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
TAXES AND OPERATING EXPENSES; ADDITIONAL RENT
PUBLIC LIABILITY INSURANCE
ENTRY FOR REPAIRS AND INSPECTIONS
OTHER COVENANTS OF TENANT
LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT
Demised Premises Floor
Plan
Description of Initial
Alterations
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:
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).
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.
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.
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.
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.
Landlord shall abate the first
four, half months’ of base rental payments, inclusive of real
estate taxes and operating expenses.
TAXES AND OPERATING EXPENSES;
ADDITIONAL RENT
As used in this Paragraph
6, the following terms shall have the following
meanings:
“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.
“Base Year” for real
estate taxes and operating expenses shall be the year 2006,
adjusted to reflect a (95%) occupied and fully assessed
building.
“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%.
“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.
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:
Payments of principal, interest, or
other finance charges made on any debt, or the amortization of
funds borrowed by Landlord;
Ground rent or other rental payments
made under any ground lease or underlying lease;
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;
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);
Salaries, wages, or other compensation
paid to officers or executives of Landlord;
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;
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;
Any costs, fines or penalties incurred
due to the violation by Landlord of any governmental rule or
authority;
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;
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);
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;
Costs incurred in connection with the
sale, financing, refinancing, mortgaging, selling or change of
ownership of the Building;
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;
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);
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;
Fees for management of the Building in
excess of the management fees provided for hereinabove;
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;
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;
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);
Costs incurred for any items to the
extent covered by a manufacturer's materialman's, vendor's or
contractor's warranty (a "Warranty");
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;
Costs of overtime HVAC service whether
provided to the Tenant or any other tenant of the
Building.
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.
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.
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.
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.
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.
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:
the Operating Costs for the Base
Year;
the Operating Costs for such calendar
year;
Tenant’s proportionate share of
the Operating Costs for such calendar year; and
The amount, if any, of Additional Rent
which shall be paid by Tenant in the next lease year.
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.
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.
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.
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.
Landlord shall provide the
following facilities and services to Tenant without additional
charge. Landlord agrees to provide:
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.
Janitorial services as per
the Cleaning Specifications attached as Exhibit C.
Tenant will have access to
the Building and the Premises twenty-four (24) hours per day,
except in the case of an emergency.
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.
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.
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.
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.
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.
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.
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.
PUBLIC LIABILITY
INSURANCE
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:
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.
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.
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.
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.
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.
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.
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.
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.
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:
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
Changes in any plans and
specifications requested by Tenant as described on Exhibit D;
or
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
Any request by Tenant that
Landlord delay the completion of any of the Initial Alterations;
or
Any breach or default by
Tenant in the performance of Tenant’s obligations under this
Lease; or
Any delay resulting from
Tenant’s having taken possession of the Premises for any
reason prior to substantial completion of the Initial Alterations;
or
Any other reasonable delay
chargeable to Tenant, its agents, employees or independent
contractors.
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.
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.
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.
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.
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
believed by Landlord to constitute an emergency, Landlord shall use
reasonable efforts to minim
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