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EXHIBIT 10.28
OFFICE LEASE
NEWSREAL, INC.,
TENANT
AND
WATERFRONT II CORPORATION,
LANDLORD
TRANSPOTOMAC CANAL CENTER
ALEXANDRIA, VIRGINIA
JUNE __, 1998
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DEED OF LEASE
TRANSPOTOMAC CANAL CENTER
ALEXANDRIA, VIRGINIA
THIS DEED OF LEASE (the "Lease") is made as of the day of June, 1998,
by and between WATERFRONT II CORPORATION, a Delaware corporation (hereinafter
referred to as "Landlord"), and NEWSREAL, INC., a Delaware corporation
(hereinafter referred to as "Tenant").
RECITALS
A. Landlord is the owner of an office building (the "Building"),
located at 00 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx, in an office building
complex known as TransPotomac Canal Center (the "Complex").
B. Tenant desires to lease space in the Building, and Landlord is
willing to rent space in the Building to Tenant, upon the terms, conditions,
covenants and agreements set forth herein.
NOW, THEREFORE, the parties hereto, intending legally to be bound, hereby
covenant and agree as set forth below.
ARTICLE I
THE PREMISES
SECTION 1.1 LEASED PREMISES. Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, for the term and upon the terms, conditions,
covenants and agreements herein provided, Suite 700, located on the seventh
(7th) floor of the Building, which space consists of approximately 9,942 square
feet of rentable area (such space being hereinafter referred to as the
"Premises"). The said approximation of square footage shall in no way affect the
fixed rental hereunder should any variance be found to exist between said
approximation and actual square footage. The Premises are outlined in red on the
first page of Exhibit A attached hereto and made a part hereof. The lease of the
Premises includes the right, together with other tenants of the Building and
members of the public, to use the common public areas of the Building and the
common public areas of the Complex (the "Common Areas"), but includes no other
rights not specifically set forth herein. Landlord reserves the right to modify
the size, location, arrangement, finish and other features of the Common Areas.
SECTION 1.2 EXPANSION SPACE. Effective as of August 1, 2001, Landlord
hereby leases to Tenant, and Tenant hereby leases from Landlord, for the term
and upon the terms, conditions, covenants and agreements herein provided, the
balance of the space on the seventh (7th) floor of the Building, which space
consists of approximately 6,087 square feet of rentable area (such space being
hereinafter referred to as the "Expansion Premises"). The said approximation of
square footage shall in no way affect the fixed rental hereunder should any
variance be found to exist between said approximation and actual square footage.
The Expansion Premises are also outlined in red on the second page of Exhibit A
attached hereto and made a part hereof. If Tenant desires to expand the Premises
to include the Expansion Premises on August 1, 2000, Tenant shall give written
notice to Landlord no later than December 31, 1999, and the effective date of
the lease of the Expansion Premises shall be August 1, 2000. If Landlord obtains
possession of the Expansion Space on or before February 1, 2001, Landlord may
require Tenant to lease the Expansion Space effective as of February 1, 2001, by
giving Tenant no less than ten (10) months' prior written notice that the
Expansion Space will be delivered to Tenant on February 1, 2001. The effective
date of the commencement of the lease of the Expansion Premises, i.e., August 1,
2000, August 1, 2001, or February 1, 2001, is
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hereinafter referred to as the "Expansion Premises Commencement Date". From and
after the Expansion Premises Commencement Date, the term "Premises" shall refer
to 16,029 square feet of rentable area comprising both the original Premises
and the Expansion Premises unless the context indicates otherwise.
ARTICLE II
TERM
SECTION 2.1 LEASE TERM. The term of this Lease (hereinafter
referred to as the "Lease Term") shall commence on July 1, 1998 (the "Lease
Commencement Date") and shall continue for a period of one hundred twenty (120)
consecutive calendar months thereafter until and including June 30, 2008,
unless the Lease Term is terminated earlier or extended in accordance with the
provisions of this Lease.
SECTION 2.2 [intentionally omitted]
SECTION 2.3 [intentionally omitted]
SECTION 2.4 DELAY IN DELIVERY OF PREMISES.
(a) It is presently anticipated that the Premises will be
ready for occupancy by Tenant on or about the Lease Commencement Date;
provided, however, if Landlord is unable to deliver possession of the Premises
by such date, Landlord shall not have any liability whatsoever to Tenant on
account of Landlord's inability to deliver possession of the Premises to
Tenant, and this Lease shall not be rendered void or voidable as a result of
such delay. Notwithstanding the foregoing, if for any reason the Premises are
not delivered on the Lease Commencement Date, Tenant shall have no liability
for rent under this Lease until the Premises are delivered to Tenant. Upon
delivery of the Premises to Tenant, Landlord and Tenant will execute an
amendment to this Lease to state the new Lease Commencement Date and conforming
changes in this Lease to reflect such new date, including, without limitation,
changes to Sections 3.1 and 3.2 hereof, to confirm that rent shall commence as
of the new Lease Commencement Date.
(b) It is presently anticipated that the Expansion
Premises will be ready for occupancy by Tenant on or about August 1, 2001. If
Tenant gives Landlord notice as provided above, the Expansion Premises will be
available for occupancy by Tenant on August 1, 2000; or if Landlord obtains
possession of the Expansion Space on or before February 1, 2001, the Expansion
Premises will be available by February 1, 2001. Notwithstanding the foregoing,
if Landlord is unable to deliver possession of the Expansion Premises by any of
such dates as applicable, Landlord shall not have any liability whatsoever to
Tenant on account of Landlord's inability to deliver possession of the
Expansion Premises to Tenant, and this Lease shall not be rendered void or
voidable as a result of such delay. Landlord and Tenant will execute an
amendment to this Lease to confirm the Expansion Premises Commencement Date.
SECTION 2.5 OPTION TO RENEW. Subject to the provisions of this
Section, Tenant shall have, and is hereby granted, an option to renew or extend
the Lease Term for one (1) additional period of sixty (60) months (such
additional period being hereinafter referred to as the "Renewal Term").
(i) This renewal option shall be exercisable by Tenant by
giving written notice to Landlord of Tenant's intention to exercise
such renewal option not more than fifteen (15) months but no later
than twelve (12) months before the
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expiration of the initial Lease Term. If Tenant shall fail to exercise
the renewal option at the time and in the manner hereinabove provided
or should Tenant fail to execute an addendum to this Lease within
thirty (30) days of the determination of the Market Rent (as
hereinafter defined), this option shall be rendered void and of no
force or effect, and Tenant shall have no further right to extend or
renew the Lease Term.
(ii) The fixed monthly rent payable during the Renewal
Term shall be at the then current Market Rent as of the commencement
of such Renewal Term. As used herein, "Market Rent" shall be the fixed
monthly rent for space of equivalent quality, size, utility and
location, with the length of the Renewal Term and credit-standing of
Tenant as well as the amount of Tenant concessions being offered by
Landlord and the operating cost reimbursements and escalations to be
taken into account. If Landlord and Tenant do not agree on the then
current Market Rent for the Renewal Term within thirty (30) days
following Landlord's receipt of Tenant's notice of its intent to
exercise its option to renew, the Market Rent shall be determined as
follows:
The Market Rent shall be determined by a group of
three (3) real estate brokers, one of whom shall be
named by Landlord, one by Tenant, and the two so
appointed shall select a third. Said brokers shall
each be licensed in Virginia as real estate brokers
specializing in the field of commercial leasing,
having at least five (5) years' experience, and
recognized as ethical and reputable within their
field. Landlord and Tenant agree to make their
appointments promptly within ten (10) days following
the expiration of the aforementioned thirty (30) day
period. The two brokers selected by Landlord and
Tenant shall promptly select a third broker. If the
two brokers are unable to agree upon a third broker
within five (5) days after they have both accepted
their appointment, the parties shall ask the Northern
Virginia Association of Realtors to appoint such
third broker. Within five (5) days after the third
broker is selected, they shall submit their
determination of the Market Rent. The Market Rent
shall be the mean of the two closest determinations
and shall be binding on Landlord and Tenant. Landlord
and Tenant shall pay the costs and expenses of the
broker selected by each of them and shall share
equally the costs and expenses of the third broker.
(iii) All references in this Lease to the Lease Term shall
be construed to mean both the initial Lease Term and the Renewal Term,
if Tenant has exercised its option and the Renewal Term commences,
unless the context clearly indicates that another meaning is intended.
(iv) The renewal option may not be exercised by Tenant, if
at the time specified for exercising such option and/or at the date
such Renewal Term is to begin, (A) this Lease shall not be in full
force and effect, (B) Tenant shall not be in actual possession of the
entire Premises, or (C) a default shall have occurred under this
Lease. If Tenant shall not be entitled to exercise such option to
renew because of the foregoing provisions of this subsection, such
option shall be rendered void and of no force and effect. It is
understood that this renewal option is personal to Tenant and will
not benefit any subtenant of the Premises
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or any assignee of this Lease whether or not Landlord has approved such
sublease or assignment.
SECTION 2.6 OPTION TO TERMINATE. Tenant shall have the one-time right to
terminate this Lease effective as of June 30, 2003, provided Tenant gives
Landlord written notice of its intention to so terminate this Lease no later
than June 30, 2002, time being of the essence. If Tenant elects to terminate
this Lease, Tenant shall pay to Landlord a fee (the "Termination Fee") to
compensate Landlord for, among other things, its unamortized costs related to
the cancelled term of the Lease. The Termination Fee shall be calculated as
follows. The Landlord's Costs (as hereinafter defined) shall be amortized over a
period of one hundred twenty (120) months from the Lease Commencement Date
assuming a monthly constant payment of principal and interest at the rate of ten
percent (10%) per annum. The Termination Fee shall equal the balloon payment
that would be due at the commencement of the sixty-first (61st) month under such
an amortization schedule plus the amount equal to two (2) months of the fixed
monthly rent for the sixth year of this Lease (i.e., $86,716.14, or two times
$43,358.07). As used herein, the Landlord's Costs shall be the sum of all
leasing commissions due for the leasing of the entire Premises for the initial
ten-year Lease Term, the Improvement Allowance (as hereinafter defined) and
Landlord's attorneys' fees and expenses for the preparation and negotiation of
this Lease. Tenant shall pay the Termination Fee in full at the time of Tenant's
delivery of its written notice of termination to Landlord. Within one month
after the Lease Commencement Date, Landlord and Tenant shall confirm in writing
the amount of the Termination Fee; however, failure to confirm said fee shall
not in any way affect Tenant's liability therefor if the termination option is
exercised.
ARTICLE III
FIXED RENT
SECTION 31 BASE RENT. Tenant shall pay to Landlord as fixed monthly rent
for the Premises, without setoff, deduction or demand, the sum of Twenty-Three
Thousand One Hundred Ninety-Eight and no/100 Dollars ($23,198.00) (i.e., $28.00
per rentable square foot per annum), which sum is subject to adjustment as
provided in Section 3.2 hereof. Said amount shall be payable monthly, in
advance, on the first day of each month during the Lease Term. Rent payable for
any portion of a month shall be prorated at the rate of one-thirtieth (1/30th)
of the fixed monthly rent for each day. Concurrently with the signing of this
Lease, Tenant shall pay to Landlord a sum equal to one month's fixed rent, which
sum shall be credited by Landlord against the fixed monthly rent due for the
first full calendar month of the Lease Term.
SECTION 3.2 ESCALATION IN BASE RENT. Commencing on July 1, 1999, and on
each and every July 1st thereafter during the Lease Term, the fixed monthly rent
set forth in Section 3.1 hereof shall be increased by three percent (3%) over
the fixed monthly rent as escalated for the immediately preceding twelve-month
period. As of the Expansion Premises Commencement Date, the fixed monthly rent
attributable to the Expansion Premises shall be based on the rate per square
foot then in effect for the Premises. The following chart sets forth the fixed
monthly rent as escalated:
from and including July 1, 1999, through and $23,893.94
including June 30, 2000 ($28.8400/sf)
from and including July 1, 2000, through and $24,610.76
including July 31, 2000 ($29.7052/sf)
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from and including August 1, 2000, through and $24,610.76
including June 30, 2001 ($29.7052/sf)
(if 9,942 sf leased)
$39,678.72
($29 .7052/sf)
(if 16,029 sf leased)
from and including July 1, 2001, through and $25,349.08
including June 30, 2002 ($30.5964/sf)
(if 9,942 sf leased)
$40,869.14
($30.5964/sf)
(if 16,029 sf leased)
from and including July 1, 2002, through and $42,095.22
including June 30, 2003 ($31.5143/sf)
from and including July 1, 2003, through and $43,358.07
including June 30, 2004 ($32.4597/sf)
from and including July 1, 2004, through and $44,658.81
including June 30, 2005 ($33.4335/sf)
from and including July 1, 2005, through and $45,998.58
including June 30, 2006 ($34.4365/sf)
from and including July 1, 2006, through and $47,378.54
including June 30, 2007 ($35.4696/sf)
from and including July 1, 2007, through and $48,799.92
including June 30, 2008 ($36.5337/sf).
SECTION 3.3 PAYMENT OF RENT. All rent shall be paid to Landlord in legal
tender of the United States at the address to which notices to Landlord are to
be given or to such other party or to such other address as Landlord may
designate from time to time by written notice to Tenant. If Landlord shall at
any time accept rent after it shall become due and payable, such acceptance
shall not excuse a delay upon subsequent occasions, or constitute or be
construed as a waiver of any of Landlord's rights hereunder.
ARTICLE IV
ADDITIONAL RENT
SECTION 4.1 INCREASES IN OPERATING CHARGES.
(a) Commencing on July 1, 1999, Tenant shall pay to Landlord
its proportionate share of the amount by which the Annual Operating Charges (as
hereinafter defined) incurred by Landlord in the operation of the Building
during each calendar year falling entirely or partly within the Lease Term
exceed the actual Annual Operating Charges incurred during calendar year 1998,
which Annual Operating Charges shall be grossed up for each calendar year
(including the 1998 base year) if the Building is less than 95% occupied to
reflect an occupancy level of ninety-five percent (95%) within the Building. For
purposes of this Section 4.1, Tenant's proportionate share of such increase
shall be eight and 70/100 (8.70%)
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prior to the Expansion Premises Commencement Date and fourteen and 02/100
percent (14.02%) after the Expansion Premises Commencement Date, representing
the agreed upon proportion that the total rentable area in the Premises bears to
the total rentable office area above grade in the Building (i.e., 114,289 sq.
ft.). Such proportionate share shall be adjusted appropriately in the event of
changes in either the size of the Premises or the amount of rentable office area
above grade in the Building.
(b) The Annual Operating Charges are defined as the sum of the
following costs and expenses relating to the ownership and operation of the
Building and the Complex, which in each instance shall be reasonable in amount
and of a nature normally incurred by owners or managers of comparable
first-class office buildings in the Washington, D.C. metropolitan area: (i) real
estate taxes, including general and special assessments, if any, and any other
taxes or governmental charges, now or hereafter levied that are in the nature
of, or in substitution for real estate taxes, which are imposed upon or assessed
against the Building or the land upon which it is situated (less four and
8 1/100 percent (4.81%), which is the portion of such real estate taxes
applicable to the retail space of the Building); (ii) gas, water, sewer,
electricity and other utility charges (including surcharges) of every type and
nature; (iii) insurance; (iv) Building personnel costs, including, but not
limited to salaries, wages, fringe benefits and other direct and indirect costs
of engineers, superintendents, watchmen, porters, and other Building personnel;
(v) costs of all materials, supplies, labor and other services purchased or
levied in connection with the Building, including but not limited to, service
and maintenance contracts for chillers, boilers, controls, elevators, mail
chute, window, janitorial and general cleaning, security services, and
management fees; (vi) all other maintenance, repair, replacement expenses and
supplies which are properly deducted by Landlord in computing its federal income
tax liability; (vii) costs of landscaping, gardening and planting, cleaning,
painting (including striping of parking areas), decorating, lighting, sanitary
control, removal of trash, garbage and other refuse; (viii) lighting, heating,
ventilating and air conditioning of the Building; (ix) fire protection; (x)
compliance with governmental laws, rules, regulations and orders; (xi)
installing and renting of signs; (xii) depreciation (on a straight-line basis)
for capital expenditures made by Landlord during the Lease Term to reduce
operating expenses; (xiii) any other costs and expenses incurred by Landlord in
the operation of the Building; (xiv) any other costs and expenses allocable to
the Building (such allocation to be determined by a certified public accountant)
including but not limited to the items in (i) through (xiii) above, incurred by
Landlord in contributing its share for the operation of the common elements of
the Complex; and (xv) the costs of any additional services not provided to the
Building or Complex at the Lease Commencement Date but thereafter provided by
Landlord in the prudent management of the Building or in the operation of the
Complex. For purposes of determining Tenant's proportionate share of increases
in Annual Operating Charges, annual increases in Controllable Expenses (as
hereinafter defined) shall be limited to six percent (6%) over the Controllable
Expenses for the immediately preceding calendar year; provided, however, this
limitation shall be subject to good faith negotiations between Landlord and
Tenant in the event Landlord desires to improve the operation of the Building or
the Complex in such a manner that this limitation would be exceeded.
"Controllable Expenses" shall mean all Annual Operating Charges except the
following: (w) real estate taxes as described in subsection (i) above or any
license fees that may be required of landlords in the future; (x) utilities as
described in subsections (ii) and (viii) above; (y) insurance as described in
(iii) above (but only if not competitively bid in the year in question); and (z)
evening contract cleaning services and daytime xxxxxx/maid services (but only if
not competitively bid in the year in question). Controllable Expenses shall not
include management fees; however, management fees shall in no event exceed four
percent (4%) of gross rents in any year. Annual Operating Charges shall not
include (i) principal or interest payments on any mortgages, deeds of trust or
other financing encumbrances; (ii) leasing commissions payable by Landlord;
(iii) deductions for depreciation of the Building or the Complex, except as
provided above; (iv) capital improvements that are not deducted by Landlord
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in computing its federal income tax liability; or (v) the costs of special
services and utilities separately chargeable to individual tenants of the
Building or the Complex. Tenant understands that the Building is operated as
part of the Complex and that certain costs of operation of the Complex are
allocated among the Building and other buildings in the Complex.
(c) Except as provided in subsection (d) below, Landlord shall
submit to Tenant each year a statement setting forth the amount payable by
Tenant pursuant to this Section 4.1 for the preceding calendar year. Within
thirty (30) days after receipt of such statement, Tenant shall pay to Landlord
the amount shown thereon.
(d) In lieu of accepting from Tenant one annual payment for
Tenant's proportionate share of increases in the Annual Operating Charges,
Landlord shall have the right to require Tenant to make estimated monthly
payments on account of the amount Tenant will be obligated to pay pursuant to
this Section 4.1 for each calendar year falling entirely or partly within the
Lease Term. If Landlord exercises such right, Landlord shall submit to Tenant a
statement setting forth Landlord's reasonable estimate of the amount Tenant will
be obligated to pay pursuant to this Section 4.1 for the calendar year in
question, which reasonable estimate may be revised from time to time, and Tenant
shall pay to Landlord on the first day of each month following receipt of such
statement during such calendar year an amount equal to such estimated amount
multiplied by a fraction, the numerator of which is 1, and the denominator of
which is the number of months during such calendar year which fall within the
Lease Term and follow the date of the foregoing statement. Within ninety (90)
days after the expiration of such calendar year, Landlord shall submit to Tenant
a statement showing Tenant's proportionate share of the increase in the Annual
Operating Charges incurred during such calendar year and the aggregate amount of
the estimated payments made by Tenant on account thereof. If the aggregate
amount of such estimated payments exceeds Tenant's actual liability for such
increase, Tenant shall deduct the net overpayment from its next estimated
payment or payments on account of future increases in the Annual Operating
Charges. If Tenant's actual liability for such increase exceeds the estimated
payments made by Tenant on account thereof, then Tenant shall immediately pay to
Landlord the total amount of such deficiency.
(e) In the event the Lease Term commences or expires during a
calendar year, the increase in the Annual Operating Charges to be paid by Tenant
for such calendar year shall be determined by multiplying the 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 365. Tenant's liability
for its proportionate share of the increase in the Annual Operating Charges for
the last calendar year falling entirely or partly within the Lease Term shall
survive the expiration of the Lease Term and shall be payable as provided in
this Section 4.1.
SECTION 4.2 TREATMENT AS ADDITIONAL RENT. All payments required to be
made by Tenant pursuant to this Article IV shall be additional rent for the
Premises and shall be paid to Landlord, without setoff or deduction, in the same
manner as fixed monthly rent is payable pursuant to Article III hereof.
Notwithstanding any dispute which may arise in connection with the computation
or estimate of the amount due under this Article IV, the Tenant shall be
obligated to pay the amount specified by the Landlord without set-off or
deduction, pending the resolution of any dispute.
SECTION 4.3 ADDITIONAL TAXES OR GOVERNMENTAL CHARGES. In the event that
any business, rent or other taxes, or any governmental changes that are now or
hereafter levied upon Tenant's use or occupancy of the Premises or Tenant's
business at the Premises are enacted, changed or altered so that any of such
taxes are levied against Landlord, or the mode of collection of such taxes is
changed so that Landlord is responsible for collection of payment
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of such taxes, Tenant shall pay any and all such taxes to Landlord upon written
demand from Landlord as additional rent under this Article IV.
SECTION 4.4 TENANT'S RIGHT TO AUDIT ANNUAL OPERATING CHARGES. Provided no
Event of Default has occurred, Tenant shall have the right, at Tenant's expense,
to audit Landlord's books and records of the Annual Operating Charges relating
to any calendar year for which payments of increases in Annual Operating Charges
are due from Tenant as additional rent. No subtenant shall have any right to
conduct an audit, and no assignee shall conduct an audit for any period during
which such assignee was not in possession of the Premises. Tenant shall provide
written notice for such audit within thirty (30) days following the date that
Landlord or its agent shall have delivered to Tenant the statement of Annual
Operating Charges with respect to which Tenant desires to make such audit. Such
audit shall cover only the immediately preceding calendar year for the statement
being audited and shall be conducted by an independent certified public
accountant at the offices of Landlord's managing agent or accountant during
normal business hours at a time mutually convenient to Landlord and Tenant. In
no event shall the accountant be compensated on the basis of a contingent fee
arrangement. Landlord may require as a condition of permitting such audit that
Tenant, its principals, employees, and accountants enter into a confidentiality
agreement reasonably acceptable to Landlord. Such audit shall be conducted in
accordance with generally accepted auditing standards. Tenant shall deliver to
Landlord a copy of the results of such audit within five (5) days of its receipt
by Tenant. If Tenant's audit reveals that Landlord's calculation of additional
rent is in error, the corrected amount shall be paid by Tenant to Landlord
within ten (10) days after the completion of the audit, or if Tenant has already
paid the additional rent, the overpayment will be promptly refunded to Tenant or
credited to the next payment of rent due under this Lease. Notwithstanding
anything to the contrary in this Section, in the event that any such audit
reveals that Landlord's calculation of Annual Operating Charges was inaccurate
by five percent (5%) or more, Landlord, not Tenant, shall pay for the reasonable
audit expenses incurred by Tenant up to Two Thousand and no/100 Dollars
($2,000.00) provided Tenant presents to Landlord detailed statements and paid
receipts for such services.
ARTICLE V
SECURITY DEPOSIT
SECTION 5.1 SECURITY DEPOSIT.
(a) Simultaneously with the execution of this Lease, Tenant
shall post as a security deposit with Landlord an irrevocable and unconditional
letter of credit from a bank located in the Washington, D.C. metropolitan area
and acceptable to Landlord in the amount of Two Hundred Thousand and no/100
Dollars ($200,000). Said letter of credit shall be increased to Four Hundred
Thousand and no/100 Dollars ($400,000) as of October 1, 1998, time being of the
essence, and shall be in the form of Exhibit B attached hereto Commencing on
September 30, 1999, and provided no default shall have occurred and remain
uncured, the amount of the letter of credit shall be reduced by Sixty Thousand
and no/100 Dollars ($60,000.00) on September 30 of each year during the Lease
Term until September 30, 2003, at which time the security deposit shall remain
at One Hundred Thousand and no/100 Dollars ($100,000.00) for the remainder of
the Lease Term.
(b) In the event Landlord receives notice from the issuer of
the letter of credit that the letter of credit will not be renewed and if Tenant
does not replace the letter of credit with an identical letter of credit
complying with the terms of this Article V no later than the date with is
fifteen (15) days prior to the expiration of the letter of credit, Landlord may
draw down the letter of credit and hold the cash as the security deposit under
this Lease. Such drawing of
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the letter of credit will not constitute a default under this Lease, and Tenant,
at its option, may replace said cash with a letter of credit complying with the
terms of this Article V.
(c) If Landlord holds cash as the security deposit, Landlord
shall not be required to maintain such cash deposit in a separate account. Such
security deposit shall not earn interest, unless required to do so by any
provision of law.
(d) The security deposit shall be security for the performance
by Tenant of all of Tenant's obligations, covenants, conditions and agreements
under this Lease. Upon the expiration of the Lease Term, and provided Tenant is
not in default hereunder, Landlord shall return the security deposit to Tenant,
less such portion thereof as Landlord shall have appropriated to satisfy any
default by Tenant hereunder. In the event of any default by Tenant hereunder
during the Lease Term, Landlord shall have the right, but shall not be
obligated, to use, apply or retain all or any portion of the security deposit
for (i) the payment of any fixed or additional rent or any other sum as to which
Tenant is in default, or (ii) the payment of any amount which Landlord may spend
or become obligated to spend to repair physical damage to the Premises or the
Building pursuant to Section 9.2 hereof, or (iii) the payment of any amount
Landlord may spend or become obligated to spend, or for the compensation of
Landlord for any losses incurred, by reason of Tenant's default, including, but
not limited to, any damage or deficiency arising in connection with the
reletting of the Premises. If any portion of said deposit is so used or applied,
within three (3) business days after written notice to Tenant of such use or
application, Tenant shall deposit with Landlord cash, or a letter of credit
complying with the terms of this Article V in an amount sufficient to restore
the security deposit to its original amount, and Tenant's failure to do so shall
constitute a default under this Lease.
(e) In the event of the sale or transfer of Landlord's interest
in the Building, Landlord shall have the right to transfer the security deposit
to such purchaser, in which event Tenant shall look only to the new Landlord for
the return of the security deposit, and Landlord shall thereupon be released
from all liability to Tenant for the return of such security deposit. Tenant
hereby acknowledges that Tenant will not look to the holder of any mortgage
(defined in Section 21.1 hereof), encumbering the Building for return of the
security deposit if such holder or its successors or assigns shall succeed to
the ownership of the Building whether by foreclosure or deed in lieu thereof,
except if and to the extent such security deposit is actually transferred to
such holder. In the absence of evidence satisfactory to Landlord for any
permitted assignment of the right to receive the security deposit, or the
remaining balance thereof, Landlord may return the same to the original Tenant,
regardless of one or more assignments of Tenant's interest in such security
deposit. In such event, upon the return of such security deposit (or balance
thereof) to the original Tenant, Landlord shall be completely relieved of
liability hereunder.
ARTICLE VI
USE OF PREMISES
SECTION 6.1 USE OF PREMISES. Tenant shall use, and occupy the Premises
solely for general office purposes and for no other use or purpose without the
prior written consent of Landlord. Tenant represents and warrants that it is
not, and will not operate the Premises as, a place of public accommodation for
the purposes of the Americans with Disability Act, as it may be amended from
time to time. Tenant shall not use or occupy the Premises for any unlawful
purpose or in any manner that will constitute waste, nuisance or unreasonable
annoyance to the Landlord or other tenants of the Building or of the Complex or
for any purpose prohibited in the rules and regulations promulgated by Landlord.
Tenant acknowledges that a use which attracts a large number of people, such as
an employment agency or public defender's
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office, would cause unreasonable annoyance to the Landlord. Tenant shall comply
with all present and future laws, ordinances (including zoning ordinances and
land use requirements), regulations, and orders of the United States of
America, the Commonwealth of Virginia, the City of Alexandria, and any other
public or quasipublic authority having jurisdiction over the Premises,
concerning the use, occupancy and condition of the Premises and all machinery,
equipment and furnishings therein. It is expressly understood that if any
present or future law, ordinance, regulation or order requires an occupancy
permit for the Premises, Tenant will obtain such permit at Tenant's own
expense. Landlord shall comply with all present and future laws, ordinances
(including zoning ordinances and land use requirements), regulations, and
orders of the United States of America, the Commonwealth of Virginia, the City
of Alexandria, and any other public or quasipublic authority having
jurisdiction over the Common Areas.
ARTICLE VII
PARKING SPACES
SECTION 7.1 PARKING. Tenant agrees to lease, in addition to the
Premises, thirty-two (32) unreserved parking spaces (i.e., two spaces per 1,000
square feet leased) in the garage of the Building throughout the Lease Term at
the prevailing rate of Ninety Dollars ($90.00) per space per month, subject to
reasonable increases on an annual basis.
ARTICLE VIII
ASSIGNMENT AND SUBLETTING
SECTION 8.1 LANDLORD CONSENT REQUIRED. Tenant shall not assign,
transfer, mortgage or otherwise encumber this Lease or its interest therein, or
sublet, rent or permit anyone to occupy the Premises, or any part thereof,
without giving Landlord thirty (30) days' prior written notice of Tenant's
intention to assign or sublet the Premises and obtaining the prior written
consent of Landlord, which consent may be withheld in Landlord's sole and
absolute, subjective discretion. No assignment or transfer of this Lease or the
right of occupancy hereunder may be effectuated by operation of law or
otherwise without the prior written consent of Landlord. The consent by
Landlord to any assignment or subletting shall not be construed as a waiver or
release of Tenant from liability for the performance of all covenants and
obligations to be performed by Tenant under this Lease, nor shall the
collection or acceptance of rent from any assignee, subtenant or occupant
constitute a waiver or release of Tenant from any of its liabilities or
obligations under this Lease. Landlord's consent to any assignment or
subletting shall not be construed as relieving Tenant from the obligation of
obtaining Landlord's prior written consent to any subsequent assignment or
subletting. If Tenant is in default hereunder, Tenant hereby assigns to
Landlord the rent due from any subtenant of Tenant and hereby authorizes each
such subtenant to pay said rent directly to Landlord.
SECTION 8.2 DEEMED ASSIGNMENT. If Tenant is a partnership, a withdrawal
or change, whether voluntary, involuntary or by operation of law, of partners
owning a controlling or majority interest in Tenant shall be deemed a voluntary
assignment of this Lease and subject to the provisions of Section 8.1. If
Tenant is a corporation, any dissolution, merger, consolidation or other
reorganization of Tenant, or the sale or transfer (whether by way of one or
more sales or transfers) of a controlling or majority interest of the capital
stock of Tenant shall be deemed a voluntary assignment of this Lease and
subject to the provisions of Section 8.1. However, the preceding sentence shall
not apply to corporations the stock of which is traded through a national or
regional exchange or over-the-counter.
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SECTION 8.3 LANDLORD OPTION TO TERMINATE. If Tenant desires to assign
or sublet more than fifty percent (50%) of the rentable area of the Premises
(i.e., 50% in the aggregate including any prior or simultaneously assigned or
subleased space), Landlord shall have the option to terminate this Lease with
regard to that portion of the Premises that Tenant desires to assign or sublet
and, in addition, Landlord shall have the option to require any existing
assignees or sublessees of Tenant to attorn to Landlord. Landlord may exercise
the option by giving Tenant written notice within thirty (30) days after
Landlord has received Tenant's written notice of intention to assign or sublet
pursuant to Section 8.1. The effective date of termination shall be mutually
agreed upon by Landlord and Tenant, and, if they cannot agree upon a
termination date, the termination date will be ninety (90) days from the date
Landlord received the notice that Tenant desires to assign or sublet more than
fifty percent (50%) of the rentable area of the Premises. Upon termination, all
of the rights and obligations of Landlord and Tenant under the terms of this
Lease shall be terminated with regard only to that portion of the rentable area
of the Premises which Tenant notified Landlord that Tenant desires to assign or
sublet, except the obligation of Tenant to pay rent and all other charges that
accrue to the date of termination. The options of Landlord under this Section
shall apply to each assignment or sublease by Tenant and a waiver by Landlord
as to one assignment or sublease shall not affect any subsequent assignment or
sublease.
SECTION 8.4 LANDLORD TO SHARE IN TENANT PROFIT. If Tenant desires to
assign or sublet the whole or a part of the Premises, Landlord may condition
its consent to the subletting or assignment on the requirement that fifty
percent (50%) of the net profit derived by Tenant from the assignment or
subletting shall be paid by Tenant to Landlord as additional rent. Net profit
shall be deemed to mean the net avails received by Tenant from any subletting
or assignment less brokerage and other expenses incurred in making the
assignment or sublease amortized, however, over the term of the assignment or
sublease, said net profit to be paid monthly to Landlord by Tenant at the times
that the subrent or assignment charge is paid by the subtenant or assignee to
Tenant and as and when the same is received by Tenant.
ARTICLE IX
TENANT'S MAINTENANCE AND REPAIR
SECTION 9.1 TENANT TO MAINTAIN PREMISES. Tenant will keep and maintain
the Premises and all fixtures and equipment located therein in a clean, safe
and sanitary condition, will take good care thereof and make all required
repairs thereto, will suffer no waste or injury thereto, and will, at the
expiration or other termination of the Lease Term, surrender the Premises,
broom clean, in the same order and condition in which they are in on the Lease
Commencement Date, ordinary wear and tear and unavoidable damage by the
elements excepted. All bulbs, tubes and lighting fixtures for the Premises
shall be provided and installed by Tenant at Tenant's cost and expense.
SECTION 9.2 TENANT TO PAY FOR REPAIRS. Except as otherwise provided in
Article XVIII hereof, all injury, breakage and damage to the Premises and to
any other part of the Building caused by any act or omission of Tenant or any
agent, employee, subtenant, licensee, contractor, customer, client, family
member, or invitee of Tenant, shall be repaired by and at the sole expense of
Tenant, except that Landlord shall have the right, at its option, to make such
repairs and to charge Tenant for all costs and expenses incurred in connection
therewith as additional rent hereunder. The liability of Tenant for such costs
and expenses shall be reduced by the amount of any insurance proceeds received
by Landlord on account of such injury, breakage or damage.
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SECTION 9.3 TENANT TO COMPLY WITH LAWS. During the Lease Term, Tenant
shall, at its own cost and expense, promptly observe and comply with all
present and future laws, ordinances, requirements, orders, directives, rules
and regulations of the federal, state, county, town, village and city
governments and of all other governmental authorities affecting the Premises or
appurtenances thereto or any part thereof whether the same are in force at the
commencement of the Lease Term or may in the future be passed, enacted or
directed, and Tenant shall pay all costs, expenses, liabilities, losses,
damages, fines, penalties, claims and demands, including reasonable counsel
fees, that may in any manner arise out of or be imposed because of the failure
of Tenant to comply with the covenants of this Section 9.3.
ARTICLE X
TENANT ALTERATIONS
SECTION 10.1 INITIAL ALTERATIONS. Tenant acknowledges that Tenant has
inspected the Premises and accepts the Premises in their "AS IS" condition.
Tenant shall accept the Expansion Premises AS IS" as of Expansion Premises
Commencement Date, it being understood that if Tenant desires to remove the
demising wall, such removal shall be at Tenant's sole cost and expense and
shall be accomplished in accordance with this Article. It is understood and
agreed that Landlord will not make, and is under no obligation to make, any
structural or other alterations, decorations, additions or improvements in or
to the Premises and the Expansion Premises.
SECTION 10.2 TENANT ALTERATIONS. Tenant will not make or permit anyone
to make any alterations, decorations, additions or improvements (hereinafter
referred to collectively as "improvements"), structural or otherwise, in or to
the Premises or the Building, without the prior written consent of Landlord,
which consent shall not be unreasonably withheld. When granting its consent,
Landlord may impose any conditions it deems appropriate, including, without
limitation, the approval of plans and specifications, approval of the
contractor or other persons to perform the work, and the obtaining of specified
insurance. All improvements permitted by Landlord must be performed by bonded
contractors and must conform to all rules and regulations established from time
to time by the Board of Fire Underwriters having jurisdiction or similar body
exercising similar functions and to all laws, regulations and requirements of
the federal, Virginia and City of Alexandria governments. As a condition
precedent to such written consent of Landlord, Tenant agrees to obtain and
deliver to Landlord written, unconditional waivers of mechanic's and
materialmen's liens against the Building and the land upon which it is situated
from all proposed contractors, subcontractors, laborers and material suppliers
for all work, labor and services to be performed and materials to be furnished
in connection with improvements to the Premises. If, notwithstanding the
foregoing, any mechanic's or materialmen's lien is filed against the Premises,
the Building and/or the land upon which it is situated, for work claimed to
have been done for, or materials claimed to have been furnished to, the
Premises, such lien 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. If Tenant shall fail to discharge any such mechanic's or
materialmen's lien, Landlord may, at its option, discharge such lien and treat
the cost thereof (including attorneys' fees incurred in connection therewith)
as additional rent payable with the next fixed monthly rental payment falling
due; it being expressly agreed that such discharge by Landlord shall not be
deemed to waive or release the default of Tenant in not discharging such lien.
It is understood and agreed that any alterations, decorations, additions or
improvements to the Premises shall be conducted on behalf of Tenant and not on
behalf of Landlord, and that Tenant shall not be deemed to be the agent of
Landlord. It is further understood and agreed that in the event Landlord shall
give its written consent to the making of any improvements to the Premises,
such written consent shall not be deemed to be an agreement or consent by
Landlord to subject its interest in the
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Premises, the Building or the land upon which it is situated to any mechanic's
or materialmen's liens which may be filed in connection therewith. Tenant shall
supply Landlord with as-built plans showing all improvements by Tenant to the
Premises or the Building promptly upon completion of each such improvement.
SECTION 10.3 IMPROVEMENTS. Tenant shall indemnify and hold Landlord
harmless from and against any and all expenses, liens, claims, liabilities and
damages based on or arising, directly or indirectly, by reason of the making of
any improvements to the Premises. If any improvements are made without the
prior written consent of Landlord, Landlord shall have the right to remove and
correct such improvements and restore the Premises to their condition
immediately prior thereto, and Tenant shall be liable for all expenses incurred
by Landlord in connection therewith. All improvements 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 end of the Lease Term: except (1) that if Tenant is not in default under
this Lease, Tenant shall have the right to remove, prior to the expiration of
the Lease Term, all movable furniture, furnishings and equipment installed in
the Premises solely at the expense of Tenant and (2) that Landlord shall have
the right to require Tenant to remove all tenant improvements and fixtures at
the end of the Lease Term at the sole cost of Tenant. Notwithstanding the
foregoing, if Tenant so requests, Landlord will state in writing at the time of
Landlord's approval of Tenant's proposed improvements to the Premises, which
improvements Landlord will not require Tenant to remove at the expiration or
earlier termination of this Lease. All damage and injury to the Premises or the
Building caused by any removal shall be repaired by Tenant, at Tenant's sole
expense, so as to conform the Premises to the standard condition of the
Building. If such property of Tenant is not removed by Tenant prior to the
expiration or termination of this Lease, the same shall become the property of
Landlord and shall be surrendered with the Premises as a part thereof.
SECTION 10.4 IMPROVEMENT ALLOWANCE. Landlord agrees to provide Tenant
with an allowance in the amount of One Hundred Sixty Thousand Two Hundred
Ninety and no/100 Dollars ($160,290.00) (the "Improvement Allowance"). Only
Eighty Thousand One Hundred Forty-Five and no/100 Dollars ($80,145.00) (i.e.,
$5.00 per rentable square foot of the entire Premises) of the Allowance shall
be available until the security deposit has been increased to $400,000 in
accordance with Section 5.1 of this Lease. The Improvement Allowance shall be
applied against the actual costs and expenses incurred in connection with
Alterations for the renovation of the Premises and for the cost of
architectural and design services in connection therewith. Landlord shall pay
the Improvement Allowance directly to Tenant or, at Landlord's option, jointly
to Tenant and Tenant's contractor or architect, upon satisfaction of the
following conditions: (i) Tenant's occupancy of the Premises; (ii) receipt by
Landlord of appropriate paid receipts or invoices and lien waivers from the
architect, contractor and all subcontractors covering all work performed by the
architect, contractor and subcontractors; (iii) all Alterations must comply
with the terms of this Article X; and (iv) no event shall have occurred that
would constitute a default under this Lease. If requested by Tenant, Landlord
shall make progress payments of the Improvement Allowance provided no default
has occurred under this Lease and Tenant can demonstrate to Landlord that
Tenant has sufficient funds in addition to the available remaining amount of
the Improvement Allowance to complete the tenant improvements including any
cost overruns in connection therewith. Requisitions for any advance of the
Improvement Allowance will be processed by Landlord as soon as all required
documentation has been received. Tenant acknowledges that payment is usually
made within thirty to sixty days after submission of the complete requisition.
From the Improvement Allowance, Landlord may withhold a fee for construction
management of three percent (3%) of the total of the Improvement Allowance plus
any amounts in excess of the Improvement Allowance due from Tenant for the
initial renovation of the Premises; however, said three percent shall be
deferred on the portion of the Improvement Allowance disbursed before the
security deposit is increased
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and shall be paid from the balance of the Improvement Allowance after the
security deposit has been increased. If Tenant does not use all of the
Improvement Allowance, Tenant may use a portion of the Improvement Allowance for
telephones, computer equipment, and cabling therefor provided such equipment is
installed in the Premises. Tenant may reserve a portion of the Improvement
Allowance for tenant improvements in the Expansion Premises, including the
removal of the demising wall; however, no interest shall accrue on any unfunded
portion of the Improvement Allowance. If Tenant has not requested any portion of
the Improvement Allowance by December 31, 2001, the remaining portion shall be
forfeited.
ARTICLE XI
SIGNS AND FURNISHINGS
SECTION 11.1 SIGNS AND NOTICES. No sign, advertisement or notice
referring to Tenant shall be inscribed, painted, affixed or otherwise displayed
on any part of the exterior or the interior of the Building (other than signs
within the Premises that are not visible outside of the Premises) except on the
directories and the doors of offices and such other areas as are designated by
Landlord, and then only in such place, number, size, color and style as are
approved by Landlord. All of Tenant's signs that are approved by Landlord shall
be installed by Landlord at Tenant's cost and expense. Tenant shall reimburse
Landlord for such amount upon written demand from Landlord and such sum shall be
considered additional rent hereunder. If any sign, advertisement or notice that
has not been approved by Landlord is exhibited or installed by Tenant, Landlord
shall have the right to remove the same at Tenant's expense. Landlord shall have
the right to prohibit any advertisement of or by Tenant which in its opinion
tends to impair the reputation of the Building or its desirability as a
high-quality office building and, upon written notice from Landlord, Tenant
shall immediately refrain from and discontinue any such advertisement. Landlord
reserves the right to affix, install and display signs, advertisements and
notices on any part of the exterior or interior of the Building except the
Premises.
SECTION 11.2 FURNISHINGS. Landlord shall have the right to prescribe the
weight and position of file systems, safes, computer systems, and other heavy
items, equipment and fixtures, which, if considered necessary by the Landlord,
shall stand on plank strips to distribute their weight. Any and all damage or
injury to the Premises or the Building caused by moving the property of Tenant
into or out of the Premises, or due to the same being in or upon the Premises,
shall be repaired by and at the sole cost of Tenant. No furniture, equipment or
other bulky matter of any description will be received into the Building or
carried in the elevators except as approved by Landlord, and all such furniture,
equipment and other bulky matter shall be delivered only through the designated
delivery entrance of the Building and the designated freight elevator. All
moving of furniture, equipment and other materials shall be under the direct
control and supervision of Landlord, who shall not, however, be responsible for
any damage to or charges for moving the same. Tenant agrees promptly to remove
from the sidewalks adjacent to the Complex any of Tenant's furniture, equipment
or other material there delivered or deposited.
ARTICLE XII
TENANT'S EQUIPMENT
SECTION 12.1 TENANT'S EQUIPMENT. Tenant will not install or operate in
the Premises any electrically operated equipment or machinery that operates on
greater than 110-volt power or any computer equipment other than normal office
equipment and appliances without first obtaining the prior written consent of
Landlord, who may condition such consent upon the
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payment by Tenant of additional rent in compensation for the excess consumption
of electricity or other utilities (including, but not limited to any excess
utility, sales or other taxes and resultant increases in electricity charges for
the Building) and for the cost of any additional wiring or apparatus that may be
occasioned by the operation of such equipment or machinery. Tenant shall not
install any equipment of any type or nature that will or may necessitate any
changes, replacements or additions to, or in the use of, the water system,
heating system, plumbing system, air-conditioning system or electrical system of
the Premises or the Building, without first obtaining the prior written consent
of Landlord. Business machines and mechanical equipment belonging to Tenant
which cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenant in the Building shall be installed and maintained by
Tenant, at Tenant's expense, on vibration eliminators or other devices
sufficient to reduce such noise and vibration to a level satisfactory to
Landlord.
ARTICLE XIII
INSPECTION BY LANDLORD
SECTION 13.1 INSPECTION BY LANDLORD. Tenant will permit Landlord, or its
agents or representatives, to enter the Premises, at any time and from time to
time, without charge therefor to Landlord and without diminution of the rent
payable by Tenant, to examine, inspect and protect the Premises and the
Building, to make such alterations and/or repairs as in the sole judgment of
Landlord may be deemed necessary, or to exhibit the same to prospective tenants
during the last one hundred eighty (180) days of the Lease Term. In connection
with any such entry, Landlord shall endeavor to minimize the disruption to
Tenant's use of the Premises.
ARTICLE XIV
INSURANCE
SECTION 14.1 TENANT TO COMPLY WITH INSURANCE REQUIREMENTS. Tenant shall
not conduct or permit to be conducted any activity, or place any equipment in or
about the Premises or the Building, which will in any way increase the rate of
fire insurance or other insurance on the Building. If any increase in the rate
of fire insurance or other insurance is stated by any insurance company or by
the applicable Insurance Rating Bureau to be due to any activity or equipment of
Tenant in or about the Premises or the Building, such statement shall be
conclusive evidence that the increase in such rate is due to such activity or
equipment, and as a result thereof, Tenant shall be liable for the amount of
such increase. Tenant shall reimburse Landlord for such amount upon written
demand from Landlord and any such sum shall be considered additional rent
payable hereunder.
SECTION 14.2 TENANT TO CARRY INSURANCE.
(a) Throughout the Lease Term, Tenant shall obtain and maintain
commercial general liability insurance on an occurrence basis protecting against
any liability occasioned by any occurrence on or about the Premises and
containing contractual liability coverage. Such insurance shall be in minimum
amounts approved by Landlord from time to time, but in no event less than Two
Million Dollars ($2,000,000) and shall be for a minimum term of one (1) year.
(b) Throughout the Lease Term, Tenant shall also obtain and
maintain insurance coverage for all risks and perils as customarily provided by
insurance companies
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(including flood and earthquake) to insure against damage to or loss of the
contents of the Premises, including, without limitation, alterations,
decorations, or improvements to the Premises previously made by Tenant or any
trade fixtures, furnishings, equipment or personal property belonging to Tenant.
Such policy shall be for the full insurable value of such property and shall not
be subject to a deductible in excess of $10,000.
(c) Each of said policies of insurance shall name Landlord, New
American Real Estate Holdings, Inc., and Landlord's managing agent as additional
insureds, and if requested by the holder of any mortgage or deed of trust
against the Building, the public liability policy referred to above shall also
name such holder as an additional insured. Each policy shall contain an
endorsement which provides that no cancellation or reduction of coverage may be
made without first giving Landlord and, if named as an additional insured, the
holder of any mortgage or deed of trust on the Building, at least thirty (30)
days' prior written notice of such proposed action. All of Tenant's insurance
required under this Lease shall be written as primary policy coverage and not
contributing with or in excess of any coverage which Landlord may carry. All
insurance policies required from Tenant under this Lease shall be issued by
insurance companies licensed to do business in the jurisdiction wherein the
Building is located with a financial rating of at least an A:XII as rated in the
most recent edition of Best Insurance Reports and in business for the past five
(5) years. On or before the Lease Commencement Date, and thereafter not less
than fifteen (15) days prior to the expiration dates of said policy or policies,
Tenant shall provide copies of policies or certificates of insurance (XXXXX 27)
evidencing the coverages required by this Section. The aforesaid insurance
limits may be reasonably increased from time to time by Landlord.
SECTION 14.3 LANDLORD TO CARRY INSURANCE. Throughout the Lease Term,
Landlord shall obtain and maintain (a) insurance against all risks of physical
loss or damage to the Building, including, without limitation, all risks covered
by an "extended coverage" policy, in an amount not less than one hundred percent
(100%) of the full replacement cost thereof, without reduction for depreciation,
and (b) comprehensive liability insurance on an "occurrence basis" against
claims or damages of death, bodily injury, or property damage occurring in or
about the Building, in amounts customary for owners of first-class office
building in the Washington, D.C. metropolitan area.
SECTION 14.4 WAIVERS OF CLAIMS, RIGHT OF SUBROGATION. To the extent
permitted by available policies of insurance, Landlord and Tenant each hereby
waives any right of recovery against the other to the extent of any loss or
damage that is covered by any policy of insurance maintained by either party
with respect to the Premises or the Building or any operations therein. If no
available policy of insurance permits such waiver without invalidating the
coverage, the party maintaining such policy shall obtain from such insurer an
endorsement effecting a waiver of all right of recovery by way of subrogation
against either party in connection with any claim, loss or damage covered by
such policy. If not obtainable, then such party shall have the other party named
as an additional insured on such policy of insurance if permitted, and such
other party shall pay any costs attributable to such inclusion. Except to the
extent expressly provided herein, nothing contained in this Lease shall relieve
Landlord or Tenant of any liability to each other or to their insurance carriers
which Landlord or Tenant may have under law or the provisions of this Lease in
connection with any damage to the Building, the Premises, tenant improvements,
fixtures, equipment, furniture, and all other personal property, by fire,
casualty or other insured risk.
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ARTICLE XV
SERVICES AND UTILITIES
SECTION 15.1 SERVICES AND UTILITIES. Landlord shall maintain, and make
all necessary repairs to, the Building in a manner befitting a modern,
first-class office building in Alexandria, Virginia, in accordance with all
applicable laws and ordinances. Landlord shall furnish to the Premises
air-conditioning and heat during the seasons when they are required, as
determined in Landlord's reasonable judgment. Landlord shall also provide
reasonably adequate electricity, water, exterior window-cleaning service, and
char and janitorial service after 6:00 p.m. on Monday through Friday only
(excluding legal holidays), as required in Landlord's sole but not unreasonable
judgment. Landlord will also provide elevator service; provided, however, that
Landlord shall have the right to remove elevators from service as may be
required for moving freight, or for servicing or maintaining the elevators
and/or the Building. The normal hours of operation of the Building will be 8:00
a.m. to 7:00 p.m. on Monday through Friday (except legal holidays) and 8:00
a.m. to 2:00 p.m. on Saturday (except legal holidays). There will be no normal
hours of operation of the Building on Sundays or legal holidays and Landlord
shall not be obligated to maintain or operate the Building at such times unless
special arrangements are made by Tenant. Landlord will furnish all services and
utilities required by this Lease only during the normal hours of operation of
the Building, unless otherwise specified herein. It is also agreed that if
Tenant requires air-conditioning or heat beyond the normal hours of operation
set forth herein, Landlord will furnish such air-conditioning or heat, provided
Tenant gives Landlord's agent sufficient advance notice of such requirement.
Tenant hereby agrees to pay for the cost of such extra service in accordance
with Landlord's then current schedule of costs and assessments for such extra
service.
SECTION 15.2 FAILURE OF UTILITIES. It is understood and agreed that
Landlord shall not have any liability to Tenant whatsoever as a result of
Landlord's failure or inability to furnish any of the utilities or services
required to be furnished by Landlord hereunder, whether resulting from the
following events (collectively, "Force Majeure Events"): fire or other
casualty, acts of God, civil commotion or riots, governmental act or failure to
act, strike, labor dispute, inability to procure materials and any other cause
beyond Landlord's reasonable control (whether similar or dissimilar to the
foregoing events). It is further agreed that any such failure or inability to
furnish the utilities or services required hereunder shall not be considered an
eviction, actual or constructive, of Tenant from the Premises and shall not
entitle Tenant to terminate this Lease or to an abatement of any rent payable
hereunder. However, if the utilities or services to be furnished by Landlord
under this Section 15.2 are interrupted due to causes within Landlord's
reasonable control and Tenant is unable to use, and does not in fact occupy,
the Premises for a period of ten (10) consecutive business days, then rent
shall xxxxx from and after said tenth day until the date Landlord has resumed
providing such utilities and services. Tenant acknowledges that if Landlord is
in any way delayed or prevented from performing any of its obligations under
this Lease due to any Force Majeure Event, then Landlord shall have no
liability for such obligations. Tenant acknowledges that Tenant will carry
business interruption insurance throughout the Lease Term and that this section
shall in no event be deemed to make Landlord liable for Force Majeure Events.
SECTION 15.3 COMPLIANCE WITH CONSERVATION REQUIREMENTS. The parties
hereto agree to comply with all mandatory and voluntary energy, water or other
conservation controls or requirements applicable to office buildings,
instituted by the Federal, Virginia or City of Alexandria governments,
including, without limitation, controls on the permitted range of temperature
settings in office buildings, or requirements necessitating curtailment of the
volume of energy consumption or the hours of operation of the Building. Any
terms or conditions of this Lease that conflict or interfere with compliance
with such controls or requirements shall be
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suspended for the duration of such controls or requirements. It is further
agreed that compliance with such controls or requirements shall not be
considered an eviction, actual or constructive, of the Tenant from the Premises
and shall not entitle Tenant to terminate this Lease or to an abatement of any
rent payable hereunder.
ARTICLE XVI
LIABILITY OF LANDLORD
SECTION 16.1 LIABILITY OF LANDLORD LIMITED. Landlord shall not be liable
to Tenant, its employees, agents, business invitees, licensees, customers,
clients, family members or guests for any damage, injury, loss compensation or
claim, including but not limited to claims for the interruption of or loss to
Tenant's business, based on, arising out of or resulting from any cause
whatsoever, including but not limited to the following: repairs to any portion
of the Premises or the Building; interruption in the use of the Premises; any
accident or damage resulting from the use or operation (by Landlord, Tenant, or
any other person or persons) of elevators, or of the heating, cooling,
electrical or plumbing equipment or apparatus; the termination of this Lease by
reason of the destruction of the Premises; any fire, robbery, theft, mysterious
disappearance and/or any other casualty; the actions of any other tenants of
the Building or of any other person or persons; and any leakage in any part or
portion of the Premises or the Building, or from water, rain or snow that may
leak into, or flow from, any part of the Premises or the Building, or from
drains, pipes or plumbing work in the Building. Any goods, property or personal
effects stored or placed by the Tenant or its employees in or about the
Premises or Building shall be at the sole risk of the Tenant, and the Landlord
shall not in any manner be held responsible therefor. It is understood that the
employees of the Landlord are prohibited from receiving any packages or other
articles delivered to the Building for Tenant, and if any such employee
receives any such package or articles, such employee shall be acting as the
agent of the Tenant for such purposes and not as the agent of the Landlord.
Notwithstanding the foregoing provisions of this Section 16.1, Landlord shall
not be released from liability to Tenant for any damage or injury caused by the
willful misconduct of Landlord or its employees.
SECTION 16.2 INDEMNIFICATION.
(a) Subject to the waiver of claims set forth in Section 14.4
of this Lease, Tenant shall indemnify and hold Landlord and Landlord's agents
and its and their officers, directors, and employees, harmless from and against
all costs, damages, claims, liabilities and expenses (including reasonable
attorneys' fees) suffered by or claimed against Landlord and Landlord's agents
and its and their officers, directors, and employees, directly or indirectly,
based on, arising out of or resulting from (i) Tenant's use and occupancy of
the Premises or the business conducted by Tenant therein, (ii) any act or
omission by Tenant or its employees, agents or invitees, or (iii) any breach or
default by Tenant in the performance or observance of its covenants or
obligations under this Lease.
(b) Subject to the waiver of claims set forth in Section 14.4
of this Lease, Landlord shall indemnify and hold Tenant and Tenant's agents and
its and their officers, directors and employees harmless from and against all
costs, damages, claims, liabilities and expenses (including reasonable
attorneys' fees) suffered by or claimed against Tenant and Tenant's agents and
its and their officers, directors, and employees to the extent directly or
indirectly, based on, arising out of or resulting from (i) any negligent act or
omission by Landlord or its employees, agents or invitees, in the operation of
the Building or the Complex; (ii) latent defects in the Building or the
Complex; or (iii) any breach or default by Landlord in the performance or
observation of its covenants or obligations under this Lease.
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SECTION 16.2 TRANSFER OF BUILDING. In the event that at any time
Landlord shall sell or transfer the Building, the Landlord named herein shall
not be liable to Tenant for any obligations or liabilities based on or arising
out of events or conditions occurring on or after the date of such sale or
transfer and the new owner of the Building shall not be liable to Tenant for
any obligations or liabilities based on or arising out of events or conditions
occurring before the date of such sale or transfer.
SECTION 16.3 NO RENTAL OFFSET. In the event that at any time during the
Lease Term Tenant shall have a claim against Landlord, Tenant shall not have
the right to deduct the amount allegedly owed to Tenant from any rent or other
sums payable to Landlord hereunder, it being understood that Tenant's sole
method for recovering upon such claim shall be to institute an independent
action against Landlord.
SECTION 16.4 NO RECOURSE AGAINST LANDLORD. Tenant agrees that in the
event Tenant is awarded a money judgment against Landlord, Tenant's sole
recourse for satisfaction of such judgment shall be limited to execution
against Landlord's interest in the Complex. In no event shall any partner,
shareholder, officer, director or any principal of Landlord or any other
persons be held to have any personal liability for satisfaction of any claims
or judgments that Tenant may have against Landlord unless such claim or
judgment is based upon the willful or grossly negligent acts or omissions of
any of the foregoing persons.
ARTICLE XVII
RULES AND REGULATIONS
SECTION 17.1 RULES AND REGULATIONS. Tenant and its agents, employees,
invitees, licensees, customers, clients, family members, guests and permitted
subtenants shall at all times abide by and observe the rules and regulations
promulgated by Landlord. The initial rules and regulations are attached hereto
as Exhibit C. In addition, Tenant and its agents, employees, invitees,
licensees, customers, clients, family members, guests and permitted subtenants
shall abide by and observe all other rules or regulations that Landlord may
promulgate from time to time for the operation and maintenance of the Building,
provided that notice thereof is given to Tenant and such rules and regulations
are not inconsistent with the provisions of this Lease. A breach of such rules
and regulations by Tenant or anyone using the Premises under Tenant shall be a
default under this Lease. Nothing contained in this Lease shall be construed as
imposing upon Landlord any duty or obligation to enforce such rules and
regulations, or the terms, conditions or covenants contained in any other
lease, as against any other Tenant, and Landlord shall not be liable to Tenant
for the violation of such rules or regulations by any other tenant or its
employees, agents, business invitees, licensees, customers, clients, family
members or guests. If there are any inconsistencies between this Lease and the
provisions of the rules and regulations, the provisions of this Lease will
prevail.
ARTICLE XVIII
DAMAGE OR DESTRUCTION
SECTION 18.1 REPAIR AND RESTORATION. If during the Lease Term the
Premises or the Building are totally or partially damaged or destroyed from any
cause, thereby rendering the Premises totally or partially inaccessible or
unusable, Landlord shall diligently (taking into account the time necessary to
effectuate a satisfactory settlement with any insurance company involved)
restore and repair the Premises and the Building to substantially the same
condition they were in prior to such damage; provided, however, if the repairs
and restoration cannot be completed within one hundred fifty (150) days after
the occurrence of such damage (taking into
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account the time needed for removal of debris, preparation of plans and issuance
of all required governmental permits), Landlord and/or Tenant shall have the
right, at the option of either, to terminate this Lease as described in the
following sentences. Within forty-five (45) days after the occurrence of such
damage, Landlord shall provide reasonable assurances to Tenant that such repairs
and restoration can be completed within one hundred fifty (150) days of the
occurrence of the damage and that Landlord intends to perform such repairs and
restoration. If Landlord so informs Tenant that such repairs and restoration can
be completed within such time, this Lease shall continue and Landlord shall
endeavor to complete said repairs and restoration within said 150-day period. If
Landlord fails to provide such assurances or does not substantially complete
such repairs or restoration within one hundred eighty (180) days after the
occurrence of such casualty for reasons within the control of Landlord (and not
due to a Force Majeure Event), then Tenant shall have the right to notify
Landlord within fifteen (15) days that it is terminating this Lease. If this
Lease is terminated pursuant to the preceding sentence, all rent payable
hereunder shall, be apportioned and paid to the date of the occurrence of such
damage. If this Lease is not terminated as a result of damage, and provided that
such damage was not caused by the act or omission of Tenant, or any of its
employees, agents, licensees, subtenants, customers, clients, family members or
guests, until the repair and restoration of the Premises is completed Tenant
shall be required to pay fixed monthly rent and additional rent only for that
part of the Premises that Tenant is able to use while repairs are being made,
based on the ratio that the amount of usable rentable area bears to the total
rentable area in the Premises. Landlord shall bear the costs and expenses of
repairing and restoring the Premises, except that if such damage or destruction
was caused by the act or omission of Tenant, or any of its employees, agents,
licensees, subtenants, customers, clients, family members or guests, upon
written demand from Landlord, Tenant shall pay to Landlord the amount by which
such costs and expenses exceed the insurance proceeds, if any, received by
Landlord on account of such damage or destruction.
SECTION 18.2 TENANT TO REPAIR FURNISHINGS. If Landlord repairs and
restores the Premises as provided in Section 18.1, Landlord shall not be
required to repair or restore any decorations, alterations or improvements to
the Premises previously made by Tenant or any trade fixtures, furnishings,
equipment or personal property belonging to Tenant. It shall be Tenant's sole
responsibility to repair and restore all such items.
SECTION 18.3 LANDLORD RIGHT TO TERMINATE. Notwithstanding anything to the
contrary contained herein, if there is a destruction of the Building that
exceeds twenty-five percent (25%) of the replacement value of the Building from
any risk, whether or not the Premises are damaged or destroyed, Landlord shall
have the right to terminate this Lease by written notice to Tenant.
ARTICLE XIX
CONDEMNATION
SECTION 19.1 EFFECT OF CONDEMNATION. If the whole or a substantial part
(as hereinafter defined) of the Premises and/or the Building or the use or
occupancy of the Premises, shall be taken or condemned by any governmental or
quasi-governmental authority for any public or quasi-public use or purpose
(including a sale thereof under threat of such a taking), then this Lease shall
terminate on the date title thereto vests in such governmental or
quasi-governmental authority, and all rent payable hereunder shall be
apportioned as of such date. If less than a substantial part of the Premises (or
the use and occupancy thereof) is taken or condemned by any governmental or
quasi-governmental authority for any public or quasi-public use or purpose
(including a sale thereof under threat of such a taking), this Lease shall
continue in full force and effect, but the fixed monthly rent and additional
rent thereafter payable hereunder shall be
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equitably adjusted (on the basis of the ratio of the number of square feet of
rentable area taken to the total rentable area in the Premises prior to such
taking) as of the date title vests in the governmental or quasi-governmental
authority. For purposes of this Section 19.1, a substantial part of the Premises
shall be considered to have been taken if more than twenty-five percent (25%)
(in the case of a temporary taking only if for a term greater than one year) of
the Premises is rendered unusable as a result of such taking. Two or more
consecutive takings (e.g., two successive one year takings) shall be considered
one taking for the full period of such consecutive takings.
SECTION 19.2 CONDEMNATION PROCEEDS. All awards, damages and other
compensation paid by the condemning authority on account of the taking or
condemnation (or sale under threat of such a taking) shall belong to Landlord,
and Tenant hereby assigns to Landlord all rights to such awards, damages and
compensation. Tenant agrees not to make any claim against Landlord or the
condemning authority for any portion of such award or compensation attributable
to damages to the Premises, the value of the unexpired Lease Term, the loss of
profits or goodwill, leasehold improvements or severance damages. Nothing
contained herein, however, shall prevent Tenant from pursuing a separate claim
against the condemning authority for the value of furnishings, equipment and
trade fixtures installed in the Premises at Tenant's expense and for relocation
expenses, provided that such claim shall in no way diminish the award nor
compensation payable to or recoverable by Landlord in connection with such
taking or condemnation.
ARTICLE XX
DEFAULT BY TENANT
SECTION 20.1 TENANT DEFAULTS. The occurrence of any of the following
shall constitute a default by Tenant under this Lease:
(a) If Tenant shall fail to pay any payment of fixed monthly
rent or additional rent when due, or shall fail to make any other payment
required by this Lease when due.
(b) If Tenant shall violate or fail to perform any other term,
condition, covenant or agreement to be performed or observed by Tenant under
this Lease.
(c) If Tenant shall vacate or abandon the Premises.
(d) If the Tenant (i) is voluntarily adjudicated a bankrupt or
insolvent, (ii) seeks or consents to the appointment of a receiver or trustee
for itself or for all or a part of its property, (iii) files a petition seeking
relief under the bankruptcy or similar laws of the United States or any state or
any other jurisdiction, (iv) makes a general assignment for the benefit of
creditors, or (v) admits in writing its inability to pay its debts as they
mature.
(e) If a petition shall be filed against the Tenant seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future federal, state, or other statute,
law or regulation and shall remain undismissed or unstayed for 30 days, or if
any trustee, receiver or liquidator of the Tenant, or of all or any substantial
part of its properties, shall be appointed without the consent or acquiescence
of the Tenant and such appointment shall remain unvacated or unstayed for 30
days.
(f) If Tenant shall fail to increase the security deposit to
$400,000 by no later than October 1, 1998, in accordance with Section 5.1 of
this Lease.
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Notwithstanding the provisions of this Section 20.1, a default shall not be
deemed to have occurred with respect to the failure of payment of any
installment of rent or additional rent unless such failure shall continue for a
period of seven (7) days, nor shall any default be deemed to have occurred if
Tenant shall fail to comply with any term, provision or covenant of this Lease,
other than payment of rent or additional rent if such failure is cured or
removed within ten (10) days after written notice is given to Tenant by Landlord
setting forth the nature of such default, or in respect to a default which
cannot be cured within such period, so long as Tenant shall commence to remove
the same within such ten-day period and shall diligently and expeditiously
proceed to complete the cure or removal thereof. Notwithstanding the foregoing,
if Tenant fails to increase the security deposit to $400,000 by no later than
October 1, 1998, time being of the essence, in accordance with Section 5.1 of
this Lease, such failure shall be an immediate Event of Default hereunder, and
Landlord, at its sole option, shall be entitled to exercise its rights and
remedies under this Lease regardless of Tenant's subsequent cure of such
default. Tenant acknowledges that during the negotiation of this Lease, Tenant
requested, and Landlord permitted, Tenant to delay posting the full $400,000
security deposit as a special accommodation to Tenant with the understanding
that Tenant would post the full $400,000 by no later than October 1, 1998, time
being of the essence.
SECTION 20.2 TERMINATION OR RE-ENTRY UPON TENANT DEFAULT. If Tenant shall
be in default under this Lease, Landlord shall have the right, at its sole
option, to terminate this Lease. With or without terminating this Lease,
Landlord may re-enter and take possession of the Premises and the provisions of
this Article XX shall operate as a notice to quit; and any other notice to quit
or notice of Landlord's intention to re-enter the Premises being hereby
expressly waived. If necessary, Landlord may proceed to recover possession of
the Premises under and by virtue of the laws of the Commonwealth of Virginia, or
by such other proceedings, including re-entry and possession, as may be
applicable. If Landlord elects to terminate this Lease, everything contained in
this Lease on the part of Landlord to be done and performed shall cease without
prejudice, however, to the right of Landlord to recover from Tenant all rent
and other sums accrued up to the time of termination or recovery of possession
by Landlord, whichever is later. Whether or not this Lease is terminated by
reason of Tenant's default, the Premises may be relet by Landlord for such rent
and upon such terms as Landlord deems reasonable under the circumstances and, if
the full rental provided herein plus the costs, expenses and damages described
below shall not be realized by Landlord, Tenant shall be liable for all damages
sustained by Landlord, including, without limitation, deficiency in fixed and
additional rent, reasonable attorney's fees, brokerage fees, and the expenses of
placing the Premises in first-class rentable condition. Any damages or loss of
rent sustained by Landlord may be recovered by Landlord, at Landlord's option,
at the time of the reletting, or in separate actions, from time to time, as said
damage shall have been made more easily ascertainable by successive relettings,
or, at Landlord's option, may be deferred until the expiration of the Lease
Term, in which event Tenant hereby agrees that the cause of action shall not be
deemed to have accrued until the date of expiration of the Lease Term. The
provisions contained in this Section 20.2 shall be in addition to, and shall not
prevent the enforcement of, any claim Landlord may have against Tenant for
anticipatory breach of this Lease.
SECTION 20.3 RIGHTS OF LANDLORD TO BE CUMULATIVE. All rights and remedies
of Landlord set forth herein are in addition to all other rights and remedies
available to Landlord at law or in equity. All rights and remedies available to
Landlord hereunder, at law or in equity are expressly declared to be cumulative.
The exercise by Landlord of any such right or remedy shall not prevent the
concurrent or subsequent exercise of any other right or remedy. No delay in the
enforcement or exercise of any such right or remedy shall constitute a waiver of
any default by Tenant hereunder or of any of Landlord's rights or remedies in
connection therewith. Landlord shall not be deemed to have waived any default by
Tenant hereunder unless such waiver is set forth in a written instrument signed
by Landlord. If Landlord waives in writing
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any default by Tenant, such waiver shall not be construed as a waiver of any
covenant, condition or agreement set forth in this Lease except as to the
specific circumstances described in such written waiver.
SECTION 20.4 NO ACCORD AND SATISFACTION. If Landlord shall institute
proceedings against Tenant and a compromise or settlement thereof shall be made,
the same shall not constitute a waiver of the same or of any other covenant,
condition or agreement set forth herein, nor of any of Landlord's rights
hereunder. Neither the payment by Tenant of a lesser amount than the
installments of fixed rent, additional rent or of any sums due hereunder nor any
endorsement or statement on any check or letter accompanying a check for payment
of rent or other sums payable hereunder 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 rent or other sums or to pursue
any other remedy available to Landlord. No re-entry by Landlord, and no
acceptance by Landlord of keys from Tenant, shall be considered an acceptance of
a surrender of this Lease.
SECTION 20.5 LANDLORD MAY ACT ON TENANT'S BEHALF. If Tenant defaults in
the making of any payment or in the doing of any act herein required to be made
or done by Tenant, then Landlord may, but shall not be required to, make such
payment or do such act. If Landlord elects to make such payment or do such act,
all costs and expenses incurred by Landlord, plus interest thereon at the rate
per annum which is two percent (2%) higher than the "prime rate" or subsequent
reference rate then being charged by The Xxxxx National Bank of D.C. from the
date paid by Landlord to the date of payment thereof by Tenant, shall be
immediately paid by Tenant to Landlord; provided however, that nothing contained
herein shall be construed as permitting Landlord to charge or receive interest
in excess of the maximum legal rate then allowed by law. The taking of such
action by Landlord shall not be considered as a cure of such default by Tenant
or prevent Landlord from pursuing any remedy it is otherwise entitled to in
connection with such default.
SECTION 20.6 INTEREST AND LATE CHARGE. If Tenant fails to make any
payment of fixed monthly rent or of additional rent on or before the date such
payment is due and payable, Tenant shall pay to Landlord a late charge of five
percent (5%) of the amount of such payment. In addition, such payment shall bear
interest at the rate per annum which is two percent (2%) higher than the "prime
rate" then being charged by The Xxxxx National Bank of D.C. from the date such
payment became due to the date of payment thereof by Tenant; provided, however,
that nothing contained herein shall be construed as permitting Landlord to
charge or receive interest in excess of the maximum legal rate then allowed by
law. Such late charge and interest shall constitute additional rent due and
payable hereunder within two (2) days of written demand therefor.
SECTION 20.7 LANDLORD'S SECURITY INTEREST. Landlord shall have a lien
upon, and Tenant hereby grants to Landlord a security interest in the security
deposit, if any, and all personal property of Tenant located in the Premises, as
security for the payment of all rent and the performance of all other
obligations of Tenant required by this Lease. In order to perfect and enforce
said lien and security interest, Tenant agrees to execute all required financing
statements. At any time after a default by Tenant hereunder, Landlord may seize
and take possession of any and all personal property belonging to Tenant which
may be found in and upon the Premises. If Tenant fails to redeem the personal
property so seized by payment of all sums due Landlord under and by virtue of
this Lease, Landlord shall have the right, after ten (10) days' written notice
to Tenant, to sell such personal property so seized at public or private sale
and upon such terms and conditions as to Landlord may appear advantageous. After
the payment of all property charges incident to such sale, the proceeds thereof
shall be applied to the payment of any and all sums due to any surplus remaining
after the payment of all sums due
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to Landlord, such surplus shall be paid over to Tenant. This section is not
intended to limit or restrict in any way Landlord's right to any lien or rent by
statute or common law.
ARTICLE XXI
SUBORDINATION AND ATTORNMENT
SECTION 21.1 SUBORDINATION.
(a) This Lease is and shall remain subject and subordinate to
the lien of any and all current and future mortgages and/or any ground leases
(which term "mortgages" shall include both construction and permanent financing
and shall include deeds of trust and similar security instruments) which may now
encumber the Building, the land on which the Building is located and/or the
Complex, and to all and any renewals, extensions, modifications, recastings or
refinancings thereof. At any time after the execution of this Lease, the holder
of any mortgage to which this Lease is subordinate shall have the right to
declare this Lease to be superior to the lien of such mortgage and Tenant agrees
to execute all documents required by such holder in confirmation thereof.
(b) In confirmation of the foregoing subordination, Tenant
shall, at Landlord's request, promptly execute any requisite or appropriate
certificate or other document. Tenant hereby constitutes and appoints Landlord
as Tenant's attorney-in-fact to execute any such certificate or other document
for or on behalf of Tenant if Tenant fails to sign and return any such
certificate or other document within ten days after receipt by Tenant.
SECTION 21.2 ATTORNMENT. Tenant agrees that in the event any
proceedings are brought for the foreclosure of any mortgage encumbering the
Building or the termination of any ground lease affecting the Building, Tenant
shall attorn to the purchaser at such foreclosure sale or any ground lessor, as
the case may be, if requested to do so by such party, and shall recognize such
party as the Landlord, under this Lease, and Tenant waives the provisions of any
statute or rule of law, now or hereafter in effect, which may give or purport to
give Tenant any right to terminate or otherwise adversely affect this Lease and
the obligations of Tenant hereunder in the event any such foreclosure proceeding
is prosecuted or completed.
ARTICLE XXII
HOLDING OVER
SECTION 22.1 TENANT HOLDING OVER. In the event that Tenant shall not
immediately surrender the Premises on the date of the expiration of the Lease
Term, Tenant shall become a Tenant by the month at twice the fixed monthly rent
and all additional rent in effect during the last month of the Lease Term. Said
monthly tenancy shall commence on the first day following the expiration of the
Lease Term. As a monthly Tenant, Tenant shall be subject to all the terms,
conditions, covenants and agreements of this Lease, except as to the amount of
the monthly rent, which shall be in the amount specified in this paragraph.
Tenant shall give to Landlord at least thirty (30) days' written notice of any
intention to quit the Premises, and Tenant shall be entitled to thirty (30)
days' written notice to quit the Premises, unless Tenant is in default
hereunder, in which event Tenant shall not be entitled to any notice to quit,
the usual thirty (30) days' notice to quit being hereby expressly waived.
Notwithstanding the foregoing provisions of this Section 22.1, in the event that
Tenant shall hold over after the expiration of the Lease Term, and if Landlord
shall desire to regain possession of the Premises promptly at the expiration of
the Lease Term, then at any time prior to Landlord's acceptance of rent from
Tenant as a monthly tenant hereunder, Landlord, at its
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option, may forthwith re-enter and take possession of the Premises without
process, or by any legal process in force in the Commonwealth of Virginia. To
the extent permitted by law, the Landlord may accept rent in the holdover amount
and concurrently commence legal proceedings to regain possession of the
Premises.
ARTICLE XXIII
COVENANTS OF LANDLORD
SECTION 23.1 TENANT RIGHT OF QUIET ENJOYMENT. Landlord covenants that
it has the right to make this Lease for the term aforesaid, and that if Tenant
shall pay all rent when due and punctually perform all the covenants, terms,
conditions and agreements of this Lease to be performed by Tenant, Tenant shall
have the right to, during the term hereby created, freely, peaceably and quietly
occupy and enjoy the full possession of the Premises without molestation or
hindrance by Landlord or any party claiming through or under Landlord, subject
to the provisions of Sections 21.1 and 23.2 hereof.
SECTION 23.2 CERTAIN RIGHTS RESERVED. Landlord hereby reserves to itself
and its successors and assigns the following rights (all of which are hereby
consented to by Tenant): (i) to change the street address and/or name of the
Building and/or the Complex and/or the arrangement and/or location of entrances,
passageways, doors, doorways, corridors, elevators, stairs, toilets, or other
public parts of the Building and/or the Complex and to change the design or
configuration of the Building; (ii) to erect, use and maintain pipes and
conduits in and through the Premises; and (iii) to grant to anyone the exclusive
right to conduct any particular business or undertaking in the Building.
Landlord may exercise any or all of the forgoing rights without being deemed to
be guilty of an eviction, actual or constructive, or a disturbance or
interruption of the business of Tenant or of Tenant's use or occupancy of the
Premises.
ARTICLE XXIV
GENERAL PROVISIONS
SECTION 24.1 NO REPRESENTATIONS. Tenant acknowledges that neither
Landlord nor any broker, agent or employee of Landlord has made any
representations or promises with respect to the Premises, the Building, the land
on which, the Building is located or the Complex, except as herein expressly set
forth, and no rights, privileges, easements or licenses are acquired by Tenant
except as herein expressly set forth.
SECTION 24.2 FINANCING REQUIREMENTS. In the event that any person,
including but not limited to any bank, insurance company, university, pension or
welfare fund, savings and loan association, real estate investment trust,
business trust, or other financial institution providing the first mortgage
interim construction financing for the Building or the Complex and/or the first
mortgage permanent financing for the Building requires, as a condition of such
financing, that modifications to this Lease be obtained, and provided that such
modifications (i) do not adversely affect Tenant's use of the Premises as herein
permitted, (ii) do not materially alter the approved architectural plans and
specifications for Tenant's renovation of the Premises, and (iii) do not
increase the rentals and other sums required to be paid by Tenant hereunder,
Landlord shall submit such required modifications to Tenant, and if Tenant does
not enter into and execute a written amendment hereto incorporating such
required modifications within thirty (30) days after the same have been
submitted to Tenant by Landlord, Landlord shall have the right, at its sole
option, to (1) cancel this Lease, (2) to sign on behalf of the Tenant pursuant
to a power of attorney, which is hereby expressly granted to the Landlord by
Tenant, or (3) to
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declare an event of default under this Lease. Such options shall be exercisable
by Landlord giving Tenant written notice of the option elected.
SECTION 24.3 NO PARTNERSHIP. Nothing contained in this Lease shall be
construed as creating a partnership or joint venture of or between Landlord and
Tenant, or to create any other relationship between the parties hereto other
than that of Landlord and Tenant.
SECTION 24.4 BROKERS. Landlord recognizes Xxxxxxxx Xxxx Company and
Insignia/Xxxxxx, Xxxxxx as the sole brokers procuring this Lease and shall pay
said brokers a commission therefor pursuant to a separate agreement between said
brokers and Landlord. Landlord and Tenant each represent and warrant to the
other that, except as provided above, neither of them has employed or dealt with
any broker, agent, or finder in carrying on the negotiations relating to this
Lease. Landlord shall indemnify and hold Tenant harmless, and Tenant shall
indemnify and hold Landlord harmless, from and against any claims for brokerage
or other commissions arising from or out of any breach of the foregoing
representation and warranty by the respective indemnitor.
SECTION 24.5 TENANT ESTOPPEL AND CERTIFICATES. Tenant agrees, at any
time from time to time, upon not less than five (5) days' prior written notice
by Landlord, to execute, acknowledge and deliver to Landlord a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or if there have been modifications, that the Lease is in full force and
effect as modified and stating the modifications); (ii) stating the dates to
which the rent and any other charges hereunder have been paid by Tenant; (iii)
stating whether or not, to the best knowledge of Tenant, Landlord is in default
in the performance of any covenant, agreement or condition contained in this
Lease, and if so, specifying the nature of such default; (iv) stating that all
Tenant work has been satisfactorily completed, or if not, a list of items
excepted; (v) any other certification reasonably required by Landlord; and (vi)
stating the address to which notices to Tenant are to be sent. Any statement
delivered by Tenant may be relied upon by any owner of the Building or the land
upon which it is situated, any prospective purchaser of the Building or such
land mortgage or prospective mortgagee of the Building or such land or of
Landlord's interest therein, or any prospective assignee of any such mortgagee.
SECTION 24.6 WAIVER OF JURY TRIAL. LANDLORD AND TENANT EACH HEREBY
WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER
OF THEM AGAINST THE OTHER IN CONNECTION WITH ANY MATTER ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT
HEREUNDER, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OR INJURY
OR DAMAGE.
SECTION 24.7 NOTICES. Landlord is a nonresident of the Commonwealth of
Virginia and has appointed CT Corporation as its appointed agent to receive
service of process, notices, orders or demands. All notices or other
communications hereunder shall be in writing and shall be deemed duly given if
delivered in person (with receipt therefor), or if sent by certified or
registered mail, return receipt requested, postage prepaid, to the following
addresses: (i) if to Landlord, at c/o Xxxxxxxx Xxxx Company, 0000 Xxxxxx
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention: Canal Center Property
Manager, with copy to Xxxx X. Xxxxxxxx, Esquire, Xxxxxxxx, Xxxxxxx & Xxxxx,
Chartered, 0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000; (ii) if to
Tenant, before occupancy, at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxx 00000, and after occupancy at the Premises. Either party may change its
address for the giving of notices by notice given in accordance with this
Section.
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SECTION 24.8 SEVERABILITY. If any provision of this Lease or the
application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and enforced to the fullest extent permitted by law.
SECTION 24.9 GENDER. Feminine or neuter pronouns shall be substituted
for those of the masculine form, and the plural shall be substituted for the
singular number, in any place or places herein in which the context may require
such substitution.
SECTION 24.10 SUCCESSORS AND ASSIGNS. The provisions of this Lease
shall be binding upon, and shall inure to the benefit of, the parties hereto and
each of their respective representatives, successors and assigns, subject to the
provisions hereof prohibiting assignment or subletting by Tenant.
SECTION 24.11 ENTIRE AGREEMENT. This Lease contains and embodies the
entire agreement of the parties hereto, and no representations, inducements or
agreements, oral or otherwise, not contained in this Lease shall be of any force
or effect. This Lease may not be modified or changed in whole or in part in any
manner other than by an instrument in writing duly signed by both parties
hereto.
SECTION 24.12 HEADINGS. Article and section headings are used herein
for the convenience of reference and shall not be considered when construing or
interpreting this Lease.
SECTION 24.13 EXECUTION AND DELIVERY. The submission of an unsigned
copy of this document to Tenant for Tenant's consideration does not constitute
an offer to lease the Premises or an option to or for the Premises. This
document shall become effective and binding only upon the execution and delivery
of this Lease by both Landlord and Tenant.
SECTION 24.14 COUNTERPARTS. This Lease may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same document.
SECTION 24.15 DETERMINATIONS OF AREA. The rentable area in the
Premises and all other determinations of area under this Lease have been and
shall be determined in accordance with the Washington D.C. Association of
Realtors, Inc. Standard Method of Measurement dated January 1, 1989.
SECTION 24.16 ATTORNEYS' FEES. If either party brings an action to
enforce the terms hereof or to declare rights hereunder, the prevailing party in
any such action shall be entitled to receive its reasonable attorneys' fees and
costs from the losing party.
SECTION 24.17 CALENDAR DAYS/BUSINESS DAYS. As used in this Lease and
the exhibits thereto (including, without limitation, the Work Agreement), all
references to "days" shall be calendar days unless business days are specified.
SECTION 24.18 CORPORATE AUTHORITY. Tenant represents and warrants to
Landlord that (i) it is a Delaware corporation authorized to conduct business in
the Commonwealth of Virginia and (ii) the person executing this Lease on behalf
of Tenant is authorized to do so on behalf of Tenant.
SECTION 24.19 CONSENT TO JURISDICTION AND FORUM. Any litigation in
connection with, or arising out of, this Lease shall be brought in the state or
federal courts for the City of
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Alexandria. Landlord and Tenant hereby consent to such court's exercise of
personal jurisdiction over them. Tenant irrevocably appoints Xxxxx X. Xxxx,
having an address at 000 Xxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, as
Tenant's agent for receipt of service of process on Tenant's behalf in
connection with any suit, writ, attachment, execution or discovery or
supplementary proceedings in connection with the enforcement of this Lease.
Service shall be effected by any means permitted by the court in which any
action is filed, or, at Landlord's option, by mailing process, postage prepaid,
by certified mail, return receipt requested, either to Tenant's agent at the
foregoing address or to Tenant at Tenant's address set forth in the Notices
section of this Lease. Service shall be deemed effective upon receipt. Tenant
may designate a change of address or agent for purposes of this section by
written notice to Landlord in accordance with the provisions of the Notices
section of this Lease at least ten (10) days before such change of address or
agent is to become effective.
SECTION 24.20 GOVERNING LAW. This Lease shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under
seal on the day and year first above written.
LANDLORD:
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ATTEST OR WITNESS: WATERFRONT II CORPORATION
By: [SEAL]
-------------------------------- --------------------------------
Name:
Title:
TENANT:
------
ATTEST OR WITNESS: NEWSREAL, INC.
/s/ XXXXX X. XXXXXX By: /s/ XXXXX X. XXXX [SEAL]
-------------------------------- --------------------------------
Name: XXXXX X. XXXX
Title: CHIEF FINANCIAL OFFICER &
GENERAL COUNSEL
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