen or unforeseen, except as provided in Section 12.1, below, but expressly
excluding capital expenditures or expenses in the nature of capital improvements
except as provided in Section 7.2(xi), below;
(vi) All maintenance of the Building, including, without
limitation, painting, ice and snow removal, landscaping, groundskeeping and the
patching, painting and resurfacing of roads, driveways and parking lots, but
expressly excluding capital expenditures or expenses in the nature of capital
improvements except as provided in Section 7.2(xi), below;
(vii) A management fee payable to Landlord or the company or
companies managing the Building, if any, not to exceed then prevailing market
rates for managing comparable office buildings in the Reston, Virginia
submarket;
(viii) Accounting and legal fees incurred in connection with
the operation and maintenance of the Building or related thereto;
(ix) All maintenance, operation and service agreements for the
Building, and any equipment related thereto, including, without limitation,
service and/or maintenance agreements for the sprinkler system in the Building,
if any (excluding those paid for by Tenant or any other third parties);
(x) Any additional services not provided to the Building at
the Commencement Date but thereafter provided by Landlord as Landlord shall deem
necessary or desirable in connection with the management or operation of the
Building, the Land and the Common Area;
(xi) any capital expenditures (1) incurred to reduce Operating
Expenses or utility costs, (2) incurred to comply with any governmental law,
order, regulation or other requirement (e.g., a code-mandated life safety
system) which are enacted or which become effective after the date of this
Lease, or (3) incurred to replace existing equipment and machinery necessary to
the day to day operation of the Building, or which constitute capital
replacements of common facilities serving the Building or Common Areas (i.e.,
replacements of common area or common usage Building components and systems
which are necessary, and are made in lieu of capital repairs otherwise required
to be made thereto) provided that any capital replacement permitted under clause
(3), above (A) shall be undertaken only where continued repair of the item in
question is inadequate to remedy the problem as determined by Landlord in its
reasonable judgment, (B) shall be amortized on a monthly payment basis over the
useful life of the replacement item (as determined in accordance with generally
accepted accounting principles) together with interest at the Interest Rate (or
such higher interest rate as may have been paid by Landlord on funds borrowed
for the purposes of incurring such capital expenditures), and only the total
monthly payments of principal and interest coming due in each applicable
calendar year during the Term, as determined under such amortization schedule,
shall be recoverable by Landlord under this Section in any such calendar year,
and (C) shall not be included as an Operating Expenses to the extent the same is
made prior to the end of [***] Lease Year.
(xiii) Other expenses and costs reasonably necessary for
operating and maintaining the Building, Land and/or Common Area.
7.3 EXCLUSIONS FROM OPERATING EXPENSES. Operating Expenses shall not
include the following:
(i) Legal fees, space planners' fees, real estate brokers'
leasing commissions and advertising expenses incurred in connection with the
leasing of space in the Building;
(ii)Costs and expenses of alterations or improvements of
the Premises or the leasehold premises of other individual tenants, whether by
contribution, rent abatement or otherwise;
(iii) Costs of correcting defects in, or inadequacy of, the
design or construction of the Building or the materials used in the construction
of the Building or the equipment or appurtenances thereto to the extent covered
by warranties and recovered by Landlord;
(iv) Depreciation, interest and principal payments on
mortgages and other debt costs, if any, other than amortization of and the
interest factor attributable to permitted capital improvements, and payments
under any ground leases; and
(v) Costs and expenses associated with the operation of the
business of the person or entity which constitutes Landlord as the same are
distinguished from the costs of operation of the Building, including accounting
and legal matters, costs of defending any lawsuits (other than lawsuits
involving the maintenance, repair and operation of Common Areas, such as
lawsuits involving vendors or suppliers providing services or materials used in
connection therewith), costs of selling or financing any of Landlord's interest
in the Building and costs incurred in connection with disputes with other
tenants;
(vi) Costs and expenses in connection with services or other
benefits of a type that are not available to Tenant
without specific charge therefor;
(vii) Penalties, fines and associated legal expenses incurred
due to violation by Landlord or any tenant in the Building of any terms of any
applicable federal, state or local government laws, rules, codes or regulations;
(viii) Costs and expenses otherwise includable in Operating
Expenses to the extent that Landlord is reimbursed from other sources (other
than through payments of Operating Expenses by Tenant or other tenants at the
Building);
(ix) Franchise or income taxes imposed on Landlord;
(x) Salaries paid to off-site personnel of Landlord (or
Landlord's property management firm) at or above the level of Vice President, or
otherwise not permitted to be included as an Operating Expense under Section
7.2(i), above;
(xi) Landlord's advertising and promotional costs for the
Building;
(xii) Payments to a company or other entity affiliated with
Landlord or Landlord's management company (including, without limitation,
payments for real estate management services) to the extent such payments exceed
the amount that would have been paid to independent third parties for goods and
services of like kind;
(xiii) Costs and expenses in connection with the abatement,
encapsulation or removal of Hazardous Materials, including asbestos or
asbestos-containing materials;
(xiv) Costs and expenses incurred to remedy conditions in the
Building that violate requirements of law, rules, ordinances or regulations
which took effect or were enacted prior to the date of this Lease;
(xv) Costs and expenses attributable to the negligence or
willful misconduct of Landlord, its employees or agents, or any management
company at the Building;
(xvi) Equipment leases for equipment leased in lieu of capital
expenditures that would have been excluded pursuant to this Section 7.3; and
(xvii) Costs of any capital expenditures, except to the extent
such capital expenditures may be included in Operating Expenses pursuant to
clause 7.2(xi), above.
In addition, in the calculation of any costs or expenses under
this Article 7, it is expressly understood that no cost or expense shall be
charged more than once.
7.4 ESTIMATED PAYMENTS. Landlord shall submit to Tenant, before the
beginning of each Calendar Year, a statement of Landlord's estimate of the
Operating Expenses payable by Tenant during such Calendar Year. In addition to
the Base Rent, Tenant shall pay to Landlord on or before the first day of each
month during such Calendar Year an amount equal to one-twelfth (1/12) the
estimated Operating Expenses payable by Tenant for such Calendar Year as set
forth in Landlord's statement. If Landlord fails to give Tenant notice of its
estimated payments due under this Section for any Calendar Year, then Tenant
shall continue making monthly estimated payments in accordance with the estimate
for the previous Calendar Year until a new estimate is provided. If Landlord
determines that, because of unexpected increases in Operating Expenses or other
reasons, Landlord's estimate of the Operating Expense was too low, then Landlord
shall have the right to give a new statement of the estimated Operating Expenses
due from Tenant for such Calendar Year or the balance thereof and to bill Tenant
for any deficiency which may have accrued during such Calendar Year, and Tenant
shall thereafter pay monthly estimated payments based on such new statement.
7.5 ACTUAL OPERATING EXPENSES. Within one hundred twenty (120) days
after the end of each Calendar Year, Landlord shall submit a statement to Tenant
showing the actual Operating Expenses for such Calendar Year and Tenant's
Proportionate Share of the amount by which such Operating Expenses exceed the
Operating Expenses during the Base Year. If for any Calendar Year, Tenant's
estimated monthly payments exceed Tenant's Proportionate Share of the amount by
which the actual Operating Expenses for such Calendar Year exceed the Operating
Expenses during the Base Year, then Landlord shall either pay such amount to
Tenant within thirty (30) days after the date of such statement, or give Tenant
a credit in the amount of the overpayment toward Tenant's next monthly payments
of estimated Operating Expenses and/or Base Rent. If for any Calendar Year
Tenant's estimated monthly payments are less than Tenant's Proportionate Share
of the amount by which the accrual Operating Expenses for such Calendar Year
exceed the Operating Expenses during the Base Year, then Tenant shall pay the
total amount of such deficiency to Landlord within thirty (30) days after
receipt of the statement from Landlord. Landlord's and Tenant's obligations with
respect to any overpayment or underpayment of Operating Expenses shall survive
the expiration or termination of this Lease.
7.6 TENANT'S RIGHT TO AUDIT. In the event Tenant shall dispute the
amount set forth in Landlord's statement of actual Operating Expenses, Tenant
shall have the right, not later than sixty (60) days following receipt of such
statement, to cause Landlord's books and records with respect to the preceding
Calendar Year to be audited by Tenant or by an independent Certified Public
Accountant mutually acceptable to Landlord and Tenant, in which event Landlord
will make all pertinent books and records for the subject Calendar Year (and, if
applicable, Base Year) available to Tenant or its Auditor at Landlord's offices,
or another mutually acceptable location within the Washington, D.C. metropolitan
area. Such audit shall occur upon not less than five (5) days prior written
notice to Landlord, at Landlord's place of business or the actual location of
Landlord's books and records if different from Landlord's place of business (but
in all events within the Washington, D.C. metropolitan area , during Landlord's
normal business hours. The amounts payable under this Article by Landlord to
Tenant or by Tenant to Landlord, as the case may be, shall be appropriately
adjusted on the basis of such audit, provided that, if Tenant performs the audit
on its own, or does not use an independent certified public accountant mutually
and reasonably acceptable to both Landlord and Tenant, Landlord shall have the
right to dispute the results of any such audit, as more fully provided for
below. If such audit discloses a liability for further refund by Landlord to
Tenant in excess of [***] of the payments previously made by Tenant for such
Calendar Year, the cost of such audit shall be borne by Landlord and shall not
be considered as an Operating Expense for purposes of this Lease; otherwise, the
cost of such audit shall be born by Tenant. Notwithstanding the foregoing, in no
event shall Landlord's cost for such audit exceed [***]. If Tenant shall not
request an audit in accordance with the provisions of this Section within sixty
(60) days of receipt of Landlord's statement of actual Operating Expenses,
Tenant shall have no further right to audit or modify Operating Expenses for
such Calendar Year (or, if applicable, the Base Year). In the event Landlord
wishes to dispute the results of any audit conducted by Tenant under this
Section 7.6, Landlord shall so notify Tenant in writing within thirty (30) days
after its receipt thereof, and, if the parties cannot resolve such dispute
voluntarily within thirty (30) days after such notice, the matters in dispute
will be submitted to an independent certified public accountant reasonably
acceptable to Landlord and Tenant (the "Independent CPA") , with Tenant to pay,
or Landlord to retain, the amount in dispute, if any, pending the resolution of
such dispute by the Independent CPA, and with the non-prevailing party to pay
all fees and costs charged by the Independent CPA to conduct such review and
resolve such dispute (and, if Tenant prevails, with Landlord to pay the amount
which was overpaid by Tenant, such fees and costs as aforesaid, and interest
thereon at the Interest Rate from the date such amount was paid by Tenant until
the date such amount was reimbursed by Landlord).
7.7 FURTHER ADJUSTMENT. In the event Landlord shall furnish any utility
or service which is included in the definition of Operating Expenses to less
than ninety-five percent (95%) of the rentable area of the Building because (i)
the average occupancy level of the Building for the Base Year and/or any
subsequent calendar year was not ninety-five percent (95%) or more of full
occupancy, (ii) any such utility or service is not required by or provided to
one or more of the tenants or occupants of the Building, and such tenant(s)
is(are) not required to contribute its(their) proportionate share thereof, or
(iii) any tenant or occupant is itself obtaining or providing any such utility
or services directly, then the Operating Expenses for such year (including the
Base Year) shall be adjusted to include all additional costs, expenses and
disbursements that Landlord reasonably determines would have been incurred had
the Building been ninety-five percent (95%) occupied during the year in question
and such utilities and services provided to all tenants. The intent of this
Section 7.7 is to ensure that the reimbursement of all Operating Expenses is
fair and equitably allocated among the tenants receiving such utilities and
services. In the calculation of Operating Expenses hereunder, no expense shall
be charged more than once.
ARTICLE 8
TAXES
8.1 GENERALLY. Tenant shall pay to Landlord throughout the Term, as
Additional Rent, Tenant's Proportionate Share of the amount by which the Real
Estate Taxes during each Calendar Year exceed the Real Estate Taxes during the
Base Year. In the event that the Commencement Date or the Expiration Date are
other than the first day of a Calendar Year, the Tenant's Proportionate Share of
Real Estate Taxes shall be adjusted to reflect the actual period of occupancy
during the Calendar Year. "Real Estate Taxes" shall mean all taxes and
assessments, including but not limited to, general or special, ordinary or
extraordinary, foreseen or unforeseen, assessed, levied or imposed by any
governmental authority upon the Building and the Land and upon the fixtures,
machinery, equipment or systems in, upon or used in connection with any of the
foregoing (exclusive of personal property owned by any other tenant or occupant
of the Building), and the rental, revenue or receipts derived therefrom
(exclusive of income taxes and/or franchise taxes on such income), under the
current or any future taxation or assessment system or modification of,
supplement to, or substitute for such system. Real Estate Taxes also shall
include special assessments which are in the nature of or in substitution for
real estate taxes, including, without limitation, road improvement assessments,
special use area assessments and school district assessments. If at any time the
method of taxation prevailing at the Date of Lease shall be altered so that in
lieu of, as a substitute for or in addition to the whole or any part of the
taxes now levied or assessed, there shall be levied or assessed a tax of
whatever nature which is assessed against property owners or operators of
commercial real estate projects in respect of property or the income derived
therefrom (but which is not an income tax or franchise tax), then the same shall
be included as Real Estate Taxes hereunder. Landlord shall charge Tenant for its
Proportionate Share of Real Estate Taxes in accordance with the procedures
established under Sections 7.4 and 7.5 for payment of Operating Expenses.
8.2 CONTESTING TAXES. Within thirty (30) days after receipt of a notice
of assessment with respect to the Real Estate Taxes for the Building, which
assessment relates to a period entirely within the Term of this Lease, Landlord
shall deliver to Tenant a copy of the same, together with written notice as to
whether Landlord intends to contest such assessment. If Landlord contests any
such assessment, Tenant shall cooperate, and shall have the right to participate
at its expense, in such contest (and the reasonable costs thereof shall be
included within the definition of Real Estate Taxes herein). If Landlord does
not elect to contest such assessment, then Tenant shall have the right to
contest, by appropriate administrative or legal proceedings, such assessment (or
the Real Estate Taxes applicable to the Building), as long as the period for
which such Real Estate Taxes are being contested does not extend beyond the
Expiration Date of this Lease, and provided further that: (i) Tenant shall give
Landlord prior written notice of its intention to contest such tax and the
identity of its tax counsel or consultant, which shall be subject to Landlord's
approval (which shall not be unreasonably withheld, conditioned or delayed);
(ii) such contest shall not be permitted to proceed if it could cause or result
in a sale or foreclosure of such Building, or impose any civil or criminal
penalties upon Landlord; (iii) Tenant shall timely pay all Real Estate Taxes
necessary to pursue such contest if and to the extent payment is necessary for
the prosecution of such protest or contest; (iv) Tenant shall diligently
prosecute such contest, and keep Landlord informed on a regular basis with
respect thereto (including provision of copies to Landlord of all written
filings made or received by Tenant therein); (v) Tenant shall pay any interest
or penalties with respect to the tax protested or contested, (vi) Tenant shall
not cancel, discontinue or settle such proceedings without Landlord's prior
written consent (which shall not be unreasonably withheld, conditioned or
delayed), and (vii) Tenant shall be responsible for (and shall pay as Additional
Rent hereunder) all increased Real Estate Taxes resulting from any adverse
decision or action taken as a result of such tax contest. If as a result of any
such challenge, a tax refund is made to Landlord, then Tenant's Share of the
difference between the amount of such refund less the expenses of the challenge
shall be paid to Tenant within thirty (30) days after the date received by
Landlord (or Tenant shall receive a credit toward Tenant's next monthly payments
of estimated Operating Expenses and/or Base Rent in such amount).
ARTICLE 9
PARKING
9.1 PARKING SPACES. During the Term, Tenant shall have the right to use
the Parking Space Allocation for its employees, agents, business guests and
invitees. Tenant's Parking Space Allocation shall consist of unreserved and
non-exclusive parking spaces available in the Parking Facilities. Tenant shall
not overburden the Parking Facilities, and any usage in excess of the Parking
Space Allocation may, at Landlord's election, be deemed to overburden the
Parking Facilities, provided Landlord agrees that it will forbear on asserting
any claim of Default against Tenant for overburdening the Parking Facilities as
long as no other tenant or occupant of the Building is complaining to Landlord
with regard to the excessive or disproportionate use of the Parking Facilities
by Tenant and its employees, agents, business guests and invitees.
9.2 CHANGES TO PARKING FACILITIES. Landlord shall have the right, from
time to time, without Tenant's consent, to change, alter, add to, temporarily
close or otherwise affect the Parking Facilities in such manner as Landlord, in
its sole discretion, deems appropriate including, without limitation, the right
to designate reserved spaces available only for use by one or more tenants
(however, in such event, those parking spaces shall still be deemed Common Area
for the purpose of the definition of Operating Expenses), PROVIDED that in
conducting any modifications or closures to the Parking Facilities (other than
temporary closings for parking lot maintenance or repair, or other improvements,
modifications or expansions to the Building and/or Common Areas which impact the
Parking Facilities, which will be conducted so as to minimize interference with
Tenant's use and enjoyment of the Parking Spaces), Landlord shall provide
alternative parking facilities reasonably acceptable to Tenant so as not to
decrease the number of parking spaces available to Tenant below the Parking
Space Allocation. In addition, if Landlord exercises its right to designate
reserved parking spaces for a tenant under any lease of the Building, Landlord
agrees to designate for the benefit of Tenant a comparable number of reserved
parking spaces (and no reservation of reserved parking for any tenant or
occupant of the Building shall be construed to reduce Tenant's Parking Space
Allocation).
ARTICLE 10
USE
Tenant shall occupy the Premises solely for the Permitted Use. The
Premises shall not be used for any other purpose without the prior written
consent of Landlord. Subject to Landlord's obligation to deliver the Premises to
Tenant in compliance with applicable laws, rules and regulations (except as the
same is limited under EXHIBIT B), Tenant shall comply, at Tenant's expense, with
(i) all present and future laws, ordinances, regulations and orders of the
United States of America, the Commonwealth of Virginia and any other public or
quasi-public federal, state or local authority having jurisdiction over Tenant's
use, occupancy and operations within the Premises, and (ii) any reasonable
requests of Mortgagee or any insurance company providing coverage with respect
to the Premises. The foregoing notwithstanding, Landlord shall remain
responsible for any improvements required by the Americans with Disabilities
Act, any by applicable life, fire and safety codes or similar laws, rules and
regulations, except (i) Tenant shall be responsible for all of the foregoing to
the extent arising out of (A) Tenant's specific use of the Premises, (B) the
failure of Tenant Improvement designed by Tenant's architect pursuant to EXHIBIT
B to so comply, unless (1) such failure is the result of deviations in
construction from Approved Plans, (2) the applicable item within such Approved
Plans would have been in compliance with such laws, codes and regulations but
for such deviation(s), and (3) such deviation is itself NOT due to the acts or
omissions of a general contractor, subcontractor or other party designated or
selected by Tenant, and/or (C) any Alterations to the Premises made by or on
behalf of Tenant, and (ii) Landlord shall have the right to include the expenses
associated with any such improvements as Operating Expenses to the extent
permitted under Sections 7.2 and 7.3 of the Lease (and subject to the
limitations set forth therein). Tenant shall not use or occupy the Premises in
any manner that is unlawful or dangerous or that shall constitute waste,
unreasonable annoyance or a nuisance to Landlord or the other tenants of the
Building. Tenant shall not use, store or dispose of any hazardous, dangerous,
inflammable, toxic or explosive materials on the Premises, other than Permitted
Materials (as defined in, and solely to the extent allowed under, Article 26 of
this Lease).
ARTICLE 11
ASSIGNMENT AND SUBLETTING
11.1 CONSENT REQUIRED. Subject to the terms of this Section 11, Tenant
shall not assign, encumber, mortgage, pledge, license, hypothecate or otherwise
transfer the Premises or this Lease, or sublease all or any part of the
Premises, or permit the use or occupancy of the Premises by any party other than
Tenant, without the prior written consent of Landlord, which shall not be
unreasonably withheld as more fully set forth below.
11.2 PROCEDURE.
11.2.1 Tenant must request Landlord's consent to any such
assignment or sublease in writing at least ten (10) business days prior to the
commencement date of the proposed sublease or assignment, which written request
(a "Proposal Notice") must include (1) the name and address of the proposed
assignee or subtenant, (2) the nature and character of the business of the
proposed assignee or subtenant, (3) financial information (including financial
statements) of the proposed assignee or subtenant, (4) the proposed effective
date of the assignment or sublease, which shall be not less than ten (10)
business days thereafter, and (5) an executed term sheet or letter of intent
setting forth all material terms and conditions of the proposed assignment or
sublease (the "Term Sheet"). Tenant shall also provide any additional
information Landlord reasonably requests regarding such proposed assignment or
subletting. Within ten (10) business days after Landlord receives Tenant's
Proposal Notice (with all required information and including the Term Sheet),
but subject to Section 11.5, below, to the extent applicable, Landlord shall
have the option (i) to grant its consent to such proposed assignment or
subletting, or (ii) to deny its consent to such proposed assignment or
subletting on a reasonable basis. If Landlord does not exercise one of the above
options (or the termination right set forth in Section 11.5, below) within ten
(10) business days after Landlord receives such Proposal Notice and Term Sheet,
then Tenant may assign or sublease the Premises upon the terms stated in the
Proposal Notice (and Term Sheet) provided that Tenant shall provide a copy of
the executed assignment or sublease to Landlord prior to the effective date of
such assignment or sublease in order for Landlord to confirm that there has been
no material deviation between the terms set forth in the Proposal Notice and
Term Sheet and the terms set forth in the final executed sublease or assignment,
it being agreed that any change in the net effective rent payable pursuant to
the assignment or sublease as originally set forth in the Proposal Notice and
Term Sheet shall be deemed to be material (and if there is any such material
deviation, the delivery of the executed sublease or assignment by Tenant to
Landlord shall be deemed to constitute the delivery of a new Proposal Notice by
Tenant to Landlord, subject to Landlord's approval and/or recapture rights, as
applicable under this Section 11.2).
11.2.2 Section 11.5, below, to the contrary notwithstanding,
Tenant shall have the right to enter into Short Term Subleases as hereinafter
defined without triggering Landlord's right of termination under Section 11.5,
but subject to Landlord's reasonable consent as determined pursuant to Section
11.2.3, below. The term "Short Term Sublease" shall mean any sublease which
meets all of the following tests: (A) when aggregated with the square footage of
all other subleases entered into pursuant to this Lease, the subleased premises
is less than [***] square feet of rentable area, (B) such sublease has a term of
[***] years or less, and (C) such sublease does not end during the last [***] of
the Term. In addition to the foregoing rights relating to Short-Term Subleases,
Tenant will also have the right to enter into subleases (hereinafter "Vendor
Subleases") for up to [***] square feet in the aggregate, in each case without
triggering Landlord's right of termination under Section 11.5 and/or Landlord's
rights under Section 11.3.1, provided (a) such subleases shall be limited to
individual offices which are not separately demised from the balance of the
Premises, (b) such subleases are entered into with vendors, suppliers, or other
companies with whom Tenant has ongoing contractual relations which make the
sublease in question reasonably necessary or appropriate for the fulfillment of
a business purpose specifically related to the conduct of Tenant's
telecommunications business, AND (c) the proposed subtenant: (1) is solvent and
is otherwise able to meet its financial and other obligations under its sublease
and with respect to its sublease premises, and (2) does not have a history of
landlord/tenant, debtor/creditor or other contractual problems (such as, but not
limited to, defaults, evictions, enforcement litigation or other disputes) with
Landlord, other landlords and/or creditors or other contracting parties.
11.2.3 Without limitation, it shall not be unreasonable for
Landlord to deny its consent to any proposed assignment or sublease which is not
a Vendor Sublease if: (1) the proposed assignee or sublessee is in financial
difficulty, is insolvent, or it otherwise appears that the proposed assignee or
subtenant may be unable to meet its financial and other obligations under this
Lease after such assignment or sublease; (2) the proposed assignee or subtenant
proposes to use the Premises for a purpose which is not a Permitted Use
hereunder, or which involves the provision of maintenance or services in excess
of that normally provided to office tenants generally; (3) the proposed assignee
or subtenant has a history of landlord/tenant, debtor/creditor or other
contractual problems (such
as, but not limited to, defaults, evictions, enforcement litigation or other
disputes) with Landlord, other landlords and/or creditors or other contracting
parties; (4) the proposed assignee or subtenant is an existing tenant, or the
affiliate of an existing tenant, in any building owned or operated by Landlord
or any affiliate of Landlord; (5) the proposed assignment or sublease has a net
effective rental rate which is less than [***] of the then fair market net
effective rental rate applicable to comparable space in comparable buildings in
the Reston, Virginia submarket; and/or (6) the proposed assignee or subtenant is
entitled to, or otherwise enjoys, sovereign or diplomatic immunity.
11.3 CONDITIONS. Any subleases and/or assignments hereunder are also
subject to all of the following terms and conditions:
11.3.1 If Landlord approves an assignment or sublease as
herein provided, Tenant shall pay to Landlord, as additional rent due under this
Lease, (i) in the case of an assignment, all sums received by Tenant in
consideration of such assignment (exclusive of sums paid to Tenant for other
assets transferred by Tenant as part of such transaction), calculated after
Tenant has recovered in full from such consideration its "Transaction Expenses"
(as hereafter defined), and (ii) in the case of a sublease, the amount, if any,
by which the rent, any additional rent and any other sums payable by the
subtenant to Tenant under such sublease, exceeds that portion of the Base Rent
plus Additional Rent payable by Tenant hereunder which is allocable to the
portion of the Premises which is the subject of such sublease, calculated after
Tenant has recovered in full its Transaction Expenses from such net amount. The
term "Transaction Expenses" shall mean all reasonable and actual out-of-pocket
expenses incurred by Tenant in procuring such assignment or sublease. The
foregoing payments shall be made on not less than a monthly basis by Tenant (in
the case of subleases) and in all cases within ten (10) business days after
Tenant receives the applicable consideration from the assignee or subtenant.
11.3.2 No consent to any assignment or sublease shall
constitute a further waiver of the provisions of this section, and all
subsequent assignments or subleases may be made only with the prior written
consent of Landlord. In no event shall any consent by Landlord be construed to
permit reassignment or re-subletting by a permitted assignee or sublessee.
11.3.3 The assignee under any assignment of this Lease shall
be fully (and, at landlord's option, directly) liable for all of the obligations
of "Tenant" under this Lease, on a joint and several basis with Tenant. Tenant
shall nevertheless remain fully liable to Landlord for all Lease obligations,
including those accruing after the effective date of such assignment.
11.3.4 Any sublease or assignment shall be subject to the
condition that the sublessee or assignee thereunder shall be bound by all of the
terms, covenants and conditions of this Lease (in the case of a sublease,
insofar as such terms, covenants and conditions relate to the portion of the
Premises subleased and/or the operations and conduct of business by the
sublessee).
11.3.5 Without limitation, any and all guaranties of this
Lease shall be unaffected by such sublease and assignment, and shall remain in
full force and effect for all purposes.
11.3.6 Any assignment or sublease without Landlord's prior
written consent shall be void, and shall, at the option of the Landlord,
constitute a default under this Lease.
11.3.7 Tenant shall pay to Landlord a processing fee of Two
Hundred Fifty and No/100 Dollars ($250.00), which shall accompany any proposed
assignment or sublease delivered by Tenant to Landlord, and which processing fee
shall be in addition to Landlord's reasonable attorneys fees and out-of-pocket
expenses incurred in connection with Landlord's review of such sublease or
assignment (if any), which shall also be reimbursed by Tenant.
11.4 AFFILIATED ENTITY; SALE OF BUSINESS.
11.4.1 Notwithstanding anything to the contrary in this Lease,
so long as such transfer is not effectuated as part of a transaction or series
of transfers orchestrated in order to effect a transfer of this Lease (or
Tenant's interest herein) in isolation to Tenant's other leasehold interests and
assets, Tenant may assign this Lease or sublet all or part of the Premises to
any entity (i) which controls or is controlled by Tenant, or (ii) which is under
common control with Tenant, or (iii) which purchases all or substantially all of
the assets of Tenant, or (iv) which purchases all or substantially all of the
stock of Tenant or (v) which merges with Tenant pursuant to a valid statutory
merger; PROVIDED, that (1) the assignee or sublessee is solvent and is otherwise
financially able to meet all of its obligations under the proposed assignment or
sublease, and (2) in such event, (a) except in cases of statutory merger, in
which case the surviving entity in the merger shall be liable as the Tenant
under this Lease, Tenant shall continue to remain fully liable under the Lease,
on a joint and several basis with the assignee or acquiror of such assets or
stock, (b) the terms of any guaranty of this Lease shall remain in full force
and effect, unmodified, and (c) following such sublease or assignment, Tenant or
such assignee, as the case may be, shall continue to comply with all of its
obligations under this Lease, including with respect to its Permitted Use of the
Premises.
11.4.2 Tenant shall be required to give Landlord at least
twenty (20) days written notice in advance of any sublease or assignment within
the scope of Section 11.4.1, above. Any other transfer of fifty percent (50%) or
more of the ownership interests (including, without limitation, partnership
interests or stock) in Tenant or of operating control over Tenant (whether by
management agreement, stock sale or other means) shall be deemed to constitute
an assignment of this Lease, and shall be subject to Landlord's consent as
aforesaid, PROVIDED that this sentence will not apply for so long as Tenant's
stock is listed for sale as a publicly traded security on a national securities
exchange.
11.4.3 Notwithstanding the last sentence of Section 11.4.2 to
the contrary, Landlord agrees that the offer and sale by Tenant (or any
stockholder of Tenant) of any stock pursuant to an effective registration
statement filed pursuant to the Securities Act of 1933 (including any initial
public offering of registered stock of the Tenant) or pursuant to and in
accordance with the securities laws of any foreign country governing publicly
traded companies and not in violation of U.S. law, shall not constitute an
assignment of this Lease, and shall not require the consent or approval of
Landlord.
11.4.4 Tenant shall not transfer all or substantially all of
its assets to any person or entity unless either (i) this Lease is one of the
assets so transferred to such other person or entity, and the transferee assumes
in writing, for Landlord's benefit, the obligations of Tenant accruing hereunder
from and after the effective date of the transfer, or (ii) the transferee(s)
thereof otherwise delivers to Landlord a written assumption of Tenant's
obligations hereunder.
11.5. RIGHT OF TERMINATION. Except for any sublease or assignment
permitted pursuant to Section 11.4, above, in the event of (i) a proposed
assignment of this Lease, or (ii) a proposed sublease which is not a Short Term
Sublease or a Vendor Sublease, Landlord shall have the right, by notice to
Tenant delivered within ten (10) business days after Landlord's receipt of
Tenant's Proposal Notice together with the executed assignment or sublease
instrument (and in lieu of the granting or denial of consent provided for in
Section 11.2, above), to terminate this Lease as to all of the Premises (in the
event of an assignment) or as to the proposed subleased portion of the Premises
only (in the event of a sublease), in each case for the balance of the Term. In
the event Landlord shall elect to terminate this Lease in connection with a
proposed assignment or sublease of this Lease as provided above in whole or in
part (as the case may be): (a) this Lease and the term hereof shall terminate
(either as to the Premises as a whole, or only as to the portion thereof which
Tenant is proposing to sublease, as the case may be) as of the later of (i) the
proposed effective date of such assignment or sublease, as set forth in Tenant's
Proposal Notice, or (ii) ten (10) business days after the date Landlord received
Tenant's Proposal Notice together with the executed assignment or sublease
instrument; (b) Tenant shall be released from all liability under the Lease (as
to the Premises as a whole, in the case of an assignment, or as to the
terminated portion of the Premises only, in the case of a partial termination
due to sublease) with respect to the period after the date of termination (other
than obligations and indemnities of Tenant which accrued with respect to the
applicable portion of the Premises prior to the effective date of such
termination, which obligations shall expressly survive such termination or
partial termination of this Lease); (c) all Base Rent, additional rent and other
charges shall be prorated to the date of such termination, and appropriately
adjusted if there is only a partial termination; (d) upon such termination date,
Tenant shall surrender the Premises (or the applicable portion thereof) to
Landlord in accordance with Section 26 hereof; and (e) in the case of a partial
termination of this Lease, Landlord shall have the obligation to separate the
portion of the Premises being terminated from the balance of the Premises,
including the erection of a demising wall and, to the extent necessary under the
circumstances (and reasonably practicable given the configuration of the
applicable portion of the Premises), the separation of any applicable Building
Systems.
ARTICLE 12
MAINTENANCE AND REPAIR
12.1 LANDLORD'S OBLIGATION. Landlord shall keep and maintain in good
repair and working order, consistent with standards applicable to other first
class office buildings in the Reston, Virginia submarket, the Building, the
Common Area and the equipment within and serving the Premises and the Building
(excluding Tenant's leasehold improvements in the Premises) that are required
for the normal maintenance and operation of the Premises and the Building. The
cost of such maintenance and repairs to the Building, and said equipment shall
be included in the Operating Expenses and paid by Tenant as provided in Article
7 herein. Tenant shall immediately give Landlord written notice of any defect or
need for repairs. After such notice, Landlord shall have a reasonable
opportunity to repair or cure such defect.
12.2 TENANT'S OBLIGATION. Subject to Article 21 of this Lease, Tenant
shall, at its own expense, maintain all of Tenant's leasehold improvements in
the Premises and other real and personal property within the Premises in good
condition, promptly making all necessary repairs and replacements. Tenant shall
repair at its expense any and all damage caused by the negligent or willful acts
or omissions of Tenant or Tenant's Agents to the Building, the Common Area, or
the Premises, including equipment within and serving the Building, ordinary wear
and tear excepted. Notwithstanding the foregoing, Tenant shall bear the cost of,
but shall not itself perform without Landlord's prior consent, any such repairs
which would affect the Building's structure or mechanical or electrical systems
or which would be visible from the exterior of the Building or from any interior
Common Area of the Building. Where Landlord performs such repairs, Tenant shall
pay to Landlord within thirty (30) days after Landlord's demand all costs
incurred in connection therewith; and if such amounts are not paid within such
thirty (30) day period, the same shall bear interest at the Interest Rate from
the date originally demanded by Landlord until the date actually paid by Tenant.
Without the prior written consent of the Landlord, or as expressly permitted
pursuant to Section 29.2 of this Lease, Tenant shall not have access to the roof
of the Building for any purpose whatsoever.
12.3 LANDLORD'S RIGHT TO MAINTAIN OR REPAIR. If, within fifteen (15)
days following notice to Tenant (or such shorter period as is appropriate in the
event of an Emergency), Tenant fails to commence to repair or replace any damage
to the Premises or Building which is Tenant's obligation to perform, and
diligently pursue timely completion of such repair and replacement, Landlord
may, at its option, cause all required maintenance, repairs or replacements to
be made. Tenant shall promptly pay Landlord all costs incurred in connection
therewith plus interest thereon at the Interest Rate from the due date until
paid.
ARTICLE 13
INITIAL CONSTRUCTION; ALTERATIONS
13.1 INITIAL CONSTRUCTION. Landlord and Tenant agree that the
construction of the Tenant Improvements (as defined in Exhibit B attached hereto
and made a part hereof) and other initial construction with respect to the
Premises shall be performed in accordance with Exhibit B.
13.2 ALTERATIONS. Tenant shall not make or permit any Alterations
without the prior written consent of Landlord. Landlord may impose any
reasonable conditions to its consent, including, without limitation, (i)
delivery to Landlord of written and unconditional waivers of mechanic's and
materialman's liens as to the Premises, the Building and the Land for all work,
labor and services to be performed and materials to be furnished, signed by all
contractors, subcontractors, materialmen and laborers participating in the
Alterations, (ii) prior approval of the plans and specifications and Tenant's
contractor(s) with respect to the Alterations, (iii) supervision by Landlord's
representative at Tenant's expense of the Alterations and (iv) delivery to
Landlord of payment and performance bonds naming Landlord and Mortgagee as
obligees. The Alterations shall conform to the requirements of Landlord's and
Tenant's insurers and of the Federal, state and local governments having
jurisdiction over the Premises, shall be performed in accordance with the terms
and provisions of this Lease in a good and workmanlike manner befitting a first
class office building and shall not adversely affect the value, utility or
character of the Premises. If the Alterations are not performed as herein
required, Landlord shall have the right, at Landlord's option, to halt any
further Alterations, or to require Tenant to perform the Alterations as herein
required or to require Tenant to return the Premises to its condition before
such Alterations. Notwithstanding the foregoing, if any mechanic's or
materialmen's lien is filed against the Premises, the Building or the Land for
work done or claimed to have been done for, or materials claimed to have been
furnished to or for the benefit of, Tenant, such lien shall be discharged of
record by Tenant within ten (10) days by the payment thereof or the filing of
any bond required by law. If Tenant shall fail to discharge any such lien,
Landlord may (but shall not be obligated to) discharge the same, the cost of
which shall be paid by Tenant within three (3) days of demand by Landlord. Such
discharge by Landlord shall not be deemed to waive or release the default of
Tenant in not discharging the same. Neither Landlord's consent to the
Alterations nor anything contained herein in this Lease shall be deemed to be
the agreement or consent of Landlord to subject Landlord's interest in the
Premises, the Building or the Land to any mechanic's or materialmen's liens
which may be filed in respect of the Alterations.
13.3 REMOVAL OF ALTERATIONS. If Landlord fails to notify Tenant at the
time of its approval of any proposed Alterations that such Alteration must be
removed upon expiration or earlier termination of this Lease elects, then such
Alteration shall be surrendered with the Premises at the Expiration Date (or
earlier termination of this Lease) and shall thereupon be the property of
Landlord. If Landlord notifies Tenant at the time of such approval that it will
require the removal of all or part of the Alterations and Tenant proceeds with
such Alterations, Tenant shall, at its expense, remove such Alterations from the
Premises, repair any damage to the Premises or the Building caused by such
removal, and restore the affected portion of the Premises to its pre-existing
condition upon the Expiration Date (or earlier termination of this Lease). If
Tenant thereupon fails to remove such Alterations upon the expiration or earlier
termination of this Lease (or to conduct such repairs and restoration at the
time of such removal), then Landlord may (but shall not be obligated to) remove
the same, and make any necessary repairs and restoration, and the cost of such
removal and restoration, and the repair of any damage caused by the same,
together with any and all damages which Landlord may suffer and sustain by
reason of the failure of Tenant to remove the same, shall be charged to Tenant
and paid upon demand.
13.4 LANDLORD ALTERATIONS. Landlord shall have no obligation to make
any Alterations in or to the Premises, the Building, the Common Area or the Land
except as specifically provided in the Work Agreement or to the extent required
to keep the Building, Common Area and Land in the condition required by this
Lease. Landlord hereby reserves the right, from time to time, to make
Alterations to the Building, change the Building dimensions, erect additional
stories thereon and attach other buildings and structures thereto, and to erect
such scaffolding and other aids to construction as Landlord deems appropriate,
and, provided that such activities do not unreasonably interfere with Tenant's
use and enjoyment of the Premises or materially reduce its rights under this
Lease, no such Alterations, changes, construction or erection shall constitute
an eviction, constructive or otherwise, or permit Tenant any abatement of Rent
or claim.
ARTICLE 14
SIGNS
14.1 GENERAL SIGN PROVISION. Except as expressly permitted hereby, no
sign, advertisement or notice shall be inscribed, painted, affixed, placed or
otherwise displayed by Tenant on any part of the Land or the outside or the
inside (including, without limitation, the windows) of the Building or the
Premises. Any permitted signs shall be installed and maintained by Landlord at
Tenant's sole expense. All signage shall be in compliance with all applicable
laws and ordinances, and all covenants, conditions and restrictions applicable
to the Building. If any prohibited sign, advertisement or notice is nevertheless
exhibited by Tenant, Landlord shall have the right to remove the same, and
Tenant shall pay any and all expenses incurred by Landlord in such removal,
together with interest thereon at the Interest Rate, upon demand.
Notwithstanding anything contained herein to the contrary, Landlord shall have
the right to prohibit any sign posted at the Building by Tenant which, in
Landlord's opinion, tends to impair the reputation of the Building or its
desirability as a first class office building.
14.2 SPECIAL SIGN RIGHTS. Section 14.1 to the contrary notwithstanding,
but in all instances subject (A) to Landlord's prior approval (which will not be
unreasonably withheld, conditioned or delayed) as to the size, type, color,
design, location and method of attachment thereof, and (B) to compliance with
all applicable laws and ordinances, and all covenants, conditions and
restrictions applicable to the Building: (1) Tenant is hereby granted exclusive
signage rights on the Building, which will permit the installation by Tenant, at
Tenant's sole expense, of a single, prominent, building identification sign,
identifying Tenant exclusively, in such size, type, color, design, and location
as Tenant may elect subject to Landlord's approval, and (2) Tenant is hereby
granted the non-exclusive right, at Tenant's sole expense, to install a sign
panel on the Building's current monument sign which may utilize Tenant's name
and/or corporate logo, but which shall otherwise conform to the general design,
size, type, and color of such monument sign as it currently exists, and in such
location thereon as Landlord may designate. Tenant agrees, within five (5) days
after the end of the Term of this Lease, to remove any and all signs installed
by it pursuant to this Lease, to repair any damage to the Building caused by
such removal and to restore any portion of the Building affected by the
installation of such signs to its pre-existing condition.
ARTICLE 15
TENANT'S EQUIPMENT AND PROPERTY
15.1 MOVING TENANT'S PROPERTY. Any and all damage or injury to the
Premises or the Building caused by moving the property of Tenant into or out of
the Premises, or due to the same being on the Premises, shall be repaired by
Landlord, and Tenant shall reimburse Landlord for the actual and reasonable
expenses incurred in connection with such repairs. Tenant shall promptly remove
from the Common Area any of Tenant's furniture, equipment or other property
there deposited.
15.2 INSTALLING AND OPERATING TENANT'S EQUIPMENT. Without first
obtaining the written consent of Landlord, which shall be subject to the
standards hereinafter set forth, Tenant shall not install or operate in the
Premises (i) any electrically operated equipment or other machinery, other than
(A) the items of equipment specifically identified in EXHIBIT F attached hereto
and made a part hereof, and (B) standard equipment for the Permitted Use that
does not require wiring, cooling or other service in excess of existing Building
standards, (ii) any equipment of any kind or nature whatsoever which will
require any changes, replacements or additions to, or changes in the use of, any
water, heating, plumbing, air conditioning or electrical system of the Premises
or the Building, or (iii) any equipment which causes the floor load to exceed
the load limits set by Landlord for the Building. Landlord's consent to such
installation or operation will not be unreasonably withheld, provided that,
without limitation, it will not be unreasonable for Landlord to deny its consent
to any such installation, operation or equipment (A) if the same would require
any structural modifications to the Building, including any floor penetrations,
extra load-bearing enhancements or similar structural modifications, (B) if
Tenant does not agree to remove all items and equipment so installed, and any
and all Building modifications required to be made to accommodate such
installation (and to restore the all affected portions of the Building to their
pre-existing condition) promptly upon expiration or earlier termination of this
Lease, at Tenant's sole expense, (C) unless Tenant agrees to pay the additional
costs for any excess consumption of utilities and any additional power, wiring,
cooling or other service (as determined in the reasonable discretion of
Landlord) that may result from such equipment, (D) which involve the use of
Hazardous Materials except as specifically permitted under Article 26 of this
Lease, (E) which cause noise or vibration that may be transmitted to the
structure of the Building or to any space therein so as to be objectionable to
Landlord or any other Building tenant, unless the same is installed and
maintained by Tenant, at its expense, on vibration eliminators or other devices
sufficient to eliminate such noise and vibration, and (F) if Tenant does not
agree to indemnities, screening requirements, procedures and other provisions
substantially similar to those set forth in Section 29.3 of this Lease with
respect to any such installations, operations and/or equipment. Any equipment or
systems installed by Tenant which involve electrical consumption in excess of
that applicable to general office use may be
submetered by Landlord at Tenant's expense, and the electrical consumption
associated therewith charged back directly to Tenant (and to be paid by Tenant
on an ongoing basis within thirty (30) days after Landlord's written demand).
Tenant shall be responsible for complying with all applicable laws, ordinances,
regulations and other legal requirements in connection with any equipment or
systems installed by Tenant pursuant to this section. Tenant shall have non-
exclusive access to the Building risers and cableways to install, at Tenant's
sole cost and expense, voice, data and utility service lines in connection with
the Permitted Use, provided Tenant shall not make disproportionate use of such
risers and cableways (so as to ensure reasonable availability to other tenants
and occupants of the Building). The Building is currently served by electrical
service available for Tenant use in the amount of 5.924 watts per usable square
foot of building area.
ARTICLE 16
RIGHT OF ENTRY
Tenant shall permit Landlord or its Agents, at any time and, except in
cases of Emergency (in which case prior notice shall not be required) upon
reasonable prior notice as hereinafter set forth, to enter the Premises, without
charge therefor to Landlord and without diminution of Rent, (i) to examine,
inspect and protect the Premises and the Building, (ii) to make such alterations
and repairs or perform such maintenance which in the sole judgment of Landlord
may be deemed necessary or desirable, (iii) to exhibit the same to prospective
purchasers of the Building or to present or future Mortgagees or (iv) to exhibit
the same to prospective tenants during the last eighteen (18) months of the Term
and to erect on the Premises a suitable sign indicating the Premises are
available. Landlord will use reasonable and diligent efforts to minimize any
unreasonable disruption to Tenant's business operations during any entries
permitted under this Article 16, including coordinating such entries with Tenant
where reasonably practicable. For purposes of this Article 16, verbal notice to
Tenant of an entry given at least one (1) Business Day prior to a non-emergency
entry shall be deemed reasonable prior notice.
ARTICLE 17
INSURANCE
17.1 INSURANCE RATING. Tenant shall not conduct or permit any activity,
or place any equipment or material, in or about the Premises, the Building or
the Common Area which will increase the rate of fire or other insurance on the
Building or insurance benefitting any other tenant of the Building; and if any
increase in the rate of insurance is stated by any insurance company or by the
applicable insurance rating bureau to be due to any activity, equipment or
material of Tenant in or about the Premises, the Building or the Common Area,
such statement shall be conclusive evidence that the increase in such rate is
due to the same and, as a result thereof, Tenant shall pay such increase to
Landlord upon demand.
17.2 LIABILITY INSURANCE. Tenant shall, at its sole cost and expense,
procure and maintain throughout the Term a commercial general liability policy
insuring against claims, demands or actions for bodily injury, death, personal
injury, and loss or damage to property arising out of or in connection with: (i)
the Premises; (ii) the condition of the Premises; (iii) Tenant's operations in,
maintenance and use of the Premises, Building and Common Area, and (iv) Tenant's
liability assumed under this Lease. Such insurance shall have such combined
single limit as reasonably required by Landlord from time to time, but in no
event less than [***] per occurrence, on an occurrence basis, and shall be
primary over any insurance carried by Landlord. Endorsements shall be obtained
for cross-liability and contractual liability.
17.3 INSURANCE FOR PERSONAL PROPERTY. Tenant shall, at its sole cost
and expense, procure and maintain throughout the Term a property insurance
policy (written on an "All Risk" basis) insuring all of Tenant's personal
property, including but not limited to equipment, furniture, fixtures,
furnishings and leasehold improvements which are the responsibility of Tenant,
for not less than the full replacement cost of said property. All proceeds of
such insurance shall be used to repair or replace Tenant's property. In
addition, Tenant shall, at its sole cost and expense, procure and maintain
business interruption insurance in an amount not less than the Base Rent due
hereunder for the first Lease Year.
17.4 REQUIREMENTS OF INSURANCE COVERAGE. All such insurance required to
be carried by Tenant herein shall be with an insurance company licensed to do
business in the Commonwealth of Virginia and rated not lower than A-XII in the
A.M. Best Rating Guide. Such insurance (i) shall contain an endorsement that
such policy shall remain in full force and effect notwithstanding that the
insured has released its right of action against any party before the occurrence
of a loss; (ii) shall name Landlord and, at Landlord's request, any Mortgagee or
ground lessor, as additional insured parties; and (iii) shall provide that the
policy shall not be canceled, failed to be renewed or materially amended without
at least thirty (30) days' prior written notice to landlord and, at Landlord's
request, any Mortgagee. On or before the Commencement Date and, thereafter, not
less than thirty (30) days before the expiration date of the insurance policy,
an original of the policy (including any renewal or replacement policy) or a
certified copy thereof, together with evidence satisfactory to Landlord of the
payment of all premiums for such policy, shall be delivered to Landlord and, at
Landlord's request, to any Mortgagee.
17.5 WAIVER OF SUBROGATION. Each party hereby releases the other party
hereto from liability for any loss or damage to any building, structure or
tangible personal property, or any resulting loss of income, or losses under
worker's compensation laws and benefits, notwithstanding that such loss, damage
or liability may arise out of the negligent or intentionally tortious act or
omission of the other party or its Agents, if such loss or damage is covered by
insurance benefitting the party suffering such loss or damage or was required to
be covered by insurance pursuant to this Lease. Each party hereto shall use
reasonable efforts to have a waiver of subrogation clause (providing that such
waiver of right of recovery against the other party shall not impair the
effectiveness of such policy or the insured's ability to recover) included in
its said policies, and shall promptly notify the other in writing if such clause
cannot be included in any such policy; if such waiver of subrogation clause
shall not be available, then the foregoing waiver of right of recovery shall be
void.
17.6 SECURITY. In the event that Landlord engages the services of a
professional security system for the Building, it is understood that such
engagement shall in no way increase Landlord's liability for occurrences and/or
consequences which such a system is designed to detect or avert and that Tenant
shall look solely to its insurer as set out above for claims for damages or
injury to any person or property. In no event shall this Section 17.6, nor any
other provision of this Lease, be construed to create any express or implied
obligation on the part of Landlord to secure the Premises, Building or Common
Areas, or otherwise provide security services for the Premises, Building or
Common Areas.
17.7 LANDLORD'S INSURANCE. At all times during the Lease Term, Landlord
will maintain the following insurance (a) all-risk fire and extended coverage
casualty insurance covering damage to the Building (excluding earthquake and
flood insurance unless available at commercially feasible rates) in an amount
not less than 100% of the replacement cost thereof, (b) commercial general
public liability insurance covering bodily injury, death and/or property damage
in an amount not less than [***] combined single limit, (c) loss of "rental
value" insurance in an amount equal to not less 100% of the projected gross
income from the Building for a period of twelve (12) months, and (d) workers
compensation and employer's liability insurance to the extent required by state
law or Landlord's mortgage. Landlord shall also have the right to obtain such
other types and amounts of insurance coverage on the Building and Landlord's
liability in connection with the Building as Landlord determines is customary or
advisable for comparable office buildings in the Reston area. Tenant
acknowledges and agrees that all premiums for insurance obtained by Landlord
pursuant to this Section 17.7 shall be included within "Operating Expenses", as
such term is defined in Section 7.2, above. Landlord shall have the right to
provide insurance coverage which it is obligated to carry pursuant to the terms
hereof in a blanket policy or through the use of primary and/or umbrella
coverages.
ARTICLE 18
LANDLORD SERVICES AND UTILITIES
18.1 ORDINARY SERVICES TO THE PREMISES. Landlord shall furnish to the
Premises throughout the Term, at a standard consistent with that of other
comparable first class office projects in the vicinity of the Building (i)
heating and air conditioning appropriate for the Permitted Use between 7:00 a.m.
and 7:00 p.m., Monday through Friday, and between 9:00 a.m. and 1:00 p.m. on
Saturday, except for the following holidays (on the days recognized as legal
holidays in respect thereof): Christmas, New Year's Day, Memorial Day,
Independence Day, Labor Day and Thanksgiving, (ii) reasonable in-suite
janitorial service on Monday through Friday of each week throughout the Term,
excluding the aforementioned holidays, (iii) regular trash removal from the
Premises, (iv) hot and cold water from points of supply, (v) restrooms as
required by applicable code, (vi) elevator service, provided that Landlord shall
have the right to remove such elevators from service as may be for moving,
freight or for servicing or maintaining the elevators or the Building, or on
non-business days, as long as one (1) elevator remains in operation at all
times, (vii) non-exclusive access to the Building's Common Area loading dock
upon reasonable prior notice to Landlord (not less than one (1) business day in
advance), and exclusive access to that certain garage area that opens into Space
A and which is usable for certain types of loading or unloading (which, subject
to applicable legal requirements, will be available for Tenant's use at all
times), and (vii) electricity. The cost of all services provided by Landlord
hereunder shall, except as limited by Section 7.2 and 7.3 of this Lease, be
included within Operating Expenses. Landlord agrees to furnish landscaping and
grounds maintenance and snow clearing for the areas used in common by the
tenants of the Building. The foregoing services shall be furnished by Landlord
and reimbursed by Tenant as part of Operating Expenses; provided, however that
Landlord shall be under no responsibility or liability for failure or
interruption in such services caused by breakage, accident, strikes, repairs or
for any other cause or causes beyond the control of Landlord, nor in any event
for any indirect or consequential damages; and, subject to Section 18.5, below,
failure or omission on the part of Landlord to furnish such service shall not be
construed as an eviction of Tenant, nor work an abatement of Rent, nor render
Landlord liable in damages, nor release Tenant from prompt fulfillment of any of
the covenants under this Lease.
18.2 AFTER-HOURS SERVICES TO THE PREMISES. If Tenant requires or
requests that the services to be furnished by Landlord (except Building standard
electricity and elevator service for at least one (1) elevator) be provided
during periods in addition to the period is set forth in Section 18.1, then
Tenant shall obtain Landlord's consent thereto and, if such consent is granted,
shall pay upon demand Landlord's additional expenses resulting therefrom.
Landlord may, from time to time during the Term, set a per hour charge for
after-hours service which shall include the cost of utility, service, labor
costs, administrative costs and a cost for depreciation of the equipment used to
provide such after-hours service. The current rate for after hours HVAC service
is $35.00 per hour per zone.
18.3 OTHER PROVISIONS REGARDING UTILITIES. All telephone service and
utility service other than those described in Section 18.1, above, to the extent
furnished to the Premises, shall be paid for by Tenant. In any multi-tenanted
Building, to the extent Tenant's special equipment (such as supplementary
air-conditioning units, security equipment, or other equipment involving
extraordinary electrical requirements) or after hours usage of the Premises
involves, in Landlord's reasonable judgement, excessive electrical consumption
relative to other tenants of the Building, Landlord reserves the right to charge
Tenant directly for the incremental cost of such excessive electrical
consumption, either through the use of engineering surveys or submeters or other
electrical measurement devices (provided that Tenant shall pay the cost of
installation of any such submeters or other electrical measurement devices is
installed in order to measure Tenant's excessive electrical consumption).
18.4 ACCESS AND SECURITY. Tenant hereby agrees to the exercise by
Landlord and its agents and employees, within their sole discretion, of such
security measures as Landlord deems necessary for the Building, provided that
such security measures shall not interfere with Tenant's access to and use of
the Premises 24 hours per day, 7 days per week, during the Term of this Lease
(it being agreed that the operation of the current security system which limits
entry to the Building during non-business hours to persons in possession of a
security key card or with authorization by Tenant or Landlord to enter the
Building shall not constitute "interference" within the meaning of this Section
18.4). Landlord shall provide Tenant with one hundred (100) security key cards
without charge. Additional security key cards may be obtained by Tenant from
Landlord at landlord's actual cost (without mark-up). Tenant may install a
security system within the Premises, provided such system and its installation
(i) shall be subject to Landlord's prior written approval, which shall not be
unreasonably withheld (provided it shall not be unreasonable for Landlord to
deny consent to any system which is not compatible with the building's overall
security and fire safety and life safety systems, or which is not reasonably
usable by any successor tenants in the Premises), (ii) shall be in accordance
with all applicable legal requirements, (iii) shall be performed at Tenant's
sole expense, and shall otherwise be installed in accordance with the provisions
governing Alterations under this Lease or the Work Agreement, and (iv) shall not
restrict emergency or other permitted access by landlord to the Premises (and
Landlord shall be provided with at least three (3) electronic and/or master keys
which permit Landlord to gain access to the Premises at all times). Nothing
contained in this Section 18.4 shall be construed or deemed to obligate Landlord
to provide any particular form or amount of security with respect to the
Premises or the Building or on behalf of Tenant or any other occupant of or
visitor to the Premises or the Building, provided that Landlord agrees to
maintain an electronic card-key access system to the Building.
18.5 INTERRUPTIONS IN ESSENTIAL SERVICES. Section 18.1, above, and
Section 19.1, below, to the contrary notwithstanding: (i) in the event Tenant is
deprived of electricity, heat, air-conditioning, water and/or the use of at
least one (1) elevator to the Premises (any of the foregoing services being
hereinafter referred to as "Essential Services"), Tenant shall promptly notify
Landlord thereof and Landlord shall use reasonable and diligent efforts to
restore (or facilitate the restoration) of such Essential Services promptly
thereafter, and (ii) if (A) the deprivation of such Essential Services occurred
either solely as a result of the willful or negligent acts or omissions of
Landlord or its Agents, or, if not caused solely by the willful or negligent
acts or omissions of Landlord or its Agents, is due to a cause which is
nevertheless covered under any policy of rental interruption insurance then
maintained by Landlord with respect to the Building, (B) the Premises (or any
part thereof) is rendered untenantable as a result thereof, and (C) such
interruption of Essential Services continues for five (5) consecutive business
days after Tenant first notified Landlord of such interruption, then commencing
on the sixth (6th) consecutive business day after the date Tenant first notified
Landlord of such interruption, Tenant shall be entitled to abate its Rent
obligations hereunder solely as to the portion of the Premises which is not
usable until such time as such Essential Service(s) is(are) restored. Other than
(i) the foregoing abatement, (ii) any abatement of Rent contemplated after a
fire or other casualty pursuant to Section 21.1, below, (iii) any sums owed
pursuant to an indemnification claim under Section 19.2 of this Lease arising
out of any death or injury to persons in relation thereto, and (iv) any monetary
liability arising out of the exercise by Tenant of its right to perform
Landlord's obligations after a default by Landlord pursuant to Article 22 of
this Lease, Landlord shall have no monetary liability to Tenant as a result of
any interruption in services or Essential Services under this Lease.
Notwithstanding anything set forth in this Lease to the contrary, Landlord shall
have no liability to Tenant or any party claiming by or through Tenant for lost
profits, business losses or other consequential damages.
ARTICLE 19
LIABILITY OF LANDLORD
19.1 NO LIABILITY. Except where due to Landlord or its Agents' gross
negligence or willful misconduct, Landlord and its Agents shall not be liable to
Tenant or its Agents for, and Tenant, for itself and its Agents, does hereby
release Landlord and its Agents from liability for, any damage, compensation or
claim arising from (i) the necessity of repairing any portion of the Premises or
the Building or the Common Area or any structural defects thereto, (ii) subject
to Section 18.5, above, any interruption in the use of the Premises or the
Common Area for any reason including any interruption or suspension of utility
service, (iii) fire or other casualty or personal or property injury, damage or
loss resulting from the use or operation (by Landlord, Tenant, or any other
person whomsoever) of the Premises or the Building or the Common Area, (iv) the
termination of this Lease, (v) any robbery, assault, theft or other criminal
act, (vi) any leakage in the Premises or the Building from water, rain, snow or
any other causes whatsoever, and/or (vii) any and all other causes whatsoever.
Except as expressly provided in Section 18.5, above, no such occurrence shall
give rise to diminution or abatement of Rent. Notwithstanding the foregoing, any
goods, automobiles, property or personal effects stored or placed by Tenant or
its Agents in or about the Premises, the Building or the Common Area shall be at
the sole risk of Tenant (and shall be insured by Tenant pursuant to the terms of
this Lease); and Tenant hereby expressly waives its right to recover against
Landlord and its Agents therefor. Tenant hereby waives any claim it might have
against Landlord or its Agents for any consequential damages or business losses
sustained by Tenant for any reason, or arising out of the loss or damage to any
person or property of Tenant, or any interruption in the use of the Premises or
the Common Area, for any reason. Tenant acknowledges its obligation to insure
against such losses and damages. The liability of Landlord hereunder shall be
further limited by Section 28.14, below.
19.2 INDEMNITY. Tenant shall indemnify, defend, protect and hold
Landlord and its Agents harmless from and against any and all damage, claim,
liability, cost or expense (including, without limitation, reasonable attorneys'
or other professionals' fees) of every kind and nature (including, without
limitation, those arising from any injury or damage to any person, property or
business) incurred by or claimed against Landlord or its Agents, directly or
indirectly, as a result of, arising from or in connection with (i) Tenant's or
its Agents' use and occupancy of the Premises, the Building or the Common Area
(except to the extent caused by the negligence or willful misconduct of Landlord
and not covered under any insurance which Tenant is required to carry pursuant
to this Lease), (ii) Tenant's breach of any provision of this Lease; or (iii)
any negligence act or omission, or willful act, of Tenant or its Agents.
ARTICLE 20
RULES AND REGULATIONS
Tenant and its Agents shall at all times abide by and observe the Rules
and Regulations and any commercially reasonable amendments thereto that may be
promulgated from time to time by Landlord for the operation and maintenance of
the Building and the Common Area and the Rules and Regulations shall be deemed
to be covenants of the Lease to be performed and/or observed by Tenant. Nothing
contained in this Lease shall be construed to impose upon Landlord any duty or
obligation to enforce the Rules and Regulations, or the terms or provisions
contained in any other lease, against any other tenant of the Building, PROVIDED
Landlord shall not enforce the Rules and Regulations, or promulgate new Rules
and Regulations, in a discriminatory manner against Tenant. Landlord shall not
be liable to Tenant for any violation by any party of the Rules and Regulations
or the terms of any other Building lease. If there is any inconsistency between
this Lease and the Rules and Regulations, this Lease shall govern. Landlord
reserves the right to amend and modify the Rules and Regulations as it deems
necessary.
ARTICLE 21
DAMAGE; CONDEMNATION
21.1 DAMAGE TO THE PREMISES. If the Premises shall be damaged by fire
or other cause, Landlord shall diligently and as soon as practicable after such
damage occurs repair such damage using the proceeds of insurance carried by
Landlord pursuant to this Lease (provided that, if the fire or casualty is due
to the fault or negligence of Tenant or its Agents, Landlord's repair and
restoration obligation shall be limited to the amount of insurance actually
received by Landlord in respect of such casualty). Notwithstanding the
foregoing, if the Premises or the Building is damaged by fire or other cause to
such an extent that, in Landlord's sole judgment, the damage cannot be
substantially repaired within two hundred (200) days after the date of such
damage, or if the Premises are damaged to an extent such that repair would cost
in excess of $200,000 during the last two (2), then either Landlord or Tenant
may, within thirty (30) days after the date Landlord notifies Tenant of its
estimate of the timing or cost of such repair, terminate this Lease by notice to
the other. Landlord shall give Tenant written notice of Landlord's estimate of
the time required for the substantial repair of such damage (or, if in the last
two Lease Years, of the estimated cost of such repairs) within thirty (30) days
after the date of such damage. If either Landlord or Tenant terminates this
Lease pursuant to this Article 21, the Rent shall be apportioned and paid to the
date of such termination. If neither Landlord nor Tenant so elects to terminate
this Lease but the damage required to be repaired by Landlord is not repaired
within two hundred (200) days from the date of such damage, or such longer
period as was set forth in Landlord's estimate (such period to be extended by
the period of any delay resulting from Force Majeure, as defined in Section
28.16, and by any period of delay caused by the acts or omissions of Tenant or
Tenant's Agents), Tenant may terminate this Lease at any time thereafter until
such reconstruction is completed upon thirty (30) days prior written notice to
Landlord, PROVIDED that if such reconstruction is substantially underway as of
the date of Tenant's notice of termination to Landlord, and Landlord
substantially completes such reconstruction within the thirty (30) day period
after its receipt of Tenant's notice of termination, then in such event the
notice of termination from Tenant shall be deemed rescinded, and this Lease
shall continue in full force and effect. During the period that Tenant is
deprived of the use of the damaged portion of the Premises, Base Rent and
Additional Rent shall be reduced by the ratio that the rentable square footage
of the Premises damaged bears to the
total rentable square footage of the Premises before such damage.
Notwithstanding anything herein to the contrary, Landlord's repair and
restoration obligation shall be limited to the Tenant Improvements originally
constructed by Landlord hereunder, and shall not apply to (and Landlord shall
not be required to rebuild, replace or repair) any Alterations, any personal
property and/or any specialized equipment of Tenant.
21.2 CONDEMNATION. If the whole or a Substantial Part of the Premises
or the Building shall be taken or condemned by any governmental or
quasi-governmental authority for any public or quasi-public use or purpose
(including, without limitation, sale under threat of such a taking), then the
Term shall cease and terminate as of the date when title vests in such
governmental or quasi-governmental authority, and Rent shall be prorated to the
date when title vests in such governmental or quasi-governmental authority. If
less than a Substantial Part of the Premises is taken or condemned by any
governmental or quasi-governmental authority for any public or quasi-public use
or purpose (including, without limitation, sale under threat of such a taking),
Base Rent shall be reduced on a per square foot basis for the portion of the
Premises so taken, and Tenant's Proportionate Share shall be adjusted to reflect
the actual ratio of the remaining rentable area of the Premises to the remaining
rentable area of the Building after such taking, effective as of the date when
title vests in such governmental or quasi-governmental authority, and this Lease
shall otherwise continue in full force and effect. Notwithstanding the
foregoing, if more than 25% of the Premises is taken, or areas of the Premises
are taken that can not reasonably be rebuilt in other areas of the Premises and
are vital to Tenant's business operations (such as Tenant's network operating
center or interconnection spaces), Tenant may terminate this Lease upon written
notice to Landlord delivered within thirty (30) days after the date Tenant is
first notified of such condemnation. Tenant shall have no claim against Landlord
(or otherwise) as a result of any taking described in this Section 21.2. Tenant
may, to the extent allowed by law, claim an award for moving expenses and for
the taking of any of Tenant's property which does not, under the terms of this
Lease, become the property of Landlord at the termination hereof (but in all
events specifically excluding Tenant's leasehold interest in the Premises), as
long as such claim is separate and distinct from any claim of Landlord and does
not diminish Landlord's award. Any award for the termination of this Lease shall
be the sole property of Landlord.
ARTICLE 22
DEFAULT
22.1 EVENTS OF DEFAULT. Each of the following shall constitute an
"Event of Default": (i) Tenant fails to pay Rent within two (2) business days
after notice from Landlord; provided that no such notice shall be required if at
least five (5) such notices shall have been given during the same Lease Year;
(ii) Tenant fails to observe or perform any other term, condition or covenant
herein binding upon or obligating Tenant within ten (10) days after written
notice from Landlord, or such longer period (not to exceed an additional one
hundred eighty (180) days) as may be reasonably necessary to cure such failure,
provided Tenant commences such cure promptly after its receipt of Landlord's
written notice and diligently continues such cure thereafter to completion,
(iii) Tenant abandons the Premises; (iv) Tenant or any Guarantor makes or
consents to a general assignment for the benefit of creditors or a common law
composition of creditors, or a receiver of the Premises or all or substantially
all of Tenant's or Guarantor's assets is appointed, or (v) Tenant or Guarantor
files a voluntary petition in any bankruptcy or insolvency proceeding, or an
involuntary petition in any bankruptcy or insolvency proceeding is filed against
Tenant or Guarantor and is not discharged by Tenant or Guarantor within ninety
(90) days.
22.2 LANDLORD'S REMEDIES. Upon the occurrence of an Event of Default,
Landlord, at its option, without further notice or demand to Tenant, may to the
fullest extent permitted by law, and in addition to all other rights and
remedies provided in this Lease, at law or in equity:
(i) Terminate this Lease and Tenant's right of possession of the
Premises, and recover all damages to which Landlord is entitled under law,
specifically including, but without limitation, all of Landlord's expenses of
reletting (including, without limitation, rental concessions to new tenants,
repairs, Alterations, reasonable legal fees and brokerage commissions). In
addition, if Landlord elects to terminate this Lease, every obligation of
Landlord hereunder shall cease as of the date of such termination, but the same
shall not affect the liability of Tenant for payment of Rent and performance of
all other terms and conditions of this Lease to the date of termination, plus
any damages and/or other sums recoverable by Landlord under this Article 22 or
otherwise at law or in equity.
(ii) Terminate Tenant's right of possession of the Premises without
terminating this Lease, in which event, Landlord may, but shall not be obligated
to, relet the Premises, or any part thereof, for the account of Tenant, for such
rent and term and upon such other conditions as are acceptable to Landlord. For
purposes of such reletting, Landlord is authorized to redecorate, repair, alter
and improve the Premises to the extent necessary in Landlord's sole discretion.
Until Landlord relets the Premises, Tenant shall remain obligated to pay Rent to
Landlord as provided in this Lease. If and when the Premises are relet and if a
sufficient sum is not realized from such reletting after payment of all
Landlord's expenses of reletting (including, without limitation, rental
concessions to new tenants, repairs, Alterations, reasonable legal fees and
brokerage commissions) to satisfy the payment of Rent due under this Lease for
any month, Tenant shall pay Landlord any such deficiency upon demand. Tenant
agrees that Landlord may file suit to recover any sums due Landlord under this
Section from time to time and that such suit or recovery of any amount due
Landlord shall not be any defense to any subsequent action brought for any
amount not previously reduced to judgment in favor of Landlord.
(iii) Terminate this Lease and Tenant's right of possession of the
Premises, and recover from Tenant, at Landlord's sole and exclusive option,
either (A) the net present value of the Rent due from the date of termination
until the Expiration Date, discounted at the lesser of the Interest Rate as of
the date of termination or seven percent (7%) per annum, LESS the amount of rent
loss Tenant proves Landlord could reasonably avoid during such period (also
discounted to present value on the same basis), or (B) "Indemnity Payments"
which shall mean an amount equal to the Base Rent and Additional Rent and other
payments provided for in this Lease which would have become due and owing
thereunder from time to time during the unexpired Lease Term after the effective
date of the termination, but for such termination, less the Base Rent and
Additional Rent and other payments, if any, actually collected by Landlord and
allocable to the Premises. If Landlord elects to pursue Indemnity Payments in
lieu of the amount recoverable under clause (A) of this subparagraph (iii),
above, Tenant shall, on demand, make Indemnity Payments monthly, and Landlord
may sue for all Indemnity Payments at any time after they accrue, either
monthly, or at less frequent intervals. Tenant further agrees that Landlord may
bring suit for Indemnity Payments at or after the end of the Lease Term as
originally contemplated under this Lease, and Tenant agrees that, in such event,
Landlord's cause of action to recover the Indemnity Payments shall be deemed to
have accrued on the last day of the Lease Term as originally contemplated.
(iv) Re-enter and repossess the Premises and remove all persons and
effects therefrom, by summary proceeding, ejectment or other legal action.
Landlord shall have no liability by reason of any such re-entry, repossession or
removal.
(v) Recover from Tenant, to the extent not already recovered pursuant
to the preceding subparagraphs of this Section 22.2, any other amount which is
necessary to compensate Landlord for economic damages sustained by Landlord and
caused by Tenant's failure to perform Tenant's obligations under this Lease,
including, without limitation, any costs or expenses incurred by Landlord: (i)
in retaking possession of the Premises; (ii) in maintaining, repairing,
preserving, restoring, replacing, cleaning, altering or rehabilitating the
Premises or a portion thereof, including expenses incurred in performing such
acts in connection with any reletting to a new tenant or tenants; (iii) for
leasing commissions incurred in connection with any reletting to a new tenant or
tenants; and/or (iv) for any other costs incurred by Landlord in reletting the
Premises.
22.3 RIGHTS UPON POSSESSION. If Landlord takes possession pursuant to
this Article, with or without this Lease, Landlord may, at its option, enter
into the Premises, remove Tenant's Alterations, signs, personal property,
equipment and other evidences of tenancy, and store them at Tenant's risk and
expense or dispose of them as Landlord may see fit, and take and hold possession
of the Premises; provided, however, that if Landlord elects to take possession
only without terminating this Lease, such entry and possession shall not
terminate this Lease or release Tenant or any Guarantor, in whole or in part,
from the obligation to pay the Rent reserved hereunder for the full Term or from
any other obligation under this Lease or any guaranty thereof.
22.4 NO WAIVER. If Landlord shall institute proceedings against Tenant
and a compromise or settlement thereof shall be made, the same shall not
constitute a waiver of any other covenant, condition or agreement herein
contained, nor of any of Landlord's rights hereunder. No waiver by Landlord of
any breach shall operate as a waiver of such covenant, condition or agreement,
or operate as a waiver of such covenant, condition or agreement itself, or of
any subsequent breach thereof. No payment of Rent by Tenant or acceptance of
Rent by Landlord shall operate as a waiver of any breach or default by Tenant
under this Lease. No payment by Tenant or receipt by Landlord of a lesser than
the monthly installment of Rent herein stipulated shall be deemed to be other
than a payment on account of the earliest unpaid Rent, nor shall any endorsement
or statement on any check or communication accompanying a check for the payment
of Rent 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 to pursue any other remedy provided in this Lease. No re-entry by
Landlord, and no acceptance by Landlord of keys from Tenant, shall be considered
an acceptance of a surrender of the Lease.
22.5 RIGHT OF LANDLORD TO CURE TENANT'S DEFAULT. If an Event of Default
shall occur, then Landlord may (but shall not be obligated to) make such payment
or do such act to cure the Event of Default, and charge the amount of the
expense thereof, together with interest thereon at the Interest Rate, to Tenant.
Such payment shall be due and payable upon demand; however, the making of such
payment or the taking of such action by Landlord shall not be deemed to cure the
Event of Default or to stop Landlord from the pursuit of any remedy to which
Landlord would otherwise be entitled. Any such payment made by Landlord on
Tenant's behalf shall bear interest until paid at the Interest Rate.
22.6 LATE PAYMENT. If Tenant fails to pay any Rent within five (5) days
after such Rent becomes due and payable, Tenant shall pay to Landlord a late
charge of five percent (5%) of the amount of such overdue Rent, provided that
the foregoing late charge shall be excused on the first occasion Tenant makes a
late payment of Rent as long as such payment is made within two (2) business
days after Landlord's written notice to Tenant of such late payment. In
addition, any such late Rent payment shall bear interest from the date such Rent
became due and payable to the date of payment thereof by Tenant at the Interest
Rate (except that, if Tenant was charged a late charge with respect to such
payment of Rent as aforesaid, interest at the Interest Rate shall commence to
accrue beginning thirty (30) days after the date such payment was due). Such
late charge and interest shall be due and payable within two (2) days after
written demand from Landlord.
22.7 CURE PERIOD FOR LANDLORD. In no event shall Landlord be considered
to be in default of any of its obligations under this Lease unless Tenant shall
have notified Landlord in writing of the alleged breach with reasonable
specificity, and such breach shall have continued for thirty (30) days after
Landlord's receipt of such written notice from Tenant (or, in the case of any
breach which cannot with reasonable diligence be cured within thirty (30) days,
within such additional period, if any, but not to exceed an additional one
hundred eighty (180) days in the aggregate, as may be reasonably required by
Landlord to cure such breach with reasonable due diligence, as long as Landlord
continues to pursue such cure with reasonable diligence).
ARTICLE 23
MORTGAGES
23.1 SUBORDINATION. Subject to the delivery of an SNDA (as defined
herein) to Tenant in accordance with Section 23.4, below, this Lease is and
shall be subject and subordinate to all ground or underlying leases and to any
first Mortgage(s) which may now or hereafter affect such lease or the Land and
to all renewals, modifications, consolidations, replacements and extensions
thereof. This subordination shall be self-operative; however, in confirmation
thereof, Tenant shall execute promptly any instrument that Landlord or any first
Mortgagee may request confirming such subordination. Notwithstanding the
foregoing, before any foreclosure sale under a
Mortgage, the Mortgagee shall have the right to subordinate the Mortgage to this
Lease, and, in the event of a foreclosure, this Lease may continue in full force
and effect and Tenant shall attorn to and recognize as its landlord the
purchaser of Landlord's interest under this Lease. Tenant shall, upon the
request of a Mortgagee or purchaser at foreclosure, execute, acknowledge and
deliver any instrument consistent with the provisions of Section 23.4, below,
that has for its purpose and effect the subordination of the lien of any
Mortgage to this Lease or Tenant's attornment to such Purchaser.
23.2 MORTGAGEE PROTECTION. Tenant agrees to give any Mortgagee by
certified mail, return receipt requested, a copy of any notice of default served
upon Landlord, provided that before such notice Tenant has been notified in
writing of the address of such Mortgagee. Tenant further agrees that if Landlord
shall have failed to cure such default within the time provided for in this
Lease, then Mortgagee shall have an additional thirty (30) days within which to
cure such default; provided, however, that if such default cannot be reasonably
cured within that time, then such Mortgagee shall have such additional time as
may be necessary to cure such default so long as Mortgagee has commenced and is
diligently pursuing the remedies necessary to cure such default (including,
without limitation, the commencement of foreclosure proceedings, if necessary),
in which event this Lease shall not be terminated or Rent abated while such
remedies are being so diligently pursued. In the event of the sale of the Land
or the Building, by foreclosure or deed in lieu thereof, the Mortgagee or
purchaser at such sale shall be responsible for the return of the Security
Deposit only to the extent that such Mortgagee or purchaser actually received
the Security Deposit.
23.3 MODIFICATION DUE TO FINANCING. If, in connection with obtaining
construction or permanent financing for the Premises, the Building or the Land,
any lender (or Mortgagee) shall request reasonable modifications of this Lease
as a condition to such financing, Tenant shall promptly execute a modification
of this Lease, provided such modifications do not increase the obligations of
Tenant hereunder or materially adversely affect the leasehold interest hereby
created or Tenant's reasonable use and enjoyment of the Premises or detract from
Tenant's rights under this Lease in more than a DE MINIMIS fashion. Tenant and
any Guarantor shall each, prior to execution and throughout the Term, upon
request from time to time, provide such financial information and documentation
about itself to Landlord or Mortgagee as may be requested.
23.4 NON-DISTURBANCE AGREEMENT. Landlord agrees to obtain from any
future Mortgagee for the Building, a subordination, non-disturbance and
attornment agreement using such Mortgagee's standard form (such agreement, an
"SNDA"), providing, INTER ALIA, (i) for the subordination of this Lease to such
Mortgage, (ii) for the attornment of Tenant to Landlord's successor in title,
(iii) that, as long as Tenant is not in Default hereunder beyond any applicable
notice and cure period, Tenant's right of possession and other leasehold rights
shall not be disturbed in the event of a foreclosure of such Mortgage or a sale
in lieu of foreclosure, and (iv) that if Landlord defaults in its construction
obligations pursuant to EXHIBIT B of this Lease, and provided the mortgagee has
been given written notice of such default and an opportunity to cure same as
otherwise provided herein and has failed or declined to do so, such mortgagee
shall recognize the remedies provided to Tenant pursuant to EXHIBIT B in respect
of such default. Landlord will cooperate with Tenant to negotiate with a future
Mortgagee the terms and provisions of any future SNDA, but gives no assurances
that it will be able to secure a future lender's agreement to deviate from its
then standard form of SNDA in any respect, and Landlord's obligation to deliver
a future SNDA as a condition to Tenant's subordination of this lease to a future
Mortgage shall be strictly limited to causing such Mortgagee to deliver an SNDA
on such future Mortgagee's standard form. Upon delivery of an SNDA to Tenant
providing for the foregoing, and containing such other provisions as such
Mortgagee may require under its standard form, Tenant agrees to promptly execute
and deliver such SNDA to Landlord (and prior to its execution by the Mortgagee).
In addition, Landlord shall obtain an SNDA from Landlord's present mortgagee in
the form of EXHIBIT E attached hereto within thirty (30) days after the date of
execution of this Lease (provided Tenant shall execute such SNDA prior to
execution by such mortgagee).
ARTICLE 24
SURRENDER; HOLDING OVER
24.1 SURRENDER OF THE PREMISES. Tenant shall peaceably surrender the
Premises to Landlord on the Expiration Date or earlier termination of this
Lease, in broom-clean condition and in as good condition as when Tenant took
possession, including, without limitation, the repair of any damage to the
Premises caused by the removal of any of Tenant's personal property or trade
fixtures from the Premises, except for reasonable wear and tear and damage
caused by fire or other casualty. Any of Tenant's personal property left on or
in the Premises, the Building or the Common Area after the Expiration Date or
earlier termination of this Lease shall be deemed to be abandoned, and, at
Landlord's option, title shall pass to Landlord under this Lease.
24.2 HOLDING OVER. In the event that Tenant shall not immediately
surrender the Premises to Landlord on the Expiration Date or earlier termination
of this Lease, Tenant shall be deemed to be a month to month tenant upon all of
the terms and provisions of this Lease, except the monthly Base Rent shall be
[***] of the monthly Base Rent in effect during the last month of the Term.
Notwithstanding the foregoing, if Tenant shall hold over after the Expiration
Date or earlier termination of this Lease, and Landlord shall desire to regain
possession of the Premises, then Landlord may forthwith re-enter and take
possession of the Premises. If the Premises are not surrendered as and when
aforesaid, and in accordance with the terms of this Lease, Tenant shall
indemnify Landlord against all liabilities and damages sustained by Landlord by
reason of such retention of possession.
ARTICLE 25
QUIET ENJOYMENT
25.1 COVENANT OF QUIET ENJOYMENT. Landlord covenants that if Tenant
shall pay Rent and perform all of the terms and conditions of this Lease to be
performed by Tenant, Tenant shall during the Term peaceably and quietly occupy
and enjoy possession of the Premises without molestation or hindrance by
Landlord or any party claiming through or under Landlord, subject to the
provisions of this Lease and any and all easements, conditions, restrictions and
other matters of record affecting the Land and/or Building.
25.2 LANDLORD'S WARRANTY OF TITLE. Landlord hereby represents and warrants to
Tenant that it is the sole owner of the Building and the Land, and that there is
no ground lease on or affecting either the Building or the Land.
ARTICLE 26
TENANT'S COVENANTS REGARDING HAZARDOUS MATERIALS
26.1 DEFINITION. As used in this Lease, the term "Hazardous Material"
means any flammable items, explosives, radioactive materials, hazardous or toxic
substances, material or waste or related materials, including any substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "infectious wastes," "hazardous materials" or "toxic substances" now or
subsequently regulated under any federal, state or local laws, regulations or
ordinances including, without limitation, oil, petroleum-based products, paints,
solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia
compounds and other chemical products, asbestos, PCBs and similar compounds, and
including any different products and materials which are subsequently found to
have adverse effects on the environment or the health and safety of persons.
26.2 GENERAL PROHIBITION AND PERMITTED MATERIALS.
26.2.1 Tenant shall not cause or permit any Hazardous Material
to be generated, produced, brought upon, used, stored, treated, discharged,
released, spilled or disposed of on, in, under or about the Premises, the
Building or the Land by Tenant or its Agents, affiliates, sublessees or
assignees. Tenant shall indemnify, defend and hold Landlord harmless from any
and all actions (including, without limitation, remedial or enforcement actions
of any kind, administrative or judicial proceedings, and orders or judgments
arising out of or resulting therefrom), costs, claims, damages (including,
without limitation, punitive damages), expenses (including, without limitation,
reasonable attorneys', consultants' and experts' fees, court costs and amounts
paid in settlement of any claims or actions), fines, forfeitures or other civil,
administrative or criminal penalties, injunctive or other relief (whether or not
based upon personal or bodily injury, property damage, contamination of, or
adverse effects upon, the environment, water tables or natural resources),
liabilities or losses arising from a breach of this prohibition by Tenant, its
Agents, affiliates, sublessees or assignees. Except as set forth in Section
29.3, below, in no event shall Landlord be required to consent to the
installation or use of any storage tanks in, on or under the Premises, the
Building or the Land. If Landlord consents to the generation, production, use,
storage, treatment or disposal of Hazardous Materials in or about the Premises
by Tenant, its Agents, affiliates, sublessees or assignees, then, in addition to
any other requirements or conditions that Landlord may impose in connection with
such consent, (1) Tenant promptly shall deliver to Landlord copies of all
permits, approvals, filings, and reports reflecting the legal and proper
generation, production, use, storage, treatment or disposal of all Hazardous
Materials generated, used, stored, treated or removed from the Premises, the
Building and the Land and, upon Landlord's request, copies of all hazardous
waste manifests relating thereto, and (2) upon expiration or earlier termination
of this Lease, Tenant shall cause all Hazardous Materials arising out of or
related to the use or occupancy of the Premises by Tenant or its Agents,
affiliates, sublessees or assignees to be removed from the Premises, the
Building and the Land and transported for use, storage or disposal in accordance
with all applicable laws, regulations and ordinances and Tenant shall provide
Landlord with evidence reasonably satisfactory to Landlord of the same.
26.2.2 PERMITTED MATERIALS.
26.2.2.1 Notwithstanding the foregoing, Tenant and
its permitted assignees and subtenants shall be permitted to use, store, handle
and dispose of reasonable amounts of Hazardous Materials that are typically used
in the operation of the Permitted Use, such as ordinary cleaners, printer and
duplication supplies and similar materials (the "Permitted Materials") provided
such Permitted Materials are used, stored, handled and disposed of in a manner
meeting the requirements of all Environmental Laws. Any such use, storage and
disposal shall be subject to all of the terms of this Section (except for the
terms prohibiting same), and Tenant shall be responsible for obtaining any
required permits and paying any fees and providing any testing required by any
governmental agency with respect to the Permitted Materials.
26.2.2.2 Landlord acknowledges that Tenant's
telecommunications use will involve the use of certain equipment that may
involve the use, storage, handling and disposal of minimal amounts of Hazardous
Materials that are necessary for the operation of such equipment. Attached as
EXHIBIT F hereto is a complete list of all equipment to be installed by Tenant
in the Premises or otherwise pursuant to this Lease that would involve
compliance with the provisions of this Article 26, and a description of the
Hazardous Materials, if any, that are required to be used, stored , handled
and/or disposed of in connection therewith, and Landlord agrees that the use,
storage, handling and/or disposal of minimal amounts of Hazardous Materials as
necessary in connection with the operation of the items listed on EXHIBIT F
shall be permissible solely to the extent described therein, and subject further
to Tenant's compliance with all of the provisions of this Article 26 exclusive
of provisions prohibiting same (and such Hazardous Materials shall be deemed
"Permitted Materials", but solely to the extent required to be used, stored,
handled or disposed of in the operation of the equipment listed on EXHIBIT F or
as otherwise permitted hereinbelow). Without limitation, and in addition to the
covenants and restrictions set forth in Section 29.3 (with regard to Tenant's
Generator and Generator Fuel Tank), Tenant agree that it will comply with all
applicable Environmental Laws in connection with the use, storage, handling and
disposal of all such Permitted Materials. Any such use, storage and disposal
shall be subject to all of the terms of this Section (except for the terms
prohibiting same), and Tenant shall be responsible for obtaining any required
permits and paying any fees and providing any testing required by any
governmental agency with respect to such Permitted Materials.
26.2.2.3 If Landlord in its reasonable opinion
determines that any Permitted Materials are being improperly stored, used,
handled or disposed of, then Tenant shall immediately take such corrective
action as may be reasonably requested by Landlord. Should Tenant fail to
commence such corrective action within two (2) business days and complete such
corrective action within ten (10) business days (or (i) such longer period as
may be necessary in the exercise by Tenant of reasonable and diligent efforts to
complete such corrective action without delay, or (ii) such shorter period as
may be appropriate in the event of an Emergency), Landlord shall have the right
to perform such work on Tenant's behalf and at Tenant's sole expense, and Tenant
shall promptly reimburse Landlord for any and all costs associated with said
work.
26.2.2.4 Landlord acknowledges that Tenant
anticipates the possibility that developments in the telecommunications business
may require Tenant to upgrade, modify or add to the equipment listed on EXHIBIT
F and which may also necessarily involve the use, storage, handling or disposal
of minimal amounts Hazardous Materials. Tenant agrees that any such future
modifications and activities will, to the extent that they involve the use,
storage, handling or disposal of Hazardous Materials in any amount, require
Landlord's prior written approval, which may, without limitation, be denied (A)
if such proposed use involves use, storage, handling or disposal of more than a
minimal amount of Hazardous Materials which are necessary for the operation of
such future equipment, (B) if such proposed use does not constitute a normal,
safe and necessary equipment requirement typically applicable to
telecommunications uses of the type operated by companies similar to Tenant
within an office building environment, (C) if such proposed use is not in
compliance with all rules, regulations, statutes and codes of any governmental
authority having jurisdiction thereover, (D) if such proposed use is not in
compliance with any covenants, conditions and restrictions applicable to the
Building, (E) if Landlord has any significant objection to the location or
method of installation of such equipment, the particular specifications thereof,
(F) if the nature of the risk associated with the use of Hazardous Materials in
connection with such equipment (including risk of bodily injury, death, property
damage, spill or environmental incident) is greater than, and not substantially
equivalent to, that permitted under Section 26.2.2.3 with regard to the items
initially permitted pursuant to EXHIBIT F, (G) if such proposed use is not
directly and necessarily related to Tenant's telecommunications use from the
Premises (and any rights under this Section 26.2.2 shall be personal to Tenant
and shall not inure to the benefit of any assignee or sublessee of Tenant other
than an assignee or sublessee permitted under Section 11.4 which continues to
operate such telecommunications business from the Premises), (H) if the rate of
any insurance carried by Landlord, or the cost of any services required to be
carried with respect to the Building is increased as a result thereof, (I) if
Tenant does not agree to provide Landlord with additional security commensurate
with the risks associated with the installation and use of such equipment,
comparable to that required hereunder with respect to Tenant's initial
equipment, (J) if such use or installation would violate any of the provisions
of Section 26.2.2.5 or 26.2.2.6, below, or (K) if Tenant does not agree to
remove such equipment upon the expiration or earlier termination of the Term,
and to restore the Building to its pre-existing condition, at Tenant's sole
expense.
26.2.2.5 Landlord makes no representations or
promises of any kind pertaining to the suitability of any area to be designated
on the interior, exterior or roof of the Building for the installation and
operation of any future equipment by Tenant. Tenant will obtain, prior to
installation, any and all necessary licenses, approvals, permits, etc.,
necessary for the installation, maintenance and use of any equipment installed
within the scope of this Section 26.2.2. Tenant's installation, operation, use,
removal and replacement of such equipment shall not in any way conflict with any
applicable law, statute, ordinance or governmental rules or regulation now in
force or which may hereafter be enacted. Tenant will, at its sole cost and
expense, promptly comply or ensure that the connection of such equipment to the
Building and Premises, and the use and operation thereof, complies with all
laws, statutes, ordinances, governmental rules or regulations, or requirements
of any board of fire insurance underwriters or other similar bodies now or
hereafter constituted relating to or affecting thereto. Tenant shall indemnify
and hold Landlord harmless from and against any and all loss, cost (including
reasonable attorney's fees incurred by Landlord in enforcing its rights with
respect thereto), damage or liability arising out of any violations of said
laws, statutes, ordinances rule or regulations, or arising out of the use,
operation and maintenance of said equipment and the use, handling, storage and
/or disposal of any Permitted Materials in connection therewith. Tenant's use
and operation of any such equipment shall be exercised: (1) in such manner as
will not create any hazardous condition or interfere with or impair the
operation of the heating, ventilation, air conditioning, plumbing, electrical,
fire protection, life safety, public utilities or other systems or facilities in
the Building; (2) in such a manner as will not directly or indirectly interfere
with, delay, restrict or impose any expense, work or obligation upon Landlord in
the use or operation of such Building; and (3) at Tenant's cost, including the
cost of repairing all damage to the Building and any personal injury and/or
property damage attributable to the installation, inspection, adjustment,
maintenance, removal or replacement of any equipment, apparatus or facilities
pursuant hereto. Such use shall be confined solely to the ordinary course of
Tenant's business operations, and shall be personal to Tenant and any party to
whom Tenant assigns this Lease pursuant to Section 11.4 hereof.
26.3 NOTICE. In the event that Hazardous Materials are discovered upon,
in, or under the Premises, the Building or the Land and any governmental agency
or entity having jurisdiction over the Premises, the Building or the Land
requires the removal of such Hazardous Materials, Tenant shall be responsible
for removing those Hazardous Materials arising out of or related to the use or
occupancy of the Premises by Tenant or its Agents, affiliates, sublessees or
assignees (but excluding any Hazardous Materials existing in the Premises prior
to the date of this Lease, and also excluding any Hazardous Materials introduced
by Landlord, or its agents, employees and contractors, into the Premises, Land
or Building). Notwithstanding the foregoing, Tenant shall not take any remedial
action in or about the Premises, the Building or the Land, nor enter into any
settlement agreement, consent decree or other compromise with respect to any
claims relating to any Hazardous Material in any way connected with the
Premises, the Building or the Land without first notifying Landlord of Tenant's
intention to do so and affording Landlord the opportunity to appear, intervene
or otherwise appropriately assert and protect Landlord's interest with respect
thereto. Tenant immediately shall notify Landlord in writing of: (i) any spill,
release, discharge or disposal of any Hazardous Material in, on or under the
Premises, the Building, the Land or any portion thereof, (ii) any enforcement,
cleanup, removal or other governmental or regulatory action instituted,
contemplated or threatened (if Tenant has notice thereof) pursuant to any
Hazardous Materials Laws; (iii) any claim made or threatened by any person
against Tenant, the Premises, the Building or the Land relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from or
claimed to result from any Hazardous Materials; and (iv) any reports made to any
environmental agency or entity arising out of or in connection with any
Hazardous Materials in, on, under or about or removed from the Premises, the
Building or the Land, including any complaints, notices, warnings, reports or
asserted violations in connection therewith. Tenant also shall supply to
Landlord as promptly as possible, and in any event within five (5) business days
after Tenant first receives or sends the same, copies of all claims, reports,
complaints, notices, warnings or asserted violations relating in any way to the
Premises, the Building, the Land or Tenant's use or occupancy thereof.
26.4 SURVIVAL. The respective rights and obligations of Landlord and
Tenant under this Article 26 shall survive the expiration or earlier termination
of this Lease without limitation.
ARTICLE 27
CONTINGENCIES
27.1 LENDER APPROVAL. This Lease and the obligations of the parties
hereto are subject to the approval of this Lease by the lender which financed
Landlord's acquisition, construction and/or ownership of the Property and
Building. Landlord shall forward an executed counterpart of this Lease to such
lender for its review and approval at the time of delivery of such Lease to
Landlord executed by Tenant. Landlord shall notify Tenant within five (5)
business days after its receipt thereof, of whether such approval has been given
or denied, and, if denied, the parties agree to attempt in good faith to
negotiate any modifications hereto in order to make this Lease acceptable to
lender. In the event the parties are unable to reach such an agreement, and such
lender continues to deny its approval, this Lease shall be deemed void AB
INITIO. If Landlord has not delivered such approval and the SNDA described in
(and pre-signed by Tenant as set forth in) Section 23.4 hereof within thirty
(30) after execution of this Lease, then at any time thereafter until Landlord
delivers such approval and the SNDA, Tenant may terminate this Lease upon
written notice to Landlord.
ARTICLE 28
MISCELLANEOUS
28.1 NO REPRESENTATION BY LANDLORD. Tenant acknowledges that neither
Landlord or its Agents nor any broker has made any representation or promise
with respect to the Premises, the Building, the Land or the Common Area, except
as herein expressly set forth, and no rights, privileges, easements or licenses
are acquired by Tenant except as herein expressly set forth. Except as otherwise
set forth herein or in EXHIBIT B of this Lease, Tenant, by taking possession of
the Premises shall accept the Premises and the Building "AS IS," subject to
correction of punch list items as noted pursuant to the Work Agreement, and to
latent defects within each Space identified no later than one (1) year after the
Commencement Date for each Space, and such taking of possession shall be
conclusive evidence that the Premises and the Building are in good and
satisfactory condition at the time of such taking of possession.
28.2 NO PARTNERSHIP. Nothing contained in this Lease shall be deemed or
construed to create a partnership or joint venture of or between Landlord and
Tenant, or to create any other relationship between Landlord and Tenant other
than that of landlord and tenant.
28.3 BROKERS. Landlord recognizes Broker(s) as the sole broker(s)
procuring this Lease and shall pay Broker(s) a commission therefor pursuant to a
separate agreement between Broker(s) and Landlord. Landlord and Tenant each
represents and warrants to the other that it has not employed any broker, agent
or finder other than Broker(s) relating to this Lease. Landlord shall indemnify
and hold Tenant harmless, and Tenant shall indemnify and hold Landlord harmless,
from and against any claim for brokerage or other commission arising from or out
of any breach of the indemnitor's representation and warranty.
28.4 ESTOPPEL CERTIFICATE. Tenant shall, without charge, at any time
and from time to time, within five (5) days after request therefor by Landlord,
Mortgagee, any purchaser of the Land or the Building or any other interested
person, execute, acknowledge and deliver to such requesting party a written
estoppel certificate certifying, as of the date of such estoppel certificate,
the following: (i) that this Lease is unmodified and in full force and effect
(or if modified, that the Lease is in full force and effect as modified and
setting forth such modifications); (ii) that the Term has commenced (and setting
forth the Commencement Date and Expiration Date); (iii) that Tenant is presently
occupying the Premises; (iv) the amounts of Base Rent and Additional Rent
currently due and payable by Tenant; (v) that any Alterations required by the
Lease to have been made by Landlord have been made to the satisfaction of
Tenant; (vi) that, to the best of Tenant's knowledge, there are no existing
set-offs, charges, liens, claims or defenses against the enforcement of any
right hereunder, including without limitation, Base Rent or Additional Rent (or,
if alleged, specifying the same in detail); (vii) that no Base Rent (except the
first installment thereof) has been paid more than thirty (30) days in advance
of its due date; (viii) that Tenant has no knowledge of any then uncured default
by Landlord of its obligations under this Lease (or, if Tenant has such
knowledge, specifying the same in detail); (ix) that, to the best of Tenant's
knowledge, Tenant is not in default beyond any applicable notice and cure
periods; (x) that the address to which notices to Tenant should be sent is as
set forth in the Lease (or, if not, specifying the correct address); and (xi)
any other certifications reasonably requested by Landlord.
28.5 WAIVER OF JURY TRIAL. Landlord and Tenant each hereby waive trial
by jury in any action, proceeding or counterclaim brought by either party
against the other with respect to any matter whatsoever arising out of or in any
way connected with this Lease, the relationship of Landlord and Tenant hereunder
or Tenant's use or occupancy of the Premises. In the event Landlord commences
any proceedings for nonpayment of Rent, Tenant shall not interpose any
counterclaims other than compulsory counterclaims (E.G., counterclaims that will
be deemed barred unless asserted in the same proceeding). This shall not,
however, be construed as a waiver of Tenant's right to assert such claims in any
separate action brought by Tenant.
28.6 NOTICES. All notices or other communications hereunder shall be in
writing and shall be deemed duly given if delivered in person or upon the
earlier of receipt, if mailed by certified or registered mail, or three (3) days
after certified or registered mailing, return receipt requested, postage
prepaid, addressed and sent, if to Landlord to Landlord's Address specified in
Section 1.15 or if to Tenant to Tenant's Address specified in Section 1.16.
Landlord and Tenant may from time to time by written notice to the other
designate another address for receipt of future notices.
28.7 INVALIDITY OF PARTICULAR PROVISIONS. If any provisions of this
Lease or the application thereof to any person or circumstances shall to any
extent be invalid or unenforceable, the remainder of this Lease, or the
application of such provision to persons or circumstances other than those to
which it is invalid or unenforceable, shall not be affected thereby, and each
provision of this Lease shall be valid and be enforced to the full extent
permitted by law.
28.8 GENDER AND NUMBER. All terms and words used in this Lease,
regardless of the number or gender in which they are used, shall be deemed to
include any other number or gender as the context may require.
28.9 BENEFIT AND BURDEN. Subject to the provisions of Article II and
except as otherwise expressly provided, the provisions of this Lease shall be
binding upon, and shall inure to the benefit of, the parties hereto and each of
their respective representatives, heirs, successors and assigns. Landlord may
freely and fully assign its interest hereunder.
28.10 ENTIRE AGREEMENT. This Lease (which includes the Exhibits and
Rider attached hereto) contains and embodies the entire agreement of the parties
hereto, and no representations, inducements or agreement, oral or otherwise,
between the parties not contained in this Lease shall be of any force or effect.
This Lease (other than the Rules and Regulations, which may be changed from time
to time as provided herein) may not be modified, changed or terminated in whole
or in part in any manner other than by an agreement in writing duly signed by
Landlord and Tenant
28.11 AUTHORITY.
(i) Tenant hereby represents and warrants to Landlord that
Tenant is a duly formed and validly existing corporation, in good standing,
qualified to do business in the Commonwealth of Virginia, that the corporation
has full power and authority to enter into this Lease and that he or she is
authorized to execute this Lease on behalf of the corporation.
(ii) Landlord hereby represents and warrants to Tenant that
Landlord is a duly formed, validly existing limited liability company, qualified
to do business in the Commonwealth of Virginia, that the company has full power
and authority to enter into this Lease, and that he or she is authorized to
execute this Lease on behalf of the company.
28.12 ATTORNEYS' FEES. If, as a result of any default of Landlord or
Tenant in its performance of any of the provisions of this Lease, the other
party uses the services of an attorney in order to secure compliance with such
provisions or recover damages therefor, or to terminate this Lease or evict
Tenant, the non-prevailing party shall reimburse the prevailing party upon
demand for any and all reasonable attorneys' fees and expenses so incurred by
the prevailing party.
28.13 INTERPRETATION. This Lease is governed by the laws of the
Commonwealth of Virginia.
28.14 NO PERSONAL LIABILITY; SALE. Neither Landlord nor its Agents,
whether disclosed or undisclosed, shall have any personal liability under any
provision of this Lease. In the event of a judgment in favor of Tenant which
remains unpaid, Tenant's right of redress, execution and levy shall be limited
to the equity of Landlord in the Building as described in Article 1 hereof,
including any net sales or insurance proceeds thereof (I.E., after repayment of
all indebtedness secured thereby, and after payment of all costs of such sale or
insurance recovery). In the event that the original Landlord hereunder, or any
successor owner of the Building, shall sell or convey the Building, all
liabilities and obligations on the part of the original Landlord, or such
successor owner, under this Lease occurring thereafter shall terminate as of the
day of such sale, and thereupon all such liabilities and obligations shall be
binding on the new owner. Tenant agrees to attorn to such new owner, provided
such new owner recognizes this Lease and Tenant's rights hereunder. Any
successor to Landlord's interest shall not be bound by (i) any payment of Base
Rent or Additional Rent made for more than one (1) month in advance, or (ii) as
to any Mortgagee or any purchaser at foreclosure, any amendment or modification
of this Lease made without the consent of such Mortgagee.
28.15 TIME OF THE ESSENCE. Time is of the essence as to both Landlord's
and Tenant's obligations contained in this Lease.
28.16 FORCE MAJEURE. Except as hereafter provided, neither Landlord nor
Tenant shall be considered to be in default of an obligation under this Lease
nor liable for loss or damage for failure to perform an obligation (nor shall
the other party be released from any of its obligations under this Lease if the
non-performing party is delayed in performing an obligation), where the
performance of such obligation by the non-performing party is delayed as a
result of event of "Force Majeure" which shall mean any acts of God, strikes,
lockouts, labor difficulties, materials shortages, explosions, sabotage, riots,
civil commotions, acts of war, results of any warfare or warlike conditions in
this or any foreign country, fire or casualty, unusually inclement weather,
unusual governmental delays (including any processing of the building permit for
the Tenant Improvements which exceeds six (6) weeks after initial submission),
legal requirements, energy shortages or other causes beyond the reasonable
control of the non- performing party, provided that in no event shall (i)
financial inability be considered an event of Force Majeure, and (ii) in no
event shall Force Majeure excuse the timely performance by Tenant of its
monetary obligations under this Lease.
28.17 HEADINGS. Captions and headings are for convenience of reference
only.
28.18 MEMORANDUM OF LEASE. Tenant shall, at the request of Landlord,
execute and deliver a memorandum of lease in recordable form. Tenant shall not
record such a memorandum or this Lease without Landlord's consent. In the event
Tenant requests recordation of a memorandum of this Lease, Tenant shall be
obligated to pay all costs, fees and taxes, if any, associated with such
recordation.
28.19 FINANCIAL INFORMATION. Within ten (10) days after Landlord's
request, Tenant shall deliver to Landlord unaudited quarterly financial
statement for Tenant in respect of its most recent fiscal quarter and (to the
extent not previously delivered by Tenant to Landlord) Tenant's audited annual
financial statement for its two (2) most recent fiscal years. Such quarterly and
annual financial statements shall include, at a minimum, a balance sheet, an
income statement, and a statement of change in financial position or sources and
uses of cash, together with any accompanying notes. Tenant hereby agrees that
Tenant's annual financial statements shall be completed within ninety (90) days
after Tenant's fiscal year-end and that Tenant's quarterly financial statements
shall be completed within forty-five (45) days after Tenant's fiscal
quarter-end. The certified public accountant preparing any such annual financial
statement shall provide an opinion that such financial statement is complete and
materially accurate and that the same has been prepared in accordance with
generally accepted accounting principles consistently applied.
28.22 EFFECTIVENESS. The furnishing of the form of this Lease shall not
constitute an offer and this Lease shall become effective upon and only upon its
execution by and delivery to each party hereto.
ARTICLE 29
SPECIAL PROVISIONS
29.1 RENEWAL OPTION(S).
29.1.1 Provided Tenant has not committed a monetary or other
Default of this Lease beyond any applicable cure period within the [***] prior
to its exercise of the Renewal Option (defined below) or between the date of
such exercise and the commencement of the Renewal Term, Tenant shall have the
option (a "Renewal Option") to extend the Lease Term for one (1) period of [***]
months (referred to as the "Renewal Term") provided Tenant gives written notice
to Landlord of its election to exercise such Renewal Option (the "Renewal
Notice") not less than twelve (12) months prior to the expiration of the last
day of the initial Lease Term or, as applicable, the initial Renewal Term.
29.1.2 All terms and conditions of this Lease, including
without limitation, all provisions governing the payment of Additional Rent,
shall remain in full force and effect during the Renewal Term(s), except the
Base Rent shall be as set forth in this Section 29.1.
29.1.3 The Base Rent payable upon the commencement of the
Renewal Term shall equal the greater of (i) [***] of the Base Rent applicable
under this Lease for the [***] Lease Year (escalated annually thereafter at the
same annual escalation rate provided for herein), or (ii) [***] of the then
prevailing market
rental rate (including base rental rate and annual escalation rate) applicable
to renewal terms with respect to comparable space in comparable buildings in the
vicinity of the Building, (the "Fair Market Rate" or "FMR") at the time of the
commencement of the applicable Renewal Term, determined based upon then existing
renewal market conditions applicable to the leasing of comparable space in
comparable buildings in the vicinity of the Building (taking into consideration
use, location, quality, age and location of the applicable building and the
definition of net rentable area). Landlord and Tenant shall negotiate in good
faith and in accordance with the procedure set forth in Section 29.1.4, below,
to determine the Fair Market Rate which will be applicable during the Renewal
Term, with the goal of concluding such negotiation or triggering a determination
of the FMR using a three-appraiser method (as described in Section 29.1.5,
below) within not more than sixty (60) days after the date of Landlord's receipt
of the Renewal Notice.
29.1.4 Within ten (10) days after Landlord receives Tenant's
Renewal Notice exercising either of the renewal options referenced above,
Landlord will provide Tenant with a written notice (the "FMR Notice") indicating
the base rental rate and annual escalation rate which Landlord in good faith
believes represents the then current FMR for the Premises. If Tenant is in
agreement with the base rental rate and annual escalation rate stated in the FMR
Notice, Tenant shall so notify Landlord within ten (10) days after its receipt
thereof, in which case such base rental rate and annual escalation rate shall
constitute the FMR for such Renewal Term within the meaning of this Section
29.1. If Tenant believes in good faith that the base rental rate and annual
escalation rate stated by Landlord in the FMR Notice are in excess of actual FMR
for the Premises, Tenant shall so notify Landlord in writing prior to the end of
the ten (10) day period after Tenant received Landlord's FMR Notice, stating in
its response (hereinafter referred to as "Tenant's Counterproposal") the base
rental rate and annual escalation rate which Tenant in good faith believes
represents the then current FMR for the Premises. If Tenant fails to respond to
the Landlord's FMR Notice within such ten (10) day period, Tenant shall be
deemed to have accepted the base rental rate and annual escalation rate stated
in Landlord's FMR Notice. If Tenant does provide Tenant's Counterproposal to
Landlord in a timely fashion, and Landlord agrees that the base rental rate and
annual escalation rate stated in Tenant's Counterproposal represent the then
current FMR, Landlord shall so notify Tenant within ten (10) days after its
receipt thereof, in which case such base rental rate and annual escalation rate
shall constitute the FMR for such Renewal Term within the meaning of this
Section 29.1. If Landlord fails to respond to the Tenant's Counterproposal
within ten (10) days after Landlord's receipt of the Tenant's Counterproposal,
or rejects the rental rate and escalation rate stated therein, then the parties
agree to submit the issue of what constitutes the appropriate FMR for the
Premises for the Renewal Term to determination using a "three appraiser method"
as described in Section 29.1.5, below.
29.1.5 If the parties submit the issue of what constitutes the
appropriate FMR for the Premises for the Renewal Term to determination using a
"three appraiser method", then the basic Rent and annual escalations applicable
during the Renewal Term shall be equal to the FMR and annual escalation rates
determined by a board of three (3) licensed real estate appraisers, one of whom
shall be named by Landlord, one by Tenant, and the two so appointed shall select
the third. Each member of the board of appraisers shall be licensed in the
Commonwealth of Virginia as a real estate appraiser, with a substantial
familiarity in the field of commercial office leasing in the Reston/Herndon area
of Fairfax County, Virginia, having no less than ten (10) years experience in
such field, and recognized as ethical and reputable within the field. Landlord
and Tenant agree to make their appointments within five (5) business days after
the earlier to occur of (i) the expiration of the ten (10) day period after
Landlord's receipt of Tenant's Counterproposal, or (ii) the date Landlord
notifies Tenant of its rejection of Tenant's Counterproposal. The two (2)
appraisers selected by Landlord and Tenant shall promptly select a third
appraiser within ten (10) days after the second to be appointed has been
appointed, and each appraiser, within ten (10) days after the third appraiser is
selected, shall submit his or her determination of the said FMR and escalations
(taking into account the provisions of Section 29.1.3 hereof). If either of the
parties fail to select an appraiser within the aforesaid time periods, such
party's appraiser shall be designated (in compliance with the applicable
criteria set forth above and affiliated with a different company from the other
broker) by an agent of the Fairfax County Board of Realtors in office at such
time; and if the appraisers selected by Landlord and Tenant (or on their behalf)
are unable to reach agreement on the identity of the third appraiser within
the applicable ten (10) day period, then the third appraiser shall be designated
(in compliance with the applicable criteria set forth above) by an agent of the
Fairfax County Board of Realtors in office at such time. The FMR shall be the
average of amount determined by the two appraisers whose determinations are
closest in amount to each other (or if two appraisers reach an identical
determination, the determination of such two appraisers), provided that if the
two (2) most proximate determinations of FMR differ by more than five percent
(5%), then the determination of FMR by such board of three appraisers shall be
null and void, and Landlord and Tenant shall, within five (5) business days
thereafter, appoint a new board of three different real estate appraisers
meeting the above-stated criteria, who shall convene in accordance with the
procedures and time frames set forth above in order to render a new
determination, as if the first determination had never taken place. After the
Fair Market Rent has been established, the appraisers shall immediately notify
the parties in writing, and such determination shall be conclusive and binding
upon the parties. Landlord and Tenant shall each pay the fee of the appraiser
selected by it, and they shall equally share the payment of the fee of the third
appraiser.
29.2 ROOF RIGHTS.
29.2.1 Subject to (i) compliance with all rules, regulations,
statutes and codes of any governmental authority having jurisdiction thereover,
(ii) compliance with any covenants, conditions and restrictions of record (or
under applicable zoning and or community ordinances) applicable to the Building,
and (iii) Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed, Tenant shall have the right of
access to and the non-exclusive use of the roof of the Building, for the
installation and operation of communication equipment, including without
limitation, antennas, equipment cages or shelters and associated power supplies,
generators and other equipment (Tenant's "Roof Use") without the obligation to
pay rent or any other fee or expense (except for expenses for which Tenant is
responsible under the express terms of this Section 29.2) to Landlord in respect
of such Roof Use; provided further that such installation and the Roof Use shall
not void any roof or other warranty applicable to the Buildings and that all
such installations shall be located and screened in a manner mutually acceptable
to both Landlord and Tenant in their reasonable discretion.
29.2.2 If the rate of any insurance carried by Landlord is
increased as a result of Tenant's Roof Use, then Tenant will pay to Landlord
within thirty (30) days after Landlord delivers to Tenant a certified statement
from Landlord's insurance carrier stating that the rate increase was caused by
Tenant's Roof Use, a sum equal to the difference between the original premium
and the increased premium resulting from the Roof Use. To the best of Landlord's
knowledge, the installation of a standard satellite dish on the roof of any
Building will not result in the rate of any insurance carried by Landlord being
increased.
29.2.3 Landlord has not made any representations or promises
pertaining to the suitability of the Building's rooftops for the Roof Use.
Tenant, for the purpose of this paragraph and its right to rooftop access
hereunder, accepts the rooftop in its "as is" condition. The foregoing
notwithstanding, Landlord agrees to cooperate with Tenant to designate an area
of the roof within which Tenant's Roof Use may be conducted and which will be
suitable for such purpose, provided Tenant provides appropriate specifications
to Landlord and makes any and all modifications necessary to accommodate such
Roof use (all of which shall be subject to Landlord's reasonable consent).
29.2.4 Tenant will obtain prior to installation or operation,
as appropriate, any and all necessary licenses, approvals, permits, etc.,
necessary for the installation, maintenance and use of any equipment installed
pursuant to this Section 29.2. Tenant's Roof Use shall not in any way conflict
with any applicable law, statute, ordinance or governmental rules or regulation
now in force or which may hereafter be enacted. The Tenant will, at its sole
cost and expense, promptly comply or ensure that Tenant's Roof Use complies with
all laws, statutes, ordinances, governmental rules or regulations, or
requirements of any board of fire insurance underwriters or other similar bodies
now or hereafter constituted. Tenant shall indemnify and hold Landlord harmless
from and against any and all loss, cost (including reasonable attorney's fees
incurred by Landlord in relation to the enforcement of this Article), damage or
liability arising out of any violations of said laws, statutes, ordinances rule
or regulations, or Tenant's breach of this Article 29.2.4.
29.2.5 Tenant's Roof Use shall be exercised: (1) in such
manner as will not create any hazardous condition or interfere with or impair
the operation of the heating, ventilation, air conditioning, plumbing,
electrical, fire protection, life safety, public utilities or other systems or
facilities in each Building; (2) in compliance with all applicable laws, codes
and regulations; (3) in such a manner as will not directly or indirectly
interfere with, delay, restrict or impose any expense, work or obligation upon
Landlord in the use or operation of such Building; (4) at Tenant's cost,
including the cost of repairing all damage to the Buildings and any personal
injury and/or property damage attributable to the installation, inspection,
adjustment, maintenance, removal or replacement of any equipment or apparatus on
the roofs approved hereunder; and (5) in a manner which will not void or
invalidate any roof warranty then in effect with respect to the roof of each
such Building. Tenant's Roof Use shall be used solely in the ordinary course of
Tenant's business operations, and any use of the roof outside of the ordinary
course of Tenant's business operations (such as, but not limited to, subleasing
portions of the roof used by Tenant for profit to third parties, in order for
such third parties to establish communications transmission facilities) shall be
subject to Landlord's consent, which consent shall not be unreasonably withheld,
but may be conditioned, INTER ALIA, upon the payment by Tenant to Landlord of
any and all net revenues paid to Tenant in respect thereof. The foregoing
notwithstanding, Landlord agree that Tenant may permit third parties to
interconnect directly to Tenant's telecommunications network through the
communications transmission facilities installed pursuant to Tenant's roof use
in the ordinary course of Tenant's business, and that such interconnection will
not be subject to the immediately preceding sentence.
29.2.6 Any antennas, satellite dishes, cables and other
related equipment which form a part of Tenant's Roof Use shall remain the
property of Tenant except to the extent paid for out of the Improvement
Allowance, and Tenant agrees, within five (5) days after the end of the Term of
this Lease, to remove all such antennas and satellite dishes, cables and other
related equipment, repair any damage to the Building caused by such removal and
restore any portion of the Building affected by the installation of the
antennas, satellite dishes, cables and other related equipment to its original
condition.
29.2.7 Landlord shall grant Tenant, its agents or its
contractors, access to the roof and other areas of the Building at reasonable
times to facilitate the installation, use, maintenance and removal of the
antennas, satellite dishes, cables and other related equipment, provided that
Tenant shall obtain Landlord's prior written approval of the scope of any such
work affecting the roof of the Building and shall be responsible for any
invalidation of a roof warranty caused by such access and activities (by
substituting itself for the roof warrantor if any such invalidation occurs).
Tenant shall take reasonable measures to minimize interference with other
tenants (if any) in the Building. Tenant, at its expense, shall use a roof
contractor approved by Landlord to seal any roof penetration caused by the
installation, maintenance or removal of Tenant's equipment and Tenant shall be
responsible for all roof repairs necessitated by the installation, maintenance,
use or removal of such equipment, including any roof repairs which would have
been covered by a warranty lost by reason of any of the same.
29.2.8 Tenant shall not, in the operation of any Roof Use
permitted herein, generate any electromagnetic interference with the existing
equipment of Landlord and other tenants (if any) of the Building, such as (but
not limited to) electromagnetic interference caused by Tenant's antennas,
satellite dishes, cables or other related equipment. Tenant acknowledges that
Landlord will not be obligated to modify the Building, any equipment therein (or
on the roof thereof) or require any tenant to make modifications of existing
equipment in order to accommodate Tenant's equipment, and/or Roof Use, or for
any other purpose. With regard to any new equipment installed by either Landlord
or Tenant in the Building, each party will install and use such equipment in a
manner which will avoid electromagnetic interference with equipment already in
use by the parties on a "first come, first served" basis.
29.3 GENERATOR AND GENERATOR FUEL TANK.
29.3.1 Subject to (i) compliance with all rules, regulations,
statutes and codes of any governmental authority having jurisdiction thereover,
(ii) compliance with any covenants, conditions and restrictions applicable to
the Building, and (iii) Landlord's prior written consent as to the location,
type of fuel tank and/or generator, and method of installation, which consent
shall not be unreasonably withheld, conditioned or delayed, Tenant shall have
the right of access to and use of a space for the placement and use of an
emergency generator ("Generator") and related above-ground fuel tank (the
"Generator Fuel Tank") pursuant to plans and specifications approved by
Landlord.
29.3.2 If the rate of any insurance carried by Landlord is
increased as a result of Tenant's installation of the Generator and/or Generator
Fuel Tank, then Tenant will pay to Landlord within thirty (30) days after
Landlord delivers to Tenant a certified statement from Landlord's insurance
carrier stating that the rate increase was caused thereby, a sum equal to the
difference between the original premium and the increased premium resulting
therefrom.
29.3.3 Landlord has not made any representations or promises
pertaining to the suitability of the area to be designated on the exterior of
the Building for the installation and operation of the Generator and Generator
Fuel Tank. Tenant, for the purpose of this paragraph, agrees to accept the
space(s) designated by Landlord for such purpose in its then "as is" condition.
The foregoing notwithstanding, Landlord agrees to cooperate with Tenant to
select an area which is reasonably suitable for the operation and maintenance of
the Generator and Generator Fuel Tank, provided Tenant provides appropriate
specifications to Landlord prior to such designation to enable Landlord to cause
the designation of such area to be suitable to accommodate such use.
29.3.4 Tenant will obtain prior to installation, any and all
necessary licenses, approvals, permits, etc., necessary for the installation,
maintenance and use of any equipment installed pursuant to this Section 29.3.
Tenant's installation, operation, use, removal and replacement of the Generator
and Generator Fuel Tank shall not in any way conflict with any applicable law,
statute, ordinance or governmental rules or regulation now in force or which may
hereafter be enacted. The Tenant will, at its sole cost and expense, promptly
comply or ensure that the connection of Tenant's Generator and Generator Fuel
Tank to the Building and Premises, and the use and operation thereof, complies
with all laws, statutes, ordinances, governmental rules or regulations, or
requirements of any board of fire insurance underwriters or other similar bodies
now or hereafter constituted relating to or affecting thereto. Tenant shall
indemnify and hold Landlord harmless from and against any and all loss, cost
(including reasonable attorney's fees incurred by Landlord in enforcing its
rights under this Section 29.3), damage or liability arising out of any
violations of said laws, statutes, ordinances rule or regulations, or arising
out of the use, operation and maintenance of said Generator and Generator Fuel
Tank.
29.3.5 Tenant's use and operation of the Generator and
Generator Fuel Tank shall be exercised: (1) in such manner as will not create
any hazardous condition or interfere with or impair the operation of the
heating, ventilation, air conditioning, plumbing, electrical, fire protection,
life safety, public utilities or other systems or facilities in the Building;
(2) in compliance with all applicable laws, codes and regulations, including any
and all applicable environmental laws, regulations and legal requirements; (3)
in such a manner as will not directly or indirectly interfere with, delay,
restrict or impose any expense, work or obligation upon Landlord in the use or
operation of such Building; and (4) at Tenant's cost, including the cost of
repairing all damage to the Building and any personal injury and/or property
damage attributable to the installation, inspection, adjustment, maintenance,
removal or replacement of any equipment, apparatus or facilities pursuant to
this Section 29.3. Such use shall be confined solely to the ordinary course of
Tenant's business operations, and shall be personal to Tenant and any party to
whom Tenant assigns this Lease pursuant to Section 11.4 hereof.
29.3.6 In connection with Tenant's use of the Generator and
Generator Fuel Tank, and subject to the above-stated responsibilities of Tenant,
Tenant shall have the right to operate the Generator at such intervals and for
such periods of time as may be recommended by or required by the manufacturer of
such generator, or at such other intervals as Tenant deems necessary in its
reasonable judgment PROVIDED (i) Tenant will provide notice to Landlord of the
scheduled times for regular testing and operation, (ii) Tenant will use all
reasonable and diligent efforts to perform any such testing or periodic
operation outside of Normal Business Hours (it being acknowledged by Landlord
that certain testing and operation will necessarily take place during peak
operational periods, which may include during Normal Business Hours), and (iii)
such testing will be performed in a manner reasonably calculated
to minimize any inconvenience to other tenants and occupants of the Building,
and their respective employees and invitees.
29.3.7 Tenant agrees that Landlord shall have the option (to
be exercised by written notice to Tenant at or about the expiration or earlier
termination of this Lease) to require Tenant to remove Tenant's Generator and
Generator Fuel Tank at the expiration or earlier termination of this Lease, in
which event Tenant will remove same, repair any damage to the Building caused by
such removal, and restore any portion of the Building and appurtenant site
improvements which were affected by the installation thereof to its original
condition, such removal and restoration to be completed within five (5) days
after the later of (i) the date of Landlord's notice exercising such option, or
(ii) the date of expiration or earlier termination of this Lease. If Landlord
does not exercise such option within thirty (30) days after the date of
expiration or earlier termination of this Lease, such equipment shall be deemed
to have been surrendered with the Premises, and Tenant shall have no further
obligation to remove same under this Section 29.3.7.
29.4 RIGHT OF FIRST OFFER.
29.4.1 Subject to the expansion rights of other tenants in the
Building, if any, as of the date hereof and described in EXHIBIT F of this
Lease, during the Lease Term, Landlord agrees that, as and when (or if
practicable, within reasonable proximity, not to exceed [***] months prior, to
the date) space becomes available for lease in the Building, Landlord shall give
notice (an "Offer Notice") to Tenant of the terms upon which Landlord is willing
to lease to Tenant that portion of the Building which Landlord believes will be
coming available as identified in Landlord's notice (each such space, an "Offer
Space"), including (i) a description of the rentable area of each Offer Space;
(ii) the date on which Landlord estimates in good faith that such Offer Space
will be available for occupancy; (iii) the annual "Base Rent" per square foot of
rentable area which Landlord intends to charge for such space, including all
fixed and/or indexed adjustments to said rate (and which shall be based upon
Landlord's good faith determination of the fair market rental and escalations
for such space); (iv) the proposed lease term for such space (and which shall be
based upon Landlord's good faith determination of market terms for the term of a
new lease); (v) the condition the space is proposed to be placed in as of the
commencement of the proposed lease; and (vi) all other terms which Landlord
intends to offer with respect to such space, including any tenant improvement
allowance.
29.4.2 Tenant may, within [***] business days after the
receipt of the Offer Notice, give notice to Landlord agreeing to lease all of
(but not less than all of) the Offer Space in accordance with the terms set
forth in the Offer Notice. If Tenant shall give such notice, then Landlord shall
within thirty (30) days deliver to Tenant a lease ("Offer Lease") of the Offer
Space having the terms specified in the Offer Notice and otherwise consistent
with the legal terms of this Lease.
29.4.3 Should Tenant fail to give notice under Subparagraph
29.4.2 above within the time provided, Tenant shall be deemed not to have
exercised this Right of First Offer, and Landlord shall be free to lease such
Offer Space to a third party; PROVIDED that if Landlord has not executed a lease
for the Offer Space, or any portion thereof, within [***] after such date, or if
Landlord shall negotiate (or seek to negotiate) a lease for the Offer Space (or
such portion) at a net effective rental rate which is less than [***] of the net
effective rental rate which was set forth in Landlord's most recent Offer Notice
for such Offer Space, Landlord will, prior to executing such lease or continuing
to seek a tenant under such revised terms, provide a revised Offer Notice to
Tenant with respect to such Offer Space (or portion), reflecting the applicable
revised terms, and Tenant will have the right, pursuant to Section 29.4.2,
above, to exercise its option rights under the terms set forth in such revised
Offer Notice for a period of five (5) business days after its receipt of such
revised Offer Notice. Should Tenant fail to execute and deliver an Offer Lease
to Landlord within the [***] business day period after delivery to Tenant of
such Offer Lease reflecting the agreed upon terms, then this Section 29.4 shall
thereafter be null and void and of no further force and effect. Time is of the
essence of this Section 29.4.
29.4.4 In connection with Tenant's possible expansion into any
space leased to a tenant of the Building which is proposed to be subleased or
assigned by such tenant during the [***] year period in which this Right of
First Offer is in effect, Landlord agrees to notify Tenant in writing of its
receipt of any proposed sublease or assignment it receives from such tenant
during such period (which notice shall also state whether, and upon what terms,
Landlord has the right to recapture all or any part of the applicable premises).
29.5 CONDUIT FOR FIBER OPTIC CABLE. Subject to the provisions hereafter
set forth, Tenant shall have the right during the Term to install on the Land
from a point of connection in the public right of way adjacent to the Land to
that portion of the exterior of the Building which is immediately adjacent to
the Premises, in a location approved by Landlord, a four-inch conduit for the
purpose of conducting fiber optic cable from then existing fiber optic cable
lines located within such public right-of-way to the Premises, including, if
necessary, an appropriate manhole for access to such conduit. Subject to the
Landlord's approval as to complete engineering plans and specifications and the
manner of implementation such connection, which shall not be unreasonably
withheld, Landlord will permit Tenant to conduct such installation and connect
such conduit and cable to the any applicable telecommunications equipment inside
of the Premises or operated as part of Tenant's Roof Use. Tenant (a) shall
install such conduit and cable in compliance with all applicable codes,
ordinances, and statutes, (b) shall be responsible to obtain all governmental
approvals, permits, licenses, and the like related to such installation, (c)
shall comply with all legal and insurance requirements applicable thereto, (d)
shall repair and/or restore any and all areas of Building or Land affected by
such installation, and (e) shall indemnify and hold Landlord harmless for any
claims, damages, losses, liabilities, or expenses (including reasonable
attorneys' fees) which Landlord may incur or sustain arising out of the
installation, use or operation of any facilities installed pursuant hereto,
including by reason of any failure of Tenant to comply with the provisions
hereof, to install and operate such conduit and cable in compliance with all
applicable codes, ordinances, and statutes and for any damage to the Premises,
Building, or Land caused by such installation, use, operation and/or removal.
Landlord shall not be liable for the failure of the conduit or cable or for the
improper installation thereof by Tenant. Upon the expiration or sooner
termination of this Lease, Tenant will, at Landlord's sole election and request
(and at Tenant's sole expense), remove such conduit and any cable installed
therein, along with any ancillary equipment or structures, and restore the
Building and Land to its pre-existing condition (and shall repair any damage to
the Premises, the Building, or any other improvements to the Land caused
thereby), and shall disconnect the cable entirely from the Premises and the
Building and repair any damage to the Premises, the Building, or any other
improvements to the Land caused thereby. Unless Landlord so elects, Tenant shall
surrender the foregoing facilities and conduit to be installed pursuant to this
subparagraph in the Building and Premises upon the expiration or sooner
termination of this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first written above.
LANDLORD:
11720 Sunrisecorp., L.L.C., a Maryland limited liability
company
By: /s/ Victor K. Tolkan
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Name: Victor K. Tolkan
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Title: Managing Member
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TENANT:
PATHNET, INC. a Delaware corporation
By: /s/ James M. Craig
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Title: Chief Financial Officer
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