LEASE
BETWEEN
ASP WASHINGTON, L.L.C.
AND
COASTAL OFFICE PRODUCTS, INC.
FOR SPACE AT
0000 XXXXXX XXXXXXXXX
XXXXXX, XXXXXXXX
MARCH ___, 2000
i
TABLE OF CONTENTS
PARAGRAPH PAGE
--------- ----
1.1 DEFINITIONS........................................................1
1.2 SCHEDULES AND ADDENDA .............................................2
2.1 LEASE OF PREMISES .................................................2
2.2 PRIOR OCCUPANCY ...................................................2
3.1 RENT ..............................................................3
3.2 DEPOSIT; PREPAID RENT .............................................3
3.3 OPERATING COSTS ...................................................3
3.4 TAXES .............................................................4
4.1 CONSTRUCTION CONDITIONS ...........................................5
4.2 COMMENCEMENT OF POSSESSION ........................................5
5.1 PROJECT SERVICES ..................................................5
5.2 INTERRUPTION OF SERVICES ..........................................6
6.1 USE OF LEASED PREMISES ............................................6
6.2 INSURANCE .........................................................8
6.3 REPAIRS ...........................................................9
6.4 ASSIGNMENT AND SUBLETTING .........................................9
6.5 ESTOPPEL CERTIFICATE .............................................10
7.1 SUBSTITUTE PREMISES...............................................10
7.2 ADDITIONAL RIGHTS RESERVED TO LANDLORD ...........................11
8.1 CASUALTY AND UNTENANTABILITY .....................................11
9.1 CONDEMNATION .....................................................12
10.1 WAIVER AND INDEMNITY .............................................12
10.2 WAIVER OF SUBROGATION ............................................12
10.3 LIMITATION OF LANDLORD'S LIABILITY ...............................13
11.1 TENANT'S DEFAULT .................................................13
11.2 REMEDIES OF LANDLORD .............................................13
12.1 SURRENDER OF LEASED PREMISES .....................................14
12.2 HOLD OVER TENANCY ................................................14
12.3 OPTION TO EXTEND .................................................14
13.1 QUIET ENJOYMENT ..................................................15
13.2 ACCORD AND SATISFACTION ..........................................15
13.3 SEVERABILITY .....................................................15
13.4 SUBORDINATION AND ATTORNMENT .....................................15
13.5 ATTORNEY'S FEES ..................................................16
13.6 CONSTRUCTION .....................................................16
13.7 BINDING EFFECT; GENDER ...........................................16
13.8 TIME .............................................................16
13.9 ENTIRE AGREEMENT .................................................16
13.10 NOTICES ..........................................................16
13.11 HEADINGS .........................................................16
13.12 BROKERAGE COMMISSIONS ............................................16
13.13 WAIVER OF JURY TRIAL .............................................17
13.14 AUTHORITY OF TENANT...............................................17
LEASE
This Lease is made as of March ___, 2000, between ASP WASHINGTON, L.L.C., a
Delaware limited liability company ("Landlord") and COASTAL OFFICE PRODUCTS,
INC. ("Tenant").
ARTICLE ONE
Definitions, Schedules and Addenda
1.1 DEFINITIONS:
a. Project shall mean such portions of the Washington Business Park,
located in Lanham, Prince George's County, Maryland, as may, from time to time,
be owned by Landlord.
b. Building shall mean that certain building, known as Building 9,
located within the Project at 0000 Xxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxx Xxxxxx'x
Xxxxxx, Xxxxxxxx 00000.
c. Leased Premises shall mean Suite C of the Building, as described in
Schedule 1.
d. Tenant's Square Footage shall mean the rentable area of the Leased
Premises, which is approximately 3,000 rentable square feet as of the date
hereof. Total Square Footage of the Building shall mean the rentable area of the
Building, which is approximately 81,873 rentable square feet as of the date
hereof. Total Square Footage of the Project shall mean the rentable area of the
Project, which is approximately 568,310 rentable square feet as of the date
hereof.
e. Lease Commencement Date shall mean March 1, 2000, which may be
adjusted pursuant to Paragraph 4.2 of this Lease; Lease Expiration Date shall
mean February 28, 2003, which may also be adjusted pursuant to Paragraph 4.2 of
this Lease; Lease Term shall mean the period between the Lease Commencement Date
and the Lease Expiration Date.
f. Base Rent shall mean that set forth in the table below and shall be
payable in monthly installments during the Lease Term.
--------------------------------------------------------------------------------------------------------------------
Monthly Monthly Total Monthly Rent
Months Base Rent Oper. Costs (Base Rent +Oper. Costs)
------ --------- ----------- ------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1 to 12 $2,237.50 $562.50 $2,800.00
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
13 to 24 $2,304.63 Adjusted Annually $2,304.63 plus Adjusted Operating
Expenses
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
25 to 36 $2,373.76 Adjusted Annually $2,373.76 plus Adjusted Operating
Expenses
--------------------------------------------------------------------------------------------------------------------
g. Tenant's Estimated Share of Operating Costs shall mean, during the
remainder of the calendar year in which this Lease commences, $2.25 per rentable
square foot of the Leased Premises, payable in equal monthly installments of
$562.50.
h. Tenant's Pro Rata Share of the Building shall mean 3.66%, and
Tenant's Pro Rata Share of the Project shall mean 0.53%, both of which shall be
subject to adjustment based on changes to the rentable area of the Leased
Premises, the Building, and/or the Project.
i. Deposit shall mean $2,237.50. Prepaid Rent shall mean $2,237.50, which
represents the first monthly installment of Base Rent.
j. Permitted Purpose shall mean general office use and the repair and
configuration of personal computers, subject to Schedule 7 hereof, and
no other purpose.
k. Managing Agent shall mean Xxxxxxxx Xxxx Company whose address is 0000
Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000.
l. Broker of Record shall collectively mean Xxxxxxxx Xxxx Company and
Mackenzie Commercial Real Estate Services LLC.
m. Landlord's Mailing Address:
c/o AMRESCO Management, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxx Xxxxxxx.
n. Tenant's Mailing Address:
Coastal Office Products
0000 Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxxx
Notwithstanding the foregoing, Tenant's mailing address shall, from and after
the Lease Commencement Date, be at the Leased Premises.
1.2 SCHEDULES AND ADDENDA: The schedules and addenda listed below are
incorporated into this Lease by reference unless lined out. The terms of
schedules, exhibits and typewritten addenda, if any, attached or added hereto
shall control over any inconsistent provisions in the paragraphs of this Lease.
a. Schedule 1: Description of Leased Premises/Floor Plan
b. Schedule 2: Rules and Regulations
c. Schedule 3: Intentionally Deleted
d. Schedule 4: Certificate of Acceptance
e. Schedule 5: HVAC: Maintenance Schedule
f. Schedule 6: Landlord's Estimate of Operating Costs
g. Schedule 7: Declaration of Covenants and Amendment to Declaration
of Covenants
ARTICLE TWO
Leased Premises
2.1 LEASE OF PREMISES: In consideration of the Rent and the provisions of this
Lease, Landlord leases to Tenant and Tenant accepts from Landlord the Leased
Premises. Tenant's Square Footage, Total Square Footage of the Building, and
Total Square Footage of the Project are stipulated amounts, based on Landlord's
method of determining Total Square Footage rental purposes. Tenant's Square
Footage may not reflect the actual amount of floor space available for Tenant's
use.
2.2 PRIOR OCCUPANCY: Tenant shall not occupy any portion of the Leased Premises
prior to Lease Commencement Date except with the express prior written consent
of Landlord. If with Landlord's consent, Tenant occupies the Leased Premises
prior to the Lease Commencement Date, Tenant shall pay Landlord Base Rent in the
amounts specified in Paragraph 1.1 and Tenant's Pro Rata Share of Operating
Costs, as defined in Paragraph 3.3, from the first day of such occupancy. These
amounts will be payable on the first day of such occupancy and thereafter on the
first day of every calendar month until the first day of the Lease Term. A
prorated monthly installment shall be paid for the fraction of the month if
Tenant's occupancy of the Leased Premises commences on any day other than the
first day of the month. If Tenant shall occupy the Leased Premises prior to
Lease Commencement Date, all covenants and conditions of this Lease shall be
binding on Tenant commencing at such prior occupancy.
ARTICLE THREE
Payment of Rent
3.1 RENT: Tenant shall pay each monthly installment of Base Rent in advance on
the Lease Commencement Date and on the first calendar day of each month
thereafter, together with each monthly installment of Tenant's Pro Rata Share of
Operating Costs. Monthly installments for any fractional calendar month at the
beginning of the Lease Term shall be prorated based on the number of days in
such month and Base Rent otherwise payable with respect to the first month of
the Lease Term for which Base Rent is payable. The Base Rent payable thereafter
shall be payable as though the Lease Commencement Date was the first day of the
first full month following the Lease Commencement Date. Base Rent, together with
all other amounts payable by Tenant to Landlord, shall be sometimes referred to
collectively as "Rent". Tenant shall pay all Rent, without deduction or setoff,
to Landlord or Managing Agent at a place specified by Landlord. Rent not paid
when due shall bear interest until paid, at the rate of 2% per month, or at the
maximum rate allowed by law, whichever is less, from the date when due. Tenant
shall also pay a processing charge of $50 with each late payment of Rent.
Landlord agrees to waive the processing and interest charge for late payments of
Rent twice during any twelve month period during the Lease Term, provided any
such late Rent payment is paid in full within ten (10) days of the date when
due.
3.2 DEPOSIT; PREPAID RENT: Tenant has paid to Landlord the Deposit and Prepaid
Rent as security for performance of Tenant's obligations under this Lease. In
the event Tenant fully complies with all the terms and conditions of this Lease,
the Deposit shall be refunded to Tenant, without interest unless otherwise
required by law, upon expiration of this Lease. Landlord may, but is not
obligated to, apply a portion of the Deposit to cure any default hereunder and
Tenant shall pay on demand the amount necessary to restore the Deposit in full
within ten (10) days after notice by Landlord. The Prepaid Rent shall be applied
to Base Rent due with respect to the first month of the Lease Term.
3.3 OPERATING COSTS: Tenant shall pay Tenant's Pro Rata Share of any Project
Operating Costs and Building Operating Costs as follows:
a. "Project Operating Costs" shall mean all reasonable and actual
expenses relating to the exterior and common areas of the Project, including but
not limited to: real estate taxes and assessments; park association fees and
assessments; utilities not separately chargeable to other tenants; insurance
premiums and (to the extent used) deductibles; maintenance, repairs and
replacements; refurbishing and repainting; cleaning, and other services;
equipment, tools, materials and supplies; property management including
management fees; security; employees and contractors; resurfacing and restriping
of walks, drives and parking areas; signs, directories and markers; parking lot
lighting; landscaping; and snow and rubbish removal. Without limiting the
foregoing and notwithstanding any provision hereof to the contrary, "Project
Operating Costs" shall also include any and all obligations of Landlord to any
neighboring or other property owner for the maintenance, repair, replacement,
operation, and/or management of any roadways, parking areas, landscaped areas,
water, sanitary sewer, storm drainage, or other site improvement or facilities
which may be in common between the Project and the property owned by such
neighboring or other property owner. In the event that any expense relating to
the exterior or common areas of the Project benefits only a portion of the
Project, which portion includes the Building, Landlord may, at Landlord's
option, equitably adjust such expense to reflect the portion of the Project so
benefitted. "Building Operating Costs" shall mean all reasonable and actual
expenses relating to the exterior of the Building and common areas of the
Building, if any, including but not limited to: utilities not separately
chargeable to other tenants; maintenance, repairs and replacements; refurbishing
and repainting; cleaning, janitorial and other services; equipment, tools,
materials and supplies; and signs, directories and markers. In the event that
any expense relating to the exterior of the Building or common areas of the
Building, if any, benefits only a portion of the Building, which portion
includes the Leased Premises, Landlord may, at Landlord's option, equitably
adjust such expense to reflect the portion of the Building so benefitted.
"Operating Costs" shall mean Project Operating Costs and Building Operating
Costs. Operating Costs shall not include expenses for legal services, real
estate brokerage and leasing commissions, Landlord's federal and state income
taxes, income tax accounting, interest, depreciation, general corporate
overhead, or capital improvements to the Building or the Project except (a) for
capital improvements (i) installed for the purpose of reducing or controlling
expenses, or (ii) required by any governmental or other authority having or
asserting jurisdiction over the Building or the Project and (b) as otherwise
provided herein. If any expense which would otherwise constitute an Operating
Cost for the calendar year during which such expense is paid relates to one or
more calendar years other than or in addition to the calendar year during which
such expense is paid, such expense will be proportionately allocated to the
Operating Costs for each calendar year to which such expense is related.
Similarly, with respect to capital expenditures to replace existing equipment
and machinery necessary to the day to day operation of the Building or the
Project or common usage Building or Project components and systems, such capital
expenditures shall be amortized on a monthly basis over the useful life thereof
(not to exceed 120 months) at an interest rate of twelve percent (12%) per
annum, and the amount recoverable by Landlord as Operating Costs in the year
during which any such expenditure is made and each year of the Lease Term
thereafter occurring shall equal the sum of all such amortization payments
payable during each such year. In the event that the Building is not fully
leased during any calendar year, Landlord may make appropriate adjustments to
the Building Operating Costs, using reasonable projections, to adjust such costs
to an amount that would normally be expected to be incurred if the Building were
95% leased, and such adjusted costs shall be used for purposes of this Paragraph
3.3. "Controllable Expenses" shall mean all Operating Costs other than any
utilities fees and charges, insurance premiums, and real estate taxes, in each
case payable by Landlord with respect to the Building or the Project, as well as
any expenses incurred by Landlord in its compliance with any law, regulation,
ordinance, or the like enacted after the date hereof by any governmental or
other authority having or asserting jurisdiction over the Building or the
Project. For purposes of calculating Operating Expenses and Tenant's Pro Rata
Share of Expense Increases, increases in Controllable Expenses shall be capped
at ten percent (10.0%) per annum.
b. Tenant shall pay, in equal monthly installments, Tenant's Pro Rata
Share of any estimated Project Operating Costs and Building Operating Costs for
each calendar year which falls (in whole or in part) during the Lease Term
(prorated for any partial calendar year at the beginning or end of the Lease
Term), which with respect to Building Operating Costs for calendar year 2000
shall mean Tenant's Estimated Share of Operating Costs. Annually, or from time
to time, based on actual and projected Operating Cost data, Landlord may adjust
its estimate of Operating Costs upward or downward. Within fifteen (15) days
after notice to Tenant of a revised estimate of Operating Costs, Tenant shall
remit to Landlord a sum equal to any shortage of the amount which should have
been paid to date for the then current calendar year based on the revised
estimate, and all subsequent monthly estimated payments shall be based on the
revised estimate.
c. As soon as possible, after the first day of each year Landlord shall
compute the actual Project Operating Costs and Building Operating Costs for the
prior calendar year, and shall give notice thereof to Tenant. Within thirty (30)
days after receipt of such notice, Tenant shall pay any deficiency between
estimated and actual in Tenant's Pro Rata Share of any Operating Costs for the
prior calendar year (prorated for any partial calendar year at the beginning or
end of the Lease Term). In the event of overpayment by Tenant, Landlord shall
apply the excess to the next payment of Rent when due, until such excess is
exhausted or until no further payments of Rent are due, in which case, Landlord
shall pay to Tenant the balance of such excess, as the same may be adjusted
based on the actual Project and/or Building Operating Costs for the then current
calendar year, within thirty (30) days after Landlord has given notice of such
actual Operating Costs to Tenant in accordance with the first sentence of this
Paragraph.
3.4 TAXES: In addition to Base Rent and other sums to be paid by Tenant
hereunder, Tenant shall (to the extent not paid directly by Tenant) reimburse
Landlord, as additional Rent, on demand, any taxes payable by Landlord (a) upon,
measured by, or reasonably attributable to the cost or value of Tenant's
equipment, fixtures and other personal property located in the Leased Premises
or by the cost or value of any leasehold improvements made to the Leased
Premises by Tenant or Landlord, regardless of whether title to such improvements
is held by Tenant or Landlord; (b) upon or measured by the monthly rental
payable hereunder, including, without limitation, any gross receipts tax or
excise tax, but excluding Landlord's federal and state income taxes; (c) upon or
with respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Leased Premises or any
portion thereof; (d) upon this Lease or any document to which Tenant is a party
creating or transferring an interest or an estate in the Leased Premises (other
than upon the recordation of this Lease (or a memorandum hereof) by Landlord or
any mortgagee of the Building).
ARTICLE FOUR
Improvements
4.1 CONSTRUCTION CONDITIONS: Tenant acknowledges that it has inspected and
accepts the Building and the Leased Premises in their present, "as-is"
condition, in the configuration described in Schedule 1, and as suitable for the
purpose for which the Leased Premises are leased. Execution of this Lease by
Tenant shall be deemed conclusively to establish that the Building, the Leased
Premises, and all other improvements are in good and satisfactory condition as
of the execution and delivery hereof. Tenant further acknowledges that no
representations as to the repair of the Leased Premises, nor promises to alter,
remodel or improve the Leased Premises have been made by Landlord, unless such
are expressly set forth in this Lease Agreement.
4.2 COMMENCEMENT OF POSSESSION: If the Leased Premises are not substantially
completed by the scheduled Lease Commencement Date then the Lease Commencement
Date shall be extended to a date five (5) days after Landlord shall notify
Tenant that the Leased Premises are ready for occupancy. In such an event the
Lease Expiration Date shall be extended by one (1) full calendar month for each
calendar month, or portion thereof, by which the Lease Commencement Date is so
extended. If Landlord fails to cause the Leased Premises to be ready for
occupancy at the time of the scheduled Lease Commencement Date, Landlord and
Landlord's agents, officers, employees, or contractors shall not be liable for
any damage, loss, liability or expense caused thereby, and this Lease shall not
become void or voidable. Prior to occupying the Leased Premises, Tenant shall
execute and deliver to Landlord a letter in the form attached as Schedule 4,
acknowledging the Lease Commencement Date and certifying that the Improvements
have been substantially completed and that Tenant has examined and accepted the
Leased Premises. If Tenant fails to deliver such letter, Tenant shall
conclusively be deemed to have made such acknowledgment and certification by
occupying the Leased Premises.
ARTICLE FIVE
Project Services
5.1 PROJECT SERVICES: Landlord shall furnish (i) Utility Services (defined
below) to the Leased Premises and any HVAC units which serve the Leased
Premises, (ii) Maintenance Services (defined below), and (iii) Parking (defined
below).
a. "Utility Services" shall mean gas, electricity, water, and other
utilities used or consumed. Tenant shall be solely (and, to the extent permitted
by the applicable utility company, directly) responsible for and promptly pay
all charges for Utility Services with respect to the Leased Premises. Landlord
shall maintain and repair those systems necessary to provide such Utility
Services (other than (i) those systems located within the Leased Premises and
serving the Leased Premises exclusively, the repair and maintenance of which
shall be performed by Tenant at Tenant's sole cost and expense and (ii) those
systems located outside of the Leased Premises and serving the Leased Premises
exclusively, the repair and maintenance of which shall be performed by Landlord
at Tenant's sole cost and expense) but shall not be liable to Tenant for
interruption in or curtailment of any utility service, nor shall such
interruption or curtailment constitute a constructive eviction or grounds for
rental abatement (except to the extent Landlord may receive proceeds from rental
abatement insurance for the Leased Premises) in whole or in part.
b. "Maintenance Services" shall mean the maintenance of all parking and
exterior areas, which maintenance shall include lighting, gardening, cleaning,
sweeping and painting and the maintenance and repair of the exterior of the
Building, its structural portions, and the roof.
c. "Parking" means the nonexclusive access, in common with all other
tenants in the Project and subject to Schedule 7 hereof, to parking areas,
driveways, walkways and service areas appurtenant to the Building. Landlord
shall have the right at any time and from time to time to change the size,
location, elevation or nature of the common parking areas, including the right
to locate additional structures thereon and to close portions thereof. Landlord
reserves the right, at its discretion, to designate reserved parking spaces and
areas and, if Landlord requests, Tenant shall cause its employees and invitees
to park in designated areas. Tenant's right to use the Building's parking areas
shall be allocated on a nonexclusive basis in proportion to that portion of the
Building leased by Tenant as the same may be adjusted for changes in the
rentable area of the Leased Premises or the Building.
d. Utility Services, Maintenance Services, and Parking described above
shall be collectively referred to as "Project Services". The costs of Landlord's
obligations with respect to Project Services shall be a part of Operating Costs.
Tenant shall be responsible for all other services required in connection with
the Leased Premises.
5.2 INTERRUPTION OF SERVICES: Landlord does not warrant that any of the Project
Services will be free from interruption. Any Project Service may be suspended by
reason of accident or of necessary repairs, alterations or improvements, or by
strikes or lockouts, or by reason of operation of law, or causes beyond the
reasonable control of Landlord. Subject to possible rent abatement as may be
provided pursuant to the conditions described in Paragraph 8.1, any such
interruption or discontinuance of such Project Services shall never be deemed a
disturbance of Tenant's use and possession of the Leased Premises, or render
Landlord liable to Tenant for damages by abatement of rent or otherwise, or
relieve Tenant from performance of Tenant's obligations under this Lease.
ARTICLE SIX
Tenant's Covenants
6.1 USE OF LEASED PREMISES: Tenant agrees to:
a. Permitted Usage: Use the Leased Premises for the Permitted Purpose only
and for no other purpose.
b. Compliance with Laws: At Tenant's expense, comply with the
provisions of all recorded covenants, conditions and restrictions and all
building, zoning, fire and other governmental laws, ordinances, regulations or
rules now in force or which may hereafter be in force relating to Tenant's use
and occupancy of the Leased Premises, the Building, or the Project and all
requirements of the carriers of insurance covering the Project. In the event
that a building, zoning, fire, or other governmental law, ordinance, regulation,
or rule which is now or hereafter becomes applicable to the Leased Premises
requires that alterations or improvements be made to the Leased Premises in
order to comply therewith, regardless of the cause thereof or the reason
therefor, Tenant shall, at Tenant's expense and subject to Paragraph 6.1(e),
make such alterations or improvements as may be required by such law, ordinance,
regulation, or rule, in which event Landlord's approval thereof shall not be
unreasonably withheld, conditioned, or delayed.
c. Nuisances or Waste: Not do or permit anything to be done in or about
the Leased Premises, or bring or keep anything in the Leased Premises that may
increase Landlord's fire and extended coverage insurance premium, damage the
Building or the Project, constitute waste, constitute an immoral purpose, or be
a nuisance, public or private, or menace or other disturbance to tenants of
adjoining premises or anyone else.
d. Hazardous Substances: (i) comply with all Environmental Laws
(hereinafter defined); (ii) not cause or permit any Hazardous Materials to be
treated, stored, disposed of, generated, or used in the Leased Premises, the
Building, or the Project, provided, however, that Tenant may store, use or
dispose of products customarily found in offices and used in connection with the
operation and maintenance of property if Tenant complies with all Environmental
Laws and does not contaminate the Leased Premises, Project or environment; (iii)
promptly after receipt, deliver to Landlord any communication concerning any
past or present, actual or potential violation of Environmental Laws, or
liability of either party for Environmental Damages. "Environmental Laws" mean
all applicable present and future statutes, regulations, rules, ordinances,
codes, permits or orders of all governmental agencies, departments, commissions,
boards, bureaus, or instrumentalities of the United States, states and their
political subdivisions and all applicable judicial, administrative and
regulatory decrees and judgments relating to the protection of public health or
safety or of the environment. "Hazardous Materials" mean substances (A) which
require remediation under any Environmental Laws; or (B) which are or become
defined as a "hazardous waste", "hazardous substance", pollutant or contaminant
under any Environmental Laws; or (C) which are toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic or mutagenic; or (D) which
contain petroleum hydrocarbons, polychlorinated biphenyls, asbestos, asbestos
containing materials or urea formaldehyde.
e. Alterations and Improvements: Make no alterations or improvements to
the Leased Premises without the prior written approval of Landlord and
Landlord's mortgagee, if any. Any such alterations or improvements by Tenant
shall be done in a good and workmanlike manner, at Tenant's expense, by a
licensed contractor approved by Landlord in conformity with plans and
specifications approved by Landlord and subject to Schedule 7 hereof. If
requested by Landlord, Tenant will post a bond or other security reasonably
satisfactory to Landlord to protect Landlord against liens arising from work
performed for Tenant. Landlord's approval of the plans and specifications for
Tenant's alterations or improvements shall create no responsibility or liability
on the part of Landlord for their completeness, design sufficiency, or
compliance with all laws, rules and regulations of governmental agencies or
authorities. However, Tenant may, without Landlord's consent but with written
notice to Landlord, perform decorative and cosmetic alterations and improvements
to the Leased Premises, such as painting, wall covering, and installation of
movable partitions five feet (5') high or less, which do not affect the Building
structure or systems. Tenant hereby indemnifies and holds Landlord harmless for
any claims, loss, costs, or damages incurred or suffered by Landlord in
connection with any alterations and improvements made by Tenant.
f. Liens: Keep the Leased Premises, the Building and the Project free
from liens arising out of any work performed, materials furnished or obligations
incurred by or for Tenant. If, at any time, a lien or encumbrance is filed
against the Leased Premises, the Building or the Project as a result of Tenant's
work, materials or obligations, Tenant shall promptly discharge such lien or
encumbrance. If such lien or encumbrance has not been removed within thirty (30)
days from the date it is filed, Tenant agrees to deposit with Landlord cash or a
bond, which shall be in a form and be issued by a company acceptable to Landlord
in its sole discretion, in an amount equal to 150% of the amount of the lien, to
be held by Landlord as security for the lien being discharged.
g. Rules and Regulations: Observe, perform and abide by all the reasonable
rules and regulations promulgated by Landlord from time to time. Schedule 2 sets
forth Landlord's rules and regulations in effect on the date hereof.
h. Signage: Subject to Schedule 7 hereof, obtain the prior written
approval of the Landlord before placing any sign or symbol in doors or windows
or elsewhere in or about the Leased Premises, or upon any other part of the
Building or the Project, including building directories. Any signs or symbols
which have been placed without Landlord's approval may be removed by Landlord.
All signs and symbols shall be kept in good condition and repair and in proper
operating order at all times. Upon expiration or termination of this Lease, all
signs installed by Tenant shall be removed by Tenant and any damage resulting
therefrom shall be promptly repaired (which repair shall include, without
limitation, the repainting and/or replacement, as the case may be, of such
portions of the Building's fascia surface as may be necessary to return such
facia surface to the same (or a better) condition than its condition as of the
date hereof). At Landlord's option, such removal and repair may be done by
Landlord and the cost charged to Tenant as Rent. All costs incurred by Landlord
or Tenant with respect to the design, construction, and/or installation of such
signage, including the application for or issuance of any permits or any similar
charges, shall be the responsibility of Tenant.
Tenant hereby acknowledges that the Building and the Leased Premises are subject
to and encumbered by that certain Declaration of Covenants, as amended by that
certain Amendment to Declaration of Covenants, a copy of which Declaration and
which Amendment is attached as Schedule 7 hereto.
6.2 INSURANCE:
a. Tenant shall, at its own expense, procure and maintain during the
Lease Term: (i) fire and extended casualty insurance covering Tenant's trade
fixtures, merchandise and other personal property located in the Leased
Premises, in an amount not less than one hundred percent (100%) of their actual
replacement cost, and (ii) worker's compensation insurance in at least the
statutory amounts, and (iii) commercial general liability insurance with respect
to the Leased Premises and Tenant's activities in the Leased Premises and in the
Building and the Project, providing bodily injury and broad form property damage
coverage with a maximum $5,000 deductible, or such other amount approved by
Landlord in writing, and minimum coverage as follows:
1. $1,000,000 with respect to bodily injury or death to any one person;
2. $5,000,000 with respect to bodily injury or death arising out of any
one occurrence;
3. $1,000,000 with respect to property damage or other loss arising out
of any one occurrence.
Nothing in this Paragraph 6.2 shall prevent Tenant from obtaining insurance of
the kind and in the amounts provided for under this paragraph under a blanket
insurance policy covering other properties as well as the Leased Premises,
provided, however, that any such policy of blanket insurance (i) shall specify
the amounts of the total insurance allocated to the Leased Premises, which
amounts shall not be less than the amounts required by subparagraphs a. through
c. above, and (ii) such amounts so specified shall be sufficient to prevent any
one of the assureds from becoming a coinsurer within the terms of the applicable
policy, and (iii) shall, as to the Leased Premises, otherwise comply as to
endorsements and coverage with the provisions of this paragraph.
Tenant's insurance shall be with a company which has a rating equal to or
greater than Best's Insurance Reports classification of A, Class X or its
equivalent, as such classification is determined as of the Lease Commencement
Date. Landlord and Landlord's mortgagee, if any, shall be named as "additional
insureds" under Tenant's insurance, and such Tenant's insurance shall be primary
and noncontributing with Landlord's insurance. Tenant's insurance policies shall
contain endorsements requiring thirty (30) days notice to Landlord and
Landlord's mortgagee, if any, prior to any cancellation, lapse or nonrenewal or
any reduction in amount of coverage.
Tenant shall deliver to Landlord as a condition precedent to its taking
occupancy of the Leased Premises certificates of insurance (with respect to the
liability policy) and evidence of insurance or equivalent (with respect to the
property policy), or certified copies of either of the policies.
b. Landlord shall secure and maintain throughout the term of this Lease
insurance (the cost of which shall be a Building Operating Cost) in amounts and
form within Landlord's sole discretion:
1. Fire insurance with extended coverage endorsements attached in an
amount sufficient for Landlord to not be deemed a co-insurer of the
Building (with any deductible being the responsibility of Landlord);
2. Comprehensive Public Liability Insurance (including bodily injury
and property damage insurance) for the Project (not including the Leased
Premises or other tenant occupied space);
3. Rental Abatement Insurance against abatement of loss of rent in
case of fire or other casualty.
4. Landlord may, but is not obligated to (A) purchase such other
insurance (i) customarily purchased, from time to time, by the owners and
managers of buildings comparable to the Building in the Washington, D.C.
area and/or (ii) required from time to time by Landlord's lender and (B) in
either case, treat the cost thereof as a Building Operating Cost. Landlord
may charge Tenant with any excess cost of the insurance described in this
subparagraph due to the particular use of the Leased Premises by Tenant.
6.3 REPAIRS: Tenant, at its sole expense, shall be responsible for all
maintenance and repairs to the Leased Premises, including those systems
necessary to provide Utility Services to the Leased Premises which are located
within and serve the Leased Premises exclusively, other than those Landlord has
explicitly agreed to provide as Project Services. Tenant agrees to maintain in
good repair the Leased Premises together with all mechanical, electrical,
plumbing and ventilation systems located within (or above) and servicing the
Leased Premises exclusively. Schedule 5 outlines the minimum scope of the
service contract to be obtained by Tenant, at Tenant's sole expense, for HVAC
maintenance. If Tenant fails to maintain or keep the Leased Premises in good
repair and such failure continues for five (5) days after written notice from
Landlord or if such failure results in a nuisance or health or safety risk,
Landlord may perform any such required maintenance and repairs, in either case,
the cost thereof shall be payable by Tenant as Rent within thirty (30) days of
receipt of an invoice from Landlord. Tenant shall also pay to Landlord (i) the
costs to maintain and repair those systems necessary to provide Utility Services
to the Leased Premises which are located outside of and serve the Leased
Premises exclusively and (ii) the cost of any repair to the Building or the
Project necessitated by any act or neglect of Tenant.
6.4 ASSIGNMENT AND SUBLETTING: Tenant shall not assign, mortgage, pledge, or
encumber this Lease, or permit all or any part of the Leased Premises to be
subleased without the prior written consent of Landlord and Landlord's
mortgagee, if any, which consent (with respect to Landlord) shall not be
unreasonably withheld or delayed. Any transfer of this Lease by merger,
consolidation, reorganization or liquidation of Tenant, or by operation of law,
or change in ownership of or power to vote the majority of the outstanding
voting stock of a corporate Tenant, or by change in ownership of a controlling
partnership interest in a partnership Tenant, shall constitute an assignment for
the purposes of this paragraph. Notwithstanding the foregoing, Tenant shall have
the right to assign or sublease part or all of the Leased Premises to any of its
subsidiaries, affiliates or any parent corporation of Tenant or to a successor
entity of greater net worth than Tenant with prior written notice to Landlord
provided that (i) Tenant continues to be primarily liable on its obligations as
set forth herein; (ii) any such assignee or sublessee shall assume and be bound
by all covenants and obligations of Tenant herewith; (iii) the proposed assignee
or sublessee is, in Landlord's good faith judgment, compatible with other
tenants in the Building and seeks to use the Leased Premises only for the
Permitted Purpose; and (iv) such use would not result in a material change in
the number of personnel working in, or members of the general public visiting,
the Leased Premises.
In addition to other reasonable bases, Tenant hereby agrees that Landlord shall
be deemed to be reasonable in withholding its consent, if: (a) such proposed
assignment or sublease is for a term of less than the whole of the remaining
Lease Term or such proposed sublease is for a portion of the Leased Premises
which is not, in Landlord's sole but reasonable judgement, independently
leaseable; or (b) such proposed assignment or sublease is to any party who is
then a tenant of the Building or the Project if Landlord has comparable area; or
(c) Tenant is in default under any of the terms, covenants, conditions,
provisions and agreements of this Lease at the time of request for consent or on
the effective date of such subletting or assignment; or (d) the proposed
subtenant or assignee is, in Landlord's good faith judgment, incompatible with
other tenants in the Building, or seeks to use any portion of the Leased
Premises for a use not consistent with other uses in the Building, or is
financially incapable of assuming the obligations of this Lease; or (e) the
proposed assignee of sublessee or its business is subject to compliance with
additional requirements of the law (including related regulation) commonly known
as the "Americans with Disabilities Act" beyond those requirements which are
applicable to the Tenant, unless the proposed assignee or sublessee shall: (i)
first deliver plans and specifications for complying with such additional
requirements and obtain Landlord's consent thereto, and (ii) comply with all
Landlord's conditions for or contained in such consent, including without
limitation, requirements for security to assure the lien-free completion of such
improvements. Tenant shall submit to Landlord the name of a proposed assignee or
subtenant, the terms of the proposed assignment or subletting, the nature of the
proposed subtenant's business and such information as to the assignee's or
subtenant's financial responsibility and general reputation as Landlord may
reasonably require.
No subletting or assignment, even with the consent of Landlord, shall relieve
Tenant of its primary obligation to pay the Rent and to perform all of the other
obligations to be performed by Tenant hereunder. The acceptance of Rent by
Landlord from any other person or entity shall not be deemed to be waiver by
Landlord of any provision of this Lease or to be a consent to any assignment,
subletting or other transfer. Consent to one assignment, subletting or other
transfer shall not be deemed to constitute consent to any subsequent assignment,
subletting or transfer.
In lieu of giving any consent to a sublet or an assignment of all the Leased
Premises, Landlord may, at Landlord's option, elect to terminate this Lease. In
the case of a proposed subletting of a portion of the Leased Premises, Landlord
may, at Landlord's option, elect to terminate the Lease with respect to that
portion of the Leased Premises being proposed for subletting. The effective date
of any such termination shall be thirty (30) days after the proposed effective
date of any proposed assignment or subletting.
One-half of any proceeds in excess of Base Rent and Tenant's Pro Rata Share of
Operating Costs which is received by Tenant pursuant to an assignment or
subletting consented to by Landlord, less reasonable brokerage commissions
actually paid by Tenant, and less other costs incurred by Tenant in connection
with making the space available for lease, shall be remitted to Landlord as
extra Rent within ten (10) days of receipt by Tenant. For purposes of this
paragraph, all money or value in whatever form received by Tenant from or on
account of any party as consideration for an assignment or subletting shall be
deemed to be proceeds received by Tenant pursuant to an assignment or
subletting.
6.5 ESTOPPEL CERTIFICATE: From time to time and within ten (10) days after
request by Landlord, Tenant shall execute and deliver a certificate to any
proposed lender or purchaser, or to Landlord, together with a true and correct
copy of this Lease, certifying with any appropriate exceptions, (i) that this
Lease is in full force and effect without modification or amendment, (ii) the
amount of Rent payable by Tenant and the amount, if any, of Prepaid Rent and
Deposit paid by Tenant to Landlord, (iii) the nature and kind of concessions,
rental or otherwise, if any, which Tenant has received or is entitled to
receive, (iv) that Tenant has not assigned its rights under this Lease or sublet
any portion of the Leased Premises, (v) that Landlord has performed all of its
obligations due to be performed under this Lease and that there are no defenses,
counterclaims, deductions or offsets outstanding or other excuses for Tenant's
performance under this Lease, (vi) that such proposed lender or purchaser may
rely on the information contained in the certificate, and (vii) any other fact
reasonably requested by Landlord or such proposed lender or purchaser.
ARTICLE SEVEN
Landlord's Reserved Rights
7.1 SUBSTITUTE PREMISES: Landlord shall have the right at any time, upon giving
Tenant sixty (60) days written notice, to relocate at Landlord's expense the
Leased Premises elsewhere in the Project, provided that Tenant's Square Footage
shall be approximately the same and such space is otherwise comparable, in the
reasonable discretion of Landlord. Should Landlord give Tenant written notice of
the relocation of the Leased Premises after Tenant has commenced or completed
the approved installation of partitions or other improvements, Landlord shall
furnish Tenant with similar partitions or other improvements of equal quality.
Landlord hereby agrees to pay expenses resulting from relocating the Tenant
including moving expenses, telephone installation, computer wires, wiring and
installation, and the cost of stationery to replace that made obsolete as a
result of the move. The relocation of the Leased Premises shall not affect any
of the clauses or conditions of this Lease, including the Rent.
7.2 ADDITIONAL RIGHTS RESERVED TO LANDLORD: Without notice and without liability
to Tenant or without effecting an eviction or disturbance of Tenant's use or
possession, Landlord shall have the right to (i) grant utility easements or
other easements in, or replat, subdivide or make other changes in the legal
status of the land underlying the Building or the Project as Landlord shall deem
appropriate in its sole discretion, provided such changes do not substantially
interfere with Tenant's use of the Leased Premises for the Permitted Purpose;
(ii) enter the Leased Premises at reasonable times and at any time in the event
of an emergency to inspect, alter or repair the Leased Premises or the Building
and to perform any acts related to the safety, protection, reletting, sale or
improvement of the Leased Premises or the Building; (iii) change the name or
street address of the Building or the Project; (iv) install and maintain signs
on and in the Building and the Project, subject to Paragraph 6.1(h) hereof; and
(v) make such reasonable rules and regulations as, in the sole judgment of
Landlord, may be needed from time to time for the safety of the tenants, the
care and cleanliness of the Leased Premises, the Building and the Project and
the preservation of good order therein.
ARTICLE EIGHT
Casualty and Untenantability
8.1 CASUALTY AND UNTENANTABILITY: If the Building is made substantially
untenantable or if Tenant's use and occupancy of the Leased Premises are
substantially interfered with due to damage to the common areas of the Building
or if the Leased Premises are made wholly or partially untenantable by fire or
other casualty, Landlord may, by notice to Tenant within forty-five (45) days
after the damage, terminate this Lease. Such termination shall become effective
as of the date of such casualty.
If the Leased Premises are made partially or wholly untenantable by fire or
other casualty and this Lease is not terminated as provided above, Landlord
shall restore the Leased Premises to the condition they were in on the Lease
Commencement Date, not including any personal property of Tenant or alterations
performed by Tenant.
If the Landlord does not terminate this Lease within such forty-five (45) day
period, as provided above, and Landlord fails, subject to force majeure, within
150 days thereafter to restore the damaged common areas, thereby eliminating
substantial interference with Tenant's use and occupancy of the Leased Premises,
or fails to restore the Leased Premises to the condition they were in on the
Lease Commencement Date, not including any personal property or alterations
performed by Tenant, Tenant may terminate this Lease as of the end of such 150
day period, provided that Tenant provides Landlord with ten (10) business days
prior written notice thereof. In the event that, prior to the end of such ten
(10) business day period, Landlord completes such restoration, Tenant's
termination notice shall be deemed rescinded, and this Lease shall continue in
full force and effect as though such notice had not been given.
In the event of termination of this Lease pursuant to this paragraph, Rent shall
be prorated on a per diem basis and paid to the date of the casualty, except to
the extent that the Leased Premises shall be tenantable, in which case Rent
shall be payable to the date of the lease termination with respect to such
tenantable portion of the Leased Premises. If the Leased Premises are
untenantable and this Lease is not terminated by Landlord, Rent shall xxxxx on a
per diem basis from the date of the casualty until the Leased Premises are ready
for occupancy by Tenant. If part of the Leased Premises are untenantable, Rent
shall be prorated on a per diem basis and apportioned in accordance with the
part of the Leased Premises which is usable or used by Tenant until the damaged
part is ready for Tenant's occupancy. Notwithstanding the foregoing, if any
damage was proximately caused by an act or omission of Tenant, its employees,
agents, contractors, licensees or invitees, then, in such event, Tenant agrees
that Rent shall not xxxxx or be diminished during the term of this Lease.
ARTICLE NINE
Condemnation
9.1 CONDEMNATION: If all or any part of the Leased Premises shall be taken under
power of eminent domain or sold under imminent threat to any public authority or
private entity having such power, this Lease shall terminate as to the part of
the Leased Premises so taken or sold, effective as of the date possession is
required to be delivered to such authority. In such event, Base Rent shall xxxxx
in the ratio that the portion of Tenant's Square Footage taken or sold bears to
Tenant's Square Footage. If a partial taking or sale of the Leased Premises, the
Building or the Project (i) substantially reduces Tenant's Square Footage
resulting in a substantial inability of Tenant to use the Leased Premises for
the Permitted Purpose, or (ii) renders the Building or the Project not
commercially viable to Landlord in Landlord's sole opinion, either Tenant in the
case of (i), or Landlord in the case of (ii), may terminate this Lease by notice
to the other party within thirty (30) days after the terminating party receives
written notice of the portion to be taken or sold. Such termination shall be
effective when the portion is taken or sold. All condemnation awards and similar
payments shall be paid and belong to Landlord, except any amounts awarded or
paid specifically to Tenant for removal and reinstallation of Tenant's trade
fixtures, personal property or Tenant's moving costs.
ARTICLE TEN
Waiver and Indemnity
10.1 WAIVER AND INDEMNITY: Except for those claims arising from the other
party's (a) breach of this Lease, (b) gross negligence, or (c) willful
misconduct, Landlord and Tenant each, to the extent permitted by law, waives all
claims it may have against the other, and against the other's agents and
employees for any damages sustained thereby or (with respect to Tenant only) any
occupant of the Leased Premises, or by any other person, resulting from any
cause arising at any time. Landlord and Tenant each agree to hold the other
harmless and indemnified against claims and liability for injuries to all
persons and for damage to or loss of property occurring in or about the Leased
Premises or the Building, due to the indemnifying party's breach of this Lease
or any act of negligence or default under this Lease by such party, its
contractors, agents, employees, licensees and invitees. Landlord and Tenant each
agrees to indemnify, defend, reimburse and hold the other harmless against any
Environmental Damages incurred by the other arising from the indemnifying
party's breach of Paragraph 6.1 (d) of this Lease. "Environmental Damages" means
all claims, judgments, losses, penalties, fines, liabilities, encumbrances,
liens, costs and reasonable expenses of investigation, defense or good faith
settlement resulting from violations of Environmental Laws, and including,
without limitation: (i) damages for personal injury and injury to property or
natural resources; (ii) reasonable fees and disbursement of attorneys,
consultants, contractors, experts and laboratories; and (iii) costs of any
cleanup, remediation, removal, response, abatement, containment, closure,
restoration or monitoring work required by any Environmental Law and other costs
reasonably necessary to restore full economic use of the Leased Premises or
Project. The obligations of Landlord and Tenant under this Paragraph 10.1 shall
expressly survive the expiration or sooner termination of this Lease.
10.2 WAIVER OF SUBROGATION: Tenant and Landlord release each other and waive any
right of recovery against each other for loss or damage to the waiving party or
its respective property, which occurs in or about the Leased Premises, the
Building, or the Project, whether due to the negligence of either party, their
agents, employees, officers, contractors, licensees, invitees or otherwise, to
the extent that such loss or damage would be covered by the fire and extended
coverage insurance policies required to be maintained by the waiving party
hereunder. Tenant and Landlord agree that all policies of insurance obtained by
either of them in connection with the Leased Premises shall contain appropriate
waiver of subrogation clauses.
10.3 LIMITATION OF LANDLORD'S LIABILITY: The obligations of Landlord under this
Lease do not constitute personal obligations of the individual partners,
shareholders, directors, officers, employees or agents of Landlord, and Tenant
shall look solely to Landlord's interest in the Building and to no other assets
of Landlord for satisfaction of any liability in respect of this Lease. Tenant
will not seek recourse against the individual partners, shareholders, directors,
officers, employees or agents of Landlord or any of their personal assets for
such satisfaction. Notwithstanding any other provisions contained herein,
Landlord shall not be liable to Tenant, its contractors, agents or employees for
any consequential damages or damages for loss of profits.
ARTICLE ELEVEN
Tenant's Default and Landlord's Remedies
11.1 TENANT'S DEFAULT: It shall be an "Event of Default" if Tenant shall (i)
fail to pay any monthly installment of Base Rent or Tenant's Pro Rata Share of
Operating Costs, or any other sum payable hereunder within ten (10) days after
such payment is due and payable; (ii) violate or fail to perform any conditions,
covenants, or agreements herein made by Tenant respecting Tenant's insurance
requirements as specified in Paragraph 6.2, and such violation or failure shall
continue for five (5) business days after written notice thereof to Tenant by
Landlord; (iii) violate or fail to perform any of the other conditions,
covenants or agreements herein made by Tenant, and such violation or failure
shall continue for fifteen (15) days after written notice thereof to Tenant by
Landlord; provided, however, if such default is of a nature that it cannot
reasonably be cured within fifteen (15) days, it shall not be an Event of
Default if Tenant commences to cure within such fifteen (15) day period and
diligently prosecutes such cure to completion within the time reasonably
required for such cure, not to exceed sixty (60) days; (iv) make a general
assignment for the benefit of its creditors or file a petition for bankruptcy or
other reorganization, liquidation, dissolution or similar relief; (v) have a
proceeding filed against Tenant seeking any relief mentioned in (iv) above; (vi)
have a trustee, receiver or liquidator appointed for Tenant or a substantial
part of its property; (vii) abandon or vacate the Leased Premises and any
portion of Rent is delinquent; (viii) default under any other lease, if any,
within the Building or the Project; or (ix) if Tenant is or (whether by
reorganization, merger, acquisition, or otherwise) becomes a partnership, if any
partner of the partnership is involved in any of the acts or events described in
subparagraphs (i) through (viii) above.
11.2 REMEDIES OF LANDLORD: If an Event of Default occurs, Landlord, may, at its
option, within five (5) days after written notice to Tenant, reenter the Leased
Premises, remove all persons therefrom, take possession of the Leased Premises,
and remove all of Tenant's personal property at Tenant's risk and expense and,
either (i) terminate this Lease and Tenant's right of possession of the Leased
Premises or (ii) maintain this Lease in full force and effect and endeavor to
relet all or part of the Leased Premises on behalf of Tenant. In the event
Landlord elects to maintain this Lease, Landlord shall have the right to relet
the Leased Premises for such rent and upon such terms as Landlord deems
reasonable and necessary, and Tenant shall be liable for all damages sustained
by Landlord, including but not limited to, (a) any deficiency in Rent for the
period of time which would have remained in the Lease Term in the absence of any
termination, leasing fees, attorneys' fees, other marketing and collection
costs, (b) the cash value of any concessions granted to a new tenant, and (c)
all other expenses of placing the Leased Premises in first class rentable
condition. Landlord retains the right to terminate this Lease under this Section
11.2, at any time, notwithstanding that Landlord fails to terminate this Lease
initially. If Landlord is unable after diligent efforts to relet the Leased
Premises within sixty (60) days after termination of this Lease, Landlord may
elect at any time thereafter to have Tenant immediately pay, as liquidated
damages and not as a penalty, all Rent then due and the present value
(discounted at ten percent (10%)) of all Rent which would have become due (based
on Base Rent and Tenant's Pro Rata Share of Operating Costs payable at the time
of such election) for the period of time which would have remained in the Lease
Term in the absence of any termination.
The remedies granted to Landlord herein shall be cumulative and shall not
exclude any other remedy allowed by law, and shall not prevent the enforcement
of any claim Landlord may have against Tenant for anticipatory breach of the
unexpired term of this Lease, including without limitation, a claim for
attorney's fees incurred by Landlord.
ARTICLE TWELVE
Termination
12.1 SURRENDER OF LEASED PREMISES: On expiration of this Lease, if no Event of
Default exists, Tenant shall surrender the Leased Premises in the same condition
as when the Lease Term commenced, ordinary wear and tear or damage from casualty
excepted. Except for furnishings, trade fixtures and other personal property
installed at Tenant's expense and not affixed to the Leased Premises, all
alterations, additions or improvements, whether temporary or permanent in
character, made in or upon the Leased Premises, either by Landlord or Tenant,
shall be Landlord's property and at the expiration or earlier termination of the
Lease Term shall remain on the Leased Premises without compensation to Tenant,
except if requested by Landlord, Tenant, at its expense and without delay, shall
remove any alterations, additions or improvements made to the Leased Premises by
Tenant designated by Landlord to be removed, and repair any damage to the Leased
Premises or the Building caused by such removal. If Tenant fails to repair the
Leased Premises, Landlord may complete such repairs and Tenant shall reimburse
Landlord for such repair and restoration. Landlord shall have the option to
require Tenant to remove all of its property. If Tenant fails to remove such
property as required under this Lease, Landlord may dispose of such property (by
sale or otherwise) in its sole discretion without any liability to Tenant, and
further may charge the cost of any such disposition to Tenant and/or offset the
same against any proceeds from the sale of such property.
12.2 HOLDOVER TENANCY: If Tenant shall holdover after the Lease Expiration Date,
Tenant shall be deemed a tenant at sufferance. During such tenancy, Tenant
agrees to pay to Landlord, monthly in advance, an amount equal to two (2) times
the Rent which would otherwise become due (based on Base Rent and Tenant's Pro
Rata Share of Operating Costs payable for the last full calendar month of the
Lease Term, together with all other amounts payable by Tenant to Landlord under
this Lease), and to be bound by all of the terms, covenants and conditions
herein specified. Upon Tenant's surrender of the Leased Premises as provided
herein, such portion of the Rent paid which may be allocable to the period
following such surrender may, in addition to all other rights and remedies
hereunder, at law, in equity, or otherwise, be credited by Landlord to any other
amounts owed to or damages incurred by Landlord as a result of such holdover or
otherwise or, if no such amounts are owed or damages have been incurred,
refunded to Tenant. If Landlord relets the Leased Premises or any portion
thereof to a new tenant and the term of such new lease commences during the
period for which Tenant holds over, Landlord shall also be entitled to recover
from Tenant all costs and expenses, attorneys fees, damages or loss of profits
incurred by Landlord as a result of Tenant's failure to deliver possession of
the Leased Premises to Landlord when required under this Lease. Nothing
contained in this Paragraph 12.2 shall be deemed or otherwise construed to limit
Landlord's rights to recover damages from Tenant under any other provision of
this Lease, and the rights and remedies contained in this Paragraph 12.2 shall
be cumulative with respect to each other and with respect to any and all other
rights and remedies of Landlord hereunder, at law, in equity, or otherwise.
12.3 OPTION TO EXTEND:
a. Notwithstanding any provision of this Lease to the contrary,
provided that, both at the time of the exercise of the option hereinafter set
forth and at the time of commencement of the Renewal Term (as hereinafter
defined), (i) this Lease is in full force and effect, and (ii) Tenant is (A) not
then in default hereunder beyond the expiration of any applicable notice and
cure period provided for in this Lease and (B) in occupancy of at least fifty
percent (50%) of the Leased Premises for the purpose of conducting its own
business, Tenant is hereby granted the option to renew the Lease Term for one
(1) additional period of two (2) years (the "Renewal Term"), such Renewal Term
to commence upon the day immediately following the Lease Expiration Date, as
defined without regard to the Renewal Term. Tenant shall exercise its option to
renew by delivering notice of such exercise (the "Renewal Notice") to Landlord
not less than 180 days nor more than 240 days prior to such Lease Expiration
Date, time being of the essence with respect to such exercise.
b. The Renewal Term shall be upon the same terms and conditions of this
Lease except that (i) the Base Rent during the Renewal Term shall be the greater
of (A) the fair market rental rate, including any annual fair market
escalations, for space comparable to and within the recognized submarket of the
Leased Premises, as determined by Landlord in its reasonable discretion or (B)
one hundred three percent (103%) of the Base Rent payable hereunder during the
last twelve (12) months of the Lease Term (excluding the Renewal Term),
escalated by three percent (3.00%) annually thereafter; (ii) Tenant shall have
no option to renew the Lease Term beyond the expiration of the Renewal Term; and
(iii) the Leased Premises shall be delivered in their condition as of the Lease
Expiration Date, as defined without regard to the Renewal Term.
c. Except for the renewal option set forth above in this Paragraph
12.3, this Lease may only be extended beyond the Lease Expiration Date by the
parties executing a new lease or an amendment hereto, in each case in form and
substance acceptable to both Landlord and Tenant in their respective sole,
absolute, and subjective discretion. Except as expressly set forth in this
Paragraph 12.3, no proposal, offer, correspondence, or the like shall be legally
binding upon Landlord or Tenant unless and until the terms thereof are
incorporated into such a new lease or amendment hereto.
ARTICLE THIRTEEN
Miscellaneous
13.1 QUIET ENJOYMENT: If and so long as Tenant pays all Rent and keeps and
performs each and every term, covenant and condition herein contained on the
part of Tenant to be kept and performed. Tenant shall quietly enjoy the Leased
Premises without hindrance by Landlord.
13.2 ACCORD AND SATISFACTION: No receipt and retention by Landlord of any
payment tendered by Tenant in connection with this Lease shall constitute an
accord and satisfaction, or a compromise or other settlement, notwithstanding
any accompanying statement, instruction or other assertion to the contrary
unless Landlord expressly agrees to an accord and satisfaction, or a compromise
or other settlement, in a separate writing duly executed by Landlord. Landlord
will be entitled to treat any such payments as being received on account of any
item or items of Rent, interest, expense or damage due in connection herewith,
in such amounts and in such order as Landlord may determine at its sole option.
13.3 SEVERABILITY: The parties intend this Lease to be legally valid and
enforceable in accordance with all of its terms to the fullest extent permitted
by law. If any term hereof shall be invalid or unenforceable, the parties agree
that such term shall be stricken from this Lease to the extent unenforceable,
the same as if it never had been contained herein. Such invalidity or
unenforceability shall not extend to any other term of this Lease, and the
remaining terms hereof shall continue in effect to the fullest extent permitted
by law, the same as if such stricken term never had been contained herein.
13.4 SUBORDINATION AND ATTORNMENT: Tenant acknowledges that this Lease is
subject and subordinate to all leases in which Landlord is lessee and to any
mortgage or deed of trust now in force against the Building and to all advances
made or hereafter to be made thereunder, or any amendments or modifications
thereof. Tenant also agrees that this Lease shall be subject and subordinate to
any future leases in which Landlord is lessee and to any future first mortgage
or deed of trust hereafter in force against the Building and to all advances
made or hereafter to be made thereunder, or any amendments or modifications
thereof (all such existing and future leases, mortgages and deeds of trust
referred to collectively as "Superior Instruments"). Tenant also agrees that if
the holder of any Superior Instrument elects to have this Lease superior to its
Superior Instrument and gives notice of its election to Tenant, then this Lease
shall be superior to the lien of any such lease, mortgage or deed of trust and
all renewals, replacements and extensions thereof, whether this Lease is dated
before or after such lease, mortgage or deed of trust. If requested in writing
by Landlord or any first mortgagee or ground lessor of Landlord, Tenant agrees
to execute a subordination agreement required to further effect the provisions
of this paragraph.
In the event of any transfer in lieu of foreclosure or termination of a lease in
which Landlord is lessee or the foreclosure of any Superior Instrument, or sale
of the Building pursuant to any Superior Instrument, Tenant shall attorn to such
purchaser, transferee or lessor and recognize such party as landlord under this
Lease, provided such party acquires and accepts the Leased Premises subject to
this Lease. The agreement of Tenant to attorn contained in the immediately
preceding sentence shall survive any such foreclosure sale or transfer.
13.5 ATTORNEY'S FEES: If the services of an attorney are required by any party
to secure the performance under this Lease or otherwise upon the breach or
default of the other party to this Lease, or if any judicial remedy is necessary
to enforce or interpret any provision of this Lease, the prevailing party shall
be entitled to reasonable attorney's fees, costs and other expenses, in addition
to any other relief to which such prevailing party may be entitled.
13.6 CONSTRUCTION: This Lease shall be construed according to the laws of the
state in which the Leased Premises are located. Notwithstanding the drafting of
this Lease by Landlord, this Lease shall not be construed against Landlord.
Except as otherwise provided herein, to the extent that any provision hereof is
subject to the consent or approval of Landlord, such consent or approval may be
withheld or conditioned in Landlord's sole, absolute, and subjective discretion.
13.7 BINDING EFFECT; GENDER: This Lease shall be binding upon and inure to the
benefit of the parties and their successors and assigns. It is understood and
agreed that the terms "Landlord" and "Tenant' and verbs and pronouns in the
singular number are uniformly used throughout this Lease regardless of gender,
number or fact of incorporation of the parties hereto.
13.8 TIME: Time is of the essence of this Lease.
13.9 ENTIRE AGREEMENT: This Lease and the schedules and addenda attached set
forth all the covenants, promises, agreements, representations, conditions,
statements and understandings between Landlord and Tenant concerning the Leased
Premises and the Building and the Project, and there are no representations,
either oral or written between them other than those in this Lease. This Lease
shall not be amended or modified except in writing signed by both parties.
Failure to exercise any right in one or more instances shall not be construed as
a waiver of the right to strict performance or as an amendment to this Lease.
13.10 NOTICES: Any notice or demand provided for or given pursuant to this Lease
shall be in writing and served on the parties at the addresses listed in
Paragraph 1.1 (n) and Paragraph 1.1 (o). Any notice shall be either (i)
personally delivered to the addressee set forth above, in which case it shall be
deemed delivered on the date of delivery to said addressee; or (ii) sent by
registered or certified mail/return receipt requested, in which case it shall be
deemed delivered three (3) business days after being deposited in the U.S. Mail;
(iii) sent by a nationally recognized overnight courier, in which case it shall
be deemed delivered one (1) business day after deposit with such courier; or
(iv) sent by telecommunication ("Fax") during normal business hours in which
case it shall be deemed delivered on the day sent, provided an original is
received by the addressee after being sent by a nationally recognized overnight
courier within one (1) business day of the Fax. The addresses and Fax numbers
listed in Paragraphs 1.1 (n) and 1.1 (o) may be changed by written notice to the
other parties, provided, however, that no notice of a change of address or Fax
number shall be effective until the date of delivery of such notice. Copies of
notices are for informational purposes only and a failure to give or receive
copies of any notice shall not be deemed a failure to give notice.
13.11 HEADINGS: The headings on this Lease are included for convenience only and
shall not be taken into consideration in any construction or interpretation of
this Lease or any of its provisions.
13.12 BROKERAGE COMMISSIONS: Tenant and Landlord each represents to the other
that no broker or agent was instrumental in procuring or negotiating or
consummating this Lease other than Broker of Record whose compensation shall be
paid (directly or indirectly) by Landlord, and Tenant and Landlord each agree to
defend, indemnify and hold harmless the other party against any loss, cost,
expense or liability for any compensation, commission, fee or charge, including
reasonable attorney's fees, resulting from any claim of any other broker, agent
or finder claiming under or through the indemnifying party in connection with
this Lease or its negotiation.
13.13 WAIVER OF JURY TRIAL: Landlord and Tenant each hereby waives all right to
trial by jury in any claim, action, proceeding or counterclaim by either party
against the other on any matters arising out of or in any way connected with
this Lease, the relationship of Landlord and Tenant and/or Tenant's use or
occupancy of the Leased Premises.
13.14 AUTHORITY OF TENANT: If Tenant is a corporation, partnership, or limited
liability company, the individual executing this Lease on behalf of said,
corporation, partnership, or limited liability company represents and warrants
that he is duly authorized to execute and deliver this Lease on behalf of said
corporation, partnership, or limited liability company and that this Lease is
binding upon said corporation, partnership, or limited liability company.
SUBMISSION OF THIS INSTRUMENT FOR EXAMINATION OR SIGNATURE BY TENANT DOES NOT
CONSTITUTE A RESERVATION OF OR OPTION FOR LEASE, AND IT IS NOT EFFECTIVE AS A
LEASE OR OTHERWISE UNTIL EXECUTION AND DELIVERY BY BOTH LANDLORD AND TENANT.
This Lease is executed as of the date first written above.
TENANT: LANDLORD:
COASTAL OFFICE PRODUCTS, INC. ASP WASHINGTON, L.L.C.,
a Delaware limited liability company
By: __________________________ By: __________________________
Name: Name:
Title: Title:
27483-1
2069-029
SCHEDULE 1
DESCRIPTION OF THE PREMISES/FLOOR PLAN
SCHEDULE 2
RULES AND REGULATIONS
1. The sidewalks, entrances, halls, corridors, elevators and stairways of the
Building and the Project shall not be obstructed or used as a waiting or
lounging place by tenants, and their agents, servants, employees, invitees,
licensees and visitors. All entrance doors leading from any Leased Premises to
the hallways are to be kept closed at all times.
2. In case of invasion, riot, public excitement or other commotion, Landlord
also reserves the right to prevent access to the Building during the continuance
of same. Landlord shall in no case be liable for damages for the admission or
exclusion of any person to or from the Building.
3. Landlord will furnish Tenant with two keys to each door lock on the Leased
Premises, and Landlord may make a reasonable charge for any additional keys and
access cards requested by any tenant. No tenant shall have any keys made for the
Leased Premises; nor shall any tenant alter any lock, or install new or
additional locks or bolts, on any door without the prior written approval of
Landlord which shall not be unreasonably withheld. If Landlord approves any lock
alteration or addition, Tenant shall supply Landlord with a key for any such
lock or bolt. Tenant, upon the expiration or termination of its tenancy, shall
deliver to Landlord all keys and access cards in Tenant's possession for all
locks and bolts in the Building.
4. No tenant shall cause any unnecessary labor by reason of such tenant's
carelessness or indifference in the preservation of good order and cleanliness
of the Leased Premises. Tenants will see that (i) the windows are closed, (ii)
the doors securely locked, and (iii) all water faucets and other utilities are
shut off (so as to prevent waste or damage) each day before leaving the Leased
Premises. In the event tenant must dispose of crates, boxes, etc. which will not
fit into office waste paper baskets, it will be the responsibility of tenant to
dispose of same. In no event shall tenant set such items in the public hallways
or other areas of the Building or garage facility, excepting tenant's owned
Leased Premises, for disposal.
5. No iron safe or other heavy or bulky object shall be delivered to or removed
from the Building, except by experienced safe men, movers or riggers approved in
writing by Landlord. All damage done to the Building by the delivery or removal
of such items, or by reason of their presence in the Building, shall be paid to
Landlord, immediately upon demand, by the tenant by, through, or under whom such
damage was done. There shall not be used in any space, or in the public halls of
the Building, either by tenant or by jobbers or others, in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber
tires.
6. Tenant shall not cover or obstruct any skylights, windows, doors and transoms
that reflector admit light into passageways or into any other part of the
Building.
7. The toilet rooms, toilets, urinals, wash bowls and water apparatus shall not
be used for any purpose other than for those for which they were constructed or
installed, and no sweepings, rubbish, chemicals, or other unsuitable substances
shall be thrown or placed therein. The expense of any breakage, stoppage or
damage resulting from violation(s) of this rule shall be borne by the tenant by
whom, or by whose agents, employees, invitees, licensees or visitors, such
breakage, stoppage or damage shall have been caused.
8. No sign, name, placard, advertisement or notice visible from the exterior of
any Leased Premises, shall be inscribed, painted or affixed by any tenant on any
part of the Building or the Project without the prior written approval of
Landlord. All signs or letterings on doors, or otherwise, approved by Landlord
shall be inscribed, painted or affixed at the sole cost and expense of the
tenant, by a person approved by Landlord.
9. No signaling, telegraphic or telephonic instruments or devices, or other
wires, instruments or devices, shall be installed by Tenant in connection with
any Leased Premises without the prior written approval of Landlord. Such
installations, and the boring or cutting for wires, shall be made at the sole
cost and expense of the tenant and under control and direction of Landlord.
Landlord retains, in all cases, the right to require (i) the installation and
use of such electrical protecting devices that prevent the transmission of
excessive currents of electricity into or through the Building, (ii) the
changing of wires and of their installation and arrangement underground or
otherwise as Landlord may direct, and (iii) compliance on the part of all using
or seeking access to such wires with such rules as Landlord may establish
relating thereto. All such wires used by tenants must be clearly tagged at the
distribution boards and junction boxes and elsewhere in the Building, with (i)
the number of the Leased Premises to which said wires lead, (ii) the purpose for
which said wires are used, and (iii) the name of the company operating same.
10. Tenant, their agents, servants or employees, shall not (a) go on the roof of
the Building, (b) use any additional method of heating or air conditioning the
Leased Premises, (c) sweep or throw any dirt or other substance from the Leased
Premises into any of the halls, corridors, elevators, or stairways of the
Building, (d) bring in or keep in or about the Leased Premises any vehicles or
animals of any kind, (e) install any radio or television antennae or any other
device or item on the roof, exterior walls, windows or window xxxxx of the
Building, (0 place objects against glass partitions, doors or windows which
would be unsightly from the interior or exterior of the Building, (g) use any
Leased Premises (i) for lodging or sleeping, (ii) for cooking (except that the
use by any tenant of Underwriter's Laboratory approved equipment for
microwaving, brewing coffee, tea and similar beverages shall be permitted,
provided that such use is in compliance with law), (iii) for any manufacturing,
or sale of merchandise or property of any kind, (h) cause or permit unusual or
objectionable odor to be produced or permeate from the Leased Premises,
including, without limitation, duplicating or printing equipment fumes. Tenant,
its agents, servants and employees, invitees, licensees, or visitors shall not
permit the operation of any musical or sound producing instruments or device
which may be heard outside Leased Premises, Building or garage facility, or
which may emit electrical waves which will impair radio or television broadcast
or reception from or into the Building.
11. No canvassing, soliciting, distribution of handbills or other written
material, or peddling by Tenant shall be permitted in the Building or the
Project, and tenants shall cooperate with Landlord in prevention and elimination
of same.
12. Tenant shall give Landlord prompt notice of all accidents to or defects in
air conditioning equipment, plumbing, electrical facilities or any part or
appurtenances of Leased Premises.
13. If any Leased Premises becomes infested with vermin by acts of Tenant, the
Tenant, at its sole cost and expense, shall cause its premises to be
exterminated from time to time to the satisfaction of the Landlord and shall
employ such exterminators as shall be approved by Landlord.
14. No curtains, blinds, shades, screens, awnings or other coverings or
projections of any nature shall be attached to or hung in, or used in connection
with any door. window or wall of the premises of the Building by Tenant without
the prior written consent of Landlord.
15. Landlord shall have the right to prohibit any advertising by tenant which,
in Landlord's opinion, tends to impair the reputation of Landlord or of the
Building, or its desirability for existing or prospective tenants who require
the highest standards of integrity and respectability, and upon written notice
from Landlord, tenant shall refrain from or discontinue such advertising.
16. Wherever the word "tenant" appears in these Rules and Regulations, it is
understood and agreed that it shall also mean tenant's associates, employees,
agents and any other person entering the Building or the Leased Premises under
the express or implied invitation of tenant. Tenant shall cooperate with
Landlord to assure compliance by all such parties with rules and regulations.
17. Landlord will not be responsible for lost or stolen personal property,
equipment, money or any article taken from Leased Premises, Building or garage
facilities regardless of how or when loss occurs.
18. All contractors and or technicians performing work for Tenant within the
Leased Premises, Building or garage facilities shall be referred to Landlord for
approval before performing such work. This shall apply to all work including,
but not limited to, installation of telephones, electrical devises and
attachments, and all installations affecting floors, walls, windows, doors,
ceilings, equipment of any other physical feature of the Building, Leased
Premises or garage facilities.
19. Showcases and any other articles shall not be placed in front of or affixed
to any part of the exterior of the Building, nor placed in the halls, corridors
or vestibules by Tenant without the prior written consent of Landlord.
20. The Tenant shall not do anything in the Leased Premises, or bring or keep
anything herein, which will in any way increase or tend to increase the risk of
fire or rate of insurance, or which shall conflict with the Regulations of the
Fire Department, any fire laws, with any insurance policy on the Building or any
part thereof, or with any rules or ordinances established by any governmental
authority.
21. The requirements of Tenant will be attended to only upon application to the
Managing Agent. Employees of Landlord shall not perform any work or do anything
outside of their regular dates unless under special instructions from Landlord,
and no employee will admit any person (Tenant or otherwise) to any office
without specific instructions from Landlord.
22. Landlord reserves the right to make reasonable amendments, modifications and
additions to the rules and regulations heretofore set forth, and to make
additional reasonable rules and regulations, as in Landlord's reasonable
judgment may from time to time be needed for the safety, care, cleanliness and
preservation of good order of the Building.
SCHEDULE 3
INTENTIONALLY DELETED
SCHEDULE 4
CERTIFICATE OF ACCEPTANCE
TENANT: COASTAL OFFICE PRODUCTS, INC.
LEASED PREMISES: 3,000 rentable square feet
LOCATION: 0000 XXXXXX XXXXXXXXX, XXXXXX, XXXXXXXX
This letter is to certify that:
1. The above referenced Leased Premises have been accepted by the
Tenant for possession.
2. The Leased Premises are substantially complete in accordance with
the plans and specifications used in constructing the demised
premises.
3. The Leased Premises can now be used for intended purposes.
Commencement Date: , 2000.
---------------------------------------
Expiration Date: , .
--------------------------------------- --------
Executed this day of , 2000.
------------- ---------------------------------------
COASTAL OFFICE PRODUCTS, INC.
By: _________________________________
Name:
Title:
SCHEDULE 5
HVAC MAINTENANCE SCHEDULE
SERVICE CONTRACT FOR PREVENTIVE MAINTENANCE OF HEATING, VENTILATING AND/OR AIR
CONDITIONING EQUIPMENT SERVING THE PREMISES.
The scope of the maintenance contract shall be as follows:
I. Four quarterly inspection/maintenance service calls to inspect and maintain
the equipment in accordance with the Check List.
II. Tuneup, inspection and startup at the beginning of the heating and cooling
seasons.
III. Four filter changes per year. Two will be in conjunction with the Spring
and Fall startup inspections.
IV. Contractor shall provide all lubricants, cleaning materials, filters,
belts, pulleys and labor required to conduct the preventive maintenance.
22. Annual chemical cleaning of condenser and evaporator coils.
CHECK LIST:
AIR CONDITIONING SYSTEMS
1. Lubricate moving parts.
2. Clean and adjust controls.
3. Check belts and drives: adjust and/or replace as necessary.
3. Inspect filters; replace as required.
5. Check evaporator air temperatures.
4. Check wiring and connections.
7. Check refrigerant and charge as necessary.
5. Check evaporator and condenser coils for cleanliness,
9. Check operating pressures.
6. Check voltage and amperage all motors.
11. Clean and adjust thermostats.
7. Clean condensate drain.
13. Check and adjust all contacts.
8. Check and adjust pressure switch cutout settings.
15. Check performance and efficiency of cooling system.
HEATING SYSTEMS
1. Lubricate moving parts.
9. Clean and adjust controls.
3. Adjust heater for efficiency.
10. Check belts and drives; adjust and/or replace as necessary.
5. Inspect filters; replace as required.
11. Check air temperature rise.
7. Check all wiring and connections.
12. Clean and adjust thermostat.
9. Check performance and efficiency of heating equipment.
SCHEDULE 6
SCHEDULE OF ESTIMATED OPERATING EXPENSES FOR 2000
SCHEDULE 7
DECLARATION OF COVENANTS AND AMENDMENT TO DECLARATION OF COVENANTS
[This Schedule 7 continues on the following page.]
