Network Solutions Inc. Contracts
Sample Business Contracts
Virginia-Herndon-365 Herndon Parkway Lease - Sugarland Business Park LP and Network Solutions Inc.
Lease Forms
- Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
- When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
- Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
- Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
- When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.
DEED OF LEASE
BY AND BETWEEN
SUGARLAND BUSINESS PARK LIMITED PARTNERSHIP
("LANDLORD")
AND
NETWORK SOLUTIONS, INC.
("TENANT")
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
The Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III
Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV
Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V
Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VI
Use Of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII
Assignment And Subletting . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII
Maintenance And Repairs . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IX
Construction: Tenant Improvements and Alterations . . . . . . . . . . . . 16
ARTICLE X
Signs, Equipment And Furnishings . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XI
Inspection By Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XII
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XIII
Tenant's Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE XIV
Liability Of Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE XV
Rules And Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XVI
Damage Or Destruction . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XVII
Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XVIII
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
<PAGE> 3
Page
----
ARTICLE XIX
Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XX
Subordination; Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XXI
Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE XXII
Covenants and Representations Of Landlord . . . . . . . . . . . . . . . . 38
ARTICLE XXIII
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE XXIV
Expansion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE XXV
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE XXVI
General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Rider No. 1 - Option to renew Lease
EXHIBIT A Site Plan
EXHIBIT A-1 Reserved Parking Spaces Plan
EXHIBIT B Standard Method of Measurement of Rentable Area
EXHIBIT C Declaration of Covenants
EXHIBIT D Signage Specifications
EXHIBIT E Form of Estoppel Certificate
EXHIBIT F Surrendered Premises
- ii -
<PAGE> 4
DEED OF LEASE
THIS DEED OF LEASE (the "Lease") is made as of the 30th day of May, 1997,
by and between SUGARLAND BUSINESS PARK LIMITED PARTNERSHIP, a Delaware limited
partnership (hereinafter referred to as "Landlord"), and NETWORK SOLUTIONS,
INC., a Delaware corporation (hereinafter referred to as "Tenant"), a
wholly-owned subsidiary of Science Applications International Corporation, a
Delaware Corporation.
RECITALS:
A. Landlord is the owner of a one story office/flex building known as
Sugarland I, having a street address of 365 Herndon Parkway, Herndon, Virginia
22070, in the office/flex park complex known as Sugarland Business Park
(hereinafter sometimes referred to as the "Park"), situated on the east side of
Herndon Parkway in Herndon, Fairfax County, Virginia.
B. Tenant desires to lease space in the Building (as hereinafter
defined) and Landlord is willing to rent space in the Building to Tenant upon
the terms, conditions, covenants and agreements set forth herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
covenant and agree as follows:
ARTICLE I
THE PREMISES
1.1 Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, for the term and upon the terms and conditions hereinafter set forth,
the following described premises (the "Premises"):
31,247 square feet of rentable area, as shown on the plan attached
as Exhibit A (hereinafter the "Premises") and which is a part of
the building which is built and situated on Parcel E-1, SUGARLAND
INDUSTRIAL PARK, Town of Herndon, Fairfax County, Virginia, as
the same is duly dedicated, platted and recorded in Deed Book 4080
at Page 182 and resubdivided in Deed Book 5738 at page 1736, among
the land records of Fairfax County, Virginia (the "Property").
The building, including the parking and other common areas more
particularly described on Exhibit A hereto, is hereinafter
referred to as the "Building."
<PAGE> 5
1.2 The Lease of the Premises includes the right to use the Building
and the adjacent parking areas which are generally described on the site plan
attached hereto as Exhibit A, but includes no other rights not specifically set
forth herein.
1.3 For the purposes hereof, it is agreed that the rentable area of
the Building (including the space used for the 900 KW generator and
uninterrupted power supply equipment) is 53,136 square feet. However, the
number of square feet in the Building and the Premises shall be subject to
adjustment on or about the Lease Commencement Date (hereinafter defined), if
requested by either Landlord or Tenant. If so requested, the rentable area of
the Building and/or the Premises shall be determined by Landlord's architect.
However, Tenant shall have the right, within the first fifteen (15) days after
the execution of this Lease by Tenant, to have the rentable area of the
Building and/or the Premises measured by its own architect in accordance with
the standard of measurement set forth in Exhibit B attached hereto. In the
event that the number of square feet of rentable area determined by Tenant's
architect in accordance with Exhibit B differs from the number of square feet
as set out in this Lease or the number of square feet of rentable area
determined by Landlord's architect in accordance with Exhibit B, then such
architects shall work together in good faith to resolve such discrepancy. In
the event such architects are unable to resolve such discrepancy, then they
shall together select a third architect, who shall be reasonably acceptable to
Landlord and Tenant, to resolve such discrepancy. Each party shall pay its own
architect and half of the cost of the third architect.
1.4 Landlord agrees that promptly after the date of this Lease,
Landlord shall submit a request to the building officials of the City of
Herndon, Virginia, for the waiver of the requirement that there be two (2)
remote and accessible means of egress from the common area of the Building. In
the event such request is granted, the number of square feet of rentable area
of the common area in the Building and the Premises shall be recalculated and
adjusted by Landlord's architect in accordance with the provisions of Exhibit B
attached hereto. In the event that the number of square feet of rentable area
in the Premises is recalculated as provided in the preceding sentence, Landlord
and Tenant shall execute an amendment to this Lease (a) reflecting such
adjustment in the square footage of the Premises, (b) providing that Tenant's
base rent shall be decreased in accordance with such reduction in square
footage effective on the date that Landlord substantially completes the
modification of the common area of the Building and (c) stating Tenant's
proportionate share of Expenses incurred by Landlord in the operation of the
Building for the purposes set forth in Section 4.3 below, effective on the date
that Landlord substantially completes the modification of the common area of
the Building.
ARTICLE II
TERM
2.1 The term of this Lease (hereinafter referred to as the "Lease
Term") shall commence on May 30, 1997 (the "Lease Commencement Date" and shall
continue for a period of approximately five (5) years and two (2) months
thereafter, through July 31, 2002, unless such Lease Term shall be renewed or
terminated earlier in accordance with the provisions hereof. (Provided,
- 2 -
<PAGE> 6
however, that if the Lease Commencement Date shall occur on a day other than
the first day of a month, the Lease Term shall commence on such date and
continue for the balance of such month and for a period of approximately five
(5) years and two (2) months thereafter, through July 31, 2002.) The term
"Lease Term" shall include any and all renewals and extensions of the term of
the Lease.
2.2 (a) It is understood and agreed that Tenant shall construct
or cause to be constructed the Tenant Improvements to the Premises described in
Section 9.1 below. Tenant shall be responsible for the design and construction
of the interior Tenant Improvements to the Premises and Tenant shall obtain all
necessary permits to construct such Tenant Improvements and legally occupy the
Premises. The timing of Tenant's completion of such work and the receipt or
issuance of any required building, special exception, occupancy or other
permits or approvals shall have no bearing on the Lease Commencement Date, the
Rent Commencement Date, as defined in Section 3.1 below or Tenant's obligation
to pay base rent and additional rent as provided in Article III and Article IV
below; provided, however, that if Final Completion, as defined herein, of
Landlord's Work is delayed beyond June 6, 1997, then the Rent Commencement Date
of July 15, 1997 shall be extended by two (2) days for each day that the
Landlord's Work is not Finally Completed by June 6, 1997. For the purposes of
this Section 2.2(a), Landlord's Work shall be deemed to be "Finally Complete"
when (i) the work described in Section 9.4 below shall have been completed, as
determined by Landlord's contractor in its professional judgement in accordance
with the provisions of Section 9.4 below, including the separation of
electrical wiring and systems serving the Premises from the remainder of the
Building electrical systems (the "Long Lead Item"), which can be completed by
Landlord without substantial interference with Tenant's completion of the
Tenant Improvements, and (ii) final inspections (except for the inspection
related to the Long Lead Item) pursuant to the applicable building permits have
been obtained. Any and all construction, installation and other related
activity by Tenant or its contractors prior to the Rent Commencement Date shall
be coordinated with Landlord in accordance with the terms of Section 9.1
hereof. All terms and conditions of this Lease, including, without limitation,
the insurance, release and waiver of liability provisions of Article XII and
XIV hereof, shall apply to and be effective during such period of occupancy by
Tenant, except for Tenant's obligation to pay any base rent or additional rent
attributable to Expenses.
(b) Landlord and Tenant shall cooperate with each other and
shall work together in good faith to effect the timely completion of the Tenant
Improvements and Landlord's Work. Where required all approval, consents or
disapprovals or denials of consent shall be delivered promptly after a request
therefor. All disapprovals or denials of consent shall include a statement of
the reason for such disapproval or denial of consent. Landlord and Tenant
shall each use its commercially reasonable efforts to comply with all
construction schedules created in connection with the performance of the work
described in this Lease.
2.3 (a) Landlord presently anticipates that the Landlord's Work
shall be Finally Complete on or about June 6, 1997. In the event that
completion of Landlord's Work or the delivery of possession of the Premises to
Tenant is delayed, regardless of the reasons or causes of such delay, this
Lease shall not be rendered void or voidable as a result of such delay, and the
term of this Lease shall commence on the Lease Commencement Date as determined
pursuant to Section 2.2(a) hereof and Tenant's obligation to pay base rent
shall commence on the Rent Commencement
- 3 -
<PAGE> 7
Date provided in Section 3.1 below, as such date may be extended pursuant to
Section 2.2(a) above. Furthermore, except as provided in Section 2.2(a) above
and Section 2.3(b) below, Landlord shall not have any liability whatsoever to
Tenant on account of any such delay.
(b) Notwithstanding anything to the contrary set forth in
Section 2.3(a) above, in the event that Landlord's Work is not Finally Complete
on or before August 1, 1997 then, except as otherwise provided below, Tenant,
at its sole option, shall have the right to terminate this Lease by delivering
written notice of the exercise of such right of termination to Landlord.
Tenant's right to terminate this Lease in accordance with the provisions of
this Section 2.3(b) may be exercised by Tenant only during the ten (10) day
period commencing on August 2, 1997 and terminating at 5:00 p.m. on August 11,
1997 and if such right is not exercised by 5:00 p.m. on August 11, 1997, such
right of termination shall lapse and expire and be of no further force and
effect. In the event this Lease is terminated pursuant to this Section 2.3(b),
this Lease shall be null and void and the parties shall be released and
discharged from further liabilities, obligations or responsibilities hereunder
and Landlord will return to Tenant all sums paid to Landlord in accordance with
Section 3.1 below. Notwithstanding the foregoing, Tenant shall not have the
right to terminate this Lease pursuant to this Section 2.3(b) if any of the
following provisions are applicable:
(i) if the delay in completion is a result
of any of the reasons described in Section 9.4
below or Section 26.18 below or any other cause
within Tenant's reasonable control; or
(ii) if the Landlord certifies in writing and
in good faith to Tenant, on or before August 1,
1997 that Landlord's Work will be Finally
Completed not later than August 15, 1997, except
for punch list items, the completion of which will
not substantially interfere with the normal
conduct of Tenant's business, and long-lead time
items.
(c) Notwithstanding anything to the contrary set forth in
Section 2.3(a) and 2.3(b) above, in the event that Landlord's Work is not
substantially complete on or before August 15, 1997, except as otherwise
provided in this Section 2.3(c), Tenant, at its sole option, shall have the
right to terminate this Lease by delivering written notice of the exercise of
such right of termination to Landlord. Tenant's right to terminate this Lease
in accordance with the provisions of this Section 2.3(c) may be exercised by
Tenant only during the ten (10) day period commencing on August 16, 1997 and
terminating at 5:00 p.m. on August 25, 1997 and if such right is not exercised
by Tenant by 5:00 p.m. on the August 25, 1997, such right of termination shall
lapse and expire and be of no further force and effect. In the event this
Lease is terminated pursuant to this Section 2.3(c), this Lease shall be null
and void and the parties shall be released and discharged from further
liabilities, obligations or responsibilities hereunder and Landlord will return
to Tenant all sums paid to Landlord concurrently with the signing of this Lease
pursuant to Section 3.1(a) hereof. Notwithstanding the foregoing, Tenant shall
not have the right to terminate this Lease pursuant to
- 4 -
<PAGE> 8
this Section 2.3(c) if the delay in completion is a result of any of the
reasons described in Section 2.3(b)(i) above.
2.4 Promptly after the Lease Commencement Date is ascertained,
Landlord and Tenant shall execute a written declaration setting for the Lease
Commencement Date, the date upon which the Lease Term will expire, and the
exact number of square feet of rentable area in the Building and the Premises.
The form of such declaration is attached hereto as Exhibit E and made a part
hereof.
2.5 For purposes of this Lease, the term "Lease Year" shall mean each
period of twelve (12) consecutive calendar months commencing on the first day
of August and ending on July 31 of each calendar year during the Lease Term,
except that the first Lease Year shall also include the period from the Lease
Commencement Date to July 31, 1997.
ARTICLE III
BASE RENT
3.1 Commencing on July 15, 1997 (the "Rent Commencement Date") and
continuing throughout the remainder of the Lease Term, Tenant shall pay to
Landlord as annual base rent for the Premises, without set off, deduction or
demand, an amount equal to the product of Seventeen Dollars and Fifty-Five
Cents ($17.55) multiplied by the total number of square feet of rentable area
in the Premises, which amount shall be subject to annual adjustment as provided
in Section 3.2 hereof. The annual base rent payable hereunder during each
Lease Year shall be divided into equal monthly installments and such monthly
installments shall be due and payable in advance on the first day of each month
during such Lease Year. Concurrently with Tenant's execution and delivery of
this Lease to Landlord, Tenant shall pay to Landlord Forty-Five Thousand Six
Hundred Ninety-Eight Dollars and Seventy-Four Cents ($45,698.74), which sum
shall be credited by Landlord toward the monthly installment of base rent due
for the first full calendar month falling within the Lease Term after the Rent
Commencement Date. If the Lease Term begins on a date other than on the first
day of a month, rent from such date until the first day of the following month
shall be prorated on a per diem basis at the base rate payable during the first
Lease Year, and such prorated rent shall be payable in advance on the Lease
Commencement Date.
3.2 (a) Commencing on the first (1st) day of the second (2nd)
Lease Year and on the first day of each and every Lease Year thereafter during
the Lease Term, the annual base rent set forth in Section 3.1 hereof shall be
adjusted (the "CPI Adjustment") to reflect increases in the cost of living in
the following manner:
(1) The Revised Consumer Price Index for Urban Wage
Earners and Clerical Workers, 1982-84 Base Year, All
Items, Washington, DC-MD-VA Metropolitan Area (CPI-W), as
published by the Bureau of Labor Statistics of the United
States Department of Labor (herein referred to as the
"Index"), which is published for the period that includes
the month immediately preceding the first day of the
Lease Year for which such CPI Adjustment is being made
(herein referred to as the
- 5 -
<PAGE> 9
"Adjustment Index"), shall be compared with the Index
published for the period that includes the month
immediately preceding the month in which the Lease
Commencement Date occurs (herein referred to as the
"Beginning Index"). If the Adjustment Index has
increased over the Beginning Index, the percentage
increase between the Beginning Index and the Adjustment
Index shall be determined.
(2) The percentage increase determined in Step (1) above
shall be multiplied by one hundred percent (100%). The
resulting percentage shall then be multiplied by the
annual base rent for the first Lease Year set forth in
Section 3.1 hereof to arrive at the amount of the
increase in annual base rent for the Lease Year for which
such adjustment is being determined.
(3) The CPI Adjustment determined in Step (2) above
shall be added to the annual base rent for the first
Lease Year set forth in Section 3.1 to arrive at the
adjusted annual base rent payable for the Lease Year for
which the adjustment is being made, which rent shall be
payable in equal monthly installments in advance on the
first day of each month of such Lease Year.
(4) Notwithstanding anything above to the contrary, in
the event that the determination made in accordance with
Steps (1)-(3) above results in a CPI adjustment for the
second Lease Year or any subsequent Lease Year which is
greater than three and one-half percent (3.5%) of the
annual base rent payable for the immediately preceding
Lease Year, then the CPI adjustment for the Lease Year
for which such adjustment is being made shall be deemed
to be an amount equal to three and one-half percent
(3.5%) of the annual base rent payable for the
immediately preceding Lease Year.
(b) In no event shall the annual base rent payable during any
Lease Year be less than the annual base rent payable hereunder during the
immediately preceding Lease Year.
(c) If the Index is changed so that a base year other than
1982-84 is used, the Index used herein shall be converted in accordance with
the conversion factor published by the Bureau of Labor Statistics of the United
States Department of Labor. If the Index is discontinued or otherwise revised
during the Lease Term, such other government index or computation with which it
is replaced shall be used in order to obtain substantially the same result as
would be obtained if the Index had not been discontinued or revised.
(d) Promptly after the adjustment in the annual base rent is
determined for each Lease Year, Landlord shall submit to Tenant a statement
setting forth the amount of such adjustment and the computations by which it
was determined. Since the actual increase in the annual base rent may not be
determined until after the start of a new Lease Year, until the actual increase
in the annual base rent is determined, Tenant shall make monthly payments of
base rent during such Lease Year in an amount equal to the monthly installments
of base rent that were payable during the preceding
- 6 -
<PAGE> 10
Lease Year. Promptly after receipt of a statement from Landlord setting forth
the actual increase in the monthly installments of base rent for such Lease
Year, the difference between the actual monthly payments paid by Tenant and the
actual amount of base rent determined to be owing for such months shall be
determined. If the actual amount determined to be owing is greater than
Tenant's actual payments, the deficiency shall be paid by Tenant together with
the next monthly installment of base rent due hereunder.
3.3 All rent shall be paid to Landlord in legal tender of the United
States at the address to which notices to Landlord are to be given or to such
other address as Landlord may designate from time to time by written notice to
Tenant. If Landlord shall at any time accept rent after it shall come due and
payable, such acceptance shall not excuse a delay upon subsequent occasions, or
constitute or be construed as a waiver of any of Landlord's rights hereunder.
ARTICLE IV
ADDITIONAL RENT
4.1 An integral part of Landlord's leasing program for the Building
involves the requirement that Tenant shall pay to Landlord the Tenant's
proportionate share of the costs and expenses incurred each year in the
operation of the Building as hereinafter set forth. For the purposes of this
Article IV, Tenant's proportionate share shall mean a fraction, in which the
numerator is the rentable area of the Premises and the denominator is the
rentable area of the Building.
4.2 The costs and expenses (the "Expenses") for which Tenant shall be
responsible to pay its proportionate share are defined as follows:
(a) "Operating Expenses" shall mean and include those direct
expenses necessary to operate and maintain the Building in a manner deemed
reasonable and appropriate by Landlord and for the best interests of Tenant,
including the following:
(i) all costs and expenses directly related to the
Building for the removal of snow, ice, and debris, unless
Tenant contracts directly for such services and pays the
provider of such services directly therefor;
(ii) all costs and expenses, other than those of a
capital nature (as defined by the Internal Revenue Service),
incurred by Landlord to operate, repair, maintain and
replace (v) the common area of the Building comprising
approximately 1,700 square feet of rentable area, which
amount is subject to adjustment pursuant to the provisions
of Section 1.4 above, (w) the foundation, roof and exterior
walls of the Building, (x) the utility service lines and
other mechanical and electrical elements of the Building
located in the
- 7 -
<PAGE> 11
common area thereof, (y) the driveways and parking areas
adjacent to the Building, including the curbs, walkways and
landscaping thereof, and (z) electricity for lighting the
parking lot and other common areas of the Building;
(iii) reasonable management expenses arising out of the
operation, use, or maintenance of the Building, including
personnel costs of Landlord and the management fee; and
(iv) insurance against fire and other casualty, and
liability insurance relating to the Building.
Notwithstanding the foregoing, Operating Expenses shall not include:
(i) expenses for any capital repairs, replacements, or
improvements, as defined by the Internal Revenue Service;
(ii) expenses for electricity or other utilities consumed by
Tenant and paid for directly by Tenant to the appropriate utility provider(s);
(iii) expenses for which the Landlord is otherwise
reimbursed or indemnified (either by an insurer, condemnor, or otherwise);
(iv) expenses incurred in leasing or procuring tenants
(including, without limitation, lease commissions, advertising expenses, and
expenses of renovating space for tenants);
(v) legal expenses arising out of the construction of the
Building or the enforcement of any agreements affecting the Building;
(vi) interest or amortization payments on any mortgage or
mortgages;
(vii) wages, salaries, or other compensation paid to any
executive employee of Landlord;
(viii) repairs or replacements made to correct any defect in
the design, materials or workmanship of the Building or to comply with any
requirements of any governmental authority;
(ix) the costs of damage and repairs to the extent
actually recovered under any warranty or insurance policy carried by Landlord
in connection with the Building;
(x) damage and repairs necessitated by the negligence
or wilful misconduct of Landlord or Landlord's employees, contractors or
agents;
- 8 -
<PAGE> 12
(xi) Landlord's general overhead expenses not related
to the Building;
(xii) legal fees, accountant's fees and other expenses
incurred in connection with disputes with tenants or other occupants of the
Building or associated with the enforcement of any leases or defense of
Landlord's title to or interest in the Building;
(xiii) costs incurred due to violation by Landlord or any
other tenant of the Building of the terms and conditions of any lease;
(xiv) the costs of any service provided to other tenants of
the Building to the extent Landlord is entitled to be reimbursed directly;
(xv) costs associated with revenue-generating public parking
areas of the Building where fees are charged for the use of parking areas by
the public and not by tenants of the Building;
(xvi) all costs associated with Americans With Disabilities
Act compliance in all public areas and common areas of the Building and the
Property; and
(xvii) building management fees in excess of fifty cents
(.50) per rentable square foot of floor area in the Building.
(b) "Real Estate Taxes" shall mean and include (i) all real
property taxes, including general and special assessments, if any, which are
imposed upon Landlord or assessed against the Building; (ii) any other present
or future taxes or governmental charges which are imposed upon Landlord, or
assessed against the Building and/or the land upon which it is situated,
including, but not limited to, any tax levied on or measured by the rents
payable by tenants in the Building which are in the nature of, or in
substitution for, real property taxes; and (iii) all taxes which are imposed
upon Landlord, and which are assessed against the value of any improvements to
the Premises made by Tenant or any machinery, equipment, fixtures or other
personal property of Tenant used therein. In no event shall "Real Estate
Taxes" include income or gross receipts taxes imposed upon Landlord, except to
the extent such taxes fall within clause (ii) of the above definition of Real
Estate Taxes. Any taxes and assessments which are payable in installments
without interest and penalty shall be deemed to be payable over the maximum
period of installments permitted by the applicable taxing authority.
(c) "Utilities" shall mean and include any gas,
electricity, water and sewer services provided to the Building during the term
of this Lease and paid for by Landlord, but shall not include any utility
services paid for directly by Tenant, or consumed and paid for directly by
other tenants of the Building or the Park.
(d) Notwithstanding anything to the contrary in this
Article IV, Tenant shall not be obligated to pay to Landlord increases of
additional rent attributable to Controllable Expenses (as defined in the next
sentence) which exceed six percent (6%), in the aggregate, of the amount of
- 9 -
<PAGE> 13
additional rent attributable to Controllable Expenses for the immediately
preceding calendar year. For the purposes of this Section 4.2(d), Controllable
Expenses are all Expenses other than Expenses incurred by Landlord which are
attributable to (i) Real Estate Taxes, (ii) Utilities, (iii) snow removal, (iv)
insurance and (v) major repairs to the Building and/or the adjacent parking
areas serving the Building, which otherwise fall within the definition of
Operating Expenses.
4.3 Tenant shall pay to Landlord, as additional rent for the Premises,
the Tenant's proportionate share of the Expenses incurred by Landlord in the
operation of the Building during any calendar year falling entirely or partly
within the Lease Term. Subject to the provisions of Section 1.4 above, for the
purposes hereof, Tenant's proportionate share of such Expenses shall be
fifty-eight and eighty-one-hundredths percent (58.81%), which is the proportion
that the number of square feet of rentable area in the Premises (31,247) bears
to the total number of square feet of rentable area in the Building (53,136);
provided, however, that Tenant's proportionate share shall be adjusted, if
necessary, at the time the number of square feet of rentable area in the
Building and in the Premises are determined by Landlord's architect in
accordance with the provision of Section 1.3 hereof.
4.4 Tenant shall pay to Landlord, as additional rent for the Premises,
Tenant's proportionate share of the Expenses incurred by Landlord in the
operation of the Building during any calendar year falling entirely or partly
within the Lease Term.
4.5 Commencing on the Rent Commencement Date and on the first day of
each month thereafter, Tenant shall make estimated monthly payments to Landlord
on account of Tenant's proportionate share of the Expenses that are expected to
be incurred during each calendar year falling entirely or partly within the
Lease Term. The amount of such monthly payments shall be determined as
follows: Commencing with the Rent Commencement Date and at the beginning of
each calendar year thereafter, Landlord shall submit to Tenant a statement
setting forth Landlord's reasonable estimate of the Expenses that are expected
to be incurred during such calendar year and the computation of Tenant's
proportionate share thereof. Provided that Tenant receives such statement at
least thirty (30) days in advance, Tenant shall pay to Landlord on the first
day of each month following receipt of such statement during such calendar year
an amount equal to Tenant's proportionate share of the anticipated Expenses
multiplied by a fraction, the numerator of which is 1, and the denominator of
which is the number of months during such calendar year which fall within the
Lease Term and follow the date of the foregoing statement. Within ninety (90)
days after the expiration of each calendar year, Landlord shall submit to
Tenant a statement, showing (i) Tenant's proportionate share of the Expenses
actually incurred during the preceding calendar year, and (ii) the aggregate
amount of the estimated payments made by Tenant on account thereof. If the
aggregate amount of such estimated payments exceeds Tenant's actual liability
for its proportionate share of such Expenses, then Landlord, in Landlord's sole
discretion, either (a) shall credit the net overpayment against the next
monthly installment of additional rent coming due under this lease or (b) shall
pay to Tenant the net overpayment within thirty (30) days after it submits such
certified statement to Tenant. If Tenant's actual liability for such Expenses
exceeds the estimated payments made by Tenant on account thereof, then Tenant
shall pay to Landlord the total amount of such deficiency within thirty (30)
days after its receipt of the certified statement from Landlord.
- 10 -
<PAGE> 14
The provisions of this paragraph shall survive the expiration or earlier
termination of the Lease for a period of one year thereafter.
4.6 Tenant's proportionate share of Expenses for any calendar year
during the Lease Term shall be apportioned so that Tenant shall pay only that
portion thereof for such year as fall within the Lease Term. This provision
shall survive the expiration or earlier termination of the Lease for a period
of one (1) year thereafter.
4.7 Landlord agrees to retain the books and records substantiating the
Expenses incurred in each calendar year for a period of at least one (1) year
from the date Landlord submits a statement to Tenant. Tenant or its designee
shall have the right, during business hours and upon reasonable prior notice,
from time to time to inspect Landlord's books and records relating to Expenses,
and/or to have such books and records audited at Tenant's expense by a
certified public accountant designated by Tenant and approved by Landlord,
which approval shall not be unreasonably withheld, conditioned or delayed,
except that any audit that discloses a discrepancy of more than five percent
(5%) in the annual Expenses shall be at Landlord's expense. Any discrepancy
shall be promptly corrected by a payment of any shortfall to Landlord by Tenant
within thirty (30) days after the applicable audit, or by a credit against the
next payment(s) of rent hereunder or (at Tenant's election) a refund of the
overpaid amount within thirty (30) days, as may be applicable. In the event
Tenant does not contest a statement of Expenses within six (6) months after it
is rendered, such statement shall become binding and conclusive.
ARTICLE V
SECURITY DEPOSIT
[INTENTIONALLY OMITTED]
ARTICLE VI
USE OF PREMISES
6.1 Tenant shall use and occupy the Premises solely for general office
purposes and for use as a telephone call center and for no other use or
purpose without the prior written consent of Landlord, which consent shall not
be unreasonably withheld, conditioned or delayed provided that such other use
or purpose is otherwise in compliance with the provisions of this Section 6.1
and would not, in Landlord's sole but reasonable discretion, impair the
reputation of the Building and/or the Park as a high quality office/flex
building and park. Tenant shall not use or occupy the Premises for any
unlawful purpose or in any manner that will constitute waste, nuisance or
unreasonable annoyance to Landlord or other occupants of the Park. Tenant
shall comply with the provisions of the Declaration of Covenants attached
hereto as Exhibit C. Tenant shall also comply with all present and future
laws, ordinances (including zoning ordinances and the land use requirements),
regulations, and orders of the County of Fairfax, Commonwealth of Virginia, and
any other public or quasi-public authority having jurisdiction over the
Premises, concerning the use, occupancy and
- 11 -
<PAGE> 15
condition of the Premises and all machinery, equipment and furnishings therein,
except to the extent that such compliance is expressly stated to be Landlord's
obligation under this Lease.
6.2 Tenant shall obtain, at its own expense, the certificate of
occupancy or other governmental approvals which may be required for its
occupancy of the Premises. It is expressly understood that if any present or
future law, ordinance, regulation or order (collectively, "Legal Requirements")
requires any other permit(s) for the Premises due to Tenant's particular use
thereof, or Tenant's improvements or future alterations thereto, that Tenant
will also obtain such permit(s) at Tenant's own expense. Further, Tenant will
comply with all legal requirements which impose on Landlord or Tenant a duty
relating to or arising as a result of the use, occupancy, or configuration of
the Premises. Tenant shall promptly pay all fines, penalties and damages that
may arise out of or be imposed on Landlord or Tenant because of Tenant's
failure to comply with the provisions of this Section.
6.3 Tenant shall pay any business, rent or other taxes that are now or
hereafter levied upon Tenant's use or occupancy of the Premises, the conduct of
Tenant's business at the Premises, or Tenant's equipment, fixtures or personal
property. In the event that any such taxes are enacted, changed, or altered so
that any of such taxes are levied against Landlord or the mode of collection of
such taxes is changed so that Landlord is responsible for collection or payment
of such taxes, Tenant shall pay any and all such taxes to Landlord upon written
demand from Landlord.
6.4 Tenant shall not generate, dispose of or maintain any toxic or
hazardous substances in the Premises other than cleaning agents and other
substances normally and customarily used by office tenants and which are not
prohibited by applicable law and which Tenant shall store and shall use in
accordance with applicable law.
ARTICLE VII
ASSIGNMENT AND SUBLETTING
7.1 (a) Tenant shall not have the right to assign, transfer mortgage
or otherwise encumber this Lease or its interest herein without first obtaining
the prior written consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed by Landlord; provided, however, that Landlord
may withhold its consent to any proposed assignment, transfer, mortgage or
other encumbrance of this Lease, among other reasons, if (i) Tenant is in
default under any provisions of this Lease, or (ii) Landlord determines, in its
reasonable discretion, that the character of the proposed assignee or the
nature of the activities to be conducted by such proposed assignee would
adversely affect the other tenants of the Building, if any, or that the
financial history or credit rating of the proposed assignee is unacceptable to
Landlord. If Tenant is a partnership, a withdrawal or change whether
voluntary, involuntary or by operation of law, of partners owning, individually
or collectively, a controlling interest in Tenant shall be deemed a voluntary
assignment of this Lease and shall be subject to the foregoing provisions. If
Tenant is a corporation, any dissolution, merger, consolidation or other
reorganization of Tenant, or the sale or transfer of a controlling interest of
the capital stock of Tenant, shall be deemed a voluntary assignment of this
- 12 -
<PAGE> 16
Lease and subject to the foregoing provisions. However, the preceding sentence
shall not apply to corporations the stock of which is traded through a national
or regional stock exchange, or through a private internal stock exchange in
connection with a scheme of employee-ownership, for example, such as that of
Tenant's current parent company, Science Applications International
Corporation, under which shares are widely-held and traded by employees of
Tenant. Landlord agrees not to unreasonably withhold its consent to a public
offering of the stock of Tenant. Any attempted assignment or transfer by
Tenant of this Lease or its interest herein without Landlord's consent shall,
at the option of Landlord, terminate this Lease; however, in the event of such
termination, Tenant shall remain liable for all rent and other sums due under
this Lease and all damages suffered by Landlord on account of such breach by
Tenant.
(b) In the event of any such assignment pursuant to this Section 7.1,
Tenant shall remain fully liable as a primary obligor and principal for
Tenant's obligations and responsibilities under this Lease, including without
limitation, the payment of all rent and other charges required hereunder and
the performance of all conditions and obligations to be performed under this
Lease.
7.2 Tenant shall not have the right to sublease (which term, as used
herein, shall include any type of subrental arrangement and any type of license
to occupy) all or any part of the Premises without first complying with the
provisions of subsections (a) and (b) below:
(a) Tenant shall have the right to sublease any portion or
portions of the Premises, provided that Tenant obtains the prior written
consent of Landlord to such proposed sublease, which consent shall not be
unreasonably withheld, conditioned or delayed by Landlord; provided, however,
that Landlord may withhold its consent to any proposed sublease, among other
reasons, if (i) Tenant is in default under any provisions of this Lease, or
(ii) Landlord determines, in its sole but reasonable discretion, that the
character of the proposed subtenant or the nature of the activities to be
conducted by such proposed subtenant would adversely affect the other tenants
of the Building, if any, or that the financial history or credit rating of the
proposed subtenant is reasonably unacceptable to Landlord. Notwithstanding the
foregoing, Tenant shall in no event have the right to sublease the Premises, or
any portion thereof, to more than three (3) subtenants at any one time,
without Landlord's consent, not to be unreasonably withheld, conditioned or
delayed.
(b) In any case where Landlord's consent to assign or to sublease
is required by this Lease, Tenant agrees to give Landlord at least fourteen
(14) days advance written notice of Tenant's intention to sublease a portion of
the Premises, along with sufficient information about the proposed subtenant to
enable Landlord to make the determination called for by subsection (b) above.
7.3 The consent by Landlord to any assignment or subletting shall not
be construed as a waiver or release of Tenant from any and all liability for
the performance of all covenants and obligations to be performed by Tenant
under this Lease, nor shall the collection or acceptance of rent from any
assignee, transferee or subtenant constitute a waiver or release of Tenant from
any of its liabilities or obligations under this Lease. Landlord's consent to
any assignment or subletting shall not be construed as relieving Tenant from
the obligation of complying with the provisions of
- 13 -
<PAGE> 17
Sections 7.1 or 7.2 hereof, as applicable, with respect to any subsequent
assignment or subletting. For any period during which Tenant is in default
hereunder, Tenant hereby assigns to Landlord the rent due from any subtenant of
Tenant and hereby authorizes each subtenant to pay said rent directly to
Landlord. Tenant further agrees to submit any and all instruments of
assignment and sublease to Landlord for Landlord's prior written approval as to
form and substance, which approval shall not be unreasonably withheld or
delayed, but which instruments, as an express condition precedent to Landlord's
prior approval, shall provide that (i) such sublease or assignment is subject
and subordinate to this Lease in all respects, and to any amendments,
modifications, renewals, extensions or expansions hereof, (ii) Tenant shall
remain primarily liable as Tenant hereunder, (iii) such assignee or sublessee
shall conduct a business in the Premises which is a permitted use pursuant to
Article VI of this Lease, (iv) in the case of an assignment, such assignee is
bound by the terms and conditions of this Lease and assumes all of the
obligations and liabilities of Tenant hereunder, (v) in the case of a sublease,
(x) Landlord is not, and will not become, a party to such sublease, (y)
Landlord's consent to such sublease does not create a contractual relationship
between Landlord and such sublessee, nor does it create any liability of
Landlord to such sublessee, and (z) Landlord's consent to such assignment or
sublease does not affect the obligations of Landlord or Tenant under this
Lease, and (vi) Landlord's consent to such assignment or sublease shall not be
construed to mean that Landlord has approved any plans or specifications for
renovations to the Premises intended by such assignee or sublessee and that any
such work to the Premises must be conducted in accordance with the terms of
this Lease.
7.4 If this Lease is or shall be assigned by Landlord to the holder of
a mortgage against the Building as additional security for such mortgage loan,
the consent of such holder (if required by the terms of the applicable loan
documents) shall be required in addition to any consents by Landlord under the
terms of this Article VII.
7.5 (a) Notwithstanding the above restrictions on subletting and
assignments and provided Tenant is not then in default under this Lease, Tenant
shall have the right, without Landlord's prior written consent, to assign this
Lease or to sublet all or any part of the Premises to (I) an "Affiliate of
Tenant" (as hereinafter described) or (II) a "Parent of Tenant" (as hereinafter
defined), provided (i) that such assignee or sublessee has a creditworthiness
(e.g. assets and capitalization) and net worth (which shall be determined on a
pro forma basis using generally accepted accounting principals consistently
applied and using the most recent financial statements) reasonably acceptable
to Landlord, (ii) that the conditions set forth in Section 7.3(i) - (vi) are
fully satisfied, as determined by Landlord in its reasonable judgment, (iii)
that the character of such person or entity and the nature of its activities on
the Premises and in the Building will not adversely affect the Building as a
first-class office/warehouse building, (iv) that the sublease with such person
or entity is not a so-called "sham" transaction intended by Tenant to
circumvent the provisions of this Article VII and (v) that Tenant provides
Landlord with written notice of such assignment or sublease not less than ten
(10) days after the effective date of such assignment or sublease.
(b) For purposes of this Section 7.5, an "Affiliate of Tenant"
shall mean any corporation, association, trust or partnership (i) which
Controls (as herein defined) Tenant or (ii)
- 14 -
<PAGE> 18
which is under the Control of Tenant through stock ownership or otherwise or
(iii) which is under common Control with Tenant. For the purposes hereof, a
"Parent of Tenant" shall mean any corporation, association, trust or
partnership (X) which Controls Tenant or (Y) which owns more than fifty percent
(50%) of the issued and outstanding voting securities of Tenant. The terms
"Control" or "Controls" as used in this Section 7.5 shall mean the power to
directly or indirectly influence the direction, management or policies of
Tenant or such other entity.
ARTICLE VIII
MAINTENANCE AND REPAIRS
8.1 Landlord shall keep and maintain the foundation, roof and exterior
walls of the Building (specifically excluding the interior walls, doors,
partitions, locks, door jambs, windows and glass in the Premises as well as all
mechanical, plumbing, heating, air conditioning, sprinkler and electrical
systems and utility service lines exclusively servicing the Premises and
located therein), the plumbing and electrical systems to and from the Building
and the driveways and parking areas adjacent to, and all common areas of, the
Building in good condition and repair.
8.2 (a) Tenant will keep and maintain the Premises and all fixtures
and equipment located therein (specifically including the interior walls,
doors, partitions, locks, door jambs, windows and glass in the Premises, as
well as all mechanical, plumbing, heating, air conditioning, sprinkler,
electrical systems, and utility service lines exclusively servicing the
Premises and located therein) in clean, safe and sanitary condition, will take
good care thereof and make all required repairs thereto, and will suffer no
waste or injury thereto. At the expiration or other termination of the Lease
Term, Tenant shall surrender the Premises, broom clean, in the same order and
condition which they are in on the Lease Commencement Date, ordinary wear and
tear and unavoidable damage by the elements or casualty excepted. Tenant
shall, at its own expense, replace any broken or damaged glass windows, doors,
locks, jambs and partition walls, and such replacement items shall be of the
same quality and design as those initially installed by Landlord in the
Premises.
(b) Tenant shall maintain the heating, ventilating and air
conditioning equipment (the "HVAC system") serving the Premises in good
condition and repair, reasonable wear and tear and damage or destruction by
fire or other casualty which Tenant is not obligated to repair excepted.
Except as provided in subsections (c) and (d) below, Tenant shall repair or
replace any damage or injury to the HVAC system serving the Premises. All
maintenance and repairs made by Tenant shall be performed only by licensed
contractors first approved by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed. Tenant shall require its
contractors to comply with Landlord's regulations regarding all work to be
performed.
(c) With specific reference to the HVAC system, Tenant is
responsible to carry, with a reputable service company, a full service
maintenance and repair contract on all component parts except the refrigeration
compressors. This contract shall include, without limitation, substantially
the following provisions:
- 15 -
<PAGE> 19
(i) Contractor will provide regularly (as required by
industry custom) scheduled inspections for each
component of the HVAC system, checking the operating
efficiency of each, oiling and adjusting where
necessary.
(ii) Contractor will provide and install air filters as
necessary in the Contractor's reasonable judgment.
(iii) Contractor will provide complete inspection of all
automatic temperature controls and their electronic
components.
(iv) Contractor will automatically correct all problems which
could cause breakdowns in extreme weather.
(v) Contractor will provide a full written report on the
system's condition after each inspection; provided,
however, the Contractor shall not be required to provide
more than two reports in any twelve-month period.
(vi) Copies of all reports will be provided to Landlord.
8.3 Except loss or damage recovered by Landlord under Landlord's
insurance, and as otherwise provided in Article XVI hereof, and notwithstanding
the provisions of Section 8.1 hereof, all injury, breakage and damage to the
Premises or to any other part of the Building caused by any negligent act or
omission or willful misconduct of Tenant, or of any agent, employee, subtenant
or contractor of Tenant, shall be repaired by and at the sole expense of
Tenant, except that Landlord shall have the right, at its option, to make such
repairs and to charge Tenant for all reasonable costs and expenses incurred in
connection therewith as additional rent hereunder. The liability of Tenant for
such costs and expenses shall be reduced by the amount of any insurance
proceeds which are received by Landlord on account of such injury, breakage or
damage, or which would be received by Landlord had Landlord maintained the
insurance coverages required to be maintained by Landlord under this Lease,
whether or not Landlord has maintained such insurance coverages.
ARTICLE IX
CONSTRUCTION; TENANT IMPROVEMENTS AND ALTERATIONS
9.1 (a) Except as expressly provided elsewhere in this Lease, the
Premises shall be delivered to and accepted by Tenant in their present "as-is"
condition. It is understood and agreed that Landlord will not make, and is
under no obligation to make, any structural or other alterations, decorations,
additions or improvements in or to the Premises, except as otherwise provided
in Section 9.4 hereof.
(b) All alterations, renovations, modifications and improvements
which are made to the Premises pursuant to this Section 9.1: (i) shall be done
in accordance with the space plan and construction drawings approved by
Landlord, (ii) shall be subject to the provisions of Article IX and
- 16 -
<PAGE> 20
Article XIII hereof and (iii) shall be made at Tenant's sole cost; provided,
however, that Landlord agrees to provide Tenant with an improvement allowance
(the "Tenant Improvement Allowance") in an amount equal to the product of
Fifteen Dollars ($15.00) multiplied by the number of square feet of rentable
area in the Premises. The Tenant Improvement Allowance shall be applied, as
hereinafter set forth, to all "hard" and "soft" costs incurred in connection
with the design, modification, alteration, renovation, construction and
installation of the Tenant Improvements, as hereinafter defined, in the
Premises, including, without limitation, any and all architectural, engineering
and consulting fees and cabling and wiring fees in connection therewith. In
the event the entire Tenant Improvement Allowance is not utilized by Tenant in
connection with designing, renovating, altering and upgrading the tenant
improvements in the Premises, such unused portion of the Tenant Improvement
Allowance shall be applied against the initial installment(s) of annual base
rent due with respect to the Premises pursuant to Article III hereof.
(c) Intentionally Omitted.
(d) (i) Tenant shall make or cause to be made the alterations
and improvements to the Premises and shall have its own space planner and
architect prepare the plans, working drawings and specifications for such work.
Tenant's space planner and architect shall prepare the plans, working drawings
and specifications for such work. Tenant shall cause, or shall be responsible
for, the preparation of such preliminary and final space plans for the Premises
and all architectural, structural, electrical, plumbing and mechanical working
drawings and other working drawings necessary for the construction and
installation of the Tenant Improvements and alterations in and to the Premises
("Tenant's Plans"), at Tenant's sole cost and expense, subject to the Tenant
Improvement Allowance. Landlord hereby acknowledges that Tenant has delivered
the Tenant's Plans to Landlord. Tenant's Plans must conform to all Insurance
Requirements, as defined in Section 9.2 below, in effect at the time this Lease
is executed and with all applicable laws, statutes, rules, regulations and
requirements of the Federal, Fairfax County and the Commonwealth of Virginia
governments, including, without limitation, the ADA and with all Insurance
Requirements, as defined in Section 9.2. The work shown on Tenant's Plans is
referred to throughout this Article IX as the "Tenant Improvements." Tenant, if
required to do so by Landlord, shall consult with Landlord's engineers and
consultants, without charge therefor, in connection with the preparation of all
architectural, structural, mechanical, plumbing and electrical working drawings
for the Tenant Improvements.
(ii) Tenant's Plans shall be subject to Landlord's written
approval prior to commencement of construction of the Tenant Improvements in
the Premises. Any material changes or modifications that Tenant desires to
make to such plans or working drawings shall also be subject to Landlord's
prior written approval. Landlord agrees that it will not unreasonably
withhold, delay or condition its approval of the Tenant's Plans for the
construction of any Tenant Improvements or of any changes or modifications
thereof; provided, however, that Landlord shall have sole and absolute
discretion to approve or disapprove any improvements (i) that will be visible
to the exterior of the Premises, (ii) which affect the structural integrity of
the Building or of the mechanical, HVAC,
- 17 -
<PAGE> 21
sprinkler, life safety and other operating systems therein, or (iii) which
would cause the overloading of the Building's electrical system or would
require any material modifications thereto.
(iii) Landlord shall have no liability or responsibility for
the work schedule for such Tenant Improvements to be constructed in the
Premises.
(iv) In connection with the intended alterations and
improvements to the Premises, Landlord agrees to pay Tenant's contractor,
promptly upon Landlord's receipt of (I) invoices for work performed and
materials supplied and (II) lien releases for the amount of the applicable
invoice, up to the amount of the Tenant Improvement Allowance. Upon completion
of the installation of the Tenant Improvements in the Premises, Tenant shall
deliver to Landlord (A) a verification of the costs of the installation of the
Tenant Improvements in the Premises from Tenant's contractor in the form of an
AIA form of requisition or other form reasonably approved by Landlord, (B)
final lien waivers furnished by Tenant's general contractor and its major
subcontractors (that is, subcontractors furnishing labor or materials in excess
of $10,000) with respect to the Tenant Improvements and (C) the certification
by Landlord's architect or other representative designated by Landlord that the
Tenant Improvements have been performed or supplied, which certifications (and
any inspections required therefor) shall be made promptly by Landlord's
architect or other representative.
(v) Tenant shall employ its own general contractor to
construct and install the Tenant Improvements in the Premises, such general
contractor to be subject to Landlord's prior written approval, which approval
shall not be unreasonably withheld, conditioned or delayed.
(vi) Prior to the commencement of the construction and
installation of any Tenant Improvements in the Premises, Tenant shall provide
Landlord with a certificate issued by Tenant's liability and property damage
insurance carrier or carriers which shall certify that Tenant's insurance will
be available to cover any loss, damage or injury to persons or property caused
or occasioned by Tenant's contractor or the work to be done by Tenant's
contractor in the Premises in an amount reasonably acceptable to Landlord up to
Five Million Dollars ($5,000,000.00) and subject to any insurance coverage
provided by Tenant's contractor.
(vii) Tenant shall be responsible for obtaining all
governmental permits, licenses or approvals necessary to construct and install
the Tenant Improvements in the Premises. Tenant agrees to comply with all
terms and conditions of all such governmental permits, licenses and approvals.
Copies of all permits and final inspection certificates shall be provided to
Landlord as Tenant receives them from the issuing governmental authority.
(viii) All work done and materials furnished in connection
with the construction and installation of the Tenant Improvements in the
Premises shall be of good quality, shall be performed in a good and workmanlike
manner, free from faults and defects and in accordance with Tenant's Plans as
approved by Landlord, and shall be in compliance with all applicable laws and
regulations. Tenant agrees to proceed, and to cause its architect and its
- 18 -
<PAGE> 22
contractor to proceed, diligently to complete the Tenant Improvements in the
Premises as soon as practicable.
(ix) Landlord's architect or other representative designated
by Landlord shall have the right to inspect Tenant's work in the Premises prior
to any disbursement of the Tenant Improvement Allowance or at any other time
reasonably requested by Landlord.
(x) Tenant shall be solely responsible to correct and repair
any work or materials installed in the Premises by Tenant or Tenant's
contractor that prove defective as a result of faulty workmanship or materials.
Further, Tenant agrees that Landlord shall have no liability to Tenant
whatsoever on account of any work performed or materials provided by Tenant or
Tenant's contractor. Tenant agrees to indemnify and hold Landlord harmless from
and against any and all costs, expenses, liens, claims, liabilities or damages
based on or arising, directly or indirectly, by reason of any work performed or
materials provided by Tenant or Tenant's contractor.
(xi) Tenant, and Tenant's contractor, shall conduct their
work pursuant to this Lease in a manner which shall minimize disruption and
inconvenience to other tenants in the Building and the Park. Public areas shall
be kept reasonably clean at all times; debris shall be removed at the end of
each work day; reasonable steps shall be taken to minimize dust and noise; and
work shall be conducted only during normal working hours unless Landlord
otherwise agrees in advance. Tenant shall promptly repair, at its sole
expense, any damage done to the Building or the Property, to other premises in
the Building, to any electrical, mechanical, HVAC, sprinkler, life safety and
other operating systems within the Building or to the surface parking areas or
other common areas appurtenant to the Building which are caused by or arise out
of the work to be performed by Tenant under this Section 9.2(d).
(xii) Tenant shall provide Landlord, or cause its architect
to provide Landlord, with a copy, on CADD computer discs, of the as-built
drawings for the Tenant Improvements and with one (1) set of as-built
construction drawings on mylar sepias, upon completion of the Tenant
Improvements in the Premises.
(xiii) Tenant, and Tenant's contractor, shall observe all
reasonable rules and regulations of Landlord relating to the construction of
Tenant Improvements in the Premises, including, without limitation, (1) that
the requirements of Industrial Risk Insurers, Herndon, Virginia, concerning
fire protection be met and (2) other reasonable requirements of Landlord or its
insurance carrier or consultant be satisfied. Such rules and regulations shall
be communicated to Tenant in writing prior to commencement of Tenant's work in
the Premises.
(e) Intentionally Omitted.
(f) Tenant agrees to repair and correct any work or materials
installed by Tenant or its contractor in the Premises pursuant to this Section
9.1, that prove to be defective as a result of faulty materials, equipment or
workmanship and that appear within one (1) year of the date of
- 19 -
<PAGE> 23
substantial completion of the Tenant Improvements, provided, however that
Tenant shall cause latent defects in work or materials installed by Tenant or
its contractor in the Premises to be repaired and/or corrected, promptly after
it receives notice of such latent defect from Landlord. Landlord shall not be
responsible to repair or correct any defective work or material installed by
Tenant or by any contractor other than Landlord's contractor or any work or
materials that prove defective as a result of any act or omission of Tenant or
any of its employees, guests, invitees, licensees, subtenants, customers,
clients or other occupants of the Premises.
(g) Intentionally Omitted.
(h) Intentionally Omitted.
(i) It is understood and agreed that Landlord will not make, and
is under no obligation to make, any structural or other alterations,
decorations, additions or improvements in or to the Premises, except as
provided in Section 9.4 hereof.
9.2 Tenant will not make or permit anyone to make any alterations,
decorations, additions or improvements (hereinafter referred to collectively as
"improvements"), structural or otherwise, in or to the Premises, including the
initial improvements to be performed by Tenant prior to Tenant's taking
occupancy of the Premises, without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, conditioned or delayed. When
granting its consent, Landlord may impose any conditions it deems reasonably
appropriate, including, without limitation, the approval by Landlord of plans
and specifications, the approval by Landlord of the contractor or other persons
who will perform the work, Tenant's obtaining all necessary permits and
approvals for such work, and Tenant's obtaining, and providing Landlord with
certificates of insurance evidencing, specified insurance. All improvements
permitted by Landlord must conform to all rules and regulations established
from time to time by the Underwriters' Association of the Commonwealth of
Virginia and to all laws, regulations and requirements of the Federal, State,
Fairfax County and Town of Herndon governments. Landlord's review and approval
of any such plans and specifications and consent to the performance of work
described therein shall not be deemed an agreement by Landlord that such plans,
specifications and work conform with all applicable Legal Requirements and
requirements of the insurers of the Building ("Insurance Requirements") nor
deemed a waiver of Tenant's obligations under this Lease with respect to Legal
Requirements and Insurance Requirements nor impose any liability or obligation
upon Landlord with respect to the completeness, design sufficiency or
compliance with Legal Requirements or Insurance Requirements of such plans,
specifications and work. As a condition precedent to such written consent of
Landlord, Tenant agrees to obtain and deliver to Landlord written,
unconditional waivers of mechanic's and materialmen's liens against the
Building and the land upon which it is situated 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
improvements to the Premises. Upon completion of the work, Tenant shall
provide Landlord with final release of lien forms from all major contractors,
subcontractors, laborers and materials suppliers. If, notwithstanding the
foregoing, any mechanic's or materialmen's lien is filed against the Premises,
the Building and/or
- 20 -
<PAGE> 24
the land upon which it is situated, for work claimed to have been done for, or
materials claimed to have been furnished to, the Premises, such lien shall be
discharged by Tenant within ten (10) days thereafter, at Tenant's sole cost and
expense, by the payment thereof or by the filing of a surety bond in form and
substance acceptable to Landlord. If Tenant shall fail to discharge any such
mechanic's or materialmen's lien, Landlord may, at its option, discharge such
lien and treat the cost thereof (including reasonable attorneys' fees incurred
in connection therewith) as additional rent payable with the next monthly
installment of base rent falling due; 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
improvements to the Premises shall be conducted on behalf of Tenant, and that
Tenant shall be fully responsible therefor. It is further understood and
agreed that in the event Landlord shall give its written consent to the making
of any improvements to the Premises, such written consent shall not be deemed
to be an agreement or consent by Landlord to subject its interest in the
Premises, the Building or the land upon which it is situated to any mechanic's
or materialmen's liens which may be filed in connection therewith. Upon
completion of any improvements by Tenant, Tenant shall provide Landlord with
accurate "as-built" plans showing the new work.
9.3 Tenant shall indemnify and hold Landlord harmless from and against
any and all expenses, liens, claims, liabilities and damages based on or
arising, directly or indirectly, by reason of the making of any improvements to
the Premises by Tenant or its employees, agents or contractors. If any
improvements requiring Landlord's consent hereunder are made without the prior
written consent of Landlord, Landlord, acting reasonably, shall have the right
to remove and correct such improvements and restore the Premises to their
condition immediately prior thereto, and Tenant shall be liable for all
reasonable expenses incurred by Landlord in connection therewith. All
improvements affixed to the Premises or the Building made by either party shall
remain upon and be surrendered with the Premises as a part thereof at the end
of the Lease Term, except that if Tenant is not in default under this Lease,
Tenant shall have the right to remove, prior to the expiration of the Lease
Term, all movable furniture, furnishings, trade fixtures and equipment
installed in the Premises solely at the expense of Tenant. All damage and
injury to the Premises or the Building caused by such removal shall be repaired
by Tenant, at Tenant's sole expense. If such property of Tenant is not removed
by Tenant prior to the expiration or termination of this Lease, the same shall
become the property of Landlord and shall be surrendered with the Premises as a
part thereof.
9.4 Notwithstanding anything to the contrary in Section 9.1 above, on
or before the Lease Commencement Date, Landlord, at its sole cost and expense,
shall Substantially Complete the following work: (i) installation of a new roof
on the Building, (ii) replacement of the heating, ventilation and air
conditioning system serving the Building and (iii) installation of a two
thousand (2,000) gallon fuel tank (the "Fuel Tank") in a location to be
determined by Landlord, in its sole discretion, on the surface of the parking
lot adjacent to the Building (collectively "Landlord's Work"). Landlord and
Tenant agree to cooperate with each other in the scheduling of Landlord's Work
so as not to delay the Substantial Completion of Landlord's Work and the Tenant
Improvements in the Premises. Landlord's Work shall be performed in accordance
with all applicable
- 21 -
<PAGE> 25
building and fire codes, regulations and ordinances. For the purposes of this
Section 9.4, Landlord's Work shall be deemed to be "Substantially Completed" on
the date determined by Landlord's contractor in its professional judgement,
except for the separation of electrical wiring and systems serving the Premises
from the remainder of the Building electrical systems. Notwithstanding the
foregoing, if Landlord is delayed in Substantial Completion or Final
Completion, as applicable, of Landlord's Work due to delays caused by the
actions or inactions of Tenant, its employees, agents, consultants, contractors
or subcontractors, then, for the purposes of determining the Rent Commencement
Date the Landlord's Work shall be deemed to have been Substantially Completed
or Finally Completed, as applicable, on the date that the Premises would have
been Substantially Completed or Finally Completed if such delay or delays had
not occurred. In the event Tenant disputes the determination by Landlord's
contractor that the Landlord's Work has been Substantially Completed or Finally
Completed on the date which Landlord's contractor determines that the
Landlord's Work was Substantially Completed or Finally Completed or would have
been Substantially Completed or Finally Completed but for delays caused by
Tenant, its employees, agents, consultants, contractors, or subcontractors,
then Landlord and Tenant shall together promptly appoint an independent
contractor to promptly determine such matter. In the event Landlord and Tenant
are unable to agree on such independent contractor, then the parties shall
request that the president of the American Arbitration Association appoint an
independent contractor to determine such matter. The determination of the
independent contractor shall be binding upon Landlord and Tenant.
ARTICLE X
SIGNS, EQUIPMENT AND FURNISHINGS
10.1 No sign, advertisement or notice referring to Tenant shall be
inscribed, painted, affixed or otherwise displayed on any part of the exterior
or the interior of the Building, except such areas as are designated by
Landlord, and then only in such place, number, size, color and style as are
approved by Landlord, in its reasonable judgment and in accordance with the
applicable regulations of the County of Fairfax, Virginia. Landlord's signage
specifications are attached hereto as Exhibit D. All of Tenant's signs that
are approved by Landlord shall be installed and removed at the expiration or
earlier termination of the Lease Term at Tenant's cost and expense. If any
sign, advertisement or notice that has not been approved by Landlord, where
such approval is required by this Lease, is exhibited or installed by Tenant,
Landlord shall have the right to remove the same at Tenant's expense. Landlord
shall have the right to prohibit any advertisement of or by Tenant which in its
reasonable opinion tends to impair the reputation of the Building and, upon
written notice from Landlord, Tenant shall immediately refrain from and
discontinue any such advertisement. Landlord reserves the right to affix,
install and display such signs, advertisements and notices on any part of the
exterior or interior of the Building, (i) as may be required by applicable law
and (ii) during the last six (6) months of the Lease Term, as Landlord may
desire to advertise the Building for rent.
10.2 Tenant shall not place or install in the Premises any safes,
fixtures or other equipment which will exceed a load factor of two-hundred
pounds (200 lbs.) per square foot on the first floor of the Premises. Any and
all damage or injury to the Premises or the Building caused by moving the
property of Tenant into or out of the Premises, or due to the same being in or
upon the Premises, shall be repaired at the sole cost of Tenant. Tenant agrees
to remove promptly from the parking
- 22 -
<PAGE> 26
areas or sidewalks adjacent to the Building any of Tenant's furniture,
equipment or other material there delivered or deposited.
10.3 Subject to the provisions of this Section 10.3, Landlord shall
provide Tenant access to and the ability to use the 900KW "back-up" generator
(the "Generator") for the Building. Tenant shall not be permitted to use or
attach any system to the Generator unless (a) such system and the use and
method of "hooking" such system up to the Generator conforms to plans,
specifications and requirements for such system and method of attachment
approved by Landlord in its reasonable judgment and (b) Tenant obtains and
provides copies to Landlord of all necessary governmental permits and approvals
for such system and its method of attachment to the Generator. Landlord shall
have no liability or responsibility to Tenant whatsoever for any damage, loss,
injury, compensation, claim or the like arising out of, resulting from or in
anyway attributable to, directly or indirectly, any failure of the Generator or
any system which Tenant elects to attach to the Generator. Landlord agrees
that it shall give Tenant reasonable advance notice (at least 48 hours except
no advance notice is required in an emergency), which notice may be verbal, of
any anticipated shut down of the Generator for service, repairs or other
reasons.
ARTICLE XI
INSPECTION BY LANDLORD
11.1 Tenant will permit Landlord, or its agents or representatives, to
enter the Premises, without charge therefor to Landlord and without diminution
of the rent payable by Tenant, (i) to examine, inspect and protect the Premises
and the Building, (ii) to make such alterations and/or repairs as in Landlord's
reasonable judgment may be required by law or be necessary to maintain the
Building in good condition and repair, (iii) to comply with and carry out
Landlord's obligations under this Lease, and (iv) to exhibit the same to
prospective tenants during the last one hundred eighty (180) days of the Lease
Term. In connection with any such entry, Landlord shall reasonably endeavor to
minimize the disruption to Tenant's use of the Premises, shall give Tenant at
least twenty-four (24) hours advance notice of such entry (except in the event
of an emergency) and shall conduct such entry only during normal working hours
(except in the event of an emergency).
ARTICLE XII
INSURANCE
12.1 Tenant shall not conduct or permit to be conducted any activity,
or place any equipment, inventory or other materials, in or about the Premises
or the Building that will in any way increase the rate of fire insurance or
other insurance on the Building. If any increase in the rate of fire insurance
or other insurance is stated by any insurance company or by the applicable
Insurance Rating Bureau to be due to any activity of Tenant or the placing of
any equipment, inventory or other materials by or about the Premises or the
Building, such statement shall be conclusive evidence that the increase in such
rate is due to such activity or equipment and, as a result thereof, Tenant
shall be liable for the amount of such increase. Tenant shall reimburse
Landlord for such amount upon written demand from Landlord and such sum shall
be considered additional rent payable hereunder.
- 23 -
<PAGE> 27
12.2 Throughout the Lease Term, Landlord shall insure the Building and
the initial Tenant Improvements in the Premises against loss due to fire and
other casualties included in standard extended coverage insurance policies, in
an amount equal to at least ninety percent (90%) of the replacement cost
thereof, exclusive of architectural and engineering fees, excavation, footings
and foundations.
12.3 Through the Lease Term, Tenant shall bear the risk of loss of the
furnishings, trade fixtures, equipment and contents of the Premises due to fire
and other casualties included in standard extended coverage insurance policies
and shall have the right to insure against such loss. Landlord shall have no
responsibility to insure against such loss.
12.4 Throughout the Lease Term, Tenant shall insure the contents of the
Premises, including all furnishings, trade fixtures, and equipment used or
installed in the Premises by Tenant, and any other personal property of Tenant
therein, against loss due to fire and other casualties included in standard
extended coverage insurance policies in minimum amounts not less than the full
replacement cost of Tenant's furnishings, trade fixtures, equipment and other
personal property. Throughout the Lease Term, Tenant shall obtain and maintain
comprehensive public liability insurance in a company or companies licensed to
do business in the Commonwealth of Virginia and approved by Landlord. Such
insurance shall be in minimum amounts of One Million Dollars ($1,000,000.00)
per occurrence plus a general aggregate of Two Million Dollars ($2,000,000.00)
for injury to persons and damage to property and shall be for a minimum term of
one (1) year. In addition, each of said policies of insurance shall name
Landlord and Boston Properties as managing agent of the office park, as
additional insureds. If requested by the holder of any mortgage or deed of
trust against the Building and communicated to Tenant in writing, the public
liability policy referred to above shall also name such holder as an additional
insured thereunder. Receipts or certificates evidencing payment of the
premiums for such insurance shall be delivered by Tenant at least annually.
Each such policy shall contain an endorsement prohibiting cancellation or
reduction of coverage without first giving Landlord and the holder of any
mortgage or deed of trust on the Building named as additional insured as
aforesaid at least thirty (30) days' prior written notice of such proposed
action.
12.5 (a) Tenant hereby waives its right of recovery against Landlord
and releases Landlord from any claim for property loss or damage arising out of
losses, claims, casualties or other damages for which Landlord may otherwise be
liable to the extent Tenant is either required to maintain insurance pursuant
to this Article XII or receives insurance proceeds on account thereof. Each
policy obtained by Tenant pursuant to the provisions of this Article XII shall
include a waiver of the insurer's right of subrogation against Landlord, and
shall contain an endorsement to the effect that any loss payable under such
policy shall be payable notwithstanding any act or negligence of Landlord, or
any agent, contractor or employee of Landlord, which might, absent such
agreement, result in the forfeiture of payment for such loss.
(b) Landlord hereby waives its right of recovery against Tenant
and releases Tenant from any claim for property loss or damage for which Tenant
may otherwise be liable arising
- 24 -
<PAGE> 28
out of losses, claims, casualties or other damages to the extent Landlord
either receives insurance proceeds on account thereof or is required by this
Lease to maintain such insurance. Each policy of insurance obtained by
Landlord with respect to the Building shall include a waiver of the insurer's
right of subrogation against Tenant and shall contain an endorsement to the
effect that any loss payable under such policies shall be payable
notwithstanding any act or negligence of Tenant, its agents, contractors or
employees which might, absent such agreement, result in the forfeiture of
payment for such loss.
ARTICLE XIII
TENANT'S RESPONSIBILITIES
13.1 Tenant shall be responsible for the payment for all utilities
furnished to the Premises including, without limitation, gas, electric, water,
sewer and telephone services. Landlord, at its expense, shall cause the
Premises to be separately metered for the purpose of measuring electrical power
furnished exclusively to the Premises. To the extent that the consumption of
gas, water and sewer services are measured by a single meter or meters for such
services for multiple tenants, Tenant shall pay only its proportionate share of
the bill or bills for such services. For the purposes hereof, "Tenant's
proportionate share" of the bill for any single metered utilities shall be the
percentage determined in accordance with Section 4.3 hereof. Tenant shall have
no responsibility for any excessive use of utilities by other tenants in the
Building but shall be responsible for its own excessive use of such utilities.
Tenant agrees to pay all applicable utility bills when due, or upon
presentation thereof by Landlord and, further, agrees to indemnify and hold
Landlord harmless from and against any claims made by any utility companies
which arise from Tenant's use of such utilities or from Tenant's failure to
pay any bill rendered for utilities furnished to the Premises.
13.2 It is understood and agreed that Landlord shall not have any
liability to Tenant whatsoever as a result of Landlord's failure or inability
to furnish any of the utilities or services required to be furnished by
Landlord under the terms of this Lease, whether resulting from breakdown,
removal from service for maintenance or repairs, strikes, scarcity of labor or
materials, acts of God, governmental requirements or from any other cause
whatsoever. It is further agreed that any such failure or inability to furnish
the utilities or services required hereunder shall not be considered an
eviction, actual or constructive, of Tenant from the Premises, and shall not
entitle Tenant to terminate this Lease or to an abatement of any rent payable
hereunder.
13.3 (a) Notwithstanding provisions of Section 13.2 to the contrary,
if (i) Landlord fails or is unable to furnish the utilities or services which
Landlord is required to provide or furnish pursuant to Section 13.1 hereof for
a period of more than seven (7) consecutive business days, (ii) Landlord has
not commenced or its not diligently pursuing curing such interruption or
inability to furnish such utilities or services, (iii) such interruption is not
the result or strikes, unavailability of parts or other materials, or any other
cause beyond Landlord's reasonable control and (iv) such interruption
materially impairs the use of the Premises by Tenant and provided that Tenant
does not use the Premises for any purpose during the period any such
interruption exists, then, Tenant shall
- 25 -
<PAGE> 29
be entitled to a pro rata abatement of rent beginning on the eighth (8th)
business day that the Premises are unusable and continuing until the use of the
Premises is restored to Tenant.
(b) Landlord will use its commercially reasonable efforts
(including, in Landlord's sole discretion, reasonable expenditures of money) to
cause the prompt restoration of any interrupted utility services; further,
should any equipment or machinery in the Building for which Landlord has
responsibility pursuant to Article VIII hereof break down so as to render the
Premises unusable by Tenant, Landlord shall promptly repair or replace it
(subject to delays which result from strikes, unavailability of parts or other
materials or other matters beyond Landlord's control).
13.4 Tenant shall not perform any acts, carry on any activities or
store any materials on the Premises which may damage the Premises, the
Building, or the land upon which the Building is situated, or be a menace or
nuisance to the other tenants in the Building, if any. Tenant shall not store
or place any materials, crates, boxes, equipment, abandoned trailers or
automobiles in or on the parking areas, access roads or landscaped area
adjacent to the Building. Tenant shall keep the Premises clean at all times
and shall store all trash, rubbish and debris within the Premises, or outside
the Premises, in trash containers approved by Landlord.
13.5 Tenant shall be responsible for its own trash removal and char and
janitorial services.
13.6 If Tenant, by its own act or neglect, or as a result of the act or
neglect of any of its employees or agents, shall damage any portion of the
Park, the Premises, the Building, or the land upon which it is situated, or
shall fail to remove any trash or hazardous or noxious waste which requires
special handling, Tenant shall reimburse Landlord for any additional costs to
Landlord occasioned thereby excepting losses or damages for which Landlord is
or is required to be insured under this Lease.
ARTICLE XIV
LIABILITY OF LANDLORD
14.1 Except as otherwise provided in Article XIII or Article XVI hereof,
Landlord shall not be liable to Tenant, its employees, agents, business
invitees, licensees, customers, clients, family members or guests for any
damage, injury, loss, compensation or claim, including, but not limited to,
claims for the interruption of or loss to Tenant's business, based on, arising
out of or resulting from any cause whatsoever, including but not limited to the
following: (i) repairs to any portion of the Premises or the Building; (ii)
interruption in the use of the Premises; (iii) any accident or damage resulting
from the use or operation (by Landlord, Tenant or any other person or persons)
of elevators (if any), or of the heating, cooling, electrical or plumbing
equipment or apparatus; (iv) the termination of this Lease by reason of the
destruction of the Premises or the Building; (v) any fire, robbery, theft,
mysterious disappearance and/or any other casualty; (vi) the actions of other
tenants in the Building, if any, or of any other person or persons; and (vii)
any leakage in any part or portion of the Premises or the Building, or from
water, rain or snow that may leak into, or flow from, any part of the Premises
or the Building, or from drains, pipes or plumbing fixtures in the Building;
- 26 -
<PAGE> 30
provided, however, that Landlord shall not be released from liability pursuant
to this Section 14.1 for personal injuries caused solely and directly by
Landlord's or its agents' or employees' gross negligence or willful misconduct.
Any goods, property or personal effects stored or placed by the Tenant or its
employees in or about the Premises or Building shall be at the sole risk of
Tenant, and Landlord shall not in any manner be held responsible therefor. In
no event shall Landlord have any liability to Tenant for any claims based on
the interruption of or loss to Tenant's business or for any consequential
damages or incidental losses whatsoever.
14.2 Tenant hereby agrees to indemnify and hold Landlord harmless from
and against all costs, damages, claims, liabilities and expenses (including
reasonable attorneys' fees and costs of litigation) suffered by or claimed by
any third party against Landlord, directly or indirectly, based on, arising out
of or resulting from (i) Tenant's use and occupancy of the Premises or the
business conducted by Tenant therein, (ii) any accident, injury or damage
whatsoever caused to any person, or to the property of any person, occurring on
or about the Premises during the Lease Term, (iii) any act or omission to act
by Tenant or its employees, contractors, agents, licensees, or invitees, or
(iv) any breach or default by Tenant in the performance or observance of its
covenants or obligations under this Lease; provided that Tenant's obligations
to indemnify and hold harmless Landlord pursuant to this Section 14.2 shall not
include any costs, damages, claims, liabilities, or expenses suffered by or
claimed against Landlord solely and directly based on, arising out of or
resulting from any negligence or willful misconduct of Landlord or its agents
or employees. In no event shall Tenant have any liability to Landlord for
rental losses, beyond the amount of any commercially reasonable deductible, for
which Landlord has obtained insurance or for any consequential damages or
incidental losses whatsoever.
14.3 Landlord hereby agrees to indemnify and hold Tenant harmless from
and against all governmental or quasi-governmental fines and penalties,
including without limitation clean-up costs, assessed against Tenant as a
result of there being discovered to be present in, on, or under the Building
and/or any other portion of the Park any toxic or hazardous wastes, substances
or related materials (collectively, "Hazardous Materials"); provided that
Landlord's obligation to indemnify and hold harmless Tenant pursuant to this
Section shall not include any costs, damages, claims, liabilities, or expenses
assessed against, suffered by or claimed against Tenant based on, arising out
of or resulting from any act or omission of Tenant or its agents, employees,
business invitees, licensees, customers, clients, family members, guests,
subtenants or assignees. As used herein, Hazardous Materials shall include,
but not be limited to, substances defined as "hazardous substances" or "toxic
substances" in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq., Hazardous
Materials Transportation Act, 49 U.S.C. Section 1802, the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., and those substances
similarly defined in the local and state laws of the Commonwealth of Virginia
and the regulations adopted and publications promulgated pursuant to said laws.
14.4 In the event that at any time Landlord shall sell or transfer the
Building, provided the purchaser or transferee assumes the obligations of
Landlord hereunder, the Landlord named herein shall not be liable to Tenant for
any obligations or liabilities based on or arising out of events or
- 27 -
<PAGE> 31
conditions occurring on or after the date of such sale or transfer.
Furthermore, Tenant agrees to attorn to any such purchaser or transferee upon
all the terms and conditions of this Lease.
14.5 In the event that at any time during the Lease Term Tenant shall
have a claim against Landlord, Tenant shall not have the right to deduct the
amount allegedly owed to Tenant from any rent or other sums payable to Landlord
hereunder, it being understood that Tenant's sole remedy for recovering upon
such claim shall be to institute an independent action against Landlord, as
provided in Section 18.8 hereof.
14.6 Tenant agrees that in the event Tenant is awarded a money judgment
against Landlord, Tenant's sole recourse for satisfaction of such judgment
shall be limited to execution against Landlord's equity interest in the
Building at the time of such execution. In no event shall Landlord or any
partner of Landlord or any other person be held to have any personal liability
for satisfaction of any claims or judgments that Tenant may have against
Landlord.
14.7 (a) Landlord hereby agrees to indemnify and hold Tenant harmless
from and against all costs, damages, claims, liabilities and expenses
(including reasonable attorney's fees and costs of litigation) suffered by or
claimed against Tenant, directly or indirectly, based on, arising out of or
resulting from (i) any accident, injury or damage whatsoever caused to any
person, or the property of any person, on or about the common or public areas
of the Building within Landlord's exclusive control during the Lease Term, (ii)
Landlord's negligence or intentional, wrongful acts or failure to comply with
applicable Legal Requirements or (iii) any breach or default by Landlord in the
performance or observance of its covenants or obligations under this Lease;
except, to the extent such accident, injury, damage, failure, breach or default
is a result of Tenant's or any of its agents, contractors or employees'
negligence, misconduct or wrongful act or omission to act and except, further,
that Landlord's obligation to indemnify Tenant pursuant to clauses (i), (ii)
and (iii) of this Section 14.7(a), shall be applicable and shall be enforceable
only to the extent that Tenant has suffered an actual and demonstrable loss
directly caused by the breach or default by Landlord in the performance or
observance of its covenants or obligations under this Lease or the negligence
of Landlord or its employees; and provided, however, that in no event shall
Landlord have any liability to Tenant for claims based on the interruption of
or loss to Tenant's business or for any indirect losses or consequential
damages whatsoever. Notwithstanding anything to the contrary in this Section
14.7(a) or elsewhere in this Lease, this Section 14.7(a) shall not apply to the
holder of any mortgage or deed of trust secured by the Building if such holder
acts as landlord under this Lease or otherwise owns or holds title to the
Building by foreclosure or deed-in-lieu of foreclosure.
(b) Throughout the Lease Term, Landlord shall obtain and maintain
comprehensive public liability insurance in a company or companies licensed to
do business in the Commonwealth of Virginia and reasonably approved by Tenant.
Such insurance shall include contractual liability and shall be in minimum
amounts of One Million Dollars ($1,000,000) per occurrence plus a general
aggregate of Two Million Dollars ($2,000,000) for injury to persons and damage
to property.
- 28 -
<PAGE> 32
ARTICLE XV
RULES AND REGULATIONS
15.1 This Lease is made subject to the provisions of the Declaration of
Covenants recorded in Deed Book 4108 at page 474, among the land records of
Fairfax County, Virginia, as amended in Deed Book 4164 at page 291, Deed Book
5454 at page 810, Deed Book 5541 at page 702 and assigned in Deed Book 5455 at
page 20. A copy of the Declaration of Covenants and said First Amendment are
attached hereto as Exhibit C. Tenant agrees to observe and comply with all
provisions of said Declaration of Covenants, as amended, which may be
applicable to it.
15.2 Tenant agrees to comply with and observe such reasonable rules and
regulations pertaining to the use and occupancy of the Premises or the Building
as may be promulgated hereinafter by Landlord (the "Rules and Regulations").
Tenant's failure to keep and observe said Rules and Regulations shall
constitute a material breach of the terms of this Lease. Landlord reserves the
right from time to time to amend or supplement said Rules and Regulations and
to adopt and promulgate additional reasonable Rules and Regulations applicable
to the Premises and the Building, and upon receipt thereof, Tenant agrees
thereupon to comply with and observe any such additional, amended or
supplemental Regulations; provided that such Rules and Regulations shall be
applied and enforced by Landlord in a reasonable and non-discriminatory manner
against all tenants of the Building.
ARTICLE XVI
DAMAGE OR DESTRUCTION
16.1 If, during the Lease Term, the Premises or the Building are totally
or partially damaged or destroyed from any cause, thereby rendering the
Premises totally or partially inaccessible or unusable, Landlord shall
diligently (taking into account the time necessary to effectuate a satisfactory
settlement with any insurance company involved) restore and repair the Premises
and the Building to substantially the same condition they were in prior to such
damage; provided, however, if in the reasonable judgment of Landlord (i) the
repairs and restoration cannot be completed within ninety (90) days after the
occurrence of such damage, including the time needed for removal of debris,
preparation of plans and issuance of all required governmental permits, or (ii)
if more than fifty percent (50%) of the Building is rendered inaccessible or
unusable as a result of such damage, or (iii) the estimated cost of such
restoration, as prepared by Landlord's architect, exceeds the amount of
insurance proceeds available to Landlord for such restoration by more than ten
percent (10%) of such amount, then Landlord shall have the right, at its sole
option, to terminate this Lease by giving written notice of termination to
Tenant within thirty (30) days after the occurrence of such damage.
Notwithstanding the foregoing, Landlord shall not be entitled to terminate the
Lease pursuant to this Section 16.1 if the damage or destruction was caused
solely and directly by the act or omission of Landlord or its agents or
employees. If this Lease is terminated as aforesaid, all rent payable
hereunder shall be apportioned and paid to the effective date of the occurrence
of such damage or destruction, and Tenant shall have no further rights or
remedies as against Landlord pursuant to this Lease, or otherwise.
- 29 -
<PAGE> 33
16.2 If, within thirty (30) days after the occurrence of the damage or
destruction described in Section 16.1, Landlord determines in its reasonable
discretion that the repairs and restoration cannot be completed within one
hundred twenty (120) days after the date of such damage or destruction but that
Landlord does not elect to terminate this Lease pursuant to Section 16.1, then
Landlord shall promptly notify Tenant of such determination. For a period
continuing through the fifteenth (15th) day after receipt of such notice,
Tenant shall have the right to terminate this Lease by providing written notice
thereof to Landlord, and the Lease Term shall end on the date of the giving of
such notice as if such date were the date originally provided herein as the end
of the Lease Term. If Tenant does not elect to terminate this Lease within
such period, and provided Landlord does not elect to terminate this Lease, then
Landlord shall proceed to repair and restore the Premises and the Building.
Notwithstanding any of the foregoing to the contrary, Tenant shall not have the
right to terminate this Lease if the act or omission of Tenant or any of its
employees, agents, licensees or subtenants shall have caused the damage or
destruction.
16.3 If this Lease is not terminated in accordance with the provisions of
Sections 16.1 or 16.2, and provided that such damage was not caused by the act
or omission to act of Tenant, or any of its employees, agents, licensees,
subtenants, invitees, customers, clients, family members or guests, until the
repair and restoration of the Premises is completed Tenant shall be required to
pay base rent and additional rent only for that part of the Premises that
Landlord and Tenant mutually agree, in their reasonable judgment, that Tenant
is able to use (as such use is contemplated by this Lease) while repairs are
being made, based on the ratio that the amount of usable rentable area bears to
the total rentable area in the Premises. Landlord shall bear the costs and
expenses of repairing and restoring the Premises, except that if such damage or
destruction was caused by the negligent act or omission to act or willful
misconduct of Tenant, or any of its employees, agents, licensees, subtenants or
invited guests, upon written demand from Landlord, Tenant shall pay to Landlord
the amount by which such costs and expenses exceed the insurance proceeds, if
any, received by Landlord on account of such damage or destruction or which
Landlord would have received had Landlord maintained the insurance required by
this Lease, where Landlord has failed to maintain such insurance.
16.4 If Landlord repairs and restores the Premises as provided in this
Article XVI, Landlord shall not be required to repair or restore any
decorations, alterations or improvements to the Premises previously made by or
at the expense of Tenant or any trade fixtures, furnishings, equipment or
personal property belonging to Tenant except the initial Tenant Improvements
contemplated herein and any other improvements to the Premises which are
required hereunder to be insured by Landlord. It shall be Tenant's sole
responsibility to repair and restore all such items which are not the
Landlord's responsibility hereunder.
ARTICLE XVII
CONDEMNATION
17.1 If the whole or any part of the Premises, or the use or occupancy of
the Premises, shall be taken or condemned by any governmental or
quasi-governmental authority for any public or
- 30 -
<PAGE> 34
quasi-public use or purpose including a sale thereof under threat of such a
taking), then this Lease shall terminate on the date title thereto vests in
such governmental or quasi-governmental authority, and all base rent and
additional rent payable hereunder shall be apportioned as of such date. If such
condemnation or taking shall not be of any portion of the Premises but shall
result in a taking of twenty-five percent (25%) or more of the parking areas
adjacent to the Building, then either Landlord or Tenant shall have the option,
upon written notice to the other given within thirty (30) days after it
receives notice of the condemnation or taking, to terminate this Lease.
17.2 All awards, damages and other compensation paid by the condemning
authority on account of such taking or condemnation (or sale under threat of
such a taking) shall belong to Landlord, and Tenant hereby assigns to Landlord
all rights to such awards, damages and compensation. Tenant agrees not to make
any claim against the Landlord or the condemning authority for any portion of
such award or compensation attributable to damages to the Premises, the value
of the unexpired term of this Lease, the loss of profits or goodwill, leasehold
improvements or severance damages. Nothing contained herein, however, shall
prevent Tenant from pursuing a separate claim against the condemning authority
for the value of furnishings, equipment and trade fixtures installed in the
Premises at Tenant's expense and for relocation expenses, provided that such
claim does not in any way diminish the award or compensation payable to or
recoverable by Landlord in connection with such taking or condemnation.
ARTICLE XVIII
DEFAULT
18.1 The occurrence of any of the following shall constitute a default
by Tenant under this Lease:
(a) If Tenant shall fail to pay any installment of base rent or
additional rent when due and such failure shall continue uncured for a period
of ten (10) days after Landlord notifies Tenant in writing of such failure;
provided, however, that after Landlord has given Tenant two (2) such written
notices in any twelve (12)-month period, Tenant shall be in default if any
payment of base rent or additional rent during such twelve (12)-month period is
not made within ten (10) days after such payment is due (without the necessity
of any notice being sent by Landlord).
(b) If Tenant shall fail to pay when due any other payment
required by this Lease (other than base rent or additional rent), and such
failure shall continue for a period of twenty (20) days after Landlord notifies
Tenant, in writing, of such failure.
(c) If Tenant shall violate or fail to perform any other term,
condition, covenant or agreement to be performed or observed by Tenant under
this Lease and such violation or failure shall continue uncured for a period of
thirty (30) days after Landlord notifies Tenant in writing of such failure. If
such violation or failure is not capable of being cured within such thirty
(30)-day period, Tenant shall not be deemed to be in default hereunder if
Tenant commences curative action within
- 31 -
<PAGE> 35
such thirty (30)-day period and proceeds diligently and in good faith
thereafter to cure such violation or failure until completion.
(d) If Tenant shall vacate or abandon the Premises for ten (10)
consecutive days and rent shall concurrently be in arrears.
(e) An Event of Bankruptcy as defined in Article XIX hereof.
18.2 If Tenant shall be in default under this Lease, including without
limitation a default prior to the Lease Commencement Date, Landlord shall have
the right, at its sole option, to terminate this Lease. In addition, with or
without terminating this Lease, Landlord may re-enter, terminate Tenant's right
of possession, and take possession of the Premises. The provisions of this
Article XVIII shall operate as a notice to quit, and Tenant waives any other
notice to quit or notice of Landlord's intention to re-enter the Premises or
terminate this Lease. If necessary, Landlord may proceed to recover possession
of the Premises under and by virtue of the laws of the Commonwealth of
Virginia, or by such other proceedings, including re-entry and possession, as
may be applicable. If Landlord elects to terminate this Lease and/or elects to
terminate Tenant's right of possession, then everything contained in this Lease
on the part of Landlord to be done and performed shall cease without prejudice,
however, to the right of Landlord to recover from Tenant all rent and other
sums due under this Lease. Whether or not this Lease and/or Tenant's right of
possession is terminated by reason of Tenant's default, Landlord shall have the
right to grant or withhold any consent or approval pursuant to this Lease in
its sole and absolute discretion. Landlord agrees to use reasonable efforts to
relet the Premises for such rent and upon such terms as are not unreasonable
under the circumstances, and if the full rental provided herein plus the costs,
expenses and damages hereafter described shall not be realized by Landlord,
Tenant shall be liable for all damages sustained by Landlord, including,
without limitation, deficiency in base rent and additional rent, reasonable
attorneys' fees, brokerage fees, and the commercially reasonable expenses of
placing the Premises in rentable condition consistent with the condition of the
Premises on the Rent Commencement Date. Tenant expressly acknowledges that
Landlord's agreement to use reasonable efforts to relet the Premises shall in
no event limit, restrict or prejudice in any way Landlord's and Landlord's
affiliates' and agents' rights to lease other space in the Park prior to
reletting the Premises. In addition, Landlord shall in no way be responsible
or liable for any failure to relet the Premises or any part thereof, or any
failure to collect any rent due or accrued upon such reletting, to the end and
intent that Tenant may be liable for the base rent, additional rent, and any
and all other items of cost and expense which Tenant shall have been obligated
to pay throughout the remainder of the Lease Term. Any damages or loss of rent
sustained by Landlord may be recovered by Landlord, at Landlord's option, at
the time of the reletting, or in separate actions, from time to time, as said
damage shall have been made more easily ascertainable by successive relettings,
or, at Landlord's option, may be deferred until the expiration of the Lease
Term, in which event Tenant hereby agrees that the cause of action shall not be
deemed to have accrued until the date of expiration of the Lease Term. The
provisions contained in this Section 18.2 shall be in addition to and shall not
prevent the enforcement of any claim Landlord may have against Tenant for
anticipatory breach of this Lease.
- 32 -
<PAGE> 36
18.3 All rights and remedies of Landlord set forth herein are in addition
to all other rights and remedies available to Landlord at law or in equity.
All rights and remedies available to Landlord hereunder or at law or in equity
are expressly declared to be cumulative. The exercise by Landlord of any such
right or remedy shall not prevent the concurrent or subsequent exercise of any
other right or remedy. No delay in the enforcement or exercise of any such
right or remedy shall constitute a waiver of any default by Tenant hereunder or
of any of Landlord's rights or remedies in connection therewith. Landlord
shall not be deemed to have waived any default by Tenant hereunder unless such
waiver is set forth in a written instrument signed by Landlord. If Landlord
waives in writing any default by Tenant, such waiver shall not be construed as
a waiver of any covenant, condition or agreement set forth in this Lease except
as to specific circumstances described in such written waiver.
18.4 If Landlord shall institute proceedings against Tenant and a
compromise or settlement thereof shall be made, the same shall not constitute a
waiver of default or of any other covenant, condition or agreement set forth
herein, nor of any of Landlord's rights hereunder. Neither the payment by
Tenant of a lesser amount than the installments of base rent, additional rent
or of any sums due hereunder nor any endorsement or statement on any check or
letter accompanying a check for payment of rent or other sums payable hereunder
shall 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 other sums or to pursue any other remedy available to Landlord.
Notwithstanding any request or designation by Tenant, Landlord may apply any
payment received from Tenant to any payment then due. No re-entry by Landlord,
and no acceptance by Landlord of keys from Tenant, shall of itself be
considered an acceptance of a surrender of this Lease.
18.5 If Tenant defaults in the making of any payment or in the doing of
any act herein required to be made or done by Tenant, then Landlord may, but
shall not be required to, make such payment or do such act. If Landlord elects
to make such payment or do such act, all costs and expenses incurred by
Landlord, plus interest thereon at the rate per annum which is two percent (2%)
higher than the publicly announced "prime rate" then being charged by The Riggs
National Bank of Washington, D.C., from the date paid by Landlord to the date
of payment thereof by Tenant, shall constitute additional rent hereunder and
shall be immediately paid by Tenant to Landlord; provided, however, that
nothing contained herein shall be construed as permitting Landlord to charge or
receive interest in excess of the maximum rate then allowed by law. The taking
of such action by Landlord shall not be considered as a cure of such default by
Tenant or prevent Landlord from pursuing any remedy it is otherwise entitled to
in connection with such default.
18.6 If Tenant fails to make any payment of base rent or of additional
rent on or before the date such payment is due and payable, and shall fail to
make such payment within three (3) days of the date on which Landlord notifies
Tenant in writing, which written notice shall be required only in the case of
the first such late payment in any twelve (12) month period, Tenant shall pay
to Landlord a late charge of five percent (5%) of the amount of such payment.
In addition, such payment shall bear interest at the rate per annum which is
two percent (2%) higher than the publicly announced "prime rate" then being
charged by The Riggs National Bank of Washington, D.C., from
- 33 -
<PAGE> 37
the date such payment became due to the date of payment thereof by Tenant;
provided, however, that nothing contained herein shall be construed as
permitting Landlord to charge or receive interest in excess of the maximum rate
then allowed by law. Such late charge and interest shall constitute additional
rent due and payable hereunder with the next installment of base rent due
hereunder.
18.7 Landlord shall be in default under this Lease if it fails to
perform any of its obligations hereunder and such failure continues for twenty
(20) days after Landlord has received written notice from Tenant specifying
such failure; provided, however, that if the failure is not susceptible to cure
within said twenty (20) day cure period, the period for such cure shall extend
for the period necessary to permit Landlord to cure the failure exercising
reasonable diligence. If the failure is not cured within such twenty (20) day
period to cure, as it may be extended, Tenant, subject to the provisions of
Section 20.3 hereof, may take such actions as are reasonably necessary to cure
the failure and Landlord shall promptly reimburse Tenant for the actual and
reasonable cost of curing such failure, together with any reasonable costs and
attorneys' fees, if any, actually incurred by Tenant in the exercise of its
rights hereunder.
ARTICLE XIX
BANKRUPTCY
19.1 The following shall be an Event of Bankruptcy under this Lease:
(a) Tenant's becoming insolvent, as that term is defined in Title
11 of the United States Code (the "Bankruptcy Code"), or under the insolvency
laws of any State, District, Commonwealth or territory of the United States
(the "Insolvency Laws");
(b) The appointment of a receiver of custodian for any or all of
Tenant's property or assets, or the institution of a foreclosure action upon
any of Tenant's real or personal property;
(c) The filing of a voluntary petition under the provisions of
the Bankruptcy Code or Insolvency Laws;
(d) The filing of an involuntary petition against Tenant as the
subject debtor under the Bankruptcy Code or Insolvency Laws, which either (i)
is not discussed within thirty (30) days of filing or (ii) results in the
issuance of an order or relief against the debtor; or
(e) Tenant's making or consenting to an assignment for the
benefit of creditors or a common law composition of creditors.
19.2 (a) Upon occurrence of an Event of Bankruptcy, Landlord shall have
all rights and remedies available to Landlord pursuant to Article XVIII,
provided that while a case in which Tenant is the subject debtor under the
Bankruptcy Code is pending and only for so long as Tenant or its Trustee in
Bankruptcy (hereinafter referred to as "Trustee") is in compliance with the
provisions of
- 34 -
<PAGE> 38
Section 19.2(b), (c) and (d) below, Landlord shall not exercise its rights and
remedies pursuant to Article XVIII.
(b) In the event Tenant becomes the subject debtor in a case
pending under the Bankruptcy Code, Landlord's right to terminate this Lease
pursuant to Section 19.2(a) shall be subject to the rights of Trustee to assume
or assign this Lease. Trustee shall not have the right to assume or assign
this Lease unless Trustee promptly (i) cures all defaults under this Lease,
(ii) compensates Landlord for monetary damages incurred as a result of such
defaults, and (iii) provides adequate assurance of future performance on the
part of Tenant as debtor in possession or on the part of the assignee tenant.
(c) Landlord and Tenant hereby agree in advance that adequate
assurance of future performance, as used in Section 19.2(b) above, shall mean
that all of the following minimum criteria must be met: (i) Tenant's gross
receipts in the ordinary course of business during the thirty (30) day period
immediately preceding the initiation of the case under the Bankruptcy Code must
be at least two (2) times greater than the next monthly installment of annual
base rent and additional rent due under this Lease; (ii) both the monthly
average and median of Tenant's gross receipts in the ordinary course of
business during the six month period immediately preceding the initiation of
the case under the Bankruptcy Code must be at least two (2) times greater than
the next monthly installment of annual base rent and additional rent due under
this Lease; (iii) Tenant must pay its estimated pro rata share of the cost of
all services provided by Landlord (whether or not previously included as a part
of the annual base rent) in advance of the performance or provision of such
services; (iv) Trustee must agree that Tenant's business shall be conducted in
a first-class manner and that no liquidating sales, auctions or other
non-first-class business operations shall be conducted on the Premises; (v)
Trustee must agree that the use of the Premises as stated in this Lease will
remain unchanged and that no prohibited use shall be permitted; (vi) Trustee
must agree that the assumption or assignment of this Lease will not violate or
affect the rights of other tenants in the Office Complex; (vii) Trustee must
pay to Landlord at the time the next monthly installment of annual base rent is
due under this Lease, in addition to such installment of annual base rent and
additional rent due under this Lease for the next six (6) months under this
Lease, said amount to be held by Landlord in escrow until either Trustee or
Tenant defaults in its payment of rent or other obligations under this Lease
(whereupon Landlord shall have the right to draw on such escrowed funds) or
until the expiration of this Lease (whereupon the funds shall be returned to
Trustee or Tenant); and (viii) Tenant or Trustee must agree to pay to Landlord
at any time Landlord is authorized to and does draw on the escrow amount to the
original level required by Section 19.2(c)(iii).
(d) In the event Tenant is unable to (i) cure its defaults, (ii)
reimburse Landlord for its monetary damages, (iii) pay the rent due under this
Lease and all other payments required of Tenant under this Lease on time (or
within five (5) days of the due date), or (iv) meet the criteria and
obligations imposed by Section 19.2(c) above, Tenant agrees in advance that it
has not met its burden to provide adequate assurance of future performance and
this Lease may be terminated by Landlord in accordance with Section 19.2(a)
above.
- 35 -
<PAGE> 39
ARTICLE XX
SUBORDINATION; MORTGAGES
20.1 This Lease is subject and subordinate to the lien of any and all
mortgages (which term "mortgages" shall include both construction and permanent
financing and shall include deeds of trust and similar security instruments)
which may now or hereafter encumber the Building, and to all and any renewals,
extensions, modifications, recastings or refinancings thereof. This Lease
shall also be subject and subordinate to (a) any new first mortgage that
hereafter may encumber the Building and (b) any second or junior mortgages that
hereafter may encumber the Building, provided that the holder of the first
mortgage consents to the subordination. At any time after the execution of
this Lease, the holder of any mortgage to which this Lease is subordinate shall
have the right to declare this Lease to be superior to the lien of such
mortgage, and Tenant agrees to execute all documents required by such holder in
confirmation thereof.
20.2 In confirmation of the foregoing subordination, Tenant shall, at
Landlord's request, promptly execute and deliver any requisite or appropriate
certificate or other document. Tenant agrees that neither the institution of
any suit, action or other proceeding by the holder of any mortgage on the
Building to realize upon such mortgage holder's interest in the Building, nor
any sale of the Building pursuant to the provisions of the Deed of Trust in
favor of such mortgage holder, shall by operation of law or otherwise, result
in the cancellation or termination of this Lease or of the obligations of
Tenant hereunder and that Tenant shall attorn to the purchaser at such
foreclosure sale, if requested to do so by such purchaser, and shall recognize
such purchaser as the landlord under this Lease. Tenant further agrees that
for the purposes of this Section 20.2, the term "purchaser" or "purchaser at a
foreclosure sale" shall mean, without limitation, a purchaser at a foreclosure
sale affecting the Building or the holder of any mortgage on the Building.
Tenant agrees that upon such attornment, such purchaser shall not (a) be bound
by any rent credits or payments of annual base rent or additional rent for more
than one (1) month in advance, except payments of annual base rent made
pursuant to the requirements of Section 3.1(a) hereof, (b) be bound by any
amendment of this Lease made without the consent of any lender providing
permanent financing for the Building if required by the terms of such Lender's
loan documents, (c) be liable for damages for any act or omission of any prior
landlord; or (d) be subject to any offsets or defenses which Tenant might have
against any prior landlord; provided, however, that after succeeding to
Landlord's interest under this Lease, such purchaser shall perform in
accordance with the terms of this Lease all obligations of Landlord arising
after the date such purchaser acquires title to the Building. Upon request by
such purchaser, Tenant shall execute and deliver an instrument or instruments
confirming its attornment.
20.3 (a) After receiving notice from any person, firm or other entity
that it holds a mortgage, deed of trust or a ground lease on the Building, or
the land on which the Building is situated, no notice from Tenant to Landlord
alleging any default by Landlord shall be effective unless and until a copy of
the same is given to such holder, Trustee, or ground lessor; provided, however,
that Tenant shall have been furnished with the name and address of such holder,
Trustee
- 36 -
<PAGE> 40
or ground lessor. The curing of any of Landlord's defaults by such holder,
Trustee or ground lessor shall be treated as performance by Landlord.
(b) In addition to the time afforded the Landlord for the curing
of any default, any such holder, Trustee, or ground lessor shall have an
additional thirty (30) days after the expiration of the period allowed to the
Landlord for the cure of any such default within which to commence a cure.
(c) In the event that any lender providing construction or
permanent financing or any refinancing for the Building requires, as a
condition of such financing, that modifications to this Lease be obtained, and
provided that such modifications (i) are reasonably acceptable to Tenant, (ii)
do not adversely affect in a material manner Tenant's use of the Premises as
herein permitted, and (iii) do not increase the rent and other sums to be paid
by Tenant hereunder, Landlord may submit to Tenant a written amendment to this
Lease incorporating such required changes, and Tenant hereby covenants and
agrees to respond to Landlord's request within ten (10) days of Tenant's
receipt thereof.
(d) Landlord shall use its reasonable efforts to obtain from any
future ground lessor or future holder of any mortgage or deed of trust on the
Building a non-disturbance agreement on such lessor's or holder's standard form
in favor of Tenant to the end and intent that as long as Tenant pays all rent
when due and punctually observes all other covenants and obligations on its
part to be observed under the Lease, the terms and conditions of this Lease
shall continue in full force and effect and Tenant's possession, use and
occupancy of the Premises shall not be disturbed during the term of this Lease
by the holder of such mortgage or deed of trust or by any purchaser upon
foreclosure of such mortgage or deed of trust. Landlord represents to Tenant
that as of the date of this Lease neither the Building nor the land upon which
it is situated is encumbered by a mortgage or deed of trust. Landlord shall
notify Tenant of the name and address of any future holder of a mortgage or
deed of trust secured by the Building, promptly after such mortgage or deed of
trust is recorded among the land records of Fairfax County, Virginia.
20.4 Notwithstanding any other provision of this Lease, in particular
this Article XX, this Lease shall not be subordinate to, and Tenant shall not
subordinate its interest in this Lease nor be required to execute further
instruments of subordination in favor of, the interest of any holder(s) of any
lien, mortgage, deed of trust or other encumbrance which may in the future,
after the execution of this Lease, affect the Building or the Property, unless
the holder of such lien, mortgage, deed of trust or other encumbrance (the
"Mortgagee") shall execute and deliver to Tenant a non-disturbance agreement in
such Mortgagee's usual, but reasonable, form, providing that so long as Tenant
is not in default under the terms and provisions of this Lease, Tenant's
interest in the Lease and possession of the Premises shall not be disturbed by
any foreclosure sale or other action by the Mortgagee or its successors in
title or interest, as mortgagee-in-possession or otherwise.
- 37 -
<PAGE> 41
ARTICLE XXI
HOLDING OVER
21.1 In the event that Tenant shall not immediately surrender the
Premises on the date of the expiration of the Lease Term, Tenant shall become a
tenant by the month at one hundred twenty-five percent (125%) of the base rent
and all additional rent in effect during the last month of the Lease Term.
Said monthly tenancy shall commence on the first day following the expiration
of the Lease Term. As a monthly tenant, Tenant shall be subject to all the
terms, conditions, covenants and agreements of this Lease. Tenant shall give
to Landlord at least thirty (30) days' written notice of any intention to
vacate the Premises, and Tenant shall be entitled to thirty (30) days' written
notice to quit the Premises, unless Tenant is in default hereunder, 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. Notwithstanding the
foregoing provisions of this Section 20.1, in the event that Tenant shall hold
over after the expiration of the Lease Term, and if Landlord shall desire to
regain possession of the Premises promptly at the expiration of the Lease Term,
then at any time prior to Landlord's acceptance of rent from Tenant as a
monthly tenant hereunder, Landlord, at its option, may forthwith re-enter and
take possession of the Premises without process, or by any legal process in
force in the Commonwealth of Virginia.
ARTICLE XXII
COVENANTS AND REPRESENTATIONS OF LANDLORD
22.1 Landlord covenants that it is the fee owner of the Building and the
land on which it is situated and, except for mortgages now or hereafter placed
against the said land or Building by Landlord in accordance with the provisions
of Article XIX hereof, the said land and Building are free and clear of all
leases, tenancies, mortgages, liens or encumbrances except as set forth in this
Lease. Landlord covenants that it has the right to make this Lease for the
term aforesaid, and that if Tenant shall pay all rent when due and punctually
perform all the covenants, terms, conditions and agreements of this Lease to be
performed by Tenant, Tenant shall, during the term hereby created, freely,
peaceably and quietly occupy and enjoy the full possession of the Premises
without molestation or hindrance by any person whatever claiming an interest in
the Premises prior or superior to Tenant's, subject to the provisions of
Section 20.2 hereof. Tenant acknowledges and agrees that its leasehold estate
in and to the Premises vests on the date this Lease is executed,
notwithstanding that the Lease Term will not commence until a future date.
22.2 Landlord hereby reserves to itself and its successors and assigns
the following rights (all of which are hereby consented to by Tenant): (i) if
required by applicable law in Landlord's reasonable judgment, to change the
street address and/or the arrangement and/or location of entrances,
passageways, doors, doorways, corridors, elevators, stairs, toilets, or other
public parts of the Building; and (ii) to erect, use and maintain pipes and
conduits in and through the Premises. Landlord may exercise any or all of the
foregoing rights without being deemed to be guilty of an eviction, actual or
constructive, or a disturbance or interruption of the business of Tenant or of
Tenant's use or occupancy of the Premises.
- 38 -
<PAGE> 42
22.3 To the best of Landlord's actual knowledge as of the date of this
Lease, no independent or professional investigation or additional inquiry
having been performed or relied on by Landlord, (i) no Hazardous Materials, as
hereinafter defined, are located on or about the Property nor has Landlord,
during its period of ownership of the Property, used the Property for the
storage, manufacture or disposal of Hazardous Materials and (ii) during the
period of Landlord's ownership of the Property, the Property has never been
listed by the Commonwealth of Virginia or by any agency of the Federal
government, as containing any oil, hazardous waste, hazardous material,
chemical waste, or other toxic substance. For the purposes of this Agreement,
"Hazardous Materials" shall mean "hazardous substance," "hazardous waste" and
"hazardous material" as defined in the Comprehensive Environmental Response
Compensation and Liability Act of 1984, 42 U.S.C. Section 9601 et. seq., as
amended, the Resource Conservation and Recovery Act of 1976, amended and the
Hazardous and Solid Waste Amendment of 1984, as amended, the regulations
adopted pursuant thereto and any other federal, state and local law, statute or
ordinance or any court or administrative decree or any private agreement with
any governmental authority pertaining to hazardous or toxic materials,
substances, pollutants, contaminants or waste.
22.4 Landlord represents that on the Lease Commencement Date, to the
best of its actual knowledge, the common and public areas of the Building
within Landlord's exclusive control shall comply with and not be in violation
of any municipal, county, state, federal and other applicable government
authorities, including, without limitation, the Americans with Disabilities Act
of 1990. Landlord shall be responsible for the continuous compliance of the
common areas of the Building with the mandatory requirements of such laws
throughout the Lease Term.
ARTICLE XXIII
PARKING
23.1 (a) During the Lease Term, Landlord shall provide, at no charge
to Tenant, unassigned parking spaces in the parking lot immediately adjacent to
the Building for use by Tenant, its guests, invitees and employees in an amount
equal to four (4) spaces for every one thousand (1,000) square feet of rentable
area in the Premises. Tenant accepts said parking area in its "as is" condition
as of the date hereof.
(b) Included among the parking spaces described in subsection (a)
above, Landlord will provide Tenant with reserved parking spaces for the
parking of eight (8) standard sized passenger automobiles in the parking lot.
Such parking spaces will be located at the places shown on Exhibit A-1 attached
hereto and made a part hereof. The location of such reserved parking spaces is
subject to change by Landlord; provided, however, that the relocation of such
reserved parking spaces shall be subject to Tenant's prior approval, which
approval shall not be unreasonably withhold, conditioned or delayed. Landlord
shall have the duty and obligation to enforce the reserved parking provided to
Tenant in this Section 24.1(b) but Landlord shall not be liable to Tenant for
any unauthorized vehicles which are parking in such reserved spaces.
- 39 -
<PAGE> 43
(c) Except as provided in Section 24.1(b) above, it is understood
and agreed that no specific parking spaces will be allocated for use by Tenant.
Each user of the parking lot will have the right to park in any available
parking space in accordance with regulations of uniform applicability
promulgated by Landlord.
23.2 It is understood and agreed that the Landlord does not assume any
responsibility for, and shall not be held liable for, any damage or loss to any
automobiles parked in the parking area or to any personal property located
therein, or for any injury sustained by any person in or about the parking
area.
ARTICLE XXIV
EXPANSION
24.1 Landlord agrees that Tenant shall have the right, at any time and
from time to time during the Lease Term, to lease additional space in the
Building which is contiguous to the Premises (the "Additional Space") as it
becomes available following the vacation of such leased space by the then
current tenant of such space, subject to the following terms and conditions:
(a) Landlord shall notify Tenant of the availability of the
Additional Space.
(b) The annual base rent and additional rent with respect to the
Additional Space shall be the same amount per square foot and shall be adjusted
at the same time and in the same manner as the adjusted annual base rent and
additional rent then in effect with respect to the original Premises.
(c) For a period of ten (10) days after receipt of any such
notice from Landlord, Tenant shall have the right to lease the Additional Space
from Landlord upon the terms and conditions set forth in this Lease (but
without any obligation on the part of Landlord to construct, alter, renovate,
repaint, recarpet or provide any construction allowance for tenant improvements
in the Premises) commencing on the date the Additional Space becomes available
as set forth in the notice from Landlord. In the event Tenant agrees to lease
the Additional Space within such ten (10) day period, Landlord and Tenant shall
promptly execute an amendment to the Lease indicating the location and
configuration of the Additional Space. The number of square feet of rentable
area of the Premises shall be measured and calculated by Landlord's architect
in accordance with the provisions of Exhibit E attached hereto and shall be set
forth in the amendment to the Lease.
(d) In no event shall Tenant have the right to lease less than
all of the Additional Space available.
(e) Tenant shall accept the Additional Space in "as is" condition
and Landlord shall have no obligation to provide Tenant with an improvement
allowance with respect to the Additional Space. All work performed in the
Additional Space shall be performed in accordance with the terms and provisions
of this Lease.
- 40 -
<PAGE> 44
(f) Tenant shall be obligated to pay additional rent with respect
to the Additional Space in accordance with the provisions of Article IV of this
Lease.
(g) In the event Tenant does not agree to lease the Additional
Space within the ten (10) day period provided in Section 24.1(c) above or if
Tenant fails to timely notify Landlord of its election to lease the Additional
Space, Landlord shall have the right to lease such space to any other person or
entity upon any terms and conditions which Landlord desires, in its discretion.
(h) The term of the lease for such Additional Space shall be for
a period of not less than one (1) year and, if there is more than one (1) year
remaining in the Lease Term, shall be coincident with the remaining Lease Term
(subject to Tenant's right to renew such term) under the Lease.
24.2 If Tenant is in default under the Lease beyond any applicable
notice and cure period, on the date Landlord's notice is given to Tenant by
Landlord or at any time thereafter but prior to the commencement of the term
for such Additional Space and if such default is not cured within the
applicable notice and cure period, if any, provided in this Lease, then, at
Landlord's option, Tenant's right to lease the Additional Space shall lapse and
be of no further force or effect.
24.3 Tenant's right under this Article XXIV are subject to (a)
Landlord's obligation to extend or renew the lease of the then current tenant
of such space beyond the expiration date of such tenant's lease upon any terms
and conditions to which Landlord and such tenant may agree pursuant to the
terms of such tenant's lease with Landlord and (b) to any expansion rights of
any other tenant occupying space in the Building with respect to such tenant's
right to lease the Additional Space.
24.4 Network Solutions, Inc. shall not be entitled to exercise its
rights under this Article XXIV to lease any Additional Space if at the time
Tenant would otherwise be entitled to exercise its rights, Network Solutions,
Inc. (together with any of its subcontractors working in the Premises) is
occupying less than fifty percent (50%) of the Premises.
ARTICLE XXV
TERMINATION
25.1 Subject to the provisions of this Article XXV, Tenant shall have
the one-time right, exercisable at its option, to terminate this Lease with
respect to all or a portion of the Premises effective at the expiration of the
fourth (4th) Lease Year. Tenant shall have no right to terminate this Lease if
Tenant shall be in default of its obligations under this Lease, beyond any
applicable notice and cure period, on the effective date of termination.
25.2 Tenant may exercise its right of cancellation under this Article
XXV by (a) giving Landlord no less than six (6) months prior written notice of
the date on which this Lease shall be so terminated (the "Termination Notice"),
(b) specifying in the Termination Notice which portion of the Premises which it
intends to surrender to Landlord in accordance with Exhibit F attached hereto
- 41 -
<PAGE> 45
and made a part hereof (the "Surrendered Premises") and (c) paying to Landlord,
not more than thirty (30) days after the date on which it delivers its
Termination Notice to Landlord, a termination payment (the "Termination
Payment") in a sum equal to the aggregate of: (i) Four Dollars and Seventy-One
Cents ($4.71) multiplied by the number of square feet in the Surrendered
Premises (which amount has been calculated based on the unamortized portion of
the Tenant Improvement Allowance and brokerage commissions as if such costs are
amortized over a five (5) year period with interest at the rate of ten percent
(10%) per annum) plus (ii) two (2) monthly installments of base rent then being
paid by Tenant with respect to the Surrendered Premises on the date the
Termination Notice is delivered to Landlord. In addition to the Termination
Payment, Tenant shall pay to Landlord, promptly after the full amount of such
costs are determined and Landlord submits to Tenant an invoice therefor, all
costs of separating the Surrendered Premises from the remaining Premises,
including, but not limited to, any and all architect's fees and other costs of
constructing demising walls and making other alterations and improvements to
the Surrendered Premises or the remaining Premises as may be necessary as a
result of such separation of the Surrendered Premises from the remaining
Premises, in order to comply with all applicable building codes, zoning laws
and other legal requirements (collectively, "Legal Requirements") or in order
to render the Surrendered Premises readily marketable to other tenants, as
reasonably determined by Landlord. The costs of separating the Surrendered
Premises shall not include any tenant allowances or tenant build-out costs for
improvements not directly related to the separation of the Surrendered Premises
from the remaining Premises; provided, however, in the event Tenant elects to
surrender Surrendered Premises A as shown on Exhibit F the costs of separating
the Surrendered Premises shall include the costs of designing and installing a
bathroom facility which satisfies all applicable Legal Requirements in
Surrendered Premises A.
25.3 Tenant's rights under this Section 25.3 are expressly subject to
Landlord's ability, in good faith, to separate the Surrendered Premises from
the remaining Premises on or before the effective date of the partial
termination in compliance with all applicable Legal Requirements. In addition,
Landlord shall have the right to redefine the portion of the Premises which
will comprise the Surrendered Premises if Landlord reasonably determines that
such redefinition is necessary to facilitate compliance with Legal Requirements
or the marketing of such space. Landlord agrees to consult with Tenant
concerning any such redefinition of the Surrendered Premises, Landlord hereby
reserving unto itself, however, final decision making authority over such
matter in accordance with the preceding sentence. If the Surrendered Premises
cannot be separated from the remaining Premises in compliance with all
applicable Legal Requirements, then, provided Landlord has redefined the
Surrendered Premises in accordance with the terms hereof, tenant's sole
recourse shall be to withdraw the Termination Notice with respect to the
Surrendered Premises, whereupon such notice shall become null and void and of
no force or effect.
25.4 If the Termination Notice is not given timely or if the
Termination Payment is not made timely to Landlord, Tenant's right of
cancellation shall be of no force or effect and this Lease shall continue
through the full Lease Term. If the Termination Notice is given timely and the
Termination Payment is made timely, this Lease with respect to the Surrendered
Premises shall terminate on the effective date set forth in the Termination
Notice.
- 42 -
<PAGE> 46
25.5 Notwithstanding anything to the contrary in this Article XXV,
Tenant shall remain liable for any payments which may become due under the
Lease which relate to costs or expenses incurred by Landlord prior to the
effective date of termination of this Lease.
ARTICLE XXVI
GENERAL PROVISIONS
26.1 Tenant acknowledges that neither Landlord nor any broker, agent or
employee of Landlord has made any representations or promises with respect to
the Premises or the Building except as herein expressly set forth, and no
rights, privileges, easements or licenses are being acquired by Tenant except
as herein expressly set forth.
26.2 Nothing contained in this Lease shall be construed as creating a
partnership or joint venture of or between Landlord and Tenant, or to create
any other relationship between the parties hereto other than that of landlord
and tenant.
26.3 Landlord and Tenant recognize Barnes, Morris, Pardoe & Foster and CB
Commercial Real Estate Group, Inc. as the brokers procuring this Lease and
Landlord shall pay said brokers a commission pursuant to a separate agreement
between said brokers and Landlord. Landlord and Tenant each represents and
warrants to the other that, except as provided in the preceding sentence,
neither of them has employed or dealt with any broker, agent or finder in
carrying on the negotiations relating to this Lease. Each party shall
indemnify and hold the other harmless from and against any claim or claims for
brokerage or other commissions asserted by any broker, agent or finder engaged
by the indemnifying party or with whom the indemnifying party has dealt in
connection with this Lease, other than the brokers named in the first sentence
of this Section 26.3.
26.4 Tenant agrees, at any time and from time to time, upon not less than
five (5) days' prior written notice by Landlord, to execute, acknowledge and
deliver to Landlord a statement in writing substantially in the form of
Exhibit E attached hereto (i) certifying that this Lease is unmodified and in
full force and effect (or if there have been any modifications, that the Lease
is in full force and effect as modified and stating the modifications); (ii)
stating the dates to which the rent and any other charges hereunder have been
paid by Tenant; (iii) stating whether or not, to the best knowledge of Tenant,
Landlord is in default in the performance of any covenant, agreement or
condition contained in this Lease, and if so, specifying the nature of such
default; (iv) stating the address to which notices to Tenant are to be sent;
and (v) stating such other information as Landlord or any mortgagee or
prospective mortgagee of the Building may reasonably request. Any such
statement delivered by Tenant may be relied upon by any owner of the Building
or the land upon which it is situated, any prospective purchaser of the
Building or such land, any mortgagee or prospective mortgagee of the Building
or such land or of Landlord's interest therein, or any prospective assignee of
any such mortgagee.
26.5 Landlord and Tenant each hereby waive trial by jury in any action,
proceeding or counterclaim brought by either of them against the other in
connection with any matter arising out
- 43 -
<PAGE> 47
of or in any way connected with this Lease, the relationship of landlord and
tenant hereunder, Tenant's use or occupancy of the Premises, and/or any claim
of injury or damage.
26.6 All notices or other communications required hereunder shall be in
writing and shall be deemed duly given if delivered by a nationally recognized
overnight courier (with receipt therefor), or if sent by certified or
registered mail, return receipt requested, postage prepaid, to the following
addresses: (i) if to Landlord at Boston Properties, 500 E Street, S.W.,
Washington, D.C. 20024, with a "courtesy" copy to Boston Properties, 8
Arlington Street, Boston, Massachusetts 02116; (ii) if to Tenant, to 10260
Campus Point Court, San Diego, CA 92121, Attention: Corporate Leasing, with a
"courtesy" copy to Tenant at the Premises (provided, however, that any failure
to provided such courtesy copy shall not in any way invalidate or otherwise
impair the delivery of such notice to Tenant), except that prior to the Lease
Commencement Date, courtesy copies of notices to Tenant shall be sent to such
address as Tenant shall designate and inform Landlord. The parties shall
exercise reasonable efforts to give the "courtesy" copies of notices provided
for herein; however, failure to give such courtesy copies of notices shall not
under any circumstances affect the effectiveness of any notice given pursuant
to the provisions of this Lease. Either party may change its address for the
giving of notices by notice given in accordance with this Section.
26.7 If any provision of this Lease or the application thereof to any
person or circumstances shall to any extent be invalid or unenforceable, the
remainder of this Lease, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each provision of this Lease shall be valid
and enforced to the fullest extent permitted by law.
26.8 Feminine or neuter pronouns shall be substituted for those of the
masculine form, and the plural shall be substituted for the singular number, in
any place or places herein in which the context may require such substitution.
26.9 The provisions of this Lease shall be binding upon, and shall inure
to the benefit of, the parties hereto and each of their respective
representatives, successors and assigns, subject to the provisions hereof
restricting assignment or subletting by Tenant.
26.10 This Lease contains and embodies the entire agreement of the
parties hereto and supersedes all prior agreements, negotiations and
discussions between the parties hereto. Any representation, inducement or
agreement that is not contained in this Lease shall not be of any force or
effect. This Lease may not be modified or changed in whole or in part in any
manner other than by an instrument in writing duly signed by both parties
hereto.
26.11 This Lease shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia.
26.12 Article and section headings are used herein for the convenience of
reference and shall not be considered when construing or interpreting this
Lease.
- 44 -
<PAGE> 48
26.13 The submission of an unsigned copy of this document to Tenant for
Tenant's consideration does not constitute an offer to lease the Premises or an
option to or for the Premises. This document shall become effective and
binding only upon the execution and delivery of this Lease by both Landlord and
Tenant.
26.14 Time is of the essence of each provision of this Lease.
26.15 This Lease shall not be recorded, except that upon the request of
either party, the parties agree to execute, in recordable form, a short-form
memorandum of this Lease, provided that such memorandum shall not contain any
of the specific rental terms set forth herein. Such memorandum may be recorded
in the land records of Fairfax County in the Commonwealth of Virginia and the
party desiring such recordation shall pay all recordation costs.
26.16 Except as otherwise provided in Section 4.4 and Section 5.1 of this
Lease any additional rent owed by Tenant to Landlord, and any cost, expense,
damage or liability shall be paid by Tenant to Landlord no later than the later
of (i) twenty (20) days after the date Landlord notifies Tenant of the amount
of such additional rent or such cost, expense, damage or liability, or (ii) the
day the next monthly installment of base rent is due. If any payment hereunder
is due after the end of the Lease Term, such additional rent or such cost,
expense, damage or liability shall be paid by Tenant to Landlord not later than
twenty (20) days after Landlord notifies Tenant of the amount of such
additional rent or such cost, expense, damage or liability.
26.17 All of Landlord's and Tenant's duties and obligations hereunder,
including but not limited to duties and obligations to pay or to refund
overpayments of base rent, additional rent and the costs, expenses, damages and
liabilities, shall survive the termination of this Lease.
26.18 In the event either party is in any way delayed, interrupted or
prevented from performing any non-monetary obligations under this Lease, and
such delay, interruption or prevention is due to fire, act of God, governmental
act, action or inaction (including, without limitation, government delays in
issuing any required building, construction, occupancy or other certificate,
permit or approval or performing any other inspection or review in connection
therewith) strike, labor dispute, inability to procure materials, or any other
cause beyond such party's reasonable control (whether similar or dissimilar),
then such party shall be excused from performing the affected obligations for
the period of such delay, interruption or prevention.
26.19 Each party hereby represents and warrants to the other that all
necessary corporate action has been taken to enter into this Lease and that the
person signing this Lease on its behalf has been duly authorized to do so.
26.20 Any amounts required to be paid by Tenant under this Lease
(including, but not limited to, the payments to be made pursuant to Sections
4.2, 4.3, 4.4, 13.1, 19.5 and 19.6) shall be considered additional rent. All
payments of additional rent shall be paid to Landlord without
- 45 -
<PAGE> 49
diminution, set-off or deduction in the same manner as annual base rent
pursuant to Article III hereof or as may otherwise be provided in this Lease.
26.21 Landlord and Tenant each hereby covenant and agree that each and
every provision of this Lease has been jointly and mutually authorized by both
Landlord and Tenant; and, in the event of any dispute arising out of any
provision of this Lease, Landlord and Tenant do hereby waive any claim of
authorship against the other party.
26.22 This Lease includes and incorporates Rider No. 1 (Option to renew
Lease) and Exhibits A, A-1, B, C, D, E and F attached hereto.
[signatures follow on the next page]
- 46 -
<PAGE> 50
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under
seal on or as of the day and year first above written.
LANDLORD:
SUGARLAND BUSINESS PARK LIMITED
PARTNERSHIP, a Delaware limited partnership
By: Sugarland, Inc., its general partner
WITNESS:
/s/ KATHRYN R. STEVENSON By: /s/ EDWARD H. LINDE
------------------------ ------------------------------
Edward H. Linde, President
[SEAL]
TENANT:
NETWORK SOLUTIONS, INC., a Delaware corporation
[KM] By: /s/ ROBERT J. KORZENIEWSKI
-------------------------------------------
Name: Robert J. Korzeniewski
--------------------------------------
Title: Chief Financial Officer
---------------------------------
ATTEST:
----------------------
[CORPORATE SEAL]
- 47 -
<PAGE> 51
RIDER NO. 1
THIS RIDER NO. 1 is attached to and made a part of that certain Lease
Agreement dated ______________, 1997 (the "Lease"), by and between SUGARLAND
BUSINESS PARK LIMITED PARTNERSHIP ("Landlord") and NETWORK SOLUTIONS, INC.
("Tenant"). The terms used in this Rider which are defined in the Lease have
the same meanings as provided in the Lease.
WITNESSETH, that for and in consideration of Tenant's entering into the
Lease Agreement described above, and other good and valuable consideration, and
intending to be legally bound hereby, Landlord hereby grants to Tenant the
conditional right to renew the initial term of the Lease upon the following
terms and conditions:
(1) Provided Tenant has not terminated or elected to terminate the Lease
in accordance with the provisions of Section 2.1(b) thereof, Landlord hereby
grants to Tenant the conditional right, exercisable at Tenant's option, to
renew the term of the Lease for two (2) additional successive terms of three
(3) years each. If exercised and if the conditions applicable thereto have
been satisfied, the first such renewal term (the "First Renewal Term") shall
commence immediately following the end of the initial term provided in Section
2.1 of the Lease and the second such renewal term (the "Second Renewal Term")
shall commence immediately following the end of the First Renewal Term. The
rights of renewal herein granted to the Tenant shall be subject to, and shall
be exercised in accordance with, the following terms and conditions:
(a) Tenant shall exercise its right of renewal with respect to each
renewal term by giving Landlord written notice of the exercise thereof (the
"renewal option notice") not less than six (6) months and not more than nine
(9) months prior to the expiration of the preceding term of the Lease. In the
event that a renewal option notice is not given in a timely manner, Tenant's
right of renewal with respect to such renewal term and any subsequent renewal
term shall lapse and be of no further force or effect. If Tenant is in default
under the Lease on the date any renewal option notice is given or at any time
thereafter on or before the commencement date of such renewal term, then, at
Landlord's option, the right of renewal as to such renewal term, and any
subsequent renewal term, shall lapse and be of no further force or effect.
(b) Promptly following Landlord's timely receipt of the renewal option
notice for each renewal term, Landlord and Tenant shall commence negotiations
concerning the amount of annual base rent which shall be payable during such
renewal term, it being intended that such annual base rent shall be equal to
the greater of (i) ninety-five percent (95%) of the then prevailing fair market
rent for the Premises during each of the First Renewal Term and the Second
Renewal Term and (ii) one hundred three percent (103%) of the annual base rent
payable with respect to the Premises during the immediately preceding Lease
Year. The parties shall have thirty (30) days after Landlord's receipt of each
renewal option notice in which to agree in the base rent which shall be payable
during the year of the renewal term for which such renewal option notice was
given. The parties shall be obligated to conduct such negotiations in good
faith. Among the factors to be considered by the parties during such
negotiations shall be (i) the general office/flex building rental market in
Herndon, VA, (ii) rental rates then being realized by other building owners for
office/flex buildings of comparable size, location and quality to the Building
in Herndon, VA, and (iii) the
<PAGE> 52
rental rates then being quoted by Landlord to prospective tenants for
comparable space in "as is" condition in the Building. In no event, however,
shall the base rent payable during any year of any renewal term be less than
the base rent in effect under the Lease during the Lease Year immediately
preceding the commencement of such renewal term. If the parties agree on the
base rent payable during the year of a renewal term, they shall promptly
execute an amendment to the Lease stating the rent so agreed upon. If during
such thirty (30) day period the parties are unable to agree on the base rent
payable during such renewal term, the Tenant's option(s) to renew the term of
the Lease shall cease and expire and be of no further force or effect.
(c) During each renewal term, all the terms, conditions, covenants and
agreements set forth in the Lease shall continue to apply and be binding upon
Landlord and Tenant, except that (i) the base rent payable during each year of
each renewal term shall be the amount set forth in Paragraph 1(b) above and
(ii) in no event shall Tenant have the right to renew the term of the Lease, or
any renewal term thereof, beyond the expiration of the Second Renewal Term.
(2) In the event that Tenant's right of renewal with respect to the First
Renewal Term shall lapse for any reason, Tenant's right of Renewal with respect
to the Second Renewal Term shall similarly lapse and be of no further force or
effect.
(3) Tenant's rights of renewals provided under this Rider No. 1 are
personal to and may be exercised only by Network Solutions, Inc. and shall not
be exercisable by any assignee or subtenant of Network Solutions, Inc.
(4) Tenant shall not be entitled to exercise its rights under this
Rider No. 1 to renew the term of the Lease if at the time Tenant would
otherwise be entitled to exercise its rights, Tenant is occupying less than
fifty percent (50%) of the Premises.
Initials of:
E
---------------
Landlord
KM
---------------
Tenant
- 2 -
<PAGE> 53
EXHIBIT A
[GRAPHIC]
Initials of:
Landlord E
---------
Tenant KM
---------
-------------------
THE TOWER GROUP SUGARLAND BUSINESS PARK Boston Properties
------------------- 365 HERNDON PARKWAY 500 E Street, S.W.
A R C H I T E C T S HERNDON, VIRGINIA Washington, D.C.
<PAGE> 54
EXHIBIT A-1
[GRAPHIC]
Landlord E
--------
Tenant KM
--------
-------------------
THE TOWER GROUP SUGARLAND BUSINESS PARK Boston Properties
------------------- 365 HERNDON PARKWAY 500 E Street, S.W.
A R C H I T E C T S HERNDON, VIRGINIA Washington, D.C.
<PAGE> 55
EXHIBIT B
The Tenant Rentable Area has been calculated based upon the GWCAR, (Greater
Washington Commercial Association of Realtors, formerly WDCAR) Standard Method
of Measurement dated June 13, 1995. The Rentable Area for a Tenant space in a
one-story building with no common core areas is calculated by measuring from
the finished surface of the dominant permanent perimeter wall surface
(including the inside face of glass at windows) to the center of any demising
partitions of adjoining areas.
The Rentable Area of a Tenant space in a Multi-Tenant building is a function of
the relationship between the Tenant Usable Area and the Building Common Area.
The Building Common Areas are spaces such as Common Corridors, Common
Toiletrooms and Common Service Rooms that are shared by more than one tenant.
The Usable Area for a Tenant space in a one-story building with common core
areas is calculated by deducting the Building Common Area from the Gross
Interior Area of the Building (as defined above).
The Rentable Area is calculated by dividing the Building Common Area by each of
the individual Tenant Usable Areas to identify the pro-rata share of the
Building Common Area. The Usable Area of each Tenant Area is then multiplied
by the pro-rata share fraction plus One (1) to identify the Tenant Rentable
Area.
Initials of:
Landlord E
---------
Tenant KM
-----------
<PAGE> 56
EXHIBIT E
FORM OF ESTOPPEL CERTIFICATE
This Exhibit E is attached to and made a part of that certain Lease
Agreement dated as of __________, 1997 (the "Lease"), between SUGARLAND
BUSINESS PARK LIMITED PARTNERSHIP ("Landlord") and NETWORK SOLUTIONS, INC.
("Tenant"). The terms used in this Exhibit that are defined in the Lease shall
have the same meaning as provided in the Lease. The Estoppel Certificate to be
executed by Landlord and Tenant pursuant to Section 2.1(c) of the Lease shall
provide as follows:
"This Estoppel Certificate made as of the ____ day of ________________,
1997, is being provided pursuant to the terms and provisions of that certain
Lease Agreement dated as of ____________, 1997 (the "Lease"), between SUGARLAND
BUSINESS PARK LIMITED PARTNERSHIP ("Landlord") and NETWORK SOLUTIONS, INC.
("Tenant"). The parties to the Lease desire to confirm that the following
terms which are defined in the Lease shall have the meanings set forth below
for all purposes in the Lease:
1. The Lease Commencement Date is ________________.
2. The initial term of the Lease shall expire on July 31, 2002.
3. The number of square feet of rentable area in the Building is
________________ and the number of square feet of rentable area in
the Premises is _______________ .
4. The annual base rent with respect to the Premises for the first
Lease Year is an amount equal to the product of
____________________________ Dollars ($___________) multiplied by
the total number of square feet of rentable area in the Premises.
5. As of the date hereof the Lease has not been modified and is in
full force and effect and there are no defaults thereunder.
Initials of:
--------------------
Landlord
--------------------
Tenant
AMENDMENT NO. 1
TO
LEASE AGREEMENT
THIS AMENDMENT NO. 1 TO LEASE AGREEMENT (the "Amendment") is made as
of the 31st day of January, 1998 by and between BOSTON PROPERTIES LIMITED
PARTNERSHIP (successor-in-interest to "Landlord") and NETWORK SOLUTIONS, INC.
("Tenant").
WITNESSETH
WHEREAS, by Lease Agreement dated as of May 30, 1997 (the "Lease"),
Landlord leased to Tenant for an initial term of five (5) years and two (2)
months 31,247 square feet of rentable area located in the office/flex building
(the "Building") known as Sugarland I and located at 365 Herndon Parkway,
Herndon, Virginia, as such space is more particularly described in the Lease;
and
WHEREAS, Tenant desires to lease additional space in the Building
contiguous to the Premises on the terms and conditions set forth herein; and
WHEREAS, Landlord and Tenant wish to amend the Lease (i) to include in
the description of the premises covered thereby an additional 9,509 square feet
of rentable area in the Building (the "Additional Space"), as depicted on
Exhibit 1 attached hereto and made a part hereof and (ii) to modify the terms
and provisions of the Lease as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein and other good and valuable consideration the receipt and
sufficiency of which hereby is acknowledged, Landlord and Tenant hereby agree
to amend the Lease as follows:
1. Defined Terms. Except as otherwise provided herein, all of the
capitalized terms used herein shall have the same meanings as provided in the
Lease.
2. The Premises. Commencing on the Lease Commencement Date-II, as
defined in Paragraph 3(a) below, the definition of the "Premises" in the Lease
hereby is amended to include therein the Additional Space. In addition,
commencing on the Lease Commencement Date-II, Exhibit 1 attached hereto
depicting the floor plan for the Additional Space, hereby is added to Exhibit A
to the Lease. As a result, commencing on the Lease Commencement Date-II, the
aggregate number of square feet of rentable area comprising the Premises hereby
is increased to a total of 40,756 square feet. Commencing on the Lease
Commencement Date-II, the Additional Space shall be subject to all of the terms
and conditions of the Lease, except as otherwise provided below.
(b) Landlord and Tenant hereby agree that (i) the rentable area of
the Building (including the space used for the 900 KW generator and
uninterrupted power supply equipment) is 53,136 square feet and (ii) the
rentable area of the entire Premises including the Additional Space is 40,756
square feet.
<PAGE> 2
(c) The provisions of Section 1.4 of the Lease shall not apply to
the Additional Space.
(d) In the event the Lease Commencement Date-II is delayed, then,
promptly after the Lease Commencement Date-II is ascertained, Landlord and
Tenant shall execute a written declaration in substantially the form attached
as Exhibit E to the Lease, setting forth the Lease Commencement Date-II and
such other information as is provided therein.
3. Term. (a) The term of the Lease with respect to the Additional
Space shall commence on February 1. 1998 (the "Lease Commencement Date-II") and
shall be coterminous with the Lease Term (i.e. through July 31, 2002);
provided, however, that in the event delivery of the Additional Space is
delayed beyond February 1, 1998, then the Lease Commencement Date-II shall be
the day after the day Landlord notifies Tenant that the Additional Space is
available for Tenant to commence the work described in Paragraph 6 below.
(b) In the event that the delivery of possession of the Additional
Space to Tenant is delayed beyond February 1, 1998, regardless of the reasons
or causes of such delay, the Lease with respect to the Additional Space shall
not be rendered void or voidable as a result of such delay and the term of the
Lease with respect to the Additional Space shall commence on the Lease
Commencement Date-II, as determined in accordance with Paragraph 3(a) above.
In no event shall Landlord have any liability whatsoever to Tenant on account
of any such delay.
4. Base Rent. (a) Commencing on February 1, 1998 (the ?Rent
Commencement Date-II), Tenant shall pay to Landlord as annual base rent for the
Additional Space an amount equal to the product of (i) the dollar amount per
square foot of annual base rent being paid by Tenant on the Rent Commencement
Date-II with respect to the original Premises multiplied by (ii) the number of
square feet of rentable area in the Additional Space. The annual base rent for
the Additional Space shall be payable as provided in Sections 3.1 and 3.3 of
the Lease and shall be adjusted each Lease Year at the same times and in the
same manner as provided in Section 3.2 of the Lease with respect to adjustments
in the annual base rent payable for the original Premises. If the Rent
Commencement Date-II falls on a date other than on the first day of a month,
rent from such date until the first day of the following month shall be
prorated on a per diem basis and such prorated rent shall be payable in advance
on the Rent Commencement Date-II.
5. Additional Rent. (a) Commencing on the Rent Commencement
Date-II, the provisions of Article IV of the Lease respecting the payment by
Tenant of its proportionate share of Expenses incurred by Landlord in the
operation of the Building, shall be applicable to this lease of the Additional
Space. Accordingly, commencing on the Rent Commencement Date-II, Tenant's
proportionate share of Expenses shall be determined with reference to the
entire Premises, including the Additional Space.
(b) Commencing on the Rent Commencement Date-II, the second (2nd)
sentence of Section 4.3 of the Lease hereby is deleted in its entirety and the
following substituted therefore:
2
<PAGE> 3
For the purposes hereof, Tenant's proportionate share of
Expenses shall be Seventy-Six and Seven tenths percent (76.7%), which
is the proportion that the number of square feet of rentable area in
the Premises (40,756) bears to the total number of square feet of
rentable area in the Building (53,136).
6. Condition of the Additional Space. (a) Except as expressly
provided otherwise in this Amendment, the Additional Space shall be delivered
to and accepted by Tenant in its present "as-is" condition. It is understood
and agreed that Landlord will not make, and is under no obligation to make, any
structural or other alterations, decorations, additions or improvements in or
to the Additional Space. Notwithstanding the foregoing, on the Lease
Commencement Date-II, Landlord shall deliver the Base Building and the
mechanical systems serving the Additional Space to Tenant in substantially the
same condition in which Landlord was required to deliver the Base Building and
the equivalent systems serving the Premises in accordance with the Lease, in
particular Section 9.8 thereof, except that (i) there shall be no ceiling
tiles in the Additional Space and Landlord shall not be obligated to replace or
install or pay for the replacement or installation of such ceiling tiles, (ii)
there shall be no fire alarm system serving the Additional Space and Landlord
shall not be required to purchase or to install a fire alarm system for the
Additional Space and (iii) there are no ducts or diffusers downstream of the
VAV boxes serving the Additional Space. In addition to the Additional Space
Improvement Allowance described in subparagraph (b) below, Landlord shall
provide to Tenant an allowance in an amount to be agreed upon by Landlord and
Tenant which shall be applied solely to the costs and expenses incurred by
Tenant in connection with the installation of the ducts and diffusers required
to serve the Additional Space.
(b) It is understood and agreed that Tenant intends to make
certain alterations, renovations and improvements to the Additional Space
(collectively, the "Additional Space Improvements"). The Additional Space
Improvements (i) shall be done in accordance with Tenant's plans therefor which
shall be subject to the prior written approval of Landlord, which shall not be
unreasonably withheld, conditioned or delayed provided such plans comply with
all applicable Legal Requirements, (ii) shall be subject to the provisions of
Article IX and Article XIII of the Lease and (iii) shall be made at Tenant's
sole cost and expense; provided, however, that Landlord agrees to provide
Tenant with an improvement allowance (the "Additional Space Improvement
Allowance") in an amount equal to the product of (x) Fifteen Dollars ($15.00)
multiplied by (y) the number of square feet of rentable area in the Additional
Space, multiplied by (z) a fraction the numerator of which is the number of
full calendar months in the period commencing on the Rent Commencement Date-II
and continuing through the expiration of the Lease Term, excluding any Renewal
Term, as defined in Rider No. 1 to the Lease and the denominator of which is
sixty (60) (the number of complete calendar months commencing on the Rent
Commencement Date and continuing through the expiration of the initial Lease
Term). The Additional Space Improvement Allowance shall be applied, as
hereinafter set forth, to all "hard" and "soft" costs incurred in connection
with the design, construction and installation of the Additional Space
Improvements, including, without limitation, any and all architectural,
engineering and consulting fees and telephone and data cabling costs. The
funding of the Additional Space Improvement Allowance is subject to the
fulfillment by Tenant of all covenants and conditions set forth in the Lease
and this Amendment. In the event the entire Additional Space Improvement
Allowance is not utilized for the Additional Space Improvements on or before
December 31, 1998, such unused portion of the Additional Space Improvement
3
<PAGE> 4
Allowance shall be applied against the installment(s) of base rent due
commencing January 1, 1999 with respect to the Additional Space pursuant to
Paragraph 3 hereof.
(c) Tenant shall be responsible for the design and construction of
the Additional Space Improvements and Tenant shall obtain all necessary permits
to construct such Additional Space Improvements and legally occupy the
Additional Space. The timing of Tenant's completion of the Additional Space
Improvements and the receipt or issuance of any required building, special
exception, occupancy or other permits or approvals shall have no bearing on the
Lease Commencement Date-II, the Rent Commencement Date-II or Tenant's
obligation to pay base rent and additional rent as provided in Paragraph 4 and
Paragraph 5 above. Any and all construction, installation and other related
activity by Tenant or its contractors in the Additional Space prior to the Rent
Commencement Date-II shall be coordinated with Landlord in accordance with the
terms of Section 9.1 of the Lease. All terms and conditions of the Lease,
including, without limitation, the insurance, release and waiver of liability
provisions of Article XII and XIV thereof, shall apply to and be effective
during such period of occupancy by Tenant, except for Tenant's obligation to
pay any base rent or additional rent attributable to Expenses.
(d) Landlord and Tenant shall cooperate with each other and shall
work together in good faith to effect the timely completion of the Additional
Space Improvements. Where required all approval, consents or disapprovals or
denials of consent shall be delivered promptly after a request therefor. All
disapprovals or denials of consent shall include a statement of the reason for
such disapproval or denial of consent. Landlord and Tenant shall each use its
commercially reasonable efforts to comply with all construction schedules
created in connection with the performance of the work described in this Lease.
(e) Landlord and Tenant agree that Landlord's Work as defined in
Section 9.4 of the Lease has been Substantially Completed, as defined in
Section 9.4 of the Lease.
7. Parking. Landlord shall not be obligated to provide Tenant
reserved parking spaces in connection with its lease of the Additional Space.
Effective on the Lease Commencement Date-II, Tenant's pro rata share of parking
spaces in the parking lot immediately adjacent to the Building shall increase
to account for the rentable area of the Additional Space.
8. Incorporation of Lease Terms. All of the terms, conditions,
covenants and agreements set forth in the Lease (a) are incorporated herein by
reference, (b) shall remain in full force and effect, (c) shall apply to this
Amendment and the lease of the Additional Space and (d) shall be applicable to
and binding upon the parties hereto at all times during the term of the Lease
as if set forth herein, except to the extent expressly modified herein.
9. Broker. Landlord and Tenant recognize Barnes, Morris, Pardoe
& Foster and CB Commercial Real Estate Group, Inc. as the brokers procuring
this Amendment and Landlord shall pay said brokers a commission pursuant to a
separate agreement between said brokers and Landlord. Landlord and Tenant each
represents and warrants to the other that, except as provided in the preceding
sentence, neither of them has employed or dealt with any broker, agent or
finder in carrying on the negotiations relating to this Amendment. Each party
shall indemnify and hold the
4
<PAGE> 5
other harmless from and against any claim or claims for brokerage or other
commissions asserted by any broker, agent or finder engaged by the indemnifying
party or with whom the indemnifying party has dealt in connection with this
Amendment, other than the brokers named in the first sentence of this Paragraph
9.
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Amendment No. 1 to Lease Agreement as of the date and year first above written.
BOSTON PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership
WITNESS:
By: Boston Properties, Inc., its general partner
/s/ LORI E. SUTHERLAND /s/ RAYMOND A. RITCHEY
-------------------------------------- -------------------------------------------------
[SEAL] Raymond A. Ritchey, Senior Vice President
TENANT:
NETWORK SOLUTIONS, INC., a Delaware corporation
By: /s/ ROBERT J. KORZENIEWSKI
--------------------------------------------
Name: Robert J. Korzeniewski
------------------------------------------
Title: Chief Financial Officer
-----------------------------------------
ATTEST:
/s/ MARK MANDOLIA
-------------------------------------
[CORPORATE SEAL]
5
<PAGE> 6
[MAP]