OFFICE LEASE
AGREEMENT
Between
MOTOR CITY DRIVE,
LLC
a Maryland
Limited Liability Company
and
GENEX TECHNOLOGIES,
INC.
3,10,1820,24,rr
TABLE OF
CONTENTS
1.
DEMISED PREMISES
2.
TERM
3.
USE
4.
MINIMUM RENT
5.
RENT ABATEMENT
6.
TAXES AND OPERATING EXPENSES; ADDITIONAL
RENT
7.
SECURITY DEPOSIT
8.
RULES AND REGULATIONS
9.
SERVICES
10.
INDEMNIFICATION
11.
PUBLIC LIABILITY INSURANCE
12.
FIRE OR OTHER CASUALTY
13.
EMINENT DOMAIN
14.
ALTERATIONS
15.
MAINTENANCE
16.
COMPLIANCE WITH LAWS
17.
MECHANIC'S LIENS
18.
SIGNS; ADVERTISEMENTS
20.
ENTRY FOR REPAIRS AND
INSPECTIONS
21.
PARKING AND COMMON AREAS
22.
OTHER COVENANTS OF TENANT
23.
OTHER MUTUAL COVENANTS
24.
DEFAULTS; REMEDIES
25.
SUBORDINATION
26.
LANDLORD'S RIGHT TO CURE TENANT'S
DEFAULT
27.
ESTOPPEL STATEMENT
28.
BANKRUPTCY
29.
WAIVER OF JURY TRAIL
30.
HOLDING OVER
31.
FIRST RIGHT TO LEASE
33.
MISCELLANEOUS
34.
CAPTIONS
35.
BENEFIT AND BURDEN
36.
SEVERABILITY
37.
GOVERNING LAW
38.
NO PARTNERSHIP
39.
OTHER RIGHTS OF LANDLORD
EXHIBIT A
Demised Premises Floor
Plan
EXHIBIT B
Rules &
Regulations
EXHIBIT C
Cleaning
Specifications
EXHIBIT D
Description of Initial
Alterations
2
LEASE
THIS LEASE made and entered into as of
this 20th day of December, 2005 by and between MOTOR CITY DRIVE,
LLC , a Maryland Limited Liability Company and owner of the
real property and the Building situated thereon located at 10411
Motor City Drive, Bethesda, Maryland, 20817, called "LANDLORD" and
Genex Technologies, Inc , a ______________
,
called "TENANT".
WITNESSETH THAT, for in consideration of
the rents and mutual covenants and agreements hereinafter
stipulated and intending to be legally bound, the parties do hereby
mutually agree as follows:
1.
DEMISED PREMISES
Landlord does hereby lease and demise to
Tenant, and Tenant does hereby hire and take from Landlord, upon
and subject to the terms and conditions of this Lease, a portion of
the Building known as The Vaswani Place, Suite ______,10411 Motor
City Drive, Bethesda, Maryland, 20817 (the "Building"), consisting
of approximately 6,846 rentable square feet, which shall be
measured in accordance with the April 2001 Greater Washington
Association of Realtors standard method of measurement, of office
space on the 6th floor as more fully described on the floor plan
attached hereto as "Exhibit A" attached to the Lease and forming a
part hereof (hereinafter referred to as the "Demised Premises"),
and which measurement shall be confirmed by Landlord and adjusted
if necessary. Tenant shall accept possession of the Premises
in its "AS IS" condition, subject only to the substantial
completion by Landlord of the Landlord Work (as such term is
defined in Exhibit D attached hereto).
2.
TERM
A.
The term of this Lease (the
“Term”) shall commence on the date, which is the later
of (x) January 1, 2006, or (y) the date upon which substantial
completion of the Landlord Work shall occur (the later of such date
being the “Lease Commencement Date”). Unless
sooner terminated in accordance with the provisions of this Lease,
including without limitation the proper exercise by Tenant of
Tenant’s Special Cancel Right, the Term shall end on the last
day of the sixtieth (60 th ) full calendar month
following the Lease Commencement Date, provided however that if the
Lease Commencement Date shall be the 1 st day of a
month, then the Term shall end on midnight preceding the fifth
anniversary of the Lease Commencement Date. In the event the
Lease Commencement Date shall occur on other than the first day of
a calendar month, the first month’s rent shall be pro-rated
for such month based upon a thirty (30) day month.
Tenant shall have the right to begin its
relocation into the demised premises without the commencement of
rental obligations, two (2) weeks prior to the agreed upon Lease
Commencement Date, so long as beneficial use does not commence and
the Tenant further agrees not to interfere with the construction or
permitting process. Tenant’s consultants shall have
access to the Premises prior to partition close-in to install
cabling and wiring prior to the partition close-in to install
cabling and wiring prior to partitions being enclosed and for the
purpose of inspecting the work in progress.
3.
USE
Tenant will use and occupy the Demised
Premises solely for general office purposes, consistent and
compatible with the character and quality of the Building.
Tenant agrees not to use the Demised Premises for any
purpose, which interferes with the use and enjoyment of the
Building by other Tenants occupying space therein or which would
increase the premiums for insurance coverage payable by Landlord in
respect of the Building or degrade the public image of the
Building.
4.
MINIMUM RENT
A.
Tenant covenants and agrees during the
Term to pay to Landlord as minimum annual rent (the “Base
Rental”) for the Demised Premises the following amounts and
at the following times:
|
Lease Year
|
Minimum Annual Base
Rental
|
Monthly Installment of Minimum
Annual Base Rental
|
|
1
|
$171,150.00
|
$14,262.50
|
|
2
|
$176,284.50
|
$14,690.38
|
|
3
|
$181,573.04
|
$15,131.09
|
|
4
|
$187,020.23
|
$15,585.02
|
|
5
|
$192,630.83
|
$16,052.57
|
Each such monthly installment shall be
paid on the first day of each month of the Term hereof commencing
with the first month of the Term. The Base Rental schedule
contained in this Article 4A reflects an annual increase in the
Base Rental of 3.0% annually.
B.
All Base Rental and other sums due
to Landlord hereunder (such other sums being collectively, the
"Additional Rent") shall be payable at the office address of
Landlord first above given, or to such other party or at such other
address as Landlord may designate, from time to time, by written
notice to Tenant, without demand and without deduction, set-off or
counterclaim. All references herein to Rent shall include
both Base Rental and Additional Rent.
5.
RENT ABATEMENT
Landlord shall abate the first four,
half months’ of base rental payments, inclusive of real
estate taxes and operating expenses.
6.
TAXES AND OPERATING EXPENSES;
ADDITIONAL RENT
A.
As used in this Paragraph 6, the
following terms shall have the following meanings:
(1)
“Taxes” shall mean all real
estate taxes, impositions and assessments, general or special,
ordinary or extraordinary, foreseen or unforeseen, imposed upon the
Property or with respect to the ownership thereof. If, due to
a future change in the method of taxation, any franchise, income,
profit or tax, however designated, shall be levied or imposed in
substitution, in whole or in part, for (or in lieu of) any tax
which would otherwise be included within the definition of Taxes,
such other tax shall be deemed to be included within
“Taxes” as defined herein.
(2)
“Base Year” for real estate
taxes and operating expenses shall be the year 2006, adjusted to
reflect a (95%) occupied and fully assessed building.
(3)
“Tenant’s proportionate
share” shall be that percentage which the square footage of
the Demised Premises bears to the square footage of the Building,
or 8.6%.
(4)
“Operating Expenses” shall
mean all expenses, costs and disbursements of every kind which
Landlord shall pay or become obligated to pay in respect of the
operation, maintenance, repair and management of the Property and
shall include, without limitation: (a) wages and salaries
(and taxes imposed upon employers with respect to such wages and
salaries); (b) contract costs of independent contractors hired for
the operation, maintenance and repair of the Building and Property
not affiliated with Landlord; (c) costs of electricity, steam,
water, sewer, fuel and other utilities chargeable to the operation
and maintenance of the Building and Property; (d) costs of
insurance for the Building and Property, including fire and
extended coverage, elevator, boiler, sprinkler leakage, water
damage, public liability and property damage, plate glass, and rent
protection, but excluding any charge for increased premiums due to
acts or omissions of other occupants of the Building because of
extra risk which are reimbursed to Landlord by such other
occupants; (e) costs of supplies, tools, materials necessary for
the normal operation, maintenance and repair of the Building,
Property and equipment; (f) interest, depreciation or amortization
and rents paid or incurred by Landlord for machinery, equipment, or
other capital improvements used or useful only in the maintenance
of operation of the Building; and (g) any and all sums for
landscaping, ground maintenance, sanitation control, cleaning,
lighting, snow removal, parking area and driveway resurfacing when
reasonably required, fire protection, policing, security and other
expenses reasonably required for the upkeep, maintenance and
operation of the Property by virtue of the ownership thereof,
including, without limitation, reasonable management fees which are
consistent with the management fees charged by owners of comparable
office buildings (with respect to size, age and class) within
Bethesda, Maryland.
i.
Notwithstanding anything to the contrary
contained herein, Operating Expenses which are passed through by
Landlord to Tenant shall exclude the following items:
personal property taxes paid by any tenant; loan payments;
brokers’ and finders’ fees or other commissions;
leasing expenses; costs or expenses which according to generally
accepted accounting principles are required to be capitalized
(except where the capital improvements are directly connected with
operating the common areas, the costs of which capital improvements
are charged only on an amortized basis over the useful life of the
improvement); depreciation on improvements or equipment and
machinery; expenses for items which are not generally of use to all
tenants; advertising or promotional expenses; attorney’s
fees; wages, salaries, costs incurred by Landlord in connection
with the clean-up or removal of any hazardous materials or toxic
waste; or costs or expenses incurred due to violation by Landlord
of any term or condition of the Lease. In addition, Operating
Expenses shall also exclude the following:
1.
Payments of principal, interest, or other
finance charges made on any debt, or the amortization of funds
borrowed by Landlord;
2.
Ground rent or other rental payments made
under any ground lease or underlying lease;
3.
Costs of leasing commissions, legal,
space planning, construction, and other expenses incurred in
procuring tenants for the Building or with respect to individual
tenants or occupants of the Building;
4.
Costs of painting, redecorating, or other
services or work performed for the benefit of another tenant
prospective tenant or occupant (other than for Common
Area);
5.
Salaries, wages, or other compensation
paid to officers or executives of Landlord;
6.
Salaries, wages, or other compensation or
benefits paid to off-site employees or other employees of Landlord
who are not assigned full-time to the operation, management,
maintenance, or repair of the Building; provided however, Operating
Expenses shall include Landlord's reasonable allocation of
compensation paid for the wages, salary, or other compensation or
benefits paid to (i) the individual Building manager, if offsite,
who is assigned part-time to the operation, management,
maintenance, or repair of the Building and (ii) employees on-site
who are assigned part-time to the operation, management,
maintenance, or repair of the Building;
7.
Costs of advertising and public relations
and promotional costs associated with the promotion or leasing of
the Building and costs of signs in or on the Building identifying
the owners of the Building or any tenant of the
Building;
8.
Any costs, fines or penalties incurred
due to the violation by Landlord of any governmental rule or
authority;
9.
Any other expenses for which Landlord
actually receives reimbursement from insurance, condemnation
awards, other tenants or any other source or, expenses associated
with the negligence or willful misconduct of other
tenants;
10.
Costs of repairs, restoration,
replacements or other work occasioned by (A) fire, windstorm or
other casualty (whether such destruction be total or partial) and
(B) the exercise by governmental authorities of the right of
eminent domain (whether such taking be total or
partial);
11.
Costs incurred in connection with
disputes with tenants, other occupants, or prospective tenants, or
costs and expenses incurred in connection with negotiations or
disputes with employees, consultants, management agents, leasing
agents, purchasers or mortgagees of the Building;
12.
Costs incurred in connection with the
sale, financing, refinancing, mortgaging, selling or change of
ownership of the Building;
13.
Costs, fines, interest, penalties, legal
fees or costs of litigation incurred due to the late payments of
taxes, utility bills and other costs incurred by Landlord's failure
to make such payments when due;
14.
General overhead and general
administrative expenses and accounting, record-keeping and clerical
support of Landlord or the management agent (recognizing that
accounting and/or recordkeeping costs in connection with Operating
Expenses may be included in Operating Expenses);
15.
All amounts which would otherwise be
included in Expenses which are paid to any affiliate or subsidiary
of Landlord, or any representative, employee or agent of same, to
the extent of the costs of such services exceed the competitive
rates for similar services of comparable quality rendered by
persons or entities of similar skill, competence and
experience;
16.
Fees for management of the Building in
excess of the management fees provided for hereinabove;
17.
Increased insurance premiums caused by
Landlord's or any other tenant's hazardous acts and insurance or
leasehold improvements in the premises leased or to be leased to
other tenants;
18.
Costs incurred to correct violations by
Landlord of any law, rule, order or regulation which was in effect
as of the date that the Building's Certificate of Occupancy was
validly issued;
19.
Costs arising from the presence of
Hazardous Substances in or about or below the land or the Building,
including without limitation, hazardous substances in the
groundwater or soil (unless introduced into or caused by
Tenant);
20.
Costs incurred for any items to the
extent covered by a manufacturer's materialman's, vendor's or
contractor's warranty (a "Warranty");
21.
Non-cash items, such as deductions for
depreciation and amortization of the Building and the Building
equipment, interest on capital invested, bad debt losses, rent
losses and reserves for such losses;
22.
Costs of overtime HVAC service whether
provided to the Tenant or any other tenant of the
Building.
B.
In addition to the Minimum Rent,
commencing on the first day of the first calendar month following
receipt of Landlord’s statement thereof, Tenant shall pay in
monthly installments or in a lump sum if in arrears, as Additional
Rent hereunder, Tenant’s Proportionate Share of the amount by
which all Taxes (as defined in Paragraph 6(A)(1) above) imposed
upon the Property for and with respect to each year of the Lease
(including any renewals or extensions of such Lease Term), exceeds
the Taxes assessed or imposed upon the Property for the Base Year.
Said Expenses shall be passed through to Tenant on the first
anniversary of the Lease Commencement Date, and each anniversary of
the Term thereafter.
C.
(1)
Tenant hereby agrees to pay as Additional
Rent, Tenant’s Proportionate Share of the amount by which
Operating Expenses, grossed-up as if the Building was ninety-five
percent (95%) occupied, incurred by Landlord in the Base Year,
increase in each calendar year of the Term after the Base Year
(grossed-up as if the Building was ninety-five (95%) occupied), and
any renewals or extensions thereof. Operating Expenses will
be appropriately prorated for the proportion of any calendar year.
Said expenses shall be passed through to Tenant beginning in
Year Two of the Term, and each anniversary of the Term
thereafter.
(2)
If the Expiration Date of this Lease does
not coincide with the last day of the real estate tax fiscal year,
the portion of the increase in Real Estate Taxes payable by Tenant
hereunder for the real estate fiscal year in which the Expiration
Date occurs shall be appropriately adjusted and pro-rated between
Landlord and Tenant based upon the respective number of days in
such real estate tax fiscal year prior to and after the Expiration
Date.
(3)
As an example of estimated increases in
Operating Expenses based on a Calendar Year (which is equal to the
Building’s fiscal year) assume total building expense
increases $50,000 between January 1 and December 31 and the
Tenant’s proportionate share is ten percent (10%).
Tenant would be responsible for an increase in operating rent
of $5,000 in expenses ($50,000 x 10%) paid in one lump sum of
$5,000 in additional rent.
D.
Landlord, at Tenant’s expense,
shall have the option to separately meter Tenant’s space (or
portion thereof) for excess electrical usage, and charge Tenant for
any electricity usage not otherwise covered by Landlord under
Section 9 of this Lease. Landlord shall calculate electricity
charges as follows: (monthly meter usage reading) x (Utility Charge
per KHW). Landlord may change calculation as needed from time
to time.
E.
After the statement of Operating Costs
has been prepared by Landlord (including following the expiration
of this Lease to the extent applicable), Landlord shall furnish to
Tenant within 120 days after the end of the calendar year, a
statement which shall show:
(1)
the Operating Costs for the Base
Year;
(2)
the Operating Costs for such calendar
year;
(3)
Tenant’s proportionate share of the
Operating Costs for such calendar year; and
(4)
The amount, if any, of Additional Rent
which shall be paid by Tenant in the next lease year.
F.
Any statements sent to Tenant pursuant to
this Paragraph 6 shall be conclusively binding upon Tenant, unless,
within ninety (90) days after such statement is sent, Tenant shall
send a written notice to Landlord objecting to such statement and
specifying the respects in which such statement is claimed to be
incorrect. If the issues raised by such notice are not
amicably settled between Landlord and Tenant within thirty (30)
days after such written notice is sent, either party may refer the
decision of the issues raised by such notice to a reputable
independent firm of certified public accountants mutually agreeable
to both parties, and the decision of such accountants shall be
conclusively binding upon the parties. The fees and expenses
involved in such decision shall be borne by the unsuccessful party
(and if both parties are partially unsuccessful, the accountants
shall apportion the fees and expenses between the parties based
upon the degree of success of each party). Landlord shall
have the right, for a period of twelve (12) months after the
rendering of any statement (or for a longer reasonable period, if
reasonably required in order to ascertain the facts), to send
corrected statements to Tenant, and any rent adjustments required
thereby shall be made within thirty (30) days
thereafter.
G.
Landlord shall keep and make available to
Tenant, at the Building, for a period of ninety (90) days after
statements are rendered as provided in this Paragraph 5, records in
reasonable detail of the matters included in the statements for the
period covered by such statements and shall permit Tenant’s
representative (including Tenant’s accountant) to examine and
audit such of its records as may be reasonably required to verify
such statements, at reasonable times during business hours, subject
to reasonable advance notice. Copies of tax bills and other
bills incurred by Landlord in the operation of the Building shall
be conclusive evidence of the amounts became payable during such
period.
7.
SECURITY DEPOSIT
As additional security for the full and
prompt performance by Tenant of the terms and covenants of this
Lease, Tenant has deposited with Landlord a sum of Thirty Thousand
Nine Hundred and Twenty Nine Dollars and seventeen cents
($28,525.00) at the time of lease execution, which shall not
constitute rent for any month unless so applied by Landlord on
account of Tenant's default. To the extent that Landlord has
not applied the Security Deposit on account of a default, the
Security Deposit shall be returned to Tenant within thirty (30)
days after termination of this Lease. In the event Tenant
fails to take possession of the Demised Premises on the Lease
Commencement Date or vacates or abandons the Demised Premises
during the Term, the Security Deposit shall not be deemed to be
liquidated damages, and such application of the Security Deposit
shall not preclude Landlord from recovering from Tenant all
additional damages incurred by Landlord. If Tenant fails at
any time to perform its obligations, Landlord may at its option
apply said deposit, or so much thereof as is required, to cure
Tenant's default, but if prior to the termination of this lease
Landlord depletes said deposit in whole or in part, Tenant shall
immediately restore the amount so used by Landlord. Following
termination of this lease and satisfaction of all Tenant
obligations thereunder, Landlord shall return to Tenant any unused
portion of the Security Deposit. Upon execution of the Lease,
the Tenant shall also provide its first (1 st ) monthly
rental payment due hereunder.
8.
RULES AND REGULATIONS
The "Rules and Regulations" in regard to
the Building and the Tenants occupying offices therein, attached
hereto as Exhibit B and made a part hereof, and such reasonable
alterations, additions or modifications thereof as may from time to
time be made by Landlord, shall be deemed a part of this Lease,
with the same effect as though written herein, and Tenant covenants
that the Rules and Regulations shall be faithfully observed by
Tenant, Tenant's employees and all persons visiting the Demised
Premises or claiming under Tenant, the right being hereby expressly
reserved by Landlord to add to, alter or rescind, from time to
time, such Rules and Regulations, which changes shall take effect
immediately after notice thereof in writing shall have been served
on Tenant by delivering the same to Tenant by certified mail return
receipt requested, provided such changes shall be binding on all
tenants in the Building. Landlord shall not be responsible
for any violation or disregard of any of the Rules and Regulations
or any rules and regulations hereafter adopted, by any other
Tenant, occupant or person in the Building of which the Demised
Premises are a part; and nothing herein shall impose any obligation
on Landlord to enforce the Rules and Regulations or any of them
against any other Tenant, occupant or person, but the same are to
be Rules and Regulations to be abided by and complied with by
Tenant hereunder. In the event of a conflict between the rules and
regulations as set forth in Exhibit B and the Terms of this Lease,
the terms of this Lease shall prevail.
9.
SERVICES
Landlord shall provide the following
facilities and services to Tenant without additional charge.
Landlord agrees to provide:
(A)
Heat and air conditioning necessary, in
Landlord's reasonable judgment, Monday through Friday from 8:00 AM
to 6:00 PM, and 8:00 a.m. to 2:00 p.m. on Saturday throughout the
year except holidays as noted below. Heat and air
conditioning required by Tenant at other times shall be supplied
upon reasonable notice, and shall be paid for by Tenant, promptly
upon billing, currently at the rate of $65.00 per hour.
Landlord may change the rate from time to time however, the
charge shall not exceed Landlord’s estimate of its actual
cost.
(B)
Janitorial services as per the Cleaning
Specifications attached as Exhibit C.
(C)
Tenant will have access to the Building
and the Premises twenty-four (24) hours per day, except in the case
of an emergency.
(D)
Landlord shall furnish electricity for
building-standard overhead office lighting fixtures, and equipment
and accessories customary for offices, where: (a) the connected
electrical load of all of the same does not exceed an average of
2.0 watts per usable square foot of the Premises for lighting, and
5.0 watt per usable square foot of the Premises for outlets (or
such lesser amount as may be available, based on the safe and
lawful capacity of the electrical circuit(s) and facilities serving
the Premises), (b) the electricity does not exceed 200 amperes at
nominal 110 volts, single phase. In addition, three phase
power is provided in the base building and available to the tenant.
Tenant’s use of electrical service in the Premises
shall not exceed, either in voltage, rated capacity, use or overall
load, that which the Building electrical equipment is designed to
handle .
(E) All
structural repairs to the Building and all repairs which may be
needed to the mechanical, electrical, air-conditioning, heating and
plumbing systems in the Demised Premises, excluding repairs to any
non-Building standard fixtures or other improvements installed or
made by or at the request of Tenant (other than the Tenant
Improvements) and requiring usual or special maintenance. In the
event that any repair is required by reason of the negligence or
abuse of Tenant or its agents, employees, invitees or of any other
person using the Demised Premises with Tenant's consent, express or
implied, Landlord may make such repair and bill the cost thereof to
the Tenant.
(F)
The holidays referred to in Section 9.A.
and 9.B. above are New Year's Day, Martin Luther King Day,
Presidents Day, Memorial Day, Independence Day, Labor Day, Columbus
Day, Veteran's Day, Thanksgiving Day, Christmas Day, and those days
designated by the federal government, and any other national
holiday promulgated by a Presidential Executive Order or
Congressional Act.
(G)
Landlord will not be in default under
this Lease or be liable to Tenant or any other person for direct or
consequential damage, or otherwise, for either the failure to
supply, or, the sufficiency of (if required or supplied) any heat,
air-conditioning, elevator, cleaning, lighting or security service;
for surges or interruptions of electricity; or for other services
Landlord has agreed to supply during any period when Landlord uses
reasonable diligence to supply or restore such services, nor shall
any such failure to supply constitute a constructive eviction of
Tenant. Landlord will use reasonable efforts to diligently
remedy any interruption in the furnishing of those services
required of Landlord hereunder. Should any interruption occur for a
period of 3 consecutive days and disrupt the work of Tenant, each
day thereafter shall be abated until the interruption has been
remedied by the Landlord. Landlord reserves the right to
temporarily discontinue such services at such times as may be
necessary by reason of accident; repairs, alterations or
improvements; strikes; lockouts; riots; acts of God; governmental
preemption in connection with a national or local emergency; any
rule, order or regulation of any governmental agency; conditions of
supply and demand that make any product unavailable; Landlord's
compliance with any mandatory governmental energy conservation or
environmental protection program; or Landlord's compliance with any
voluntary governmental energy conservation program at the request
of or with consent or acquiescence of Tenant; or any other
happening beyond the control of Landlord. Notwithstanding
anything in this Lease to the contrary, unless Tenant is then in
default beyond the expiration of any applicable cure period, if any
failure to furnish utilities or elevator service shall be caused by
matters within the control of Landlord and continue for more than
five (5) consecutive Business Days and render all of the Premises
unusable and Tenant in fact ceases the conduct of its business by
reason of such failure, then and in such event, all Rent payable
hereunder for the Premises shall be abated for the period from and
after the sixth consecutive Business Day, of such failure until the
date such service or utility is restored to the level immediately
prior to the failure, or if earlier, the date conduct of business
operations resumes within the Premises. Tenant shall provide
Landlord with prompt written and telephonic notice of any failure,
suspension or interruption of services affecting the
Premises.
10.
INDEMNIFICATION
A.
Tenant shall indemnify, defend and hold
Landlord, its members, principals, beneficiaries, partners,
officers, directors, employees, Mortgagee(s) and agents, and the
respective principals and members of any such agents (collectively
the “Landlord Related Parties”) harmless against and
from all liabilities, obligations, damages, penalties, claims,
costs, charges and expenses, including, without limitation,
reasonable attorneys’ fees and other professional fees (if
and to the extent permitted by law), which may be imposed upon,
incurred by, or asserted against Landlord or any of the Landlord
Related Parties (collectively, the “Claims”) and
arising, directly or indirectly, out of or in connection with the
use, occupancy or maintenance of the Premises by, through or under
Tenant including, without limitation, any of the following: (1) any
work or thing done in, on or about the Premises or any part thereof
by Tenant or any of its transferees, agents, servants, contractors,
employees, customers, licensees or invitees; (2) any use, non-use,
possession, occupation, condition, operation or maintenance of the
Premises or any part thereof; (3) any act or omission of Tenant or
any of its transferees, agents, servants, contractors, employees,
customers, licensees or invitees, regardless of whether such act or
omission occurred within the Premises; (4) any injury or damage to
any person or property occurring in, on or about the Premises or
any part thereof; or (5) any failure on the part of Tenant to
perform or comply with any of the covenants, agreements, terms or
conditions contained in this Lease with which Tenant must comply or
perform. In case any action or proceeding is brought against
Landlord or any of the Landlord Related Parties by reason of any of
the foregoing, Tenant shall, at Tenant’s sole cost and
expense, resist and defend such action or proceeding with counsel
approved by Landlord or, at Landlord’s option, reimburse
Landlord for the cost of any counsel retained directly by Landlord
to defend and resist such action or proceeding.
B.
Landlord and the
Landlord Related Parties shall not be liable for, and Tenant hereby
waives, all claims for loss or damage to Tenant’s business or
damage to person or property sustained by Tenant or any person
claiming by, through or under Tenant [including Tenant’s
principals, agents and employees (collectively, the “Tenant
Related Parties”)] resulting from any accident or occurrence
in, on or about the Premises, the Building or the Property,
including, without limitation, claims for loss, theft or damage
resulting from: (1) the Premises, Building, or Property, or any
equipment or appurtenances becoming out of repair; (2) wind or
weather; (3) any defect in or failure to operate, for whatever
reason, any sprinkler, heating or air-conditioning equipment,
electric wiring, gas, water or steam pipes; (4) broken glass; (5)
the backing up of any sewer pipe or downspout; (6) the bursting,
leaking or running of any tank, water closet, drain or other pipe;
(7) the escape of steam or water; (8) water, snow or ice being upon
or coming through the roof, skylight, stairs, doorways, windows,
walks or any other place upon or near the Building; (9) the falling
of any fixture, plaster, tile or other material; (10) any act,
omission or negligence of other tenants, licensees or any other
persons or occupants of the Building or of adjoining or contiguous
buildings, or owners of adjacent or contiguous property or the
public, or by construction of any private, public or quasi-public
work; or (11) any other cause of any nature except where such loss
or damage is due to Landlord’s willful failure to make
repairs required to be made pursuant to other provisions of this
Lease, after the expiration of a reasonable time after written
notice to Landlord of the need for such repairs. To the
maximum extent permitted by law, Tenant agrees to use and occupy
the Premises, and to use such other portions of the Building as
Tenant is herein given the right to use, at Tenant’s own
risk.
C.
With the exception of
Claims for which Tenant is responsible under this Article 10.A.
above, and subject to the waiver of subrogation provisions set
forth in this Lease and the provisions contained in Section 10.B
and Section 10.D. below, Landlord shall indemnify defend and hold
Tenant and the Tenant Parties harmless against all Claims which
relate to or result wholly or in part from, or are alleged to
relate to or arise wholly or in part from: (i) all damage, loss,
claims or injury to persons, property or business occurring in,
about or from the common areas of the Building and the Property, or
(ii) damage, loss, claims or injury to persons, property or
business directly or indirectly arising out of Landlord's or its
agents' use, management or operation of the Property.
Notwithstanding the foregoing to the contrary, the foregoing
indemnity shall not apply to claims finally determined by a court
of competent jurisdiction to have been caused by the negligence or
willful misconduct of the party seeking to be
indemnified.
D.
Tenant does hereby waive the right to sue
Landlord for any indirect, consequential, punitive or incidental
damages (including without limitation, any claims for lost profits
or lost business opportunity) arising by reason of the breach by
Landlord of an obligation under this Lease.
11.
PUBLIC LIABILITY
INSURANCE
A.
At all times commencing on and after the
earlier of the Lease Commencement Date or the date Tenant or its
agents, employees or contractors enters the Premises for any
purpose, Tenant shall carry and maintain, at its sole cost and
expense:
(1)
Commercial General Liability Insurance
applicable to the Premises, the Limited Common Areas and their
appurtenances providing, on an occurrence basis, a minimum combined
single limit of Two Million Dollars ($2,000,000.00), with a
contractual liability endorsement covering Tenant’s indemnity
obligations under this Lease.
(2)
All Risk of Physical Loss Insurance
written at replacement cost value and with a replacement cost
endorsement covering all of the Leasehold Improvements (inclusive
of the Initial Leasehold Improvements) and Tenant’s Property
in the Premises.
(3)
Workers’ Compensation Insurance as
required by the State of Maryland and in amounts as may be required
by applicable statute, and Employers’ Liability Coverage of
One Million Dollars ($1,000,000.00) per occurrence.
(4)
Whenever good business practice indicates
the need of additional insurance coverage or different types of
insurance in connection with the Premises or Tenant’s use and
occupancy thereof, and similar tenants of similar properties in the
Washington, D.C. metropolitan area are then being required
generally to obtain such additional insurance coverage or different
types of insurance, Tenant shall, upon request, obtain such
insurance at Tenant’s expense and provide Landlord with
evidence thereof.
B.
Tenant shall carry and maintain, at its
expense, or Tenant shall require any contractors performing work on
the Premises to carry and maintain, at no expense to Landlord, in
addition to workers’ compensation insurance as required by
the jurisdiction in which the Building is located, All
Builder’s Risk Insurance in the amount of the replacement
cost of any alterations, additions or improvements (or such lesser
amount reasonably required by Landlord) and Commercial General
Liability Insurance (including, without limitation,
Contractor’s Liability coverage, Contractual Liability
coverage and Completed Operations coverage), written on an
occurrence basis with a minimum combined single limit of Two
Million Dollars ($2,000,000.00) and adding the “owner(s) of
the Building and its (or their) respective members, principals,
beneficiaries, partners, officers, directors, employees, agents
(and their respective members and principals) and
mortgagee(s)” (and any other designees of Landlord as the
interest of such designees shall appear) as additional
insureds.
C.
Any company writing any insurance which
Tenant is required to maintain or cause to be maintained pursuant
to the terms of this Lease (all such insurance as well as any other
insurance pertaining to the Premises or the operation of
Tenant’s business therein being referred to as
“Tenant’s Insurance”), as well as the form of
such insurance, shall at all times be subject to Landlord’s
reasonable approval, and each such insurance company shall if rated
by A.M. Best, have an A.M. Best rating of “A-” or
better. Any such insurance company shall be licensed and
lawfully permitted to do business in the state in which the
Premises is located. All policies evidencing Tenant’s
Insurance (except for Workers’ Compensation) shall specify
Tenant as named insured and the “owner(s) of the Building and
its (or their) respective members, principals, beneficiaries,
partners, officers, directors, employees, agents (and their
respective members and principals) and mortgagee(s)” (and any
other designees of Landlord as the interest of such designees shall
appear) as additional insureds. Provided that the coverage
afforded Landlord and any designees of Landlord shall not be
reduced or otherwise adversely affected, all of Tenant’s
Insurance may be carried under a blanket policy covering the
Premises and any other of Tenant’s locations. All
policies of Tenant’s Insurance shall contain endorsements
that the insurer(s) will give to Landlord and its designees at
least thirty (30) days’ advance written notice of any change,
cancellation, termination or lapse of said insurance. Tenant
shall be solely responsible for payment of premiums for all of
Tenant’s Insurance. Tenant shall deliver to Landlord at
least fifteen (15) days prior to the time Tenant’s Insurance
is first required to be carried by Tenant, and upon renewals at
least five (5) business days prior to the expiration of any such
insurance coverage, a certificate of insurance of all policies
procured by Tenant in compliance with its obligations under this
Lease. The limits of Tenant’s Insurance shall in no
event limit Tenant’s liability under this Lease.
12.
FIRE OR OTHER CASUALTY
Tenant shall promptly notify Landlord of
any damage to the Premises resulting from fire or any other
casualty. If the Premises shall be damaged by fire or other
casualty, Landlord shall promptly and diligently, subject to
reasonable delays for insurance adjustment or other matters beyond
Landlord's reasonable control, and subject to all other terms of
this Article 12, restore the base building and its common
areas exclusive of the Leasehold Improvements. Such
restoration shall be to substantially the same condition prior to
the casualty, except for modifications required by zoning and
building codes and other laws or by the holder of a mortgage on the
Building or any other modifications to the common Areas deemed
desirable by Landlord, provided that access to the Premises and any
common restrooms serving the Premises shall not be materially
impaired. Upon the occurrence of any damage to the Premises,
upon notice (the “Landlord Repair Notice") to Tenant from
Landlord, Tenant shall assign to Landlord (or to any party
designated by Landlord) all insurance proceeds payable to Tenant
under Tenant's insurance required under item (2) of Section
11 (A) above of this Lease, and Landlord shall repair any injury or
damage to the Leasehold Improvements installed in the Premises and
shall return such Tenant Improvements and Original Improvements to
their original condition; provided that if the cost of such repair
by Landlord exceeds the amount of insurance proceeds received by
Landlord from Tenant's insurance carrier, as assigned by Tenant,
the cost of such repairs shall be paid by Tenant to Landlord prior
to Landlord's commencement of repair of the damage. In the
event that Landlord does not deliver the Landlord Repair Notice
within sixty (60) days following the date the casualty becomes
known to Landlord, Tenant shall, at its sole cost and expense,
repair any injury or damage to the Leasehold Improvements and shall
return such Leasehold Improvements to their original condition.
Whether or not Landlord delivers a Landlord Repair Notice,
prior to the commencement of construction, Tenant shall submit to
Landlord, for Landlord's review and approval, all plans,
specifications and working drawings relating thereto, and Landlord
shall select the contractors to perform such improvement work.
Landlord shall not be liable for any inconvenience or
annoyance to Tenant or its visitors, or injury to Tenant's business
resulting in any way from such damage or the repair thereof;
provided, however, if such fire or other casualty shall have
damaged the Premises or a portion thereof or Common Areas necessary
to Tenant's occupancy, then Landlord shall allow Tenant a
proportionate abatement of Rent during the time and to the extent
and in the proportion that the Premises or such portion thereof are
unfit for occupancy for the purposes permitted under this Lease,
and are not occupied by Tenant as a result thereof, provided that
such abatement of Rent shall be allowed only to the extent Landlord
is reimbursed from the proceeds of rental interruption insurance
purchased by Landlord as part of Operating Expenses; provided
further, however, if the damage or destruction is due to the
negligence or willful misconduct of Tenant or any of its agents,
employees, contractors, invitees or guests, then Tenant shall be
responsible for any reasonable, applicable insurance deductible
(which shall be payable to Landlord upon demand) and there shall be
no rent abatement. In the event that Landlord shall not
deliver the Landlord Repair Notice, Tenant's right to rent
abatement pursuant to the preceding sentence shall terminate as of
the date which is reasonably determined by Landlord to be the date
Tenant should have completed repairs to the Premises assuming
Tenant used reasonable due diligence in connection
therewith.
13.
EMINENT DOMAIN
If the whole of the Property, Building or
Demised Premises shall be taken or condemned for a public or
quasi-public use under any statute or by right of eminent domain or
private purchase in lieu thereof by any competent authority, Tenant
shall have no claim against Landlord and shall not have any claim
or right to any portion of the amount that may be awarded as
damages or paid as a result of any such condemnation or purchase;
and all rights of the Tenant to damages therefor are hereby
assigned by Tenant to Landlord. The foregoing shall not,
however, deprive Tenant of any separate award for moving expenses
or for any other award, which would not reduce the award payable to
Landlord. Upon the date the right to possession shall vest in the
condemning authority, this Lease shall cease and terminate with
Rent adjusted to such date and Tenant shall have no claim against
Landlord for value of any unexpired term of this Lease.
14.
ALTERATIONS
Tenant shall make no alterations,
installations, additions or improvements (herein collectively
called "Alterations") in or to the Demised Premises or the
Building, structural or otherwise, without Landlord's prior written
consent, which shall not be unreasonably withheld, conditioned or
delayed. If any such Alterations are made without the prior
written consent of Landlord, Landlord may correct or remove the
same, and Tenant shall be liable for any and all expenses incurred
by Landlord in the performance of such work. All Alterations
shall be at Tenant's sole expense, shall comply with all laws,
rules, orders and regulations of governmental authorities having
jurisdiction thereof and shall be made at such times and in such
manner as Landlord determines will not unreasonably interfere with
the use of the Building by other Tenants and their respective
premises. All Alterations shall be made only by such
contractors or mechanics as are approved in writing by Landlord.
Such approval shall not be unreasonably withheld, conditioned
or delayed. Approval of contractors or mechanics by Landlord
shall be based upon the contractors or mechanics being properly
licensed, their financial posture, experience, and past job
performance. Tenant shall pay prevailing wages to all contractors
and mechanics.
All Alterations to the Demised Premises,
whether made by Landlord or Tenant, and whether at Landlord's or
Tenant's expense, or the joint expense of Landlord and Tenant,
shall be and remain the property of Landlord, hereinafter unless
otherwise agreed to by Landlord and Tenant. Upon expiration of the
Lease, Tenant shall have no obligation to remove, modify or alter
any of the initial alterations described in Exhibit D
attached.
Landlord, at the expiration of the Term
or any renewal or extension thereof, may elect to require Tenant to
remove all or any part of the Alterations (excluding Initial
Alterations), unless Landlord agrees in writing not to require the
removal of an Alteration. Removal of Tenant's Property and
Alteration shall be at Tenant's cost and expense and Tenant shall,
at its cost and expense, repair any damage to the Demised Premises
or the Building caused by such removal. In the event Landlord
does not so elect, and Tenant does not remove Tenant's Property, it
shall become property of Landlord at the expiration of the Term.
In the event Tenant fails to remove Tenant's property or the
Alterations requested to be removed by Landlord on or before the
expiration of the Term or any extension or renewal thereof, then
and in such event, the Landlord may remove Tenant's Property and
Alteration from the Demised Premises at Tenant's expense and the
Tenant hereby agrees to reimburse the Landlord for the cost of such
removal together with any and all damages which the Landlord may
suffer and sustain by reason of the failure of Tenant to remove the
same.
Landlord, at its own cost and expense,
shall perform or provide the renovations to the Demised Premises as
more fully described on Exhibit D (the renovations therein
described being referred to herein as the “Initial
Alterations”). Landlord's architect shall perform all
of the architectural services required in connection with the
construction of the Initial Alterations. Landlord shall
require the use of building standard finishes for the Initial
Alterations. Landlord shall be responsible for obtaining all
necessary permits for occupancy. Landlord shall have no
liability for any delay in delivering the Demised Premises due to
contractor delay. Upon substantial completion of the Initial
Alterations as reasonably determined by Landlord’s architect,
this Lease shall commence and Tenant shall have the right to occupy
the Demised Premises.
“
Substantial
Completion” of the Initial Alterations shall be the date
reasonably determined by Landlord that the Initial Alterations has
been performed, other than any details of construction, mechanical
adjustment or any other matter, the non-completion of which does
not materially interfere with the ability of Tenant to commence
beneficial use and occupancy of the Premises.
Notwithstanding any provision in this
Lease to the contrary, in the event Landlord is delayed in the
substantial completion of the Initial Alterations by reason of any
Tenant Caused Delay, then and in such event the Lease Commencement
Date shall be the date which Landlord’s architect reasonably
determines that the Initial Alterations would have been
substantially completed in the absence of the Tenant Caused Delay.
For purposes hereof, a Tenant Caused Delay shall be defined
as follows:
“Tenant Caused
Delay” shall mean any delay resulting by reason of any one or
more of the following:
a.
Tenant’s failure to respond to any
request by Landlord for any approval or information within any time
period prescribed, or if no time period is prescribed, then within
five (5) Business Days of such request; or
b.
Changes in any plans and specifications
requested by Tenant as described on Exhibit D; or
c.
The performance or nonperformance by a
person or entity employed by Tenant in the completion of any work
in the Premises (all such work and such persons or entities being
subject to the prior approval of Landlord); or
d.
Any request by Tenant that Landlord delay
the completion of any of the Initial Alterations; or
e.
Any breach or default by Tenant in the
performance of Tenant’s obligations under this Lease;
or
f.
Any delay resulting from Tenant’s
having taken possession of the Premises for any reason prior to
substantial completion of the Initial Alterations; or
g.
Any other reasonable delay chargeable to
Tenant, its agents, employees or independent
contractors.
15.
MAINTENANCE
Tenant shall keep the Demised Premises
and the fixtures and equipment therein in good order and condition,
will suffer no waste or injury thereto, and shall at the expiration
or sooner termination of this Lease, surrender and deliver up the
Demised Premises to Landlord in the same good order and broom clean
condition as existed on the Lease Commencement Date wear and tear
excepted. If repairs are required due to the negligent acts
of the Tenant, its agents, employees or invitees, the Landlord
(upon written notice from Tenant of the need for same) will make
the same forthwith. Tenant shall be required to give Landlord
immediate notice of the need for any repair which, if not promptly
repaired, will constitute an unsafe condition, which might cause
injury. The Landlord shall, at reasonable times, be permitted to
enter upon the Demised Premises to examine the condition thereof
and to make the repairs as are required by the provisions of this
paragraph at Tenant's expense.
16.
COMPLIANCE WITH LAWS
Tenant agrees, on behalf of itself, its
employees and agents, that it shall comply at all times with any
and all Federal, state and local laws, statutes, regulations,
ordinances and other requirements of any of the constituted public
authorities relating to its use and occupancy of the Demised
Premises. Tenant shall be responsible for maintaining proper
occupancy permits.
17.
MECHANIC'S LIENS
Tenant shall not create or permit to be
created or to remain, and shall discharge and have removed or
obtain security in the form of legally recordable bonds for any
lien, encumbrance or charge levied on account of any mechanics,
laborer's or materialmen's lien upon the Demised Premises or the
Property. If any mechanic's laborer's or materialmen's lien
shall at any time be filed against the Demised Premises or the
Property for work claimed to have been done for or materials
claimed to have been furnished to Tenant (except for work
contracted for by Landlord), Tenant, within ten (10) business days
after notice of the filing thereof, at its sole cost and expense
will cause it to be discharged of record by payment, deposit, bond,
order of a court of competent jurisdiction or otherwise. If Tenant
shall fail to discharge any such lien, Landlord may, at its option,
discharge the same and treat the cost thereof as additional rent
payable with the monthly rent next becoming due. Tenant will
indemnify, defend and hold harmless Landlord from and against any
and all expenses, liens, claims or damages to person or property
which may or might arise by reason of Tenant making any
Alterations, additions or improvements to the Demised Premises or
the Property.
18.
SIGNS; ADVERTISEMENTS
Landlord shall provide Building standard
suite entry signage and building directory signage at its expense.
Landlord shall also provide up to 1 additional sign on the
building directory for a subtenant that occupies over 2,500
rentable square feet. Other than the foregoing, no sign,
advertisement or notice shall be inscribed, painted, affixed or
displayed on any part of the outside or the inside of the Building,
including, without limitation, the doors of offices, and if any
such sign, advertisement or notice is exhibited, Landlord shall
have the right to remove the same and Tenant shall be liable for
any and all expenses incurred by Landlord by said removal.
Landlord shall have the right to prohibit any advertisement
of Tenant, which in its opinion tends to impair the reputation of
the Building or its desirability as a high-quality office Building
and, upon written notice from Landlord, Tenant shall immediately
refrain from and discontinue any such advertisement.
20.
ENTRY FOR REPAIRS AND
INSPECTIONS
Tenant will permit Landlord, or its
agent, employees or contractors to enter the Demised Premises,
without charge therefore to Landlord or without diminution of the
Rent payable by Tenant, to examine, inspect and protect the Demised
Premises, and to make such repairs as in the judgment of Landlord
may be deemed necessary to maintain or protect the Demised Premises
or the Building, or to exhibit the same to prospective Tenants
during the last one hundred and eighty (180) days of the Term.
Except for any entry by Landlord in an emergency situation or
to provide normal cleaning and janitorial service, Landlord shall
provide Tenant with reasonable prior notice which notice may be
given verbally. Absent circumstances bel
