EXHIBIT 10.7
THE XXXX XXXXXXX COMPANY
Reston International Center
00000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxx Xxxxxxxx 00000
Telephone 000 000 0000
Mr. Xxxxxx Xxxxxxxx March 2, 1999
Xx. Xxxxxxx Xxxx
The Xxxxxxxx Company
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
RE: LETTER OF INTENT BETWEEN NETWORK ACCESS SOLUTIONS, INC. AND TRANSDULLES
CENTER INC. TO LEASE THE ENTIRE BUILDING AT 00000 XXXXX XXXXX, XXXXXXXX
XXXXXXXX.
Dear Xxx and Xxxxxxx:
This constitutes a good faith, but expressly non-binding, Letter Of Intent
offer submitted to Network Access Solutions, Inc. (the "Tenant") to lease the
entire building located at 00000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx, (the
"Building").
Subject to our mutual agreement on all relevant lease provisions, including
the matters set forth below, Tenant intends to enter into a written lease
agreement with the landlord, TransDulles Center, Inc., (the "Landlord"), for all
of the rentable space in the Building. Tenant shall, upon acceptance of this
Letter of Intent, enter immediately into good faith negotiations with the goal
of finalizing and executing a written lease agreement at the earliest possible
opportunity.
Before entering into formal lease negotiations, Xxxxxx hereby agrees to the
following basic terms and conditions.
______________________________________________
1. THE DEMISED PREMISES:
-------------------------
The premises to be leased by Tenant shall consist of the entire Building
comprising approximately 61,500 rentable square feet of contiguous office and
warehouse space (the "Demised Premises")
2. LEASE COMMENCEMENT DATE:
----------------------------
The lease term for the Demised Premises shall commence on or about the
later of i) April 1, 1999 or ii) within approximately thirty (30) days of lease
execution by Xxxxxx.
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3. RENT COMMENCEMENT DATE:
---------------------------
The Rent Commencement Date shall be the same date as the Lease Commencement
Date. Notwithstanding the foregoing, Tenant will have the right to access the
Demised Premises during the fifteen (15) day period which immediately precedes
the Lease Commencement Date for the sole purpose of installing
telecommunications equipment, specialty equipment, and related Tenant
personality without incurring the obligation to pay rent or other consideration.
4. LEASE TERM:
---------------
The Lease Term shall be for a period of five (5) years from the Lease
Commencement Date (the "Lease Term").
5. BASE RENT FOR THE DEMISED PREMISES:
---------------------------------------
The Base Rent for the Demised Premises delivered in its existing "as is"
condition shall be at the initial annual rate of Seven Dollars and Fifty Nine
Cents ($7.59) per each rentable square foot of space leased on a Triple Net
basis (hereafter referred to as the "Base Rent").
6. BASE RENTAL RATE ESCALATIONS:
---------------------------------
Commencing on the first day of the second (2nd) lease year and continuing
on each anniversary thereof, the triple net portion of the Base Rent only will
be increased by three percent (3.0%).
7. CONDITION OF DEMISED PREMISES:
----------------------------------
Landlord shall deliver the Demised Premises to Tenant in its existing "as
is" condition.
8. RENEWAL OPTION FOR DEMISED PREMISES:
----------------------------------------
Tenant shall have the right to renew the lease for the Demised Premises for
one (1) additional three (3) year renewal term (the "Renewal Option"), at a
rental rate equal to the then prevailing market rental as determined by
Landlord. Tenant will provide written notice to Landlord of its intent to
exercise such Renewal Option, not less than nine (9) months' prior to the
scheduled expiration of the Lease Term. Such Renewal Option will apply to the
entire Demised Premises only.
9. REAL ESTATE TAXES & OPERATING EXPENSES:
-------------------------------------------
Tenant shall pay its proportionate share of pass-throughs of real estate
taxes, insurance, landscaping services, snow removal, common area charges,
building repairs and maintenance and management charges. Landlord estimates
said costs to be approximately $1.90 per square foot. Landlord will continue to
maintain the building exterior, roof and down spouts. Tenant shall be
responsible for the direct payment of janitorial services, trash removal and all
utility bills to the utility company providing such service to the Building
(e.g., electric and gas).
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10. LANDLORD'S OBLIGATION TO PAY FEES TO THE STAUBACH COMPANY:
---------------------------------------------------------------
Landlord shall pay brokerage commissions to the Staubach Company as the
representative of Tenant in the amount of three percent (3.0%) of the aggregate
lease value exclusive of all scheduled lease escalators per paragraph 6 above,
Such commissions shall be paid in accordance with a separate agreement between
The Staubach Company and Landlord. Tenant hereby represents that it has dealt
with no brokers or agents in connection with this Letter of Intent other than
The Xxxx Xxxxxxx Company and the Staubach Company. As part of its preparation
of this Letter of Intent, Landlord has made no allowance or provision for the
payment of brokerage commissions or fees to anyone other than the Xxxx Xxxxxxx
Company and The Staubach Company. Xxxxxx agrees to indemnify and hold harmless
Landlord from any claims for a commission or fee arising from this Letter of
Intent.
11. DEPOSIT:
-------------
Upon lease execution, Xxxxxx will deliver to Landlord a security deposit
equal to one (1) months' Base Rent, to be held by Landlord over the full Lease
Term and any extensions thereof. Such security deposit will be returned to
Tenant at the end of the Lease Term less all or that portion properly retained
by Landlord as reimbursement for an uncured Tenant default under the Lease.
12. ASSIGNMENT/SUBLETTING:
---------------------------
i.) At all times during the Lease Term and during all renewal periods, Tenant
shall have the right to sublease all or any portion of the Demised Premises, or
to assign all of its leasehold rights, to any subsidiary or affiliate of Tenant,
without Landlord's approval and Tenant shall be entitled to retain 100% of
profits, if any, resulting therefrom. In such event, Tenant shall remain fully
liable for the performance of all terms and conditions under the lease.
ii.) Tenant shall not sublet any portion of the Demised Premises to any other
entity without the express prior written permission of Landlord, which shall not
be unreasonably withheld, conditioned, or delayed. Tenant shall be entitled to
retain 50% of any net sublease profits after first deducting the straight-line
amortization of the sublease term of all direct and actual costs incurred by
Tenant related to such subleasing. Notwithstanding the foregoing, in the event
of approval of such subleasing by Landlord, Tenant shall remain fully liable for
the performance of all terms and conditions under the lease.
13. ANTENNA AND GENERATORS RIGHTS
----------------------------------
At all times during the Lease Term and during subsequent renewal terms,
Tenant shall have the right to place up to three (3) antennas on the roof of the
Building and one (1) back-up generator on the Property without additional charge
or cost, subject to the approval of a.) Landlord for issues related to
structural integrity of the Building and avoiding an unsightly installation and
appearance, and b.) any and all required governmental authorities. All costs
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expenses associated the installation, maintenance and removal of the antenna(s)
and generator shall be the sole responsibility of the Tenant.
14. SIGNAGE RIGHTS OF TENANTS
------------------------------
Tenant, at its sole cost and expense, will have the right to have one (1)
sign or logo placed on the top portion of the Building facade. All such signage
shall be designed and installed in accordance with all local laws and ordinances
and shall be subject to Landlord's approval.
15. AGREEMENT ON THE CESSATION OF NEGOTIATIONS WITH THIRD PARTIES:
-------------------------------------------------------------------
Upon the mutual execution of this Letter to Intent, Tenant shall deposit
with Landlord the sum of $25,000 as a good faith deposit that Tenant shall cease
negotiations with other properties and proceed expeditiously towards the
execution of a lease. By accepting the good faith deposit, Landlord shall cease
negotiations with all current and potential interested third parties for a
period of thirty (30) days from the date this Letter of Intent is fully
executed, other than Tenant. Such deposit, upon full execution of a lease,
shall be applied to the mutually agreed upon security deposit or first months
rent. If Tenant terminates negotiations with Landlord, the good faith deposit
shall become the property of Landlord.
**************************************************
In closing, we look forward to completing this transaction with you as
expediently as possible.
Very truly yours,
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Director
AGREED & ACCEPTED:
NETWORK ACCESS SOLUTIONS, INC. TRANSDULLES CENTER, INC.
BY: /s/ Xxxxx Xxxxxx BY: _________________________
TITLE: CHIEF FINANCIAL OFFICER TITLE: ______________________
DATE: March 2, 1999 DATE: _______________________
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