<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
-10-
<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
-11-
<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