EXHIBIT 10.18
-------------
DEED OF LEASE FOR OFFICE SPACE
BETWEEN
FP STERLING PARK II, LLC,
A VIRGINIA LIMITED LIABILITY COMPANY
AS LANDLORD
AND
SUTRON CORPORATION,
A VIRGINIA CORPORATION
AS TENANT
<PAGE>
TABLE OF CONTENTS
SECTION 1. DEFINED TERMS AND DEFINITIONS
1.01 "Additional Rent"
1.02 "Base Rent"
1.03 "Building"
1.04 "Common Areas"
1.05 "Exhibits"
1.06 "Initial Improvements"
1.07 "Landlord's Address for Notice"
1.08 "Landlord's Agents"
1.09 "Lease Year"
1.10 "Operating Expenses"
1.11 "Permitted Use"
1.12 "Premises"
1.13 "Project"
1.14 "Property"
1.15 "Real Estate Taxes"
1.16 "Rent"
1.17 "Rent Commencement Date"
1.18 Intentionally Omitted
1.19 Intentionally Omitted
1.20 "Tenant's Address for Notice"
1.21 "Tenant's Agents"
1.22 "Tenant's Share"
1.23 "Tenant's Trade Name"
1.24 "Term"
SECTION 2. GRANT OF PREMISES
2.01 Tenant's Possession and Use of Premises
2.02 Surrender of Premises and Holdover
2.03 Landlord to have access to the Premises
2.04 Delivery of Premises
2.05 Intentionally Omitted
2.06 Tenant Access
2.07 Renewal Options
2.08 Expansion Rights
SECTION 3. RENT
3.01 Payment of Base Rent
3.02 Payment of Janitorial Services
3.03 Payment of Operating Expenses
3.04 Utilities
3.05 Payment of Real Estate Taxes
3.06 Intentionally Omitted
3.07 Partial Occupancy
3.08 Payments Generally
3.09 Audit Rights
ii
<PAGE>
SECTION 4. MAINTENANCE AND REPAIRS
4.01 Tenant Repairs
4.02 Landlord Repairs
4.03 Initial Improvements
4.04 Tenant Alterations
4.05 Restoration after Damage by Casualty
4.06 Termination after Damage by Casualty
4.07 Condemnation
4.08 ADA Compliance
4.09 Mold
4.10 Signs
SECTION 5. INSURANCE
5.01 Tenant's Insurance
5.02 Waiver of Subrogation
5.03 Indemnification by Tenant/Landlord
5.04 Landlord's Liability Excluded
5.05 Landlord Exculpation
5.06 Landlord's Insurance
SECTION 6. HAZARDOUS MATERIALS
6.01 Hazardous Materials Defined
6.02 Environmental Compliance
6.03 Hazardous Materials Indemnification
6.04 Landlord Representation
SECTION 7. SUBLETTING AND ASSIGNING
7.01 Transfer of Premises
7.02 Transfer Defined
7.03 Subordination/Estoppel Certificates
SECTION 8. DEFAULT
8.01 Default
8.02 Consequences of Default
8.03 Self-Help
8.04 No Implied Waivers
8.05 Waiver of Jury Trial
8.06 Landlord Default; Tenant Remedies
SECTION 9. MISCELLANEOUS
9.01 Notices
9.02 Successors and Assigns and Landlord's Liability
9.03 No Offer
9.04 Attorney's Fees
9.05 Interpretation
9.06 Amendments
9.07 Brokerage
9.08 Entire Agreement
9.09 Force Majeure
9.10 Authority
9.11 Mortgagees' Approval
9.12 Parking
9.13 No Liens
iii
<PAGE>
9.14 Financial Statements
9.15 Net Lease
9.16 Reservations by Landlord
9.17 Roof Rights
9.18 Monitoring Pond
9.19 Satellite Farm
9.20 Emergency Generator
EXHIBIT "A"
PREMISES
EXHIBIT "B"
IMPROVEMENTS
EXHIBIT "B-1" TRUCK COURT AND
CURB ISLANDS SPACE PLAN
EXHIBIT "C"
DECLARATION OF LEASE COMMENCEMENT
EXHIBIT "D" RULES
AND REGULATIONS
EXHIBIT "E"
MONITORING POND
EXHIBIT "F"
SATELLITE FARM
iv
<PAGE>
DEED OF LEASE
DATED as of the _____ day of ______________, 2008
LANDLORD:
FP Sterling Park II, LLC,
a Virginia limited liability company
TENANT:
Sutron Corporation,
a Virginia corporation
In consideration
of the mutual covenants hereinafter set forth, and of
other good and valuable consideration, Landlord and Tenant do
hereby enter into
this Deed of Lease and do agree as follows:
1.00 DEFINED TERMS AND DEFINITIONS
1.01 "ADDITIONAL
RENT" means any and all amounts required to be paid by
Tenant hereunder, other than Base Rent, and any and all reasonable
charges or
expenses incurred by Landlord on behalf of Tenant under the terms
of this Lease.
Additional Rent shall be payable (except as otherwise expressly set
forth
herein) in the same manner and upon the same terms and conditions
as the Base
Rent reserved hereunder. Any failure on the part of Tenant to pay
such
Additional Rent when and as the same shall become due shall entitle
Landlord to
the remedies available to it for nonpayment of Base Rent.
1.02 "BASE RENT"
means an annual (Triple Net) amount (exclusive of
Tenant's Share of Operating Expenses and Real Estate Taxes) payable
by Tenant
for the Premises in equal monthly installments in accordance with
the following
schedule:
--------------------------------------------------------------------------
Rentable Square Annual
Base Monthly Base
Time
Period
Foot
Rate
Rent
Rent
--------------------------------------------------------------------------
CD -
5/31/09*
$0
$0
$0
--------------------------------------------------------------------------
6/1/09 -
5/31/10
$13.00
$361,621.00 $30,135.08
--------------------------------------------------------------------------
6/1/10 -
5/31/11
$13.33
$370,800.61 $30,900.05
--------------------------------------------------------------------------
6/1/11 -
5/31/12
$13.66
$379,980.22
$31,665.02
--------------------------------------------------------------------------
6/1/12 -
5/31/13
$14.00
$389,438.00 $32,453.17
--------------------------------------------------------------------------
6/1/13 -
5/31/14
$14.35
$399,173.95 $33,264.50
--------------------------------------------------------------------------
6/1/14 -
5/31/15
$14.71
$409,188.07 $34,099.01
--------------------------------------------------------------------------
6/1/15 -
5/31/16
$15.08
$419,480.36 $34,956.70
--------------------------------------------------------------------------
6/1/16 -
5/31/17
$15.46
$430,050.82 $35,837.57
--------------------------------------------------------------------------
6/1/17 -
5/31/18
$15.85
$440,899.45 $36,741.62
--------------------------------------------------------------------------
6/1/18 -
5/31/19
$16.25
$452,026.25 $37,668.85
--------------------------------------------------------------------------
* Notwithstanding any provision of the Lease to the contrary,
Tenant's
obligation to pay Base Rent for the Premises shall not commence
until June 1,
2009, the "Rent Commencement Date."
1.03 "BUILDING"
means the building known as 22400 Davis Drive,
Sterling, Virginia 20164. The Building contains a total of 57,521
rentable
square feet of space.
1
<PAGE>
1.04 "COMMON
AREAS" means those areas within the Property not reserved
to individual occupants of premises, but from time to time
available and
designated by Landlord to benefit or serve the Building. Without
limitation,
Common Areas may include roofs, foundations, exterior walls, sign
canopies,
parking and landscaped areas, sidewalks, access roads, general
signs, machinery,
equipment, and the mechanical, electrical and other systems and
installations
serving the Property as a whole (whether or not located within the
Building), as
same may be expanded, reduced or otherwise altered from time to
time in
Landlord's sole but reasonable discretion. Landlord may, in its
sole but
reasonable discretion, from time to time change the location,
layout and
arrangement of the Common Areas and/or reduce the size of the
Common Areas by
erecting thereon store buildings or other structures or
improvements of any
kind, provided that if Landlord erects another tenant-occupied
building on the
Property Landlord will not increase Tenant's Share of Operating
Expenses or Real
Estate Taxes as a result of the addition of such new building to
the Project.
1.05 "EXHIBITS"
means the following exhibits which are attached to this
Lease and made a part hereof, and any other exhibit which may in
the future be
attached hereto by the written consent of the parties:
Exhibit "A" -
Premises
Exhibit "B" -
Improvements
Exhibit "B-1" - Truck
Court and Curb Islands Space Plan
Exhibit "C" -
Declaration of Lease Commencement
Exhibit "D" -
Rules and Regulations
Exhibit "E" -
Monitoring Pond
Exhibit "F" -
Satellite Farm
1.06 "INITIAL
IMPROVEMENTS" means the improvements to be made to the
Premises pursuant to Section 4.03, Exhibit "B" and "Exhibit B-1"
hereto.
1.07 "LANDLORD'S
ADDRESS FOR NOTICE" means FP Sterling Park I, LLC, c/o
First Potomac Management LLC, Attn.: Tim Zulick, 7600 Wisconsin
Avenue, 11th
Floor, Bethesda, Maryland 20814.
1.08 "LANDLORD'S
AGENTS" includes any asset manager, agent, managing
agent, affiliate, contractor, employee, director, partner, officer
or servant of
Landlord, or any corporate entity affiliated with Landlord or third
party
operator and owner of the Building or the Property.
1.09 The first
"LEASE YEAR" will begin on the Commencement Date and end
on the last day of the twelfth (12th) full calendar month following
the Rent
Commencement Date (hereinafter defined). The second Lease Year will
begin on the
first day of the thirteenth (13th) full calendar month following
the Rent
Commencement Date and extend for a period of twelve (12) full
calendar months.
Each subsequent Lease Year will begin on the annual anniversary of
the first day
of the second (2nd) Lease Year and extend for twelve (12) full
calendar months.
1.10 "OPERATING
EXPENSES" means, without limitation, the sum of all
expenses, costs and disbursements of every kind and nature that
Landlord pays or
becomes obligated to pay in connection with owning, operating,
managing,
maintaining, insuring, repairing, policing, and securing the
Building, the
Property, the parking facilities, and the land upon which the
Building and
parking facilities are situated (the "Land"), including but not
limited to: all
management fees (in an amount not to exceed five percent (5%) of
the Project's
Gross Receipts) and office expenses related to the Building; all
costs and
expenses of operating, maintaining, managing,
2
<PAGE>
repairing, lighting, signing, cleaning, painting, striping,
policing and
securing the Common Areas (including the cost of uniforms,
equipment and
employment taxes); alarm and life safety systems; all applicable
sales and use
taxes; expenses incurred for heat, cooling and other utilities; the
cost of
insuring the Building and the Property (including, but not limited
to, liability
insurance for personal injury, death and property damage, insurance
against
fire, all-risk coverage including earthquake and flood, theft or
other
casualties, worker's compensation insurance or similar insurance
covering
personnel, fidelity bonds for personnel, insurance against
liability for
defamation and claims of false arrest occurring on or about the
Property,
structural insurance, plate glass insurance and rent-loss
insurance); the cost
of cleaning all exterior glass; removal of water, snow, ice, trash
and debris;
regulation of traffic; the cost of landscaping; the cost of
janitorial and
cleaning service, trash collection and recycling services, pest
control;
concierge, lobby, or security service (if any); the pro-rata
salaries, wages and
other personnel costs of engineers, superintendents, watchpersons,
and all other
employees for services provided directly to the Building, including
any sales
tax imposed upon their service; charges under maintenance and
service contracts
for elevators, chillers, boilers and controls; window cleaning;
building and
grounds maintenance; parking lot maintenance; management fees;
permits and
licenses; all maintenance, replacement and repair expenses (unless
excluded
below) and supplies including replacement, maintenance and repair
of the roof,
awnings, paving, curbs, walkways, drainage, landscaping, pipes,
ducts, conduits
and similar items, signage for the Building or the Property, and
lighting
facilities; costs and expenses of planting, replanting and
replacing flowers,
shrubbery and planters; the cost of water services, if any,
furnished by
Landlord for the non-exclusive use of all tenants; costs (including
finance
charges) of improvements to the Building, equipment or capital
items that are
designed to increase safety, improve energy efficiency or
expand
telecommunications service; the cost of replacing existing
equipment or systems
or other costs incurred for the purpose of complying with the
directives of a
public or quasi public entity or authority; costs of complying with
all
governmental regulations, including, without limitation, the
disposal of
chlorofluorocarbons and compliance with Title III of the Americans
With
Disabilities Act of 1990 ("ADA") or any other Virginia statute
regarding
barriers; costs of independent contractors; owner's association
assessments;
Landlord's share of expenses under any declaration, covenant, or
other agreement
recorded among the land records of the county in which the Building
is located
and applicable to the Building or the Property; and all other costs
and expenses
properly incurred in the operation and maintenance of the Building
or the
Property, and the amortized portion of any capital expenditures or
improvements
and interest thereon. Landlord agrees that it will not build an
additional
tenant-occupied building that will be part of the same Project as
the Building.
Notwithstanding the foregoing, "Operating Expenses" shall not
include: (i)
payment of principal and interest on mortgages; (ii) ground rent or
other rental
payments made under any ground lease or underlying lease; (iii)
lease
commissions; (iv) any expenses for which Landlord actually
receives
reimbursement from insurance, condemnation awards, other tenants,
any warranty
or otherwise; (v) legal and other professional fees incurred in
connection with
disputes with tenants, other occupants, or prospective tenants,
(vi) costs
incurred in connection with the sale, financing, refinancing,
mortgaging,
selling or change of ownership of the Building, the Project, the
parking
facilities or the Property; (vii) depreciation of the Building or
equipment;
(viii) improvements or replacements to the Building, equipment or
other capital
items having a useful life (as determined in accordance with
commercially
reasonable industry standards) in excess of three (3) years from
the date of
installation (collectively "Capital Costs"), except those that are
intended to
reduce Operating Expenses, increase safety, improve energy
efficiency, expand
telecommunications services or comply with governmental regulations
or other
directives of a public or quasi-public entity or authority; (ix)
costs, fines,
interest, penalties, legal fees or costs of litigation incurred due
to the late
payments of taxes, utility bills and other costs incurred by
Landlord's failure
to make such payments when due; (x) salaries, wages, or other
compensation paid
to officers of Landlord; or (xi) any federal, state, or local
income tax, and
any
3
<PAGE>
franchise, gift, transfer, excise, or inheritance tax. The term
"Gross
Receipts," as used in this Section, shall mean and include the
gross rents and
all other payments from tenants under leases at the Project or from
licensees,
concessionaires, and other third parties with respect to the
occupancy or use of
the Project, including without limitation base rents, operating
expense
reimbursements, common area charges, percentage rental payments (if
applicable),
forfeited deposits, income from the sale of utility services,
business
interruption insurance proceeds, and all similar and dissimilar
amounts. The
term "Gross Receipts" shall specifically exclude, implied rent
during free rent
periods, security deposits (unless and until applied in accordance
with the
Leases), rents not collected, and insurance and condemnation
proceeds (other
than business interruption insurance proceeds).
1.11 "PERMITTED
USE" means general office, production, assembly,
research and development, testing, sales, marketing, warehouse and
distribution
use in connection with Tenant's business and to the extent such use
is permitted
by the laws and other governmental regulations applicable to the
Building and
the Premises, and no other use whatsoever. Landlord acknowledges
and agrees
that, to the best of its knowledge, all of the activities currently
conducted by
Tenant at its present location are Permitted Uses.
1.12 "PREMISES"
means the 27,817 rentable square foot area, known as
Suite #100, shown outlined on Exhibit "A", located within the
Building. The
rentable square footage leased by Tenant for all purposes under the
Lease shall
be measured and computed in accordance with the American National
Standard
Method of Measuring Area in Office Buildings of the Buildings
Owners and
Managers Association's International Standard Method of Measuring
Floor Area in
Office Buildings, (ANSI/BOMA Z65.1-1996). The parties stipulate
that the
rentable square footage of the Premises is that stated in this
Section 1.12.
1.13 "PROJECT"
means the Building, the Building's parking lot and any
other Common Areas serving the Building, together with all
improvements and
appurtenances.
1.14 "PROPERTY"
shall mean the land upon which the Project is located
and the Project.
1.15 "REAL ESTATE
TAXES" means all general and special real estate
taxes, special assessments, including Business, Professional, and
Occupational
License Tax ("BPOL"), any state or local business personal property
tax, and
other ad valorem taxes, levies and assessments (net of any refund)
paid upon or
in respect of the Building, the Property, or the rents therefrom;
real estate
rental, receipt or gross receipt tax or any other tax on Landlord
(excluding
Landlord's income taxes), and any metropolitan district water and
sewer charges
and other governmental charges which customarily are part of the
real estate tax
bill issued by the governmental authorities charged with such
responsibility;
and all taxes or other charges imposed in lieu of any such taxes,
including fees
of counsel and experts which are reasonably incurred by, or
reimbursable by,
Landlord in contesting any such taxes or in seeking any reduction
in the
assessed valuation of the Building or the Land or a judicial review
thereof. If
any such application or review results in a refund on account of
any prior
assessment, after payment of reasonable expenses incurred in
connection
therewith (whether by Landlord, Tenant or other tenants of the
Building), then,
if Tenant is not in default hereunder, Landlord will reimburse
Tenant Tenant's
proportionate share of the refund applicable to the Term.
Notwithstanding the
foregoing, "Real Estate Taxes" does not include: (i) any interest
or penalties
paid by or imposed upon Landlord as a result of Landlord's failure
to pay Real
Estate Taxes when due and payable, or (ii) any net income,
franchise or capital
gains tax, inheritance tax or estate tax imposed or constituting a
lien upon
Landlord or all or any part of the Property.
4
<PAGE>
1.16 "RENT" means
Base Rent and all Additional Rent, as the same may be
adjusted from time to time.
1.17 "RENT
COMMENCEMENT DATE" means June 1, 2009.
1.18 INTENTIONALLY
OMITTED.
1.19 INTENTIONALLY
OMITTED.
1.20 "TENANT'S
ADDRESS FOR NOTICE" means Sutron Corporation, 22400
Davis Drive, Suite #100, Sterling, Virginia 20164.
1.21 "TENANT'S
AGENTS" includes any agent, officer, employee, servant,
partner, independent contractor, licensee, invitee, or visitor of
Tenant.
1.22 "TENANT'S
SHARE" means forty-eight and thirty-six hundredths
(48.36%), being based on the ratio of the rentable area of the
Premises to the
rentable area of the Building (27,817/57,521).
1.23 "TENANT'S
TRADE NAME" means Sutron Corporation.
1.24 "TERM" means
the period commencing on the date that this Lease is
fully executed (the "Commencement Date") and expiring at 11:59 p.m.
on May 31,
2019 (the "Expiration Date"), unless earlier terminated or unless
extended
pursuant to the Lease, in which case the Term shall include all
extensions.
Landlord shall deliver possession of the Premises to Tenant in its
"as-is"
condition on the Commencement Date. If Landlord does not deliver
possession of
the Premises to Tenant on the Commencement Date then, unless such
delay is
caused by Tenant or Tenant's Agents, the Rent Commencement Date and
the
Expiration Date shall be postponed for a period of time equal to
the delay in
the delivery of possession of the Premises. If the Rent
Commencement Date is
postponed, as set forth in this Section 1.24, Landlord and Tenant
shall execute
a Declaration of Lease Commencement, substantially similar to the
form attached
hereto as Exhibit "C," after the Commencement Date, Rent
Commencement Date and
Expiration Date have been ascertained. If the Landlord has not
delivered the
Premises to Tenant in its "as is" condition by the ninetieth (90th)
day
following the Commencement Date, Tenant shall have the right, as
its sole
remedy, to terminate this Lease on thirty (30) days notice given
prior to the
date that the Premises is delivered to Tenant in its "as is"
condition, but if
the Premises are delivered within such thirty (30)-day period the
termination
notice will be null and void.
2.00 GRANT OF PREMISES
2.01 TENANT'S
POSSESSION AND USE OF PREMISES. Landlord leases the
Premises to Tenant, and Tenant leases the Premises from Landlord,
for the Term,
together with a nonexclusive, nontransferable license to use the
Common Areas.
Tenant shall have the right to use the agreed-upon portions of the
Property for
the construction, installation, use, maintenance, repair and
replacement of
Tenant's Rooftop Equipment, Monitoring Pond Equipment, Satellite
Farm Equipment
and Tenant's Emergency Generator (collectively "Tenant's
Equipment") upon the
terms and conditions set forth in Sections 9.17, 9.18, 9.19 and
9.20 of the
Lease, together with connecting underground power and communication
lines and
cables required to provide electrical power to Tenant's Equipment
or connect
Tenant's Equipment to the Premises, in the locations approved by
Landlord. All
of Tenant's Equipment shall be and remain the property of Tenant.
Upon
installation, construction, maintenance and removal of Tenant's
Equipment (it
being
5
<PAGE>
expressly agreed that Tenant shall be required to remove Tenant's
Equipment and
all underground power and communication lines and cables required
to provide
electrical power to Tenant's Equipment or connect Tenant's
Equipment to the
Premises prior to the expiration or earlier termination of this
Lease), Tenant
shall, at Tenant's expense, restore the Property, as nearly as
possible, to its
original condition. Tenant shall use the Premises for the Permitted
Use, under
Tenant's Trade Name, and for no other purpose and under no other
name unless
otherwise agreed to by Landlord. Tenant shall not use the Premises,
nor suffer
the Premises to be used, for any unlawful purpose or in any
unlawful manner or
in violation of any valid regulation of any governmental body, or
in any manner
to (i) create any nuisance or trespass; (ii) vitiate any insurance
carried by
Landlord or on Landlord's behalf; (iii) alter the classification or
increase the
rate of any insurance on the Building; or (iv) use the Building or
Property for
or cause any disruptive, harassing or outrageous conduct. Tenant
shall not
commit waste, overload the floors or structure of the Building, or
take any
action that would impair or alter parking spaces on the Property
unless
otherwise agreed to by Landlord. Tenant shall not keep Hazardous
Materials
within or about the Premises, nor shall Tenant use or allow the
Premises to be
used for any impermissible purposes pursuant to Section 6.02. In
the event of
any such waste, damage or manner of use by Tenant, immediately upon
written
notice to Tenant at the Premises, Tenant shall take such steps as
are reasonably
necessary to cease and repair the same, failing which Landlord
shall be entitled
to take such steps and Tenant shall pay to Landlord, upon demand,
Landlord's
actual reasonable cost thereof. In addition, if the use or
occupancy of the
Premises, the conduct of business in the Premises or any act or
omission of
Tenant in the Premises or the Property, causes or results in any
increase in
premiums for the insurance carried from time to time by Landlord
with respect to
the Property, Tenant shall pay to Landlord on demand Landlord's
cost of any
increase in premiums. Use of the Premises is subject to all
covenants,
conditions and restrictions of record. Tenant shall not permit any
objectionable
odors or noises to emanate from the Premises. Tenant hereby agrees
to defend,
indemnify and hold Landlord and the Property harmless from and
against any and
all reasonable costs, damages, expenses, and liabilities (including
reasonable
attorneys' fees) arising out of or related to any breach of this
Section 2.01.
Tenant shall, at its sole expense, promptly observe and comply with
all
statutes, laws, ordinances, rules, regulations, orders and
requirements of all
governmental, quasi-governmental or regulatory authorities
applicable to the
Premises and the conduct of its business, and with Landlord's rules
and
regulations (the "Rules and Regulations") promulgated from time to
time and
applicable to the Premises and the Common Areas. The current Rules
and
Regulations are attached hereto as Exhibit "D". Subject to this
Lease and so
long as Tenant is not in default beyond the applicable notice and
cure period
(if any) specified in this Lease, Tenant shall have the quiet
enjoyment of the
Premises without hindrance on the part of Landlord or anyone
claiming though
Landlord.
2.02 SURRENDER OF
PREMISES AND HOLDOVER. On the Expiration Date, Tenant
shall remove from the Premises all of its furniture, trade
fixtures, equipment
and other personal property, and such of any alterations installed
by or on
behalf of Tenant as Landlord may require Tenant to remove (it being
expressly
agreed that, with respect to items requiring Landlord's consent,
Landlord will
notify Tenant of such removal obligations at the time consent is
granted),
repair any damage caused by their installation or removal, and
surrender vacant
possession of the Premises, clean, broom-swept and in substantially
the same
condition as will exist after the construction of the Improvements
and/or any
alterations approved by Landlord for which removal is not required,
subject to
ordinary wear and tear and damage by casualty. Any personal
property of Tenant
not removed within ten (10) business days following the expiration
or earlier
termination of the Lease shall be deemed to have been abandoned by
Tenant and to
have become the property of Landlord, and may be retained or
disposed of by
Landlord, as Landlord shall desire, in accordance with applicable
law. Tenant
acknowledges that it is extremely important that Landlord have
substantial
advance notice of the date on which Tenant will vacate the
6
<PAGE>
Premises, both because Landlord will require an extensive period to
locate a
replacement tenant and because Landlord will plan its entire
leasing and
renovation program for the Building in reliance on the expiration
dates of this
Lease and other leases. Tenant also acknowledges that if Tenant
fails to
surrender the Premises at the expiration or earlier termination of
the Term, it
will be conclusively presumed that the value to Tenant of remaining
in
possession of the Premises, and the loss that will be suffered by
Landlord as a
result thereof, far exceed the amount of the Base Rent and
Additional Rent that
would have been payable had the Term continued during such holdover
period.
Therefore, unless the parties have agreed in writing to the
contrary prior to
the date of such expiration or termination, if Tenant shall not
immediately
surrender the Premises on the date of the expiration or earlier
termination of
the Term, the monthly rent payable by Tenant hereunder ("Holdover
Rent") shall
be increased in accordance with the following terms: (1) during the
thirty (30)
day period immediately following the expiration or termination of
the Term
hereof, Tenant shall pay Landlord monthly Holdover Rent in an
amount equal to
one hundred twenty-five percent (125%) of the Base Rent and
Additional Rent
payable hereunder during the month immediately preceding the
expiration or
termination date of this Lease; and (2) at all times after the
expiration of
such thirty (30) day period referenced in Section 2.02(1) above,
Tenant shall
pay Landlord monthly Holdover Rent in an amount equal to one
hundred fifty
percent (150%) of the Base Rent and Additional Rent payable
hereunder during the
month immediately preceding the expiration or termination date.
Such Holdover
Rent shall be computed by Landlord on a monthly basis and shall be
payable by
Tenant on the first day of such holdover period and the first day
of each
calendar month thereafter during such holdover period until the
Premises have
been vacated by Tenant. Landlord's acceptance of such Holdover Rent
from Tenant
shall not in any manner impair or adversely affect Landlord's other
rights and
remedies hereunder, including, but not limited to, Landlord's right
to evict
Tenant from the Premises, and Tenant shall be liable for all actual
losses
suffered by Landlord as a result of Tenant's failure to timely
vacate.
2.03 LANDLORD TO
HAVE ACCESS TO THE PREMISES. Landlord and Landlord's
Agents shall have the right, but not the obligation, to enter the
Premises from
time to time during all reasonable hours (or at any time and by
forcible means
in an emergency or when Tenant is unavailable during business
hours) to inspect
same, to make improvements or repairs to the Premises or the
Building, to show
the Premises to prospective purchasers, tenants, and lenders, or
for any other
reason, in Landlord's reasonable judgment. Except in the event of
an emergency
when no notice shall be required, Landlord shall give Tenant
reasonable prior
notice of any entry by Landlord or Landlord's Agents (which notice
may be oral
or written). Landlord shall have the right to place "For Sale"
signs, and during
the last twelve (12) months of the Term, "For Rent" signs, on the
Premises.
Landlord shall, during entry to the Premises, exercise reasonable
efforts to
minimize any interference with Tenant's business operations. No
entry by
Landlord pursuant to this Section 2.03 shall constitute a breach of
Landlord's
covenant for quiet enjoyment.
2.04 DELIVERY OF
PREMISES. Landlord shall deliver the Premises, and
Tenant shall accept same in its "as-is" condition, on the
Commencement Date
described in Section 1.24, or so soon thereafter as Landlord is
able to deliver
the same. Landlord represents to Tenant that the Premises and
Building is in
shell condition and has received the "Shell Building Final," and
passed
inspections for its Mechanical, Electric and Plumbing systems, by
the County and
by the fire inspector. If Landlord does not deliver possession of
the Premises
to Tenant by the Commencement Date, unless such delay is caused by
Tenant or
Tenant's Agents, the Rent Commencement Date and Expiration Date
shall be
postponed for a period of time equal to the delay in the delivery
of possession
of the Premises.
7
<PAGE>
2.05 INTENTIONALLY
OMITTED.
2.06 TENANT
ACCESS. Subject to Section 9.09, Tenant shall have access
to the Premises twenty-four (24) hours per day, seven (7) days per
week.
2.07 RENEWAL
OPTIONS. (a) Tenant has the conditional right to extend
the Term of the Lease for two (2) additional terms (the "First
Option Term" and
the "Second Option Term," respectively) of five (5) years each
beyond the
initial Term or the First Option Term (as the case may be) at the
Base Rent set
forth in paragraph (b) below and upon the same terms and conditions
set forth
herein (except that there will be no further privilege of
extension), provided
that the following conditions are met:
(i) Tenant notifies Landlord of its election to exercise the
right of renewal granted hereby at least nine (9) months and no
more than twelve
(12) months prior to the expiration of the initial Term (defined in
Section 1.24
hereof) or the First Option Term (as the case may be);
(ii) at the time of the exercise of such right and for the
remainder of the Term thereafter, there is no existing default
which is not
remedied within the applicable cure periods set forth in this
Lease;
(iii) the Lease has not terminated prior to the commencement
of the applicable Option Term; and
(iv) at the time of the exercise of such option and for the
remainder of the Term thereafter, the original named Tenant is in
possession of
and occupying the entire Premises [it being the intent of the
parties that this
option is personal to the original named Tenant hereunder (i.e., it
does not
inure to the benefit of any subsequent Tenant, subtenant or
assignee of the
Lease) and if such original named Tenant is no longer in possession
of and
occupying the entire Premises, then this option is void].
(b) During the
applicable Option Term, Tenant shall pay Landlord Base
Rent equal to the Fair Market Rent (defined below), including
escalations, for
the Premises for such Option Term. The "Fair Market Rent," as used
in this
Section, shall mean the market annual base rental rate (plus any
market
appropriate annual escalations thereof) for comparable space in the
Sterling,
Virginia market for the applicable Option Term, taking into account
all
appropriate factors. Within thirty (30) days of Landlord's receipt
of Tenant's
notice of its exercise of the option, Landlord shall notify Tenant
of the Base
Rent applicable to the Option Term in question based upon the
foregoing
parameters. If Tenant notifies Landlord in writing within ten (10)
business days
of Tenant's receipt of Landlord's notice that Tenant agrees with
Landlord's
determination of the Fair Market Rent, then, provided the foregoing
conditions
thereto are met, the Term shall be extended for five (5) years
beyond the
Expiration Date. If Tenant disagrees with Landlord's determination
of the Base
Rent applicable to said Option Term, Tenant shall notify Landlord
of such
disagreement within ten (10) business days of Tenant's receipt of
Landlord's
notice. If Tenant fails to notify Landlord within such ten (10)
business day
period that Tenant agrees or disagrees with Landlord's
determination of the Base
Rent, then Tenant shall be deemed to disagree with such
determination, and in
the event of such disagreement or deemed disagreement Landlord and
Tenant will
negotiate in good faith to determine the appropriate Base Rent
applicable to
said Option Term in accordance with the foregoing parameters. In
the event that
the parties cannot agree upon the appropriate Base Rent within
sixty (60) days
of Tenant's exercise of the option, the Base Rent applicable to the
Option Term
in question will be determined in accordance with the following
terms, the
results of which shall be binding upon the parties:
8
<PAGE>
Within ten (10) business days after the expiration of such sixty
(60) day
period, each party shall give written notice to the other setting
forth the name
and address of a Broker (as hereinafter defined) selected by such
party who has
agreed to act in such capacity, to determine the Base Rent
applicable to the
Option Term in question. If either party shall fail to select a
Broker as
aforesaid, then the party which has selected a Broker as aforesaid
(the
Appointing Party) shall have the right to issue a written notice to
the party
which failed to select a Broker as aforesaid (the Non Appointing
Party) advising
such Non Appointing Party that it has failed to appoint its Broker,
in which
case, if the Non Appointing Party does not then designate its
Broker within five
(5) business days following receipt of the Appointing Party's
Notice, then the
Base Rental shall be determined by the Broker selected by the other
party. Each
Broker shall thereupon independently make his determination of the
Base Rental
applicable to the Option Term in question based upon the parameters
for
determining Base Rental outlined above within twenty (20) days
after the
appointment of the second Broker. If the two Brokers determinations
are not the
same, but the higher of such two determinations (based upon the
initial annual
Base Rent and average Base Rent over the course of the applicable
Option Term)
is not more than one hundred five percent (105%) of the lower of
them, then the
Base Rent shall be deemed to be the average of the two
determinations. If the
higher of such two determinations is more than one hundred five
percent (105%)
of the lower of them, then the two Brokers shall jointly appoint a
third Broker
within ten (10) days after the second of the two determinations
described above
has been rendered. The third Broker shall independently make his
determination
of the Base Rent within twenty (20) days after his appointment by
choosing
between the two determinations previously submitted in accordance
with the
foregoing by the parties' respective Brokers, and the third
Broker's
determination shall be deemed to be the Base Rent payable by Tenant
with respect
to the applicable Option Term. For the purposes of this Section,
"Broker" shall
mean (i) a real estate broker licensed in the Commonwealth of
Virginia, (ii)
with at least ten (10) years of experience in commercial real
estate in the
Commonwealth of Virginia, (iii) with particular and current
experience in the
Sterling, Virginia market, and (iv) recognized within the field as
being
reputable and ethical. Each party shall pay for the cost of its
Broker and one
half of the cost of the third Broker, if any.
(c) Prior to the
commencement of the applicable Option Term, upon the
request of Landlord, Tenant hereby agrees to execute an amendment
to the Lease
memorializing said extension of the Term. If Tenant fails to timely
notify
Landlord of its desire to exercise the renewal option granted
hereby, then
Tenant shall be deemed to have conclusively waived its renewal
option.
2.08 EXPANSION
RIGHTS. (a) Subject to the terms of this paragraph and
any renewal, expansion or other leasing rights of other tenants in
the Building
existing as of the date of this Lease, Landlord's right to renew or
extend the
term of the current tenants lease(s), and any rights of future
tenants in the
Offer Space (hereinafter defined), Tenant shall have a right of
first offer (the
"Right of First Offer") on other space in the Building (the "Offer
Space"), if
the same becomes available for leasing prior to the expiration of
the Term.
Landlord shall not have any obligation to take action to regain
possession of
the Offer Space or any portion thereof for the purpose of offering
the same to
Tenant until the expiration or termination of all other tenants'
rights thereto
(including renewal rights), and then only if Landlord elects not to
renew or
extend the term of the current tenants lease(s). The parties
acknowledge that
the remainder of the Building is vacant and being marketed to third
parties as
of the execution of this Lease. The parties agree that Tenant does
not want to
lease the remainder of the Building at this time. Accordingly,
Landlord may
lease the remainder of the Building to any other person or entity
on whatever
terms Landlord and such third party may agree upon without any
obligation to
offer such space to Tenant. If all or a portion of the remainder of
the Building
shall again become vacant after being leased to a third party
during the Term,
then Landlord shall comply with the requirements of this Section
2.08.
9
<PAGE>
(b) Landlord will
notify Tenant if such Offer Space becomes available
for leasing during the Term and the terms on which said Offer Space
may be
leased by Tenant ("Offer Notice"), which terms will be consistent
with: (i) the
terms upon which Tenant is leasing the Premises if the Offer Space
becomes
available during the first eighteen (18) months of the Term, it
being agreed
that the Improvement Allowance and any other concessions shall be
prorated to
reflect the shortened length of the term for such Offer Space; or
(ii) the terms
upon which similar space is being leased by Landlord in the Project
and
consistent with the terms at which similar space in comparable
buildings is
being leased by other landlords in the Sterling, Virginia area.
Tenant will have
thirty (30) days following delivery of such Offer Notice during
which to notify
Landlord in writing of Tenant's intent to lease all and not a
portion of the
Offer Space described in Landlord's Offer Notice or to reject
leasing the same.
Tenant's failure to timely exercise its Right of First Offer within
said thirty
(30) day period shall be deemed an absolute waiver by Tenant of its
right to
lease said Offer Space specified in Landlord's Offer Notice and
this paragraph
shall thereafter be of no further force and effect. Upon Tenant's
rejection (or
deemed rejection) of the Offer Space specified in Landlord's Offer
Notice,
Landlord shall be free to lease said Offer Space to any other
person or entity
on any terms. If, during the Term, Tenant rejects the Offer Space
and such space
or a portion thereof again becomes available during the Term
(following the
leasing of such space to a third party), Tenant shall have the same
Right of
First Offer describe in this Section 2.08.
(c) Tenant's Right
of First Offer shall be subject to the following
conditions:
(i) at the time of the exercise of such right and throughout
the period prior to Landlord's delivery of the Offer Space to
Tenant, there is
no existing outstanding default by Tenant which has not been
remedied within the
applicable cure period;
(ii) at the time of Landlord's Offer Notice and throughout the
period prior to Landlord's delivery of the Offer Space to Tenant,
Tenant is in
possession of and occupying the entire Premises; and
(iii) Tenant must lease the entire Offer Space specified in
Landlord's Offer Notice.
Landlord, in its sole and absolute discretion, may waive any of the
foregoing
conditions.
(d) If Tenant
timely and properly exercises the Right of First Offer
granted hereby, prior to Landlord's delivery of the Offer Space to
Tenant,
Tenant and Landlord shall execute an amendment to the Lease
memorializing said
expansion of the Premises and the terms applicable thereto. If
Tenant fails to
timely notify Landlord of its desire to exercise the Right of First
Offer
granted hereby, then Tenant shall be deemed to have conclusively
waived its
Right of First Offer as to the Offer Space and the Offer Notice in
question.
3.00 RENT
3.01 PAYMENT OF
BASE RENT. Beginning on the Rent Commencement Date,
installments of Base Rent shall be paid monthly, in advance,
without demand,
notice, deduction, offset or counterclaim, on the first day of each
month. All
such installments for any partial month shall be prorated on a per
diem basis.
If the Rent Commencement Date is other than the first (1st) day of
a
10
<PAGE>
month, Base Rent from that date until the first (1st) of the next
succeeding
month will be prorated on the basis of the actual number of days in
each such
month and shall be payable in advance on the Rent Commencement
Date.
3.02 PAYMENT OF
JANITORIAL SERVICES. Tenant shall be solely responsible
for contracting for and bearing the cost of any cleaning or
janitorial services
to the Premises throughout the Term.
3.03 PAYMENT OF
OPERATING EXPENSES. (a) To the extent not provided by
Landlord and reimbursed pursuant to this Section, Tenant shall be
responsible
for all costs and expenses of its trash removal. In addition,
beginning on the
Rent Commencement Date and continuing throughout the Term, Tenant
shall be
responsible for the payment of Tenant's Share of Operating
Expenses. Prior to
the Rent Commencement Date, and then at the beginning of each year
(which may be
a calendar year or other twelve-month period selected by Landlord
from time to
time) Landlord shall furnish Tenant with Landlord's reasonable
estimation of
Tenant's Share of Operating Expenses for the forthcoming year, and
Tenant shall
pay same in equal monthly installments, in advance and without
prior demand,
together with Base Rent. After the end of each year a
reconciliation and
adjustment shall be made based on the actual cost incurred by
Landlord for
Operating Expenses in respect of such year. The estimated Operating
Expenses for
2008 are $2.08 per rentable square foot. Landlord and Tenant
acknowledge that
the foregoing is an estimate only and that the Tenant is obligated
to pay
Tenant's Share of the actual Operating Expenses, subject to the
Controllable
Operating Expense Cap set forth below.
(b) Beginning on
the first day of the second Lease Year and ending on
the last day of the Term, for the purpose of calculating Tenant's
Share of
Operating Expenses, the Controllable Operating Expenses (as defined
below) shall
be limited to Landlord's Controllable Operating Expense Cap (as
hereinafter
defined). The Controllable Operating Expense Cap shall be an amount
equal to
Landlord's actual Controllable Operating Expenses for the first
Lease Year
increased by five percent (5%) annually, on a cumulative basis. [By
way of
illustration only, if the actual per square foot Controllable
Operating Expenses
are $2.00 for the first Lease Year, then the Controllable Operating
Expense Cap
for the second Lease Year will be $2.10 ($2.00 x 1.05), and the
Controllable
Operating Expense Cap for the third Lease Year will be $2.21 ($2.10
x 1.05)].
For the purposes hereof the term "Controllable Operating Expenses"
shall mean
all Operating Expenses except: sales, use and any other taxes, cost
of
insurance, costs of procuring and providing utility services, snow
removal
costs, landscaping costs, union labor costs (to the extent
controlled by a
collective bargaining agreement), costs associated with procuring
permits and
licenses, and costs of complying with all governmental laws and
regulations.
3.04 UTILITIES.
"Utilities" means water, gas, electricity, and any
other utilities from time to time supplied by Landlord or the
applicable utility
provider to the Premises. For Utilities that are separately
metered, Tenant
shall pay all costs of Utilities utilized in or for the Premises
directly to the
provider. Tenant expressly acknowledges that, as part of the
Improvements, it is
required to install separate meters for gas and electric. For
Utilities that are
not separately metered, such as water and sewer, the cost of such
Utilities
shall be included in Operating Expenses. Tenant shall use
reasonable diligence
in the conservation of Utilities. To the extent that Tenant
contracts for any
utility directly with the supplier thereof, Tenant shall promptly
pay all bills
for such utilities. Landlord shall not be liable for any failure to
furnish, or
for any loss, injury or damage caused by or resulting from any
variation,
interruption or failure of utility services. Notwithstanding the
foregoing, if
there is a failure by Landlord to furnish the utilities or services
specified in
this Lease, which failure: (i) interferes substantially with or
prevents
Tenant's use of the Premises or any material part thereof, (ii) is
capable of
being remedied by
11
<PAGE>
Landlord by the exercise of commercially reasonable efforts (as
opposed to being
outside of Landlord's control), and (iii) continues for five (5)
consecutive
business days, the Monthly Base Rent shall abate for the period
beginning on the
sixth (6th) consecutive business day of such interruption and
continuing until
such interruption is remedied, based upon the portion or portions
of the
Premises rendered unusable by such interruption of utilities or
services.
3.05 PAYMENT OF
REAL ESTATE TAXES. Throughout the Term, Tenant shall be
responsible for the payment of Tenant's Share of Real Estate Taxes.
From time to
time Landlord shall furnish Tenant with a copy of Landlord's bill
for Real
Estate Taxes and an invoice for Tenant's Share of Real Estate Taxes
reflected on
such bill, and, within ten (10) business days of Landlord's
invoice, Tenant
shall pay such amount to Landlord. Landlord shall bill Tenant for
Tenant's Share
of Real Estate Taxes semi-annually. After the end of each year, a
reconciliation
and adjustment shall be made based on the actual cost incurred by
Landlord for
Real Estate Taxes in respect of such year. The estimated Real
Estate Taxes for
2008 are $1.22 per rentable square foot. Landlord and Tenant
acknowledge that
the foregoing is an estimate only and that the Tenant is obligated
to pay
Tenant's Share of the actual Real Estate Taxes.
3.06 INTENTIONALLY
OMITTED.
3.07 PARTIAL
OCCUPANCY. If, during the Term, the Building is not fully
occupied during any year, (or if any tenant provides itself with
any service or
Utilities which Landlord provides as a part of Operating Expenses,
or is
separately assessed for Real Estate Taxes) Operating Expenses, Real
Estate Taxes
and Utilities for such year (to the extent that the same vary with
occupancy
levels) may be grossed up to reflect one-hundred percent (100%)
occupancy, using
sound accounting and management principles consistently
applied.
3.08 PAYMENTS
GENERALLY. All rentals and other charges hereunder shall
commence to accrue and become payable in accordance with the terms
hereof on the
Commencement Date. All payments required to be made by Tenant under
this Lease
shall be deemed to be rent and shall be collectible as such, shall
be in lawful
money of the United States, and shall be timely delivered to
Landlord's Address
for Notice, with no deduction, offset, abatement, credit or the
like, except as
expressly be provided herein. Each late payment shall incur a late
fee in the
amount of five percent (5%) of such payment to cover extra tracking
and handling
expenses. All amounts owed by Tenant to Landlord under this Lease
which are
overdue shall bear interest at the rate of 12% per annum from the
date due until
paid. The tender by Tenant of a lesser amount than due shall be
treated as a
payment on account notwithstanding any endorsement or statement to
the contrary
on the payment or in any cover letter, and Landlord's acceptance of
such lesser
amount shall not constitute a waiver of any other available right
or remedy.
Notwithstanding the foregoing, on the first (1st) occasion
during any calendar
year that any installment of Base Rent or Additional Rent is not
timely paid
when due hereunder, no late fee or default interest will be
assessed until the
fifth (5th) day after the day that such payment was originally
due.
3.09 AUDIT RIGHTS.
Within one hundred twenty (120) days of the
reconciliation and adjustment as set forth in Section 3.03
regarding Operating
Expenses (but not more than once per year), if Tenant disputes the
amount of
Additional Rent set forth in the reconciliation statement, an
independent
certified public accountant or other representative of Tenant,
designated and
paid for by Tenant, may, upon at least twenty (20) business days
prior written
notice to Landlord, and at reasonable times, inspect Landlord's
records at
Landlord's offices, provided that Tenant is not then in default
under this Lease
and Tenant has paid all amounts required to be paid under the
applicable
reconciliation statement, as the case may be. No such audit may be
conducted on
a contingency basis by the accountant or other representative (and
therefore no
portion of the fee or other
12
<PAGE>
compensation payable to the accountant or other representative may
in any way be
tied to the results of such audit), and any such audit conducted on
such basis
shall be deemed void for the purposes hereof, and Tenant hereby
waives and
further rights under this Section 3.09 following the performance of
an audit on
such basis. Tenant's failure to dispute the amount of Additional
Rent set forth
in any statement within one hundred twenty (120) days of Tenant's
receipt of
such statement shall be deemed to be Tenant's approval of such
statement and
Tenant, thereafter, waives the right or ability to dispute the
amounts set forth
in such statement. If after such inspection, Tenant still disputes
such
Additional Rent, a determination as to the proper amount shall be
made, at
Tenant's expense, by an independent certified public accountant
(the
"Accountant") selected by Landlord, subject to Tenant's reasonable
approval. The
results of any audit conducted pursuant to this Section 3.09 shall
be kept
confidential by Tenant and its accountant, and at Landlord's
request, such
accountant must agree in writing (in a commercially reasonable
form) to keep the
results of such audit confidential and not to reveal the same to
any parties
other than Landlord and Tenant. In the event of any breach of the
foregoing
confidentiality/non disclosure covenant by the accountant, Tenant
or Tenant's
agents, then the audit with respect to which such breach occurred
shall be
deemed void for the purposes hereof. If Tenant's audit shall
conclusively
disclose an overstatement of Operating Expenses (and related
overpayment of
Operating Expenses by Tenant) of more than five percent (5%) of the
amount
actually incurred by Landlord for such period, Landlord shall
promptly reimburse
Tenant for the reasonable cost of such audit, provided that the
maximum
reimbursement payable by Landlord with respect to the cost of such
audit shall
be $3,000.00.
4.00 MAINTENANCE AND REPAIRS
4.01 TENANT
REPAIRS. Except for those items for which Landlord is
responsible by virtue of Section 4.02 below, Tenant shall, at its
own cost and
expense, clean, repair, maintain and replace the interior of the
Premises and
any improvements, equipment and fixtures therein, including without
limitation
all plate glass, lighting and other fixtures and equipment inside
the Premises
whether or not they were initially installed at Landlord's expense,
and any
HVAC, electrical and mechanical systems that service the Premises,
so as to keep
them in good operating condition and in compliance with the
requirements from
time to time of all governmental authorities having jurisdiction.
All repairs,
maintenance and/or replacements made by Tenant shall be subject to
Landlord's
prior written approval, which will not be unreasonably withheld
provided that
the same are at least equal in quality and class to the original
work and/or
fixtures and equipment. In the event that Tenant fails to make any
necessary
repairs, Landlord shall have the right, at its option, after
providing written
notice to Tenant, to perform on behalf of Tenant any repair or
replacement
approved by Landlord and one hundred five percent (105%) of the
reasonable cost
and expense incurred shall be due within thirty (30) days of
demand. Landlord
and Tenant agree that the Landlord will obtain a reasonable and
customary
maintenance, repair and service contract on the HVAC system serving
the
Premises, the cost of which shall be billed to Tenant and shall be
deemed to be
Additional Rent. The parties agree that, notwithstanding any
provision of this
Lease to the contrary, Tenant's obligation to pay for the
maintenance, repair
and replacement of the Building-standard systems (which includes
the HVAC,
sprinkler, electrical and plumbing systems) serving the Premises
shall be
limited to: (i) the cost of maintaining and making minor repairs to
the
Building-standard systems serving the Premises; (ii) the cost of
the
afore-mentioned service contract on the HVAC system; (iii) Tenant's
Share of any
such costs that are included in Operating Expenses; and (iv) the
first $4,000.00
per year of the cost of major repairs or the cost of replacing
such
Building-standard systems serving the Premises. Tenant shall
promptly place all
of its refuse in the trash receptacles provided for this purpose
and shall not
allow same to accumulate within the Premises or anywhere on the
Common Areas. It
is understood and agreed that all property of Tenant kept, stored
or maintained
in the Premises or
13
<PAGE>
the Project shall be at the sole risk of Tenant. Tenant agrees at
its sole cost
and expense to comply with all present and future laws regarding
the collection,
sorting, separation and recycling of waste products, garbage,
refuse and trash.
4.02 LANDLORD
REPAIRS. Except in the case of damage by casualty as
described in Section 4.05 below, and except as required to be
repaired and
maintained by Tenant under Section 4.01 above, Landlord shall, as a
part of
Operating Expenses, (i) repair, maintain and replace the roof,
structure,
foundation, gutters, downspouts, and the mechanical, electrical and
HVAC systems
serving the Common Areas of the Building, and (ii) clean,
landscape, repair,
maintain, and replace the Common Areas, and keep same reasonably
free of snow,
ice and other obstructions. If applicable, Landlord shall supply
Utilities to
the Premises and bill Tenant as provided in Section 3.04 above.
Landlord shall
at all times operate and maintain the Building in accordance with a
standard at
least as high as that customarily followed in the operation and
maintenance of
first class Flex buildings similar to the Building and with similar
tenants in
the vicinity of the Building ("Comparable Buildings").
4.03 INITIAL
IMPROVEMENTS. On the Commencement Date Tenant shall accept
possession of the Premises in their "as-is" condition, and Landlord
shall not be
required to perform any improvements whatsoever to the Premises
except as
provided for in this Section 4.03 or Exhibit "B." Landlord shall
deliver the
Premises on the Commencement Date free of any leaks in the roof of
the Building.
Any leaks in the roof caused by the construction of Tenant's
Improvements shall
be the responsibility of Tenant, at its sole cost and expense. All
other work
necessary to improve, furnish, fixture, equip, stock, and decorate
the Premises
for Tenant's Permitted Use shall be performed by Tenant, at its
sole cost and
expense, in accordance with Section 4.04 below. Tenant represents
that it has
thoroughly examined the Building and the Property (including
without limitation
the Premises and the Building) and is aware of, and accepts, the
existing shell
condition thereof. Landlord and Tenant will cooperate with each
other to ensure
that neither interferes with the other's ability
