THIRD AMENDMENT TO OFFICE LEASE AGREEMENT
Exhibit 10.18
THIRD AMENDMENT TO OFFICE LEASE AGREEMENT
THIS THIRD AMENDMENT TO OFFICE LEASE AGREEMENT (this “Third Amendment”) is made and entered
into as of the 7th day of July, 2010, by and between WASHINGTON TELEVISION CENTER LLC, a District
of Columbia limited liability company (“Landlord”) and BLACKBOARD INC., a Delaware corporation
(“Tenant”).
RECITALS
A. Pursuant to that certain Office Lease Agreement dated as of December 15, 2006 (the
“Original Lease”), as modified by that certain First Amendment to Office Lease Agreement dated as
of June 5, 2007, and as further modified by that certain Second Amendment to Office Lease Agreement
dated as of December 2, 2008 (as modified, the “Lease”), Landlord has leased to Tenant certain
space consisting of approximately One Hundred Twenty-Nine Thousand Sixty-Eight (129,068) square
feet of rentable area on the first (1st), fifth (5th), sixth
(6th), seventh (7th) and eighth (8th) floors in the office
building located at 000 Xxxxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000, as more particularly
described in the Lease (the “Premises”).
B. Landlord and Tenant desire to further amend the Lease as set forth in this Third Amendment
to expand the Premises to include the Fifth Floor Additional Space (as defined below), pursuant to
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant, intending to be legally bound, do hereby agree as follows:
1. Defined Terms. All defined terms herein shall have the meaning given to such term
in the Lease, unless specifically defined herein.
2. Incorporation of Recitals. The foregoing recitals are incorporated by reference
into this Third Amendment as if set forth in this Section 2 in full.
3. Fifth Floor Additional Space. Tenant hereby leases from Landlord, and Landlord
hereby leases to Tenant, approximately Four Thousand Nine Hundred Eighty-Five (4,985) rentable
square feet on the fifth (5th) floor of the Building as further identified on
Exhibit A attached hereto (the “Fifth Floor Additional Space”) for the Fifth Floor
Additional Space Lease Term (as defined below).
4. Fifth Floor Additional Space Lease Term. The lease term of the Fifth Floor
Additional Space shall commence on the earlier of (a) the date Tenant commences conducting business
operations in any material portion of the Fifth Floor Additional Space, or (b) September
1, 2010 (the earlier of (a) or (b), the “Fifth Floor Additional Space Commencement Date”), and
shall be coterminous with Lease Term, including any renewal or extension periods contemplated
thereunder (the “Fifth Floor Additional Space Lease Term”).
5. Fifth Floor Additional Space Base Rent. Annual Base Rent for the Fifth Floor
Additional Space shall be equal to the product of (a) the Fifth Floor Additional Space Base Rent
Per Rentable Square Foot (as shown in the chart below) in effect during the applicable Fifth Floor
Additional Space Lease Year (defined below), and (b) the number of square feet in the Fifth Floor
Additional Space. With respect to the Fifth Floor Additional Space, the term “Fifth Floor
Additional Space Lease Year” means, as applicable, a period of twelve (12) consecutive months
commencing on the Fifth Floor Additional Space Commencement Date, and each successive twelve (12)
month period thereafter; provided, however, that if the Fifth Floor Additional Space Commencement
Date is not the first day of a month, then the second Fifth Floor Additional Space Lease Year shall
commence on the first day of the month after the month in which the Fifth Floor Additional Space
Lease Commencement Date occurs, and the Base Rent for any partial additional month during either
the first or last Fifth Floor Additional Space Lease Year will be the Monthly Base Rent in effect
for the first or last, as applicable, Fifth Floor Additional Space Lease Year prorated based on the
actual number of days in such month. Landlord and Tenant acknowledge that the Fifth Floor
Additional Space Lease Years do not coincide with the “Lease Years” under the Original Lease.
| Fifth Floor | ||||||||||||
| Additional Space | ||||||||||||
| Fifth Floor | Base Rent Per | Annual Fifth Floor | Monthly Fifth Floor | |||||||||
| Additional Space | Rentable Square | Additional Space | Additional Space | |||||||||
| Lease Year | Foot | Base Rent | Base Rent | |||||||||
1 |
$ | 41.00 | $ | 204,385.00 | $ | 17,032.08 | ||||||
2 |
$ | 42.03 | $ | 209,520.00 | $ | 17,460.00 | ||||||
3 |
$ | 43.08 | $ | 214,754.00 | $ | 17,896.17 | ||||||
4 |
$ | 44.16 | $ | 220,138.00 | $ | 18,344.83 | ||||||
5 |
$ | 45.26 | $ | 225,621.00 | $ | 18,801.75 | ||||||
6 |
$ | 46.39 | $ | 231,254.00 | $ | 19,271.17 | ||||||
7 |
$ | 47.55 | $ | 237,037.00 | $ | 19,753.08 | ||||||
8 |
$ | 48.74 | N/A | $ | 20,247.41 | |||||||
The term “Base Rent” includes the Annual Fifth Floor Additional Space Base Rent, and with respect
to the third sentence of Section 4.1(a) of the Original Lease, the term “Monthly Base Rent”
includes the Monthly Fifth Floor Additional Space Base Rent, and the term “Lease Year” includes the
term Fifth Floor Additional Space Lease Year. Landlord and Tenant agree that the number of
rentable square feet in the Fifth Floor Additional Space is Four Thousand Nine Hundred Eighty-Five
(4,985) and not subject to remeasurement. Landlord and Tenant agree that the abatement of Monthly
Base Rent set forth in the first (1st) sentence of Section 4.1(b) of the Lease
is not applicable to the Fifth Floor Additional Space Base Rent payable under the terms of this
Third Amendment.
6. Fifth Floor Additional Space Prepaid Rent. Within five (5) business days after the
date of execution of this Third Amendment by Landlord and Tenant, Tenant shall deliver to Landlord
an amount equal to the first two (2) monthly installments of Fifth Floor Additional Space Base Rent
(i.e., $34,064.16), which amount shall be applicable toward and applied against Tenant’s Fifth
Floor Additional Space Base Rent obligations first due under this Third Amendment.
7. Operating Expenses and Real Estate Taxes. Commencing on January 1, 2012, Tenant
shall pay (in accordance with the process generally set forth in Section 5.1(e) of the
Lease), as additional rent for the Fifth Floor Additional Space, (i) Tenant’s proportionate share
(with respect to the Fifth Floor Additional Space only) of the amount by which Operating Expenses
incurred by Landlord for each calendar year falling entirely or partly within the Fifth Floor
Additional Space Lease Term exceed the Fifth Floor Additional Space Base Year Operating Expenses
(hereinafter defined) incurred by Landlord during the twelve (12) month period commencing January
1, 2011, and ending December 31, 2011 (the “Fifth Floor Additional Space Base Year”), and (ii)
Tenant’s proportionate share (with respect to the Fifth Floor Additional Space only) of the amount
by which Real Estate Taxes for each calendar year falling entirely or partly within the Fifth Floor
Additional Space Lease Term exceed the Fifth Floor Additional Space Base Year Real Estate Taxes
(hereinafter defined) incurred by Landlord during the Fifth Floor Additional Space Base Year. For
the purpose of this Third Amendment, the term “Fifth Floor Additional Space Base Year Operating
Expenses” means the Operating expenses incurred by Landlord during the Fifth Floor Additional Space
Base Year and the term “Fifth Floor Additional Space Base Year Real Estate Taxes” means the Real
Estate Taxes incurred by Landlord during the Fifth Floor Additional Space Base Year. Landlord and
Tenant acknowledge that the “Base Year” for the “Premises” under the Original Lease is different
than the “Base Year” for the Fifth Floor Additional Space. To the extent that the aggregate of the
Operating Expenses and Real Estate Taxes (for the Fifth Floor Additional Space only) for any
calendar year are less than the aggregate of the Fifth Floor Additional Space Base Year Operating
Expenses and Fifth Floor Additional Space Base Year Real Estate Taxes, then Tenant shall only be
responsible for the net increase over the aggregate of the Fifth Floor Additional Space Base Year
Operating Expenses and the Fifth Floor Additional Space Base Year Real Estate Taxes after deducting
the amount of such reduction from the Fifth Floor Additional Space Base Year Operating Expenses
and/or Fifth Floor Additional Space Base Year Real Estate Taxes (as applicable); provided, however,
in no event will the netting-out of increase in taxes and expenses pursuant to this sentence result
in a credit or reimbursement to Tenant. By way of hypothetical example of the foregoing sentence
only, if the Fifth Floor Additional Space Base Year Operating Expenses (for the Fifth Floor
Additional Space) were $100 and the Fifth Floor Additional Space Base Year Real Estate Taxes (for
the Fifth Floor Additional Space) were $100 and thereafter in a calendar year in which Real Estate
Taxes (for the Fifth Floor Additional Space) are $110 and Operating Expenses (for the Fifth Floor
Additional Space) are $90, then Tenant’s responsibility for (its proportionate share) of such costs
(for the Fifth Floor Additional Space) would be $0.
8. Condition of Fifth Floor Additional Space. Tenant agrees to lease the Fifth Floor
Additional Space in its “as-is” condition and Landlord shall not, except as provided below
in this Section 8, be required to make or perform any initial tenant improvements for Tenant’s use
or occupancy of the Fifth Floor Additional Space. As of the date of this Third Amendment, the
Fifth Floor Additional Space is separately demised and neither Landlord nor Tenant needs to
construct any improvements with respect to the demising of the Fifth Floor Additional Space.
Notwithstanding the foregoing terms of this Section 8, Landlord shall, prior to September
1, 2010, complete the following: (i) replace all missing ceiling tiles in the Fifth Floor
Additional Space, which replacement tiles may come from Landlord’s storage, provided that such
replacement tiles are reasonably clean and consistent in appearance with the ceiling tiles and
carpet tiles existing in the Fifth Floor Additional Space, (ii) replace all window blinds with
substantially the type and style of meccho shades currently located in Tenant’s Premises on the
sixth (6th), seventh (7th) and eighth (8th) floors of the
Building, (iii) refurbish the perimeter heat pump units applicable to the Fifth Floor Additional
Space, (iv) perform a general cleaning of the Fifth Floor Additional Space, (v) with respect to the
Fifth Floor Additional Space, ensure that the light fixtures, thermofusers and thermostats are in
working order including replacement of ballasts as needed, and (vi) perform HVAC balancing of the
Fifth Floor Additional Space.
9. Tenant Improvements.
(a) Tenant Work; Improvement Allowance. Because the Fifth Floor Additional Space is
being leased by Tenant in its “as-is” condition, Landlord shall not be required to construct any
initial tenant improvements (except as expressly provided in the last sentence of Section 8 of this
Third Amendment), and the Fifth Floor Additional Space Commencement Date will be determined without
regard to whether any initial tenant improvements have been completed and/or are being performed.
Tenant shall, in accordance with the applicable terms of the Lease (including, without limitation,
the applicable terms of Exhibit B thereof), perform, and/or cause to be performed, the
design and construction of the initial tenant-improvements in Fifth Floor Additional Space (the
“Fifth Floor Additional Space Tenant Work”), at Tenant’s cost and expense. Notwithstanding the
foregoing terms of this Section 9(a), provided no Event of Default exists on the part of
Tenant under the Lease, Landlord shall, effective as of January 1, 2011 (the “Effective Date”),
grant Tenant an allowance (the “Fifth Floor Additional Space Improvements Allowance”) in the amount
of Seventy-Four Thousand Seven Hundred Seventy-Five and 00/100ths Dollars ($74,775.00), to be
applied to the cost of the Tenant’s initial improvements to the Fifth Floor Additional Space or to
any subsequent alterations to Tenant’s Fifth Floor Expansion Space. Tenant may use the Fifth Floor
Additional Space Improvements Allowance for any items required for Tenant’s occupancy of the Fifth
Floor Additional Space or Tenant’s Fifth Floor Expansion Space, including, without limitation, the
cost of all architectural drawings and engineering drawings for electrical, mechanical and
plumbing, the cost of all fixtures, tenant construction, computer cabling, connecting staircases,
moving costs, and any other expenses incidental to Tenant’s occupancy within the Fifth Floor
Additional Space or the Fifth Floor Expansion Space. After the Effective Date, Landlord shall
promptly (and in no event later than thirty (30) days after Landlord’s receipt of all applicable
information) disburse the Fifth Floor Additional Space Improvements Allowance to Tenant from time
to time to pay costs incurred by Tenant for the improvement of the Fifth Floor Additional Space or
the Fifth Floor Expansion Space in accordance with the terms of this Third Amendment following
Tenant’s submission of a requisition and reasonably supporting documentation, including lien
waivers as may be requested by Landlord. Any portion of the Fifth Floor Additional Space
Improvements Allowance that remains unapplied after the fifth (5th) anniversary of the
Fifth Floor Additional Space Lease Commencement Date (the
“Fifth Floor Additional Space Tenant Improvement Deadline”) shall be deemed waived and forfeited if
not utilized by the Fifth Floor Additional Space Tenant Improvement Deadline. Landlord shall not
be obligated to disburse any of the Fifth Floor Additional Space Improvements Allowance after the
Fifth Floor Additional Space Tenant Improvement Deadline. Landlord and Tenant agree that (i) all
references to Demolition in the Lease and (ii) the following Sections of Exhibit B of the
Lease do not apply to this Third Amendment: 3, 6(a), 6(b), 6(d), 8, 15 (except as provided in
subsection (b) below) and Schedule II. For purposes of this Third Amendment, all references to the
“Improvements Allowance” in Exhibit B of the Lease will be deemed to refer to the Fifth
Floor Additional Space Tenant Improvement Allowance. Landlord hereby approves Xxxxxxx-Xxxxxxxx,
Xxxxx Xxxxx Construction Corporation, Rand Construction and Xxxx Contracting as Tenant’s general
contractor with respect to any work performed by Tenant in the Fifth Floor Additional Space or the
Fifth Floor Expansion Space.
(b) Landlord Oversight Construction Management Fee. Tenant shall be responsible for
the timely payment to Landlord of an oversight construction management fee equal to the amount of
one percent (1%) of Tenant’s total “hard” construction costs for the initial tenant improvements
constructed by or on behalf of Tenant in the Fifth Floor Additional Space. Landlord shall have the
right, but not the obligation, to deduct such fee from disbursements of the Fifth Floor Additional
Space Improvements Allowance. From time to time, upon Landlord’s request, Tenant shall provide
Landlord reasonable access to its books and records to allow Landlord to verify the “hard”
construction costs expended by Tenant.
10. Signage. Landlord shall, at Landlord’s cost, provide Building standard suite
entry signage identifying Tenant in a location designated by Landlord and in such place, number,
size, color and style as are approved by Landlord in Landlord’s sole discretion, and Landlord also
shall, at Tenant’s option, list Tenant’s name in the Building lobby directory with respect to the
Fifth Floor Additional Space pursuant to the terms of the Lease.
11. Counterparts; Facsimile. This Third Amendment may be executed in multiple
counterparts, each of which shall be deemed an original and all of which together constitute one
and the same document. Faxed or emailed signatures will have the same binding effect as original
signatures.
12. Ratification. Except as expressly modified by the terms of this Third Amendment,
the Lease shall remain unchanged and continue in full force and effect. All terms, covenants and
conditions of the Lease applicable to the Premises, as amended hereby (including, but not limited
to, Tenant’s renewal, expansion and termination rights, all as expressly set forth in the Lease),
are confirmed and ratified, remain in full force and effect, and constitute valid and binding
obligations of Landlord and Tenant, enforceable according to the terms thereof.
13. Authority. Landlord, Tenant and the persons executing and delivering this Third
Amendment on their respective behalves each represents and warrants that such person is duly
authorized to so act, and has the power and authority to enter into this Third Amendment, and that
all action required to authorize Landlord, Tenant and such person to enter into this Third
Amendment has been duly taken.
14. Binding Effect. This Third Amendment shall not be effective and binding unless
and until fully executed and delivered by each of the parties hereto. All of the covenants
contained in this Third Amendment, including, but not limited to, all covenants of the Lease as
modified hereby, shall be binding upon and inure to the benefit of the parties hereto, their
respective heirs, legal representatives, and permitted successors and assigns. In the event of a
conflict between the terms of the Lease and the terms of this Third Amendment, the terms of this
Third Amendment will control.
15. Brokers. Landlord and Tenant each warrants to the other that in connection with
this Third Amendment it has not employed or dealt with any broker, agent or finder, other than
Xxxxxxx on behalf of Tenant and Transwestern on behalf of Landlord (collectively, the “Brokers”).
Landlord acknowledges that Landlord shall pay any commission or fee due to such specified Brokers
pursuant to one or more separate agreements. Tenant shall indemnify and hold Landlord harmless
from and against any claim for brokerage or other commissions asserted by any broker, agent or
finder employed by Tenant or with whom Tenant has dealt, other than the Brokers. Landlord shall
indemnify and hold Tenant harmless from and against any claim for brokerage or other commissions
asserted by any broker, agent or finder employed by Landlord or with whom Landlord has dealt, other
than the Brokers.
16. References. The terms of this Third Amendment shall be deemed to modify and
supplement the terms of the Lease, and all future references to the Lease (unless otherwise
provided) shall be deemed to be to the Lease as amended by this Third Amendment. All references to
the Premises in the Lease shall be deemed to include the Fifth Floor Additional Space, except to
the extent that inclusion of the Fifth Floor Additional Space into the definition of the Premises
renders the terms of the Lease inconsistent with the terms of this Third Amendment.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed as
of the date first above written.
| WITNESS/ATTEST: | LANDLORD: | ||||||||||
| WASHINGTON TELEVISION
CENTER LLC, a District of Columbia limited liability company |
|||||||||||
| By: | WTC Realty, Inc., a Delaware corporation, its Managing Member |
||||||||||
| By: | /s/ Xxxxx Xxxxx | [SEAL] | |||||||||
| Name: Xxxxx Xxxxx | |||||||||||
| Title: Vice President | |||||||||||
| WITNESS/ATTEST: | TENANT: | ||||||||||
| BLACKBOARD INC., a Delaware corporation | |||||||||||
| By: | /s/ Xxxxxxxx Xxxxxx | [SEAL] | |||||||||
| Name: Xxxxxxxx Xxxxxx | |||||||||||
| Title: Director, Legal | |||||||||||
