1
Exhibit 10.16
DEED OF LEASE
BY AND BETWEEN
WESTWOOD CENTER, L.L.C.
("LANDLORD")
AND
SAGE NETWORKS, INC.
A DELAWARE CORPORATION
("TENANT")
AT
0000 XXXXXXXX XXXXXX XXXXX
XXXXXX XXXXXX, XXXXXXXX
2
TABLE OF CONTENTS
1. TERMS. 1
2. PAYMENT OF BASE RENT & ADDITIONAL RENT 6
3. SECURITY DEPOSIT 6
4. USES; TENANT COVENANTS 7
5. ENVIRONMENTAL PROVISIONS; RECYCLING7
6. LATE CHARGES; INTEREST 11
7. REPAIRS AND MAINTENANCE 12
8. UTILITIES AND SERVICES 13
9. OPERATING COSTS 14
10. REAL ESTATE TAXES 18
11. ADDITIONAL PROVISIONS; OPERATING COSTS AND REAL ESTATE TAXES 19
12. TENANT'S INSURANCE 20
13. LANDLORD'S INSURANCE 22
14. DAMAGE OR DESTRUCTION 22
15. MACHINERY AND EQUIPMENT; ALTERATIONS AND ADDITIONS; REMOVAL OF
FIXTURES 24
16. ACCEPTANCE OF PREMISES 25
17. TENANT IMPROVEMENTS 25
18. ACCESS 26
19. MUTUAL WAIVER OF SUBROGATION 27
20. INDEMNIFICATION 27
3
21. ASSIGNMENT AND SUBLETTING 28
22. ADVERTISING 30
23. LIENS 30
24. DEFAULT 30
25. SUBORDINATION 35
26. SURRENDER OF POSSESSION 36
27. NON-WAIVER 36
28. HOLDOVER 36
29. CONDEMNATION 37
30. NOTICES 37
31. MORTGAGEE PROTECTION 38
32. COSTS AND ATTORNEYS' FEES 38
33. BROKERS 38
34. LANDLORD'S LIABILITY 39
35. ESTOPPEL CERTIFICATES 39
36. FINANCIAL REPRESENTATIONS AND INFORMATION 40
37. TRANSFER OF LANDLORD'S INTEREST 40
38. RIGHT TO PERFORM 40
39. COMMON AREAS 41
40. SALES AND AUCTIONS 41
41. ACCESS TO ROOF 41
42. ACCESS 42
43. AUTHORITY OF LANDLORD AND TENANT 43
4
44. NO ACCORD OR SATISFACTION 43
45. LEGAL REQUIREMENTS 43
46. PARKING 43
47. GENERAL PROVISIONS 43
48. RULES AND REGULATIONS 45
49. ARBITRATION 45
50. WAIVER OF JURY TRIAL 47
51. RENEWAL TERM 47
EXHIBIT A Location and Dimensions of Premises
EXHIBIT B Description of Land
EXHIBIT C Construction Provisions
EXHIBIT D Rules and Regulations
EXHIBIT E Declaration of Lease Commencement
EXHIBIT F Form of Estoppel Certificate
EXHIBIT G Tenant Financial Information
EXHIBIT H Existing Equipment/Fixtures
5
DEED OF LEASE
THIS DEED OF LEASE ("Lease") is made as of the 11th day of
February, 1999, by and between WESTWOOD CENTER, L.L.C., a Delaware limited
liability company ("Landlord"), and SAGE NETWORKS, INC., a Delaware
corporation ("Tenant").
R E C I T A L S:
Landlord, for and in consideration of the rents and all other
charges and payments hereunder and of the covenants, agreements, terms,
provisions and conditions to be kept and performed hereunder by Tenant,
grants and conveys to Tenant, and Tenant hereby hires and takes from
Landlord, a leasehold interest in the premises described below
("Premises"), subject to all matters hereinafter set forth and upon and
subject to the covenants, agreements, terms, provisions and conditions of
this Lease for the term hereinafter stated.
NOW THEREFORE Landlord and Tenant hereby agree to the following:
I. TERMS.
A. Premises. (a) The premises demised by this Lease will consist of
approximately 13,171 rentable square feet of space (the "Premises") measured by
Landlord's architect in accordance with the 1989 Washington, D.C. Commercial
Association of Realtors ("WDCAR") Standard Method of Measurement, and shall be
comprised of suite _____ on the first floor in that building located at 0000
Xxxxxxxx Xxxxxx Xxxxx, XxXxxx, Xxxxxxx Xxxxxx, Xxxxxxxx (the "Building"),
together with the right to the use of not more than forty nine (49) parking
spaces located in the adjacent parking facility (including any parking structure
and/or surface lot as may exist for the Building from time to time), and the
non-exclusive use of various Common Areas (as defined in Section 39 hereof), as
more particularly set forth herein. The land upon which the Building is
situated, which is generally depicted on the diagram attached hereto as Exhibit
B (the "Site Plan") and incorporated herein by reference, shall be referred to
hereinafter as the "Land". The Land and the Building are collectively referred
to herein as the "Project". The location and dimensions of the Premises are
shown on the conceptual floor plans attached hereto as Exhibit A and
incorporated herein by reference. No easement for light or air is incorporated
in or intended to be conveyed with the Premises.
(b) Upon completion of the final plans and specifications for the
Premises, Landlord shall deliver to Tenant a certificate indicating the total
square footage of the Premises based upon an opinion of a registered architect.
Tenant, or its representatives, shall have the right to access, review and
remeasure the Premises; provided, however, Tenant shall give notice exercising
such right within fifteen (15) days after receipt of the Landlord's notice or
Tenant shall be deemed to have waived that right. If Tenant's remeasurement
discloses a
6
discrepancy of more than one and one-half percent (1-1/2%), then the Lease shall
be adjusted in accordance with such remeasurement unless Landlord disputes the
results of Tenant's remeasurement, in which event, prior to the remeasurement
being considered effective, the question of such measurement shall be submitted
to Arbitration in accordance with Section 49 hereof, (provided that in such
event the initial two arbitrators shall be each of Landlord's and Tenants
architects, the third arbitrator must also be a licensed architect), and rather
than the determination of the third arbitrator being binding, the square footage
of the Premises shall be deemed to be the average of the determinations of those
two architects whose determinations are the closest, with the third to be
disregarded. If the remeasurement (or, if disputed, Arbitration) establishes
that there was a discrepancy adverse to Tenant of more than three percent (3%)
or more, then Landlord shall reimburse Tenant for the reasonable and actual cost
of remeasurement and of any Arbitration within thirty (30) days after invoice
therefor, and if the remeasurement establishes that there was a discrepancy of
less than three percent (3%), then Tenant shall reimburse Landlord for the
reasonable Arbitration expenses within thirty (30) days after invoice therefor.
The foregoing shall not affect the Commencement Date of this Lease, and pending
resolution pursuant hereto, Base Rent paid hereunder shall be based upon the
estimate set forth above. Further the foregoing measurement (i) shall only be
available as of substantial completion and not thereafter, and (ii) shall cause
adjustment in the amount of the Allowance (as defined in Exhibit C) and in
Tenant's Share.
B. Tenant's Share. "Tenant's Share" shall mean a fraction, the
numerator of which is the total rentable square footage of the Premises as
determined in accordance with Section 1.1 hereof, and the denominator of which
is 97,081, representing the total rentable square footage of the Building. No
adjustment shall be made for space within the Project occupied by any building
engineer(s) or similar on-site property management or operational personnel,
provided any such space will be located within a core area location to be
determined within the reasonable judgment of Landlord.
C. Lease Term. The term of this Lease (the "Term" or "Lease Term")
shall commence on the "Commencement Date" as defined in Section 1.4 below (and
as more fully set forth in Exhibit C hereto), and shall expire one hundred
twenty (120) months after the Commencement Date (the "Lease Expiration Date");
provided that if the Commencement Date is a date other than the first day of a
calendar month, the Lease Term shall run for the number of months set forth
above from the first day of the calendar month following the Commencement Date.
D. Commencement Date.
1. The "Commencement Date" shall be ninety (90) days after the
date upon which Landlord delivers the Notice of Possession (as defined in
Exhibit C attached hereto) to Tenant, and Tenant is able to enter the Premises
for the purposes of performing Tenant's Work therein as identified in Exhibit C
attached hereto. Notwithstanding the foregoing, for purposes of this Lease, the
term "Commencement Date" shall also mean any adjusted Commencement Date which
may be established pursuant to the provisions of this
7
Lease. Landlord and Tenant hereby agree to execute a Declaration, in the form
attached hereto as Exhibit E, to confirm the Commencement Date. Tenant's failure
to execute said Declaration shall not affect the Commencement Date, or the Lease
Expiration Date, as the same may be determined by the terms of this Lease.
E. Base Rent. The base rent payable by Tenant hereunder ("Base Rent")
is set forth in this Section 1.5.1, below. The Base Rent payable to Landlord is
in addition to (and not to be reduced by) any payment of Additional Rent (as
hereinafter defined) hereunder. Base Rent is "net" of electrical service which
will be contracted for and paid directly by Tenant. Base Rent shall be payable
monthly, in equal monthly installments, in advance, on the first day of each
calendar month of the Term, without prior notice, demand, deduction or offset.
1.5.1 Subject to the provisions of Section 1.5.2 below, the annual Base
Rent for the Premises (monthly installments of which may be referred to herein
as "Monthly Base Rent") for the initial Lease Year of the Term shall be Twenty
Three Dollars and Fifty Cents ($23.50) per square foot of the Premises.
Thereafter, as of the first twelve (12) month anniversary of the Commencement
Date and each annual anniversary thereafter, the Base Rent shall be increased to
an amount equal to one hundred three percent (103%) of the Base Rent for the
immediately preceding Lease Year.
1.5.2 In the event Tenant exercises its Renewal Option in
accordance with Section 51 of this Lease, Base Rent and escalations for the
Renewal Term under this Lease shall be as set forth in Section 51 below.
F. Additional Rent. Tenant's Share of Real Estate Taxes (as defined in
Section 10), Operating Costs (as defined in Section 9) and any other sum owed or
reimbursable by Tenant to Landlord under this Lease (excluding Base Rent) shall
be considered additional rent hereunder (collectively "Additional Rent"), and,
except for items of Additional Rent for which demand is required pursuant to the
express terms of this Lease, shall be payable without demand, set-off or
deduction. Estimates of those items of Additional Rent described in Section 9
and Section 10 of this Lease shall be provided by Landlord to Tenant in
accordance with the terms of Sections 9 and 10 hereof, and shall be payable
monthly, in advance, on the first day of each calendar month of the Term,
together with Tenant's monthly payment of Base Rent, without demand, set-off or
deduction.
G. Notice and Payment Addresses. Any notices under this Lease shall be
governed by the terms of Section 30, below. The notice addresses of the parties
are as follows:
If to Landlord: c/x Xxxxxx & Associates, Inc.
1900 Interstate Tower
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
8
And a copy to: X. Xxxxxxx Saas, Esq.
Xxxxxxxxx & Saas, P.C.
0000 Xxxx Xxxx Xxxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000
If to Tenant: Both prior to and after the Commencement Date at:
Sage Networks, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
ATTN: Xxxxx Xxxxxxxx
Chief Operating Officer
And a copy to: Mr. Xxxxx Xxxx
Sage Networks, Inc.
at the Premises
And a copy to: Xxxxx X. Xxxxx, General Counsel
Sage Networks, Inc.
00 Xxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Either party may, by ten (10) days' prior written notice to the other, designate
a new address to which all notices hereunder shall be directed.
H. Rent Payment Address. Tenant shall send payments of Base Rent and
Additional Rent hereunder to Landlord at the following address, or to such other
address of which Landlord may advise Tenant in writing:
x/x Xxxxxxxx Xxxx Xxxx Xxxxxx Services, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
XxXxxx, Xxxxxxxx 00000
I. Lease Year. Each twelve (12) month period within the Lease Term
shall be referred to herein as a "Lease Year." The first Lease Year shall
commence on the Commencement Date and terminate on the last day of the twelfth
full calendar month after the Commencement Date. Each subsequent Lease Year
shall commence on the date immediately following the last day of the preceding
Lease Year and shall continue for a period of twelve (12) full calendar months,
except that the last Lease Year of the Lease Term shall terminate on the date
this Lease expires or is otherwise terminated.
J. Deed of Lease. To the extent required under applicable law to make
this Lease legally effective, this Lease shall constitute a deed of lease.
9
II. PAYMENT OF BASE RENT & ADDITIONAL RENT.
Tenant shall pay Landlord the Base Rent and Additional Rent due under this Lease
without prior notice, demand, deduction or offset, in lawful money of the United
States. Base Rent and Additional Rent shall be paid at the address noted in
Section 1.8, or to such other party or at such other place as Landlord may
hereafter from time to time designate in writing. Base Rent and Additional Rent
under this Lease for any partial month at the beginning or end of the Lease Term
shall be prorated. Except for monthly installments of estimated Additional Rent
as set forth in Sections 9 and 10 of this Lease, or as otherwise provided in
this Lease, all payments of Additional Rent shall be paid no later than ten (10)
business days after the date Landlord notifies Tenant in writing of the amount
thereof. In the event of any dispute concerning the computation of the amount of
any Additional Rent due, Tenant shall pay the amount specified by Landlord
pending the resolution of the dispute, and, subject to Section 9.4 hereof, such
payment shall be without prejudice to Tenant's right to continue to challenge
the disputed computation.
III. SECURITY AND ADVANCE DEPOSIT.
A. Security Deposit. Simultaneously with the execution of this Lease by
Tenant, Tenant shall provide Landlord with a security deposit in an amount equal
to One Hundred Fifty Thousand Dollars ($150,000.00) (the "Security Deposit").
The Security Deposit shall constitute security for payment of Base Rent and
Additional Rent and for any and all other obligations of Tenant under this
Lease. If Tenant defaults, beyond any applicable cure period, with respect to
any covenant or condition of this Lease, including but not limited to the
payment of Base Rent, Additional Rent or any other payment due under this Lease,
and the obligation of Tenant to maintain the Premises and deliver possession
thereof back to Landlord at the expiration or earlier termination of the Lease
Term in the condition required herein, then Landlord may (without any waiver of
Tenant's default being deemed to have occurred) apply all or any part of the
Security Deposit to the payment of any sum in default beyond any applicable cure
period, or any other reasonable sum which Landlord may be required or deem
necessary to spend or incur by reason of Tenant's default, or to satisfy in part
or in whole any damages suffered by Landlord as a result of Tenant's default
which continues to exist beyond any applicable cure period. In the event of such
application, Tenant shall promptly deposit with Landlord the amount necessary to
restore the Security Deposit to the full amount set forth above. The parties
expressly acknowledge and agree that the Security Deposit is not an advance
payment of Base Rent or Additional Rent, nor a measure of Landlord's damages in
the event of any default by Tenant. If Tenant shall have fully complied with all
of the covenants and conditions of this Lease, but not otherwise, the amount of
the Security Deposit then held by Landlord shall be repaid to Tenant within
thirty (30) days after the expiration or sooner termination of this Lease. In
the event of a sale or transfer of Landlord's estate or interest in the
Building, Landlord shall transfer the Security Deposit to the purchaser or
transferee, and upon such transfer Landlord shall be considered released by
Tenant from all liability for the return of the Security Deposit, provided such
assignee assumes all prospective liability of Landlord hereunder. The Security
Deposit shall
10
be posted in cash or by letter of credit, and, if in the form of letter of
credit shall be a clean, irrevocable letter of credit from an institution and in
form and substance reasonably satisfactory to Landlord in all respects. If in
the form of letter of credit, the same shall be "evergreen" and shall be renewed
automatically on an annual basis throughout the Term (or, alternatively, a
replacement letter of credit shall be furnished to Landlord, which letter of
credit must satisfy all of the conditions set forth above and which replacement
letter of credit shall be delivered not later than thirty (30) days prior to the
then scheduled expiry date of the existing letter of credit); failing which
Landlord shall be entitled to draw thereon and hold the proceeds therefrom in
cash as the Security Deposit hereunder.
3.2 Advance Deposit. Simultaneously with the execution of this Lease by Tenant,
Tenant shall deposit with Landlord the sum of $27,439.00 as a deposit of the
first month's Rent (the "Advance Deposit"), which shall be applied by Landlord
on behalf of the Tenant to the payment of the first month's Rent when due and
payable. Any good faith deposit made at the time Tenant executed and delivered
to Landlord any letter of intent or proposal to lease shall be applied toward
the amount of the Advance Deposit. The Advance Deposit, prior to its being
applied to the payment of monthly Rent, shall constitute security for the
payment and performance by Tenant of all of Tenant's obligations, covenants,
conditions and agreements under this Lease, but shall not be deemed liquidated
damages, but shall be applied in reduction of Tenant's total obligation(s) to
Landlord.
3.3 No Separate Account. Landlord shall not be obligated to hold the Security
Deposit (if converted to cash) or the Advance Deposit in a separate account from
other Building or Project funds.
3.4 Reduction of Security Deposit. Provided that no Default or Event of Default
then exists by or on behalf of Tenant hereunder, and further provided that there
then exists no condition or situation which, with the giving of notice or the
passage of time could constitute a default or Event of Default by or on behalf
of Tenant hereunder, commencing as of the fourth annual anniversary of the
Commencement Date and continuing (subject to the foregoing condition) on each
annual anniversary thereafter, Tenant shall have the right to reduce the
Security Deposit by an amount equal to twenty-five percent (25%) of the amount
of the original Security Deposit such that, provided the foregoing condition is
met, as of the expiration of the seventh (7th) Lease Year, the Security Deposit
shall be extinguished. In the event the Security Deposit is in the form of a
letter of credit, such reduction shall take place by replacement letter of
credit in form and substance consistent with Section 3.1 above, and Tenant
acknowledges and agrees that Landlord shall have no obligation to release the
then existing letter of credit to Tenant until an original replacement letter of
credit consistent with this Article 3 has been delivered to Landlord.
IV. USES; TENANT COVENANTS.
A. Permitted Uses. The Premises are to be used for general office,
network operation center and administration purposes and such other uses
incidental to such uses and
11
consistent with the operation of a first class office building as may be
permitted by applicable law, provided such uses shall not include any retail,
industrial or manufacturing use.
B. Other General Use Covenants. Tenant shall not commit or allow to be
committed any waste upon the Premises, or any public or private nuisance.
Tenant, at its expense, shall comply with all laws relating to its use and
occupancy of the Premises and shall observe the Rules and Regulations attached
hereto as Exhibit D. No act shall be done in or about the Premises that is
unlawful, or which will increase the existing rate of insurance on the Building.
To the best of Landlord's knowledge, the proposed use will not increase the
existing rate of insurance on the Building. In the event of a breach of the
covenant set forth in the immediately preceding sentence regarding insurance
rates, Tenant shall cease the activity giving rise to such increase and, to the
extent any increased insurance premiums were in fact paid by Landlord as a
result of such activity, Tenant shall pay to Landlord any and all such increases
in insurance premiums resulting from such breach, provided that so long as
Tenant continues to pay such increases in premiums, and provided that the
activity giving rise to such increased premiums is an activity permitted under
Section 4.1, above, the continuation of such activity by Tenant shall not be
prohibited or constitute a breach of this Lease.
V. ENVIRONMENTAL PROVISIONS; RECYCLING.
A. General. Tenant agrees to comply (and to cause its agents,
employees, contractors and, while within the Premises, invitees to comply) with
any and all applicable Environmental Laws (as defined below) in connection with
(1) Tenant's use and occupancy of the Premises, (2) any use and occupancy of the
Premises arising in connection with any assignment of this Lease, or sublease or
license of the Premises or any part thereof, and (3) any other fact or
circumstance the existence of which legally imposes on Tenant the obligation to
so comply therewith. Tenant shall provide all information within Tenant's
control requested by Landlord and/or governmental authorities in connection with
Environmental Laws or Hazardous Materials (defined below) relating to the
matters contemplated in the preceding sentence.
B. Tenant's Warranties and Covenants
During the Term and any Renewal Term (as hereafter defined) of the Lease,
Tenant warrants, represents and covenants to and with Landlord as follows:
1. Tenant will not introduce, or permit or suffer the
introduction, within the Premises or the Project of (A) asbestos in any form,
(B) urea formaldehyde foam insulation, (C) transformers or other equipment which
contain dielectric fluid containing polychlorinated biphenyls, or (D) except as
permitted below, any flammable explosives, radioactive materials or other
substance constituting "hazardous materials" or "hazardous wastes" pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. Sections 9601 et seq.), the Hazardous Materials
12
Transportation Act, as amended (49 U.S.C. Sections 1801 et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Sections 9601 et seq.) and
the regulations adopted and promulgated pursuant thereto, the Federal Water
Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.), and in the regulations adopted and publications
promulgated pursuant thereto, or successor legislation thereto, or any other
Federal, state or local environmental law, ordinance, rule, regulation and/or
other statute of a governmental or quasi-governmental authority relating to
pollution or protection of the environment (collectively, "Environmental Laws").
The substances described in (A), (B), (C) or (D) above are hereinafter
collectively referred to herein as "Hazardous Materials".
2. Except as expressly permitted hereby, the Premises will
never be used by Tenant for any activities involving, directly or indirectly,
the use, generation, treatment, transportation, storage or disposal of any
Hazardous Materials, or to refine, produce, store, handle, transfer, process or
transport Hazardous Materials.
3. Tenant (A) shall comply with the Environmental Laws and all
other applicable laws, rules and regulations or orders pertaining to health, the
environment or Hazardous Materials, in so far as such laws pertain to Tenant's
use and occupancy of the Premises or the need for such compliance arises due to
the acts or omissions of Tenant, its agents, employees, contractors, invitees
(while within the Premises), subtenants or assignees, (B) shall not, except as
specifically permitted hereby, store, utilize, generate, treat, transport or
dispose of (or permit or acquiesce in the storage, utilization, generation,
transportation, treatment or disposal of) any Hazardous Materials on or from the
Premises, (C) shall cause its agents, employees, licensees, contractors,
invitees (while within the Premises), subtenants and assignees to comply with
the representations, warranties and covenants herein contained and be
responsible for any non-compliance by any such party(ies), (D) agrees that no
portion of the Premises will be used by Tenant or any assignee or subtenant of
Tenant as a landfill or a dump, and (E) will not install any underground tanks
of any type.
4. In the event of any future storage, presence, utilization,
generation, transportation, treatment or disposal of Hazardous Materials in, on
or about the Premises, or in the event of any Hazardous Materials Release (as
hereinafter defined) which in either case is attributable, in whole or in part,
to the presence of Hazardous Materials existing in, on or about on the Project
subsequent to the Commencement Date and is caused, directly or indirectly, by
Tenant or Tenant's agents, employees, contractors, licensees, invitees (while
within the Premises), sub-tenants or assignees, or is otherwise Tenant's
responsibility under the terms of this Lease, Tenant shall, at the direction of
Landlord or any federal, state, or local authority or other governmental
authority, remove or cause the removal of any such Hazardous Materials and
rectify any such Hazardous Materials Release, and otherwise comply or cause
compliance with the laws, rules, regulations or orders of such authority, all at
the expense of Tenant, including without limitation, the undertaking and
completion of all investigations, studies, sampling and testing and all
remedial, removal and other actions necessary to clean up and remove all
Hazardous Materials, on, from or affecting the Premises. If, under such
circumstances, Tenant shall fail to proceed with such removal or
13
otherwise comply with such laws, rules, regulations or orders within the cure
period permitted under the applicable regulation or order, the same shall
constitute a default under this Lease and, upon forty eight (48) hours notice
given by Landlord to Tenant, Landlord may, but shall not be obligated to, take
such action as may be reasonably necessary under the circumstance to eliminate
such Hazardous Materials from the Premises or otherwise comply with the
applicable law, rule, regulation or order, acting either in its own name or in
the name of Tenant pursuant to this Section, and the cost thereof shall be borne
by Tenant and thereupon become due and payable as Additional Rent hereunder;
provided, however, that Landlord shall not exercise its self-help rights
hereunder, nor exercise any right otherwise provided herein to terminate this
Lease or Tenant's right of possession due to Tenant's failure or inability to
correct such problem within a time certain as long as Tenant is at all times
using its best efforts its efforts to correct the problem (provided however,
that if Landlord determines, in its reasonable discretion, that there exists a
substantial risk of governmental enforcement action against Landlord, or
governmental or third party civil liability to Landlord, if Landlord fails to
take independent action immediately to remediate an environmental problem which
is otherwise Tenant's responsibility under this Section 5, then Landlord shall,
notwithstanding Tenant's continuing best efforts to correct the problem, be
entitled to take such independent action, and to recover the reasonable and
actual costs associated therewith from Tenant). Tenant shall give to Landlord
and its authorized agents and employees access to the Premises for such purposes
and hereby specifically grants to Landlord a license to remove the Hazardous
Materials and otherwise comply with such applicable laws, rules, regulations or
orders, acting either in its own name or in the name of the Tenant pursuant to
this Section.
5. Landlord represents, warrants and covenants that to the
best of its current actual knowledge, as of the date of execution hereof, the
Land is free from any Hazardous Materials and is not in violation of any
Environmental Laws. Tenant shall not be liable for the performance of any
remedial action required, fines, penalties or any other charges which may be
assessed relating to any Hazardous Materials in existence at or on the Premises
as of the Commencement Date.
6. Each of Tenant and Landlord hereby indemnifies and holds
the other and their respective shareholders, constituents, subsidiaries,
affiliates, officers, directors, partners, employees, agents and trustees
harmless from, against, for and in respect of, any and all damages, losses,
settlement payments, obligations, liabilities, claims, actions or causes of
actions, encumbrances, fines, penalties, and costs and expenses suffered,
sustained, incurred or required to be paid by any such indemnified party
(including, without limitation, reasonable fees and disbursements or attorneys,
engineers, laboratories, contractors and consultants) because of, or arising out
of or relating to a violation of any of the indemnifying party's
representations, warranties and covenants under this Section, including any
Environmental Liabilities (as hereinbelow defined) arising therefrom. For
purposes of this indemnification clause, "Environmental Liabilities" shall
include all costs and liabilities with respect to the presence, removal,
utilization, generation, storage, transportation, disposal or treatment of any
Hazardous Materials or any release, spill, leak, pumping, pouring, emitting,
emptying, discharge, injection, escaping, leaching, dumping or
14
disposing into the environment (air, land or water) of any Hazardous Materials
(each a "Hazardous Materials Release"), including without limitation, cleanups,
remedial and response actions, remedial investigations and feasibility studies,
permits and licenses required by, or undertaken in order to comply with the
requirements of, any federal, state or local law, regulation, or agency or
court, any damages for injury to person, property or natural resources, claims
of governmental agencies or third parties for cleanup costs and costs of
removal, discharge, and satisfaction of all liens, encumbrances and restrictions
on the Premises relating to the foregoing. The foregoing notwithstanding, the
foregoing indemnifications shall not encompass consequential damages or damages
related to loss of business or business interruption which may arise on account
of the presence of any Hazardous Materials on or about the Project. The
foregoing indemnification and the responsibilities of Tenant and Landlord under
this Section shall survive the termination or expiration of this Lease.
7. Tenant shall promptly notify Landlord in writing of the
occurrence of any Hazardous Materials Release or any pending or threatened
regulatory actions, or any claims made by any governmental authority or third
party, relating to any Hazardous Materials or Hazardous Materials Release on or
from the Premises, and shall promptly furnish Landlord with copies of any
correspondence or legal pleadings or documents in connection therewith. Landlord
shall have the right, but shall not be obligated, to notify any governmental
authority of any state of facts which may come to its attention with respect to
any Hazardous Materials or Hazardous Materials Release on or from the Premises
following consultation with Tenant.
8. Tenant agrees that Landlord shall have the right (but not
the obligation) to conduct, or to have conducted by its agents or contractors,
such periodic environmental inspections of the Project as Landlord shall
reasonably deem necessary or advisable from time to time. Landlord shall provide
Tenant with no less than seventy-two (72) hours prior notice of any such
inspection within the interior of the Premises, except in case of an emergency,
in which case only such notice as may be practicable under the circumstance
shall be required. The cost of any such inspection shall be borne by Tenant in
the event such inspection determines that Tenant has breached the covenants set
forth in Section 5.2.3 above.
C. Permitted Materials. Notwithstanding the foregoing, Tenant and its
assignees, subtenants and licensees shall be permitted to store reasonable
amounts of Hazardous Materials that are typically used in an ordinary general
office use environment such as ordinary cleaners, printer and duplication
supplies and similar materials (the "Permitted Materials") provided such
Permitted Materials are properly used, stored and disposed of in a manner and
location meeting 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. If Landlord in its
reasonable opinion determines that any Permitted Materials are being improperly
stored, used or disposed of, then Tenant shall immediately take such
15
corrective action as requested by Landlord. Should Tenant fail to take such
corrective action within three (3) business days of receipt of such notice (or
such shorter time as may be set forth in such notice in the event Landlord
determines that the same presents a possible threat to person or property within
the Building), 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.
D. Recycling Regulations. Landlord shall, as an Operating Cost
hereunder, provide receptacles and containers as necessary for Tenant to comply
with all orders, requirements and conditions now or hereafter imposed by any
ordinances, laws, orders and/or regulations (hereinafter collectively called
"regulations") of any governmental body having jurisdiction over the Premises or
the Building regarding the collection, sorting, separation and recycling of
waste products, garbage, refuse and trash (hereinafter collectively called
"waste products").
VI. LATE CHARGES; INTEREST
16
A. Tenant hereby acknowledges that late payment to Landlord of Base
Rent or Additional Rent will cause Landlord to incur administrative costs and
loss of investment income not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. If any Base Rent or Additional
Rent due from Tenant is not received by Landlord or Landlord's designated agent
by that date which is seven (7) days after the date the same is due (or, in the
event that Tenant is late in payment more than two [2] times in any twelve [12]
month period, then thereafter in the event any such payment is not received by
Landlord by the date the same is due), then Tenant shall pay to Landlord a late
charge equal to five percent (5%) of such overdue amount. The parties hereby
agree that such late charges represent a fair and reasonable estimate of the
administrative cost that Landlord will incur by reason of Tenant's late payment.
Landlord's acceptance of such late charges shall not constitute a waiver of
Tenant's Default with respect to such overdue amount or otherwise estop Landlord
from exercising any of the other rights and remedies granted hereunder.
B. In addition to the administrative late charge provided for under
Section 6.1, above, if any Base Rent or Additional Rent or any other sum due
hereunder from Tenant to Landlord is not paid by that date which is seven (7)
days after the date the same is due (or, in the event that Tenant is late in
payment more than two [2] times in any twelve [12] month period, then thereafter
in the event any such payment is not received by Landlord by the date the same
is due), then the entire unpaid amount shall bear interest from the date
originally due until the date paid at an annual rate of interest equal to the
"prime rate" of interest as published in the Wall Street Journal (or, if not
published, as established by the then largest national banking association in
the United States of America) from time to time (the "Prime Rate") plus three
percent (3%) (the "Default Rate").
VII. REPAIRS AND MAINTENANCE.
7.1 Landlord's Obligations. Landlord shall be responsible for and shall
maintain, repair, replace and keep in good operating condition, comparable to
similar properties in the McLean, Virginia area, the Common Areas (as defined in
Section 39 below) (including, without limitation, the lobbies, elevators,
stairs, grounds, loading areas and corridors), the roofs, foundations, floors,
ceilings, walls, windows, load-bearing elements, conduits and structural walls
and other structural elements of the Building, the underground utility and sewer
pipes of the Building, all base building mechanical, electrical, plumbing, HVAC
system and the sprinkler system and other fire and life-safety systems, and the
adjacent parking structure and surface parking facility, the cost of which shall
be included within Operating Costs except to the extent set forth in Section
9.6, hereof; provided that, to the extent the need for any such repairs or
replacements arise as a the result of the negligence or willful misconduct of
Tenant (or Tenant's agents, employees, contractors, invitees (while within the
Premises), assignees or sub-tenants) and the same is not covered under the
policies of casualty insurance which are required to be carried by the parties
pursuant to this Lease (in which case the proceeds of such insurance will be
utilized to satisfy the cost thereof), the cost
17
of such repairs or replacements shall be reimbursable by Tenant to Landlord as
Additional Rent under this Lease, and such reimbursement shall be due not later
than ten (10) business days after Landlord's written demand therefore.
7.2. Repair Standards. All repairs and maintenance required of Landlord pursuant
to this Section or elsewhere in this Lease shall be performed in accordance with
standards applicable to comparable office buildings in McLean, Virginia, and
performed in a timely and diligent fashion. Landlord agrees to diligently attend
to any routine repairs or maintenance needs brought to its attention by Tenant
as soon as reasonably practicable and in a manner calculated to minimize to the
extent possible disruption of Tenant's business activities.
7.3 Tenant's Obligations. Subject to Landlord's obligations as set forth in
Section 7.1 above and its right of access pursuant to Section 18, and except for
janitorial and cleaning services (to the extent provided for under Section 8.1,
below), Tenant shall be exclusively responsible for all repairs and maintenance
to the interior non-structural portions of the Premises. Tenant shall promptly
report in writing to Landlord any defective condition in the Premises known to
Tenant which Landlord is required to repair, and failure to so report such
defects shall excuse any delay by Landlord in commencing and completing such
repair to the extent the same would otherwise be Landlord's responsibility under
this Lease, provided that (i) Landlord shall not be so excused if Landlord had
actual knowledge of the need for such repair independent of Tenant's
notification, and (ii) once Landlord is notified or has actual knowledge of the
need for such repair, Landlord's repair obligation under Section 7.1, above,
shall be fully effective as to such item (and, to the extent any delay in
reporting such defects results in the otherwise avoidable need to perform a
capital repair or replacement which under Section 9.5 is excluded from Operating
Costs, in lieu of an ordinary repair which under Section 9.5 would be included
within Operating Costs, Tenant shall be responsible for the reasonable and
actual cost of such capital repair or replacement unless Tenant can demonstrate
that a capital repair or replacement to such item would in any event have been
necessary within twelve (12) months thereafter, even if the defective condition
had been reported to Landlord or known by Landlord in a timely fashion).
Landlord's obligation to make repairs shall be limited to the express
obligations stated herein.
VIII. UTILITIES AND SERVICES.
A. Services. Landlord shall furnish Tenant with the following services
and facilities, the cost of all of which shall be deemed Operating Costs
hereunder: (i) at least one elevator in the Building subject to call at all
times, including Sundays and holidays; (ii) zoned heating, ventilation and air
conditioning within the Premises at all times, within the temperature and
humidity ranges usually furnished in comparable office buildings in the McLean,
Virginia area (provided that such services in the Common Areas of the Building
shall only be provided during business hours, excluding holidays); (iii)
balancing of the HVAC system when necessary in an effort to provide reasonably
uniform air temperatures throughout the zones within the Premises; (iv) hot and
cold running water sufficient for needs attributable to a general office use;
(v) public lavatory facilities and supplies and janitorial and char services,
including trash removal and recycling, Monday through Friday, except
18
holidays; (v) replacement of light bulbs (in fixed lighting fixtures only)
throughout the Premises; and (vi) access to the Project 24 hours a day, 365 days
a year, including holidays. For purposes hereof, "holidays" shall be: New Year's
Day, Memorial Day, July 4th, Labor Day, Thanksgiving, and Christmas, and
business hours shall be 7:30 a.m. to 6:00 p.m. Monday through Friday, excluding
holidays, and 9:00 a.m. to 2:00 p.m. on Saturdays, excluding holidays. Landlord
shall provide perimeter security for the Premises limited to a Data Watch or
similar key-card system, 24 hours a day, 365 days a year. All key-cards for such
system shall be obtained by Tenant in accordance with Section 42 hereof.
8.2 Additional Services. If Tenant requires cleaning services, light bulb or
fixture replacement or other services on weekends or holidays, Landlord shall
make reasonable efforts to provide such additional service after reasonable
prior written request therefor from Tenant, and Tenant shall reimburse Landlord
for such additional service within ten (10) days of request therefore, at the
actual direct cost to Landlord. Additionally, the Premises shall be separately
metered for electrical consumption and therefor Tenant shall pay the cost of all
HVAC services for the Premises. Landlord shall provide such additional services
provided that Tenant shall pay 100% of the cost thereof as Additional Rent
hereunder.
8.3 Additional Provisions. Except as specifically and expressly set forth
hereinbelow, in no event shall Landlord be liable to Tenant for (a) any damage
to the Premises, or (b) any loss, damage or injury to any property therein or
thereon, or (c) any claims for the interruption of or loss to Tenant's business
or for any damages or consequential losses occasioned by bursting, rupture,
leakage or overflow of any plumbing or other pipes or other similar cause in,
above, upon or about the Premises or the Building, unless such loss, damage or
injury is the result of the gross negligence or willful misconduct of Landlord,
and is not covered by the insurance required to be carried by Tenant hereunder.
If any public utility or governmental body shall require Landlord or Tenant to
restrict the consumption of any utility or reduce any service to the Premises or
the Building, Landlord and Tenant shall comply with such requirements, without
any abatement or reduction of the Base Rent, Additional Rent or other sums
payable by Tenant hereunder.
8.4 Electrical Service. The Premises will be separately metered for electrical
service in accordance with the provisions of EXHIBIT C attached hereto. Tenant
shall be solely responsible for obtaining electrical service for the Premises
from the appropriate utility, and for the payment of all costs of electrical
service provided to the Premises directly to the service provider. Landlord
shall have no liability or obligation in respect of or as a result of Tenant's
failure to obtain or maintain electrical service to the Premises.
IX. INCREASES IN OPERATING COSTS.
19
9.1 Defined. For each calendar year or portion thereof during the Term, Tenant
shall pay as additional rent to Landlord, without diminution, set-off or
deduction, Tenant's Share of an amount (hereinafter referred to as "Expense
Increases") equal to the difference between:
(A) "Tenant's Share" of "Operating Costs" (defined in Section 9.5, below)
for such calendar year; and
(B) "Tenant's Share" of "Operating Costs" for the "Operating Costs Base
Year" (defined below).
9.2 Base Year. For all purposes hereof, the Operating Costs Base Year shall be
the 1999 calendar year.
9.3 Estimated Payments. Commencing with the first day of the second Lease Year
of the Lease Term, Tenant shall make monthly installment payments toward
Tenant's Share of Expense Increases on an estimated basis, based on Landlord's
reasonable estimate of Expense Increases for such calendar year. Landlord shall
provide its estimate of such costs with as much advance notice as is reasonably
possible. Tenant shall pay Landlord, as additional rent, commencing on the first
day of the month immediately following the last day of the Operating Costs Base
Year, and on the first day of each month thereafter during the Term, one-twelfth
(1/12th) of Landlord's estimate of Tenant's Share of Expense Increases for the
then-current calendar year. If at any time or times during such calendar year,
it appears to Landlord that Tenant's Share of Expense Increases for such
calendar year will vary from Landlord's estimate by more than five percent (5%)
on an annualized basis, Landlord may, by written notice to Tenant, revise its
estimate for such calendar year and Tenant's estimated payments hereunder for
the balance of such calendar year shall thereupon be based on such revised
estimate.
9.4 Annual Reconciliation. Within one hundred twenty (120) days after the end of
each calendar year after the Operating Costs Base Year, Landlord shall provide
to Tenant a statement (the "Expense Statement") setting forth the total
Operating Costs for such calendar year and Tenant's Share of Expense Increases
for such year, calculated in accordance with Section 9.1, above. Within fifteen
(15) days after the delivery of such Expense Statement, Tenant shall pay to
Landlord any deficiency between the amount shown as Tenant's Share of Operating
Costs for such calendar year and the estimated payments made by Tenant toward
such amount in accordance with Section 9.3, above. In the case of excess
estimated payments, the excess shall be applied against estimated payments of
Operating Costs for the subsequent calendar year, unless the Lease shall have
expired, in which event Landlord shall refund such excess, without interest,
with the delivery of the Expense Statement.
9.5 Operating Costs. The term "Operating Costs" shall mean any and all expenses
incurred by Landlord in connection with the operation, management, maintenance
and repair of the Building and the Land, and all easements, rights and
appurtenances thereto, including, but not limited to: (a) the cost of the
personal property used in conjunction therewith; (b) costs to repair and
maintain the Building and/or roof; (c) all expenses paid or incurred by Landlord
for electricity for the Common Areas of the Building, including any surcharges
imposed, and for water, gas, sewers, oil and utility services for the Building
(except as charged directly to tenants); (d) the costs and expenses incurred in
connection with the provision of the utilities
20
and services set forth in Section 8, above, including without limitation the
maintenance, repair and replacement of the Building systems furnishing such
utilities and/or services; (e) Building supplies and materials; (f) cleaning and
janitorial services in or about the Premises, the Building (including without
limitation common areas) and the Land; (g) window glass replacement, repair and
cleaning; (h) repair and maintenance of the grounds, including costs of
landscaping, gardening and planting, including service or management contracts
with independent contractors, including but not limited to security and energy
management services and costs; (i) costs to achieve compliance with any
governmental laws, rules, orders or regulations enacted after the date hereof;
(j) utility taxes; (k) compensation (including employment taxes, salaries,
wages, medical, surgical, and general welfare benefits (including health,
accident and group life insurance), pension payments, payroll taxes, and
worker's compensation insurance) for all persons who perform duties in
connection with the operation, management, maintenance and repair of the
Building (equitably pro-rated to the extent any such personnel is not employed
at the Building on a full time basis); (l) any capital expenditures incurred
either to reduce Operating Costs, to comply with any governmental law, order,
regulation or other requirement (e.g., a code-mandated life safety system)
enacted after the date hereof, or to replace existing equipment and machinery
necessary to the day to day operation of the Building, or which are capital
replacements (i.e., replacements of common area or common usage Building
components and systems in lieu of capital repairs otherwise required to be made
thereto, but excluding replacement of the Building roof, parking lot and/or
garage), provided that any capital expenditure which does not result in a
quantifiable reduction of Operating Costs shall be amortized over the useful
life thereof, not to exceed ten (10) years, and only the amortized annual
portion, together with interest at a rate of twelve percent (12%) per annum,
shall be recoverable by Landlord under this Section 9.5(l) in any one year; (m)
cost of premiums for casualty, liability, elevator, xxxxxxx'x compensation,
boiler and machinery, sprinkler leakage, rent loss, use and occupancy and other
insurance; (n) license, permit and inspection fees, excluding Tenant
Improvements; (o) management fees; (p) consulting fees in connection with the
provision of common area maintenance services; (q) costs of continuing education
and professional trade and association dues for Building management staff; (r)
vault space rentals and public space rentals, if any; (s) personal property
taxes; (t) concierge service, or other amenity furnished generally to office
tenants; (u) trash removal, including all costs incurred in connection with
waste product recycling pursuant to Section 5.5 (except to the extent any such
costs are charged directly to the tenants); (v) any local and state surcharges
or special charges; (w) uniforms and dry cleaning; (x) snow and ice removal or
prevention; (y) telephone, telegraph, postage, stationery supplies and other
materials and expenses required for the routine operation of the Building; (z)
costs associated with recycling of waste products; (aa) association assessments
or other assessments for project-wide common area services; and (bb) any other
expense or charge whether or not hereinbefore described which, in accordance
with generally accepted accounting and management practices, would be considered
a reasonable and necessary expense of maintaining, managing, operating or
repairing the Building and/or the Land.
9.6 Exclusions. Notwithstanding the foregoing, Operating Costs shall not include
any of the following: (1) capital expenditures, except those set forth in item
9.5 (l), above; (2) costs of any special services rendered to individual tenants
(including Tenant), for which a special, separate charge shall be made (and
shall be payable within ten (10) days of written demand); (3) painting,
redecorating or other work which Landlord performs for specific tenants, the
expenses of which are paid by such tenants; (4) Real Estate Taxes (as defined in
Section 10);
21
(5) depreciation or amortization of costs required to be capitalized in
accordance with generally accepted accounting practices (except as set forth in
Section 9.5, above); (6) ground rent, if Landlord's interest in the land upon
which the Building is located derives solely from a ground lease; (7) interest
and amortization of funds borrowed by Landlord (except as specifically provided
above); (8) leasing commissions, and advertising, legal, space planning and
construction expenses incurred in procuring tenants for the Building; (9)
salaries, wages, or other compensation paid to officers or executives of
Landlord in their capacities as officers and executives; (10) and any other
expenses for which Landlord actually receives direct reimbursement from
insurance, condemnation awards, other tenants or any other source but excluding
general payments of Expense Increases pursuant to this Section 9 by Tenant and
other tenants of the Building.
9.7 Further Adjustment. In the event Landlord shall furnish any utility or
service which is included in the definition of Operating Costs to less than one
hundred percent (100%) of the rentable area of the Building because (i) the
average occupancy level of the Building for the Base Services Year and/or any
subsequent calendar year was not one hundred percent (100%) 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, or (iii) any tenant or
occupant is itself obtaining or providing any such utility or services, then the
Operating Costs for such year (including, as set forth above, the Base Services
Year) shall be adjusted to include all additional costs, expenses and
disbursements that Landlord reasonably determines would have been incurred if
Landlord had provided all such utilities and services to all tenants and
occupants in the Building, and shall be allocated among the tenants by the
Landlord to reflect those costs which would have occurred had the Building been
one hundred percent (100%) occupied during the year in question and such
utilities and services provided to all tenants. The intent of this Section 9.7
is to ensure that the reimbursement of all Operating Costs is fair and equitably
allocated among the tenants receiving the utilities and services in question. In
the calculation of Operating Costs hereunder, no expense shall be charged more
than once, and in no event shall any such calculation result in payment by
Tenant of an amount greater than Tenant's Share of actual Expense Increases for
the applicable time period.
9.8 Multi-Project Operating Costs. The Building is a part of a larger project or
development and as such, Landlord shall have the right (but not the obligation)
to allocate to the Building an appropriate portion of those Operating Costs
which are incurred with respect to the project as a whole. By way of example,
landscaping costs for a multi-building project shall be allocated on a
proportionate basis between all tenantable buildings in the project.
X. INCREASES IN REAL ESTATE TAXES
10.1 Defined. For each calendar year or portion thereof during the Term, Tenant
shall pay as additional rent to Landlord, without diminution, set-off or
deduction, Tenant's share of an amount (hereinafter referred to as "Tax
Increases") equal to the difference between:
(A) "Tenant's Share" of "Real Estate Taxes" (defined in Section 10.5,
below) paid in such calendar year; and
(B) "Tenant's Share" of "Real Estate Taxes" paid in the "Real Estate Tax
Base Year" (defined below.)
22
10.2 Base Year. For all purposes hereof, the Real Estate Tax Base Year shall be
the 1999 calendar year.
10.3 Estimated Payments. Commencing with the first day of the second Lease Year
of the Lease Term, Tenant shall make monthly installment payments toward
Tenant's Share of Tax Increases on an estimated basis, based on Landlord's
reasonable estimate of Tax Increases for such calendar year. Tenant shall pay
Landlord, as additional rent, commencing on the first day of the month
immediately following the last day of the Real Estate Tax Base Year, and on the
first day of each month thereafter during the Term, one-twelfth (1/12th) of
Landlord's estimate of Tenant's Share of Tax Increases for the then-current
calendar year. If at any time or times during such calendar year, it appears to
Landlord that Tenant's Share of Tax Increases for such calendar year will vary
from Landlord's estimate by more than five percent (5%) on an annualized basis,
Landlord may, by written notice to Tenant, revise its estimate for such calendar
year and Tenant's estimated payments hereunder for such calendar year shall
thereupon be based on such revised estimate.
10.4 Annual Reconciliation. Within one hundred twenty (120) days after the end
of each calendar year after the Real Estate Tax Base Year, Landlord shall
provide to Tenant a statement (the "Expense Statement") setting forth the total
Real Estate Taxes for such calendar year and Tenant's Share of Tax Increases for
the applicable year. Within fifteen (15) days after the delivery of such Expense
Statement, Tenant shall pay to Landlord any deficiency between the amount shown
as Tenant's Share of Tax Increases for such calendar year and the estimated
payments made by Tenant toward such amount in accordance with Section 10.3,
above. In the case of excess estimated payments, the excess shall be applied
against estimated payments of Real Estate Taxes for the subsequent calendar
year, unless the Lease shall have expired, in which event Landlord shall refund
such excess, without interest, with the delivery of the Expense Statement.
10.5 Real Estate Taxes. For purposes of this Lease, "Real Estate Taxes" shall
mean all taxes and assessments, general or special, ordinary or extraordinary,
foreseen or unforeseen, assessed, levied or imposed upon the Building or the
Land, or assessed, levied or imposed upon the fixtures, machinery, equipment or
systems in, upon or used in connection with the operation of the Building or the
Land under the current or any future taxation or assessment system or
modification of, supplement to, or substitute for such system. Real Estate Taxes
shall include all reasonable expenses (including, but not limited to, attorneys'
fees, disbursements and actual costs) incurred by Landlord in obtaining or
attempting to obtain a reduction of such taxes, rates or assessments, including
any legal fees and costs incurred in connection with contesting or appealing the
amounts or the imposition of any Real Estate Taxes. Landlord shall have the
right to pay any special assessment by installments, and in such event Real
Estate Taxes shall include such installments and interest paid on the unpaid
balance of the assessment. Real Estate Taxes shall not include income,
franchise, estate or sales tax imposed on Landlord as opposed to the Building or
Land.
XI. ADDITIONAL PROVISIONS; OPERATING COSTS AND REAL ESTATE
TAXES.
23
A. Partial Year; End of Term. To the extent that a more accurate method
of allocating same cannot be implemented by Landlord, Tenant's Share of
Operating Costs and Real Estate Taxes for any partial calendar year shall be
determined by multiplying the amount of Tenant's Share thereof for the full
calendar year by a fraction, the numerator of which is the number of days during
such partial year falling within the Term and the denominator of which is 365.
If this Lease terminates on a day other than the last day of a calendar year,
the amount of any adjustment to Tenant's Share of Real Estate Taxes with respect
to the year in which such termination occurs shall be prorated on the basis
which the number of days from January 1 of such year to and including such
termination date bears to 365; and any amount payable by Landlord to Tenant or
Tenant to Landlord with respect to such adjustment shall be payable within
thirty (30) days after delivery by Landlord to Tenant of the applicable Expense
Statement and Tax Statement with respect to such year.
B. Other Taxes. In addition to Tenant's Share of Operating Costs and
Real Estate Taxes, Tenant shall pay, prior to delinquency, all personal property
taxes payable with respect to all property of Tenant located in the Premises or
the Building, and shall provide promptly, upon request of Landlord, written
proof of such payment.
C. Covenant Regarding Timely Payment of Operating Costs and Real Estate
Taxes. Landlord covenants to pay all Operating Costs and Real Estate Taxes
before the same become delinquent, subject to Tenant's obligation to make the
payments contemplated by Article 9 and Article 10, above, in a timely fashion.
Tenant shall not be responsible for reimbursement to Landlord of any interest
charge or penalty for late payment by Landlord of Operating Costs and/or Real
Estate Taxes, provided that payment of Tenant's pro rata share of such expense
has been timely made by Tenant to Landlord pursuant to the terms of this Lease.
11.4 Contesting Real Estate Taxes. Landlord will have the right to employ a tax
consulting firm to attempt to assure a fair tax burden on the Project, provided
Landlord will use reasonable efforts to minimize the cost of such service. The
reasonable cost of such service shall be included in the Real Estate Taxes
hereunder in the year same were incurred or paid, at Landlord's election.
Additionally, during any such period, Landlord shall have the right, in its
reasonable judgment, to contest any tax assessment, valuation or levy against
the Project, and to retain legal counsel and expert witnesses to assist in such
contest and otherwise to incur expenses in such contest, and any reasonable
fees, expenses and costs incurred by Landlord in contesting any assessments,
levies or tax rate applicable to the Project, whether or not such contest is
successful, shall be included in Real Estate Taxes as set forth above. In the
event Landlord is successful in obtaining a reduction in any Real Estate Taxes
due for periods of time within the Term, provided any such reduction or credit
is obtained during the Term, Tenant shall share in the benefit of such reduction
(net of all costs, expenses and fees incurred by Landlord in pursuing and
obtaining such reduction) by applying Tenant's pro rata share of such reduction
or credit (to the extent the amount thereof was paid to Landlord in a timely
fashion pursuant to the terms of this Lease) to Tenant's Share of Tax Increases
next coming due.
11.5 Arbitration. Disputes regarding Operating Costs, Real Estate Taxes, and any
audit thereof, shall be subject to arbitration in accordance with the provisions
of Section 49 hereof.
24
XII. TENANT'S INSURANCE.
A. Coverage Requirements. Tenant shall during the Term of this Lease,
pro cure at its expense and keep in force the following insurance:
..............Commercial general liability insurance naming the Landlord and
Landlord's managing agent as additional insureds against any and
all claims for bodily injury and property damage occurring in or
about the Premises or any appurtenances thereto covering the
operation of the Tenant (its employees, agents, and invitees) and
any subtenants, licensees and concessionaires of the Tenant. Such
insurance shall be written on an "Occurrence Form" and shall
include, without limitation, blanket contractual liability
recognizing provisions of this Lease, broad form property damage,
coverage for independent contractors, personal injury liability
and coverage for hired auto and non-ownership auto liability. Such
insurance shall be primary and not contributing to any insurance
available to Landlord and Landlord's insurance shall be in excess
thereto. Such insurance shall have a limit of not less than One
Million Dollars ($1,000,000.00) per occurrence with a Two Million
Dollars ($2,000,000.00) general aggregate with an excess
(umbrella) liability insurance in the amount of Two Million
Dollars ($2,000,000.00) per occurrence and Two Million Dollars
($2,000,000.00) annually in the aggregate; provided, however that
no such limits shall be deemed limitation of the liability of
Tenant hereunder. If Tenant has other locations that it owns or
leases, the policy shall include an aggregate limit per location
endorsement. Such liability insurance shall be primary and not
contributing to any insurance available to Landlord and Landlord's
insurance shall be in excess thereto. In no event shall the limits
of such insurance be considered as limiting the liability of
Tenant under this Lease;
..............Personal property insurance insuring all equipment, trade
fixtures, inventory, fixtures and personal property located within
the Premises (excluding leasehold improvements, which shall be
insured by and remain the property of Landlord). Such insurance
shall be written on a replacement cost basis in an amount equal to
one hundred percent (100%) of the full replacement value of the
aggregate of the foregoing;
Workers' compensation and occupational disease insurance, employee
benefit insurance and any other insurance in the statutory amounts
required by the laws of the State where the operations are to be
performed with broad-form all-states endorsement. Employer's
liability insurance with a limit of One Million Dollars
($1,000,000.00) for each accident.
Business income insurance and loss of rental insurance in an
amount equal to at least to eighteen (18) months Rent.
B. Rating; Certificates; Cancellation. The policies required to be
maintained by Tenant shall be with companies rated A-X or better in the most
current issue of Best's Insurance Reports. Insurers shall be licensed to do
business in the Commonwealth of
25
Virginia and domiciled in the USA. Any deductible amounts under any insurance
policies required hereunder shall be commercially reasonable. Certificates of
insurance and certified copies of the policies shall be delivered to Landlord
prior to the Commencement Date and annually thereafter at least thirty (30) days
prior to the expiration date of the old policy. Tenant shall have the right to
provide insurance coverage which it is obligated to carry pursuant to the terms
hereof in a blanket policy, provided such blanket policy expressly affords
coverage to the Premises and to Landlord as required by this Lease. Each policy
of insurance shall provide notification to Landlord and any mortgagee(s) of
Landlord at least thirty (30) days prior to any cancellation or modification to
reduce the insurance coverage.
C. Other. In the event Tenant does not purchase the insurance
required by this Lease or keep the same in full force and effect, and the same
is not corrected within one (1) business day following written notice thereof
from Landlord to Tenant, then Landlord may, but shall not be obligated to,
purchase the necessary insurance and pay the premium therefore. Tenant shall
repay to Landlord, as Additional Rent, any and all reasonable expenses
(including attorneys' fees) and damages which Landlord may sustain by reason of
the failure of Tenant to obtain and maintain insurance.
XIII. LANDLORD'S INSURANCE.
A. Coverage. At all times during the Lease Term, Landlord will
maintain, the cost of which shall be reimbursable as an Operating Cost
hereunder, (a) fire and extended coverage insurance covering the Project,
including all of Tenant's Work, in an amount equal to one hundred percent (100%)
of the replacement value thereof, and (b) public liability and property damage
insurance in such amounts as Landlord deems reasonable from time to time.
Landlord shall also have the right to obtain such other types and amounts of
insurance coverage on the Building (including loss of rental insurance) and
Landlord's liability in connection with the Building as are customary or
advisable for a comparable office project in the McLean, Virginia area, as
determined by Landlord in Landlord's reasonable judgment. Any dispute regarding
the appropriateness of such additional insurance coverage shall be subject to
arbitration pursuant to Section 49 of this Lease.
B. Rating; Certificates; Cancellation. The policies required to be
maintained by Landlord shall be with companies rated A-X or better in the most
current issue of Best's Insurance Reports. Insurers shall be licensed to do
business in the Commonwealth of Virginia and domiciled in the USA. Any
deductible amounts under any insurance policies required hereunder shall be
commercially reasonable, in Landlord's reasonable judgement. Landlord shall have
the right to provide insurance coverage which it is obligated to carry pursuant
to the terms hereof in a blanket policy, provided such blanket policy expressly
affords coverage to the Project and to Tenant as required by this Lease.
XIV. DAMAGE OR DESTRUCTION.
A. Damage Repair.
14.1.1 If the Building or Premises shall be destroyed or rendered
untenantable, either wholly or in part, by fire or other casualty, then Landlord
shall, within thirty (30) days after
26
the date of such casualty, provide Tenant with Landlord's good faith written
estimate (the "Estimate") of how long it will take to repair or restore the
Premises.
14.1.2 If neither party elects to terminate this Lease in accordance with
the terms hereof following any casualty, then Landlord shall commence promptly
and diligently prosecute to completion the restoration of the Premises to their
previous condition, subject to Force Majeure as defined herein and delays caused
by Tenant; and pending substantial completion of such restoration, the Base Rent
and Additional Rent shall be abated in the same proportion as the untenantable
portion of the Premises bears to the whole thereof, and this Lease shall
continue in full force and effect.
14.1.3 If Landlord estimates within the Estimate that it will require in
excess of one hundred eighty three (183) days after the date Tenant's right of
termination hereunder expires to fully repair or restore the Premises in
accordance herewith, then, within thirty (30) days after Landlord delivers
Tenant the Estimate, Tenant and Landlord shall each have the right to terminate
this Lease by written notice to the other, which termination shall be effective
as of the date of such notice of termination, and all liabilities and
obligations of Landlord and Tenant thereafter accruing shall terminate and be of
no legal force and effect except as otherwise specifically set forth herein.
Notwithstanding the foregoing, Tenant shall not have the right to terminate this
Lease if the fire or other casualty was the result of Tenant's negligence or
willful misconduct.
14.1.4 If neither party elects to terminate the Lease and Landlord fails or
declines to exercise any other termination right pursuant to this Section 14,
Landlord will use all reasonable efforts to commence and complete its
restoration of the affected portions of the Premises promptly, and in the event
Landlord is unable to complete such restoration within one hundred eighty three
(183) days after the date Tenant's right of termination hereunder expires (or
such longer period as was referenced in the Estimate, if applicable), as such
period may be extended due to Force Majeure or due to any Tenant Delays (as such
term is defined in Exhibit C hereof, and not limited as to the number of days)
then within thirty (30) days after the expiration of such period (but in all
events prior to the date Landlord completes its restoration of the Premises),
Tenant shall again have the right to terminate this Lease upon thirty (30) days
prior written notice to Landlord; provided, however, that if Landlord
substantially completes such restoration (such that Tenant may lawfully re-enter
and occupy the Premises in accordance with the terms of this Lease) prior to the
end of the thirty (30) day notice period, Tenant's notice of termination shall
be deemed rescinded and ineffective for all purposes, and this Lease shall
continue in full force and effect. The provisions of this Section are in lieu of
any statutory termination provisions allowable in the event of casualty damage.
14.1.5 If at any time in the course of its restoration of damaged portions
of the Premises, Landlord believes in good faith that its original Estimate is
no longer accurate for reasons other than Force Majeure (in which event the
provisions of Section 14.1.4 shall control), Landlord shall have the right to
deliver a revised Estimate to Tenant of the additional time period which
Landlord believes will be required to fully repair or restore the Premises in
accordance herewith, and, unless Tenant terminates this Lease by written notice
to Landlord within ten (10) business days after its receipt of such revised
Estimate from Landlord, Tenant shall be deemed to have agreed that, for all
purposes of this Section 14.1, the 183 day time limit otherwise imposed upon
completion of Landlord's restoration of the damaged portions of the Premises
shall be extended by the number of additional days needed to complete
27
estimated by Landlord within such revised Estimate. If Tenant elects to
terminate this Lease as to the damaged Building after receiving such a revised
Estimate from Landlord, as aforesaid, such termination shall be effective as of
the date of such notice of termination, and all liabilities and obligations of
Landlord and Tenant thereafter accruing hereunder with respect to such Building
shall terminate and be of no legal force and effect except as otherwise
specifically set forth herein.
B. Reconstruction. If all or any portion of the Premises is damaged by
fire or other casualty and this Lease is not terminated in accordance with the
provisions hereof, then all insurance proceeds under the policy referred to in
Section 13.1 hereof that are recovered by Landlord on account of any such damage
by fire or casualty shall be made available for the payment of the cost of
repair, replacing and rebuilding.
C. Business Interruption. Other than rental abatement as and to the
extent provided in Section 14.1, no damages, compensation or claim shall be
payable by Landlord for inconvenience or loss of business arising from
interruption of business, repair or restoration of the Building or Premises.
14.4 Repairs. Landlord's repair obligations, should it elect to repair, shall be
limited to the base Building, Common Areas and all interior improvements to and
property within the Premises which are covered or required to be covered
hereunder by Landlord's insurance. Landlord shall use reasonable efforts to
commence such repairs and restorations within a reasonable period after Landlord
elects to restore the Premises, and to complete such repairs within the time
frames referenced in Section 14.1, above. Tenant acknowledges that any such
repairs or restorations shall be subject to applicable laws and governmental
requirements, any disbursement requirements imposed by Landlord's mortgagee (if
any), and to delay in the process of adjusting any insurance claim associated
therewith; and delays resulting from any of the foregoing shall constitute a
"Force Majeure" hereunder, shall not in any event constitute a breach of this
Lease by Landlord, and shall extend the time for completing such restoration as
long as Landlord uses reasonable efforts to commence and complete such repairs
and restorations in a timely fashion.
14.5 End of Term Casualty. Anything herein to the contrary notwithstanding, if
more than thirty (30%) of the Premises is destroyed or damaged during the last
eighteen (18) months of the Lease Term, then either Landlord or Tenant shall
have the right to terminate this Lease (in whole if the damage extends to all of
the Premises or otherwise as to the affected portion of the Premises within the
Building) upon thirty (30) days prior written notice to the other, which
termination shall be effective on the thirtieth (30th) day after the other
party's receipt of such notice. Such notice must be delivered within thirty (30)
days after such casualty, or shall be deemed waived; provided, however, that
Tenant may revoke such termination notice, and require Landlord to restore the
Premises, by exercising any renewal option provided herein, if any.
XV. MACHINERY AND EQUIPMENT; ALTERATIONS AND ADDITIONS; REMOVAL OF
FIXTURES.
28
A. Tenant shall not place a load upon the floor of the
Premises which exceeds the maximum live load per square foot which Landlord (or
Landlord's architect or engineer) reasonably determines is appropriate for the
Building without Landlord's prior written consent. Tenant will not install or
operate in the Premises any electrical or other equipment requiring any changes,
replacements or additions to any base building system, without Landlord's prior
written consent, which shall not be unreasonably withheld, conditioned or
delayed (and if such consent is granted Tenant shall be responsible for the
costs of such changes, replacements or additions).
B. Tenant shall not make or allow to be made any alterations,
additions or improvements to or on the Premises which affect any structural or
building system components of the Premises or which, under applicable codes,
rules and/or regulations require any building electrical, plumbing or other
permit, without Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Tenant shall have the right to
make any other alterations, repairs, additions or improvements in or to the
Premises without Landlord's prior written consent provided (i) the same do not
diminish the value of the Premises, and (ii) Tenant provides Landlord with prior
written notice thereof; provided, however that no exterior modification shall be
made in any event without Landlord's prior written consent in all cases. Any
such alterations, additions or improvements, including, but not limited to, wall
covering, paneling and built-in cabinet work, shall be made at Tenant's sole
expense (and, with respect to structural alterations, according to plans and
specifications approved in writing by Landlord), in compliance with all
applicable laws, by a licensed contractor, and in a good and workmanlike manner
conforming in quality and design with the Premises existing as of the
Commencement Date, shall not diminish the value of the Building or the Premises
and shall at once become a part of the realty and shall be surrendered with the
Premises (except as provided in Section 15.3, below). Tenant shall have the
right to use its own vendors to perform alterations to the Premises, subject to
Landlord's approval, which approval shall not be unreasonably withheld, in cases
where the underlying alteration requires Landlord's consent hereunder.
C. Upon the expiration or sooner termination of the Lease
Term, Tenant shall, at Tenant's sole expense, with due diligence, remove any
alterations, additions, or improvements made by Tenant which are designated by
Landlord to be removed at the time its consent to the installation thereof is
granted, and repair any damage to the Premises caused by such removal. Tenant
shall remove any of its movable property, trade fixtures and roof devices.
Tenant shall pay Landlord any damages for injury to the Premises or Building
resulting from such removal. All items of Tenant's personal property that are
not removed from the Premises or the Building by Tenant at the termination of
this Lease shall be deemed abandoned and become the exclusive property of
Landlord, without further notice to or demand upon Tenant. If the Premises are
not surrendered as and when aforesaid, Tenant shall indemnify Landlord against
all claims, losses, costs, expenses (including reasonable attorneys' fees) and
liabilities resulting from the delay by Tenant in so surrendering the same,
including without limitation any claims made by any succeeding occupant founded
on such delay. Tenant's obligations under these Sections 15.2 and 15.3 shall
survive the expiration or termination of this Lease.
29
XVI. ACCEPTANCE OF PREMISES.
Landlord shall tender, and Tenant shall accept possession of, the Premises in
accordance with the terms of Exhibit C attached hereto. All provisions regarding
delivery of possession of the Premises, construction of leasehold improvements
to the Premises and any adjustments which may be made with respect to the
Commencement Date (as defined in Section 1.4) are set forth in Exhibit C.
XVII. TENANT IMPROVEMENTS.
The provisions governing initial improvements to be performed by Landlord or
Tenant to the Premises are set forth in Exhibit C hereto.
XVIII. ACCESS.
18.1 Subject to the restrictions set forth below, Tenant shall permit Landlord
and its agents to enter the Premises at all reasonable times to inspect the
same; to show the Premises to prospective tenants, or interested parties such as
prospective lenders and purchasers; to exercise its rights under Section 48; to
clean, repair, alter or improve the Premises or the Building; to discharge
Tenant's obligations when Tenant has failed to do so within a reasonable time
after written notice from Landlord, subject to the express terms of this Lease;
to post notices of non-responsibility and similar notices and "For Sale" signs
and to place "For Lease" signs upon or adjacent to the Building or the Premises.
Tenant shall permit Landlord and its agents to enter the Premises at any time in
the event of an emergency. When reasonably necessary, Landlord may temporarily
close entrances, doors, corridors, elevators or other facilities without
liability to Tenant by reason of such closure. In exercising the foregoing
rights, Landlord shall use reasonable efforts to minimize any disruption to
Tenant's business. Landlord shall coordinate any entry, pursuant to the
foregoing, into the Premises with Tenant's facilities supervisor at least 24
hours in advance (except in cases of emergency involving fire or other casualty,
or other risk of injury or death to persons), and Landlord acknowledges that
Tenant may require Landlord and its agents to be accompanied by a representative
of Tenant for security purposes upon Landlord's entry to certain limited
portions of the Premises (other than in cases of emergency involving fire or
other casualty, or other risk of injury or death to persons) for legitimate,
documented security purposes. Tenant shall supply Landlord with telephone
numbers for Tenant's facilities supervisor so that Landlord will be able to
comply with established security procedures to the extent feasible under the
circumstances in the event Landlord requires immediate access to the Premises to
cure any emergency situation.
18.2 Landlord shall be excused from such of its obligations under this Lease as
are directly and materially impacted by the inability of Landlord to access the
Premises or any applicable part thereof due to Tenant's security restrictions,
if and to the extent the performance of such obligations was in fact hindered,
frustrated, or rendered impossible or impracticable due to the effect of such
restrictions on access.
XIX. MUTUAL WAIVER OF SUBROGATION.
30
19.1 Tenant. Notwithstanding anything to the contrary in this Lease, whether the
loss or damage is due to the negligence of Landlord or Landlord's agents or
employees, or any other cause, Tenant hereby releases Landlord and Landlord's
agents and employees from responsibility for and waives its entire claim of
recovery for (i) any and all loss or damage to the personal property of Tenant
located in the Project, arising out of any of the perils which are covered by
Tenant's property insurance policy, with extended coverage endorsements which
Tenant is required to obtain under the applicable provisions of this Lease,
whether or not actually obtained, or (ii) loss resulting from business
interruption at the Premises, arising out of any of the perils which are or are
required to be covered by the business interruption insurance policy required to
be carried by Tenant under this Lease.
19.2 Landlord. Notwithstanding anything to the contrary in this Lease, whether
the loss or damage is due to the negligence of Tenant or Tenant's agents or
employees, or any other cause, Landlord hereby releases Tenant and Tenant's
agents and employees from responsibility for and waives its entire claim of
recovery for any and all loss or damage to the Building or any personal property
of Landlord located about the Project and the Building generally and all
property attached thereto (excluding any such property required to be insured by
Tenant hereunder), arising out of any of the perils which are covered by
Landlord's property insurance policy which Landlord is required to obtain under
the applicable provisions of this Lease, whether or not actually obtained.
19.3 Carriers. Landlord and Tenant shall each cause its respective insurance
carrier(s) to consent to such waiver of all rights of subrogation against the
other, and to issue an endorsement to all policies of insurance obtained by such
party confirming that the foregoing release and waiver will not invalidate such
policies.
XX. INDEMNIFICATION.
20.1 Subject to the provisions of Section 19 hereof and other provisions of this
Lease, Tenant shall indemnify and hold harmless Landlord, its agents, employees,
officers, directors, partners and shareholders from and against any and all
third party claims, liabilities, judgments, demands, causes of action, claims,
losses, damages, costs and expenses, including reasonable attorneys' fees and
costs, arising out of such third party claims, to the extent arising out of (i)
the use and occupancy of the Premises by Tenant, its officers, contractors,
licensees, agents, servants, employees, guests, invitees, visitors, assignees or
subtenants; (ii) the negligence or willful misconduct of Tenant, its officers,
contractors, licensees, agents, servants, employees, guests, invitees, visitors,
assignees or subtenants, in or about the Project; and/or (iii) any breach or
Default by Tenant under this Lease; provided that this indemnity shall not apply
to any loss, damage, liability or expense resulting from injuries to third
parties caused by the negligence or willful misconduct of Landlord, or its
officers, contractors, licensees, agents, employees or invitees (while within
the Premises).
20.2 The indemnifications set forth in this Section 20 shall survive termination
of this Lease.
XXI. ASSIGNMENT AND SUBLETTING.
31
A. Consent Required. Except as specifically set forth herein to the
contrary, 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, in its
sole and absolute discretion.
B. Procedure. Tenant must request Landlord's consent to such assignment
or sublease in writing at least fifteen (15) business days prior to the
commencement date of the proposed sublease or assignment, which written request
must include (a) the name and address of the proposed assignee or subtenant, (b)
the nature and character of the business of the proposed assignee or subtenant,
(c) financial information (including financial statements) of the proposed
assignee or subtenant, and (d) a copy of the proposed sublet or assignment
agreement. Tenant shall also provide any additional information Landlord
reasonably requests regarding such proposed assignment or subletting. Within ten
(10) days after Landlord receives Tenant's request (with all required
information included), Landlord shall, by written notice to Tenant, elect
either: (i) to grant its consent to such proposed assignment or subletting, or
(ii) to deny its consent to such proposed assignment or subletting, setting
forth with specificity the reason for such denial. If Landlord does not exercise
either of the above options within ten (10) business days after Landlord
receives Tenant's request, then Tenant may assign or sublease the Premises upon
the terms stated in Tenant's request.
C. Conditions. Any subleases and/or assignments hereunder are also
subject to all of the following terms and conditions:
1. If Landlord approves an assignment or sublease as herein
provided (other than an assignment or sublease pursuant to Section 21.4 hereof),
Tenant shall pay to Landlord, as Additional Rent due under this Lease (which
amounts shall be due immediately upon receipt by Tenant), fifty percent (50%) of
the "Net Profits" (as defined below) generated from such transaction during each
Lease Year. For purposes hereof, the term "Net Profits" means: (i) with respect
to assignment, the amount paid by the assignee to acquire Tenant's rights under
the Lease, less (1) the portion of such sum fairly attributable to the
acquisition of Tenant's leasehold improvements or personal property which were
funded solely by Tenant, and (2) all reasonable and actual out-of-pocket
expenses incurred and paid by Tenant in procuring such assignment, including,
without limitation, brokerage fees, advertising costs, legal fees, allowances,
the cost of leasehold improvements and other concessions; and (ii) with respect
to 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
the sum of (x) 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, (y) all reasonable and actual out-of-pocket expenses
incurred by Tenant in procuring such sublease, including, without limitation,
brokerage fees, advertising costs, legal fees, allowances, the cost of leasehold
improvements and other concessions, and (z) the amortized costs of any leasehold
improvements or personal property provided as a part of such transaction and
existing prior to the commencement of the sublease term to the extent funded
solely by Tenant. The foregoing payments shall be made to Landlord by Tenant
immediately upon receipt of such sums by Tenant.
32
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
resubletting by a permitted assignee or sublessee.
3. Tenant shall remain liable for all Lease obligations, all
of which shall be unaffected by any such sublease or assignment, and which Lease
obligations shall remain in full force and effect for all purposes. An assignee
of Tenant, at the option of Landlord, shall become directly liable to Landlord
for all obligations of Tenant hereunder, but no sublease or assignment by Tenant
shall relieve Tenant of any liability hereunder.
4. 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.
5. The term of any such assignment or sublease shall not
extend beyond the Lease Term. In no event will any assignee or subtenant (other
than pursuant to a transfer of the Lease within the scope of Section 21.4,
below) have the right to renew or extend the term of this Lease pursuant to
Section 51, below, which right shall be deemed personal to Tenant.
21.3.6 Without limitation, it shall not be unreasonable for Landlord to
deny its consent to any proposed assignment or sublease if the proposed assignee
or subtenant fails to satisfy any one or more of the following criteria: (1) if
the proposed assignee or sublessee has a net worth such that Landlord determines
in its reasonable judgment 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) if the proposed assignee or subtenant proposes to
use the Premises for a purpose which is not a permitted use hereunder; (3) if
the proposed assignee or subtenant has a history of landlord/tenant or
debtor/creditor problems (such as, but not limited to, defaults, evictions, or
other disputes) with Landlord, other landlords or other creditors; or (4)
Landlord determines, in its reasonable judgment, that the proposed
assignment/sublease documentation is not acceptable, and the proposed assignee
or subtenant has failed to cure same after reasonable notice by Landlord (not to
exceed ten [10] days in any event).
A. Affiliated Entity; Sale of Business; Co-Location Agreements.
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, Landlord's written
consent shall not be required for any sublease, assignment or other transfer of
this Lease to any other entity which (i) controls or is controlled by Tenant, or
(ii) is controlled by Tenant's parent company, or (iii) which purchases all or
substantially all of the assets of Tenant, or (iv) which purchases all or
substantially all of the ownership interests or stock of Tenant, provided,
however, that in each such event 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. Tenant shall be required to give Landlord at least thirty
(30) days written notice in advance of any such sublease or
33
assignment, except with respect to transfers by operation of law occasioned
through a sale of publicly traded shares in Tenant. Further and in addition to
the foregoing, notwithstanding anything to the contrary in this Lease, Tenant
shall not be prohibited by this Section 21 from entering into agreements with
Tenant's customers, in the ordinary course of Tenant's business, pursuant to
which Tenant permits such customers to locate equipment within the Premises;
provided however that in any such event no such customers shall be deemed to be
in privity with Landlord hereunder, nor shall any such parties be considered
third party beneficiaries of any of the rights of Tenant hereunder.
XXII. ADVERTISING.
Tenant shall not display any sign, graphics, notice, picture, or poster, or any
advertising matter whatsoever, anywhere in or about the Premises or the Building
at places visible from anywhere outside or at the entrance to the Premises
without first obtaining Landlord's written consent thereto, which Landlord may
grant or withhold in its sole discretion; provided, however that Landlord's
consent to a proposal by Tenant to install logo signage in the reception area of
the Premises shall not be unreasonably withheld, conditioned or delayed. Tenant
shall be responsible to maintain any permitted signs and remove the same at
Lease termination. If Tenant shall fail to do so, Landlord may do so at Tenant's
cost. Tenant shall be responsible to Landlord for any damage caused by the
installation, use, maintenance or removal of any such signs.
XXIII. LIENS.
Tenant shall keep the Premises and the Building free from any liens arising out
of any work performed, materials ordered or obligations incurred by or on behalf
of Tenant, and Tenant hereby agrees to indemnify and hold Landlord, its agents,
employees, independent contractors, officers, directors, partners, and
shareholders harmless from any liability, cost or expense (including attorneys'
fees and defense costs) for or arising from such liens. Tenant shall cause any
such lien imposed to be released of record by payment or posting of the proper
bond acceptable to Landlord within twenty (20) days after written request by
Landlord. Tenant shall give Landlord written notice of Tenant's intention to
perform work on the Premises which might result in any claim of lien at least
ten (10) days prior to the commencement of such work to enable Landlord to post
and record a Notice of Nonresponsibility or other notice deemed proper before
commencement of any such work. If Tenant fails to remove any lien within the
prescribed twenty (20) day period, then Landlord may do so at Tenant's expense
and Tenant's reimbursement to Landlord for such amount, including reasonable
attorneys' fees and costs, shall be deemed Additional Rent hereunder.
XXIV. DEFAULT.
A. Tenant's Default. A "Default" under this Lease by Tenant shall exist
if any of the following occurs (taking into account the expiration of the notice
and cure periods provided for below):
1. If Tenant fails to pay Base Rent, Additional Rent or any
other sum required to be paid hereunder within five (5) days after written
notice from Landlord that such payment was due, but was not paid as of the due
date (provided, however, if Landlord
34
has delivered two (2) such notices to Tenant within the prior twelve (12) month
period, any subsequent failure to pay Base Rent, Additional Rent or any other
sum required to be paid to Landlord hereunder on or before the due date for such
payment occurring shall constitute a Default by Tenant without requirement of
such five (5) day notice and opportunity to cure; but in the event a full year
elapses between such failures then Tenant shall again have the right to such
cure period); or
2. If Tenant fails to perform any term, covenant or condition
of this Lease except those requiring the payment of money to Landlord as set
forth in Section 24.1.1 above, and Tenant fails to cure such breach within
thirty (30) days after written notice from Landlord where such breach could
reasonably be cured within such thirty (30) day period; provided, however, that
where such failure could not reasonably be cured within the thirty (30) day
period, that Tenant shall not be in Default if it commences such performance
promptly after its receipt of Landlord's written notice and diligently
thereafter prosecutes the same to completion; provided that no such grace period
to be permitted in the event of any one or more of the following: (i) the
Default relates to the maintenance of insurance obligations, (ii) the Default
relates to the assignment and subletting provisions, (iii) the Default relates
to a violation of Section 5.2 of this Lease, (iv) the Default is of a nature as
set forth in Section 24.1.3, in which event the periods set forth therein shall
control, or Section 24.1.4, in which event there shall be no applicable cure
period, or (v) there exists a reasonable possibility of danger to the health or
safety of the Landlord, the Tenant, Tenant's invitees, or any other occupants
of, or visitors to, the Building; or
3. If Tenant shall (i) make an assignment for the benefit of
creditors, (ii) acquiesce in a petition in any court in any bankruptcy,
reorganization, composition, extension or insolvency proceedings, (iii) seek,
consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of Tenant and of all or substantially all of Tenant's property, (iv)
file a petition seeking an order for relief for the benefit of Tenant under the
Bankruptcy Code, as now or hereafter amended or supplemented, or by filing any
petition under any other present or future federal, state or other statute or
law for the same or similar relief, or (v) fail to win the dismissal,
discontinuation or vacating of any involuntary bankruptcy proceeding filed
against Tenant within sixty (60) days after such proceeding is initiated; or
24.1.4 If Tenant shall have abandoned or vacated the Premises or any
material (i.e., in excess of 30%) portion thereof.
A. Remedies. Upon a Default, Landlord shall have the following
remedies, in addition to all other rights and remedies provided by law or
available in equity or otherwise provided in this Lease, any one or more of
which Landlord may resort to cumulatively, consecutively, or in the alternative:
1. Landlord may continue this Lease in full force and effect,
and this Lease shall continue in full force and effect as long as Landlord does
not terminate this Lease, and Landlord shall have the right to collect Base
Rent, Additional Rent and other charges when due.
35
2. Landlord may terminate this Lease, or may terminate
Tenant's right to possession of the Premises, at any time by giving written
notice to that effect, in which event Landlord covenants to use commercially
reasonable efforts to relet the Premises or any part thereof and mitigate its
damages, as more fully set forth herein. Upon the giving of a notice of the
termination of this Lease, this Lease (and all of Tenant's rights hereunder)
shall immediately terminate, provided that, without limitation, Tenant's
obligation to pay Base Rent, Additional Rent, and any damages otherwise payable
under this Section 24, shall survive such termination and shall not be
extinguished thereby. Upon the giving of a notice of the termination of Tenant's
right of possession, all of Tenant's rights in and to possession of the Premises
shall terminate but this Lease shall continue subject to the effect of this
Section 24. Upon either such termination, Tenant shall surrender and vacate the
Premises in the condition required by Section 26, and Landlord may re-enter
(provided it can do so without breach of peace) and take possession of the
Premises and all the remaining improvements or property and eject Tenant or any
of the Tenant's subtenants, assignees or other person or persons claiming any
right under or through Tenant or eject some and not others or eject none. This
Lease may also be terminated by a judgment specifically providing for
termination. Any termination under this Section shall not release Tenant from
the payment of any sum then due Landlord or from any claim for damages or Base
Rent, Additional Rent or other sum previously accrued or thereafter accruing
against Tenant, all of which shall expressly survive such termination. Reletting
may be for a period shorter or longer than the remaining Lease Term. No act by
Landlord other than giving written notice to Tenant shall terminate this Lease.
Acts of maintenance, efforts to relet the Premises or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a constructive or other termination of Tenant's right
to possession or of this Lease, either of which may be effected solely by an
express written notice from Landlord to Tenant. On termination, Landlord shall
have the right to remove all Tenant's personal property and store same at
Tenant's cost, and to recover from Tenant as damages:
a) The worth at the time of award of unpaid Base Rent,
Additional Rent and other sums due and payable which had been earned at the time
of termination; plus
b) The worth at the time of award of the amount by which the
unpaid Base Rent, Additional Rent and other sums due and payable which would
have been payable after termination for the balance of the Lease Term exceeds
the fair rental value of the Premises for the balance of the Term; plus
c) Any other amount necessary to compensate Landlord for all
of the out-of-pocket costs incurred on account of Tenant's failure to perform
Tenant's obligations under this Lease, including, without limitation, any costs
or expenses reasonably 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 such acts for reletting to a new tenant or tenants; (iii) for leasing
commissions; or (iv) for any other costs necessary or appropriate to relet the
Premises. To the extent any of such costs are incurred in connection with a
lease transaction having a term in excess of the remaining Term hereof, all of
the foregoing costs incurred in connection therewith shall be amortized on a
straight-line basis over the term of such new lease, assuming equal monthly
installments of principal and interest, at an interest rate of twelve
36
percent (12%), and Tenant's liability shall be limited to the amortized portion
of the same (i.e., the monthly payments as so determined) falling within the
Term hereof.
d) The "worth at the time of award" of the amounts referred to
in Section 24.2.2.1 is computed by allowing interest at the Default Rate through
the date of payment. The "worth at the time of award" of the amounts referred to
in Section 24.2.2.2 shall be computed by discounting the same to present value
using the Discount Rate. In lieu of the amounts recoverable by Landlord pursuant
to Section 24.2.2.2, above, but in addition to the amounts specified in Section
24.2.2.1 and 24.2.2.3 (or any other portion of this Section 24), Landlord may,
at its sole election, recover "Indemnity Payments," as defined hereinbelow, from
Tenant. For purposes of this Lease "Indemnity Payments" means an amount equal to
the Base Rent, Additional Rent and other payments provided for in this Lease
which would have become due and owing hereunder from time to time during the
unexpired Lease Term after the effective date of the termination, but for such
termination, less the Base Rent, Additional Rent and other payments, if any,
actually collected from Tenant or others, by Landlord and allocable to the
Premises. If Landlord elects to pursue Indemnity Payments as set forth above,
Tenant shall, on demand, make Indemnity Payments monthly, and Landlord may xxx
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 and/or any other damages recoverable herein 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. In seeking any new tenant for the Premises, Landlord
shall be entitled to grant any reasonable concessions. In no event shall Tenant
be entitled to any excess of any rental obtained by reletting over and above the
rental herein reserved. To the fullest extent permitted by law, Tenant waives
redemption or relief from forfeiture under any other present or future law, in
the event Tenant is evicted or Landlord takes possession of the Premises by
reason of any Default of Tenant hereunder.
3. Landlord may, with or without terminating this Lease,
re-enter the Premises pursuant to judicial process (except in the event of
Tenant's abandonment of the Premises in which event no judicial process shall be
required) and remove all persons and property from the Premises; such property
may be removed and stored in a public warehouse or elsewhere at the cost of and
for the account of Tenant. No re-entry or taking possession of the Premises by
Landlord pursuant to this Section shall be construed as an election to terminate
this Lease unless a written notice of such intention is given to Tenant, or
possession of the Premises is assumed by a new tenant, in which event Tenant's
liability is mitigated by the amount of rent actually received by Landlord from
such other tenant, less the actual costs incurred by Landlord in obtaining such
new tenant; including, but not limited to market based brokerage fees, legal
fees, tenant improvement costs, lease concessions and any other cost.
4. Tenant, on its own behalf and on behalf of all persons
claiming through or under Tenant, including all creditors, does hereby
specifically waive and surrender any and all rights and privileges, so far as is
permitted by law, which Tenant and all such persons might otherwise have under
any present or future law (1) except as may be otherwise specifically required
herein, to the service of any notice to quit or of Landlord's intention to
37
re-enter or to institute legal proceedings, which notice may otherwise be
required to be given, (2) to redeem the Premises, (3) to re-enter or repossess
the Premises, (4) to restore the operation of this Lease, with respect to any
dispossession of Tenant by judgment or warrant of any court or judge, or any
re-entry by Landlord, or any expiration or termination of this Lease, whether
such dispossession, re-entry, expiration or termination shall be by operation of
law or pursuant to the provisions of this Lease, (5) to the benefit of any law
which exempts property from liability for debt or for distress for rent or (6)
to a trial by jury in any claim, action proceeding or counter-claim arising out
of or in any way connected with this Lease.
24.2.5 In the event of termination of this Lease or repossession of the
Premises after a Default, Landlord agrees to use commercially reasonable efforts
to mitigate its damages and relet the Premises after any termination of this
Lease or Tenant's right to possession of the Premises hereunder, provided that
(i) (if applicable) Landlord shall not be obligated to show preference for
reletting the Premises over any other vacant space in the Project, (ii) Landlord
shall have the right (but not the obligation) to divide the Premises, or to
consolidate portions of the Premises with other spaces, in order to facilitate
such reletting, as Landlord deems appropriate, (iii) Landlord shall not have any
obligation to use efforts other than commercially reasonable efforts under the
circumstances to collect rental after any such reletting, and (iv) Landlord may
relet the whole or any portion of the Premises for any period, to any tenant,
and for any use and purpose, upon such terms as it deems appropriate, and may
grant any rental or other lease concessions as it deems advisable, including
free rent. In any dispute regarding whether Landlord has met its obligation to
use commercially reasonable efforts to mitigate its damages hereunder, Tenant
shall have the burden of proving, by clear and convincing evidence, that
Landlord has failed to do so. In no event shall Tenant be entitled to any excess
of any rental obtained under this Section 24.2.5 by reletting over and above the
Base Rent and Additional Rent herein reserved.
XXV. SUBORDINATION.
25.1 Subordination. This Lease shall at all times be and remain subject and
subordinate to the lien of any mortgage, deed of trust, ground lease or
underlying lease now or hereafter in force against the Premises, and to all
advances made or hereafter to be made upon the security thereof. Tenant shall
execute and return to Landlord any customary documentation requested by Landlord
in order to confirm the foregoing subordination within ten (10) days after
Landlord's written request. In the event any proceedings are brought for
foreclosure, or in the event of the exercise of the power of sale under any
mortgage or deed of trust made by the Landlord covering the Premises, Tenant
shall attorn to the purchaser at any such foreclosure, or to the grantee of a
deed in lieu of foreclosure, and recognize such purchaser or grantee as the
Landlord under this Lease. Tenant agrees that no mortgagee or successor to such
mortgagee shall be (i) bound by any payment of Base Rent or Additional Rent for
more than one (1) month in advance, (ii) bound by any amendment or modification
of this Lease made without the consent of Landlord's mortgagee or such successor
in interest, (iii) liable for damages for any breach, act or omission of any
prior landlord, or (iv) subject to any claim of offset or defenses that Tenant
may have against any prior landlord; provided that such mortgagee or successor
shall not be relieved of the obligation to comply with all of the Landlord's
obligations under the Lease accruing from and after the date such mortgagee or
successor takes title to the Project, irrespective of whether the original
non-compliance with any such obligation arose prior to and is continuing as of
such date, or arose on or after
38
such date (provided however that if such obligation arose prior to the date such
mortgagee or successor took title to the Project, such mortgagee or successor
shall not be deemed in default until after the provision of any notice of
default required by this Lease to such mortgagee or successor, and its failure
to cure same within the cure period provided for herein).
25.2 Non-Disturbance Agreement. Landlord agrees to use good faith efforts to
obtain a Subordination, Non-Disturbance and Attornment Agreement from any
present (if any) or future mortgagee for the Building in a form to be negotiated
between Landlord, Tenant and the applicable mortgagee or deed of trust holder,
using such mortgagee's standard form, and approval of which by Tenant and
Landlord shall not be unreasonably withheld, conditioned or delayed (as
reasonably approved by Landlord, Tenant and such Mortgagee, 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, and (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. Upon obtaining
such SNDA from such mortgagee, Tenant agrees to promptly execute and deliver
such SNDA to Landlord. Notwithstanding the foregoing, Landlord's ability to
obtain an SNDA shall not be a condition hereof, and the failure of Landlord to
obtain an SNDA shall not be deemed a default by Landlord hereunder or entitle
Tenant to exercise any remedial action.
XXVI. SURRENDER OF POSSESSION.
Upon expiration of the Lease Term, Tenant shall promptly and peacefully
surrender the Premises to Landlord in as good condition as when received by
Tenant from Landlord or as thereafter improved, reasonable use and wear and tear
and damage by fire, casualty and condemnation excepted. If the Premises are not
surrendered in accordance with the terms of this Lease, Tenant shall indemnify
Landlord and its agents, employees, independent contractors, officers,
directors, partners, and shareholders against any loss or liability including
reasonable attorneys' fees and costs, and including liability to succeeding
tenants, resulting from delay by Tenant in so surrendering the Premises. This
indemnification shall survive termination of this Lease.
XXVII. NON-WAIVER.
Waiver by Landlord of any breach of any term, covenant or condition herein
contained shall not be deemed to be a waiver of such term, covenant, or
condition(s), or any subsequent breach of the same or any other term, covenant
or condition of this Lease, other than the failure of Tenant to pay the
particular rental so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such Base Rent.
XXVIII. HOLDOVER.
If Tenant shall, without the written consent of Landlord, hold over after the
expiration of the Lease Term, Tenant shall be deemed a tenant at sufferance,
which tenancy may be terminated as provided by applicable state law. During any
holdover tenancy (whether or not consented to by Landlord), unless Landlord has
otherwise agreed in writing, Tenant agrees to pay to Landlord, a per diem
occupancy charge equal to one hundred fifty percent (150%) of the per
39
diem Base Rent and Additional Rent as was in effect under this Lease for the
last month of the Lease Term. Such payments shall be made within five (5) days
after Landlord's demand, and in no event less often than once per month (in
advance). In the case of a holdover which has been consented to by Landlord,
unless otherwise agreed to in writing by Landlord and Tenant, Tenant shall give
to Landlord thirty (30) days prior written notice of any intention to quit the
Premises, and Tenant shall be entitled to thirty (30) days prior written notice
to quit the Premises, except in the event of non-payment of Base Rent or
Additional Rent in advance or the breach of any other covenant or the existence
of a Default. Upon expiration of the Lease Term as provided herein, Tenant shall
not be entitled to any notice to quit, the usual notice to quit being hereby
expressly waived under such circumstances, and Tenant shall surrender the
Premises on the last day of the Lease Term as provided in Section 26, above.
XXIX. CONDEMNATION.
29.1 Definitions. The terms "eminent domain", "condemnation", and "taken", and
the like in this Section 29 include takings for public or quasi-public use, and
sales under threat of condemnation and private purchases in place of
condemnation by any authority authorized to exercise the power of eminent
domain.
29.2 Taking. If the whole of the Premises is taken, either permanently or
temporarily, by eminent domain or condemnation, this Lease shall automatically
terminate as of the date title vests in the condemning authority, and Tenant
shall pay all Base Rent, Additional Rent, and other payments up to that date. If
twenty percent (20%) or more of the Premises is permanently taken, or if access
to the Tenant is, by virtue of a taking, permanently denied or materially
adversely affected, by eminent domain or condemnation, then Landlord or Tenant
shall have the right (to be exercised by written notice to the other within
sixty (60) days after receipt of notice of said taking) to terminate this Lease
from the date when possession is taken thereunder pursuant to such proceeding or
purchase. If neither party elects to terminate this Lease, as aforesaid, then
Landlord shall within a reasonable time after title vests in the condemning
authority, repair and restore, at Landlord's expense, the portion not taken so
as to render same into an architectural whole to the fullest extent reasonably
possible, and, if any portion of the Premises is taken, thereafter the Base Rent
shall be reduced (on a per square foot basis) in proportion to the portion of
the Premises taken. If there is a temporary taking involving the Premises or
Building, if a taking of other portions of the Building or Common Areas does not
deny Tenant access to and continued use (in the same manner as prior to the
taking) of the Building and Premises, or if less than twenty percent (20%) of
the Premises is permanently taken by eminent domain or condemnation and does not
deny Tenant access to and continued use of the Building and Premises, then this
Lease shall not terminate, and Landlord shall repair and restore, at its own
expense, the portion not taken so as to render same into an architectural whole
to the fullest extent reasonably possible, and, if any portion of the Premises
was taken, thereafter the Base Rent shall be reduced (on a per square foot
basis) in proportion to the portion of the Premises taken.
29.3 Award. Except as set forth below, Landlord reserves all rights to damages
to the Premises or arising out of the loss of any leasehold interest in the
Premises created hereby, arising in connection with any partial or entire taking
by eminent domain or condemnation. Tenant hereby assigns to Landlord any right
Tenant may have to such damages or award, and Tenant shall make no claim against
Landlord or the condemning authority for damages for termination of Tenant's
leasehold interest or for interference with Tenant's business as a result
40
of such taking. The foregoing notwithstanding, Tenant shall have the right to
claim and recover from the condemning authority compensation for any loss which
Tenant may incur for Tenant's moving expenses, business interruption or taking
of Tenant's personal property (but specifically excluding any leasehold interest
in the Building or Premises) under the then applicable law provided that Tenant
shall not make any claim that will detract from or diminish any award for which
Landlord may make a claim.
XXX. NOTICES.
All notices and demands which may be required or permitted to be given to either
party hereunder shall be in writing, and shall be delivered personally or sent
by United States certified mail, postage prepaid, return receipt requested, or
by Federal Express or other reputable overnight carrier, to the addresses set
out in Section 1.7, and to such other person or place as each party may from
time to time designate in a notice to the other. Notice shall be deemed given
upon the earlier of actual receipt or refusal of delivery.
XXXI. MORTGAGEE PROTECTION.
Tenant agrees to give any mortgagee(s) and/or trust deed holder(s), by
registered mail, a copy of any notice of default served upon the Landlord,
provided that prior to such notice Tenant has been notified in writing (by way
of notice of assignment of rents and leases, or otherwise) of the addresses of
such mortgagee(s) and/or trust deed holder(s). Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in
this Lease, then the mortgagee(s) and/or trust deed holder(s) shall have an
additional thirty (30) days within which to cure such default or if such default
cannot be cured within that time, then such additional time as may be necessary
if within such thirty (30) days any mortgagee and/or trust deed holder(s) has
commenced and is diligently pursuing the remedies necessary to cure such
default, during which time Tenant shall not have the right to pursue any claim
against Landlord, such mortgagee and/or such trust deed holder(s), including but
not limited to any claim of actual or constructive eviction.
XXXII. COSTS AND ATTORNEYS' FEES.
In any litigation between the parties arising out of this Lease, and in
connection with any consultations with counsel and other actions taken or
notices delivered, in relation to a default by any party to this Lease, the
non-prevailing party shall pay to the prevailing party all reasonable expenses
and court costs including attorneys' fees incurred by the prevailing party, in
preparation for and (if applicable) at trial, and on appeal. Such attorney's
fees and costs shall be payable upon demand.
XXXIII. BROKERS.
Tenant represents and warrants to Landlord that neither it nor its officers or
agents nor anyone acting on its behalf has dealt with any real estate broker
other than Xxxxxxxx Xxxx Real Estate Services, Inc. (on behalf of Landlord) and
Xxxxxx X. Xxxxxxx, Inc. (on behalf of Tenant) in the negotiating or making of
this Lease, both of which shall be paid a fee by Landlord, pursuant to separate
written agreement, upon the consummation of this Lease. Tenant agrees to
indemnify and hold Landlord, its agents, employees, partners, directors,
41
shareholders and independent contractors harmless from all liabilities, costs,
demands, judgments, settlements, claims and losses, including reasonable
attorney's fees and costs, incurred by Landlord in conjunction with any such
claim or claims of any other broker or brokers claiming to have interested
Tenant in the Building or Premises or claiming to have caused Tenant to enter
into this Lease. Landlord represents that it has not dealt with any brokers
other than the parties listed above in negotiating and entering into this Lease
and shall indemnify, defend and hold Tenant harmless from any breach of the
foregoing representation and warranty.
XXXIV. LANDLORD'S LIABILITY.
Anything in this Lease to the contrary notwithstanding, covenants,
undertakings and agreements herein made on the part of Landlord, are made and
intended not for the purpose of binding Landlord personally or the assets of
Landlord but are made and intended to bind only Landlord's interest in the
Premises and Building, as the same may, from time to time, be encumbered; no
personal liability shall at any time be assumed by or asserted or enforceable
against Landlord or any member, manager, officer, employee, agent, trustee,
beneficiary, or individual partner of Landlord or of any member, manager,
officer, employee, agent, trustee, beneficiary, or individual partner of
Landlord, or any of their respective heirs, legal representatives, successors
and assigns on account of this Lease or on account of any covenant, undertaking
or agreement of Landlord in this Lease or any claim made against Landlord under
this Lease; and Tenant agrees to look solely to the interests of Landlord in the
Premises and the Building for the enforcement of any claims against Landlord
arising hereunder. Any and all personal liability, if any, beyond that which may
be asserted under this Section 34 is hereby expressly waived and released by
Tenant and by all persons claiming by, through, or under Tenant. In addition, in
no event shall Landlord be in default of this Lease unless Tenant notifies
Landlord of the precise nature of the alleged breach by Landlord, and Landlord
fails to cure such breach within fifteen (15) days after the date of Landlord's
receipt of such notice or refusal of delivery (provided that if the alleged
breach is of such a nature that it cannot reasonably be cured within such
fifteen (15) day period, then Landlord shall not be in default if Landlord
commences a cure within such fifteen (15) day period and diligently thereafter
prosecutes such cure to completion). In no event shall Tenant have any right to
terminate this Lease by virtue of any uncured default by Landlord.
XXXV. ESTOPPEL CERTIFICATES.
Tenant shall, from time to time, within ten (10) business days of Landlord's
written request, execute, acknowledge and deliver to Landlord or its designee a
written statement stating: the date the Lease was executed and the date it
expires; the date the Tenant entered occupancy of the Premises; the amount of
Base Rent, Additional Rent and other charges due hereunder and the date to which
such amounts have been paid; that this Lease is in full force and effect and has
not been assigned, modified, supplemented or amended in any way (or specifying
the date and terms of any agreement so affecting this Lease); that this Lease
represents the entire agreement between the parties as to this leasing; that all
conditions under this Lease to be performed by the Landlord have been satisfied
(or specifying any such conditions that have not been satisfied); that all
required contributions by Landlord to Tenant on account of Tenant's improvements
have been received (or specifying any such contributions that have not been
received); that to Tenant's knowledge, following reasonable investigation and
42
inquiry, there are no existing defenses or offsets which the Tenant has against
the enforcement of this Lease by the Landlord; that no Base Rent or Additional
Rent has been paid more than one (1) month in advance; that no security has been
deposited with Landlord (or, if so, the amount thereof) other than the Security
Deposit; or any other customary factual matters evidencing the status of the
Lease, as may be reasonably required either by a lender making a loan to
Landlord to be secured by a deed of trust or mortgage against the Building, or a
purchaser of the Building, which written statement shall, to the extent the
certifications required to be made therein are true and correct as of such time,
be in substantially the same form as Exhibit F attached hereto and made a part
hereof by this reference. It is intended that any such statement delivered
pursuant to this paragraph may be relied upon by a prospective purchaser of
Landlord's interest or a mortgagee of Landlord's interest or assignee of any
mortgage upon Landlord's interest in the Building. If Tenant fails to respond
within ten (10) business days after receipt by Tenant of a written request by
Landlord as herein provided, Tenant shall be deemed to have given such
certificate as above provided without modification and shall be deemed to have
admitted the accuracy of any information supplied by Landlord to a prospective
purchaser or mortgagee consistent with the terms of the estoppel so requested.
Landlord shall, from time to time, within ten (10) business days of Tenant's
written request, execute, acknowledge and deliver to Tenant or its designee a
written statement stating: the date the Lease was executed and the date it
expires; the date the Tenant entered occupancy of the Premises; the amount of
Base Rent, Additional Rent and other charges due hereunder and the date to which
such amounts have been paid; that this Lease is in full force and effect and has
not been assigned, modified, supplemented or amended in any way (or specifying
the date and terms of any agreement so affecting this Lease); that this Lease
represents the entire agreement between the parties as to this leasing; that all
conditions under this Lease to be performed by the Tenant have been satisfied
(or specifying any such conditions that have not been satisfied); that to
Landlord's knowledge, there are no defaults by Tenant under this Lease.
XXXVI. FINANCIAL REPRESENTATIONS AND INFORMATION.
Tenant has provided Landlord prior to the date hereof with the
information regarding Tenant's net asset value and financial condition that is
attached as Exhibit G hereto and made a part hereof. Tenant represents that the
information contained in Exhibit G is true, correct and complete, and
acknowledges that Landlord is relying thereupon (without additional
investigation) in entering into this Lease with Tenant. Tenant shall deliver to
Landlord updated information, using the same format (and containing not less
than the same level of detail) set forth in Exhibit G, certified by Tenant's
chief financial officer as true, correct and complete as of the date made,
within ten (10) business days after Landlord's written request (which shall be
limited to one (1) request per calendar quarter during the Lease Term). In the
event Tenant ever provides to any creditor of Tenant's (including but not
limited to lenders, other landlords and/or judgment creditors) formal financial
statements regarding Tenant (including but not limited a detailed balance sheet,
a profit and loss statement, and/or a cash flow statement), whether or not
audited by an independent certified public accountant, Tenant agrees to provide
the same information to Landlord, within ten (10) business days after
43
Landlord's written request (which shall be limited to one (1) request per
calendar quarter during the Lease Term).
Within ten (10) days after Landlord's request, Tenant shall deliver to Landlord
a year-to-date financial statement of Tenant for Tenant's current fiscal year
and annual financial statements for the two (2) fiscal years prior to Tenant's
current fiscal year, which financial statements shall be prepared by a certified
public accountant in accordance with generally accepted accounting principles
consistently applied and include a balance sheet and profit and loss statement
and which annual financial statements shall be audited by a certified public
accountant. In the event that Tenant does not produce nor possess financial
statements, Tenant shall deliver to Landlord, in lieu of financial statements,
internal balance sheets, the accuracy of which shall have been certified to by
the president, a vice president, the treasurer or assistant treasurer of Tenant.
Such certifications shall specifically state that the balance sheets are
accurate and full representations of the financial condition of Tenant. To the
extent tenant is not a publicly traded company, Landlord agrees that it shall
use reasonable efforts to maintain the confidentiality of Tenant's financial
information; provided, however that Landlord shall be permitted to disclose same
to Landlord's lenders, prospective purchasers, and investors.
XXXVII. TRANSFER OF LANDLORD'S INTEREST.
In the event of any transfer(s) of Landlord's interest in the Premises or the
Building to a bona-fide third-party purchaser, other than a transfer for
security purposes only, upon the assumption of this Lease by the transferee, the
transferor shall be automatically relieved of any and all obligations and
liabilities on the part of Landlord accruing from and after the date of such
transfer, and Tenant agrees to attorn to the transferee.
XXXVIII. RIGHT TO PERFORM.
If Tenant shall fail to pay any sum of money, other than Base Rent and
Additional Rent, required to be paid by it hereunder or shall fail to perform
any other act on its part to be performed hereunder, and (except in the event of
emergency in which case no grace or cure period shall be applicable or required)
such failure shall continue for ten (10) days after notice to Tenant (or such
other cure period as may be provided for herein), Landlord may, but shall not be
obligated so to do, and without waiving or releasing Tenant from any obligations
of Tenant, make any such payment or perform any such other act on Tenant's part
to be made or performed as provided in this Lease. Landlord shall have (in
addition to any other right or remedy of Landlord) the same rights and remedies
in the event of the nonpayment of sums due under this section as in the case of
Default by Tenant in the payment of Base Rent. All sums paid by Landlord and all
penalties, interest and costs in connection therewith, shall be due and payable
by Tenant upon written demand within ten (10) business days after such payment
by Landlord, together with interest thereon at the Default Rate from such date
to the date of payment.
XXXIX. COMMON AREAS
44
For purposes hereof, the term "Common Areas" shall mean (i) all portions of the
Land other than portions upon which the Building is situated, including
landscaped areas and the like, as the same may be modified from time to time by
Landlord; (ii) all loading docks, corridors, lobbies, elevator cabs, stairs and
other portions of the Building that would customarily be made available to
tenants of the Building, as the same may be modified from time to time by
Landlord; (iii) any parking deck, parking structure, or surface parking
facility, and any connector from the Building thereto; and (iv) any areas which
are common areas for, on, or utilized in general by tenants, owners and/or
occupants of the complex.
XD. SALES AND AUCTIONS.
Tenant may not display or sell merchandise outside the exterior walls and
doorways of the Premises and may not use such areas for storage. Tenant shall
not conduct or permit to be conducted any sale by auction in, upon or from the
Premises whether said auction be voluntary, involuntary, pursuant to any
assignment for the payment of creditors or pursuant to any bankruptcy or other
insolvency proceedings.
XDI. ACCESS TO ROOF.
41.1 Subject to (i) compliance with all rules, regulations, proffers, statutes
and codes of any governmental authority having jurisdiction thereover, and (ii)
subject to Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed, Tenant shall have the right of
access to and non-exclusive use of the roof of the Building for the installation
of various communication equipment (Tenant's "Roof Use"); provided further that
such installation and the Roof Use shall not void any roof or other warranty
applicable to the Building and that all such installations shall be located and
screened in a manner mutually acceptable to both Landlord and Tenant.
41.2 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 ten (10) days
before the date Landlord is obligated to pay a premium on the insurance (or
within ten (10) 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, whichever date is later), a sum equal to the difference
between the original premium and the increased premium resulting from the Roof
Use.
41.3 Landlord has not made any representations or promises pertaining to the
suitability of the Building's rooftop 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.
41.4 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 41. Tenant's Roof Use shall not
in any way conflict with any applicable law, statute, proffer, 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 Building complies with all laws, statutes, proffers, ordinances,
45
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 Tenant's Roof Use. Tenant shall indemnify and hold
Landlord harmless from and against any and all loss, cost (including reasonable
attorney's fees incurred in defending Landlord), damage or liability arising out
of any violations of said laws, statutes, proffers, ordinances rule or
regulations.
41.5 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 the Building;
(2) in compliance with all applicable laws, codes, proffers, statutes 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 the Building; (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 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 the Building. Tenant's Roof
Use shall be used solely in the ordinary course of Tenant's business operations
and specifically not for commercial resale or any similar purpose, 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 for profit to third
parties) shall be subject to Landlord's consent, which consent may be given or
withheld in Landlord's sole and absolute discretion.
XDII. ACCESS.
Landlord shall install access control systems to the Common Area entrances of
the Building and Landlord shall provide on or before the Commencement Date, 100
key cards therefore, the cost of which shall be paid by Landlord. Thereafter,
Tenant may obtain from the applicable security system vendor as many key cards
as Tenant requires, at Tenant's sole expense (which shall be Landlord's actual
cost from the security company providing such service). All monitoring costs
attributable to such system(s), if any, shall constitute Operating Costs for all
purposes hereof.
XDIII. AUTHORITY OF LANDLORD AND TENANT.
Each of Landlord and Tenant shall furnish the other with appropriate
partnership and/or corporate resolutions, as applicable, confirming that the
individual executing this Lease on behalf of each has been duly authorized to
execute and deliver this Lease on behalf of such party and that this Lease is
binding upon such party.
XDIV. NO ACCORD OR SATISFACTION.
No payment by Tenant or receipt by Landlord of a lesser amount than the Base
Rent, Additional Rent and other sums due hereunder shall be deemed to be other
than on account of the earliest Base Rent or other sums due, nor shall any
endorsement or statement on any check or accompanying any check or payment be
deemed an accord and satisfaction; and
46
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Base Rent, Additional Rent or other sum and to
pursue any other remedy provided in this Lease.
XDV. LEGAL REQUIREMENTS.
Landlord shall cause the Building (but not the Premises, for which Tenant shall
be solely responsible) to comply as of the Commencement Date with all laws,
orders, ordinances and regulations of Federal and local authorities and with
directions of public rules, recommendations, requirements and regulations of the
Board of Fire Underwriters, Landlord's insurance companies and any other
organization establishing insurance rates in the geographical area where the
Project is located and all applicable building codes, to the extent the same are
applicable to the Building, respecting all matters of the Project other than the
use and occupancy of the Premises by Tenant, including, without limitation, the
accessibility requirements of the Americans with Disabilities Act ("ADA"), all
zoning and other land use laws, and all Environmental Laws. To landlord's
knowledge, having done no independent investigation or inquiry, the proposed use
of the Premises by Tenant will not violate currently applicable zoning
regulations as they pertain to the Building.
XDVI. PARKING.
Tenant shall have the right (together with Landlord and its agents, employees
and contractors, and together with the rights of other tenants in the Building
and the Project) to use, from the parking areas available to the Project in the
parking structure and surface parking on the Project and Common Areas an amount
of parking as set forth in Section 1.1 hereof (i.e., 49 aggregate spaces). Such
parking right shall be non-exclusive, and on an unreserved basis. Tenant agrees
not to overburden the Building's parking facilities.
XDVII. GENERAL PROVISIONS.
A. Acceptance. This Lease shall only become effective and binding upon
full execution hereof by Landlord and Tenant and delivery of a signed copy by
Landlord to Tenant.
B. Joint Obligation. If there be more than one Tenant, the obligations
hereunder imposed shall be joint and several.
C. Marginal Headings, Etc. The marginal headings, Table of Contents,
lease summary sheet and titles to the sections of this Lease are not a part of
the Lease and shall have no effect upon the construction or interpretation of
any part hereof.
D. Choice of Law. This Lease shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia (without regard to the
choice of law and/or conflict of law principles applicable in such State).
47
E. Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, inure to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
F. Recordation. Except to the extent otherwise required by law, neither
Landlord nor Tenant shall record this Lease or a memorandum hereof.
G. Quiet Possession. Upon Tenant's paying the Base Rent and Additional
Rent reserved hereunder and observing and performing all of the covenants,
conditions and provisions on Tenant's part to be observed and performed
hereunder, Tenant shall have quiet possession and enjoyment of the Premises for
the Lease Term hereof, free from any disturbance or molestation by Landlord, or
anyone claiming by, through or under Landlord, but in all events subject to all
the provisions of this Lease.
H. Inability to Perform; Force Majeure. This Lease and the obligations
of the Tenant hereunder shall not be affected or impaired because either
Landlord or Tenant is unable to fulfill any of its obligations hereunder or is
delayed in doing so, to the extent such inability or delay is caused by reason
of war, civil unrest, strike, labor troubles, unusually inclement weather,
governmental delays, inability to procure services or materials despite
reasonable efforts, third party delays, acts of God, or any other cause(s)
beyond the reasonable control of the Landlord (which causes are referred to
collectively herein as "Force Majeure".) Any time specified obligation of
Landlord or Tenant in this Lease shall be extended one day for each day of delay
suffered by Landlord or Tenant as a result of the occurrence of any Force
Majeure. The foregoing notwithstanding in no event will an event of Force
Majeure extend the time within which Tenant or Landlord must perform any of its
monetary obligations under this Lease.
I. Partial Invalidity. Any provision of this Lease which shall prove to
be invalid, void, or illegal shall in no way affect, impair or invalidate any
other provision hereof and such other provision(s) shall remain in full force
and effect.
J. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, whenever possible, be cumulative with all other remedies at
law or in equity.
K. Entire Agreement. This Lease contains the entire agreement of the
parties hereto and no representations, inducements, promises or agreements, oral
or otherwise, between the parties, not embodied herein, shall be of any force or
effect.
L. Survival. All indemnities set forth in this Lease shall survive the
expiration or earlier termination of this Lease.
M. Consents. If any provision of this Lease subjects any action,
inaction, activity or other right or obligation of any party to the prior
consent or approval of the other, such consent shall not be unreasonably
withheld, conditioned or delayed unless otherwise specifically provided herein.
48
N. Saving Clause. In the event (but solely to the extent) the
limitations on Landlord's liability set forth in Section 8.3 of this Lease would
be held to be unenforceable or void in the absence of a modification holding the
Landlord liable to Tenant or to another person for injury, loss, damage or
liability arising from Landlord's omission, fault, negligence or other
misconduct on or about the Premises, or other areas of the Building appurtenant
thereto or used in connection therewith and not under Tenant's exclusive
control, then such provision shall be deemed modified as and to the extent (but
solely to the extent) necessary to render such provision enforceable under
applicable law. The foregoing shall not affect the application of Section 34 of
this Lease to limit the assets available for execution of any claim against
Landlord.
47.15 Rule Against Perpetuities. In order to ensure the compliance of this Lease
with any rule against perpetuities that may be in force in the state in which
the Premises are located, and without limiting or otherwise affecting either
Landlord's or Tenant's obligations under this Lease, as stated in the other
sections hereof, or modifying any other termination rights which may be set
forth herein, Landlord and Tenant agree that, irrespective of the reasons
therefor (other than a Default by Tenant), in the event Tenant fails to take
possession of the Premises and commence paying Base Rent and Additional Rent
hereunder within ten (10) years after the date of execution of this Lease, then
this Lease, and the obligations of the parties hereunder, shall be deemed to be
null and void and of no further force and effect. Without affecting the specific
timing requirements otherwise applicable thereto under this Lease, any and all
options granted to Tenant under this Lease (including, without limitation,
expansion, renewal, right of first refusal, right of first offer, and like
options) must be exercised by Tenant, if at all, during the term of this Lease.
XDVIII. RULES AND REGULATIONS.
Tenant agrees to comply with the Rules and Regulations attached hereto as
Exhibit D.
XDIX. ARBITRATION.
49.1 If arbitration is specifically agreed upon hereunder as a dispute
resolution procedure, the arbitration shall be conducted as provided in this
Section. All proceedings shall be conducted according to the Commercial
Arbitration Rules of the American Arbitration Association, except as hereinafter
provided. No action at law or in equity in connection with any such dispute
shall be brought until arbitration hereunder shall have been waived, either
expressly or pursuant to this Section. The judgment upon the award rendered in
any arbitration hereunder shall be final and binding on both parties hereto and
may be entered in any court having jurisdiction thereof. During any arbitration
proceeding pursuant to this Section, the parties shall continue to perform and
discharge all of their respective obligations under this Lease, except as
otherwise provided in this Lease.
49.2 All disputes that are required to be arbitrated in accordance with this
Lease shall be raised by notice to the other party, which notice shall state
with particularity the nature of the dispute and the demand for relief, making
specific reference by article number and title of the provisions of this Lease
alleged to have given rise to the dispute. The notice shall also refer to this
Section and shall state whether or not the party giving the notice demands
arbitration under this Section.
49
49.3 Within thirty (30) days of any demand for arbitration, each of Tenant and
Landlord shall appoint one (1) arbitrator, and within ten (10) days of their
appointment, the two (2) arbitrators thus selected shall jointly select a third
(3rd) arbitrator. All arbitrators shall have at least ten (10) years' experience
in commercial real estate matters and, in particular, the subject matter of the
dispute, to act as arbitrator hereunder. If either party fails to select an
arbitrator within the initial thirty (30) day period, or if the two (2)
arbitrators are unable to agree upon a third (3rd) arbitrator, then, upon the
request of either party, the remaining arbitrator(s) shall be appointed by The
American Arbitration Association. The arbitration proceedings shall take place a
mutually acceptable location in the Washington, D.C./Baltimore metropolitan
areas.
49.4 The right of Landlord and Tenant to submit a dispute to arbitration is
limited to issues specifically agreed in this Lease to be submitted to
arbitration, and specifically does not apply to any remedial action undertaken
by Landlord pursuant to the provisions of Section 24 hereof. When resolving any
dispute, the arbitrator shall apply the pertinent provisions of this Lease
without departure therefrom in any respect. The arbitrator shall not have the
power to change any of the provisions of this Lease, but this Section shall not
prevent in any appropriate case the interpretation, construction and
determination by the arbitrator of the applicable provisions of this Lease to
the extent necessary in applying the same to the matters to be determined by
arbitration.
49.5 Without limitation, any dispute between Landlord and Tenant regarding the
application, interpretation or effect of the provisions of Exhibit C to
particular factual circumstances, including without limitation any dispute
regarding approval of plans and specifications for Tenant's Work, compliance of
construction with the approved plans and specifications therefor (or as
otherwise required by this Lease), Substantial Completion of all or any part of
Tenant's Work, completion of punch list items and Landlord's calculation of the
total Costs, shall be subject to arbitration pursuant to this Section 49 if
Landlord and Tenant cannot resolve such dispute voluntarily.
D. WAIVER OF JURY TRIAL.
LANDLORD AND TENANT HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE OTHER ON ALL MATTERS ARISING
OUT OF THIS LEASE, OR THE USE AND OCCUPANCY OF THE PREMISES. IF LANDLORD
COMMENCES ANY SUMMARY PROCEEDING FOR NON-PAYMENT OF BASE RENT OR ADDITIONAL
RENT, TENANT WILL NOT INTERPOSE (AND WAIVES THE RIGHT TO INTERPOSE) ANY
NON-MANDATORY COUNTERCLAIM IN ANY SUCH PROCEEDING.
DI. RENEWAL TERM.
A. Provided Tenant is not in Default of this Lease at the time its
rights hereunder are to be exercised, Tenant shall have the option ("Renewal
Option") to extend the Lease Term for one (1) extension period of sixty (60)
months (the "Renewal Term") provided Tenant gives written notice to Landlord of
its election to exercise such Renewal Option (the "Renewal Notice") not more
than eighteen (18) nor less than twelve (12) months
50
prior to the expiration of the last day of the initial Lease Term. Time is of
the essence in this Section 51.
B. 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, except the Base Rent
shall be as set forth in this Section 51.
C. The Base Rent payable upon the commencement of the Renewal Term
shall equal one hundred percent (100%) of the then prevailing market rental rate
(including base rental rate, annual escalation rate, and any applicable tenant
concessions) applicable to renewal terms with respect to comparable space in
comparable buildings in the Tysons Corner, Virginia area, (the "Fair Market
Rate" or "FMR") (but not less than the Rent for the prior Lease Year) 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 Project (taking into
consideration use, location, quality, age and location of the applicable
building and the definition of net rentable area as well as then market lease
concessions, and improvement allowances). Further, the Fair Market Rate shall be
determined on a net basis, with Tenant remaining responsible for all Additional
Rent as set forth herein. Landlord and Tenant shall negotiate in good faith and
in accordance with the procedure set forth in Section 51.4, 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-broker method (as described in Section 51.5, below) within not
more than sixty (60) days after the date of Landlord's receipt of the Renewal
Notice.
D. Within ten (10) days after Landlord receives Tenant's Renewal Notice
exercising the Renewal Option 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 twenty (20) 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 51. 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 twenty (20) 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 twenty (20) 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 twenty (20) 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 51. If Landlord fails to
respond to the Tenant's Counterproposal within twenty (20) days after Landlord's
receipt of the Tenant's Counterproposal, or rejects the rental rate and
escalation rate stated therein, then the parties
51
agree to submit the issue of what constitutes the appropriate FMR for the
Premises for the Renewal Term to determination using a "three broker method" as
described in Section 51.5, below.
E. If the parties submit the issue of what constitutes the appropriate
FMR for the Premises for the Renewal Term to determination using a "three broker
method", then the Base 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 brokers, 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 brokers shall be licensed in the Commonwealth of Virginia
as a real estate broker, with a substantial familiarity in the field of
commercial office leasing in McLean, 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) brokers selected by Landlord and Tenant shall promptly select a third
broker within ten (10) days after they both have been appointed, and each
broker, within ten (10) days after the third broker is selected, shall submit
his or her determination of the said FMR and escalations (taking into account
the provisions of Section 51.3 hereof). If either of the parties fail to select
a broker within the aforesaid time periods, the broker selected by the other
party shall select the other two (2) brokers to participate in the
determination, each of which shall meet the selection criteria set forth above,
and be affiliated with a different company from the first broker and from each
other; and if the brokers selected by Landlord and Tenant are unable to reach
agreement on the identity of the third broker within the applicable ten (10) day
period, then the third broker shall be designated (in compliance with the
applicable criteria set forth above) by an agent of the Virginia Board of
Realtors in office at such time. The FMR shall be the average of amount
determined by the two brokers whose determinations are closest in amount to each
other (or [a] if two brokers reach an identical determination, the determination
of such two brokers, or, as applicable [b] if two brokers' estimates are the
same monetary difference from the third, but in opposite directions, the average
of the three brokers shall prevail), 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 brokers 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 brokers 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 brokers 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 broker selected by it, and they shall
equally share the payment of the fee of the third broker.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Deed of Lease, or
have caused this Deed of Lease to be executed on their respective behalves by
their duly authorized officers, as of the day and year first above written.
LANDLORD:
52
WESTWOOD CENTER, L.L.C.
By: /s/ Xxxxx X. Xxxxxxx, Xx.
------------------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Vice President
TENANT:
SAGE NETWORKS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------------
Title: Co-Chairman
---------------------------------
53
EXHIBIT A
Location and Dimensions of Premises
54
EXHIBIT B
Description of Land
55
EXHIBIT C
Construction/Build-Out Provisions
Landlord's Work and Tenant's Work
1. Preparation of Plans and Specifications. Landlord and Tenant on a
preliminary space plan for the construction of initial leasehold improvements to
the Premises (the "Space Plan"), a copy of which is attached as Schedule C-1
hereto and made a part hereof. (The Space Plan includes related specifications
for interior tenant finishes, to the extent same deviate from Building
standard.) With respect to such initial leasehold improvements, within ten (10)
days after the execution of this Lease, Tenant shall submit to Landlord all
information (the "Plans Information") needed in order for Landlord's architects,
engineers and/or other construction personnel ("Landlord's Architect") to
prepare architectural plans, construction drawings and finishes for the
Premises, consistent with the Space Plan. Landlord shall provide all Building
systems information necessary for Landlord's Architect to prepare mechanical,
electrical and plumbing ("MEP") drawings. Within thirty (30) days of receipt of
all information required from Tenant, Landlord's Architect shall prepare the
architectural plans, construction drawings and finishes, and the MEP's, for the
Premises, as required for the permitting and construction of the Premises
("Plans and Specifications"). Landlord shall deliver the completed Plans and
Specifications to Tenant promptly after completion. If Tenant fails to provide
all necessary Plans Information, Landlord or Landlord's Architect shall notify
Tenant of any such missing information, and Tenant shall deliver same to
Landlord within five (5) days after such notification. Any period of delay
caused by Tenant's failure to provide all the Plans Information when required
above shall toll the aforementioned thirty (30) day period until Tenant delivers
such information, and shall constitute a "Tenant Delay" (as defined in paragraph
9 of this Exhibit C, below) hereunder.
2. Approval of Plans and Specifications. As soon as practicable after
receipt of such Plans and Specifications, but in no event more than five (5)
days after receipt thereof, Tenant shall return to Landlord such Plans and
Specifications with Tenant's suggested modifications and/or approval. If, upon
receipt of Tenant's modified Plans and Specifications, Landlord wishes to take
exception to Tenant's modifications, Landlord may do so within five (5) business
days after the date upon which Landlord receives Tenant's modified Plans and
Specifications. If Landlord takes exception, then Landlord and Tenant shall
negotiate in good faith to promptly resolve any disagreements and make
modifications to the Plans and Specifications which are acceptable to Landlord
and Tenant. The parties shall attempt to reach agreement as soon as possible,
and in all events within five (5) business days after the date upon which
Landlord receives Tenant's proposed modifications to the Plans and
Specifications.
3. Revisions to Plans and Specifications. If Tenant's modifications are
acceptable to Landlord, said Plans and Specifications shall thereafter be
revised by Landlord to reflect the applicable changes, and the same shall be
resubmitted to Tenant for approval within five (5) business days after their
receipt by Landlord. If Landlord takes exception to Tenant's modifications, said
Plans and Specifications shall be revised by Landlord to reflect any changes
agreed upon in the above referenced good faith negotiations within three (3)
business days after the expiration of the five (5) business day negotiating
period set forth in paragraph 2, above. Landlord shall deliver the revised Plans
and Specifications to Tenant prior to the expiration of such three (3) business
day period, and Tenant shall grant its approval or disapproval thereto, and/or
state any further objections or proposed modifications, within three (3)
business days after receipt thereof. After the first submission and
resubmission, Landlord and Tenant agree to restrict further objections or
disputes to matters which have not previously been agreed upon or accepted by
the other party. The parties shall, in all events, act in good faith and use all
reasonable efforts to reach agreement as soon as possible, and in all events
within fifteen (15)
56
business days after the date upon which Landlord first received Tenant's
modified Plans and Specifications. The process of submissions and resubmissions
shall continue thereafter until final agreement is reached, and in such process,
the parties shall thereafter adhere to the three (3) business day response time
required after the second resubmission. Each party agrees that its failure to
respond to a submission or resubmission within the above-referenced time frames
shall constitute such party's acceptance of the submission or resubmission in
question.
4. Landlord's Work.
(A) Upon Landlord and Tenant's final approval of the Plans and
Specifications, the same shall constitute the "Approved Plans", and the work
shown on the Approved Plans shall be deemed "Landlord's Work" unless otherwise
noted thereon. Following final approval of the Approved Plans, Landlord agrees
to apply for a building permit and upon the later of the date of issuance
thereof, or that date which is fifteen (15) days after the existing tenant
occupying the Premises vacates therefrom, to cause Landlord's Work to be
completed, installed or performed, as the case may be, in accordance therewith,
subject only to minor variations and/or variations necessitated by the
unavailability of specified materials and equipment. The costs associated with
Landlord's Work shall be paid as provided in Paragraphs 6 and 7, below.
(B) Except as above provided, no deviation from the Approved
Plans shall be made by either party except by written change order approved by
the other party, which approval shall not be unreasonably withheld or delayed.
In the event Tenant requests or causes the need for any change orders with
respect to Landlord's Work, the net cost of such change orders shall be at
Tenant's sole cost and any delays resulting therefrom shall constitute "Tenant
Delays" hereunder. In the event any change orders increase the cost of
Landlord's Work, Tenant shall pay Landlord the incremental additional cost
associated with any such change orders within fifteen (15) days after Landlord's
demand therefor.
5. Tenant's Work.
(A) Notwithstanding anything to the contrary in this Exhibit
C, Tenant shall be responsible for all work, construction, installations or
improvements in or to the Premises which are not designated as Landlord's Work
(including but not limited to all fixtures, furniture, equipment and other
office installations.) Such work shall hereinafter be referred to as "Tenant's
Work," and shall be at Tenant's sole cost and expense. Prior to commencing
Tenant's Work, Tenant shall submit to Landlord, for Landlord's review and
approval, which shall not be unreasonably withheld, drawings and specifications
for Tenant's Work, showing all aspects of such work. Tenant's Work shall be
deemed to constitute an "alteration" within the meaning of Section 15 of the
Lease, and shall be subject to the terms of (and approval procedures described
in) Section 15 of the Lease even if Tenant's Work takes place prior to the
Commencement Date of this Lease.
(B) Tenant shall be responsible for and shall pay when due all
costs associated with the preparation of plans and the performance of Tenant's
Work incurred in accordance with this Exhibit C. Failure by Tenant to pay the
costs associated with Tenant's Work on a timely basis so as to avoid the
assertion of any statutory and/or common law lien against the Premises or the
Building shall constitute a default by Tenant for all purposes of the Lease.
6. Improvement Allowance Defined. In consideration of Tenant's
fulfillment of all of its obligations under this Exhibit C and the performance
of all of its financial and other obligations under the Lease, Landlord shall
make a one-time contribution of up to $131,710.00 (which is calculated as
57
$10.00 per rentable square foot of the Premises), to be applied solely toward
actual hard and soft costs paid by Landlord in the design, purchase,
construction and installation of Landlord's Work and for no other purpose, in
accordance with the terms of this Exhibit C. Landlord's total financial
obligation with respect to the purchase, construction, and installation of
Landlord's Work or any other improvements to the Premises shall be limited
solely to the Improvement Allowance, and Tenant shall be solely responsible for
any and all such costs in excess of the Improvement Allowance. Costs to be
applied against the Improvement Allowance shall include, without limitation,
architectural and engineering fees and expenses associated with the preparation
and review of the Plans and Specifications and the Approved Plans (both prior to
and after the date of the Lease); permit and inspection fees; cost of labor,
materials, general conditions and contractor profits arising under the
construction contract(s) pursuant to which Landlord's Work is performed; a
construction management fee payable to Landlord's construction manager in the
amount of four percent of managed costs; and any other hard and soft costs
associated with the performance of the Landlord's Work.
7. Improvement Allowance Payment Schedule.
(A) Landlord shall apply the Improvement Allowance toward the
cost of Landlord's Work, as defined by and in accordance with the terms of this
Exhibit C. Landlord agrees that the Improvement Allowance shall be applied
solely to pay costs of design and construction of Landlord's Work in the
Premises.
(B) If, during the course of performing Landlord's Work,
Landlord in good faith believes that the cost of Landlord's Work will exceed the
Improvement Allowance, Landlord shall notify Tenant in writing, which notice
shall include Landlord's good faith estimate of the additional cost to complete
Landlord's Work (the "Completion Deposit"). Within fifteen (15) days after
receipt of such notice, Tenant shall pay Landlord (or, if Landlord elects,
Tenant shall pay Landlord's contractor) the Completion Deposit. If Tenant fails
to pay the Completion Deposit as and when due hereunder, (i) such failure shall
constitute a Tenant Delay and a default under the Lease, and (ii) Landlord shall
have the right to halt Landlord's Work.
(C) The following provisions shall apply with respect to any
underpayment or overpayment by Tenant in the event Tenant pays the Completion
Deposit hereunder. If the Final Statement states that the Actual Cost exceeds
the sum of the Improvement Allowance and (if any) the Completion Deposit (the
"Total Tenant Payment"), then Tenant shall pay Landlord an amount equal to the
difference between the Actual Cost and the Total Tenant Payment within fifteen
(15) days after receipt of Landlord's statement. If the Final Statement states
that the Actual Cost is less than the Total Tenant Payment, then Landlord shall
credit the unused portion of the Total Tenant Payment (but not more than the
unused portion of the Completion Deposit) toward Tenant's next due payment(s) of
Rent and additional rent.
8. Permits.
(A) Except as provided below, Landlord shall obtain all
necessary permits in connection with Landlord's Work. Landlord's Work shall not
be deemed Substantially Complete until Landlord obtains all final inspection
approvals which are required for Landlord to deliver the Premises to Tenant with
Landlord's Work completed, and that can be obtained by Landlord prior to Tenant
performing Tenant's Work and prior to Tenant installing its fixtures, furniture
and equipment (including, if the same may be issued prior to Tenant's
performance of Tenant's Work, if any, and installation of its fixtures,
furniture and equipment , a non residential use permit for the Premises).
58
(B) Tenant shall be responsible for applying for and obtaining
all permits required for Tenant to perform Tenant's Work, or to operate within
the Premises, including without limitation (and except as provided in Paragraph
8(A), above) the final non residential use permit or its equivalent, and for
obtaining any final fire inspection approval required after installation of its
fixtures, furniture and equipment.
9. Tenant Delays. Tenant acknowledges that delays in preparation of
Approved Plans and/or in the construction of Landlord's Work caused by Tenant
may otherwise result in deferral of the Possession Date (defined below), and
consequently the Commencement Date (as such term is defined in Section 1.4 of
the Lease), and thus Tenant's obligation to pay Rent, additional rent and other
charges due under this Lease to Landlord. Accordingly, Tenant agrees that the
Commencement Date shall be deemed to have been moved up one (1) day for each day
of delay in the commencement or completion of Landlord's Work occasioned by any
"Tenant Delay", which term shall include, without limitation, any delay in the
commencement or completion of Landlord's Work caused by the acts or omissions of
Tenant, its agents, architects, employees, contractors and invitees. (For
purposes of illustration only, if the Commencement Date is April 15, 1999, and
there were ten (10) days of Tenant Delays, the Commencement Date shall be deemed
to have occurred on April 5, 1999.)
10. Delivery & Acceptance of Possession. When Landlord's Work is
substantially complete, Landlord shall deliver to Tenant a written notice (the
"Completion Notice") certifying that Landlord's Work is "Substantially Complete"
(as defined in the Lease). Within five (5) days after Landlord delivers the
Completion Notice, Tenant and a representative of Landlord shall jointly inspect
the Premises, as Tenant deems appropriate and Tenant shall be deemed to have
accepted the Premises (in their condition as of the date of the Completion
Notice but without waiving Landlord's ability, if any, to correct punch list
items pursuant to Paragraph 11 below) on the earlier of (i) the date of such
joint inspection, or (ii) the fifth (5th) day after Landlord delivers the
Completion Notice; which date may be referred to hereinafter as the "Possession
Date."
11. Punch List. If, as a result of the aforementioned joint inspection,
Tenant discovers minor deviations or variations from the Approved Plans of a
nature commonly found on a "punch list" (as that term is used in the
construction industry), Tenant shall promptly notify Landlord of such
deviations; provided, however, that in the event of a dispute, Landlord (or
Landlord's Architect) and Tenant (or Tenant's architect) shall negotiate in good
faith, using their reasonable discretion, to determine which items constitute
punch list items. The existence of such punch list items shall not postpone the
Commencement Date of this Lease nor the obligation of Tenant to pay Rent,
additional rent or any other charges due under this Lease.
12. Provisions Regarding Tenant's Work. The following shall apply with
respect to Tenant's Work, and any subsequent alterations to the Premises
(hereafter, "alterations") by Tenant made pursuant to section 15 of the Lease.
(A) First-Class Lien-Free Completion. Tenant shall only use
new, first-class materials in connection with Tenant's Work and alterations, and
same shall be paid for in full and in a timely fashion by Tenant, and shall be
performed in a lien-free, first-class, and good and workmanlike manner, and in
accordance with applicable codes and requirements. Tenant's Work and alterations
shall comply with the requirements of the Americans with Disabilities Act
("ADA").
(B) Bonding. All contractors and subcontractors performing any
work on behalf of Tenant within the Premises shall be subject to Landlord's
approval, and shall be bonded (or, at Landlord's
59
option, bondable) and licensed to do business in jurisdiction within which the
Premises is located.
(C) Insurance Requirements During Construction.
(1) Tenant shall secure, pay for, and maintain, or
cause its contractors and subcontractors to secure, pay for, and maintain,
during the continuance of construction and fixturing work within the Premises,
all of the insurance policies required in the amounts as set forth herein,
together with such insurance as may from time to time be required by city,
county, state or federal laws, codes, regulations or authorities.
(2) Tenant's Work and alterations may not commence,
nor may either party permit its contractors and subcontractors to commence any
work, until all required insurance has been obtained, and, if Landlord requests,
until Tenant's certificates of such insurance have been delivered to Landlord.
Tenant's insurance policies shall name the Landlord, Landlord's mortgagee(s) and
Landlord's Architect and general contractor for the Premises as additional
insureds. Tenant's certificates of insurance shall provide that no change or
cancellation of such insurance coverage shall be undertaken without thirty (30)
days' prior written notice to Landlord.
(3) Landlord shall have the right to require Tenant,
and Tenant shall have the duty, to stop work in the Premises immediately if any
of the coverage Tenant is required to carry herein lapses during the course of
the work, in which event Tenant's Work (or alterations) may not be resumed until
the required insurance is obtained and satisfactory evidence of same is provided
to Landlord.
(4) In the event Tenant employs a contractor or
subcontractor to perform all or part of Tenant's Work and/or alterations, Tenant
shall purchase, or cause its contractor to carry, General Contractor's and
Subcontractor's Required Minimum Coverages and Limits of Liability as follows
(the insurance required under this Exhibit C shall be in addition to any and all
insurance required to be procured by Tenant pursuant to the terms of the Lease):
(i) Worker's Compensation, as required by
state law, and Employer's Liability Insurance with a
limit of not less than $2,000,000 (or more if
required by the law of the State) and any insurance
required by any Employee Benefit Act or similar
statute applicable where the work is to be performed,
as will protect the contractor and subcontractors
from any and all liability under the aforementioned
act(s) or similar statute.
(ii) Comprehensive General Liability
Insurance (including Contractor's Protective
Liability) in an amount not less than $5,000,000 per
occurrence whether involving personal injury
liability (or death resulting therefrom) or property
damage liability or a combination thereof (combined
single limit coverage) with a minimum aggregate limit
of $5,000,000. Such insurance shall insure Tenant's
general contractor against any and all claims for
personal injury, death, and damage to the property of
others arising from its operations under its
contract, whether such operations are performed by
Tenant's contractors, subcontractors, or
sub-subcontractors, or by anyone directly or
indirectly employed by any of them.
(iii) Comprehensive Automotive Liability
Insurance, for the ownership, maintenance, or
operation of any automotive equipment, whether
60
owned, leased, or otherwise held, including
employer's non-ownership and hired car liability
endorsements, in an amount not less than $2,000,000
per occurrence and $2,000,000 aggregate, combined
single limit bodily injury and property damage
liability.
(D) Tenant agrees that Landlord will have the right to inspect the
performance of Tenant's Work or alterations by Tenant's contractor(s) and
subcontractor(s), through Landlord's construction manager, and Tenant agrees to
cooperate with Landlord to facilitate such inspection, including without
limitation: (a) notifying Landlord and such construction manager prior to any
and all government inspections of Tenant's Work so that Landlord's construction
manager can be present therefor; (b) permitting Landlord's construction manager
free and clear access to the Premises during the construction period, as
necessary to perform such inspections, and (c) complying (or causing its
contractor to comply) with the reasonable directions of such construction
manager in connection with Tenant's Work or alterations, as long as such
directions are not inconsistent with the Approved Plans. Landlord shall use
reasonable efforts not to interfere unreasonably with the performance of
Tenant's Work during the course of any inspections by Landlord or Landlord's
construction manager pursuant to this Paragraph 12(D)
(E) In the performance of Tenant's Work or alterations in accordance
with this Lease, Tenant shall cause its contractor to use reasonable and
diligent efforts not to interfere with ongoing operations in the Building.
Without limiting the foregoing, Tenant agrees to cause its contractor to use
reasonable and diligent efforts to minimize excess noise, and to limit its
construction activities to the portion of the Premises being constructed and
those portions of the common area (if any) in which Tenant is permitted to
perform alterations or Tenant's Work in accordance with the Approved Plans.
(F) Tenant's contractor shall be responsible for all utility costs
associated with the performance of Tenant's Work or alterations and shall either
supply its own electricity and other utilities, or shall reimburse Landlord for
all utility consumption associated with such work. Tenant's contractor shall
keep all construction areas reasonably clean and free of trash and debris, and
shall police the activities of its contractors, subcontractors and their
respective employees with regard to keeping the Building and land clean, and not
disturbing the other tenants and occupants of the Building in the course of such
construction activities. Tenant agrees to follow (or to cause its contractors
and subcontractors to follow) all reasonable directions given to Tenant or its
contractor and subcontractors by Landlord's construction manager. Tenant's
construction contract shall indemnify Tenant and Landlord from damages, losses
and expenses associated with the acts and omissions of Tenant's contractor, its
agents, employees and subcontractors, and shall otherwise be subject to
Landlord's prior reasonable approval.
(G) Tenant shall provide to Landlord copies of all applications for
permits, copies of all governmental inspection reports and/or certificates, and
any and all notices or violations communicated to Tenant or its contractors by
applicable governmental authorities, promptly upon receipt and/or submission
thereof, as the case may be. Tenant agrees to comply (or to cause its
contractors to comply) with all applicable federal, state and local laws,
regulations and ordinances in the performance of Tenant's Work or alterations,
and to promptly rectify any violations of such laws caused by the acts or
omission of Tenant, its employees, agents and/or contractors, and Tenant shall
be responsible for any non-compliance by Tenant or its agents, employees and
contractors. In the event (i) of any violation of this Exhibit C, or (ii) the
construction of any improvements in the Premises which are not within the scope
of the Approved Plans (or other Landlord-approved plans), Landlord shall have
the right to cause Tenant and Tenant's contractor to stop Tenant's Work or
alterations and to remove any such improvements which have been constructed in
violation of the Approved Plans (or other Landlord-approved plans) or this
Exhibit C at Tenant's expense, and to seek any and all appropriate legal and
61
equitable relief in order to enforce the provisions of this Exhibit C.
62
EXHIBIT D
Rules and Regulations
1. The sidewalks, halls, passages, exits, entrances, elevators and
stairways of the Building shall not be obstructed by Tenant, its agents or
employees or used by any of them for any purpose other than for ingress to and
egress from the Premises. The halls, passages, exits, entrances, elevators, and
stairways are not for the general public, and Landlord shall in all cases retain
the right to control and prevent access thereto of all persons whose presence in
the judgment of Landlord would be prejudicial to the safety, character,
reputation and interests of the Building and its tenants, provided that nothing
herein contained shall be construed to prevent such access to persons with whom
any tenant normally deals in the ordinary course of its business, unless such
persons are engaged in illegal activities. Neither Tenant nor its agents,
employees or invitees shall go upon the roof of the Building without the prior
written consent of Landlord.
2. No sign, placard, picture, name, advertisement or notice, visible
from the exterior of the Premises shall be inscribed, painted, affixed or
otherwise displayed by Tenant on any part of the Building without the prior
written consent of Landlord. Landlord will adopt and furnish to Tenant general
guidelines relating to signs inside the Building on the office floors. Tenant
agrees to conform to such guidelines, but may request approval of Landlord for
modifications, which approval will not be unreasonably withheld. All approved
signs or lettering on doors shall be printed, painted, affixed or inscribed at
the expense of Tenant by a person approved by Landlord, which approval will not
be unreasonably withheld. Material visible from outside the Building will not be
permitted.
3. Tenant shall not allow a fire or bankruptcy sale or any auction to
be held on the Premises or allow the Premises to be used for the storage of
merchandise held for sale to the general public.
4. Tenant shall not use or permit the use of the Premises for lodging.
No cooking shall be done or permitted by Tenant on the Premises, except the use
of Underwriters' Laboratory approved equipment for brewing coffee, tea, hot
chocolate and similar beverages, and a microwave oven, shall be permitted,
provided that such use is in accordance with all applicable federal, state and
city laws, codes ordinances, rules and regulations.
5. Tenant shall not employ any person or persons other than the janitor
of Landlord for the purpose of cleaning the Premises, unless otherwise agreed to
by Landlord in writing. Except with the written consent of Landlord, no person
or persons other than those approved by Landlord shall be permitted to enter the
Building for the purpose of cleaning the Premises. Tenant shall not cause or
permit any unnecessary labor by reason of carelessness or indifference in the
preservation of good order and cleanliness, on the part of Tenant, its agents,
employees or contractors. Janitor services will not be furnished on nights when
rooms are occupied after 9:30 p.m. unless, by agreement in writing, such service
is extended to a later hour for specifically designated rooms.
6. Unless specified otherwise in the Lease, Landlord will furnish
Tenant free of charge with two keys to each door lock in the Premises. Landlord
may make a reasonable charge for additional keys. Tenant shall not have any
additional keys to the Premises made. Tenant shall not alter any lock or install
a new or additional lock or any bolt on any door of the Premises without the
prior written consent of Landlord, and Tenant shall in each such case shall
furnish Landlord with a key for any such lock. Tenant, upon the expiration or
termination of its tenancy, shall deliver to Landlord all keys to doors in the
Building which shall have been furnished to the Tenant.
63
7. Landlord shall designate how all office equipment, furniture,
appliances and other large objects or property ("Equipment") shall be moved in
and/or out of the Building. The persons employed to move any Equipment in or out
of the Building must be acceptable to Landlord. Landlord shall have the right to
prescribe the weight, size and position of all Equipment brought into the
Building. Heavy objects shall, if considered necessary by Landlord, stand on
wood strips of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss or damage to any such Equipment from
any cause, and all damage done to the Building by moving or maintaining such
Equipment shall be prepaid at the expense of Tenant.
8. Tenant shall not permit, use or keep in the Premises or the Building
any kerosene, gasoline or inflammable or combustible fluid or material other
than limited quantities thereof reasonably necessary for the operation and
maintenance of office equipment, or, without Landlord's prior written approval,
use any method of heating or air conditioning other than that supplied by
Landlord. Tenant shall not use or keep or permit to be used or kept any foul
obnoxious gas or substance in the Premises, or permit or suffer the Premises to
be occupied or used in a manner offensive or objectionable to Landlord or to
other occupants of the Building by reason of noise, odors, or vibrations, or
interfere in any way with other Building tenants or those having business
therein.
9. Landlord shall have the right, exercisable without notice and
without liability to Tenant, to change the name and street address of the
Building.
10. Landlord reserves the right to exclude from the Building between
the hours of 6:00 p.m. and 7:00 a.m. and at all hours on Sundays, legal holidays
and on Saturdays any person who, in Landlord's sole opinion, has no legitimate
business in the Building. Landlord shall in no case be liable for damages for
any error with regard to the admission to or exclusion from the Building of any
person. In the case of invasion, mob, riot, public excitement or other
circumstances rendering such action advisable in Landlord's opinion, Landlord
reserves the right to prevent access to the Building during the continuance of
the same by such action as Landlord may deem appropriate, including closing
and/or locking of doors.
11. The directory of the Building will be provided for the display of
the name and location of Tenants. Any additional name which Tenant shall desire
to place upon said directory must first be approved by Landlord in writing and,
if so approved, a charge will be made therefore.
12. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, hangings or decorations shall be attached to, hung or placed in, or
used in connection with any window of the Building without the prior written
consent of Landlord, and such items shall be installed as instructed by
Landlord.
13. Tenant shall not permit or obtain for use in the Premises, ice,
water, food, beverage, towel or other similar services, except in accordance
with any reasonable regulations therefor as may be established by Landlord.
14. Tenant shall ensure that the doors of the Premises are closed and
locked, and that all water faucets, water apparatus and utilities are shut off
before Tenant or Tenant's employees leave the Premises, so as to prevent waste
or damage, and for any default or carelessness in this regard Tenant shall be
responsible for any and all injuries sustained by other tenants or occupants of
the Building and/or Landlord. All tenants shall keep the doors to the Building
corridors closed at all times except for ingress and egress.
64
15. All Building toilet rooms, toilets, urinals, wash basins and other
apparatus shall not be used for any purpose other than that for which they were
constructed, no foreign substance of any kind whatsoever shall be thrown
therein. The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by that Building tenant who, or whose
agents, employees or invitees, shall have caused it.
16. Except with the prior written consent of Landlord, Tenant shall not
sell, nor shall Tenant permit the sale at retail, of newspapers, magazines,
periodicals, theater tickets or any other goods or merchandise to the general
public in or on the Premises, nor shall Tenant carry on, or permit or allow any
employee or other person to carry on, the business of stenography, typewriting
or any similar business in or from the Premises for the service or accommodation
of occupants of any other portion of the Building, nor shall the Premises be
used for manufacturing of any kind, or any business or activity other than that
specifically provided for in Tenant's Lease.
17. Tenant shall not install any radio or television antenna,
loudspeaker, or other device on the roof or exterior walls of the Building
without Landlord's prior written consent.
18. Hand trucks shall not be used in any space or public halls of the
Building, either by Tenant or others, except those equipped with rubber tires
and side guards or such other material-handling equipment as Landlord may
approve. No other vehicles of any kind shall be brought by Tenant into the
Building or kept in or about the Premises.
19. Tenant agrees to coordinate all moving activity of office equipment
and furniture in and out of the Building with Landlord or Landlord's agent, and
to use the services of an insured professional moving company. Tenant
acknowledges that any attempt to bring in or take out any office equipment or
furniture from the Building without prior written approval of Landlord or
Landlord's agent will be prevented by the on-site security guard.
20. Tenant shall store all its trash and garbage within the Premises.
No material shall be placed in the trash boxes, receptacles or common areas if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage as is
required by Landlord for the Building, without being in violation of any law or
ordinance governing such disposal. All garbage and refuse disposal shall be made
only through entryways and elevators provided for such purposes and at such
times as Landlord shall designate.
21. Canvassing, soliciting, distribution of handbills, or any other
written material peddling in the Building are prohibited, and Tenant shall
cooperate to prevent the same.
22. Tenant agrees to abide by all governmental rules and regulations
pertaining to thermostatic control of the temperature of the Premises.
23. Tenant agrees not to allow or keep any animals or pets of any kind
on the Premises, except those seeing-eye dogs which are for the direct purpose
of aiding and assisting the visually impaired.
24. Any request Tenant makes to Landlord will be attended to only upon
application by telephone or in person at the office of Landlord. Employees of
Landlord shall not perform any work or do anything outside of their regular
duties unless under special instructions from Landlord.
65
25. Landlord may waive any one or more of these Rules and Regulations
for the benefit of any particular Building tenant or tenants, but no such waiver
by Landlord shall be construed as a waiver of such Rules and Regulations in
favor of any other Building tenant or tenants, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any or all of the
tenants of the Building.
26. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of any premises in the
Building, including Tenant's Lease.
27. Landlord reserves the right to make such other reasonable rules and
regulations as in its judgment may from time to time be needed for the safety,
care, and cleanliness of the Building, and for the preservation of good order
therein.
66
EXHIBIT E
Declaration of Lease Commencement
THIS DECLARATION is attached to and made a part of that certain Deed of
Lease dated the day of ______________, 1999, (the "Lease") entered into by and
between WESTWOOD CENTER, L.L.C., a Delaware limited liability company
("Landlord") and SAGE NETWORKS, INC., a Delaware corporation ("Tenant").
Landlord and Tenant are parties to the Lease. All capitalized terms
used herein shall have the same meaning as was ascribed to such terms in the
Lease, unless otherwise indicated.
Landlord and Tenant do hereby declare that (a) the "Commencement Date"
is hereby established to be ________________ and (b) the Term of the Lease shall
expire on __________________________. The Lease is in full force and effect as
of the date hereof, Landlord has fulfilled all of its obligations under the
Lease required to be fulfilled by Landlord on or prior to such date with the
exception of punch list items, and Tenant has no right of setoff against any
rentals.
IN WITNESS WHEREOF Landlord and Tenant have executed this Declaration
as of the ___ day of ________________, 1999.
WITNESS/ATTEST: LANDLORD:
WESTWOOD CENTER, L.L.C.
By:___________________________(SEAL)
Name:
Title:
TENANT:
SAGE NETWORKS, INC.
By:___________________________(SEAL)
Name: ____________________________
Title: ___________________________
X-0
00
XXXXXXX X
XXXX XX XXXXXXXX CERTIFICATE
Date: _________________
_______________________
_______________________
_______________________
_______________________
Re: Lease of 13,171 rentable square feet of space on the 1st floor
(the "Premises") of the building located at 0000 Xxxxxxxx
Xxxxxx Xxxxx, XxXxxx, Xxxxxxxx
Dear Sirs:
This estoppel certificate is given to you such that you, your lenders
and partners, and their respective successors and assigns, may rely on the
contents hereof in connection with your acquisition/financing of the project
described herein. The undersigned, Sage Networks, inc., a Delaware corporation
("Tenant"), having an address of 0000 Xxxxxxxx Xxxxxx Xxxxx, XxXxxx, Xxxxxxxx is
the tenant under that certain Deed of Lease for the above Premises dated
_____________ ___, ____, the term of which expires on __________________, 20__,
which Premises is owned by Westwood Center, L.L.C., a Delaware limited liability
company ("Landlord/Assignor"). A copy of the Deed of Lease and any amendments,
exhibits and addenda thereto is attached hereto as Exhibit A (the "Lease").
Tenant hereby represents to Landlord and to ____________________________
("Assignee" or "lender"), its lender's partners and assignees as follows:
(a) Tenant has accepted and is occupying the Premises;
(b) the Lease has not been modified or amended except as stated in
the documents attached hereto as Exhibit A, and constitutes
the entire agreement between Landlord and Tenant;
(c) the Lease is in full force and effect;
(d) all construction, build-out, improvements, alterations, or
additions to the Premises required to be made by Landlord
under the Lease have been fully completed in accordance with
the terms of the Lease, and have been accepted by Tenant;
(e) to the best of Tenant's knowledge, having undertaken
reasonable investigation and inquiry, and as of the date of
execution hereof, Tenant is not in default under the Lease and
no circumstance exists which, with the giving of notice or the
passage of time would create such a default. To the best of
Tenant's knowledge, having undertaken reasonable investigation
and inquiry, and as of the date of execution hereof, Landlord
is not in default under the Lease and no circumstances exist
under which with the giving of notice or the passage of time
would create such a default.
(f) Tenant has not received any free rent, partial rent, rebates,
rent abatements, rent concessions, or any other economic
concession (rental or otherwise) or similar compensation not
expressed in the Lease;
(g) there are no offsets or credits against rentals nor have
rentals been prepaid, except as expressly provided by the
terms of the Lease, and there are no known defenses or
counterclaims to Tenant's future obligation to pay the
specified rentals at the times
E-2
68
required in accordance with the terms of the Lease.
(h) The Lease Expiration Date is ___________________;
(i) Tenant has not exercised any options or rights to renew,
extend, amend, modify or change the term of the Lease. Tenant
has no right to extend the Term of the Lease except as set
forth in Section 51 of the Lease.
(j) Tenant acknowledges that the Lease and the rents payable
thereunder are to be assigned to Assignee, and upon notice of
the assignment Tenant shall thereafter make all rental
payments required under the Lease to the Assignee.
(k) the current Monthly Base Rent is $___________. Monthly Base
Rent has been paid through ______________. No rent has been
prepaid for more than one month. Tenant is obligated to pay
Tenant's Share of Increases in Operating Costs and Real Estate
Taxes in the amounts as set forth in the Lease. Tenant's
estimated share of Operating Costs and Real Estate Taxes have
been paid through __________________. Tenant has no claim of
overpayment of additional rent for calendar years prior to
(the immediately preceding calendar year);
(l) Tenant has posted a security deposit of $____________ to be
held by Landlord pursuant to the terms of the Lease, of which
$_____________ remains held by Landlord.
(m) all insurance required by Tenant under the Lease has been
obtained and maintained by Tenant and all premiums therefor
have been paid;
(n) the address for notices to Tenant under the Lease is correctly
set forth above;
(o) the person signing this letter on behalf of Tenant is a duly
authorized agent of the Tenant;
(p) having undertaken no independent investigation or inquiry,
Tenant has no actual knowledge of the presence of any
"hazardous materials", "toxic substances" or "hazardous
substances" as defined and regulated by any federal or state
governmental agency or instrumentality on or about the
Premises;
(q) Tenant has not:
(i) made a general assignment for the benefit of
creditors;
(ii) commenced any case, proceeding or other action
seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its
debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors;
(iii) had any involuntary case, proceeding or other action
commenced against it which seeks to have an order for
relief entered against it, as debtor, or seeks
reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts under
any law relating to bankruptcy, insolvency,
reorganization or relief of debtors;
(iv) subleased all or any part of the Premises or assigned
the Lease, or otherwise transferred its interest in
the Lease or the Premises except as
E-3
69
follows___________________________________;
(vi) had a trustee, receiver, custodian or other similar
official appointed for or take possession of all or
any material part of its property or had any court
take jurisdiction of any other material part of its
property; or
(vii) filed and is not subject of any filing for bankruptcy
or reorganization under the federal bankruptcy code
or any state statutes of similar import.
TENANT:
SAGE NETWORKS, INC.
By: ____________________________________
Name:___________________________________
Title:__________________________________
E-4
70
EXHIBIT "A" TO ESTOPPEL CERTIFICATE
[Attach copy of Lease and any amendments]
X-0
00
XXXXXXX X
Tenant's Financial Information
X-0
00
XXXXXXX X
Existing Fixtures
E-7