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Exhibit 10.14
OFFICE LEASE AGREEMENT
BETWEEN
THE AMERICAN OCCUPATIONAL THERAPY ASSOCIATION, INC.
A DISTRICT OF COLUMBIA NON-PROFIT CORPORATION
(LANDLORD)
AND
THE XXXXXXXXXX GROUP, INC.
(TENANT)
XXXXX 000
0000 XXXXXXXXXX XXXX
XXXXXXXX, XXXXXXXX
DATED: JANUARY, ______1999
* * * * * * * * * * * * * *
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TABLE OF CONTENTS - OFFICE LEASE AGREEMENT
ARTICLE 1 - BASIC LEASE INFORMATION AND CERTAIN DEFINITIONS...........6
ARTICLE 2 - PREMISES .................................................8
ARTICLE 3 - TERM; COMMENCEMENT DATE; DELIVERY
AND ACCEPTANCE OF PREMISES..............................8
ARTICLE 4 - RENT......................................................9
ARTICLE 5 - RENTAL ESCALATION FOR INCREASES IN OPERATING COSTS.......10
ARTICLE 6 - PARKING..................................................13
ARTICLE 7 - SERVICES OF LANDLORD.....................................13
ARTICLE 8 - ASSIGNMENT AND SUBLETTING................................14
ARTICLE 9 - REPAIRS..................................................17
ARTICLE 10 - ALTERATIONS..............................................18
ARTICLE 11 - LIENS....................................................19
ARTICLE 12 - USE AND COMPLIANCE WITH LAWS.............................19
ARTICLE 13 - DEFAULT AND REMEDIES.....................................20
ARTICLE 14 - INSURANCE................................................21
ARTICLE 15 - DAMAGE BY FIRE OR OTHER CAUSE............................22
ARTICLE 16 - CONDEMNATION.............................................23
ARTICLE 17 - INDEMNIFICATION..........................................24
ARTICLE 18 - SUBORDINATION AND ESTOPPEL CERTIFICATES..................25
ARTICLE 19 - SURRENDER OF THE PREMISES................................26
ARTICLE 20 - LANDLORD'S RIGHT TO INSPECT..............................26
ARTICLE 21 - SECURITY DEPOSIT.........................................27
ARTICLE 22 - BROKERAGE................................................27
ARTICLE 23 - OBSERVANCE OF RULES AND REGULATIONS......................27
ARTICLE 24 - NOTICES..................................................28
ARTICLE 25 - MISCELLANEOUS............................................28
ARTICLE 26 - OTHER DEFINITIONS........................................30
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EXHIBITS
The following Exhibits and Riders are attached hereto and by this
reference made a part of this Lease:
EXHIBIT A - Floor Plan of the Premises
EXHIBIT B - The Land
EXHIBIT C - Leasehold Improvements
EXHIBIT D - Form of Commencement Notice
EXHIBIT E - Washington Board of Realtors Standard Method of Measurement
EXHIBIT F - Rules and Regulations
ADDENDUM NO. 1 - Extension Option
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INDEX OF DEFINED TERMS
Definitions of certain terms used in this Lease are found in the following
sections:
TERM LOCATION OF DEFINITION
Additional Rent Article 1, Section 4.01
Architectural Plans Exhibit C
Bankruptcy Code Section 8.06
Base Building Exhibit C
Base Rent Section 1.01N
Basic Lease Information and Certain
Definitions Article 1
Broker Section 1.01U
Building Section 1.01B
Building Shell Condition Exhibit C
Building Standard Article 26
Business Days Article 26
Commencement Date Section 1.01F
Common Areas Article 26
Days Article 26
Events of Default Section 13.01
Excess Operating Costs Section 1.01Q
Excess Operating Costs Estimate Section 5.01
Expiration Date Section 1.01H
herein, hereof, hereby, hereunder
and words of similar import Article 26
Holidays Article 26
include and including Article 26
Interest Rate Section 4.03
Land Section 1.01C
Landlord Preamble
Landlord's Address for Notice Section 1.01V
Landlord's Address for Payment Section 1.01W
Landlord's Standard Improvements Exhibit C
Landlord's Contractor Exhibit C
Landlord's Designer Exhibit C
Landlord's Work Exhibit C
Leasehold Improvements Exhibit C
MEP Plans Exhibit C
Net Rentable Area Article 26
Net Rentable Area of the Building Section 1.01K
Net Rentable Area of the Premises Section 1.01J
Reference to Landlord as having
"no liability to Tenant" or being
"without liability to Tenant"
or words of like import Article 26
Non-Building Standard Exhibit C
Operating Costs Section 5.02
Parking Facilities Section 1.01D
Plans Exhibit C
Premises Section 1.01A
Prime Rate Section 4.03
Project Section 1.01E
Rent Section 1.01M
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Repair Article 26
Rules and Regulations Section 23.01
Security Deposit Section 1.01T Intentionally
Left Blank
Structural Plans Exhibit C
Successor Landlord Section 18.02
Taxes Section 5.02
Tenant Article 26
Tenant Delay Exhibit C
Tenant's Address for Notice Section 1.01X
Tenant's Allowance Exhibit C
Tenant's Architect Exhibit C
Tenant's Expenditure Authorization Exhibit C
Tenant's MEP Engineers Exhibit C
Tenant's Structural Engineers Exhibit C
Tenant's Permitted Uses Section 1.01S
Tenant's Property Section l4.01(a)
Tenant's Share Section 1.01L
Tenant's Work Exhibit C
Term Section 1.01I
termination of this Lease
and words of like import Article 26
terms of this Lease Article 26
this Lease Preamble
year Article 26
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OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT ("this Lease") is made and entered into by
and between The American Occupational Therapy Association, Inc., a District of
Columbia non-profit corporation ("Landlord"), and The Xxxxxxxxxx Group, Inc.
("Tenant"), upon all the terms set forth in this Lease and in all Exhibits
hereto, to each and all of which terms Landlord and Tenant hereby mutually
agree, and in consideration of One Dollar and other valuable considerations, the
receipt and sufficiency of which are hereby acknowledged, and of the rents,
agreements and benefits flowing between the parties hereto, as follows:
ARTICLE 1.
BASIC LEASE INFORMATION AND CERTAIN DEFINITIONS
Section 1.01. Each reference in this Lease to information and definitions
contained in the Basic Lease Information and Definitions and each use of the
terms capitalized and defined in this Section 1.01 shall be deemed to refer to,
and shall have the respective meaning set forth in, this Section 1.01.
A. Premises: That portion of the ninth (9th) floor of the
Building, presently known as Suite No(s). 900,
substantially as shown by diagonal lines drawn on
floor plan(s) attached hereto as Exhibit A.
B. Building: The building on the land located at 0000
Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx.
C. Land: That certain parcel of land described under the
caption "Land" in Exhibit B hereof.
D. Parking The underground parking garage located at 4800
Facilities: Hampden Square, Bethesda, Maryland.
E. Project: The Land and all improvements thereon.
F. Commencement That certain date on which the Term shall
Date: commence, as determined, pursuant to the
provisions of Article 3 hereof.
G. Target The later of February 1, 1999 or approximately
Commencement Date: sixty (60) days after a lease and construction
drawings are fully executed.
H. Expiration Date: January 31, 2004 or sixty (60) months after the
Commencement Date, if the Commencement Date is
after February 1, 1999.
I. Term: Approximately five (5) years, beginning on the
Commencement Date and ending at 11:59 p.m. on the
Expiration Date, unless this Lease is sooner
terminated as provided herein.
J. Net Rentable Area 3,556 square feet, subject to the provisions of
of the Premises: Section 3.03 hereof.
K. Net Rentable Area 84,885 square feet, subject to adjustment pursuant
of the Building: to Section 3.03 hereof.
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L. Tenant's Share: 4.19%, representing a fraction, the numerator of
which is the Net Rentable Area of the Premises and
the denominator of which is the Net Rentable Area
of the Building, subject to future adjustment
pursuant to the provisions of Sections 3.03 and
5.04 hereof.
M. Rent: The Base Rent and the Additional Rent.
N. Base Rent: The Base Rent shall be $94,234.00 per annum (based
on $26.50 per square foot of Net Rentable Area of
the Premises) subject to such increases as are
provided herein.
O. Additional Rent: Any other sums pursuant to Section 4.01 hereof.
P. Base Operating Costs: That portion of Base Rent which represents payment
towards Tenant's Share of Operating Costs for
calendar year 1999.
Q. Excess Operating Costs: That amount by which Tenant's Share of actual
Operating Costs for a given year exceeds Base
Operating Costs.
R. Initial Adjustment Year: 2000.
S. Tenant's Permitted Tenant may use the Premises for general office use
Uses: befitting a first class office building.
T. Security Deposit: $7,852.83to be held by Landlord in accordance with
the provisions of Article 21 hereof.
U. Broker: Xxxxxxx Xxxx Company
V. Landlord's The American Occupational Therapy Association, Inc.
Address 0000 Xxxxxxxxxx Xxxx
for Notice: Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
W. Landlord's The American Occupational Therapy Association, Inc.
Address 0000 Xxxxxxxxxx Xxxx
for Payment: Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Chief Financial Officer
X. Tenant's Address Prior to Commencement Date:
for Notice: The Xxxxxxxxxx Group, Inc.
0000 Xx. Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn:
After Commencement Date:
The Xxxxxxxxxx Group, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxx 000 Xxxxxxxx, XX 00000-0000
Attn:
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Y. Parking Permits and Tenant shall be issued three (3) parking permits
Permit Fees: for unassigned parking spaces in the Parking
Facilities for use in common with other tenants
and with the public at an initial monthly permit
fee of $85.00 per parking permit. Tenant shall
also be issued one (1) parking permit for one
unassigned parking space in the parking facilities
in the Building at an initial monthly permit fee
of $95.00 for such parking permit. Tenant's
parking rights shall be subject to the limitations
of Article 6 hereof.
ARTICLE 2.
PREMISES
Section 2.01. Landlord hereby leases the Premises to Tenant, and Tenant
hereby rents and hires the Premises from Landlord, for the Term. During the
Term, Tenant shall have the right to use, in common with others and in
accordance with the Rules and Regulations, the Common Areas. Landlord shall
deliver the Demised Premises in its present and "as is" condition subject to a
one time tenant's allowance as provided in Exhibit C, Article 2, Section 2.04.
Section 2.02. Provided that Tenant fully and timely performs all the terms
of this Lease on Tenant's part to be performed, including payment by Tenant of
all Rent, Tenant shall hold and enjoy the Premises during the Term without
hindrance or disturbance from or by Landlord; subject, however, to all of the
terms, conditions and provisions of any and all ground leases, deeds of trust,
mortgages, restrictive covenants, easements, and other encumbrances now or
hereafter affecting the Premises and the Project (provided that any such
restrictive covenants or easements shall not materially interfere with Tenant's
Permitted Uses of the Premises in accordance with the terms of this Lease), and
further subject to the provisions of Section 18.01 hereof.
ARTICLE 3.
TERM; COMMENCEMENT DATE; DELIVERY AND ACCEPTANCE OF PREMISES
Section 3.01. The Commencement Date shall be the earlier of (a) the date
the Premises are deemed available for occupancy pursuant to Section 3.02 hereof,
or (b) the date Tenant, or anyone claiming by, through or under Tenant, occupies
any portion of the Premises for the purpose of the conduct of Tenant's (or such
other person's) business therein; provided, however, that, if the Leasehold
Improvements are not substantially completed until after February 1, 1999 for
any reason other than as a result of Tenant Delay (defined in Exhibit "C"
hereof), then the Commencement Date shall be the later to occur of (i) February
1, 1999, or (ii) the date Tenant, or anyone claiming through or under Tenant,
occupies any part of such portion of the Premises for the purpose of the conduct
of Tenant's (or such other person's) business.
Section 3.02. A. The Premises (or a portion thereof located on a separate
floor) shall be deemed available for occupancy as soon as the Leasehold
Improvements shall have been substantially completed as determined by Landlord.
Landlord shall provide Tenant with not less than fifteen (15) days' prior notice
of the anticipated date of the substantial completion of the Leasehold
Improvements.
B. Notwithstanding anything to the contrary contained herein, if
there is a delay in the availability for occupancy of the Premises, or a portion
thereof located on a separate floor, due to Tenant Delay (as defined in Exhibit
C to the Lease), then the Premises, or such portion, as the case may be, shall
be deemed available for occupancy on the date on which the Premises, or such
portion, would have been available for occupancy but for such Tenant Delay, even
though the construction or installation of the Leasehold Improvements has not
been commenced or completed.
Section 3.03. The Net Rentable Area of the Premises and the Building are
approximately as stated in the Basic Lease Information, and shall be
specifically calculated by the Landlord's architect using base building plans in
accordance with the Washington D.C. Association of Realtors Standard Method of
Measurement attached hereto as Exhibit E. By written instrument substantially in
the form of Exhibit D attached hereto, Landlord shall notify Tenant of the
Commencement Date, the Net Rentable Area of the Premises and all other matters
stated therein. The Commencement Notice shall be conclusive
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and binding on Tenant as to all matters set forth therein, unless, within ten
(10) days following the delivery of such Commencement Notice, Tenant contests
any of the matters contained therein by notifying Landlord in writing of
Tenant's objections. The foregoing notwithstanding, neither Landlord's failure
to deliver, nor Tenant's failure to execute, any Commencement Notice shall
affect Landlord's determination of the Commencement Date.
Section 3.04. Tenant may not enter or occupy the Premises prior to the
Commencement Date without Landlord's express written consent and any entry by
Tenant shall be subject to all of the terms of this Lease; provided, that no
such early entry shall change the Commencement Date or the Expiration Date and
further provided that, Tenant may enter the Premises for a period of fifteen
(15) days prior to the Commencement Date or at such earlier time as may be
necessary for such installation, as reasonably approved by Landlord (the
"Pre-Occupancy Entry Period") for the sole purpose of Tenant's installation of
its fixtures, telephones, computer networks, and related matters. Tenant shall
cause its work to be coordinated and complementary with the work of Landlord's
contractor. Tenant shall comply with all applicable work schedules and
requirements promulgated by Landlord and Landlord's contractor relating to such
entry and the completion of the Leasehold Improvements and Tenant's installation
work, and in no event shall Tenant's installation work interfere with the
completion of the Leasehold Improvements. During the Pre-Occupancy Entry Period,
Base Rent shall neither accrue or be due and payable solely as a result of
Tenant's occupancy of the premises for the purposes described in this Section
3.04, but Tenant shall comply with the terms and conditions contained in
Articles 9, 10, 11, 12, 13, 14, 15, 16, 17, 23, and 25 of this Lease. Landlord
shall provide Tenant with prior notice of the commencement of the Pre-Occupancy
Entry Period.
Section 3.05. Occupancy of the Premises or any portion thereof by Tenant
or anyone claiming through or under Tenant for the conduct of Tenant's, or such
other person's, business therein shall be conclusive evidence that Tenant and
all parties claiming through or under Tenant (a) have accepted the Premises or
such portion as suitable for the purposes for which the Premises are leased
hereunder, (b) have accepted the Common Areas as being in a good and
satisfactory condition and (c) have waived any defects in the Premises and the
Project other than punch list items and patent defects; provided, however, that,
if any Leasehold Improvements have been constructed and installed to prepare the
Premises for Tenant's occupancy, Tenant's acceptance of the Premises and waiver
of any defect therein shall occur upon Landlord's substantial completion of the
Leasehold Improvements in the Premises or such portion in accordance with the
terms of Exhibit C hereof. Landlord shall have no liability, to Tenant or any of
Tenant's agents, employees, licensees, servants or invitees, except for
negligence or willful misconduct, for any injury or damage to any person or
property due to the condition or design of, or any defect in, the Premises or
the Project, including any electrical, plumbing or mechanical systems and
equipment of the Premises or the Project and the condition of or any defect in
the Land; and Tenant, for itself and its agents, employees, licensees, servants
and invitees, expressly assumes all risks of injury or damage to person or
property, either proximate or remote, resulting from the condition of the
Premises or the Project subject to the exceptions stated herein.
ARTICLE 4.
RENT
Section 4.01. Tenant shall pay to Landlord, without notice or demand, in
lawful money of the United States of America, at Landlord's Address for Payment,
or at such other place as Landlord shall designate in writing from time to time:
(a) the Base Rent, in equal monthly installments, in advance, on the first day
of each calendar month during the Term, and (b) the Additional Rent ("Additional
Rent") consisting of all other sums of money due and payable by Tenant pursuant
to this Lease, including those sums of money due and payable by Tenant under
Section 4.02 hereof and Article 5 hereof, at the respective times required
hereunder. The first monthly installment of Base Rent and the Additional Rent
payable under Article 5 hereof shall be paid in advance on the date of Tenant's
execution of this Lease and applied to the first installment of Base Rent and
such Additional Rent coming due under this Lease. Payment of the Rent shall
begin on the Commencement Date; provided, however, that, if either the
Commencement Date or the Expiration Date falls on a date other than the first
day of a calendar month, the Rent due for such fractional month shall be
prorated on a per diem basis between Landlord and Tenant so as to charge Tenant
only for the portion of such fractional month falling within the Term.
Section 4.02. During the Term, the Base Rent shall be increased annually,
effective as of the first day of the month following the month in which the
anniversary of the Commencement Date occurs (such date being herein referred to
as the
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"Adjustment Date"), to an amount equal to the product obtained by multiplying
the Base Rent in effect for the twelve (12) months immediately preceding the
applicable Adjustment Date by one hundred three percent (103%). Payment of Base
Rent as adjusted hereunder shall begin on the applicable Adjustment Date for the
twelve (12) month period to which such adjusted Base Rent applies.
Section 4.03. All past due installments of Rent that continue unpaid more
than five (5) days after due date thereof shall bear interest until paid at a
rate per annum (the "Interest Rate") equal to the greater of fifteen percent
(15%) or five percent (5%) above the prime rate of interest from time to time
publicly announced by The Xxxxx National Bank of Washington, D.C., a national
banking association, or any successor thereof (the "Prime Rate"); provided,
however, that, if at the time such interest is sought to be imposed the rate of
interest exceeds the maximum rate permitted under federal law or under the laws
of the State of Maryland, the rate of interest on such past due installments of
Rent shall be the maximum rate of interest then permitted by applicable law.
ARTICLE 5.
RENTAL ESCALATION FOR INCREASES IN OPERATING COSTS
Section 5.01. Tenant shall pay to Landlord Excess Operating Costs, as
Additional Rent, commencing with the Initial Adjustment Year and continuing
through each year or fractional year thereafter during the Term. Excess
Operating Costs shall be calculated and paid as follows:
(a) On or before the first day of January of each year during the Term
commencing with the Initial Adjustment Year, or as soon thereafter as is
practicable, Landlord shall furnish Tenant with a statement (the "Excess
Operating Costs Estimate") setting forth Landlord's reasonable estimate of
Excess Operating Costs for the forthcoming year. On the first day of each
calendar month during such year, Tenant shall pay to Landlord one-twelfth of
Excess Operating Costs as estimated on the Excess Operating Costs Estimate. If
for any reason Landlord has not provided Tenant with the Excess Operating Costs
Estimate on or before the first day of January of any applicable year during the
Term then, (i) until the first day of the calendar month following the month in
which Tenant is given the Excess Operating Costs Estimate, Tenant shall continue
to pay to Landlord on the first day of each calendar month the monthly sum, if
any, payable by Tenant under this Section 5.01 for the month of December of the
preceding year, and (ii) promptly after the Excess Operating Costs Estimate is
furnished to Tenant or together therewith, Landlord shall give notice to Tenant
stating whether the installments of Excess Operating Costs previously made for
such year were greater or less than the installments of Excess Operating Costs
to be made for such year in accordance with the Excess Operating Costs Estimate,
and (A) if there shall be a deficiency, Tenant shall pay the amount thereof to
Landlord within thirty (30) days after the giving of the Excess Operating Costs
Estimate, or (B) if there shall have been an overpayment, Landlord shall apply
such overpayment as a credit against the next accruing installment(s) of Base
Rent and Additional Rent due from Tenant under this Section 5.01 until fully
credited to Tenant, and (C) on the first day of the first calendar month
following the month in which Tenant is given the Excess Operating Costs Estimate
and on the first day of each calendar month thereafter during the Term
throughout the remainder of such year, Tenant shall pay to Landlord an amount
equal to one-twelfth (l/l2th) of Excess Operating Costs. The foregoing
notwithstanding, Landlord shall have the right one time during any year to
notify Tenant in writing of any change in the Excess Operating Costs Estimate,
in which event such Excess Operating Costs, as previously estimated, shall be
adjusted to reflect the amount shown in such notice and shall be effective, and
due from Tenant, on the first day of each month during the year for which given
following Landlord's giving of such notice.
(b) On the first day of March of each year during the Term (beginning
on the first day of March of the year following the Initial Adjustment Year), or
as soon thereafter as is practicable, Landlord shall furnish Tenant with a
statement of the actual Excess Operating Costs ("Excess Operating Costs
Statement") for the preceding year. Within thirty (30) days after Landlord's
delivery of the Excess Operating Costs Statement, Tenant shall make a lump sum
payment to Landlord in the amount, if any, by which Excess Operating Costs for
such preceding year as shown on such Landlord's Excess Operating Costs Statement
exceeds the aggregate of the monthly installments of Excess Operating Costs paid
during
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such preceding year. If Excess Operating Costs, as shown on such Landlord's
Excess Operating Costs Statement, is less than the aggregate of the monthly
installments of Excess Operating Costs actually paid by Tenant during such
preceding year, then Landlord shall apply such amount to the next accruing
installment(s) of Base Rent and Additional Rent due from Tenant under this
Section 5.01 until fully credited to Tenant.
If actual Excess Operating Costs for any year, as reflected in the Excess
Operating Costs Statement for such year, are greater than ten percent (10%) of
Base Operating Costs plus actual Excess Operating Costs for the immediately
preceding year (or, with respect to actual Excess Operating Costs for the
Initial Adjustment Year, if actual Excess Operating Costs are greater than ten
(10) percent of Base Operating Costs), then Tenant shall have the right, upon
notice delivered to Landlord not later than sixty (60) days after Tenant's
receipt of Landlord's Excess Operating Costs Statement, and at Tenant's sole
cost and expense, to audit Landlord's books and records pertaining to Excess
Operating Costs for the year to which the Excess Operating Costs Statement
relates. Tenant shall conduct such audit at Landlord's property management
office during normal business hours on a date mutually acceptable to Landlord
and Tenant. Tenant acknowledges that the information gained from such audit is
Landlord's proprietary business information, and Tenant agrees that all such
information will remain confidential between Landlord and Tenant. Tenant shall
instruct its accountants to maintain the confidentiality of Landlord's
information.
(c) If the Term ends on a date other than the last day of December, the
actual Excess Operating Costs for the year in which the Expiration Date occurs
shall be prorated so that Tenant shall pay that portion of Excess Operating
Costs for such year represented by a fraction, the numerator of which shall be
the number of days during such fractional year falling within the Term, and the
denominator of which is 365 (or 366, in the case of a leap year). The provisions
of this Section 5.01 shall survive the Expiration Date or any sooner termination
provided for in this Lease.
Section 5.02. For purposes of this Lease, the term "Operating Costs" shall
mean any and all reasonable and customary expenses, costs and disbursements of
every kind which Landlord pays, incurs or becomes obligated to pay in connection
with the operation, management, repair and maintenance of all portions of the
Project. All Operating Costs shall be determined according to generally accepted
accounting principles which shall be consistently applied. Operating Costs
include the following:
(a) Wages, salaries, and fees (including all reasonable educational,
travel and professional fees) of all personnel or entities (exclusive of
personnel above the grade of building manager and exclusive of Landlord's
executive personnel) engaged in the operation, repair, maintenance, or security
of the Project, (or if any such person or entity is not engaged full-time in the
operation, repair, maintenance, or security of the Project, then an allocable
share of such wages, salaries, and fees), including taxes, insurance, and
benefits relating thereto and the costs of all supplies and materials (including
work clothes and uniforms) used in the operation, repair, and maintenance or
security of the Project.
(b) Cost of performance by Landlord's personnel of, or cost of all
service agreements for, maintenance of the Project, janitorial services, access
control, alarm service, window cleaning, elevator maintenance and landscaping
for the Project. Such cost shall include amounts payable to the any neighborhood
association and rental of personal property used by Landlord's personnel in the
maintenance and repair of the Project, subject to capital expenditures
restriction below.
(c) Cost of utilities for the Project, including water, sewer, power,
electricity, gas, fuel and lighting, and all air-conditioning, heating and
ventilating costs.
(d) Cost of all insurance, including casualty and liability insurance
applicable to the Project and to Landlord's equipment, fixtures and personal
property used in connection therewith (other than that used exclusively by
Landlord in the space occupied by Landlord within the Building but not including
any items within the Building Management Office maintained by Landlord within
the Building), business interruption or rent insurance against such perils as
are commonly insured against by prudent landlords, such other insurance as may
be required by any lessor or mortgagee of Landlord and such other insurance
which Landlord considers reasonably necessary in the operation of the Project,
together with all appraisal and consultants' fees in connection with such
insurance.
(e) All Taxes. For purposes hereof, the term "Taxes" shall mean (i) all
taxes, assessments, and other governmental charges, applicable to or assessed
against the Project or any portion thereof, or applicable to or assessed against
Landlord's personal property used in connection therewith (other than that used
exclusively by Landlord in the space
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occupied by Landlord within the Building but not including any items within the
Building Management Office maintained by Landlord within the Building), whether
federal, state, county, or municipal and whether assessed by taxing districts or
authorities presently taxing the Project or the operation thereof or by other
taxing authorities subsequently created, or otherwise, and any other taxes and
assessments attributable to or assessed against all or any part of the Project
or its operation, and (ii) any reasonable expenses, including fees and
disbursements of attorneys, tax consultants, arbitrators, appraisers, experts
and other witnesses, incurred by Landlord in contesting any taxes or the
assessed valuation of all or any part of the Project. If at any time during the
Term there shall be levied, assessed, or imposed on Landlord or all or any part
of the Project by any governmental entity any general or special ad valorem or
other charge or tax directly upon rents received under leases, or if any fee,
tax, assessment, or other charge is imposed which is measured by or based, in
whole or in part, upon such rents, or if any charge or tax is made based
directly or indirectly upon the transactions represented by leases or the
occupancy or use of the Project or any portion thereof, such taxes, fees,
assessments or other charges shall be deemed to be Taxes; provided, however,
that any (i) franchise, corporation, income or net profits tax, unless expressly
substituted for real estate taxes or imposed as additional charges in connection
with the ownership of the Project including but not limited to public parking
zone taxes (PPZ), which may be assessed against Landlord or the Project or both,
(ii) transfer taxes assessed against Landlord or the Project or both, (iii)
penalties or interest on any late payments of Landlord, and (iv) personal
property taxes of Tenant or other tenants in the Project shall be excluded from
Taxes. If any or all of the Taxes paid hereunder are by law permitted to be paid
in installments, notwithstanding how Landlord pays the same, then, for purposes
of calculating Operating Costs, such Taxes shall be deemed to have been divided
and paid in the maximum number of installments permitted by law, and there shall
be included in Operating Costs for each year only such installments as are
required by law to be paid within such year, together with interest thereon and
on future such installments as provided by law.
(f) Legal and accounting costs incurred by Landlord or paid by Landlord
to third parties (exclusive of legal fees with respect to disputes with
individual tenants, negotiations of tenant leases, or with respect to the
ownership rather than the operation of the Project), appraisal fees, consulting
fees, all other professional fees and disbursements and all association dues.
(g) Cost of non-capitalized repairs and general maintenance of the
Project (excluding repairs and general maintenance paid by proceeds of insurance
or by Tenant, other tenants of the Project or other third parties).
(h) Amortization of the cost of improvements or equipment which are
capital in nature and which (i) are for the purpose of reducing Operating Costs
of the Project, up to the amount saved as a result of the installation thereof,
as reasonably estimated by Landlord, or (ii) are required by any governmental
authority, or (iii) replace any building equipment needed to operate the Project
at the same quality levels as prior to the replacement. All such costs,
including interest thereon, shall be amortized on a straight-line basis over the
useful life of the capital investment items, as reasonably determined by
Landlord, but in no event beyond the reasonable useful life of the Project as a
first-class office project.
(i) The actual management fee paid, not to exceed four percent (4%) of
gross rents per annum and all items reimbursable to the Project manager, if any,
pursuant to any management contract for the Project.
"Operating Costs" shall not include (i) specific costs for any capital
repairs, replacements or improvements, except as provided above; (ii) expenses
for which Landlord is reimbursed, refunded or indemnified (either by an insurer,
condemnor, tenant, warrantor or otherwise) to the extent of funds received by
Landlord; (iii) expenses incurred in leasing or procuring tenants (including
lease commissions, advertising expenses and expenses of renovating space for
tenants); (iv) payments for rented equipment, the cost of which would constitute
a capital expenditure not permitted pursuant to the foregoing if the equipment
were purchased; (v) interest or amortization payments, or the cost of financing
or refinancing on any mortgages or the costs of sale of the Building; (vi) net
basic rents under ground leases; (vii) costs representing an amount paid to an
affiliate of Landlord which is in excess of the amount which would have been
paid in the absence of such relationship; or (viii) costs specially billed to
specific tenants and the cost of services supplied to tenants of the Building
and not made available to Tenant on the same basis; (ix) fines or penalties of
any kind or nature incurred by Landlord, other than fines or penalties incurred
wholly or partly as a result of Tenant's conduct on or about the Premises or
Tenant's breach of this Lease; (x) costs for the repair of damage caused by the
willful misconduct of Landlord or its agents, employees, or contractors; (xi)
costs directly attributable to any breach of Landlord's duties under the lease
or to any breach by Landlord or the Tenant of any other lease of space in the
Building; and (xii) management fees, to the extent that a change in the method
or formula of calculating management
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fees in any year after calendar year 1999 from that method or formula used
during calendar year 1999 results in an increase in management fees. There shall
be no duplication of costs or reimbursement. Landlord shall not include in the
calculation of Excess Operating Costs any item which is properly includable in
Base Operating Costs in accordance with generally accepted accounting principles
consistently applied.
Section 5.03. If the Building is not fully occupied (meaning ninety five
(95%) of the Net Rentable Area of the Building) during any full or fractional
year of the Term, the actual Operating Costs that vary according to occupancy
shall be adjusted for such year to an amount which Landlord estimates would have
been incurred in Landlord's reasonable judgment had the Building been fully
occupied.
Section 5.04. If during the Term any change occurs in either the number of
square feet of the Net Rentable Area of the Premises or of the Net Rentable Area
of the Building, Excess Operating Costs shall be adjusted, effective as of the
date of any such change. Landlord shall promptly notify Tenant in writing of
such change and the reason therefor. Any changes made pursuant to this Section
5.04 shall not alter the computation of Excess Operating Costs as provided in
this Article 5, but, on and after the date of any such change, Excess Operating
Costs pursuant to Section 5.01(a) shall be computed upon Tenant's Share thereof,
as adjusted. If such estimated payments of Tenant's Share are so adjusted during
a year, a reconciliation payment for Excess Operating Costs pursuant to this
Article 5 for the calendar year in which such change occurs shall be computed
pursuant to the method set forth in Section 5.01(b), such computation to take
into account the daily weighted average of Excess Operating Costs during such
year.
Section 5.05. In addition to the adjustment to the monthly rent for
increases in Real Estate Taxes and Operating Expenses, Tenant's Initial Base
Rental Rate shall be increased at each lease anniversary, by three (3%) percent
of the previous year's rental rate pursuant to Section 4.02 (and not in
duplication thereof).
ARTICLE 6.
PARKING
Landlord hereby grants to Tenant a license to use in common with other
tenants and with the public the Parking Facilities and shall issue three (3)
Parking Permits for such use. Each such Parking Permit shall entitle Tenant to
one unassigned parking space in the Parking Facilities. Landlord hereby also
grants to Tenant a license to use one (1) parking space at a location designated
by Landlord in the parking facilities in the Building and shall issue one (1)
Parking Permit to Tenant for such use, subject to Tenant's compliance with
Landlord's rules governing use of the Parking Permit. The initial monthly
Parking Fees for each Parking Permit for the year in which the Commencement Date
occurs are set forth in Article 1. All Parking Fees shall be payable, as
Additional Rent, in advance on the first day of each calendar month during the
Term. Parking Fees may be increased by Landlord at any time and from time to
time in accordance with the Parking Fees Landlord is then charging other users
for parking in the parking facilities in the Building or for unassigned parking
in the Parking Facilities, as the case may be. If Tenant fails to pay all or any
part of the Parking Fees, then Landlord, at its option, shall have the right to
treat such failure as a default under this Lease and, furthermore, to terminate
such Parking Permits, without legal process, and to remove Tenant, Tenant's
vehicles or those of its employees, licensees or invitees and all of Tenant's
personal property from the Parking Facilities all in accordance with applicable
law.
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ARTICLE 7.
SERVICES OF LANDLORD
Section 7.01. A. During the Term, Landlord shall furnish Tenant with the
following services: (a) hot and cold water in Building Standard bathrooms and
chilled water in Building Standard drinking fountains; (b) electrical power
sufficient for lighting the Premises and for the operation therein of
typewriters, voicewriters, calculating machines, word processing equipment,
photographic reproduction, copying machines, computers and related equipment and
similar items of business equipment; (c) heating, ventilating or
air-conditioning, as appropriate, during Business Hours (Holidays excepted),
sufficient to maintain temperatures and humidities of not less than 68 degrees
(dry bulb) in the winter and not greater than 74 degrees (dry bulb) in the
summer, in accordance with standards of buildings comparable to the building in
the Bethesda, Maryland central business district and in accordance with the air
quality standards and/or recommendations promulgated by the Environmental
Protection Agency, the Occupational Safety and Health Administration, and other
applicable authorities, (d) electric lighting for the Common Areas of the
Project; (e) passenger elevator service, in common with others, for access to
and from the Premises twenty-four (24) hours per day, seven (7) days per week;
provided, however, that Landlord shall have the right to limit the number of
(but not cease to operate all) elevators to be operated after Business Hours and
on Saturdays, Sundays and Holidays; (f) customary janitorial cleaning services
after Business Hours Monday through Friday, exclusive of Holidays, (g)
replacement, as necessary, of all Building Standard lamps and ballasts in
Building Standard light fixtures within the Premises, (h) a "Kastle," or
equivalent electronic security system providing secured, after Business Hours
access to the Building and the elevators therein by means of a card controlled
or equivalent central station monitor system. All services referred to in this
Section 7.01A shall be provided by Landlord and paid for by Tenant as part of
Base Operating Costs and Excess Operating Costs, except that Tenant shall pay
Landlord the cost of $9.00 per card for each card beyond the first two cards
issued by Landlord to tenant for the operation of the security system described
in subsection (h) above, and (i) Restroom facility keys for access to the ninth
(9th) floor Ladies' Restroom facilities.
B. If Tenant requires air-conditioning, heating or other services
routinely supplied by Landlord, including cleaning services, for hours or days
in addition to the hours and days specified in Section 7.01A, Landlord shall
make reasonable efforts to provide such additional service after reasonable
prior written request therefor from Tenant, and Tenant shall reimburse Landlord
for the actual cost of such additional service; provided, however, that, if any
other tenants served by the equipment providing such additional service to the
Premises request that Landlord concurrently provide such service to such other
tenants, the cost of Landlord's providing such additional and concurrent service
shall be prorated among all of such tenants requesting such service. Landlord
shall have no obligation to provide any additional service to Tenant at any time
Tenant is in default under this Lease unless Tenant pays to Landlord, in
advance, the cost of such additional service. If any machinery or equipment
which generates abnormal heat or otherwise creates unusual demands on the
air-conditioning or heating system serving the Premises is used in the Premises
and if Tenant has not, within five (5) days after demand from Landlord, taken
such steps, at Tenant's expense, as shall be necessary to cease such adverse
affect on the air-conditioning or heating system, Landlord shall have the right
to install supplemental air-conditioning or heating units in the Premises, and
the full cost of such supplemental units (including the cost of acquisition,
installation, operation, use and maintenance thereof) shall be paid by Tenant to
Landlord in advance or on demand.
C. If Tenant's requirements for or consumption of electricity exceed
the reasonable consumption limits of comparable office users in the building,
Landlord shall, at Tenant's expense, make reasonable efforts to supply such
service through the then-existing feeders and risers serving the Building and
the Premises and shall xxxx Tenant periodically for such additional service. The
degree of such additional consumption and potential consumption by Tenant shall
be determined at Landlord's election, exercisable from time to time, by either
or both (a) survey of standard or average tenant usage of electricity in the
Building performed by a reputable consultant selected by Landlord and paid for
by Tenant, and (b) a separate meter in the Premises to be installed, maintained,
and read by Landlord, all at Tenant's sole expense. Tenant shall not install any
electrical equipment requiring special wiring unless approved in advance by
Landlord which consent shall not unreasonably be withheld. At no time shall use
of electric current in the Premises exceed the capacity of existing feeders and
risers to or wiring in the Premises. Any risers or wiring to meet Tenant's
excess electrical requirements shall, upon Tenant's written request, be
installed by Landlord, at Tenant's sole cost, if, in Landlord's reasonable
judgment, the same are necessary and shall not (i) cause permanent damage or
injury to the Project, the Building or the Premises, (ii) cause or create a
dangerous or hazardous condition, (iii) entail excessive or unreasonable
alterations, repairs or expenses, or (iv) interfere with or disturb other
tenants or occupants of the Building.
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Section 7.02. Landlord's obligation to furnish electrical and other utility
services shall be subject to the rules and regulations of the supplier of such
electricity or other utility services and the rules and regulations of any
municipal or other governmental authority regulating the business of providing
electricity and other utility services.
Section 7.03. No failure to furnish, or any stoppage of, the services
referred to in this Article 7 resulting from any cause, other than Landlord's
gross negligence or willful acts or omissions shall make Landlord liable in any
respect for damages to any person, property or business, or be construed as an
eviction of Tenant, or entitle Tenant to any abatement of Rent or other relief
from any of Tenant's obligations under this Lease. Should any malfunction of any
systems or facilities occur within the Project or should maintenance or
alterations of such systems or facilities become necessary, Landlord shall
repair the same promptly and with reasonable diligence, and Tenant shall have no
claim for rebate, abatement of Rent or damages because of malfunctions or any
such interruptions in service, unless such malfunction or interruption in
services (i) renders the Premises untenantable for the normal conduct of
Tenant's business at the Premises,; (ii) results from causes within Landlord's
control; and (iii) extends for a period longer than five (5) consecutive
Business Days, in which event Rent payable hereunder shall be abated for the
entire period in which the Premises are so untenantable.
Section 7.04. At Landlord's cost and expense, Landlord shall provide one
listing of Tenant's name on the Building directory and shall provide Building
Standard Signage on the suite entry door.
ARTICLE 8.
ASSIGNMENT AND SUBLETTING
Section 8.01. Neither Tenant nor its legal representatives or successors in
interest shall, by operation of law or otherwise, assign, mortgage, pledge,
encumber or otherwise transfer this Lease or any part hereof, or the interest of
Tenant under this Lease, or in any sublease or the rent thereunder without
Landlord's consent, not to be unreasonably withheld, conditioned, or delayed.
The Premises or any part thereof shall not be sublet, occupied or used for any
purpose by anyone other than Tenant, without Tenant's obtaining in each instance
the prior written consent of Landlord in the manner hereinafter provided and
such consent shall not be unreasonably withheld, conditioned or delayed. Tenant
shall not modify, extend, or amend a sublease previously consented to by
Landlord without obtaining Landlord's prior written consent thereto, which
consent shall not be unreasonably withheld, conditioned, or delayed.
Section 8.02. An assignment of this Lease shall be deemed to have occurred
(a) if in a single transaction or in a series of related transactions more than
50% in interest in Tenant, any guarantor of this Lease, or any subtenant
(whether stock, partnership, interest or otherwise) is transferred, diluted,
reduced, or otherwise affected with the result that the present holder or owners
of Tenant, such guarantor, or such subtenant have less than a 50% interest in
Tenant, such guarantor or such subtenant or (b) if Tenant's obligations under
this Lease are taken over or assumed in consideration of Tenant leasing space in
another office building. The transfer of the outstanding capital stock of any
corporate Tenant, guarantor or subtenant through the "over-the-counter" market
or any recognized national securities exchange (other than by persons owning 5%
or more of the voting calculation of such 50% interest in (a) above) shall not
be included in the calculation of such 50% interest in (a) above.
Section 8.03. Notwithstanding anything in Section 8.01 to the contrary,
Tenant shall have the right, upon ten (10) days' prior written notice to
Landlord, (a) to sublet all or part of the Premises to any related corporation
or other entity which controls Tenant, is controlled by Tenant or is under
common control with Tenant; or (b) to assign this Lease to a successor
corporation into which or with which Tenant is merged or consolidated or which
acquired substantially all of Tenant's assets and property; provided that (i)
such successor corporation assumes substantially all of the obligations and
liabilities of Tenant and shall have assets, capitalization and net worth at
least equal to the assets, capitalization and net worth of Tenant as of the date
of this Lease or as of the date of such subletting or assignment, whichever is
greater, as determined by generally accepted accounting principles, and (ii)
Tenant provides in its notice to Landlord the information required in Section
8.04. For the purpose hereof "control" shall mean ownership of not less than 50%
of all the voting stock or legal and equitable interest in such corporation or
entity.
Section 8.04. If Tenant should desire to assign this Lease or sublet the
Premises (or any part thereof), Tenant shall give Landlord written notice no
later than the time required for notice under Section 8.03 in the case of an
assignment or
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subletting, or forty-five (45) days in advance of the proposed effective date of
any other proposed assignment or sublease, specifying (a) the name, current
address and business of the proposed assignee or sublessee, (b) the amount and
location of the space within the Premises proposed to be so subleased, (c) the
proposed effective date and duration of the assignment or subletting, and (d)
the proposed rent or consideration to be paid to Tenant by such assignee or
sublessee. Tenant also shall promptly supply Landlord with financial statements
and other information as Landlord may reasonably request to evaluate the
proposed assignment or sublease. For assignments and sublettings other than
those permitted by Section 8.03, Landlord shall have a period of ten (10) days
following receipt of such notice and other information requested by Landlord
within which to notify Tenant in writing that Landlord elects: (a) to terminate
this Lease as of the proposed effective date set forth in Tenant's notice, in
which event Tenant shall be relieved of all further obligations hereunder,
except for obligations under Articles 17 and 22 and all other provisions of this
Lease which expressly survive the termination hereof and recapture the portion
of the Demised Premises Tenant wishes to sublease; or (b) to permit Tenant to
assign or sublet such space; provided, however, that, if the rental rate agreed
upon between Tenant and its proposed subtenant is greater than the rental rate
that Tenant must pay Landlord hereunder for that portion of the Premises, or if
any consideration shall be promised to or received by Tenant in connection with
such proposed assignment or sublease (in addition to rent), then one-half (1/2)
of all of such net profits form the sublease of the Premises (excess rent and
other consideration) shall be considered Additional Rent owed by Tenant to
Landlord (less brokerage commissions, attorneys' fees and other disbursements
reasonably incurred by Tenant for such assignment and subletting if acceptable
evidence of such disbursements is delivered to Landlord), and shall be paid by
Tenant to Landlord, in the case of excess rent, in the same manner that Tenant
pays Base Rent and, in the case of any other consideration, within ten (10)
Business Days after receipt thereof by Tenant; or (c) to refuse, in Landlord's
reasonable discretion, to consent to Tenant's assignment or subleasing of such
space and to continue this Lease in full force and effect as to the entire
Premises. The parties agree that Landlord may reasonably refuse to consent to an
assignment or subletting if the proposed assignee or subtenant is not
financially creditworthy, is a governmental authority or agency, an organization
or person enjoying sovereign or diplomatic immunity, a medical or dental
practice (unless specifically provided as Tenant's Permitted Uses in Article 1
of this Lease), a school or training academy, a user that will attract a volume,
frequency or type of visitor or employee to the Building which is not consistent
with the standards of a high quality office building or that will impose an
excessive demand on or use of the facilities or services of the Building, a user
having a nature, use or reputation not reasonably suited for urban
multi-tenanted office buildings, a user employing in excess of one (1) employee
for every one hundred fifty (150) square feet of leasable area, or a user having
a nature competitive or disruptive to the business of Landlord. It shall also be
reasonable for Landlord to refuse to consent to any assignment or subletting if
(i) Tenant is then in default under this Lease, or (ii) such assignment or
subletting would cause a default under another lease in the Building or under
any ground lease, deed of trust, mortgage, restrictive covenant, easement or
other encumbrance affecting the Project, or (iii) such subletting, together with
other sublettings then in effect, would result in more than 49% of the Premises
being sublet and the proposed subtenant's not financially creditworthy. If
Landlord should fail to notify Tenant in writing of its election within the
aforesaid thirty (30) day period, Landlord shall be deemed to have elected
option (c) above. Tenant agrees to reimburse Landlord for reasonable legal fees
and any other reasonable costs incurred by Landlord in connection with any
permitted assignment or subletting and such payment shall not be deducted from
the Additional Rent owed to Landlord pursuant to subsection (b) above. Tenant
shall deliver to Landlord copies of all documents executed in connection with
any permitted assignment or subletting, which documents shall be in form and
substance reasonably satisfactory to Landlord and which documents, (i) in the
case of a permitted assignment, shall require such assignee to assume
performance of all terms of this Lease on Tenant's part to be performed, and
(ii) in the case of a permitted subletting, shall require such sublessee to
comply with all terms of this Lease on Tenant's part to be performed. No
acceptance by Landlord of any Rent or any other sum of money from any assignee,
sublessee or other category of transferee shall be deemed to constitute
Landlord's consent to any assignment, sublease, or transfer.
Section 8.05. Any attempted assignment or sublease by Tenant in violation
of the terms and provisions of this Article 8 shall be void and shall constitute
a material breach of this Lease. In no event, shall any assignment, subletting
or transfer, whether or not with Landlord's consent, relieve Tenant of its
primary liability under this Lease for the entire Term, and Tenant shall in no
way be released from the full and complete performance of all the terms hereof.
If Landlord takes possession of the Premises before the expiration of the Term
of this Lease, Landlord shall have the right, at its option, to terminate all
subleases, or to take over any sublease of the Premises or any portion thereof
and such subtenant shall attorn to Landlord, as its landlord, under all the
terms and obligations of such sublease occurring from and after such date, but
excluding previous acts, omissions, negligence or defaults of Tenant and any
repair or improvement obligation in excess of available net insurance proceeds
or condemnation award.
17
Section 8.06. Tenant acknowledges that this Lease is a lease of
nonresidential real property and therefore agrees that Tenant, as the debtor in
possession, or the trustee for Tenant (collectively "the Trustee") in any
proceeding under Title 11 of the United States Bankruptcy Code relating to
bankruptcy, as amended, or under any other similar federal or state statute
(collectively, the "Bankruptcy Code"), shall not seek or request any extension
of time to assume or reject this Lease or to perform any obligations of this
Lease which arise from or after the order of relief.
If the Trustee proposes to assume or to assign this Lease or sublet the
Premises (or any portion thereof) to any person who shall have made a bona fide
offer to accept an assignment of this Lease or a subletting on terms acceptable
to the Trustee, the Trustee shall give Landlord, and lessors and mortgagees of
Landlord of which Tenant has notice, written notice setting forth the name and
address of such person and the terms and conditions of such offer, no later than
twenty (20) days after receipt of such offer, but in any event no later than ten
(10) days prior to the date on which the Trustee makes application to the
bankruptcy court for authority and approval to enter into such assumption and
assignment or subletting. Landlord shall have the prior right and option, to be
exercised by written notice to the Trustee given at any time prior to the
effective date of such proposed assignment or subletting, to accept an
assignment of this Lease or subletting of the Premises upon the same terms and
conditions and for the same consideration, if any, as the bona fide offer made
by such person, less any brokerage commissions which may be payable out of the
consideration to be paid by such person for the assignment or subletting of this
Lease.
The Trustee shall have the right to assume Tenant's rights and obligations
under this Lease only if the Trustee: (i) promptly cures, or provides adequate
assurance that the Trustee will promptly cure, any default under this Lease;
(ii) compensates, or provides adequate assurance that the Trustee will promptly
compensate, Landlord for any actual pecuniary loss incurred by Landlord as a
result of Tenant's default under this Lease; and (iii) provides adequate
assurance of future performance under this Lease. All payments of Rent required
of Tenant under this Lease, whether or not expressly denominated as such in this
Lease, shall constitute rent for the purposes of Title 11 of the Bankruptcy
Code.
The parties agree that for the purposes of the Bankruptcy Code relating to
(i) the obligation of the Trustee to provide adequate assurance that the Trustee
will "promptly" cure defaults and compensate Landlord for actual pecuniary loss,
the word "promptly" shall mean that cure of defaults and compensation will occur
no later than one hundred twenty (120) days following the filing of any motion
or application to assume this Lease; and (ii) the obligation of the Trustee to
compensate or to provide adequate assurance that the Trustee will promptly
compensate Landlord for "actual pecuniary loss," the term "actual pecuniary
loss" shall mean, in addition to any other provisions contained herein relating
to Landlord's damages upon default, payments of Rent, including interest at the
Interest Rate on all unpaid Rent, all attorneys' fees and related costs of
Landlord incurred in connection with any default of Tenant and in connection
with Tenant's bankruptcy proceedings.
Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed, without further act or deed,
to have assumed all of the obligations arising under this Lease and each of the
conditions and provisions hereof on and after the date of such assignment. Any
such assignee shall, upon the request of Landlord, forthwith execute and deliver
to Landlord an instrument, in form and substance acceptable to Landlord,
confirming such assumption.
Section 8.07. The term "Landlord," as used in this Lease, so far as
covenants or obligations on the part of Landlord are concerned, shall be limited
to mean and include only the owner or owners, at the time in question, of the
fee title to, or a lessee's interest in a ground lease of, the Land or the
Building. In the event of any transfer, assignment or other conveyance or
transfers of any such title or interest, Landlord herein named (and in case of
any subsequent transfers or conveyances, the then grantor) shall be
automatically freed and relieved from and after the date of such transfer,
assignment or conveyance of all liability as respects the performance of any
covenants or obligations on the part of Landlord contained in this Lease
thereafter to be performed provided, and to the extent that, the transferee of
such title or interest shall have assumed and agreed to observe and perform any
and all obligations of Landlord hereunder, during its ownership of the Project
subject to the terms of Section 18.02,. Landlord may transfer its interest in
the Project without the consent of Tenant and such transfer or subsequent
transfer shall not be deemed a violation on Landlord's part of any of the terms
of this Lease.
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ARTICLE 9.
REPAIRS
Section 9.01. Except for ordinary wear and tear and except as otherwise
provided in Section 9.02, Landlord shall perform all maintenance and make all
repairs and replacements to the Premises (including the Leasehold Improvements)
and the Building to keep same in good working order and condition. Tenant shall
pay to Landlord the actual cost for (a) all maintenance, repairs and
replacements within the Premises (including the Leasehold Improvements), other
than (i) repairs and replacements necessitated by the willful misconduct or
negligence of Landlord or its agents, employees, contractors, invitees or
licensees to the extent the cost thereof is not collectible under Tenant's
insurance, or, if Tenant is not carrying all of the insurance described in
Section 14.01A, to the extent such cost would not be covered by the insurance
described in Section 14.01A if the same were in effect, and (ii) maintenance,
repairs and replacements to the Central Building Systems located within the
Premises, and (b) all repairs and replacements necessitated by damage to the
Project (including the Building structure and the Central Building Systems
within the Premises) caused by the negligence or willful misconduct of Tenant or
its agents, contractors, invitees and licensees but only to the extent the cost
thereof is not collectible under Landlord's insurance, or, if Landlord is not
carrying all of the insurance described in Section 14.02, to the extent that
such cost would not be covered by the insurance described in Section 14.02 if
the same were in effect. Amounts payable by Tenant pursuant to this Section 9.01
shall be payable on demand after receipt of an invoice therefor from Landlord.
Landlord has no obligation and has made no promise to maintain, alter, remodel,
improve, repair, decorate, or paint the Premises or any part thereof, except as
specifically set forth in this Lease. In no event shall Landlord have any
obligation to maintain, repair or replace any furniture, furnishings, fixtures
or personal property of Tenant.
Section 9.02. Tenant shall keep the Premises (including the Leasehold
Improvements) in good order and in a safe, neat and clean condition. No
representations respecting the condition of the Premises or the Building or the
other portions of the Project have been made by Landlord to Tenant except as
specifically set forth in this Lease. Except as provided in Section 10.01 or
specifically consented to by Landlord, Tenant shall not perform any maintenance
or repair work or make any replacement in or to the Premises (including the
Leasehold Improvements) other than of a de minimis nature but rather shall
promptly notify Landlord of the need for such maintenance, repair or replacement
so that Landlord may proceed to perform the same pursuant to the provisions of
Section 9.01. In the event Landlord specifically consents to the performance of
any maintenance, or the making of any repairs or replacements by Tenant and
Tenant fails to promptly commence and diligently pursue the performance of such
maintenance or the making of such repairs or replacements, then Landlord, at its
option, may perform such maintenance or make such repairs and Tenant shall
reimburse Landlord, on demand after Tenant receives an invoice therefor, the
cost thereof.
Section 9.03. All repairs which may be made by Tenant pursuant to Section
9.02 shall be performed in a good and workmanlike manner by contractors or other
repair personnel selected by Tenant from an approved list of contractors and
repair personnel maintained by Landlord in the Project's management office;
provided, however, that neither Tenant nor its contractors or repair personnel
shall be permitted to do any work affecting the Central Building Systems. In no
event shall such work be done for Landlord's account or in a manner which allows
any liens to be filed in violation of Article 11. To the extent any repairs
involve the making of alterations to the Premises, Tenant shall comply with the
provisions of Article 10, and Tenant shall comply with the provisions of Section
10.02 with regard to any construction, alteration or repair work performed by or
on behalf of Tenant with respect to the Premises.
Section 9.04. Subject to the other provisions of this Lease imposing
obligations regarding repair upon Tenant, Landlord shall repair all machinery
and equipment necessary to provide the services of Landlord described in Article
7 and all portions of the Project which are not a part of the Premises and are
not leased to others (provided that Tenant shall pay the costs of any repair to
such systems, or the Project, or any part thereof damaged by Tenant or Tenant's
employees, customers, clients, agents, licensees and invitees but only to the
extent the cost thereof is not collectible under Landlord's insurance, or, if
Landlord is not carrying all of the insurance described in Section 14.02, to the
extent that such cost would not be covered by the insurance described in Section
14.02 if the same were in effect). Subject to other terms of this Lease
specifically imposing obligations regarding repair upon Tenant, and further
subject to the provisions of Article 15 and Article 16 of this Lease, Landlord
shall repair and maintain the other parts of the Building not leased to Tenant
and the
19
Common Areas to a standard comparable to that of other office buildings in the
Bethesda, Maryland central business district.
ARTICLE 10.
ALTERATIONS
Section 10.01. Tenant shall not at any time during the Term make any
alterations to the Premises without first obtaining Landlord's written consent
thereto, which consent Landlord shall not unreasonably withhold, provided,
however, that Landlord shall not be deemed unreasonable by refusing to consent
to any alterations which are visible from the exterior of the Building or the
Project, which will or are likely to cause any weakening of any part of the
structure of the Premises, the Building or the Project or which will or are
likely to cause damage or disruption to the Central Building Systems or which
are prohibited by any underlying ground lease or mortgage. Should Tenant desire
to make any alterations to the Premises, Tenant shall submit all plans and
specifications for such proposed alterations to Landlord for Landlord's review
before Tenant allows any such work to commence, and Landlord shall promptly
approve or disapprove such plans and specifications for any of the reasons set
forth in this Section 10.01 or for any other reason reasonably deemed sufficient
by Landlord. Tenant shall select and use only contractors, subcontractors or
other repair personnel approved by Landlord (such approval not to be
unreasonably withheld). Upon Tenant's receipt of written approval from Landlord
and any required approval of any mortgagee or lessor of Landlord, and upon
Tenant's payment to Landlord of (a) a reasonable fee prescribed by Landlord for
the work of Landlord and Landlord's employees and representatives in reviewing
and approving such plans and specifications and (b) the fees, if any, charged by
any mortgagee or lessor of Landlord for such review and approval, Tenant shall
have the right to proceed with the construction of all approved alterations, but
only so long as such alterations have been approved (with all necessary permits
having been issued) by the appropriate governmental authorities and are in
strict compliance with the plans and specifications so approved by Landlord and
with the provisions of this Article 10 including the use of contractors and
repair personnel described above. All alterations shall be made at Tenant's
expense, either by Tenant's contractors approved in advance by Landlord, or, at
Tenant's option, by Landlord on terms reasonably satisfactory to Tenant,
including a reasonable fee to Landlord of performing such work to cover
Landlord's overhead and a reasonable fee for Landlord's agent or manager in
supervising and coordinating such work. If Tenant's contractors make such
alterations, Landlord's agent or manager shall supervise and coordinate such
Tenant's contractor's work. In no event, however, shall anyone other than
Landlord or Landlord's employees or representatives perform any work affecting
the Central Building Systems.
Section 10.02. All construction, alterations and repair work done by or for
Tenant shall (a) be performed in such a manner as to maintain harmonious labor
relations, (b) not adversely affect the safety of the Project, the Building or
the Premises or the systems thereof and not affect the Central Building Systems,
(c) comply with all building, safety, fire, plumbing, electrical, and other
codes and governmental and insurance requirements, (d) not result in any usage
in excess of Building Standard of water, electricity, gas, or other utilities or
of heating, ventilating or air-conditioning (either during or after such work)
unless prior written arrangements satisfactory to Landlord are made with respect
thereto, (e) be completed promptly and in a good and workmanlike manner and in
compliance with, and subject to, all of the provisions of Article 2 of Exhibit C
hereof and (f) not disturb Landlord or other tenants in the Building. After
completion of any alterations to the Premises Tenant will deliver to Landlord a
copy of "as built" plans and specifications depicting and describing such
alterations.
Section 10.03. All leasehold improvements, alterations and other physical
additions made to, or installed by or for Tenant in, the Premises (including the
Leasehold Improvements) shall be and remain Landlord's property (except Tenant's
furniture, personal property and movable trade fixtures) and shall not be
removed without Landlord's written consent. Tenant agrees to remove, at Tenant's
expense, all of its furniture, personal property and movable trade fixtures,
and, if directed to or permitted to do so by Landlord in writing, Tenant agrees
to remove, at Tenant's expense, all, or any part of, the leasehold improvements,
alterations and other physical additions made by Tenant to the Premises, after
the Commencement Date, on or before the Expiration Date or any sooner date of
termination of this Lease and Tenant shall repair, or promptly reimburse
Landlord for the cost of repairing, all damage done to the Premises or the
Building by such removal. Any leasehold improvements, alterations or physical
additions made by Tenant which Landlord does not direct or permit Tenant to
remove at any time during or at the end of the Term shall become the property of
Landlord at the end of
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the Term without any payment to Tenant. If Tenant fails to remove any of
Tenant's furniture, personal property or movable trade fixtures by the
Expiration Date or any sooner date of termination of the Term or, if Tenant
fails to remove any leasehold improvements, alterations or other physical
additions made by Tenant to the Premises which Landlord has in writing directed
Tenant to remove, Landlord shall have the right, on the fifth (5th) day after
Landlord's delivery of written notice to Tenant to deem such property abandoned
by Tenant and to remove, store, sell, discard or otherwise deal with or dispose
of such abandoned property in a commercially reasonable manner. Tenant shall be
liable for all reasonable costs of such disposition of Tenant's abandoned
property, and Landlord shall have no liability to Tenant in any respect
regarding such property of Tenant. The provisions of this Section 10.03 shall
survive the expiration or any termination of this Lease. Notwithstanding the
foregoing, Tenant shall only be required to remove any alterations or Leasehold
Improvements made by it if, at the time that it obtains Landlord's approval of
such alterations or Leasehold Improvements, Landlord notifies Tenant that it
will require removal of such alterations or Leasehold Improvements at the
termination of the lease.
ARTICLE 11.
LIENS
Section 11.01. Tenant shall keep the Project, the Building and the Premises
and Landlord's interest therein free from any liens arising from any work
performed, materials furnished, or obligations incurred by or on behalf of
Tenant (other than by Landlord pursuant to Exhibit C). Notice is hereby given
that neither Landlord nor any mortgagee or lessor of Landlord shall be liable
for any labor or materials furnished, if any, to Tenant except as furnished to
Tenant by Landlord pursuant to Exhibit C. If any lien is filed for such work or
materials, such lien shall encumber only Tenant's interest in leasehold
improvements on the Premises. Within ten (10) days after Tenant learns of the
filing of any such lien, Tenant shall notify Landlord of such lien and shall
either discharge and cancel such lien of record or deposit into court cash or
bonds sufficient under the laws of the State of Maryland to cover the amount of
the lien claim plus any penalties, interest, attorneys' fees, court costs, and
other legal expenses in connection with such lien. If Tenant fails to so
discharge or bond such lien within twenty (20) calendar days after written
demand from Landlord, Landlord shall have the right, at Landlord's option, to
pay the full amount of such lien without inquiry into the validity thereof, and
Landlord shall be promptly reimbursed by Tenant, as Additional Rent, for all
reasonable amounts so paid by Landlord, including expenses, interest, and
attorneys' fees.
ARTICLE 12.
USE AND COMPLIANCE WITH LAWS
Section 12.01. The Premises shall be used only for offices for the conduct
of Tenant's business limited to the uses specifically set forth in the Basic
Lease Information and for no other purposes whatsoever. Tenant shall use and
maintain the Premises in a clean, safe, lawful manner and shall not allow within
the Premises any offensive noise, odor, conduct or nuisance or permit Tenant's
employees, agents, licensees or invitees to create a nuisance or act in a
disorderly manner within the Building or the Project. Any statement as to the
particular nature of the business to be conducted by Tenant in the Premises and
uses to be made thereof by Tenant as set forth in the Basic Lease Information
shall not constitute a representation or warranty by Landlord that such business
or uses are lawful or permissible under any certificate of occupancy for the
Premises or the Building or are otherwise permitted by law.
Section 12.02. Tenant shall, at Tenant's sole expense, (i) comply with all
laws, orders, ordinances, and regulations of federal, state, county, and
municipal authorities having jurisdiction over the Premises, including any laws,
orders, ordinances, and regulations relating to the use or consumption of
hazardous substances by Tenant, its agents or employees, or the presence or
removal of such substances in or from the Premises; (ii) comply with any
directive, order or citation made pursuant to law by any public officer
requiring abatement of any nuisance or which imposes upon Landlord or Tenant any
duty or obligation arising from Tenant's occupancy or use of the Premises or
from conditions which have been created by or at the request or insistence of
Tenant, or required by reason of a breach of any of Tenant's obligations
hereunder or by or through other fault of Tenant; (iii) comply with all
insurance requirements applicable to the Premises; (iv) comply with the Rules
and Regulations contained in Exhibit F of this Lease, as the same may be changed
from time to time; (v) cause Tenant's employees, agents, invitees, and
contractors to refrain from smoking in the Building at all times (other than in
a designated smoking area in the parking facilities of the Building which
Landlord may designate at any time and from time
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to time); and (vi) indemnify and hold Landlord harmless from any loss, cost,
claim or expense which Landlord incurs or suffers by reason of Tenant's failure
to comply with its obligations under clauses (i), (ii), (iii) or (iv) above.
Tenant shall have no obligation to perform any structural alterations to
Premises pursuant to the terms set forth in (i) above except to the extent such
alterations are required to correct conditions which have been created by or at
the request or insistence of Tenant or are required by reason of a breach of any
Tenant's obligations hereunder or by or through other fault of Tenant. If Tenant
receives notice of any such directive, order, citation or of any violation of
any law, order, ordinance, regulation or any insurance requirement, Tenant shall
promptly notify Landlord in writing of such alleged violation and furnish
Landlord with a copy of such notice. The foregoing notwithstanding, Landlord
shall make structural alterations or structural improvements required to comply
with applicable laws and regulations unless such alterations or improvements are
necessitated by Tenant's particular use of the Premises (as opposed to being
necessitated by office use generally.)
ARTICLE 13.
DEFAULT AND REMEDIES
Section 13.01. The occurrence of any one or more of the following events
shall constitute an Event of Default (herein so called) of Tenant under this
Lease: (a) if Tenant fails to pay any Rent hereunder as and when such Rent
becomes due and such failure shall continue for more than ten (10) days after
Landlord gives Tenant written notice of past due Rent; (b) if Tenant fails to
pay Rent on time more than twice in any period of twelve (12) months,
notwithstanding that such payments have been made within the applicable cure
period; (c) if Tenant vacates the Premises before the last year of the Term, or
if the Premises become deserted or abandoned for more than forty-five (45)
consecutive days, or if Tenant fails to take possession of the Premises on the
Commencement Date or promptly thereafter unless Tenant's failure to take
possession of the Premises is caused by Landlords default; (d) if Tenant permits
to be done anything which creates a lien upon the Premises and fails to
discharge, or bond such lien or post such security with Landlord as is required
by Article 11; (e) if Tenant violates the provisions of Article 8 by attempting
to make an unpermitted assignment or sublease; (f) if Tenant fails to maintain
in force all policies of insurance required by this Lease and such failure shall
continue for more than ten (10) days after Landlord gives Tenant written notice
of such failure; (g) if any petition is filed by or against Tenant or any
guarantor of this Lease under any present or future section or chapter of the
Bankruptcy Code, or under any similar law or statute of the United States or any
state thereof (which, in the case of an involuntary proceeding, is not
permanently discharged, dismissed, stayed, or vacated, as the case may be,
within sixty (60) days of commencement), or if any order for relief shall be
entered against Tenant or any guarantor of this Lease in any such proceedings;
(h) if Tenant or any guarantor of this Lease becomes insolvent or makes a
transfer in fraud of creditors or makes an assignment for the benefit of
creditors; (i) if a receiver, custodian, or trustee is appointed for the
Premises or for all or substantially all of the assets of Tenant or of any
guarantor of this Lease, which appointment is not vacated within sixty (60) days
following the date of such appointment; (j) if Tenant fails to perform or
observe any other material term of this Lease and such failure shall continue
for more than twenty (20) days after Landlord gives Tenant written notice of
such failure, or, if such failure cannot be corrected within such twenty (20)
day period, if Tenant does not commence to correct such default within said
twenty (20) day period and thereafter diligently prosecute the correction of
same to completion within a reasonable time and in any event prior to the time a
failure to complete such correction could cause Landlord to be subject to
prosecution for violation of any law, rule, ordinance or regulation or causes,
or could cause a default under any deed of trust, mortgage, underlying lease,
tenant leases or other agreements applicable to the Project; or (k) if Tenant
fails to perform any term (other than the payment of Rent) of this Lease more
than three (3) times in any period of twelve (12) months, notwithstanding that
Tenant has corrected any previous failures within the applicable cure period.
Section 13.02. Upon the occurrence of any Event of Default, Landlord shall
have the right, at Landlord's option, to elect to do any one or more of the
following without further notice or demand to Tenant:
(a) terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and, if Tenant fails to so surrender,
Landlord shall have the right, in accordance with applicable law, without notice
and without resorting to legal process, to enter upon and take possession of the
Premises and to expel or remove Tenant and its effects without being liable for
prosecution or any claim for damages therefor; and Tenant shall, and hereby
agrees to, indemnify Landlord for all loss and damage which Landlord suffers by
reason of such termination, including damages in an amount
22
equal to the total of (1) the costs of recovering the Premises and all other
expenses incurred by Landlord in connection with Tenant's default; (2) the
unpaid Rent earned as of the date of termination, plus interest at the Interest
Rate; (3) the amount by which total Base Rent which Landlord would have received
under this Lease for the remainder of the Term, but discounted to the then
present value at a rate of eight percent (8%) per annum, exceeds the fair market
rental value on a net basis for the balance of the Term as of the time of such
default, discounted to the then present value at a rate of eight percent (8%)
per annum; and (4) all other sums of money and damages owing by Tenant to
Landlord; or
(b) enter upon and take possession of the Premises in accordance with
applicable law without terminating this Lease and without being liable to
prosecution or any claim for damages therefor, and, if Landlord elects, relet
the Premises on such terms as Landlord deems advisable, in which event Tenant
shall pay to Landlord on demand the cost of repossessing, renovating, repairing,
and altering the Premises for a new tenant or tenants and any deficiency between
the Rent payable hereunder and the rent paid under such reletting; provided,
however, that Tenant shall not be entitled to any excess payments received by
Landlord from such reletting. Landlord's failure to relet the Premises shall not
release or affect Tenant's liability for Rent or for damages, however, Landlord
shall use commercially reasonable efforts to relet the Premises; or
(c) enter the Premises without terminating this Lease in accordance
with applicable law and without being liable for prosecution or any claim for
damages therefor and maintain the Premises and repair or replace any damage
thereto or do anything for which Tenant is responsible hereunder. Tenant shall
reimburse Landlord immediately upon demand for any expenses which Landlord
incurs in thus effecting Tenant's compliance under this Lease, and Landlord
shall not be liable to Tenant for any damages with respect thereto.
Section 13.03. No agreement to accept a surrender of the Premises and no
act or omission by Landlord or Landlord's agents during the Term shall
constitute an acceptance or surrender of the Premises unless made in writing and
signed by Landlord. No re-entry or taking possession of the Premises by Landlord
shall constitute an election by Landlord to terminate this Lease unless a
written notice of such intention is given to Tenant.
Section 13.04. No provision of this Lease shall be deemed to have been
waived by Landlord unless such waiver is in writing and signed by Landlord.
Landlord's acceptance of Rent following an Event of Default hereunder shall not
be construed as a waiver of such Event of Default. No custom or practice which
may occur or develop between the parties in connection with the terms of this
Lease shall be construed to waive or lessen Landlord's right to insist upon
strict performance of the terms of this Lease, without a written notice thereof
to Tenant from Landlord.
Section 13.05. The rights granted to Landlord in this Article 13 shall be
cumulative of every other right or remedy provided in this Lease or which
Landlord may otherwise have at law or in equity or by statute, and the exercise
of one or more rights or remedies shall not prejudice or impair the concurrent
or subsequent exercise of other rights or remedies or constitute a forfeiture or
waiver of Rent or damages accruing to Landlord by reason of any Event of Default
under this Lease. Tenant agrees to pay to Landlord all costs and expenses
incurred by Landlord in the enforcement of this Lease, including all reasonable
attorneys' fees incurred in connection with the collection of any sums due
hereunder or the enforcement of any right or remedy of Landlord.
ARTICLE 14.
INSURANCE
Section 14.01. A. Tenant, at its sole expense, shall obtain and keep in
force during the Term the following insurance:
(a) All Risk insurance, (including coverage for business
interruption), insuring the Leasehold Improvements and Tenant's interest in the
Premises and all property located in the Premises, including furniture,
equipment, fittings, installations, fixtures, supplies and any other personal
property, leasehold improvements and alterations in the Premises ("Tenant's
Property"), in an amount equal to the full replacement value, it being
understood that no lack or inadequacy of insurance by Tenant
23
shall in any event make Landlord subject to any claim by virtue of any theft of
or loss or damage to any uninsured or inadequately insured property;
(b) Comprehensive general public liability insurance including
personal injury, bodily injury, broad form property damage, operations hazard,
owner's protective coverage, contractual liability (with a cross liability
clause and a severability of interests clause to cover Tenant's indemnities set
forth herein), and products and completed operations liability, in aggregate
limits not less than $2,000,000.00 inclusive on a claims basis or such higher
limits as Landlord may require from time to time during the Term;
(c) Worker's Compensation and Employer's Liability insurance, in form
and amount as required by applicable law;
(d) In the event Tenant performs any repairs or alterations to the
Premises, Builder's Risk insurance on an "all risk" basis (including collapse)
on a completed value (non-reporting) form for full replacement value covering
all work incorporated in the Building and all materials and equipment in or
about the Premises during the course of construction; and
(e) Any other normal or necessary form or forms of insurance or any
changes or endorsements to the insurance required herein as Landlord, or any
mortgagee or lessor of Landlord, may require from time to time.
B. Tenant shall have the right to include the insurance required by
Section 14.01A under Tenant's policies of "blanket insurance," provided that no
other loss which may also be insured by such blanket insurance shall affect the
insurance coverages required hereby and further provided that Tenant delivers to
Landlord a certificate specifically stating that such coverages apply to
Landlord, the Premises and the Project. All such policies of insurance or
certificates thereof shall name Tenant as named insured thereunder and shall
name as additional named insureds Landlord, and all mortgagees and lessors of
Landlord of which Tenant has been notified, all as their respective interests
may appear. All such policies or certificates shall be issued by insurers
licensed to do business in the state of Maryland with a rating of "A-X" or
better as established by Best's Rating Guide or an equivalent rating with such
other publication of a similar nature as shall be in current use and shall be in
form satisfactory from time to time to Landlord. Tenant shall deliver to
Landlord certificates with copies of policies, together with satisfactory
evidence of payment of premiums for such policies, by the Commencement Date,
and, with respect to renewals of such policies, Tenant shall deliver the same
not later than thirty (30) days prior to the end of the expiring term of
coverage. All policies of insurance shall be primary and Tenant shall not carry
any separate or additional insurance concurrent in form or contributing in the
event of any loss or damage with any insurance required to be maintained by
Tenant under this Lease. All such policies and certificates shall contain an
agreement by the insurers to notify Landlord and any mortgagee or lessor of
Landlord in writing, by Registered U.S. mail, return receipt requested, not less
than thirty (30) days before any material change, reduction in coverage,
cancellation (including cancellation for nonpayment of premium) or other
termination thereof or change therein and shall include a clause or endorsement
denying the insurer any rights of subrogation against Landlord, if such clause
or endorsement is obtainable without additional cost to Tenant.
Section 14.02. Landlord shall insure the Building against damage, with
casualty and comprehensive general public liability insurance, all in such
amounts and with such deductibles as Landlord and Landlord's mortgagee
reasonably deems appropriate. Notwithstanding any contribution by Tenant to the
cost of insurance premiums, as provided hereinabove, Landlord shall not be
required to carry insurance of any kind on Tenant's Property, and Tenant hereby
agrees that Tenant shall have no right to receive any proceeds from any
insurance policies carried by Landlord.
Section 14.03. Tenant shall not knowingly conduct or permit to be
conducted in the Premises any activity, or place any equipment in or about the
Premises or the Building, which will invalidate the insurance coverage in effect
or increase the rate of fire insurance or other insurance on the Premises or the
Building, and Tenant shall comply with all requirements and regulations of
Landlord's casualty and liability insurer. If any invalidation of coverage or
increase in the rate of fire insurance or other insurance occurs or is
threatened by any insurance company due to any act or omission by Tenant, or its
agents, employees, representatives, or contractors, such statement or threat
shall be conclusive evidence that the increase in such rate is due to such act
of Tenant or the contents or equipment in or about the Premises, and, as a
result thereof, Tenant shall be liable for such increase and shall reimburse
Landlord therefor upon demand. Any such increase shall be considered Additional
Rent payable with the next monthly installment of Base Rent becoming due under
this Lease. In no event shall Tenant introduce or permit to kept on the Premises
or brought into the Building any dangerous, noxious, radioactive or
24
explosive substance, other than those substances which constitute component
parts of the office supplies and equipment ordinarily used or consumed by
tenants of office space in the ordinary conduct of their business and brought
onto the Premises by Tenant in ordinary quantities, provided Tenant exercises
due care in transporting, using, consuming, and disposing of such substances and
the storage and uses of such substances is in full compliance with this Section
14.03 and with Article 12 of this lease.
Section 14.04. Landlord and Tenant each hereby waive any right of recovery
or cause of action for injury or loss to the extent that such injury or loss is
covered by the insurance policies carried by Landlord or Tenant (or which would
have been covered if Tenant and Landlord respectively were carrying the
insurance required by this Lease). Said waivers shall be in addition to, and not
in limitation or derogation of, any other waiver or release contained in this
Lease. Written notice of the terms of the above mutual waivers shall be given to
the insurance carriers of Landlord and Tenant and the parties' insurance
policies shall be properly endorsed, if necessary, to prevent the invalidation
of said policies by reason of such waivers.
ARTICLE 15.
DAMAGE BY FIRE OR OTHER CAUSE
Section 15.01. If the Building or any portion thereof is damaged or
destroyed by any casualty to the extent that, in Landlord's reasonable judgment,
(a) repair of such damage or destruction would not be economically feasible, or
(b) the damage or destruction to the Building cannot be repaired within one
hundred eighty (180) days after the date of such damage or destruction, or if
the proceeds from insurance remaining after any required payment to any
mortgagee or lessor of Landlord are insufficient to repair such damage or
destruction, Landlord shall have the right, at Landlord's option, to terminate
this Lease by giving Tenant notice of such termination, within sixty (60) days
after the date of such damage or destruction.
Section 15.02. If the Premises or any portion thereof is damaged or
destroyed by any casualty against which Tenant is required to be insured under
Section 14.01, and if, in Landlord's reasonable opinion, the Premises cannot be
rebuilt or made fit for Tenant's purposes within one hundred eighty days (180)
after the date of such damage or destruction, or if the proceeds from the
insurance Tenant is required to maintain pursuant to Article 14 (including the
amount of proceeds which would have been available if Tenant was carrying such
insurance) are insufficient to repair such damage or destruction, then either
Landlord or Tenant shall have the right, at the option of either party, to
terminate this Lease by giving the other written notice, within sixty (60) days
after such damage or destruction.
Section 15.03. In the event of partial destruction or damage to the
Building or the Premises which is not subject to Section 15.01 or 15.02 but
which renders the Premises partially but not wholly untenantable, this Lease
shall not terminate and Rent shall be abated in proportion to the area of the
Premises which, in Landlord's reasonable opinion, cannot be used or occupied by
Tenant for the conduct of Tenant's business as a result of such casualty.
Landlord shall in such event, within a reasonable time after the date of such
destruction or damage, subject to force majeure (as defined in Section 25.06) or
to Tenant Delay and to the extent and availability of insurance proceeds,
restore the Premises to as near the same condition as existed prior to such
partial damage or destruction, provided that Tenant pays to Landlord Tenant's
insurance proceeds as required in Section 15.05. In no event shall Rent xxxxx or
shall any termination occur if damage to or destruction of the Premises is the
result of the negligence or willful act of Tenant, or Tenant's agents,
employees, representatives, contractors, successors, assigns, licensees or
invitees.
Section 15.04. If the Building or the Premises or any portion thereof is
destroyed by fire or other causes at any time during the last year of the Term,
then either Landlord or Tenant shall have the right, at the option of either
party, to terminate this Lease by giving written notice to the other within
sixty (60) days after the date of such destruction.
Section 15.05. Landlord shall have no liability to Tenant for
inconvenience, loss of business, or annoyance arising from any repair of any
portion of the Premises or the Building. If Landlord is required by this Lease
or by any mortgagee or lessor of Landlord to repair or if Landlord undertakes to
repair, Tenant shall pay to Landlord that amount of Tenant's insurance proceeds
(or the amount which would have been received by Tenant if Tenant was carrying
the insurance required by this Lease) which insures such damage as a
contribution towards such repair, and Landlord shall use reasonable efforts to
have such repairs made promptly and in a manner which will not unnecessarily
interfere with Tenant's occupancy.
25
Section 15.06. In the event of termination of this Lease pursuant to
Section 15.01, 15.02, or 15.04, then all Rent shall be apportioned and paid to
the date on which possession is relinquished or the date of such damage,
whichever last occurs, and Tenant shall immediately vacate the Premises
according to such notice of termination; provided, however, that those
provisions of this Lease which are designated to cover matters of termination
and the period thereafter shall survive the termination hereof.
ARTICLE 16.
CONDEMNATION
Section 16.01. In the event the whole or substantially the whole of the
Building or the Premises is taken or condemned by eminent domain or by any
conveyance in lieu thereof (such taking, condemnation or conveyance in lieu
thereof being hereinafter referred to as "condemnation"), the Term shall cease
and this Lease shall terminate on the earlier of the date the condemning
authority takes possession or the date title vests in the condemning authority.
Section 16.02. In the event any portion of the Building shall be taken by
condemnation (whether or not such taking includes any portion of the Premises),
which taking, in Landlord's judgment, is such that the Building cannot be
restored in an economically feasible manner for use substantially as originally
designed, then Landlord shall have the right, at Landlord's option, to terminate
this Lease, effective as of the date specified by Landlord in a written notice
of termination from Landlord to Tenant.
Section 16.03. In the event that a portion, but less than substantially
the whole, of the Premises shall be taken by condemnation, then this Lease shall
be terminated as of the date of such condemnation as to the portion of the
Premises so taken, and, unless Landlord exercises its option to terminate this
Lease pursuant to Section 16.02, this Lease shall remain in full force and
effect as to the remainder of the Premises provided Tenant can use remainder for
conduct of its business.
Section 16.04. In the event of termination of this Lease pursuant to the
provisions of Section 16.01 or 16.02, the Rent shall be apportioned as of such
date of termination; provided, however, that those provisions of this Lease
which are designated to cover matters of termination and the period thereafter
shall survive the termination hereof.
Section 16.05. All compensation awarded or paid upon a condemnation of any
portion of the Project shall belong to and be the property of Landlord without
participation by Tenant. Nothing herein shall be construed, however, to preclude
Tenant from prosecuting any claim directly against the condemning authority for
loss of business, loss of good will, moving expenses, damage to, and cost of
removal of, trade fixtures, furniture and other personal property belonging to
Tenant; provided, however, that Tenant shall make no claim which shall diminish
or adversely affect any award claimed or received by Landlord.
Section 16.06. If any portion of the Project other than the Building is
taken by condemnation or if the temporary use or occupancy of all or any part of
the Premises shall be taken by condemnation during the Term, this Lease shall be
and remain unaffected by such condemnation, and Tenant shall continue to pay in
full the Rent payable hereunder. In the event of any such temporary taking for
use or occupancy of all or any part of the Premises, Tenant shall be entitled to
appear, claim, prove and receive the portion of the award for such taking that
represents compensation for use or occupancy of the Premises during the Term and
Landlord shall be entitled to appear, claim, prove and receive the portion of
the award that represents the cost of restoration of the Premises and the use or
occupancy of the Premises after the end of the Term hereof. In the event of any
such condemnation of any portion of the Project other than the Building,
Landlord shall be entitled to appear, claim, prove and receive all of that
award.
ARTICLE 17.
INDEMNIFICATION
Section 17.01. Tenant hereby waives all claims against Landlord for damage
to any property or injury to, or death of, any person in, upon, or about the
Project, including the Premises, arising at any time and from any cause other
than by reason of the negligence or
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willful misconduct of Landlord, its agents, employees, representatives, or
contractors. Tenant shall, and hereby agrees to, indemnify and hold Landlord
harmless from any damage to any property or injury to, or death of, any person
arising from the use or occupancy of the Common Areas and the Premises by
Tenant, its agents, employees, representatives, contractors, successors,
assigns, licensees, or invitees, unless such damage is caused by the negligence
or willful misconduct of Landlord, its agents, employees, representatives, or
contractors and to the extent not covered by Tenant's insurance. Without
limiting the generality of the foregoing, Landlord shall not be liable for any
injury or damage to persons or property resulting from the condition or design
of, or any defect in, the Building or its mechanical systems and equipment which
may exist or occur, fire, explosion, falling plaster, steam, gas, electricity,
water, rain, flood, snow, or leaks from any part of the Premises or from the
pipes, appliances, plumbing works, roof, or subsurface of any floor or ceiling,
or from the street or any other place, or by dampness or by any other cause
whatsoever other than as a result of Landlord's negligence or willful
misconduct. Landlord shall not be liable for any such damage caused by other
tenants or persons in the Building or by occupants of adjacent property thereto,
or by the public, or caused by construction (unless caused by the negligence or
willful misconduct of Landlord) or by any private, public or quasi-public work.
Tenant, for itself and its agents, employees, representatives, contractors,
successors and assigns, invitees and licensees, expressly assumes all risks of
injury or damage to person or property, either proximate or remote, resulting
from the condition of the Project or any part thereof other than as a result of
Landlord's negligence or willful misconduct. Tenant's foregoing indemnity shall
include reasonable attorneys' fees, investigation costs, and all other
reasonable costs and expenses incurred by Landlord in any connection therewith.
The provisions of this Article 17 shall survive the expiration or termination of
this Lease with respect to any damage, injury, or death occurring before such
expiration or termination. If Landlord is made a party to any litigation
commenced by or against Tenant or relating to this Lease or to the Premises, and
provided that in any such litigation Landlord is not finally adjudicated to be
at fault, then Tenant shall pay all costs and expenses, including reasonable
attorneys' fees and court costs, incurred by or imposed upon Landlord because of
any such litigation, and the amount of all such costs and expenses, including
reasonable attorneys' fees and court costs, shall be a demand obligation owing
by Tenant to Landlord.
Section 17.02. Landlord shall, and hereby agrees to, indemnify and hold
Tenant harmless from any damages in connection with loss of life, bodily or
personal injury or property damage arising from any occurrence in the Common
Areas of the Project or with respect to Landlord's maintenance, repair,
replacement or operation of building systems or structure when not a result of
the negligence or willful misconduct of Tenant and to the extent not covered by
Tenant's insurance. Notwithstanding anything in this Article 17 to the contrary,
Landlord shall not be liable to Tenant for any claims resulting from the gross
negligence or willful misconduct of Landlord, its agents, employees,
representatives, or contractors to the extent such claims are covered by the
types of insurance Tenant is to maintain pursuant to Section 14.01A.
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ARTICLE 18.
SUBORDINATION AND ESTOPPEL CERTIFICATES
Section 18.01. This Lease and all rights of Tenant hereunder are subject
and subordinate to all underlying leases now or hereafter in existence, and to
any supplements, amendments, modifications, and extensions of such leases
heretofore or hereafter made and to any deeds of trust, mortgages, or other
security instruments which now or hereafter cover all or any portion of the
Project or any interest of Landlord therein, and to any advances made on the
security thereof, and to any increases, renewals, modifications, consolidations,
replacements, and extensions of any of such deeds of trust, mortgages or other
security instruments. This provision is declared by Landlord and Tenant to be
self-operative and no further instrument shall be required to effect such
subordination of this Lease. Upon demand, however, Tenant shall execute,
acknowledge, and deliver to Landlord any further instruments and certificates
evidencing such subordination as Landlord, or any mortgagee or lessor of
Landlord, shall reasonably require, and if Tenant fails to so execute,
acknowledge and deliver such instruments in a timely manner after Landlord's
request, Tenant hereby irrevocably empowers Landlord (or any officer of
Landlord) to execute, acknowledge, and deliver any such instruments and
certificates. Tenant shall not unreasonably withhold, delay, or defer its
written consent to reasonable modifications in this Lease which are a condition
of any construction, interim or permanent financing for the Project or any
reciprocal easement agreement affecting the Project, provided that such
modifications do not increase the obligations of Tenant hereunder or materially
and adversely affect Tenant's use and enjoyment of the Premises or Tenant's
rights under this Lease. This Lease is further subject and subordinate to: (a)
all applicable ordinances of any governmental authority having jurisdiction over
the Project relating to easements, franchises, and other interests or rights
upon, across, or appurtenant to the Project; and (b) all utility and other
easements and agreements, now or hereafter affecting the Project.
Section 18.02. Notwithstanding the generality of the foregoing provisions
of Section 18.01, any mortgagee or lessor of Landlord shall have the right at
any time to subordinate any such deed of trust or mortgage or underlying lease
to this Lease, or to any of the provisions hereof, on such terms and subject to
such conditions as such mortgagee or lessor of Landlord may consider appropriate
in its discretion. At any time, before or after the institution of any
proceedings for the foreclosure of any such deed of trust or mortgage, or the
sale of the Building under any such deed of trust or mortgage, or the
termination of any underlying lease, Tenant shall, upon request of such
mortgagee, lessor or any person or entities succeeding to the interest of such
mortgagee, lessor or the purchaser at any foreclosure sale ("Successor
Landlord"), automatically become the tenant (or if the Premises has been validly
subleased, the subtenant) of the Successor Landlord, without change in the terms
or other provisions of this Lease (or, in the case of a permitted sublease,
without change in this Lease or in the instrument setting forth the terms of
such sublease); provided, however, that the Successor Landlord shall not be: (i)
bound by any termination, amendment, modification or surrender of the Lease
without the Successor Landlord's written consent; (ii) bound by any advance
payment of Base Rent or Additional Rent for more than the current month to any
prior landlord (including Landlord) which was not delivered to the Successor
Landlord; (iii) liable for any damages or subject to any offset or defense by
Tenant to the payment of Rent by reason of any act or omission of any prior
landlord (including Landlord) prior to the date that the Successor Landlord
succeeds to the interest of Landlord; (iv) required to construct the Building or
liable for any costs thereof; (v) in any way responsible for any deposit or
security which was delivered to any prior landlord (including Landlord) but
which was not subsequently delivered to the Successor Landlord; (vi) required to
pay or credit to Tenant any tenant improvement allowances provided for in the
Lease in the event the Successor Landlord elects not to construct the Building;
or (vii) personally or corporately liable, in any event, beyond the limitations
on landlord liability set forth in Section 25.05 of this Lease. This agreement
of Tenant to attorn to a Successor Landlord shall survive any such foreclosure
sale, trustee's sale, conveyance in lieu thereof or termination of any
underlying lease. Tenant shall upon demand at any time, before or after any such
foreclosure or termination, execute, acknowledge, and deliver to the Successor
Landlord any written instruments and certificates evidencing such attornment as
such Successor Landlord may reasonably require; provided, however, that Landlord
shall use its reasonable efforts to require that such instruments or
certificates provide that upon such attornment and as long as Tenant is not in
default hereunder, Tenant's possession of the Premises under this Lease shall
not be disturbed.
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Section 18.03. Tenant shall, from time to time, within ten (10) days after
request from Landlord, or from any mortgagee or lessor of Landlord, execute,
acknowledge and deliver in recordable form a certificate certifying, to the
extent true, that this Lease is in full force and effect and unmodified (or, if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications); that the Term has commenced; the full
amount of the Rent then accruing hereunder; the dates to which the Rent has been
paid; that Tenant has accepted possession of the Premises and that any
improvements required by the terms of this Lease to be made by Landlord have
been completed to the satisfaction of Tenant; the amount, if any, that Tenant
has paid to Landlord as a Security Deposit; that no Rent under this Lease has
been paid more than thirty (30) days in advance of its due date; that the
address for notices to be sent to Tenant is as set forth in this Lease (or has
been changed by notice duly given and is as set forth in the certificate); that
Tenant, as of the date of such certificate, has no charge, lien, or claim of
offset under this Lease or otherwise against Rent or other charges due or to
become due hereunder; that, to the knowledge of Tenant, Landlord is not then in
default under this Lease; and such other matters as may be reasonably requested
by Landlord or any mortgagee or lessor of Landlord. Any such certificate may be
relied upon by Landlord, any Successor Landlord, or any mortgagee or lessor of
Landlord. Landlord agrees periodically to furnish, when reasonably requested in
writing by Tenant, certificates signed by Landlord containing information
similar to the foregoing information.
Section 18.04. No act or failure to act on the part of Landlord which
would entitle Tenant under the terms of this Lease, or by law, to be relieved of
Tenant's obligations hereunder or to terminate this Lease, shall result in a
release of such obligations or a termination of this Lease unless (a) Tenant has
given notice by registered or certified mail to any mortgagee or lessor of
Landlord whose address shall have been furnished to Tenant, and (b) Tenant
offers such mortgagee or lessor of Landlord a reasonable opportunity to cure the
default, including time to obtain possession of the Premises by power of sale,
judicial foreclosure or other appropriate proceedings, if such should prove
necessary to effect a cure.
ARTICLE 19.
SURRENDER OF THE PREMISES
Section 19.01. Upon the Expiration Date or earlier termination of this
Lease, or upon any re-entry of the Premises by Landlord without terminating this
Lease pursuant to Section 13.02(b), Tenant, at Tenant's sole cost and expense,
shall peacefully vacate and surrender the Premises to Landlord in good order,
broom clean and in the same condition as at the beginning of the Term or as the
Premises may thereafter have been improved by Landlord or Tenant (provided that
Tenant's improvements were made with Landlord's consent), reasonable use and
wear thereof and repairs which are Landlord's obligations under Articles 9, 15
and 16 only excepted, and Tenant shall remove all of Tenant's Property and turn
over all keys for the Premises to Landlord. Should Tenant continue to hold the
Premises after the expiration or earlier termination of this Lease, such holding
over, unless otherwise agreed to by Landlord in writing, shall constitute and be
construed as a tenancy at will at monthly installments of Rent equal to the
greater of one hundred twenty-five percent (125%) of the monthly portion of Rent
in effect as of the date of expiration or earlier termination or one hundred
twenty-five percent (125%) of the fair market rental value of the Premises, and
subject to all of the other terms, charges and expenses set forth herein except
any right to renew this Lease or to expand the Premises or any right to
additional services. Tenant shall also be liable to Landlord for all damage
which Landlord suffers because of any holding over by Tenant, and Tenant shall
indemnify Landlord against all claims made by any other tenant or prospective
tenant against Landlord resulting from delay by Landlord in delivering
possession of the Premises to such other tenant or prospective tenant. Such
indemnification of Landlord by Tenant shall not exceed the sum equal to the
greater of two hundred percent (200%) of the monthly portion of rent in effect
as of the date of expiration or earlier termination times the number of months
holding over, or two hundred percent (200%) of the fair market rental value of
the Premises. The provisions of this Article 19 shall survive the expiration or
earlier termination of this Lease.
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ARTICLE 20.
LANDLORD'S RIGHT TO INSPECT
Section 20.01. Landlord shall retain duplicate keys to all doors of the
Premises. Tenant shall provide Landlord with new keys should Tenant receive
Landlord's consent to change the locks. Landlord shall have the right to enter
the Premises at reasonable hours and with reasonable notice to Tenant giving
Tenant an opportunity to accompany Landlord (or, in the event of an emergency,
at any hour and without notice to or accompaniment by Tenant) (a) to exhibit the
same (i) to present or prospective mortgagees, lessors or purchasers during the
Term, and (ii) to prospective tenants during the last twelve month period of the
Term, (b) to inspect the Premises, (c) to confirm that Tenant is complying with
all of Tenant's covenants and obligations under this Lease, (d) to clean or make
repairs required of Landlord under the terms of this Lease, (e) to make repairs
to areas adjoining the Premises, and (f) to repair and service utility lines or
other components of the Building; provided, however, Landlord shall use
reasonable efforts to minimize interference with Tenant's business including,
without limitation, endeavoring to make non-emergency repairs to the Premises
after Business Hours. Landlord shall not be liable to Tenant for the exercise of
Landlord's rights under this Article 20, and Tenant hereby waives any claims for
damages for any injury or inconvenience to or interference with Tenant's
business, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned thereby.
ARTICLE 21.
SECURITY DEPOSIT
Section 21.01. Tenant's Security Deposit shall be held by Landlord, with
interest to accrue to Tenant at three percent (3%) per annum, as security for
the performance of Tenant's convenants and obligations under this Lease. Unless
required by applicable law, Landlord shall not be required to keep the Security
Deposit segregated from other funds of Landlord. Tenant shall not assign or in
any way encumber the Security Deposit. Upon the occurrences of any Event of
Default by Tenant, Landlord shall have the right, without prejudice to any other
remedy, to use the Security Deposit or portions thereof to the extent necessary
to pay any arrearages in Rent and any other damage, injury or expense. Following
any such application of all or any portion of the Security Deposit, Tenant shall
pay to Landlord on demand the amount so applied in order to restore the Security
Deposit to its original amount. If Tenant is not in default at the termination
of this Lease, any remaining balance of the Security Deposit shall be returned
by Landlord to Tenant, provided that Tenant surrenders the Premises without
damage pursuant to Article 19. If Landlord transfers its interest in the
Premises during the Term, Landlord shall assign the Security Deposit to the
transferee, and thereafter Landlord shall have no further liability to Tenant
for the Security Deposit.
ARTICLE 22.
BROKERAGE
Section 22.01. Tenant and Landlord each represent and warrant to the other
that it has not entered into any agreement with, or otherwise had any dealings
with, any broker or agent in connection with the negotiation or execution of
this Lease which could form the basis of any claim by any such broker or agent
for a brokerage fee or commission, finder's fee, or any other compensation of
any kind or nature in connection herewith, other than with the Broker, and each
party shall, and hereby agrees to, indemnify and hold the other harmless from
all costs (including court costs, investigation costs, and reasonable attorneys'
fees), expenses, or liability for commissions or other compensation claimed by
any broker or agent with respect to this Lease which arise out of any agreement
or dealings, or alleged agreement or dealings, between the indemnifying party
and any such agent or broker, other than with the Broker. This provision shall
survive the expiration or earlier termination of this Lease. Landlord shall pay
all fees and commissions payable to the Broker, pursuant to a separate
agreement.
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ARTICLE 23.
OBSERVANCE OF RULES AND REGULATIONS
Section 23.01. Tenant and Tenant's servants, employees, agents, visitors,
and licensees shall observe faithfully and comply strictly with all Rules and
Regulations (herein so called) attached to this Lease as such Rules and
Regulations may be reasonably changed from time to time. Landlord shall at all
times have the right to make reasonable changes in and additions to such Rules
and Regulations; provided Landlord gives Tenant prior notice of such changes and
provided that such new rules and regulations or changes in existing rules and
regulations do not conflict with this Lease and do not materially interfere with
the lawful conduct of Tenant's business in the Premises. Any failure by Landlord
to enforce any of the Rules and Regulations now or hereafter in effect, either
against Tenant or any other tenant in the Building, shall not constitute a
waiver of any such Rules and Regulations. Landlord shall not be liable to Tenant
for the failure or refusal by any other tenant, guest, invitee, visitor, or
occupant of the Building to comply with any of the Rules and Regulations.
Landlord will enforce the rules evenly to all Tenants.
ARTICLE 24.
NOTICES
Section 24.01. All notices, consents, demands, requests, documents, or
other communications (other than payment of Rent) required or permitted
hereunder (collectively, "notices") shall be deemed given, whether actually
received or not, when dispatched for delivery by air express courier (with
signed receipts) to the other party, or on the second Business Day after deposit
in the United States mail, postage prepaid, certified, return receipt requested,
except for notice of change of address which shall be deemed given only upon
actual receipt. The addresses of the parties for notices are set forth in the
Basic Lease Information, or any such other addresses subsequently specified by
each party in notices given pursuant to this Section.
ARTICLE 25.
MISCELLANEOUS
Section 25.01. Professional Fees. In any action or proceeding brought by
either party against the other under this Lease, the prevailing party shall be
entitled to recover from the other party its actual professional fees such as
appraisers', accountants' and attorneys' fees, investigation costs, and other
legal expenses and court costs incurred by the prevailing party in such action
or proceeding. The parties shall be obligated to demand their professional fees
be reasonable.
Section 25.02. Reimbursements by Tenant. Wherever this Lease requires
Tenant to reimburse Landlord for the cost of any item, such costs will be the
reasonable and customary charge periodically established by Landlord for such
item. Landlord shall keep in its on-site manager's office a schedule of such
charges (which Landlord may periodically change) for Tenant's examination. The
schedule of charges may include, at the discretion of Landlord, a reasonable
allocation of overhead, administrative, and related costs and a reasonable
profit for Landlord's agent or manager who performs such services or arranges
for the performance of such services. All such charges shall be payable within
thirty (30) days as Additional Rent.
Section 25.03. Severability. Every agreement contained in this Lease is,
and shall be construed as, a separate and independent agreement. If any term of
this Lease or the application thereof to any person or circumstances shall be
invalid or unenforceable, the remaining agreements contained in this Lease shall
not be affected.
Section 25.04. Non-Merger. There shall be no merger of this Lease with any
ground leasehold interest or the fee estate in the Project or any part thereof
by reason of the fact that the same person may acquire or hold, directly or
indirectly, this Lease or any interest in this Lease as well as any ground
leasehold interest or fee estate in the Project or any interest in such fee
estate.
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Section 25.05. Landlord's Liability. Anything contained in this Lease to
the contrary notwithstanding, Tenant agrees that Tenant shall look solely to the
estate and property of Landlord in the Project for the collection of any
judgment or other judicial process requiring the payment of money by Landlord
for any default or breach by Landlord under this Lease, subject, however, to the
prior rights of any mortgagee or lessor of the Project. No other assets of
Landlord or any partners, directors, officers, shareholders, or other principals
of Landlord shall be subject to levy, execution or other judicial process for
the satisfaction of Tenant's claim.
Section 25.06. Force Majeure. Whenever a period of time is herein
prescribed for action to be taken by Landlord or Tenant, Landlord or Tenant
shall not be liable or responsible for, and there shall be excluded from the
computation for any such period of time, any delays due to force majeure, which
term shall include strikes, riots, acts of God, shortages of labor or materials,
war, governmental approvals, laws, regulations, or restrictions, or any other
cause of any kind whatsoever which is beyond the reasonable control of Landlord
or Tenant. Force Majeure shall not excuse or delay Tenant's obligation to pay
Rent or any other amount due under this Lease.
Section 25.07. Headings. The article headings contained in this Lease are
for convenience only and shall not enlarge or limit the scope or meaning of the
various and several articles hereof. Words in the singular number shall be held
to include the plural, unless the context otherwise requires.
Section 25.08. Successors and Assigns. All agreements and covenants herein
contained shall be binding upon the respective heirs, personal representatives,
and successors and assigns of the parties hereto. If there be more than one
Tenant, the obligations hereunder imposed upon Tenant shall be joint and
several. If there is a guarantor of Tenant's obligations hereunder, Tenant's
obligations shall be joint and several obligations of Tenant and such guarantor,
and Landlord need not first proceed against Tenant hereunder before proceeding
against such guarantor, and any such guarantor shall not be released from its
guarantee for any reason, including any amendment of this Lease, any forbearance
by Landlord or waiver of any of Landlord's rights, the failure to give Tenant or
such guarantor any notices, or the release of any party liable for the payment
or performance of Tenant's obligations hereunder. Notwithstanding the foregoing,
nothing contained in this Section 25.08 shall be deemed to override Article 8.
Section 25.09. Representations of Landlord. Neither Landlord nor
Landlord's agents or brokers have made any representations or promises with
respect to the Premises, the Building, the Parking Facilities, the Land, or any
other portions of the Project except as herein expressly set forth and all
reliance with respect to any representations or promises is based solely on
those contained herein. No rights, easements, or licenses are acquired by Tenant
under this Lease by implication or otherwise except as, and unless, expressly
set forth in this Lease.
Section 25.10. Entire Agreement; Amendments. This Lease and the Exhibits
attached hereto set forth the entire agreement between the parties and cancel
all prior negotiations, arrangements, brochures, agreements, and understandings,
if any, between Landlord and Tenant regarding the subject matter of this Lease.
No amendment or modification of this Lease shall be binding or valid unless
expressed in a writing executed by both parties hereto.
Section 25.11. Authority of Tenant. If Tenant signs as a corporation,
execution hereof shall constitute a representation and warranty by Tenant that
Tenant is a duly organized and existing corporation, that Tenant has been and is
qualified to do business in the State of Maryland and in good standing with the
State of Maryland that the corporation has full right and authority to enter
into this Lease, and that all persons signing on behalf of the corporation were
authorized to do so by appropriate corporate action. If Tenant signs as a
partnership, trust, or other legal entity, execution hereof shall constitute a
representation and warranty by Tenant that Tenant has complied with all
applicable laws, rules, and governmental regulations relative to Tenant's right
to do business in the State of Maryland, that such entity has the full right and
authority to enter into this Lease, and that all persons signing on behalf of
Tenant were authorized to do so by any and all necessary or appropriate
partnership, trust, or other actions.
Section 25.12. Governing Law. This Lease shall be governed by and
construed under the laws of the State of Maryland. Any action brought to enforce
or interpret this Lease shall be brought in the court of appropriate
jurisdiction in the State of Maryland. Should any provision of this Lease
require judicial interpretation, Landlord and Tenant hereby agree and stipulate
that the court interpreting or considering same shall not apply the presumption
that the terms hereof shall be more strictly construed against a party by reason
of any rule or conclusion that a document should be construed more strictly
against the party who itself or through its agents prepared the same, it being
agreed that all parties hereto have
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participated in the preparation of this Lease and that each party had full
opportunity to consult legal counsel of its choice before the execution of this
Lease.
Section 25.13. Use of Name of Building. Tenant shall not, without the
prior written consent of Landlord, use the name of the Building for any purpose
other than as the address of the business to be conducted by Tenant in the
Premises, and Tenant shall not do or permit the doing of anything in connection
with Tenant's business or advertising (including brokers' flyers promoting
sublease space) which in the reasonable judgment of Landlord may reflect
unfavorably on Landlord or the Building or confuse or mislead the public as to
any apparent connection or relationship between Tenant and Landlord, the
Building, or the Land.
Section 25.14. Ancient Lights. Any elimination or shutting off of light,
air, or view by any structure which may be erected on lands adjacent to the
Building shall in no way affect this Lease and Landlord shall have no liability
to Tenant with respect thereto.
Section 25.15. Changes by Landlord. Landlord shall have the unrestricted
right to make changes to all portions of the Project in Landlord's reasonable
discretion for the purpose of improving access or security to the Project or the
flow of pedestrian and vehicular traffic therein. Landlord shall have the right
at any time, without the same constituting an actual or constructive eviction
and without incurring any liability to Tenant therefor, to change the
arrangement or location of entrances or passageways, doors and doorways, and
corridors, elevators, stairs, bathrooms, or any other Common Areas so long as
reasonable access to the Premises remains available and Tenant's use of the
Premises is not materially adversely affected. Landlord shall also have the
right (a) to rearrange, change, expand or contract portions of the Project
constituting Common Areas, (b) to use Common Areas while engaged in making
additional improvements, repairs or alterations to the Building, or any portion
thereof, and (c) to do and perform such other acts and make such other changes
in, to or with respect to the Common Areas and Building as Landlord may, in the
exercise of sound business judgment, deem to be appropriate. Landlord shall be
entitled to change the name or address of the Building or the Project. Landlord
shall have the right to close, from time to time, the Common Areas and other
portions of the Project for such temporary periods as Landlord deems legally
sufficient to evidence Landlord's ownership and control thereof and to prevent
any claim of adverse possession by, or any implied or actual dedication to, the
public or any party other than Landlord.
Section 25.16. Time of Essence. Time is of the essence of this Lease.
Section 25.17. Acceptance by Landlord. The submission of this Lease to
Tenant shall not be construed as an offer and Tenant shall not have any rights
with respect thereto unless said Lease is consented to by any mortgagee, and any
lessor of Landlord, to the extent such consent is required, and Landlord
executes a copy of this Lease and delivers the same to Tenant.
Section 25.18. Performance by Tenant. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole cost and expense and without any abatement of Rent. If
Tenant shall fail to pay any Rent, other than Base Rent, required to be paid by
it hereunder or shall fail to perform any other act on its part to be performed
hereunder, and such failure shall continue for longer than the period of cure,
if any, permitted in Section 13.01, then Landlord, without waiving or releasing
Tenant from obligations of Tenant, may, but shall not be obligated to, make any
such payment or perform any such other act on Tenant's part to be made or
performed as in this Lease provided. All sums so paid by Landlord and all
necessary incidental costs together with interest thereon at the Interest Rate,
from the date of such payment by Landlord, shall be payable to Landlord on
demand. Tenant covenants to pay any such sums, and Landlord shall have (in
addition to any other right or remedy of Landlord) the same rights and remedies
in the event of the nonpayment thereof by Tenant as in the case of default by
Tenant in the payment of Rent.
Section 25.19. Financial Statements. At any time during the term of this
Lease, Tenant shall, upon ten (10) days prior written notice from Landlord,
provide Landlord with a current financial statement and financial statements of
the two (2) years prior to the current financial statement year. Such statement
shall be prepared in accordance with generally accepted accounting principles
and, if such is the normal practice of Tenant, shall be audited by an
independent certified public accountant in the ordinary course of business.
Section 25.20. Memorandum of Lease. Tenant shall, at the request of
Landlord, execute, acknowledge and deliver to Landlord a memorandum of this
Lease in recordable form, setting forth the names of the parties hereto, the
Commencement
33
Date, the Expiration Date, and other pertinent data regarding this Lease. Said
Memorandum of Lease shall not in any circumstances be deemed to modify or to
change any of the provisions of this Lease. Landlord may elect, at its sole
expense, to record said Memorandum of Lease.
ARTICLE 26.
OTHER DEFINITIONS
When used in this Lease, the terms set forth hereinbelow shall have the
following meanings:
(a) "Building Standard" shall mean those items which Landlord
establishes as standard for the Building from time to time.
(b) "Business Days" shall mean Monday through Friday (except for
Holidays); "Business Hours" shall mean 8:00 a.m. to 6:00 p.m. on Business Days
and 8:00 a.m. to 1:00 p.m. on Saturdays (except for Holidays); and "Holidays"
shall mean those holidays designated as national holidays by the government of
the United States.
(c) "Common Areas" shall mean those certain areas and facilities of
the Building and those certain improvements to the Land which are from time to
time provided by Landlord for the use of tenants of the Building and their
employees, clients, customers, licensees and invitees or for use by the public,
which facilities and improvements include any and all corridors, elevators,
elevator foyers, vending areas, bathrooms, electrical and telephone rooms,
mechanical rooms, janitorial areas and other similar facilities of the Building
and any and all grounds, parks, landscaped areas, outside sitting areas,
sidewalks, walkways, tunnels, pedestrian ways, skybridges and loading docks.
Landlord reserves the right to restrict access to any of the Common Areas as
Landlord may, in the exercise of sound business judgement, deem to be
appropriate.
(d) The words "day" or "days" shall refer to calendar days, except
where "Business Days" are specified.
(e) The words "herein," "hereof," "hereby," "hereunder" and words of
similar import shall be construed to refer to this Lease as a whole and not to
any particular Article or Section thereof unless expressly so stated.
(f) The words "include" and "including" shall be construed as if
followed by phrase "without being limited to."
(g) "Net Rentable Area" shall be determined by the Washington Board
of Realtors Standard Method of Measurement attached hereto as Exhibit E.
(h) Reference to Landlord as having "no liability to Tenant" or being
"without liability to Tenant" or words of like import shall mean that Tenant is
not entitled to terminate this Lease, or to claim actual or constructive
eviction, partial or total, or to receive any abatement or diminution of rent,
or to be relieved in any manner of any of Tenant's other obligations hereunder,
or to be compensated for loss or injury suffered or to enforce any other right
or kind of liability whatsoever against Landlord under or with respect to this
Lease or with respect to Tenant's use or occupancy of the Premises.
(i) A "repair" shall be deemed to include such rebuilding,
replacement and restoration as may be necessary to achieve and maintain good
working order and condition.
(j) The "termination of this Lease" and words of like import includes
the expiration of the Term or the cancellation of this Lease pursuant to any of
the provisions of this Lease or to law. Upon the termination of this Lease, the
Term shall end at 11:59 p.m. on the date of termination as if such date were the
Expiration Date, and neither party shall have any further obligation or
liability to the other after such termination except (i) as shall be expressly
provided for in this Lease and (ii) for such obligations as by their nature or
under the circumstances can only be, or by the provisions of this Lease, may be,
performed after such termination. In any event, unless expressly otherwise
provided in this Lease, any liability for a payment (which shall be apportioned
as of the date of such termination) which shall have accrued to or with respect
to any period ending at the time of termination, shall survive the termination
of this Lease.
34
(k) The "terms of this Lease" shall be deemed to include all terms,
covenants, conditions, provisions, obligations, limitations, restrictions,
reservations and agreements contained in this Lease.
(l) "Tenant" shall be deemed to include Tenant's successors and
assigns (to the extent permitted by Landlord) and any and all occupants of the
Premises permitted by Landlord and claiming by, through or under Tenant.
(m) A "year" shall mean a calendar year.
[SIGNATURE PAGE TO FOLLOW]
35
IN WITNESS WHEREOF, Landlord and Tenant have set their hands and seals
hereunto and have caused this Lease to be executed by duly authorized officials
thereof as of the day and year set forth on the cover page hereof.
LANDLORD:
THE AMERICAN OCCUPATIONAL THERAPY ASSOCIATION, INC.,
a District of Columbia non-profit corporation
By:
---------------------------------------------------
Name: Xxxxxxxx Xxxx
Title: Executive Director
TENANT:
The Xxxxxxxxxx Group, Inc.
A ____________________ corporation
By:
---------------------------------------------------
Name:
Title:
36
EXHIBIT A
FLOOR PLAN OF THE PREMISES
[THIS EXHIBIT IS INTENDED SOLELY TO IDENTIFY THE APPROXIMATE LOCATION OF
THE PREMISES AND SHOULD NOT BE RELIED ON FOR ANY OTHER PURPOSE.]
[To be provided]
37
EXHIBIT B
THE LAND
Legal Description
Lot 7 in Block 24-C in a subdivision known as "EDGEMOOR" as per plat thereof
recorded in Plat Book 154 at plat 17557 among the Land Records of Xxxxxxxxxx
County, Maryland.
TOGETHER WITH the right to the use thereof as a parking facility over the land
described in Deed dated August 27, 1980, from the Xxxxxxxxxx Building Limited
Partnership to the National Foundation for Cancer Research recorded in Liber
5564 at folio 230 among the Land Records of Xxxxxxxxxx County, Maryland, as such
right is reserved in said Deed.
ALSO TOGETHER WITH the right to the use thereof as a parking facility over the
land described in Deed dated August 3, 1981, from the Xxxxxxxxxx Building
Limited Partnership to the National Foundation for Cancer Research recorded in
Liber 5744 at folio 584 among the Land Records of Xxxxxxxxxx County, Maryland,
as such right is reserved in said Deed.
38
EXHIBIT C
LEASEHOLD IMPROVEMENTS
ARTICLE 1
DEFINITIONS
The terms defined in Article 1 of this Exhibit C, for all purposes of this
Exhibit C, shall have the meanings herein specified, and, in addition to the
terms defined herein, the definitions in the Basic Lease Information and
otherwise in this Lease shall also apply to this Exhibit C.
1.01. "Architectural Plans" shall mean one hundred percent (100%) fully
coordinated and complete, accurate architectural working drawings and
specifications for the Leasehold Improvements for the Premises prepared by
Landlord's Architect including all architectural dimensioned plans showing wall
layouts, wall and door locations, power and telephone locations and reflected
ceiling plans and further including elevations, details, specifications and
schedules according to accepted AIA standards.
1.02. Intentionally Deleted
1.03. "Landlord's Contractor" means the person or firm from time to time
selected by Landlord to construct and install the Leasehold Improvements in the
Premises.
1.04. "Landlord's Designer" shall mean the architect or space planner
engaged by Landlord to review the Plans for the Leasehold Improvements as
contemplated by Article 2 hereof.
1.05. Intentionally Deleted
1.06. "Landlord's Work" means the Building Shell Work items which are
supplied, installed, and finished by Landlord and which shall be paid for by
Landlord as provided for below.
1.07. "Leasehold Improvements" shall mean the aggregate of the Landlord's
Work and Tenant's Work.
1.08. "MEP Plans" shall mean one hundred percent (100%) fully coordinated
and complete mechanical, electrical and plumbing plans, schedules and
specifications for the Leasehold Improvements for the Premises, prepared by
Landlord's MEP Engineers in accordance and in compliance with the requirements
of applicable building, plumbing, and electrical codes and the requirements of
any authority having jurisdiction over or with respect to such plans, schedules
and specifications, which are complete, accurate, consistent and fully
coordinated with and implement and carry out the Architectural Plans.
1.09. "Non-Building Standard" means all materials, finishes, and
workmanship used in connection with the construction and installation of the
Leasehold Improvements which deviate from Landlord's Standard Improvements.
1.10. "Plans" shall mean the Architectural Plans together with the MEP
Plans, and if applicable, the Structural Plans.
1.11. "Structural Plans" shall mean one hundred percent (100%) fully
coordinated and complete structural plans, schedules and specifications, if any,
for the Leasehold Improvements for the Premises, prepared by Landlord's
contractor in accordance and in compliance with the requirements of any
authority having jurisdiction over or with respect to such plans, schedules and
specifications, which are complete, accurate, consistent and fully coordinated
with and implement and carry out the Architectural Plans and MEP Plans.
1.12. "Tenant's Architect" shall mean the reputable architect engaged and
approved by Landlord to prepare the Architectural Plans.
39
1.13. "Tenant's Expenditure Authorization" means an authorization by
Tenant to Landlord to expend funds on behalf of Tenant for Tenant's Work.
1.14. "Tenant's MEP Engineers" shall mean the engineers engaged by Tenant
and approved by Landlord in writing to prepare the MEP Plans.
1.15. "Tenant's Structural Engineers" shall mean the engineers engaged by
Tenant and approved by Landlord in writing to prepare the Structural Plans.
1.16. "Tenant's Work" means the items set forth in the Plans, other than
Landlord's work.
ARTICLE 2
COMPLETION OF PREMISES
2.01. Tenant shall supply all information needed for the preparation of
plans and finishes to Landlord's space planner. Landlord's planner shall produce
and supply preliminary plans, architectural working drawings, reflected ceiling
plan, and a schedule of finishes for all Building Standard and above Building
Standard Work. Approval of the Plans by Tenant shall mean that Tenant has
reviewed and understands the Plans, and that the Plans are in complete
conformance with Tenant's requirements. Upon Tenant's approval of these Plans,
any changes requested by the Tenant shall be performed at Tenant's cost. It is
understood and agreed that Landlord in no way warrants the accuracy of the Plans
and Landlord shall not have any liability to Tenant, or anyone claiming through
Tenant as a result of such plans unless and until Tenant signs the final plans.
Tenant shall perform a field verification to independently determine the
existing conditions, specifications and dimensions of the Premises.
2.02. As soon as practicable after the execution of this Lease, Landlord
shall prepare and deliver to Tenant the Architectural Plans, the MEP Plans, and
if structural work is required, the Structural Plans, stamped for permit filing,
together with any underlying detailed information Landlord may require in order
to evaluate the Plans and/or to determine the cost for the Tenant Work
contemplated by the Plans. Landlord and Tenant shall, however, meet prior to
such delivery to discuss Tenant's estimate of costs, long lead items, and the
schedule for completion of Tenant's Work. After Tenant's receipt of the Plans,
Tenant shall notify Landlord in writing as to whether Tenant approves or
disapproves such Plans. Approval of Plans by Tenant shall mean that Tenant has
reviewed and understands the Plans, and that the Plans are in complete
conformance with Tenant's requirements. Upon Landlord's subsequent approval of
these Plans, any changes requested by the Tenant shall be performed at Tenant's
cost. After Landlord's approval of the Plans, Landlord will prepare and deliver
a statement of the estimated cost for the Tenant's Work (i.e. the Tenant's
Expenditure Authorization), which will consist of negotiated proposals received
by Landlord's contractor for major trades (i.e., MEP and dry wall) and lump-sum
bids for finish trades (i.e., millwork), together with a schedule for completion
of construction of the Leasehold Improvements. Within two (2) Business Days
after Tenant's receipt of the cost statement and schedule, Tenant will approve
or disapprove the same. If Tenant fails to expressly disapprove the cost
statement within this two (2) Business Day period, then Landlord shall be
authorized to proceed thereon. If any changes are requested by Tenant during
preparation or after completion of the Plans, Tenant will be responsible for all
architectural and mechanical engineering costs resulting from such changes.
2.03. All work involved in the construction and installation of the
Leasehold Improvements shall be carried out by Landlord's Contractor under the
sole direction of Landlord, and with respect to all Leasehold Improvements other
than a Demising Partition stated in Section 3.01 of this Exhibit C, at Tenant's
cost and expense. Tenant shall cooperate with Landlord, Landlord's Contractor,
and Landlord's Designer to promote the efficient and expeditious completion of
such work.
2.04. Tenant shall pay Landlord for all installations and engineering,
including, but not limited to, such items as supplemental heating and air
conditioning equipment, ducts, exhaust fans or vents, humidifiers, special
controls or motors, electrical panel boxes, meters, exhaust systems, plumbing,
cabinetry, and raised flooring that may be required for a computer room or any
similar installations. Landlord's contractor will prepare an estimate of costs
for Tenant's approval and Tenant will be required to pay for the additional
costs required by Landlord's contractor agreement prior to commencement of work.
Landlord agrees to provide Tenant with an allowance toward the construction of
the Tenant's Work equal to twenty-eight thousand four hundred forty-eight
dollars ($28,448.00) ("Tenant's Allowance"). Accordingly,
40
the cost of the Tenant's Work for purposes of this Section shall be reduced by
Tenant's Allowance. Tenant agrees that in the event of default of payment for
Tenant's Work, Landlord (in addition to all other remedies) shall have the same
rights as in the event of default of payment of Rent under this Lease.
2.05. If there are any changes in the Leasehold Improvements caused by
Tenant from the work as reflected in the final working drawings, each such
change must receive the prior written approval of the Landlord, and, in the
event of any such approved change in the working drawings, Landlord shall, upon
completion of Tenant's Work, furnish Tenant with an accurate "as drawn" plan of
the Tenant's Work as constructed, which plans shall be incorporated into this
Exhibit C by this reference for all intents and purposes. Any additional changes
made by Tenant after completion of the Plans or during construction, and any
additional expenses or cost, arising by reasons of any changes, additions,
modifications or alterations requested by Tenant, shall be at the sole cost and
expenses of Tenant and shall be paid by Tenant to Landlord prior to the
commencement of construction of such changes, additions, modifications, and
alterations (subject to Tenant's Allowance).
2.06. Under no circumstances whatsoever will Tenant, or Tenant's
authorized representative, ever alter or modify or in any manner disturb any
system or installation of the Building, including the Base Building plumbing
system, Base Building electrical system, Base Building heating, ventilating, and
air conditioning systems, Base Building fire protection and fire alarm systems,
Base Building maintenance systems, Base Building structural systems, elevators,
and anything located within the central core of the Building (the "Central
Building Systems"). Only under Landlord's express written permission and under
direct supervision of Landlord or Landlord's authorized representative shall
Tenant or Tenant's authorized representative alter or modify or in any manner
disturb any system or installation of the Building which is located within the
Premises, including electrical, heating, ventilating, and air conditioning
systems, and fire protection and alarm system. For the purposes of this Section,
"Base Building" shall be defined as that portion of any Building system or
component which is within the core and/or common to and/or serves or exists for
the benefit of other tenants in the Building.
2.07. All design, construction, and installation shall conform to the
requirement of applicable building, plumbing, and electrical codes and the
requirements of any authority having jurisdiction over, or with respect to, such
work.
2.08. Landlord shall have no obligation to commence installation of any of
the Leasehold Improvements in the Premises until (a) Tenant shall have submitted
the Plans and approved the cost for such work as required by Section 2.02 hereof
and (b) Landlord shall have received Tenant's advance payment described in
Section 2.04.
ARTICLE 3
LANDLORD'S WORK
3.01. Landlord shall, at its sole cost and expense, furnish, install and
complete a Demising Partition (wall) between landlord's space and tenant's space
on the (9th) ninth floor. The Demising Partition will extend from the floor to
the underside of the floor above and shall be a total of one (1) sheet of _"
thick gypsum wallboard each side of 3"" metal studs, 24" on center, with 3_"
thick fiberglass "batt" insulation, taped and painted both sides below ceiling
height, with 4" vinyl cove base included on both sides of wall. Landlord shall
perform such other work as stated in the final executed working drawings.
3.02. Landlord shall furnish, install and complete a Demising Partition
(wall) in accordance with the Lease and this Exhibit C.
3.03 Landlord shall perform all Leasehold Improvements in good and
workmanlike manner, in compliance with all laws.
41
ARTICLE 4
COMMENCEMENT OF RENTAL
4.01. Tenant's obligation for the payment of Rental under this Lease for
the Premises shall not commence until Landlord has substantially completed all
of the Leasehold Improvements as set forth in this Exhibit C, subject only to
the completion or correction of the items on the Landlord's punch list,
provided, however, that if Landlord is delayed in substantially completing such
work as a result of:
(a) Tenant's failure to timely submit and/or approve all the plans
and specifications as required by Section 2.02 of this Exhibit C,
(b) Tenant's changes in any plans and specifications, following
Landlord approval thereof,
(c) Tenant's request for materials, finishes, or installations other
than Landlord's Standard Improvements, including but not limited to any delays
caused by the inability to obtain such materials in a timely manner,
(d) Tenant's disapproval, or failure to approve, Landlord's cost
estimate for Tenant's Work as required by Section 2.02 of this Exhibit C,
(e) Tenant's failure to make the advance payment required under
Section 2.04,
(f) Tenant's interference with Landlord's completion of construction
of the Premises during the Pre-Occupancy Entry Period in violation of the terms
set forth in Section 3.04 of this lease, or
(g) any other failure by Tenant to comply strictly with the terms of
this Exhibit C,
Then Tenant's obligation to pay Rent under this lease shall be accelerated by
the number of days of such delay (herein called "Tenant Delay").
42
EXHIBIT D
FORM OF COMMENCEMENT NOTICE
This Commencement Notice is delivered this day of ___, 199__ by
_______________________, a _______________________ ("Landlord") to ___________ ,
a ("Tenant"), pursuant to the provisions of Section 3.03 of that one certain
Office Lease Agreement (the "Lease") dated ____________, 199__, by and between
Landlord and Tenant covering certain space on the ____________( ) floor of the
building located as 0000 Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx. All terms used
herein with their initial letter capitalized shall have the meaning assigned to
such terms in the Lease.
W I T N E S S E T H:
1. The Building, the Premises and all other improvements required to be
constructed and furnished by Landlord in accordance with the terms of the Lease
have been satisfactorily completed by the Landlord and accepted by the Tenant
subject to punchlist items and patent defects.
2. The Premises have been delivered to, and accepted by, the Tenant, but
for the completion of any punchlist items and patent defects.
3. The Commencement Date of the Lease is the _______ day of
____________________, 199__, and the Expiration Date is the ____________ day of
_____________________, ____________.
4. The Premises consist of ____________ square feet of Net Rentable
Area.
5. The Base Rent is $_______ per annum, payable in monthly installments
of $_______ , subject, however, to the provisions of the Lease relating to
adjustments of Base Rent and to payment of Excess Operating Costs.
6. Remittance of the foregoing payments shall be made on the first day
of each month in accordance with the terms and conditions of the Lease at the
following address:
Sincerely,
LANDLORD:
-----------------------------------
-----------------------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
43
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
44
EXHIBIT E
WASHINGTON, D.C. ASSOCIATION OF REALTORS STANDARD
METHOD OF MEASUREMENT
45
EXHIBIT F
RULES AND REGULATIONS
1. Sidewalks, doorways, vestibules, halls, stairways and similar areas
shall not be obstructed by tenants or their officers, agents, servants, and
employees, or used for any purpose other than ingress and egress to and from the
Premises and for going from one part of the Building to another part of the
Building.
2. Plumbing fixtures and appliances shall be used only for the purpose
for which constructed, and no sweepings, rubbish, rags, or other unsuitable
material shall be thrown or placed therein. The cost of repairing any stoppage
or damage resulting to any such fixtures or appliances from misuse on the part
of a tenant or such tenant's officers, agents, servants, and employees shall be
paid by such tenant.
3. No signs, posters, advertisements, or notices shall be painted or
affixed on any of the windows or doors, or other part of the Building, except of
such color, size, and style, and in such places, as shall be first approved in
writing by the Building manager. No nails, hooks, or screws shall be driven into
or inserted in any part of the Building, except by Building maintenance
personnel.
4. Directories will be placed by Landlord, at Landlord's own expense, in
conspicuous places in the Building. No other directories shall be permitted.
5. The Premises shall not be used for conducting any barter, trade, or
exchange of goods or sale through promotional give-away gimmicks or any business
involving the sale of secondhand goods, insurance salvage stock, or fire sale
stock, and shall not be used for any auction or pawnshop business, any fire
sale, bankruptcy sale, going-out-of-business sale, moving sale, bulk sale, or
any other business which, because of merchandising methods or otherwise, would
tend to lower the first-class character of the Building.
6. Tenants shall not do anything, or permit anything to be done, in or
about the Building, or bring or keep anything therein, that will in any way
increase the possibility of fire or other casualty or obstruct or interfere with
the rights of, or otherwise injure or annoy, other tenants, or do anything in
conflict with the valid pertinent laws, rules, or regulations of any
governmental authority.
7. Tenant shall not place a load upon any floor of the Premises which
exceeds the floor load per square foot which such floor was designed to carry or
which is allowed by applicable building code. Landlord shall have the authority
to prescribe the weight and position of safes or other heavy equipment which may
overstress any portion of the floor. All damage done to the Building by the
improper placing of heavy items which overstress the floor will be repaired at
the sole expense of the Tenant.
8. A tenant shall notify the building manager when safes or other heavy
equipment are to be taken into or out of the Building. Moving of such items
shall be done under the supervision of the building manager, after receiving
written permission from him.
9. Corridor doors, when not in use, shall be kept closed.
10. All deliveries (with the exception of Federal Express, couriers, and
UPS) will be made through the lower level garage..
11. Each tenant shall cooperate with Building employees in keeping the
Premises neat and clean.
12. Nothing shall be swept or thrown into the corridors, halls, elevator
shafts, or stairways. No birds, animals, or reptiles, or any other creatures,
shall be brought into or kept in or about the Building.
46
13. Should a tenant require telegraphic, telephonic, annunciator, or any
other communication service, Landlord will direct the electricians and
installers where and how the wires are to be introduced and placed, and none
shall be introduced or placed except as Landlord shall direct.
14. Tenants shall not make or permit any improper noises in the
Building, or otherwise interfere in any way with other tenants or persons having
business with them.
15. No equipment of any kind shall be operated on the Premises that
could in any way annoy any other tenant in the Building without written consent
of Landlord.
16. Business machines and mechanical equipment belonging to Tenant which
cause noise and/or vibration that may be transmitted to the structure of the
Building or to any leased space so as to be objectionable to Landlord or any
tenants in the Building shall be placed and maintained by Tenant, at Tenant's
expense, in setting of cork, rubber, or spring type noise and/or vibration
eliminators sufficient to eliminate noise and/or vibration.
17. Tenants shall not use or keep in the Building any inflammable or
explosive fluid or substance, or any illuminating material, unless it is battery
powered, UL approved.
18. All individuals working in The AOTA Building (tenants and their
employees) shall be required to have an identity badge which will contain a
photograph of the individual, their name, and the name of the company with whom
they are employed. The badge is to be worn for purposes of identification during
working hours. Each employee will be photographed by Jefferson Management Group
and issued a badge at no charge. The cost for replacement badges will be ten
dollars ($10.00) to be paid to The American Occupational Therapy Association,
c/o Jefferson Management Group, Inc.
A receptionist will be seated at a desk in the lobby from early morning
to the end of the working day (specific hours to be established and may be
changed from time to time). The receptionist's duties will include ensuring that
individuals not wearing or showing a badge as they enter the building are asked
to sign in. The desk will have a sign saying "ALL VISITORS PLEASE CHECK WITH
AOTA RECEPTIONISTS" The receptionist will greet visitors at the desk and issue
them a visitors badge. The receptionist will enter the name of the company being
visited and the number of the badge issued into a log. All visitors will be
expected to return their badge to the receptionist upon exiting the building. In
the event that a visitor badge has not been returned by the end of the work day,
the receptionist will contact the tenant identified as the visitor's
destination.
19. Landlord has the right to evacuate the Building in event of
emergency or catastrophe or for the purpose of holding a reasonable number of
fire drills.
20. If any governmental license or permit shall be required for the
proper and lawful conduct of Tenant's business, Tenant, before occupying the
Premises, shall procure and maintain such license or permit and submit it for
Landlord's inspection. Tenant shall at all times comply with the terms of any
such license or permit.
21. Each tenant shall be responsible for all persons for whom such
tenant authorizes entry into the Building and shall be liable to Landlord for
all acts of such persons.
22. Landlord may, upon request by any tenant, waive compliance by such
tenant with any of the Rules and Regulations, provided that (i) no waiver shall
be effective unless signed by Landlord or Landlord's authorized agent; (ii) any
such waiver shall not relieve such tenant from the obligation to comply with
such rule or regulation in the future unless expressly consented to by Landlord;
and (iii) no waiver granted to any tenant shall relieve any other tenant from
the obligation of complying with the foregoing Rules and Regulations, unless
such other tenant has received a similar waiver in writing from Landlord.
23. No drapes, blinds, shades or screens shall be attached to or hung
in, or used in connection with, any exterior window or door of the Premises so
as to be seen from the outside of the Premises without the prior written consent
of Landlord.
24. No bicycles or vehicles of any kind shall be brought into or kept in
or about the Premises.
47
25. No additional locks or bolts of any kind shall be placed upon any of
the entrances to the Premises, nor shall any changes be made in existing locks
or the mechanisms thereof. Each tenant shall, upon the termination of its
tenancy, return to Landlord all keys either furnished to, or otherwise procured
by, such tenant and in the event of the loss of any such keys, such tenant shall
pay to Landlord the cost of replacing the locks.
26. Tenant shall notify Landlord or the Building manager of any person
employed by it to do janitorial work within the Premises, except for full-time
employees of Tenant, prior to such person's commencing work, and such person
shall, while in the Building and outside of the Premises, comply with all
instructions issued by Landlord or its representatives. No tenant shall pay any
employees of Landlord or Landlord's agent to perform any work or services in the
Premises or the Building.
27. Canvassing, soliciting and peddling in the Building is prohibited
and each tenant shall cooperate to prevent the same.
28. There should not be used in the public or Common Areas of the
Building, either by any tenant or by others, in the delivery or receipt of
merchandise, any hand trucks except those equipped with rubber tires and side
guards.
29. Except while loading and unloading vehicles, there shall be no
parking of vehicles or other obstructions placed in the loading dock area.
30. Only Building Standard cool white lamps may be used in any fixture
that may be visible from outside the Building.
31. Nothing may be placed on or about the balcony or terrace areas of
the Building without Landlord's or the Building manager's prior written
approval.
32. Landlord reserves the right to rescind any of these Rules and
Regulations and make such other and further rules and regulations not
inconsistent with the express terms of the lease as in the judgment of Landlord
shall from time to time be needed for the safety, protection, care, and
cleanliness of the Building, the operation thereof, the preservation of good
order therein, and the protection and comfort of its tenants, their agents,
employees, and invitees, which Rules and Regulations when made and notice
thereof given to a tenant shall be binding upon him in like manner as if
originally herein prescribed.
33. No posters, advertisements or solicitations visible from outside the
Premises shall be permitted without prior approval by the Property Management
office.
34. The moving of tenant's property into and out of the Premises shall
be coordinated with and be scheduled at time(s) established by the Property
Management office.
35. The two garage entrances will be secured at all times by roll-up
doors. Tenants with assigned spaces in the garage will be issued "garage door
openers" with which to access the garage at no charge. The cost for replacement
openers will be fifty-five dollars ($55.00) to be paid to The American
Occupational Therapy Association c/o Jefferson Management Group, Inc. Access to
the garage may also be obtained by entering a four-digit code into the keypad
located at the exterior of the garage doors. Visitors using assigned spaces in
the garages may be given the four-digit access code at tenants' discretion.
48
ADDENDUM NO. 1
EXTENSION OPTION
Except for Landlord's right of occupancy, with respect to the premises
subject to this lease, upon expiration of the original term of this lease,
Tenant shall have the right to extend the Term of this Lease with respect to the
premises then subject to this Lease for the Extension Term (herein so called)
upon and subject to the following terms and conditions.
1. Tenant may extend this Lease for one (1) Extension term of five (5)
years by Tenant's giving written notice thereof to Landlord no later than twelve
(12) months prior to the expiration of the original Term. Tenant shall not have
the right to exercise the extension option if Landlord, within thirty (30) days
of receipt of Tenant's notice, gives Tenant written notice of Landlord's
election to exercise its right to occupy the space upon expiration of the
original term. If Landlord elects not to exercise its right to occupy the space,
the Extension Term shall commence immediately upon the expiration of the
original Term, and upon exercise of such extension option ("Extension Option")
the "Expiration Date" of the Term shall automatically become the last day of the
Extension Term.
2. The exercise by Tenant of the Extension Option set forth herein must
be made, if at all, by written notice executed by Tenant and delivered to
Landlord on or before the date set forth hereinabove. Once Tenant shall exercise
the Extension Option, Tenant may not thereafter revoke such exercise except as
herein provided. Tenant shall not have the right to exercise the Extension
Option if an Event of Default under this Lease has occurred and is continuing.
Tenant's right to extend the Term for the Extension Term shall be revoked if an
Event of Default has occurred and is continuing immediately prior to the
commencement of the Extension Term. Tenant's failure to exercise timely the
Extension Option for any reason whatsoever shall conclusively be deemed a waiver
of such option.
3. Tenant shall take the Premises "as is" for the Extension Term, and
the Landlord shall have no obligation to make any improvements or alterations to
the Premises.
4. Base Rent for the first year of the Extension Term shall be equal to
one hundred (100%) of the then Fair Market Value Rate ("FMVR") (as determined by
mutual agreement between Tenant and Landlord or in the absence thereof by the
three (3) broker method). The Base Rent during the second and all subsequent
years during the Extension Term shall be computed in accordance with rental
increase or graduation provisions, if any, applicable at the appropriate time in
leases to comparable tenants leasing comparable space for a comparable term in
buildings in Bethesda, Maryland comparable to the Building. For purposes hereof
FMVR means the fair market full service rental rate per square foot of Net
Rentable Area which landlords of office buildings in Bethesda, Maryland
comparable to the Building are charging for a comparable lease term for
comparable space at the appropriate time for comparable tenants leasing space of
comparable size, taking into account concessions then prevalent in the market
and the base year chosen for the calculation of increases in Operating Costs.
Within thirty (30) days after Landlord has received notice from Tenant that
Tenant is exercising the Extension Option, Landlord shall send to Tenant a
written notice specifying the FMVR and such rental increase and graduation
provisions as determined by Landlord in accordance with this paragraph and,
within fifteen (15) days after receipt of such notice, Tenant shall give
Landlord written notice of its acceptance or challenge of Landlord's
determination of the FMVR; provided, however, that (i) if Tenant fails to
respond within such fifteen (15) day period, Tenant shall be deemed to have
accepted such determination of Landlord, and (ii) if Tenant timely challenges
Landlord's determination of the FMVR and such rental increase and graduation
provisions, Landlord and Tenant shall endeavor to reach an agreement as to the
FMVR and such rental increase and graduation provisions within fifteen (15) days
after the expiration of such fifteen (15) day period for challenge. If Landlord
and Tenant are unable to reach an agreement as to the FMVR and such rental
increase and graduation provisions within said time period, they each shall
immediately thereafter select an appraiser, each of whom shall be a licensed
real estate broker or an MAI-certified real estate appraiser with a minimum of
five (5) years' experience in the suburban Maryland office market, who shall
determine the FMVR and such rental increase and graduation provisions. The
appraisers shall be instructed to complete the appraisal procedure and to submit
their written determinations to Landlord and Tenant within thirty (30) days
after their selection. In the event that the determination of the FMVR and such
rental increase and graduation provisions submitted by Landlord's appraiser is
less than or equal to one hundred five percent (105%) of the determination of
the FMVR and such rental increase and graduation provisions submitted by
Tenant's appraiser, the FMVR shall be the average of such determinations. If the
determination of the FMVR and such rental increase and graduation provisions
submitted Landlord's appraiser is greater than one hundred five percent (105%)
of the
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determination of the FMVR and such rental increase and graduation provisions
submitted by Tenant's appraiser, the appraisers shall, within ten (10) days,
appoint a third appraiser with similar qualifications to make such determination
of the FMVR and such rental increase and graduation provisions in accordance
with the foregoing limitations. The third appraiser shall be instructed to
complete the appraisal procedure and to submit a written determination of the
FMVR and such rental increase and graduation provisions to Landlord and Tenant
within thirty (30) days after such appraiser's appointment. The determination
which is neither the highest nor the lowest of the three (3) determinations of
the FMVR and such rental increase and graduation provisions (or if two
determinations are the same, the amount of such determinations) shall be binding
upon the Landlord and Tenant. Landlord and Tenant shall each bear the costs of
their respective appraisers. The expenses of the third appraiser shall be borne
one-half (1/2) by Landlord and one-half (1/2) by Tenant. Notwithstanding the
foregoing, once the FMVR has been determined, Tenant shall have the right to
revoke its exercise of the Extension Option within ten (10) Business Days
thereafter.
5. Except as set forth in this Addendum, the leasing of the Premises for
the Extension Term shall be upon the same terms and conditions as are applicable
for the original Term, and shall be subject to all of the provisions of the
Lease.
