Virginia-Arlington-1820 North Fort Myer Drive Office Lease - Ames Center LC and CAIS Inc.
OFFICE LEASE
By and Between
AMES CENTER, L.C.
a Virginia Limited Liability Corporation
(Lessor)
and
CAIS , INC.
(Lessee)
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TABLE OF CONTENTS
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1. Demised Premises
2. Term
3. Use
4. Rent
5. Security Deposit
6. Assignment and Subletting
7. Rental Escalations for Increase in Expenses
8. Alterations
9. Intentionally Deleted
10. Liens
11. Real Estate and Other Taxes or Assessments
12. Maintenance by Lessee
13. Signs and Advertisements
14. Deliveries and Moving of Lessee's Property
15. Lessee's Equipment
16. Services and Utilities
17. Lessee's Responsibility for Damage
18. Entry for Inspections, Repairs and Installations, etc.
19. Hazardous Materials
20. Insurance Rating
21. Indemnity and Public Liability Insurance
22. Worker's Compensation Insurance
23. All Risk Coverage Insurance
24. Lessee's Contractor's Insurance
25. Requirements for Lessee's Insurance Policies
26. Liability for Damage to Personal Property and Person
27. Damage to the Building and/or the Demised Premises
28. Default of Lessee
29. Repeated Defaults
30. Waiver
31. Subordination
32. Condemnation
33. Rules and Regulations
34. Right of Lessor to Cure Lessee's Default
35. Late Charges
36. Bankruptcy
37. Parking
38. Landlord's Lien
39. Intentionally Deleted
40. Intentionally Deleted
41. Modification to Lease
42. Survival of Certain Terms
43. Construing Lease
(ii)
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44. Time of the Essence
45. No Partnership
46. No Representations by Lessor
47. Broker and Agent
48. Waiver of Jury Trial
49. Enforcement of Lease
50. Notices
51. Estoppel Certificates
52. Holding Over
53. Covenants of Lessor
54. Intentionally Deleted
55. Recordation
56. Intentionally Deleted
57. Gender
58. Benefit and Burden
59. Governing Law
60. Savings Clause
61. Corporate Lessee
62. Joint and Several Liability
63. Business Day/Working Day
64. Entire Agreement
65. Initial Construction, Construction Allowance and Condition of Demised
Premises
66. First Right to Lease
67. Roof/Airtights
68. Quiet Enjoyment
Exhibits
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A. Floor Plan, Demised Premises
B. Specifications for Office Space
C. Rules and Regulations
D. Declaration as to Date of Delivery and Acceptance of Possession of
Demised Premises
E. Direct Hourly HVAC Costs
(iii)
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DEED OF LEASE
This Deed of Lease ("Lease"), made and entered into on this _____ day of
_____________, 1999, by and between AMES CENTER, L.C., a Virginia Limited
Liability Corporation, hereinafter called "Lessor", and CAIS, INC., a Virginia
corporation, hereinafter called "Lessee."
Witnesseth, that, for and in consideration of the rents, mutual covenants,
and agreements hereinafter set forth, the parties hereto do hereby mutually
agree as follows:
1. DEMISED PREMISES
----------------
Lessor does hereby lease to Lessee, and Lessee does hereby lease from
Lessor, for the term and upon the conditions hereinafter provided, Suite No. 400
on the 4th floor (Fourth Floor Demised Premises), and Suite No. 500 of the 5th
floor (Fifth Floor Demised Premises), of the office building situated at 1820
North Fort Myer Drive, Arlington, Virginia (such building being hereinafter
referred to as the "Building" and such rentable area being hereinafter
collectively referred to as the "Demised Premises"). The Demised Premises
contains approximately 28,232 square footage (14,116 square feet on the 4th
floor and 14,116 square feet on the 5th floor), and is outlined on the floor
plan attached hereto and made a part hereof as Exhibit A as determined in
accordance with GWCAR standard method of measurement (revised June 1995).
Lessee shall be entitled to verify the measurement of the Demised Premises no
later than the Commencement Date. If Lessor and Lessee's respective architects
are unable to agree upon the rentable area, the amount shall be determined by a
third architect jointly selected by the two respective architects. Each party
shall bear the cost of its own architect and the costs of the third architect
shall be borne in equal shares. The resulting agreed rentable floor area shall
be deemed to be the rentable area of the Premises for all purposes of this
Lease. If as a result of the re-measurement the Demised Premises is determined
to contain less or more than the number of square feet of leasable area set
forth in this Lease, then and in such event both the proportionate share of
Lessee for pass-through purposes hereunder and the amount of Monthly Rent during
the Lease Term and any extensions thereto shall be proportionately adjusted
using the corrected measurement.
2. TERM
----
Subject to and upon the covenants, agreement and conditions of Lessor and
Lessee set forth herein, or in any Exhibit hereto, the term of this Lease for
Fourth Floor Demised Premises and shall commence on the 1st day of September,
1999 (hereinafter called the "Fourth Floor Commencement Date" for the Demised
Premises), and shall commence on March 1, 2000, for the Fifth Floor Demised
Premises (herein called the Fifth Floor Commencement Date") and expire on the
28th day of February, 2010 (the "Initial Term").
In the event Lessor is unable to deliver possession of either the Fourth
Floor Demised Premises or Fifth Floor Demised Premises to Lessee by respective
Commencement Date designated above for such floor, with all of the Lessor's Work
therein substantially completed due to causes beyond the control of the Lessor,
Lessor, its agents and employees, shall not be liable or responsible for any
claims, damages or liabilities arising in connection therewith or by reasons
thereof, nor shall Lessee be excused or released from this Lease, because of
Lessor's inability to deliver the Demised Premises. The Commencement Date as to
each such floor shall be respectively extended to such reasonable date Lessor
delivers possession of the Demised Premises with all of the Lessor's Work
therein substantially completed, or if earlier, the date the Lessor's Work would
have been substantially completed in the absence of any delay caused by Lessee,
and Lessee's obligations, including the payment of rent, pursuant to this Lease
shall commence thereon on a floor by floor basis. In the event Lessor shall
perform the Lessor's Work, Lessor agrees to cause its contractor, TWIN
CONTRACTING CORPORATION, to competitively bid to at least three (3)
subcontractors for each major trade all of the Lessor's Work and to obtain bids
from any subcontractors recommended by Lessee which are reasonably acceptable to
Lessor. Further, Lessor agrees to waive any profit, overhead, general conditions
or other mark-ups on any of the Lessor's Work. Lessor shall cause its contractor
to limit all of its profit, overhead, mark-up and general conditions to an
aggregate of eleven percent (11%) of the "hard" costs of the Lessor's Work. In
no event shall the cost of the Lessor's Work include any costs incurred by
reason of any change or other modifications to any of the Common Areas of the
Building necessitated in order to cause same to comply with the Americans with
Disabilities Act.
In no event shall substantial completion be deemed to have occurred until
Lessee is lawfully able to use and occupy the respective floor within the
Demised Premises for the conduct of its business operations. Lessee shall have
the right to cancel and terminate this Lease with no penalty to Lessee in the
event that Lessor fails to deliver possession of the Fourth Floor Demised
Premises with the Lessee Work substantially completed on or before September 30,
1999 (in which event any prepaid rent and security deposit will be promptly
refunded to Lessee together with any costs incurred by Lessee in connection with
this Lease or the Demised Premises).
The Lessee shall have the right to extend the Initial Term for one
additional five year term commencing at the expiration of the Initial Term (the
"Extended Term"). The Lessee shall give the Lessor written notice no less than
one (1) year prior to the expiration of the Initial Term of its exercise of the
Option to extend the Initial Term.
The Initial Term and the Extended Term are hereafter sometimes collectively
referred to as the "Term".
Monthly rent for the first Lease Year of the Extended Term shall be the
greater of 103% of the fully escalated Monthly Rent at the end of the Initial
Term or ninety-five percent (95%) of the estimated prevailing Fair Market Rent
at the end of the Initial Term as determined by the method hereinafter set
forth. The "Base Year" for purposes of calculating Lessee's pro rata share of
increases in operating expenses and Base Real Estate Taxes for purposes of
calculating Lessee's pro rata share of increases in Real Estate Taxes shall be
revised during the Extension Term to reflect those operating expenses and Real
Estate Taxes paid or incurred during the first Lease Year of the Extension Term.
Market rent shall be determined in accordance with the provisions below:
The Fair Market Rent shall be determined by a group of three (3) real
estate brokers, one of whom shall be named by Lessor, one by Lessee, and
the two so appointed shall select a third. For purposes hereof, "Fair
Market Rent" means the fair market rate per square foot of rentable area
that would be agreed upon between a landlord and tenant entering into a new
lease for comparable space as to location, size, configuration in a
comparable building as to quality, age and reputation with a comparable
term, and also considering comparable concessions as may then be customary
in the market for new leases, including, without limitation, rental
abatements, cash allowances, and/or credits for tenant improvements over
the entire Term. Said brokers shall each be licensed in Virginia as real
estate brokers specializing in the field of commercial leasing, having at
least ten (10) years experience, and recognized as ethical and reputable
within their field. Lessor and Lessee agree to make their appointments
promptly within ten (10) days following the expiration of the
aforementioned thirty (30) day period. The two brokers selected by Lessor
and Lessee shall promptly select a third broker. If the two brokers are
unable to agree upon a third broker, the parties shall promptly submit the
matter to the Chief Executive Officer of the Board of Realtors of Northern
Virginia, or its successors, for its determination. Within five (5) days
after the third broker is selected, the three brokers shall submit their
determination of the Fair Market Rent. The Fair Market Rent shall be the
mean of the two closest determinations and shall be binding on both Lessor
and Lessee. Lessor and Lessee shall pay the costs and expense of the
broker selected by each of them and shall share equally the costs and
expense of the third broker.
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When Lessee accepts possession of the Demised Premises, Lessor and Lessee
shall execute the "Declaration as to Date of Delivery and Acceptance of
Possession of Demised Premises," attached hereto as Exhibit D, which shall
specify, the Commencement Date for each respective floor contained within the
Demised Premises.
For the purposes of this Lease, the term "Commencement Date" shall also
mean any extended Commencement Date which may be established pursuant to the
operation of the provisions of this section of the Lease.
The Lessee shall have the right to terminate this Lease at the end of the
seventh lease year ("Seventh Lease Year") (i.e. the seventh anniversary of the
Fourth Floor Commencement Date) by the Lessee giving the Lessor one hundred and
eighty (180) days prior written notice of its intent to cancel the Lease. The
Lessee shall be required to pay the Lessor, at the time of Lessee's notice, a
termination fee equal to the unamortized cost of the initial construction
allowance and additional construction allowance, as hereinafter set forth, the
unamortized costs of the brokerage commission, and Lessee must continue to pay
Monthly Rent and Additional Rent until the end of the Seventh Lease Year.
3. USE
---
Lessee shall use and occupy the Demised Premises solely for general office
purposes and installation of telephone switches and other equipment used in
connection with its internet and telecommunications service business, in
accordance with the applicable zoning regulations. The Demised Premises shall
not be used for any other purpose without the prior written consent of Lessor.
Lessee shall not use or occupy the Demised Premises for any unlawful purpose,
and will comply with all present and future laws, ordinance, regulations, and
orders of all governments, government agencies and any other public authority
having jurisdiction over the Demised Premises. Notwithstanding the foregoing,
Lessee shall not be required to comply with any laws, regulations or
requirements which would either require Lessee to (i) perform any structural
alterations unless the same arise as a result of Lessee's particular use of the
Demised Premises (other than general office use), (ii) remove any hazardous
material or substance installed by a party other than Lessee or by an agent,
employee or contractor of Lessee, (iii) perform any alterations or installations
if Lessee's use without same is "grandfathered" under existing laws, rules or
ordinances, (iv) correct or cure any defect or deficiency in work required of
Lessor under Exhibit "C" or elsewhere in this Lease or (v) arise solely by
reason of modifications or alterations made by either Lessor or its other
tenants in any part of the Building beyond the Demised Premises. Lessee agrees
not to have more than 110 persons stationed in either the Fourth Floor Demised
Premises or Fifth Floor Demised Premises during the Lease term.
4. RENT
----
1. Lessee covenants and agrees to pay to Lessor rent of any kind or
nature, including Monthly Rent (as hereinafter defined) and any sums, charges,
expenses and costs identified in this Lease as additional rent to be paid by
Lessee to Lessor. Lessee's obligation to pay rent shall begin on the
Commencement Date and shall continue to remain an obligation of Lessee until
completely satisfied.
Lessee shall make all payments of rent by check, payable to the Lessor's
agent, Virginia Management, Inc., 4600 N. Fairfax Drive, Suite 1002, Arlington,
Virginia 22203, or to such other party or to such other address as Lessor may
designate from time to time by written notice to Lessee, without demand and
without deduction, set-off or counterclaim. If Lessor at any time or times
accepts rent after it shall become due and payable, such acceptance shall not
excuse delay upon subsequent occasions, or constitute, or be construed as, a
waiver of any or all of Lessor's rights hereunder. If the Lessee's checks are
returned and not paid more than two (2) times during the Term, the Lessor shall
have the right to thereafter require the Lessee to pay all rent by certified or
cashiers checks.
2. The monthly rent for the Fourth Floor Demised Premises (hereinafter
referred to as "Fourth Floor Monthly Rent") as of the Fourth Floor Commencement
Date, which Lessee hereby agrees to pay in advance to Lessor and Lessor hereby
agrees to accept, shall be TWENTY NINE THOUSAND NINE HUNDRED NINETY SIX AND
50/100 Dollars ($29,996.50). Commencing on the Fifth Floor Commencement Date the
month rent for the Demised Premises (hereinafter referred to as "Monthly Rent")
shall be FIFTY NINE THOUSAND NINE HUNDRED NINETY THREE AND 00/100 Dollars
($59,993.00).
3. Commencing on December 1, 2000 , and each twelve (12) months during
(i) the Initial Term and (ii) Extended Term from and after the first Lease Year
of such Extended Term, if applicable, (with the understanding that there shall
be no such adjustment for the first Lease Year of the Extended Term) the Monthly
Rent shall be increased by a sum equal to three percent (3%) of the Monthly Rent
during the preceding twelve month lease period.
4. Monthly Rent as specified above shall be payable in advance on the
first day of each calendar month during the term of this Lease.
5. If the Fourth Floor Commencement Date, and therefore the obligation
under the Lease to pay Fourth Floor Monthly Rent, or if the Fifth Floor
Commencement Date, and therefore the obligation under the Lease to pay Monthly
Rent, whichever is applicable hereunder, begins on a day other than the first
day of a calendar month, then Monthly Rent from such date until the first day of
the following calendar month shall be prorated at the rate of one-thirtieth
(1/30th) of Monthly Rent for each day of that month from and including the
particular Commencement Date, payable in advance, as specified above.
6. Any payment required to be made by the Lessee in addition to the
Monthly Rent including but not limited to increases in operating expenses,
consumer price index escalation and real estate taxes and other taxes or
assessments shall be deemed to be additional rent.
7. Lessee shall pay the first installment of Monthly Rent for the Fourth
Floor Demised Premises concurrent with execution of this Lease. Lessee shall pay
the first installment of Monthly Rent for the Fifth Floor Demised Premises on or
before the date construction of the Lessor's Work for the Fifth Floor shall
commence.
5. SECURITY DEPOSIT
----------------
Upon execution of this Lease, Lessee shall deposit with Lessor cash or an
appropriate letter of credit ("Letter of Credit") in the amount of THREE HUNDRED
FIFTY THOUSAND AND 00/100 Dollars ($350,000.00). Should Lessee deposit cash at
anytime during the Term, Lessee shall be entitled to subsequently replace the
appropriate letter of credit whereupon Lessor shall promptly remit to Lessee the
cash deposited, together with all interest accrued thereon. Should Lessee use a
letter of credit hereunder, Lessee shall bear all costs and fees associated with
issuing such Letter of Credit. This Letter of Credit must be with an
institution located in the Washington, D.C. Metropolitan area, which
institution must be reasonably acceptable to the Lessor and the Letter of Credit
must be on terms, conditions and in a form reasonably acceptable to Lessor. In
the event that Lessee is not in default under the terms of this Lease, after
notice to Lessee and the expiration of the applicable cure period, Lessee shall
have the right to reduce the amount of the Letter of Credit as of December 1,
2000 and the remainder of the term to SIXTY THOUSAND AND 00/100 Dollars
($60,000.00). Such deposit (which if cash shall be maintained by Lessor in a
separate interest bearing account with the interest thereon being considered a
part of the deposit until such time as the security deposit shall reduce to
$60,000 whereupon the deposit shall prospectively cease earning interest)
shall be considered as security for the prompt payment and performance by Lessee
of all of Lessee's obligations under this Lease. Upon expiration of the term
hereof (or any renewal or extension thereof in accordance with this Lease), and
provided that Lessee is not in default under the terms hereof Lessor shall
return such security deposit to Lessee, less such portion thereof as Lessor
shall have withheld to make good any default by Lessee. In the event of any
default by Lessee hereunder, Lessor shall have the right to apply all or any
portion of the security deposit to cure such default, in which event Lessee
shall promptly restore the security deposit to its original amount. The use,
application or retention of the security deposit, or any portion thereof, by
Lessor shall not prevent Lessor from exercising any other right or remedy
provided by this Lease or by Law, and shall not be deemed liquidated damages not
limit any
2
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recovery to which Lessor may otherwise be entitled. In the event of the sale or
transfer of Lessor's interest in the Building, Lessor shall transfer the
security deposit to such purchaser or transferee, in which event Lessee shall
look to the new lessor for the return of the security deposit, and Lessor shall
be released from liability to Lessee for the return of such security deposit. In
the absence of evidence satisfactory to Lessor of any permitted assignment of
the right to receive the security deposit, or the remaining balance thereof,
Lessor may return the same to the original Lessee regardless of any assignment
of Lessee's interest in this Lease or the security deposit. In such event, upon
the return of the security deposit for balance thereof to the original Lessee,
Lessor shall be relieved of liability under this paragraph. This security
deposit shall not be assigned or encumbered by Lessee.
6. ASSIGNMENT AND SUBLETTING
-------------------------
The parties have therefor agreed that Lessee shall have no right to
transfer, assign, sublet, enter into license or concession agreements, or
mortgage or hypothecate this Lease of Lessee's interest in the Demised Premises
or any part thereof (herein collectively a "Transfer") without Lessor's prior
written consent which consent shall not be unreasonably withheld, conditioned or
delayed. Except as otherwise provided below, any attempted transfer,
assignment, subletting, license or concession agreement of hypothecation made
without Landlord's consent shall be void and confer no rights upon any third
person. Except as otherwise provided herein, any transfer of this Lease from
Lessee by merger, consolidation, liquidation or otherwise by operation of law,
including, but not limited to, an assignment for the benefit of creditors, shall
be included in the term "assignment" for the purposes of this Lease and shall be
a violation of the provisions hereof. Lessee shall nevertheless have the right
to sublease all or a portion of the Demised Premises or assign this Lease
throughout the term of the Lease without Lessor's consent to an affiliate, to a
successor by merger, consolidation or purchase of the Lessee or all of the
Lessee's assets. Further, the use of the Premises by a subsidiary or affiliate
of Lessee (which for purposes hereof shall also include without limitation
Cleartel Communications, Inc.), or a joint venture or partnership in which
Lessee (or any affiliate or subsidiary) is a member or partner, shall not
constitute a subletting requiring Lessor's prior approval, provided however that
Lessee shall give Lessor at least ten (10) days, prior written notice of such
intended use. Lessor shall be entitled to condition its consent to any Transfer
where its consent is required to the requirement that (i) it receive payment for
its reasonable administrative, legal and accounting costs arising from the
implementation of such transaction, such sum not to exceed One Thousand Dollars
($1,000.00), and (ii) with respect to a subletting requiring the consent of
Lessor hereunder only, that fifty percent (50%) of any profit on any assignment
and subletting be paid to the Lessor when, as and if received by the Lessee,
after recovery by Lessee of all reasonable costs and expenses incurred with
respect to the assignment or subletting, including without limitation, brokerage
or consulting fees, construction allowances or costs, concessions provided to
the subtenant or assignee, and legal fees. In the event of any assignment or
subletting, the Lessee shall nevertheless remain liable during the term of this
Lease.
7. RENTAL ESCALATIONS FOR INCREASE IN EXPENSES
-------------------------------------------
For the purpose of this Article:
1. The term "operating expense" shall mean any and all expenses incurred
by Lessor in connection with the operation, maintenance, replacement and repair
of the Building. By way of example but without limitation, operating expenses
shall include any and all of the following: salaries, wages, medical, surgical
and general welfare benefits (including group life insurance) and pension
payments for employees of Lessor or Agent engaged in the operation, maintenance
or repair of the Building and improvements (all of which are to be pro-rated to
reflect only the time spent at the Building by such employees in the case any
such employees shall provide for Lessor or Agent services at properties other
than the Building), payroll taxes, license fees, worker's compensation
insurance, personal property taxes charged and applicable to the building, any
gross receipts tax imposed on or measured by the income of Lessor from the
operation of the Building, electricity (except as charged directly to tenants),
fuel, utility taxes, water and sewer charges, fire and extended coverage and
liability insurance, repairs and maintenance, building and cleaning supplies,
building personnel uniforms and the cleaning thereof, cleaning of windows and
exterior curtain walls, snow removal, cleaning and trash removal, repairs and
telephone and telegraph and stationery, management expenses not to exceed three
percent (3%) of the gross rents from the Building, security expenses, reasonable
legal fees to the extent incurred for Building operations only (as opposed to
fees for tenant defaults, lease negotiations, transactions involving the
proposed or actual sale or refinancing of the Building, or any ground lease),
reasonable accounting fees relating to the determination of operating expenses
and the preparation of statements required by tenants' leases but excluding all
such accounting fees incurred to prepare Lessor's income tax returns and
periodic financial statements, and all other expenses now or hereafter
reasonably and customarily incurred in connection with the operation,
maintenance and management of comparable office buildings in Arlington County,
Virginia. Operating Expenses shall not include any of the following: expenses
for capital improvements made to the land or building (except to the extent that
such capital expenses are intended to reduce or to help limit increases in
operating expenses in which event such expenses shall be amortized over a period
equal to the useful life of such improvement determined in accordance with
generally accepted accounting principles and the amortized cost allocated to
each calendar year during the Term, together with and imputed interest amount
calculated on the unamortized portion thereof using an interest rate which is 2
percent over the prime rate of interest charged from time to time by First
Virginia Bank or its successor by merger or consolidation, or such other
financial institution reasonably determined by the Lessor), expenses for
painting, redecorating or other work which Lessor or Agent performs for any
tenant in the Building; interest or principal amortization, or other payments on
loans to Lessor whether secured or unsecured; depreciation of the Building or
other said improvements, ground rent; leasing commission; credits, allowances,
moving expenses or other payments or rent waivers granted to any tenant
(including Lessee), any costs paid to induce any tenant to move into or maintain
its tenancy at the Building, or other concessions to tenants (including
specified cleaning or other services not provided to other tenants of the
Building on a regular basis, including Lessee) legal expenses, salaries, wages
or other compensation paid to officers or executive of Lessor; and income or
franchise taxes, except as to any gross receipts tax; costs incurred due to
violations by Lessor of any of the terms and conditions of any leases in the
Building; overhead to subsidiaries or affiliates of the Lessor for services; any
amounts paid to any person, firm or corporation related or otherwise affiliated
with Lessor or any general partner, officer or director of Lessor or any of its
general partners, to the extent same exceeds arms-length competitive prices paid
in the metropolitan area where the Building is located for the services or goods
provided; costs attributable to enforcing leases against tenants in the
Building, such as attorneys fees, court costs, adverse judgments and similar
expenses; rentals and other related expenses incurred in leasing equipment
ordinarily considered to be of a capital nature, except equipment used in
providing janitorial, security, maintenance services not affixed to the
Building; advertising and promotional expenditures; repairs and other work
occasioned by fire, or other casualty that is reimbursable under customary
insurance policies maintained by other similar landlords; any fines or penalties
incurred due to violations by Lessor of any governmental rule or authority and
the defense of same; expenses for vacant or vacated space, including utility
costs, securing and renovating such space; costs incurred to cause the Building
or Land to comply with the Americans with Disabilities Act, as from time to time
amended, or any codes or regulations promulgated thereunder, or any similar laws
of any state, municipality or other governmental authority; all bad debt loss,
rent loss or reserve for bad debt or rent loss; costs resulting from the gross
negligence or willful misconduct of Lessor or its agents, contractors or
employees; any amounts not actually expended, such as a contingency funds,
reserve funds or sinking funds; the cost of any item or service which Lessee
separately reimburses Lessor or pays to third parties, or that Lessor provides
selectively to one or more tenants of the Building, other than Lessee, whether
or not Lessor is reimbursed by such other Lessee(s); all costs of repair or
restoration to any portion of the Building due to an eminent domain taking or
conveyance of title in lieu of condemnation proceedings; all costs hereunder
that are otherwise reimbursable by warranties held by the Lessor; any costs of
disputes between third parties not caused by Lessee; costs relating to
maintaining Lessors existence, either as a corporation, partnership, or other
entity, such as trustees fees, annual fees, partnership organization or
administration expenses, deed recordation expenses; any costs of selling,
financing or mortgaging Lessor's interest in the Building and/or the Land; any
costs of defending lawsuits; any other costs or expenses not otherwise expressly
stated herein which under generally accepted operating and/or management
procedures would not be considered as a properly reimbursable Operating Expense;
and interest or penalties arising by reason of Lessor's failure to timely pay
any Operating Expense.
2. "Base Year" shall mean the calendar year ending December 31, 2000.
3. "Comparison Year" shall mean the period of twelve months commencing
January 1st of each year and ending on December 31st of the same year.
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4. If the average occupancy level of the Building for any calendar year
(including also the Base Year) is less than 95 percent (95%) the operating
expenses for such calendar year shall be increased by the additional operating
expenses as reasonably estimated by Lessor, that would have been incurred by
Lessor in providing the same services provided to Lessee (and included in
operating expenses) if the average occupancy level of the building for the
calendar year had been 95 percent. For purposes of the preceding sentence the
"average occupancy level of the Building" for any calendar year shall be the
arithmatic average of the rentable area of the Building occupied by tenants on
the first day of each month during the calendar year.
Following the end of each Comparison Year commencing with the 2001 calendar
year, Lessee will pay to Lessor or Agent, as additional rent, on a monthly basis
over the next twelve months, after receipt of an itemized statement showing by
category the amount of the Operating Expenses for the Comparison Year and
Lessee's pro rata share of the amount of the increase, if any, of the operating
expenses for the Comparison Year over the Base Year. Lessee's share of the
increase shall be 17.45% of the total increase, which share shall be increased
if the Demised Premises shall be increased during the term or any renewal
hereof.
Lessor will make every effort to notify Lessee of said increase in
operating expenses, if any, sixty (60) days following the close of the calendar
year.
Lessee at its expense shall have the right at any reasonable time within
twelve (12) months after the end of an applicable year for which additional rent
is due, within ten (10) days following prior written notice to Lessor, to audit
Lessor's books and records relating to Operating Expenses for such calendar year
but such right shall expire at the end of the twelve (12) months after the
applicable year. In addition, Lessee shall be entitled at anytime during the
term to audit the Operating Expenses for the Base Year, to assure the inclusion
of all such expenses and the gross-up to 95% where applicable. Any overpayment
by Lessee of Rent for any year reflected by such audit shall be promptly
refunded to Lessee. In the event as a result of such audit it shall be
determined that Lessor overcharged Lessee more than three percent (3%) for
Operating Expense increases, Lessor shall also reimburse Lessee all reasonable
costs incurred by Lessee with respect to its audit. Lessee shall cause the
audit to take place in the offices of the Lessor or its management agent.
Nothing contained in this Article shall be construed at any time to reduce
the rent payable hereunder below the amount stipulated in Section 4 of this
Lease.
8. ALTERATIONS
-----------
After Lessee's initial occupancy of the Demised Premises, Lessee shall make
no alterations, installations, additions or improvements (hereinafter
collectively called "Alterations") other than Alterations which are decorative
in nature (e.g. painting, re-carpeting) provided such decorative alterations
comply with applicable codes (and further provided that Lessee submits in
advance for its reasonable approval samples of the decorative items in the case
of carpeting and wall coverings), in or to the Demised Premises or the Building
without Lessor's prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed. If any Alterations requiring Lessor's consent
are made without the prior written consent of Lessor, Lessor may correct or
remove the same, and Lessee shall be liable for and promptly pay for any and all
expenses incurred by Lessor in the performance of this work. All Alterations
shall be made at Lessee's sole expense, at such times and in such manner as
Lessor may designate, and only by such contractors or mechanics as are approved
in writing by Lessor. Approval of contractors or mechanics by Lessor, which
approval may not be unreasonably withheld, shall be based upon the contractors
or mechanics being properly licensed, their financial posture, experience and
past job performance. At the option of the Lessor, the Lessor may require the
Lessee to use a contractor designated by the Lessor.
All Alterations to the Demised Premises, whether made by Lessor or Lessee,
and whether at Lessor's or Lessee's expense, or the joint expense of Lessor and
Lessee, shall be and remain the property of Lessor. Notwithstanding the
foregoing, however, any Alterations, fixtures or any other property installed in
the Demised Premises at the sole expense of Lessee and with respect to which
Lessee has not been granted any credit or allowance by Lessor, and which can be
removed without causing material damage to the Demised Premises and the Building
or the Demised Premises, shall be and remain the property of Lessee. In the
event Lessee removes any of these Alterations and the like, Lessee agrees, at
Lessor's election, (A) to promptly repair any damage to the Building caused by
said removal and to restore the Demised Premises to the condition in which it
was in on the Commencement Date, or (B) promptly pay Lessor, as additional rent,
for all costs incurred by Lessor to undertake such repairs. Any replacements of
any property or improvements of Lessor, whether made at Lessee's expense or
otherwise, shall be and remain the property of Lessor with the understanding
that movable systems furniture shall not be deemed to constitute an improvement
for such purposes.
Lessor, at the expiration or earlier termination of the term of the Lease,
may elect to require Lessee to remove all or any part of the Alterations made by
Lessee subsequent to the Commencement Date in the case of Alterations which are
unusual for modern office buildings for normal office use in the Greater
Washington, D.C. metropolitan area, unless Lessor agrees in writing not to
require the removal of any Alterations at the time Lessor consents to the
Lessee's Alterations. Removal of Lessee's Alterations shall be at Lessee's cost
and expense, and Lessee shall, at its cost and expense, repair any damage to the
Demised Premises or the Building caused by such removal.
In the event on or before the expiration, or earlier termination, of the
term of the Lease Lessee fails to promptly remove its personal property (whether
placed prior or subsequent to the Commencement Date) or the Alterations
requested to be removed by Lessor and required pursuant to the foregoing
provisions to be removed by Lessee, then Lessor may remove such personal
property and Alterations from the Demised Premises at Lessee's expense, and
Lessee hereby agrees to pay to Lessor, as additional rent, the cost of such
removal together with any and all damages which Lessor may suffer and sustain by
reason of the failure of Lessee to remove the same. Said amount of additional
rent shall be due and payable upon receipt by Lessee of a written statement of
costs and damages from Lessor. Lessee shall be required to remove any generator
and any supplemental HVAC units installed or placed by Lessee at the Building no
later than thirty (30) days following expiration or termination of this Lease.
9. INTENTIONALLY DELETED
---------------------
10. LIENS
-----
If any mechanics' or other lien is filed against the Demised Premises, or
the Building of which the Demised Premises are a part, for work, labor,
services, or materials, done for or supplied to or claimed to have been done for
or supplied to Lessee, such lien shall be discharged by Lessee, at its sole cost
and expense, within ten (10) days from the date Lessee received written demand
from Lessor to discharge said lien, by the payment thereof or by filing any bond
required by law. If Lessee shall fail to discharge any such lien, Lessor may,
at its option, discharge the same and treat the cost thereof as additional rent,
due and payable upon receipt by Lessee of a written statement of costs from
Lessor. It is hereby expressly covenanted and agreed that such discharge of any
lien by Lessor shall not be deemed to waive or release Lessee from its default
under the Lease for failing to discharge the same. Prior to commencing any such
work, the Lessee and its contractor shall provide such assurance as the Lessor
requires to protect the Lessor against any such liens from being filed.
Lessee will indemnify and hold harmless Lessor from and against any and all
claims, damages and expenses incurred by Lessor, arising from any liens placed
against the Demised Premises or the Building and the land upon which it is
situated, as a result of Lessee undertaking Pre-occupancy Tenant work in the
Demised Premises at its own cost and under its own control and direction, or
making any Alterations to the Demised Premises.
11. REAL ESTATE AND OTHER TAXES OR ASSESSMENTS
------------------------------------------
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For the purpose of this Article:
1. The term "Real Estate Taxes" means all taxes, rates and assessments,
general and special, levied or imposed with respect to the land, building and
improvements constructed thereon including all taxes, rates and assessments,
general and special, levied or imposed for school, public betterment, general or
local improvements. If the system of real estate taxation shall be altered or
varied and any new tax or levy shall be levied or imposed on said land, building
and improvements, and/or Lessor, in substitution for real estate taxes presently
levied or imposed on immovables in the jurisdiction where the property is
located, then any such new tax or levy shall be included within the term "Real
Estate Taxes". Real Estate Taxes shall in no event include penalties or interest
imposed for late payment. Further, the term Real Estate Taxes shall specifically
exclude any capital levy, franchise, estate, inheritance, transfer or
recordation tax, as well as any abatements, reductions or credits received by
Lessor. Assessments which may be paid over a period in excess of twelve months
without penalties shall be included with taxes only to the extent such payments
are required to be made within the particular calendar year. Real Estate Taxes
allocable to the Building shall include taxes on the Building as defined
hereunder but shall not include taxes on unimproved parcels of land (as opposed
to unimproved portions of the parcel presently improved by the Building).
2. The term "Base Real Estate Taxes" means the assessed value of said
land with the building and improvements multiplied by the then current tax rate
for the fiscal year ending December 31, 2000, in addition to any other Real
Estate Taxes paid or incurred by Lessor attributable to such fiscal year.
3. The term "Real Estate Tax Year" means each successive twelve month
(12-month) period following and corresponding to the period in respect which the
base real estate taxes are established, irrespective of the period or periods
which may from time to time in the future be established by competent authority
for the purposes of levying or imposing real estate taxes.
Each year commencing January 1, 2001, Lessee shall pay to Lessor within
thirty (30) days after demand in writing therefore, itemizing the assessed
valuation of the property, the tax rate and the real estate taxes and
assessments payable thereon for the Real Estate Tax Year, as additional rent as
defined in Section 4(e) which shall not be deductible from any rental, Lessee's
pro rata share, determined in the manner hereinafter provided, of any increase
in Real Estate Taxes for or attributable to the then current Real Estate Tax
Year over the Base Real Estate Taxes (all as defined above). Lessee's share, as
aforesaid, shall be 17.45% of the total increase, which share shall be increased
or decreased if the Demised Premises shall be increased or decreased during the
term of any renewal hereof. Lessee's share has been determined based upon the
assumption that the Demised Premises will include prior to January 1, 2001 both
the Fourth Floor and Fifth Floor.
Reasonable expenses incurred by Lessor in obtaining or attempting in good
faith to obtain a reduction of any Real Estate Taxes shall be added to and
included in the amount of any such Real Estate Taxes. Real Estate Taxes which
are being contested by Lessor shall nevertheless be included for purposes of the
computation of the liability of Lessee under Section 11(a) hereof, provided
however, that in the event that Lessee shall have paid any amount of increased
rent pursuant to this Article and Lessor shall thereafter receive a refund of
any portion of any Real Estate Taxes on which such payment shall have been
based, Lessor shall pay to Lessee its proportionate share of such refund, based
upon the percentage of Lessee during the particular fiscal period for which such
refund was received (i.e. after consideration of any adjustment to Lessee's
percentage required by reason of any increase or decrease of the Demised
Premises), such percentage currently being 17.45% of such refund. Lessor shall
have no obligation to contest, object or litigate the levying or imposition of
any Real Estate Taxes. Lessor may settle, compromise, consent to, waive or
otherwise determine in its discretion any real estate tax increase without
consent or approval of Lessee.
Nothing contained in this Article shall be construed at any time to reduce
the monthly installments of rent payable hereunder below the amount stipulated
in Articles 4 and 9 of this Lease.
If the Termination Date of this Lease shall not coincide with the end of a
Real Estate Tax Year, then in computing the amount payable under this Article
and for the period between the commencement of the applicable Real Estate Tax
Year and, if there shall be a difference, such difference pro rated on a monthly
basis shall be payable by Lessee. Lessee's obligation to pay increased Real
Estate Taxes under this Article for the final period of the Lease shall survive
the expiration of the term of this Lease.
12. MAINTENANCE BY LESSEE
---------------------
Lessee shall keep the Demised Premises and the fixtures and equipment
therein in clean, safe and sanitary condition, shall take good care thereof, and
shall suffer no waste or injury thereto. At the expiration or earlier
termination of the term of this Lease, Lessee shall surrender the Demised
Premises broom clean and in the same order and condition in which they were on
the Commencement Date, ordinary wear and tear and damage by the elements, fire
and other casualty, or by any act or omission of Lessor or any agent, employee
or contractor of Lessor, or taking by eminent domain, excepted.
13. SIGNS AND ADVERTISEMENTS
------------------------
No sign, advertisement or notice shall be inscribed, painted, affixed or
displayed on any part of the outside or the inside of the Building, including
windows and doors, except with Lessor's prior written consent and then only in
such place, number, size, color and style as is authorized by Lessor. If any
such sign, advertisement or notice is exhibited without first obtaining Lessor's
written consent, which consent may be granted or withheld in the Lessor's sole
and absolute discretion, Lessor shall have the right to remove the same, and
Lessee shall be liable for any and all expenses incurred by Lessor by said
removal, as additional rent.
14. DELIVERIES AND MOVING OF LESSEE'S PROPERTY
------------------------------------------
No furniture, equipment or other bulky matter of any description shall be
received into the Building except in the manner and during the times approved by
Lessor. Lessee shall obtain Lessor's permission prior to moving said property
into the Building. All moving of furniture, equipment and other material within
the public areas shall be under the direct control and supervision of Lessor who
shall, however, not be responsible for any damage to or charges for moving the
same. Lessee agrees promptly to remove from the sidewalks adjacent to the
Building any of the Lessee's furniture, equipment or other material there
delivered or deposited.
15. LESSEE'S EQUIPMENT
------------------
Except as provided below, Lessee will not install or operate in the Demised
Premises any electrically operated equipment or other machinery, other than
typewriters, word processing machines, adding machines, radios, televisions,
tape recorders, dictaphones, bookkeeping machines, copying machines, clocks, and
other business machines and equipment normally employed for general office use
which do not require high electricity consumption for operation, without first
obtaining the prior written consent of Lessor, who may condition such consent
upon payment by Lessee of additional rent as compensation for additional
consumption of electricity and/or other utility services.
In connection with Lessee's provision of telecommunications and/or internet
services from the Demised Premises, which shall include, without limitation, the
installation, operation, maintenance and replacement of communications and
switch equipment and facilities and various computer facilities consistent with
the power consumption capabilities on Lessee's floors. At Lessee's sole cost
and expense, including all maintenance and replacements thereof, and following
written approval by Lessor of the plans and specification relating thereto,
Lessee shall be entitled to install: a fire suppression system to be selected by
Lessee and /or modify the existing Building sprinkler system servicing the
Demised
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<PAGE>
Premises to a dry pipe double reaction system installed in such a way as to be
approved by state and local jurisdictions and not violate the integrity or
warranty of the existing system; a battery backup system; an electrical
grounding system; two (2) four inch (4") conduits risers from the Building
telecommunications room to the Demised Premises; pathway sufficient to support
two (2) rooftop antennas and other rooftop equipment as may be approved by
Lessor; telecommunication wiring and cabling between adjoining portions of the
demised premises; subject to available pathway, telecommunication wiring and
cabling to non contiguous portions of the Demised Premises not occupied by the
Lessee.
Lessee shall be entitled, if required for continuous uninterrupted
telecommunications services, and without additional charge beyond that of the
cost of a parking space (as set forth in Section 37 hereof) should such location
require a space, to a limited area in the garage, garage exterior or roof, the
location of which to be reasonably determined by Lessor, for the purpose of
installing supplemental HVAC and/or an emergency power generator (with
appropriate conduit, wiring and cabling), all work to be furnished and
installed, maintained and replaced at Lessee's sole cost and expense. Lessee
may conduct periodic tests (e.g. once per week) of the emergency power generator
at such times as to not hinder or interfere with other tenants in the building.
Lessor shall at no cost or expense to Lessor reasonably cooperate with Lessee in
the event, during the course of this Lease, Lessee shall require additional
HVAC, emergency power generation or additional power at Lessee's sole cost and
expense and subject to availability of space, capacity, and impact upon existing
tenants. Lessor shall advise Lessee of any cost or expense of which Lessor
intends to seek reimbursement from Lessee prior to incurring same.
Any auxiliary air-conditioning equipment which Lessee may desire to install in
the Demised Premises shall be attached to the Building's commercial condenser
water system, if available, and Lessee shall pay to Lessor such reasonable
charges as established from time to time for such use. Nothing contained in
this section 15 requiring particular items to be at the sole cost or expense of
Lessee shall be deemed to preclude use by Lessee of the initial construction
allowance and/or additional construction allowance (both allowances of which are
described in Section 65 of this Agreement) toward such costs.
If any or all of Lessee's equipment requires electricity consumption in
excess of the capacity of the electrical system installed by Lessor in the
Demised Premises, all additional transformers, distribution panels and wiring
that may be required to provide the amount of electricity required for Lessee's
equipment shall be installed by Lessor at the cost and expense of Lessee. If
Lessee's equipment causes Lessee's consumption of electricity (exclusive of the
ceiling lights and power to supply the Building's HVAC to the Demised Premises)
to exceed an average of five (5) watts per rentable square foot, or if such
equipment is to be consistently operated beyond the normal Building hours of
8:00 a.m. to 6:00 p.m., Monday through Friday, and 9:00 a.m. to 1:00 p.m. on
Saturday, excepting holidays as hereafter set forth, Lessor may install at its
option a separate meter for the specific equipment that is causing Lessee's
excessive consumption of electricity at Lessee's sole cost and expense. In the
event Lessor installs a separate meter for the specific equipment, Lessee shall
then pay the cost of electricity it consumes as recorded by such meter directly
to the electric company. No adjustment shall be made in Lessee's rent.
Lessee shall not install any equipment of any kind or nature whatsoever
which will or may necessitate any changes, replacements or additions to, or in
the excessive use of, the water system, heating system, plumbing system, air-
conditioning system, or electrical system of the Demised Premises or the
Building without first obtaining the prior written consent of Lessor. Lessor
shall not unreasonably withhold, delay or condition its consent hereunder.
Business machines and mechanical equipment belonging to Lessee which cause noise
or vibration that may be transmitted to the structure of the Building or to any
space therein to such a degree as to be objectionable to Lessor or to any tenant
in the Building shall be installed and maintained by Lessee, at Lessee's
expense, on vibration eliminators or other devices sufficient to materially
eliminate such noise and vibration.
Lessor shall have the right to prescribe the weight and position of all
heavy equipment and fixtures, including, but not limited to, data processing
equipment, record and file system and safes which Lessee intends to install or
locate within the Demised Premises. Lessor shall not unreasonably withhold,
delay or condition its consent hereunder. Lessee shall obtain Lessor's prior
review and approval before installing or locating heavy equipment and fixtures
in the Demised Premises, and if installation or location of such equipment or
fixtures, in Lessor's opinion, requires structural modifications or
reinforcement of any portion of the Demised Premises or the Building, Lessee
agrees to reimburse Lessor, as additional rent, for any and all costs incurred
by Lessor to make such required modifications or reinforcements, and such
modifications or reinforcements shall be completed prior to Lessee installing or
locating such equipment or fixtures in the Demised Premises. Lessee shall
reimburse Lessor within thirty (30) days of receipt of any statement setting
forth those costs.
16. SERVICES AND UTILITIES
----------------------
1. Lessor shall provide the following utilities and services consistent
with the standards used by other owners of comparable (in size, quality, age and
reputation) as the Building within the Northern Virginia area:
1. Hot and cold water and lavatory supplies, it being understood and
agreed that hot and cold water shall be furnished by Lessor only at those points
of supply provided for general use of other tenants in the Building, and at
those points of supply in kitchen and lavatories to be installed in the Demised
Premises as part of Lessee's initial construction.
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<PAGE>
2. After business hours cleaning services in corridors and
lavatories, and changing of fluorescent bulbs in common areas and suites on an
"as-needed" basis. These services will be provided daily Monday through Friday,
except legal holidays. Such services shall be provided based upon standards for
first class office space.
3. Zoned heat and air-conditioning in season in such quantities as
to assure uniform temperatures within the ranges set forth below and humidity
levels ( Winter 70 N F drybulb 35% relative humidity and Summer 75 N F Drybulb
50% relative humidity) throughout the Demised Premises, Monday through Friday
from 7:00 a.m. to 6:00 p.m. and on Saturday from 7:00 a.m. to 1:00 p.m., except
for the following holidays: New Year's Day, Martin Luther King, Jr. Day,
President's Day, Memorial Day, Fourth of July, Labor Day, Columbus Day, Veterans
Day, Thanksgiving Day, and Christmas Day, and any other national holiday
promulgated by a Presidential Executive Order or Congressional Act. Lessor shall
provide heat and air-conditioning at times in addition to those specified in the
preceding sentence at Lessee's expense, provided Lessee gives Lessor notice
prior to 1:00 p.m. on a business day in the case of after-hours service on that
business day and prior to 3:00 p.m. on the immediately preceding business day in
the case of after-hours service on a Saturday, a Sunday or a holiday. Lessor
shall charge Lessee for said after-hours services its direct costs. Lessor
reserves the right, in its sole discretion, to increase the hourly charge for
said after-hours service, but in no event shall the rate per hour charged Lessee
be more than the rate per hour charged other tenants or be more than the direct
cost to Lessor. Lessee agrees to comply with the provisions of any building
warranties obtained by Lessor in connection with its installations under Section
15 provided Lessor gives Lessee advance written notice of such provisions. In
the event the same after-hours service is also requested by other tenants of the
Building in addition to Lessee, the charge therefor to each tenant requesting
such after-hours service shall be prorated among all requesting tenants based
upon the respective square footages of each of the demised premises of the
tenants requesting such after-hours service. Notwithstanding the foregoing,
Lessor agrees that Lessor shall provide at its direct cost (i.e. no profit,
administrative charge, overhead or markup) utilities necessary to permit Lessee
to operate on a 24 hours a day, seven days a week basis, either the building
standard system servicing the Demised Premises or Lessee's supplemental unit (if
any). Lessor agrees that the overtime charge for HVAC to the Lessee shall be at
the rate of $15.00 per hour for each floor of the Demised Premises, which hourly
rate shall be subject to increase at the rate of 3% per annum each December 1
(with the first such rate increase to occur on December 1, 2000). Lessor shall
cooperate with Lessee in the provision of chiller water, and other utilities
recognizing that Lessee's business operations require the conduct of business
round-the-clock within certain areas to be reasonably designated by Lessee
subject to Lessor's reasonable approval.
4. Maintenance, painting and electric lighting service for all
public areas and special service areas in the Building.
5. Electricity and proper electrical facilities to furnish
sufficient electricity for equipment of Lessee installed pursuant to the section
of this Lease entitled, "Lessee's Equipment" recognizing that nothing contained
herein shall affects the rights of Lessor with respect to Additional Power set
forth in Section 15 above.
6. Thermostats shall be set to maintain temperatures between 65NF
and 70NF during the heating season and between 76NF and 80NF during the cooling
season or such other temperatures as the Lessor may reasonably determine during
the Term.
2. In the event any public utility supplying energy requires, or
government law, regulation, executive or administrative order results in a
requirement, that Lessor or Lessee must reduce, or maintain at a certain level,
the consumption of electricity for the Demised Premises or Building, which
affects the heating, air-conditioning, lighting, or hours of operations of the
Demised Premises or Building, Lessor and Lessee shall each adhere to and abide
by said laws, regulations or executive orders without any reduction in rent.
3. At any time and from time to time during the Term of the Lease,
provided Lessor first consults with Lessee to assure that there will be no
material adverse affect on Lessee's operations within the Demised Premises, and
that the costs of provision of such utilities will not exceed the costs which
would be incurred in the absence of such change, Lessor at its sole discretion
shall have the right to select and change the utility companies providing
utilities to the Building, and upon such terms and conditions as are solely
satisfactory to the Lessor.
4. Lessor's inability to furnish, to any extent, these defined services,
or any cessation thereof resulting from causes beyond the control of Lessor,
shall not render Lessor liable for damages to either person or property, nor be
construed as an eviction of Lessee, nor work an abatement of any portion of
rent, nor relieve Lessee from fulfillment of any covenant or agreement hereof.
Lessor agrees to use its best efforts to restore any cessation in services,
recognizing that Lessee's communication business requires twenty-four hour
service, 365 days a year. Should any of the Building equipment or machinery
cease to function properly for any cause, Lessor shall use reasonable diligence
to repair the same promptly, but Lessee shall have no claim for damages or for a
rebate of any portion of rent on account of any interruptions in any services
occasioned thereby or resulting therefrom. If any disruption or interruption of
any service to be provided under this Article by Lessor shall occur and continue
for more than three (3) business days, which interruption shall
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<PAGE>
reasonably render Lessee unable to conduct its business in the Demised Premises,
then and in such event all rent shall abate until the earlier of the date of
restoration of service in the Demised Premises or Lessee's resumption of
business operations in the Demised Premises .
5. Prior to the commencement date, the Lessor shall provide an electronic
security system installed and monitored by Julien Enterprises or an equivalent
vendor. The basic components of the system shall include electronic access
control points at the main entry lobby, garage ramp door, and the elevators.
The access control systems on the main lobby doors and elevators shall operate
daily 6:00 p.m. to 8:00 a.m., Monday through Friday, and 24-hours a day on
Saturdays, Sundays, and holidays. Lessor recognizes that Lessee shall be
entitled to access the Building and Premises seven (7) days a week, 24 hours a
day, with at least one elevator in service at all times available for Lessee's
use, and that such round the clock access is imperative by reason of Lessee's
telecommunication operations. Lessor shall initially furnish at no charge to
Lessee 220 security cards. Additional or replacement cards shall be made
available at the rate of $15.00 per card, subject to reasonable increase each
year to reflect actual increases incurred by Lessor for such new cards.
6. Lessor shall keep the roof, foundation, and structural components of
exterior walls of the Demised Premises, together with the parking and other
common areas of the Building in good, clean, sanitary and sightly condition,
working order and repair. Lessor shall make all necessary repairs or
replacements thereto, so as to maintain the Building and its components
consistent with comparable buildings as to age, size and location. Lessor shall
make all repairs with due diligence and due care in a good and workmanlike
manner and in compliance with all applicable local, state and Federal
regulations, ordinances and laws and in making such repairs shall use reasonable
efforts to prevent any unreasonable interference with Lessee's use of the
Demised Premises. Lessor shall promptly restore any damage to any portion of the
Demised Premises resulting from any act or omission of Lessor, its agents,
servants, employees or contractors not caused by Lessee. Lessor shall, without
expense to Lessee, make any and all structural or extraordinary alterations
required to be made to the Demised Premises by law, ordinance or regulation of
any governmental authority, board of fire insurance underwriters, Lessor's
insurers, or similar authority. If Lessor has not commenced repair or
maintenance required to be performed by Lessor hereunder within ten (10) days
after written notice thereof from Lessee, or if so commenced, is not diligently
pursuing same to completion, Lessee shall have the right, but not the
obligation, to make such repairs and Lessor shall reimburse Lessee for the
reasonable cost thereof within ten (10) days after receipt of a bill therefor
from Lessee. In the event of an emergency, Lessee may (but shall not be
obligated to) perform such repairs which would otherwise be Lessor's obligation
hereunder which may be reasonably necessary, after having given Lessor such
notice, if any, as may be practicable under the circumstances. Notwithstanding
anything to the contrary set forth hereinabove, Lessee shall not be required to
perform any repairs which would otherwise be Lessor's obligation hereunder.
17. LESSEE'S RESPONSIBILITY FOR DAMAGE
----------------------------------
Any and all injury, breakage or damage to the Demised Premises or the
Building arising from any cause done by Lessee or its agents, contractors,
servants, employees and visitors, or by individuals and persons making
deliveries to or from the Demised Premises, except as provided for in the
section of this Lease entitled, "ALL RISK COVERAGE INSURANCE," shall be repaired
at the sole expense of Lessee. In the case of any such injury, breakage or
damage beyond the Demised Premises, such damage may at Lessor's option be
repaired by Lessor, and in such event, payment of the cost of such repairs by
Lessee shall be due as additional rent with the next installment of Monthly Rent
after Lessee receives a bill for such repairs from Lessor. This provision shall
not be in limitation of any other rights and remedies which Lessor has or may
have in such circumstances.
18. ENTRY FOR INSPECTIONS, REPAIRS AND INSTALLATIONS, ETC.
------------------------------------------------------
Following reasonable advance notice from Lessor or its Agent, except in
cases of emergencies in which event no such notice shall be required, Lessee
shall permit Lessor, or its agent, employees or contractors, to enter the
Demised Premises at all reasonable times and in a reasonable manner, without
charge to Lessor or diminution of Monthly Rent payable by Lessee, to examine,
inspect, protect the Building, or to show it to prospective or existing lenders
or to prospective purchasers, and, upon one (1) day written notice, to make such
repairs as in the judgment of Lessor may be deemed necessary to maintain or
protect the Building, or to exhibit the same to prospective tenants during the
last year of the Term of this Lease. Lessor shall use reasonable efforts to
minimize interference to Lessee's business when making repairs and in otherwise
scheduling its access into the Demised Premises, but Lessor shall not be
required to perform the repairs at a time other than during normal working
hours.
In the event of an emergency, Lessor may enter the Demised Premises without
notice and make whatever repairs are necessary to protect the Building.
Lessee shall permit Lessor, or its agents, employees or contractors, upon
no less than three (3) days prior written notice to Lessee, to enter the Demised
Premises at reasonable times and in a reasonable manner, without charge to
Lessor or diminution of Monthly Rent payable by Lessee, to make installations
related to the contraction of pre-occupancy tenant work being performed by
Lessor for other tenants of the Building. Lessor shall use reasonable efforts
to minimize interferences with Lessee's business operations, but except in
unusual circumstances, Lessor shall not be required to perform such work at a
time other than normal working hours.
If on the Commencement Date there is no security system for the Building
the Lessor shall have the right at any time during the term to install such
security system as the Lessor deems appropriate.
The Lessor shall also have the right during any reasonable time or times
(except in the case of an emergency, in which event the Lessor may enter at any
time) to enter the Demised Premises for the purpose of making repairs or
improvements to space above, below and/or on the same floor as the Demises
Premises, including the right to install above the ceiling, below the slab or
within columns, and/or remove water lines, heating and air conditioning vents,
to accommodate any change in utility service providers and the like to serve the
Lessee or other Lessees of the Building. However, Lessee may impose upon Lessor
reasonable limitations to avoid placement of water lines above Lessee's computer
center to be located in the Demised Premises. Notwithstanding the foregoing,
Lessor shall not be required to relocate existing water lines or any material
part of the sprinkler system. Costs of relocating any parts of the sprinkler
system shall be borne by Lessee.
19. HAZARDOUS MATERIALS
-------------------
Lessee shall not (either with or without negligence) cause or permit the
escape, disposal or release of any biologically or chemically active or other
hazardous substances or materials by reason of Lessee's operations at the
Demised Premises (as opposed to the operations of Lessor or the operations of
any other tenant of Lessor or an invitee of any other tenant). Lessee shall not
allow the storage or use of such substances or materials in any manner not
sanctioned by law or by the highest standards prevailing in the industry for the
storage and use of such substances or materials, nor allow to be brought into
the Building or Parking Facility any such materials or substances except those
which are customarily used in the ordinary course of Lessee's business, and, to
the extent such materials are not typically found in other modern office suites,
then only after written notice is given to Lessor of the identity of such
substances or materials. Without limitation, hazardous substances and materials
shall include those described in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section
6901 et seq., any applicable state or local laws and the regulations adopted
under these acts. If any lender or governmental agency shall make a good faith
determination that Lessee has violated the provisions of this paragraph, then
the reasonable costs of such testing shall be reimbursed by Lessee to Lessor
upon demand as additional charges if such requirement applies to the Demised
Premises. In addition, Lessee shall execute affidavits, representations and the
like from time to time at Lessor's request concerning Lessee's best knowledge
and belief regarding the presence of hazardous substances or materials on the
Demised Premises arising by reason of Lessee's operations. In all events,
Lessee shall indemnify Lessor from all costs, expenses, damages, liabilities or
causes of action from any release of hazardous materials on the Demised Premises
or otherwise in
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the Building, to the extent (and only to the extent) caused by Lessee or persons
acting under Lessee . Lessee shall have no liability, debt or obligation under
this Lease by reason of any use, generation, manufacture, refining, processing,
storage, disposal or release of a hazardous substance or material unless such
hazardous substance or material was caused by Lessee, or any agent, employee or
contractor of Lessee. Lessor shall be deemed the owner of any such hazardous
substance, the existence, use, generation, release, manufacture, refining,
processing, storage, disposal or release of which was not caused by Lessee, or
any agent, employee or contractor of Lessee.
Lessor shall indemnify, defend and hold Lessee harmless from and against
any handling, transportation, storage, treatment or use of hazardous or toxic
substances which may occur at the Building prior to the Commencement Date and
Lessor represents to the best of its knowledge that the Building is in
compliance with all applicable federal, state and local laws, regulations and
ordinances.
Lessor shall certify upon Lessee's occupancy of the Demised Premises that
the shell Building system meets all current health standards for fresh air
changes (current ASHRAE standards) and hazardous materials abatement. Lessor
represents to Lessee that to the best of its knowledge the Building and
improvements are not in violation, nor have they been in violation, of any
federal, state or local law, ordinance or regulation relating to any
environmental conditions on or in the Building or any such improvements thereon,
including without limitation, soil and groundwater conditions.
20. INSURANCE RATING
----------------
Lessee shall not conduct or permit to be conducted any activity, or place
any equipment or property in or about the Demised Premises that will increase in
any way the rate of All Risk Coverage insurance or other insurance on the
Building beyond the rate applicable for other comparable (in age, size and
quality) office buildings located in Northern Virginia, unless consented to by
Lessor. Lessor's consent may be conditioned upon Lessee's payment of any costs
arising directly or indirectly from such increase. If any increase in the rate
of All Risk Coverage insurance or other insurance on the Building is stated by
any insurance company or by the applicable Insurance Rating Bureau to be due to
Lessee's activity, equipment of property in or about the Demised Premises, said
statement shall be conclusive evidence that the increase in such rate is due to
such activity, equipment or property and, as a result thereof, Lessee shall be
liable for such increase. Any such rate increase and related costs incurred by
Lessor shall be deemed additional rent due and payable by Lessee to Lessor upon
receipt by Lessee of a written statement of the rate increase and costs. Lessee
may contest, at its sole cost and expense, any insurance rate increase, provided
such action by Lessee will not adversely affect the insurance coverage of
Lessor.
21. INDEMNITY AND PUBLIC LIABILITY INSURANCE
----------------------------------------
1. Lessee shall indemnify and save harmless Lessor from any and all
liability, damage, expense, cause of action, suits, claims, judgments and cost
of defense arising from injury to person, property or personal property in and
on the Demised Premises, or upon any adjoining sidewalks or public areas of the
Building, which arise out of the act, failure to act or negligence of Lessee,
its agents or employees.
2. In order to assure such indemnity, Lessee shall, at its sole cost,
carry and keep in full force and effect at all times during the term of this
Lease, a comprehensive general liability policy with a single limit of at least
One Million Dollars ($1,000,000.00) including coverage for bodily injury,
property damage and personal injury liability.
3. Lessee shall obtain and keep in full force and effect during the Term
of the Lease rental loss insurance in such amounts as the Lessor deems to be
commercially reasonable.
4. Lessor hereby agrees to indemnify and hold harmless Lessee from and
against any and all claims, losses, actions, damages, liabilities and expenses
(including reasonable attorneys' fees and disbursements) (collectively,
"Damages") that arise from any breach of any covenant or representation made in
connection with this or any other lease in the Building or willful or grossly
negligent act or omission of Lessor, its agents, contractors or employees.
Whenever the Lessee shall be deemed liable for losses, liabilities, obligations,
damages, penalties, claims, costs, charges and expenses under the provisions of
the Lease, no such liability shall arise from losses, liabilities, obligations,
damages, penalties, claims, costs, charges and expenses resulting from the gross
negligence or willful misconduct of Lessor and/or its agents, employees or
contractors.
22. WORKER'S COMPENSATION INSURANCE
-------------------------------
Lessee shall carry and keep in full force and effect at all times during
the term of this Lease, at its sole cost, worker's compensation or similar
insurance in form and amounts required by law.
23. ALL RISK COVERAGE INSURANCE
---------------------------
Lessor shall obtain and maintain All Risk Coverage insurance covering the
Building. Lessee shall obtain and maintain throughout the term of this Lease
and any extension periods All Risk Coverage insurance insuring against damage to
and loss of Lessee's tenant improvements, fixtures, equipment, furniture, and
all other personal property in and about the Demised Premises. Lessor and
Lessee hereby release each other and waive any claims they may have against the
other for loss or damage to the Building, Demised Premises, tenant improvements,
fixtures, equipment and/or any other personal property arising from a risk
insured against under the All Risk Coverage insurance policies to be carried by
Lessor and Lessee, as required above, even though such loss or damage was caused
by the negligence of Lessor and Lessee, their agents or employees, except for
the amount of the deductible under said policies. Lessor and Lessee agree to
obtain and maintain throughout the term of this Lease endorsements to their
respective All Risk Coverage policies waiving the right of subrogation of their
insurance companies against the other party and its agents and employees.
Except to the extent expressly provided in this Lease, nothing contained in this
Lease shall relieve either Lessor or Lessee to the other, or the insurance
carriers which Lessee or Lessor may have under law or the provisions of this
Lease in connection with any damage to the Building, Demised Premises, tenant
improvements, fixtures, equipment, furniture, and all other personal property,
by fire or other casualty.
24. LESSEE'S CONTRACTOR'S INSURANCE
-------------------------------
Lessee shall require any contractor of Lessee performing work on the
Demised Premises to carry and maintain, at no expense to Lessor:
1. Comprehensive general liability insurance, including contractor's
liability coverage, contractual liability coverage, completed operations
coverage, broad form property damage endorsement and contractor's protective
liability coverage, to afford protection with limits, for each occurrence, of
not less than One Million Dollars ($1,000,000.00) with respect to personal
injury, death, or property damage; and
2. Worker's compensation or similar insurance in form and amounts
required by law.
25. REQUIREMENTS FOR LESSEE'S INSURANCE POLICIES
--------------------------------------------
The company or companies writing any insurance which Lessee is required to
carry and maintain or cause to be carried or maintained pursuant to this Lease
as well as the form of such insurance shall at all times be subject to Lessor's
approval and any such
9
<PAGE>
company or companies shall be a good and responsible insurance company, licensed
to do business in the Commonwealth of Virginia. Lessee's public liability and
All Risk Coverage insurance policies and certificates evidencing such insurance
shall name Lessor and its Agent as additional insured and shall also contain a
provision by which the insurer agrees that such policy shall not be canceled
except after thirty (30) days written notice to Lessor. Lessee agrees to provide
the Lessor prior to taking possession of the Demised Premises the certificates
evidencing such insurance; Lessor may withhold delivery of the Demised Premises
without delaying the Commencement Date, or triggering any abatement of rent, if
Lessee fails to provide Lessor with these certificates.
Any insurance carried or to be carried by Lessee hereunder shall be primary
over any policy that might be carried by Lessor. If Lessee shall fail to
perform any of its obligations regarding the acquisition and maintenance of
insurance, Lessor may perform the same and the cost of same shall be deemed
additional rent, payable upon Lessor's demand. Lessee's insurance shall not
have a deductible greater than One Thousand Dollars ($1,000.00) per claim.
Lessor reserves the right at any time during the term to require the Lessee
to increase the amounts and types of coverage under the Lease to such amounts
and types of coverage as would then be deemed commercially reasonable by the
Lessor, after taking into consideration the insurance required in other
comparable (as to size, age and quality) office buildings in Northern Virginia.
26. LIABILITY FOR DAMAGE TO PERSONAL PROPERTY AND PERSON
----------------------------------------------------
All personal property of Lessee, its employees, agents, subtenants,
business invitees, licensees, customers, clients, family members, guests or
trespassers, in and on the Demised Premises shall be and remain in and on the
Demised Premises and the Building at the sole risk of said parties and except to
the extent set forth in Section 21(d) above, Lessor shall not be liable to any
such person or party for any damage to, or loss of personal property thereof,
including loss or damage arising from, (A) any act, including theft, or any
failure to act, of any other persons, (B) the leaking of the roof, (C) the
bursting, rupture, leaking or overflowing of water, sewer or steam pipes, (D)
the rupture or leaking of heating or plumbing fixtures, including security and
protective systems, (E) short-circuiting or malfunction of electrical wires or
fixtures, including security and protective systems or (F) the failure of the
heating or air-conditioning systems. Lessor shall also not be liable for the
interruption or loss to Lessee's business arising from any of the above-
described acts or causes. Lessee specifically agrees to save Lessor harmless in
all such cases.
Lessor shall not be liable for any personal injury to Lessee, Lessee's
employees, agents, business invitees, licensees, customers, clients, family
members, guests or trespassers arising from the use, occupancy and condition of
the Demised Premises or the Building, unless such party establishes that there
has been gross negligence or a willful act or willful failure to act on the part
of Lessor, its agents or employees.
27. DAMAGE TO THE BUILDING AND/OR THE DEMISED PREMISES
--------------------------------------------------
If the Demised Premises is damaged by fire or other casualty insured
against by Lessor's All Risk Coverage insurance policy covering the Building,
and the Demised Premises can be fully repaired, in Lessor's opinion, within 180
days from the date of the insured risk, Lessor, at Lessor's expense, shall
repair such damage, provided, however, Lessor shall have no obligation to repair
any damage to, or to replace, Lessee's non-building standard tenant
improvements, if any, installed by Lessee at its sole cost and expense, or any
other property located in the Demised Premises. Except as otherwise provided
herein, if the entire Demised Premises is rendered untenantable by reason of the
insured risk, then Monthly Rent shall abate for the period from the date such
damage to the date when Lessor has completed repairs to the Demised Premises as
specified above, and if only a portion of the Demised Premises is so rendered
untenantable, then Monthly Rent shall abate for such period in the proportion
which the area of the portion of the Demised Premises so rendered untenantable
bears to the total area of the Demised Premises, provided, however, if, prior to
the date when such repairs have been completed, any portion of the Demised
Premises so damaged shall be rendered tenantable and shall be used or occupied
by Lessee or any person claiming through or under Lessee, then the amount by
which the Monthly Rent shall abate shall be equitably apportioned for the period
from the date of any such use or occupancy to the date when such repairs are
completed. Notwithstanding the foregoing, if by reason of the fire or other
casualty Lessee is unable to reasonably conduct its business within the
undamaged portion of the Demised Premises, all Monthly Rent and Additional Rent
shall abate as is the entire Demised Premises were untenantable. Any abatement
of rent hereunder shall continue until the first to occur of (i) expiration of
forty-five (45) days following either completion by Lessor of its repairs or
restoration or (ii) the date Lessee is reasonably able to resume conduct of its
business operations within the Demised Premises or any substantial portion
thereof. No compensation or claim or reduction of rent will be allowed or paid
by Lessor by reason of inconvenience, annoyance, or injury to business arising
from the insured risk or the necessity of repairing the Demised Premises or any
portion of the Building which they are a part.
Notwithstanding the foregoing, if, prior to or during the term of this
Lease, (A) the Demised Premises is so damaged that, in Lessor's opinion, the
Demised Premises cannot be fully repaired within 180 days from the date the
damage occurred and provided Lessor concurrently terminates all other office
leases in the Building, or (B) the Building is so damaged that, in Lessor's
opinion, substantial repair or reconstruction of the Building shall be required
(whether or not the Demised Premises is damaged or rendered untenantable) and
provided Lessor concurrently terminates all other office leases in the Building,
then, in any of such events, Lessor, at its option, may give to Lessee, within
sixty (60) days after such fire or other casualty, a thirty (30) days notice of
termination of this Lease and, in the event such notice is given, this Lease
shall terminate (whether or not the term shall have commenced) upon the
expiration of such thirty (30) days with the same effect as if the date of
expiration of such thirty (30) days were the date definitely fixed for
expiration of the term of the Lease, and the then-applicable Monthly Rent shall
be apportioned as of such date, including any rent abatement as provided above.
In the event Lessor is unable to complete its repairs within 180 days of
occurrence of any damage, destruction or other casualty to the Building or the
Demised Premises, so as to enable Lessee to continue its business in the Demised
Premises in a manner satisfactory to Lessee, Lessee may elect to cancel this
Lease without penalty of any kind upon thirty (30) days written notice to
Lessor, which notice shall be given by Lessee at anytime after the 150/th/ day
following the fire or casualty, and which notice shall be effective in the
absence of the Lessor substantially completing its repairs within the thirty
days period following the date of Lessee's notice.
28. DEFAULT OF LESSEE
-----------------
This Lease shall, at the option of Lessor, cease and terminate if (A)
Lessee fails to pay rent in accordance with terms of Lease, including any
installment of Monthly Rent, or any sums, charges, expenses and costs of any
kind or nature identified in this Lease as additional rent, although no legal or
formal demand has been made, and such failure to pay rent continues for a period
of ten (10) days after written notice addressed to Lessee has been delivered by
Lessor to the Demised Premises, or (B) Lessee violates or fails to perform any
of the other conditions, covenants or agreements of this Lease made by Lessee,
and any violation or failure to perform any of those conditions, covenants or
agreement continues for a period of twenty (20) days after written notice
thereof has been delivered by Lessor to Lessee, or, in cases where the violation
or failure to perform cannot be corrected within twenty (20) days, Lessee does
not begin to correct the violation or failure to perform within twenty (20) days
after receiving Lessor's written notice and/or Lessee thereafter does not
diligently pursue the correction of the violation or failure to perform. Any
said violation or failure to perform or to pay any rent, if left uncorrected,
shall operate as a notice to quit, any further notice to quit or notice of
Lessor's intention to re-enter being hereby expressly waived. Lessor may
thereafter proceed to recover possession under and by virtue of the provisions
of the laws of the jurisdiction in which the Building is located or by such
other proceedings, including re-entry and possession, as may be applicable. If
Lessor elects to terminate this Lease, everything herein contained on the part
of Lessor to be done and performed shall cease without prejudice to the right of
Lessor to recover from Lessee all rent accruing up to and through the date of
termination of this Lease or the date of recovery of possession of the Demised
Premises by Lessor, whichever is later. Should this Lease be terminated before
the expiration of the term of this Lease by reason of Lessee's default as
hereinabove provided, or if Lessee abandons or vacates the Demised Premises
before the expiration or termination of the term of this Lease, the Demised
Premises may be relet by Lessor for such rent and upon such terms as are not
unreasonable in the sole option of Lessor under the circumstances, and, if the
full rent hereinabove provided is not realized by Lessor, Lessee shall be liable
for all damages sustained by Lessor, including, without limitation, deficiency
in rent, reasonable attorneys' fees, and brokerage fees, prorated to reflect
only those fees attributable to the portion of the re-let term
10
<PAGE>
coinciding with the balance of the term of this Lease which was in effect at the
time of the default and expenses of placing the Demised Premises in first-class
rentable condition. Any damage or loss of rent sustained by Lessor may be
recovered by Lessor, at Lessor's option, at the time of the reletting, or in
separate actions, from time to time, as said damage shall have been made more
easily ascertainable by successive reletting, or, at Lessor's option, may be
deferred until the expiration of the term of this Lease, in which event the
cause of action shall not be deemed to have accrued until the date of expiration
of said term. The provisions contained in this section shall be in addition to
and shall not prevent the enforcement of any claim Lessor may have against
Lessee for anticipatory breach of the unexpired term of this Lease.
In the event of any action or proceeding brought by either party hereto
against the other based upon or arising out of any breach of the terms and
conditions hereof, the prevailing party shall be entitled to recover all costs,
including reasonable attorneys' fees, from the other.
29. REPEATED DEFAULTS
-----------------
If Lessee is in default of this Lease for the same or substantially the
same reason more than twice during any twelve (12) month period during the term
of this Lease, then, at Lessor's election, Lessee shall not have any right to
cure such repeated default during the twelve (12) month period following the
second such default, the terms and conditions of the section of this Lease
entitled, "DEFAULT OF LESSEE," notwithstanding. In the event of Lessor's
election not to allow a cure of a repeated default, Lessor shall have all of the
rights provided for in that section of this Lease for an uncured default.
30. WAIVER
------
If Lessor or Lessee institutes legal or administrative proceedings against
the other party and a compromise or settlement thereof is made, the same shall
not constitute a waiver of such other party's obligations to comply with any
covenant, agreement or condition, nor of any of rights of the party bringing
such action hereunder. No waiver by Lessor or Lessee of any breach of any
covenant, condition, or agreement specified herein shall operate as an
invalidation or as a continual waiver of such covenant, condition or agreement
itself, or of any subsequent breach thereof. No payment by Lessee or receipt by
Lessor of a lesser amount than the amount of rent due Lessor shall be deemed to
be other than on account of the earliest stipulated rent, nor shall any
endorsement or statement on any check or letter accompanying a check for payment
of such rent be deemed an accord and satisfaction, and Lessor may accept such
check or payment without prejudice to Lessor's right to recover the balance of
such rent or to pursue any other remedy provided for in this Lease or in the
governing law of the jurisdiction in which the Building is located. No payment
by Lessee of an amount in excess of the amount to which Lessor shall be entitled
shall be deemed to be other than on account of the next stipulated rent, if any,
or constitute an accord and satisfaction as to any claims of Lessor which may
then be existing. No re-entry by Lessor, and no acceptance by Lessor of keys
from Lessee, shall be considered an acceptance of a surrender of the Lease.
31. SUBORDINATION
-------------
This Lease is subject and subordinate to the lien of all and any mortgages
(which term "mortgages" shall include both construction and permanent financing
and shall include deeds of trust and similar security instruments) which may now
or hereafter encumber or otherwise affect the real estate (including the
Building) of which the Demised Premises is a part, or Lessor's leasehold
interest therein, and to all and any renewals, extensions, modifications,
recastings or refinancings thereof. In confirmation of such subordination,
Lessee shall, at Lessor's request, promptly execute any requisite or appropriate
certificate or other document provided Lessee is provided with reasonable
assurances of non-disturbance from the mortgagee or ground lessor requesting
such assurances. No later than thirty (30) days following the date hereof,
Lessor agrees to obtain from its mortgagee having any deed of trust upon the
Building (or ground lessor under any ground lease) an agreement (a "Non-
disturbance Agreement") which shall provide that, as long as Lessee is not in
default under this Lease, this Lease will not be terminated during the term
hereof as a result of any foreclosure or conveyance in lieu of foreclosure under
the deed of trust on the Building held by such mortgagee or under any such
ground lease. Any such Non-disturbance Agreement shall be in form and content
reasonably acceptable to Lessee. Lessee acknowledges that the form of the Non-
disturbance Agreement received from Lessor prior to execution of this Lease
shall be acceptable for such purposes.
Lessee agrees that in the event that any proceedings are brought for the
foreclosure of any such mortgage, Lessee shall attorn to the purchaser at such
foreclosure sale, if requested to do so by such purchaser. Lessee shall also
recognize such purchaser as the Lessor under this Lease. Lessee waives the
provisions of any statute or rule of law, now or hereafter in effect, which may
give or purport to give Lessee any right to terminate or otherwise adversely
affect this Lease and the obligations of Lessee hereunder in the event that any
such foreclosure proceeding is prosecuted or completed.
If the Building, the Demised Premises or any part respectively thereof is
at any time subject to a mortgage or a deed of trust or other similar
instrument, and this Lease or the rents are assigned to such mortgagee, trustee
or beneficiary, and the Lessee is given written notice thereof, including the
post office address of such assignee, then Lessee may not terminate this Lease
for any default on the part of Lessor without first giving written notice by
certified or registered mail, return receipt requested, to such Assignee,
Attention: Mortgage Loan Department. The notice shall specify the default in
reasonable detail, and afford such assignee a reasonable opportunity to make
performance, at its election, for and on behalf of Lessor.
32. CONDEMNATION
------------
If the whole or a material part of the Demised Premises or the Building is
condemned or acquired in lieu of condemnation by any governmental authority for
any public or quasi-public or other use or purpose, then the term of this Lease
shall cease and terminate as of the date when title vests in such governmental
authority. Lessee shall have no claim against Lessor or the condemning
authority for any portion of the amount of the condemnation award or settlement
that Lessee claims as its damages arising from such condemnation or acquisition,
or for the value of any unexpired term of the Lease. Lessee may make a separate
claim against the condemning authority for a separate award for the value of any
of Lessee's tangible personal property and trade fixtures, for moving and
relocation expenses and for such business damages and/or consequential damages
as may be allowed by law, provided the same shall not diminish the amount of
Lessor's award.
33. RULES AND REGULATIONS
---------------------
Lessee, its agents and employees shall abide by and observe the rules and
regulations attached hereto as Exhibit C and such other reasonable rules and
regulations as may be promulgated from time to time by Lessor for the operation
and maintenance of the Building, provided a copy thereof is sent to Lessee.
Except to the extent expressly set forth below, nothing contained in this Lease
shall be construed to impose upon Lessor any duty or obligation to enforce such
rules and regulations, or the terms, conditions or covenants contained in any
other lease as against any other tenant, and Lessor shall not be liable to
Lessee for violation of the same by any other tenant, any other tenant's
employees, agents, business invitees, licensees, customers, clients, family
members or guests. Lessor shall not discriminate against Lessee in the
enforcement of any rule or regulation. All rules and regulations that may be
enforced by Lessor
11
<PAGE>
against Lessee shall be reasonable and uniformly enforced among all of the
tenants in the Building. The Lessor shall use its reasonable efforts to enforce
all of the rules and regulations of the Building against other tenants in the
Building whose breach of such rules and regulations adversely affect the use of
the Demised Premises or of the common areas by Lessee, its employees, and
invitees. Lessee shall be notified in writing of any alleged breach by the
Lessee of the rules and regulations, and Lessee shall be given twenty (20) days
to cure such breach before any such breach shall constitute a breach of the
terms of the Lease.
34. RIGHT OF LESSOR TO CURE LESSEE'S DEFAULT
----------------------------------------
If Lessee defaults in the making of any payment to any third party, or
doing any act required to be made or done by Lessee for or on behalf of said
third party relating to the Demised Premises, then Lessor may, but shall not be
required to, make such payment or do such act, and the amount of the expense
thereof, if made or done by Lessor, with interest thereon at a rate equal to two
(2) percentage points above the then applicable prime base rate of interest per
annum as fixed by First Virginia Bank, or a reasonable comparable substitute
bank determined by the Lessor, accruing from the date paid by Lessor, shall be
paid by Lessee to Lessor and shall constitute additional rent hereunder due and
payable by Lessee upon receipt of a written statement of costs from Lessor. The
making of such payment or the doing of such act by Lessor shall not operate to
cure Lessee's default, nor shall it prevent Lessor from the pursuit of any
remedy to which Lessor would otherwise be entitled.
35. LATE CHARGES
------------
If Lessee shall fail to pay any installment of rent (including Monthly
Rent, any additional rent, or other charges to be paid by Lessee pursuant to the
Lease) within five(5) days after the same becomes due and payable Lessee shall
be obligated to pay a late payment charge equal to the greater of One Hundred
Dollars ($100.00) or three percent (3%) of any rent or charge not paid when due,
to reimburse Lessor for its additional administrative costs. The actual cost to
Lessor of such failure to pay is difficult or impossible to determine and the
parties agree that the said amount is liquidated damages for the failure to so
pay. However, no such late charge be payable by Lessee on any late payment of
rent in the event Lessee remits to Lessor the late payment within seven (7) days
following written notice to Lessee that Lessor has failed to timely receive any
payment to which Lessor is entitled under this Lease. However, in the event
Lessee is late more than two (2) times in any twelve (12) month period, Lessor
shall be entitled to the late charge and/or interest as provided in the Lease,
without the necessity of such written notice. In addition, any installments of
rent, including Monthly Rent, any additional rent, or other charges to be paid
by Lessee pursuant to this Lease which are not paid by Lessee within ten (10)
days after the same becomes due and payable, shall bear interest at a rate equal
to two (2) percentage points above the then base rate of interest as declared
First Virginia Bank accruing from the date such installment or payment became
due and payable to the date of payment thereof by Lessee. Such interest shall
constitute additional rent due and payable to Lessor by Lessee upon the date of
payment of the delinquent payment referenced above.
36. BANKRUPTCY
----------
In the event that the Lessee shall be adjudicated insolvent or bankrupt
pursuant to the provisions of any state or federal insolvency or bankruptcy act,
or if a receiver or trustee of the property of Lessee shall be appointed by
reasons of Lessee's insolvency or inability to pay its debts, or if any
assignment shall be made of Lessee's property for the benefit of creditors, or
Lessee admits in writing its inability to pay its debts generally as they become
due, then and in any such events, Lessor may, at its option and in addition to
any other remedy available to Lessor, terminate this Lease and all rights of
Lessee hereunder by giving to Lessee written notice of Lessor's election to
terminate.
In the event of termination, Lessor shall have the immediate right of re-
entry and may remove all person and property from the leased premises and such
property may be removed and stored in a public warehouse or elsewhere at the
cost of, and for the account of Lessee, all without service of notice or resort
to legal process and without being deemed guilty of trespass, or becoming liable
for any loss or damage which may be occasioned thereby.
In the event the trustee of the Lessee, or Lessee as debtor in possession,
shall timely assume this Lease under the Bankruptcy Code and continue in
possession of the Property, it shall be the responsibility of the trustee or
debtor in possession to cure or give adequate assurance that all defaults under
the provisions of this Lease shall be promptly cured, to fully compensate or
provide adequate assurance of compensation for any and all losses suffered by
Lessor, and to provide adequate assurances that all conditions of this Lease
shall be performed in the future, including but not limited to:
1. Adequate assurance of the payment of rent and other consideration due
under this Lease.
2. Adequate assurance that any percentage rent due will not decline
substantially.
3. Adequate assurance that assumption or assignment will not breach
substantially any provision such as radius, location, use or exclusivity
provisions in other lease, financing or master agreements.
4. Adequate assurance that assumption or assignment will not disrupt
substantially any tenant mix or balance.
In no event, will Lessor be required to provide additional services or
supplies under this Lease unless fully compensated by the trustee or debtor in
possession.
In the event that any new insolvency or receivership should occur after the
closing of the bankruptcy case, the Lessor may at its option, and in addition to
any other remedy available to Lessor, terminate this Lease and all rights of the
Lessee hereunder by giving to Lessee written notice of the Lessor's election to
terminate.
In the event that the Trustee for Lessee, or Lessee as Debtor-in-
Possession, exercises certain rights as set out above which would result in the
Property being used for a use other than general office purposes, then Lessor
specifically reserves the right to change or modify the Lease to include a
percentage rent rate or minimum basis of sales rate in the event that the space
is used for retail or commercial purposes and additionally to amend any
provision relating to parking (i.e., the number of parking spaces, location,
employee parking, etc.) in this Lease.
The provisions hereof shall be construed at the option of the Lessor, as
giving due recognition of the federal bankruptcy laws, if applicable, to be
interpreted to result in a termination of this Lease in each instance, and to
the fullest extent and at the earliest time that such termination is permitted
by law, it being of the utmost importance to the Lessor to deal only with
lessees who have and continue to have a strong degree of financial strength and
stability.
37. PARKING
-------
The Lessee shall be entitled at all times to park in the "Parking Facility"
which is a part of the Building on a nonexclusive basis two (2) parking spaces
per one thousand square feet in the Demised Premises for its employees and
invitees at market rates then charged by the Lessor in said Parking Facility.
Lessor agrees that Lessee shall be entitled to additional parking within the
Parking Facility on a pro-rata basis with the other tenants in the Building.
38. LANDLORD'S LIEN
---------------
Lessor acknowledges that Lessee has granted certain of its lenders a
security interest in various of Lessee's personal property and that such lenders
have required, and future lenders are likely to hereafter require, a waiver by
Lessor of its landlord's lien in and
12
<PAGE>
to all personal property of Lessee now or hereafter located at the Demised
Premises. Lessor hereby agrees to execute and deliver to Lessee within ten days
after written request therefor such evidence of Lessor's lien waiver as may
reasonably be requested in connection with any acquisition or financing by
Lessee of equipment, furniture, furnishings or trade fixtures or for the
provision of credit to Lessee in connection with its business operations.
39. INTENTIONALLY DELETED
---------------------
40. INTENTIONALLY DELETED
---------------------
41. MODIFICATION TO LEASE
---------------------
Lessee agrees that if any present or future secured lender on the Building
requires modifications to this Lease the Lessee agrees to promptly enter into
such modification, provided that such modification shall not be in substantial
derogation or diminution of any of the rights of the parties hereunder nor
increase any of the obligations or liabilities of the parties hereunder.
42. SURVIVAL OF CERTAIN TERMS
-------------------------
Both parties agree that all of the obligations of both Lessor and Lessee
set forth in this Lease to the extent pertaining to periods elapsing during the
term of this Lease shall survive the termination of this Lease.
43. CONSTRUING LEASE
----------------
The parties agree that both parties and their counsel have participated in
the drafting and/or review of the Lease and in the event of any dispute under
the Lease neither party shall be deemed to have been the drafter of the Lease
and the Lease shall not be construed against either party.
44. TIME OF THE ESSENCE
-------------------
Time shall be of the essence in the performance of all terms, conditions
and provisions of this Lease.
45. NO PARTNERSHIP
--------------
Nothing contained in this Lease shall be deemed or construed to create a
partnership or joint venture of or between Lessor and Lessee, or to create any
other relationship between the parties hereto other than that of Lessor or
Lessee.
46. NO REPRESENTATIONS BY LESSOR
----------------------------
Neither Lessor nor any agent or employee of Lessor has made any
representations or promises with respect to the Demised Premises or the Building
except as herein expressly set forth, and no rights, privileges, easements or
licenses are acquired by Lessee except as herein expressly set forth. Lessee,
by taking possession of the Demised Premises, shall accept the same in the then
"as is" condition, except for latent defects and punch list items. Taking of
possession of the Demised Premises by Lessee shall be conclusive evidence that
the Demised Premises and the Building are in good and satisfactory condition at
the time of such taking of possession, as provided for in Exhibit D subject to
latent defects (identified to Lessor within six months (provided that in the
event Lessee has not an opportunity to test the building systems within such six
month period due to seasonal changes, such 6 month period as to the Building
systems shall be extended to one year) following the respective Commencement
Date for the particular portion of the Demised Premises) and the punchlist
items.
47. BROKER AND AGENT
----------------
Lessor and Lessee each represent and warrant one to another that, except as
hereinafter set forth, neither of them has employed any broker in carrying on
the negotiations, or had any dealings with any broker, relating to this Lease.
Lessee represents that it has employed Charles E. Smith Commercial Real Estate
as its broker; Lessor represents that it has employed Virginia Management, Inc.
as its broker, and further agrees to pay the commissions accruing to each
identified broker pursuant to certain outside agreement(s). Lessor shall
indemnify and hold Lessee harmless, and Lessee shall indemnify and hold Lessor
harmless, from and against any claim or claims for brokerage or other commission
arising from or out of any breach of the foregoing representation and warranty
by the respective indemnitors.
Lessor appoints and Lessee recognizes, until such time as Lessor otherwise
notifies Lessee in writing, Virginia Management, Inc. as Lessor's management
agent (referred to in this Lease as "Agent") for the management and operations
of the Building including the issuance and receipt of all notices and the
instituting and processing all legal actions on behalf of Lessor under this
Lease.
Lessor appoints and Lessee recognizes, until such time as Lessor otherwise
notifies Lessee in writing, William Lillis on all matters as required by law.
48. WAIVER OF JURY TRIAL
--------------------
LESSOR AND LESSEE HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON OR
WITH RESPECT TO ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS LEASE. THE RELATIONSHIP OF LESSOR AND LESSEE HEREUNDER, LESSEE'S USE
OR OCCUPANCY OF THE DEMISED PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.
49. ENFORCEMENT OF LEASE
--------------------
In the event Lessor is required or elects to take legal action to enforce
against Lessee the performance of Lessee's obligations under this Lease, after
written notice and the expiration of the applicable cure period, then Lessee
shall immediately reimburse Lessor for all costs and expenses, including,
without limitation, reasonable attorneys' fees, incurred by Lessor in its
prosecution of that legal action.
50. NOTICES
-------
All notices or other communications hereunder, except for service of
process, shall be in writing and shall be deemed duly given if delivered in
person, by certified mail, return receipt requested; or by registered mail,
postage prepaid: (i) if to Lessor, in care of Virginia Management, Inc., 4600
North Fairfax Drive, Suite 1002, Arlington, Virginia 22203; and (ii) if to
Lessee, at 1255 22nd Street, N.W., Washington, D.C. 20037, Attention: Mr.
William M. Caldwell, IV, President, with a copy to its counsel, Richard F. Levin
at Grossberg, Yochelson, Fox & Beyda at 2100 Pennsylvania Avenue, N.W.,
Washington, D.C. 20037, prior to November 1, 1999, and thereafter, 2000 L
Street, N.W., Suite 612, Washington, D.C. 20037. Lessor has designated William
B. Lillis for the issuance and receipt of all legal notices and service of
process. The party to receive notices and the place notices are to be sent for
either Lessor or Lessee may be changed by notice given pursuant to the
provisions of this section.
51. ESTOPPEL CERTIFICATES
---------------------
13
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Lessee agrees, at any time and from time to time, upon not less than ten
(10) days prior written notice by Lessor, to execute, acknowledge and deliver to
Lessor a statement in writing (i) certifying that this Lease is unmodified and
in full force and effect (or, if there have been modifications, that the Lease
is in full force and effect as modified and stated the modifications), (ii)
stating the dates to which the rent and other charges hereunder have been paid
by Lessee, (iii) stating whether or not, to the best knowledge of Lessee, Lessor
is in default in the performance of any covenant, agreement or condition
contained in this Lease, and, if so, specifying each such default of which
Lessee may have knowledge, (iv) stating the address to which notices to Lessee
should be sent and, if Lessee is a corporation, the name and address of its
registered agent in the jurisdiction in which the Building is located, (v) such
other information as Lessor may reasonably request, and (vi) agreeing not to pay
rent more than thirty (30) days in advance or to amend the Lease without the
consent of any mortgage lender having a security interest in the Building. Any
such statement delivered pursuant hereto may be relied upon by any owner of the
Building, any prospective purchaser of the Building, any mortgagee or
prospective mortgagee of the Building or of Lessor's interest, or any
prospective assignee of any such mortgage. Lessee shall also be entitled to
request and receive from Lessor an estoppel certificate substantially similar to
that which Lessee is obligated to provide under the Lease and which shall be
provided upon the same terms which Lessee is obligated under the Lease for the
benefit of Lessee or any of Lessee's lenders or designees.
52. HOLDING OVER
------------
In the event Lessee does not immediately surrender the Demised Premises on
the date of expiration of the term of this Lease or any extension period
thereof, Lessee shall, by virtue of this section of the Lease, become a lessee
by the month and hereby agrees to pay to Lessor a Monthly Rent equal to 125% of
the amount of this Monthly Rent in effect during the last month of the term of
this Lease as it may have been extended as and for liquidated damages because
the damage to Lessor as a result of such holding over are difficult or
impossible to determine. The month-to-month tenancy shall commence with the
first day next after the expiration of the term of this Lease. Lessee as a
month-to-month tenant shall continue to be subject to all of the conditions and
covenants of this Lease. Lessee shall give to Lessor at least thirty (30) days
written notice of any intention to quit the Demised Premises. Lessee shall be
entitled to thirty (30) days written notice to quit the Demised Premises, except
in the event of nonpayment of the modified Monthly Rent in advance, in which
event Lessee shall not be entitled to any notice to quit, the usual thirty (30)
days notice to quit being hereby expressly waived.
In the event Lessee holds over after the expiration of the term of the
Lease or extension period thereof, and Lessor desires to regain possession of
the Demised Premises promptly at the expiration of the term of this Lease or
extension period thereof, then at any time prior to Lessor's acceptance of
modified Monthly Rent from Lessee as a month-to-month tenant hereunder, Lessor,
at its option, may forthwith re-enter and take possession of the Demised
Premises without process, or by any legal process in force in the jurisdiction
in which the Building is located.
53. COVENANTS OF LESSOR
-------------------
Lessor covenants that it has the right to make this Lease for the term of
the lease aforesaid, and that if Lessee shall pay the rent and shall perform all
of the covenants, agreements and conditions specified in this Lease to be
performed by Lessee, Lessee shall, for the term of the Lease, freely, peaceably
and quietly occupy and enjoy the full possession of the Demised Premises without
molestation or hindrance by Lessor, its agents or employees.
54. INTENTIONALLY DELETED
---------------------
55. RECORDATION
-----------
Lessee shall not record this Lease or any memorandum thereof without the
written consent of Lessor. In the event Lessee desires to record this Lease,
all fees, costs, taxes and expenses in connection with the filing and recording
of this Lease or any memorandum thereof shall be the sole obligations of Lessee.
Lessor may condition its consent to any request by requiring that only a
memorandum of lease be filed and recorded, such memorandum to exclude
information as to the amount of rent specified in this Lease. In the event
Lessee shall cause a memorandum of this Lease to be recorded, Lessee shall at
its sole cost and expense cause the release of such memorandum following the
expiration or other termination of this Lease.
56. INTENTIONALLY DELETED
---------------------
57. GENDER
------
Feminine or neuter pronouns shall be substituted for those of the masculine
form, and the plural shall be substituted for the singular number, in any place
or places herein in which the context may require such substitution or
substitutions.
58. BENEFIT AND BURDEN
------------------
The terms and provision of this Lease shall be binding upon and shall inure
to the benefit of the parties hereto and each of their respective
representatives, successors and permitted assigns. Lessor may freely and fully
assign its interest hereunder. In the event of any sale or transfer of the
Building by operation of law or otherwise by the party named as Lessor hereunder
(or any subsequent successor, transferee or assignee), then said party, whose
interest is thus sold or transferred shall be and is completely released and
forever discharged from and with respect to all covenants, obligations and
liabilities as Lessor hereunder after the date of such sale or transfer.
In the event Lessor shall be in default under this Lease, and if as a
consequence of such default, Lessee shall recover a money judgement against
Lessor, such judgement shall be satisfied only out of the proceeds of sale
received upon execution of such judgement against the right, title and interest
of Lessor in the Building as the same may then be constituted and encumbered and
Lessor shall not be liable for any deficiency. In no event shall Lessee have
the right to levy execution against any property of Lessor other than its
interests in the Building. Notwithstanding any provisions to the contrary, in
no event shall Lessor be released from any liability, debt or obligation
pertaining to periods during which the particular Lessor owned the Building
unless and to the extent that the same has been assumed by the Purchaser from
the Lessor, nor shall Lessee's right to recover sums from Lessor's policies of
insurance maintained with respect to the Building be adversely affected by
reason of any limitation of Lessor's liability or similar provisions contained
in the Lease.
59. GOVERNING LAW
-------------
This Lease and the rights and obligations of Lessor and Lessee hereunder
shall be governed by the laws of the jurisdiction in which the Building is
located.
60. SAVINGS CLAUSE
--------------
If any provision of this Lease or the application thereof to any person or
circumstance is to any extent held invalid, then the remainder of this Lease or
the application of such provision to persons or circumstances other than those
as to which it is held invalid shall not be affected thereby, and each provision
of the Lease shall be valid and enforced to the fullest extent permitted by law.
61. CORPORATE LESSEE
----------------
If Lessee is or will be a corporation, the persons executing this Lease on
behalf of Lessee hereby consent, represent and warrant that Lessee is a duly
incorporated or a duly qualified (if a foreign corporation) corporation and
authorized to do business in the Commonwealth of Virginia; and that the person
or persons executing this Lease on behalf of Lessee is an officer or are
officers of Lessee, and that he or they as such officers are duly authorized to
sign and execute this Lease. If Lessee is a partnership, limited
14
<PAGE>
partnership or limited liability company, the person executing this Lease
represents and warrants that the entity is properly formed and authorized to do
business in the Commonwealth of Virginia and they have the authority to execute
this Lease and bind the entity. Upon request of Lessor to Lessee, Lessee shall
deliver to Lessor documentation satisfactory to Lessor evidencing Lessee's
compliance with the provisions of this section. Further, Lessee agrees to
promptly execute all necessary and reasonable applications or documents
confirming such registration as requested by Lessor or its representative
required to permit the issuance of necessary permits and certificates for
Lessee's use and occupancy of the Demised Premises. Any delay or failure by
Lessee in submitting such application or document so executed shall not serve to
delay the Commencement Date or delay or waive Lessee's obligations to pay rent
hereunder.
62. JOINT AND SEVERAL LIABILITY
---------------------------
If two or more individuals, corporations, partnerships or other business
associations (or any combination of two or more thereof) shall sign this Lease
as Lessee, the liability of each of them shall be joint and several. In like
manner, if Lessee named in this Lease shall be a partnership or other business
association the members of which are, by virtue of statute or general law,
subject to personal liability, the liability of each of such member shall be
joint and several.
63. BUSINESS DAY/WORKING DAY
------------------------
The terms "business day" and "working day" are terms describing each
calendar day Monday through Friday except any holiday identified specifically or
generically in the section of this Lease entitled, "SERVICES AND UTILITIES"
falling on one of such calendar days.
64. ENTIRE AGREEMENT
----------------
This Lease, together with Exhibits A, B, C and D attached hereto and made a
part hereof, contains and embodies the entire agreement of the parties hereto,
and no representations, inducements, or agreements, oral or otherwise, between
the parties not contained and embodied in this Lease and said Exhibits shall be
of any force or effect, and the same may not be modified, changed or terminated
in whole or in part in any manner other than by an agreement in writing duly
signed by all parties hereto.
65. INITIAL CONSTRUCTION, CONSTRUCTION ALLOWANCE AND CONDITION OF DEMISED
---------------------------------------------------------------------
PREMISES
--------
Lessor shall deliver the Demised Premises in a broom clean "as is"
condition, subject to the terms described below.
Lessor shall provide to Lessee an initial construction allowance (the
"Lessor's Allowance") equal in amount to Twenty Five Dollars( $25.00) per
rentable square foot of the Demised Premises to construct all improvements in
the Demised Premises above a Base Building as defined. Lessor agrees to cause
Lessor's contractor to construct Lessor's Work at Lessee's request and expense,
subject to the Lessor's Allowance and, if desired by Lessee, the Lessor's
Additional Allowance (below defined) in accordance with the final plans approved
by both Lessor and Lessee. Lessor agrees not to unreasonably delay , withhold
or condition its consent to the final plans. Lessee agrees to pay to Lessor the
cost of Lessor's Work, if any, in excess of the Lessor's Allowance and Lessor's
Additional Allowance remaining, such sums to be paid at the time of substantial
completion. However, Lessee shall not pay for any of the base building
environment items specified below, all of which to be provided to Lessee by
Lessor at Lessor's sole cost and expense. There shall be no construction
management or supervisory fee imposed by Lessor. Any unused portion of the
Lessor's Allowance (as opposed to the Lessor's Additional Allowance) shall be
made available to Lessee against the installments of rent otherwise payable
hereunder. The Lessor's Allowance may also be applied by Lessee towards any
design, demolition, permitting and construction costs related to Lessor's Work,
and costs of cabling, technology and move related expenses. Lessor shall
disburse Lessor's Allowance directly to Lessor's contractor to be applied
towards the cost of constructing Lessor's Work, upon Lessor's receipt of
invoices. Lessee shall have access to the Premises two (2) weeks prior to the
Commencement Date for purposes of construction of installation of voice/data
communication systems, subject to the following conditions: (i) Lessee shall
coordinate any installation work with Lessor; (ii) Lessee shall be liable for
any damage or injury caused to person or property as a result of such early
access; (iii) Lessee's installation work shall not interfere with any work which
Lessor may be doing in the Premises or with any other Lessee's use and enjoyment
of the Building; and (iv) such entry shall be subject to all terms and
conditions of the Lease except for Lessee's obligation to pay rent.
Lessor will provide upon Lessee's written request an additional
construction allowance (the "Lessor's Additional Allowance") of up to Five
Dollars ($5.00) per square foot over the initial construction allowance to be
amortized over the term at an interest rate of eight and one-half percent (
8.5%) per annum.
Base building environment to be provided to Lessee for Lessee's own
construction shall be delivered by Lessor, at its sole cost and expense, in the
condition and level of completion as follows:
Floors: Floor surfaces ready to receive carpet finishes without filling,
flashing, chipping or other preparation.
Walls: Perimeter walls, core walls, furred solid walls, columns bulkheads, etc.,
to be sheet rocked or plastered, finished, prepared and to receive finish paint
or wall covering.
Windows: Window sills, mullions, trim, installed and finished. Window blinds to
be installed.
Elevator Lobby: All lobby features to be complete and installed including, but
not limited to, elevator door frames, thresholds, call buttons, lights, trash
receptacles, and code required signage. All lobby alarm systems including, but
-----
not limited to, detectors, annunciators, bells, pull stations, lights, flashers,
extinguishers, etc., as may be required to be installed and complete.
Core Area: All core area spaces, including closets, toilet rooms, etc., to be
complete and finished and ready for Lessee use.
Plumbing: All wetstack plumbing systems to be complete and ready for connection
to Lessee-added plumbing work.
Electrical: Electrical system to be complete at floor electrical rooms, in
accordance with specifications dated July 11, 1997.
Mechanical Systems: Mechanical systems to be completed in accordance with plans
and specifications dated July 11, 1997.
Sprinklers: Sprinkler system to be completed and operational in accordance with
plans and specifications dated July 11, 1997.
Alarms and Life Safety Systems: All building tenant area alarm circuits,
emergency circuits, equipment, fixtures and trim to be completed and operational
in accordance with plans and specifications dated July 11, 1997.
Access: The Demised Premises will be accessible during all working hours without
interference by base building contractors or continuing base building work. One
elevator will be operational and protected for use by contractors to bring
materials, equipment, tools and personnel to the Demised Premises.
Lessor certifies that the Building will meet Arlington County, Virginia,
governmental approval and will be occupiable using the equivalent of building
standard materials and assemblies, customary practice and technique.
Lessor will within ______ days of the execution of this Lease provide Lessee a
complete set of proposed drawings, specifications and documents for the Lessee's
use in the design of the Premises, and will make available the Building
engineers, architects, and engineering designers to answer any questions about
the existing Building systems and structure.
15
<PAGE>
66. FIRST RIGHT TO LEASE
--------------------
Lessor hereby grants to Lessee a first right to lease any space, on the 1st
and 2nd floors of the Building which become available for leasing, at any time
during the Initial Term, at Lessee's fully escalated per square foot rental for
the Demised Premises at the commencement of such first right. Lessor will
advise Lessee in writing of the availability of any such space prior to making
same and Lessee shall have ten (10) working days to notify Lessor of its
agreement to lease the additional space. If Lessee fails to exercise its option
to lease additional space within this ten (10) day period, Lessor shall be free
to offer such additional space to others.
67. ROOF/AIRTIGHTS
--------------
The Lessor shall provide space on the roof in an area reasonably acceptable
to Lessor for placement of two (2) antennae, together with associated wiring
and cabling, or related equipment or future similar equipment for use by the
Lessee only, . Lessee shall be solely responsible for the maintenance and
repair of such satellite dish or related equipment an the removal at the
expiration of the Term. Lessee shall comply with building rules and other laws,
codes and regulations of applicable governmental authorities in the use and
maintenance of such equipment. Lessee shall conduct and maintain its equipment
in a manner not to unreasonably interfere with the roof-top equipment of other
tenants in the Building, and Lessor shall similarly obligate its other tenants
to operate their respective roof-top equipment to assure that they will not
unreasonably interfere with Lessee's antennae. Lessee's roof top equipment
shall be furnished and installed by and at the sole cost and expense of Lessee.
Lessee hereby indemnifies Lessor and holds Lessor harmless against all claims,
actions, damages, judgments, settlements, liability, cost and expenses in
connection with the use or operation, installation, maintenance or removal of
Lessee's roof-top equipment.
68. QUIET ENJOYMENT
---------------
Lessor covenants that it has the right to make this Lease and that, if
Lessee pays all of the Annual Base Rent and the Additional Rent, performs all of
its obligations provided for hereunder and observes all of the other provisions
hereof, Lessee shall have the right, during the term of this Lease and any
applicable renewal period, to the quiet enjoyment, use and occupancy of the
Demised Premises, without any molestation or hindrance by Lessor or others
claiming by, through or under Lessor.
16
<PAGE>
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be signed
in their names by their duly authorized representatives and delivered as their
act and deed, intending to be legally bound by its terms and provisions.
LESSOR:
AMES CENTER, L.C.
A Virginia Limited Liability Company
SNELL CONSTRUCTION CORPORATION, Member
By: __________________________________
Its: President
SECO ASSOCIATES LIMITED PARTNERSHIP, Member
By:___________________________________
Its ________________________________
I, _____________________, a Notary Public in and for the jurisdiction
aforesaid do hereby certify that ______________________________, who is
personally well known to me as the person who executed the foregoing and annexed
Lease, dated the _____ day of _____________, 1999, on behalf of the Lessor, to
acknowledge the same, personally appeared before me in said jurisdiction and
acknowledged said Lease to be his act and deed and delivered the same as such.
Given under my hand and seal this _____ day of _______________, 1999.
___________________________________
Notary Public
My commission expires:
LESSEE:
CAIS , INC.
By: __________________________________
____________________________)
____________________________) ss:
____________________________)
I, _____________________, a Notary Public in and for the jurisdiction
aforesaid do hereby certify that ______________________________, who is
personally well known to me as the person who executed the foregoing and annexed
Lease, dated the _____ day of _____________, 1999, on behalf of the Lessor, to
acknowledge the same, personally appeared before me in said jurisdiction and
acknowledged said Lease to be his act and deed and delivered the same as such.
Given under my hand and seal this _____ day of _______________, 1999.
___________________________________
Notary Public
My commission expires:
17
<PAGE>
EXHIBIT B
SPECIFICATIONS FOR OFFICE SPACE
Pre-occupancy Lessee work to be provided by and at the expense of lessor
and included within the Monthly Rent.
Lessee accepts possession of the Demised Premises in its "as is" condition
existing on the date possession is delivered to Lessee, without requiring any
alternations, improvements, or decorations to be made by Lessor at Lessor's
expenses except as set forth in the Lease.
18
<PAGE>
EXHIBIT C
RULES AND REGULATIONS
1. The sidewalks, entrances, passages, courts, vestibules, stairways,
corridors or halls or other parts of the Building not occupied by any Lessee
shall not be obstructed or encumbered by any Lessee or used for any purpose
other than ingress and egress to and from the Demised Premises. Lessor shall
have the right to control and operate the public portions of the Building, and
the facilities furnished for the common use of the Lessees, in such manner as
Lessor deems best for the benefit of the Lessees generally. No Lessee shall
permit the visit to the Demised Premises of persons in such numbers or under
such conditions as to interfere with the use and enjoyment by other Lessees of
the entrances, corridors, and other public portions or facilities of the
Building.
2. No awnings or other projections shall be attached to the outside walls of
the Building without the prior written consent of the Lessor. No drapes,
blinds, shades, signs, or screens shall be attached to or hung in, or used in
connection with any window or door of the Demised Premises, without the prior
written consent of the Lessor. Such awnings, projection, curtains, blinds,
shades, screens, signs or other fixtures must be of a quality, type, design and
color, and attached in the manner approved by Lessor.
3. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Lessee on any part of the outside or inside
of the Demised Premises or Building including windows or doors without the prior
written consent of the Lessor. In the event of the violation of the foregoing
by any Lessee, Lessor may remove same without any liability, and may charge the
expense incurred by such removal to the Lessee or Lessees violating this rule.
Interior signs on doors and directory tablet shall be inscribed, painted or
affixed for each Lessee by the Lessor at the expense of such Lessee, and shall
be of a size, color and style acceptable to the Lessor.
4. No showcases or other articles shall be put in front or affixed to any part
of the exterior of the building, nor placed in the halls, corridors or
vestibules without the prior written consent of the Lessor.
5. The water and wash closets and other plumbing fixture shall not be used for
any purposes other than those for which they were constructed, and no sweepings,
rubbish, rags, or other substances shall be thrown therein. All damages
resulting from any misuse of the fixtures shall be borne by the Lessee who, or
whose servants, employees, agents, visitors or licensees, shall have caused the
same.
6. There shall be no marking, painting, drilling into or in any way defacing
any part of the Building, except as to ordinary interior decoration of the
Demised Premises. No boring, cutting or stringing of wires shall be permitted.
Lessee shall not construct, maintain, use or operate within the Demised Premises
or elsewhere within or on the outside of the Building, any electrical device,
wiring or apparatus in connection with loud speaker system or other sound
system.
7. No bicycles, vehicles or animals, birds or pets of any kind shall be
brought into or kept in or about the Demised Premises, and no cooking shall be
done or permitted by any Lessee on said premises, except Lessor expressly hereby
consents to Lessee's having and using a refrigerator, microwave and coffee and
lunchroom facilities within the Demised Premises for the exclusive use of Lessee
and its employees. No Lessee shall cause or permit any unusual or objectionable
odors to be produced upon or permeate from the Demised Premises.
8. No space in the building shall be used for manufacturing, for the storage
of merchandise, or for the sale of merchandise, goods or property of any kind,
or to hold any auction whatsoever.
9. No Lessee shall make, or permit to be made, any unseemly or disturbing
noises or disturb or interfere with occupants of this or neighboring buildings
or premises of those having business with them whether by the use of any musical
instrument, radio, talking machine, unmusical noise, whistling, singing, or in
any other way. No Lessee shall throw anything out of the doors or windows or
down the corridors or stairs.
10. No inflammable, combustible or explosive fluid, chemical or substance shall
be brought or kept upon the Demised Premises.
11. No additional locks or bolts of any kind shall be placed upon any of the
doors, or windows by the Lessee, nor shall any changes be made in existing locks
or the mechanism thereof.
12. All removals, or the carrying in or out of any safes, freight, furniture or
bulky matter of any description must take place during the hours which the
Lessor or its Agent may determine from time to time. The Lessor reserves the
right to inspect all freight to be brought into the building and to exclude from
the building all freight which violates any of these Rules and Regulations or
the Lease of which these Rules and Regulations are a part.
13. Any person employed by any lessee to do janitor work within the Demised
Premises must obtain Lessor's consent, which consent shall not be unreasonably
withheld, and such person shall, while in the Building and outside of said
Demised Premises, comply with all instructions issued by the Property Manager of
the Building.
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14. The Lessor reserves the right to exclude from the building at all times
any person who is not known or does not properly identify himself to the
building management. Each Lessee shall be responsible for all persons for whom
Lessee authorizes entry into or exit out of the Building.
15. The premises shall not be used for lodging or sleeping or for any immoral
or illegal purpose.
16. Each Lessee, before closing and leaving the Demised Premises at any time,
shall see that all windows are closed and all lights turned off.
17. Canvassing, soliciting and peddling in the Building is prohibited and each
Lessee shall cooperate to prevent the same.
18. No water cooler, plumbing or electrical fixtures shall be installed by any
Lessee without the prior written consent of Lessor.
19. There shall not be used in any space, or in the public halls of the
Building, either by any Lessee or by jobbers or others, in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and side guards.
20. Access plates to underfloor conduits shall be left exposed. Where Lessee
elects not to provide removable plates in their carpet for access into the
underfloor duct system, it shall be the Lessee's responsibility to pay for the
removal and replacement of the carpet for any access needed into the duct or
conduit system at any time in the future.
21. Mats, trash or other objects shall not be placed in the public corridors.
22. Drapes or blinds installed by the Lessee for their use which are visible
from the exterior of the Building must be approved by Lessor in writing and be
cleaned by the Lessee and must have non-see through white liners.
23. The Lessor will furnish and install lights bulbs for the building standard
fluorescent fixtures only. For special fixtures the Lessee will stock his own
bulbs, which will be installed by the Lessor when so requested by the Lessee.
24. The Lessee will, at its own cost, promptly comply with and carry out all
orders, requirements or conditions now or hereinafter imposed upon it by the
ordinances, laws, rules, orders and/or regulations of the Commonwealth of
Virginia, Arlington County or the United States of America.
25. The Lessee covenants and agrees, at its sole cost and expense, to comply
with all present and future laws, orders, requirements, conditions and
regulations of all entities having jurisdiction over the Property regarding
health, safety, environmental and/or access to the property by all individuals
(including those with disabilities).
26. The Lessee covenants and agrees, at its sole cost and expense, to comply
with all present and future laws, orders, requirements, conditions and
regulations of all entities having jurisdiction over the Property regarding the
collection, sorting, separation and recycling of waste products, garbage, refuse
and trash.
27. Violation of these rules and regulations, or any amendments thereto, shall
be sufficient after notice and opportunity to cure to cause for termination of
this Lease at the option of the Lessor.
28. The Lessor may, upon request by any Lessee, waive the compliance by such
Lessee of any of the foregoing rules and regulations, provided that (i) no
waiver shall be effective unless signed by Lessor or Lessor's authorized agent,
(ii) any such waiver shall not relieve such Lessee from the obligation to comply
with such rule or regulation in the future unless expressly consented to by
Lessor, and (iii) no waiver granted to any Lessee shall relieve any other Lessee
from the obligation of complying with the foregoing rules and regulations unless
such other Lessee has received a similar waiver in writing from Lessor.
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EXHIBIT D
DECLARATION AS TO DATE OF DELIVERY
AND ACCEPTANCE OF POSSESSION OF
DEMISED PREMISES
Attached to and made a part of the Lease, dated the ________ day of
___________________, 19 _____, entered into by and between
_______________________________________________________________, as Lessor, and
_________________________________________________, as Lessee.
Lessor and Lessee do hereby declare and evidence that possession of the
Demised Premises was accepted by Lessee on the _____ day of _______________,
19_____. The Building, the Demised Premises and other improvements required to
be constructed and finished by Lessor in accordance with Exhibit B have been
satisfactorily completed by Lessor and accepted by Lessee. The Lease is now in
full force and effect. For the purpose of this Lease, the Commencement Date is
established as the _________ day of ______________________, 19 _____. As of the
date of delivery and acceptance of possession of the Demised Premises as herein
set forth, there is no right of set off against rents claimed by Lessee against
Lessor.
Lessee, if a corporation, states that its registered agent is
_____________________________, having an address at ____________________, and
that it is a corporation in good standing in the jurisdiction in which the
Building is located.
LESSOR:
By:________________________________
By:________________________________
LESSEE:
By:________________________________
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EXHIBIT E
DIRECT HOURLY HVAC COSTS
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