<PAGE>
EXHIBIT 10.16 - OFFICE LEASE
AGREEMENT BY AND BETWEEN FJ DULLES BUSINESS PARK
II LLC AND DIGITAL SUPPORT CORPORATION
12/21/00
OFFICE LEASE AGREEMENT
BY AND BETWEEN
FJ DULLES BUSINESS PARK II LLC
(as Landlord)
And
DIGITAL SUPPORT CORPORATION
(as Tenant)
84
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S>
<C>
ARTICLE I
DEFINITIONS .....................................................
1
ARTICLE II PREMISES
........................................................
2
ARTICLE III TERM
............................................................
2
ARTICLE IV BASE RENT
.......................................................
4
ARTICLE V COMMON
AREA MAINTENANCE EXPENSES AND REAL ESTATE TAXES ..........
5
ARTICLE VI USE OF PREMISES
.................................................
7
ARTICLE VII ASSIGNMENT AND
SUBLETTING .......................................
9
ARTICLE VIII MAINTENANCE AND REPAIRS
......................................... 12
ARTICLE IX ALTERATIONS
..................................................... 12
ARTICLE X SIGNS
...........................................................
15
ARTICLE XI SECURITY DEPOSIT
................................................ 16
ARTICLE XII INSPECTION
...................................................... 18
ARTICLE XIII INSURANCE
.......................................................
18
ARTICLE XIV SERVICES AND UTILITIES
.......................................... 19
ARTICLE XV LIABILITY OF
LANDLORD ........................................... 20
ARTICLE XVI RULES
...........................................................
21
ARTICLE XVII DAMAGE OR DESTRUCTION
........................................... 21
ARTICLE XVIII CONDEMNATION
.................................................... 22
ARTICLE XIX DEFAULT
.........................................................
22
ARTICLE XX BANKRUPTCY
...................................................... 25
ARTICLE XXI SUBORDINATION
................................................... 26
ARTICLE XXII HOLDING OVER
.................................................... 27
ARTICLE XXIII COVENANTS OF LANDLORD
........................................... 27
ARTICLE XXIV PARKING
.........................................................
28
ARTICLE XXV ESTOPPELS
.......................................................
29
ARTICLE XXVI GENERAL PROVISIONS
.............................................. 30
</TABLE>
85
<PAGE>
EXHIBIT A - Plan Showing Premises
EXHIBIT B - Work Agreement
EXHIBIT B-1 - Construction Schedule
EXHIBIT C - Rules
EXHIBIT D - Certificate Affirming Lease
Commencement Date
EXHIBIT E - Base Rent Schedule
EXHIBIT F - Protective Covenants
EXHIBIT G - Location of Reserved Parking
Spaces
EXHIBIT H - Form of Letter of Credit
86
<PAGE>
OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT (this LEASE) is dated as of the 4th day
of
January 2001 by and between FJ DULLES
BUSINESS PARK II LLC, a Virginia limited
liability company ("LANDLORD"), and DIGITAL
SUPPORT CORPORATION, a Virginia
corporation ("TENANT").
ARTICLE I
DEFINITIONS
1.1 Building:
a one (1) story building containing approximately forty-four
thousand four hundred fifty-three (44,453)
square feet of total rentable area as
of the date hereof and located at 3863
Centerview Drive, Chantilly, Virginia.
1.2 Premises:
approximately seventeen thousand nine hundred fifty-seven
(17,957) square feet of rentable area
located in the Building, as more
particularly designated on Exhibit A.
1.3 Lease
Term: one hundred twenty (120) months.
1.4
Anticipated Lease Commencement Date: June 1, 2001.
1.5 Base Rent:
Two Hundred Seventy-Eight Thousand Three Hundred
Thirty-Three and 50/100 Dollars
($278,333.50) for the first Lease Year, divided
into twelve (12) equal monthly installments
of Twenty-Three Thousand One Hundred
Ninety-Four and 46/100 Dollars ($23,194.46)
for the first Lease Year.
1.6 Base Rent
Annual Escalation Percentage: three percent (3%).
1.7 [Intentionally omitted.]
1.8
[Intentionally omitted.]
1.9 Security
Deposit Amount: One Hundred Thousand Dollars ($100,000.00), as
adjusted from time to time pursuant to
Section 11.1 hereof.
1.10 Brokers:
Trammell Crow Real Estate Services, Inc., as agent of
Landlord, and Spaulding & Slye LLC, as
agent of Tenant.
1.11 Tenant Notice
Address: 14301 D Sullyfield Circle, Chantilly, Virginia
20151-1630 until Tenant has commenced
beneficial use of the Premises, and at the
Premises, after Tenant has commenced
beneficial use of the Premises, with a copy
to Mr. Marc Busman at the address set forth
in Section 26.4 hereof.
1.12 Landlord Notice
Address: FJ Dulles Business Park II LLC, c/o Buvermo
Properties, Inc., 1901 N. Moore Street,
Suite 804, Arlington, Virginia 22209,
Attention: Portfolio Manager-Dulles
Business Park, with copies to: The JBG
Companies, 5301 Wisconsin Avenue, N.W.,
Suite 300, Washington, D.C. 20015,
Attention: Ms. Sharon M. Oliver.
1.13 Landlord Payment
Address: FJ Dulles Business Park II LLC and delivered
to Trammell Crow Company at the following
address: 14595 Arion Parkway, Suite
900, Chantilly, Virginia 20151, Attention:
Dulles Business Park Property
Manager.
1.14 [Intentionally
omitted.]
87
<PAGE>
1.15 Guarantor(s):
None.
1.16 Complex: that
certain complex [of which the Building and the Land (as
hereinafter deemed) are a part] of
buildings known as "DULLES BUSINESS PARK,"
and including all easements, rights, and
appurtenances thereto (including
private streets, storm detention
facilities, and any other service facilities),
as more fully described in that certain
Declaration for Protective Covenants and
Restrictions for Dulles Business Park dated
October 25, 1984, as amended (the
"PROTECTIVE COVENANTS"), adopted by Fidelio
Properties as sole owner of the
Complex (said Fidelio Properties, together
with its successors and assigns,
being hereinafter collectively referred to
as the "DECLARANT"), a copy of which
Protective Covenants as they exist on the
date of execution of this Lease is
attached hereto as Exhibit F and made a
part hereof.
1.17 Common Areas:
those areas, components and systems of the Building and
the Land or any combination of the
foregoing, as the case may be, which serve,
or which are made available by Landlord for
use by, Tenant in common with
Landlord, other tenants of the Building and
the employees, agents and invitees
of Landlord and of such other tenants.
ARTICLE II
PREMISES
2.1 Landlord
leases the Premises to Tenant and Tenant leases the Premises
from Landlord for the term and upon the
conditions and covenants set forth in
this Lease. Tenant will have the
non-exclusive right to use the common and
public areas of the Building (including,
but not limited to, Tenant's
proportionate share of the space in the
telephone room and electrical room
serving the Premises). Except as may
otherwise be expressly provided in this
Lease, the lease of the Premises does not
include the right to use the roof,
mechanical rooms, electrical closets,
janitorial closets, telephone rooms,
parking areas or other non-common or
non-public areas of the Building.
2.2 The
rentable area in the Building and in the Premises shall be
determined by Landlord's architect in
accordance with the Building Owners and
Managers Association International Standard
Method for Measuring Floor Area in
Office Buildings, ANSI/BONA Z65.1-1996.
Landlord shall have the option,
exercisable by written notice to Tenant at
any time during the Term, to have the
rentable floor area of the Premises
remeasured by Landlord's architect in the
manner described above or any successor
thereto irrespective of whether any
option to expand or contract the Premises
is exercised by Tenant. Upon such
remeasurement by the Landlord's architect,
Landlord may, at its option, give
Tenant written notice of the rentable floor
area so determined, in which event
the rentable area as thus remeasured shall
be deemed to be the rentable floor
area of the Premises for all purposes of
this Lease, all Rent theretofore paid
by Tenant to Landlord during the Term shall
be retroactively adjusted, and any
deficiency shall be paid by Tenant to
Landlord within thirty (30) days after
Landlord's notice to Tenant setting forth
the rentable floor area of the
Premises.
ARTICLE III
TERM
3.1 All of the
provisions of this Lease shall be in full force and effect
from and after the date first above
written. The Lease Term shall commence on
the Lease Commencement Date specified in
Section 3.2. If the Lease Commencement
Date is not the first day of a month, then
the Lease Term shall be the period
set forth in Section 1.3 plus the partial
month in which the Lease Commencement
Date occurs. The Lease Term shall also
include any properly exercised renewal or
extension of the term of this Lease which
is specifically provided for in this
Lease.
3.2 The "LEASE
COMMENCEMENT DATE" shall be the date on which the work and
materials to be
88
<PAGE>
provided pursuant to Exhibit B are
substantially complete as determined pursuant
to Exhibit B. Promptly after the Lease
Commencement Date is ascertained,
Landlord and Tenant shall execute the
certificate confirming the Lease
Commencement Date attached to this Lease as
Exhibit D.
3.3 It is
presently anticipated that the Premises will be delivered to
Tenant on or about the Anticipated Lease
Commencement Date; provided, however,
that if Landlord does not deliver
possession of the Premises by such date,
Landlord shall not have any liability
whatsoever, and this Lease shall not be
rendered void or voidable, as a result
thereof.
3.4 "Lease
Year" shall mean a period of twelve (12) consecutive months
commencing on the Lease Commencement Date,
and each successive twelve (12) month
period thereafter; provided, however, that
if the Lease Commencement Date is not
the first day of a month, then the second
Lease Year shall commence on the first
day of the month in which the first
anniversary of the Lease Commencement Date
occurs.
3.5 Landlord
hereby grants to Digital Support Corporation, a Virginia
corporation ("DSC"), the conditional right,
exercisable at DSC's option, to
renew the term of this Lease for one (1)
five-year term (the "RENEWAL TERM"). If
exercised, and if the conditions applicable
thereto have been satisfied, the
Renewal Term shall commence immediately
following the end of the initial Lease
Term provided in Sections 1.3 and 3.1 of
this Lease. The right of renewal herein
granted to DSC shall be subject to, and
shall be exercised in accordance with,
the following terms and conditions:
(a) DSC shall
exercise its right of renewal with respect to the
Renewal Term by giving Landlord written
notice of such election not earlier than
fifteen (15) months nor later than twelve
(12) months prior to the expiration of
the initial Lease Term. -The-parties shah
have thirty (30) days after Landlord's
timely receipt of such notice in which to
agree on the rent payable during the
Renewal Term which would equal the
prevailing market rent. Among the factors to
be considered by the parties during such
negotiations in determining the
prevailing market rent shall be the general
commercial office space rental
market in Chantilly, Virginia, the rental
rates then being quoted by Landlord to
comparable tenants for comparable space in
the Building, and the rents being
charged similar tenants for similar
commercial office space in one-story office
and research and development use buildings.
If during such thirty (30) day
period the parties agree on such Base Rent,
Base Rent Annual Escalation
Percentage and additional rent payable
during each year of the Renewal Term,
then they shall promptly execute an
amendment to this Lease stating the rent so
agreed upon. If during such thirty (30) day
period the parties are unable, for
any reason whatsoever, to agree on such
Base Rent, Base Rent Annual Escalation
Percentage and additional rent payable,
then within five (5) days thereafter the
parties shall each appoint an independent
real estate broker who shall be
licensed in the Commonwealth of Virginia
and who specializes in the field of
commercial office space leasing in the
Northern Virginia market, has at least
ten (10) years of experience and is
recognized within the field as being
reputable and ethical. Such two (2)
individuals shall each determine within ten
(10) days after their appointment such Base
Rent, Base Rent Annual Escalation
Percentage and additional rent (to be in
accordance with the parameters
specified in this Section 3.5). If such
individuals do not agree on such items,
but the higher of such two values is not
more than one hundred five percent
(105%) of the lower of them, then the
prevailing market rent shall be deemed to
be the average of the two values. If the
higher of such two values is more than
one hundred five percent (105%) of the
lower of them, then the two brokers shall
jointly appoint a third broker within ten
(10) days after the second of the two
determinations described above has been
rendered. The third broker shall
independently make his or her determination
of the prevailing market rent within
ten (10) days after his or her appointment.
The highest and the lowest
determinations of value among the three
brokers shall be disregarded and the
remaining determination shall be deemed to
be the prevailing market rent and
shall be final and conclusive. Landlord and
DSC shall each bear the cost of its
broker and shall share equally the cost of
the third broker. Upon determination
of the Base Rent, Base Rent Annual
Escalation Percentage and additional rent
payable during the Renewal Term pursuant to
this Section 3.5, the parties shall
promptly execute an amendment to this Lease
stating the rent so determined.
89
<PAGE>
(b) If DSC's
renewal notice is not given timely, then DSC's right
of renewal shall lapse and be of no further
force or effect.
(c) If DSC is
either (i) in default under any applicable notice or
cure period with respect to any of DSC's
non-monetary obligations under this
Lease, or (ii) in default of DSC's monetary
obligations under this Lease on the
date DSC sends a renewal notice or any time
thereafter until the Renewal Term is
to commence, then, at Landlord's election,
the Renewal Term shall not commence
and the term of this Lease shall expire at
the expiration of the initial Lease
Term.
(d) DSC's
right of renewal under this Section 3.5 may be exercised
only by DSC and may not be exercised by any
transferee, sublessee or assignee of
DSC; provided, however, that DCS's right of
renewal under this Section 3.5 may
be exercised by (i) to a corporation or
other business entity (herein sometimes
referred to as a "successor corporation")
into or with which DSC shall be merged
or consolidated, or to which substantially
all of the assets of DSC may be
transferred, provided that such successor
corporation shall have a net worth and
liquidity factor at least equal to the net
worth and liquidity factor of DSC as
of the date of this Lease, and provided
that the successor corporation shall
assume in writing all of the obligations
and liabilities of DSC under this
Lease; or (ii) to a corporation or other
business entity (herein sometimes
referred to as a "related corporation")
which shall control, be controlled by or
be under common control with DSC. For
purposes of clause (ii) above, "control"
shall be deemed to be ownership of more
than fifty percent (50%) of the stock or
other voting interest of the controlled
corporation or other business entity.
For purposes of this Lease an "Affiliate"
shall mean any successor corporation
or related corporation as defined in this
Section 3.5(d).
(e) If at the
time DSC exercises its right of renewal under this
Section 3.5 more than fifty percent (50%)
of the number of square feet of
rentable area comprising the Premises have
been subleased or assigned to any
party which is not an Affiliate, or if this
Lease has been terminated with
respect to any such portion, then DSC's
rights pursuant to this Section 3.5
shall lapse and be of no further force or
effect.
ARTICLE IV
BASE RENT
4.1 From and after
the Lease Commencement Date, Tenant shall pay the Base
Rent in equal monthly installments in
advance on the first day of each month
during a Lease Year. On the first day of
the second and each succeeding Lease
Year, the Base Rent in effect shall be
increased by an amount equal to the
product of (a) the Base Rent Annual
Escalation Percentage, multiplied by (b) the
Base Rent in effect immediately before the
increase, calculated on a per square
foot basis and without regard to any rental
abatement, allowance or other
concession granted by Landlord during such
Lease Year, which Base Rent per
square foot shall be as set forth on
Exhibit E attached hereto.
4.2
Concurrently with Tenant's execution of this Lease, Tenant shall
pay an
amount equal to one (1) monthly installment
of the Base Rent payable during the
first Lease Year, which amount shall be
credited toward the monthly installment
of the Base Rent payable for the first full
calendar month of the Lease Term. If
the Lease Commencement Date is not the
first day of a month, then the Base Rent
from the Lease Commencement Date until the
first day of the following month
shall be prorated on a per diem basis at
the rate of one-thirtieth (1/30th) of
the monthly installment of the Base Rent
payable during the first Lease Year,
and Tenant shall pay such prorated
installment of the Base Rent on the Lease
Commencement Date.
4.3 All sums
payable by Tenant under this Lease, whether or not stated to
be Base Rent, additional rent or otherwise,
shall be paid to Landlord in legal
tender of the United States, without
setoff, deduction or
90
<PAGE>
demand, at the Landlord Payment Address, or
to such other party or such other
address as Landlord may designate in
writing. Landlord's acceptance of rent
after it shall have become due and payable
shall not excuse a delay upon any
subsequent occasion or constitute a waiver
of any of Landlord's rights
hereunder. Except as otherwise provided in
this Lease, any additional rent or
other sum owed by Tenant to Landlord (other
than Base Rent), and any
cost,expense, damage or liability incurred
by Landlord for which Tenant is
liable, shall be considered additional rent
payable pursuant to this Lease to be
paid by Tenant no later than thirty (30)
days after the date Landlord notifies
Tenant in writing of the amount thereof. If
any sum payable by Tenant under this
Lease is paid by check which is returned
due to insufficient funds, stop payment
order, or otherwise, then: (a) such event
shall be treated as a failure to pay
such sum when due; and (b) in addition to
all other rights and remedies of
Landlord hereunder, Landlord shall be
entitled (i) to impose, as additional
rent, a returned check charge of Fifty
Dollars ($50.00) to cover Landlord's
administrative expenses and overhead for
processing, and (ii) to require that
all future payments be remitted by wire
transfer, money order, or cashier's or
certified check.
4.4 Landlord
and Tenant agree that no rental or other payment for the use
or occupancy of the Premises is or shall be
based in whole or in part on the net
income or profits derived by any person or
entity from the Building or the
Premises. Tenant further agrees that it
will not enter into any sublease,
license, concession or other agreement for
any use or occupancy of the Premises
which provides for a rental or other
payment for such use or occupancy based in
whole or in part on the net income or
profits derived by any person or entity
from the Premises so leased, used or
occupied. Nothing in the foregoing
sentence, however, shall be construed as
permitting or constituting Landlord's
approval of any sublease, license,
concession, or other use or occupancy
agreement not otherwise approved by
Landlord in accordance with the provisions
of Article VII.
ARTICLE V
COMMON AREA MAINTENANCE EXPENSES AND REAL ESTATE TAXES
5.1 For the
purposes of this Article V, the term "BUILDING" shall be deemed
to include the site upon which the Building
is constructed and all associated
easements (which site is sometimes referred
to herein as the "LAND"). If the
Building is operated as a part of a complex
of buildings or in conjunction with
other buildings or parcels of land, then
Landlord shall prorate the common
expenses and costs with respect to each
such building or parcel of land in such
manner as Landlord, in its sole but not
arbitrary judgment, shall determine.
5.2 Tenant
shall pay as additional rent Tenant's proportionate share of
Common Area Maintenance Expenses [as
defined in Section 5.2(a) hereof] for each
calendar year falling entirely or partly
within the Lease Term ("TENANT'S SHARE
OF COMMON AREA MAINTENANCE EXPENSES"),
which shall be that percentage (40.40% as
of the Lease Commencement Date) which is
equal to a fraction, the numerator of
which is the number of square feet of
rentable area in the Premises (17,957 as
of the Lease Commencement Date), and the
denominator of which is the number of
square feet of total rentable area from
time to time in the Building (44,453 as
of the Lease Commencement Date) (excluding
storage and roof space).
(a) "COMMON
AREA MAINTENANCE EXPENSES" shall mean all costs and
expenses incurred by Landlord during any
calendar year in managing, operating
and maintaining Common Areas, as determined
by Landlord. Such costs and expenses
shall include, but not be limited to, the
cost of insurance; labor costs
(including social security taxes and
contributions and fringe benefits); charges
under maintenance and service contracts
(including but not limited to chillers,
boilers, elevators, window and security
services); the cost of water, gas,
sanitary sewer, storm sewer, electricity,
and other utilities to Common Areas;
the cost of services to Common Areas and
facilities and systems related thereto
(including but not limited to, paving
91
<PAGE>
and parking areas, lighting and sound
facilities, storm and sanitary drainage
systems, utility conduits, systems and
ducts, fire protection systems, sprinkler
systems, security systems, building signs,
whether or not located on the Land,
retaining walls, curbs, gutters, fences,
sidewalks, canopies, steps, ramps,
grass, trees and shrubbery), which services
may include, among other things,
snow removal, extermination fees, lighting,
cleaning, landscaping, gardening,
sweeping, painting, and resurfacing; that
portion of management fees which does
not exceed five percent (5%) of gross
receipts from the Building; business
taxes, license fees, public space and vault
rentals and charges; costs of
maintenance, repair and replacement of any
HVAC units serving the Common Areas
of the Building; assessments imposed by any
association now or hereafter
established to maintain Common Areas; the
cost of any equipment or services
provided by Landlord in connection with the
servicing, operation, maintenance
repair and protection of the Common Areas
and related exterior appurtenances
(whether or not provided on the Lease
Commencement Date); and that portion of
any and all costs and expenses incurred by
Landlord in each calendar year as
Landlord's share of Complex Expenses, as
such share is allocated by Landlord.
"Complex Expenses" shall mean any and all
costs and expenses for or in
connection with managing, operating,
maintaining, repairing and replacing the
common areas of the Complex. Common Area
Maintenance Expenses shall include the
cost of capital improvements made by
Landlord to manage, operate or maintain the
Common Areas together with any financing
charges incurred in connection
therewith, provided that such costs shall
be amortized over the useful life of
the improvements and only the portion
attributable to the calendar year shall be
included in Common Area Maintenance
Expenses for the calendar year; further
provided, that such expenditures shall be
limited to (i) those replacements of
building elements with other building
elements which serve similar purposes and
which are reasonably necessary to keep the
Building in good repair, in
Landlord's reasonable judgment, and which
will not change the character of the
Building, (ii) improvements or building
elements added to the Building which in
Landlord's reasonable judgment will
increase the efficiency of the Building
(i.e., are reasonably anticipated by
Landlord to reduce Common Area Maintenance
Expenses -as-they relate to the item which
is the subject of the capital
expenditure or to reduce the rate of
increase in the Common Area Maintenance
Expense which relates to the item which is
the subject of the capital
expenditure from what it otherwise may have
been reasonably anticipated to be in
the absence of such capital expenditure),
or (iii) improvements or replacements
which are required to comply with the
requirements of any laws, regulations, or
insurance or utility company requirements.
Neither Common Area Maintenance
Expenses nor Complex Expenses shall include
(1) Real Estate Taxes, (2) payments
of principal and interest on any Mortgages
(as hereinafter defined), (3) leasing
commissions, (4) costs of preparing,
improving or altering any spaces in
preparation for occupancy of any new or
renewal tenant, (5) costs incurred by
Landlord on account of utilities, char
services or other services attributable
to space occupied by any tenant of the
Complex, (6) the cost of capital
improvements made by Landlord to manage,
operate or maintain the Building to the
extent that the same are not otherwise
included in Common Area Maintenance
Expenses as hereinabove provided, (7) the
cost of any environmental remediation
with respect to circumstances existing
prior to the Lease Commencement Date, (8)
costs of maintaining a leasing office or
trailer at the Building, (9) costs
associated with claims, disputes,
litigation or enforcement of rules and
regulations with any tenant in the Complex
other than Tenant, and (10) costs,
including legal expenses;
or-penalties-associated with respect to Landlord's
late payment of Complex Expenses, Common
Area Maintenance Expenses or Real
Estate Taxes, provided that Tenant is then
current in the payment of all of its
monetary obligations under this Lease.
(b) If the
average occupancy rate for the Building during any
calendar year is less than ninety-five
percent (95%), then Common Area
Maintenance Expenses for such year shall be
deemed to include all additional
expenses, as reasonably estimated by
Landlord, which would have been incurred
during such year if such average occupancy
rate had been ninety-five percent
(95%).
(c) Any
statement provided to Tenant by Landlord pursuant to this
Article shall be conclusive and binding
upon Tenant unless, within forty-five
(45) days after receipt thereof, Tenant
notifies Landlord
92
<PAGE>
of the respects in which the statement is
claimed to be incorrect. Unless
otherwise mutually agreed, any such dispute
shall be determined by arbitration
in the jurisdiction in which the Premises
are located, in accordance with the
then current commercial rules of the
American Arbitration Association (however,
in no event shall any auditor or arbitrator
be paid on a contingency fee basis).
The costs of the arbitration shall be
divided equally between Landlord and
Tenant, except that each party shall bear
the cost of its own legal fees, unless
(i) the arbitration results in a
determination that Landlord's statement
contained a discrepancy of less than five
percent (5%) in Landlord's favor, in
which event Tenant shall bear all costs
incurred in connection with such
arbitration, including, without limitation,
reasonable legal fees, or (ii) the
arbitration results in a determination that
Landlord's statement contained a
discrepancy of at least five percent (5%)
in Landlord's favor, in which event
Landlord shall bear all costs incurred in
connection with such arbitration,
including, without limitation, reasonable
legal fees. Pending determination of
any dispute, Tenant shall pay all amounts
due pursuant to the disputed
statement, but such payments shall be
without prejudice to Tenant's position.
Upon at least ten (10) days notice to
Landlord, Tenant or a Certified Public
Accountant whom is employed by Tenant on
other than a contingency fee basis
shall have reasonable access during normal
business hours and at Tenant's
expense, to appropriate books and records
of Landlord to the amount of expenses
covered by the disputed statement, for the
purpose of verifying the statement.
5.3 Tenant
shall pay as additional rent Tenant's proportionate share of
Real Estate Taxes [as defined in Section
5.3(a) hereof] for each calendar year
falling entirely or partly within the Lease
Term (the "TENANT'S SHARE OF Real
Estate Taxes"), which shall be that
percentage (40.40% as of the Lease
Commencement Date) which is equal to a
fraction, the numerator of which is the
number of square feet of rentable area in
the Premises, and the denominator of
which is the number of square feet of total
rentable area from time to time in
the Building (44,453 as of the Lease
Commencement Date) (excluding storage and
roof space).
(a) "REAL
ESTATE TAXES" shall mean (1) all real estate taxes,
special user fees, rates, and assessments
(including general and special
assessments, if any), ordinary and
extraordinary, foreseen and unforeseen, which
are imposed upon Landlord or assessed
against the Building or the Land, (2) any
other present or future taxes or
governmental charges that are imposed upon
Landlord or assessed against the Building
or the Land which are in the nature of
or in substitution for real estate taxes,
including any tax levied on or
measured by the rents payable by tenants of
the Building, all taxes and
assessments for public improvements or any
other purpose and any gross receipts
or receipts or similar taxes, and (3)
expenses (including, without limitation,
attorneys' and consultants' fees and court
costs) incurred in reviewing,
protesting or seeking a reduction of real
estate taxes, whether or not such
protest or reduction is ultimately
successful. Subject to the foregoing, Real
Estate Taxes shall not include any
inheritance, estate, gift, franchise,
corporation, net income or net profits tax
assessed against Landlord from the
operation of the Building.
(b)
[Intentionally omitted.]
5.4 Tenant
shall make estimated monthly payments to Landlord on account of
the amount of Tenant's Share of Common Area
Maintenance Expenses and Tenant's
Share of Real Estate Taxes that are
expected by Landlord to be incurred by
Tenant during each calendar year. At the
beginning of the Lease Term and at the
beginning of each calendar year thereafter,
Landlord shall submit a statement
setting forth Landlord's reasonable
estimate of such Tenant's Share of Common
Area Maintenance Expenses and Tenant's
Share of Real Estate Taxes. Tenant shall
pay to Landlord on the first day of each
month following receipt of such
statement, until Tenant's receipt of the
succeeding annual statement, an amount
equal to one-twelfth (1/12) of such
Tenant's Share of Common Area Maintenance
Expenses and Tenant's Share of Real Estate
Taxes (estimated on an annual basis
without proration). From time to time but
no more often than once during any
calendar year, Landlord may revise
Landlord's initial estimate for such calendar
year and adjust Tenant's monthly payments
to reflect Landlord's revised
estimate. After the end of each calendar
year Landlord shall submit a statement
showing (1) Real Estate Taxes, and (2) the
aggregate amount of Tenant's
93
<PAGE>
estimated payments of Tenant's Share of
Common Area Maintenance Expenses and
Tenant's Share of Real Estate Taxes made
during such year. If such statement
indicates that the aggregate amount of such
estimated payments of Tenant's Share
of Common Area Maintenance Expenses and
Tenant's Share of Real Estate Taxes
exceeds Tenant's actual liability therefor,
then Landlord shall credit Tenant's
net overpayment toward subsequent payments
of Base Rent next coming due
hereunder, or if the Lease Term has expired
or been terminated other than
because of an Event of Default by Tenant,
then Landlord shall pay the amount of
any such excess estimated payments to
Tenant within thirty (30) days after the
later of (i) the expiration or termination
of the Lease Term or (ii) the date on
which Tenant cures all defaults under this
Lease. If such statement indicates
that Tenant's actual liability exceeds the
aggregate amount of such estimated
payments of Tenant's Share of Common Area
Maintenance Expenses and Tenant's
Share of Real Estate Taxes, then Tenant
shall pay the-amount of-such excess as
additional rent within thirty (30) days
after Tenant's receipt of such
statement. If the Lease Term commences or
expires on a day other than the first
day or the last day of a calendar year,
respectively, then Tenant's liabilities
pursuant to this Article for such calendar
year shall be apportioned by
multiplying the respective amount of
Tenant's proportionate share thereof for
the full calendar year by a fraction, the
numerator of which is the number of
days during such calendar year falling
within the Lease Term, and the
denominator of which is three hundred
sixty-five (365). Furthermore, in the
event that Landlord challenges any Real
Estate Taxes that are levied, assessed
or imposed upon the Building or the Land,
and if Tenant shall have paid
additional rent on account of such
contested Real Estate Taxes and Landlord
thereafter receives a refund of such Real
Estate Taxes, then Tenant shall
receive a credit toward subsequent payments
of Base Rent coming due hereunder,
or if the Lease Term has expired or been
terminated other than because of an
Event of Default by Tenant, then Landlord
shall pay the amount of Tenant's share
of any such refund to Tenant within thirty
(30) days after the later of (i) the
expiration or termination of the Lease
Term, or (ii) the date on which Tenant
cures all defaults under this Lease.
ARTICLE VI
USE OF PREMISES
6.1 Tenant
shall use and occupy the Premises solely for general
(non-medical) office purposes, and
ancillary integration, laboratory, training
and storage uses, and for no other use or
purpose. Tenant shall not use or
occupy the Premises for any unlawful
purpose, or in any manner that will violate
the certificate of occupancy for the
Premises or the Building or that will
constitute waste, nuisance or unreasonable
annoyance to Landlord or any other
tenant or user of the Building, or in any
manner that will increase the number
of parking spaces required for the Building
or its full occupancy as required by
law. Tenant shall comply with all present
and future laws (including, without
limitation, the Americans with Disabilities
Act (the "ADA") and the regulations
promulgated thereunder, as the same may be
amended from time to time),
ordinances (including without limitation,
zoning ordinances and land use
requirements), regulations, orders and
recommendations (including, without
limitation, those made by any public or
private agency having authority over
insurance rates) (collectively, "Laws")
concerning the use, occupancy and
condition of the Premises and all
machinery, equipment, furnishings, fixtures
and improvements therein, all of which
shall be complied with in a timely manner
at Tenant's sole expense. If any such Law
requires an occupancy or use permit or
license for the Premises or the operation
of the business conducted therein
(including a certificate of occupancy or
nonresidential use permit), then Tenant
shall obtain and keep current such permit
or license at Tenant's expense and
shall promptly deliver a copy thereof to
Landlord. Use of the Premises is
subject to all covenants, conditions and
restrictions of record. Tenant shall
not use any space in the Building for the
sale of goods to the public at large
or for the sale at auction of goods or
property of any kind. Tenant shall not
conduct any operations, sales, promotions,
advertising or special events in, on
or about the Complex outside of the
Premises.
6.2 Tenant shall pay
before delinquency any business, rent or other taxes
or fees that are now or hereafter levied,
assessed or imposed upon Tenant's use
or occupancy of the Premises, the conduct
of Tenant's business at the Premises,
or Tenant's equipment, fixtures,
furnishings, inventory or personal
94
<PAGE>
property. If any such tax or fee is enacted
or altered so that such tax or fee
is levied against Landlord or so that
Landlord is responsible for collection or
payment thereof, then Tenant shall pay as
additional rent the amount of such tax
or fee.
6.3 Tenant
shall not cause or permit any Hazardous Materials to be
generated, used, released, stored or
disposed of in or about the Building, the
Land, or the Complex, provided that Tenant
may use and store reasonable
quantities of standard cleaning materials
and customary office supplies as may
be reasonably necessary for Tenant to
conduct normal general office use
operations in the Premises provided the
same are handled, stored and disposed of
in accordance with all Laws. At the
expiration or earlier termination of this
Lease, Tenant shall surrender the Premises
to Landlord free of Hazardous
Materials and in compliance with all
Environmental Laws. "HAZARDOUS Materials"
means(1) asbestos and any asbestos
containing material and any substance that is
then defined or listed in, or otherwise
classified pursuant to, any
Environmental Law or any other applicable
Law as a "HAZARDOUS SUBSTANCE,"
"HAZARDOUS MATERIAL," "HAZARDOUS WASTE,"
"INFECTIOUS WASTE," "TOXIC SUBSTANCE,"
"TOXIC POLLUTANT" or any other formulation
intended to define, list, or classify
substances by reason of deleterious
properties such as ignitability,
corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, or
Toxicity Characteristic Leaching Procedure
(TCLP) toxicity, (2) any petroleum
and drilling fluids, produced waters, and
other wastes associated with the
exploration, development or production of
crude oil, natural gas, or geothermal
resources, and 3) any petroleum product,
polychlorinated biphenyls, urea
formaldehyde, radon gas, radioactive
material (including any source, special
nuclear, or by-product material), medical
waste, chlorofluorocarbon, lead or
lead-based product, and any other substance
whose presence could be detrimental
to the Building, the Land, or the Complex
or hazardous to health or the
environment. "Environmental Law" means any
present and future Law and any
amendments (whether common law, statute,
rule, order, regulation or otherwise),
permits and other requirements or
guidelines of governmental authorities
applicable to the Building or the Land and
relating to the environment and
environmental conditions or to any
Hazardous Material.
(a)
Notwithstanding any termination of this Lease, Tenant shall
indemnify and hold Landlord, its employees
and agents harmless from and against
any damage, injury, loss, liability,
charge, demand or claim based on or arising
out of the presence or removal of, or
failure to remove, Hazardous Materials
generated, used, released, stored or
disposed of by Tenant or any Invitee in or
about the Building, whether before or after
Lease Commencement Date. In
addition, Tenant shall give Landlord
immediate verbal and follow-up written
notice of any actual or threatened
Environmental Default, which Environmental
Default Tenant shall cure in accordance
with all Environmental Laws and to the
satisfaction of Landlord and only after
Tenant has obtained Landlord's prior
written consent, which shall not be
unreasonably withheld. An "ENVIRONMENTAL
Default" means any of the following by
Tenant or any Invitee: a violation of an
Environmental Law; a release, spill or
discharge of a Hazardous Material on or
from the Premises, the Land or the
Building; an environmental condition
requiring responsive action; or an
emergency environmental condition. Upon any
Environmental Default, in addition to all
other rights available to Landlord
under this Lease, at law or in equity,
Landlord shall have the right but not the
obligation to immediately enter the
Premises, to supervise and approve any
actions taken by Tenant to address the
Environmental Default, and, if Tenant
fails to immediately address same to
Landlord's satisfaction, to perform, at
Tenant's sole cost and expense, any lawful
action necessary to address same. If
any lender or governmental agency shall
require testing to ascertain whether an
Environmental Default is pending or
threatened, then Tenant shall pay the
reasonable costs therefor as additional
rent. Promptly upon request, Tenant
shall execute from time to time affidavits,
representations and similar
documents concerning Tenant's best
knowledge and belief regarding the
presence-of Hazardous Materials at or in
the Building, the Land or the Premises.
(b) In the
event that Landlord receives written notice from a
governmental agency of the presence of
Hazardous Materials in the Premises or in
any of the Common Areas of the Building
which are utilized by Tenant in a
quantity and of a nature that violates any
applicable governmental laws or
regulations and that were not introduced to
the Building by or on behalf of
Tenant, Landlord shall take such action, if
any, as may be required to comply
with such governmental laws or regulations;
provided, however, that
95
<PAGE>
Landlord shall have the right to contest
any such notice of violation, in which
case Landlord's obligation to cure shall
not arise until after the final
adjudication of the validity of the
violation notice.
6.4 Landlord
at its expense (subject to reimbursement pursuant to Article V
to the extent permitted thereby) shall take
steps necessary to comply with Title
III of the ADA to the extent same applies
directly to the common areas of the
Building or the Parking Area serving the
Building and Complex; provided,
however, that to the extent any
non-compliance is a result of the use or
occupancy of the Premises or any action or
inaction of Tenant or any Invitee (as
defined in Article VIII), or if any
improvements made by Landlord to comply with
the ADA benefit solely the Premises, then
such compliance shall be at Tenant's
cost. Tenant at its sole cost and expense
shall be solely responsible for taking
any and all measures which are required to
comply with the ADA concerning the
Premises (including means of ingress and
egress thereto) and the business
conducted therein. Any Alterations made or
constructed by Tenant for the purpose
of complying with the ADA or which
otherwise require compliance with the ADA
shall be done in accordance with this
Lease; provided, that Landlord's consent
to such Alterations shall not constitute
either Landlord's assumption, in whole
or in part, of Tenant's responsibility for
compliance with the ADA, or
representation or confirmation by Landlord
that such Alterations comply with the
provisions of the ADA.
ARTICLE VII
ASSIGNMENT AND SUBLETTING
7.1 Tenant
shall not assign, transfer or otherwise encumber (collectively,
"assign") this Lease or all or any of
Tenant's rights hereunder or interest
herein, or sublet or permit anyone to use
or occupy (collectively, "sublet") the
Premises or any part thereof, without
obtaining the prior written consent of
Landlord, which consent may be withheld or
granted in Landlord's ;sole and
absolute discretion. No assignment or right
of occupancy hereunder may be
effectuated by operation of law or
otherwise without the prior written consent
of Landlord. Any attempted assignment,
transfer or other encumbrance of this
Lease or all or any of Tenant's rights
hereunder or interest herein, and any
sublet or permission to use or occupy the
Premises or any part thereof not in
accordance with this Article VII shall be
void and of no force or effect. Any
assignment or subletting, Landlord's
consent thereto, or Landlord's collection
or acceptance of rent from any assignee or
subtenant shall not be construed
either as waiving or releasing Tenant from
any of its liabilities or obligations
under this Lease as a principal and not as
a guarantor or surety, or as
relieving Tenant or any assignee or
subtenant from the obligation of obtaining
Landlord's prior written consent to any
subsequent assignment or subletting. As
security for this Lease, Tenant hereby
collaterally assigns to Landlord the rent
due from any assignee or subtenant of
Tenant. For any period during which Tenant
is in default hereunder, Tenant hereby
authorizes each such assignee or
subtenant to pay said rent directly to
Landlord upon receipt of notice from
Landlord specifying same. Landlord's
collection of such rent shall not be
construed as an acceptance of such assignee
or subtenant as a tenant. Tenant
shall not mortgage, pledge, hypothecate or
encumber (collectively "mortgage")
this Lease without Landlord's prior written
consent, which consent may be
granted or withheld in Landlord's sole and
absolute discretion. To reimburse
Landlord for expenses incurred by Landlord
in connection with Tenant's request
for Landlord to give its consent to any
assignment, subletting, or mortgage,
Tenant shall pay to Landlord (a) an
administrative fee of seven hundred fifty
dollars ($750.00) and (b) Landlord's
reasonable attorney's fees actually
incurred. Any sublease, assignment or
mortgage shall, at Landlord's option, be
effected on forms reasonably approved by
Landlord. Tenant shall deliver to
Landlord a fully-executed copy of each
agreement evidencing a sublease,
assignment or mortgage within ten (10) days
after Tenant's execution thereof and
such agreement shall be of no force or
effect until Landlord has executed a
consent in form and substance acceptable to
Landlord in its sole discretion.
Notwithstanding any of the foregoing to the
contrary, provided Tenant is not in
default under this Lease, and subject to
Landlord's rights and Tenant's
obligations pursuant to Sections 7.4, 7.5
and 7.6 below, Landlord shall not
unreasonably withhold its consent to any
proposed subletting of all or any
portion of the Premises or assignment of
this Lease. Without limiting the
generality of the immediately preceding
sentence, it is specifically agreed that
it shall be reasonable for Landlord, within
twenty (20) days following
Landlord's receipt of Tenant's Request
Notice (as defined in Section 7.3
96
<PAGE>
hereof), to withhold its consent if: (i)
the proposed subtenant is engaged in a
business, or the Premises will be used in a
manner, that is inconsistent with
image of the Building; or (ii) Landlord is
not satisfied, in its reasonable
judgment, that the financial condition of
the proposed subtenant is sufficient
to pay the subrent under the proposed
sublease; or (iii) the proposed use of the
Premises is not in compliance with Article
VI or is not compatible with the
other uses within, and the terms of other
leases with respect to, the Building;
or (iv) the initial Tenant does not remain
fully liable as a primary obligor for
the payment of all rent and other charges
payable by Tenant under this Lease and
for the performance of all other
obligations of Tenant under this Lease; or (v)
the proposed subtenant is a governmental or
quasi-governmental agency; or (vi)
the proposed use of the premises shall
increase the pedestrian traffic in the
Building above the level of traffic
generated by normal and customary office
usage; or (vii) the proposed subtenant is a
current tenant in the Building or a
potential tenant in the Building with whom
Landlord is engaged in active
negotiations unless the proposed subtenant
already occupies space in the
Building which is contiguous to any portion
of the Premises and Landlord has
been requested by such subtenant to provide
expansion space-at least-sixty {60)
days prior -to-the date of Tenant's
proposed sublease of a portion of the
Premises to such subtenant and Landlord has
not been able to arrange for the
lease of such expansion space to the
proposed subtenant by such date.
7.2 If Tenant
is a partnership, then any event (whether voluntary,
concurrent or related) resulting in a
dissolution of Tenant, any withdrawal or
change (whether voluntary, involuntary or
by operation of law) of partners
owning a controlling interest in Tenant
(including each general partner), or any
structural or other change having the
effect of limiting the liability of the
partners shall be deemed a voluntary
assignment of this Lease subject to the
provisions of this Article. If Tenant is a
corporation (or a partnership with a
corporate general partner), then any event
(whether voluntary, concurrent or
related) resulting in a dissolution,
merger, consolidation or other
reorganization of Tenant (or such corporate
general partner), or the sale or
transfer or relinquishment of the interest
of shareholders who, as of the date
of this Lease, own a controlling interest
of the capital stock of Tenant (or
such corporate general partner), shall be
deemed a voluntary assignment of this
Lease subject to the provisions of this
Article; provided, however, that the
foregoing portion of this sentence shall
not apply to corporations whose stock
is traded through a national or regional
exchange or over-the-counter market. If
Tenant is a limited liability company, then
any dissolution of Tenant or a
withdrawal or change, whether voluntary,
involuntary or by operation of law, of
members owning a controlling interest in
Tenant shall be deemed a voluntary
assignment of this Lease. In addition, a
transfer of all or substantially all of
the assets of Tenant, either by merger,
consolidation, or otherwise shall be
deemed to be an assignment under this
Article VII. Whether Tenant is a
partnership, corporation or any other type
of entity, then at the option of
Landlord, a sale of all or substantially
all of its assets, a change in its name
of which Landlord has not received prior
notice, or a conversion into any other
type of entity shall also be deemed a
voluntary assignment of this Lease.
Notwithstanding anything contained in this
Article VII to the contrary, provided
Tenant is not in default hereunder, Tenant
may, upon at least ten (10) days
prior written notice to Landlord but
without Landlord's prior written consent
and without being subject to Landlord's
rights and Tenant's obligations set
forth in Sections 7.4, 7.5 and 7.6 below,
assign or transfer its entire interest
in this Lease or sublease all or any
portion of the Premises to an Affiliate. In
the event of any such assignment or
subletting, Tenant shall remain fully liable
as a primary obligor for the payment of all
rent and other charges required
hereunder and for the performance of all
obligations to be performed by Tenant
hereunder. For purposes of this Section
7.2, "CONTROL" shall be deemed to be
ownership of more than fifty percent (50%)
of the stock or other voting interest
of the controlled corporation or other
business entity. Together with Tenant's
notice to Landlord pursuant to this Section
7.2, Tenant shall submit to Landlord
sufficient information regarding the
transaction as is reasonably necessary for
Landlord to confirm that the transaction
meets the qualifications set forth in
this Section 7.2.
7.3 If at any
time during the Lease Term Tenant desires to assign, sublet
or mortgage all or part of this Lease or
the Premises, then in connection with
Tenant's request to Landlord for Landlord's
consent thereto, Tenant shall give
notice to Landlord in writing ("TENANT'S
REQUEST Notice") containing: the
identity of the proposed assignee,
subtenant or other party and a description of
its business; the terms of the proposed
97
<PAGE>
assignment, subletting or other
transaction; the commencement date of the
proposed assignment, subletting or other
transaction (the "PROPOSED SUBLEASE OR
Assignment Commencement DATE"); the area
proposed to be assigned, sublet or
otherwise encumbered (the "PROPOSED SUBLET
OR ASSIGNMENT SPACE"); the most
recent financial statement or other
evidence of financial responsibility of such
proposed assignee, subtenant or other
party; and a certification executed by
Tenant and such party stating whether or
not any premium or other consideration
is being paid for the assignment, sublease
or other transaction.
7.4 If the
term of the proposed sublease (including all applicable renewal
terms) constitutes ninety percent (90%) or
more of the remaining Lease Term or
if the Proposed Sublease or Assignment
Space (when aggregated with all other
space subleased by Tenant) constitutes
fifty percent (50%) or more of the
Premises and the Subtenant under the
proposed sublease is not an Affiliate, then
Landlord shall have the right in its sole
and absolute discretion to terminate
this Lease with respect to the Proposed
Sublet or Assignment Space by sending
Tenant written notice of such termination
within thirty (30) days after
Landlord's receipt of Tenant's Request
Notice. If the Proposed Sublet or
Assignment Space does not constitute the
entire Premises but constitutes more
than fifty percent (50%) of the Premises
and the Subtenant under the proposed
sublease is not an Affiliate, and Landlord
exercises its option to terminate
this Lease with respect to the Proposed
Sublet or Assignment Space, then (a)
Tenant shall tender the Proposed Sublet or
Assignment Space to Landlord on the
Proposed Sublease or Assignment
Commencement Date and such space shall
thereafter be deleted from the Premises,
and (b) as to that portion of the
Premises which is not part of the Proposed
Sublet or Assignment Space, this
Lease shall remain in full force and effect
except that Base Rent and additional
rent shall be reduced pro rata. The cost of
any construction required to permit
the operation of the Proposed Sublet or
Assignment Space separate from the
balance of the Premises shall be paid by
Tenant to Landlord as additional rent
hereunder. If the Proposed Sublet or
Assignment Space constitutes the entire
Premises and the Subtenant under the
proposed sublease is not an Affiliate, and
Landlord elects to terminate this Lease,
then Tenant shall tender the Proposed
Sublet or Assignment Space to Landlord, and
this Lease shall terminate, on the
Proposed Sublease or Assignment
Commencement Date.
7.5 If any
sublease or assignment (whether by operation of law or
otherwise, including without limitation an
assignment pursuant to the provisions
of the Bankruptcy Code or any other
Insolvency Law) provides that the subtenant
or assignee thereunder is to pay any amount
in excess of the rental and other
charges due under this Lease, then whether
such excess be in the form of an
increased monthly or annual rental, a lump
sum payment, payment for the sale,
transfer or lease of Tenant's fixtures,
leasehold improvements, furniture and
other personal property, or any other form
(and if the subleased or assigned
space does not constitute the entire
Premises, the existence of such excess
shall be determined on a pro-rata basis),
Tenant shall pay to Landlord fifty
percent (50%) of any such excess or other
premium applicable to the sublease or
assignment (after deducting Tenant's
reasonable, out-of-pocket costs incurred in
subleasing, but not deducting any costs
attributable to vacancy periods or
"DOWNTIME"), which amount shall be paid by
Tenant to Landlord (unless such
payment is otherwise waived, in whole or in
part, by Landlord in writing) as
additional rent upon such terms as shall be
specified by Landlord and in no
event later than ten (10) days after any
receipt thereof by Tenant. Acceptance
by Landlord of any payments due under this
Section shall not be deemed to
constitute approval by Landlord of any
sublease or assignment, nor shall such
acceptance waive any rights of Landlord
hereunder. Landlord shall have the right
to inspect and audit Tenant's books and
records relating to any sublease or
assignment.
7.6 All
restrictions and obligations imposed pursuant to this Lease on
Tenant shall be deemed to extend to any
subtenant, assignee, licensee,
concessionaire or other occupant or
transferee, and Tenant shall cause such
person to comply with such restrictions and
obligations. Any assignee shall be
deemed to have assumed obligations as if
such assignee had originally executed
this Lease and at Landlord's request shall
execute promptly a document
confirming such assumption. Each sublease
is subject to the condition that if
the Lease Term is terminated or Landlord
succeeds to Tenant's interest in the
Premises by voluntary surrender or
otherwise, at Landlord's option the subtenant
shall be bound to Landlord for the balance
of the term of such sublease and
shall attorn to and recognize Landlord as
its landlord under the then executory
98
<PAGE>
terms of such sublease or, at Landlord's
sole option, the subtenant shall
execute a direct lease with Landlord on
Landlord's then-current standard form.
ARTICLE VIII
MAINTENANCE AND REPAIRS
8.1 Tenant, at
Tenant's sole cost and expense, shall promptly make all
repairs, perform all maintenance, and make
all replacements in and to the
Premises that are necessary or desirable to
keep the Premises in good condition
and repair, in a clean, safe and tenantable
condition, and otherwise in
accordance with all Laws and the
requirements of this Lease. Tenant shall
maintain all fixtures, furnishings and
equipment located in, or exclusively
serving, the Premises in clean, safe and
sanitary condition, shall take good
care thereof and make all required repairs
and replacements thereto, except for
Landlord's obligations as specifically set
forth in Section 8.2 hereof. Tenant
shall give Landlord prompt written notice
of any defects or damage to the
structure of, or equipment or fixtures in,
the Building or any part thereof.
Tenant shall suffer no waste or injury to
any part of the Premises, and shall,
at the expiration or earlier termination of
the Lease Term, surrender the
Premises in an order and condition equal to
or better than their order and
condition on the Lease Commencement Date,
except for ordinary wear and tear and
as otherwise provided in Section 9.3 and
Article XVII. Except as otherwise
provided in Article XVII, all injury,
breakage and damage to the Premises and to
any other part of the Building or the Land
caused by any act or omission of any
invitee, agent, employee, subtenant,
assignee, contractor, client, family
member, licensee, customer or guest of
Tenant (collectively, "INVITEES") or
Tenant, shall be repaired by and at
Tenant's expense, except that Landlord shall
have the right at Landlord's option to make
any such repair and to charge Tenant
for all costs and expenses incurred in
connection therewith.
8.2 Except as
otherwise provided in this Lease, Landlord shall (subject to
reimbursement pursuant to Article V)
provide regularly scheduled extermination
services for the Building, keep the
exterior and demising walls, load bearing
elements, foundations, roof and common
areas that form a part of the Building,
and the building standard mechanical,
electrical, HVAC and plumbing systems,
pipes and conduits that are provided by
Landlord in the operation of the
Building (collectively, the "BUILDING
STRUCTURE AND Systems"), clean and in good
operating condition and, promptly after
becoming aware of any item needing
repair, will make repairs thereto.
Notwithstanding any of the foregoing to the
contrary: (a) installation, maintenance and
repair of special tenant areas,
facilities, finishes and equipment
(including, but not limited to, any special
fire protection equipment,
telecommunications and computer equipment,
kitchen/galley equipment, air-conditioning
equipment serving the Premises only
and all other furniture, furnishings and
equipment of Tenant and all
Alterations) shall be the sole
responsibility of Tenant and shall be deemed not
to be a part of the Building Structure and
Systems; and (b) Landlord shall have
no obligation to make any repairs brought
about by any act or neglect of Tenant
or any Invitee.
ARTICLE IX
ALTERATIONS
9.1 The
original improvement of the Premises shall be accomplished in
accordance with Exhibit B (if any).
Landlord is under no obligation to make any
structural or other alterations,
decorations, additions, improvements or other
changes (collectively, "Alterations") in or
to the Premises or the Building
except as (if any) or as otherwise
expressly provided in this Lease.
Tenant shall not make or permit anyone to make any Alterations in
or to
the Premises or the Building, without the
prior written consent of Landlord,
which consent may be withheld or granted in
Landlord's sole and absolute
discretion. Notwithstanding the foregoing,
Landlord shall not unreasonably
withhold its consent to any non-structural
Alteration which Tenant may desire to
make to the Premises; provided, however,
that Landlord shall retain sole and
absolute discretion to withhold its consent
to any
99
<PAGE>
Alteration, whether structural or
non-structural, which may, in the sole and
absolute judgment of Landlord (i) adversely
affect the marketability of the
Premises, (ii) exceed the capacity of,
hinder the effectiveness of, interfere
with, or will be connected to the
electrical, mechanical, heating, ventilating,
air conditioning, or plumbing systems of
the Premises or the Building, or (iii)
be visible from outside the Premises.
Notwithstanding the foregoing, Tenant
shall have the right, after providing at
least ten (10) days prior written
notice to Landlord, but without the
necessity of obtaining Landlord's consent,
to recarpet, repaint, or to make purely
"cosmetic" or "DECORATIVE" nonstructural
Alterations in and to the Premises-that (I)
do not fall within clauses (i)
through (iii) above, (II) do not require
the issuance of a building permit, and
(III) do not cost, when aggregated with all
other Alterations made during the
previous twelve (12) months, more than
Twenty Thousand Dollars ($20,000.00). Any
Alterations made by Tenant shall be made:
(a) in a good, workmanlike,
first-class and prompt manner; (b) using
new materials only; (c) by a
contractor, on days, at times and under the
supervision of an architect approved
in writing by Landlord; (d) in accordance
with plans and specifications prepared
by an engineer or architect reasonably
acceptable to Landlord, which plans and
specifications shall be approved in writing
by Landlord at Landlord's standard
charge to be paid as additional rent to
cover Landlord's administrative expenses
and overhead for processing;
(e)-in-accordance-with.-all-Laws and the
requirements of any insurance company
insuring the Building or any portion
thereof; (f) after having obtained any
required consent of the holder of any
Mortgage; (g) after obtaining public
liability and worker's compensation
insurance policies approved in writing by
Landlord, which policies shall cover
every person who will perform any work with
respect to such Alteration; and (h)
upon request, after Tenant has delivered to
Landlord documentation reasonably
satisfactory to Landlord evidencing
Tenant's financial ability to complete the
Alteration in accordance with the
provisions of this Lease. Prior to each
payment to any contractor, subcontractor,
laborer, or material supplier for all
work, labor, and services to be performed
and materials to be furnished in
connection with Alterations, Tenant shall
obtain and deliver to Landlord
written, unconditional waivers of
mechanics' and materialmen's liens against the
Premises and the Building from all proposed
contractors, subcontractors,
laborers and material suppliers for all
work, labor and services performed and
materials furnished in connection with
Alterations to the extent the costs
thereof have been paid and, at a minimum,
through the previous invoice submitted
for payment. If any lien (or a petition to
establish such lien) is filed in
connection with any Alteration, such lien
(or petition) shall be discharged by
Tenant within ten (10) days thereafter, at
Tenant's sole cost and expense, by
the payment thereof or by the filing of a
bond acceptable to Landlord. If
Landlord gives its consent to the making of
any Alteration, such consent shall
not be deemed to be an agreement or consent
by Landlord to subject its interest
in the Premises or the Building to any
liens which may be filed in connection
therewith. All Alterations involving
structural, electrical, mechanical or
plumbing work, the heating, ventilation and
air conditioning system of the
Premises or the Building, and the roof of
the Building shall be performed at
Tenant's sole cost and expense and by a
contractor or subcontractor acceptable
to Landlord in its sole but reasonable
discretion. Whether or not Landlord
performs such work, then Landlord's
property manager shall be paid additional
rent in an amount equal to three percent
(3%) of the cost of such work. Promptly
after the completion of an Alteration,
Tenant at its expense shall deliver to
Landlord three (3) sets of accurate
as-built drawings showing such Alteration in
place. Tenant shall reimburse Landlord, its
employees and agents for (as
additional rent), and shall indemnify,
defend upon request and hold them
harmless from and against all costs,
damages, claims, liabilities, expenses
(including attorneys' fees), losses,
penalties and court costs suffered by or
claimed against them, directly or
indirectly, based on or arising out of in
whole or in part, the construction or
installation of Alterations.
9.2 If any
Alterations are made without the prior written consent of
Landlord, Landlord shall have the right at
Tenant's expense to remove and
correct such Alterations and restore the
Premises and the Building to their
condition immediately prior thereto, or to
require Tenant to do the same. All
Alterations to the Premises or the Building
made by either party shall
immediately become the property of Landlord
and shall remain upon and be
surrendered with the Premises as a part
thereof at the expiration or earlier
termination of the Lease Term; provided,
however, that (a) if Tenant is not in
default under this Lease, then Tenant
100
<PAGE>
shall have the right to remove, prior to
the expiration or earlier termination
of the Lease Term, all movable furniture,
furnishings and equipment (including
trade fixtures) installed in the Premises
solely at the expense of Tenant, and
(b) Tenant shall remove all Alterations and
other items in the Premises or the
Building which Landlord designates in
writing for removal. Landlord shall have
the rig
