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Exhibit 10.19
OFFICE BUILDING LEASE
FOR
QUADRAMED CORPORATION
RESTON EXECUTIVE II
Suites 500 and 600
Reston, Virginia 22090
CHARLES E.
SMITH
REAL ESTATE SERVICES L.P.
2345 Crystal Drive
Crystal City
Arlington, Virginia 22202
[LOGO OF SMITH COMPANY]
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<PAGE>
TABLE OF CONTENTS
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SPECIFIC AND GENERAL PROVISIONS
PAGE
1. SPECIFIC
PROVISIONS........................................................1
2.
RENT.......................................................................4
2.1 Base Annual
Rent.....................................................4
(a) Payment of Base Annual
Rent......................................4
(b) Escalation of Base Annual
Rent...................................4
2.2 Additional
Rent......................................................4
(a) Real Estate
Taxes................................................4
(b) Operating
Expenses...............................................5
2.3 Additional Rent Estimates
and Adjustments............................5
(a) Initial Additional Rent
Adjustments..............................5
(b) Annual
Budget....................................................5
(c) Additional Rent
Reconciliations..................................5
(d) Verification of Additional
Rent..................................6
(e) Fiscal
Year......................................................6
2.4 Rent Adjustment
Limit................................................6
2.5 Survival of Rent
Obligation..........................................6
2.6 Pro Rata
Share.......................................................6
2.7 Prorated
Rent........................................................6
2.8 Application of
Rent..................................................6
2.9 Late Payment Fee and
Interest Charge.................................6
2.10 Other Tenant Costs and
Expenses......................................6
3. CONSTRUCTION OF PREMISES AND
OCCUPANCY ....................................6
3.1 Tenant Plans, Construction
and Rent Liability........................6
(a) Preparation of Tenant
Plans......................................6
(b) Extension of Construction
Timetable..............................7
3.2
Possession...........................................................7
3.3
Permits..............................................................7
3.4 Demised
Premises.....................................................7
4. SUBLETTING AND
ASSIGNMENT..................................................7
4.1
Consent..............................................................7
4.2 Recapture of
Premises................................................8
4.3
Subletting...........................................................8
4.4 Tenant
Liability.....................................................8
4.5 Reasonable Standards of
Consent......................................8
4.6 Other
Transfers........:.............................................8
4.7 Rights on
Default....................................................8
5. SERVICES AND
UTILITIES.....................................................9
5.1 Building Standard Services
and Utilities.............................9
5.2 Overtime
Services....................................................9
5.3 Excessive
Usage......................................................9
(a) Equipment
Restrictions...........................................9
(b) Excess Electrical
Usage..........................................9
(c) Additional Utility
Costs.........................................9
5.4 Excessive Heat
Generation............................................9
5.5 Building
Security...................................................10
5.6 Roof and Auxiliary
Spaces...........................................10
5.7 Trash
Removal.......................................................10
6. USE AND UPKEEP OF
PREMISES................................................10
6.1
Use.................................................................10
6.2 Illegal and Prohibited
Uses.........................................10
6.3 Insurance
Rating....................................................10
6.4
Alterations.........................................................10
(a)
Approval
Required...............................................10
(b) Alteration
Requirements.........................................11
(c) Removal of Leasehold Improvements and Tenant's
Property.........11
(d) Compliance with
Laws............................................11
6.5 Maintenance by
Landlord.............................................12
(a) Landlord Repairs and
Maintenance................................12
(b) Use of Demised Premises by
Landlord.............................12
6.6 Signs and
Publications..............................................12
6.7 Excessive Floor
Load................................................12
6.8 Moving and
Deliveries...............................................12
(a)
Prohibitions/Notices............................................12
(b) Coordination with
Landlord......................................12
(c) Moving
Damages..................................................12
(i)
<PAGE>
TABLE OF CONTENTS
(continued)
6.9 Rules and
Regulations...............................................13
6.10 Tenant Maintenance and Condition
of Demised Premises Upon
Surrender...........................................................13
6.11 Tenant Property and Leasehold
Improvements..........................13
6.12 Landlord's Right to Perform
Tenant's Duties.........................13
6.13 Medical
Waste.......................................................13
7.
ACCESS....................................................................13
7.1 Landlord's
Access...................................................13
7.2 Restricted
Access...................................................13
7.3 Tenant's
Access.....................................................13
8.
LIABILITY.................................................................14
8.1 Tenant's
Property...................................................14
8.2 Criminal Acts of Third
Parties......................................14
8.3 Public
Liability....................................................14
8.4 Construction on Contiguous
Property.................................14
8.5 Tenant
Insurance....................................................14
(a) Liability
Insurance.............................................14
(b) Fire and Casualty
Insurance.....................................14
(c) Increases in
Coverage...........................................14
(d) Policy
Requirements.............................................14
(e) No Limitation of
Liability......................................14
(f) Waiver of
Subrogation...........................................15
(g) Business
Interruption...........................................15
8.6 Incident
Reports....................................................15
8.7 Landlord's
Insurance................................................15
9.
DAMAGE....................................................................15
9.1 Damages Caused by
Tenant............................................15
9.2 Fire or Casualty
Damage.............................................15
9.3
Untenantability.....................................................15
(a) Restoration
Requirements........................................15
(b) Casualty Near Expiration of Lease
Term..........................16
10.
CONDEMNATION..............................................................16
10.1 Landlord's Right to
Award...........................................16
10.2 Tenant's Right to File
Claim........................................16
11.
BANKRUPTCY................................................................16
11.1 Events of
Bankruptcy................................................16
11.2 Landlord's
Remedies.................................................17
(a) Termination of
Lease............................................17
(b) Suit for
Possession.............................................17
(c) Non-Exclusive
Remedies..........................................17
(d) Assumption or Assignment by
Trustee.............................17
(e) Adequate Assurance of Future
Performance........................17
(f) Failure to Provide Adequate
Assurance...........................17
11.3
Guarantors..........................................................17
11.4
Damages.............................................................17
12. DEFAULTS AND
REMEDIES.....................................................17
12.1
Default.............................................................18
12.2
Remedies............................................................17
12.3 Landlord's Right to
Relet...........................................18
12.4 Recovery of
Damages.................................................18
(a) Quantification of
Damages.......................................18
(b) Non-Exclusive
Rights............................................19
12.5
Waiver..............................................................19
12.6 Intentionally
Deleted...............................................19
(a) Repudiation Prior to Commencement
Date..........................19
(b) Repudiation of Any Obligation of Tenant During Lease
Term.......19
12.7 Tenant Abandonment of Demised
Premises..............................19
(a)
Abandonment.....................................................19
(b) Landlord Right to Enter and to
Relet............................19
12.8 Tenant's
Property...................................................19
12.9 Intentionally
Deleted...............................................20
12.10 Injunctive
Relief...................................................20
12.11 Independent
Covenants...............................................20
(ii)
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TABLE OF CONTENTS
(continued)
12.12 Waiver of
Redemption................................................20
12.13
Attorneys'Fees......................................................20
13.
SUBORDINATION.............................................................20
13.1
Subordination.......................................................20
13.2 Estoppel
Certificates...............................................20
13.3
Attornment..........................................................21
13.4 Mortgagee
Rjghts....................................................21
(a) Mortgagee
Requirements..........................................21
(b) Notices to
Mortgagee............................................21
14. TENANT'S
HOLDOVER.........................................................21
14.1 With Landlord
Consent...............................................21
14.2 Without Landlord
Consent............................................21
15. SECURITY
DEPOSIT..........................................................22
16. QUIET
ENJOYMENT...........................................................22
17.
SUCCESSORS................................................................22
18. WAIVER OF JURY TRIAL AND
STATUTE OF LIMITATIONS...........................22
19. LIMITATION OF LANDLORD'S
LIABILITY; NOTICE................................22
19.1 Intentionally
Deleted...............................................22
19.2 Individual
Liability................................................22
19.3 Notice in Event of Landlord's
Default...............................22
20.
AUTHORITY.................................................................22
21. TENANT'S RESPONSIBILITY
REGARDING HAZARDOUS SUBSTANCES....................23
21.1 Hazardous
Substances................................................23
21.2 Tenant's
Restrictions...............................................23
(a)
Violations......................................................23
(b)
Use.............................................................23
21.3 Affirmative
Obligations.............................................23
(a) Compliance with
Laws............................................23
(b) Clean-Up
Plans..................................................23
(c) Information
Requests............................................23
21.4 Intentionally
Deleted...............................................23
21.5 Survival of
Obligations.............................................23
22. INTENTIONALLY
DELETED.....................................................23
23.
DEFINITIONS...............................................................23
23.1
Pronouns............................................................24
23.2 Demised
Premises....................................................24
23.3 Lease
Term..........................................................24
23.4 Tenants
Property....................................................24
23.5 Leasehold
Improvements..............................................24
24. NOTICE TO
PARTIES.........................................................24
24.1 Addresses for
Notices...............................................24
24.2 Effective Date of
Notice............................................24
25. NOTICE TO
MORTGAGEES.................'....................................24
26. SPECIAL PROVISIONS;
EXHIBITS..............................................24
26.1 Incorporation in
Lease..............................................24
26.2
Conflicts...........................................................24
27.
CAPTIONS..................................................................24
28. ENTIRE AGREEMENT;
MODIFICATION............................................24
29. GOVERNING LAW;
SEVERABILITY...............................................25
30. BINDING EFFECT OF
LEASE...................................................25
31. FORCE
MAJEURE.............................................................25
32.
RECORDATION...............................................................25
33. TIME OF
ESSENCE...........................................................25
34. BROKERS AND
COMMISSIONS...................................................25
35. RELATIONSHIP OF LANDLORD
AND TENANT.......................................25
(iii)
<PAGE>
This Lease, made
this 15/th/ day of June, 2001, between CESC RESTON
EXECUTIVE CENTER LLC, a
Delaware limited liabilty company (hereinafter referred
to as "Landlord"), and
QUADRAMED CORPORATION, a Delaware corporation
(hereinafter referred to as
"Tenant").
Landlord, for
and in consideration of the covenants and agreements set
forth hereinafter, leases to
Tenant, and Tenant leases from Landlord, the
premises described, for the
use set forth and for the term and at the rent
reserved herein.
1. SPECIFIC
PROVISIONS
1.1 PREMISES
(a) Demised Premises:
Suites 500 and 600, each consisting of 19,912
square feet.
(b) Rentable Area: Approximately
39,824 square feet (Modified
Washington D.C. Association of Realtors
standard floor area measure as defined in
Exhibit G).
(c) Complex:
The buildings, improvements and grounds known
as
Reston Executive Center, of which the
Building is a part.
(d) Building:
RESTON EXECUTIVE II
(e) Address:
12110 Sunset Hills Road
Reston, Virginia 22090
1.2 LEASE DATES
(a) Lease Term:
The term of this Lease ("Lease Term") shall be
Ten (10) years, commencing on August 1,2001
("Commencement Date"), and expiring on July 31,
2011, both dates inclusive, unless sooner
terminated in accordance with the provisions of
this Lease. Provided Tenant was not at fault
therefor, in the event Landlord is unable to
tender possession of the Demised Premises to
Tenant on the Commencement Date, the aforesaid
dates, and all dates hereinafter related
thereto shall be postponed to the extent
Landlord is delayed in tendering possession of
the Demised Premises to Tenant.
(b) Base Year:
Base Year shall be defined as the period
commencing on January 1, 2001, and ending on
December 31, 2001.
(c) Fiscal Year:
Fiscal Year shall be defined as each annual
period, or portion thereof, included within the
Lease Term commencing on January 1 and ending
on December 31.
(d) Lease Year:
The first Lease Year shall commence on the
Commencement Date and shall terminate at 11:59
p.m. on the day before the first anniversary of
the
Commencement Date. All subsequent Lease
Years shall be for twelve calendar months,
except that the last Lease Year shall terminate
on the date this Lease expires or is terminated
in accordance with the provisions hereof.
(e) Calendar Year: Calendar Year
(sometimes appearing as 'calendar
year') shall be defined as each annual period
from January 1 through the immediately
following December 31.
1.3 BASE ANNUAL RENT
(a) Initial Base Annual Rent: One Million Four Hundred
Sixty-Three
Thousand Five Hundred
Thirty-Two and 00/100 Dollars ($1,463,532.00),
($36.75 per square foot) payable in equal monthly installments of
One
Hundred Twenty-One Thousand Nine Hundred Sixty-One and 00/100
Dollars
($121,961.00), hereinafter referred to as "base monthly rent", for
the
first Lease Year.
(b) Percentage Factor: Three Percent (3%).
1
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1.4 BASE YEAR COSTS
Not Applicable.
1.5 ADDITIONAL RENT
Additional Rent shall be payable by Tenant in accordance with
Section
2, commencing on the first (l/st/) anniversary of the
Commencement
Date, consisting of each of the following:
(a) Increases in Real
Estate Taxes:
Tenant's pro rata share (based on 137,780
square feet of office space in the Building),
equal to Twenty-Eight and Nine Hundredths
Percent
(28.9%), of the amount of Real Estate
Taxes in excess of the Base Year Real Estate
Taxes.
(b) Increases in Operating
Expenses:
Tenant's pro rata share (based on 137,780
square feet of office space in the Building),
equal to Twenty-Eight and Nine Hundredths
Percent (28.9%), of the amount of Operating
Expenses in excess of the Base Year Operating
Expenses.
1.6 SECURITY DEPOSIT
Four Hundred Forty Thousand and 00/100 Dollars ($440,000.00)
in
accordance with Section 45 hereinafter.
1.7 STANDARD BUILDING OPERATING DAYS
AND HOURS
8:00 A.M. to 6:00 P.M. Monday - Friday
8:00 A.M. to 1:00 P.M. Saturday
1.8 USE OF PREMISES
General office use in keeping with the quality and nature of
this
first class office building.
1.9 (a) ADDRESS FOR NOTICES TO
TENANT
Quadramed Corporation
QuadraMed
22 Pelican Way
with a copy to 12110
Sunset Hills Road
San Rafael,
Suite 600
California 949011
Reston, Virginia 20190
Attn: Executive Vice
Attn: Director, Human
President
Resources
(b) ADDRESS FOR
NOTICES TO LANDLORD
CESC Reston Executive Center LLC
c/o Charles E. Smith Real Estate Services L.P.
2345 Crystal Drive
Arlington, VA 22202
with a copy to:
(c) ADDRESS FOR
PAYMENT OF RENT
CESC Reston Executive Center LLC
c/o Charles E. Smith Real Estate Services L.P.
P. O. Box 642006
Pittsburgh, PA 15264-2006
2
<PAGE>
1.10 SPECIAL
PROVISIONS
Accrual of Rent
Obligation
Section 36
Remodeling the
Demised Premises
Section 37
Parking
Section 38
Renewal Option
Section 39
Fair Market
Value Rent
Section 40
Building
Directory
Section 41
Exterior Signage
Section 42
Right of First
Offering
Section 43
Nondisturbance
Section 44
Letter of Credit
Section 45
Excess
Electrical Consumption
Section 46
Execution of
Document
Section 47
1.11 EXHIBITS TO
LEASE
Exhibit A- Not Applicable
Exhibit B- Not Applicable
Exhibit C- Building Rules and Regulations
Exhibit D- Cleaning Specifications
Exhibit E- Not Applicable
Exhibit F- Not Applicable
Exhibit G- Rentable Area Definition
IN WITNESS
WHEREOF, Landlord has caused this Lease, composed of
Specific
Provisions, General
Provisions, Special Provisions and Exhibits, to be
signed
and sealed by one or more of
its Officers, General Partners, Trustees, or
Agents, and Tenant has caused
this Lease, as described above, to be signed in
its corporate name by its
duly authorized officer and its corporate seal to be
hereto affixed and duly
attested by its Secretary.
WITNESS:
LANDLORD: CESC RESTON
EXECUTIVE CENTER
LLC
/s/
By: /s/ Kenneth L.Mc
Vearry
(SEAL)
-------------------------------------
-------------------------------
Kenneth L. Mc Vearry
Executive Vice President
ATTEST:
TENANT:
QUADRAMED CORPORATION
CORPORATE SEAL /s/
By /s/ Mark N.Thomas
(SEAL)
----------------------
-------------------------------
Secretary
Name: MARK N.THOMAS
MICHAEL H. LANZA
Title: CFO
3
<PAGE>
GENERAL PROVISIONS
2. RENT
2.1 Base Annual Rent.
(a) Payment of Base Annual Rent. After the Commencement Date,
Tenant
shall pay the monthly
installments of Base Annual Rent in advance without
deduction, demand, right of
set-off or recoupment, in immediately available
funds, on the first day of
each and every calendar month throughout the entire
Lease Term specified in
Section 1.2(a), to Charles E. Smith Real Estate Services
L.P. ("Landlord's Agent") at
the address specified in Section 1.9(c), or to such
other person or at such other
place as Landlord may hereafter designate in
writing.
(b) Escalation of Base Annual Rent. Commencing on the
first
anniversary date of the
Commencement Date and continuing on each subsequent
anniversary thereof, the Base
Annual Rent shall be increased by the Percentage
Factor stipulated in Section
1.3(b) times the Base Annual Rent payable for the
preceding Lease Year (all of
which shall be calculated without giving effect to
any waiver of rent or rent
credit otherwise provided to Tenant). The escalated
Base Annual Rent so
determined shall be the "Base Annual Rent" for all
purposes
of this Lease, including the
calculation of the increase in Base Annual Rent for
the subsequent Lease
Year.
2.2 Additional Rent. Commencing on the
date set forth in Section 1.5 and
continuing throughout the
Lease Term, Tenant shall pay as Additional Rent
Tenant's pro rata share of
any (i) Real Estate Taxes and (ii) Operating
Expenses, in excess of the
(i) Real Estate Taxes and (ii) Operating Expenses,
respectively, accruing during
the Base Year. Additional Rent shall be determined
as follows:
(a) Real Estate Taxes. Tenant shall pay Tenant's pro rata share,
as
defined in Section 1.5(a), of
any Real Estate Taxes accruing during each Fiscal
Year falling entirely or
partly within the Lease Term, in excess of the amount
of Real Estate Taxes accruing
during the Base Year.
(i) The term "Real Estate Taxes"
shall mean (1) all taxes,
assessments (including all
assessments for public improvements or benefits,
whether or not commenced or
completed prior to the date hereof and whether or
not to be completed within
the Lease Term), water, sewer, transportation or
other excises, levies,
license fees, permit fees, impact fees, inspection fees,
and other authorization fees
and other similar charges, in each case whether
general or special, levied or
assessed, ordinary or extraordinary, foreseen or
unforeseen, of every
character (including all interest and penalties
thereon),
which at any time during or
in respect of the Lease Term, may, by any
governmental or taxing
authority, be assessed, levied, confirmed, or imposed on
or in respect of, or be a
lien upon, the land and the building improvements of
which the Demised Premises
are a part, and on any land and/or improvements now
or hereafter owned by
Landlord and/or others that provide the Complex or
locality or the Demised
Premises with other services, programs, amenities or
common facilities, together
with (2) any other tax imposed on real estate or on
owners of real estate
generally, including taxes imposed on leasehold
improvements which are
assessed against the Landlord and taxes upon or with
respect to any activity
conducted on the land and improvements of which the
Demised Premises are a part,
upon this Lease or any rent reserved or payable
hereunder. Real Estate Taxes
shall not include any income, franchise or other
taxes measured by Landlord's
income. Wherever Real Estate Taxes are incurred
with respect to one or more
buildings in the Complex or with respect to common
areas within the Complex,
then the Landlord shall reasonably allocate those Real
Estate Taxes consistently and
equally among all buildings and tenants in the
Complex.
(ii) If Real Estate
Taxes accruing during the Base Year are
subsequently reduced by any
application or proceeding brought by or on behalf of
Landlord for reduction in the
amount of Real Estate Taxes payable by Landlord,
the Real Estate Taxes deemed
to have accrued during the Base Year shall be
decreased and Landlord may
promptly bill Tenant for the Additional Rent not
previously paid by Tenant for
any Fiscal Year during the Lease Term, based upon
the reduced amount of Real
Estate Taxes accruing during the Base Year.
(iii) Grossed Up Real Estate Taxes. Notwithstanding anything
in
this Lease to the contrary,
Real Estate Taxes for all fiscal years shall be
"grossed-up" on the basis
that the Building is Ninety-Five Percent (95%)
occupied and fully
assessed.
(iv) In addition to
the pro rata share of any increase in Real
Estate Taxes to be paid by
Tenant pursuant to Sections 2.2(a)(i), (ii) and (iii)
above, Tenant shall reimburse
Landlord upon demand for any and all taxes
required to be paid by
Landlord upon, measured by, or reasonably attributable
to
the cost or value of Tenant's
Property or by the cost or value of any Leasehold
Improvements made in or to
the Demised Premises by or for Tenant, regardless of
whether title to such
Leasehold Improvements shall be in Tenant or Landlord,
and
for all taxes required to be
paid by Landlord upon, measured by, or reasonably
attributable to or with
respect to the possession, leasing, operation,
management, maintenance,
alteration, repair, use or occupancy by Tenant of the
Demised Premises or any
portion thereof to the extent such taxes are not
included in Real Estate
Taxes.
(b) Operating Expenses. Tenant shall pay Tenant's pro rata share,
as
indicated in Section 1.5(b),
of any Operating Expenses accruing during each
Fiscal Year falling entirely
or partly within the Lease Term, in excess of the
Operating Expenses accruing
during the Base Year.
(i) The term
"Operating Expenses" shall mean any and all
expenses of Landlord in
connection with the servicing, insuring, operation,
maintenance, replacement and
repair of the Building and related interior and
exterior appurtenances of
which the Demised Premises are a part, or for health,
welfare or safety; expenses,
if any, of Landlord either alone or in conjunction
with others to maintain
common facilities, amenities, programs and services
required or approved by
jurisdictional authorities for the Building, the
building site, the Complex or
the locality in which the Complex is situated; the
cost of any services to
achieve a reduction of, or to minimize the increase in,
Operating Expenses or Real
Estate Taxes; management fees (not to exceed five
percent [5%] of the gross
rental income of the Building); vault rentals;
business license, personal
property and other taxes; capital expenditures and
other costs of Landlord for
equipment or systems installed to reduce or minimize
increases in Operating
Expenses or to comply with any governmental or
quasi-governmental ordinance
changed, enacted or newly interpreted, after the
Commencement Date (at the
option of Landlord, such costs, with interest at
twelve percent (12%)
annually, may be recovered from Tenant in installments
simultaneous with the payment
of monthly installments of Base Annual Rent in
accordance with a cost
repayment schedule based on the useful life of such
equipment or systems). At the
reasonable discretion of Landlord, certain of
these expenses may be
equitably apportioned among two or more buildings in the
Complex.
4
<PAGE>
(ii) The term
"Operating Expenses" shall not include any of the
following, except to the
extent that such costs and expenses are specifically
included in Operating
Expenses as described in Section 2.2(b)(i)above: capital
expenditures and depreciation
of the Building; painting and decorating of tenant
space; interest and
amortization of mortgages; ground rent; compensation paid
to
officers or executives of
Landlord; taxes as measured by the net income of
Landlord from the operation
of the Building; insurance reimbursements of
Operating Expenses to
Landlord; Real Estate Taxes; brokerage commissions;
costs
of repairs, restoration,
replacements or other work occasioned by fire,
windstorm or other insured
casualty (whether such destruction be total or
partial) to the extent of
insurance proceeds therefor; the cost of repairs,
etc., occasioned by the
exercise by governmental authorities of the right of
eminent domain, whether such
taking be total or partial, to the extent of any
condemnation awards; costs
occasioned by intentional tort of Landlord, or any
subsidiary or affiliate of
Landlord, or any employee or agent of same or the act
of any other tenant in the
Building, or any other tenant's agents, employees,
licensees or invitees, to the
extent Landlord recovers the applicable cost from
such person; leasing
commissions, attorneys' fees (except for those
reasonable
attorneys'fees directly
related to Operating Expenses or Real Estate Taxes);
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, or
similar costs and expenses incurred in connection with
negotiations or disputes with
management agents, purchasers or mortgagees of the
Building; 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
or expenses relating to another tenant's or
occupant's space which were
incurred in rendering any service or benefit to
such tenant that was not
available to Tenant; payments of principal and interest
or other finance charges made
on any debt and rental payments made under any
ground or underlying lease or
leases; costs incurred in connection with the
sale, financing, refinancing,
mortgaging, selling or change of ownership of the
Building, including
attorneys' and accountants' fees, closing costs, title
insurance premiums, transfer
taxes 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 trustees fees,
partnership organizational
expenses and accounting fees (except accounting fees
relating solely to the
ownership and operation of the Building); Landlord's
general corporate overhead
and general and administrative expenses; any
compensation paid to clerks,
attendants or other persons in commercial
concessions operated by
Landlord or in the parking garage of the Building;
rentals and other related
expenses incurred in leasing air conditioning systems,
elevators or other equipment
ordinarily considered to be of a capital nature
(except for equipment not
affixed to the Building which is used in providing
janitorial or similar
services); the rent for Landlord's on-site management or
leasing office, or any other
offices or spaces of Landlord or any related
entity; Landlord's income and
franchise taxes; special assessments and other
business taxes except 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, or any
representative, employee or
agent of same, to the extent the costs of such
services exceed fair market
value; except the management fee paid to Landlord's
Agent, all other fees for
management of the Building; costs or expenses of
utilities directly metered to
tenants of the Building and payable separately by
such tenants; costs incurred
(less costs of recovery) for any items to the
extent covered by a
manufacturer's materialman's, vendor's or contractor's
warranty (a 'Warranty') which
are paid by such manufacturer, materialman, vendor
or contractor; electric power
costs for which any tenant directly contracts with
the local public service
company; services provided and costs incurred in
connection with the operation
of the parking garage or retail or the ancillary
operations owned, operated or
subsidized by Landlord; rental for any space in
the Building set aside for
conference facilities, storage facilities or exercise
facilities; hazardous
material remediation costs exceeding $10,000 annually;
wages and salaries for
off-site employees and employees at the Building above
the level of building
manager; reserves for repairs, maintenance or
replacements; and marketing
expenses.
Grossed Up Real Estate Taxes and Operating Expenses
---------------------------------------------------
Notwithstanding anything in this Lease to the contrary,
Operating
Expenses for all fiscal years
shall be "grossed-up" on the basis that the
Building is Ninety-Five
Percent (95%) occupied and fully assessed.
2.3 Additional Rent Estimates and
Adjustments.
(a) Initial Additional Rent Adjustments. Landlord shall submit
to
Tenant prior to the date set
forth in Section 1.5 a statement of Landlord's
reasonable estimate of the
increases described in Sections 2.2(a) and (b) above,
together with the amount of
Tenant's Additional Rent which is estimated to
result from such increases,
in which event Tenant shall pay such estimated
Additional Rent to Landlord
in equal monthly installments beginning on the date
set forth in Section 1.5, on
the dates and in the manner required for the
payment of Tenant's monthly
installments of Base Annual Rent.
(b) Annual Budget. Subsequent to the Calendar Year in which
Tenant's
obligation to pay each
component of Additional Rent pursuant to Section 2.2
commences, Tenant shall
thereafter pay each such component of Additional Rent in
twelve equal monthly
installments based upon Landlord's estimates. In order
to
provide for the current
monthly payment of each component of Additional Rent
described herein, Landlord
shall submit to Tenant, prior to January 1 of the
calendar year for which the
estimate is being prepared, a statement of
Landlord's reasonable
estimate of the increases described in Section 2.2
above,
together with the amount of
Tenant's Additional Rent which is estimated to
result from such increases.
Tenant agrees to pay each such estimated component
of Additional Rent to
Landlord in twelve equal installments beginning on
January
1, on the dates and in the
manner required for the payment of Tenant's monthly
installments of Base Annual
Rent.
(c) Additional Rent Reconciliations. After the end of each
Calendar
Year, and within one hundred
eighty (180) days thereof, but without forfeiture
or waiver of Landlord's
rights to Additional Rent if such deadline is not met,;
Landlord will submit to
Tenant an audited financial statement of the actual
increases in Real Estate
Taxes and Operating Expenses accruing during the Fiscal
Year which ended during such
Calendar Year over the Real Estate Taxes and
Operating Expenses which
accrued during the Base Year, respectively. Such
statement shall also indicate
the amount of Tenant's excess payment or
underpayment of Additional
Rent based on Landlord's estimate described in
Sections 2.3(a) and 2.3(b).
If Additional Rent paid by Tenant during the
preceding Calendar Year shall
be in excess of, or less than, the aggregate of
its share of the actual
increase in Real Estate Taxes and Operating Expenses,
Landlord and Tenant agree to
make the appropriate adjustment following the
submission of Landlord's
statement. Tenant shall either pay any Additional Rent
due with the installment of
Base Annual Rent due for the month following
submission of Landlord's
statement, or pay any Additional Rent due within thirty
(30) days if the Lease Term
has expired or has otherwise been terminated. Tenant
shall deduct its excess
payment, if any, from the installment of Base Annual
Rent due for the month
following submission of Landlord's statement, or
following the expiration or
earlier termination of the Lease Term, Tenant shall
be reimbursed by Landlord
without the need for notice or request for any excess
payments made, less any
amounts then due Landlord under this Lease.
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(d) Verification of Additional Rent. Unless Tenant asserts
errors
within one hundred eighty
(180) days after Landlord has submitted the audited
financial statement for a
Fiscal Year to Tenant, Tenant shall have no right to
contest the amount of
Tenant's pro rata share of Real Estate Taxes and/or
Operating Expenses or the
statement submitted by Landlord. No such assertion of
error by Tenant shall extend
the time for payments as set forth in Sections 2.2
and 2.3 above. If Tenant has
given a timely assertion of error and if it shall
be determined that there is
an error in Landlord's statement, Tenant shall be
entitled to a credit for any
overpayment, which shall be applied to any sums
then due Landlord under this
Lease and then to the next installment(s) of
Additional Rent until fully
credited for the overpayment, or refunded if Tenant
has vacated the Demised
Premises, or Tenant shall be billed for any underpayment
and shall remit any amount
owing to Landlord within thirty (30) days of Tenant's
receipt of such statement. In
the event Tenant asserts in a timely fashion an
error in the statement of
Operating Expenses submitted by Landlord, Tenant shall
have the right to examine, or
have its accountant examine, at the office of
Landlord's accountant in the
Washington metro area, the books and records
relating to the error
asserted from which such statement has been prepared. No
such examination shall extend
the time for payments due in accordance with this
Section 2.3, however. Tenant
shall pay upon demand a reasonable sum to reimburse
Landlord for the costs of
services of Landlord's accountant in cooperating and
assisting in the examination.
If the error asserted amounts to more than five
percent (5%) in the Operating
Expenses statement and Tenant is found to have
been correct, Landlord shall
bear its and Tenant's reasonable accountants'
costs. Notwithstanding the
foregoing, if another tenant finds a mistake in
Landlord's records, or if
Landlord otherwise learns of a mistake therein, Tenant
shall be credited to the same
extent that Landlord credits such tenant.
(e) Fiscal Year. Landlord shall have the right to change its
Fiscal
Year from time to time. If
Landlord changes its Fiscal Year during the Lease
Term, thereby creating a
Fiscal Year with fewer than twelve (12) months
(hereinafter "short year"),
the Real Estate Taxes and Operating Expenses for the
short year shall be
determined on an annualized basis by taking the monthly
average of the actual Real
Estate Taxes and Operating Expenses, respectively,
and multiplying each by
twelve. The amounts determined by this method shall be
used in determining the
increases described in Sections 2.2(a) and 2.2(b) for
the short year.
2.4 Rent Adjustment Limit.
Notwithstanding any deductions from or
adjustments to Base Annual
Rent and Additional Rent as provided for above, in no
event shall the total monthly
installment of Base Annual Rent and Additional
Rent to be paid by Tenant in
any month during the Lease Term or any extension
thereof be less than the
monthly installment of Base Annual Rent stipulated in
Section 1.3, except as
required as the result of the Landlord's application of
a
credit due to Tenant pursuant
to Section 2.3(c).
2.5 Survival of Rent Obligation. The
obligation of Tenant with respect to
payment of Base Annual Rent,
as defined in Section 2.1, and Additional Rent as
defined in Sections 2.2 and
2.10, together with all other sums due hereunder,
accrued and unpaid during the
Lease Term, shall survive the expiration or
earlier termination of this
Lease.
2.6 Pro Rata Share. Tenant's "pro rata
share" stipulated in Sections
1.5(a) and 1.5(b) represent
the ratio that the total rentable area of the
Demised Premises bears to the
total rentable area of the Building. In the event
of any dispute as to the
Tenant's "pro rata share", certification of the "pro
rata share" by Landlord's
architect shall be binding on both Landlord and
Tenant. The total of pro rata
shares of all tenants of the Building shall not
exceed 100%.
2.7 Prorated Rent. Any Base Annual
Rent or Additional Rent payable
pursuant to Sections 2.1 and
2.2 for one or more full calendar months in a
partial Fiscal Year at the
beginning or end of the Lease Term shall be prorated
based upon the number of
months in the Fiscal Year. Any Base Annual Rent or
Additional Rent payable
pursuant to Sections 2.1 and 2.2 for a portion of a
calendar month shall be
prorated based upon the number of days in the applicable
calendar month.
2.8 Application of Rent. No payment by
Tenant or receipt by Landlord of
lesser amounts of Base Annual
Rent or Additional Rent than those required by
this Lease shall be deemed to
be other than on account of the earliest unpaid
stipulated Base Annual Rent
or Additional Rent. No endorsement or statement on
any check or any letter
accompanying any check or payment as Base Annual Rent or
Additional Rent shall be
deemed an accord and satisfaction, and Landlord may
accept such check or payment
without prejudice to Landlord's right to recover
the balance of such Base
Annual Rent and Additional Rent or pursue any other
remedy provided in this
Lease. Any credit due to Tenant hereunder by reason of
overpayment of Base Annual
Rent or Additional Rent shall first be applied to any
Base Annual Rent, Additional
Rent or other sums owed to Landlord by Tenant as
set forth elsewhere in this
Lease, if Tenant shall be in default, beyond the
applicable notice and cure
periods, when said credit shall be owed.
2.9 Late Payment Fee and Interest
Charge. In the event any installment of
Base Annual Rent or
Additional Rent due hereunder is not paid within ten
(10)
calendar days after written
notice from Landlord that it is due, then Tenant
shall also pay to Landlord as
Additional Rent (a) a late payment fee equal to
five percent (5%) of the
payment as liquidated damages for the additional
administrative costs incurred
by Landlord as a result of such late payments,
plus (b) an interest charge
calculated at the rate of twelve percent (12%) per
annum on the delinquent
payment from the date due until paid.
2.10 Other
Tenant Costs and Expenses. All costs and expenses which
Tenant
assumes or agrees to pay to
Landlord pursuant to this Lease, including without
limitation costs of
construction and alterations, shall be deemed Additional
Rent, whether or not the same
is specifically designated herein as Additional
Rent, and, in the event of
nonpayment thereof, Landlord shall have all the
rights and remedies herein
provided for the nonpayment of Base Annual Rent and
Additional Rent payable
pursuant to Sections 2.1 and 2.2, including assessment
of late payment fees and
interest charges.
3. CONSTRUCTION OF PREMISES AND
OCCUPANCY
3.1 Tenant Plans, Construction and
Rent Liability. The improvements to be
constructed by Landlord in
the Demised Premises are hereinafter referred to as
the "Construction
Improvements".
(ii) Landlord shall
have the right to approve any architect
and/or engineer selected by
Tenant, which approval shall not be unreasonably
withheld, and each of
Tenant's architects and engineers shall be licensed in
the
jurisdiction in which the
Demised Premises are located and shall maintain (and
provide Landlord with
evidence of the existence of) professional liability
insurance adequate in
Landlord's reasonable judgment.
6
<PAGE>
(iii) Tenant's preliminary plan shall be certified by
the
architect or engineer
preparing same to be in compliance with applicable
building and fire codes, and
with The Americans with Disabilities Act and all
amendments, modifications,
extensions, replacements, regulations, orders and
directives in connection
therewith (the "ADA"). If the Demised Premises as
reflected on Tenant's plans
are not in compliance with applicable building and
fire codes, or do not comply
with all requirements of the ADA, then Tenant's
plans shall not be, nor shall
they be deemed to be, acceptable to Landlord.
Landlord's approval of
Tenant's plans or work does not constitute certification
by Landlord that said plans
or work meet the applicable requirements of any
building or fire codes, laws
or regulations, or the ADA, nor shall it impose any
liability whatsoever upon
Landlord.
(b) Extension of Construction Timetable. Nothing contained in
this
Section 3.1, nor any delay in
completing the Demised Premises, shall in any
manner affect the
Commencement Date set forth in Section 1.2 or Tenant's
liability for payment of Base
Annual Rent and Additional Rent from such
Commencement Date.
3.2 Possession. If Landlord shall be
unable to tender possession of the
Demised Premises on the
Commencement Date set forth in Section 1.2 by reason of:
(a) the fact that the Demised
Premises are located in a building being
constructed and which has not
been sufficiently completed to make the Demised
Premises ready for occupancy;
(b) the holding over or retention of possession of
any tenant or occupant; (c)
the Construction Improvements have not been
substantially completed due
to delays by Landlord; or (d) for any other reason
beyond the control of
Landlord, Landlord shall not be subject to any liability
for the failure to tender
possession on said date. Under such circumstances the
Base Annual Rent and
Additional Rent reserved and covenanted to be paid
herein
shall not commence until
possession of the Demised Premises is tendered to
Tenant. No such failure to
tender possession on the Commencement Date set forth
in Section 1.2 shall in any
other respect affect the validity of this Lease or
the obligations of Tenant
hereunder, nor shall same be construed to extend the
termination date of this
Lease set forth in Section 1.2. In the event the actual
Commencement Date does not
occur within one (1) year of the date this Lease is
fully executed and delivered
by Landlord and Tenant, then Landlord, without
further liability to Tenant,
shall have the right to terminate this Lease upon
thirty (30) days prior
written notice to Tenant.
3.3 Permits. Tenant shall be
responsible for obtaining at its sole cost
and expense any construction
and occupancy permits for the Demised Premises.
Tenant shall be responsible
for obtaining any other permits or licenses
necessary for its lawful
occupancy of the Demised Premises. Tenant shall provide
Landlord with a copy of all
such permits and licenses.
4. SUBLETTING AND
ASSIGNMENT
4.1 Consent. Without the prior written
consent of Landlord, not to be
unreasonably withheld or
delayed in accordance with Section 4.5, Tenant will not
sublet the Demised Premises
or any part thereof or transfer possession or
occupancy thereof to any
person, firm or entity, or transfer or assign this
Lease, and no subletting or
assignment hereof shall be effected by operation of
law or in any other manner,
such as the transfer of all or substantially all of
Tenant's assets or voting
control of Tenant's stock, partnership interest or
other equity, without such
prior written consent of Landlord. If Tenant is a
partnership, then any sale,
conveyance, or other transfer of in, any partnership
interest, or any dissolution
of Tenant, or any act which will result in a future
change in control, or a
withdrawal or change, whether voluntary, involuntary or
by operation of law, of a
partner or partners owning a controlling interest in
Tenant, shall be deemed a
voluntary assignment of this Lease. All permitted
sublettings and assignments
of the Demised Premises and this Lease shall be
subject to the provisions of
this Lease, including but not limited to Section
4.3. No assignment shall be
made except for the entire Demised Premises. Any
subletting or assignment
consented to by Landlord, to be effective, shall be
evidenced in writing in a
form acceptable to Landlord. Consent by Landlord to
any assignment or subletting
by Tenant shall not operate as a waiver of the
necessity for obtaining
Landlord's consent in writing to any subsequent
assignment or subletting. The
collection or acceptance of rent from any such
assignee, subtenant or other
occupant shall not constitute a waiver of or
release of Tenant from any
covenant or obligation contained in this Lease, nor
shall such acceptance of rent
be deemed to create any right to the Demised
Premises in such assignee,
subtenant or other occupant, nor any legal or other
relationship between the
Landlord and any such assignee, subtenant or other
occupant. Landlord's
acceptance of any name for listing on the Building
directory shall not be
deemed, nor will it substitute for, Landlord's consent
as
required by this Lease, to
each sublease, assignment and any other occupancy of
the Demised Premises. In the
event that Tenant defaults, beyond the applicable
notice and cure periods,
under this Lease in the payment of Base Annual Rent or
Additional Rent, Tenant
hereby assigns to Landlord the rent and other sums due
from any subtenant, assignee
or other occupant and hereby authorizes each such
subtenant, assignee and other
occupant to pay said rent and other sums directly
to Landlord upon demand. Any
transfer of this Lease or the Demised Premises, or
any transfer of any interest
in Tenant restricted pursuant to this Section 4.1,
without the prior written
consent of Landlord pursuant to this Section 4.1 shall
be void. By taking a transfer
of this Lease by assignment, transfer of interest
in Tenant, or by any other
manner described in this Section 4.1, or otherwise
with Landlord's consent to
the transfer, the transferee shall be bound by all
provisions of this Lease,
which shall be binding upon the transferee as if the
transferee had signed this
Lease in lieu of the original Tenant named herein.
Provided Tenant is not then
in default, beyond the applicable notice and cure
period, of any of the terms
or conditions of this Lease, then notwithstanding
anything to the contrary in
the first sentence of Section 4.1. Tenant shall not
be required to obtain
Landlord's consent to assign this Lease or sublet all or
any part of the Demised
Premises to any parent, successor or acquiring entity,
subsidiary or affiliated
company, Tenant's customers, subcontractors or partners
but Tenant immediately shall
furnish Landlord with written notice and a
fully-executed copy of any
such sublease agreement, together with a floor plan
of the sublet area. Any such
subletting or assignment shall be subject to the
remaining provisions of
Sections 4.1, 4.4, 4.6 and 4.7.
7
<PAGE>
4.2 Recapture of Premises. In the
event Tenant desires to sublet the
Demised Premises or assign
this Lease or effect the transfer of any interest in
this Lease or in Tenant
restricted pursuant to Section 4.1, Tenant shall give to
Landlord written notice of
Tenant's intended subtenant, assignee or transferee
in order to secure Landlord's
written consent in accordance with Section 4.1.
Within thirty (30) days of
receipt of said notice, Landlord shall have the
right, at its option: (i) to
terminate this Lease as of the proposed
Commencement Date of the
sublease or assignment by giving Tenant not less than
sixty (60) days notice if
Tenant's notice states the Tenant's desire to sublet
more than eighty percent
(80%) of the Demised Premises; or (ii) if Tenant's
notice states the Tenant's
desire to sublet less than eighty percent (80%) of
the Demised Premises, to
terminate this Lease and simultaneously to enter into a
new lease with Tenant for
that portion of the Demised Premises Tenant may desire
to retain upon the same
terms, covenants and conditions as then set forth in
this Lease, prorated based
upon the space retained by Tenant. Tenant shall
promptly execute such lease
amendments and other documents as Landlord may
require to effectuate the
terms and intent of this Section 4.2.
4.3 Subletting. Provided Tenant first
obtains the written consent of the
Landlord to such sublease or
assignment as required by Section 4 and further
provided that Tenant is not
in default, beyond the applicable notice and cure
periods, of any of the terms
or conditions of this Lease on the date each rent
payment is due pursuant to
such sublease or assignment, then only Fifty Percent
(50%) of any rent and other
consideration accruing to Tenant as a result of each
such sublease or assignment
which is in excess of the pro rated portion of Base
Annual Rent and Additional
Rent then being paid by Tenant for the Demised
Premises or portion thereof
being sublet pursuant to said sublease or assignment
shall be paid by Tenant to
Landlord monthly as Additional Rent; otherwise 100%
thereof shall be due
Landlord. Tenant shall be permitted to first deduct the
reasonable advertising costs,
reasonable legal fees, reasonable brokerage
commissions and reasonable
remodeling costs in calculating Landlord's share of
the net excess rent and other
consideration to be paid to Landlord pursuant to
this Section. Tenant shall
provide documentation of such expenses to Landlord at
the time Tenant requests
Landlord's giving consent to the subletting or
assignment.
4.4 Tenant Liability. In the event of
any subletting of the Demised
Premises or assignment of
this Lease by Tenant or transfer of an interest in
this Lease or in Tenant,
Tenant shall remain liable to Landlord for payment of
the Base Annual Rent and
Additional Rent stipulated herein and all other
covenants and conditions
contained herein. No subletting of the Demised Premises
or assignment of this Lease
or transfer of an interest in this Lease or in
Tenant shall operate to
release, discharge or otherwise affect the liability of
any guarantors, co-signers or
other parties liable to Landlord pursuant to the
terms of any guaranty or
otherwise for the obligations of Tenant under this
Lease.
4.5 Reasonable Standards of Consent.
Tenant acknowledges that Landlord, in
considering whether to grant
or withhold consent required of Landlord pursuant
to this Section 4, shall be
entitled to apply any or all of the following
criteria:
(a) The financial strength of proposed subtenant/assignee/
transferee
must be acceptable to
Landlord in Landlord's reasonable discretion based on
adequate current and
historical financial information given by Tenant Failure
to
provide such financial
information, shall be grounds for Landlord to withhold
or
deny consent;
(b) The proposed subtenant/assignee/transferee must have a
good
reputation in the business
community and must be credit-worthy;
(c) Use of the Demised Premises by the proposed
subtenant/assignee/
transferee must be permitted
by this Lease;
(d) Use of the Demised Premises by the proposed
subtenant/assignee/
transferee shall not violate
or create any potential violation of any laws and
must be in keeping with the
character of the Building and the Complex;
(e) Use of the Demised Premises by the proposed
subtenant/assignee/
transferee shall not violate,
or cause Landlord to violate, any other leases,
agreements or mortgages
affecting (i) the Demised Premises, the Building, the
Complex or the land related
to such improvements, or (ii) the Landlord,
Landlord's Agent or other
tenants, whether such leases, agreements or mortgages
were entered into prior or
subsequent to this Lease;
(f) The proposed use shall be compatible with all other uses
within
the Building or Complex and
the proposed use or user shall not cause a
diminution in the reputation
of the Building, the Complex, Landlord, Landlord's
Agent or other
tenants;
(g) The proposed subtenant/assignee/transferee shall have no right
to
further sublet the subleased
premises, nor to further assign this Lease, nor to
further transfer any interest
in such proposed subtenant/assignee/transferee;
except as provided
herein.
(h) In the event Tenant is in default, beyond any applicable
cure
period consent may be
withheld irrespective of whether these other criteria
are
met by the proposed
subtenant/assignee/transferee.
4.6 Other Transfers. Notwithstanding
anything herein to the contrary,
Tenant shall not pledge,
assign, transfer, encumber or otherwise convey its
interest in the Demised
Premises (excluding Tenant's personal property)
conditionally or as security
for any obligations of Tenant to any third party,
or otherwise. Any such
transfer in violation of this provision shall be void.
4.7 Rights on Default. In the event
Tenant defaults under this Lease
beyond any applicable cure
period, in addition to the rights and remedies of
Landlord outlined in Section
12, Landlord, at its option, may elect to recognize
any sublease between Tenant
and any subtenant, or any agreement by which Tenant
has granted any leasehold
estate or interest in the Demised Premises, as a
direct lease or agreement
between Landlord and such subtenant or other grantee,
upon written notice to Tenant
and such subtenant or other grantee, without
releasing or affecting the
liability of Tenant to Landlord under this Lease, and
Tenant shall be deemed to
have assigned its interest in such sublease or other
agreement to Landlord
(without the need for executing any further
documentation
evidencing same) and such
subtenant or other grantee shall attorn to and
recognize the rights of
Landlord under such sublease or other agreement, as the
case may be. Notwithstanding
Tenant's consent or acquiescence in the termination
of this Lease and/or Tenant's
voluntary surrender of the Demised Premises (or
any portion thereof),
Landlord may consider any sublease or other agreement
transferring a leasehold
estate or interest in the Demised Premises, and/or any
right to use or possess the
Demised Premises (or any portion thereof) by any
subtenant or other grantee,
terminated as of the date Landlord terminates this
Lease and/or Tenant's right
to possession of the Demised Premises, it being the
intention of the parties that
any leasehold estate or other interest in the
Demised Premises shall be
subject to the terms and conditions of this Lease,
including all rights and
remedies of Landlord outlined herein, notwithstanding
anything to the contrary
contained in such sublease or other agreement.
8
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5. SERVICES AND
UTILITIES
5.1 Building Standard Services and
Utilities. Subject to the limitations
set forth in Section 5.3
below, Landlord shall furnish sufficient electric
current for lighting and
office equipment such as typewriters, calculators,
small copiers, desktop
personal computers and word processors and similar
items.
Landlord shall also furnish
water for lavatory and drinking purposes, lavatory
supplies, fluorescent tube
replacements, automatically operated elevator service
and nightly cleaning service
in accordance with prevailing practices of
first-class office buildings
in the Washington, D.C. area (as set forth in
Exhibit D attached hereto),
as they may be modified from time to time, except
that Landlord shall not be
responsible for cleaning Tenant's kitchens (except
for routine mopping and
dusting), private bathrooms, rugs, carpeting (except
vacuuming) and drapes.
Landlord shall have no liability for and expressly
disclaims any responsibility
for the engineering, design, installation,
provision of or maintenance
of Tenant's telecommunications and data transmission
systems and the inside wire
associated therewith. Landlord further agrees to
furnish heating and cooling
during the appropriate seasons of the year, between
the hours and on the days set
forth in Section 1.7 (exclusive of legal public
holidays as defined in
section 6103(a) and (c) of Title 5 of the United States
Code, as it may hereafter be
amended; for purposes hereof, the following are the
legal public holidays for the
Building: New Year's Day, Martin Luther King, Jr.,
Day, Inauguration Day,
Presidents' Day, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans'
Day, Thanksgiving Day and Christmas Day). All of
the aforesaid services shall
be provided without cost to Tenant except as such
expenses may be included in
calculating Additional Rent pursuant to the
provisions of Sections 2.2
and 2.3. Landlord shall not be liable for failure to
furnish, or for suspension or
delay in furnishing, any of such services if such
failure, suspension or delay
is caused by breakdown, maintenance or repair work,
strike, riot, civil
commotion, governmental regulations, emergency periods
due
to weather or any other cause
or reason whatever beyond the reasonable control
of Landlord. Failure,
suspension, delay or interruption of services shall not
result in any abatement of
Base Annual Rent or Additional Rent, be deemed an
eviction or breach of this
Lease (including any express or implied covenant of
quiet enjoyment), or relieve
Tenant of performance of Tenant's obligations under
this Lease unless the Demised
Premises are rendered untenantable by such
failure, suspension, delay or
interruption of services for five (5) consecutive
business days due to
Landlord's negligence or willful misconduct, in which
event Tenant may abate paying
Base Annual Rent from said fifth (5th) day until
such service is
restored.
5.2 Overtime Services. Should Tenant
require heating and cooling services
beyond the hours and/or days
stipulated in Section 1.7, upon receipt of at least
24 hours prior written notice
from Tenant, Landlord will furnish such additional
service at the
then-prevailing hourly rates for both utility services
and
personnel as established by
Landlord from time to time; provided, further, that
there will be a minimum
charge of four (4) hours each time overtime services are
required.
For purposes of Section 5.2. the prevailing hourly cost of
overtime
heating and cooling services
as of the date of execution of this Lease is as
follows:
$79.60 per
hour for one (1) floor/Monday - Saturday
$96.19 per hour for one (1) floor/Sundays & holidays
5.3 Excessive Usage.
(a) Equipment Restrictions. Tenant will not install or operate in
the
Demised Premises any heavy
duty electrical equipment or machinery or any other
equipment which consumes
excess gas (where applicable), excess water, excess
sewer services or excess
electricity as defined in Section 5.3(b) below, without
first obtaining prior written
consent of Landlord. Landlord may, among other
things, require as a
condition to its consent for the installation of such
equipment or machinery that
Tenant pay as Additional Rent the costs for excess
consumption of such utilities
that may be occasioned by the operation of said
equipment or machinery.
Landlord may make periodic inspections of the Demised
Premises at reasonable times
to determine that Tenant's equipment and machinery
comply with the provisions of
this Section and Section 5.4.
(b) Excess Electrical Usage. The consumption of
electricity,
including lighting, in excess
of five (5) watts per square foot for the entire
Demised Premises shall be
deemed excessive. Additionally, any individual piece
of electrically operated
machinery or equipment having a name plate rating in
excess of two (2) kilowatts
shall also be deemed as requiring excess electric
current.
(c) Additional Utility Costs. Landlord shall have the right to
either
require that one or more
separate meters be installed to record the consumption
or use of electricity or
other utilities, or cause a reputable independent
engineer to survey and
determine the quantity of such utilities consumed by
such
excessive use. The cost of
any such survey and meters and of installation,
maintenance and repair
thereof shall be paid for by Tenant. Tenant agrees to
pay
Landlord (or the utility
company, if direct service is provided by the utility
company), promptly upon
demand therefor, for all such consumption and demand as
shown by said meters, or a
flat monthly charge determined by the survey, as
applicable, at the rates
charged for such service by the local public utility
company. If Tenant's cost of
such utilities based on meter readings is to be
paid to Landlord, Tenant
shall pay a service charge related thereto in an amount
Landlord shall reasonably
determine.
5.4 Excessive Heat Generation.
Landlord shall not be liable for its
failure to maintain
comfortable atmospheric conditions in all or any portion
of
the Demised Premises due to
heat generated by over-occupancy of the Demised
Premises or by any equipment,
machinery or additional lighting installed by
Tenant (with or without
Landlord's consent) that exceeds design capability for
the Building. If Tenant does
not desire such auxiliary cooling equipment,
Tenant shall pay for excess
electrical consumption by the existing cooling
system.
9
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5.5 Building Security. Any security
system or other security measures
(collectively, the "Security
System") that Landlord may undertake for
protection of the Demised
Premises, the Building and/or Complex (including any
parking garages or areas) are
for the protection of the physical structures
only and shall not be relied
upon by Tenant, its agents, employees or invitees
to protect Tenant, Tenant's
Property and Leasehold Improvements or Tenant's
employees, invitees or their
property. Tenant shall not do anything to
circumvent or allow others to
circumvent any Security System. Landlord shall not
be liable for any failure of
any Security System to operate or for any breach or
circumvention of the Security
System by others, and Landlord makes no
representations or warranties
concerning the installation, performance and
monitoring of any Security
System, or that it will detect or avert the
occurrences which any such
Security System is intended or expected to detect or
avert. Landlord shall provide
a key or access card security system for the
Building.
5.6 Roof and Auxiliary Spaces. Tenant
shall not use the roof, roof utility
closets or other auxiliary
spaces in the Building for antennas, condenser
coolers, telecommunications
and/or data transmission equipment or any other type
of equipment or for any other
purpose without the prior written consent of
Landlord, which consent may
be conditioned upon the terms of a separate written
agreement and the payment by
Tenant of separate consideration for the use of
such space.
5.7 Trash Removal. Tenant covenants
and agrees, at its sole cost and
expense, to comply with all
present and future laws, orders and regulations of
the federal, state, county,
municipal and local governments, departments,
commissions, agencies and
boards regarding the collection, sorting, separation
and recycling of trash. Upon
request by Landlord, Tenant shall sort and separate
its trash into such
categories as are provided by law. Each separately
sorted
category of trash shall be
placed in separate receptacles as directed by
Landlord. Landlord reserves
the right to refuse to collect or accept from Tenant
any trash that is not
separated and sorted as required by law and directed by
Landlord, and to require
Tenant to arrange for such collection at Tenant's sole
cost and expense, utilizing a
contractor satisfactory to Landlord. Tenant shall
pay all costs, expenses,
fines, penalties and damages that may be imposed on
Landlord or Tenant by reason
of Tenant's failure to comply with the provisions
of this Section, and Tenant,
at Tenant's sole cost and expense, shall indemnify,
defend and hold Landlord
harmless from and against any actions, claims and suits
(including legal fees and
expenses) arising from such non compliance, utilizing
counsel reasonably
satisfactory to Landlord.
6. USE AND UPKEEP OF
PREMISES
6.1 Use. Tenant shall use and occupy
the Demised Premises only for the
purposes specified in Section
1.8 and for no other purpose whatsoever, and shall
comply, and cause its
employees, agents, contractors, invitees and other users
of the Demised Premises to
comply, with all applicable federal, state and local
laws, statutes, ordinances
and regulations, including, but not limited to, the
ADA, zoning regulations, and
smoking regulations. Any variation or deviation
from the specific use
expressly set forth in Section 1.8 shall be deemed a
default of this Lease. Tenant
shall pay before delinquency any business, rent
and other tax and fee that is
now or hereafter assessed or imposed upon Tenant's
use or occupancy of the
Demised Premises, the conduct of Tenant's business in
the Demised Premises or
Tenant's Property. If any such tax or fee is enacted or
altered so that such tax or
fee is imposed upon Landlord so that Landlord is
responsible for collection or
payment thereof, then Tenant shall promptly pay
the amount of such tax or fee
directly to the taxing authority, or if previously
paid by Landlord, to Landlord
upon demand.
6.2 Illegal and Prohibited Uses.
Tenant will not use or permit the Demised
Premises or any part thereof
to be used for any disorderly, unlawful or extra
hazardous purpose and will
not manufacture anything therein. Tenant will not use
or permit the Demised
Premises to be used for any purposes that unreasonably
interfere with the use and
enjoyment by other tenants of the Building or Complex
or, in Landlord's opinion,
impair the reputation or character of the Building,
Complex, Landlord or
Landlord's Agent. Tenant shall immediately refrain from
and
discontinue such use after
receipt of written notice from Landlord.
6.3 Insurance Rating. Tenant will not
do or permit anything to be done in
the Demised Premises, the
Building or the Complex or bring or keep anything
therein which shall in any
way increase the rate of fire or other insurance on
said Building or the Complex,
or on the property kept therein, or conflict (or
permit any condition to exist
which would conflict) with applicable fire laws or
regulations, or with any
insurance policy upon said Building or Complex or any
part thereof, or with any
statute, rules or regulations enacted or established
by any appropriate
governmental authority. Tenant shall be responsible for
any
increase in insurance costs
with respect to the Building or Complex if the
increases were caused by its
actions or failure to act.
6.4 Alterations.
(a) Approval Required. Except for cosmetic changes and
decorations,
Tenant shall not make any
alterations, installations, changes, replacements,
repairs, additions or
improvements in or to (or which interfere with) the
structural elements of the
Building or the Demised Premises, or the Systems
(hereinafter defined),
without the prior written consent of Landlord, which
consent may be granted or
withheld in Landlord's sole and absolute discretion.
Tenant shall not make any
non-structural, non-System alterations, changes,
replacements, repairs,
additions or improvements in or to the Demised Premises
or any part thereof, without
the prior written consent of Landlord, which
consent shall not be
unreasonably withheld. All Tenant plans and
specifications
shall be submitted to
Landlord for prior approval. All Tenant engineering
plans
and specifications shall be
prepared at Tenant's expense by an engineer
reasonably approved by
Landlord. Landlord may, among other things, condition
its
consent upon Tenant's
agreement that any construction up-gradings required by
any governmental authority as
a result of Tenant's work, either in the Demised
Premises or in any other part
of the Building or Complex will be paid for by
Tenant in advance. Tenant
shall not install any equipment of any kind or nature
whatsoever which will or may
necessitate any changes, replacements or
additions to the water
system, plumbing system, heating system, ventilating
system, air-conditioning
system, supply, return or control systems, Landlord's
data system(s), or the
electrical system of the Demised Premises or the
Building (collectively, the
"Systems"), nor install or use any air-conditioning
unit, engine, boiler,
generator, machinery, heating unit, stove,
10
<PAGE>
water cooler, ventilator,
radiator or any other similar apparatus, nor modify or
interfere with any of the
Systems, without the prior written consent of the
Landlord, which consent may
be granted or withheld in the Landlord's sole and
absolute discretion. Any
auxiliary air-conditioning equipment which Tenant may
desire to install in the
Demised Premises shall be connected to the Building's
commercial condenser water
system, if available, and Tenant shall pay to
Landlord such reasonable
charges as established by Landlord from time to time
for the use of the Building's
commercial condenser water system. Tenant shall
not modify or interfere with
the Systems without the prior written consent of
Landlord, and then only as
Landlord may direct. Landlord may condition its
consent upon Tenant's payment
of all costs to make such changes, replacements or
modifications. Tenant shall
not design, configure, install, use or arrange for
the design, configuration,
installation or use of its telecommunications and
data transmission systems or
inside wire associated therewith in any manner that
interferes with the existing
telecommunications and/or data transmission systems
or inside wire associated
therewith of Landlord or other tenants in the
Building. Landlord's consent
to any work by Tenant or approval of Tenant's plans
or specifications shall not
be deemed a certification that such work complies
with applicable building
codes, laws or regulations, nor shall it impose any
liability whatsoever upon
Landlord.
(b) Alteration Requirements. All of Tenant's approved work shall
be
done in accordance with
Landlord's Supplemental Rules and Regulations for
Contractors (as promulgated
and amended by Landlord from time to time) and shall
be done by duly qualified,
licensed and bonded contractors in accordance with
all applicable laws, codes,
ordinances, rules and regulations, and Tenant shall
obtain (or give) at its cost
any required permits, licenses, registrations,
notices, or inspections for
performance of its work. Notwithstanding the
aforesaid, if any mechanic's
or materialman's lien shall at any time, whether
before, during or after the
Lease Term, be filed against any part of the
Building or other property of
Landlord by reason of work, labor, services or
materials performed for or
furnished to or on behalf of Tenant, Tenant shall
forthwith cause the lien to
be released of record by being discharged or bonded
off to Landlord's
satisfaction within ten (70) days after being notified of
the
filing thereof. If Tenant
shall fail to cause such lien to be released of record
within said ten (10) day
period, then, in addition to any other right or remedy
of Landlord, Landlord may
bond off or discharge the lien by paying the amount
claimed to be due. Any amount
paid by Landlord, whether as bond premium or
payment of the lien amount,
and all costs and expenses, including reasonable
attorneys' fees incurred by
Landlord in procuring the same and its release from
the appropriate land records,
shall be due from Tenant to Landlord as Additional
Rent, and shall be payable on
the first day of the next following month, or if
the Lease Term has expired,
upon demand.
(c) Removal of Leasehold Improvements and Tenant's Property.
All
Leasehold Improvements within
the Demised Premises shall, subject to Landlord's
right to require Tenant to
remove all or any portion of the Leasehold
Improvements and restore the
Demised Premises to its condition as of the date
this Lease is fully executed
and delivered by Landlord and Tenant, remain at the
expiration or earlier
termination of the Lease Term without disturbance,
molestation or injury. Should
Landlord elect that Leasehold Improvements be
removed upon the expiration
or earlier termination of the Lease Term, then
Landlord shall notify Tenant
in writing of such election when Landlord approves
Tenant's Improvements. Should
Tenant fail to remove all or any portion of
Tenant's Property in
accordance with the provisions of this Lease, Tenant
hereby
agrees that Landlord shall
have the right to cause all or any portion of the
Leasehold Improvements and/or
Tenant's Property to be removed at Tenant's sole
cost and expense. Tenant
hereby agrees to reimburse Landlord for the cost of
such removal together with
the reasonable cost of repairing any damage resulting
therefrom, and the cost of
restoring the Demised Premises to its condition as of
the date this Lease is fully
executed and delivered by Landlord and Tenant.
Approximately sixty (60) days
prior to Tenant's scheduled vacation of the
Demised Premises, Landlord
and Tenant shall meet to review any items that shall
be removed and what items
shall remain as required here under. Landlord shall
provide its estimate to
Tenant of the costs of such removal and the costs of any
repairs to or restoration of
the Demised Premises as herein provided. In the
event Tenant fails to remove
the Leasehold Improvements designated by Landlord
for removal prior to the
expiration of the Lease Term and/or fails to remove
Tenant's Property as
aforesaid and/or fails to make such repairs and/or
restoration as aforesaid,
Landlord shall cause the removal, repair and/or
restoration to be performed
at Tenant's sole expense, which expense shall not be
limited by the amount of the
estimate referred to herein. Tenant shall provide
for the transfer or disposal
of all items removed, failing which Landlord is
hereby authorized to dispose
of same in any manner deemed appropriate,
including, but not limited
to, disposal into the trash, without liability to
Tenant, and at Tenant's sole
cost and expense, and Tenant shall indemnify,
defend and hold harmless
Landlord, Landlord's Agent and their respective
employees and agents from and
against all claims, damages, costs and expenses,
including reasonable
attorneys' fees, arising from or in connection with the
disposal of all or any items
removed by Landlord hereunder.
(d) Compliance with Laws. In the event that during the Lease
Term
either Landlord or Tenant
shall be required by the order or decree of any court,
or any other governmental
authority, or by law, code or ordinance (including but
not limited to the ADA), to
repair, alter remove, reconstruct, or improve any
part of the Demised Premises
or of the Building, then Tenant agrees, at its sole
cost and expense, to comply
with such requirements imposed on Demised Premises
or Tenant and shall perform,
at its expense, or Tenant shall permit Landlord to
perform, at Tenant's expense,
such repairs, alterations, removals,
reconstructions, or
improvements. Notwithstanding the foregoing, any
required
work, which is generally
applicable to landlords similarly situated shall be
Landlord's responsibility.
Within ten (10) days after receipt, Tenant shall
advise Landlord in writing,
and provide the Landlord with copies of (as
applicable), (i) any notices
alleging violation of any law, code or ordinance
(including the ADA) relating
to any portion of the Demised Premises or the
Building, (ii) any claims
made or threatened in writing regarding noncompliance
with any law, code or
ordinance and relating to any portion of the Building or
of the Demised Premises, or
(iii) any governmental or regulatory actions or
investigations instituted or
threatened regarding noncompliance with any law,
code or ordinance and
relating to any portion of the Building or the Demised
Premises. No such order or
decree or the compliance required therewith shall
have any effect whatsoever on
the obligations or covenants of Tenant herein
contained. Tenant hereby
waives all claims for damages or abatement of Base
Annual Rent and Additional
Rent because of such repairing, alteration, removal,
reconstruction, or
improvement. Notwithstanding anything in Section 6.4(d)
to
the contrary, Landlord will
comply with all final orders of any government
agency to conform the common
areas of the Building with the requirements of The
Americans with Disabilities
Act (ADA). Tenant shall be responsible at its
expense for compliance of the
Demised Premises with the ADA.
11
<PAGE>
6.5 Maintenance by
Landlord.
(a) Landlord Repairs and Maintenance. Except to the extent that
Tenant
is required to maintain and
repair pursuant to Sections 5.4, 6.4, 6.7, 6.8,
6.10, 6.11, 9 and 21,
Landlord shall maintain and repair, in a first-class
manner consistent with
similar buildings in Northern Virginia, all public or
common areas located within
the Building, including external landscaping,
walkways and parking areas,
and, except to the above extent, Landlord shall make
repairs to structural roofs,
walls, standard heating, air conditioning, plumbing
and electrical systems and
equipment. Except as otherwise expressly provided in
this Lease, such maintenance
shall be provided without cost to Tenant, except
that (i) such expenses may be
included in calculating the Additional Rent
pursuant to the provisions of
Sections 2.2 and 2.3; and (ii) if such expenses
are incurred by Landlord in
making repairs attributable to acts or omissions of
Tenant or Tenant's employees,
agents, contractors or invitees, then Tenant shall
reimburse Landlord for all
such expenses within ten (10) days after Landlord
submits a bill for such costs
to Tenant. Tenant hereby waives all claims for
damages or abatement of Base
Annual Rent and Additional Rent because of such
repairing, alteration,
removal, reconstruction, or improvement.
(b) Use of Demised Premises by Landlord. Landlord reserves the
right
to erect, use, maintain,
repair and replace all pipes, ducts, conduits, wiring,
fluids, gases, components,
and similar materials and structures in and through
the Demised Premises,
including any changes, additions or replacements as
Landlord may from time to
time make thereto. Landlord may install any and all
materials, equipment, pipes,
ducts, conduits, wires, and related fluids, gases,
components and mechanical
equipment serving other portions, tenants and
occupants of the Building,
in, through, under or above the Demised Premises that
Landlord deems desirable and
shall have the right to locate, both vertically and
horizontally, utility lines,
wiring, air ducts, flues, duct shafts, drains,
sprinkler mains and valves,
and such other facilities within the Demised
Premises as may be deemed
necessary by engineering design and/or code and/or
other legal requirements and
to repair, alter, replace or remove these items.
These shall be located so as
to cause minimum interference with Tenant's use of
the Demised Premises and
shall, if possible, be located above Tenant's suspended
ceiling, if any, or as close
to the concrete slab as possible, below the floor,
along column lines or in
storage areas. Landlord shall have the right to remove
or abate any hazardous
materials located in the Demised Premises and Tenant
shall fully cooperate with
Landlord in this regard. Landlord's right to locate
facilities within the Demised
Premises shall include facilities required by
tenants or occupants in
levels above or below the Demised Premises as well as on
the same level as the Demised
Premises. None of the above conduct by Landlord
shall be deemed to constitute
an interference with Tenant's quiet enjoyment or
an actual or constructive
eviction of Tenant. Tenant shall be entitled to no
abatement of Base Annual Rent
or Additional Rent whatsoever on account of such
installation, location,
construction, use, entry, removal, repair, maintenance
or other conduct as aforesaid
provided, however, if the Demised Premises are
rendered untenantable thereby
for five (5) consecutive business days due to
Landlord's negligence or
willful misconduct, then Tenant may abate paying Base
Annual Rent from said fifth
(5th) day until the Demised Premises are again
tenantable.
6.6 Signs and Publications. No sign,
advertisement or notice shall be
inscribed, painted or affixed
on any part of the outside of the Building, except
as otherwise provided
hereinafter, or in the common areas of the Building, or
inside the Demised Premises
where it may be visible from the public areas of the
Building, except on the
directories and doors of offices, and then only in such
size, color, method of
attachment and style as Landlord shall reasonably
approve. Landlord shall have
the right to prohibit any signage or publication of
Tenant on the Demised
Premises which in Landlord's opinion tends to impair the
reputation or character of
the Building, Complex, Landlord or Landlord's Agent.
Tenant shall refrain from and
discontinue such signage or publication upon
receipt of written notice
from Landlord.
6.7 Excessive Floor Load. Landlord
shall have the right to prescribe the
weight and method of
installation of safes, non-personal and non-network
computer equipment, and other
heavy fixtures or equipment. Tenant will not
install in the Demised
Premises any item of Tenant's Property or fixtures that
will place a load upon the
floor exceeding the designed floor load capacity of
the floor and the Building.
Landlord may prescribe the placement and positioning
of all such objects within
the Demised Premises and/or Building, and, if
necessary, such objects shall
be placed upon platforms, plates or footings of
such size as Landlord shall
prescribe. All damage done to the Building or the
Demised Premises by
installing or removing a safe or any other article of
Tenant's Property or
fixtures, or due to
