Exhibit 10.24
LEASE
between
TMT RESTON I & II, INC.,
as Landlord,
and
TALK AMERICA INC. ,
as Tenant
TABLE OF
CONTENTS
1.
USE AND RESTRICTIONS ON
USE.
2.
TERM.
3.
RENT.
4.
RENT ADJUSTMENTS.
5.
SECURITY DEPOSIT.
6.
ALTERATIONS.
7.
REPAIR.
8.
LIENS.
9.
ASSIGNMENT AND
SUBLETTING.
10.
INDEMNIFICATION.
11.
INSURANCE.
12.
WAIVER OF SUBROGATION.
13.
SERVICES AND UTILITIES.
14.
HOLDING OVER.
15.
SUBORDINATION.
16.
RULES AND REGULATIONS.
17.
REENTRY BY LANDLORD.
18.
DEFAULT.
19.
REMEDIES.
20.
TENANT’S BANKRUPTCY OR
INSOLVENCY.
21.
QUIET ENJOYMENT.
22.
CASUALTY
23.
EMINENT DOMAIN.
24.
SALE BY LANDLORD.
25.
ESTOPPEL CERTIFICATES.
26.
SURRENDER OF PREMISES.
27.
NOTICES.
28.
TAXES PAYABLE BY TENANT.
29.
INTENTIONALLY OMITTED.
30.
DEFINED TERMS AND
HEADINGS.
31.
TENANT’S
AUTHORITY.
32.
FINANCIAL STATEMENTS AND CREDIT
REPORTS.
33.
COMMISSIONS.
34.
TIME AND APPLICABLE LAW.
35.
SUCCESSORS AND ASSIGNS.
36.
ENTIRE AGREEMENT.
37.
EXAMINATION NOT OPTION.
38.
RECORDATION.
39.
PARKING.
40.
LIMITATION OF LANDLORD’S
LIABILITY.
EXHIBIT A -
FLOOR PLAN DEPICTING THE PREMISESA-1
EXHIBIT A-1 -
SITE PLANA-1-1
EXHIBIT A-2 -
EXPANSION SPACEA-1-2
EXHIBIT B -
INITIAL ALTERATIONSB-
EXHIBIT B-1 -
PROJECT SCHEDULEB-1-1
EXHIBIT C -
COMMENCEMENT DATE MEMORANDUMC-1
EXHIBIT D -
RULES AND REGULATIONSD-1
EXHIBIT E -
FORM OF GUARANTYE-
LEASE
REFERENCE
PAGES
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BUILDING:
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Reston Plaza
II
12020 Sunrise
Valley Drive
Reston, VA
20191
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LANDLORD:
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TMT Reston I
& II, Inc., a Delaware corporation
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LANDLORD’S ADDRESS:
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c/o
RREEF
8280 Greensboro
Drive, Suite 550
McLean,
Virginia 22102
Attn: Patrick
N. Connell, Vice President / Regional Director
with a copy
(which shall not constitute notice) to:
Covington &
Burling
1201
Pennsylvania Avenue, N.W.
Washington,
D.C. 20004-2401
Attention:
Robert J. Gage, Esq.
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ADDRESS FOR
RENT PAYMENT:
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TMT Reston I
& II, Inc.
P.O. Box
13517
Newark, NJ
07188-0517
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LANDLORD’S REGISTERED AGENT FOR SERVICE OF
PROCESS:
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Commonwealth
Legal Services Corporation
4701 Cox Road,
Suite 301
Glen Allen, VA
23060-6802
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LEASE REFERENCE
DATE:
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February 28,
2006
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TENANT:
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Talk America
Inc., a Pennsylvania corporation
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GUARANTOR
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Talk America
Holdings, Inc., a Delaware corporation
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TENANT’S
NOTICE ADDRESS:
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(a) As of
beginning of Term:
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Premises
with a copy
(which shall not constitute notice) to:
New Hope,
Pennsylvania 18938
Attn: Legal
Department
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(b) Prior to
beginning of Term (if different):
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Premises
with a copy
(which shall not constitute notice) to:
New Hope,
Pennsylvania 18938
Attn: Legal
Department
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PREMISES
IDENTIFICATION:
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Suite Number
250 on the second (2nd) floor of the Building (for outline of
Premises see Exhibit A)
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PREMISES
RENTABLE AREA:
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Approximately
10,019 sq. ft. (for outline of Premises see Exhibit A)
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COMMENCEMENT
DATE:
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December 1,
2005
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TERM OF
LEASE:
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Approximately
four (4) years, zero (0) months and zero (0) days beginning on the
Commencement Date and ending on the Termination Date. The period
from the Commencement Date to the last day of the same month is the
“ Commencement Month .”
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TERMINATION
DATE:
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November 30,
2009
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EXTENSION
OPTION
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Subject to the
provisions set forth in Section 2.2, Tenant shall receive an option
to extend the Term of this Lease for all or a portion of the
Premises for one (1) consecutive extension term of five (5)
consecutive years
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EXPANSION SPACE
OPTION
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Subject to the
provisions set forth in Section 2.3, Tenant shall receive an option
to lease any remaining portion of the second (2nd) floor of the
Building that shall become vacant and available or is reasonably
expected by Landlord to become vacant and available during the
first two (2) years of the initial Term of this Lease
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ANNUAL
RENT:
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Twenty six and
00/100 Dollars ($26.00) per rentable square foot per annum, subject
to an escalation of three percent (3%) per annum on each
anniversary of the Commencement Date, commencing with the first
(1st) anniversary of the Commencement Date.
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RENT ABATEMENT
(Article 3):
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Subject to the
provisions set forth in Articles 3 and 19 of this Lease, Tenant
shall receive an abatement during the first (1st) full calendar
month of the Term of this Lease equal to one hundred percent
(100.0%) of such Monthly Installment of the initial Annual
Rent.
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MONTHLY
INSTALLMENT OF RENT:
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Lease
Year
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Rentable Square
Footage
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Annual Rent Per Square
Foot
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Annual
Rent
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Monthly Installment of
Rent
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1 ˚
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10,019
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$26.00
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$260,494.00
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$21,707.83
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2
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10,019
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$26.78
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$268,308.82
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$22,359.07
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3
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10,019
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$27.58
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$276,324.02
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$23,027.00
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4
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10,019
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$28.41
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$284,639.79
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$23,719.98
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˚ Subject
to an abatement as set forth in Section 3.1.1.
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BASE YEAR
(EXPENSES):
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January 1, 2006
to December 31, 2006
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BASE YEAR
(INSURANCE):
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January 1, 2006
to December 31, 2006
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BASE YEAR
(TAXES):
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January 1, 2006
to December 31, 2006
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BUILDING
SIZE
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approximately
48,886 sq. ft.
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TENANT’S
PROPORTIONATE SHARE:
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20.49%
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SECURITY
DEPOSIT:
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$21,707.83,
subject to the provisions set forth in Section 5
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ASSIGNMENT/SUBLETTING FEE:
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$1,500.00
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AFTER-HOURS
HVAC COST:
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$40.00 per
hour, subject to change at any time, from time to time.
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HOLIDAYS
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New Year's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
Christmas Day, subject to change at any time, from time to
time.
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REAL ESTATE
BROKER DUE COMMISSION:
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Studley
(Virginia), Inc.
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TENANT’S
SIC CODE:
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4812
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BUILDING
BUSINESS HOURS:
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Monday -
Friday, 8:00 a.m. - 6:00 p.m.
Saturday, 8:00
a.m. - 1:00 p.m.
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AMORTIZATION
RATE:
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10%
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The Reference
Pages information is incorporated into and made a part of the
Lease. In the event of any conflict between any Reference Pages
information and the Lease, the Lease shall control. This Lease
includes the Exhibits, all of which are made a part of this
Lease.
[SIGNATURES CONTAINED ON
NEXT PAGE]
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WITNESS :
By: /s/
Patricia M. Webel
Name:
Patricia M. Webel
Title:
Property Manager
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TMT RESTON I
& II, INC.,
a Delaware
corporation
By:
RREEF Management Company,
a Delaware
corporation
By: /s/
Patrick N. Connell
Name:
Patrick N. Connell
Title: Vice
President / Regional Director
Dated:
9-26-05
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ATTEST:
By: /s/
Craig H. Pizer
Name: Craig
H. Pizer
Title:
Associate General Counsel - Assistant Secretary
[Corporate
Seal]
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TENANT:
TALK AMERICA
INC.
a Pennsylvania
corporation
By: /s/
Aloysius T. Lawn, IV
Name:
Aloysius T. Lawn IV
Title: EVP-
General Counsel
Dated:
9-19-05
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LEASE
By this Lease Landlord
leases to Tenant and Tenant leases from Landlord the Premises in
the Building as set forth and described on the Reference Pages. The
Premises are depicted on the floor plan attached hereto as
Exhibit A , and the Building is depicted on the site plan
attached hereto as Exhibit A-1 . The Reference Pages,
including all terms defined thereon, are incorporated as part of
this Lease.
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1.
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USE AND RESTRICTIONS ON USE.
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1.1 The
Premises are to be used solely for general office purposes. Tenant
shall not do or permit anything to be done in or about the Premises
which will in any way obstruct or interfere with the lease rights
of other tenants or occupants of the Building, including, but not
limited to, any exclusive lease rights of another tenant or
occupant of the Building, or injure, annoy, or disturb them, or
allow the Premises to be used for any improper, immoral, unlawful,
or objectionable purpose, or commit any waste. Tenant shall not do,
permit or suffer in, on, or about the Premises the sale of any
alcoholic liquor without the written consent of Landlord first
obtained. Tenant shall comply with all governmental laws,
ordinances and regulations applicable to the use of the Premises
and its occupancy and shall promptly comply with all governmental
orders and directions for the correction, prevention and abatement
of any violations in the Building or appurtenant land, caused or
permitted by, or resulting from the specific use by, Tenant, or in
or upon, or in connection with, the Premises, all at Tenant’s
sole expense. Tenant shall not do or permit anything to be done on
or about the Premises or bring or keep anything into the Premises
which will in any way increase the rate of, invalidate or prevent
the procuring of any insurance protecting against loss or damage to
the Building or any of its contents by fire or other casualty or
against liability for damage to property or injury to persons in or
about the Building or any part thereof. Landlord represents that,
to the best of Landlord’s actual knowledge (defined as the
personal knowledge of Patrick N. Connell, Vice President and
Regional Director of RREEF Management Company), as of the
Commencement Date, the common areas of the Building and appurtenant
land are in compliance with all applicable laws.
1.2 Tenant shall not, and
shall not direct, suffer or permit any of its agents, contractors,
employees, licensees or invitees (collectively, the “
Tenant Entities ”) to at any time handle,
use, manufacture, store or dispose of in or about the Premises or
the Building any (collectively “ Hazardous
Materials ”) flammables, explosives, radioactive
materials, hazardous wastes or materials, toxic wastes or
materials, or other similar substances, petroleum products or
derivatives or any substance subject to regulation by or under any
federal, state and local laws and ordinances relating to the
protection of the environment or the keeping, use or disposition of
environmentally hazardous materials, substances, or wastes,
presently in effect or hereafter adopted, all amendments to any of
them, and all rules and regulations issued pursuant to any of such
laws or ordinances (collectively “ Environmental
Laws ”), nor shall Tenant suffer or permit any
Hazardous Materials to be used in any manner not fully in
compliance with all Environmental Laws, in the Premises or the
Building and appurtenant land or allow the environment to become
contaminated with any Hazardous Materials. Notwithstanding the
foregoing, Tenant may handle, store, use or dispose of products
containing small quantities of Hazardous Materials (such as aerosol
cans containing insecticides, toner for copiers, paints, paint
remover and the like) to the extent customary and necessary for the
use of the Premises for general office purposes; provided that
Tenant shall always handle, store, use, and dispose of any such
Hazardous Materials in a safe and lawful manner and never allow
such Hazardous Materials to contaminate the Premises, Building and
appurtenant land or the environment. Tenant shall protect, defend,
indemnify and hold each and all of the Landlord Entities (as
defined in Article 30) harmless from and against any and all loss,
claims, liability or costs (including court costs and
attorney’s fees) incurred by reason of any actual or asserted
failure of Tenant to fully comply with all applicable Environmental
Laws, or the presence, handling, use or disposition in or from the
Premises of any Hazardous Materials by Tenant or any Tenant Entity
(even though permissible under all applicable Environmental Laws or
the provisions of this Lease), or by reason of any actual or
asserted failure of Tenant to keep, observe, or perform any
provision of this Section 1.2.
2.1 The Term of this Lease
shall begin on the Commencement Date. The parties hereby
acknowledge that Talk America Holdings, Inc. (“
Parent ”), a Delaware corporation, is
currently in possession of the Premises pursuant to that certain
lease agreement dated April 28, 2000 by and between Landlord, as
successor-in-interest to Reston Plaza I & II, LLC, and Parent,
as successor-in-interest to Talk.com, as amended by that certain
First Amendment to Lease dated May 6, 2004 and that certain Second
Amendment to Lease dated , 2004 (as amended, the “
Prior Lease ”) and that Tenant is the
wholly-owned subsidiary of Parent. The parties also acknowledge
that Tenant is currently in possession of approximately 1,136
rentable square feet on the first (1st) floor of that certain
building located at 12030 Sunrise Valley Drive in Reston, Virginia
pursuant to the terms of that certain lease agreement dated October
28, 2004, by and between Landlord and Tenant (the
“Reston I Lease” ). Tenant
acknowledges that it enters into this Lease without any
representations or warranties by the Landlord, or anyone acting or
purporting to act on behalf of Landlord, as to the present or
future condition of the Premises or the appurtenances thereto or
any improvements therein or of the Building, except as specifically
set forth in this Lease. It is further agreed that Tenant does and
will accept the Premises “AS IS” in their present
condition as of the date hereof and the Landlord has no obligation
to perform any work therein. Notwithstanding any provision in this
Lease to the contrary, if the Term has not commenced within one (1)
year after the date of this Lease, this Lease shall automatically
terminate on the first (1st) anniversary of the date hereof. The
sole purpose of the preceding sentence is to avoid any possible
interpretation that this Lease violates the Rule Against
Perpetuities or other rule of law against restraints on
alienation.
2.1.1
The parties agree that the Prior Lease shall terminate
pursuant to a separate agreement by and between Landlord and Tenant
( “Prior Lease Termination Agreement”
). The Prior Lease, the Prior Lease Termination Agreement and the
Reston I Lease shall constitute the “ Related
Agreements .” Any Event of Default as defined in the
Related Agreements existing as of the Commencement Date of this
Lease shall constitute an immediate Event of Default (as defined
hereinafter), to which no notice by Landlord to Tenant shall be
required. Any default under any of the Related Agreements shall
constitute a default hereunder, as further set forth in Section
18.1.2.
2.2 Provided that: (i)
Tenant is in physical possession and actual occupancy of the
Premises and no Event of Default exists at the time of the exercise
of such option or arises subsequent thereto, and no event exists
which by notice and/or the passage of time would constitute an
Event of Default if not cured within the applicable cure period
provided under this Lease; and (ii) Tenant has not sublet or
assigned any of its rights, title, and interest in and to this
Lease, Tenant shall have the option to extend this Lease with
respect to all or a portion of the Premises for one (1) consecutive
extension term of five (5) consecutive years, provided Tenant
notifies Landlord in writing of its exercise of such option not
sooner than twelve (12) months nor later than nine (9) months prior
to the Termination Date. Annual Rent during such extension term
shall be at one hundred percent (100%) of the fair market rate,
including market concessions, as determined by the mutual agreement
of Landlord and Tenant, and provided that Tenant shall post an
increase in its Security Deposit which is commensurate with such
new Annual Rent. Such Annual Rent for the extension term shall
escalate at the fair market escalation rate as determined by the
mutual agreement of Landlord and Tenant, provided that in no event
shall such Annual Rent escalate at less than the escalation rate of
three (3%) per annum. All other provisions of this Lease shall
remain the same during the extension term, except that Tenant shall
have no further extension option and the Base Year shall be the
first (1st) full calendar year of the extension term. Should
Landlord and Tenant be unable for any reason to agree upon a new
Annual Rent and/or escalation rate within forty-five (45) days
after Tenant’s exercise of this option, then the Annual Rent
and/or escalation rate, as applicable, shall, at Tenant’s
sole option and discretion, be determined by appraisal by a board
of three (3) real estate brokers, one of whom shall be named by
Landlord, one by Tenant, and the two so appointed shall select a
third. Such brokers shall be members of the Greater Washington
Association of Commercial Realtors or any successor thereto,
licensed in the Commonwealth of Virginia, and each shall have not
less than ten (10) years’ experience in the field of
commercial office leasing in the Washington, D.C. metropolitan
area. Each shall be recognized as being ethical and reputable
within its field. Landlord and Tenant agree to make their
appointments promptly within ten (10) business days after the
expiration of the forty-five (45) day period, and the two brokers
shall promptly select a third broker within fifteen (15) days
thereafter. Each broker shall, within thirty (30) days after
selection of the third broker, submit its determination of the
Annual Rent and/or escalation rate, as applicable, and the Annual
Rent and/or escalation rate, as applicable, shall be deemed to be
the rent and/or escalation rate, as applicable, determined by the
third broker, unless it is higher than the higher of the two values
determined by the first two brokers, in which event the higher of
the first two appraisals shall be the Annual Rent and/or escalation
rate, as applicable, or unless it is lower than the lower of the
two values determined by the first two brokers, in which event the
lower of the first two appraisals shall be the Annual Rent or
escalation rate, as applicable. In arriving at its rental rate
determinations, each broker shall consider and analyze all material
components of the Lease, and review terms being offered to
prospective office tenants for comparable space in comparable
office buildings and locations in the northern Virginia
metropolitan area for leases commencing on or about the time of
commencement of the extension period. In no event shall the
escalation rate be less than three percent (3%) per annum. Landlord
and Tenant shall each pay the fee of the broker selected by it and
they shall share equally the payment of the fee of the third
broker.
2.3 Provided that: (i)
Tenant is in physical possession and actual occupancy of the
Premises and no Event of Default exists at the time of the exercise
of such option or arises subsequent thereto, and no event exists or
arises subsequent thereto which by notice and/or the passage of
time would constitute an Event of Default if not cured within the
applicable cure period provided under this Lease; and (ii) Tenant
has not sublet or assigned any of its rights, title, and interest
in and to this Lease, and subject to any pre-existing rights
granted to other tenants, if at any time during the first two (2)
years of the initial Term of this Lease any remaining portion of
the second (2nd) floor of the Building (each such portion, an
“ Expansion Space ”), as shown
on Exhibit A-2 , attached hereto, shall
become vacant and available or is reasonably expected by Landlord
to become vacant and available, Landlord shall notify Tenant of the
availability of such Expansion Space in writing and Landlord shall
provide Tenant with a copy of the proposed terms and conditions
(“ Proposed Expansion Space Terms
”) under which Landlord shall offer such Expansion Space,
including the Annual Rent and the date of anticipated delivery of
possession. Tenant shall have ten (10) days from the date of
Landlord’s notice to Tenant to advise Landlord in writing
that Tenant accepts such Expansion Space (“
Expansion Space Election Period ”) on
the Proposed Expansion Space Terms, in its “AS IS”
condition, with all Building systems servicing such Expansion Space
in working condition at Landlord’s reasonable expense, and
agrees that it shall become a part of the Premises. Tenant shall be
solely responsible for all repairs, improvements, alterations,
fixtures and furnishings to be made or installed in Expansion
Space. Subject to the terms and conditions of Article 6 of this
Lease, Tenant shall obtain Landlord’s prior written approval
of Tenant’s drawings, plans and specifications before
commencing construction of improvements. Tenant’s obligation
to commence payment of Annual Rent for such Expansion Space shall
occur on the day the Expansion Space is substantially completed by
Tenant, but in no case longer than the earlier to occur of (i)
sixty (60) days from the initiation of the construction of
improvements or (ii) sixty (60) days from the date of delivery of
possession by Landlord to Tenant. If Tenant shall not so elect to
lease Expansion Space within the Expansion Space Election Period,
Landlord may lease such Expansion Space to a third party. In the
event Landlord and Tenant agree on lease terms pursuant to this
Section 2.3, the parties shall enter into an amendment modifying
this Lease to set forth such lease terms within thirty (30) days of
the parties’ agreement; provided, however, if either party
shall fail to do so after Tenant shall have exercised its option
for the Expansion Space, they shall each be bound by their mutual
agreement as to the Annual Rent and additional rent. Annual Rent
for such Expansion Space shall be at one hundred percent (100%) of
the fair market rate, including market concessions provided to
Tenant pursuant to this Lease, as determined by the mutual
agreement of Landlord and Tenant, provided that Tenant shall post
an increase in its Security Deposit which is commensurate with the
additional Annual Rent of such Expansion Space. Such Annual Rent
for the Expansion Space shall escalate at the fair market
escalation rate as determined by the mutual agreement of Landlord
and Tenant, provided that in no event shall such Annual Rent
escalate at less than the escalation rate of three (3%) per annum.
All other provisions of this Lease shall remain the same with
respect to the Expansion Space. Should Landlord and Tenant be
unable for any reason to agree upon the Annual Rent and/or
escalation rate within forty-five (45) days after Tenant’s
exercise of this option, then the Annual Rent and/or escalation
rate, as applicable, shall be determined by appraisal by a board of
three (3) real estate brokers, one of whom shall be named by
Landlord, one by Tenant, and the two so appointed shall select a
third. Such brokers shall be members of the Greater Washington
Association of Commercial Realtors or any successor thereto,
licensed in the Commonwealth of Virginia, and each shall have not
less than ten (10) years’ experience in the field of
commercial office leasing in the Washington, D.C. metropolitan
area. Each shall be recognized as being ethical and reputable
within its field. Landlord and Tenant agree to make their
appointments promptly within ten (10) business days after the
expiration of the forty-five (45) day period, and the two brokers
shall promptly select a third broker within fifteen (15) days
thereafter. Each broker shall, within thirty (30) days after
selection of the third broker, submit its determination of the
Annual Rent and/or escalation rate for such Expansion Space, as
applicable and the Annual Rent and/or escalation rate for such
Expansion Space, as applicable, shall be deemed to be the rent
and/or escalation rate, as applicable, determined by the third
broker, unless it is higher than the higher of the two values
determined by the first two brokers, in which event the higher of
the first two appraisals shall be the Annual Rent and/or escalation
rate, as applicable, or unless it is lower than the lower of the
two values determined by the first two brokers, in which event the
lower of the first two appraisals shall be the Annual Rent or
escalation rate, as applicable. In arriving at its rental rate
determinations, each broker shall consider and analyze all material
components of the Lease, and review terms being offered to
prospective office tenants for comparable space in comparable
office buildings and locations in the northern Virginia
metropolitan area for leases commencing on or about the time of
commencement of the extension period. In no event shall the
escalation rate be less than three percent (3%) per annum. Landlord
and Tenant shall each pay the fee of the broker selected by it and
they shall share equally the payment of the fee of the third
broker. Notwithstanding anything contained herein to the contrary,
Tenant shall have no right to lease from Landlord and Landlord
shall have no obligation to lease to Tenant any such Expansion
Space which shall become vacant and available or is reasonably
expected by Landlord to become vacant and available after the first
two (2) years of the initial Term of this Lease.
3.1 Tenant agrees to pay to
Landlord the Annual Rent in effect from time to time by paying the
Monthly Installment of Rent then in effect on or before the first
day of each full calendar month during the Term, except that the
first full month’s rent shall be paid upon the execution of
this Lease. The Monthly Installment of Rent in effect at any time
shall be one-twelfth (1/12) of the Annual Rent in effect at such
time. Rent for any period during the Term which is less than a full
month shall be a prorated portion of the Monthly Installment of
Rent based upon the number of days in such month. Said rent shall
be paid to Landlord, without deduction or offset and without notice
or demand, at the Rent Payment Address, as set forth on the
Reference Pages, or to such other person or at such other place as
Landlord may from time to time designate in writing. If an Event of
Default occurs, Landlord may require by notice to Tenant that all
subsequent rent payments be made by an automatic payment from
Tenant’s bank account to Landlord’s account, without
cost to Landlord. Tenant must implement such automatic payment
system prior to the next scheduled rent payment or within ten (10)
days after Landlord’s notice, whichever is later. Unless
specified in this Lease to the contrary, all amounts and sums
payable by Tenant to Landlord pursuant to this Lease shall be
deemed “ additional rent ”.
3.1.1
Notwithstanding the foregoing, provided that there shall not exist
any Event of Default, and subject to the provisions of Section 19.3
below, the Monthly Installment of Annual Rent due for the first
(1st) full calendar month following the Commencement Date shall be
abated. Nothing in this Section 3.1.1, however, shall be
interpreted to except or excuse Tenant from any additional rent or
other amounts due under this Lease or the Prior Lease to
Landlord.
3.2 Tenant recognizes that
late payment of any rent or other sum due under this Lease will
result in administrative expense to Landlord, the extent of which
additional expense is extremely difficult and economically
impractical to ascertain. Tenant therefore agrees that if rent or
any other sum is not paid when due and payable pursuant to this
Lease, a late charge shall be imposed in an amount equal to the
greater of: (a) Fifty Dollars ($50.00), or (b) six percent (6%) of
the unpaid rent or other payment. The amount of the late charge to
be paid by Tenant shall be reassessed and added to Tenant’s
obligation for each successive month until paid. The provisions of
this Section 3.2 in no way relieve Tenant of the obligation to pay
rent or other payments on or before the date on which they are due,
nor do the terms of this Section 3.2 in any way affect
Landlord’s remedies pursuant to Article 19 of this Lease in
the event said rent or other payment is unpaid after date
due.
3.3 Notwithstanding anything
to the contrary contained herein, if the Commencement Month is not
a full calendar month, such Commencement Month shall be deemed for
all purposes of this Lease to be part of the First Lease Year and
Tenant shall pay additional Annual Rent for such Commencement Month
calculated on a per diem basis at the Annual Rental Rate for the
First Lease Year.
4.1 For the purpose of this
Article 4, the following terms are defined as follows:
4.1.1
Lease Year: Each consecutive twelve (12) month period
falling partly or wholly within the Term; provided, however, if the
Commencement Month is not a full calendar month, then the first
Lease Year shall consist of the Commencement Month and the
subsequent twelve (12) consecutive month period.
4.1.2
Expenses: All costs of operation, maintenance, repair,
replacement and management of the Building (including (A) the
amount of any credits which Landlord may grant to particular
tenants of the Building in lieu of providing any standard services
or paying any standard costs described in this Section 4.1.1 for
similar tenants and (B) the portion of shared expenses allocable to
the Building as provided for in the final sentence of this Section
4.1.2), as determined in accordance with generally accepted
accounting principles, including the following costs by way of
illustration, but not limitation: water and sewer charges; utility
costs, including, but not limited to, the cost of heat, light,
power, steam, gas; waste disposal; the cost of janitorial services;
the cost of access control and monitoring services (including any
central station signaling system); costs of cleaning, repairing,
replacing and maintaining the common areas, including parking and
landscaping, window cleaning costs; labor costs; costs and expenses
of managing the Building including management and/or administrative
fees; air conditioning maintenance costs; elevator maintenance fees
and supplies; material costs; equipment costs including the cost of
maintenance, repair and service agreements and rental and leasing
costs; purchase costs of equipment; current rental and leasing
costs of items which would be capital items if purchased; tool
costs; licenses, permits and inspection fees; wages and salaries;
employee benefits and payroll taxes; accounting and legal fees; any
sales, use or service taxes incurred in connection therewith. In
addition, Landlord shall be entitled to recover, as additional rent
(which, along with any other capital expenditures constituting
Expenses, Landlord may either include in Expenses or cause to be
billed to Tenant along with Expenses and Taxes but as a separate
item), Tenant’s Proportionate Share of: (i) an allocable
portion of the cost of capital improvement items which are
reasonably calculated to reduce operating expenses; (ii) the cost
of fire sprinklers and suppression systems and other life safety
systems; and (iii) other capital expenses which are required under
any governmental laws, regulations or ordinances which were not
applicable to the Building at the time it was constructed; but the
costs described in this sentence shall be amortized over the
reasonable life of such expenditures in accordance with such
reasonable life and amortization schedules as shall be determined
by Landlord in accordance with generally accepted accounting
principles, with interest on the unamortized amount at one percent
(1%) in excess of the Wall Street Journal prime lending rate
announced from time to time. Expenses shall not include Taxes,
Insurance Costs, depreciation or amortization of the Building or
equipment in the Building except as provided herein, loan principal
payments, costs of alterations of tenants’ premises, leasing
commissions, interest expenses on long-term borrowings or
advertising costs. If any Expenses are shared jointly between or
among the Building and another building, such as, but not limited
to, Reston Plaza I, such costs shall be allocated proportionately
between or among such buildings based upon the rentable square
footage of each building, or such other equitable manner as
Landlord shall deem appropriate.
Notwithstanding anything to the contrary, Expenses shall not
include Taxes, Insurance Costs, depreciation or amortization of the
Building or equipment in the Building except as provided herein,
loan principal payments, costs of alterations of tenants’
premises, leasing commissions; interest expenses on long-term
borrowings; advertising costs; wages and salaries for off-site
employees and employees at the Building above the level of district
manager; costs of repairs, restoration, replacements or other work
occasioned by (1) fire, windstorm or other casualty of a
customarily insurable nature (whether such destruction be total or
partial) and either (aa) payable (whether paid or not) by insurance
required to be carried by Landlord under this Lease, or (bb)
otherwise payable (whether paid or not) by insurance then in effect
obtained by Landlord, (2) the exercise by governmental authorities
of the right of eminent domain, whether such taking be total or
partial; (3) the gross negligence or intentional tort of Landlord,
or any subsidiary or affiliate of Landlord, or any representative,
employee or agent of same, or (4) the act of any other tenant in
the Building, or any other tenant’s agents, employees,
licensees or invitees to the extent Landlord has the right to
recover and actually recovers the applicable cost from such person;
attorneys’ fees, costs, disbursements and other expenses
incurred in connection with negotiations for leases with tenants,
other occupants, or prospective tenants or other occupants of the
Building, or similar costs incurred in connection with disputes
with tenants, other occupants, or prospective tenants; allowances,
concessions and other costs and expenses incurred in completing
fixturing, furnishing, renovating or otherwise improving,
decorating or redecorating space for tenants (including Tenant),
prospective tenants or other occupants and prospective occupants of
the Building or vacant, leasable space in the Building; costs of
the initial construction of the Building; deductions for
depreciation of the original Building when initially constructed;
costs of expenses relating to another tenant’s or
occupant’s space which were in excess of the Building
standard services then being provided by Landlord to all tenants or
other occupants in the Building, whether or not such other tenant
or occupant is actually charged therefor by Landlord; payments of
rent made on any debt payments made under any ground or underlying
lease or leases, except to the extent that a portion of such rental
payments is reasonably allocable to ad valorem/real estate taxes
and increased property values as a result of such leases; except as
real estate taxes may be increased due to a re-assessment of the
Building upon any of such events, costs incurred in connection with
the sale, financing, refinancing, mortgaging, selling or change of
ownership of the Building, including brokerage commissions,
attorneys’ and accountants’ fees, closing costs, title
insurance premiums, transfer and recordation taxes as a result of
such action, and interest charges; 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; costs
incurred by Landlord for trustee’s fees, partnership
organizational expenses and accounting fees except accounting fees
relating solely to the ownership and operation of the Building
(exclusive of the incremental accounting fees to the extent
incurred separately in reporting operating results to the Building
owners or lenders); any compensation paid to clerks, attendants or
other persons in commercial concessions operated by Landlord or in
the parking garage of the Building; Landlord’s income and
franchise taxes (other than those business taxes which relate
solely to the operation of the Building); all amounts which would
otherwise be included in operating expenses which are paid to any
affiliate or subsidiaries of Landlord, to the extent the costs of
such services exceed the competitive rates for similar services of
comparable quality; costs or expenses of utilities directly metered
to tenants of the Building and payable separately by such tenants;
moving expense costs of tenants of the Building to the extent not
provided by Landlord (i) to Tenant and (ii) generally to other
initial tenants of the Building; advertising and promotional costs
associated with the leasing of the Building; costs incurred to
correct violations by Landlord of any law, rule, order or
regulation which was in effect as of the Commencement Date;
electric power costs for which any tenant directly contracts with
the local public service company; and management fees in excess of
fair market management fees.
4.1.3 Taxes: Real
estate taxes and any other taxes, charges and assessments which are
levied with respect to the Building or the land appurtenant to the
Building, or with respect to any improvements, fixtures and
equipment or other property of Landlord, real or personal, located
in the Building and used in connection with the operation of the
Building and said land, any payments to any ground lessor in
reimbursement of tax payments made by such lessor; and all fees,
expenses and costs incurred by Landlord in investigating,
protesting, contesting or in any way seeking to reduce or avoid
increase in any assessments, levies or the tax rate pertaining to
any Taxes to be paid by Landlord in any calendar year. Taxes shall
not include any corporate franchise, or estate, inheritance or net
income tax, or tax imposed upon any transfer by Landlord of its
interest in this Lease or the Building or any taxes to be paid by
Tenant pursuant to Article 28. If any Taxes are shared jointly
between or among the Building and another building, such as, but
not limited to, Reston Plaza I, such costs shall be allocated
proportionately between or among such buildings based upon the
rentable square footage of each building, or such other equitable
manner as Landlord shall deem appropriate.
4.1.4 Insurance
Costs: Any and all insurance charges of or relating to all
insurance policies and endorsements deemed by Landlord to be
reasonably necessary or desirable and relating in any manner to the
protection, preservation, or operation of the Building or any part
thereof. If any Insurance Costs are shared jointly between or among
the Building and another building, such as, but not limited to,
Reston Plaza I, such costs shall be allocated proportionately
between or among such buildings based upon the rentable square
footage of each building, or such other equitable manner as
Landlord shall deem appropriate.
4.2 If in any calendar year,
(i) Expenses paid or incurred shall exceed Expenses paid or
incurred in the Base Year (Expenses) and/or (ii) Taxes paid or
incurred by Landlord shall exceed the amount of such Taxes which
became due and payable in the Base Year (Taxes), and/or (iii)
Insurance Costs paid or incurred by Landlord shall exceed the
amount of such Insurance Costs which became due and payable in the
Base Year (Insurance Costs), Tenant shall pay as additional rent
for such calendar year Tenant’s Proportionate Share of each
such excess amount.
4.3 The annual determination
of Expenses and Insurance Costs shall be made by Landlord and shall
be binding upon Landlord and Tenant, subject to the provisions of
this Section 4.3. During the Term, Tenant may review, at
Tenant’s sole cost and expense, the books and records
supporting such determination in an office of Landlord, or
Landlord’s agent, during normal business hours, upon giving
Landlord five (5) days advance written notice within sixty (60)
days after receipt of such determination, but in no event more
often than once in any one (1) year period, subject to
execution of a confidentiality agreement acceptable to Landlord,
and provided that if Tenant utilizes an independent accountant to
perform such review it shall be one of national standing which is
reasonably acceptable to Landlord, is not compensated on a
contingency basis and is also subject to such confidentiality
agreement. If Tenant fails to object to Landlord’s
determination of Expenses and Insurance Costs within ninety (90)
days after receipt, or if any such objection fails to state with
specificity the reason for the objection, Tenant shall be deemed to
have approved such determination and shall have no further right to
object to or contest such determination. In the event that during
all or any portion of any calendar year or Base Year, the Building
is not fully rented and occupied Landlord shall make an appropriate
adjustment in occupancy-related Expenses for such year for the
purpose of avoiding distortion of the amount of such Expenses to be
attributed to Tenant by reason of variation in total occupancy of
the Building, by employing consistent and sound accounting and
management principles to determine Expenses that would have been
paid or incurred by Landlord had the Building been at least
ninety-five percent (95%) rented and occupied, and the amount so
determined shall be deemed to have been Expenses for such calendar
year.
4.4 Prior to the actual
determination thereof for a calendar year, Landlord may from time
to time reasonably estimate Tenant’s liability for Expenses,
Insurance Costs and/or Taxes under Sections 4.1, Section 6.3 and
Article 28 for the calendar year or portion thereof. Landlord will
give Tenant written notification of the amount of such estimate and
Tenant agrees that it will pay, by increase of its Monthly
Installments of Rent due in such calendar year, additional rent in
the amount of such estimate. Any such increased rate of Monthly
Installments of Rent pursuant to this Section 4.4 shall remain in
effect until further written notification to Tenant pursuant
hereto.
4.5 When the above mentioned
actual determination of Tenant’s liability for Expenses,
Insurance Costs and/or Taxes is made for any calendar year and when
Tenant is so notified in writing, then:
4.5.1
If the total
additional rent Tenant actually paid pursuant to Section 4.3 on
account of Expenses, Insurance Costs and/or Taxes for the calendar
year is less than Tenant’s liability for Expenses, Insurance
Costs and/or Taxes, then Tenant shall pay such deficiency to
Landlord as additional rent in one lump sum within thirty (30) days
of receipt of Landlord’s bill therefor; and
4.5.2
If the total
additional rent Tenant actually paid pursuant to Section 4.3 on
account of Expenses, Insurance Costs and/or Taxes for the calendar
year is more than Tenant’s liability for Expenses, Insurance
Costs and/or Taxes, then Landlord shall credit the difference
against the then next due payments to be made by Tenant under this
Article 4, or, if the Lease has terminated, refund the difference
in cash. Tenant shall not be entitled to a credit by reason of
actual Expenses and/or Taxes and/or Insurance Costs in any calendar
year being less than Expenses and/or Taxes and/or Insurance Costs
in the Base Year (Expenses and/or Taxes and/or
Insurance).
4.6 If the Commencement Date
is other than January 1 or if the Termination Date is other than
December 31, Tenant’s liability for Expenses, Insurance Costs
and Taxes for the calendar year in which said Date occurs shall be
prorated based upon a three hundred sixty-five (365) day year.
Tenant’s obligation to pay Tenant’s Proportionate Share
of any unpaid Expenses, Insurance Costs, and Taxes which are
otherwise due and payable under this Lease shall survive the
expiration or earlier termination of the Term.
5.1 Tenant shall deposit the
Security Deposit with Landlord upon the execution of this Lease.
Notwithstanding the foregoing, Landlord and Tenant acknowledge and
agree that Parent previously has deposited a security deposit with
respect to the Premises under the Prior Lease in the amount of
Forty Thousand Nine Hundred Fifty and 50/100 Dollars ($40,950.50)
(the “ Prior Lease Security Deposit
”). Landlord and Tenant acknowledge and agree that, in
accordance with the terms and conditions of the Prior Lease
Termination Agreement, Landlord shall continue to hold a portion of
such Prior Lease Security Deposit equal to the Security Deposit
hereunder and that, subject to Landlord’s right to apply any
or all of such Prior Lease Security Deposit pursuant to the terms
of the Prior Lease, Landlord shall refund the remaining balance, if
any, of the Prior Lease Security Deposit to Parent on or before
December 31, 2005. The Security Deposit shall be held by Landlord
as security for the faithful performance by Tenant of all the
terms, covenants and conditions of this Lease to be kept and
performed by Tenant and not as an advance rental deposit or as a
measure of Landlord’s damage in case of Tenant’s
default. If Tenant defaults with respect to any provision of this
Lease, Landlord may, after the applicable cure period, use any part
of the Security Deposit for the payment of any rent or any other
sum in default, or for the payment of any amount which Landlord may
spend or become obligated to spend by reason of Tenant’s
default, or to compensate Landlord for any other loss or damage
which Landlord may suffer by reason of Tenant’s default. If
any portion is so used, Tenant shall within ten (10) days after
written demand therefor, deposit with Landlord an amount sufficient
to restore the Security Deposit to its original amount and
Tenant’s failure to do so shall be a material breach of this
Lease. Except to such extent, if any, as shall be required by law,
Landlord shall not be required to keep the Security Deposit
separate from its general funds, and Tenant shall not be entitled
to interest on such deposit. Provided that Tenant shall fully and
faithfully perform every provision of this Lease to be performed by
it, the Security Deposit or any balance thereof shall be returned
to Tenant at such time after termination of this Lease when
Landlord shall have determined that all of Tenant’s
obligations under this Lease have been fulfilled, but in any event
no later than sixty (60) days after the expiration of this
Lease.
5.2 As additional security
for the faithful performance by Tenant of all covenants, conditions
and agreements of this Lease, Parent, (“
Guarantor ”) has executed and delivered to
Landlord the Continuing Lease Guaranty (the “
Guaranty ”), in the form attached hereto as
Exhibit E , unconditionally guaranteeing to
Landlord the due and punctual payment and performance by Tenant of
all of Tenant’s obligations hereunder for the time period and
as otherwise more particularly set forth in the Guaranty. No right
or remedy available to Landlord under the Guaranty or this Lease
shall extinguish any other right to which Landlord may be entitled.
In furtherance of the foregoing, it is understood that in the event
Tenant fails to perform any of its obligations hereunder, any
amounts recovered by Landlord under the Guaranty shall not be
deemed liquidated damages. Landlord may apply such sums to reduce
Landlord’s damages and such application of funds shall not
preclude Landlord from recovering from Tenant or the Guarantor
jointly and severally all additional damages incurred by Landlord
by reason of Tenant’s failure to perform
hereunder.
6.1 Except for those, if
any, specifically provided for in Exhibit B to this Lease,
Tenant shall not make or suffer to be made any alterations,
additions, or improvements, including, but not limited to, the
attachment of any fixtures or equipment in, on, or to the Premises
or any part thereof or the making of any improvements as required
by Article 7, without the prior written consent of Landlord. When
applying for such consent, Tenant shall, if requested by Landlord,
furnish complete plans and specifications for such alterations,
additions and improvements. Landlord’s consent shall not be
unreasonably withheld, conditioned or delayed with respect to
alterations which (i) are not structural in nature, (ii) are not
visible from the exterior of the Building, (iii) do not materially
affect or require modification of the Building’s electrical,
mechanical, plumbing, HVAC or other systems, (iv) will not
interfere with the use and occupancy of any other portion of the
Building by any other tenant or their invitees; (v) do not and will
not, whether alone or taken together with other improvements,
require the construction of any other improvements or alterations
in other tenant’s space or the Common Areas; and (vi) in
aggregate do not cost more than $2.50 per rentable square foot of
that portion of the Premises affected by the alterations in
question.
6.2 In the event Landlord
consents to the making of any such alteration, addition or
improvement by Tenant, the same shall be made by using a contractor
reasonably approved by Landlord, at Tenant’s sole cost and
expense. If Tenant shall employ any contractor and such contractor
or any subcontractor of such contractor shall employ any non-union
labor or supplier, Tenant shall be responsible for and hold
Landlord harmless from any and all delays, damages and extra costs
suffered by Landlord as a result of any dispute with any labor
unions concerning the wage, hours, terms or conditions of the
employment of any such labor. In the event that Tenant requests and
Landlord provides supervisory services to Tenant in connection with
such work, Landlord may charge Tenant an administrative fee not to
exceed five percent (5%) of the cost of such work to cover its
overhead as it relates to such proposed work. Furthermore, Tenant
shall reimburse to Landlord any third-party costs actually incurred
by Landlord in connection with the proposed work and the design
thereof (including review of such proposed work and design), with
all such amounts being due ten (10) days after Landlord’s
demand, which will be submitted with reasonable supporting
information.
6.3 All alterations,
additions or improvements proposed by Tenant shall be constructed
in accordance with all government laws, ordinances, rules and
regulations, using Building standard materials where applicable,
and Tenant shall, prior to construction, provide the additional
insurance required under Article 11 in such case, and also all such
assurances to Landlord as Landlord shall reasonably require to
assure payment of the costs thereof, including but not limited to,
notices of non-responsibility, waivers of lien, surety company
performance bonds and funded construction escrows and to protect
Landlord and the Building and appurtenant land against any loss
from any mechanic’s, materialmen’s or other liens.
Tenant shall pay in addition to any sums due pursuant to Article 4,
any increase in real estate taxes attributable to any such
alteration, addition or improvement for so long, during the Term,
as such increase is ascertainable; at Landlord’s election
said sums shall be paid in the same way as sums due under Article
4. Landlord may, as a condition to its consent to any particular
alterations or improvements, require Tenant to deposit with
Landlord the amount reasonably estimated by Landlord as sufficient
to cover the cost of removing such alterations or improvements and
restoring the Premises, to the extent required under Section
26.2.
7.1 Landlord shall have no
obligation to alter, remodel, improve, repair, decorate or paint
the Premises, except as specified in Exhibit B if attached
to this Lease and except that Landlord shall repair and maintain
the structural portions of the Building, including the basic
plumbing, air conditioning, heating and electrical systems
installed or furnished by Landlord. By taking possession of the
Premises, Tenant accepts them as being in good order, condition and
repair and in the condition in which Landlord is obligated to
deliver them. It is hereby understood and agreed that no
representations respecting the condition of the Premises or the
Building have been made by Landlord to Tenant, except as
specifically set forth in this Lease.
7.2 Tenant shall, at all
times during the Term, keep the Premises in good condition and
repair excepting damage by fire, or other casualty, and in
compliance with all applicable governmental laws, ordinances and
regulations, promptly complying with all governmental orders and
directives for the correction, prevention and abatement of any
violations or nuisances in or upon, or connected with, the
Premises, all at Tenant’s sole expense.
7.3 Landlord shall not be
liable for any failure to make any repairs or to perform any
maintenance unless such failure shall persist for an unreasonable
time after written notice of the need of such repairs or
maintenance is given to Landlord by Tenant.
7.4 Except as provided in
Article 22, there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with
Tenant’s business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or
the Premises or to fixtures, appurtenances and equipment in the
Building. Except to the extent, if any, prohibited by law, Tenant
waives the right to make repairs at Landlord’s expense under
any law, statute or ordinance now or hereafter in
effect.
8.1 Tenant shall keep the
Premises, the Building and appurtenant land and Tenant’s
leasehold interest in the Premises free from any liens arising out
of any services, work or materials performed, furnished, or
contracted for by Tenant, or obligations incurred by Tenant. In the
event that Tenant fails, within ten (10) days following the
imposition of any such lien, to either cause the same to be
released of record or provide Landlord with insurance against the
same issued by a major title insurance company or such other
protection against the same as Landlord shall accept (such failure
to constitute an Event of Default), Landlord shall have the right
to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien.
All such sums paid by Landlord and all expenses incurred by it in
connection therewith shall be payable to it by Tenant within five
(5) days Landlord’s demand .
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9
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ASSIGNMENT AND
SUBLETTING.
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9.1 Tenant shall not have
the right to assign or pledge this Lease or to sublet the whole or
any part of the Premises whether voluntarily or by operation of
law, or permit the use or occupancy of the Premises by anyone other
than Tenant, and shall not make, suffer or permit such assignment,
subleasing or occupancy without the prior written consent of
Landlord, such consent not to be unreasonably withheld, conditioned
or delayed, and said restrictions shall be binding upon any and all
assignees of the Lease and subtenants of the Premises. In the event
Tenant desires to sublet, or permit such occupancy of, the
Premises, or any portion thereof, or assign this Lease, Tenant
shall give written notice thereof to Landlord at least sixty (60)
days but no more than one hundred twenty (120) days prior to the
proposed commencement date of such subletting or assignment, which
notice shall set forth the name of the proposed subtenant or
assignee, the relevant terms of any sublease or assignment and
copies of financial reports and other relevant financial
information of the proposed subtenant or assignee.
9.2 Notwithstanding any
assignment or subletting, permitted or otherwise, Tenant shall at
all times remain directly, primarily and fully responsible and
liable for the payment of the rent specified in this Lease and for
compliance with all of its other obligations under the terms,
provisions and covenants of this Lease. Upon the occurrence of an
Event of Default, if the Premises or any part of them are then
assigned or sublet, Landlord, in addition to any other remedies
provided in this Lease or provided by law, may, at its option,
collect directly from such assignee or subtenant all rents due and
becoming due to Tenant under such assignment or sublease and apply
such rent against any sums due to Landlord from Tenant under this
Lease, and no such collection shall be construed to constitute a
novation or release of Tenant from the further performance of
Tenant’s obligations under this Lease.
9.3 In addition to
Landlord’s right to approve of any subtenant or assignee,
Landlord shall have the option, in its sole discretion, in the
event of any proposed subletting or assignment, to terminate this
Lease, or in the case of one or more proposed sublettings (together
with any prior sublettings) of twenty percent (20%) or more of the
Premises in the aggregate for a period constituting the all or
substantially all of the remainder of the Term (exclusive of any
extension term), to recapture the portion of the Premises to be
sublet, as of the date the subletting or assignment is to be
effective. The option shall be exercised, if at all, by Landlord
giving Tenant written notice given by Landlord to Tenant within
thirty (30) days following Landlord’s receipt of
Tenant’s written notice as required above. However, if Tenant
notifies Landlord, within five (5) days after receipt of
Landlord’s termination notice, that Tenant is rescinding its
proposed assignment or sublease, the termination notice shall be
void and the Lease shall continue in full force and effect;
provided, however, Tenant’s failure to rescind its proposed
assignment or sublease shall be deemed a waiver of such rescission
right by Tenant. If this Lease shall be terminated with respect to
the entire Premises pursuant to this Section, the Term of this
Lease shall end on the date stated in Tenant’s notice as the
effective date of the sublease or assignment as if that date had
been originally fixed in this Lease for the expiration of the Term.
If Landlord recaptures under this Section only a portion of the
Premises, the rent to be paid from time to time during the
unexpired Term shall abate proportionately based on the proportion
by which the approximate square footage of the remaining portion of
the Premises shall be less than that of the Premises as of the date
immediately prior to such recapture. Tenant shall, at
Tenant’s own cost and expense, discharge in full any
outstanding commission obligation which may be due and owing as a
result of any proposed assignment or subletting, whether or not the
Premises are recaptured pursuant to this Section 9.3 and rented by
Landlord to the proposed tenant or any other tenant.
9.4 In the event that Tenant
sells, sublets, assigns or transfers this Lease (excluding an
assignment, sublease or other transaction as permitted by Section
9.8), Tenant shall pay to Landlord as additional rent an amount
equal to seventy five percent (75%) of any Increased Rent (as
defined below), less the Costs Component (as defined below), when
and as such Increased Rent is received by Tenant. As used in this
Section, “ Increased Rent ” shall mean
the excess of (i) all rent and other consideration which Tenant is
entitled to receive by reason of any sale, sublease, assignment or
other transfer of this Lease, over (ii) the rent otherwise payable
by Tenant under this Lease at such time. For purposes of the
foregoing, any consideration received by Tenant in form other than
cash shall be valued at its fair market value as determined by
Landlord in good faith. The “ Costs
Component ” is that amount which, if paid monthly,
would fully amortize on a straight-line basis, over the entire
period for which Tenant is to receive Increased Rent, the
reasonable costs incurred by Tenant for leasing commissions and
tenant improvements in connection with such sublease, assignment or
other transfer (excluding therefrom, however, any costs or expenses
attributable to any vacancy factor).
9.5 Notwithstanding any
other provision hereof, it shall be considered reasonable for
Landlord to withhold its consent to any assignment of this Lease or
sublease of any portion of the Premises if at the time of either
Tenant’s notice of the proposed assignment or sublease or the
proposed commencement date thereof, there shall exist any uncured
default of Tenant or matter which will become a default of Tenant
with passage of time unless cured, or if the proposed assignee or
sublessee is an entity: (a) with which Landlord is already in
negotiation; (b) is already an occupant of the Building unless
Landlord is unable to provide the amount of space required by such
occupant; (c) is a governmental agency; (d) is incompatible with
the character of occupancy of the Building; (e) with which the
payment for the sublease or assignment is determined in whole or in
part based upon its net income or profits; or (f) would subject the
Premises to a use which would: (i) involve increased personnel or
wear upon the Building; (ii) violate any exclusive right granted to
another tenant of the Building; (iii) require any addition to or
modification of the Premises or the Building in order to comply
with building code or other governmental requirements; or, (iv)
involve a violation of Section 1.2. Tenant expressly agrees that
for the purposes of any statutory or other requirement of
reasonableness on the part of Landlord, Landlord’s refusal to
consent to any assignment or sublease for any of the reasons
described in this Section 9.5, shall be conclusively deemed to be
reasonable.
9.6 Upon any request to
assign or sublet, Tenant will pay to Landlord the
Assignment/Subletting Fee plus, on demand, a sum equal to all of
Landlord’s reasonable costs, including reasonable
attorney’s fees, incurred in investigating and considering
any proposed or purported assignment or pledge of this Lease or
sublease of any of the Premises, regardless of whether Landlord
shall consent to, refuse consent, or determine that
Landlord’s consent is not required for, such assignment,
pledge or sublease. Any purported sale, assignment, mortgage,
transfer of this Lease or subletting which does not comply with the
provisions of this Article 9 shall be void.
9.7 If Tenant is a
corporation, limited liability company, partnership or trust, any
transfer or transfers of or change or changes within any twelve
(12) month period in the number of the outstanding voting shares of
the corporation or limited liability company, the general
partnership interests in the partnership or the identity of the
persons or entities controlling the activities of such partnership
or trust resulting in the persons or entities owning or controlling
a majority of such shares, partnership interests or activities of
such partnership or trust at the beginning of such period no longer
having such ownership or control shall be regarded as equivalent to
an assignment of this Lease to the persons or entities acquiring
such ownership or control and shall be subject to all the
provisions of this Article 9 to the same extent and for all intents
and purposes as though such an assignment. The foregoing limitation
shall not apply to the ordinary purchase and sale of shares of
Tenant if Tenant is a corporation, the voting stock of which is
listed on a nationally-recognized securities exchange as defined in
the Securities Exchange Act of 1934, as amended or
superseded.
9.8 Notwithstanding the
foregoing provisions of this Article to the contrary, Tenant shall
be permitted to assign this Lease, or sublet all or a portion of
the Premises, to a Qualified Tenant Affiliate (as hereinafter
defined) of Tenant without the prior consent of Landlord, if all of
the following conditions are first satisfied:
9.8.1
No Event of
Default by Tenant shall have occurred and no event exists which by
notice and/or the passage of time would constitute an Event of
Default if not cured within the applicable cure period provided
under the Lease, if any;
9.8.2
a fully
executed copy of such assignment or sublease, the assumption of
this Lease by the assignee or acceptance of the sublease by the
sublessee, and such other information regarding the assignment or
sublease as Landlord may reasonably request, shall have been
delivered to Landlord;
9.8.3
the Premises
shall continue to be operated solely for general office purposes or
other use acceptable to Landlord in its sole discretion;
9.8.4
Tenant shall
pay all third party costs reasonably incurred by Landlord in
connection with such assignment or subletting, including without
limitation attorneys’ fees (such third party costs not to
exceed $1,500.00 per such assignment or subletting) and the
Assignment/Subletting Fee set forth on the Reference Page of the
Lease; and
9.8.5
such
Qualified Tenant Affiliate shall possess a creditworthiness and
financial net worth acceptable to Landlord in its reasonable
discretion (as evidenced by a copy of such entity’s financial
statements covering its most recent fiscal year, audited by an
independent certified public accounting firm (if available), or if
not available, certified by such entity’s chief financial
officer).
Tenant
acknowledges (and, at Landlord’s request, at the time of such
assignment or subletting shall confirm) that in each instance
Tenant shall remain liable for performance of the terms and
conditions of the Lease despite such assignment or subletting. If
such sublease is for less than all of the Premises, tenant and such
sublessee agree to construct at their expense a Building standard
multi-tenant corridor on the applicable floor, if required by, and
in accordance with applicable laws. Such Qualified Tenant
Affiliate’s use of the Premises, in whole or in part, shall
not violate any exclusive right granted to another tenant in the
Building. As used herein, the term “ Qualified
Tenant Affiliate ” shall mean an entity which
(i) directly or indirectly controls Tenant; or (ii) is under the
direct or indirect control of Tenant; or (iii) is under common
direct or indirect control with Tenant; or (iv) is the
successor-in-interest to Tenant after a merger, sale of
substantially all of the assets of Tenant or public offering of
Tenant’s stock. As used in this Article 9, the term
“control” shall mean ownership of fifty-one percent
(51%) or more of the voting securities or rights of the controlled
entity.
10.1 None of the Landlord
Entities shall be liable and Tenant hereby waives all claims
against them for any damage to any property or any injury to any
person in or about the Premises or the Building by or from any
cause whatsoever (including without limiting the foregoing, rain or
water leakage of any character from the roof, windows, walls,
basement, pipes, plumbing works or appliances, the Building not
being in good condition or repair, gas, fire, oil, electricity or
theft), except to the extent caused by or arising from the gross
negligence or willful misconduct of Landlord or its agents,
employees or contractors. Tenant shall protect, indemnify and hold
the Landlord Entities harmless from and against any and all loss,
claims, liability or costs (including court costs and
attorney’s fees) incurred by reason of (a) any damage to any
property (including but not limited to property of any Landlord
Entity) or any injury (including but not limited to death) to any
person occurring in, on or about the Premises or the Building to
the extent that such injury or damage shall be caused by or arise
from any actual or alleged act, neglect, fault, or omission by or
of Tenant or any Tenant Entity to meet any standards imposed by any
duty with respect to the injury or damage; (b) the conduct or
management of any work or thing whatsoever done by the Tenant in or
about the Premises or from transactions of the Tenant concerning
the Premises; (c) Tenant’s failure to comply with any and all
governmental laws, ordinances and regulations applicable to the
condition or use of the Premises or its occupancy; or (d) any
breach or default on the part of Tenant in the performance of any
covenant or agreement on the part of the Tenant to be performed
pursuant to this Lease. The provisions of this Article shall
survive the termination of this Lease with respect to any claims or
liability accruing prior to such termination.
11.1 Tenant shall keep in
force throughout the Term: (a) a Commercial General Liability
insurance policy or policies to protect the Landlord Entities
against any liability to the public or to any invitee of Tenant or
a Landlord Entity incidental to the use of or resulting from any
accident occurring in or upon the Premises with a limit of not less
than $1,000,000.00 per occurrence and not less than $2,000,000.00
in the annual aggregate, or such larger amount as Landlord may
prudently require from time to time, covering bodily injury and
property damage liability and $1,000,000 products/completed
operations aggregate; (b) Business Auto Liability covering owned,
non-owned and hired vehicles with a limit of not less than
$1,000,000 per accident; (c) insurance protecting against liability
under Worker’s Compensation Laws with limits at least as
required by statute with Employers Liability with limits of
$500,000 each accident, $500,000 disease policy limit, $500,000
disease--each employee; (d) All Risk or Special Form coverage
protecting Tenant against loss of or damage to Tenant’s
alterations, additions, improvements, carpeting, floor coverings,
panelings, decorations, fixtures, inventory and other business
personal property situated in or about the Premises to the full
replacement value of the property so insured; and, (e) Business
Interruption Insurance with limit of liability representing loss of
at least approximately six (6) months of income.
11.2 The aforesaid policies
shall (a) be provided at Tenant’s expense; (b) name the
Landlord Entities as additional insureds (General Liability) and
loss payee (Property—Special Form); (c) be issued by an
insurance company with a minimum Best’s rating of “
A:VII ” during the Term; and (d) provide
that said insurance shall be written on an occurrence basis and
shall not be canceled unless thirty (30) days prior written notice
(ten days for non-payment of premium) shall have been given to
Landlord; a certificate of Liability insurance on ACORD Form 25 and
a certificate of Property insurance on ACORD Form 27 shall be
delivered to Landlord by Tenant upon the Commencement Date and at
least thirty (30) days prior to each renewal of said
insurance.
11.3 Whenever Tenant shall
undertake any alterations, additions or improvements in, to or
about the Premises (“ Work ”) the
aforesaid insurance protection must extend to and include injuries
to persons and damage to property arising in connection with such
Work, without limitation including liability under any applicable
structural work act, and such other insurance as Landlord shall
require; and the policies of or certificates evidencing such
insurance must be delivered to Landlord prior to the commencement
of any such Work.
12.1 So long as their
respective insurers so permit, Tenant and Landlord hereby mutually
waive their respective rights of recovery against each other for
any property loss insured by fire, extended coverage, All Risks or
other insurance now or hereafter existing for the benefit of the
respective party but only to the extent of the net insurance
proceeds payable under such policies. Each party shall obtain any
special endorsements required by their insurer to evidence
compliance with the aforementioned waiver.
13.1 Provided Tenant shall
not be in default under this Lease, and subject to the other
provisions of this Lease, Landlord agrees to furnish to the
Premises during Building Business Hours (specified on the Reference
Pages) on generally recognized business days (but exclusive in any
event of Sundays and Holidays), the following services and
utilities subject to the rules and regulations of the Building
prescribed from time to time, such services to be reasonably
commensurate with industry standard for suburban commercial office
buildings in the Reston, Virginia submarket, of a similar age, size
and quality to the Building: (a) water suitable for normal office
use of the Premises; (b) heat and air conditioning required in
Landlord’s judgment for the use and occupation of the
Premises during Building Business Hours; (c) cleaning and
janitorial service; (d) elevator service by nonattended automatic
elevators, if applicable; (e) snow removal and pest control; and,
(f) equipment to bring to the Premises electricity for lighting,
convenience outlets and other normal office use. Landlord shall
include electricity costs in Expenses. In the absence of
Landlord’s gross negligence or willful misconduct, Landlord
shall not be liable for, and Tenant shall not be entitled to, any
abatement or reduction of rental by reason of Landlord’s
failure to furnish any of the foregoing, unless such failure shall
persist for an unreasonable time after written notice of such
failure is given to Landlord by Tenant and provided further that
Landlord shall not be liable when such failure is caused by
accident, breakage, repairs, labor disputes of any character,
energy usage restrictions or by any other cause, similar or
dissimilar, beyond the reasonable control of Landlord. Landlord
shall use reasonable efforts to remedy any interruption in the
furnishing of services and utilities.
13.2 Should Tenant require
any additional work or service, as described above, including
services furnished outside ordinary business hours specified above,
Landlord may, on terms to be agreed, upon reasonable advance notice
by Tenant, furnish such additional service and Tenant agrees to pay
Landlord such charges as may be agreed upon, including any tax
imposed thereon, but in no event at a charge less than
Landlord’s actual cost plus overhead for such additional
service and, where appropriate, a reasonable allowance for
depreciation of any systems being used t
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