Virginia-Fairfax-3975 Fair Ridge Drive Lease - Brit LP and ANADAC Inc.
FIFTY WEST CORPORATE CENTER
DEED OF LEASE
between
BRIT LIMITED PARTNERSHIP,
as Landlord
and
ANADAC, INC.,
as Tenant
Dated: September 28, 2000
<PAGE>
TABLE OF CONTENTS
1. PREMISES................................................................ 1
2. TERM.................................................................... 1
3. RENT.................................................................... 2
4. ANNUAL EXPENSE INCREASES................................................ 3
5. ADDITIONAL RENT......................................................... 7
6. TENANT IMPROVEMENTS..................................................... 7
7. LANDLORD ACCESS......................................................... 8
8. QUIET ENJOYMENT......................................................... 9
9. SERVICES................................................................ 9
10. USE OF PREMISES......................................................... 9
11. SIGNS................................................................... 10
12. FIXTURES; ELECTRICAL EQUIPMENT.......................................... 10
13. ALTERATIONS; MECHANICS LIENS............................................ 11
14. MAINTENANCE AND REPAIRS BY LANDLORD..................................... 12
15. REPAIRS AND MAINTENANCE BY TENANT....................................... 12
16. INSURANCE; INDEMNITY.................................................... 13
17. PROPERTY AT TENANT'S RISK............................................... 14
18. DAMAGE.................................................................. 14
19. CONDEMNATION............................................................ 15
20. LAWS AND ORDINANCES..................................................... 16
21. RULES AND REGULATIONS................................................... 16
22. SURRENDER; HOLDOVER..................................................... 16
23. EVENTS OF DEFAULT....................................................... 17
24. LANDLORD'S REMEDIES UPON DEFAULT........................................ 18
25. REMEDIES CUMULATIVE; NO WAIVER.......................................... 19
26. SECURITY DEPOSIT........................................................ 19
27. LIEN ON PERSONAL PROPERTY............................................... 21
28. ASSIGNMENT; SUBLETTING.................................................. 21
29. NONDISTURBANCE AND SUBORDINATION........................................ 23
30. MORTGAGEE PROTECTION.................................................... 24
- i -
<PAGE>
31. MODIFICATIONS DUE TO FINANCING.......................................... 24
32. ESTOPPEL CERTIFICATES................................................... 24
33. FINANCIAL STATEMENTS.................................................... 25
34. [INTENTIONALLY OMITTED]................................................. 25
35. NOTICES................................................................. 25
36. BROKERS................................................................. 26
37. ATTORNEYS' FEES......................................................... 26
38. WAIVER OF JURY TRIAL; COUNTERCLAIMS..................................... 26
39. ASSIGNS AND SUCCESSORS; LIMITATIONS ON LIABILITY........................ 27
40. [INTENTIONALLY OMITTED]................................................. 27
41. LANDLORD'S CONSENT OR APPROVAL.......................................... 27
42. HEADINGS; INTERPRETATION................................................ 27
43. SEVERABILITY............................................................ 28
44. APPLICABLE LAW.......................................................... 28
45. RECORDING............................................................... 28
46. TIME IS OF THE ESSENCE.................................................. 28
47. SURVIVAL OF OBLIGATIONS................................................. 28
48. [INTENTIONALLY OMITTED]................................................. 28
49. PARKING................................................................. 28
50. ENTIRE AGREEMENT........................................................ 29
51. OPTION TO RENEW......................................................... 29
52. HAZARDOUS MATERIALS..................................................... 29
53. RIGHT OF FIRST NOTICE................................................... 30
54. ANTENNA LICENSE......................................................... 30
55. ADA COMPLIANCE.......................................................... 33
EXHIBIT A -- PREMISES
EXHIBIT B -- COMMENCEMENT AGREEMENT
EXHIBIT C1 -- TENANT'S PLANS
EXHIBIT C2 -- FINAL CONSTRUCTION DRAWINGS
EXHIBIT D -- RULES AND REGULATIONS
EXHIBIT E -- APPROVED GENERAL CONTRACTOR LIST
EXHIBIT F -- THE BUILDING
EXHIBIT G -- VISITOR PARKING
- ii -
<PAGE>
DEED OF LEASE
THIS LEASE AGREEMENT (this "Lease") is made as of the 28th day of
September, 2000, by and between BRIT LIMITED PARTNERSHIP, a Maryland limited
partnership ("Landlord"), and ANADAC, INC., a Virginia corporation ("Tenant").
WITNESSETH:
1. PREMISES. For and in consideration of the rent hereinafter reserved
and the mutual covenants hereinafter contained, Landlord hereby leases to
Tenant, and Tenant does hereby rents from Landlord, the premises (the
"Premises") identified as Suite 100S and consisting of approximately 56,566
rentable square feet of office space on the Terrace level, first (1st) and third
(3rd) floors of the South Wing of the building (the "Building") known as the
Fifty West Corporate Center, 3975 Fair Ridge Drive, Fairfax, Virginia 22033,
together with the non-exclusive use of the Common Area at the Property, upon the
terms and conditions set forth herein. The Premises are more particularly
described on Exhibit A attached hereto. The Common Areas shall be defined as all
interior and exterior shared facilities, property, services and amenities of the
Building and Property to be utilized by the tenants of the Property on a
non-exclusive basis (which currently include but are not limited to jogging
trails, on-site deli, fitness facility, conference center, exterior landscaped
park-like grounds). Landlord reserves the right to alter or amend the Common
Areas in its prudent and reasonable business judgment throughout the term of the
Lease. The land upon which the Building is located, and other improvements upon
such land are hereinafter referred to herein as the "Property." (The actual
rentable square footage of the Premises shall be determined following completion
of a final space plan, which shall be measured in accordance with the BOMA
standard method of measurement. Upon written request to Landlord, Tenant shall
have the right, prior to the Commencement Date, at Tenant's expense, to have a
certified architect review and confirm the square footage figure determined by
Landlord's architect.) Except as provided for herein, the roof, exterior faces
of all perimeter walls and the use of air space above the Building shall be
reserved for Landlord's exclusive use and Tenant shall have no right of access
thereto. This Lease conveys to Tenant no license, easement or parking privileges
except as expressly provided herein.
2. TERM.
(a) The term of this Lease (the "Term") shall commence on the earlier
to occur of (i) the day which is the first business day after the day the Tenant
Improvements (as defined in Section 6) is substantially complete, as evidenced
by a final Fairfax County building inspection and a certificate of substantial
completion from Landlord's architect or construction manager, or (ii) the date
on which Tenant commences beneficial use of the Premises (the "Lease
Commencement Date"), but in no event shall the Term commence prior to June 1,
2001, and shall continue for a period of ten (10) consecutive years thereafter,
unless the Lease Term is extended or terminated earlier in accordance with the
provisions of this Lease (the Termination Date"). Notwithstanding the foregoing,
should the Tenant request in writing that the Term commence prior to June 1,
2001, the Landlord will reasonably cooperate with such request by the Tenant so
long as it is commercially reasonable to do so as determined in Landlord's
construction manager's sole and absolute discretion. If Landlord determines that
it is commercially reasonable to accommodate such request, then (i) the Landlord
will endeavor to complete construction of the Tenant Improvements in accordance
with the Tenant's request subject to the requirements of Section 6 and any
Excess Tenant Costs and Change Order Costs as defined in Section 6(b) and (ii)
upon the mutual agreement of the Landlord and Tenant, the Term shall commence,
including the obligation to pay Rent, upon such earlier date as may be agreed
upon by the parties (the "Early Commencement Date"). If the Lease Commencement
Date is a day other than the first day of a month, then the Lease Term shall
commence on the Lease Commencement Date and shall continue for the balance of
the month in which the Lease Commencement Date occurs and for a period of the
aforesaid number of consecutive years thereafter. Tenant shall be deemed to have
commenced beneficial use of the Premises when Tenant begins to conduct business
from the Premises. Notwithstanding the foregoing, if Landlord is delayed in
completing Tenant Improvements in whole or in part by any default, acts or
omissions of Tenant, then for purposes of determining the Commencement Date,
Tenant Improvements shall be deemed to have been substantially complete on the
date Landlord's architect or construction manager determines that Tenant
Improvements
<PAGE>
would have been substantially completed absent such delays caused by Tenant.
Promptly after the Lease Commencement Date is ascertained, Landlord and Tenant
shall execute a certificate, in the form attached hereto as EXHIBIT B, setting
forth the Lease Commencement Date and the date upon which the term of this Lease
will expire.
(b) If permission is given to Tenant to enter into possession of
the Premises prior to the Lease Commencement Date, Tenant covenants and agrees
that such occupancy shall be deemed to be under all the terms, covenants,
conditions and provisions of this Lease, except Tenant shall have no obligation
to pay Rent during such period unless the Early Commencement Date, as defined in
Section 2(a) above, applies.
(c) Early Entry. Landlord hereby grants permission to Tenant to
enter into the Premises thirty (30) days prior to the date that Landlord
estimates will be the Lease Commencement Date only for the purposes of
installing wiring, cabling, furniture, telecommunications equipment and trade
fixtures necessary for Tenant to conduct its business. Tenant covenants and
agrees that it shall coordinate such activities of Tenant with Landlord or
Landlord's contractor regarding the time and purposes of its entry and shall not
interfere with the construction of the Premises. Such early occupancy by Tenant
shall be deemed to be under all the terms, covenants, conditions and provisions
of this Lease, except that Tenant shall have no obligation to pay Rent during
such period.
3. RENT.
(a) Tenant covenants and agrees to pay to Landlord during the
first Lease Year of the Term a fixed rental of One Million Six Hundred
Ninety-Six Nine Hundred Eighty and 00/100 Dollars ($1,696,980.00)(the "Annual
Base Rent"), based on Thirty and 00/100 Dollars ($30.00) per rentable square
foot, in equal monthly installments (the "Monthly Base Rent") of One Hundred
Forty-One Four Hundred Fifteen and 00/100 Dollars ($141,415.00). Thereafter,
during each Lease Year of the Term, the Annual Base Rent shall be equal to the
product obtained by multiplying (i) the Annual Base Rent for the preceding Lease
Year of the Term by (ii) one hundred three percent (103%).
(b) Concurrently with the execution of this Lease, Tenant shall
pay to Landlord an amount equal to one (1) monthly installment of the Annual
Base Rent payable during the first (1st) Lease Year, which amount shall be
credited by Landlord toward the monthly installment of Annual Base Rent payable
for the first (1st) full calendar month of the Lease Term. So long as it is not
a result of Landlord's gross negligence or willful misconduct or Landlord's
inability to tender possession of the Premises to Tenant or an Affiliate, in
accordance with Section 28(i), as a result of the previous tenant's failure to
vacate the Premises, this amount shall be a non-refundable payment to Landlord
in the event Tenant or an Affiliate, in accordance with Section 28(i), does not
occupy the Premises pursuant to this Lease. If the Lease Commencement Date is a
day other than the first (1st) day of a month, then Annual Base Rent from the
Lease Commencement Date until the first (1st) day of the following month shall
be prorated on a per diem basis at the rate of one-thirtieth (1/30th) of the
monthly installment of Annual Base Rent payable during the first (1st) lease
year, and Tenant shall pay such prorated installment of Annual Base Rent in
advance on the Lease Commencement Date.
(c) Rent shall be payable in lawful money of the United States
of America to the Landlord or to such other person and at such place as the
Landlord may from time to time direct by written notice to the Tenant, in
advance, without previous notice or demand therefore and without deduction or
setoff, except as may otherwise be set forth in this Lease. Monthly Base Rent
shall be due and payable on the first day of each and every month during the
Term hereof, except as otherwise provided herein. No payment by Tenant or
receipt by Landlord of a lesser amount than the amounts herein stipulated 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 rent be deemed an accord and satisfaction and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or to pursue any other remedy provided in this Lease.
Tenant shall pay Landlord upon demand the sum of Fifty Dollars ($50.00) for each
of Tenant's checks returned to Landlord not paid for insufficient funds or
other reasons not the fault of Landlord, to cover Landlord's costs in handling
such returned items, and, if there shall be more than one (1) such returned
check, Tenant shall thereafter pay all future sums due hereunder to Landlord in
the form of certified or cashier's checks or money orders. The foregoing
returned check charge represents the parties' reasonable estimate as of the date
-2-
<PAGE>
notice given within sixty (60) days after receipt of the Estimation Statement
or Annual Statement (as the case may be) for the fiscal year to which such
estimate or calculation relates.
(f) "Annual Operating Costs," as used herein, shall include all expenses
incurred by Landlord in connection with owning, operating, managing, insuring,
repairing, maintaining and protecting of the Building and/or its appurtenances
(including, without limitation, any parking areas servicing the Building) and/or
the Property, and shall include, by way of illustration but not limitation, the
following: all rents, charges and expenses, salaries, wages and employee
benefits for agents or employees of Landlord engaged in the operation,
maintenance, servicing or repair of the Building and/or the Property and/or its
appurtenances, license, permit and inspection fees and/or charges, repairs and
maintenance, utility and utility distribution charges, water and sewer charges,
charges for gas, oil and other fuels, charges for steam, premiums for any
casualty, liability, rent and/or other insurance obtained by Landlord or on
Landlord's behalf with respect to the Building and/or the Property, security
services, char and cleaning services, building and cleaning supplies, uniforms
and dry cleaning and laundering, window cleaning, snow removal, repair and
maintenance of the sidewalks, driveways, roadways (public and private) and
grounds, including plantings and ground cover and other improvements and
replacements thereto, accounting and legal fees, fees and expenses incurred by
Landlord under any service (including, without limitation, garbage and waste
disposal (including recycling costs), elevator service, and plumbing service) or
management contracts, the cost for telephone, telegraph, facsimile, stationery,
postage and other materials and supplies used in the operation of the Building
and/or the Property, personal property taxes, chillers, air conditioning and
ventilation, advertising and promotion expenses, all sales and/or excise taxes
imposed on any of the services provided by Landlord, and any other expenses or
charges of any nature whatsoever, whether or not herein mentioned, which shall
be included in Annual Operating Costs in accordance with generally accepted
accounting and management principles with respect to operation of similar office
buildings in the Fairfax, Virginia area. Annual Operating Costs shall include a
management fee not to exceed five percent (5%) of the gross revenue from the
Building, and the cost of any capital improvements intended to decrease Annual
Operating Costs or required by Federal, state or local statutes, regulations,
rules or orders. The cost of such capital improvements shall be amortized over
the life of the particular asset and to this extent shall be included in Annual
Operating Costs. Notwithstanding the foregoing Annual Operating Costs shall be
reduced by all cash discounts, trade discounts or quantity discounts actually
received by Landlord or Landlord's managing agent in the purchase of any goods,
utilities or services. In the calculation of any expenses hereunder, it is
understood that no expense shall be charged more than once. Landlord shall use
its reasonable efforts in good faith to effect an equitable proration of bills
for services rendered to the Building and to any other property owned by
Landlord or an affiliate of Landlord. In the event there exists a conflict as to
an expense which is specified to be included in Annual Operating Costs and is
also specified to be excluded from Annual Operating Costs within the below list,
the exclusions listed below shall prevail and the expenses shall be deemed
excluded. Landlord shall not recover more than one hundred percent (100%) of the
Annual Operating Costs actually incurred by Landlord. "Annual Operating Costs,"
as used herein, shall specifically exclude the following:
(i) costs and expenses incurred in completing, fixturing, furnishing,
renovating or otherwise improving, decorating or redecorating tenantable space
for other tenants of the Building pursuant to said tenant's leases, to the
extent such work is not in the common or public areas of the Building or the
Property;
(ii) costs incurred by Landlord for trustee's fees, partnership or
corporate organizational expenses and accounting fees, except accounting fees
relating solely to the ownership and operation of the Building;
(iii) interest and amortization on indebtedness or any costs of financing
or refinancing the Building;
(iv) leasing commissions incurred in procuring tenants for the Building;
(v) income, excess profit, franchise taxes or other such taxes imposed on
or measured by the net income of Landlord from the operation of the Building;
-4-
<PAGE>
hereof of the extra expenses that Landlord will incur in processing returned
checks, the exact amount of such charges being difficult to ascertain, and such
charge shall not be considered interest. Tenant may elect, with Landlord's
consent, which consent may not be unreasonably withheld conditioned or delayed,
to make Rent payments via wire transfer which wire transfer shall occur on the
first day of each month. Upon such election, Tenant and/or Landlord shall
provide the other party with all necessary information including, but not
limited to, the name of the appropriate bank, such bank's ABA number and the
appropriate account number(s) at such bank(s) and each shall submit any request
forms or other documentation required with its bank to effectuate the wire
transfer.
(d) For purposes of this Lease, the term "Lease Year" shall mean a
period of twelve (12) consecutive months, commencing on the Lease Commencement
Date, and each successive twelve (12) month period thereafter; except that if
the Lease Commencement Date is a day other than the first day of a month, then
the first Lease Year shall commence on the Lease Commencement Date and shall
continue for the balance of the month in which the Lease Commencement Date
occurs and for a period of twelve (12) calendar months thereafter.
4. ANNUAL EXPENSE INCREASES.
(a) Tenant agrees to pay as additional rent ("Additional Rent") to
Landlord, Tenant's Pro Rata Share (as hereinafter defined) of the sum (said sum
being hereinafter referred to as the "Increase") of (i) the amount, if any, by
which the Annual Operating Costs (as hereinafter defined) exceed the Annual
Operating Costs actually incurred by Landlord for calendar year 2001 (the "Base
Operating Costs") and (ii) the amount, if any, by which the Real Estate Taxes
(as hereinafter defined) for the Property exceed the Real Estate Taxes actually
incurred by Landlord for the 2001 tax year (the "Base Taxes"). The payments
called for in this Section 4(a) are hereinafter sometimes called the "Adjustment
Rent." The term "Tenant's Pro Rata Share," as used herein, shall mean the
number, expressed as a percentage, equal to the rentable square footage of the
Premises divided by the total square footage contained in the Building.
(b) After the conclusion of each fiscal year of the Building, Landlord
shall furnish to Tenant a statement (each an "Annual Statement") in reasonable
detail showing the actual Annual Operating Costs and the Real Estate Taxes for
such fiscal year. Tenant shall, with the next installment of Rent that occurs
within thirty (30) days of receipt of Annual Statement, pay to Landlord the
excess of its Pro Rata Share of the Increase for the fiscal year covered by
such Annual Statement above the total monthly payments towards such Increase
made by Tenant pursuant to Section 4(c); provided that, if Tenant's monthly
payments on account thereof exceed Tenant's Pro Rata Share of the Increase for
the fiscal year covered by such Annual Statement, Landlord hereby agrees to
credit the excess against Monthly Base Rent accruing thereafter (except where
the Term has expired, in which case Landlord agrees, after deducting any sums
due Landlord hereunder, to pay Tenant the excess within thirty (30) days after
preparation of the Annual Statement for such fiscal year).
(c) The Landlord may from time to time during the Term deliver to
Tenant a written estimate by Landlord of the amount of annual Adjustment Rent
which Landlord may estimate and determine will be payable by Tenant during an
ensuing Building fiscal year (or portions of a fiscal year) (such estimated sum
being hereinafter called the "Estimated Adjustment Rent"). Commencing on the
first day of the calendar month immediately following the month in which such
statement of Estimated Adjustment Rent is tendered, and on the first day of
each and every calendar month thereafter until the next such statement, the
Tenant shall pay to Landlord (in addition to the Monthly Base Rent, and as
Additional Rent) a sum as specified by Landlord which is equal to one-twelfth
(1/12th) of said Estimated Adjustment Rent, such payments to continue to be due
and payable until further notice from Landlord.
(d) Any Additional Rent on account of increases due and payable for a
partial Lease Year at the commencement or end of the Term shall be equitably
pro-rated, based upon the number of months and/or days remaining until
expiration of the Term of this Lease, and the amount or amounts found to be
owing by the Tenant shall be paid within thirty (30) days after Landlord's
written demand.
(e) Tenant may not claim a readjustment of Tenant's Pro Rata Share or
the Increase based on any error of estimation, determination or calculation
thereof except by written
-3-
<PAGE>
(vi) rent for Landlord's management or leasing office
located in the Building;
(vii) ground rent;
(viii) advertising and promotional expenses incurred by
Landlord in connection with its leasing of the Premises;
(ix) attorneys' fees incurred in connection with specific
actions taken against tenants other than Tenant;
(x) costs of repairs, restoration or replacements
occasioned by (A) fire, windstorm or other casualty of an insurable nature
(whether such destruction be total or partial) to the extent paid by insurance
obtained by Landlord, or (B) the exercise by governmental authorities of the
right of eminent domain, whether such taking be total or partial, to the extent
Landlord receives compensation therefore through condemnation or similar awards;
(xi) the cost of capital improvements (except to the extent
same are intended to decrease Annual Operating Costs, or any improvements
required by Federal, state or local statutes, regulations, rules or orders),
except that the annual depreciation amounts of said costs may be included in
Annual Operating Costs:
(xii) charitable or political donations by Landlord;
(xiii) wages and salaries for Landlord's employees above the
level of property manager who perform work at or related to the Property;
(xiv) costs or expenses of utilities directly metered to
tenants of the Building and paid separately by such tenants;
(xv) the cost of art, sculpture and paintings which are not
acquired by Landlord in the ordinary course of its business and located in the
Building or on the Property.
(xvi) costs incurred for any items to the extent Landlord
actually recovers under a manufacturer's, materialmen's, vendor's or
contractor's warranty;
(xvii) costs or fees relating to the defense of Landlord's
title in the real estate containing the Building, or any part thereof;
(xviii) the cost of overtime or other additional expenses to
Landlord solely due to Landlord's default under the Lease;
(xix) costs incurred due to the late payment of taxes and
utility bills owing, so long as Landlord was obligated to make such payments
and did not in good faith dispute the amount of such payments;
(xx) costs directly resulting from the gross negligence or
willful misconduct of Landlord, its employees, agents, contractors or
employees; and
(g) The term "Real Estate Taxes" mean all taxes, rates and
assessments, general and special, levied or imposed with respect to the
Property, including all taxes, rates and assessments, general and special,
levied or imposed for schools, public betterment, general or local improvements
and operations (including vault rentals) and taxes imposed in connection with
any special taxing district and any assessments made by the United States of
America, the Commonwealth of Virginia, Fairfax County, or any public
corporation, district or other public entity. 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 Property and/or Landlord in substitution for real estate taxes
presently levied or imposed on land, improvements or fixtures in Fairfax
County, then any such new tax or levy shall be included within the term "Real
Estate Taxes." Should any governmental taxing authority acting under any law or
regulation, levy, assess, or impose a tax, excise and/or assessment however
described (other than an income or franchise tax) upon, against, or account of,
or
-5-
<PAGE>
measured by, in whole or in part, the Rent expressly reserved hereunder, or upon
the rent expressly reserved under the other leases or leasehold interests in the
Premises, the Building and/or the Property, as a substitute (in whole or in
part) or in addition to any existing real estate taxes on land and buildings or
otherwise, such tax or excise on rents shall be included within the term "Real
Estate Taxes." Expenses, including, but not limited to, reasonable attorneys'
fees and consulting fees, incurred by Landlord in protesting, contesting or
disputing, or obtaining or attempting to obtain a reduction of any Real Estate
Taxes (or the assessment upon which the Real Estate Taxes are based) shall be
added to and included in Real Estate Taxes. Real Estate Taxes which are being
contested by Landlord shall nevertheless be included for purposes of the
computation of the increase under this Section 4; provided, however, that, in
the event that Tenant shall have paid any amount of increased Rent pursuant to
this Section 4 and the Landlord shall thereafter receive a refund of any portion
of any Real Estate Taxes on which such payments shall have been based, Landlord
shall credit Tenant's Pro Rata Share of such refund (but in no event shall such
credit exceed the amount of such increased Rent theretofore paid by Tenant on
account of such Real Estate Taxes) against Rent then due or thereafter accruing.
Notwithstanding the foregoing, "Real Estate Taxes" shall not include any
inheritance, estate, succession, transfer or gift tax or any income tax or any
other like tax which is measured in any manner by the income or profit of
Landlord, except to the extent any such tax is intended as a substitute for a
Real Estate Tax. Landlord shall not recover more than one hundred percent (100%)
of the Real Estate Taxes, assessments and insurance premiums actually incurred
by Landlord.
(h) If during all or part of any fiscal year of the Building (such fiscal
year to be as determined and designated by Landlord, and which may be on a
Calendar Year or other fiscal year basis as Landlord may determine from time to
time)(or partial fiscal year) of the term. Landlord shall not furnish any
particular item of work or service (which would constitute an item of Annual
Operating Costs hereunder) to at least ninety-five percent (95%) of the rentable
area of the Building, because (i) less than all of the Building is occupied or
(ii) such item of work or service is not desired or required by any tenant, or
(iii) any tenant is itself obtaining and providing such item of work or service,
then an adjustment shall be made in computing the Annual Operating Costs for
such fiscal year (or partial fiscal year) so that the Annual Operating Costs
shall be increased for such fiscal year (or partial fiscal year) to the amount
that would have been reasonably incurred had Landlord provided such item of work
or service to ninety-five (95%) of the rentable area of the Building for the
entire fiscal year (or partial fiscal year).
(i) Tenant shall pay directly all rental, sales, use, business and other
taxes levied or imposed by the Commonwealth of Virginia, Fairfax County or other
governmental authority on Tenant or Tenant's real or personal property, or the
Rent (as hereinafter defined) and the services provided by Landlord hereunder,
such payments to be in addition to all other payments required under the terms
of this Lease.
(j) As used herein, the term "Rent" shall mean the Annual Base Rent and
all additional rent, as the same may be adjusted from time to time.
(k) For a period of four (4) months after any Annual Statement required
under Section 4(b) is delivered to Tenant, Landlord shall permit Tenant, at
Tenant's expense (except as otherwise provided in this Section 4(k)), to review
Landlord's bills, records and invoices directly relating to the Annual Operating
Costs and Real Estate Taxes applicable to Tenant for the year covered by such
Annual Statement. Such review shall occur at reasonable times following
reasonable written notice from Tenant to Landlord accompanied by payment in the
amount of $1,500.00 to compensate Landlord for administrative and other costs
incurred by Landlord. Landlord shall make all relevant documentation available
within seven (7) days of Tenant's notice. Said review shall occur in Landlord's
offices or, at Landlord's option, at such other place reasonably determined by
Landlord, which location shall be within a thirty (30) mile radius of Landlord's
offices. Reviews by auditors who work on a contingency or similar fee shall not
be permitted. In the absence of litigation or other legal proceedings, Tenant
and its reviewers shall keep all information and materials provided to or
reviewed by them strictly confidential. Except as otherwise provided herein,
each Annual Statement shall be conclusive and binding upon Tenant unless within
one hundred twenty (120) days after Landlord's delivery of any such statement
Tenant shall notify Landlord that Tenant disputes the correctness of said
statement. Pending the determination of any such dispute by agreement or
otherwise, Tenant shall pay Additional Rent in accordance with the applicable
Annual Statement, and such payment shall be without prejudice to Tenant's
position. If the dispute shall be determined in Tenant's favor, Landlord shall,
within
-6-
<PAGE>
thirty (30) days after such determination in Tenant's favor, refund to Tenant
the amount of Tenant's overpayment of Additional Rent resulting from compliance
with the Annual Statement. If the amount of Tenant's overpayment is more than
five percent (5%) of the amount actually due, Landlord shall reimburse Tenant
for the reasonable review costs incurred by Tenant (not to exceed $1,500) and
refund to Tenant the $1,500 review fee.
5. ADDITIONAL RENT. Any and all amount required to be paid by Tenant
hereunder and any and all charges or expenses incurred by Landlord on behalf of
Tenant under the terms of this Lease shall be considered Additional Rent
payable (except as otherwise expressly set forth herein) in the same manner
and upon the same terms and conditions as the Monthly Base Rent reserved
hereunder. Any failure on the part of Tenant to pay such Additional Rent when
and as the same shall become due shall, after expiration of any applicable
notice and cure periods provided hereunder, entitle Landlord to the remedies
available to it for nonpayment of Rent.
6. TENANT IMPROVEMENTS.
(a) Construction.
(i) Tenant's Space Plans. Tenant, at its expense (but subject to
Landlord's Contribution set forth in Section 6(b) below), shall submit to
Landlord all layout plans and specifications, showing in reasonable detail any
and all interior and/or exterior alterations or improvement (including material
specifications) that Tenant proposes to make to the Premises (the "Tenant's
Space Plans"). Landlord shall notify Tenant, within fourteen (14) days after
Tenant submits Tenant's Space Plans, if Tenant's Space Plans fail to meet with
Landlord's approval. Within fourteen (14) days after Tenant receives any such
notice, Tenant shall revise Tenant's Space Plans to the extent necessary to
obtain Landlord's approval and shall resubmit them for Landlord's approval.
After approval by Landlord, which shall be within fourteen (14) days, Tenant's
Space Plans shall be marked "Approved," dated, signed by Landlord and Tenant,
marked Exhibit C1 and attached to and made a part of this Lease. (Tenants shall
furnish a minimum of two (2) such copies for approval.)
(ii) Construction Drawings. Tenant, at its expense (but subject
to Landlord's Contribution set forth in Section 6(b) below), shall develop and
submit to Landlord construction drawings based on Tenant's Space Plans,
detailing the architectural, mechanical and electrical plans and specifications
for the Premises (the "Construction Drawings"). (Tenant shall furnish a minimum
of two (2) such copies for approval.) Within fourteen (14) days after Tenant
submits the Construction Drawings, Landlord shall notify Tenant if the
Construction Drawings fail to meet with Landlord's approval. Within fourteen
(14) days after Tenant receives any such notice, Tenant shall revise the
Construction Drawings to the extent necessary to obtain Landlord's approval and
shall resubmit them for Landlord's approval. After approval by Landlord, which
shall be given within fourteen (14) days after re-submittal by Tenant, the
Construction Drawings shall be marked "Approved," dated, signed by Landlord and
Tenant, marked Exhibit C2 and attached to and made a part of this Lease. Said
approved Construction Drawings (the "Final Construction Drawings") shall be used
by Landlord, as determined hereunder, to construct the improvement to the
Premises. Neither Landlord nor Tenant is under any obligation to make any
alterations, decorations, additions or improvements in or to the Premises except
as set forth in the Final Construction Drawings. Any material delay in
Landlord's completion of Tenant Improvements caused by modifications requested
by Tenant shall constitute a tenant delay for purposes of determining the date
of Substantial Completion of the Premises.
(iii) Selection of Contractor. With respect to the tenant
improvement work set forth in the Final Construction Drawings (the "Tenant
Improvements"), which, unless specified otherwise, shall be performed with
Building standard materials and specifications, Landlord shall (i) bid the
Tenant Improvement work to at least three (3) general contractors (the "Tenant
Selected Contractors") which general contractors Tenant must select from the
list of approved general contractors provided in Exhibit E and provided, that
Landlord and Tenant agree that Maloney Aire shall be used for all HVAC work and
Landlord's designated plumber shall be used for all plumbing work in connection
with the Tenant Improvements; and (ii) prior to the awarding of the bid,
Landlord shall consult with Tenant regarding bids of general contractors from
whom Landlord has requested bids. Tenant shall select the bid of a Tenant
Selected Contractor. Landlord shall directly contract with the Tenant Selected
Contractor to complete the Tenant Improvements.
-7-
<PAGE>
(b) Landlord's Contribution.
(i) Amount of Landlord's Contribution. Landlord will contribute up to
Twenty-Five and 00/100 Dollars ($25.00) per rentable square foot of the Premises
("Landlord's Contribution") towards the cost of the Tenant Improvements, which
include but are not limited to architect's and engineer's fees, costs and
expenses of labor (including General Contractor's overhead, general conditions
and profit), materials, permits and licenses, preparation of all space planning,
mechanical, electrical and plumbing working drawings, reproductions, the cost of
cabling the Premises, keys, and signage, and a construction management fee paid
to Landlord's management company in the amount of three percent (3%) of the
total costs of the Tenant Improvements, which Landlord may deduct from the
Landlord's Contribution.
(ii) Excess Tenant Costs. Tenant shall be responsible for all
additional costs incurred by Landlord resulting from modifications to Final
Construction Drawings which are requested by Tenant ("Excess Tenant Costs"). Any
such modifications shall be subject to Landlord's prior written approval. Tenant
shall pay to Landlord, as additional rent, the total amount of the Excess Tenant
Costs as follows:
(A) fifty percent (50%) of the estimated Excess Tenant Costs
shall be due and payable upon Landlord's approval of the modification to
Tenant's Plans; and
(B) the balance shall be due and payable upon substantial
completion of the Tenant Improvements.
(iii) Change Orders. Tenant shall be responsible for all charges and
expenses incurred in connection with any change order or modifications to the
Final Construction Drawings (subject to Landlord's approval)("Change Order
Costs"). Any such modifications shall be subject to Landlord's prior written
approval. Tenant shall pay to Landlord, as additional rent, the total amount of
the Change Order Costs as follows:
(A) fifty percent (50%) of the estimated Change Order Costs
shall be due and payable upon Landlord's approval of the modification to
Tenant's Plans; and
(B) the balance shall be due and payable upon substantial
completion of the Tenant Improvements.
(iv) Unused Portion of Landlord's Contribution. In the event the cost
of the Tenant Improvements is less than the Landlord's Contribution, then the
unused portion of the Landlord's Contribution may be used by Tenant in
connection with other improvements to the Premises requested by Tenant during
the first six (6) years of the Term, which improvements are subject to
Landlord's prior written approval as set forth in Section 6(a) above. Upon
completion of the Tenant Improvements, the parties shall certify in writing as
to the amount of the Landlord's Contribution that remains unused by Tenant.
(c) Possession: Compliance. Except as to any defects, incomplete work, or
punch list items that are described in a written notice given by Tenant to
Landlord prior to or during the thirty (30) day period following beneficial use,
and that Landlord's architect or engineer confirms are, in fact, defects or
incomplete items, the taking of possession of the Premises by Tenant shall
constitute an acknowledgment by Tenant that the Premises are in good condition
and that all work and materials provided by Landlord are satisfactory.
Notwithstanding the foregoing, Landlord shall be responsible to repair any
latent structural defect of which Tenant notifies Landlord, which notification
must occur immediately upon discovery of such defect, at any time during the
Term of the Lease. Landlord and Tenant each covenants and agrees that it will
fully and faithfully comply with all reasonable response requirements to assure
completion of the Premises. Landlord agrees to correct and complete, within a
reasonable period of time, those defects and incomplete items described in such
notice that Landlord's architect or engineer confirms are, in fact, defects or
incomplete items.
7. LANDLORD ACCESS. Landlord and its agents may enter the Premises at all
reasonable hours to exhibit the same to prospective purchasers, mortgagees or
tenants, to inspect the Premises, to see that Tenant is complying with all its
obligations hereunder or to make repairs to the Premises or the Property.
Landlord shall (except in the event of any emergency, in the
-8-
<PAGE>
exercise of ordinary maintenance and repair obligations, or if Landlord's
presence is requested by Tenant) exercise reasonable efforts to give Tenant
prior notice of such access and, during access, minimize any interference with
Tenant's business operations, and shall enter only in the presence of an
authorized representative of Tenant.
8. QUIET ENJOYMENT. Subject to the terms hereof, Landlord covenants
that, if Tenant pays the Rent and all other charges provided for herein,
performs all of its obligations provided for hereunder and observes all of the
other provisions hereof, Tenant shall at all times during the Term peaceably
and quietly have, hold and enjoy the Premises, without any interruption or
disturbance from Landlord.
9. SERVICES.
(a) Except as set forth in this Section 9, Landlord shall be under
no obligation to furnish any services or supplies to the Premises or to repair
or maintain the Premises. Landlord shall furnish elevator service, water and
lavatory supplies during normal business hours, and normal and usual cleaning
and janitorial service (which current specifications are attached hereto as
Exhibit F), Mondays through Fridays (exclusive of Federal, State or local legal
holidays), except during periods of repair and maintenance; provided that
Tenant shall leave the Premises in a condition suitable for performance by the
Landlord of its janitorial services. Landlord further agrees to furnish (i)
reasonably adequate electric current for normal office uses and (ii) heat and
air conditioning appropriate to the seasons of the year sufficient to
reasonably cool or heat the Premises from 6:00 a.m. to 6:00 p.m., Mondays
through Fridays, inclusive, and from 6:00 a.m. to 1:00 p.m., Saturdays (said
services not being furnished on Sundays or Federal, state or local legal
holidays), except during periods of repair and maintenance, all in accordance
with the standards of comparable office buildings in the Fairfax, Virginia
area. Landlord shall provide heat and air conditioning at times in addition to
those specified above, at Tenant's expense, upon not less than forty-eight (48)
hours written notice from Tenant. Tenant shall pay Landlord for said after
hours service based upon Landlord's service charge as established by Landlord
from time-to-time for all tenants in the Building. Except for periods of
emergency, repair or maintenance, (y) Tenant shall have access to the Building
and the Premises twenty-four (24) hours a day, three hundred sixty-five (365)
days a year, and (z) electrical service and at lease one (1) elevator will be
in operation at all times.
(b) In the event a service interruption occurs and persists for more
than five (5) days and such service interruption is solely due to Landlord's
gross negligence or willful misconduct then Tenant may pursue a claim for
compensation. Subject to the foregoing, no claim for compensation or abatement
of Rent shall be made by the Tenant by reason of inconvenience, nuisance, loss
of business or discomfort arising from the interruption or cessation of or
failure in the supply of any utilities, services or systems serving the
Premises or from the repair, renovation or rebuilding of any portion of the
Property or basic systems thereof nor shall the same give rise to a claim in
Tenant's favor that such interruption, cessation, failure, repair, renovation
or rebuilding constitutes actual or constructive, total or partial eviction
from the Premises.
(c) In the event that Tenant deems that the persons retained by
Landlord to clean the Premises are not performing in accordance with the
Building-standard janitorial/cleaning services attached hereto, then Tenant may
request that the cleaning company or specific personnel be changed. If Landlord
refuses to change the cleaning company and/or personnel, then Tenant may, with
thirty (30) days prior written notice to Landlord, elect to retain its own
cleaning company to perform the Building-standard cleaning services for the
Premises. Tenant shall bear the entire cost of such cleaning services, but
shall receive a credit from Landlord equal to any credit Landlord obtains from
Landlord's cleaning company as a result of the reduction in size of the area
cleaned by such cleaning company. If Tenant retains its own cleaning company as
provided herein, Landlord shall have no further obligation to clean the
Premises pursuant to this Section 9.
10. USE OF PREMISES. The Premises shall be used and occupied by Tenant
solely for general office and data center purposes in accordance with
applicable zoning laws and for no other purpose whatsoever. Tenant shall not
use the Premises, nor suffer the Premises to be used, for any unlawful purpose
or in any unlawful manner or in violation of any valid regulation of any
governmental body, or in any manner to (i) create any nuisance or trespass;
(ii) annoy or embarrass Landlord; (iii) vitiate any insurance carried by
Landlord or on Landlord's behalf; (iv) alter the
-9-
<PAGE>
classification or increase the rate of any insurance on the Building; or (v) use
the Building or Property for or cause any disruptive, harassing or outrageous
conduct. Tenant shall not commit waste, overload the floors or structure of the
Building, or take any action that would impair or alter parking spaces on the
Property. Tenant shall not keep within or about the Premises any dangerous,
inflammable, toxic or explosive material, nor shall Tenant use the Premises or
the Property, nor suffer the Premises to be used, for the manufacture, storage,
treatment or disposal of any hazardous or toxic substance, material or waste as
such terms may be defined from time to time under Federal, state or local law,
except in such quantities as may be permitted and as is customary for cleaning
purposes only. In the event of any such waste, damage or manner of use by
Tenant, Tenant shall promptly take such steps as are reasonably necessary to
cease and repair the same, failing which the Landlord shall be entitled to take
such steps and the Tenant shall pay to the Landlord, within fourteen (14) days,
the Landlord's actual, out-of-pocket cost thereof. In addition, if the use or
occupancy of the Premises, the conduct of business in the Premises or any act or
omission of the Tenant in the Premised or the Property, causes or results in any
increase in premiums for the insurance carried from time to time by the Landlord
with respect to the Property, the Tenant shall pay to the Landlord within
fourteen (14) days the Landlord's cost of any increase in premiums. Use of the
Premises is subject to all covenants, conditions and restrictions of record.
Tenant shall not permit any objectionable odors or noises to emanate from the
Premises. Tenant hereby agrees to defend, indemnify and hold Landlord and the
Property harmless from and against any and all costs, damages, expenses, and
liabilities (including reasonable attorneys' fees) arising out of or related to
any breach by Tenant of this Section 10. To the best of Landlord's knowledge and
belief, the Property is zoned PDC (Planned Development Commercial) under the
Fairfax County Zoning Ordinance.
11. SIGNS. No sign, advertisement or notice shall be inscribed, painted,
affixed or displayed on the windows or exterior walls of the Premises or any
public area of the Building without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, conditioned or delayed, and then in
such places, numbers, sizes, color and style as are approved in writing in
advance by Landlord and which conform to all applicable laws, regulations, rules
and ordinances. If any such sign, advertisement or notice is exhibited without
Landlord's prior written approval, Landlord shall have the right to remove the
same after prior written notice to Tenant and Tenant shall be liable for any and
all actual, out-of-pocket expenses incurred by Landlord by said removal. Tenant
will maintain its permitted signs (if any), decorations, lettering, advertising
matter and such other things as may be approved in good condition and repair,
and in compliance with all applicable statutes, regulations and rules, at all
times. Landlord may prohibit any advertisement of Tenant which in Landlord's
opinion tends to impair the reputation of the Building or the Property; upon
written notice from Landlord, Tenant shall refrain from and discontinue such
advertisement. Notwithstanding the foregoing, (a) Landlord shall affix building
standard directional signage in the first floor lobby indicating the main
entrance to Tenant's Premises; and (b) for so long as the Tenant or its
Affiliate, in accordance with Section 28(i) herein, is leasing at least 56,566
square feet in the Building (which amount may be adjusted but only subject to
the remeasurement of the Premises as permitted under Section 1 herein) or the
Tenant or its Affiliate, in accordance with Section 28(i) herein, is the largest
tenant in the Building, the original Tenant hereunder or its Affiliate, in
accordance with Section 28(i) herein, shall have the exclusive right to install
corporate signage at any time after full execution and delivery of this Lease on
the exterior of the facade of the South Wing of Building, the design, size,
material, color and location of which signage must be mutually agreed upon by
Landlord and Tenant prior to installation, and which signage shall otherwise
comply with the provisions of this Section 11. Notwithstanding the foregoing, in
no event may Tenant's permitted signage exceed fifty (50%) of the allowable
signage under the Fairfax County Zoning Ordinance for the Building. Subject to
the requirement that Tenant or its Affiliate, in accordance with Section 28(i)
herein, lease at least 56,666 square feet in the Building (which amount may be
adjusted but only subject to the remeasurement of the Premises as permitted
under Section 1 herein) or be the largest tenant in the Building, the signage of
no other tenant will be permitted to be installed on the bridge separating the
North Wing and South Wing of the Building in the area depicted on Exhibit F
attached hereto.
12. FIXTURES; ELECTRICAL EQUIPMENT.
(a) Tenant shall not place a load upon the floor of the Premises
exceeding one hundred (100) pounds per square foot without Landlord's prior
written consent (which consent may be withheld or conditioned in Landlord's sole
discretion). Business machines, mechanical
-10-
<PAGE>
equipment and materials belonging to Tenant which cause vibration, noise, cold,
heat or fumes that may be transmitted to the Building or to any other leased
space therein to such a degree as to be objectionable to Landlord or to any
other tenant in the Building shall be placed, maintained, isolated, stored
and/or vented by Tenant at its sole expense so as to absorb and prevent such
vibration, noise, cold, heat or fumes. No freight, furniture or other building
matter or any description may be received into the Building or carried in the
elevators, except at such times and dates in such manner as are specifically
approved by Landlord in writing in advance. Tenant shall be responsible for any
and all damage, injury, or claims resulting from moving of Tenant's equipment,
furnishings and/or materials into or out of the Premises or from the storage or
operation of the same. Any and all damage or injury to the Premises or the
Property (or any part thereof) caused by such moving, storage or operation shall
be repaired by Tenant, at Tenant's sole cost, to Landlord's reasonable
satisfaction.
(b) Tenant shall have the right to install or operate in the Premises
any small electrically operated standard office equipment as is typically used
in modern offices, in Landlord's reasonable judgment. Tenant shall not install
or operate in the Premises any "non-standard" equipment without first obtaining
the prior consent in writing of Landlord, which consent may, in Landlord's sole
discretion, be conditioned on, among other matters, the payment by Tenant of
Additional Rent in compensation for such excess consumption of water and/or
electricity as may be occasioned by the operation of said equipment or
machinery; nor shall Tenant install any other equipment whatsoever which will or
may necessitate any changes, replacements or additions to the water system,
plumbing system, heating system, air conditioning system or the electrical
system of the Premises or the Building without the prior written consent of
Landlord, which consent may be withheld or conditioned in Landlord's reasonable
discretion; provided that, if Landlord shall consent to such installations, all
additional utility facilities, changes, replacements or additions necessary to
handle such equipment shall be performed by Landlord or by contractors approved
by Landlord at Tenant's expense in accordance with plans and specifications to
be approved in writing, in advance, by Landlord.
13. ALTERATIONS; MECHANICS LIENS.
(a) Except as otherwise set forth herein, Tenant shall not make or
permit anyone to make any alterations, improvements, installations or
modifications in or to any part of the Premises without first obtaining
Landlord's prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed. Notwithstanding the foregoing, Tenant shall be
permitted to make non-structural alterations not visible from the exterior of
the Premises, which are purely decorative in nature, which in the aggregate do
not exceed the sum of Two and 00/100 Dollars ($2.00) per rentable square foot of
the Premises ($113,132.00), upon prior written notice to Landlord including the
date and time that such alteration shall be made. When granting its consent,
Landlord may impose any conditions it reasonably deems appropriate, including,
without limitation, the approval of plans and specifications, approval of the
contractor or other persons who will perform the work, and the obtaining of
specified insurance. If Landlord shall consent to any alterations or changes in
or to the Premises, Tenant shall have all such work performed at Tenant's sole
expense and shall comply with the requirements to be established by the
Landlord, which shall include, but are not limited to, Tenant's obtaining of all
permits and certificates required in connection with any said additions,
improvements, alterations and installations, and Tenant's use thereof. Any
additions, improvements, alterations and installations made by Tenant (excepting
only office furniture and business equipment) shall become and remain a part of
the Building and be and remain Landlord's property at the Lease Termination
Date; provided, however, that Landlord may require Tenant to remove such
additions, improvements, alterations or installation and to restore the Premises
to their original condition, normal wear and tear and casualty excepted, at
Tenant's sole cost and expense and if Tenant fails to restore the Premises as
required, Landlord may do so at Tenant's expense. Upon Tenant's written request,
Landlord shall, at the time Landlord consents to said additions, improvements,
alterations or installation, advise Tenant is such removal will be required. If
any alteration is made without the prior written consent of Landlord, Landlord
may correct or remove the same, and Tenant shall be liable for any and all
expenses incurred by Landlord in the performance of this work.
(b) Any alterations shall be conducted on behalf of Tenant and not on
behalf of Landlord and Tenant shall be deemed to be the "owner" and not the
"agent" of Landlord. If Landlord shall give its written consent to Tenant's
making any alterations, such written consent shall not be deemed to be an
agreement or consent by Landlord to subject Landlord's interest in
-11-
<PAGE>
the Premises or the Property to any mechanic's liens which may be filed in
respect of any alterations made by or on behalf of Tenant. If any mechanic's or
other lien or any notice of intention to file a lien is filed against the
Property, or any part thereof, or the Premises, for any work, labor, services
or materials claimed to have been performed or furnished for or on behalf of
Tenant, Tenant shall initiate appropriate legal proceedings or otherwise cause
the same to be canceled and discharged of record by payment, bond or order of a
court of competent jurisdiction within fourteen (14) days of receiving notice
of the filing thereof. If Tenant shall fail to discharge any such lien,
Landlord may, at its option discharge or bond off the same, without inquiring
into the validity thereof, and treat the cost thereof as Additional Rent
payable upon Landlord's demand therefore.
14. MAINTENANCE AND REPAIRS BY LANDLORD. Landlord shall use reasonable
efforts and exercise prudent business judgment to keep, maintain and repair the
Building and Property, including the Common Area, in good order and repair
commensurate with other first class suburban office buildings in the Northern
Virginia area. Landlord shall use reasonable efforts and exercise prudent
business judgment to maintain and preserve the character of the Building and
Property, including landscaping, commensurate with other first class suburban
office buildings in the Northern Virginia area throughout the term of the
Lease. Notwithstanding the foregoing, Landlord shall have no duty to Tenant to
make any repairs or improvements to the Premises or the Buildings except for
the roof, the foundation of the Buildings and structural repairs, and repairs
to the Building's electrical, water, sewage, heating, ventilation and air
conditioning, life safety and elevator systems in the common areas of the
Property, as may be necessary to keep such items in good condition and repair
and for safety and tenantability, and then only if not brought about, in whole
or part, by any act or neglect of Tenant, its agents, employees, contractors,
invitees, licensees, or others for whom Tenant is legally responsible, and if
not otherwise the obligation of Tenant hereunder. Landlord shall not be liable
for any damage (including any consequential damages or lost profits) caused to
the person or property of Tenant, its agents, employees or invitees, due to the
Building or any part or appurtenances thereof being improperly constructed or
being or becoming out of repair, or arising from the leaking of gas, water,
sewer or steam pipes, or from electricity, or from any other cause whatsoever.
Subject to the terms hereof, Landlord has granted Tenant exclusive control of
the Premises for the Term hereof and Landlord shall be under no obligation to
inspect the Premises. Tenant agrees to promptly report immediately in writing
to Landlord any defective condition in or about the Premises known to Tenant
which Landlord is required to repair hereunder, and a failure to so report
shall make Tenant liable to Landlord for any additional expense, damage or
liability resulting from the failure to report such defects. Tenant shall
forthwith notify the Landlord of any accident, defect, damage or deficiency in
any part of the Property (including without limitation the Premises or any
facilities, utilities, machinery, equipment, systems or installations located
therein or serving the Premises), which comes to the attention of the Tenant,
its employees or contractors notwithstanding that the Landlord may have no
obligation in respect thereof.
15. REPAIRS AND MAINTENANCE BY TENANT. Except as expressly provided in
Section 14, Tenant shall keep and maintain the Premises and the fixtures therein
in good order and repair during the Term at Tenant's sole cost and expense.
Notwithstanding anything herein to the contrary, Tenant will keep all
non-structural elements and the interior of the Premises, interior window panes,
interior plate glass, backed-up toilets, door closers, interior door knobs and
locks, in good order and repair and will make all repairs and replacements
thereto at its expense; and will surrender the Premises at the expiration of the
Term or at such other time as it may vacate the Premises in as good condition as
when received, excepting ordinary wear and tear and casualty. Tenant will not
overload the electrical wiring serving the Premises or within the Premises, and
will install at its expense, subject to the provisions of this Lease, any
additional electrical wiring which may be required in connection with Tenant's
equipment. Any damage sustained by any party caused by mechanical, electrical,
plumbing or any other equipment or installations, whose maintenance and repair
is the responsibility of Tenant shall be paid by Tenant, and Tenant shall
indemnify and hold Landlord harmless from and against any and all claims,
actions, damages and liability in connection therewith, including, but not
limited to attorneys' and other professional fees, and any other cost which
Landlord might reasonably incur. All injury to the Premises or the Building and
all breakage done by Tenant, or Tenant's agents, contractors, directors,
employees, invitees, licensees or officers shall be promptly repaired by the
Tenant at Tenant's sole expense. In the event that the Tenant shall fail to make
any repairs required pursuant to this Section 15, Landlord, after reasonable
notice and opportunity to cure delivered to Tenant, shall have the right to make
such repairs and any charge or cost so incurred by the Landlord shall be paid by
Tenant
- 12 -
<PAGE>
within fourteen (14) days of written demand therefore. Tenant will indemnify and
hold Landlord harmless from and against any and all expenses, liens, claims or
damages to person or property which may or might arise by reason of the making
of any such repairs. This provision shall be construed as an additional remedy
granted to the Landlord and not in limitation of any other rights and remedies
which the Landlord has or may have in said circumstances.
16. INSURANCE: INDEMNITY.
(a) Tenant shall carry and keep in full force and effect at all times
during the Term of this Lease for the protection of Landlord and Tenant herein,
comprehensive general liability insurance for bodily injury, death and damage to
property of others, including tenants legal liability for damage to the Premises
and blanket contractual liability, with respect to all business conducted from
the Premises and the use and occupancy thereof and the use of the common areas
including the activities, operations and work conducted or performed by the
Tenant, by any other person on behalf of the Tenant, by those for whom the
Tenant is in law responsible and by any other person on the Premises, with
minimum limits of coverage of at least One Million Dollars ($1,000,000.00) for
each occurrence for property damage and bodily injury with an annual aggregate
of Three Million Dollars ($3,000,000.00). Notwithstanding the foregoing,
Landlord shall have the right to require Tenant to increase the minimum limits
of coverage set forth above, from time to time, to the standard limits of
coverage required in comparable buildings in the Fairfax, Virginia area.
(b) In addition, Tenant, at Tenant's sole cost and expense, shall
obtain and maintain in full force and effect throughout the Term of this Lease,
insurance policies providing for the following coverage: (i) all risk and
property insurance against fire, theft, vandalism, malicious mischief, leakage
and such additional perils as now are or hereafter may be included in a standard
extended coverage endorsement from time to time in general use in the Fairfax,
Virginia area, as well as business interruption coverage, insuring Tenant's
improvements in the Premises, merchandise, trade fixtures, furnishings,
equipment and all other items of personal property of Tenant located on or in
the Premises, in an amount equal to not less than the full replacement value
thereof, and (ii) such other insurance as the Landlord may reasonably require
having regard to the risks which are customarily insured against by prudent
landlords and tenants of similarly leased premises in the Fairfax, Virginia
area. All proceeds of such insurance, so long as the Lease shall remain in
effect, shall be used only to repair or replace the items so insured.
(c) All insurance policies carried by Tenant pursuant to this Section
16, and any other insurance policies carried by Tenant with respect to the
Premises, shall (i) be issued in form reasonably acceptable to Landlord by good
and solvent insurance companies licensed to do business in the Commonwealth of
Virginia and reasonably satisfactory to Landlord; (ii) name Landlord, its
mortgagee, its management agent and any other parties in interest, from time to
time designated in writing by notice from Landlord to Tenant, as additional
named insured, with proceeds payable to the Landlord in the event of an insured
casualty and any termination of this Lease; (iii) be written as primary policy
coverage and not contributing with or in excess of any coverage which Landlord
may carry; (iv) provide for at least thirty (30) days prior written notice to
Landlord of any cancellation or material alteration of such policy or any
defaults thereunder; (v) contain an express waiver of any right of subrogation
by the insurance company against Landlord and Landlord's agents; (vi) contain an
automatic increase in insurance endorsement providing appropriate inflation
protection; (vii) limit deductible amounts to no more than Twenty-Five Thousand
Dollars ($25,000.00), and (viii) have such other form and content as Landlord
may reasonably require.
(d) Upon the Lease Commencement Date and thereafter not less than
thirty (30) days prior to the expiration dates of each policy providing all or
part of the insurance required pursuant to this Section 16, Tenant shall deliver
to Landlord a statement evidencing the policy or policies, and renewals thereof,
evidencing Tenant's insurance coverage as required hereunder and evidencing the
payment of premiums or accompanied by other evidence satisfactory to Landlord of
such payment. In the event that Tenant shall, either upon the Lease Commencement
Date or prior to the thirtieth (30th) day before any such insurance coverage
herein required to be obtained and maintained by Tenant, fail to do so, then
Landlord, in Landlord's sole discretion, may (but shall not be obligated to)
obtain such insurance coverage and pay the premiums therefore for a period not
exceeding one year in each instance, and the premiums so paid by Landlord shall
be payable by Tenant to Landlord, within thirty (30) days of presentation of
Landlord's invoice therefore, as Additional Rent.
-13-
<PAGE>
(e) Tenant hereby releases Landlord and its agents and employees from any
and all liability or responsibility to Tenant or any person claiming by, through
or under Tenant, by way of subrogation or otherwise, except to the extent of
Landlord's obligation to repair pursuant to Section 14 hereof, for the death of
or injury to the Tenant or others, or for the loss of or damage to property
(including books, records, files, money, securities, negotiable instruments,
papers or other valuables) of the Tenant or others, except as a result of
Landlord's willful misconduct or gross negligence, or for any indirect or
consequential or economic loss, injury or damage of the Tenant or others arising
from or out of any occurrence or situation in, upon, at or relating to the
Property and, without limiting the generality of the foregoing, the Landlord
shall not be liable or in any way responsible for any death, injury, loss or
damage to persons or property resulting from fire, explosion, falling plaster,
escaping steam or gas, electricity, water, rain, flood, snow, ice or leaks from
any part of the Property or from the pipes, sprinklers, appliances, plumbing
works, roof, windows or subsurface of any floor or ceiling of the Property,
except if solely caused by Landlord's willful misconduct or gross negligence; or
caused by other tenants occupants or persons in the Premises or other premises
in the Property or the public; or caused by operations in the construction of
any private, public or quasi-public work; or against which the Tenant is
required to insure pursuant to this Lease. Tenant agrees to look to its own fire
and hazard insurance policies in the event of damage to Tenant's personal
property.
(f) Notwithstanding anything to the contrary, to the extent of any claim or
liability in excess of Twenty-Five Thousand and 00/100 Dollars ($25,000.00) that
is covered by the insurance Landlord is required to carry pursuant to Section
16(g), Landlord hereby releases Tenant and its agents and employees from any and
all liability or responsibility to Landlord or any person claiming by, through
or under Landlord, by way of subrogation or otherwise, for the death of or
bodily injury to the Landlord or others, or for the loss of or damage to
tangible property (including books, records, files, money, securities,
negotiable instruments, papers or other valuables) of the Landlord or others,
except as a result of Tenant's willful misconduct or gross negligence, or for
any indirect or consequential or economic loss, injury or damage of the Landlord
or others arising from or out of any occurrence or situation in, upon, at or
relating to the Property and, without limiting the generality of the foregoing,
the Tenant shall not be liable or in any way responsible for any death, injury,
loss or damage to persons or property resulting from fire, explosion, falling
plaster, escaping steam or gas, electricity, water, rain, flood, snow, ice or
leaks from any part of the Property or from the pipes, sprinklers, appliances,
plumbing works, roof, windows or subsurface of any floor or ceiling of the
Property; or caused by other tenants occupants or persons in the Premises or
other premises in the Property or the public; or caused by operations in the
construction of any private, public or quasi-public work; or against which the
Landlord is required to insure pursuant to this Lease to the extent of any claim
or liability in excess of Twenty-Five Thousand and 00/100 Dollars ($25,000.00)
that is covered by Landlord's insurance. Except as set forth elsewhere in this
Lease, Landlord agrees to look to its own fire and hazard insurance policies in
the event of damage to Landlord's personal property.
(g) Throughout the Lease Term, Landlord shall maintain standard all risk
coverage insurance on the Building, insuring against such perils equal to
ninety percent (90%) of the replacement cost of the Building or such greater
amounts as are normally insured against by prudent owners of comparable office
buildings in the Greater Baltimore/Washington Metropolitan Area. Landlord shall
also maintain comprehensive public liability insurance in amounts such as are
normally maintained by prudent owners of comparable office buildings.
Landlord's insurance policies must contain an express waiver of any right of
subrogation by the insurance company against Tenant.
17. PROPERTY AT TENANT'S RISK. All personal property in the Premises, of
whatever nature, whether owned by Tenant or any other person, shall be and
remain Tenant's sole risk and, except as directly caused by the gross
negligence or willful misconduct of Landlord. Landlord shall not assume any
liability or be liable for any damage to or loss of such personal property,
arising from the bursting, overflowing, or leaking of the roof or of water,
sewer, or steam pipes, or from heating or plumbing fixtures or from the
handling of electric wires or fixtures or from any other cause whatsoever.
18. DAMAGE. If the Premises shall be damaged by fire or other natural
casualty, without the fault or neglect of Tenant, its servants, employees,
agents, contractors, invitees, or licensees, or other persons for whom Tenant is
legally responsible, the damage shall be repaired within a reasonable time by
and at the expense of Landlord, and the Annual Base Rent and
- 14 -
<PAGE>
Additional Rent shall abate pro rata until such repairs shall have been made,
according to the part of the Premises which is thereby rendered unusable by
Tenant; provided, however, that (i) Landlord shall have no obligation to
repair, replace or restore Tenant's furniture, fixtures, furnishings or other
personal property and (ii) Tenant shall, with all reasonable diligence and at
Tenant's sole expense, make all other repairs and do all other items of work
which are necessary to return the Premises to the condition existing
immediately prior to such damage or destruction and promptly to complete the
Premises for use and occupancy by the Tenant. Due allowance shall be made in
Landlord's repair obligation for reasonable delay which may arise by reason of
any adjustment or settlement of insurance claims by Landlord, and for delay on
account of "labor troubles" or any other cause beyond Landlord's control.
Notwithstanding the foregoing, if (i) the Premises are rendered wholly
untenantable by fire or other cause and the Landlord decides not to rebuild the
Premises, or (ii) if the Premises are damaged by fire or other casualty and
such damage cannot reasonably be repaired within ninety (90) days following
such fire or other casualty, or (iii) if the entire Building be so damaged that
Landlord shall decide to demolish it or not to rebuild it, and (iv) Landlord
notifies the Tenant in writing of the extent of such damage and such decision,
in any of such events, the Term shall terminate upon the thirtieth (30th) day
after such notice is given as if such date were the Termination Date set forth
herein, and Tenant shall vacate the Premises and surrender the same to Landlord
on such date. Landlord shall have no liability, and shall not be responsible
for consequential damages, lost profits or any damage to Tenant's personal
property, arising from any such fire or other damage or Landlord's decision to
terminate this Lease. No compensation or claim or reduction of rent will be
allowed or paid by Landlord by reason of inconvenience, annoyance, or injury to
business arising from the necessity of repairing the Premises or any portion of
the Building of which they are a part however the necessity may occur.
19. CONDEMNATION.
(a) If all of the Premises is condemned or taken in any manner for
public or quasi-public use (including for all purposes of this Section 19, but
not limited to, a conveyance or assignment in lieu of a condemnation or
taking), this Lease shall automatically terminate as of the date that Tenant is
required to surrender possession of the Premises as a result of such
condemnation or other taking. If a part of the Premises so condemned or taken
renders the remaining portion untenantable and unusable by Tenant, as
determined by Landlord in Landlord's reasonable discretion, this Lease may be
terminated by Tenant as of the date Tenant is required to surrender possession
of such portion of the Premises, by written notice to Landlord within sixty
(60) days following notice to Tenant of the date on which Tenant is required to
surrender possession of such portion of the Premises. If a portion of the
Building is condemned or taken so as to require, in the opinion of Landlord, a
substantial alteration or reconstruction of the remaining portions thereof,
this Lease may be terminated by Landlord, as of the date Landlord is required
to surrender possession as a result of such condemnation or taking, by written
notice to Tenant within sixty (60) days following notice to Landlord as of the
date on which possession of the Building (or such part thereof) must be
surrendered.
(b) Landlord shall be entitled to the entire award in any condemnation
proceeding or other proceeding for taking for public or quasi-public use,
including, without limitation, any award made for the value of the leasehold
estate created by this Lease. No award for any partial or entire taking shall
be apportioned, and Tenant hereby assigns to Landlord any award that may be
made in such condemnation or other taking, together with any and all rights of
Tenant now or hereafter arising in or to same or any part thereof; provided,
however, that nothing contained herein shall be deemed to give Landlord any
interest in or to require Tenant to assign to Landlord any separate award made
to Tenant specifically for its relocation expenses, the taking of personal
property and fixtures belonging to Tenant, or the interruption of or damage to
Tenant's business, provided that such award shall not diminish the award to
which Landlord is otherwise entitled.
(c) In the event of a partial condemnation or other taking that does not
result in a termination of this Lease as to the entire Premises, the Annual
Base Rent shall be reduced in the proportion that the square footage of the
portion of the Premises taken by such condemnation or other taking bears to the
square footage contained in the Premises immediately prior to such condemnation
or other taking. In the event that this Lease shall be terminated pursuant to
this Section 19, the Annual Base Rent shall be adjusted through the date that
Tenant is required to surrender possession of the Premises.
- 15 -
<PAGE>
(d) If all or any portion of the Premises is condemned or otherwise
taken for public or quasi-public use for a limited period of time, this Lease
shall remain in full force and effect and Tenant shall continue to perform all
of the terms, conditions and covenants of this Lease; provided, however, that
(i) during such limited period, the Annual Base Rent shall be reduced in the
proportion that the square footage contained in the Premises immediately prior
to such condemnation or other talking, and (ii) Landlord shall be entitled to
whatever compensation may be payable from the requisitioning authority for the
use and occupation of the Premises for the period involved.
20. LAWS AND ORDINANCES. The Tenant shall, at its sole expense, promptly
observe and comply with all statutes, laws, ordinances, rules, regulations,
orders and requirements of all governmental, quasi-governmental or regulatory
authorities including, without limitation, police, fire, health or environmental
authorities or agencies, applicable Insurance Rating Bureau, and of any
liability or fire insurance company by which the Landlord or the Tenant may be
insured at any time during the Term, which are applicable to the Tenant, the
condition, maintenance or operation of the Premises or the leasehold
improvements therein or any part thereof, the occupation or use of the Premises
or the conduct of any business in, at, upon or from the Premises, or which are
applicable to or require the making of repairs, replacements, installations,
alterations, additions, changes or improvements to the Premises or the
leasehold improvements therein; subject, however, to the other provisions of
this Lease requiring the Landlord's prior approval of leasehold improvements.
Landlord represents that, to Landlord's actual knowledge, as of the date hereof,
Landlord has not received any notice from any applicable governmental authority
that the Building is in violation of applicable building codes or regulations.
If Landlord shall receive notice of any judgments or orders from any applicable
governmental authority regarding the Building or the Property, Landlord shall
use commercially reasonable efforts to achieve compliance.
21. RULES AND REGULATIONS. Tenant shall at all times, and shall cause
everyone for whom the Tenant is in law responsible or over whom the Tenant
might reasonably be expected to have control (including, but not limited to,
Tenant's employees) to, comply with the rules and regulations promulgated by
Landlord. Landlord's current rules and regulations are set forth on the
attached Exhibit D. Tenant shall also comply with any measures the Landlord may
from time to time introduce to conserve or to reduce consumption of energy.
22. SURRENDER: HOLDOVER
(a) Upon the expiration or sooner termination of the Term of this
Lease, Tenant shall quit and surrender to Landlord the Premises and all keys,
locks and other fixtures connected therewith (except only office furniture and
business equipment) in good order and condition, as the same is now or shall
be on the Lease Commencement Date, ordinary wear and tear and casualty
expected, and shall inform Landlord of all combinations of locks, safes and
vaults, if any, in the Premises. Subject to the provisions of Sections 13 and
27 hereof, Tenant, at Tenant's sole expense, shall promptly remove all
personal property of Tenant, repair all damage to the Premises caused by such
removal and restore the Premises to the condition which existed prior to the
installation of the property so removed. Any personal property of Tenant not
removed within ten (10) days following the expiration or earlier termination of
the Lease shall be deemed to have been abandoned by Tenant and to have become
the property of Landlord, and may be retained or disposed of by Landlord, as
Landlord shall desire, in accordance with applicable law.
(b) If Tenant shall not immediately surrender the Premises on the
Termination Date, then Tenant shall, by virtue of this Lease, become a
month-to-month tenant at one hundred fifty percent (150%) of the Monthly Base
Rent in effect prior to the expiration of the Term, commencing said monthly
tenancy with the first day after the Termination Date; and Tenant, as a monthly
Tenant, shall be subject to all of the other terms, conditions and covenants of
this Lease as though the same had originally been a monthly tenancy. In such
event, each party hereto shall give to the other at least thirty (30) days'
written notice to quit the Premises, except in the event of non-payment of Rent
when due, or of the breach of any other covenant by the said Tenant after
expiration of any applicable notice and cure provisions of this Lease, in which
event TENANT SHALL NOT BE ENTITLED TO ANY NOTICE TO QUIT, THE USUAL THIRTY (30)
DAYS' NOTICE TO QUIT BEING HEREBY EXPRESSLY WAIVED. In the event that Tenant
shall hold over after the Termination Date and Landlord shall desire to regain
possession of the Premises promptly following the Termination Date, then
Landlord may, at Landlord's election, re-enter and take possession of the
Premises forthwith, by any legal action or process in force in the Commonwealth
of Virginia, TENANT HEREBY WAIVING ANY NOTICE TO QUIT; provided,
-16-
<PAGE>
however, that (i) Tenant shall pay Landlord a fair rental value (but not as
rent) equal to one hundred fifty percent (150%) of the Monthly Base Rent plus
all Additional Rent payable for the last month of the Term, for each month or
portion thereof that Tenant remains in possession following the Termination
Date, and (ii) Tenant shall indemnify Landlord against any and all claims,
losses and liabilities for damages resulting from failure to surrender
possession, including without limitation, any claims made by any succeeding
tenant, except that Landlord waives its right to consequential and punitive
damages incurred as a result of a Tenant holdover of two (2) months or less.
23. EVENTS OF DEFAULT. The occurrence of any of the following shall
be deemed to be an "Event of Default" under this Lease:
(a) if Tenant shall default in the payment of any amount to be
paid by Tenant hereunder and such default shall continue for a period of seven
(7) days after the date when the same shall become due and payable (all of
which monetary obligations of Tenant shall bear interest at the rate of fifteen
percent (15%) per annum (but in no event greater than the highest non-usurious
rate permitted under the laws of the Commonwealth of Virginia) from the due
date until paid in full, and such interest shall constitute Additional Rent
hereunder due and payable with the installment of Monthly Base Rent next due);
(b) if Tenant shall default in performing any of the covenants,
terms or provisions of this Lease (other than the payment, when due, of any of
Tenant's monetary obligations hereunder, or the surrender of the Premises upon
the expiration of the Term), or any of the Rules and Regulations now or
hereafter established by Landlord to govern the operation of the Buildings, and
Tenant fails to cure such default within fifteen (15) days after written notice
thereof from Landlord, provided that, unless such default endangers the health,
safety or welfare of any occupants of the Building or cannot reasonably be
remedied, if said default shall be of such a nature that it cannot reasonably
be cured or remedied within said fifteen (15) day period, such default by
Tenant in the performance of any of the covenants, terms or provisions of this
Lease (except as aforesaid) shall not be deemed an Event of Default if Tenant
shall have commenced in good faith to cure such default within the aforesaid
fifteen (15)-day period and shall then continuously and diligently pursue such
cure to completion within an additional thirty (30) days. Notwithstanding the
foregoing, the occurrence of any event or condition caused by Tenant of
Tenant's agents, officers, employees, contractors, licensees, invitees or
others for whom Tenant is legally responsible which (i) may endanger or
compromise the health, safety or welfare of the Property (or any portion
thereof) or the occupants thereof, or (ii) cannot reasonably be remedied,
shall, without notice of cure period, be deemed an Event of Default;
(c) if Tenant shall abandon the Premises or vacate the Premises
for more than forty-five (45) days without either (i) obtaining Landlord's
prior written consent to such abandonment or vacating, which consent shall not
unreasonably withheld, conditioned or delayed, or (ii) actively and in good
faith pursuing a sublease or assignment of the Premises in accordance with
Section 28;
(d) if any steps are taken or any action or proceedings are
instituted by the Tenant or by any other party including, without limitation,
any court or governmental body of competent jurisdiction for the dissolution,
winding up or liquidation of the Tenant or the assets thereof;
(e) if Tenant shall become insolvent, make an assignment for
the benefit of creditors, or file, be the subject of, or acquiesce in a
petition filed in any court in the nature of a bankruptcy, reorganization,
composition, extension, arrangement or insolvency proceeding (unless, in the
case of a petition field against Tenant, the same is dismissed within (60)
days);
(f) if any seizure, execution, attachment or similar process is
issued against Tenant or Tenant's assets or any encumbrancer takes any action
or proceeding whereby any of the improvements, fixtures, furniture, equipment
or inventory in or relating to the Premises or any portion thereof or the
interest of the Tenant therein or in this Lease or any business conducted in or
from the Premises shall be taken or attempted to be taken;
-17-
<PAGE>
(g) if a receiver, manager, custodian or any party having similar
powers is appointed for all or a portion of the property or business of the
Tenant, or any assignee, subtenant, concessionaire, licensee or occupant of the
Premises;
(h) if Tenant makes the sale in bulk of all or substantially all of
its assets;
(i) if any insurance policy on the Property or any part thereof is
canceled or is threatened by the insurer to be canceled, or the coverage
thereunder reduced in any way by the insurer and the Tenant has failed to remedy
the condition giving rise to such cancellation, threatened cancellation or
reduction of coverage within twenty (20) days after notice thereof from the
Landlord;
(j) if the Tenant purports to make a Transfer other than in compliance
with the provisions of this Lease; or
(k) the occurrence of any event which, pursuant to the other terms of
this Lease entitles Landlord to re-enter the Premises or terminate this Lease.
24. LANDLORD'S REMEDIES UPON DEFAULT. Upon the occurrence of any Event of
Default, Landlord, at its option may pursue any one or more of the following
remedies without any notice or demand whatsoever except as provided herein:
(a) Landlord, at its option, may at once, or any time thereafter
terminate this Lease by written notice to Tenant, (except the Landlord may not
terminate this Lease after the first monetary default by Tenant in any given
Lease Year unless Tenant fails to cure such default after having been given
notice of said default and five (5) days to cure such default) whereupon this
Lease shall end concurrently with the receipt by Tenant of such notice, TENANT
HEREBY EXPRESSLY WAIVING ANY NOTICE TO QUIT PROVIDED BY CURRENT OR FUTURE LAW.
Upon such termination by Landlord, Tenant will at once surrender possession of
the Premises to Landlord and remove all of Tenant's effects therefrom, and
Landlord may re-enter the Premises and repossess it, and remove all persons and
effects there from, without being guilty of trespass, forcible entry, detainer
or other tort. Notwithstanding any termination of this Lease pursuant to this
Section 24(a), Tenant shall remain liable for the Rent as hereinafter provided.
(b) Landlord may, without terminating this Lease, enter upon and take
possession of the Premises and expel or remove Tenant and any other person who
may be occupying the Premises or any part thereof, without being liable for
prosecution or any claim for damages therefore, and, if Landlord so elects, make
such alterations and repairs, as, in Landlord's sole judgment, may be necessary
to re-let the Premises, and relet such space or any part thereof, on Tenant's
behalf, for such rent and for such period of time and subject to such terms and
conditions as Landlord may deem advisable and receive the rent therefore. Upon
each such re-letting, all rent received by Landlord from such re-letting shall
be applied first to the payment of any loss or expense of such re-letting,
including brokerage fees, reasonable attorneys' fees and the cost of such
alterations and repairs; second, to the payment of any indebtedness other than
Rent due hereunder from Tenant to Landlord, including interest thereon; third,
to the payment of Rent due and unpaid hereunder, together with interest thereon
as herein provided; and the residue, if any, shall be held by Landlord and
applied in payment of future Rent as the same may become due and payable
hereunder. Tenant agrees to pay to Landlord, within fourteen (14) days of
demand, any deficiency that may arise by reason of such re-letting.
Notwithstanding any such re-letting without termination, Landlord may at any
time thereafter elect to terminate this Lease for such prior Event of Default.
Landlord shall in no event be liable in any way whatsoever for its failure or
refusal to re-let the Premises or any part thereof, or, in the event that the
Premises are re-let, for its failure to collect the rent under such re-letting,
and no such refusal or failure to re-let or failure to collect rent shall
release or affect Tenant's liability for damages or otherwise under this Lease.
No re-entry by Landlord, and no acceptance by Landlord of keys from Tenant,
shall be considered an acceptance of a surrender of this Lease. Tenant hereby
waives any right of redemption it may have under the law.
(c) In the event Landlord terminates this Lease in accordance with the
provisions of this Section 24, Landlord may, in addition to any other remedy it
may have, recover from Tenant all damages and reasonable, actual, out-of-pocket
expenses Landlord may suffer or incur by reason of the Event of Default
hereunder, including, without limitation, the cost of recovering the
-18-
<PAGE>
Premises, reasonable attorneys' fees and either (i) the worth at the time of
such termination of the excess if any, of the amount of Rent and charges
equivalent to the Rent reserved in this Lease for the remainder of the stated
term over the then reasonable rental value of the Premises for the remainder of
the stated term, or (ii) the excess of the Rent reserved hereunder above the
amount of rent collected upon re-letting the Premises, all of which sums shall
become immediately due and payable by Tenant to Landlord within fourteen (14)
days of demand.
(d) Landlord may, but shall not be obligated to, cure, without
notice (unless expressly provided herein to the contrary), any Events of Default
by Tenant under this Lease, and Tenant shall pay to Landlord, as Additional
Rent, within fourteen (14) days of presentation of Landlord's invoice therefore,
all actual, out-of-packet costs and expenses incurred by Landlord in curing such
Events of Default, including, without limitation, court costs and attorneys'
fees and disbursements in connection therewith, together with interest on the
amount of costs and expenses so incurred at the rate specified in Section 24(a)
hereof; provided, that Landlord shall not be liable to Tenant for any loss,
injury or damage caused by acts of the Landlord in remedying or attempting to
remedy any such Event of Default. Tenant shall, in addition, pay to Landlord
upon presentation of Landlord's invoice therefore, such actual, out-of-pocket
expenses (regardless of whether or not suit is filed) as Landlord may incur
(including, without limitation, court costs and attorneys' fees and
disbursements) in enforcing the performance of any obligation of Tenant under
this Lease. Any reservation of a right by Landlord to enter upon the Premises
and to make or perform any repairs, alterations, or other work in, to, or about
the Premises which, in the first instance, is the Tenant's obligation pursuant
to the Lease, shall not be deemed to: (i) impose any obligation on Landlord to
do so; (ii) render Landlord liable to Tenant or any third party for the failure
to do so; or (iii) relieve Tenant from any obligation to indemnify Landlord as
otherwise provided elsewhere in the Lease.
(e) For each payment of Rent (or portion thereof) which is not
paid within seven (7) days after the due date thereof, Tenant shall pay a late
charge equal to the greater of (i) $100.00 or (ii) five percent (5%) of such
installment of Rent (or portion thereof). It is hereby acknowledged by Landlord
and Tenant that this charge represents the parties' reasonable estimate as of
the date hereof of the extra expenses that Landlord will incur in processing
delinquent payments of Rent, the exact amount of such charges being difficult to
ascertain, and such late charge shall not be considered interest. Payment of the
foregoing late charge shall not be deemed to excuse the untimely payment of Rent
by Tenant. Notwithstanding the foregoing, Tenant shall not be assessed a late
charge for any one late Rent payment within each Lease Year.
(f) [Intentionally omitted].
(g) Any suit brought to collect the amount of any deficiency in
Rent for any month shall not prejudice in any way the rights of Landlord to
collect the deficiency for any subsequent month by a similar proceeding.
Landlord may, in Landlord's sole discretion, choose to defer collection of such
amounts until the date upon which the Term expires or would have expired but
for such sooner termination, and Tenant hereby agrees that in such event
Landlord's cause of action shall be deemed to have accrued as of the date upon
which the Term expires or would have expired but for such sooner termination,
as the case may be.
25. REMEDIES CUMULATIVE; NO WAIVER. All rights and remedies given
herein and/or by law or in equity to Landlord are separate, distinct and
cumulative, and no one of them, whether exercised by Landlord or not, shall be
deemed to be in exclusion of any others. In the event of any breach or
threatened breach by Tenant or any of the covenants or provisions of this Lease,
Landlord shall, without limitation, have the right of injunction. No pursuit of
any remedy by Landlord shall constitute a forfeiture or waiver of any Rent due
to Landlord hereunder or of any damages accruing to Landlord by reason of
Tenant's violation of any of the covenants and provisions of this Lease. No
failure of Landlord to exercise any power given Landlord hereunder, or to insist
upon strict compliance by Tenant with its obligations hereunder, and no custom
of practice of the parties at variance with the terms hereof shall constitute a
waiver of Landlord's right to demand exact compliance with the terms hereof,
unless such waiver shall be given in writing and signed by Landlord.
26. SECURITY DEPOSIT.
-19-
<PAGE>
(a) Upon the execution of this Lease, Tenant shall deliver to
Landlord a letter of credit as set forth in Section 26(b) to serve as a security
deposit hereunder (the "Security Deposit"). In no instance shall the amount of
such Security Deposit be considered a measure of liquidated damages. All or any
part of the Security Deposit may be applied by Landlord in total or partial
satisfaction of any Event of Default by Tenant. The application of all or any
part of the Security Deposit to any obligation or Event of Default of Tenant
under this Lease shall not deprive Landlord of any other rights or remedies
Landlord may have nor shall such application by Landlord constitute a waiver by
Landlord. If all or any part of the Security Deposit is applied to an obligation
of Tenant under this Lease, then Tenant shall, within fourteen (14) days of
written notice from Landlord, restore the Security Deposit by payment in cash or
cash equivalent to Landlord of the amount so applied by Landlord, which Landlord
shall then hold as part of the Security Deposit hereunder. The Security Deposit
shall not be considered an advance payment of Rent. In no event shall the
Security Deposit constitute a measure of Landlord's damage in case of default by
Tenant. It is agreed that Landlord may, during the continuance of any Event of
Default and in Landlord's sole discretion, apply the Security Deposit or any
part thereof towards the payment of the Rent and all other sums payable by
Tenant under this Lease, and toward the performance of each and every one of
Tenant's covenants under this Lease; provided, however, (i) Tenant shall remain
liable for any amounts that said Security Deposit shall be insufficient to pay;
(ii) Landlord may exhaust any or all rights and remedies against Tenant before
resorting to said Security Deposit, but nothing herein contained shall require
or be deemed to require Landlord to do so; and (iii) upon application of all or
part of said Security Deposit by Landlord, Tenant shall be obligated to promptly
deposit with Landlord the amount necessary to restore the Security Deposit to
the amount held by Landlord immediately prior to such advance by Landlord. Any
balance of the Security Deposit remaining after the full and complete
satisfaction of Tenant's obligations to Landlord shall be returned by Landlord
to Tenant without interest within forty-five (45) days after the Termination
Date. Tenant agrees that in the event of the sale of the Property or any portion
thereof containing the Premises, by foreclosure or deed in lieu thereof, the
purchaser at such sale shall only be responsible for return of the Security
Deposit to the extent that such purchaser actually receives such Security
Deposit. Notwithstanding the foregoing, in the event of the sale or transfer of
Landlord's interest in the Building or this Lease, Landlord shall have the right
to transfer the Security Deposit to the purchaser or transferee, in which event
Tenant shall look only to the new landlord for the return of the Security
Deposit and Landlord shall thereupon be released from all liability to Tenant
for the return of such Security Deposit.
(b) Simultaneously with the execution of this Lease, Tenant shall
deliver to Landlord an irrevocable standby letter of credit (the "Letter of
Credit") payable in the Baltimore/Washington, D.C. metropolitan area running in
favor of Landlord, issued by First Union National Bank, NationsBank, N.A.,
Crestar Bank, N.A. or such other bank as may be reasonably acceptable to
Landlord, in its sole discretion ("Issuer"), in the amount equal to Two Hundred
Eighty-Two Thousand Eight Hundred Thirty and 00/100 Dollars ($282,830.00), which
amount may be adjusted but only subject to the remeasurement of the Premises as
permitted under Section 1 herein.
Landlord hereby deems acceptable any bank that is under the supervision of the
Superintendent of Banks of the State of Maryland, or a National Banking
Association, having (i) total assets of no less than Five Hundred Million
00/100 Dollars ($500,000,000.00), and (ii) capital of no less than five percent
(5%) of total assets (in each case as defined by the federal or other
government authorized regulator of the respective bank). The Letter of Credit
shall be irrevocable following the execution of this Lease and during the Term
of the Lease, including any extensions thereof. The Letter of Credit shall
serve as the Security Deposit for Tenant's obligations under this Lease, and
may be drawn upon by Landlord in total or partial satisfaction of any Event of
Default by Tenant. The application of all or any part of the Letter of Credit
to any obligation or Event of Default of Tenant under this Lease shall not
deprive Landlord of any other rights or remedies Landlord may have nor shall
such application by Landlord constitute a waiver by Landlord. If all or any
part of the Letter of Credit is applied to an obligation of Tenant under this
Lease, then Tenant shall immediately restore the Letter of Credit to its
original amount, or, at Landlord's option, by payment in cash or cash
equivalent to Landlord of the amount so applied by Landlord, which Landlord
shall then hold as part of the Security Deposit hereunder.
(c) The form and terms of the Letter of Credit must be approved in
writing in advance by Landlord, and shall provide, among other things, in
effect that:
-20-
<PAGE>
(i) Landlord shall have the right to draw down an amount
up to the face amount of the Letter of Credit upon the presentation to the
issuing bank of Landlord's statement that an Event of Default has occurred and
that such amount is due to Landlord under the terms and conditions of this
Lease, it being understood that such statement shall be signed by an authorized
party of Landlord;
(ii) The Letter of Credit will be honored by the issuing
bank without inquiry as to the accuracy thereof and regardless of whether the
Tenant disputes the content of such statement;
(iii) In the event of a transfer of Landlord's interest in
the building of which the Premises are a part, Landlord shall have the right to
transfer the Letter of Credit to the transferee or require Tenant to obtain a
replacement Letter of Credit (at no cost to Tenant absent an Event of Default)
and thereupon the Landlord shall, without any further agreement between the
parties, be released by Tenant from all liability therefore, and it is agreed
that the provisions hereof shall apply to every transfer or assignment of said
Letter of Credit to a new Landlord.
(d) Tenant further covenants that it will not assign or encumber
said Letter of Credit or any part thereof and that neither Landlord nor its
successors or assigns will be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.
(e) If at any time that Tenant is required to maintain the
above-described Letter of Credit, (i) the Issuer's total assets shall be less
than Five Hundred Million and 00/100 Dollars ($500,000,000.00), (ii) the
Issuer's capital falls below five percent (5%) of total assets (in each case as
defined by the federal or other government authorized regulator of the
respective bank), (iii) the Issuer is taken over (e.g., into receivership or
conservatorship) by a state or federal banking regulator or authority, or (iv)
the Issuer fails or becomes insolvent, then upon notice from Landlord to Tenant,
Tenant shall substitute a new Letter of Credit for the then-existing Letter of
Credit within twenty (20) days of the date of the Landlord's notice, or such
longer period as Landlord may specify, issued by a national banking association
located in the Baltimore/Washington, D.C. metropolitan area, which banking
association shall meet or exceed the minimum criteria for assets and capital set
forth in Section 25(b) hereof.
27. LIEN ON PERSONAL PROPERTY. Landlord hereby waives any Landlord lien
rights as to Tenants personal property, trade fixtures, equipment, work papers,
and proprietary materials.
28. ASSIGNMENT; SUBLETTING.
(a) Except as otherwise set forth herein, Tenant will not assign,
transfer, mortgage, pledge, hypothecate or otherwise encumber this Lease or
sublet or rent or permit the occupancy or use by any third party (including,
without limitation, any licensee, concessionaire or franchisee or any person
other than Tenant), of the Premises or any part thereof, whether effectuated by
operation of law or by transfer of any interest in Tenant or otherwise, (each of
the foregoing hereinafter referred to as "Transfer"), without Tenant first
requesting and obtaining the prior written consent of Landlord (such request to
consent to be provided at least forty-five (45) days prior to the proposed
Transfer), which consent, except in the case of a proposed assignment or
subletting, may be withheld in Landlord's sole and absolute subjective
discretion. If Tenant requests Landlord's consent to a proposed assignment or
subletting, such consent may not be unreasonably withheld, conditioned or
delayed by Landlord, provided the other terms regarding assignments and
sublettings, as set forth herein, are satisfied. Landlord shall grant or
withhold such consent within thirty (30) days after receiving Tenant's request
for the proposed Transfer and all documentation and information that is
reasonably requested by Landlord in connection with Landlord's consideration of
the proposed Transfer. The term "Transfer" shall also include any subletting or
assignment which would otherwise occur by operation of law, merger,
consolidation, reorganization, transfer or other change of Tenant's corporate or
proprietary structure. Any assignment or subletting shall not in any manner
relieve Tenant of any liability hereunder. Any request for consent of the
Landlord to any Transfer shall be in writing accompanied by full particulars of
the proposed Transfer with copies of all documents relating thereto, full
particulars of the identity, responsibility, reputation, financial standing and
business of the Transferee (as hereinafter defined) together with all further
information relating to the proposed Transfer which
-21-
<PAGE>
is relevant. In addition, the Tenant shall promptly furnish such further
information which the Landlord may request.
(b) If Tenant is a corporation, partnership, or any other proprietary
entity, and if at any time during the Term, any part or all of the ownership
interests thereof shall be transferred by sale, assignment, bequest,
inheritance, operation of law or other disposition so as to result in a change
in the present control of said entity by the person or persons now owning a
majority of said ownership interests, any such transfer shall be deemed a
Transfer, and Tenant shall notify Landlord of this event within fifteen (15)
days from the date of such transfer, and Landlord may terminate this Lease at
any time after such change by giving Tenant sixty (60) days written notice. The
Tenant shall make available to the Landlord, or its representatives, all books
and records of the Tenant for inspection at all reasonable times to ascertain to
the extent possible whether there has been any such change of control.
Notwithstanding anything to the contrary set forth above, none of the following
shall be considered a Transfer, and, therefore, Landlord's consent shall not be
required in connection therewith: (i) the sale of stock or other securities by
Tenant in connection with any "public offering"; (ii) the sale of interests in
Tenant as part of a "private placement" made to raise capital; and (iii) if
Tenant at any time completes a public offering and becomes a corporation whose
stock is traded publicly either on a stock exchange or over the counter, the
sale and trading of shares of stock in Tenant will not be deemed to result in a
Transfer, even if the controlling interest in Tenant changes as a result.
(c) Except as otherwise set forth herein, any attempted Transfer
without Landlord's consent shall be null and void and shall confer no rights
upon the purported assignee, transferee, mortgagee or sublessee (each of the
foregoing hereinafter referred to as a "Transferee"), and, at the option of
Landlord, shall terminate this Lease; provided, however, that in the event of
such termination, Tenant shall remain liable for all rent and other sums due or
to become due under this Lease through the scheduled Termination Date set forth
herein and all damages suffered by Landlord on account of such breach by Tenant.
Neither the consent by Landlord to any Transfer, nor the collection or
acceptance of rent from any Transferee, shall constitute a waiver or release of
Tenant from any covenant or obligation contained in this Lease or Tenant's
liability under any such covenant or obligation, nor shall any such Transfer be
construed to relieve Tenant from obtaining the consent in writing of Landlord to
any further Transfer. In the event Landlord consents to a Transfer, (i) Tenant
shall enter into and effect such Transfer substantially upon terms consistent
with the request for consent, the information furnished in connection with such
request, and any conditions to its consent imposed by the Landlord, (ii) Tenant
shall enter into and cause the Transferee to enter into, at least seven (7) days
prior to the proposed effective date of such Transfer, all reasonable and
customary agreements prepared by the Landlord or its attorneys as may be
appropriate to implement any change to this Lease required by such Transfer and
to satisfy any of the conditions to its consent imposed by the Landlord, (iii)
Tenant shall pay to Landlord a fee to cover accounting costs, plus any
reasonable, actual, out-of-pocket legal fees incurred by Landlord as a result of
the Transfer, and (iv) Tenant shall pay to Landlord fifty percent (50%) of all
rent, additional rent, and any other monies, property, and consideration paid to
Tenant by the Transferee in excess of the fixed Rent and Additional Rent due
under this Lease applicable to the transferred premises after deduction of all
costs and expenses (including attorney's fees, brokerage commissions,
advertising costs and the cost of constructing any improvements or alterations
within the Premises) actually incurred by Tenant in connection with the
Transfer. Landlord may require an additional security deposit from the
Transferee as a condition of its consent. Tenant hereby assigns to Landlord the
rent due from each Transferee and hereby authorizes each such Transferee to pay
said rent directly to Landlord. Tenant agrees to use its commercially reasonable
efforts to obtain at least the then fair market rent in connection with any
assignment or sublease.
(d) Without limiting the other instances in which it may be
reasonable for Landlord to withhold its consent to an assignment or subletting,
Landlord and Tenant acknowledge that it will be reasonable for Landlord to
withhold its consent in any of the following instances: (i) in Landlord's
reasonable judgment, the financial worth of the proposed assignee or sublessee
does not meet the credit standards applied by Landlord for other tenants under
leases with comparable terms; (ii) in Landlord's reasonable judgment, the
charter or reputation of, or proposed use of the Premises by, the proposed
subtenant or assignee is inconsistent with the quality of other tenancies in
the Building; (iii) Landlord has received from any prior lessor to the proposed
assignee or subtenant a negative report concerning such prior lessor's
experience with the proposed assignee or subtenant; (iv) Landlord has
experienced previous defaults by or is in litigation with the proposed assignee
or subtenant; (v) the proposed assignment or sublease will create a vacancy
-22-
<PAGE>
elsewhere in the Building; (vi) the proposed assignee or subtenant is a person
with whom Landlord is actively negotiating to lease space in the Building; or
(vii) an Event of Default then exists under the Lease, or an Event of Default
has occurred on three (3) or more occasions during the previous twelve (12)
months preceding the date that Tenant requests consent.
(e) Notwithstanding any provision of this Lease to the contrary, in the
event Tenant shall, with or without the consent of Landlord, assign this Lease
or sublet in excess of fifty percent (50%) of the Premises in the Building other
than to an Affiliate in accordance with Section 28(i), any and all renewal
rights and options, termination rights, first notice and first refusal rights,
and similar rights granted herein shall be null and void and of no further force
or effect, it being understood that any and all of such rights are personal to
Tenant (and not to any Transferee) and are not appurtenant to the Premises or
this Lease.
(f) If Tenant agrees to assign this Lease or to sublet all or any portion
of the Premises, Tenant shall, prior to the effective date thereof (the
"Effective Date"), deliver to Landlord executed counterparts of any such
agreement and of all ancillary agreements with the proposed assignee or
subtenant, as applicable. Landlord shall then have all of the following rights,
any of which Landlord may exercise by written notice to Tenant given thirty (30)
days after Landlord has received all of the foregoing documents:
(i) with respect to a proposed assignment of this Lease, the right
to terminate this Lease on the Effective Date as if it were the Termination
Date;
(ii) with respect to a proposed subletting of the entire Premises for
all or substantially all of the then-remainder of the Term, the right to
terminate this Lease on the Effective Date as if it were the Termination Date;
or
(iii) with respect to a proposed subletting of less than the entire
Premises but more than twenty-five percent (25%) of the Premises for a term of
three (3) years or more including renewal options, the right to terminate this
Lease as to the portion of the Premises affected by such subletting on the
Effective Date, as if it were the Termination Date, in which case Tenant shall
promptly execute and deliver to Landlord an appropriate modification of this
Lease in form satisfactory to Landlord in all respects; and upon such
termination Tenant's obligations (including holdover) hereunder shall cease,
except for those obligations which survive termination of the Lease;
(g) If, pursuant to the exercise of the Landlord's option under Section
28(f) above, this Lease terminates as to only a portion of the Premises, the
Annual Base Rent and Additional Rent shall be adjusted in proportion to the
portion of the Premises affected by such termination, as determined by
Landlord's managing agent.
(h) If Landlord exercises any of its options under Section 28(f),
Landlord may then lease the Premises or any portion thereof to Tenant's
proposed assignee or subtenant or any other party, as the case may be, without
liability whatsoever to Tenant.
(i) Notwithstanding anything contained in this Section 28 to the contrary,
Landlord shall not withhold its consent to a proposed assignment or subletting
of all or any portion of the Premises to any "Affiliate" of Tenant, provided the
financial condition, net worth and credit worthiness of the proposed assignee or
sublessee meets the credit standards applied by Landlord for other tenants under
leases with comparable terms and is equal to or better than Tenant's financial
condition, reputation and net worth, as it exists on the date of this Lease, and
such Affiliate is of comparable quality with comparable use of premises as other
tenants of the Building, does not adversely affect the Building, and expressly
assumes in writing, prior to the effective date of such assignment, all
obligations of Tenant hereunder. The term "Affiliate" shall mean (i) any entity
which controls Tenant or is controlled by Tenant or is under common control with
Tenant, (ii) any person or entity to whom all or substantially all of the assets
of Tenant are conveyed, or (iii) any successor to Tenant by merger,
consolidation or other operation of law. Tenant shall give Landlord written
notice of any such proposed assignment or subletting at least thirty (30) days
prior to the proposed effective date of such assignment or subletting.
29. NONDISTURBANCE AND SUBORDINATION.
-23-
<PAGE>
(a) This Lease shall be subject and subordinated at all times to all
ground or underlying leases which may hereafter be executed affecting the
Property, and the lien of all mortgages and deeds of trust in any amount or
amounts whatsoever now or hereafter placed on or against the Property, on or
against Landlord's interest or estate therein, and on or against all such ground
or underlying leases, all without the necessity of having further instruments
executed on the part of Tenant to effectuate such subordination; provided,
however, tenant shall, within ten (10) days of Landlord's request therefore,
execute and deliver any reasonable and customary documents or instruments that
may be required by any lender or ground lessor to effectuate any subordination.
(b) Notwithstanding the foregoing, any beneficiary under any
mortgage or deed of trust may at any time subordinate its deed of trust to this
Lease in whole or in part, without any need to obtain Tenant's consent, by
execution of a written document subordinating such deed of trust to the Lease
to the extent set forth in such document and thereupon the Lease shall be
deemed prior to such deed of trust to the extent set forth in such document
without regard to their respective dates of execution, delivery and/or
recording. In that event, to the extent set forth in such document, such deed
of trust shall have the same rights with respect to this Lease as would have
existed if this Lease had been executed, and a memorandum thereof, recorded
prior to the execution, delivery and recording of the deed of trust.
(c) With respect to any mortgage that presently encumbers the
Property or that may in the future encumber the Property during the Term,
Landlord agrees that upon receipt of a written request by Tenant, Landlord will
use commercially reasonable efforts to obtain from the holder of the mortgage
or deed of trust to grant Tenant a nondisturbance agreement ("Nondisturbance
Agreement") in the usual form of such holder; provided, however, that such form
is commercially reasonable that in no event shall Landlord be required to
expend any money or bring suit against any party in order to obtain a
Nondisturbance Agreement, and Tenant shall pay for all costs, if any, incurred
by Landlord in connection with its obtaining the Nondisturbance Agreement from
the holder. Except for making such request, Landlord will be under no duty or
obligation hereunder, nor will the failure or refusal of such holder to grant a
nondisturbance agreement render Landlord liable to Tenant, or affect this
Lease, in any manner. Tenant will bear all costs and expenses (including
attorneys' fees) of such holder and Landlord in connection with a
nondisturbance agreement. Notwithstanding the foregoing, the parties recognize
and agree that the failure of Landlord or such mortgagee to deliver a
Nondisturbance Agreement shall negate, void and vitiate the terms of Section
29(a) and 29(b) above.
30. MORTGAGER PROTECTION. Tenant agrees to give any mortgagees or trust
deed holders a copy of any notice of default (which shall be delivered pursuant
to the terms of this Lease) served upon Landlord, provided that prior to such
notice Tenant has been notified, in writing of the address of such mortgagees or
trust deed holders. Tenant further agrees that if Landlord shall have failed to
cure such default within the time provided for in this Lease, then the
mortgagees or trust deed holders shall have an additional sixty (60) days within
which to cure such default or if such default cannot be cured within that sixty
(60) days, any such mortgagee or trust deed holder has commenced and is
diligently pursuing the remedies necessary to cure such default (including but
not limited to commencement of foreclosure proceedings, if necessary to effect
such cure), in which event this Lease shall not be terminated so long as such
remedies are being so diligently pursued. Notwithstanding anything herein to the
contrary, with respect to any default of Landlord materially affecting Tenant's
use and/or occupancy of the Premises, the cure period of such mortgagees or
trust deed holders shall be limited to forty-five (45) days following Tenant's
written notice to such mortgagees or trust deed holders.
31. MODIFICATIONS DUE TO FINANCING. If, in connection with obtaining
temporary or permanent financing for the Building or the Property, any lender
shall request reasonable modification(s) to this Lease as a condition to such
financing, Tenant agrees that Tenant will not unreasonably withhold, condition,
delay or defer the execution of an amendment to this Lease to effect such
modification(s), provided such modification(s) do not increase the financial
obligations of Tenant hereunder or materially and adversely affect (i) the
interest hereby created or (ii) Tenant's reasonable use and enjoyment of the
Premises.
32. ESTOPPEL CERTIFICATES. Tenant agrees, at any time in connection with
the sale of the Building or refinancing of the Building or otherwise for a good
faith business purpose, upon written request from Landlord, to execute,
acknowledge and deliver to Landlord or to such
- 24 -
<PAGE>
person(s) as may be designated by Landlord, within ten (10) days' following
demand therefore and pursuant to Section 35 herein, a statement in writing (i)
certifying that Tenant is in possession of the Premises, has unconditionally
accepted the same and is currently paying the Rent reserved hereunder (or, if
Tenant has conditionally accepted possession of the Premises, or is not
currently paying Rent, stating the reasons therefore), (ii) 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
stating the modifications), (iii) stating the dates to which the Rent and other
charges hereunder have been paid by Tenant, (iv) stating whether or not, to the
best of Tenant's knowledge, Landlord is in default in the performance of any
covenant, agreement or condition contained in this Lease (or of any event which
will, upon the passage of time, constitute a default), and, if so, specifying
each such default in detail, (v) that Tenant has no knowledge of any event
having occurred that authorized (or which, but for the passage of time will
allow) the termination of this Lease by Tenant (or if Tenant has such knowledge,
specifying the same in detail), and (vi) such other information as Landlord or
such other person may reasonably request. Any such statement, delivered pursuant
hereto may be relied upon by any owner, prospective purchaser, mortgagee or
prospective mortgagee of the Building or the Property or Landlord's interest
therein.
22. FINANCIAL STATEMENTS. Tenant, upon written request by Landlord, but
no more that twice per calendar year unless there is an Event of Default, will
provide Landlord with a copy of its current financial statements, consisting of
a balance sheet, an earnings statement, statement of changes in financial
position, statement of changes in Tenant's equity, and related footnotes,
prepared in accordance with generally accepted accounting principles. Such
financial statements must be either certified by a certified public accountant
or sworn to as to their accuracy by Tenant's most senior official and its chief
financial officer. The financial statements provided must be as of a date not
more than twelve (12) months prior to the date of request.
34. [INTENTIONALLY OMITTED].
35. NOTICES. No notice, and no request, consent, approval, waiver or
other communication which may be or is required or permitted to be given under
this Lease shall be effective unless the same is given in the manner set forth
in this Section 35. Each notice given pursuant to this Lease shall be given in
writing and shall be (i) delivered in person, (ii) sent by nationally
recognized overnight courier service, or (iii) sent by certified mail, return
receipt requested, first class postage prepaid, to Landlord or Tenant, as the
case may be, at their respective notice addresses as set forth below, or at any
such other address that may be given by one party to the other by notice
pursuant to this Section 35. Such notices, if given as prescribed in this
Section 35, shall be deemed to have been given (a) at the time of delivery if
delivery is made in person, (b) on the next business day if deposited with a
nationally recognized overnight courier service in time for next day delivery,
or (c) on the third business day following the date of mailing if mailed.
During any interruption or threatened interruption of substantial delay in
postal services, all notices shall be delivered personally or by nationally
recognized overnight courier service.
If to Landlord:
BRIT LIMITED PARTNERSHIP
c/o Jeffrey Lee Cohen
Suite 300
11140 Rockville Pike
Rockville, MD 20852
If to Tenant:
prior to the Lease Commencement Date:
Anadac, Inc.
2200 Clarendon Boulevard
Suite 900
Arlington, Virginia 22201
Attn: C.F.O.
With a copy (which copy shall not be required for notice to be
effective) to:
Watt, Tieder, Hoffar & Fitzgerald, LLP
7929 Westpark Drive
Suite 400
-25-
<PAGE>
McLean, Virginia 22102
Attn: John G. Lavoie, Esquire
from and after the Lease Commencement Date:
at the Premises.
Attn: C.F.O.
36. BROKERS. Landlord and Tenant each represent and warrant one to another
that neither of them has employed any broker, agent or finder in carrying on the
negotiations relating to this Lease other than Transwestern Carey Winston and
Grubb & Ellis of Metropolitan Washington, D.C., which broker(s) shall be paid by
Landlord in accordance with a separate agreement. Landlord shall indemnify and
hold Tenant harmless, and Tenant shall indemnify and hold Landlord harmless,
from and against any claim or claims for broker or other commission arising from
or out of any breach of the foregoing representation and warranty by the
respective indemnitors.
37. ATTORNEYS' FEES. Tenant hereby agrees to pay, as Additional Rent, all
actual, out-of-pocket attorneys' fees and disbursements (and all other court
costs or expenses of legal proceedings) which Landlord may incur or pay out by
reason of, or in connection with:
(a) any action or proceeding by Landlord to terminate the Lease;
(b) any other action or proceeding by Landlord against Tenant
(including, but not limited to, any arbitration proceeding);
(c) any Event of Default whether or not Landlord commences any
action or proceeding against Tenant;
(d) any action or proceeding brought by Tenant against Landlord
(or any officer, partner, or employee of Landlord) in which Tenant fails to
secure a final unappealable judgment against Landlord;
(e) any other appearance by Landlord (or any officer, partner
or employee of Landlord) as a witness or otherwise in any action or proceeding
whatsoever involving or affecting Landlord, Tenant, this Lease;
(f) any assignment, sublease, or leasehold mortgage proposed
or granted by Tenant (whether or not permitted under this Lease), and all
negotiations with respect thereto.
(g) any alteration of the Premises by Tenant, and all
negotiations with respect thereto.
Tenant's obligations under this Section shall survive the expiration of the
Term or any other termination of this Lease. This Section is intended to
supplement (and not to limit) other provisions of this Lease pertaining to
indemnities and/or attorney's fees. Such attorney's fees and disbursements
shall include services performed by in-house counsel used by Landlord, the fees
for which shall be calculated at an hourly rate of $210.00 per hour, which
hourly rate shall increase by five percent (5%) for each twelve-month period
after the date of this Lease, and which rate Tenant hereby agrees is
reasonable. In the event Tenant brings an action or proceeding against
Landlord, and Tenant secures a final unappealable court judgement against
Landlord, then Landlord shall pay all reasonable attorney's fees and
disbursements which Tenant has incurred or paid out by reason of, or in
connection with, such action or proceeding.
38. WAIVER OF JURY TRIAL: COUNTERCLAIMS. LANDLORD AND TENANT EACH HEREBY
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY CLAIM, ACTION, PROCEEDING OR
COUNTERCLAIM BY EITHER PARTY AGAINST THE OTHER ON ANY MATTERS ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS LEASE. THE RELATIONSHIP OF LANDLORD AND TENANT
AND/OR TENANT'S USE OR OCCUPANCY OF THE PREMISES. TENANT SHALL NOT IMPOSE ANY
COUNTERCLAIM OR COUNTERCLAIMS, EXCEPT COMPULSORY COUNTERCLAIMS, IN A SUMMARY
PROCEEDING OR OTHER ACTION BASED ON TERMINATION OR HOLDOVER. THIS
-26-
<PAGE>
WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY TENANT AND TENANT
ACKNOWLEDGES THAT NEITHER LANDLORD NOR ANY PERSON ACTING ON BEHALF OF LANDLORD
HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR
IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. TENANT FURTHER ACKNOWLEDGES THAT IT
HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE
SIGNING OF THIS LEASE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY AND
ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF
THIS WAIVER PROVISION AND AS EVIDENCE OF THE SAME HAS EXECUTED THIS LEASE.
39. ASSIGNS AND SUCCESSORS: LIMITATION ON LIABILITY.
(a) This Lease shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that the
original Landlord named herein and each successive owner of the Premises shall
be liable only for obligations accruing during the period of its ownership;
provided that nothing in this Section 39 shall be deemed to permit any Transfer
in violation of Section 28 hereof. Whenever Landlord conveys its interest in
the Building, Landlord shall be automatically released from the further
performance of covenants on the part of Landlord herein contained, and from any
and all further liability, obligations, costs and expenses, demands, causes of
action, claims or judgments arising from or growing out of, or connected with
this Lease after the effective date of said release. The effective date of said
release shall be the date the assignee of Landlord executes an assumption to
such an assignment whereby the assignee expressly agrees to assume all of
Landlord's obligations, duties, responsibilities and liabilities with respect
to this Lease. If requested, Tenant shall execute a form release and such other
documentation as may be required to further effect the foregoing provision.
(b) The liability of Landlord for Landlord's obligations under this
Lease shall not exceed and shall be limited to Landlord's interest in the
Building and Tenant shall not look to any other property or asset of Landlord,
its partners or its agents or representatives in seeking either to enforce
Landlord's obligations under this Lease or to satisfy a judgment for Landlord's
failure to perform such obligations. No other properties or assets of Landlord,
and no properties or assets of Landlord's agents or representatives shall be
subject to levy, execution or other enforcement procedures for the satisfaction
of any judgment (or other judicial process) or for the satisfaction of any
other remedy of Tenant arising out of or in connection with this Lease, the
relationship of Landlord and Tenant or Tenant's use of the Premises, and if
Tenant shall acquire a lien on or interest in any other properties or assets by
judgment or otherwise, Tenant shall promptly release such lien on or interest
in such other properties and assets by executing, acknowledging and delivering
to Landlord an instrument to that effect prepared by Landlord's attorneys.
(c) The liability to pay Rent and perform all other obligations
under this Lease of each individual, corporation, partnership or business
association signing this Lease as Tenant, and of each member of any such
partnership or business association, the members of which are subject to
personal liability, shall be deemed to be joint and several.
40. [INTENTIONALLY OMITTED].
41. LANDLORD'S CONSENT OR APPROVAL. With respect to any provision of
this Lease which provides that Tenant shall obtain Landlord's consent or
approval, Landlord may withhold or condition such consent or approval for any
reason in its sole and absolute discretion, unless the provision specifically
states otherwise.
42. HEADINGS: INTERPRETATION.
(a) The captions and section numbers appearing in this Lease are
inserted only as a matter of convenience and reference, and in no way shall be
held to explain, modify, amplify, define, limit, construe, or describe the
scope or intent of such Sections of this Lease nor in any way add to the
interpretation, construction or meaning of any provision or otherwise affect
this Lease.
(b) Each obligation of any party hereto expressed in this Lease,
even though not expressed as a covenant, is considered to be a covenant for all
purposes.
-27-
<PAGE>
43. SEVERABILITY. If any term, covenant or condition of this Lease or the
application thereof to any person or circumstance shall to any extent be held
invalid or unenforceable, the remainder of this Lease or the application of such
term, covenant or condition to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby and
each term, covenant and condition of this Lease shall be valid and enforced to
the fullest extent permitted by law.
44. APPLICABLE LAW. This Lease shall be construed under the laws of the
Commonwealth of Virginia, without regard to the conflict of laws principles
thereof.
45. RECORDING. Neither this Lease nor any memorandum nor short form
hereof shall be recorded in the land or other records of Fairfax County without
the prior written consent of Landlord (which may be withheld in Landlord's sole
discretion). Tenant shall bear all taxes and fees in connection with any
permitted recordation.
46. TIME IS OF THE ESSENCE. Time is of the essence in this Lease and of
all provisions hereof, except as expressly set forth to the contrary herein.
47. SURVIVAL OF OBLIGATIONS. All of Tenant's duties and obligations
provided for herein, including any and all indemnifications of Landlord and the
Property, to the extent that the same shall not be fulfilled during the Term
hereof, and Landlord's rights and remedies in respect of such unfulfilled duties
and obligations, shall survive and remain in full force and effect
notwithstanding the expiration or sooner termination of the Term of this Lease.
All obligations of Landlord (except the duty to return the Security Deposit if
the same is transferred upon the sale or conveyance of the Building) should
survive the expiration or termination of the Lease, to the extent such
obligations remain applicable following any such expiration or termination.
48. [INTENTIONALLY OMITTED].
49. PARKING.
(a) Provided that no Event of Default is then occurring beyond any
applicable notice and cure period, Landlord shall make available to Tenant, its
employees and guests, at no charge to Tenant throughout the Term, two hundred
four (204) unassigned parking spaces (i.e. based on a ratio of 3.6 spaces per
thousand rentable square feet of the Premises). Parking will be in those areas
(the "Parking Areas") as Landlord or its operator may from time to time
designate. The Parking Areas are currently adjacent to the Building and any
permanent relocation, unless the same is occasioned by casualty, destruction or
condemnation thereof, shall be equally convenient. Tenant shall not use, or
permit its invitees to use, any number of parking spaces in excess of the number
allocated as provided above. Tenant and its invitees shall comply with the
regulations promulgated by Landlord from time to time relating to parking.
Landlord shall not be required to reserve or police the use of the parking
areas; provided that Landlord may, at its option, limit access to the parking
areas, by mechanical gates or otherwise, to ensure that only authorized users
are admitted to the parking areas. Unless entitled to do so, Tenant and its
employees shall not park in any spaces designated for use by the handicapped, by
visitors only or as reserved. Landlord, at Landlord's option, may institute a
"stacking" plan in the parking areas. Landlord shall not commit itself in any
lease, amendment, or other agreement to provide to any tenant a number of
parking spaces which shall cause the total number of parking spaces the Landlord
has committed itself to provide to all the tenants in the Building to exceed the
number of parking spaces then existing and available at the time of entering
such lease, amendment, or agreement. Landlord shall, if at any time Landlord
shall provide reserved parking to any tenant in the Building, upon Tenant's
written request, provided reserved parking to Tenant in a comparable location
relative to the Building as provided to such other tenant and at the same ratio
and fee as provided to such other tenant or, if no fee, than at the cost as
determined by Landlord associated with such reserved parking. Visitor parking
for the Building shall be designated with appropriate signage for the mutual
convenience of Landlord and the tenants in the Building in a reasonable fashion,
number and location as determined by Landlord in its sole and absolute
discretion which location is generally indicated on Exhibit G attached hereto.
(b) The use of the Parking Areas shall be at the sole risk of Tenant and
the users of the parking permits provided hereunder, and Tenant hereby releases
Landlord and its agents and employees from any and all liability or
responsibility to Tenant or any user of a parking permit
-28-
<PAGE>
provided hereunder for any death, injury, loss or damage to persons or property
occurring during the use of the Parking Areas, unless such death, injury, loss
or damage to persons or property is the direct result of Landlord's gross
negligence or willful misconduct.
50. ENTIRE AGREEMENT. This Lease and the Exhibits attached hereto
consists of this writing and is intended by the parties as the final expression
of their agreement and as a complete and exclusive statement of the terms
thereof, all prior negotiations, discussions, representations, warranties,
agreements and inducements between the parties having been incorporated herein.
No course of prior dealing between the parties or their affiliates shall be
relevant or admissible to supplement, explain or vary any of the terms of this
Lease. This Lease can only be modified by a writing signed by all of the
parties hereto or their duly authorized agents.
51. OPTION TO RENEW. Provided that (a) No Event of Default exists either
(i) on the date that Tenant exercises the Option to Renew granted under this
Section, or (ii) at the expiration of the initial Term (unless such default is
waived in writing by Landlord), (b) the original Tenant hereunder or an
Affiliate, in accordance with Section 28(i), is then leasing the entire
Premises, and (c) the original Tenant hereunder has not sublet or assigned any
of its interest in the Lease or the Premises except as approved in Section 28,
Tenant shall have the right and option, by giving notice as set forth below, to
extend and renew the term of the Lease (the "Option to Renew") for one (1)
additional term of five (5) years (the "Renewal Term") beginning on the day
immediately following expiration of the Term and upon the same terms covenants
and conditions herein set forth, except that the Annual Base Rent shall be the
greater of (a) the then prevailing market rate for similar space in similar
buildings in the Fairfax County, Virginia area as negotiated in good faith by
Landlord and Tenant, or (b) the Annual Base Rent in effect for the Lease Year
immediately prior to the Renewal Term and increased by the annual increase in
effect during the Term, and, unless otherwise specified in the amendment
evidencing the Renewal Term, Annual Base Rent shall continue to be increased by
the annual increase in effect during the Term. Notwithstanding the foregoing,
Tenant shall not be entitled to any additional renewal terms subsequent to the
Renewal Term, and Tenant shall not be entitled to any rent waivers, Tenant
allowances or tenant improvements otherwise applicable during the initial term
of this Lease. If Tenant desires to exercise the Option to Renew, Tenant shall
give Landlord written notice thereof at least nine (9) months prior to the
expiration of the Term. All rights of Tenant to the Renewal Term hereof shall
automatically terminate and be of no further force or effect upon the earlier to
occur of: (w) the early termination of the Lease, (x) Tenant's failure to timely
or properly exercise the Option to Renew, (y) the assignment or subletting of
any interest of the original Tenant hereunder in the Lease or the Premises
except as provided in Section 28, or (z) the termination of Tenant's right to
possession of the Premises. If the Option to Renew is properly exercised,
Landlord and Tenant shall execute an amendment to the Lease to confirm the
Renewal Term and the terms and conditions of said extended term.
52. HAZARDOUS MATERIALS. Tenant shall not use or allow the Premises to be
used for the Release, storage, use, treatment, disposal or other handling of any
Hazardous Substance, without the prior written consent of Landlord. The term
"Release" shall have the same meaning as is ascribed to it in the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et seq., as amended, ("CERCLA"). The term "Hazardous Substance" means (i) any
substance defined as a "hazardous substance" under CERCLA, (ii) petroleum,
petroleum products, natural gas, natural gas liquids, liquefied natural gas, and
synthetic gas, and (iii) any other substance or material deemed to be hazardous,
dangerous, toxic, or a pollutant under any federal, state or local law, code,
ordinance or regulation. Tenant shall: (a) comply with all federal, state, and
local laws, codes, ordinances, regulations, permits and licensing conditions now
existing or hereinafter in effect governing the Release, discharge, emission, or
disposal of any Hazardous Substance and prescribing methods for or other
limitations on storing, handling, or otherwise managing Hazardous Substances,
(b) at its own expense, promptly contain and remediate any Release of Hazardous
Substances arising from or related to Tenant's activities in the Premises, the
Building, the Property or the environment and remediate and pay for any
resultant damage to property, persons, and/or the environment, (c) give prompt
notice to Landlord, and all appropriate regulatory authorities, of any Release
of any Hazardous Substance in the Premises, the Building, the Property or the
environment arising from or related to Tenant's activities, which Release is not
made pursuant to and in conformance with the terms of any permit or license duly
issued by appropriate governmental authorities, (d) at Landlord's request,
retain an independent engineer or other qualified consultant or expert
acceptable to Landlord, to conduct, at Tenant's expense, an environmental audit
of the Premises and immediate surrounding areas, (e) reimburse Landlord,
- 29 -
<PAGE>
upon demand, the reasonable cost of any testing for the purpose of ascertaining
if there has been any Release of Hazardous Substances in the Premises, if
such testing is required by any governmental agency or Landlord's Mortgagee,
(f) upon expiration or termination of this Lease, surrender the Premises to
Landlord free from the presence and contamination of any Hazardous Substance.
Tenant shall indemnify, defend, and hold harmless Landlord, the manager of the
Building, and their respective officers, directors, beneficiaries,
shareholders, partners, agents, and employees from all fines, suits,
procedures, claims, and actions of every kind, and all costs associated
therewith (including attorneys' and consultants' fees) arising out of or in any
way connected with any deposit, spill, discharge, or other release of Hazardous
Substances that occurs during the term of this Lease, at or from the Premises,
or which arises at any time from Tenant's use or occupancy of the Premises, or
from Tenant's failure to provide all information, make all submissions, and
take all steps required by all governmental authorities under the CERCLA and
all other environmental laws. Tenant's obligations and liabilities under this
Section 52 shall survive the expiration of this Lease. Landlord hereby
represents and warrants that, to Landlord's actual knowledge, Landlord has not
received any notice from any applicable governmental authority that there are
asbestos or other Hazardous Substances on the Premises, Building or Property in
violation of applicable state or federal law.
53. RIGHT OF FIRST NOTICE. Provided no Event of Default is then
occurring, Tenant is occupying the entire Premises except as permitted in
Section 28, and the original Tenant hereunder has not sublet or assigned any of
its interest in the Premises or the Lease except as permitted in Section 28.
Tenant shall have a "Right of First Notice" to lease any tenantable space in the
South Wing of the Building that shall become available during the Lease Term.
Landlord shall not provide to any other tenant in any future leases or amend or
modify any existing leases which currently contain no such rights a superior
right of first notice to any space which may come available in the South Wing
during the Term. The Right of First Notice is subject to any and all rights in
existence as of the date of this Lease under other leases in the Building or
other agreements of Landlord, and shall be exercised in accordance with the
following terms:
(a) Prior to leasing any of the space defined above, Landlord must
first notify Tenant of the availability of such space (the "Notice Space"), and
Tenant shall then have seven (7) days to notify Landlord of its irrevocable
acceptance of Landlord's offer to lease the space at market terms. If Tenant
does not accept Landlord's offer within the period specified above, Landlord
may at any time thereafter lease the Notice Space to another tenant, provided,
however, that such Right of First Notice shall again be applicable upon the
expiration of the lease of the Notice Space to such other tenant. For purposes
of this Section, the terms "available" and "availability" shall mean that the
Notice Space is not subject to the terms of any lease or other agreement, and
that no person or entity is using the Notice Space or has a right to use the
Notice Space, whether by lease, sublease, assignment, amendment or other
agreement.
(b) If Tenant should accept any of the Landlord's offers to lease
the Notice Space, Tenant and Landlord shall, within ten (10) days after
Landlord furnishes Tenant with a new lease or amendment, execute, at Landlord's
option, a new lease or a lease amendment incorporating the Notice Space into
this Lease. If Tenant and Landlord do not enter into such a lease or amendment
within such ten (10)-day period, Tenant shall lose its Right of First Notice on
the Notice Space; provided such delay is not caused by Landlord's failure to
act in good faith.
54. ANTENNA LICENSE.
(a) License: Premises. Landlord hereby grants to Tenant a
non-exclusive license to:
(1) Install, use, operate, maintain, repair and remove, at
Tenant's sole cost and expense, one (1) satellite dish antenna not more than
thirty-six (36) inches in diameter (collectively, the "Antenna Equipment") on
the roof of the Building in the location or locations (the "Roof Premises") to
be mutually agreed upon by Landlord and Tenant, which Antenna Equipment shall
not rise higher than six feet (6') above the roof line of the Building. The
term "Antenna Equipment" includes any related equipment, cabling, wiring or
other device or thing used in or about the Building in connection with the
aforedescribed antenna. All Antenna Equipment shall be subject to Landlord's
prior written approval, which consent shall not be unreasonably withheld
conditioned or delayed, and the manner of the installation thereof shall be in
accordance with drawings and specifications therefore approved in writing by
Landlord, and no installation or
-30-
<PAGE>
modification of the Antenna Equipment will be made without Landlord's prior
written approval, which consent shall not be unreasonably withheld conditioned
or delayed. Notwithstanding anything to the contrary contained herein,
Landlord's approval is solely for the Antenna Equipment, utilizing
non-penetrating roof mounts and maximum recommended safety ballast.
(2) When granting its consent, Landlord may impose any
reasonable conditions it deems appropriate, including, without limitation, the
approval of plans and specifications, the approval of the contractor or other
persons who will perform the work, the obtaining of specified insurance and the
approval of the appearance of the Antenna Equipment and installation thereof.
All work, installation, maintenance and operation permitted by Landlord pursuant
to this Lease must conform to all laws, regulations and requirements of federal,
state and county governments, and any other public or quasi-public authority
having jurisdiction over the Roof Premises. Tenant shall obtain all necessary
licenses from the Federal Communications Commission ("FCC") and all
installation, maintenance and operation shall be conducted in conformance with
FCC rules and/or operating authority. As a condition precedent to such written
consent of Landlord, Tenant agrees to obtain and deliver to Landlord written,
unconditional waivers of mechanics' and materialmen's liens against the Roof
Premises, the Premises, the Antenna Equipment, the Building and the land on
which the Building is located ("Land") from all proposed contractors,
subcontractors, laborers and material suppliers for all work, labor and services
to be performed and materials to be furnished in connection with all work
permitted under this Lease. If, notwithstanding the foregoing, any mechanics' or
materialmen's lien is filed against the Roof Premises, the Premises, any Antenna
Equipment, the Building and/or the Land, for work claimed to have been done for,
or materials claimed to have been furnished to, the Roof Premises, such lien
shall be discharged by Tenant within ten (10) days after Tenant receives notice
of the filing, at Tenant's sole cost and expense, by the payment thereof, or by
the filing of a bond acceptable to Landlord. If Tenant shall fail to discharge
any such mechanics' or materialmen's lien, Landlord may, at its option,
discharge such lien without inquiry into the validity thereof and treat the cost
thereof (including reasonable attorneys' fees incurred in connection therewith)
as Additional Rent due hereunder, it being expressly agreed that such discharge
by Landlord shall not be deemed to waive or release the default of Tenant in not
discharging such lien. It is understood and agreed that any work shall be
conducted on behalf of Tenant and not on behalf of Landlord. It is further
understood and agreed that in the event Landlord shall give its written consent
to any work, such written consent shall not be deemed to be an agreement or
consent by Landlord to subject its interest in the Roof Premises, the Demised
Premises, the Building or the Land to any mechanics' or materialmen's liens
which may be filed in connection therewith.
(3) It is further understood and agreed that Tenant has
inspected the roof, that Tenant accepts the Roof Premises "as is" and that no
alterations, additions, improvements or installations whatsoever shall be made
thereto or in any other part of the Building until all plans and specifications
have first been submitted and approved in writing by Landlord. Any alterations,
additions, improvements or installations which Tenant may request Landlord to do
for Tenant will be done by Landlord at Tenant's sole cost and expense. Said
costs shall be itemized in a separate work agreement between Landlord and
Tenant.
(4) No Antenna Equipment may exceed thirty-six (36) inches in
diameter nor six (6) feet in height.
(5) Tenant agrees, at any time or upon seven (7) days notice
from Landlord from time to time (or such shorter time as may be reasonable in
case of emergency), and at Tenant's sole cost and expense, to relocate any
Antenna Equipment so designated by Landlord (and to such area as may be
designated by Landlord) to the extent that Landlord reasonably determines same
to be necessary in connection with any maintenance, repair or replacement of all
or any part of the roof and/or its components and/or in connection with any
other situation reasonably deemed by Landlord to be an emergency or a prudent
business decision; provided, however, that any such new location shall not
materially alter, impair or diminish the operation of the Antenna Equipment.
Landlord agrees to use reasonable efforts to minimize the amount and frequency
of moves required. Failure to timely relocate any Antenna Equipment pursuant to
this Section shall immediately entitle but not obligate Landlord to relocate
such Antenna Equipment as though default had occurred.
(6) Landlord shall use commercially reasonable efforts to
attempt to request that any person hereafter installing antennas, satellite
dishes or the like on the roof during
-31-
<PAGE>
the Term hereof attempt to coordinate such installation, and the use of such
additional equipment, with Tenant so as to reasonably minimize any interference
with the Antenna Equipment. Subject to the foregoing terms of this paragraph,
Tenant's right to use the Roof Premises is non-exclusive and shall not prevent
Landlord from using same for other purposes.
(b) Term. The term of this license shall coincide directly with the
Term of this Lease.
(c) Installation and Maintenance of Antenna Equipment; Repairs to
Roof Premises; Removal of Antenna Equipment; Permits; Insurance.
(1) Installation of the Antenna Equipment, and the maintenance
and repair thereof, throughout the Term of this Lease, shall be by Tenant, at
Tenant's sole cost and expense, and Tenant shall at all times maintain and
repair same in accordance with the highest and best practices observed by
persons using similar equipment. The Antenna Equipment shall be installed and
maintained so as not to interfere electrically or in any manner with any other
equipment operated upon or in the building, including transmitting equipment of
other licenses of the FCC or any United States Government agency and receiving
equipment, whether licensed or not, for radio or television broadcast or
non-broadcast radio frequency signals of any kind. If any such interference
results from operation of the Antenna Equipment, Tenant, within four (4) days of
notice thereof shall modify the Antenna Equipment so as to terminate
interference or shut down the Antenna Equipment.
(2) Tenant, at its sole cost and expense, shall repair any
damage to the Roof Premises, roof or penthouse areas, the Building and/or the
Land attributable to the installation, use, operation, maintenance, repair or
removal of the Antenna Equipment.
(3) Tenant shall, at the expiration of the Term of this Lease,
remove the Antenna Equipment from the Roof Premises and Building and restore
same to substantially the same condition as on the date of installation of the
Antenna Equipment, ordinary wear and tear and casualty excepted.
(4) Tenant, at its sole cost and expense, shall procure and
maintain in effect, with copies delivered to Landlord, all government approvals,
including, but not limited to, any licenses or permits necessary for the
installation, use, operation, maintenance, repair and/or removal of the Antenna
Equipment.
(5) Tenant shall procure and maintain during the Term of this
Lease, public liability insurance covering Tenant, Landlord, Landlord's general
partner(s) (if any), the property management company (if any), and any mortgagee
and/or ground lessor for the Land and/or Building for any personal injury or
property damage attributable to the Antenna Equipment, and/or the installation,
use, operation, maintenance, repair and/or removal thereof, which insurance
shall be in the minimum amounts of not less than $1,000,000 for injury to one
(1) person, $1,000,000 for damage to property and $3,000,000 in the aggregate
for each occurrence. Such insurance shall be for the benefit of Landlord and
such other persons as their respective interests may appear. Anything to the
contrary contained herein notwithstanding, Tenant further agrees to indemnify
Landlord and such other persons from any and all loss, cost, liability, damage,
claim or expense (including reasonable attorneys' fees) arising in any manner in
connection with or attributable to the Roof Premises, the Antenna Equipment
and/or the installation, use, operation, maintenance, repair and/or removal
thereof, any act or omission by Tenant or Tenant's employees, agents, assignees,
contractors, licensees or invitees, and/or any default or breach of Tenant's
covenants or obligations hereunder. Tenant shall promptly provide Landlord with
certificates of insurance for all of the foregoing which certificates shall
expressly provide that such insurance is subject to a waiver of subrogation by
the insurer(s) providing such insurance and that such insurance shall not be
terminated, canceled or modified without giving Landlord and such other persons
at least thirty (30) days prior written notice. Tenant shall maintain any other
insurance as may be reasonably required by Landlord and shall provide Landlord
with certificates of insurance thereof. The company or companies writing any
insurance which Tenant is required to carry and maintain hereunder shall at all
times be subject to Landlord's approval and shall be licensed to do business in
the Commonwealth of Virginia.
- 32 -
<PAGE>
(6) Every agreement, covenant, obligation or other
undertaking by Tenant under this Section 57 shall be at Tenant's sole cost and
expense except that, anything to the contrary contained herein notwithstanding,
Landlord shall have the right, at Landlord's option, to perform any work
relating to the Roof Premises or the Antenna Equipment ("Base Building Work")
which affects the Building and/or any Building systems (including, but not
limited to, slab or roof penetrations) and the cost thereof shall be reimbursed
by Tenant to Landlord within fourteen (14) days of demand. Landlord shall also
have the right to perform any other work required hereunder to be performed by
Tenant but not done by Tenant and the cost thereof shall be reimbursed to
Landlord within fourteen (14) days; provided, however, that except in case of
imminent threat of loss or injury to person or property Landlord shall not
undertake any such work unless Tenant shall have failed to perform same within
fifteen (15) days following receipt of notice thereof from Landlord; provided
further, however, that no such notice shall be required if Tenant has received
one (1) notice under this paragraph within the preceding twelve (12) month
period. The foregoing terms of this paragraph notwithstanding, except as
otherwise provided in this paragraph with respect to Base Building Work,
Landlord agrees to permit Tenant to have its regular full-time employees, and/or
any consultants and/or technicians reasonably approved by Landlord, regularly
engaged in the performance of such work to perform the installation and
maintenance work for the Antenna Equipment so long as such work is coordinated
with Landlord and done in a manner reasonably satisfactory to Landlord.
(d) Electrical Power. Tenant will, at Tenant's expense, provide
the necessary power installation for the operation of the Antenna Equipment.
Tenant shall not install or operate any Antenna Equipment or other machinery
that operates with voltage in excess of the Building capacity unless Tenant, at
its sole cost and expense, installs such equipment as necessary to increase the
Building capacity and obtains the prior written consent of Landlord, which
consent may be withheld in Landlord's sole and absolute discretion. Tenant shall
not install any equipment of any type or nature that will or may necessitate any
changes, replacements or additions to, or in the use of, the water system,
heating system, plumbing system, air-conditioning system or electrical system of
the Roof Premises or the Building, without first obtaining the prior written
consent of Landlord, which consent may be withheld or conditioned in Landlord's
sole and absolute discretion.
(e) Access by Tenant. Subject to emergencies and periods of
preventative maintenance, Building rules and regulations, and the terms of this
Section 54, Landlord agrees that throughout the Term of this license, Tenant, or
any of the designated representatives of Tenant, shall have 24-hour access to
the Roof Premises for the purpose of installing, using, operating, maintaining
and repairing the Antenna Equipment. Access shall be limited to those persons
whose names are supplied by Tenant to Landlord in writing upon execution of the
License, and replacements therefore, whose names are supplied by Tenant to
Landlord in writing from time to time. A representative of Landlord shall be
present during any access by Tenant. For every visit to the Roof Premises by
Tenant, its employees, invitees, contractors or agents in excess of one visit
per month during business hours, Tenant shall pay Landlord, upon notice from
Landlord, in accordance with Landlord's then current schedule of costs.
Landlord's current charge, as of the date hereof, is Twenty-Five Dollars
($25.00) per hour during Building standard hours and Fifty Dollars ($50.00) per
hour for after hours access, which amounts are subject to change, in Landlord's
reasonable discretion.
(f) Inspection. Tenant will permit Landlord, or its agents or
other representatives of Landlord or Landlord's mortgagee, to enter the Roof
Premises, without charge therefore to Landlord and without diminution of the
rent payable by Tenant, to examine, inspect and protect the Roof Premises and
the Building, to make alterations and/or repairs, or for any other reason, in
the sole judgment of the Landlord. Landlord shall use commercially reasonable
efforts not to unreasonably interfere with or alter the Antenna Equipment.
55. ADA COMPLIANCE.
Landlord shall use reasonable efforts to ensure that the common areas of the
Building conform to the requirements of the Americans with Disabilities Act of
1990 (the "ADA"); provided, however, that Landlord shall not be obligated to
make any change, pursuant to this Section, in said common areas except if
Landlord is directed, ordered or otherwise compelled to do so by applicable
governmental authority. Notwithstanding any other provision of this Section,
Landlord shall not be responsible for, and Tenant, at its sole cost and
expense, shall have the obligation of rectifying
-33-
<PAGE>
(a) any violation of the ADA within the Premises; and (b) any violation of the
ADA in the Building common areas which are attributable to any use by Tenant,
which use, under any law, regulation or ordinance, requires different amenities
than those for the Building in general. In addition, if Tenant makes any
alterations which cause the common areas of the Premises not to comply with the
ADA, then Tenant, at its cost and expense, shall be responsible for making such
alterations required to correct any noncompliance caused by the alterations of
Tenant.
IN WITNESS WHEREOF, the parties hereto have executed this Lease under seal on
the day and year first above written.
WITNESS/ATTEST: LANDLORD:
BRIT LIMITED PARTNERSHIP
By: BECO Management, Inc.,
Authorized Agent
/s/ Clane Ruben By: /s/ Jeffrey Lee Cohen (SEAL)
---------------- ---------------------
Printed Name: Jeffrey Lee Cohen
-----------------
Title: President
------------------------
WITNESS: TENANT:
ANADAC, INC.
/s/ Melinda Jensen By: /s/ Paul J. Bulger (SEAL)
------------------ ------------------
Printed Name: Paul J. Bulger
----------------
Title: President & CEO
-----------------------
-34-