Exhibit 10.3
OFFICE LEASE
Between
THE OWNERS OF 1717 H STREET,
N.W., WASHINGTON, D.C.
LANDLORD,
and
XXXXXX XXXXX & COMPANY
d/b/a
XXXXXX XXXXX WORLDWIDE,
TENANT,
for
SEVENTH, EIGHTH AND NINTH FLOORS
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X.
TABLE OF CONTENTS
Paragraph Number and Heading Page
---------------------------- ----
1. Premises...................................................... 1
2. Term.......................................................... 2
3. Acceptance of Premises and Tenant Improvement Work............ 3
4. Base Rent; Additional Rent.................................... 4
5. Operating Expenses............................................ 7
6. Real Estate Taxes............................................. 13
7. Late Charges; Interest........................................ 16
8. Services...................................................... 16
9. Personal Property Taxes....................................... 24
10. Tenant's Default.............................................. 24
11. Landlord's Remedies for Tenant's Default...................... 25
12. Landlord Defaults............................................. 27
13. Security Deposit.............................................. 28
14. Use........................................................... 28
15. Assignment and Subletting..................................... 28
16. Condition of Premises......................................... 31
17. Entry by Landlord............................................. 31
18. Liability; Indemnity.......................................... 31
19. Insurance..................................................... 31
20. Improvements.................................................. 33
21. Rules and Regulations......................................... 34
22. Hazardous Materials........................................... 34
23. Limitation on Liability; Tenant's Property.................... 35
24. Damage to Premises............................................ 36
25. Condemnation.................................................. 37
26. Subordination................................................. 38
27. Estoppel Certificates......................................... 39
28. No Personal Liability of Landlord............................. 39
29. No Waiver..................................................... 39
30. Holding Over.................................................. 40
31. (Intentionally Deleted)....................................... 40
32. Covenant of Quiet Enjoyment................................... 40
33. Notices....................................................... 40
34. Broker's Commission........................................... 41
35. Maintenance................................................... 41
36. Parking....................................................... 43
37. Rule Against Perpetuities..................................... 43
38. Renewal....................................................... 43
39. Expansion Option.............................................. 46
40. First Right to Lease.......................................... 48
41. Termination Option............................................ 49
42. Storage Space................................................. 50
43. Waiver of Jury Trial.......................................... 51
45. Signs......................................................... 51
46. Exterior/Landscaping.......................................... 52
47. Exclusivity................................................... 52
49. Miscellaneous................................................. 52
Exhibit A - Outline of Premises
Exhibit B - Work Agreement and Allowance
Exhibit C - Char Service Schedule
Exhibit D - Rules and Regulations
Exhibit E - SNDA
Exhibit F - Competitors List
Exhibit G - Signage
OFFICE LEASE
THIS OFFICE LEASE (the "Lease") is made and executed this 9th
day of January 1998, by and between (i) the Owners of 0000 X Xxxxxx, X.X.,
Xxxxxxxxxx, X.X., the Building (defined below), being Xxxxxx X. Xxxxxxxxx and
Xxxxxxxx X. Xxxxxxxxx, Trustees under Trust Indenture made by Xxxxxxxx X.
Xxxxxxxx dated November 28, 1953, Xxxxxx X. Xxxxxxxxx and Xxxxxxxx X. Xxxxxxxxx,
Trustees under Trust Indenture made by Xxxxxxx X. Xxxxxxx dated November 28,
1953, Xxxxxx X. Xxxxxxxxx, Xxxxxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxx, Trustees
under the Will of Xxxxxxxx Xxxx (Trust Estates 2 through 4), Xxxxxx X.
Xxxxxxxxx, Xxxxxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxx, Trustees under Trust
Indenture made by Xxxx X. Xxxxxxx dated August 14, 1959 (Trust Estates 1 through
4), Xxxxxx X. Xxxxxxxxx, Xxxxxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxx, Trustees
under Trust Indenture made by Xxxxxxxx X. Xxxxxxxx dated August 14, 1959 (Trust
Estates 4, 5 and 6), Xxxxxx X. Xxxxxxxxx, Xxxxxxxx X. Xxxxxxxxx and Xxxxxx X.
Xxxx, Trustees under Trust Indenture made by Xxxxxxx X. Xxxxxxx dated August 14,
1959 (Trust Estates 1 through 6), Xxxxxx X. Xxxxxxxxx, Xxxxxxxx X. Xxxxxxxxx and
Xxxxxx X. Xxxx, as Trustees under the Trust Indenture made by Xxxxxxxx X. Xxxx
(Trust Estates 4 and 5), dated August 14, 1959, Xxxxxx X. Xxxxxxxxx, Xxxxxxx X.
Xxxxxxxx and Xxx X. Xxxxxxxx, Trustees under Trust Indenture No. I made by
Xxxxxx X. Xxxxxxxxx dated September 21, 1959 (Trust Estates 1 through 8), Xxxxxx
X. Xxxxxxxxx, Xxxxxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxx, Trustees under Trust
Indenture No. II made by Xxxxxx X. Xxxxxxxxx dated September 21, 1959, and
Xxxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxx, Trustees under Trust Indenture made by
Xxxxxxx X. Xxxxxxxx dated May 7, 1965 (Trust Estates 3 through 9 and 11),
("Landlord"), and (ii) XXXXXX XXXXX & COMPANY, a Delaware corporation doing
business as XXXXXX XXXXX WORLDWIDE ("Tenant").
1. PREMISES.
(a) Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, all of the office space on the Seventh (7th) Eighth (8th) , and Ninth
(9th) Floors of the office building located at 0000 X Xxxxxx, X.X., Xxxxxxxxxx,
X.X. (the "Building"), comprising a total of approximately 87,327 rentable
square feet as measured in accordance with the Washington D.C. Association of
Realtors Method of Measurement dated as of June 13, 1995 (the "Premises" or the
"initial Premises" when referring to the initially leased approximately 87,327
rentable square feet). The Premises are outlined in red on EXHIBIT A attached
hereto. "Expansion Space" (as defined below) and "Additional Expansion Space"
(as defined below) shall become part of the Premises as and when leased by
Tenant, and the amount of rentable square feet of the Premises shall be
increased accordingly.
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(b) The Building comprises a total of approximately 318,085 rentable
square feet of office space measured in accordance with the Washington D.C.
Association of Realtors Method of Measurement dated as of June 13, 1995 (the
"Building Rentable Area").
2. TERM.
(a) The term of this Lease (the "Lease Term") shall be the period
commencing on February 1, 1998 (the "Lease Commencement Date") and continuing
thereafter through July 31, 2008. Except as otherwise provided in this Lease, if
Tenant exercises the First Renewal Option in accordance with the provisions of
Paragraph 38, below, all references herein to the "Lease Term" shall include the
Extended Term (as defined below), and if Tenant exercises the Second Renewal
Option in accordance with the provisions of Paragraph 38, below, all references
herein to the "Lease Term" shall include the Second Extended Term (as defined
below).
(b) The "Tenant Build-out Period" shall be the period commencing on the
date Landlord delivers possession of the Premises to Tenant and continuing
through the date the "Tenant Improvement Work" (hereinafter defined) is
substantially completed (hereinafter defined). Tenant shall be provided with
complete access to the Premises during the Tenant Build-out Period to commence
demolition and construction of the Tenant Improvement Work (as defined below) .
(c) The first "Lease Year" shall be the period commencing on July 15,
1998, and ending on July 31, 1999. Each subsequent Lease Year during the Lease
Term shall commence on the day immediately following the last day of the
preceding Lease Year, and shall continue for a period of twelve (12) full
calendar months.
(d) The "Rent Commencement Date" shall be July 15, 1998, whether or not
Landlord has delivered the Premises to Tenant or Tenant has performed or
completed the Tenant Improvement Work; or for any other reason.
(e) Unless the Lease Term is extended in accordance with the provisions
of Paragraph 38, below, the "Lease Expiration Date" shall be July 31, 2008.
(f) Landlord shall use commercially reasonable efforts to deliver the
Premises to Tenant on February 1, 1998, or as soon thereafter as possible, by
taking all reasonably practicable steps to recover possession of the Premises
from The International Bank for Reconstruction and Development, which is the
tenant of the Premises as of the date of execution of this Lease (the "Current
Tenant"). If Landlord does not deliver the Premises to Tenant by February 1,
1998, then Landlord shall pay Tenant all of the rent received by Landlord from
the Current Tenant pursuant to its current lease (dated December 11, 1995) after
February 1, 1998, minus all amounts that are attributable to operating expenses
for the
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Current Tenant after February 1, 1998, (the "net rents") , which net rents shall
be deemed income to the Tenant and not to the Landlord, and Tenant shall be
liable for all taxes attributable to the receipt of said net rents. The net
rents shall be paid to Tenant within ten (10) days of receipt by Landlord from
the Current Tenant. In the event the current Tenant fails to pay its rent as and
when due under its lease, Landlord agrees that it will pursue recovery of said
sums and the costs and expenses (including reasonable attorneys' fees) of doing
so shall be deducted from the net rents due Tenant. Landlord agrees that it
shall not waive any net rents due from the Current Tenant.
3. ACCEPTANCE OF PREMISES AND TENANT IMPROVEMENT WORK.
(a) Tenant accepts the existing condition of the Premises and agrees
that Landlord shall not be required to make or pay for any "Improvements" (as
defined in Paragraph 20, below) to the Premises, except for the payment of the
"Tenant Allowance," the "Expansion Space Improvement Allowance," and each
"Renewal Allowance," all as defined below, and as may be provided in EXHIBIT B
hereto. Tenant agrees to accept the initial demised Premises and all Expansion
Space and Additional Expansion Space hereafter leased by Tenant, with all tenant
improvements existing therein at the time said space is leased in their "as is"
condition, provided however, that Landlord agrees that upon delivery to Tenant
that the then existing sprinkler system, VAV boxes and window blinds (which all
shall be of the same color) shall be operational and in good working condition
(Tenant shall be responsible for any damage thereto caused by Tenant's
demolition of the then existing tenant improvements or installation of Tenant's
new Tenant Improvements). Tenant agrees it shall be responsible for modifying
and expanding the then existing sprinkler system (including adding and
relocating sprinkler loops and heads beyond those then existing in the Premises
as of the date the Premises are delivered to Tenant), the HVAC system in the
Premises (including installing VAV boxes beyond those then existing in the
Premises as of the date the Premises are delivered to Tenant) , and that
Landlord shall not be responsible for making or paying for (other than by
providing the foregoing allowances) any changes, additions or improvements to
the then existing tenant improvements, the Building or base Building systems
with regard to Tenant's demolition of the then existing tenant improvements or
the construction and installation of Tenant's new Tenant Improvements.
(b) Tenant will perform the demolition of the tenant improvements
then existing in the Premises at the time of delivery, and complete
construction and installation of Tenant's new Tenant Improvements in the
Premises in accordance with the provisions of EXHIBIT B hereto (hereinafter
the "Tenant Improvement Work"), and Paragraph 19 as to Expansion Space,
Additional Expansion Space and any other Improvements to the Premises.
Throughout the Lease Term, Tenant shall engage any and all general
contractors and subcontractors necessary
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to perform any and all of the Tenant Improvement Work and to construct any other
or subsequent Improvements within the Premises. Tenant must obtain the written
consent of Landlord, which shall not be unreasonably withheld, delayed or
conditioned, prior to engaging any architect, engineer, general contractor or
major subcontractor to construct any Improvements within the Premises or to
perform any work in connection with construction of any such Improvements.
(c) Provided that Landlord complies with its obligations with respect
to the payment of the Tenant Allowance (hereinafter defined) in accordance with
the terms of this Lease, Tenant shall construct in the Premises, including any
Expansion Space or Additional Expansion Space, Improvements having a total cost
of not less than Thirty-Five Dollars ($35.00) per rentable square foot of the
Premises, including without limitation Twenty-Seven and 50/100 Dollars ($27.50)
per rentable square foot of the Premises for the costs to Tenant of all design,
architectural and engineering work, construction costs, construction
supervision, contractors' overhead and profit, licenses and permits, and other
hard costs incurred by Tenant in connection with the Improvements.
(d) Landlord shall provide Tenant with a "Tenant Allowance" of Two
Million Four Hundred One Thousand, Four Hundred Ninety Two Dollars ($2,401,492),
an amount equal to Twenty-Seven and 50/100 Dollars per rentable square foot of
the initial Premises, which Tenant may use for construction of Improvements to
the initial Premises, for space planning and architectural fees and moving
expenses, and which shall be paid by Landlord in accordance with the provisions
of EXHIBIT B hereto. If the total cost of construction of the Premises,
including design, architectural and engineering services and other hard costs
incurred in connection with the Improvements, is less than the total of the
Tenant Allowance, the unexpended portion shall be applied to Tenant's Base Rent
obligations for the initial months of the Lease for which Base Rent shall be
due.
(e) Landlord's fee for supervision and oversight of the construction of
the Tenant Improvement Work in the initial Premises shall be Ten Thousand
Dollars ($10,000). If Tenant exercises the Expansion Option, Landlord's fee for
supervision and oversight of the construction of the Tenant Improvement Work in
the Expansion Space shall be Five Thousand Dollars ($5,000). If Tenant leases
any Additional Expansion Space, Landlord's fee for supervision and oversight of
the construction of the Tenant Improvement Work in each Additional Expansion
Space shall be the lesser of (i) Five Thousand Dollars ($5,000) or (ii) $0.12
per rentable square foot.
4. BASE RENT; ADDITIONAL RENT.
(a) Tenant shall pay to Landlord "Base Rent" and "Additional Rent."
Base Rent is the rent due from Tenant to Landlord that is fixed pursuant to the
terms hereof at the commencement of each Lease Year during the Lease Term. Base
Rent does not include
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increases in Operating Expenses (as defined below) or in Real Estate Taxes
(as defined below). Additional Rent is any and all rent, payments or other
charges (E.G., increases in Operating Expenses) other than Base Rent that
Tenant is required to pay under the provisions of this Lease. Base Rent and
Additional Rent shall be made payable to "The Owners of 1717 H Street, c/o
Stoladi Property Group" at 0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000, Suite 400, unless otherwise specified by Landlord pursuant to a prior
written notice delivered to Tenant.
(b) Tenant shall be obligated to pay Base Rent beginning on the Rent
Commencement Date. For the first Lease Year there shall be due and owing from
Tenant to Landlord as annual Base Rent the total sum of Two Million Six Hundred
Two Thousand Five Hundred Fifty Five and 88/100 Dollars ($2,602,555.88),
comprising (i) one Hundred Thirteen Thousand Seven Hundred Thirty Six and 38/100
Dollars ($113,736.38) for the period July 15, 1998 through July 31, 1998, and
(ii) Two Million Four Hundred Eighty Eight Thousand Eight Hundred Nineteen and
50/100 Dollars ($2,488,819.50) for the period August 1, 1998 through July 31,
1999. For the Second Lease Year and each Lease Year thereafter, the annual Base
Rent for the Premises shall be Two Million Four Hundred Eighty-Eight Thousand
Eight Hundred Nineteen and 50/100 Dollars ($2,488,819.50) (i.e., 87,327 rentable
square feet x $28.50 per rentable square foot), as adjusted pursuant to
Paragraph 4 (d), (e) and (f), and Paragraphs 38, 39 and 40. Notwithstanding the
foregoing, if Tenant occupies, and conducts its business in, all or any part of
the Premises for any period before July 15, 1998, or before the rent
commencement dates for the Expansion Space (hereinafter defined) or Additional
Expansion Space (hereinafter defined), Tenant shall reimburse Landlord, within
ten (10) days of Landlord's demand, for the cost of all utilities attributable
to Tenant's occupancy of the Premises during the aforesaid period(s). Tenant's
proportionate share of the cost of such utilities shall be based upon the amount
of rentable square feet of the Premises Tenant occupies during the aforesaid
period.
(c) Tenant's first payment of Base Rent, for the period July 15, 1998
through July 31, 1998, shall be due on the Rent Commencement Date. For the
remainder of the Lease Term and during any extension of the Lease Term, Tenant
shall pay its annual Base Rent in 12 equal monthly installments. Commencing on
August 1, 1998, all monthly installments of Base Rent shall be payable in
advance on the first day of each calendar month during the Lease Term. (For the
first Lease Year, each monthly installment due after July 1998 shall be Two
Hundred Seven Thousand Four Hundred One and 63/100 Dollars ($207,401.63)). All
rent due under this Lease shall be payable, without demand and without setoff or
other reduction, except as expressly provided in this Lease, at the office
within the Building of the property management company engaged by the Landlord
for the Building, or at such other place as Landlord designates by written
notice to Tenant.
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(d) Upon the commencement of the second Lease Year and upon the
commencement of each Lease Year thereafter during the Lease Term, OTHER THAN the
sixth Lease Year, and effective simultaneously with such dates (the "Adjustment
Dates"), the annual Base Rent per rentable square foot shall be increased by an
amount equal to the product of (1) fifty percent (50%) of the increase in the
CPI (as defined below) multiplied by (2) Eighteen and 50/100 Dollars ($18.50),
but said increase shall not exceed two percent (2.0%) of the sum of (i) Eighteen
and 50/100 Dollars ($18.50) and (ii) the amount by which Base Rent was increased
upon commencement of the immediately preceding Lease Year pursuant to this
Paragraph 4(d). The increase in the CPI shall be determined by subtracting the
CPI for the month that is three months prior to the commencement of the first
Lease Year (the "Base Index") from the CPI for the month that is three months
prior to the Adjustment Date and dividing the result by the Base Index.
Notwithstanding the foregoing, however, in no event shall the Base Rent payable
during the second Lease Year or any Lease Year thereafter during the first ten
(10) Lease Years of the Lease Term be less than the Base Rent payable during the
immediately preceding Lease Year. The "CPI" is hereby defined to be the index
for the Washington, D.C.-Maryland-Virginia area, now known as the United States
Bureau of Labor Statistics Consumer Price Index for Urban Wage Earners and
Clerical Workers, all items (1982-84 = 100). In the event the CPI is not in
effect at any time during the Lease Term, Landlord and Tenant shall attempt to
agree upon a substitute formula, but if the parties are unable to agree upon a
substitute formula, then the matter shall be determined by arbitration in
accordance with the rules of the American Arbitration Association then
prevailing.
(e) The following sets forth an example of how increases in Base Rent
shall be determined in accordance with Paragraph 4(d):
ASSUME: (1) Base Rent per rentable square foot for the first Lease Year is
$28.50; (2) CPI for the first Lease Year is 100; (3) CPI for the second Lease
Year is 105; (4) CPI for third Lease Year is 110. Employing the formula set
forth in Paragraph 4(d), the Base Rent per rentable square foot for the second
Lease Year would be the lesser of:
(i) $18.50 x (((105-100)/100) x 0.50) = $0.46; $28.50 + $.46 = $28.96
or
(ii) $18.50 x 0.02 = $0.37; $28.50 + $.37 = $28.87
Accordingly, Base Rent per rentable square foot for the Second Lease
Year would be $28.87. The Base Rent per rentable square foot for the third Lease
Year would be the lesser of:
(i) $18 . 50 x (((110-100) /100) x 0. 50) = $0.93; $28 . 50 + $.93 = $29.43
or
(ii) ($18.50 + $0.37) x 0.02 = $0.38; $28.87 + $.38 = $29.25
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Accordingly, Base Rent per rentable square foot for the Third Lease
Year would be $29.25.
(f) In addition to the increases in Base Rent provided for in
Paragraph 4(d), Base Rent shall be increased, above the escalated Base Rent
in effect at the end of the fifth Lease Year, by an amount equal to Two and
50/100 Dollars ($2.50) per rentable square foot of the Premises (including
any Expansion Space and Additional Expansion Space leased to Tenant),
effective upon the commencement of the sixth Lease Year. Notwithstanding the
foregoing, Landlord shall xxxxx, and Tenant shall not be required to pay, one
half (1/2) of the Base Rent that otherwise would be due during the first
month of the Sixth Lease Year.
5. OPERATING EXPENSES.
(a) "Operating Expenses" shall be all reasonable costs and expenses
(including, without limitation, the cost of liability, casualty, business income
and other insurance reasonably allocated to Landlord's operation of the
Building) incurred by Landlord in the operation, maintenance, and repair of the
Building, and in the provision of services to Building tenants, (other than
retail tenants of the Building), including Tenant. The accounting of the
Operating Expenses shall be performed in accordance with generally accepted
accounting principles. Operating Expenses shall be appropriate for the prudent
management, operation, maintenance, servicing and repair of the Building and
shall be reduced by all cash discounts, trade discounts or quantity discounts
received by Landlord or Landlord's managing agent in the purchase of any goods,
utilities or services in connection with the prudent operation of the Building.
Landlord shall equitably prorate bills for services rendered to the Building and
to any other property owned by Landlord. Landlord shall use reasonable efforts
to pursue all insurance, breach of warranty or other claims that might result in
a reduction in Operating Expenses payable by Tenant. As of the date of execution
of this Lease, there is no space in the Building used for retail. If any space
in the Building is, in the future, used for retail, all retail space located in
the Building shall be separately metered for utilities, and the cost of
utilities consumed in such retail space shall not be included in the Operating
Expenses.
(b) The following costs and expenses shall be excluded from Operating
Expenses:
(1) Costs in connection with any structural repair or major
change in the Building;
(2) Costs of correcting defects in the initial design,
construction, reconstruction or renovation of the Building, including the
parking garage;
(3) Costs, including permit, license and inspection costs,
associated with alterations or improvements of the Premises, the premises of
other tenants or occupants of the Building or vacant retail space in the
Building or incurred in renovating or otherwise
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improving, decorating, painting or redecorating vacant space for tenants or
other occupants of the Building;
(4) Depreciation of the Building, fixtures or equipment;
(5) Interest points, fees and principal payments on mortgages
and other debt costs, if any, or amortization on any mortgage or mortgages or
any other debt instrument encumbering the Building or the Land;
(6) Payments made to any ground lessor or master space lessor;
(7) Expenses directly resulting from the breach of this Lease
by Landlord, or the negligence of Landlord, its agents, contractors or
employees, or other tenants;
(8) Reimbursable costs for which Landlord is reimbursed by its
insurance carrier, any tenant's carrier, any tenant, any warrantor or any other
third party;
(9) Any bad debt loss, rent loss, reserves for bad debts or
rent loss or legal fees incurred in collecting rent or other obligations from
other Building tenants;
(10) The cost of services provided to other tenants of the
Building beyond those provided to all Building Tenants, and costs incurred by
Landlord in respect of breaches of other leases in the Building;
(11) Costs associated with the operation of the business of
the person or entity which constitutes Landlord, as distinguished from the costs
of operation of the Building, including accounting and legal matters, costs of
defending any lawsuits with any mortgagee, costs of selling, syndicating,
financing, mortgaging or hypothecating any of Landlord's interest in the
Building, costs of any disputes between Landlord and its employees, disputes of
Landlord with Building management, and outside fees paid in connection with
disputes with other tenants;
(12) The wages of any employee of Landlord who does not devote
substantially all of his or her time to the Building or common areas of the
Building, except to the extent such wages are reasonable, and properly and
equitably allocable to time spent by such employee in directly servicing the
Building or common areas thereof;
(13) Fees for services rendered to the Building or common
areas by entities controlled by or under common control with Landlord to the
extent such fees exceed the market rate payable for comparable services if
rendered by unrelated third parties;
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(14) Any expenditures which under normal accounting rules
should be treated as capital expenditures, EXCEPT amortization (at the prime
rate of interest reported in The Wall Street Journal ("Prime Rate")) of capital
expenditures made by Landlord for the purpose of reducing Operating Expenses of
the Building, (amortization shall be on a straight-line basis over Landlord's
reasonable estimate of the useful life of the particular improvement or
equipment);
(15) Fines, penalties, late payment charges and interest
arising from the acts or inaction of Landlord or failure timely to make tax
and/or other payments, except that interest on assessments described in clause
(27) shall be included and deemed incurred as if Landlord has elected to pay
such assessments in the maximum number of permitted installments);
(16) Capital costs incurred by Landlord in restoring all or
any portion of the Building after the occurrence of a casualty and any other
costs reimbursed by insurance proceeds;
(17) Legal fees, court costs, and consultants' fees not
related to the general welfare of Building tenants;
(18) Costs of remediation or cleanup of any asbestos or
Hazardous Materials (as defined below) near, in, on or under the Building;
(19) Any operating expenses, including maintenance,
attributable to the parking garage;
(20) Costs of repairs or replacements caused by the exercise
of any condemnation rights by any public or quasi-public authority;
(21) Taxes, including Real Estate Taxes (which shall be paid
in accordance with the provisions of Paragraph 6 of the Lease);
(22) Salaries and the cost of other compensation paid to
executive employees above the grade of manager (including profit sharing,
bonuses and other employee benefit plans);
(23) The rent or expenses in lieu of rent for Landlord's
on-site management or leasing office to the extent such rent or expenses in lieu
of rent exceeds market rent;
(24) Costs and expenses of utilities directly metered to
tenants of the Building and payable separately by such tenants;
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(25) Increased insurance premiums caused by Landlord's or any
other tenant's hazardous, reckless, willful or negligent acts;
(26) Interest incurred on amounts by which any tenant's
estimated payments exceed such tenant's proper share of Operating Expenses or
Real Estate Taxes;
(27) Assessments and Real Estate Taxes to the extent paid in
less than the maximum permitted number of installments;
(28) Charitable and political contributions, advertising and
promotional expenditures, including costs of staging special events (unless
consistently provided to or applied for the benefit of all tenants, or as
necessary to provide service in accordance with a first-class standard, e.g.,
expenses for the annual Building Holiday party).
(29) The costs associated with any concessions or incentives
granted to tenants in the Building (such as moving expense allowances or
reimbursements);
(30) Costs and expenses of janitorial or other services
payable separately by tenants of the Building (but Operating Expenses shall be
deemed to include the costs and expenses of such services deemed furnished to
such tenants based on the assumption that the provision of such services to such
tenants (per rentable square foot) equals the cost of providing such services to
all other tenants (per rentable square foot);
(31) Rental for items (except when needed in connection with
normal repairs and maintenance of permanent systems typically rented for such
purposes), which, if purchased, rather than rented, would constitute a capital
improvement which is specifically excluded in clause (14);
(32) Marketing costs including rent or expenses in lieu of
rent for a marketing office, leasing commissions, space planners' fees,
attorneys' fees, advertising expenses, expenses incurred in connection with the
negotiation and preparation of letters, deal memos, letters of intent, leases,
subleases and/or assignments, space planning costs and other costs and expenses
incurred in connection with lease, sublease and/or assignment negotiations and
transactions with present or prospective tenants or other occupants of the
Building;
(33) Costs of bringing the common areas of the Building or the
Land into compliance with existing or future laws or other legal requirements,
including without limitation federal, state or local environmental laws and
Title III of the Americans with Disabilities Act of 1990, as amended ("ADA")
except as provided in Paragraph 35; and
(34) Costs of acquiring any antiquities or works of art.
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(c) "Base Year Operating Expenses" shall be the greater of (A) the
Operating Expenses incurred during calendar year 1999 or (B) the Operating
Expenses incurred during the first 12 months in which Tenant occupies all or
part of the Premises.
(d) "Operating Expense Increases" shall be the operating Expenses that
are incurred during the fifth and each subsequent Lease Year during the Lease
Term that are in excess of the amount of the Base Year Operating Expenses.
(e) Tenant's "Proportionate Share" shall be the percentage that the
total rentable square feet contained within the Premises at any time bears to
the total Building Rentable Area. Tenant's Proportionate Share percentage as of
the Lease Commencement Date is 27.62%.
(f) Beginning with the fifth Lease Year, Tenant shall pay to Landlord,
as Additional Rent, Tenant's Proportionate Share of Operating Expense Increases.
(g) Notwithstanding the foregoing provisions of this Paragraph 5,
the amount of Tenant's Proportionate Share of Operating Expense Increases
that Tenant is required to pay during and with respect to the fifth Lease
Year shall not exceed twelve and one-half percent (12 1/2%) of the Base Year
Operating Expenses. The Base Year Operating Expenses shall be increased by
the amount by which the Operating Expenses incurred during the fifth Lease
Year exceed one hundred twelve and one half percent (112 1/2%) of Tenant's
Proportionate Share of the Base Year Operating Expenses. For the sixth Lease
Year through the tenth Lease Year, the amount of Tenant's Proportionate Share
of Operating Expense Increases that Tenant is required to pay shall not
exceed one-hundred and four percent (104%) of Tenant's Proportionate Share of
Operating Expense Increases for the previous Lease Year.
(h) Landlord shall notify Tenant, at least 30 days in advance of the
fifth and each subsequent Lease Year during the Lease Term, of Landlord's
reasonable estimate of Tenant's Proportionate Share of Operating Expense
Increases for each such Lease Year, and Tenant shall pay one-twelfth (1/12) of
these estimated amounts on the first day of each month after the date of such
notice until the estimated Tenant's Proportionate Share of Operating Expense
Increases is again adjusted by notice from Landlord. Landlord's estimate of
Tenant's Proportionate Share of Operating Expense Increases shall not be
adjusted more than once with respect to any Lease Year. If Landlord does not
notify Tenant in advance of the beginning of a Lease Year as provided above,
Tenant shall continue to make monthly payments of one-twelfth (1/12) of the most
recently estimated amount of its Proportionate Share of Operating Expense
Increases until the first full calendar month that is 30 days after Tenant's
receipt of notice of a new estimated amount from Landlord. Within 120 days after
the end of the fifth and each subsequent Lease Year during the Lease Term,
Landlord shall submit to Tenant a statement prepared by a certified public
accountant employed or engaged by the Landlord's management company for the
Building ("Statement") showing Tenant's
11
actual Proportionate Share of Operating Expense Increases for the previous
Lease Year itemized as to major categories of expenses, the amount thereof
paid by Tenant, and the balance due or the overpayment. The balance due shall
be paid by Tenant to Landlord, or the overpayment shall be paid by Landlord
to Tenant, without interest, within thirty (30) days after the date of the
Statement. Tenant or its designee may, upon reasonable notice, examine or
audit Landlord's records pertaining to all amounts payable by Tenant under
the terms of this Lease, at the office of Landlord during ordinary business
hours not more than once during the sixth and each subsequent Lease Year to
verify the matters in the Statement for the Base Year and the immediately
preceding three (3) Lease Years (Landlord agrees to maintain said records and
the records for the Base Year) , provided that such examination shall not
excuse or delay the timely payment of Tenant's Proportionate Share of
Operating Expense Increases. For the purpose of Tenant's examination or audit
only, Tenant shall have the right to make copies of said records at its
expense. Tenant shall maintain the appropriate confidentiality of said
copies. If Tenant's inspection of Landlord's records correctly shows that
Tenant's Proportionate Share of Operating Expense Increases has been
overstated in the Statement by more than five percent (5%) of the entire
Tenant's Proportionate Share of Operating Expense Increases, Landlord shall
pay said excess Operating Expense payments made by Tenant and reimburse
Tenant for the reasonable cost of the examination or audit within ten (10)
days of Landlord's receipt of Tenant's examination or audit report.
(i) If the average occupancy rate of the Building Rentable Area shall
be less than one-hundred percent (100%) for the period during which the Base
Year Operating Expenses are calculated or for the fifth or any subsequent Lease
Year, for purposes of calculating Operating Expenses, the Operating Expenses for
such period that vary with the level of occupancy of the Building (for example,
char services, management fees, and elevator costs) shall be increased by the
additional costs and expenses that Landlord reasonably estimates would have been
incurred if the average occupancy rate had been one-hundred percent (100%) for
such period. In no event shall the Building tenants be required to pay, in the
aggregate, more than 100% of the actual Operating Expenses of the Building for
any calendar year, and Tenant shall not be required to pay more than 100% of its
Proportionate Share of the total Operating Expenses actually incurred for any
Lease Year, with such actual Operating Expenses to be determined and payments
reconciled through the process described in Paragraph 5 (h). At Tenant's written
request, Landlord will provide information sufficient to disclose or quantify
adjustments made to each category of Operating Expenses increased pursuant to
the provisions of this Paragraph 5.
(j) In addition to the payment of Operating Expense Increases required
by the provisions of this Paragraph 5, Tenant shall pay for all use of HVAC
services other than during Building Operating Hours (as hereinafter defined).
Non-Building-Operating Hours HVAC usage must be arranged by Tenant with the
Building management. If Tenant delivers to Building management a written request
for Non-Building-Operating-Hours HVAC service
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(i) before 10 a.m. on the Friday before weekend service is requested, (ii) by 10
a.m. on the day before service on a Holiday (as defined below) is requested, and
(iii) by noon on the day before weekday evening service is requested, Tenant
shall be required to pay Eight Dollars ($8.00) per hour per floor for such
service. If Non-Building-Operating Hours HVAC is requested, but not in
accordance with the requirements of the preceding sentence, Landlord shall have
the right to require Tenant to pay Thirty-Five Dollars ($35) per hour per floor
for such service.
6. REAL ESTATE TAXES.
(a) (i) "Real Estate Taxes" shall be all taxes (including special
assessments) for the Building that are payable within a particular calendar
year, including all taxes imposed on the Building and the land upon which it is
situated, as well as all reasonable costs incurred by Landlord, including
reasonable attorneys' fees and consultants' fees in connection with any real
estate tax contest or appeal. Real Estate Taxes shall include, without
limitation, real estate taxes, personal property taxes applicable to the
personalty of Landlord, whether used by Landlord or its agent, related to or
used in the management or operation of the Building, (other than such taxes
based upon Landlord's net income), public space rentals, including but not
limited to vault rentals, any taxes, assessments or other levies which may at
any time be imposed and/or collected by any federal, state, county, municipal,
quasi-governmental or corporate entity in respect of bus, subway or other public
transportation facilities operating in the metropolitan area of the District of
Columbia, and including also any assessment or levy for any business improvement
district duly formed in accordance with applicable law, and any tax assessment
or other charges in the nature of a sales, use or other tax upon Landlord, the
Premises, the Building, the Land and/or the rents payable hereunder (except
income taxes, franchise taxes calculated upon Landlord's net income, estate or
inheritance taxes of Landlord). If the levy shall be levied or imposed on the
Building, and/or Land and/or Landlord, in substitution for real estate taxes
and/or personal property taxes presently levied or imposed on immovables in the
District of Columbia, and including also without limitation any taxes on rents,
then any such new tax or levy shall be included within the amount of Real Estate
Taxes of which Tenant shall pay its Proportionate Share. If the amount of the
Real Estate Taxes is not ascertainable because such Real Estate Taxes or
substitute levies or taxes relate to one or more properties other than the
Building and the Land or to rents received by Landlord in addition to those
received from the Building, then Tenant shall pay its Proportionate Share of
Real Estate Tax Increases of said items to be paid by Tenant forming a part of
the Real Estate Taxes shall be reasonably allocable to the Building as
reasonably determined by Landlord. If any Real Estate Taxes levied against the
Land, Building or improvements covered hereby or the rents reserved therefrom,
shall be evidenced by improvement bonds or other bonds, or in any other form,
which may be paid in annual installments, only the amount payable for a Real
Estate Tax Year elapsing during the Lease Term shall be included as Real Estate
Taxes for purposes of this definition. Real Estate Taxes
13
shall not include, nor shall Tenant be obligated to pay pursuant to this Lease,
such taxes as capital gains, corporation, unincorporated business, income,
profit, excess profit, inheritance, transfer, recordation, estate, gift or
franchise taxes, or any fines, penalties and/or interest on late payments of any
Real Estate Taxes (unless such late payment is caused by Tenant's failure to
make timely payment of any installments of its Proportionate Share of Real
Estate Taxes, in which case Tenant shall be solely liable to reimburse Landlord
for the entirety of any such fine, penalty and/or interest).
(ii) "Base Year Real Estate Taxes" shall be the greater of (A)
the Real Estate Taxes due and payable during calendar year 1999 or (B) the Real
Estate Taxes due and payable during the first 12 months after the Tenant
Build-out Period.
(iii) "Real Estate Tax Increases" shall be the Real Estate
Taxes for the third and each subsequent Lease Year during the Lease Term that
are in excess of the amount of the Base Year Real Estate Taxes.
(iv) Beginning with the third Lease Year, Tenant shall pay to
Landlord, as Additional Rent, Tenant's Proportionate Share (as defined in
Paragraph 5 (e) above) of Real Estate Tax Increases.
(b) Landlord shall notify Tenant, at least thirty (30) days in advance
of the third and each subsequent Lease Year during the Lease Term, of Landlord's
reasonable estimate of Tenant's Proportionate Share of Real Estate Tax Increases
for each such Lease Year, and Tenant shall pay one-twelfth (1/12) of these
estimated amounts on the first day of each month after the date of such notice
until the estimated Tenant's Proportionate Share of Real Estate Tax Increases is
again adjusted by notice from Landlord. Landlord's estimate of Tenant's
Proportionate Share of Real Estate Tax Increases shall not be adjusted more than
once with respect to any Lease Year. If Landlord does not notify Tenant in
advance of the beginning of a Lease Year as provided above, Tenant shall
continue to make monthly payments of one-twelfth (1/12) of the most recently
estimated amount of its Proportionate Share of Real Estate Tax Increases until
the first full calendar month that is 30 days after Tenant's receipt of notice
of a new estimated amount from Landlord. Within 120 days after the end of the
third and each subsequent Lease Year during the Lease Term, Landlord shall
submit to Tenant a statement prepared by a certified public accountant employed
or engaged by the Landlord's management company for the Building ("Statement")
showing Tenant's actual Proportionate Share of Real Estate Tax Increases for the
previous Lease Year, the amount thereof paid by Tenant, and the balance due or
the overpayment. The balance due shall be paid by Tenant to Landlord, or the
overpayment shall be paid by Landlord to Tenant, without interest, within thirty
(30) days after the date of the Statement. Tenant may, upon reasonable notice,
examine or audit Landlord's records at the office of Landlord during ordinary
business hours not more than once during the fourth and each subsequent Lease
Year to verify the matters in the
14
Statement for the Base Year Real Estate Taxes and for the immediately preceding
three (3) Lease Years (Landlord agrees to maintain said records and the records
for the Base Year), provided that such examination shall not excuse or delay the
timely payment of Tenant's Proportionate Share of Real Estate Tax Increases. For
the purpose of Tenant's examination or audit only, Tenant shall have the right
to make copies of said records at its expense. Tenant shall maintain the
appropriate confidentiality of said copies. If Tenant's inspection of Landlord's
records correctly shows that Tenant's Proportionate Share of Real Estate Tax
Increases has been overstated in the Statement by more than five percent (5%) of
the entire Tenant's Proportionate Share of Real Estate Tax Increases, Landlord
shall reimburse Tenant for the reasonable cost of the examination or audit.
(c) Tenant shall receive its proportionate share of any tax refund
attributable to any period for which Tenant has paid its Proportionate Share of
Real Estate Taxes Increases, within ten (10) days of the receipt of same by
Landlord, provided that Tenant first cures any then-existing breach of this
Lease or default by Tenant. Notwithstanding the foregoing, Tenant shall not be
required to pay any portion of costs incurred to contest or appeal any real
estate taxes imposed for any period during which Tenant did not occupy (or have
the right to occupy) the Premises, and Tenant shall not be entitled to share in
any refund applicable to any period during which Tenant did not occupy (or have
the right to occupy) the Premises. Tenant shall have the right twice during the
first ten (10) Lease Years of the Lease Term, once during the Extended Term (as
defined below) and once during the Second Extended Term (as defined below) to
require Landlord to contest an increase in the Real Estate Tax assessment for
the Building which Landlord has decided not to contest, provided, however, if
Tenant has not obtained the agreement of the other major tenants (i.e. tenants
leasing space equal to one floor of the building) to pursue the appeal prior to
Tenant exercising its aforesaid right to require Landlord to pursue an appeal,
then Tenant shall be liable for the full amount, not just its, Proportionate
Share, of any increase in the Real Estate Tax assessment resulting from such an
appeal, and, if there is such an increase, all costs and attorneys' fees
relating to such appeal.
7. LATE CHARGES; INTEREST. Any rental or other payment required to be
made by Tenant hereunder that is not received by Landlord within five (5)
days after its due date (a) shall be subject to a late charge equal to three
percent (3%) of the amount due, which amount shall be paid by Tenant, as
Additional Rent, with the next monthly payment of Base Rent, and (b) also
shall bear interest from the due date until paid at the rate of eighteen
percent (18%) per annum (1 1/2%) per month). Once during each Lease Year, an
unintentional late payment by the Tenant shall not be subject to the
aforesaid late charge and interest unless and until said payment will have
been received by Landlord within ten (10) days after its due date or within
three (3) days after the date Landlord notifies Tenant that the payment has
not been received by Landlord within the five (5) days of its original due
date.
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8. SERVICES. The Building Operating Hours shall be 7:00 a.m. to 6:00 p.m.
Monday through Friday, and 9:00 a.m. to 1:00 p.m. Saturday, except New Year's
Day, Xxxxxx Xxxxxx Xxxx'x Birthday, President's Day, Memorial Day, Independence
Day, Labor Day, Veteran's Day, Thanksgiving and Christmas Day ("Holidays").
Tenant shall have access to the Premises 24 hours a day each day of the year.
Landlord shall provide the following facilities and services in accordance with
standards employed by other landlords of comparable modern first-class
commercial office buildings in the downtown Washington, D.C. central business
district:
(a) Elevator service from 7:00 a.m. to 6:00 p.m. except Saturdays,
Sundays and Holidays, and from 9:00 a.m. to 1:00 p.m. Saturdays, with one
elevator subject to call at all times, including every day after Building
Operating Hours, Saturdays, Sundays and Holidays.
(b) (i) A lobby concierge or lobby attendant on duty 24 hours a
day, every day of the year except Holidays, and (ii) the existing operating
proximity card reader and surveillance system, and a guard every day of the
year, all of which systems and services shall be operated and performed
consistent with standards employed by other landlords of comparable modern
first-class commercial office buildings in the downtown Washington, D.C. central
business districts (including, but not limited to, the guard, upon reasonable
request, escorting employees of Tenant after Building Operating Hours to their
vehicles in the garage). In the event Landlord installs an elevator locking
system for all floors of the Building, Tenant shall be entitled to use such
system for the floor of the Building on which the Premises are located.
Notwithstanding the foregoing, Landlord shall not be responsible for the
performance of the lobby concierge or lobby attendant, the proximity card
reader, or the guard and surveillance system or for damage or injury to Tenant,
its employees, invitees or others due to the failure, action or inaction of any
lobby concierge, lobby attendant, proximity card reader, guard or surveillance
system that is provided.
(c) (i) A modern, electronic security system, as currently
installed in the Building, that will control external ingress to the Building
and internal ingress to the Premises at all points, including controls in the
main lobby, elevators, and programmable selective access to secured areas of the
Building, which shall be activated during other than Building Operating Hours
and all day Saturdays, Sundays, and Holidays; (ii) an elevator control system,
as currently installed in the Building, that will provide for Tenant-only
elevator access; (iii) continuous camera surveillance of areas of ingress and
egress to the Building, as currently installed in the Building. Tenant shall
have the right to install, at its expense, and with the prior written approval
of Landlord, which shall not be unreasonably withheld, conditioned or delayed, a
system providing for Tenant-only access from the fire stairwells to floors of
the Building occupied solely by Tenant. In addition, Tenant shall have the right
to use stairwells to walk between floors occupied solely by Tenant, with secure,
electronically controlled access to such floors through such stairwells,
provided that any such electronically controlled
16
access shall be installed by Tenant, at its expense, and only with the prior
written approval of Landlord, which shall not be unreasonably withheld,
conditioned or delayed.
(d) Landlord shall initially supply one (1) electronic security card to
Tenant for the Premises to be used by employees of Tenant who work in the
Premises, not to exceed three-hundred and thirty (330) cards, with the cost
thereof to be included in Operating Expenses. Landlord shall issue additional
and replacements for lost cards only upon the payment of a reasonable cost for
each additional card or key. Tenant shall provide Landlord with the name of each
employee who has been given a card and the card number. Tenant shall ensure that
all employees of Tenant shall return their cards at the end of their employment,
and Tenant shall promptly report to Landlord any lost or stolen cards.
(e) Tenant shall have access to the roof, without being required to pay
any additional Base Rent, to place a satellite dish or antenna, if Tenant
obtains the prior written consent of Landlord, which consent shall not be
unreasonably delayed, conditioned or denied, and in accordance with the
following restrictions and conditions:
(i) Tenant, at its sole cost and expense, may install and
maintain one satellite dish having a diameter of not more than thirty inches
(30") and one antenna thirty-six inches 36" high (the "Roof Installations") on
the roof of the Building in a location designated by Landlord; provided,
however, that Tenant's Roof Installations shall not interfere with any other
satellite dishes or other roof installations located on the roof of the
Building.
(ii) If, at any time during the Lease Term, in Landlord's
reasonable judgment, it is necessary or desirable for the Roof Installations to
be moved to another location designated by Landlord, Tenant shall relocate the
Roof Installations at Landlord's cost and expense.
(iii) Tenant shall submit to Landlord detailed plans and
specifications for installing the Roof Installations and Tenant shall not
commence installation of the Roof Installations without first obtaining
Landlord's approval of Tenant's contractor and Tenant's plans and
specifications.
(iv) The Roof Installations shall comply with all applicable
laws, codes, regulations, and other requirements ("Requirements"). If at any
time during the Lease Term, the Roof Installations do not comply with all
Requirements, Tenant shall immediately modify the Roof Installations, with
Landlord's approval, to bring them into compliance with such Requirements, or,
at Tenant's option, remove said Roof Installation. Tenant's failure to obtain
any permit required in order to install the Roof Installations for any reason
whatsoever shall not have any effect on this Lease other than to nullify the
right given to Tenant to install and use the Roof Installations until said
permit is obtained.
17
(vi) Landlord is under no duty to maintain the Roof
Installations and in no event shall Landlord be liable to Tenant for damage to
Tenant, its employees, contractors or agents, or to the Roof Installations,
unless the damage is caused by Landlord's negligent or willful act.
(vii) Notwithstanding anything to the contrary in the Lease,
upon installation of the Roof Installations, Tenant, at its sole cost and
expense, shall be responsible for performing any and all repairs to the
Building, including the roof, the need for which arises out of or is in any way
related to the Roof Installations.
(viii) Except as otherwise expressly provided in this Section,
all of the terms and conditions of Paragraph 20 of the Lease shall apply with
respect to the Roof Installations.
(ix) Tenant shall defend Landlord, and hereby does indemnify
and hold harmless Landlord, from and against any and all liabilities, damages,
causes of action, suits, claims, judgments, costs and expenses (including
reasonable attorney's fees) arising from any claimed or asserted injury, loss or
damage to any persons or property arising from the installation, operation or
maintenance of the Roof Installations, or from any act or omission of Tenant or
any person acting on behalf of Tenant with respect to the Roof Installations.
Furthermore, if the installation, operation or maintenance of the Roof
Installations, or any act or omission of Tenant or any person acting on behalf
of Tenant with respect to the Roof Installations, results in the full or partial
impairment of any warranty relating to the Building roof, Tenant shall be
responsible to reimburse Landlord for all resulting damages sustained by
Landlord.
(f) Tenant's use of electrical services furnished by Landlord shall be
subject to the following:
(i) Landlord will provide the necessary facilities to supply
(A) two (2) xxxxx per rentable square foot within the Premises for Tenant's
fluorescent ceiling lighting and (B) four (4) xxxxx per rentable square foot
within the Premises for Tenant's receptacle/equipment loads. Collectively,
Tenant's fluorescent lighting and receptacles/equipment shall not have a total
electrical design load greater than an average of six (6) xxxxx per rentable
square foot per floor within the Premises (the "Standard Building Capacity").
(ii) Tenant shall notify Landlord, in writing, of any
equipment Tenant desires to install or maintain within the Premises that has a
rated electrical load greater than 500 xxxxx and/or that requires a service
voltage other than 120 volts, and Landlord's written approval shall be required
with respect to the installation of any such high electrical consumption
equipment in the Premises, provided that Landlord's approval shall not be
unreasonably withheld.
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(iii) Tenant shall pay for all costs of meters, submeters,
wiring, risers, transformers, electrical panels, air conditioning and other
items required by Landlord, in Landlord's reasonable discretion, to accommodate
Tenant's design loads and capacities that exceed Standard Building Capacity,
including, without limitation, the installation and maintenance thereof,
provided that before installation of such items, Landlord shall have given
Tenant at least ten (10) business days prior written notice of Landlord's intent
to install the same. Notwithstanding the foregoing, Landlord may, in its
reasonable discretion, refuse to install, and withhold consent for Tenant's
installation of, any wiring, risers, transformers, electrical panels, or air
conditioning, if, in Landlord's reasonable judgment after consulting with its
electrical engineers, the same are not necessary or would cause damage or injury
to the Building or the Premises or cause or create a dangerous or hazardous
condition or entail excessive or unreasonable alterations or repairs to the
Building or the Premises, or would interfere with or create or constitute a
disturbance to other tenants or occupants of the Building. In no event shall
Landlord be liable for Landlord's refusal to install any such electrical
facility or equipment, or for withholding consent for Tenant to install any such
electrical facility or equipment.
(iv) Tenant shall pay to Landlord, as Additional Rent, within
thirty (30) days of Tenant's receipt of demand therefor by Landlord, the cost of
consumption of electrical service within the Premises in excess of the Standard
Building Capacity ("Extraordinary Electrical Service") as such cost is
reasonably determined by Landlord.
(v) Landlord may, at its option, upon not less than forty-five
(45) days, prior written notice to Tenant, discontinue the availability
through Landlord to Tenant of Extraordinary Electrical Service to the
Premises. If Landlord gives such notice, Tenant may, at its option, contract
directly with the applicable public utility for the supplying of Extraordinary
Electrical Service to the Premises, subject to the provisions of this
Paragraph 8 and all other provisions of the Lease.
(g) Landlord shall provide and replace, as necessary, building standard
electric bulbs and fluorescent tubes in light fixtures in the Building.
(h) Tenant shall have the right, without being required to pay any
additional rent or other charges, to place in the Premises or on the roof of the
Building at a location mutually agreed upon by Landlord and Tenant a backup
power supply generator. Tenant may install, operate and maintain, such generator
and related equipment (the "Equipment"), subject to the following conditions:
(i) Tenant, at its cost, shall procure all necessary
governmental permits and licenses for the installation, maintenance or use of
the Equipment, and shall at all times comply with all requirements of laws,
ordinances and rules of all public authorities and insurance companies and all
orders, rules and regulations of any public authority, which shall
19
impose any order or duty upon Landlord or Tenant with respect to or affecting
the Equipment or arising out of Tenant's use or manner of use thereof.
(ii) Tenant shall promptly pay and discharge all out-of pocket
costs and expenses incidental to and/or connected with the furnishing,
installation, maintenance and operation of the Equipment.
(iii) Installation of the Equipment shall be at Tenant's
expense. Tenant shall obtain Landlord's prior written consent as to the location
of the Equipment and the manner in which such installation work is to be done.
All plans and specifications concerning such installation shall be subject to
Landlord's prior written approval. Landlord shall have the right to refuse to
give its approval if any structural analysis of the proposed location of the
Equipment indicates the proposed location could damage or weaken any part of the
Building or cause or create a dangerous or hazardous condition or adversely
affect the aesthetics or value of the Building. If, at any time during the Lease
Term, in Landlord's reasonable judgment, it is necessary or desirable for the
Equipment to be moved to another location designated by Landlord, Tenant shall
relocate the Equipment at Landlord's cost and expense.
(iv) Tenant, at its cost, shall maintain the Equipment in a
clean and safe manner throughout the Lease Term, and shall comply with all
applicable laws, ordinances and regulations. In addition, all repairs to the
Building made necessary by reason of the furnishing, installation, maintenance,
operation or removal of the Equipment or any replacements thereof shall be at
Tenant's sole cost. Upon expiration or termination of this Lease, Tenant agrees
that it will promptly remove the Equipment and any wiring, conduit or
accessories associated with the Equipment and shall promptly repair any damage
to the Building or the Project caused by the installation or removal of the
Equipment and related equipment, all at its cost.
(v) If the Equipment is located on the roof of the Building,
the Roof Installation provisions of this Lease shall apply thereto, including
the provision that Tenant shall have a right to access to the roof only upon
reasonable prior written notice to Landlord, except that Tenant may have access
to the roof in an emergency for the purpose of repairing or maintaining the
Equipment by contacting the management office (emergency telephone number).
(vi) Tenant, at its cost, shall maintain such insurance as is
appropriate with respect to the installation, operation and maintenance of the
Equipment and shall provide Landlord with evidence of such insurance prior to
installation. Landlord shall have no liability on account of any damage to or
interference with the operation of the Equipment, except that which is caused by
the negligence or willful misconduct by Landlord or its Agents or by the failure
of Landlord to observe any of the terms and conditions of the Lease.
20
(vii) Tenant, at its cost, shall cause the utilities used by
the Equipment to be separately metered and shall pay for such utilities.
(viii) Tenant shall defend Landlord, and hereby does indemnify
and hold harmless Landlord, from and against any and all liabilities, damages,
causes of action, suits, claims, judgments, costs and expenses (including
reasonable attorney's fees) arising from any claimed or asserted injury, loss or
damage to any persons or property arising from the installation, operation or
maintenance of the Equipment, or from any act or omission of Tenant or any
person acting on behalf of Tenant with respect to the Equipment. Furthermore, if
the installation, operation or maintenance of the Equipment, or any act or
omission of Tenant or any person acting on behalf of Tenant with respect to the
Equipment, results in the full or partial impairment of any warranty relating to
the Building roof, Tenant shall be responsible to reimburse Landlord for all
resulting damages sustained by Landlord.
(i) Char service five (5) nights per week, excluding Holidays, as
specified on EXHIBIT C attached hereto.
(j) Landlord agrees that Building maintenance personnel or outside
service contractors, as appropriate, during the period 7:00 a.m. to 5:30 p.m.
shall respond within one (1) hour to any request by Tenant made during Building
Operating Hours to repair HVAC and major electrical or plumbing problems and
within a reasonable period of time to Tenant's request to repair other Building
equipment malfunctions and such personnel shall promptly repair or replace any
such damaged equipment subject to availability of parts. Landlord shall take the
foregoing requirement into account in procuring warranties and service contracts
for the Building.
(k) Landlord will furnish air-conditioning or heat, as reasonably
determined by Landlord, during Building Operating Hours. At all times during the
Lease Term, temperatures in the Premises during Building Operating Hours shall
be maintained at 72 degrees Fahrenheit (+ or - 2 degrees Fahrenheit) , year
round, provided that (i) when the outside temperature is 20 degrees Fahrenheit
or lower, temperatures in the Premises during Building Operating Hours shall be
maintained at not less than 70 degrees Fahrenheit and (ii) when the outside
temperature is 92 degrees Fahrenheit or higher, temperatures in the Premises
during Building Operating Hours shall be maintained at not more than 74 degrees
Fahrenheit (+ or - 2 degrees Fahrenheit). The supply air temperature serving the
Premises shall be maintained at 56 degrees Fahrenheit at the point of departure
from the chiller during the summer months throughout the Lease Term. The base
Building HVAC will deliver outside air in compliance with ASHRAE standards
promulgated in any given year, which standard currently is 20 cfm per person
based upon 150 square feet per person. Condenser water supply shall be available
for Tenant's supplemental HVAC system on a 24 hours per day every day of the
Lease Term, at no additional cost above Base Rent. The Landlord's
21
obligations to maintain the foregoing HVAC temperature requirements are
conditional upon Tenant, at its expense, installing, maintaining, and operating
its supplemental HVAC system for its computer room (as shall be set forth on the
approved Plans and Specifications for the Improvements) or any other
supplemental HVAC system Tenant may at any time install in the Premises, or if
Tenant causes heat loading conditions to exist in the Premises beyond what is
standard in office usage in first-class office buildings in the metropolitan
Washington, D.C. area (e.g. training rooms containing numerous computers, for
which supplemental HVAC units in the Premises have not been provided by Tenant
to accommodate such additional heat loads). Landlord shall diligently and
promptly commence repair of any malfunction in the Building HVAC system. Tenant
shall diligently and promptly commence repair of any malfunction in its
supplemental HVAC system in the Premises. Landlord shall not be required to meet
the standards set forth in this Paragraph 7(k) between 7:00 a.m. and 7:30 a.m.
On weekdays other than Holidays, the temperatures in the Building between 7:00
a.m. and 7:30 a.m. shall be reasonably habitable.
(1) Exercise facilities will be located within the Building and shall
be available for exclusive use by Tenant's officers, directors and employees, by
other tenants of the Building, and by officers, directors and employees of
Landlord, during Building Operating Hours, in accordance with rules and
regulations reasonably promulgated by Landlord from time to time. Landlord shall
maintain the exercise facilities and replace worn equipment as reasonably
necessary in accordance with the standards applied by building managers with
respect to similar exercise facilities located in first class office buildings
in downtown Washington, D.C. Landlord shall have no liability for any injury of
any type sustained by any person in the course of, or as a result of, the use of
the exercise facilities. Users of the facilities shall be required to execute a
full and complete release prior to their use of the facilities.
(m) The Building shall be managed, operated and maintained consistent
with standards employed by other landlords of other modern first-class
commercial office buildings in the downtown Washington, D.C. central business
district.
(n) The Landlord will provide hot and cold water for drinking, lavatory,
toilet and kitchen purposes drawn through fixtures located in common areas of
the Building and installed in the Premises by or with the consent of the
Landlord.
The cost of providing all of the foregoing facilities and services
shall be included in Operating Expenses to the extent not otherwise excluded in
accordance with the terms of this Lease.
(o) Notwithstanding anything contained herein to the contrary, if ten
percent (10%) or more of the Premises is rendered unusable for the "Use"
described in Paragraph 14 of this Lease as a result of an interruption of
services or as a result of any renovation, alteration or repair performed or
required to be performed by Landlord, for five (5) consecutive days or for
22
a total of twenty (20) days in any Lease Year, Tenant shall be entitled to xxxxx
that percentage of its Base Rent and Additional Rent that the unusable portion
of the Premises bears to the whole of the Premises, for any period of
unusability subsequent to the five-day or 20-day periods to which reference is
made above. If more than fifty percent (50%) of the Premises remains unusable
(as defined above) for more than ninety (90) consecutive days or more than 210
days in any Lease Year, Tenant may terminate the Lease by giving written notice
to Landlord of its election to terminate, which shall be effective thirty (30)
days after the aforementioned 90-day period or 210-day period, as the case may
be.
9. PERSONAL PROPERTY TAXES. Tenant shall be solely liable for payment of
all personal property taxes and assessments on its personalty and other property
located in the Premises.
10. TENANT'S DEFAULT. It shall be a default by Tenant, and Tenant shall be
in default, if Tenant: (a) fails to pay when due any Base Rent or Additional
Rent required hereunder and does not make such payment within five (5) business
days after Landlord gives Tenant notice of such failure; or (b) abandons the
Premises (ceases to occupy the Premises and fails to pay rent when due); or (c)
files for relief under the United States Bankruptcy Code (the "Bankruptcy Code")
or under any other state or federal bankruptcy or insolvency law, or files an
assignment for the benefit of creditors, or if an involuntary proceeding under
the Bankruptcy Code or under any other federal or state bankruptcy or insolvency
law is commenced against Tenant and not discharged within 30 days; or (d) fails
to perform, discharge or satisfy any other obligation imposed by this Lease and
does not remedy the same within thirty (30) days after receipt of written notice
from Landlord specifying such failure, provided that if any non-monetary default
shall reasonably require more than 30 days to cure, Tenant shall be allowed such
longer period, not to exceed 90 days, as is necessary to effect such cure, so
long as efforts to cure are commenced within the aforesaid 30-day period and are
diligently pursued to completion.
11. LANDLORD'S REMEDIES FOR TENANT'S DEFAULT.
(a) At any time after a default by Tenant, Landlord may terminate this
Lease by written notice to Tenant or by any available judicial process.
(b) If Landlord terminates this Lease after a default by Tenant:
(i) Landlord shall be entitled to recover from Tenant, and
Tenant within thirty (30) days of termination shall pay to Landlord, all Base
Rent and Additional Rent accrued to the time of such termination;
(ii) Landlord shall be entitled to recover from Tenant, and
within thirty (30) days of demand therefore Tenant shall pay to Landlord (A) all
expenses incurred by Landlord in regaining possession of the Premises (including
legal fees), (B) all costs of preparing the
23
Premises for reletting, and (C) that percentage of all brokerage fees which that
portion of the Lease Term remaining at the time of Tenant's default shall bear
to the lease term of the successor tenant;
(iii) Landlord shall have the right to re-enter the Premises
by any legal process then in force;
(iv) Landlord hereby waives its right of distraint with
respect to all of Tenant's personal property (including, but not limited to,
computers, computer files, client files, office equipment and artwork, but not
including anything that is affixed to or made a part of the Building) that is or
was within the Premises, provided however, that Landlord may demand that Tenant
remove all such personal property within the Premises that is owned by Tenant,
at Tenant's expense; provided that, in the event Tenant fails to remove such
property within a reasonable time, Landlord may remove such property at Tenant's
expense and dispose of it in the manner Landlord, in its reasonable discretion,
determines is appropriate and shall have no liability to Tenant or any other
person for doing so;
(v) Landlord may take all steps, including repair or
alteration of the Premises, that Landlord, in its sole reasonable discretion,
deems necessary or advisable, to prepare the Premises for reletting;
(vi) Landlord may relet all or any part of the Premises for
such term, at such rental, and upon such terms and conditions as Landlord, in
its sole discretion, deems advisable;
(vii) Tenant shall pay to Landlord, as liquidated damages, for
each month during the balance of the Lease Term (which would remain but for
termination of the Lease by Landlord), on the first day of each such month, (A)
an amount equal to all Base Rent and Additional Rent due under the Lease for
each such month, in the event Landlord is unable to relet the Premises on
reasonable terms, or, (B) in the event Landlord is able to relet the Premises on
reasonable terms, an amount equal to any deficiency between (1) all Base Rent
and Additional Rent due under the Lease for each such month, and (2) the net
Base Rent and Additional Rent for each such month collected upon reletting; and
(viii) If Landlord terminates this Lease after a default by
Tenant, then, in addition to the remedies described in Paragraph 11(b)(i)-(vi),
and as an alternative to the continued application of the remedy described in
Paragraph 11(b)(vii), at any time after termination, at Landlord's election by
written notice to Tenant, Landlord shall be entitled to recover from Tenant, and
Tenant shall pay to Landlord, an amount equal to the value at the time of
Landlord's election of the excess, if any, of (A) all Base Rent and Additional
Rent due under this Lease for the remainder of the Lease Term (which would
remain but for termination of the Lease by Landlord) over (B) the reasonable
rental value of the Premises for
24
the remainder of the Lease Term (which would remain but for termination of the
Lease by Landlord) which value shall not include any amount attributable to (y)
market-rate tenant concessions including but not limited to tenant improvement
allowances or rent abatement or (z) market-rate brokerage commissions, (C) which
excess amount shall be discounted to present value by application of the
interest rate applicable at the time of Landlord's election to 10-year United
States Treasury obligations maturing on that date that is the midpoint of the
remainder of the Lease Term (but for Landlord's termination of the Lease) as of
the date of Landlord's election.
(c) If Landlord does not elect to terminate this Lease after any
default by Tenant, Landlord shall be entitled to recover from Tenant, and Tenant
shall be obligated to pay to Landlord, immediately upon Landlord's written
demand therefor, all damages, costs and expenses (including reasonable attorneys
fees) sustained or incurred by Landlord that arise or result from Tenant's
default, and Tenant shall continue to be liable for all Base Rent and Additional
Rent due hereunder, and for the performance of all other obligations imposed by
this Lease. Landlord shall use reasonable efforts to mitigate its damages.
Landlord's election not to terminate the Lease upon any default by Tenant shall
not impair Landlord's right to terminate the Lease later for that default if
Tenant does not make full payment in accordance with this Paragraph 11(c), or
upon any other default by Tenant.
(d) If Tenant abandons the Premises (ceases to occupy the Premises and
fails to pay rent when due), Landlord shall have the right to re-enter the
Premises without judicial process, to change the locks to all entrances to the
Premises, and to take all steps, including repair or alteration of the Premises,
that Landlord, in its sole reasonable discretion, deems advisable or necessary
to prepare the Premises for reletting, and to relet the Premises at such rental
and upon such terms and conditions as Landlord, in its sole reasonable
discretion, deems advisable; and such re-entry, change of locks, repair,
alteration and/or reletting shall not terminate this Lease. In the event of
abandonment of the Premises by Tenant, Tenant shall continue to be liable for
all Base Rent and Additional Rent due under the Lease, in addition to all
reasonable costs incurred in regaining possession of the Premises and preparing
the Premises for reletting, including all reasonable brokers, fees, which shall
be calculated solely with respect to that portion of the Lease Term remaining at
the time of Tenant's abandonment, and all reasonable legal fees, less any
amounts realized as a result of any reletting.
(e) The rights and remedies provided to Landlord herein are cumulative
and not exclusive, and are in addition to, not in substitution for, any and all
rights Landlord has or may have at law or in equity, all of which rights
Landlord expressly retains.
(f) Tenant waives all rights of redemption granted by law.
25
12. LANDLORD DEFAULTS. The occurrence of any of the following shall
constitute a "Landlord Default" hereunder:
(a) Landlord shall have failed to pay when due any sum owing from
Landlord to the Tenant hereunder, and such failure shall continue for a period
of more than fifteen (15) business days after Tenant delivers notice to Landlord
and Landlord's lender of such failure; or
(b) There shall be a failure by Landlord to comply with any condition,
covenant, agreement or other obligation on the part of Landlord to be kept,
observed or performed hereunder (other than a condition, covenant, agreement or
other obligation to pay any sum of money owing from Landlord to Tenant
hereunder) and such failure shall continue for a period of more than thirty (30)
days after delivery of notice by Tenant to Landlord and Landlord's lender
specifying the default and requiring that it discontinue; provided that, for any
default which cannot reasonably be cured within said thirty (30) day period, the
cure period therefor shall be extended for such time as is reasonably necessary
to effect a cure of such default (but in no event beyond ninety (90) days after
delivery of such notice for any default which is due or attributable to the
negligence or intentional acts of Landlord or Landlord's agents), on the
conditions that Landlord promptly commences and diligently pursues such cure to
completion.
13. SECURITY DEPOSIT. [Intentionally deleted.]
14. USE. Tenant shall use and occupy the Premises for office purposes only,
and for no other purpose. Such use shall be consistent with office use in
first-class commercial office buildings in downtown Washington, D.C. Tenant
shall not use or allow the Premises or any part thereof to be used for any
unlawful purpose.
15. ASSIGNMENT AND SUBLETTING.
(a) Tenant will not transfer or assign the Lease, nor sublet the whole
or any part of the Premises, nor permit the Premises to be used or occupied in
whole or in part by others, without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, conditioned or delayed, provided,
however, that Tenant shall have no right to assign the Lease or to sublet if
Tenant is then in default. Simultaneously with any request to assign the Lease
or sublet any part of the Premises, Tenant shall provide to Landlord financial
statements of the proposed assignee or sublessee prepared not more than six
months prior to the date of Tenant's request to sublet or assign, together with
any other information regarding the proposed assignee or sublessee reasonably
required by Landlord. Landlord may withhold its consent to any assignment or
sublease if the proposed assignee or sublessee, in Landlord's reasonable
judgment, (i) has a reputation for dishonesty and unfair dealing, or (ii) will
not operate a business compatible with a first-class office building in downtown
Washington,
26
D.C., or (iii) in the case of a proposed assignment, the proposed
assignee is not sufficiently responsible financially to meet all obligations of
Tenant under the Lease, or (iv) in the case of a proposed assignment, Landlord's
lender does not consent to the assignment, or (v) in the case of a proposed
sublease, the proposed subtenant is not sufficiently responsible financially to
meet all obligations of subtenant under the proposed sublease. Landlord shall
give its consent, or notify the Tenant of its refusal to consent, to any
proposed sublease, or shall request of Tenant further information regarding the
proposed sublessee reasonably required by Landlord, within fifteen (15) business
days of Landlord's receipt of Tenant's written request to sublease. Within
fifteen (15) business days of Landlord's receipt of all information requested of
Tenant regarding the proposed sublessee, Landlord shall give its consent, or
notify the Tenant of its refusal to consent, to the proposed sublease. Landlord
shall give its consent, or notify the Tenant of its refusal to consent, to any
proposed assignment, or shall request of Tenant further information regarding
the proposed assignee reasonably required by Landlord, within thirty (30)
business days of Landlord's receipt of Tenant's written request to assign the
lease. Within thirty (30) business days of Landlord's receipt of all information
requested of Tenant regarding the proposed assignee, Landlord shall give its
consent, or notify the Tenant of its refusal to consent, to the proposed
assignment. If Landlord fails to give its consent, notify Tenant of its refusal
to consent, or to request further information regarding a proposed sublessee
within fifteen (15) business days after Landlord's receipt of a request by
Tenant to sublease, or to give its consent or notify Tenant of its refusal to
consent within fifteen (15) business days of its receipt of all information
requested of Tenant regarding the proposed sublessee, Landlord shall be deemed
to have consented to such request. If Landlord fails to give its consent, notify
Tenant of its refusal to consent, or to request further information regarding a
proposed assignee within thirty (30) business days after Landlord's receipt of a
request by Tenant to assign, or to give its consent or notify Tenant of its
refusal to consent within thirty (30) business days of its receipt of all
information requested of Tenant regarding the proposed assignee, Landlord shall
be deemed to have consented to such request. In the event of any assignment or
sublease, Tenant shall nevertheless remain fully liable for all obligations of
Tenant under the Lease, and Landlord's prior written consent to any further
assignment or sublease shall be required.
(b) The terms "assignment" and "assign" as used herein shall mean and
refer to: (i) any disposition or transfer by Tenant (other than a sublease) of
its rights or obligations under the Lease; (ii) an arrangement (other than a
sublease, or other than as provided in Xxxxxxxxx 00 (x), xxxxx) that allows the
use and occupancy of the Premises by any person or entity other than Tenant;
(iii) subject to Paragraph 15(d), a transfer or pledge of voting control of
Tenant if Tenant is a non-public corporation; or (iv) a transfer of more than
fifty percent (50%) of the partnership interest of Tenant (if Tenant is a
partnership).
(c) If Landlord consents to a sublease or assignment by Tenant, Tenant
shall pay to Landlord (i) fifty percent (50%) of any "Profit" (as defined below)
derived by Tenant from
27
that sublease or assignment with respect to any portion of the Premises located
on the Seventh (7th) Floor, Eighth (8th) Floor, or Ninth (9th) Floor, and (ii)
seventy-five percent (75%) of any "Profit" (as defined below) derived by Tenant
from that sublease or assignment with respect to any portion of the Premises
located on the Fourth (4th) Floor, Fifth (5th) Floor, Sixth (6th) Floor, Tenth
(10th) Floor, or Eleventh (11th) Floor, or in any Expansion Space (as defined
below). "Profit" means (i) in the case of a sublet, the total amount paid by a
sublessee to Tenant as consideration for such sublet in excess of the Base Rent
and Additional Rent for the allocable sublet space and after deducting all of
Tenant's reasonable subleasing costs including commissions paid, legal fees,
concessions and improvements made to the subleased premises; and (ii) in the
case of an assignment, the total amount paid by an assignee, either directly or
indirectly, as consideration for such assignment in excess of the Base Rent and
Additional Rent for the allocable assigned space. Tenant shall pay Landlord the
percentage of the Profit that is due in accordance with the provisions of this
Paragraph 15 promptly upon receipt by Tenant. Within thirty (30) days after
Tenant receives any amount from an assignee or sublessee as consideration for an
assignment or sublet, the Tenant shall submit to Landlord a statement containing
a reasonably detailed calculation of any Profit derived from such an assignment
or sublet, certified as correct by an officer of Tenant, and simultaneously with
the delivery of such statement. Upon Landlord's request, Tenant shall provide
substantiation of Tenant's calculation of Profit (with supporting documentation)
reasonably satisfactory to Landlord.
(d) Notwithstanding anything to the contrary set forth in this
Paragraph 15, Tenant shall have the right, upon prior written notice to Landlord
in each instance but without the necessity of obtaining Landlord's consent, to
(i) assign or otherwise transfer this Lease or any of its rights hereunder to an
Affiliate or Successor Entity, (ii) sublet the Premises or any part thereof to
an Affiliate or Successor Entity, or (iii) permit the use of the Premises or any
part thereof by an Affiliate or Successor Entity. "Affiliate" shall mean any
entity which, directly or indirectly, controls or is controlled by or is under
common control with Tenant. For purposes of the definition of "Affiliate," the
word "Control" (including "Controlling", "Controlled by" and "under common
Control with") shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policy of a particular
entity, whether through the ownership of voting securities, by contract or
otherwise. A "Successor Entity" as used in this Paragraph 15 shall mean (x) an
entity into which or with which Tenant, its successors or assigns, is merged or
consolidated, or (y) an entity acquiring this Lease for the term hereby demised,
the good will and all of the other property and assets of Tenant, its successors
or assigns, and assuming all of the liabilities of Tenant, its successors and
assigns.
(e) Notwithstanding anything to the contrary in this Lease, Tenant
shall have the right, without obtaining the consent of Landlord, but upon prior
written notice to Landlord, to permit office-sharing arrangements pursuant to
which clients or subcontractors of Tenant may
28
use space in the Premises, provided that any such arrangements under which any
rent or other remuneration or consideration is received directly or indirectly
by Tenant shall be subject in all respects to the provisions of Paragraphs
15(a), 15(b) and 15(c). Tenant shall promptly provide Landlord with the names of
such persons who are using these cards at any given time. Landlord shall supply
Tenant with thirty (30) additional security cards for these "office-sharers"
(Tenant shall administer cards), which cards shall access the perimeter of the
building only.
16. CONDITION OF PREMISES. Tenant will keep the Premises in good order and
condition, and will surrender them at the expiration or other termination of the
Lease in the condition in which they will be upon completion of the initial
Improvements or any other Improvements permitted under the terms of this Lease,
casualty and normal wear and tear excepted.
17. ENTRY BY LANDLORD. Upon reasonable written notice, except (i) in cases
of emergency or (ii) for the protection of the Building or the Premises, of any
property located therein, or of any person, in which event no notice shall be
required, Landlord and its agents shall have access to the Premises at any
reasonable time for the purpose of inspection, or for the purpose of making any
repair, alteration or renovation Landlord considers necessary or desirable, so
long as such entry does not unreasonably interfere with the operation of
Tenant's business in the Premises or permanently reduce the number of rentable
square feet of the Premises, or to show the Premises to a prospective purchaser
of the Building or, during the final Lease Year of the Lease Term, or after
Tenant has exercised its Termination Option pursuant to the provisions of
Paragraph 41, below, to a prospective tenant. Any major repair shall be made
during non-Building Operating Hours and shall be scheduled so as to minimize
interference with Tenant's business activities. Landlord shall have the absolute
right to alter or renovate the common areas and the exterior of the Building,
and any such alteration or renovation shall not be a breach of Paragraph 32 or
of any other provision of the Lease, provided such alteration or renovation will
be of a quality and condition consistent with first-class commercial office
buildings in downtown Washington, D.C.
18. LIABILITY; INDEMNITY. Tenant shall defend Landlord, and hereby does
indemnify and hold harmless Landlord, from and against any and all liabilities,
damages, causes of action, suits, claims, judgments, costs and expenses
(including reasonable attorney's fees) arising from any claimed or asserted
injury, loss or damage to any persons or property (a) arising within the
Premises, unless caused by the intentional misconduct or gross negligence of
Landlord or Landlord's employees or agents, (b) arising out of any act or
omission of Tenant or of any person within the Premises or the Building by the
license, express or implied, of Tenant, or (c) arising in whole or in part from
any default or breach of this Lease by Tenant.
19. INSURANCE.
29
(a) Tenant will not conduct or permit to be conducted any activity, or
place any equipment in or about the Premises, that will, in any way, materially
increase the rate of fire insurance or other insurance on the Building; and if
any increase in the rate of fire insurance or other insurance is stated by any
insurance company or by the applicable Insurance Rating Bureau to be due to
activity or equipment in or about the Premises, such statements shall be
conclusive evidence that the increase in such rate is due to such activity or
equipment and, as a result thereof, Tenant shall be liable for such increase and
shall reimburse Landlord therefor on demand.
(b) At all times during the Lease Term and at all times Tenant is
occupying the Premises, Tenant shall carry the following insurance:
(i) Workers compensation insurance;
(ii) Commercial general liability insurance (bodily
injury, personal injury and property damage), in a
minimum amount of $2,000,000 combined personal injury
and property damage single limit per occurrence,
including contractual liability coverage, with an
umbrella coverage in the minimum annual aggregate
amount of $10,000,000; and
(iii) All-risk insurance for (1) all of Tenant's furniture,
fixtures and equipment, (2) all personal or other
removable property that may be stored, contained or
found on the Premises, and (3) all Improvements (as
defined in Paragraph 20 of the Lease) made by or for
Tenant under the provisions hereof, in amounts not
less than one hundred percent (100%) of the full
replacement cost thereof.
(c) All insurance carried by Tenant pursuant to the requirements of
this Lease shall be issued by a company or companies licensed to do business in
the District of Columbia with a Best's rating of "A-" or higher.
(d) Throughout the Lease Term, Landlord shall, at its expense, keep the
base Building insured against any loss or damage caused by fire damage or other
casualty to the full replacement cost thereof. Throughout the Lease Term,
Landlord shall carry the following insurance, the cost of which shall be
included in Operating Expenses:
(i) Commercial general liability insurance (bodily
injury, personal injury and property damage), in a
minimum amount of $2 million combined personal injury
and property damage single limit per occurrence,
including contractual liability coverage, with an
umbrella coverage in the minimum amount of
$10,000,000;
30
(ii) Adequate boiler and machinery coverage; and
(iii) Adequate business income/interruption insurance.
(e) All insurance carried by Landlord pursuant to the requirements of
this Lease shall be issued by a company or companies licensed to do business in
the District of Columbia with a Best's rating of "A-" or higher.
(e) Certificates evidencing Tenant's insurance shall be delivered to
Landlord prior to the earlier of (i) any occupancy by Tenant of the Premises or
(ii) commencement of installation of any Improvements in the Premises, including
installation in the Premises of any equipment owned or to be used by Tenant, and
at least annually thereafter, and each policy shall contain an endorsement that
will prohibit its cancellation or material change prior to the expiration of
thirty (30) days after notice to Landlord of such proposed cancellation or
material change.
(f) Tenant shall require that any sublessee of a portion of the
Premises carry insurance in accordance with all requirements set forth in this
Paragraph 18 with respect to the Premises.
20. IMPROVEMENTS. As used in this Lease, "Improvements" shall mean any
alterations, additions, installations, improvements or changes of any kind to
the Premises, including the Tenant Improvement Work, the Renewal Improvements
(referenced in Paragraph 38), the Improvements in the Expansion Space
(referenced in Paragraph 39), and the Improvements in the Additional Expansion
Space (referenced in Paragraph 40) . No Improvements shall be made in or to the
Premises without the prior written consent of Landlord, which consent shall not
be unreasonably withheld, conditioned or delayed, provided, however, that after
the initial Tenant Improvements Work is constructed and other than the initial
Improvements to the Expansion Space and Additional Expansion Space and the
refurbishment of the Improvements upon renewal, Tenant shall have the right
during the Lease Term, without obtaining Landlord's prior written consent, to
make minor cosmetic changes (e.g. painting and carpeting) to the Improvements,
which changes do not cost more than $7,500 and which do not alter or affect the
Building structure or base Building mechanical, electrical and plumbing systems
and which do not move partition walls or doors. The provisions of Exhibit B
shall apply to the construction of the initial and any future Improvements. All
Improvements shall become the property of Landlord, and shall be surrendered
with the Premises, at the expiration or earlier termination of the Lease Term,
provided, however, that, if Tenant is not in default, Tenant shall have the
right to remove, prior to the expiration or earlier termination of the Lease
Term, all movable furniture, furnishings and equipment in the Premises solely at
Tenant's expense. Landlord shall have the right to repair at Tenant's expense
all damage and injury to the Premises caused by such removal or to require
Tenant to do the same. If any such furniture, furnishings or equipment is not
removed by Tenant prior to the expiration or
31
earlier termination of the Lease Term, then, five (5) days after written notice
is delivered to Tenant, the same shall become Landlord's property and shall be
surrendered with the Premises as a part thereof and Landlord may remove or
dispose of such property at Tenant's expense. If any mechanic's lien is filed
against the Premises, the Building or the real property of which the Premises
are a part for work claimed to have been done for or materials claimed to have
been furnished to Tenant, it shall be discharged by Tenant within fifteen (15)
days after Tenant's receipt of notice thereof, at Tenant's sole cost and
expense, by the payment thereof or by filing any bond required by law. If Tenant
shall fail to discharge any such mechanic's lien as required by this Xxxxxxxxx
00, Xxxxxxxx may, at its option, discharge the same and the cost thereof shall
be Additional Rent due from Tenant with the monthly installment of Base Rent
next becoming due; it hereby being expressly agreed that such discharge by
Landlord shall not be deemed to waive, or release, the default of Tenant in not
discharging the same.
21. RULES AND REGULATIONS. Tenant shall comply with the Rules and
Regulations set forth on EXHIBIT D attached hereto and made a part hereof, and
with such other reasonable rules and regulations as Landlord may adopt for the
Building from time to time, provided such other rules and regulations shall be
effective only after Tenant has received reasonable notice thereof. Landlord
shall enforce the rules set forth in EXHIBIT D in a nondiscriminatory manner. In
the event of any inconsistency or contradiction between the main body of this
Lease and any such rules and regulations the provisions of the main body of this
Lease shall govern and prevail.
22. HAZARDOUS MATERIALS. Tenant will not allow any Hazardous Materials to
be kept in the Premises, or do anything which would increase the rate of
casualty insurance upon the Building. Notwithstanding the foregoing, Tenant may
use and store within the Premises reasonable quantities of Hazardous Materials
that are customarily used in comparable offices (such as cleaning fluids and
photocopier supplies), provided such use and storage complies with all
applicable environmental laws. The term "Hazardous Materials" shall mean (a)
"hazardous wastes," as defined by the Resource Conservation and Recovery Act of
1976, as amended from time to time, (b) "hazardous substances," as defined by
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, (c) "toxic substances," as defined by the
Toxic Substances Control Act, as amended from time to time, (d) "hazardous
materials," as defined by the Hazardous Materials Transportation Act, as amended
from time to time, (e) all substances classed or defined as "hazardous" or
"toxic" pursuant to any legislation enacted or in effect during the Lease Term,
and (f) oil or other petroleum products.
23. LIMITATION ON LIABILITY; TENANT'S PROPERTY.
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(a) Notwithstanding anything to the contrary in this Lease, (i)
Landlord shall not be liable to Tenant for any loss or damage to property which
is either covered by Tenant's insurance or for which Tenant is required by this
Lease to carry insurance, and (ii) any liability of Landlord to Tenant in
connection with this Lease shall be limited to direct damages and shall not
include indirect, consequential, or incidental damages, or any lost profits or
damages to Tenant's business.
(b) Except as may be the direct result of intentionally wrongful or
negligent acts or omissions of Landlord or Landlord's agents or employees,
Landlord shall not be liable to Tenant or its employees, agents, business
invitees, licensees, customers, clients, family members, guests, or trespassers,
for any damage, compensation, claim or expense arising from (i) damage or loss
to the property of Tenant or others located anywhere in the Premises or the
Building, or (ii) death, accident or injury to persons occurring anywhere within
the Premises or the Building or as a result of any activity within the Building.
(c) Except as may be the direct result of intentionally wrongful or
negligent acts or omissions of Landlord or Landlord's agents or employees,
Landlord shall not be liable to Tenant, its employees, agents, business
invitees, licensees, customers, clients, family members, guests, or trespassers
for any damage, compensation, claim, cost or expense arising from (i) the
repairing or renovation of any portion of the Building, (ii) any interruption in
the use of the Premises or the Building, (iii) accident or damage resulting from
the use or operation (by Landlord, Tenant or any other person or persons
whatsoever) of elevators or heating, cooling, electrical or plumbing equipment
or apparatus; (iv) any discontinuance of or interruption in the provision of
heat, air-conditioning, elevator service or any other service; (v) any fire,
robbery, theft, criminal act and/or other casualty; (vi) any leakage in any part
of the Premises or the rest of the Building or from water, rain or snow that may
leak into or flow from any part of the Premises or the Building or from drains,
pipes, or plumbing work in or about the Building; or (vii) any other cause
whatsoever not within the reasonable control of Landlord. In no event shall
Landlord be liable to Tenant, its employees, agents, business invitees,
licensees, customers, clients, family members, guests or trespassers for any
damages, compensation or claim arising from the termination of this Lease by
reason of the destruction of the Demised Premises or a taking or sale in lieu
thereof by condemnation or eminent domain. All personal property in the Premises
shall be and remain at Tenant's sole risk, and Landlord shall not be liable for
any damage to or loss of such personal property or for any accident or injury to
persons in the Premises or Building arising from any cause as provided in this
Paragraph 23. Tenant shall have the rights of abatement and termination for
interruption of services provided in Paragraph 8(o) and Paragraphs 24 and 25 of
this Lease, notwithstanding the foregoing provisions of this Paragraph 23(c).
24. DAMAGE TO PREMISES.
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(a) If any portion of the Premises is damaged by fire or other
casualty, or if the Building is damaged such that Tenant is deprived of
reasonable access to any portion of the Premises, Tenant shall promptly give
notice to Landlord. If fifty percent (50%) or more of the Premises or fifty
percent (50%) or more of the Building is damaged, Landlord shall not be required
to repair the Premises or the Building, provided Landlord gives notice to Tenant
within sixty (60) days after such damage, of its intention not to repair the
damage ("Notice of Non-Restoration"). If Landlord delivers a Notice of
Non-Restoration to Tenant as provided above, this Lease shall terminate ten (10)
days after Tenant's receipt thereof.
(b) If less than fifty percent (50%) of the Premises or less than fifty
percent (50%) of the Building is damaged or if the common areas of the Building
are damaged so as to deny Tenant access to the Premises, or if Landlord does not
deliver a Notice of Non-Restoration to Tenant as provided above, (i) Landlord
shall repair the Premises and/or the Building, as applicable, at Landlord's
expense, to substantially the condition of the Building and/or Premises prior to
the damage, provided that Landlord shall not be required to repair or replace
any of Tenant's fixtures or equipment in the Premises or any Improvements made
by or for Tenant, and (ii) as soon as is reasonably practicable, and in any
event not more than sixty (60) days after the date of any such damage to the
Premises and/or the Building, Landlord shall give notice (the "Restoration
Notice") to Tenant of the date by which Landlord reasonably estimates the
restoration of the Premises shall be substantially completed. If the damage does
not interfere with Tenant's use of the Premises, there shall be no abatement of
Base Rent or Additional Rent. If the damage deprives Tenant of the use of less
than all of the Premises, the Base Rent and Additional Rent shall be abated by
the percentage that the unusable rentable area of the Premises bears to the
total rentable area thereof, for the period commencing with the damage and
ending with substantial completion by Landlord of the repairs. If the damage
makes it impossible for Tenant to carry on its business at all in the Premises,
then all Base Rent and Additional Rent shall be abated in full during the period
commencing with the damage and ending with substantial completion by Landlord of
the repairs.
(c) Tenant shall have the right to terminate the Lease by delivering a
notice of termination to Landlord, which shall be effective 10 days after
delivery thereof, if (i) Landlord estimates in the Restoration Notice that the
damage to the Premises and/or Building will require more than 180 days from the
date of the damage to repair, provided Tenant's notice of termination is
delivered to Landlord within thirty (30) days of Tenant's receipt of the
Restoration Notice, or (ii) the repair of the damage is not substantially
completed within thirty (30) days after the date by which, in the Restoration
Notice, Landlord estimates the restoration of the Premises shall be
substantially completed, provided Tenant's notice of termination is delivered to
Landlord upon the end of said thirty day period. If the Lease is terminated as
provided herein, Tenant shall be released from liability for Base Rent and
Additional Rent for any period after such termination is effective.
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(d) Notwithstanding anything set forth in this Paragraph 24 to the
contrary, in the event that, during the final twelve (12) months of the Lease
Term, more than thirty-three percent (33%) of the Premises is damaged and
thereby rendered untenantable or not reasonably usable by Tenant for its
business purposes, either Landlord or Tenant may terminate this Lease by notice
to the other party within thirty (30) days after the occurrence of such damage,
and this Lease shall terminate on the date of such notice if timely given. For
purposes of this Paragraph 24 (d), the Premises shall be deemed wholly
untenantable or unusable if, due to such damage, Tenant shall be precluded from
using more then thirty-three percent (33%) of the Premises for the conduct of
its business, and Tenant's inability to so use the Premises is reasonably
expected to continue until at least the ninetieth (90th) day after the date on
which such damage occurred.
(e) Notwithstanding anything herein to the contrary, Tenant shall have
the right to terminate this Lease, and Landlord shall not be obligated to
restore the Premises or the Building, and shall have the right to terminate this
Lease, if zoning or other applicable laws or regulations do not permit such
repair and restoration.
(f) Tenant shall have the rights of' abatement and termination for
Interruption of services provided in Paragraph 8(o) of this Lease,
notwithstanding the foregoing provisions of this Paragraph 24.
25. CONDEMNATION. If the whole of the Premises is taken in fee simple,
under eminent domain, the Lease Term shall terminate as of the date of such
taking. If less than the whole of the Premises is so taken, and such partial
taking materially and adversely affects the continuance of Tenant's business on
the Premises, the Lease Term may, at the election of either party, terminate
upon notice to the other within sixty (60) days after surrender of possession
pursuant to such taking; if neither party so elects, the Lease Term shall
terminate as to the part taken and shall continue as to the part not taken, and
the Base Rent shall be reduced by the percentage that the part taken bears to
the whole of the Premises. (For purposes of calculating Tenant's share of
Operating Expenses, the part of the Premises not taken shall thereafter
constitute the Premises, and Tenant's share of Operating Expenses shall be
recalculated, using the method described in Paragraph 5 hereof, based upon the
new area of the Premises.) If more than fifty percent (50%) of the Building is
so taken, the Lease Term may, at the election of Landlord, terminate upon notice
to Tenant within sixty (60) days after surrender of possession pursuant to such
taking. In the event of termination pursuant to this Paragraph, Base Rent and
Additional Rent shall be apportioned as of the date of termination. If a part of
the Premises shall be taken by eminent domain, and this Lease and the Lease Term
shall not be terminated in accordance with this Paragraph 25, Landlord, at
Landlord's expense, shall restore that part of the Premises not so acquired or
condemned to a self-contained rental unit substantially equivalent (with respect
to character, quality, appearance and services) to that which existed
immediately prior to such acquisition or condemnation.
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Landlord shall be entitled to all damages and compensation awarded for any
taking, and Tenant assigns to Landlord all of its right to any such award.
Tenant, however, may claim any award made specifically for fixtures and other
equipment installed by it, but only if such award shall be made by the
condemnation court in addition to and stated separately from the award made by
it for the land and the Building or part thereof so taken. Tenant shall have the
rights of abatement and termination for interruption of services provided in
Paragraph 8 (o) of this Lease, notwithstanding the foregoing provisions of this
Paragraph 25.
26. SUBORDINATION. This Lease is subject and subordinate to the lien of any
mortgage or deed of trust now or at any time hereafter placed upon the Building,
and Tenant shall execute any and all instruments to effect such subordination
which the Landlord may require within 10 days of receipt of Landlord's request
therefor. Landlord will secure for Tenant, from the current holder of the
mortgage on the Building and from the ground lessor and master lessor, if any,
within 30 days after the date of execution of this Lease, a non-disturbance
agreement in the form attached hereto as EXHIBIT E, executed by the mortgage
holder, the ground lessor and master lessor, if any, and by Landlord, and if
Landlord does not do so, Tenant may terminate this Lease by written notice to
Landlord. Landlord also will secure for Tenant, from any future holder of any
mortgage or deed of trust, or ground lease or master lease, on the Building, a
non-disturbance agreement, in a form substantially similar to that attached as
EXHIBIT E hereto, and, if Landlord does not do so, this Lease shall be deemed
not subordinate to any such mortgage or deed of trust, or ground lease or master
lease, if any.
27. ESTOPPEL CERTIFICATES. Within twenty (20) calendar days of Tenant's
receipt of a written request therefor by Landlord, Tenant shall execute and
deliver to Landlord, or to such person(s) as may be designated by Landlord, a
written estoppel certificate concerning the status of the Lease on such
reasonable and customary form as may be required by the holder of a mortgage or
deed of trust on the Building, or by a prospective lender or by a prospective
purchaser of the Building. Tenant shall be deemed to have accepted, agreed to
and ratified any estoppel certificate to which Tenant does not object with
specificity as to the grounds for objection, in writing, within twenty (20)
calendar days of Tenant' s receipt thereof from Landlord. Tenant shall have the
right to obtain upon request an estoppel certificate from the Landlord
certifying that the Lease is not in default.
28. PERSONAL LIABILITY OF LANDLORD.
(a) There shall be no personal liability on the part of any individual
who is a partner, trustee, officer, director, shareholder, agent or
representative of Landlord, or of any mortgagee in possession, to any person
with respect to any terms of this Lease or for any claim of loss, damage,
liability, or expense arising under the Lease or relating to Tenant's leasing or
occupation of the Premises.
36
(b) Notwithstanding anything to the contrary in this Paragraph 28 or
elsewhere in the Lease, in all events the liability of the fee owners of the
Building and the real property on which the Building is located (collectively,
the "Property") shall be limited to their equity in the Property, and in the
event that Landlord under this Lease is at any time the fee owner (rather than
master lessee) of the Building, then such Landlord's liability under this Lease
or arising in connection with this Lease shall be limited to and satisfied
solely from Landlord's equity interest in the Property. In the event that the
Property is encumbered by financing in an amount that exceeds 80% of the fair
market value of the Property at the time of the financing, the Landlord's
liability shall be limited to the amount which is equal to twenty percent (20%)
of the aforesaid fair market value of the Property, which liability shall be
satisfied first from Landlord's equity in the Property and, if that is
insufficient, then from Landlord's assets beyond Landlord's equity in the
Building.
29. NO WAIVER. This Lease is binding on and may be legally enforced by, the
parties hereto, their heirs, executors, administrators, successors and assigns.
No waiver of any breach of any term contained herein, or of any default, shall
be construed to be a waiver of any such term or of any subsequent breach
thereof, or of any subsequent default.
30. HOLDING OVER. If Tenant remains in possession of the Premises after the
expiration of the Lease Term, Tenant shall be a tenant from month to month, upon
all the terms hereof which are not inconsistent with such tenancy; provided,
however, that Tenant shall pay to Landlord, (a) as Base Rent, on the first day
of each month during the first two months of such tenancy, an amount equal to
one hundred fifty percent (150%) of the monthly Base Rent and Additional Rent in
effect immediately before the expiration of the Lease Term, and on the first day
of each month during the third and all subsequent months of such tenancy, an
amount equal to two hundred percent (200%) of the monthly Base Rent and
Additional Rent in effect immediately before the expiration of the Lease Term,
and, in addition, shall continue to be responsible for any payments of
Additional Rent that otherwise would be due under the terms of this Lease if the
Lease were still in effect. The aforesaid month-to-month tenancy may be
terminated by Landlord or Tenant upon thirty (30) days' written notice. In the
event Tenant remains in possession after such termination, Tenant shall pay, as
liquidated damages, for each month or part of a month of such possession, an
amount equal to two hundred percent (200%) of the monthly amount Tenant was
paying immediately before the expiration of the Lease Term.
31. [Intentionally deleted.]
32. COVENANT OF QUIET ENJOYMENT. Landlord covenants that it has the right
to make this Lease for the Lease Term, and that if Tenant shall pay the Base
Rent and the Additional Rent and perform all of the covenants, terms, and
conditions required by this Lease, Tenant shall, except as otherwise provided in
this Lease, during the Lease Term, freely, peaceably and
37
quietly occupy and enjoy the full possession of the Premises without molestation
or hindrance by Landlord or its agents.
33. NOTICES. All notices or other communications hereunder shall be in
writing, unless otherwise expressly provided herein, and shall be deemed duly
given if delivered by hand or by certified or registered mail, return receipt
requested, first-class, postage prepaid (i) if to Landlord, at 0000
Xxxxxxxxxxxxx Xxxxxx, Xxxxx 00, X.X., Xxxxxxxxxx, X.X., 00000, with a copy to
Xxxxxx X. Xxxxxxx, Esq., David, Hagner, Xxxxx & Xxxxxxx, P.C., 0000 00xx Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, X.X. 00000, and (ii) if to Tenant prior to Tenant's
occupancy of the Premises, at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000 Xxxxxxxx, XX
00000 Attention: Xxxxxxx X. Xxxxxxx, and if to Tenant after Tenant's occupancy
of the Premises, at the Premises, with a copy to Xxxxxxx X. Xxxxxx, Esq., Xxxxxx
& Xxxxxx, 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, unless notice of a
change of address is given by Landlord or Tenant pursuant to the provisions of
this Paragraph 32. Notice shall be deemed to have been given upon receipt or at
the time delivery is refused.
34. BROKER'S COMMISSION. Tenant represents that it has dealt exclusively
with Barnes, Morris, Xxxxxx and Xxxxxx, Inc. and Equis ("Broker") in connection
with this Lease. Landlord and Tenant acknowledge that Broker is the sole and
exclusive procuring cause of this Lease. Landlord shall pay to Broker a
brokerage commission equal to three percent (3%) of the Base Rent and storage
space base rent, unescalated but increased pursuant to Paragraph 4 (f), for the
initial Premises (i.e. 87,327 rentable square feet) for the first ten (10) Lease
Years of the Lease Term, fifty percent (50%) of which shall be payable upon
execution of the Lease by all parties, and the balance of which shall be payable
upon Landlord's receipt from Tenant of the first month's Base Rent. In addition,
if Tenant exercises the Expansion Option (as defined below), Landlord shall pay
to Broker a brokerage commission equal to three percent (3%) of the unescalated
Base Rent for the Expansion Space (as defined below) leased by Tenant, fifty
percent (50%) of which shall be payable on the date the Lease Term for the
Expansion Space commences, as provided in Paragraph 39(a), and the balance of
which shall be payable upon Landlord's receipt from Tenant of the first month's
Base Rent for the Expansion Space. Broker shall not be entitled to any other
brokerage commission or fee, including with respect to the Extended Term, the
Second Extended Term, or any other renewal or extension of the Lease or of
Tenant's occupancy of the Premises beyond the initial ten (10) Lease Years of
the Lease Term.
35. MAINTENANCE.
(a) Landlord shall keep and maintain in good order and repair and in a
first class manner the Building, including the Building structure and systems,
the foundation, roof, exterior walls, elevators, electrical, plumbing, HVAC
systems, entrance, sidewalks, lobbies, stairways, landscaped areas, parking
garage and common areas and facilities. Landlord shall
38
be responsible for causing the lobby, other common areas, and exterior areas,
sidewalks, driveways, parking garage, exercise facility, entrances and core area
restrooms on all floors leased by Tenant to comply with the requirements of
Title III of the ADA, all Environmental Laws (hereinafter defined), provided
however, that with regard to the bathrooms on the floors leased by Tenant (i)
Landlord shall install in each an alarm visual strobe and insulate the sink hot
and drain pipes that are exposed under the counter tops, and (ii) Tenant shall
perform all ADA changes required as a result of Tenant installing, at Tenant's
expense, a rear door in the womens' bathrooms, which doors Landlord consents to
Tenant installing, provided they are installed in accordance with applicable
laws, codes and regulations. Landlord agrees that the base Building fire alarm
system shall be adequate to accommodate the strobes and annunciators required by
the provisions of the District of Columbia Code to be installed in the Premises
by Tenant as part of the Tenant Improvement Work. Where Improvements or any
other alterations made by Landlord or by Tenant after execution of this Lease
trigger "path of travel" requirements under the ADA, the party making such
alterations shall be responsible for satisfying such requirements. Any changes
to the Building necessary to cause such common and public areas to comply with
the requirements of Title III of the ADA or Environmental Laws shall be at
Landlord's expense and shall not be included in the Operating Expenses of the
Building, unless such changes are required by the construction of Improvements
by or for Tenant or by any other act or omission of Tenant, in which case shall
be solely responsible for all costs of any such changes. In addition, Landlord
shall remedy, as promptly as is feasible under the circumstances, any material
interruption of the Services to be provided to Tenant as set forth in Paragraph
8, above. The Landlord shall in no event be required to make repairs to
leasehold improvements made by the Tenant, or to make repairs to wear and tear
within the Premises. The Tenant agrees to deliver notice to the Landlord, as
promptly as is reasonable under the circumstances, of any defective condition in
or about the Premises known to the Tenant which the Landlord is required to
repair hereunder; provided, however, that the Tenant's failure to report to the
Landlord any such defective condition shall not relieve the Landlord of the
Landlord's obligation to repair any such defective condition promptly upon
learning of the need for such repair.
(b) Except to the extent a violation is caused by Tenant or any invitee
of Tenant, Landlord shall be responsible for causing the Building to comply with
all applicable federal and local laws, ordinances, regulations and orders
governing asbestos and Hazardous Materials ("Environmental Laws"). Any action
necessary to cure a violation of any Environmental Laws shall be at Landlord's
expense and shall not be included in the operating Expenses of the Building,
except that any violation caused by Tenant or an invitee of Tenant shall be
cured at Tenant's sole cost.
(c) Landlord shall retain an expert indoor environmental quality
consultant (the "Landlord's IAQ Consultant") who shall conduct testing (and
prepare written reports of such testing) of the indoor air quality of the
Building and such other indoor environmental factors
39
as are reasonably tested in first-class office buildings (collectively, "IAQ")
one (1) time every other calendar year, for the purpose of determining the
normal and acceptable IAQ of the Premises and the common areas of the Building.
36. PARKING. Tenant shall have the right during the Lease Term to lease one
(1) parking space in the Building's parking garage for each one thousand (1,000)
rentable square feet of the Premises. The parking garage will operate
twenty-four hours a day every day of the year except Holidays, and will he
accessible to Tenant's employees with monthly parking contracts every day of the
year, including Holidays. The parking fees shall be established by the Landlord
(or garage operator) from time to time and shall be competitive with those of
similar parking garages for similar parking spaces (i.e., "reserved" or
"non-reserved") of comparable quality located in the vicinity of the Building.
At the time of execution of this Lease, the rate is $150 per month for
unreserved spaces and $270 per month for reserved spaces, of which there is a
limited number. The parking garage shall be operated by Landlord consistent with
standards employed by the operators of other parking garages in comparable
first-class commercial office buildings in the downtown Washington, D.C. central
business district.
37. RULE AGAINST PERPETUITIES. Notwithstanding any provision in this Lease
to the contrary, if the Lease Term has not commenced within twenty-one (21)
years after the date of execution of this Lease, this Lease automatically shall
terminate on the 21st anniversary of the date of execution hereof. The sole
purpose of this provision is to avoid any possible interpretation of this Lease
as violating the Rule Against Perpetuities or other rule of law against
restraints on alienation.
38. RENEWAL.
(a) Tenant shall have the right to extend the Lease Term for one
five-year period (the "Extended Term") commencing immediately after the end of
the tenth Lease Year (the "First Renewal Option"), and, provided Tenant has
exercised the First Renewal Option, Tenant shall have the right to extend the
Lease Term for a second five-year period (the "Second Extended Term") commencing
immediately after the end of the fifteenth Lease Year (the "Second Renewal
Option").
(b) To exercise the First Renewal Option, Tenant must deliver to
Landlord written notice of such exercise ("First Renewal Option Notice") not
earlier than fifteen (15) months prior to the last day of the tenth Lease Year
and not later than twelve (12) months prior to the last day of the tenth Lease
Year. To exercise the Second Renewal Option, Tenant must deliver to Landlord
written notice of such exercise ("Second Renewal Option Notice") not earlier
than fifteen (15) months prior to the last day of the fifteenth Lease Year and
not later than twelve (12) months prior to the last day of the fifteenth Lease
Year. If Tenant does not provide notice to Landlord in accordance with all
provisions of this Paragraph 38(b), Tenant
40
shall not have the right to extend the Lease Term, and such rights as are
provided herein shall be null and void and of no further effect.
(c) Provided that Tenant exercises its First Renewal Option as provided
above, the Base Rent per rentable square foot of the Premises that shall be due
from Tenant for the eleventh Lease Year (the first Lease Year during the
Extended Term) shall be adjusted to the lesser of (i) ninety-five percent (95%)
of the then prevailing fair market base rental rate for new tenants of space of
comparable size and quality in office buildings in Washington, D.C., taking into
consideration the value of concession packages as determined pursuant to
Paragraph 38(f) (including, without limitation, allowances and rent abatements)
(the "Adjusted Market Rate"), or (ii) the Base Rent per rentable square foot of
the Premises that Tenant is obligated to pay under the terms of the Lease for
the tenth Lease Year (the "Current Lease Rate"). If the Adjusted Market Rate is
less than the Current Lease Rate, (A) the Base Rent shall escalate in accordance
with the "Market Escalation Factor," as determined pursuant to Paragraph 38(f),
during the Extended Term and (B) the Operating Expenses and the Real Estate
Taxes incurred during the eleventh Lease Year shall be the new Base Year
Operating Expenses and the new Base Year Real Estate Taxes applicable during the
Extended Term, and Tenant therefore shall have no obligation to pay any amounts
on account of Operating Expenses and Real Estate Taxes for the eleventh Lease
Year. If the Current Lease Rate is less than the Adjusted Market Rate, (X) the
Base Rent shall escalate in accordance with Paragraph 4(d) during the Extended
Term, (Y) there shall be no change in the Base Year Operating Expenses or the
Base Year Real Estate Taxes during the Extended Term and Tenant shall be
obligated to continue to pay Tenant's Proportionate Share of Operating Expense
Increases and Tenant's Proportionate Share of Real Estate Tax Increases during
each and every Lease Year during the Extended Term, and (Z) Landlord shall
provide to Tenant a "Renewal Improvement Allowance" equal to Ten Dollars
($10.00) per rentable square foot of the Premises, which may be used by Tenant
in accordance with the purposes set forth in Paragraph 3(d), above.
(d) Provided that Tenant exercises its Second Renewal Option as
provided above, the Base Rent per rentable square foot of the Premises that
shall be due from Tenant for the sixteenth Lease Year (the first Lease Year
during the Second Extended Term) shall be adjusted to the lesser of (i)
ninety-five percent (95%) of the then-prevailing fair market base rental rate
for new tenants of space of comparable size and quality in office buildings in
Washington, D.C., taking into consideration the value of concession packages as
determined pursuant to Paragraph 38(f) (including, without limitation,
allowances and rent abatements) (the "Adjusted Market Rate"), or (ii) the Base
Rent per rentable square foot of the Premises that Tenant is obligated to pay
under the terms of the Lease for the fifteenth Lease Year (the "Current Lease
Rate"). If the Adjusted Market Rate is less than the Current Lease Rate, (A) the
Base Rent shall escalate in accordance with the "Market Escalation Factor," as
determined pursuant to Paragraph 38 (f), during the Second Extended Term and (B)
the Operating
41
Expenses and the Real Estate Taxes incurred during the eleventh Lease Year shall
be the new Base Year Operating Expenses and the new Base Year Real Estate Taxes
applicable during the Second Extended Term, and Tenant therefore shall have no
obligation to pay any amounts on account of Operating Expenses and Real Estate
Taxes for the sixteenth Lease Year. If the Current Lease Rate is less than the
Adjusted Market Rate, (X) the Base Rent shall escalate in accordance with the
"Market Escalation Factor," during the Second Extended Term, (Y) there shall be
no change in the Base Year Operating Expenses or the Base Year Real Estate Taxes
during the Second Extended Term and Tenant shall be obligated to continue to pay
Tenant's Proportionate Share of Operating Expense Increases and Tenant's
Proportionate Share of Real Estate Tax Increases during each and every Lease
Year during the Second Extended Term, and (Z) Landlord shall provide to Tenant a
"Renewal Improvement Allowance" equal to Ten Dollars ($10.00) per rentable
square foot of the Premises, which shall be used by Tenant for refurbishment of
the Premises (e.g. repainting and recarpeting), and any unused amount of the
Renewal Improvement Allowance shall be applied as a rental credit. The Renewal
Improvements shall be constructed in accordance with the provisions of Exhibit B
and the Renewal Improvement Allowance shall be paid in accordance with the
provisions of Exhibit B.
(e) The Adjusted Market Rate and the Market Escalation Factor with
respect to the Extended Term, or the Second Extended Term, as the case may be,
shall be determined as follows. After Landlord's receipt of the First Renewal
Option Notice, or Second Renewal Option Notice, as the case may be, Landlord and
Tenant shall attempt to agree upon the Adjusted Market Rate and the Market
Escalation Factor. If Landlord and Tenant are unable to reach agreement upon the
Adjusted Market Rate and the Market Escalation Factor within thirty (30) days
after Landlord's receipt of the First Renewal Option Notice, or the Second
Renewal Option Notice, as the case may be, the Adjusted Market Rate and the
Market Escalation Factor shall be determined by a panel of three brokers, one of
whom shall be selected by Landlord, one of whom shall be selected by Tenant, and
the third of whom shall be chosen by the brokers selected by Landlord and by
Tenant. Each broker selected shall have at least 10 years' experience in the
downtown Washington, D.C., commercial real estate market, and shall be
recognized as ethical and reputable within the local real estate industry and
not otherwise employed by or engaged by or working for Landlord, Tenant or any
of their respective affiliates. Landlord and Tenant each shall select a broker
as specified above within fifteen (15) days after the expiration of the
aforesaid 30-day period. The third broker shall be selected within fifteen (15)
days after the first two brokers have been selected. Within thirty (30) days
after the third broker has been selected, the three brokers shall determine the
Adjusted Market Rate and the Market Escalation Factor. The Adjusted Market Rate
shall be the amount that is agreed upon by any two of the three brokers. In the
event no two of the three brokers are able to agree upon the Adjusted Market
Rate within 30 days after the selection of the third broker, each of the brokers
shall submit to Landlord and Tenant within fifteen (15) days his or her
determination of the Adjusted Market Rate, the determination that
42
is furthest from the average of the three determinations shall be disregarded,
and the average of the remaining two determinations shall be the Adjusted Market
Rate. The Market Escalation Factor shall be the rate or formula agreed upon by
any two of the three brokers. In the event no two of the three brokers are able
to agree upon the Market Escalation Factor within 30 days after the selection of
the third broker, the Market Escalation Factor shall be determined by the third
broker. It is understood and agreed that the determination of the Adjusted
Market Rate and the Market Escalation Factor as provided herein shall be binding
upon Landlord and Tenant. Landlord shall pay the cost of the services of the
broker it selects, Tenant shall pay the cost of services of the broker it
selects, and the cost of the services of the third broker shall be borne one
half by Landlord and one half by Tenant.
(f) Except as provided in this Paragraph 38, during the Extended Term
and the Second Extended Term, all terms and conditions contained in the Lease
shall continue to apply with full force and effect, provided however, that this
Paragraph 38 will not be deemed to provide further renewal options under the
Lease as renewed.
39. EXPANSION OPTION.
(a) At any time prior to February 28, 1999, Tenant shall have the
option to expand the Premises to include either (i) all of the office space on
all or one or more entire floors of the Fourth (4th), Fifth (5th) and Sixth
(6th) Floors of the Building, or (ii) all of the office space on all or one or
more entire floors of the Sixth (6th), Tenth (l0th) and Eleventh (11th) Floors
of the Building (the "Expansion Space"), which option hereinafter shall be
referred to as the "Expansion Option." Tenant shall not be entitled to exercise
the aforesaid Expansion Option to lease Expansion Space if, at the time Tenant
is entitled to exercise said option, Tenant has subleased or has entered into an
agreement to sublease in the future more than twenty-five percent (25%) of the
then total amount of rentable square feet of the Premises, unless Tenant itself
occupies at all times the Expansion Space and does not relocate its employees
from the initial Premises into the Expansion Space in order to comply with this
provision. To exercise the Expansion Option, Tenant must deliver to Landlord
written notice of the exercise of the Expansion Option (the "Expansion Notice")
on or before February 28, 1999. If Tenant delivers to Landlord the Expansion
Notice within the time provided herein, the Expansion Space shall be leased upon
all of the same terms and conditions set forth in this Lease with respect to the
Premises (which terms and conditions shall be adjusted proportionately to
account for the increased rentable square footage of the Premises upon inclusion
of the Expansion Space), except that: (1) the Lease Term with respect to the
Expansion Space shall commence on the later of (A) September 1, 2000, or (B) the
date on which Landlord delivers the Expansion Space to Tenant; (2) Tenant shall
be obligated to pay Base Rent and Additional Rent for the Expansion Space
beginning on the date that is 120 calendar days after the date on which Landlord
delivers the Expansion Space to Tenant; (3) if Tenant exercises the Expansion
Option with respect to Expansion Space on the Tenth (10th)
43
or Eleventh (11th) Floors, the Base Rental for that space shall be Two Dollars
($2.00) per rentable square foot greater than that for the remainder of the
Premises; and (4) Landlord shall provide to Tenant an "Expansion Space
Improvement Allowance" equal to Twenty-Seven and 50/100 Dollars ($27.50) per
rentable square foot of the Expansion Space, which shall be paid by Landlord,
and may be used by Tenant in accordance with the purposes set forth in Paragraph
3(d), above. The Expansion Space Improvements shall be constructed in accordance
with the provisions of EXHIBIT B and the Expansion Space Improvement Allowance
shall be paid in accordance with the provisions of Exhibit B.
(b) Landlord shall use commercially reasonable efforts to deliver the
Expansion Space to Tenant by September 1, 2000, or as soon thereafter as
possible, by taking all reasonable steps to recover possession of the Expansion
Space from the entity that is the tenant of the Expansion Space as of the date
of execution of this Lease (the "Current Expansion Space Tenant"). If Landlord
does not deliver the Expansion Space to Tenant by September 1, 2000, and as a
direct result Tenant is forced to hold over under its existing lease for
premises at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxx (the "Existing Lease"),
then Landlord shall reimburse Tenant for the amounts paid by Tenant under the
Existing Lease for the period during which Tenant occupies space pursuant to the
Existing Lease after the expiration of the Existing Lease by reason of
Landlord's failure to timely deliver the Expansion Space (the "Expansion
Holdover Period") that are in excess of the amounts Tenant would have been
obligated to pay during the Expansion Holdover Period if those amounts were
required to be paid at the rate in effect under the Existing Lease immediately
prior to the expiration of the term of the Existing Lease, provided that the
total amount of any such reimbursement shall not exceed the amount actually
received by Landlord as rent from the Current Expansion Space Tenant after
September 1, 2000 that are in excess of the amounts the Current Expansion Space
Tenant would have been obligated to pay after the expiration of its lease for
the Premises if those amounts were required to be paid at the rate in effect
under the Current Expansion Space Tenant's lease for the Premises immediately
prior to the expiration of the term of that lease. Tenant shall have the right
to rescind the exercise of this expansion option in the event that Landlord
fails to deliver the Expansion Space to Tenant by June 30, 2001, provided that
Tenant exercise said option to rescind by giving written notice thereof to
Landlord by July 10, 2001.
40. FIRST RIGHT TO LEASE. Tenant shall have a continuing first right to
lease, exercisable at any time after full execution of this Lease, any space
that becomes available on floors immediately above or below the Premises
("Additional Expansion Space"). In addition, Tenant shall have a continuing
first right to lease, exercisable at any time after full execution of this
Lease, any additional available lower level or storage space ("Additional
Storage Space"). Tenant shall not be entitled to exercise the aforesaid rights
to lease Additional Expansion Space or Additional Storage Space if, at the time
Tenant is entitled to exercise said rights Tenant has subleased or has entered
into an agreement to sublease in the future more
44
than twenty-five percent (25%) of the then total amount of rentable square feet
of the Premises, unless Tenant itself occupies the Additional Expansion Space
for the entire first year of Tenant's leasing of said Additional Expansion Space
and does not relocate its employees from the initial or Expansion Premises into
the Additional Expansion Space in order to comply with this provision. If Tenant
leases any Additional Expansion Space but Tenant does not itself occupy said
Additional Expansion Space for the entire first year of Tenant leasing said
space or if Tenant relocates its employees from the initial or expansion space
in violation of the above provision, then Landlord shall be entitled to 100% of
the profits from all future subleasing of said Additional Expansion Space.
Landlord shall provide written notice to Tenant that Additional Expansion Space
or Additional Storage Space is available ("Landlord's Notice") promptly after
Landlord learns that any such space will soon become or has become available.
Tenant shall have fifteen (15) days after receiving Landlord's Notice to provide
written notice to Landlord ("Tenant's Notice") that Tenant wishes to lease the
Additional Expansion Space or Additional Storage Space identified in. Landlord's
Notice. Within ten (10) days after Landlord receives Tenant's Notice with
respect to Additional Storage Space, Landlord and Tenant shall enter into a
written amendment to this Lease providing for the lease of such Additional
Storage Space under the same terms relating to Storage Space rent as are
contained in Paragraph 42, below. Within ten (10) days after Landlord receives
Tenant's Notice with respect to Additional Expansion Space, Landlord shall
deliver to Tenant a notice stating the rent and other terms and conditions upon
which Landlord is willing to lease the Additional Expansion Space ("Notice of
Proposed Terms"). The parties shall have a period of thirty (30) days after
Landlord's delivery to Tenant of the Notice of Proposed Terms to negotiate in
good faith in an attempt to reach agreement with respect to rent, terms and
conditions for the Additional Expansion Space. If the parties are unable to
reach agreement on the rent, terms and conditions for the Additional Expansion
Space, Landlord shall have the right (subject to any applicable provisions of
this Lease) to lease the Additional Expansion Space to any person or entity
other than Tenant, provided, however, that if Landlord seeks to lease the
Additional Expansion Space at a rent rate and upon terms and conditions that are
more favorable to the tenant than those that were offered to Tenant, Landlord
must notify Tenant in writing of that rent and those terms and conditions (the
"Second Offering Notice"), and Tenant shall have a period of ten (10) days after
Landlord's delivery to Tenant of the Second Offering Notice to agree by written
notice to Landlord to lease the Additional Expansion Space at the rent and on
the terms and conditions stated in the Second Offering Notice. If Tenant either
declines to lease the Additional Expansion Space at the rent and on the terms
and conditions stated in the Second Offering Notice, or does not agree in
writing to the rent, terms and conditions stated in the Second Offering Notice
within the aforesaid ten-day period, Landlord shall be free to lease the
Additional Expansion Space to a third party on the terms and conditions stated
in the Second Offering Notice for a period of six (6) months after the date on
which Tenant declines to lease the offered space. If a lease with respect to the
Additional Expansion Space is not entered
45
into by Landlord and a third party upon the terms and conditions set forth in
the Second Offering Notice within such six (6) month period, or if such space
again becomes available for any other reason, Tenant shall again have the first
right to lease such Additional Expansion Space in accordance with the terms of
this Paragraph 39. In no event shall the failure of Landlord and Tenant to agree
to terms under this First Right to Lease result in the loss of any of Tenant's
renewal or other expansion option rights or change of the terms thereof. In the
event Tenant leases Additional Expansion Space, the Additional Expansion Space
Improvements shall be constructed in accordance with the provisions of Exhibit B
and the Additional Expansion Space Improvement Allowance, if any, shall be paid
in accordance with the provisions of Exhibit B.
41. TERMINATION OPTION. Tenant shall have the right to terminate the Lease
(i) effective as of the last day of the fifth Lease Year, by delivering to
Landlord written notice of termination not later than sixteen (16) months prior
to the last day of the fifth Lease Year, and paying to Landlord the "Termination
Fee" (as defined below) not later than six (6) months prior to the last day of
the fifth Lease Year, or (ii) effective as of the last day of the seventh Lease
Year, by delivering to Landlord written notice of termination not later than
sixteen (16) months prior to the last day of the seventh Lease Year, and paying
to Landlord the Termination Fee not later than six (6) months prior to the last
day of the seventh Lease Year. The Termination Fee shall be the amount equal to
the sum of (1) the unamortized amount of all tenant improvement allowances paid
or applied by Landlord to or for the benefit of Tenant (including, but not
limited to, the "Tenant Allowance" described in Paragraph 3 (d), which shall be
amortized on a straight-line basis over the first ten (10) Lease Years of the
Lease Term, and the "Expansion Space Improvement Allowance" described in
Paragraph 1 (c)), which shall be amortized on a straight-line basis over the
actual term for which the Expansion Space is leased by Tenant), the unamortized
amount of all rental abatement provided to Tenant pursuant to Paragraph 4 (e) of
the Lease, and the unamortized amount of all brokerage and other commissions
paid by Landlord in accordance with the terms of the Lease, which shall be
amortized on a straight-line basis over the first ten (10) Lease Years of the
Lease Term for the commission for the initial Premises and on a straight-line
basis over the term of the Expansion Space for the commission for the Expansion
Space, if any, leased by Tenant), and (2) an amount equal to two months' Base
Rent, as escalated, that is due as of the month immediately prior to the
effective date of termination.
42. STORAGE SPACE. Tenant shall have the right to lease up to two thousand
eight hundred (2,800) usable square feet (measured according to BOMA standards)
of storage space in the Building, which space shall be secure and demised, with
existing lighting and existing conditions. During the first Lease Year, Tenant
shall pay Ten Dollars ($10.00) per rentable square foot for the storage space,
which rate shall be increased in each succeeding Lease Year by two percent (2%)
of the storage space rent applicable for the preceding Lease Year. If Tenant
exercises its option to expand in accordance with Paragraph 38, above, Tenant
shall
46
have the right to lease approximately 1,000 usable square feet of additional
storage space, at the rental rate for storage space then in effect. Tenant shall
have the right to install, at its sole expense, a heating and/or air
conditioning system and additional lighting in the storage space, provided that
said system and lighting (i) is approved by Landlord, which approval shall not
be unreasonably withheld, conditioned or delayed, (ii) Tenant maintains said
system and lighting at its expense, and (iii) Tenant pays the utility costs for
operating said system, which Tenant shall separately meter as required by
Landlord, and Tenant pays for the maintenance for such storage space, provided
however, that Tenant shall not otherwise be liable for Operating Expenses or
Real Estate Taxes for the garage. Landlord shall be responsible for preventing
water infiltration into the storage space (which cost shall be included in
Tenant's Operating Expenses), but Landlord shall not be liable for damage due to
humidity caused by existing conditions or, if Tenant installs the aforesaid
system, the inadequacy or failure or said system.
43. WAIVER OF JURY TRIAL. Landlord and Tenant, freely, knowingly, and with
advice of counsel, hereby waive their right to a trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other in respect of any matter whatsoever arising out of or in any way connected
with this Lease, the relationship of Landlord and Tenant hereunder, Tenant's use
or occupancy of the Premises, and any claim or counterclaim of injury, damage or
otherwise by Landlord or Tenant against or with respect to each other.
44. RETAIL SPACE. Landlord shall ensure that the exterior appearance of any
future retail space in the Building shall be designed and maintained in
accordance with the standards generally observed with respect to exterior retail
space located in comparable modern first-class commercial office buildings in
the downtown Washington, D.C. central business district. Landlord agrees not to
lease retail space in the Building to retail tenants that do not meet the
standards applied by comparable modern first class commercial office buildings
in the downtown Washington, D.C. central business district. In addition,
Landlord shall not lease the retail space for the following services to walk-in
members of the public: passport, motor vehicle licensing and registration,
public assistance, unemployment, drug treatment, or law enforcement.
45. SIGNS. Tenant shall have the right to display its name and 100 lines
(e.g. for departments or names) on the directory in the main lobby of the
Building. Tenant may install, at its sole expense, on floors on which it is the
sole tenant, signs in the interior of the Premises, including in elevator
lobbies, that are not visible from the exterior of the Premises. If any of
Tenant's signage is installed on a floor that is leased only partially to
Tenant, Landlord's consent (which shall not be unreasonably withheld,
conditioned or delayed) shall be required with respect to such signage. All such
signage shall be of a size and materials that are appropriate for a first-class
office building located in the District of Columbia. Subsequent to the Lease
Commencement Date, and provided Tenant is occupying the
47
Premises, Tenant shall have the right to place exterior signage on the Building
as set forth on Exhibit G hereto (the "Initial Signage") with respect to
appearance, substance, size and location, (the materials, method of attachment
and other specifications for the signs shall be appropriate for a first-class
office building located in the District of Columbia and shall be mutually agreed
upon by Landlord and Tenant), which exterior signage shall be furnished and
installed at Tenant's expense. If Tenant exercises the Expansion Option and
thereby leases three entire additional floors of the Building, and moves
Tenant's corporate headquarters to the Building, then Tenant shall have the
right to place one exterior sign on the Building, either on the right or left
hand front column, as set forth on EXHIBIT F hereto ("Signage with Corporate
Expansion") with respect to appearance, substance, size and location, (the
materials, method of attachment and other specifications for the signs shall be
appropriate for a first-class office building located in the District of
Columbia and shall be mutually agreed upon by Landlord and Tenant), which
exterior signage shall be furnished and installed at Tenant's expense.
Throughout the Lease Term, Tenant shall have the right to display signage that
is mutually agreed upon by Tenant and Landlord.
46. EXTERIOR/LANDSCAPING. Prior to the Rent Commencement Date, Landlord
shall refurbish the entrance area to the Building by cleaning the sidewalk and
improving the plantings.
47. EXCLUSIVITY. At any time during the Lease Term, Landlord shall not
lease space in the Building to the following companies: Buck Consultants, Inc.,
Xxxxxx Associates, L.L.C., Towers Xxxxxx, Xxxxxxx X. Xxxxxx, Inc., Aon
Consulting Worldwide, and Hay Group. After Tenant's exercise of its Expansion
Option pursuant to Xxxxxxxxx 00, Xxxxxxxx shall not lease more than one floor of
the Building, or give an option to expand with respect to more than one floor of
the Building, to any competitor listed on Exhibit E hereto, unless at the time
Landlord is entering into agreement to lease or give an option to lease to a
competitor listed on Exhibit E, Tenant shall have subleased or agreed to
sublease space in the Premises that is equal to or greater than the rentable
square feet of one entire floor of the Premises. Upon any assignment of this
Lease to any person or entity other than an Affiliate or Successor, as those
terms are defined above, this Paragraph 47 immediately shall become null and
void and of no further effect.
48. AUTHORITY.
(a) Landlord hereby represents and warrants, solely for the benefit of
Tenant, that, as of the date of execution of this Lease Landlord is a validly
existing corporation under the laws of the District of Columbia, is authorized
to do business in the District of Columbia, and has full power and authority,
and has obtained all necessary authorizations and consents to enter into and
perform its obligations under this Lease, and the persons executing and
delivering this Lease on behalf of Landlord have been authorized to do so by all
necessary
48
corporate actions. The persons executing this Lease on behalf of Landlord have
the authority to bind Landlord to the terms and conditions of this Lease.
(b) Tenant hereby represents and warrants, solely for the benefit of
Landlord, that, as of the date of execution of this Lease, Tenant is a validly
existing corporation under the laws of the State of Delaware, is authorized to
do business in the District of Columbia, and has full power and authority, and
has obtained all necessary authorizations and consents to enter into and perform
its obligations under this Lease, and the persons executing and delivering this
Lease on behalf of Tenant have been authorized to do so by all necessary
corporate actions. The persons executing this Lease on behalf of Tenant have the
authority to bind Tenant to the terms and conditions of this Lease.
49. MISCELLANEOUS.
(a) This Lease constitutes the entire agreement between the parties
concerning the matters set forth herein, and supersedes and revokes any and all
negotiations, arrangements, letters of intent, representations, inducements, or
other oral or written agreements. Representations, oral or in writing, between
the parties, not contained in this Lease, shall be of no force or effect. If
Tenant shall comprise more than one person, the obligations hereunder of all
such persons shall be joint and several. This Lease shall be governed by and
construed in accordance with the laws of the District of Columbia. If any
provision of this Lease or the application thereof to any person or circumstance
shall to any extent be held by a court of competent jurisdiction invalid or
unenforceable, the remainder of the Lease shall not be affected. The paragraph
headings used herein are for convenience of the parties only, and shall not be
deemed to alter or modify in any way the contents of any paragraph of this
Lease.
(b) This Lease shall not be binding upon Landlord or Tenant unless and
until Tenant shall have executed and delivered a fully executed copy of this
Lease to Landlord and Landlord shall have executed and delivered a fully
executed copy of this Lease to Tenant. This Lease shall not be recorded in the
land records of the District of Columbia.
(c) The captions in this Lease are inserted only as a matter of
convenience and for reference and in now way define, limit or describe the scope
of this Lease or the intent of any provision hereof.
(d) Except as otherwise expressly set forth to the contrary in this
Lease, each of Landlord and Tenant shall exercise any rights it may have under
this Lease to consent, approve or otherwise exercise discretion with respect to
a matter in a reasonable manner and shall not unreasonably withhold, condition
or delay the granting of any such consent or approval.
49
IN WITNESS WHEREOF, the parties have set their hands and seals as of
the day and year first above written.
WITNESS: LANDLORD:
/s/ Xxxxxx X. Xxxxxx /S/ Xxxxxx X. Xxxxxxxxx
---------------- -------------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxxx, Trustee
/s/ Xxxxxx X. Xxxxxx /S/ Xxxxxxxx X. Xxxxxxxxx
---------------- -------------------------------
Xxxxxx X. Xxxxxx Xxxxxxxx X. Xxxxxxxxx, Trustee
Trustees under Trust Indenture
made by Xxxxxxxx X. Xxxxxxxx
dated November 28, 1953 and
Trustee under Trust Indenture
made by Xxxxxxx X. Xxxxxxx date
November 28, 1953
/s/ Xxxxxx X. Xxxxxx /S/ Xxxxxx X. Xxxxxxxxx
------------------- -------------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxxx, Trustee
/S/ Xxxxxx X. Xxxxxx /S/ Xxxxxxxx X. Xxxxxxxxx
------------------- -------------------------------
Xxxxxx X. Xxxxxx Xxxxxxxx X. Xxxxxxxxx, Trustee
/S/ Xxxxxx x Xxxxxx /S/ Xxxxxx X. Xxxx
------------------- -------------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxx, Trustee
Trustees under the Will of
Xxxxxxxx Xxxx (Trust Estates 2
through 4), Trustees under
Trust Indenture made by Xxxx X.
Xxxxxxx dated August 14, 1959
(Trust Estates 1 through 4),
Trustees under Trust Indenture
made by Xxxxxxxx X. Xxxxxxxx
dated August 14, 1959 (Trust
Estates 4, 5 and 6), Trustees
under Trust Indenture made by
Xxxxxxx X. Xxxxxxx dated August
14, 1959 (Trust Estates 1
through 6), Trustees under the
Trust Indenture made by
Xxxxxxxx X. Xxxx (Trust Estates
4 and 5), dated August 14,
1959, Trustees under Trust
50
Indenture No. II made by Xxxxxx
X. Xxxxxxxxx dated September
21, 1959.
/s/ Xxxxxx X. Xxxxxx /S/ Xxxxxx X. Xxxxxxxxx
------------------- -------------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxxx, Trustee
/S/ Xxxxxx X. Xxxxxx /S/ Xxxxxxx X. Xxxxxxxx
------------------- -------------------------------
Xxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxx, Trustee
/S/ Xxxxxx X. Xxxxxx /S/ Xxx X. Xxxxxxxx
------------------- -------------------------------
Xxxxxx X. Xxxxxx Xxx X. Xxxxxxxx, Trustee
Trustees under Trust Indenture
No. I made by Xxxxxx X.
Xxxxxxxxx dated September 21,
1959 (Trust Estates 1 through
8)
/s/ Xxxxxx X. Xxxxxx /S/ Xxxxxx X. Xxxxxxxxx
------------------- -------------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxxx, Trustee
/S/ Xxxxxx X. Xxxxxx /S/ Xxxxxx X. Xxxx
------------------- -------------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxx, Trustee
Trustees under Trust Indenture
made by Xxxxxxx X. Xxxxxxxx
dated May 7, 1965 (Trust
Estates 3 through 9 and 11)
ATTEST: TENANT:
XXXXXX XXXXX & COMPANY
d/b/a XXXXXX XXXXX WORLDWIDE
/s/Xxxxx X. Xxxxxxx /S/ Xxxxxxx X. Xxxxxx (SEAL)
------------------------ -------------------------------
Xxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxx
Assistant Secretary
County of Xxxxxxxxxx
State of Maryland
51
/S/ Xxxx X. Xxxxxxxx
---------------------
Xxxx X. Xxxxxxxx
Notary Public
My commission expires: June 5, 2001
52
