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<PAGE>
EXHIBIT 10.10
AGREEMENT OF LEASE
by and between
MOR FORBES LLLP
(Landlord)
and
VOCUS, INC.(Tenant)
<TABLE>
<CAPTION>
Page
<S> <C>
1. Leased Premises ........................................
1
2. Term ...................................................
2
3. Security Deposit .......................................
4
4. Use ....................................................
5
5. Basic Annual Rent ......................................
6
5.1. Definitions ....................................... 6
5.2. Rent Adjustment ................................... 8
5.3. Tax Adjustment .................................... 9
5.5. Utilities ......................................... 10
5.6. Payments .......................................... 10
6. Requirements of Law ....................................
11
7. Tenant's Improvements ..................................
11
8. Condition of Premises ..................................
11
9. Conduct on Premises ....................................
13
10. Insurance ..............................................
13
11. Mechanics' and Materialmen's Liens and Other Liens .....
13
12. Tenant's Failure to Perform ............................
13
13. Loss, Damage, Injury ...................................
13
14. Destruction -- Fire or Other Casualty ..................
14
15. Eminent Domain .........................................
14
16. Environmental Assurances ...............................
15
(a) Covenants .......................................... 15
(b) Indemnification by Tenant .......................... 15
(b) Indemnification by Landlord ........................ 15
(c) Definitions ........................................ 16
17. Assignment/Subletting ..................................
16
18. Defaults ...............................................
17
19. Acceptance of Leased Premises ..........................
20
20. Access to Premises and Change in Services ..............
20
21. Estoppel Certificates ..................................
20
22. Subordination ..........................................
20
23. Attornment .............................................
21
24. Notices ................................................
21
25. Landlord's Liability ...................................
21
</TABLE>
<PAGE>
<TABLE>
<S> <C>
26. Separability, Enforceability ............................
21
27. Captions ................................................
22
28. Recordation .............................................
22
29. Successors and Assigns ..................................
22
30. Holding Over ...........................................
22
31. Commissions ............................................
22
32. Waiver of Jury Trial ...................................
22
33. Miscellaneous ..........................................
23
34. Authority ..............................................
24
35. Riders .................................................
24
</TABLE>
Rider No. 1 - Right of First Offer
Rider No. 2 - Renewal Option
EXHIBIT A - Site Plan and Leased Premises
EXHIBIT B - Plans and Specifications
EXHIBIT C - Lease Commencement Agreement
EXHIBIT D - Rules and Regulations
EXHIBIT E - HVAC Contract Specifications
EXHIBIT F - HVAC Certification
<PAGE>
MOR FORBES LLLP
LEASE AGREEMENT
THIS AGREEMENT OF LEASE is made this 21st day of December, 2000,
by and
between MOR FORBES LLLP, a limited liability limited partnership
formed under
the laws of the state of Maryland (hereinafter referred to as
"Landlord"), and
VOCUS, INC., a corporation duly formed under the laws of the
State of Delaware
(hereinafter referred to as "Tenant").
WITNESSETH, that the parties hereby covenant, promise and agree
as
follows:
1. Leased Premises.
(a) Landlord is the developer of the building to be constructed
at
4260 Forbes Boulevard, known as Building A (hereinafter referred
to as the
"Building"), in the Forbes 50 Business Center, Prince George's
County, Maryland.
The Building is located in a project which, upon completion, is
expected to be
comprised of two one-story research and development buildings
(the "Project").
Landlord does hereby lease unto Tenant and Tenant does hereby
rent from
Landlord, that portion of the Building containing approximately
22,488 square
feet (hereinafter referred to as the "Leased Premises") as more
particularly
shown on "Exhibit A" attached hereto, incorporated by reference
herein and
initialled by the parties, together with the non-exclusive right
to use the
designated parking areas, driveways and sidewalks. See Rider
No.1 - Right of
First Offer.
(b) The Leased Premises will be finished (the "Tenant
Improvements")
by Landlord (through its general contractor, Manekin, LLC), in
accordance with
plans and specifications to be prepared by Tenant's space
planner/architect (the
"Architect") on or before January 16, 2001, and approved by
Landlord and Tenant.
The Architect shall additionally provide to Landlord from time
to time during
the design process schematic and design development drawings of
the proposed
Tenant Improvements. The selection of Tenant's Architect shall
be subject to
Landlord's approval, such approval not to be unreasonably
withheld, conditioned
or delayed. GHK is hereby approved by Landlord as Tenant's
Architect. At such
time as the plans and specifications for the Tenant Improvements
are finalized
and approved by Landlord and Tenant, they shall be attached
hereto as Exhibit B
and made a part hereof (the "Plans and Specifications"). All
fees and expenses
payable to Tenant's Architect shall be paid by Tenant, but
Tenant shall have the
right, to apply Landlord's Contribution, defined below, toward
payment of such
expenses. Tenant agrees that Tenant shall bear full
responsibility for the Plans
and Specifications, and the Leased Premises, as improved in
accordance with the
Plans and Specifications, as being in compliance with all
applicable
requirements of law, including without limitation, the Americans
With
Disabilities Act, as amended. Tenant releases Landlord from any
claim by Tenant
arising out of failure of the Leased Premises to be in
compliance with all
applicable requirements of law, except to the extent that
Landlord, or its
general contractor, fails to finish the Leased Premises in
accordance with the
Plans and Specifications. Except to the extent that Tenant is
responsible for
assuring that the Leased Premises comply with all applicable
laws, and except to
the further extent that any legal requirements are attributable
to Tenant's
particular use of the Leased Premises, and are not applicable to
the building
generally, Landlord, at its expense, shall be responsible for
assuring that the
Building and the Project are constructed in accordance with all
applicable laws,
codes and ordinances,
<PAGE>
including the Americans With Disabilities Act, as such laws
exist on the
Commencement Date.
(c) Landlord shall contribute up to Twenty Dollars ($20.00)
multiplied by the Rentable Area of the Leased Premises, as
hereinafter defined,
toward the cost of the Tenant Improvements ("Landlord's
Contribution"). In
addition to Landlord's Contribution, at Tenant's option,
Landlord shall
contribute an additional allowance of up to Ten Dollars ($10.00)
multiplied by
the Rentable Area of the Leased Premises toward the cost of the
Tenant
Improvements ("Landlord's Additional Contribution"). To the
extent Landlord's
Additional Contribution is utilized by Tenant, the Basic Annual
Rent described
below shall be increased by an amount sufficient to amortize
Landlord's
Additional Contribution over the initial Lease Term, with
interest at a rate of
twelve percent (12%) per annum. All charges and expenses
incurred for work and
material respecting the finishing of the Leased Premises which
are in excess of
Landlord's Contribution and Landlord's Additional Contribution
and approved by
Tenant as set forth below, shall be deemed additional rent and
shall be paid by
Tenant upon receipt of an invoice from Landlord therefor. All
charges and
expenses incurred in connection with any change orders will be
paid by Tenant at
the time it executes such change order.
(d) The cost of the work to be performed by Landlord shall
include
the general contractor's fee of 5% of all construction costs,
excluding soft
costs (the "Hard Costs"), plus an additional 5% of all Hard
Costs for general
conditions. After the Plans and Specifications are finalized,
Landlord or its
general contractor shall obtain, for each of the major trades,
competitive bids
from at least three reputable subcontractors acceptable to
Landlord. Tenant
shall have the right to select one subcontractor to bid on each
of such
subcontracts, subject to Landlord's prior approval. The
selection of such
subcontractors from the bidding process shall be made by mutual
agreement of
Landlord and Tenant.
(e) After the major trades are bid and selected as
aforesaid,
Landlord shall prepare and deliver to Tenant a budget for the
cost of
constructing the Tenant Improvements (the "Budget"). To the
extent that the
Budget includes any costs in excess of the amount of Landlord's
Contribution
(which excess costs are hereinafter referred to as the "Tenant
Costs"), Tenant
shall have the right to approve same; provided, however, the
cost of all
subcontracts approved by Tenant and the fees payable to the
general contractor
pursuant to subparagraph (d) above, are hereby deemed approved
by Tenant. In the
event that the Budget includes Tenant Costs not otherwise
approved or deemed
approved by Tenant and Tenant fails to approve or disapprove
same in writing
within three (3) business days after receipt of the Budget from
Landlord, then
the Budget and such Tenant Costs shall be deemed approved by
Tenant. In the
event that Tenant disapproves same in writing within said three
(3) business day
period, then Tenant, Landlord and Tenant's Architect shall
endeavor in a prompt
and cooperative manner to reduce or eliminate the Tenant Costs
to Tenant's
reasonable satisfaction by revising the Plans and
Specifications, reducing the
scope of the work or otherwise. Any delays in the Commencement
Date, as
hereinafter defined, resulting from Tenant's failure to approve
the original
Budget shall be deemed a "Tenant Delay" for purposes of Section
2 below, it
being understood and agreed, however, that both parties will
endeavor in good
faith to avoid unnecessary delays so as to enable construction
to proceed
timely.
2. Term. This Lease shall be for a term of approximately ten
(10) years
(the Lease Term) commencing on the "Commencement Date", as
hereinafter defined,
and terminating at
-2-
<PAGE>
11:59 p.m. on the last day of the tenth (10th) full lease year,
unless otherwise
terminated or extended in accordance with the provisions hereof.
Each respective
period of twelve (12) successive calendar months during the
Lease Term or any
renewals thereof commencing with the first full calendar month
during the Lease
Term shall be hereinafter referred to as the "lease year". If
the Commencement
Date does not occur on the first day of a month, the first lease
year shall
include the twelve (12) calendar months and the period from the
Commencement
Date until the first day of the following month. See Rider No. 2
- Renewal
Option.
The Commencement Date will be the latest to occur of the
following:
(a) the date on which Landlord's construction of the Tenant
Improvements in
accordance with the Plans and Specifications is substantially
complete and
certified as such to Landlord and Tenant by Landlord's
architect; and (b) the
date on which Landlord obtains a temporary use and occupancy
permit or other
applicable governmental approval which permits Tenant's
occupancy of the Leased
Premises. Landlord estimates that the Commencement Date will
occur on or about
May 1, 2001 (the "Estimated Commencement Date), so long as this
Lease is
executed and delivered by Tenant on or before December 21, 2000,
and the Plans
and Specifications are finalized and approved by Landlord and
Tenant on or
before January 16, 2001 (collectively, "Tenant's Deadlines").
The Estimated
Commencement Date of May 1, 2001 will be postponed by one day
for each day
Tenant is late in meeting either or both of Tenant's Deadlines,
and for the
period of any other Tenant Delay hereunder. The Estimated
Commencement Date
shall be further post-poned as reasonably required by Landlord
if the Tenant
Improvements, as shown on the Plans and Specifications, require
laboratory space
or any other specialty construction.
Notwithstanding any language in this Lease to the contrary, in
the event
that the Commencement Date fails to occur by May 1, 2001, then,
to the extent
caused by Tenant's failure to meet either or both of Tenant's
Deadlines, or as a
result of any Tenant Delay, or any other delay attributable to
Tenant, then
Tenant's obligation to pay Basic Annual Rent shall nevertheless
commence as of
May 1, 2001 (or such later date the Commencement Date would have
occurred if not
for Tenant's delay), which date shall be deemed the Commencement
Date for all
purposes of this Lease. In the event that the Commencement Date
fails to occur
within thirty (30) days after the Estimated Commencement Date
(as the same may
be postponed in accordance with the terms of this Lease)[that
date which, is
thirty (30) days after the Estimated Commencement Date being
referred to herein
as the "Final Delivery Date"], then the Basic Annual Rent
payable by Tenant
hereunder shall be abated by one day for each day after the
Final Delivery Date
that the actual Commencement Date occurs.
In the event that Landlord shall be unable, by reason of
construction delays or otherwise, to deliver possession of the
Leased Premises
on the Estimated Commencement Date (as the same may be postponed
in accordance
with the terms of this Lease), then this Lease shall
nevertheless continue in
full force and effect, and Tenant shall have no right to
rescind, cancel or
terminate the same if possession is given within one hundred
twenty (120) days
thereafter. If Landlord fails to deliver the Leased Premises
within one hundred
twenty (120) days after the Estimated Commencement Date (as the
same may be
postponed in accordance with the terms of this Lease) then
Tenant may terminate
this Lease by giving written notice to Landlord of such
termination within ten
(10) days after the expiration of such 120-day period (so long
as Landlord does
not deliver possession within such 10-day period), which remedy,
if exercised by
Tenant, shall be Tenant's sole and exclusive remedy for
Landlord's
-3-
<PAGE>
failure to deliver possession hereunder. In the event of such
termination,
Landlord shall promptly return to Tenant all deposits and/or
letters of credit
previously delivered to Landlord hereunder, and the parties
shall not have any
further obligations under this Lease, other than the
indemnification obligations
set forth in Section 31 below which shall survive such
termination. Whether or
not Landlord shall deliver possession of the Leased Premises on
the Estimated
Commencement Date, or within such additional 120-day period,
Tenant agrees that
in no event shall Landlord be liable for damages, if any,
sustained by Tenant as
a result of Landlord's failure to deliver possession.
After Landlord delivers possession of the Leased Premises,
Landlord
will remain responsible for the completion of those "punchlist"
items, if any,
to which Landlord and Tenant have agreed in writing within
fifteen (15) days
after the date Tenant occupies the Leased Premises. Landlord
shall endeavor in
good faith to cause its general contractor to complete all
punchlist items
within thirty (30) days following the preparation of a list of
the agreed
punchlist items.
Landlord shall use its reasonable efforts to notify Tenant
fifteen
(15) days prior to the date on which the Leased Premises will be
ready for
Tenant's occupancy, and Tenant shall have the right to enter the
Leased Premises
at that time for the installation of its telephones, cabling,
wiring, furniture
and equipment, provided that such work is done under the general
supervision of
Landlord and does not interfere with Landlord's work. Such entry
shall be at
Tenant's sole risk and expense. Commencing on the first day of
such early
access, Tenant agrees that all the terms and provisions of this
Lease shall be
in full force and effect except that Tenant shall have no
obligation to pay rent
during such early access period. Tenant agrees to indemnify and
hold harmless
landlord for any damage or personal injury which may occur as a
result of
Tenant's entry into the Leased Premises prior to the
Commencement Date. Tenant
shall deliver to Landlord evidence of the insurance required to
be maintained by
Tenant pursuant to Section 10 of this Lease prior to Tenant's
entry into the
Leased Premises.
On the Commencement Date or such later date as Landlord may
request,
Tenant shall promptly enter into a supplementary written
agreement (the "Lease
Commencement Agreement") in substantially the form attached
hereto as "Exhibit
C," thereby specifying, among other things, the date as of which
the Lease Term
shall have begun and as of which the Lease Term shall end, the
amount of Basic
Annual Rent payable by Tenant hereunder, and the principal
amount of the Letter
of Credit, defined below.
3. Security Deposit.
(a) Cash. Tenant, contemporaneously with the execution of
this
Lease, shall deposit with Landlord the sum of Twenty-Two
Thousand Three Hundred
Dollars and Sixty Cents ($22,300.60) as a security deposit (the
"Deposit").
Landlord's receipt of the Deposit shall be confirmed by Landlord
in the Lease
Commencement Agreement. To the extent the Deposit has not been
applied or
exhausted pursuant to the further terms hereof, ninety percent
(90%) thereof
shall be returned by Landlord to Tenant within thirty (30) days
following the
expiration of the Lease Term, and the balance within ninety (90)
days after the
end of the Operating Year in which the Lease expiration date
occurs. Landlord
shall have the right to apply the Deposit to cure any breach by
Tenant beyond
the applicable cure period, if any, of any of Tenant's
obligations or duties
pursuant to this Lease, and upon any such application of the
Deposit by
Landlord, Tenant
-4-
<PAGE>
shall immediately restore the same to the dollar amount set
forth in this
Section. Landlord shall be entitled to the full use of the
Deposit, shall not be
required to escrow or otherwise segregate the Deposit, and no
interest shall
accrue thereon or be paid or payable by Landlord with respect to
the Deposit.
(b) Letter of Credit. In addition to the Deposit, Tenant
shall
deposit with Landlord a clean, non-contingent irrevocable Letter
of Credit (the
"Letter of Credit"), in form and substance and issued by a
financial institution
reasonably acceptable to Landlord, in an amount equal to the
cost of all Tenant
Improvements to be performed by Landlord hereunder, the total
cost of which is
expected to exceed $18.00 multiplied by the Rentable Area of the
Leased Premises
(the "Excess Costs"). The Letter of Credit shall be freely
assignable to any
lender of Landlord, and to any successor or assign of Landlord's
interest under
the Lease. The Letter of Credit shall be deposited with Landlord
within five (5)
calendar days after the date the Budget is delivered to Tenant
or, if the Budget
requires Tenant's approval, within five (5) calendar days after
the date the
Budget is approved (or deemed approved) by Tenant. If from time
to time, during
the course of construction or upon completion thereof, the
Excess Costs are
reasonably expected to or actually exceed the original amount of
the Letter of
Credit, then within five (5) days of Landlord's request, the
principal amount of
the Letter of Credit shall be increased by Tenant accordingly.
Landlord's
receipt of the Letter of Credit shall be confirmed in the Lease
Commencement
Agreement. To the extent the same has not been applied or
exhausted pursuant to
the further terms hereof, the Letter of Credit shall be returned
by Landlord to
Tenant following the expiration of the Lease Term. In addition
to any and all
other remedies available to Landlord under this Lease, Landlord
shall have the
right to draw upon the Letter of Credit to cure any breach by
Tenant of any of
Tenant's obligations or duties pursuant to the Lease, if such
breach is not
cured beyond the applicable cure period, if any. Any demand by
Landlord for a
draw upon the Letter of Credit shall be accompanied by a
statement to the issuer
thereof purportedly signed by an authorized representative of
Landlord
certifying that Tenant is in breach of its obligations under the
Lease beyond
the expiration of applicable grace and cure periods, if any, and
that Landlord
is entitled to draw upon the Letter of Credit in accordance with
the terms of
the Lease. Upon any such draw, Tenant shall immediately restore
the same to its
original amount. No interest shall accrue thereon or be paid or
payable with
respect to the Letter of Credit.
(c) Waiver of Letter of Credit. So long as Tenant is not then
in
default of this Lease and has not been in default beyond the
applicable grace
and cure periods, if any, more than once during any lease year
of the term
hereof, Tenant's obligation to maintain the Letter of Credit
shall be waived and
the Letter of Credit shall be returned to Tenant if Tenant has
achieved either
of the following: (a) a credit rating of BBB or better as
reported by a
national, reputable credit reporting agency acceptable to
Landlord, and such
rating has continued for no less than three (3) consecutive
quarters during the
term of this Lease, or (b) profitability in four (4) consecutive
quarters during
the term of this Lease, as evidenced by Tenant's unaudited
financial statements,
certified to be true and correct by Tenant's chief financial
officer.
4. Use. Landlord and Tenant expressly agree that the Leased
Premises shall
be used or occupied by Tenant for general office and
administrative purposes,
and for no other purposes whatsoever.
-5-
<PAGE>
5. Basic Annual Rent. Subject to adjustment pursuant to Section
l(c)
above, Tenant shall pay to Landlord during the Lease Term "Basic
Annual Rent" in
an amount equal to the per square foot amount set forth below,
multiplied by the
Rentable Area of the Leased Premises:
<TABLE>
<CAPTION>
LEASE BASIC ANNUAL MONTHLY
YEAR RENT INSTALLMENT PER SQUARE FOOT
----- ------------- ----------- ---------------
<S> <C> <C> <C>
1 $ 267,607.20 $ 22,300.60 $11.90
2 $ 274,353.60 $ 22,862.80 $12.20
3 $ 281,324.88 $ 23,443.74 $12.51
4 $ 288,296.16 $ 24,024.68 $12.82
5 $ 295,492.32 $ 24,624.36 $13.14
6 $ 302,913.36 $ 25,242.78 $13.47
7 $ 310,559.28 $ 25,879.94 $13.81
8 $ 318,430.08 $ 26,535.84 $14.16
9 $ 326,300.88 $ 27,191.74 $14.51
10 $ 334,396.56 $ 27,866.38 $14.87
</TABLE>
Basic Annual Rent shall be payable in equal monthly installments
as set forth
above, without any deductions or set-offs, and without demand,
in advance on the
first day of each and every month for which payment is due, and
the first such
monthly installment shall be due and payable simultaneously with
Tenant's
execution of this Lease. If the Lease Term shall commence on a
day other than
the first day of a month, then the Basic Annual Rent for the
fractional part of
a month at the beginning of the term shall be pro-rated
accordingly.
5.1. Definitions. For purposes of this Lease, the following
meanings
or definitions shall apply:
(a) "Rentable Area of the Building" shall, for all purposes
of
this Lease, be deemed to be 54,692 square feet. The "Rentable
Area of the
Project" shall be deemed to be 54,692 square feet until such
time as "Building
B", to be located at 4230 Forbes Blvd., is substantially
completed. Upon
substantial completion of Building B, the Rentable Area of the
Project will
thereafter comprise both buildings on the Real Property with
which Tenant shares
certain expenses, which shall be deemed to be 110,449 square
feet. Landlord's
architect will certify to Landlord and Tenant that, if built in
accordance with
the drawings of the Project previously provided to Tenant, the
rentable area of
the finished Project will be 110,449 square feet.
(b) "Rentable Area of the Leased Premises" is hereby deemed
to
be 22,488 square feet, which amount shall be certified to
Landlord and Tenant by
Landlord's architect after the Plans and Specifications are
finalized. The
Rentable Area of the Leased Premises has been determined in
accordance with the
"industrial" standard (i.e., measured to the outside face of
exterior walls and
the middle of interior demising walls). Tenant's pro rata
portion of those
expenses applicable to the Project ("Tenant's Portion") shall be
a fraction, the
numerator of which shall be the Rentable Area of the Leased
Premises, and the
denominator of which shall be the Rentable Area of the Project,
as it exists
from time to time. As of the Commencement Date, Tenant's Portion
shall be
forty-one and twelve hundredths percent (41.12%).
Notwithstanding the foregoing
figures and expectations, Landlord reserves the right to change
the total number
and square footage of the buildings comprising the Project prior
to completion
of construction thereof, in which event the number and
percentages set forth
herein will be revised by Landlord accordingly.
(c) The term "Common Area Expenses" shall mean all
reasonable
and customary expenses paid or incurred by
-6-
<PAGE>
Landlord in connection with Landlord's management of the Real
Property and the
management, maintenance, operation and repair of the common
areas of the Real
Property, including, but not limited to, (i) keeping the
driveways, parking
areas, sidewalks and steps free and clear of ice, snow and
debris; (ii)
maintaining all grass and landscaping on the Real Property;
(iii) maintaining
the common areas of the buildings of the Real Property
(including the Building),
including the utility rooms and security systems, if any, and
repair of normal
wear and tear of the roof and caulking; (iv) trash removal from
dumpsters on the
Real Property, if any and pick-up for paper recycling; (v)
monitoring, repairing
and payment of all common utilities, including water, sewerage,
unmetered or
metered sprinkler and exterior electrical utilities on the Real
Property; (vi)
management fees not to exceed those customarily charged for
buildings comparable
to the Building in the general vicinity of the Project; and
(vii) the cost of
maintaining Insurance, as defined below. "Common Area Expenses"
does not include
(1) the costs of work Landlord performs for, and/or at the
expense of, any
particular tenant (including Tenant), which costs will be billed
directly to
Tenant or such other tenant, as the case may be, (2) any
expenses incurred in
connection with capital improvements, other than as expressly
permitted herein,
(3) costs of repairs and replacements occasioned by casualty or
condemnation and
payable by insurance proceeds, (4) any cost that is reimbursed
to Landlord by
insurance carriers, or is separately charged to and payable by
tenants, (5) all
ownership costs not allocable to actual management, repair,
maintenance or
operation of the Building, including, without limitation,
leasing commissions,
advertising and other direct expenses or procuring tenants,
including lease
concessions, (6) depreciation of the Building and other
depreciable property
within the Real Property, (7) interest on and amortization of
any debt or any
costs of financing, refinancing, constructing or purchasing the
Leased Premises,
(8) interest and penalties for late payment of Taxes provided
Tenant has
deposited with Landlord the amount necessary to pay such Taxes
in accordance
with this Lease and any fines or penalties incurred by Landlord
due to violation
by Landlord of any rule of a governmental authority other than
those arising
from tenant's use or occupancy, (9) wages, salaries and benefits
of employees
over the rank of property manager except to the extent those
employees are
directly involved in the day to day management and operation of
the Building,
(10) costs of correcting initial construction defects for work
performed by
Landlord or any affiliate of Landlord, (11) costs of repairs
caused by
Landlord's gross negligence, (12) any rent under any ground or
underlying lease,
(13) costs incurred due to Landlord's negligence or willful
misconduct or due to
violation by Landlord of the terms or conditions of this Lease
on its part to be
performed, and (14) general overhead of Landlord except as set
forth in (9)
above. Notwithstanding the foregoing, Landlord will be allowed
reasonably to
allocate the costs of trash removal based on actual use of such
service.
(d) "Taxes" shall mean any present or future federal, state,
municipal, local and/or any other taxes, assessments, levies,
benefit charges,
and/or other governmental and/or private impositions (including
business park
charges and dues), levied, assessed and/or agreed to be imposed
upon the Real
Property of which the Leased Premises are a part or any part or
parts of said
Real Property, or upon the rent due and payable hereunder,
whether or not now
customary or within the contemplation of the parties hereto and
regardless of
whether the same shall be extraordinary or ordinary, general or
special,
foreseen or unforeseen, or similar or dissimilar to any of the
foregoing but
shall not include any inheritance, estate, succession, income,
profits or
franchise tax, provided, however, if at any time during the
Lease Term or any
extension thereof the method of taxation prevailing at the
commencement of the
Term
-7-
<PAGE>
shall be altered or eliminated so as to cause the whole or any
part of the items
defined as Taxes above to be replaced by a levy, assessment or
imposition,
wholly or partly as a capital levy, or otherwise, on the rents
or income
(provided the tax on such income is not a tax levied on taxable
income
generally) received from the buildings, wholly or partly in
place of an
imposition on or as a substitute for, or an increase of, taxes
in the nature of
real estate taxes issued against the Real Property, then the
charge to Landlord
resulting from such altered or replacement method of taxation
shall be deemed to
be within the definition of "Taxes". All reasonable expenses
incurred by
Landlord (including attorneys' fees and costs) in contesting any
increase in
Taxes or any increase in the assessment of the Real Property
shall be included
as an item of Taxes for the purpose of computing additional rent
due hereunder.
Notwithstanding the foregoing, until Building B is constructed
by Landlord,
Parcel L shall be excluded from the Real Property for purposes
of determining
Taxes hereunder.
(e) "Real Property" shall mean the Lots, the two buildings
on
the Lots, and all fixtures, equipment and other improvements in
or upon said
Lots, and shall include the sidewalks, areaways, parking areas,
loading areas,
gardens and lawns.
(f) "Insurance" shall mean all insurance of whatsoever
nature
kept or caused to be kept by Landlord out of or in connection
with its ownership
of the Real Property, the buildings, equipment, fixtures and
other improvements
installed and/or owned by Landlord and used in connection with
the buildings
and/or the Real Property and/or all alterations, rebuildings,
replacements and
additions thereto, including, but not limited to, insurance
insuring the same
against loss or damage by, or abatement of rental income
resulting from fire,
and other such hazards, casualties and contingencies (including,
but not limited
to, war risk insurance, if available), liability and indemnity
insurance.
(g) "Lots" shall mean Parcels J, K, and L in Block A of the
Hanson-Palmer Business Park, Prince George's County, Maryland,
upon which
Buildings A and B are or will be situated. Building A will be
located on Parcel
J and a portion of Parcel K, and Building B will be located on
Parcel L and a
portion of Parcel K.
(h) The term "Operating Year" shall mean: (i) when used in
context with Common Area Expenses, such applicable fiscal year
as Landlord may
adopt from time to time during the Lease Term provided same is
consistent with
the fiscal year Landlord uses for all other tenants in the
Project and is not
changed more than one (1) time in any calendar year, and (ii)
when used in
context with Taxes, each respective tax year (i.e., the fiscal
year beginning
July 1) during the Lease Term, or such other fiscal year as the
applicable
authorities may select.
5.2. Rent Adjustment. Tenant agrees to pay to Landlord monthly,
as
additional rent, with and at the same time as the payments of
Basic Annual Rent,
the following amounts:
(a) One-twelfth of Tenant's estimated Portion of Common Area
Expenses, which estimated Portion shall be calculated on the
basis of One Dollar
and Seventy Cents ($1.70) per square foot, resulting in a
monthly installment of
Three Thousand One Hundred Eighty-Five Dollars and Eighty Cents
($3,185.80); and
(b) One-twelfth of Tenant's estimated Portion of Taxes,
which
estimated Portion shall be calculated on
-8-
<PAGE>
the basis of Eighty Cents ($.80) per square foot, resulting in a
monthly
installment of One Thousand Four Hundred Ninety-Nine Dollars and
Twenty Cents
($1,499.20).
At any time during a lease year, but not more than one (1) time
in
such year, Landlord may revise its estimate of Tenant's Portion
of Common Area
Expenses and Taxes (collectively, the "Expenses") as set forth
above and adjust
Tenant's monthly installments to reflect the revised estimates.
Landlord will
give Tenant prior written notice of the revised estimates and
the amount by
which Tenant's monthly installments will be adjusted, and Tenant
will pay the
adjusted installments with each payment of the rent, beginning
with the first
payment of the Basic Annual Rent to come due after Tenant's
receipt of such
notice.
Landlord will deliver to Tenant, within one hundred twenty
(120)
days (or such longer time as is reasonable under the
circumstances) after the
end of each applicable Operating Year for the Expenses, a
statement for such
Operating year (the "Statement"), showing Tenant's Portion of
such Expenses.
Tenant will pay Landlord within thirty (30) days of the receipt
of the
Statement, such amounts as may be necessary to adjust Tenant's
estimated
payments for such preceding Operating Year so that such payments
will equal
Tenant's Portion of the actual Expenses for such Operating Year.
If the actual
amount of Tenant's Portion of such Expenses is less than the
amounts paid by
Tenant as installments of its applicable portion of such
Expenses, then Landlord
will credit Tenant's account by the amount of the excess or, if
at the end of
the Lease Term, promptly refund to Tenant the amount of the
excess. Unless
Tenant gives Landlord written notice of its exception to any
Statement for such
preceding Operating Year within thirty (30) days after delivery
thereof, the
same shall be conclusive and binding on Tenant; provided,
however, that in the
event that Tenant shall give Landlord written notice of its
exception to such
Statement within such thirty (30) day period, Tenant shall
nevertheless be
obligated to pay the additional rent.
At Tenant's sole cost and expense and without unreasonable
interference with Landlord's business operations or waiving
Tenant's obligation
to pay the amount shown on such Statement, Tenant shall have the
right, upon at
least ten (10) business days' prior written notice given to
Landlord within
sixty (60) days after its receipt of a Statement, to examine the
books, records
and other papers of Landlord used to compute the Expenses
reflected on such
Statement (the "Audit"). Any overpayment by Tenant reflected by
the Audit shall
be promptly corrected. Any such examination shall be conducted
only during
Landlord's regular business hours, and all information examined
shall be kept by
Tenant in the strictest confidence.
Failure of Landlord to provide any Statement within the time
prescribed will not relieve Tenant of its obligations under this
Section 5.2.
5.3. Tax Adjustment. Tenant acknowledges that Landlord must pay
the
Taxes for an entire tax year (i.e., July 1 - June 30) in
advance. Therefore,
within thirty (30) days after the Commencement Date, Tenant
shall pay to
Landlord a sum equal to Tenant's Portion of the pre-paid Taxes
paid by Landlord
for the tax year in which the Commencement Date occurs (the
"Commencement Tax
Year"), pro-rated from the Commencement Date to the end of the
Commencement Tax
Year. During the tax year immediately following the Commencement
Tax Year (the
"Second Tax Year"), Tenant shall reimburse Landlord, upon
receipt of an invoice
therefor, for Tenant's Portion of any pre-paid Taxes paid by
Landlord with
respect to the Second Tax Year, after subtracting therefrom the
amount of any
estimated payments made
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<PAGE>
by Tenant pursuant to Section 5.2(b) above with respect to such
Second fax Year.
Thereafter, Tenant's estimated monthly amount of Tenant's
Portion of Taxes as
set forth in Section 5.2(b) above shall be adjusted to reflect
its Portion of
such actual Taxes, which monthly amounts shall be applied to the
tax years
immediately following the Second Tax Year and succeeding tax
years, subject to
further adjustment. Following termination of the Lease Term by
passage of time
or for any reason other than Tenant's default of this Lease (the
"Termination
Date"), Tenant shall be reimbursed by Landlord to the extent of
any Portion of
Taxes which it has pre-paid as of such Termination Date for the
period beyond
such Termination Date.
5.4. Summary of Payments. The following is a list of the
various
payments and installments of Basic Annual Rent and additional
rent pursuant to
this Section 5 as of the Commencement Date. Some of these
amounts will change
during the Lease Term.
<TABLE>
<CAPTION>
Monthly
Installments P.S.F.
------------ ------
<S> <C> <C>
Basic Annual Rent $22,300.60 $11.90
(1st lease year)
Common Area Expenses $ 3,185.80 $ 1.70
(estimate)
Taxes (estimate) $ 1,499.20 $ .80
---------- ------
TOTAL $26,985.60 $14.40
========== ======
</TABLE>
5.5. Utilities.
(a) Notwithstanding that certain utilities are commonly
metered on the Real Property and the costs of such utilities are
included within
the Common Area Expenses set forth above, if Tenant's use of
water or any other
commonly metered utility is disproportionate to that of other
tenants in the
Building or Project, Landlord or Tenant shall have the right, at
Tenant's sole
cost and expense, to have a meter installed upon the Leased
Premises and
thereafter to pay to Landlord or the applicable utility provider
all charges
respecting the Leased Premises based upon readings of said
meter. In such event,
those costs which are separately metered shall be excluded from
Tenant's Portion
of Common Area Expenses.
(b) Except to the extent included in Common Area Expenses,
Tenant shall pay on a timely basis to the appropriate utility or
other supplier,
all charges for gas, steam, electricity, light, heat, power,
telephone and all
other utility and communication services, used, rendered and/or
supplied upon or
in connection with the Leased Premises.
5.6. Payments. All payments or installments of any rent
hereunder,
other than Basic Annual Rent, and all sums whatsoever due under
this Lease
(including attorneys' fees) shall he deemed additional rent and
shall be paid to
Landlord at the address designated for notice to Landlord
herein, or as
otherwise designated by Landlord, If any rent or additional rent
is not paid
within five days of when due, Tenant shall pay a late charge
equal to five
percent (5%) of the arrearage. In addition, the arrearage shall
bear interest
calculated at the rate of eighteen percent (18%) per annum for
each day such sum
is in arrears in consideration of Landlord's additional expense
caused by such
failure to pay. Such late charges shall be payable
simultaneously with the
arrearage payment, without demand. Time is of the essence with
respect to
Tenant's monetary obligations in this Lease. Unless otherwise
stated, any such
additional rent shall be due within thirty (30) days after the
Landlord has
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<PAGE>
submitted a written statement to Tenant showing the amount due,
and Tenant's
obligation to pay any such additional rent which applies to the
period prior to
the termination of the Lease shall survive the termination of
this Lease.
6. Requirements of Law. Tenant shall, at the sole cost and
expense of
Tenant, observe and comply with all laws, requirements, rules,
orders,
ordinances and regulations applicable to the Leased Premises,
the Real Property
or the Building. Tenant shall comply with Landlord's rules and
regulations for
the Project, a copy of which is attached hereto as Exhibit D, as
the same may be
amended, modified or supplemented from time to time by Landlord,
provided same
are generally enforced uniformly and non-discriminatorily and do
not increase
Tenant's monetary obligations under the Lease.
7. Tenant's Improvements. Tenant shall not make any
alterations,
decorations, installations, additions and/or improvements to the
Leased
Premises, including, but not limited to, the installation of any
fixtures,
amenities, equipment, appliances or other apparatus
(collectively, the "Work"),
without Landlord's prior written consent which shall not be
unreasonably
withheld, conditioned or delayed, and then only by contractors
or mechanics
approved by Landlord. Notwithstanding the foregoing, Tenant
shall have the
right, without Landlord's consent, to make non-structural
repairs to the Leased
Premises which do not affect the roof, mechanical, electrical or
plumbing
systems of the Building, and which do not, in any lease year,
cost more than Ten
Thousand Dollars ($10,000) in the aggregate. All such Work shall
be done at
Tenant's sole cost and expense and at such times and in such
manner as Landlord
may from time to time reasonably designate. All such Work shall
be done under
the general supervision of Landlord to assure standard quality
improvements on
the Real Property for which Landlord shall be paid a reasonable
supervisory fee,
not to exceed seven percent (7%) of the cost of the Work. All
such Work done by
either of the parties hereto upon the Leased Premises, except
movable furniture,
equipment and trade fixtures put in at the expense of Tenant,
shall be the
property of Landlord and shall remain upon and be surrendered
with the Leased
Premises at the termination of this Lease without molestation or
injury;
provided, however, that Landlord may elect to require Tenant to
remove all or
any part of said work at the expiration of this Lease, in which
event such
removal shall be done at Tenant's sole cost and expense. At
Tenant's request,
Landlord will inform Tenant at the time it grants its consent to
any proposed
Work, of whether the Work must be removed by Tenant at the
expiration of the
Lease Term. Tenant shall, at its sole cost and expense, repair
any damage to the
Leased Premises and/or the Building caused by such removal or by
the removal of
its personalty.
8. Condition of Premises. (a) Landlord hereby agrees to and will
assign
to Tenant at the termination of Landlord's Warranty Period (as
defined below),
to the extent they are assignable, any and all written
warranties and guarantees
from Landlord's contractors, subcontractors and suppliers of any
materials and
labor to the Leased Premises for that portion, if any, of the
Lease Term that
such warranties and guarantees are in effect. With regard to any
new
construction performed by Landlord for the benefit of Tenant
pursuant to Section
1(b) of this Lease, Landlord hereby warrants ("Landlord's
Warranty") to Tenant
that Landlord will be responsible for a period ("Landlord's
Warranty Period") of
one (1) year from the Commencement Date to repair or to have
repaired all
defects in such construction, to the extent such defects are not
caused by the
negligence of Tenant or any of its agents, servants, employees
or contractors
(in which event such defects will be repaired at Tenant's sole
cost). To the
extent that Landlord is obligated to make repairs pursuant
to
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<PAGE>
Landlord's Warranty, Tenant will be relieved during Landlord's
Warranty Period
of the obligations imposed upon it pursuant to this Lease to
make or pay for
such repairs to the Leased Premises. Tenant agrees to and will
give Landlord
prompt notice of the need for any such repairs.
(b) Subject to Landlord's Warranty, Tenant shall at all times
during
the Lease Term take good care of and keep the Leased Premises
and the
improvements, fixtures, equipment and appurtenances therein and
thereto
(including, but not limited to, interior and exterior windows,
interior and
exterior doors, including locks and hardware, pipes, plumbing,
water and sewer
connections within or exclusively serving the Leased Premises,
and light
fixtures) in good order and condition and, at Tenant's sole cost
and expense,
shall make all necessary repairs thereto, which repairs shall be
in quality and
class at least equal to the original work. Tenant shall not
commit or suffer any
waste of the Leased Premises and will assume responsibility for
all maintenance
and repair, regardless of the nature, pertaining to the heating
and/or air
conditioning equipment. Tenant will secure and maintain during
the Lease Term, a
full service contract on such mechanical equipment with a
company reasonably
acceptable to Landlord and providing at least the services
outlined on the
attached Exhibit E. Tenant must deliver a copy of such service
contract to
Landlord upon the commencement of the term of this Lease and
whenever a change
of company or a change in such contract occurs. At the
expiration of the Lease
Term, Tenant must also deliver to Landlord a certification from
the company
regularly maintaining the mechanical systems in the Leased
Premises, which
certification must be based on an inspection conducted within
thirty (30) days
of the termination date of the Lease and which must state that
all such systems
are in good operating order and be in substantially the form
attached as Exhibit
F. Landlord or Landlord's representatives may enter the Leased
Premises at any
reasonable time upon at least twenty-four (24) hours' prior
notice which may be
verbal to verify Tenant's compliance with this Lease. In the
event Tenant fails
to maintain the mechanical equipment as provided in this Section
8, Tenant will
be liable to Landlord for any costs incurred by Landlord in
maintaining or
repairing such mechanical equipment.
(c) Landlord shall maintain in good order, condition and repair,
the
exterior walls (excluding windows), downspouts, foundation and
the roof, along
with the common areas of the Project, the cost of which shall be
included in the
Common Area Expenses, so long as such maintenance is not
required as a result of
any acts of Tenant, or Tenant's agents, employees or visitors,
in which event
the same shall be repaired by Landlord at the sole cost and
expense of Tenant
(to the extent not covered by insurance).
(d) At the expiration of the Lease Term, or at the sooner
termination of this Lease as herein provided, Tenant shall
deliver up the Leased
Premises in the same good order and condition, reasonable wear
and tear and
damage from casualty or condemnation excepted, as at the
beginning of the
tenancy, broom clean and (subject to the provisions of the
preceding Section
hereof) Tenant shall remove all of its property and/or property
maintained
and/or stored for or on the account of others therefrom prior to
such
termination. Any items of Tenant's personalty remaining in the
Leased Premises
after the termination of the Lease shall be deemed abandoned by
Tenant and
become the sole property of Landlord. Notwithstanding the
foregoing, any costs
incurred by Landlord in storing and/or disposing of such
abandoned property
shall remain the sole obligation of Tenant, which obligation
shall survive the
termination of this Lease.
-12-
<PAGE>
9. Conduct on Premises. Tenant shall not do, or permit anything
to be done
in the Leased Premises, or bring or keep anything therein which
will, in any way
invalidate or conflict with the fire insurance policies on the
Real Property;
obstruct or interfere with the rights of Landlord or other
tenants; or interfere
with the good order of the Building. Tenant agrees that any
increase in fire or
other insurance premiums on the Real Property and/or the
contents thereof to the
extent caused by the use or occupancy of Tenant shall, as they
occur or accrue,
be added to the rent heretofore reserved and b
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