FIRST AMENDMENT TO DEED OF LEASE
THIS FIRST AMENDMENT TO DEED OF LEASE (this "First Amendment") is made
effective as of the 31st of December, 1997 (the "Effective Date"), by and
between XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY, a Massachusetts corporation
("Landlord") and QUESTECH, INC., a Virginia corporation ("Tenant").
WITNESSETH:
WHEREAS, pursuant to that certain Deed of lease dated March 14, 1995
(the "Original Lease"), Landlord leased to Tenant and Tenant leased from
Landlord approximately 25,939 rentable square feet of office space (the
"Premises," as more particularly described in the Original Lease) on the
first (1st) floor of the building located at 0000-Xxxx Xxxxxxxx Xxxx, Xxxxx
Xxxxxx, Xxxxxxxx (the "Building");
WHEREAS, the Term of the Original Lease is scheduled to expire on
September 30, 1998; and
WHEREAS, Landlord and Tenant have agreed to modify the terms and extend
the Term of the Original Lease, upon the terms, conditions and provisions
hereinafter set forth.
Now, THEREFORE, in consideration of the foregoing, of the mutual covenants
and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant, intending to be legally bound, hereby covenant and agree as
follows:
1. Incorporation of Recitals. The foregoing recitals are hereby
incorporated herein and made a part hereof by this reference.
2. Definitions. Except as otherwise specified herein, all capitalized
terms in this First Amendment shall have the meanings assigned thereto in the
Original Lease. The term "Lease" as used in this First Amendment (and in the
Original Lease) shall mean the Original Lease, as amended by this First
Amendment.
3. Term.
(a) The Original Lease is hereby amended as follows:
(i) Section 1c of the Original Lease is hereby amended by
deleting therefrom the language "Lease Expiration Date:
September 30, 1998," and by inserting in lieu thereof the
following language: "Lease Expiration Date: December 31,
1997."
(ii) Section 3 of the Original Lease is hereby amended by
deleting therefrom the language "September 30, 1998," and by
inserting in lieu thereof the following language: "December
31, 1997."
(b) The Term of the Original Lease, as amended by Section 3(a),
above, is hereby extended for a period of seven (7) years (the "Extension
Term"), commencing on January 1, 1998 (the "Extension Term Commencement Date"),
and, expiring on December 31, 2004 (the "Extension Term Expiration Date"),
unless earlier terminated in accordance with the terms and conditions of Lease.
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4. Annual Base Rent. From and after the Extension Term Commencement
Date, the "Annual Base Rent" under the Lease shall be in the amounts set
forth on the following schedule:
Annual Base Rent
Per Square Foot Annual Monthly
Time Period Per Annum Base Rent Base Rent
----------- ---------------- --------- ---------
1/1/1998 - 12-31-1998 $24.00 $622,536.00 $51,878.00
1/1/1999 - 12/31/1999 $24.72 $641,212.08 $53,434.34
1/1/2000 - 12/31/2000 $25.46 $660,406.94 $55,033.91
1/1/2001 - 12/31/2001 $26.22 $680,120.58 $56,676.72
1/1/2002 - 12/31/2002 $27.01 $700,612.39 $58,384.37
1/1/2003 - 12/31/2003 $29.01 $752,490.39 $62,707.53
1/1/2004 - 12/31/2004 $29.88 $775,057.32 $64,588.11
From and after the Extension Term Commencement Date, Section 4(b) of the
Original Lease (captioned "Annual Adjustment") shall no longer be of any force
or effect.
5. Operating Expenses. Commencing on the first anniversary of the
Extension Term Commencement Date and continuing therafter for the ramainder of
the Extension Term, Tenant shall pay to Landlord, as Additional Rent, Tenant's
Pro Rata Share of the Operating Expenses incurred during each calendar year of
the Extension Term which are in excess of the Base Amount in accordance with the
terms of Section 4c of the Original Lease, as modified by this First Amendment.
During the Extension Term: (a) the "Base Amount" shall mean the total amount of
Operating Expenses for the Buildings incurred during calendar year 1998; and (b)
Tenant's Pro Rata Share is eleven and eighty-two one-hundredths percent
(11.82%).
6. As-Is Condition. Tenant hereby accepts the Premises in their
"as-is" condition as of the Effective Date, and Landlord shall have no
obligation to make any improvements or alterations of any kind in or to the
Premises in connection with this First Amendment or the Extension Term,
except as otherwise expressly set forth on the Extension Term Work Agreement
attached hereto as Exhibit A and incorporated herein by this reference.
7. Lobby Lincense.
(a) During the Extension Term, the non-exclusive right and lincense
granted to Tenant by Landlord to use the Lobby Space pursuant to Section 2a(ii)
of the Original Lease shall remain in full force and effect, subject to the
terms and conditions of this Section 7. From and after the Extension Term
Commencement Date, Tenant shall pay to Landlord, as Additional Rent for the
Lobby License (the "Monthly Lobby Space Lincense Fee"), the amounts set forth on
the following schedule:
Annual Lobby Monthly Lobby
Time Period Space License Fee Space License Fee
1/1/1998 - 12/31/1998 $2,400.00 $200.00
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1/1/1999 - 12/31/1999 $2,472.00 $206.00
1/1/2000 - 12/31/2000 $2,546.00 $212.17
1/1/2001 - 12/31/2001 $2,662.00 $218.50
1/1/2002 - 12/31/2002 $2,701.00 $225.08
1/1/2003 - 12/31/2003 $2,901.00 $241.75
1/1/2004 - 12/31/2004 $2,988.00 $249.00
(b) Notwithstanding anything contained in this first Amendment or
the Original Lease to the contrary, either Landlord or Tenant shall have the
right to revoke or terminate, as the case may be, the Lobby License at any
time during the Extension Term upon seventy-five (75) days' prior written
notice to the other party. Upon such revocation or termination, Tenant shall
restore the Lobby Space in accordance with the terms and conditions of
Section 8 of the Original Lease. Tenant's failure to pay the Monthly Lobby
Space License Fee shall constitute a default pursuant to Section 16 of the
Original Lease.
8. Security Deposit.
a. Simultaneously with the execution of this First Amendment,
Tenant shall deposit with Landlord, as security (and not prepaid rent) for
the payment of Monthly Base Rent, Monthly Lobby Space License Fee, and for
the faithful performance by Tenant of all other covenants, conditions and
agreements of the Lease, cash in the amount of Fifty-One Thousand Eight
Hundred Seventy-Eight Dollars ($51,878.00) (the "Security Deposit"). The
Security Deposit shall earn interest at the simple rate of interest of three
percent (3%) per annum. If any sum payable by Tenant to Landlord shall be
overdue and unpaid, or if Landlord makes any Payments on behalf of Tenant, or
if Tenant fails to perform any of the Original Lease, as amended by this
First Amendment, then Landlord, at its option and without prejudice to any
other remedy which Landlord may have, may apply all or part of the Security
Deposit to compensate Landlord for the payment of Monthly Base Rent,
Additional Rent or the Monthly Lobby Space License Fee, or any loss or damage
sustained by Landlord. Tenant shall restore the Security Deposit to the
original sum deposited upon demand. Provided that Tenant shall have made all
payments and performed all covenants and agreements of the Lease, the
Security Deposit shall be repaid to Tenant within sixty (60) days after the
expiration of the Extension Term or the vacation of the Premises by Tenant,
whichever is later or as soon thereafter as possible.
b. In the event of the sale or transfer of Landlord's interest in
the Building, Landlord shall transfer the Security Deposit to the purchaser
or assignee, in which event Tenant shall look only to the new Landlord for
the return of the Security Deposit, and Landlord shall there upon be released
from all liability to Tenant for the return of the Security Deposit. Tenant
hereby agrees not to look to the mortgagee, as mortgagee, mortgagee in
possession, or successor in title to the property, for accountability for any
security deposit required by the Landlord hereunder, unless said sums have
actually been received by said mortgagee as security for the Tenant's
performance of the Lease. In the event of any permitted assignment of
Tenant's interest in the Lease, the Security Deposit may, at Landlord's sole
option, be held by Landlord as a deposit made by the assignee, and Landlord
shall have no further liability to any prior Tenant with respect to the
return of the the Security Deposit.
c. The parties acknowledge that upon the receipt by Landlord of
the cash Security Deposit to be deposited by Tenant pursuant to this Section
8,(i) the existing letter of credit held by Landlord as security under the
Original Lease shall be terminated and (ii) the parties hereto shall act
promptly and in good faith to effectuate the termination of the existing
letter of credit.
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9. Parking. As of the Extension Term Commencement Date, Section 22a of
the Original Lease is hereby amended by deleting therefrom the language
"eighteen (18) reserved parking spaces, seven (7) of which shall be located
in the parking garage adjacent to the Buildings, and eleven (11) of which
shall be located on the surface lot adjacent to the Buildings, for use by
Tenant's employees', agents and guests," and by inserting in lieu thereof the
following: "eighteen (18) reserved parking spaces designated as follows: (i)
seven (7) such spaces shall be located in the parking garage adjacent to the
Buildings (which spaces shall be Tenant's existing spaces numbered 62, and
70 through 75), and (ii) eleven (11) such spaces shall be located on the
surface lot adjacent to the Buildings (which spaces shall be Tenant's
existing eleven (11) reserved spaces as of the Effective Date), for use by
Tenant's employees, agents and guests. Notwithstanding the foregoing, in the
event Landlord elects, in its sole discretion, to undertake the development of
a third building on the land on which the Building are located, Landlord
shall have the right to temporarily relocate any or all of such reserved
spaces in Landlord's sole and absolute discretion."
10. Exterior Sign. Landlord shall, at Landlord's sole cost and expense,
remove Tenant's existing sign from the Building and install a new sign (the
dimensions, materials, color and other attributes of which shall be approved
by Landlord in its sole discretion) on the Building at the location set forth
on Exhibit B attached hereto and incorporated herein by this reference (the
"New Exterior Sign"). Tenant shall, at its sole cost and expense, maintain
the New Exterior Sign throughout the Extension Term, and remove same, at
Tenant's sole cost and expense, at the end of the Extension Term hereof,
subject to and in accordance with the terms and conditions of Section 28 of
the Original Lease. Notwithstanding the foregoing, in the event Aetna Life
and Casualty Company ("Aetna") removes its existing sign from the Building,
Tenant, upon prior written notice to Landlord, shall have the right, at its
sole expense, to relocate the New Exterior Sign to the location occupied by
the Aetna sign (the "Aetna Sign Location"). The relocation of the New
Exterior Sign by Tenant to the Aetna Sign Location shall be subject to and in
accordance with the terms and conditions of Section 28 of the Original Lease.
11. Air Quality of Premises. Tenant has determined that the quality and
quantity of air flow in the Premises is acceptable. During the Extension
Term, Landlord shall not be obligated to perform air quality testing in or to
the Premises. Tenant, on behalf of itself and its officers, directors,
employees, agents representatives, contractors, licensees and invitees,
hereby releases, relinquishes,and waives its rights to do so, and any and all
claims, suits, damages and actions in law or in equity which it had, has, or
may hereafter have against Landlord and its officers, directors,
shareholders, employees, subsidiaries, affiliates, agents, representatives,
attorneys predecessors, successors and assigns, arising out of or based upon,
or in any manner connected with the quality or quantity of air flow in the
Premises. In the event that any claim is made against Landlord during the
Extension Term by Tenant, its officers, directors, employees, agent,
representatives, contractors, licensees or invitees, arising out of or based
upon, or in any manner connected with the quantity or quality of air flow in
the Premises, Tenant shall indemnify Landlord in accordance with Section 11
of the Original Lease, unless the liability from such claims is conclusively
deemed by a court of competent jurisdiction (after exhaustion of any and all
appeal processes) to be as a direct result of an immediate and demonstrable
health problem in the Premises or as a direct result of the violation of any
health ordinances governing the Premises. The provisions of this Paragraph
11 shall survive the transactions contemplated herein or any termination of
the Lease.
12. Additional Modifications.
(a) Effective as of the Extension Term Commencement Date, Section
4c(iii) of the Original Lease is hereby amended by adding the following
language to the end thereof: "Notwithstanding the foregoing, Landlord's right
to increase Operating Expenses in the event of a "Special Tenant" shall only
be applicable if there were no Special Tenants during the Base Year."
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(b) As of the Effective Date, the Original Lease is hereby amended
by adding thereto a new Section 30. which reads as follows:
"30. ENVIRONMENTAL CONCERNS.
A. Tenant, its agents. employees, contractors or invites
shall not (i) cause or permit any Hazardous Materials
(hereinafter defined) to be brought upon, stored, used or
disposed on, in or about the Premises and/or the Building, or
(ii) knowingly permit the release, discharge, spill or
emission of any Hazardous Material in or from the Premises.
B. Tenant hereby agrees that it is and shall
be fully responsible for all costs,expenses, damages or
liabilities (including, but not limited to those incurred by
Landlord and/or its mortgagee) which may occur from the use,
storage, disposal, release, spill, discharge or emissions of
Hazardous Materials by Tenant whether or not the same may be
permitted by this Lease. Tenant shall defend, indemnify and
hold harmless Landlord, its mortgagee and its agents from and
against any claims, demands, administrative orders, judicial
orders, penalties, fines, liabilities, settlements, damages,
costs or expenses (including, without limitation, reasonable
attorney and consultant fees, court costs and litigation
expenses) of whatever kind or nature, known or unknown,
contingent or otherwise, arising out of or in any way related
to the use, storage, disposal, release, discharge, spill, or
emission of any Hazardous Material, or the violation of any
Environmental Laws, by Tenant, its agents, employees,
contractors or invites. The provisions of this Section 30
shall be in addition to any other obligations and liabilities
Tenant may have to Landlord at law or in equity and shall
survive the transactions contemplated herein or any
termination of this Lease.
C. As used in this Lease, the term 'Hazardous Materials' shall
include, without limitation:
(i) Those substances included within the definitions of
'hazardous substances,' 'hazardous materials,' 'toxic
substances,' or 'solid waste' in the Comprehensive
Environmental Response Compensation and Liability Act of 1980
(42 U.S.C. Section 9601 et seq.) ('CERCLA'), as amended by
Superfund Amendments and Reauthorization Act of 1986 ('XXXX'),
the Resource Conservation and Recovery Act of 1976 ('RCRA'),
and the Hazardous Materials Transportation Act, and in the
regulations promulgated pursuant to said laws, all as amended;
(ii) Those substances listed in the United States Department
of Transportation Table (49 CFR 172.101 and amendments
thereto) or by the Environmental Protection Agency (of any
successor agency) as hazardous substances (40 CFR Part 302 and
amendments thereto); and
(iii) Any material, waste or substance which is (A)
petroleum, (B) asbestos, (C) polychlorinated biphenyl, (D)
designated as a 'hazardous substance' pursuant to Section 311
of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33
U.S.C. Section 1321) or listed pursuant to the Clean Water Act
(33 U.S.C. Section 1317); (E) flammable explosives; or (F)
radioactive materials.
D. All federal, state or local laws, statutes,
regulations, rules, ordinances, codes, standards, orders,
licences and permits of any governmental authority identified
in
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Section 30.C. above, or issued or promulgated thereunder
shall be referred to as the 'Environmental Laws.'
E. Landlord or its employees shall not (i) intentionally cause
or knowingly permit any Hazardous Materials (hereinafter
defined) to be brought upon, stored, used or dispose on, in or
about the Building, or (ii) knowingly permit the release,
discharge, spill or emission of any Hazardous Materials in the
Building. Landlord shall defend, indemnify and hold harmless
Tenant from and against any claims, demands, administrative
orders, judicial orders, penalties, fines, liabilities,
settlements, damages, costs or expenses (including without
limitation reasonable attorney's fees), arising out of the
use, storage, disposal, release, discharge, spill or emission
by Landlord of any Hazardous Material at the Building."
13. Brokers. Tenant represents and warrants to Landlord that neither it
nor its officers or agents nor anyone acting on its behalf has dealt with any
real estate brokers in connection with this First Amendment other than LPC
Commercial Services, Inc., as Landlord's agent, and The Xxxx Ezra Company, as
Tenant's agent (the "Brokers") to whom any commissions due shall be paid by
Landlord. Tenant agrees to indemnify and hold harmless Landlord from the
claim or claims of any broker or brokers (other than the Brokers) with whom
it is ultimately determined that Tenant has dealt in violation of the
foregoing representations and warranties.
14. Counterpart Copies. This First Amendment may be executed in two (2)
or more counterparts shall have the same force and effect as if all parties
hereto had executed a single copy of this First Amendment.
15. Miscellaneous. This First Amendment (a) shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors, representatives, executors, administrators, transferees and
assigns (except as expressly otherwise provided in the Lease) and (b) shall
be governed by and construed in accordance with the laws of the Commonwealth
of Virginia.
16. Ratification. Except as expressly amended by this First Amendment,
all other terms, conditions and provisions of the Lease are hereby ratified
and confirmed and shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to Deed of Lease under seal as of the day and year first
hereinabove written.
LANDLORD:
ATTEST: XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
/s/ By /s/ Xxxx X. Xxxxxxxx
------------------------ ----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Investment Officer
Xxxx Xxxxxxx Mutual
Life Ins. Co.
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TENANT:
ATTEST: QUESTECH, INC.
/s/ By /s/ X.X. Xxxxxxxxx
----------------------- -----------------------------
Name: X.X. Xxxxxxxxx
Title: Chairman and CEO
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EXHIBIT A
EXTENSION TERM WORK AGREEMENT
This Extension Term Work Agreement (this "Work Agreement") is attached to
and made a part of that certain First Amendment to Deed of Lease (the "First
Amendment") made effective as of December 31, 1997, by and between Xxxx
Xxxxxxx Mutual Life Insurance Company, as landlord ("Landlord") and Questech,
Inc., as tenant ("Tenant") for the premises (the "Premises") described in
that certain Deed of Lease dated March 14, 1995 (the "Original Lease") in the
office building located at 0000-Xxxx Xxxxxxxx Xxxx, Xxxxx Xxxxxx, Xxxxxxxx
(the "Building"). It is the intent of this Work Agreement that Tenant shall
be permitted freedom in the design and layout of the Premises, consistent
with applicable building codes and requirements of law, including without
limitation the Americans With Disabilities Act, and with sound architectural
and construction practice in first-class office buildings, provided that
neither the design nor the implementation of the Tenant Improvements
(hereinafter defined) shall cause any interference to the operation of the
Building's mechanical, plumbing, life safety, electrical or other systems or
to other Building operations or functions, nor shall they increase
maintenance or utility charges for operating the Building. Capitalized terms
not otherwise defined in this Work Agreement shall have the meanings set
forth in the Original Lease, as amended by the First Amendment. In the event
of any conflict between the terms hereof and the terms of the Original Lease,
as amended by the First Amendment, the terms hereof shall prevail for the
purposes of design and construction of the Tenant Improvements.
A. LEASEHOLD IMPROVEMENTS. All construction, improvements or
alterations required by Tenant in the Premises during the Extension Term
("Tenant Improvements") shall be undertaken by Tenant, at Tenant's sole cost
and expense, subject to the application of the Improvement Allowance
(hereinafter defined), in strict accordance with the terms of this Work
Agreement.
B. PLANS AND SPECIFICATIONS
1. Space Planner. Tenant may employ the services of Landlord's
space planner to prepare space plans and working drawings and specifications
for the Tenant Improvements, or Tenant may employ other professional space
planning and architectural assistance. If Tenant elects to use a design
consultant or architect other than Landlord's designated design consultants,
Tenant shall obtain Landlord's prior written approval, which approval shall
not be unreasonably withheld. (The design consultant or architect employed by
Tenant shall be referred to herein as the "Space Planner.") If Tenant elects
to use Landlord's space planner, Tenant shall devote such time in
consultation with Landlord's space planner as shall be necessary to enable
the latter to complete the Tenant's Plan (hereinafter defined) and submit
same to Landlord for its review and approval as specified below. If Tenant
elects to use its own space planning professionals, Tenant's Plan shall be
prepared in accordance with the building standard format for working drawings
and with information furnished by and coordination with Landlord's space
planner and structural, mechanical, electrical and plumbing engineers. Tenant
shall be solely responsible for all fees and costs of the Space Planner,
regardless of whether or not such Space Planner is Landlord's design
consultant, subject however to the application of the Improvement Allowance.
2. Time Schedule. Landlord and Tenant shall adhere to the
following schedule:
a. Tenant shall furnish to Landlord for Landlord's review and
approval a proposed preliminary space plan (the "Preliminary Plan") prepared
by the Space Planner showing the general layout of the Premises upon
completion of the Tenant Improvements. The Preliminary Plan shall contain the
information and otherwise comply with the requirements therefor described in
Schedule A-1 attached hereto. Landlord shall advise Tenant of Landlord's
approval or disapproval of Tenant's Preliminary Plan within ten
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Exhibit A, Page 2
(10) business days after Tenant submits the Preliminary Plan to Landlord.
Tenant shall revise the proposed Preliminary Plan to meet Landlord's
objections, if any, and resubmit the Preliminary Plan to Landlord for its
review and approval promptly after Landlord notifies Tenant of Landlord's
objections, if any. Landlord shall respond to any revised Preliminary Plan
submitted by Tenant within seven (7) business days after its submission.
b. Promptly after Landlord has approved the Preliminary Plan,
Tenant shall furnish to Landlord for its review and approval a proposed
detailed space plan for the Tenant Improvements (the "Final Space Plan")
prepared by the Space Planner, substantially in conformance with the
Preliminary Plan approved by Landlord. The Final Space Plan shall contain the
information and otherwise comply with the requirements therefor described in
Schedule A-2 attached hereto. Landlord shall advise Tenant of Landlord's
approval or disapproval of the Final Space Plan within ten (10) business days
after Tenant submits the Final Space Plan to Landlord. Tenant shall revise
the proposed Final Space Plan to meet Landlord's objections, if any, and
resubmit the Final Space Plan to Landlord for its review and approval promptly
after Landlord notifies Tenant of Landlord's objections, if any. Landlord
shall respond to any revised Final Space Plan submitted by Tenant within
seven (7) business days after its submission.
c. Promptly after Landlord approves of the Final Space Plan,
Tenant shall furnish to Landlord for its review and approval all
architectural plans, working drawings and specifications (the "Contract
Documents") for the construction of the Tenant Improvements in the Premises
in accordance with the Final Space Plan. The Contract Documents shall include
without limitation the final mechanical, electrical, plumbing, life-safety and
structural plans and specifications for the Premises and all final
architectural plans, working drawings and specifications for the Tenant
Improvements. The Contract Documents shall comply with the requirements
described in Schedule A-3 attached hereto, and they shall be sufficient in
form and substance to enable the Contractor (hereinafter defined) to obtain a
building permit for the construction of the Tenant Improvements. Landlord
shall advise Tenant of Landlord's approval or disapproval of the Contract
Documents, or any of them, within fifteen (15) business days after Tenant
submits the Contract Documents to Landlord. Tenant shall revise the Contract
Documents to meet Landlord's objections, if any, and resubmit the Contract
Documents to Landlord for its review and approval promptly after Landlord
notifies Tenant of Landlord's objections, if any. Landlord shall respond to
any revised Contract Documents submitted by Tenant within ten (10) business
days after their submission.
d. The Preliminary Plan, the Final Space Plan and the
Contract Documents are referred to collectively herein as the "Tenant's Plan."
e. The Tenant's Plan shall comply with all applicable
building codes, laws and regulations (including without limitation the
Americans with Disabilities Act), shall not interfere with or require any
changes to or modifications of the base Building's mechanical, electrical,
plumbing or other systems or to other Building operations or functions, and
shall not increase maintenance or utility charges for operating the Building
in excess of the standard requirements for normal first-class office
buildings. Landlord's approval of the Tenant's Plans shall constitute
approval of tenant's design concept only and approval of the Tenant's Plans
shall in no event be deemed to be a representation or warranty by Landlord
as to whether the Tenant's Plans comply with any and all legal requirements
applicable to the Tenant's Plans the the Tenant's Improvements. Tenant hereby
agrees to indemnify and hold Landlord and its agents, officers, directors,
and employees harmless from and against any cost, damage, claim, liability or
expense (including attorneys' fees) incurred by or claimed against Landlord
and its agents, officers, directors and employees, directly or indirectly,
96
Exhibit A, Page 3
as a result of or in any way arising from the failure of the Tenant's Plans to
comply with the requirements set forth above.
3. Base Building Changes. If Tenant requests work to be done in
the Premises or for the benefit of the Premises that necessitates revisions or
changes in the design or construction of the base Building or Building
systems, any such changes shall be subject to prior written approval of
Landlord, in its sole discretion, and Tenant shall be responsible for all
costs and delays resulting from such design revisions or construction changes,
including architectural and engineering charges, and any special permits or
fees attributed thereto. Before Landlord shall order such design and/or
construction changes to be made, Tenant shall pay to Landlord the full cost of
such changes.
4. Changes. If there are any changes requested by Tenant, after
Landlord's approval of Tenant's Plan in accordance with the schedule set forth
above, each such change must be approved by Landlord and paid for by Tenant as
requested below. Tenant shall be responsible for all architectural and
engineering costs and delivery resulting from such changes.
C. COST OF TENANT IMPROVEMENTS
1. Construction Costs. All costs of design and construction of the
Tenant Improvements, including without limitation the costs of all space
planning, architectural and engineering work related thereto, all governmental
and quasi-governmental approvals and permits required therefor, the cost to
install the Tenant Improvements by the Contractor (hereinafter defined), all
other direct and indirect construction costs, including the installation costs
associated with Tenant's telephone systems and local area network, wiring
throughout the Premises, and the Construction Supervision Fee (hereinafter
defined) (collectively, "Construction Costs"), shall be paid by Tenant,
subject, however, to the application of (i) the Improvement Allowance
described in Paragraph C.2 below, not previously disbursed pursuant to this
Work Agreement (the "Available Allowance") below.
2. Improvement Allowance. Provided that Tenant has fully performed
all of its obligations under this Work Agreement and the Original Lease, as
amended by the First Amendment, Landlord agrees to provide to Tenant an
allowance (the "Improvement Allowance") in the amount of Two Hundred Seven
Thousand Five Hundred Twelve Dollars ($207,512.00) (or Eight Dollars ($8.00)
per rentable square foot of the Premises), to be applied solely to the
Construction Costs; provided, however, that Tenant shall only be permitted to
use (i) up to Twenty-Five Thousand Nine Hundred Thirty-Nine Dollars
($25,939.00) of the Improvement Allowance to defray the cost of installation
for Tenant's telephone systems and local area network wiring and (ii) up to
Seventy-Seven Thousand Eight Hundred Seventeen Dollars ($77,817.00) of the
Improvement Allowance to defray the cost of all space planning, architectural
and engineering work related to the Tenant Improvements. Landlord shall pay,
in addition to the Tenant Allowance, Two Thousand Five Hundred Ninety-Three
Dollars ($2,593.00)(or ten cents ($0.10) per rentable square foot of the
Premises) to defray the cost of all space planning, architectural and
engineering work related to the Tenant Improvements. Subject to the
provisions of Paragraph C.3, below, the Construction Costs shall be paid by
Landlord to the extent of, and shall be deducted by Landlord from, the
Available Allowance, as invoices therefor are rendered to Landlord as and when
Construction Costs are actually incurred by Tenant; provided, however, that
Landlord shall have received partial lien waivers and such other documentation
as Landlord may reasonably require from the party requesting such payment, and
Tenant shall have satisfied all of the other conditions set forth in Paragraph
C.3, below. In the event that Tenant does not expend all or any portion of the
Improvement
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Exhibit A, Page 4
Allowance for costs expressly permitted hereunder within twelve (12) months
after the Extension Term Commencement Date, the unused portion of the
Improvement Allowance shall be retained by Landlord.
3. Disbursement of Improvement Allowance. Disbursement of the
Improvement Allowance shall be subject to the following conditions:
a. Once each calendar month, Tenant shall present to Landlord
separate requests for payment for the Tenant Improvements work (the "Draw
Request") which have been completed to date; provided that (i) the final Draw
Request may be submitted immediately upon completion of the Tenant
Improvements, and (ii) the conditions set forth in Paragraph C3(c), below,
shall be satisfied. Each Draw Request shall include Tenant's certification
that the Tenant Improvements covered thereby have been satisfactorily
completed, and shall be substantiated by original invoices for such work,
along with partial lien waivers with respect thereto. At Landlord's election,
such Draw Requests shall also include a confirmation by the Construction
Supervisor (hereinafter defined) that the Tenant Improvements for which
payment is requested have been completed in conformity with the Tenant's Plan;
provided that such confirmation (1) shall not be considered an assurance by
Landlord that such Tenant Improvements are in conformance with the Tenant's
Plan or applicable code requirements; and (2) shall not preclude Landlord from
subsequently asserting that the Tenant Improvements (or any part thereof)
deviate from the Tenant's Plan or applicable code requirements. Within thirty
(30) days of Landlord's receipt of a complete and correct Draw Request,
Landlord shall make payment to the Contractor, subject as hereinafter provided.
b. All Draw Requests covering construction work shall be
accompanied by the AIA Application and Certificate for Payment (AIA Documents
G702 and G703), certified by the Space Planner, and covering only such work as
is actually installed in the Premises. All Certificates for Payment shall
include full, partial, or conditional releases of lien, as the case may be,
and other such documentation as the Landlord may reasonably request. Prior to
substantial completion of the Tenant Improvements, all Certificates for
Payment shall include retainage of not less than ten percent (10%) of the
value of the work in place, until fifty percent (50%) of the work has been
completed, whereupon, at Landlord's discretion, there shall be no further
retainage withheld; provided however that if Landlord determines that
construction problems have arisen thereafter, Landlord shall require that a
retainage of five percent (5%) of the value of the work in place be withheld
from future payments.
c. Landlord shall not disburse the final ten percent (10%) of
the Improvement Allowance until Landlord has received a final Draw Request
accompanied by final lien waivers and/or other evidence reasonably
satisfactory to Landlord that all contractors, workers, material and service
suppliers and all other persons having claims against Tenant for payment of
work done or material or services supplied in connection with the Tenant
Improvements have been paid in full, and (ii) final plans, specifications and
drawings for all work in place, including changes to or deviations from the
Tenant's Plan approved by Landlord.
d. In the event that a Default is then occurring under the
Original Lease, as amended by the First Amendment, Landlord shall have no
obligation to make any payment of the Improvement Allowance, until such time
as the Default has been cured by Tenant.
e. Landlord shall have the right, but not an obligation, to
pay any contractor, workers, material and service supplier, and all other
persons who have performed work or supplied material
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Exhibit A, Page 5
or service in connection with the Tenant Improvements if Tenant has failed to
do so, and Tenant shall pay Landlord on demand the amount Landlord has so
paid.
5. Costs Exceeding Available Allowance. All Construction Costs
in excess of the Available Allowance shall be paid by Tenant within ten (10)
business days of receipt by Tenant of invoices therefor.
D. CONSTRUCTION
1. Selection of Tenant's Contractor. Once Landlord has approved the
Tenant's Plan, Tenant shall prepare a bid package in order to obtain a fixed
price bid for the construction of the Tenant Improvements (the "Bid
Package"), which Bid Package shall be subject to Landlord's approval in its
reasonable discretion. Tenant shall submit the Bid Package to three (3) of
the following general contractors: Xxxxxx Construction; G&F Construction; and
Xxxxxxxxxxx Construction Corporation (the "Approved Contractors"). Once
Tenant has received from the Approved Contractors bids for the construction
of the Tenant Improvements, Tenant shall select the contractor to undertake
the Tenant Improvements (the "Contractor") from among the Approved
Contractors.
2. Construction Supervision. All of the Tenant Improvements shall
be performed by the Contractor. Landlord shall retain the services of LPC
Commercial Services, Inc. ("Construction Supervisor") to act as Landlord's
construction supervisor in connection with the construction of the Tenant
Improvements, and Tenant shall pay the Construction Supervisor a construction
supervision fee ("Construction Supervision Fee") in the amount of Six
Thousand Two Hundred Twenty-Five Dollars ($6,225.00), to cover the costs of
coordination and supervision of the Tenant Improvements. The Construction
Supervision Fee shall be deducted by Landlord from the Improvement Allowance.
3. Construction by the Contractor. In undertaking the Tenant
improvements, Tenant and the Contractor shall comply with the following
conditions:
a. No work shall proceed without Landlord's prior written
approval (which shall not be unreasonably withheld, conditioned or delayed)
of which (i) each of Tenant's subcontractors, and (ii) compliance by Tenant
and the Contractor with the insurance requirements set forth below:
b. All work shall be performed in conformity with (i) the
final approved Tenant's Plan, (ii) all applilcable codes and regulations of
governmental authorities having jurisdiction over the Building and the
Premises, (iii) valid building permits and other authorizations from
appropriate governmental agencies, when required, which shall have been
obtained at Tenant's sole expense, and (iv) Landlord's construction policies,
rules and regulations attached hereto as Schedule A-4, as the same may be
modified by Landlord from time to time ("Construction Rules"). Any work not
acceptable to the appropriate governmental agencies or not reasonably
satisfactory to Landlord shall be promptly corrected or replaced at Tenant's
expense. Notwithstanding any failure by Landlord to object to any such work,
Landlord shall have no responsibility therefor; and
c. Before any work is commenced or the Contractor's equipment
is moved onto any part of the Building or the Land, the Contractor and all
subcontractors shall deliver to Landlord policies or certificates evidencing
the following types of insurance coverage in the following minimum amounts,
which policies shall be issued by companies approved by Landlord, shall be
maintained by Tenant and the Contractor
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Exhibit A, Page 6
at all times during the performance of the Tenant Improvements, and which
shall name Landlord, its managing agent, and any other persons having an
interest in the Building as additional insureds as their interest may appear:
(1) Worker's compensation coverage as required by law and
employers liability coverage, including without limitation bodily injury
caused by disease with a limit of $250,000.00 per employee;
(2) Commercial general liability policy to include,
without limitation, completed operations, property damage, independent
contractor's and personal injury coverage with limits in an amount of not
less than $3,000,000.00 Combined Single Limit;
(3) Automobile liability coverage, with bodily injury
limits of at least $1,000,000.00 per accident; and
(4) All insurance required pursuant to Section 12 of the
Lease.
Dependent on the scope of work to be performed at the Premises, Landlord
shall have the right to require increased limits or broader coverages as
Landlord reasonably deems appropriate.
5. Landlord Inspection. Landlord and its representatives are
authorized by Tenant to make periodic inspections of the Premises during
contruction of the Tenant Improvements, and to discuss with the Contractor,
and all subcontractors performing work in connection with the Tenant
Improvements, anything having to do with the Tenant Improvements, the
Premises, the Building and/or the base Building systems.
X. XXXXX BY TENANT. No delay by Tenant in completing the Tenant
Improvements shall delay or otherwise effect (1) the Extension Term
Commencement Date; or (2) Tenant's obligation to pay Annual Base Rent on and
the Monthly Lobby Space License Fee from and after the Extension Term
Commencement Date.
F. TENANT'S AGENT. Tenant hereby designates Xxxxxx X. Xxxxxxx, III., whose
address is 0000-Xxxx Xxxxxxxx Xxxx, Xxxxx Xxxxxx, Xxxxxxxx and whose
telephone number is (000) 000-0000, who may act as its agent for purposes of
authorizing and executing any and all documents, work orders or other
writings and changes thereto needed to effect the terms of this Work
Agreement, and any and all changes, additions or deletions to the work
contemplated herein. Tenant's Agents shall have full power and authority to
bind Tenant to all actions taken with regard to the Tenant Improvements and
Landlord shall have the right to relay on any documents executed by such
authorized party.
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Exhibit A, Page 7
LIST OF SCHEDULES
Schedule A-1 Preliminary Plan
Schedule A-2 Requirements for Final Space Plan
Schedule A-3 Requirements for Contract Documents
Schedule A-4 Construction Rules and Regulations
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SCHEDULE A-1
REQUIREMENTS FOR PRELIMINARY PLAN
Preliminary layout plans, drawings and specifications (together with related
information for structural design work) (three (3) sets), including without
limitation the following information:
a. partitions, location of doors, location of lighting fixtures
and special requirements (such as additional plumbing pipes in
the Premises);
b. locations, dimensions and structural design of all
penetrations of the floor slab requiring structural framing if
any; and
c. locations and structural design of all floor area requiring dead
load capacities in excess of 60 pounds per rentable square foot
and live load capacities excess of 15 pounds per rentable square
foot, if any.
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SCHEDULE A-2
REQUIREMENTS FOR FINAL SPACE PLAN
Floor plans, together with related information for mechanical, electrical
and plumbing design work showing partition arrangement and reflected ceiling
plans (three (3) sets), including without limitation the following
information:
a. identify the location of conference rooms and density of occupancy;
b. indicate the density of occupancy for all rooms;
c. identify the location of any food service areas or vending equipment
rooms;
d. identify areas, if any, requiring twenty-four (24) hour air
conditioning;
e. indicate those partitions that are to extend from floor to underside
of structural slab above or require special acoustical treatment;
f. identify the location of rooms for and layout of, telephone
equipment other than building core telephone closet;
g. identify the locations and types of plumbing required for toilets
(other than core facilities), sinks, drinking fountains etc.;
h. indicate light switches of offices, conference rooms and all other
rooms in the Premises;
i. indicate the layouts for specially installed equipment, including
computer and duplicating equipment, the size and capacity of
mechanical and electrical services required and head rejection of
the equipment;
j. indicate the dimensioned location of : (A) electrical receptacles
(one hundred twenty (120) volts), including receptacles for wall
clocks and telephone outlets and their respective locations (wall to
floor), (B) electrical receptacles for use in the operation of Tenant's
business equipment which requires two hundred eight (208) volts or
separate electrical circuits, (c) electronic calculating and CRT
systems, etc. and (D) special audio-visual requirements;
k. indicate proposed layout of sprinkler and other life safety and fire
protection equipment, including any special equipment (e.g. Halon) and
raised flooring;
l. indicate the swing of each door;
m. indicate a schedule for doors and frames complete with hardware if
applicable; and
n. indicate any special file systems to be installed.
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SCHEDULE A-3
REQUIREMENTS FOR CONTRACT DOCUMENTS
Final architectural detail and working drawings, finish schedules and related
plans (three (3) reproducible sets) including without limitation the
following information and/or meeting the following condition:
a. materials, colors and designs of wallcoverings; floor coverings and
window coverings and finishes;
b. paintings and decorative treatment required to complete all
construction;
c. complete, finished, detailed mechanical, electrical, plumbing and
structural plans and specifications with respect thereto for the
Initial Improvements, including but not limited to the Building's
base mechanical systems;
d. all final drawings and blueprints must be drawn to a scale of
one-eighth (1/8) inch to one (1) foot.
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SCHEDULE A-4
CONSTRUCTION RULES AND REGULATIONS
1. Contractors and construction personnel will use loading dock area for all
deliveries and will not use loading dock for vehicle parking.
2. No utilities (electricity, water, gas, plumbing) or services to the
tenants are to be cut off or interrupted without first having requested, in
writing, and secured, in writing, the permission of Landlord.
3. Contractors will remove their trash and debris daily, or as often as
necessary to maintain cleanliness in the building. Building trash containers
are not to be used for construction debris. Landlord reserves the right to
xxxx Tenant for any cost incurred to clean up debris left by the Contractor
or any subcontractor. Further, the building staff is instructed to hold the
driver's license of any employee of the contractor while using the freight
elevator to ensure that all debris is removed from the elevator.
4. The Contractor will supply Landlord with a copy of all permits prior to
the start of any work.
5. The Contractor will post the building permit on a wall of the
construction site while work is being performed.
6. Public area corridors and carpet are to be protected by plastic runners
or a series of walk-off mats from the elevator to the suite under
reconstruction.
7. Walk-off mats are to be provided at entrance doors. Protection of
hallway carpets, wall coverings, and elevators from damage with masonite
board, carpet, cardboard, or pads is required.
8. Landlord will be notified of all work schedules of all workmen on the job
and will be notified, in writing, of names of those who may be working in the
building after "normal" business hours.
9. Passenger elevators shall not be used for moving building materials and
shall not be used for construction personnel. The designated freight
elevator is the only elevator to be used for moving materials and
construction personnel. This elevator may be used only when it is completely
protected as determined by Landlord's building engineer.
10. Contractors will be responsible for daily removal of waste foods, milk
and soft drink containers, etc. to trash room and will not use any Building
trash receptacles but trash receptacles supplied by them.
11. No building materials are to enter the Building by way of main lobby, and
no materials are to be stored in any lobbies at any time.
12. Construction personnel are not to eat in the lobby or in front of the
Building nor are they to congregate in the lobby or in front of the Building.
There will be no smoking, eating, or open food containers in the elevators,
carpeted areas or public lobbies.
13. Landlord is to be contacted by any tenant when work is completed for
inspection. All damage to Building will be determined at that time.
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Schedule A-4, Page 2
14. All key access, fire alarm work, or interruption of security hours must
be arranged with Landlord's Building engineer.
15. There will be no radios allowed on job site. All workers are required to
wear a shirt, shoes, and full length trousers. There will be no yelling or
boisterous activities. There will be no alcohol or controlled substances
allowed or tolerated.
16. Public spaces-- corridors, elevators, bathrooms, lobby etc.-- must be
cleaned immediately after use. Construction debris or materials found in
public areas will be removed at Tenant's cost.
17. All construction materials or debris must be stored within the Premises
or in an approved lock-up.
18. All contractors hired by Tenant to undertake work in the Premises shall
be licensed and bonded in the District of Columbia. Tenant shall indemnify
Landlord, its managing agent, Mortgagee and their agents, against all
claims, damage, injury or loss (including without limitation reasonable
attorneys fees) arising out of the presence of, or work undertaken by, any
contractor, subcontractor or materialmen hired by Tenant to undertake work
and/or install equipment in the Premises, and Tenant shall require in
writing, all of its contractor(s) and sub-contractor(s) to indemnify and hold
such parties harmless from all claims, damage, injury and loss (including
without limitation reasonable attorneys fees) which may or might arise by
reason of the actions or omissions of said contracting parry, its agents or
in the performance of construction work in the Premises.
19. Tenant's contractors shall not post any signs on any part of the Building
on the Premises.
20. Tenant's contractors shall at all times ensure that work is performed so
as to avoid disruption of the business of the Building or its tenants.
21. All Tenant's materials, work, installations and decorations of any nature
brought upon or installed in the Premises shall be at Tenant's risk, and
neither Landlord nor any party acting on Landlord's behalf shall be
responsible for any damage thereto or loss or destruction thereof.
22. Tenant shall award its contracts and conduct its activities hereunder in
a manner consistent with Landlord's contractors' labor agreement affecting
the Building.
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