Maryland-Bethesda-Two Bethesda Metro Center Office Lease - Newlands Building Venture LLC and CoStar Realty Information Inc.
OFFICE LEASE FOR
COSTAR REALTY INFORMATION, INC.
THE FRANCIS G. NEWLANDS BUILDING
BETHESDA METRO CENTER
BETHESDA, MARYLAND
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TABLE OF CONTENTS
Page
1. DEMISED PREMISES............................................................................1
2. TERM........................................................................................1
3. USE.........................................................................................3
4. RENT........................................................................................5
5. RENTAL ESCALATION FOR INCREASES IN EXPENSES.................................................7
6. DEPOSIT....................................................................................13
7. ASSIGNMENT AND SUBLETTING..................................................................14
8. PRE-OCCUPANCY TENANT WORK..................................................................17
9. ALTERATIONS................................................................................21
10. MECHANIC'S LIEN...........................................................................22
11. MAINTENANCE BY LESSEE.....................................................................23
12. SIGNS AND ADVERTISEMENTS..................................................................23
13. DELIVERIES AND MOVING OF LESSEE'S PROPERTY................................................26
14. LESSEE'S EQUIPMENT........................................................................26
15. SERVICES AND UTILITIES....................................................................29
16. LESSEE'S RESPONSIBILITY FOR DAMAGE........................................................32
17. ENTRY FOR INSPECTIONS, REPAIRS AND INSTALLATIONS..........................................32
18. INSURANCE.................................................................................33
19. REQUIREMENTS FOR LESSEE'S INSURANCE POLICIES..............................................34
20. LIABILITY FOR DAMAGE TO PERSONAL PROPERTY AND PERSON......................................35
21. DAMAGE TO THE BUILDING AND/OR THE DEMISED PREMISES........................................35
22. DEFAULT OF LESSEE.........................................................................37
23. BANKRUPTCY................................................................................39
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24. SUBORDINATION.............................................................................41
25. CONDEMNATION..............................................................................42
26. RULES AND REGULATIONS.....................................................................43
27. NO PARTNERSHIP............................................................................43
28. NO REPRESENTATIONS BY LESSOR..............................................................43
29. BROKER AND AGENT..........................................................................44
30. WAIVER OF JURY TRIAL......................................................................44
31. NOTICES...................................................................................44
32. ESTOPPEL CERTIFICATES.....................................................................45
33. HOLDING OVER..............................................................................45
34. PARKING...................................................................................46
35. OPTION TO EXTEND TERM.....................................................................47
36. RIGHT OF FIRST NEGOTIATION................................................................48
37. COVENANTS OF LESSOR.......................................................................49
38. GENDER....................................................................................50
39. CORPORATE OR LIMITED LIABILITY COMPANY LESSEE.............................................50
40. BENEFIT AND BURDEN........................................................................51
41. LENDER APPROVAL...........................................................................51
42. GOVERNING LAW.............................................................................51
43. RULE AGAINST PERPETUITIES.................................................................51
44. ROOFTOP RIGHTS............................................................................52
45. GUARANTY OF CORPORATE GUARANTOR...........................................................54
46. ENTIRE AGREEMENT..........................................................................54
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EXHIBITS
Exhibit A - Floor Plan
Exhibit B - Air-Conditioned Shell
Exhibit C - Rules and Regulations
Exhibit D - Declaration as to Commencement Date
Exhibit E - Specifications for Office Cleaning
Exhibit F - Subordination, Non-Disturbance and Attornment
Agreement
Exhibit G - Statement of Tenant In Re: Lease
Exhibit H HVAC Criteria
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THE FRANCIS G. NEWLANDS BUILDING
OFFICE LEASE
THIS LEASE, made and entered into on this 12 day of August, 1999, by
and between NEWLANDS BUILDING VENTURE, LLC, a Maryland limited liability
company, hereinafter called "Lessor," and COSTAR REALTY INFORMATION, INC., a
Delaware corporation, hereinafter called "Lessee."
WITNESSETH, That, for and in consideration of the rents, mutual
covenants, and agreements hereinafter set forth, the parties hereto do hereby
mutually agree as follows:
1. DEMISED PREMISES
Lessor does hereby lease to Lessee, and Lessee does hereby lease from
Lessor, for the term and upon the conditions hereinafter provided, a total of
approximately 60,041 square feet of rentable area, consisting of the entirety
of the ninth (9th), tenth (10th) and eleventh (11th) floors of the office
building under construction and situated at Two Bethesda Metro Center,
Bethesda, Maryland (such building being hereinafter referred to as the
"Building" and such rentable area being hereinafter collectively referred to as
the "Demised Premises"). The Demised Premises has been assigned Suites No. 900,
1000 and 1100 and is outlined on the floor plans attached hereto and made a
part hereof as Exhibit A. The exact area of the Demised Premises shall be
subject to final measurement by Lessor's architect with an opportunity for
Lessee's architect to be present or otherwise verify the measurements, in
accordance with the Washington D.C. Association of Realtors Standard Method of
Measurement (January 1, 1989) using a core factor of approximately eight
percent (8%) on the full ninth (9th), tenth (10th) and eleventh (11th) floors
and approximately thirteen percent (13%) on any multi-tenanted floor, and
appropriate adjustment of applicable provisions of this Lease shall be made to
the extent required.
2. TERM
(A) Subject to and upon the covenants, agreements and conditions
of Lessor and Lessee set forth herein, or in any Exhibit or Addendum hereto,
the term of this Lease shall commence on the Commencement Date, which, subject
to Base Building Completion (as defined below), shall be the earlier of (i)
Lessee's occupancy of the Demised Premises for the conduct of its business, or
(ii) subject to a Lessor Delay (as defined below), or Force Majeure (as defined
below), one hundred twenty (120) days after the Possession Date, which shall be
the date Lessor has confirmed to Lessee in writing that the Lessor's Work (as
defined below) to be performed by Lessor pursuant to Section 8 below shall have
been completed, subject to the Excluded Items (as defined below), to a stage
sufficient to permit Lessee to commence the construction of its Pre-
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Occupancy Tenant Work (as defined below), which completion shall be subject to
confirmation or verification by Lessee's architect, which shall not be
unreasonably withheld, conditioned or delayed. The term of this Lease shall
expire on the last day of the calendar month during which the tenth (10th)
anniversary of the Commencement Date occurs, subject to extension as provided
in Section 35 below. The term "Lease Year" shall mean the period beginning with
the Commencement Date and ending with the last day of the calendar month during
which the first (1st) anniversary of the Commencement Date occurs, and each
consecutive twelve (12) month period thereafter.
(B) The Possession Date is currently anticipated to occur on or
about November 15, 1999, thereby resulting in an outside Commencement Date on
or about March 15, 2000. Lessor shall keep Lessee advised of any changes in the
anticipated Possession Date; provided, however, that if the Possession Date is
other than November 15, 1999, Lessor shall confirm the actual Possession Date
by written notice to Lessee at least ten (10) days prior thereto. In no event
shall the Possession Date be prior to November 15, 1999. In the event Lessor
has not completed the Lessor's Work to be performed by it pursuant to Section 8
below by the anticipated Possession Date, except for punch list items that will
not materially affect the use of the Demised Premises for the construction of
Lessee's Pre-Occupancy Tenant Work ("Excluded Items"), Lessor, its agent and
employees shall not be liable or responsible for any claims, damages, or
liabilities arising in connection therewith or by reason thereof, nor shall
Lessee be excused from its obligations to perform under the Lease. The
Commencement Date shall be extended however, in accordance with the provisions
of this section of the Lease, to the earlier of (i) the date the Demised
Premises are occupied by Lessee for the conduct of its business, or (ii)
subject to a Lessor Delay or Force Majeure, the date which is one hundred
twenty (120) days after the Possession Date. Upon the Commencement Date, Lessor
and Lessee shall execute the "Declaration as to Commencement Date," attached
hereto as Exhibit D, which shall specify the Commencement Date.
(C) Notwithstanding the foregoing, in the event either the
Possession Date or Base Building Completion shall not have occurred or been
achieved on or before February 1, 2000 through no fault of Lessee, then except
as otherwise provided below, Lessee shall have the option to cancel and
terminate this Lease by giving written notice of such cancellation and
termination to Lessor on or before February 10, 2000. It is expressly
understood and agreed, however, that Lessee shall not be entitled to so cancel
and terminate this Lease for failure of the Possession Date to have occurred on
or before February 1, 2000 if Lessor has completed all the Lessor's Work,
except for the Excluded Items and such items of Lessor's Work which may not be
completed until after the installation of any items of Pre-occupancy Tenant
Work.
(D) Notwithstanding the foregoing, the one hundred twenty
(120)-day period between the Possession Date and the Commencement Date shall be
extended one (1) day for each day of delay in the construction of Lessee's
Pre-Occupancy Tenant Work caused by a Lessor Delay or a Force Majeure. A
"Lessor Delay" shall mean any of the following items individually or
collectively: (i) Lessor's failure to comply with any performance deadline
specified in this Lease to be complied with by Lessor after the Possession
Date,
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(ii) the performance of work in the Demised Premises by any person or firm
employed or retained by Lessor which materially hinders or interferes with the
performance of Lessee's Pre-Occupancy Tenant Work, and (iii) any interruption
of elevator access to the Demised Premises for one (1) full working day or
more. "Force Majeure" means any circumstance caused by any of the following:
strikes or lockouts; acts of God; inability to obtain labor, materials,
equipment or supplies; war or enemy action or invasion; civil commotion;
insurrection; riot; mob violence; malicious mischief or sabotage; an unusual
failure of transportation; fire or other casualty not due to negligence or
willful misconduct of Lessee; adverse weather conditions; a condemnation; or
other similar cause or circumstance which is not within the reasonable control
of Lessee; provided, however, that a lack of funds shall not be deemed to be a
cause or circumstance beyond the reasonable control of Lessee.
(E) Base Building Completion shall mean the issuance of a base
building or core Certificate of Occupancy by the appropriate authority, and the
mechanical, electrical and plumbing systems of the Building are fully
operational during normal Building operating hours, and the Building's main
lobby, elevators (including installation of cabs in all elevator cores) and all
public areas through which access must be had to reach the Demised Premises are
substantially complete. Further, Base Building Completion shall be achieved
substantially in accordance with the plans and specifications therefor
heretofore exhibited to Lessee.
3. USE
Lessee will use and occupy the Demised Premises solely for general
office purposes and uses ancillary or incidental thereto in accordance with the
applicable zoning regulations. The Demised Premises will not be used for any
other purpose without the prior written consent of Lessor. Lessee will not use
or occupy the Demised Premises for any unlawful purpose, and will comply with
all present and future laws, ordinances, regulations, and orders of all
governments, government agencies and any other public authority having
jurisdiction over the Demised Premises, including without limitation, the
requirements of the Americans with Disabilities Act of 1990 and its
implementing regulations ("ADA"), as existing or hereafter amended, to the
extent applicable to Lessee's use of the Demised Premises or the Pre-occupancy
Tenant Work or Alterations (as defined below) made therein by Lessee; it being
understood and agreed that Lessor shall be responsible for compliance with ADA
as applicable to the common areas of the Building to the extent such compliance
is not required by Lessee's particular business operations or any use of the
Demised Premises for other than general office use, in which event Lessee shall
be responsible for such compliance.
Lessee, its agents, employees, sublessees, contractors, invitees and
guests shall not use any portion or all of the Demised Premises or the Building
or land or other appurtenances thereto for the generation, treatment, storage
or disposal of "hazardous materials," "hazardous waste," "hazardous substances"
or "oil" (collectively "Materials") as such terms are defined under the
Comprehensive Environmental Response,
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Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., as amended, the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. 6901 et seq., as
amended, and any and all other "environmental statutes" which regulate the use
of hazardous and/or dangerous substances, and the regulations promulgated
thereunder and any and all state and local laws, rules and regulations
(collectively, "Environmental Regulations"), without the express prior written
consent of Lessor. Notwithstanding the foregoing, however, Lessee may use
Materials in the ordinary course of business, provided that such use is in
accordance with all Environmental Regulations, and any manufacturer
instructions; and provided further that Lessee may not discharge any Materials
in any public sewer or any drain and/or drainpipe leading or connected thereto.
Lessee shall promptly give written notice to Lessor of any communication
received by Lessee from any governmental authority or other person or entity
concerning any complaint, investigation or inquiry regarding any use or
discharge (or alleged use or alleged discharge) by Lessee of any Materials.
Lessor shall have the right (but not the obligation) to conduct such
investigations and tests as Lessor shall deem necessary with respect to any
such complaint, investigation or inquiry, and if such investigations or tests
shall disclose the use or discharge by Lessee of Materials in violation of
Environmental Regulations, Lessee, at its expense, shall take such action (or
refrain from taking such action) as Lessor may reasonably request in connection
with such investigations or tests by Lessor. Lessee shall indemnify, defend
(with counsel approved by Lessor, which approval shall not be unreasonably
withheld, conditioned or delayed), and hold Lessor harmless from and against
any such improper use or discharge (or both) by Lessee, including any costs of
all necessary clean-up activities occasioned by Lessee's actions, whether
during the term or after termination of this Lease, which indemnification
obligation of Lessee shall survive the expiration or earlier termination of the
term of this Lease.
The construction of the Building reflects the recent excavation of the
site on which the Building is located and the construction of new improvements
thereon. To the best knowledge of Lessor, the Building does not contain any
Materials, except as may be in accordance with all Environmental Regulations.
Further, Lessor shall not in the future use Materials in or about the Building
except in the ordinary course of business of managing, operating, repairing and
maintaining the Building and in accordance with all Environmental Regulations.
In the event Materials are discovered in the common areas of the Building or
the land upon which the Building is located, then Lessor shall use commercially
prudent efforts to abate or contain the condition to the extent required by and
in accordance with Environmental Regulations; and in the event Materials are
discovered in any tenant occupied areas of the Building other than the Demised
Premises, Lessor shall use commercially reasonable efforts to cause the
respective tenant(s) to abate or contain the condition to the extent required
by and in accordance with Environmental Regulations. Lessee shall not be
responsible for any abatement or containment of Materials, or direct payment or
reimbursement through Operating Expenses or Operating Costs (except as
expressly provided in Section 5 below) for any abatement or containment, unless
the situation giving rise to the abatement or containment is caused by Lessee.
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4. RENT
(A) Lessee covenants and agrees to pay to Lessor Monthly Rent (as
hereinafter defined) and any sums, charges, expenses and costs identified in
this Lease as additional rent to be paid by Lessee to Lessor. Lessee's
obligation to pay rent shall begin on the Commencement Date and shall continue
to remain an obligation of Lessee until completely satisfied.
Lessee will make all payments of rent by check to the Lessor's
agent, The Chevy Chase Land Company, Two Wisconsin Circle, Suite 540, Chevy
Chase, Maryland 20815, or to such other party or to such other address as Lessor
may designate from time to time by written notice to Lessee, without demand and
without deduction, set-off or counterclaim except as may be otherwise expressly
provided in this Lease. If Lessor shall at any time or times accept rent after
it shall become due and payable, such acceptance shall not excuse delay upon
subsequent occasions, or constitute, or be construed as, a waiver of any or all
of the Lessor's rights hereunder.
(B) The monthly rent for the Demised Premises (hereinafter
referred to as "Monthly Rent") which Lessee hereby agrees to pay in advance to
Lessor and Lessor hereby agrees to accept, shall be as follows, subject to
adjustment upward or downward after final space measurement as provided in
Section 1 above, such adjustment to be computed at the respective per square
foot rate set forth below:
Per Square Foot
Lease Period Monthly Rent Rate for Adjustment
------------ ------------ -------------------
From the Commencement
Date through the
expiration of the first
(1st) Lease Year $180,123.00 $36.00
Second (2nd) Lease Year $184,626.08 $36.90
Third (3rd) Lease Year $189,229.22 $37.82
Fourth (4th) Lease Year $193,982.46 $38.77
Fifth (5th) Lease Year $198,835.78 $39.74
Sixth (6th) Lease Year $203,789.16 $40.73
Seventh (7th) Lease Year $208,892.65 $41.75
Eighth (8th) Lease Year $214,096.20 $42.79
Ninth (9th) Lease Year $219,449.86 $43.86
Tenth (10th) Lease Year $224,953.61 $44.96
If the Commencement Date is on a date other than the first day of a calendar
month, rent from such date until the first day of the following calendar month
shall be prorated at the rate of one thirtieth (1/30th) of the Monthly Rent for
each day, payable in advance.
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Notwithstanding anything to the contrary, in the event Lessee shall elect to
exercise its option to install the Building Sign (as defined in Section 12
below), then the Monthly Rent due and payable from and after the date on which
substantial completion of the installation of the Building Sign shall be
achieved shall be increased as follows (it being understood and agreed that
Monthly Rent due and payable for the period preceding substantial completion of
the installation of the Building Sign shall remain due and payable in
accordance with the schedule set forth above), subject to adjustment upward or
downward after final space measurement as provided in Section 1 above, such
adjustment to be computed at the respective per square foot rate set forth
below:
Per Square Foot
Lease Period Monthly Rent Rate for Adjustment
------------ ------------ -------------------
From the Commencement
Date through the
expiration of the first
(1st) Lease Year $183,875.56 $36.75
Second (2nd) Lease Year $188,478.71 $37.67
Third (3rd) Lease Year $193,181.92 $38.61
Fourth (4th) Lease Year $198,035.23 $39.58
Fifth (5th) Lease Year $202,988.61 $40.57
Sixth (6th) Lease Year $208,042.07 $41.58
Seventh (7th) Lease Year $213,245.62 $42.62
Eighth (8th) Lease Year $218,549.24 $43.68
Ninth (9th) Lease Year $224,053.00 $44.78
Tenth (10th) Lease Year $229,656.83 $45.90
If the date on which substantial completion of the installation of the
Building Sign shall be achieved is a date other than the first day of a
calendar month, then the amount of the increase in the then applicable Monthly
Rent from such date until the first day of the following calendar month shall
be prorated at the rate of one-thirtieth (1/30th) of the amount of such
increase for each day, payable in advance.
(C) Monthly Rent as specified above shall be payable in advance on
the first day of each calendar month during the term of this Lease. Lessee
shall also pay to Lessor with the payment of Monthly Rent such payments toward
additional rent provided for in the section of the Lease entitled "RENTAL
ESCALATIONS FOR INCREASES IN EXPENSES."
(D) The Monthly Rent schedules set forth in Subsection (B) above
are based upon a current full service rental rate of $36.00 and $36.75 per
rentable square foot, respectively, escalated cumulatively at 2.5% per year.
Lessee shall have the right, to be exercised by written notice to Lessor at
least ninety (90) days prior to the anticipated Commencement Date, to convert
this Lease from a full service Lease to a "net of electric"
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Lease. In the event Lessee so elects, the base rental rates shall be adjusted
to $34.50 and $35.25 per rentable square foot, respectively, for the first
(1st) Lease Year, escalated cumulatively thereafter at 2.5% per year. Further,
the Demised Premises will be separately metered for electricity consumption,
and Lessee shall be responsible for paying directly to the utility supplier the
cost of all electricity consumed upon the Demised Premises and in heating and
air-conditioning the Demised Premises. Upon receipt of Lessee's election to so
convert this Lease, Lessor shall prepare, and Lessor and Lessee shall promptly
execute and deliver, an addendum to this Lease amending the appropriate
provisions hereof.
5. RENTAL ESCALATION FOR INCREASES IN EXPENSES
In the event the Operating Expenses of the Building during any
calendar year commencing January 1, 2001 and thereafter exceed the amount of
"Base Operating Expenses," defined to be the amount of Operating Expenses
actually incurred by Lessor in calendar year 2000, Lessee shall pay to Lessor,
as additional rent, Lessee's proportionate share of the portion of the
Operating Expenses that exceeds the amount of the Base Operating Expenses. The
proportionate share to be so paid by Lessee shall be the percentage which the
total square feet of the Demised Premises bears to the total square feet of all
office and retail space in the Building (approximately 277,133 rentable square
feet measured in accordance with the Washington, D.C. Association of Realtors
Standard Method of Measurement - January 1, 1989), which is 21.67% (subject to
adjustment after final space measurement as provided in Section 1 above), and
the amount of said proportionate share to be paid by Lessee shall be the same
proportion as the number of days in such calendar year said Demised Premises
were leased by Lessee bears to three hundred sixty (360). The term "Operating
Expenses" is defined as meaning (i) any and all expenses, charges and fees
incurred in connection with managing, operating, maintaining, servicing,
insuring and repairing the Building and related exterior appurtenances, and
(ii) Real Estate Taxes and impositions, general and special, of whatever kind
or description levied against the Building or land. The term "Real Estate
Taxes" for any calendar year is hereby defined to mean the total amount of all
taxes and assessments, general and special, ordinary and extraordinary,
foreseen and unforeseen, now or hereafter assessed, levied or imposed upon the
Building and the land on which the Building is situated ("the Land") for such
year, together with any tax in the nature of a real estate tax, and ad valorem
tax on rent or any tax on income if imposed in lieu of or in addition to real
estate taxes and assessments and generally passed through as an operating
expense to tenants in first-class office buildings in the Bethesda-Chevy Chase
market area, and any taxes and assessments which may hereafter be substituted
for Real Estate Taxes and together with the amount of any fees incurred in the
setting of the amount of these taxes. In the event that the method currently
used for the computation of the assessed market value of the Building and/or
the Land is discontinued or revised, the determination of the increases in Real
Estate Taxes under this Section 5 shall thereafter be made according to a
formula and procedure which most nearly approximates the method of
determination hereinabove set forth. In the event that any business, rent, or
other taxes which are now or hereafter levied upon Lessee's use or occupancy of
the
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Premises, on Lessee's leasehold improvements, on Lessee's business at the
Premises or on Lessor by virtue of Lessee's occupancy of the Premises, are
enacted, changed or altered so that any such taxes are levied against Lessor or
in the event that the mode of collection of such taxes is changed so that
Lessor is responsible for collection or payment of such taxes, any and all such
taxes shall be deemed to be a part of the increase in Real Estate Taxes and
Lessee shall pay Lessor Lessee's proportionate share of the full amount of such
taxes. Operating Expenses shall not include the Operating Costs listed in the
next paragraph below, nor shall Operating Expenses include the following:
- original construction costs of the Building;
- reserves for repairs, maintenance and replacements unless and
until applied to payment of an Operating Expense;
- salaries, wages or other compensation paid to employees,
officers or executives (collectively "Building Personnel") of
Lessor or its Management Agent (as defined in Section 29
below) who do not devote a substantial portion of their time
to the operation, management, maintenance or repair of the
Building (it being agreed that Lessor shall reasonably and in
good faith effect an equitable proration of Building
Personnel salaries, wages or other compensation for services
rendered to or at the Building and to any other property
owned by Lessor or its Management Agent, and only the portion
of such salaries, wages or other compensation allocable to
the Building will be included in Operating Expenses);
- costs of electricity supplied to the individual premises of
tenants of the Building or any special service to any other
tenant in excess of that furnished to Lessee on a rent
inclusive basis hereunder whether or not Lessor receives
reimbursement from such other tenants;
- costs of correcting defects in the initial design or
construction of the Building;
- any amounts (other than a management fee as provided for
below) paid to any person, firm or corporation related or
otherwise affiliated with Lessor or any of its members, to
the extent the same exceeds fair and reasonable prices paid
in the Bethesda-Chevy Chase market area for services and
goods comparable in quality and character to those provided;
- management fees in excess of those customarily charged from
time to time during the term of this Lease for the management
of similar office buildings in the Bethesda-Chevy Chase
market area, given any particular circumstances which may
from time to time reasonably require the payment of a
premium;
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- legal fees incurred in connection with the leasing of the
Building or in connection with disputes with other tenants;
- leasing commissions, advertising expenses and other such
expenses incurred in leasing or marketing the space within
the Building;
- costs of repairs or replacements incurred by reason of fire
or other casualty or condemnation;
- costs for which Lessor is entitled to be reimbursed by its
insurance carrier or is reimbursed by any tenant's insurance
carrier;
- costs of renovating or otherwise improving space for new
tenants or in renovating space vacated by any tenant or any
other such alteration or improvement work which Lessor
performs for any tenant;
- assessments to the extent prepaid in fewer than the maximum
permitted number of installments;
- costs of any concessions or incentives granted to tenants of
the Building (such as moving expenses allowances or
reimbursements);
- costs associated with the operation of the business of the
entity which constitutes Lessor as the same are distinguished
from the costs of operation of the Building, including
franchise, estate, income (except as specifically set forth
above), recordation, inheritance or transfer taxes payable by
Lessor, as well as legal and accounting fees (other than with
respect to the operation of the Building);
- interest or penalties incurred by reason of Lessor's failure
to comply with applicable laws or to timely pay any Operating
Expense, except to the extent the imposition of any such
interest or penalty arises out of the act or omission of
Lessee;
- depreciation of the Building or any equipment, machinery,
fixtures or improvements therein or other non-cash items such
as interest on capital invested, bad debt losses, rent losses
and reserves for such losses;
- costs incurred to bring the Building into compliance with
applicable laws and regulations existing as of the date of
this Lease;
- costs to investigate or clean-up of any Materials in, on or
under the Building or the Land (other than in the normal
course of business, such as oil or gasoline leaks from
vehicles or the spills of oil used in the chillers or any
back-up generators), except that notwithstanding the
foregoing, Lessor shall not be required to exclude from
Operating Expenses any costs
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incurred as a result of Materials in, on or under the
Building or the Land resulting from any acts or omissions of
Lessee, its agents, employees, sublessees, contractors,
invitees or guests, nor shall anything herein affect or
diminish Lessee's indemnification of Lessor with respect to
Materials as more fully set forth in Section 3 above;
- costs directly resulting from the gross negligence or willful
misconduct of Lessor or its agents, contractors or employees;
- costs of capital improvements and alterations, repairs or
replacements of a capital nature under generally accepted
accounting principles (unless such improvements or items are
reasonably expected to reduce the expenses of the Building or
are made to comply with governmental requirements imposed
after the date of this Lease, in which event the cost of any
such improvement shall be amortized over the useful life of
the improvement, and only the annual amortized portion of
such cost will be included in Operating Expenses);
- painting or decoration other than public areas;
- costs of purchasing paintings, sculptures or other art work
for display in the Building;
- interest and amortization of principal, and fees or charges
incurred in connection with the financing or refinancing of
the Building and the Land;
- ground rents;
- 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 for any items for which Lessor is reimbursed
under a manufacturer's, materialman's, vendor's or
contractor's warranty (a "Warranty"); it being understood and
agreed that Lessor shall use good faith efforts to pursue any
reimbursement to which it may be entitled under a Warranty;
- consulting costs and expenses paid by Lessor unless they
relate directly to the management or operation of the
Building;
- costs or payments associated with Lessor obtaining air rights
or other development rights; and
- any compensation paid to clerks, attendants or other persons
in commercial concessions (excluding the parking facilities
serving the
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Building) operated for profit by Lessor to serve as an
amenity to tenants of the Building.
In the event the Operating Costs of the Building during any calendar
year commencing January 1, 2001 and thereafter exceed the amount of "Base
Operating Costs," defined to be the amount of Operating Costs actually incurred
by Lessor in calendar year 2000, Lessee shall pay to Lessor, as additional
rent, Lessee's proportionate share of the portion of the Operating Costs that
exceeds the amount of the Base Operating Costs. The term "Operating Costs" is
defined as meaning the costs of the cleaning contract and cleaning supplies,
and electricity for the Building. The proportionate share to be so paid by
Lessee shall be the percentage which the total square feet of the Demised
Premises bears to the total square feet of all office space in the Building
(approximately 254,633 rentable square feet measured in accordance with the
Washington, D.C. Association of Realtors Standard Method of Measurement -
January 1, 1989), which is 23.58% (subject to adjustment after final space
measurement as provided in Section 1 above), and the amount of said
proportionate share to be paid by Lessee shall be the same proportion as the
number of days in the calendar year said Demised Premises were leased by Lessee
bears to three hundred sixty (360). In the event Lessor installs a separate
electric meter or meters for the premises occupied by any other tenant or
tenants of the Building, an appropriate adjustment as reasonably determined by
Lessor will be made in the electricity cost component of Operating Costs for
the tenants of the Building not separately metered.
As soon as practicable after the first day of January, 2001, and as
soon as practicable after each first day of January thereafter during the term
of the Lease, Lessor shall submit to Lessee a statement of Lessor's estimate of
the amount by which Operating Expenses and Operating Costs for the applicable
calendar year (as estimated by Lessor) are expected to exceed the amount of the
Base Operating Expenses and the Base Operating Costs, respectively. Commencing
with the first day of the month immediately following the delivery of such
statement, Lessee will pay to Lessor, as additional rent with Monthly Rent,
one-twelfth (1/12th) of Lessee's proportionate share of such excess of
estimated Operating Expenses and Operating Costs over Base Operating Expenses
and Base Operating Costs, respectively. Lessee shall continue to make said
payment monthly thereafter on the first day of each calendar month until the
amount of such payment is next adjusted after January 1st of the following
calendar year for increases in the amounts of Lessee's proportionate share of
Operating Expenses and/or Operating Costs as provided for herein.
As soon as practicable after the expiration of each calendar year, a
determination shall be made of the Operating Expenses and Operating Costs for
such calendar year and the amount of the increase (if any) in the Operating
Expenses and Operating Costs for such calendar year over the amount of the Base
Operating Expenses and the Base Operating Costs respectively. Operating
Expenses and Operating Costs for each calendar year shall be those actually
incurred, provided, however, that if the Building was not at least ninety-five
percent (95%) occupied during the entire calendar year, the Operating
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Expenses (including without limitation Real Estate Taxes) and Operating Costs
shall be adjusted, using reasonable projections taking into account any leases
which are net of electric and/or char service, and only to the extent any items
of Operating Expenses or Operating Costs vary with the occupancy level of the
Building, to project the Operating Expenses and Operating Costs as if the
Building were ninety-five percent (95%) occupied during the entire calendar
year by tenants using substantially all Building services. Lessor shall submit
to Lessee a statement of the aforesaid determination, including a reasonable
breakdown of the categories of expenses and Lessee's aforesaid proportionate
share of any increase.
Within thirty (30) days after the delivery of such statement
(including any statement delivered after the expiration or termination of the
term of this Lease), Lessee shall pay to Lessor an amount equal to (i) its
proportionate share of the increase, if any, in the actual amount of Operating
Expenses and/or Operating Costs for the just expired calendar year over the
Base Operating Expenses and the Base Operating Costs, respectively, less (ii)
the aggregate amount of monthly payments toward additional rent made by Lessee
during such calendar year and attributed to the estimated increases in
Operating Expenses and/or Operating Costs for such calendar year. If the
aggregate amounts of such payments toward additional rent for estimated
increases in Operating Expenses and/or Operating Costs paid by Lessee during
such calendar year exceeds Lessee's proportionate share of the actual increases
in Operating Expenses and/or Operating Costs, the excess shall be credited
toward payment of the next installment of Monthly Rent to be paid by Lessee
after Lessee receives said statement of Operating Expenses and Operating Costs
from Lessor, or if the calculation is prepared after the expiration or earlier
termination of this Lease, refunded to Lessee within thirty (30) days after
Lessor's determination of the excess.
Lessor shall maintain accurate books and records of Operating Expenses and
Operating Costs in accordance with sound accounting practices consistently
applied. Provided Lessee shall have given written notice to Lessor within
ninety (90) days after Lessor's delivery of an aforesaid statement of
determination of Operating Expenses and Operating Costs, and provided further
that Lessee shall make prior payment of all amounts due from Lessee pursuant to
such statement, Lessee, at its expense except as set forth below, shall have
the right, within one hundred eighty (180) days after Lessor's receipt of
Lessee's said written notice, and during normal business hours, to audit the
books and records of Lessor relating to Lessor's determination of any increase
in Operating Expenses and Operating Costs for the calendar year for which
Lessor's current determination is being made. Lessee shall keep in confidence
all information which it might gain or gather from the examination of Lessor's
books and records. Should it be determined by any such audit that the statement
of Operating Expenses and Operating Costs submitted to Lessee by Lessor was
inaccurate, and Lessor does not contest the result of such audit as provided
below, the parties shall promptly make an adjustment to reflect Lessee's actual
proportionate share of Operating Expenses and Operating Costs covered by such
inaccurate statement, and Lessor shall bear the reasonable cost of such audit
if it shall
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disclose an overstatement of Operating Expenses and Operating Costs by Lessor
of five percent (5%) or more.
Nothing herein shall be construed as a waiver of Lessor's right to contest the
results of any such audit by Lessee, and Lessor may cause a certified public
accountant designated by Lessor to conduct an audit of Lessor's books and
records to determine Operating Expenses and Operating Costs for the year in
question, provided that such audit by Lessor shall be commenced within
forty-five (45) days following receipt of Lessee's audit report. If the results
of Lessor's audit are contrary to those of Lessee's audit and Lessor and Lessee
cannot resolve their differences within thirty (30) days following receipt of
Lessor's audit report, then Lessor and Lessee agree to promptly select another
independent certified public accountant to conduct a third audit, and the
results of the third audit shall be final and binding on the parties. Each
party shall bear the cost of its own audit and shall pay one-half (1/2) of the
cost of the third audit, unless the third audit shall also disclose an
overstatement of Operating Expenses and Operating Costs by Lessor of five
percent (5%) or more, in which event Lessor shall bear the reasonable cost of
Lessee's audit and the third audit.
6. DEPOSIT
(A) Simultaneously with the execution of this Lease by Lessee,
Lessee shall deposit with Lessor the sum of One Hundred Eighty-Three Thousand
Eight Hundred Seventy-Five and 56/100 Dollars ($183,875.56) as a cash security
deposit to be applied to payment and satisfaction of the Monthly Rent for the
first (1st) full calendar month of the term of this Lease. Such cash deposit
shall be held by Lessor in an interest-bearing money market account in Lessor's
name at Sequoia National Bank, but all interest earned on the cash deposit
shall be treated for income tax purposes as accruing for the benefit of, and
shall be reported by, Lessee who shall furnish its Employer Identification
Number in connection with establishing such money market account. All such
interest shall be and become part of the cash deposit for all purposes. Such
cash deposit, prior to its being applied to the payment of the said Monthly
Rent, shall be security for the payment and performance by Lessee of all
Lessee's obligations, covenants, conditions and agreements under this Lease,
and Lessor shall have the right, but shall not be obligated, to apply all or
any portion of the deposit to cure any default by Lessee, in which event Lessee
shall be obligated to promptly deposit with Lessor the amount necessary to
restore the cash deposit to One Hundred Eighty-Three Thousand Eight Hundred
Seventy-Five and 56/100 Dollars ($183,875.56). Any balance of the cash deposit
remaining after application to payment and satisfaction of the Monthly Rent for
the first (1st) full calendar month of the term of this Lease shall be credited
toward payment of the next installment of Monthly Rent to be paid by Lessee.
(B) Simultaneously with the execution of this Lease by Lessee,
Lessee shall also deliver to Lessor an unconditional and irrevocable letter of
credit in favor of Lessor in customary form and issued directly by a local bank
reasonably acceptable to Lessor in the amount of Two Hundred Thirty Thousand
and 00/100 Dollars ($230,000.00) (the
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"Letter of Credit Amount") and having an expiration date not earlier than
February 28, 2010, or if Lessee delivers to Lessor a letter of credit expiring
prior to February 28, 2010, then Lessee shall be required to deliver to Lessor,
at least thirty (30) days prior to the expiration of the then current letter of
credit, a replacement letter of credit or an amendment or endorsement thereto
extending the expiration date of the letter of credit such that there will
always be in effect a letter of credit in the Letter of Credit Amount until
February 28, 2010. Said letter of credit shall be security for the payment and
performance by Lessee of all Lessee's obligations, covenants, conditions and
agreements under this Lease, and may be drawn upon at any time prior to
expiration upon Lessee's default under the terms of this Lease, including,
without limitation, Lessee's failure to deliver to Lessor a replacement letter
of credit, or an amendment or endorsement thereto, on or before thirty (30)
days prior to the expiration of the then current letter of credit as required
by the preceding sentence. Accordingly, Lessor shall have the right, but shall
not be obligated, to present said letter of credit for payment and apply the
proceeds to cure Lessee's default, in which event Lessee shall be obligated to
promptly deposit with Lessor cash or additional letters of credit in an amount
sufficient to restore the additional deposit held by Lessor to the Letter of
Credit Amount.
(C) In the event Lessee is in default under any of the provisions
of this Lease beyond the expiration of any applicable notice or cure period,
said cash deposit and/or the proceeds of said letter of credit shall not be
deemed liquidated damages and Lessor may apply the said cash deposit and/or the
proceeds of said letter of credit to reduce Lessor's damages, and such
application of the deposit shall not preclude Lessor from recovering from
Lessee all additional damages incurred by Lessor that are allowed under this
Lease. In the event of the sale or transfer of Lessor's interest in the
Building, Lessor shall have the right to transfer or assign said cash deposit
and/or letter of credit to the purchaser or transferee, in which event the new
lessor shall become vested with all rights and obligations with respect
thereto, and Lessor released therefrom.
(D) Upon the expiration or earlier termination of this Lease,
Lessor shall return to Lessee the letter of credit or so much of the letter of
credit proceeds retained by Lessor and the cash portion of the security deposit
as has not been applied or entitled to be held by Lessor to be applied to cure
any and all defaults by Lessee occurring prior to the expiration or earlier
termination of this Lease.
7. ASSIGNMENT AND SUBLETTING
(A) Lessor's Prior Consent Required. Lessee and Lessee's
representatives, successors and assigns will not assign, transfer, mortgage or
otherwise encumber this Lease or sublet or rent (or permit the occupancy or use
of) the Demised Premises, or any part thereof, without obtaining the prior
written consent of Lessor, nor shall any assignment or transfer of this Lease
or the right of occupancy hereunder be effectuated by operation of law or
otherwise without the prior written consent of Lessor (which consents shall not
be unreasonably withheld, conditioned or delayed, subject to and as more fully
provided in Subsection (B) below). Lessee shall reimburse Lessor for all costs
and
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expenses, including reasonable attorney's fees, architect's fees and engineer's
fees, which Lessor incurs by reason of or in connection with any assignment or
sublease by Lessee (whether or not permitted under this Lease), and all
negotiations, reviews and actions with respect thereto, which sums shall be due
and payable as additional rent hereunder within thirty (30) days after receipt
of a statement of such costs and expenses from Lessor; provided, however, that
in no event shall Lessee's obligation for reimbursement to Lessor for such
costs and expenses exceed the aggregate sum of Two Thousand Five Hundred and
00/100 Dollars ($2,500.00) per assignment or sublease transaction.
Notwithstanding anything to the contrary herein contained, Lessee may assign
this Lease or sublet the Demised Premises or any part thereof without Lessor's
consent (but upon prior written notice to Lessor) if and only if such
assignment or subletting is to or with any current or future subsidiary or
affiliate of Lessee. A "subsidiary" of Lessee shall mean any corporation not
less than fifty percent (50%) of whose outstanding voting stock shall, at the
time, be owned by Lessee. An "affiliate" of Lessee shall mean any corporation,
partnership or limited liability company which controls or is controlled by or
is under common control with Lessee, "control" meaning the power to direct or
cause the direction of the management and policy of a corporation, partnership
or limited liability company through the ownership of voting securities,
partnership interests, or membership interests, as the case may be. An
affiliate of Lessee shall also mean any successor corporation to Lessee by
merger, consolidation, non-bankruptcy reorganization or governmental action, or
which acquires all or substantially all of the property and assets of Lessee,
so long as such successor corporation assumes Lessee's obligations under this
Lease and has a net worth at least equal to that of Lessee on the date hereof.
Further, for purposes of this Lease, the sale of Lessee's capital stock through
any public exchange shall not be deemed an assignment, subletting or other
transfer of this Lease or the Demised Premises requiring Lessor's consent.
(B) Qualifications of Subtenant. Subject to the provisions of
Subsection (C) hereof, if all of the following conditions are met, Lessor shall
not withhold its consent hereunder to any sublease by Lessee (the words
"sublease" or "subtenant" as used in this Subsection (B) and in Subsection (C)
below to include an assignment and an assignee, respectively), it being
understood that Lessor's right to withhold consent if the following conditions
are not met is a material consideration for Lessor's agreement to enter into
this Lease.
(i) Lessee must first notify Lessor, in writing, of any
proposed sublease, at least thirty (30) days prior to the effective date of
such proposed sublease. The notice to Lessor must include a copy of the
proposed sublease and a copy of the proposed subtenant's most recent financial
statement, in form and content reasonably satisfactory to Lessor;
(ii) The subtenant must have a credit rating satisfactory
to Lessor in Lessor's reasonable judgment;
(iii) The sublease must be expressly subject and
subordinate to this Lease, must require that any subtenant must comply with and
abide by all of the
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applicable terms of this Lease, and must provide that any termination of this
Lease shall extinguish the sublease as well;
(iv) The subtenant may not change the use of the premises
or propose to conduct its business in a manner which, in Lessor's reasonable
judgment, is not appropriate for a first class office building in the
Metropolitan Washington, D.C. Area;
(v) The subtenant may not be a tenant, subtenant, or
other occupant of any part of the Building, unless there is no other comparable
space in the Building available to offer the subtenant; and
(vi) The Lessee may not be in default under this Lease.
(C) Lessor's Right of First Refusal. Lessor shall have the right,
within fifteen (15) days after receipt of the notice from Lessee required under
Subsection (B)(i) above that Lessee proposes to sublease all or a portion of
the Demised Premises (it being understood and agreed that Lessee may implement
the provisions of this Subsection (C) upon delivery of Lessee's self-initiated
proposal to sublease all or a portion of the Demised Premises, and that Lessee
need not have in hand a third party offer or proposal to sublease all or a
portion of the Demised Premises), to elect (i) to sublet the Demised Premises
from Lessee for the sublease term proposed by Lessee at the rent then being
paid by Lessee for the Demised Premises under Section 4 hereof (or that portion
thereof which Lessee proposes to sublease) by a proportionate reduction in the
rent as hereinafter set forth; (ii) to terminate this Lease, effective on the
date the proposed sublease is to commence, in its entirety if Lessee intends to
so sublet all of the Demised Premises for substantially all of the remainder of
the term of this Lease or, if Lessee proposes to sublet a portion of the
Demised Premises for substantially all of the remainder of the term of this
Lease, to terminate this Lease only with respect to such portion of the Demised
Premises; or (iii) consent to the sublease proposal in which event Lessee shall
continue to pay rent as provided in Section 4 hereof and, in addition, Lessee
shall be required to pay Lessor each month during the term of the sublease and
within five (5) business days of receipt of rent from the sublessee, forty-five
percent (45%) of the amount of rent payable by such sublessee in excess of the
amount of rent payable by Lessee hereunder with respect to the portion of the
Demised Premises sublet. Upon exercise by Lessor of either of the options set
forth in subclauses (i) or (ii) above, Lessee shall have the right to rescind
its sublease proposal by prompt written notice to Lessor within five (5) days
after receipt of Lessor's exercise notice, and unless Lessee so rescinds its
sublease proposal, Lessee shall surrender the Demised Premises or such portion
thereof, as the case may be, to Lessor, and thereafter the rent to be paid by
Lessee pursuant to Section 4 above shall be that portion of the total rent
which the amount of square foot area remaining in the possession of Lessee
bears (if any) to the total square foot area of the Demised Premises. Further,
if only a portion of the Demised Premises is so surrendered by Lessee, Lessor
shall be responsible, at its cost and expense, for demising such surrendered
portion of the Demised Premises and the remaining portion of the Demised
Premises retained by Lessee, which work shall be accomplished in a good and
workmanlike manner and in accordance with all applicable codes. In the event
that Lessor does not exercise its right
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to sublet the Demised Premises, or such portion thereof, as the case may be, or
to terminate this Lease within said thirty (30) day period, Lessee shall have
the right, subject to the provisions of subclause (iii) above, to sublet the
Demised Premises or a portion thereof after first obtaining the written consent
of Lessor as provided in Subsection (A) above. Upon exercise by Lessor of the
option set forth in subclause (iii) above, Lessee covenants and agrees to
provide Lessor with quarterly statements, prepared and verified by Lessee's
chief financial officer, stating the amount of rent received by Lessee from its
subtenant(s) during such quarterly period. If such statement shows Lessee
failed to make the full payments required by subclause (iii) above, a late
charge equal to ten percent (10%) of the amount due shall be paid by Lessee, as
additional rent hereunder.
(D) Transfer of Interest in Lessee. Subject to the provisions of
Subsection (A) hereof, any transfer after the date hereof, whether to one or
more persons or entities and whether at one or more different times, of a
controlling interest in Lessee (regardless of whether Lessee is a corporation,
partnership, or other entity) whether voluntarily, by operation of law, or
otherwise, shall be deemed an assignment of this Lease within the meaning of
this Section 7.
(E) No Waiver or Release. The consent by Lessor to any assignment
or subletting shall not be construed as a waiver or release of Lessee from the
terms of any covenant or obligation under this Lease, nor shall the collection
or acceptance of rent from any such assignee, subtenant or occupant constitute
a waiver or release of Lessee from any covenant or obligation contained in this
Lease, nor shall any such assignment or subletting be construed to relieve
Lessee from obtaining the consent in writing of Lessor to any further
assignment or subletting. Lessee and any guarantor shall remain fully
responsible and liable for all of Lessee's obligations under this Lease, and
the assignee, subtenant or occupant shall automatically be jointly and
severally liable to the extent of the assigned, sublet or occupied portion of
the Demised Premises. Lessee hereby assigns to Lessor the rent due from any
assignee, subtenant or occupant of Lessee and hereby authorizes each such
assignee, subtenant or occupant to pay said rent directly to Lessor, at
Lessor's option, in the event of any default by Lessee under the terms of this
Lease.
8. PRE-OCCUPANCY TENANT WORK
Lessor shall, at its expense, deliver the Demised Premises as a shell
in accordance with Exhibit B (the "Lessor's Work"). The floor to floor height
shall provide for a finished ceiling height of 8'6", the floor load capacity
shall accommodate 80 pounds live load and 20 pounds partition load, and the
column spacing on the floors shall be approximately 25' by 25'. Lessor's Work
shall also include sprinklering the Demised Premises in Lessor's standard grid
pattern subsequent to the Possession Date. Lessor and Lessee shall reasonably
cooperate in coordinating such sprinklering work with Lessee's Pre-occupancy
Tenant Work. Lessee shall be responsible for the relocation of sprinkler heads
from the standard grid pattern, as well as the installation of additional
sprinkler heads.
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Any and all tenant work and installations desired by Lessee for its
initial occupancy of the Demised Premises and shown on mutually approved
working drawings ("Pre-occupancy Tenant Work") shall be undertaken by Lessee at
its cost and expense (subject to the cash allowance provided for below), shall
be subject to the written approval of Lessor, and shall not be commenced until
such approval is obtained. Provided the Pre-occupancy Tenant Work shall
incorporate and conform with the Tenant Improvement Standards set forth in
Exhibit B or comparable alternate components, Lessor's approval shall not be
unreasonably withheld, conditioned or delayed; it being understood that
Lessor's decision will otherwise be based upon aesthetics, as well as the
effect which any improvements to be constructed may have on the structure of
the Building and its mechanical, plumbing and electrical systems. All
Pre-occupancy Tenant Work shall be done in accordance with the plans and
specifications prepared by Lessee's contractor or architect and as approved by
Lessor, and shall be subject to the provisions of the Lease applicable to
Alterations set forth in Section 9 below.
From time to time as Lessee's plans and specifications for
Pre-occupancy Tenant Work, including without limitation mechanical, fire
protection, electrical and plumbing ("MEP") plans, are being prepared and have
been developed to a stage reasonably sufficient and appropriate for review by
Lessor, Lessee shall submit the same to Lessor. Lessee shall provide to Lessor
such other information as Lessor may reasonably request in order to complete
its review of Lessee's preliminary and final plans and specifications. No
construction of any Pre-occupancy Tenant Work will be commenced until Lessor's
written approval of Lessee's final plans and specifications is granted or
deemed granted as herein provided.
Within ten (10) days after Lessor receives the first set of
preliminary plans and specifications from Lessee, within five (5) business days
after Lessor receives the second (2nd) submission of preliminary plans and
specifications from Lessee, and within two (2) business days after each
subsequent submission of preliminary plans and specifications and final plans
and specifications by Lessee, Lessor shall notify Lessee in writing as to
whether Lessor approves or disapproves such plans and specifications. If Lessor
disapproves the same, Lessor shall state, to the extent possible, its specific
objections, and Lessee shall promptly thereafter resubmit plans and
specifications revised to satisfy those objections. Within two (2) business
days after Lessor receives such resubmittals of plans and specifications,
Lessor shall notify Lessee in writing as to whether Lessor approves or
disapproves such resubmittals of plans and specifications. If Lessor fails to
respond within the required period as to either the initial respective
submission of Lessee's plans and specifications or such resubmittals thereof,
Lessor's approval shall be deemed granted. When Lessor approves Lessee's final
plans and specifications, a copy thereof shall be initialed by Lessor and
Lessee for identification purposes. Upon such approval of Lessee's final plans
and specifications, and Lessor's written notice to Lessee that the Lessor's
Work has progressed to a stage sufficient to permit Lessee to commence the
construction of its Pre-Occupancy Tenant Work, Lessee, its employees, agents
and contractors, may enter upon the Demised Premises at reasonable times for
the purpose of installing Pre-occupancy Tenant Work, trade fixtures and other
equipment for the conduct
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of Lessee's business upon the Demised Premises; provided, however, that any
such pre-Commencement Date entry by Lessee shall be upon the terms and
conditions of this Lease, including Lessee's indemnification of Lessor pursuant
to Section 18 below, and excluding only Lessee's obligation to pay rent; and
provided further that any such pre-Commencement Date entry by Lessee will not
interfere with or unreasonably delay Lessor in the completion of the Lessor's
Work or other construction activity on or within the Building.
If Lessee elects to undertake its own construction management (or
retain a third party construction manager) with respect to Pre-occupancy Tenant
Work, Lessee shall pay to Lessor a plan review and coordination fee (the "Plan
Review Fee") in an amount equal to one percent (1%) of the hard cost of the
Pre-occupancy Tenant Work, payable prior to the commencement of any
Pre-occupancy Tenant Work. If Lessee elects to retain Lessor's Management Agent
to perform construction management services with respect to Pre-occupancy
Tenant Work, then in lieu of the Plan Review Fee, Lessee shall pay to Lessor a
construction management fee (the "Construction Management Fee") in an amount
equal to four percent (4%) of the hard cost of the Pre-occupancy Tenant Work,
payable in equal monthly installments over the estimated course of construction
of the Pre-occupancy Tenant Work. With respect to the Pre-occupancy Tenant
Work, Lessee must elect either to (i) undertake its own construction management
(or retain a third party construction manager), or (ii) retain Lessor's
Management Agent to perform construction management services. Further, Lessee
may elect to use Girard Engineering as its MEP engineer. Lessee's selection of
any other MEP engineer shall be subject to the prior written approval of
Lessor, which approval shall not be unreasonably withheld, and shall also be
subject to Lessee's payment of Girard Engineering's fee (the "MEP Plan Review
Fee," which shall not exceed $6,000.00) to review the MEP plans prepared by any
other MEP engineer. The payment of the Plan Review Fee, the Construction Fee or
the MEP Plan Review Fee, as the case may be, shall constitute additional rent,
and in the event of nonpayment thereof by Lessee, Lessor shall have all the
rights and remedies set forth in this Lease with respect to nonpayment of rent.
Lessor shall pay to Lessee, on the following terms and conditions, a
cash allowance of up to Two Million One Hundred One Thousand Four Hundred
Thirty-Five and 00/100 Dollars ($2,101,435.00) (the "Construction Allowance")
(subject to adjustment upward or downward after final space measurement as
provided in Section 1 above, such adjustment to be computed at the rate of
$35.00 per square foot), to be applied to the payment of the cost and expense
incurred by Lessee in the design and construction of the Pre-occupancy Tenant
Work, including (i) the hard cost of the Pre-occupancy Tenant Work, (ii) the
costs of permits, space planning, architectural, engineering and design fees,
(iii) the Plan Review Fee, the Construction Management Fee, or the MEP Plan
Review Fee, as the case may be, and (iv) telecommunications systems and
equipment and computer cabling installed in the Demised Premises. Any balance
of the Construction Allowance remaining after such application to the cost and
expense of the Pre-occupancy Tenant Work shall be applied to reimburse Lessee
for direct moving expenses incurred in the relocation of Lessee's furniture and
equipment
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from their current location to the Demised Premises. In the event any further
balance of the Construction Allowance remains after application to reimburse
Lessee for such moving expenses, then such further balance of the Construction
Allowance shall be escrowed in a form and manner satisfactory to Lessor's
permanent lender for application to the payment and satisfaction in whole or in
part, as the case may be, of the Monthly Rent for the second (2nd) full
calendar month of the term of this Lease and each consecutive calendar month
thereafter, if required, until such further balance of the Construction
Allowance is exhausted.
The Construction Allowance shall be disbursed as the Pre-occupancy
Tenant Work progresses upon Lessee's submission of a requisition statement, not
more frequently than monthly, with supporting invoices representing the cost of
all Pre-occupancy Tenant Work since Lessee's last requisition, together with
evidence of payment of the cost of all Pre-occupancy Tenant Work covered by the
last requisition. Lessee shall also submit lien waivers by all contractors and
suppliers employed by Lessee for the Pre-occupancy Tenant Work. Lessor shall
have the right to verify all such invoices, and after inspection and approval
by Lessor and its architect of the Pre-occupancy Tenant Work, which approval
shall not be unreasonably withheld or delayed, Lessor shall pay to Lessee or
its contractor an amount equal to the approved requisition sum; provided,
however, that in no event shall Lessor's total liability for such payments
exceed the Construction Allowance. All Pre-occupancy Tenant Work, whether at
Lessor's or Lessee's expense, or the joint expense of Lessor and Lessee, shall
become and remain the property of Lessor and be surrendered with the Demised
Premises upon the expiration or earlier termination of this Lease.
The selection of Lessee's contractor(s) to perform Pre-occupancy
Tenant Work shall be subject to the prior written approval of Lessor. Approval
of a contractor by Lessor shall be based upon the contractor being properly
licensed and insured in accordance with Section 18(D) below, his financial
posture, experience and past job performance. Lessor's approval of Lessee's
contractor(s) shall not be unreasonably withheld, conditioned or delayed. If
Lessor fails to respond, within five (5) business days, to Lessee's request for
contractor approval accompanied by satisfactory evidence of the respective
contractor's required qualifications set forth above, Lessor's approval shall
be deemed granted. Lessor may further require that Lessee obtain and deliver to
Lessor written and unconditional waivers of mechanic's and materialmen's liens
upon the Land and Building for all work, labor and services to be performed,
and materials to be furnished in connection with such work, signed by all
contractors, subcontractors, and materialmen to become involved in such work.
Lessor shall have the right to inspect and approve all work performed by
Lessee's contractors. Further, all provisions of Section 10 below shall apply
to all work performed by Lessee's contractors.
Lessee shall not be required to remove or alter any Pre-occupancy
Tenant Work at the expiration or earlier termination of the term of the Lease.
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9. ALTERATIONS
After Lessee's initial occupancy of the Demised Premises and
installation of Lessee's approved Pre-occupancy Tenant Work, Lessee shall make
no alterations, installations, additions or improvements (herein collectively
called "Alterations") in or to the Demised Premises or the Building without
Lessor's prior written consent. Items of a cosmetic nature and decorative
modifications which do not adversely affect the structure of the Building or
its mechanical, plumbing or electrical systems, are not deemed Alterations.
Similarly, improvements which do not require a building permit, and which do
not adversely affect the structure of the Building or its mechanical, plumbing
or electrical systems, are not deemed Alterations. Consent by Lessor to
Lessee's Alterations shall not be unreasonably withheld, conditioned or
delayed, except that Lessor may withhold its consent for any reason with regard
to requested Alterations by Lessee which adversely affect the structure of the
Building or the mechanical, plumbing or electrical systems of the Building.
Lessee, at its sole cost and expense, must provide Lessor with a copy of the
original or revised full-floor mechanical and electrical plans for the floor or
floors on which the Alterations are to be made, revised by the Building
architect and engineers to show Lessee's proposed Alterations. If any
Alterations are made without the prior written consent of Lessor, Lessor may
correct or remove the same, and Lessee shall be liable for any and all expenses
incurred by Lessor in the performance of this work. All Alterations shall be
made at Lessee's sole expense, at reasonable times and in a workmanlike manner,
and only by such contractors or mechanics as are approved in writing by Lessor.
Approval of contractors or mechanics by Lessor shall be based upon the
contractors or mechanics being properly licensed and insured in accordance with
Section 18(D) below, their financial posture, experience and past job
performance. Lessor's approval of such contractors or mechanics shall not be
unreasonably withheld, conditioned or delayed. If Lessor fails to respond,
within five (5) business days, to Lessee's request for contractor approval
accompanied by satisfactory evidence of the respective contractor's required
qualifications set forth above, Lessor's approval shall be deemed granted.
Lessor may further require that Lessee obtain and deliver to Lessor written and
unconditional waivers of mechanics' and materialmen's liens upon the Land and
the Building for all work, labor and services to be performed, and materials to
be furnished, in connection with any permitted Alterations, signed by all
contractors, subcontractors and materialmen to become involved in any permitted
Alterations. Lessor shall not be liable for any damages or losses caused by
Lessee's contractors, and, as between Lessor and Lessee, Lessee agrees to pay
any and all expenses, claims or damages to person or property which may arise
directly or indirectly by reason of making any Alterations, all in accordance
with Sections 10, 16 and 18(B) below.
All Alterations to the Demised Premises, whether made by Lessor or
Lessee, and whether at Lessor's or Lessee's expense, or the joint expense of
Lessor and Lessee, shall be and remain the property of Lessor. Notwithstanding
the foregoing, however, and provided this Lease shall remain free from default
by Lessee, any Alterations, fixtures or any other property installed in the
Demised Premises at the sole expense of Lessee and with respect to which Lessee
has not been granted any credit or allowance by Lessor,
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whether pursuant to Exhibit B or otherwise, and which were designated for such
removal on Lessee's plans and specifications therefor and can be removed
without causing material damage to the Demised Premises and the Building or the
Demised Premises, shall be and remain the property of Lessee. In the event
Lessee removes any of these Alterations and the like, Lessee agrees to repair
any damage to the Building caused by said removal and to restore the Demised
Premises to a condition no less than that existing on the Commencement Date,
normal wear and tear and damage by the elements, fire and other casualty
excepted. Any replacements of any property or improvements of Lessor, whether
made at Lessee's expense or otherwise, shall be and remain the property of
Lessor.
Lessor, at the time Lessor consents to the Alterations, may elect to
require Lessee to remove all or any part of the Alterations made by Lessee
subsequent to the Commencement Date, it being understood and agreed, however,
that in no event shall Lessor require Lessee to remove any Alterations which
are in the nature of normal office improvements. Removal of Lessee's
Alterations shall be at Lessee's cost and expense, and Lessee shall, at its
cost and expense, repair any damage to the Demised Premises or the Building
caused by such removal.
Lessee shall remove all of Lessee's property at the expiration or
earlier termination of the Lease. In the event Lessee does not remove Lessee's
property at the expiration or earlier termination of the Lease, such property
shall become the property of Lessor.
In the event Lessee fails to remove its property or the Alterations
which it is required to remove on or before the expiration, or earlier
termination, of the term of the Lease, then and in such event, Lessor may
remove such property and Alterations from the Demised Premises at Lessee's
expense, and Lessee hereby agrees to pay to Lessor, as additional rent, the
reasonable cost of such removal together with any and all reasonable damages
which Lessor may suffer and sustain by reason of the failure of Lessee to
remove the same. Said amount of additional rent shall be due and payable upon
receipt by Lessee of a written statement of costs and damages from Lessor.
10. MECHANIC'S LIEN
If any mechanic's lien is filed against the Demised Premises, or the
Building of which the Demised Premises are a part, for work claimed to have
been done for Lessee or materials claimed to have been furnished to Lessee,
such mechanic's lien shall be discharged by Lessee, at its sole cost and
expense, within twenty (20) days (or such shorter period as may be necessary to
avoid a foreclosure or to allow Lessor to finance or sell the Building without
restriction or qualification) from the date Lessee receives written demand from
Lessor to discharge said lien, by the payment thereof or by filing any bond
required by law. If Lessee shall fail to discharge any such mechanic's lien,
Lessor may, at its option, discharge the same and treat the cost thereof as
additional rent,
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due and payable upon receipt by Lessee of a written statement of costs from
Lessor. It is hereby expressly covenanted and agreed that such discharge of any
mechanic's lien by Lessor shall not be deemed to waive or release Lessee from
its default under the Lease for failing to discharge the same. Lessee will
indemnify and hold harmless Lessor from and against any and all expenses,
liens, claims or damages to person or property which may or might arise as a
result of Lessee undertaking Pre-occupancy Tenant Work in the Demised Premises
at its own cost and under its own control and direction, or making any
Alterations to the Demised Premises, provided that any such expense, lien,
claim or damages did not arise out of the negligence or willful misconduct of
Lessor, its agents, employees or contractors.
11. MAINTENANCE BY LESSEE
Subject to Lessor's obligations under Section 15, Lessee will keep the
Demised Premises and the fixtures and equipment therein in clean, safe and
sanitary condition, will take good care thereof and will suffer no waste or
injury thereto. At the expiration or other termination of the term of this
Lease, Lessee will surrender the Demised Premises broom clean and in the same
order and condition in which they were on the Commencement Date, except for
ordinary wear and tear, damage by the elements, fire and other insured
casualty, and permitted Alterations and Pre-occupancy Tenant Work which Lessee
is not required to remove.
12. SIGNS AND ADVERTISEMENTS
No sign, advertisement or notice shall be inscribed, painted, affixed
or displayed on any part of the outside or the inside of the Building so as to
be visible from outside the Demised Premises, except with Lessor's prior
written consent and then only in such place, number, size, color and style
(i.e., Building standard lettering) as is authorized by Lessor. If any such
sign, advertisement or notice is exhibited without first obtaining Lessor's
written consent, Lessor shall have the right to remove the same, and Lessee
shall be liable for any and all expenses incurred by Lessor by said removal.
Signs within the Demised Premises and not generally visible from outside the
Demised Premises shall not require Lessor's consent.
Lessor agrees to display Lessee's name on the Building directory or
directories in the size and style of lettering used by Lessor. The initial
directory listings will be at Lessor's expense. Any changes thereto will be at
Lessee's expense. The number of individual names listed on the Building
directory or directories shall be subject to such limitation as shall be
established from time to time by Lessor, but in no event shall Lessee be
entitled to less than one hundred twenty (120) individual listings on the
Building directory. On any multi-tenanted floor occupied by Lessee, Lessee may
display its name on either the main entry door of the Demised Premises or the
adjacent corridor wall, as directed by Lessor, in Building standard color, size
and style of lettering, to be furnished by Lessor at Lessee's expense. On any
full floor occupied by Lessee, Lessee may elect to
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display its name or corporate logo using alternative materials, colors and
lettering, provided the same are in keeping with the standards of a first-class
office building in the Bethesda-Chevy Chase market area and shall be subject to
the prior approval of Lessor, which approval shall not be unreasonably
withheld, conditioned or delayed.
Lessor shall have the right to prohibit any published advertisement of
Lessee which references the Building and in Lessor's reasonable opinion tends
to impair the reputation of the Building or its desirability as a high quality
office building, and, upon written notice from Lessor, Lessee shall immediately
refrain from and discontinue any such advertisement.
Lessor agrees that so long as Lessee is not in default of its
obligations under this Lease beyond the expiration of any applicable notice and
cure period, and so long as Lessee continues to occupy the single largest
amount of rentable area in the Building (except for Discovery Communications,
Inc.) (the "Occupancy Test"), Lessee shall have the right, during the term of
this Lease and at its sole cost and expense, to elect to display the trade name
"COSTAR" or "RIG" on the northern facade of the Building under the roof
structure (the "Building Sign"). In the event Lessee shall become known by a
trade name other than "COSTAR" or "RIG", Lessee may display such other trade
name on the Building Sign in lieu of "COSTAR" or "RIG", provided that the
location and dimensions of the Building Sign shall remain unchanged, and Lessor
must first approve in writing any other change in the Building Sign (including
the change of the trade name displayed), which approval shall not be
unreasonably withheld, conditioned or delayed. If Lessee elects to install the
Building Sign, such election shall be made by written notice thereof to Lessor
at least thirty (30) days prior to installation of the Building Sign. Lessee
shall simultaneously submit to Lessor for its approval a detailed sign
rendering and specifications depicting the precise location, graphics and
materials of the Building Sign, as well as the manner of affixing the Building
Sign to the Building. Lessor's approval shall not be unreasonably withheld,
provided that the Building Sign shall be constructed of metal letters (not to
exceed the size of the letters in the "Oracle" sign currently affixed to the
southern facade of the adjacent building known as Three Bethesda Metro Center)
pinned directly to the Building, and the Building Sign may be backlit, but
shall not include any sign surface behind the letters.
If Lessee elects to install the Building Sign, Lessee shall be
responsible for obtaining any permits necessary for the installation of the
Building Sign, and shall otherwise comply with all laws, ordinances and
regulations governing the erection, installation and maintenance of signs.
Without limiting the generality of the foregoing, Lessee shall maintain the
Building Sign in a neat appearance and in good working order consistent with
the character of the Building as a first-class office building in the Bethesda
Central Business District. If Lessee fails to do so, Lessor may, but shall not
be obligated, to do the same, and the cost thereof to Lessor shall be due and
payable by Lessee as additional rent hereunder within thirty (30) days after
receipt by Lessee of a written statement of costs from Lessor. Promptly upon
expiration or termination of this Lease, Lessee agrees to remove the Building
Sign and fully repair and restore in a good
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and workmanlike manner any portion of the Building or its facade damaged by
installation and removal of the Building Sign.
Further, if Lessee no longer satisfies the Occupancy Test, Lessor
shall have the right to require Lessee to remove the Building Sign within
thirty (30) days after written notice from Lessor, and fully repair and restore
in a good and workmanlike manner any portion of the Building or its facade
damaged by installation and removal of the Building Sign. If Lessee fails to do
so, Lessor may, but shall not be obligated to do the same, and the cost thereof
to Lessor shall be due and payable by Lessee as additional rent hereunder
within thirty (30) days after receipt by Lessee of a written statement of costs
from Lessor. Effective upon the date of such removal of the Building Sign
because Lessee no longer satisfies the Occupancy Test, or in the event Lessee
otherwise elects to remove the Building Sign and fully repair and restore in a
good and workmanlike manner any portion of the Building or its facade damaged
by installation and removal of the Building Sign (in which event Lessee shall
have no further right to re-install the Building Sign), the then Monthly Rent
and all subsequent Monthly Rent due and payable pursuant to Section 4 above
shall be recomputed using the following annual rental rates per rentable square
foot as applicable to the Lease Year in which the Building Sign is so removed
and all subsequent Lease Years:
Per Square Foot
Lease Period Rate for Adjustment
------------ -------------------
First (1st) Lease Year $36.00
Second (2nd) Lease Year $36.90
Third (3rd) Lease Year $37.82
Fourth (4th) Lease Year $38.77
Fifth (5th) Lease Year $39.74
Sixth (6th) Lease Year $40.73
Seventh (7th) Lease Year $41.75
Eighth (8th) Lease Year $42.79
Ninth (9th) Lease Year $43.86
Tenth (10th) Lease Year $44.96
Notwithstanding the foregoing, if Lessor elects to require removal of
the Building Sign because Lessee no longer satisfies the Occupancy Test, then
within fifteen (15) days after receipt of Lessor's written notice to remove the
Building Sign, time being of the essence, Lessee may elect by written notice to
Lessor within the said 15-day period, to elect to retain the Building Sign on
the Building facade if, and only if, Lessee shall simultaneously in such
written notice to Lessor (i) irrevocably exercise its option to lease the
entire fifth (5th) floor of the Building when it becomes available in 2004,
with the rent therefor to be determined as nearly as practicable in accordance
with Section 36 below, but without any right on the part of Lessee to rescind
the exercise of its option, or (ii) irrevocably elect to extend the initial
term of this Lease for one (1) additional period of two (2) years upon the same
terms and conditions as contained in this Lease, including,
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without limitation, the continued cumulative escalation of Monthly Rent at two
and one-half percent (2.5%) per year without interruption from the initial term
to the said 2-year period and throughout the said 2-year period, or (iii)
irrevocably elect to increase the then Monthly Rent and all subsequent Monthly
Rent due and payable pursuant to Section 4 above if Lessee elects to install
the Building Sign (all expressed as an annual rental rate per rentable square
foot) by Fifty Cents ($0.50) per rentable square foot. Upon any such election
by Lessee, Lessor shall prepare, and Lessor and Lessee shall promptly execute
and deliver, an addendum to this Lease amending the applicable provisions
thereof.
13. DELIVERIES AND MOVING OF LESSEE'S PROPERTY
No furniture, equipment or other bulky matter of any description will
be received into the Building or carried in the elevators except in the manner
and during the times approved by Lessor. Lessee shall obtain Lessor's
determination prior to moving said property into the Building, it being
understood and agreed that Lessor shall provide Lessee with reasonable access
to the Building's loading dock for the purpose of delivering to the Demised
Premises materials for Lessee's Pre-occupancy Tenant Work, as well as Lessee's
furniture, equipment and other personal property. Further, at the time of
Lessee's initial move-in, Lessor will either (i) make the Building's freight
elevator available for Lessee's exclusive use for a reasonable period of time
necessary to accomplish the move-in on a timely and efficient basis, or (ii)
coordinate use of the freight elevator by Lessee and others so as to otherwise
accomplish Lessee's move-in on a timely and efficient basis. Any such activity
undertaken by Lessee shall be subject to Lessee's responsibility for damage in
accordance with Section 16 below. All moving of furniture, equipment and other
material within the public areas shall be under the direct control and
supervision of Lessor who shall, however, not be responsible for any damage to
or charges for moving the same. Lessor shall have the sole right to determine
the load capacities of the elevators of the Building and to determine if
Lessee's property can be safely transported in the elevators. Lessee agrees
promptly to remove from the sidewalks adjacent to the Building any of the
Lessee's furniture, equipment or other material there delivered or deposited.
14. LESSEE'S EQUIPMENT
Lessee will not install or operate in the Demised Premises any
electrically operated equipment or other machinery, other than typewriters,
word processing machines, adding machines, radios, televisions, tape recorders,
dictaphones, bookkeeping machines, copying machines, clocks, personal
computers, servers, office kitchen equipment and other business machines and
equipment normally employed for general office use which do not require high
electricity consumption (that is, in excess of five (5) watts per rentable
square foot) for operation, without first obtaining the prior written consent
of Lessor, who may condition such consent upon payment by Lessee of additional
rent as compensation for additional consumption of electricity and/or other
utility services. Such additional rent shall be in addition to Lessee's
obligations, pursuant to the
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section of this Lease entitled "RENTAL ESCALATION FOR INCREASES IN EXPENSES,"
to pay its proportionate share of increases in Operating Costs.
If any portion or all of Lessee's equipment shall require electricity
consumption in excess of the capacity of the electrical system installed by
Lessor in the Demised Premises (five (5) watts per rentable square foot), all
additional transformers, distribution panels and wiring that may be required to
provide the amount of electricity required for Lessee's equipment shall be
installed by Lessor at the cost and expense of Lessee. If Lessee's equipment
shall cause Lessee's consumption of electricity to exceed an average of five
(5) watts per rentable square foot, if any particular item of Lessee's
equipment shall consume electricity in excess of five (5) watts per rentable
square foot, or if such equipment is to be consistently operated beyond the
normal Building hours of 8:00 a.m. to 6:00 p.m., Monday through Friday, and
8:00 a.m. to 2:00 p.m. on Saturday, Lessor may install at its option, but at
Lessee's sole cost and expense (i) a separate electric meter for the Demised
Premises, or (ii) a separate meter for the specific equipment that is causing
Lessee's excessive consumption of electricity. In the event Lessor installs a
separate meter for the Demised Premises, Lessee shall then pay the cost of
electricity it consumes as recorded by such meter directly to the electric
company, and an appropriate adjustment as reasonably determined by Lessor will
be made to Lessee's proportionate share of Operating Costs to reflect Lessee's
reduced consumption of electricity because of such separate metering of the
Demised Premises. In the event Lessor separately meters the specific equipment,
Lessee shall be billed periodically by Lessor based upon such consumption and
no adjustment shall be made to Lessee's proportionate share of Operating Costs
nor to the Operating Costs of those tenants not separately metered.
Except as shown on Lessee's plans and specifications for its
Pre-occupancy Tenant Work as approved by Lessor, and subject to Lessee's
obligations with respect to excess utility consumption or other costs in
accordance with the provisions of this Lease, Lessee shall not install any
equipment of any kind or nature whatsoever which will or may necessitate any
changes, replacements or additions to, or in the use of, the water system,
heating system, plumbing system, air-conditioning system, or electrical system
of the Demised Premises or the Building without first obtaining prior written
consent of Lessor. Business machines and mechanical equipment belonging to
Lessee which cause noise or vibration that may be transmitted to the structure
of the Building or to any space therein to such a degree as to be objectionable
to Lessor or to any tenant in the Building shall be installed and maintained by
Lessee, at Lessee's expense, on vibration eliminators or other devices
sufficient to eliminate such noise and vibration.
Lessor understands that Lessee's plans and specifications for its
Pre-occupancy Tenant Work may depict the installation of one (1) or two (2)
rooftop air handling units (the "Units") to serve a supplemental HVAC system to
be installed by Lessee in the Demised Premises. In that event, Lessee shall
have the non-exclusive right to install and maintain the Units at a location on
the structural roof of the Building to be mutually agreed upon, with the method
of installation to be specified in such plans and specifications, it being
understood that no roof penetrations which would void Lessor's
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roof warranty or prejudice the water tight integrity of the roof will be
permitted. Lessee shall also be granted access to existing wetstacks, flues and
chases within the Building to run piping and electrical feeds from the Demised
Premises to the Units in accordance with Lessee's plans and specifications to
be approved by Lessor. Such use of the rooftop space of the Building for the
Units and access to existing wetstacks, flues and chases shall be without
additional charge or fee payable by Lessee to Lessor, except as expressly set
forth in this paragraph. Lessee shall have sole responsibility for the
maintenance, repair and replacement of the Units. Further, the ownership,
installation, use maintenance and removal of the Units shall be at Lessee's
sole cost and risk. Except to the extent caused by the negligence or willful
misconduct of Lessor, its agents, employees or contractors, Lessee agrees to
save Lessor harmless from and against all claims, actions, damages, liability
and expenses, including reasonable attorney's fees, arising from or relating to
the ownership, installation, use and operation, maintenance and repair, and
removal of the Units. To insure such indemnity, all of Lessee's insurance
policies required under this Lease shall, if reasonably requested by Lessor,
include the Units as an insured risk. Upon the expiration or earlier
termination of the term of this Lease, Lessee shall remove any Units then
installed, and repair in a good and workmanlike manner any portion of the
Building or the roof damaged by such removal. In the event Lessee fails to so
remove the Units, Lessor may remove and dispose of the Units, at Lessee's cost
and expense, without liability for any property of Lessee or any third party so
disposed of or removed by Lessor.
Lessor shall have the right to prescribe the weight and position of
all heavy equipment and fixtures, including, but not limited to, data
processing equipment, record and file systems, and safes which Lessee intends
to install or locate within the Demised Premises. Lessee shall obtain Lessor's
prior review and approval (which approval shall not be unreasonably withheld,
conditioned or delayed) before installing or locating heavy equipment and
fixtures in the Demised Premises, and if installation or location of such
equipment or fixtures, in Lessor's opinion, requires structural modifications
or reinforcement of any portion of the Demised Premises or the Building, and
Lessor elects to make such structural modifications or reinforcement, it being
understood that Lessor shall have no obligation to do so, Lessee agrees to pay
to Lessor any and all costs incurred by Lessor to make such required
modifications or reinforcements, and such modifications or reinforcements shall
be completed prior to Lessee installing or locating such equipment or fixtures
in the Demised Premises. Lessee shall pay one-half (1/2) of said costs upon
its approval of the cost estimates therefor and the entire remaining balance of
such costs when the work is complete as determined by Lessor's architect and/or
engineer.
Subject to the following terms and conditions, Lessee shall have the
non-exclusive right to install an emergency generator (the "Generator") at a
location on the structural roof of the Building to be mutually agreed upon.
Such use of the rooftop space of the Building for the Generator shall be
subject to the payment by Lessee to Lessor of an annual license fee in the
amount of One Thousand Five Hundred and 00/100 Dollars ($1,500.00), subject to
annual escalations equal to two and one-half percent (2-1/2%) of
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the license fee payable for the immediately preceding yearly period, payable
upon the date of installation of the Generator and on each anniversary thereof
during the term of this Lease, the payment of which shall constitute additional
rent hereunder. The Generator shall be fueled by connection to the existing
diesel fuel supply line running from a 550 gallon fuel storage tank on the P-4
level of the Building to Lessor's emergency generator for the Building also
located on the structural roof of the Building. Lessor shall maintain the said
fuel storage tank as an Operating Expense, but Lessor and Lessee shall
reasonably and in good faith endeavor to agree upon an equitable proration of
the costs of any diesel fuel actually consumed in the operation of the
Generator and Lessor's emergency generator for the Building. Prior to
installation of the Generator, Lessee shall deliver to Lessor for its approval,
which approval shall not be unreasonably withheld or delayed, (i) a description
of the precise Generator Lessee desires to install, including complete
technical and design specifications, and the method of installation, it being
understood that no roof penetrations which would void Lessor's roof warranty or
prejudice the water tight integrity of the roof will be permitted, (ii) the
proposed roof location of the Generator, and (iii) such other information as
Lessor may reasonably request. Lessee shall be responsible for obtaining and
maintaining all approvals, permits and licenses required by any federal, state
or local government for the installation and operation of the Generator and pay
all fees attendant thereto; and Lessee shall have the sole responsibility for
the maintenance, repair and replacement of the Generator. Further, the
ownership, installation, use, maintenance and removal of the Generator shall be
at Lessee's sole cost and risk. Except to the extent caused by the negligence
or willful misconduct of Lessor, its agents, employees or contractors, Lessee
agrees to save Lessor harmless from and against all claims, actions, damages,
liability and expenses, including reasonable attorney's fees, arising from or
relating to the ownership, installation, use and operation, maintenance and
repair, and removal of the Generator. To insure such indemnity, all of Lessee's
insurance policies required under this Lease shall include the Generator as an
insured risk. Upon the expiration or earlier termination of the term of this
Lease, Lessee shall remove any Generator then installed, and repair in a good
workmanlike manner any portion of the Building or the roof damaged by such
removal. In the event Lessee fails to so remove the Generator, Lessor may
remove and dispose of the Generator, at Lessee's cost and expense, without
liability for any property of Lessee or any third party so disposed of or
removed by Lessor.
15. SERVICES AND UTILITIES
(A) So long as Lessee shall not be in default of its obligations
under this Lease, including without limitation, the payment of all items of
rent and additional rent after any applicable notice and cure period has
expired, Lessor shall provide the following utilities and services:
(1) Hot and cold water and lavatory supplies, it being
understood and agreed that hot and cold water shall be furnished by Lessor only
at those points of supply provided for general use of other tenants in the
Building.
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(2) Automatically operated elevator service at all times,
including elevator access to the parking garage.
(3) Cleaning and char services, as specified in Exhibit E,
after normal business hours, Monday through Friday of each week, except on the
holidays listed in subparagraph (4) below. Such services shall be consistent
with the standards for the operation of a first-class office building in the
Bethesda-Chevy Chase Central Business District.
(4) Heat and air-conditioning in season in accordance with
the criteria specified in Exhibit H, Monday through Friday from 8:00 a.m. to
6:00 p.m., and on Saturday from 8:00 a.m. to 2:00 p.m., except for the
following holidays: New Year's Day, Martin Luther King Day, Washington's
Birthday, Memorial Day, Fourth of July, Labor Day, Columbus Day, Veteran's Day,
Thanksgiving Day, and Christmas Day, and any other national holiday promulgated
by a Presidential Executive Order or Congressional Act. Lessor shall provide
heat and air-conditioning at times in addition to those specified in the
preceding sentence at Lessee's expense, provided Lessee gives Lessor notice
prior to 1:00 p.m. (in the case of after-hours service on weekdays) and prior
to 3:00 p.m. on Fridays (in the case of after-hours service on Saturdays,
Sundays or said holidays). Lessor shall charge Lessee for said after-hours
services the same rate it charges other tenants, which is $65.00 per hour on
the date of execution of this Lease. Lessor reserves the right, in its
reasonable discretion, to increase the hourly charge for said after-hours
service, but in no event will the rate per hour charged Lessee be more than the
rate per hour charged other tenants. In the event the same after-hours service
is also requested by other tenants of the Building in addition to Lessee, the
charge therefor to each tenant requesting such after-hours service shall be
prorated among all requesting tenants based upon the respective square footages
of each of the demised premises of the tenants requesting such after-hours
service.
(5) Maintenance, repair, painting and electric lighting
service for all public areas and special service areas in the Building,
including the parking garage. In furtherance thereof, Lessor shall at all times
during the term of this Lease maintain and keep the Building (including its
structural elements and its mechanical, electrical and plumbing systems) and
its common areas in good order and repair, and in a clean and sanitary
condition, in a manner consistent with the operation of a first-class office
building in the Bethesda Central Business District. Sidewalks and pathways
which are exposed to the elements shall be kept reasonably free from ice and
snow as required by applicable local laws and regulations. All shrubbery,
trees, flower beds and other landscaped areas located within the common areas
of the Building and Land shall be professionally maintained. Nothing herein
shall preclude the cost of any such items of work from being included as an
Operating Expense.
(6) Electricity and proper electrical facilities to
furnish sufficient electricity for equipment of Lessee installed pursuant to
the section of this Lease entitled "LESSEE'S EQUIPMENT."
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(7) A building security system consistent with the
standards for the operation of a first-class office building in the Bethesda
Central Business District, including a card access system at public entry
points into the Building, as well as closed-circuit TV monitoring.
(8) A base building sprinkler system and fire alarm system
complying with local codes and ordinances, as well as ADA; subject to Lessee's
responsibility to relocate base building sprinkler heads, and install
additional sprinkler heads in compliance with local codes and ordinances as
part of its Pre-occupancy Tenant Work.
(9) Periodic inspection of indoor air quality in the
Building to consist of inspection of the Building's mechanical systems as they
relate to indoor air quality, combined with measurements of selected indoor
contaminants which verify the performance of the Building's mechanical systems
in providing good quality indoor air which shall meet or exceed the ASHRAE
standards recited in Exhibit H. Further, objectionable odors from any
restaurant premises in the Building shall not be permitted to permeate from the
respective restaurant premises into the Demised Premises.
(B) In the event any utility company supplying energy requires,
or government law, regulation, executive or administrative order results in a
requirement, that Lessor or Lessee must reduce, or maintain at a certain level,
the consumption of electricity for the Demised Premises or Building, which
affects the heating, air-conditioning, lighting, or hours of operation of the
Demised Premises or Building, Lessor and Lessee shall each adhere to and abide
by said laws, regulations or executive orders without any reduction in rent.
(C) Lessor's inability to furnish, to any extent, these defined
services, or any cessation thereof resulting from causes beyond the control of
Lessor, shall not render Lessor liable for damages to either person or
property, nor be construed as an eviction of Lessee, nor work an abatement of
any portion of rent, nor relieve Lessee from fulfillment of any covenant or
agreement hereof. Should any of the Building equipment or machinery cease to
function properly for any cause, Lessor shall use reasonable diligence to
repair the same promptly, but Lessee shall have no claim for damages or for a
rebate of any portion of rent on account of any interruptions in any services
occasioned thereby or resulting therefrom, unless the interruptions are caused
by Lessor's negligence, willful misconduct, or breach of its obligations under
this Lease. Notwithstanding the foregoing, if for any reason other than the
negligence or willful misconduct of Lessee, or a casualty described in Section
21 below, a service interruption shall occur and continue for more than five
(5) consecutive days such as to materially interfere with or deny Lessee's use
of the Demised Premises, and Lessee as a result thereof actually ceases to
occupy the Demised Premises, in whole or in part, then the Monthly Rent and
additional rent shall be equitably apportioned and abated (on the basis of that
proportion which the area of the Demised Premises so vacated by Lessee bears to
the entire area of the Demised Premises) on a per diem basis from the date of
such service interruption until the service is restored; provided, however,
that if prior to the date on which the service is restored, any part of the
Demised Premises shall be rendered tenantable and shall be used or occupied by
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Lessee for its normal business purpose, then the amount by which the Monthly
Rent and additional rent shall abate shall be equitably apportioned for the
period from the date of any such partial use or occupancy to the date on which
such service is restored.
16. LESSEE'S RESPONSIBILITY FOR DAMAGE
Any and all injury, breakage or damage to the Building, arising from
the negligence, willful misconduct, breach of this Lease or violation of law of
or done by Lessee or its agents, contractors, servants, employees and visitors
(as to visitors, while in the Demised Premises only), or by individuals and
persons making deliveries to or from the Demised Premises (after Lessee shall
have been advised by Lessor of damage caused by such party), except as provided
for in the section of this Lease entitled "DAMAGE TO THE BUILDING AND/OR THE
DEMISED PREMISES," shall be repaired by Lessor at the sole expense of Lessee,
unless the cost of such repairs is reimbursed or paid by Lessor's or Lessee's
insurance carrier. Payment of the cost of such repairs by Lessee shall be due
as additional rent within thirty (30) days after Lessee receives a bill for
such repairs from Lessor. This provision shall not be in limitation of any
other rights and remedies which Lessor has or may have in such circumstances.
17. ENTRY FOR INSPECTIONS, REPAIRS AND INSTALLATIONS
Lessee will permit Lessor, or its agent, employees or contractors,
upon one (1) day's notice to Lessee, to enter the Demised Premises at all
reasonable times and in a reasonable manner, without charge to Lessor or
without diminution of Monthly Rent payable by Lessee, to examine, inspect and
protect the same, and, upon one (1) day written notice, to make such repairs as
in the reasonable judgment of Lessor may be deemed necessary to maintain or
protect the Demised Premises or the Building, or to make installations related
to the construction of pre-occupancy tenant work being performed by Lessor for
other tenants of the Building, or to exhibit the same to prospective purchasers
or lenders at any reasonable time or to prospective tenants during the last one
hundred twenty (120) days of the term of this Lease. Lessor shall use
commercially reasonable efforts to minimize interference to Lessee's business
or use of the Demised Premises when making repairs in or adjacent to the
Demised Premises, but Lessor shall not be required to perform the repairs at a
time other than during normal working hours. It is expressly understood that
the Demised Premises do not include any mechanical, electrical, telephone and
similar rooms which service the Building; janitor closets; common area
restrooms; elevator, pipe and other vertical shafts and ducts; flues;
stairwells (except any stairwells exclusively serving the Demised Premises);
and the area above the acoustical ceiling.
If notwithstanding Lessor's commercially reasonable efforts to
minimize interference to Lessee's business or use of the Demised Premises, the
making of such repairs in or adjacent to the Demised Premises shall materially
interfere with or deny Lessee's use of the Demised Premises, and Lessee as a
result thereof actually ceases to
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occupy the Demised Premises, in whole or in part, for more than five (5)
consecutive days, then the Monthly Rent and additional rent shall be equitably
apportioned and abated (on the basis of that proportion which the area of the
Demised Premises so vacated by Lessee bears to the entire area of the Demised
Premises) on a per diem basis from the date on which Lessee so vacated the
Demised Premises, and continuing until such repairs are completed or Lessee
sooner resumes occupancy of the area of the Demised Premises so vacated by
Lessee.
In the event of an emergency, Lessor may enter the Demised Premises
without notice and make whatever repairs are necessary to protect the Demised
Premises or the Building without any liability whatsoever resulting from such
entry, excepting, however, Lessor's negligence or willful misconduct determined
in light of the emergency circumstances.
18. INSURANCE
(A) Insurance Rating. Lessee will not conduct or permit to be
conducted any activity, or place any equipment or property in or about the
Demised Premises that will increase in any way the rate of fire insurance or
other insurance on the Building, unless consented to by Lessor. Lessor's
consent may be conditioned upon Lessee's payment of any costs arising directly
or indirectly from such increase. If any increase in the rate of fire insurance
or other insurance on the Building is stated by any insurance company or by the
applicable Insurance Rating Bureau to be due to Lessee's activity, equipment or
property in or about the Demised Premises, said statement shall be conclusive
evidence that the increase in such rate is due to such activity, equipment or
property and, as a result thereof, Lessee shall be liable for such increase.
Any such rate increase and related costs incurred by Lessor shall be deemed
additional rent due and payable by Lessee to Lessor within thirty (30) days
after receipt by Lessee of a written statement of the rate increase and costs.
Lessee may contest, at its sole cost and expense, any insurance rate increase,
provided such action by Lessee will not adversely affect the insurance coverage
of Lessor.
(B) Indemnity and Commercial General Liability Insurance. Lessee
agrees that it will indemnify and save harmless Lessor from any and all
liability, damage, expense, cause of action, suits, claims, judgments and cost
of defense arising from injury to person or personal property in and on the
Demised Premises, or upon any adjoining sidewalks or public areas of the
Building, which arise out of the act, failure to act or negligence of Lessee,
its agents or employees, provided such cost or expense is not paid or
reimbursed by Lessor's insurance carrier, and provided further that any such
injury or damage did not arise out of the negligence or willful misconduct of
Lessor. Lessor agrees that except to the extent caused by the negligence or
willful misconduct of Lessee, its agents, employees or contractors, it will
indemnify and save harmless Lessee from any and all liability, damage, expense,
cause of action, suits, claims, judgments, and cost of defense arising from
injury to person or personal property in and on the common areas of the
Building, and other areas under the exclusive control of Lessor, which arise
out of the
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negligence or willful misconduct of Lessor, its agents, employees, or
contractors, provided such cost or expense is not paid or reimbursed by
Lessee's insurance carrier.
In order to assure such indemnity, Lessee agrees, at its sole cost, to
carry and keep in full force and effect at all times during the term of this
Lease, a commercial general liability policy with a single limit of at least
Two Million Dollars ($2,000,000.00) including coverage for bodily injury,
property damage and personal injury liability. Said policy shall name Lessor as
an additional insured and shall have attached thereto an endorsement to the
effect that no act or omission of Lessee shall affect the obligation of the
insurer to pay Lessor the full amount of any loss sustained by Lessor.
(C) Mutual Waiver of Subrogation. Lessor and Lessee each waive the
right of subrogation for all risk of loss or damage to property of the other
whether such loss or damage is caused by the negligence of either party to the
extent that such loss or damage is covered by such party's property insurance.
Lessor's and Lessee's respective property insurance policies shall each contain
a waiver of subrogation endorsement.
(D) Lessee's Contractor's Insurance. Lessee shall require any
contractor of Lessee performing work on the Demised Premises to carry and
maintain, at no expense to Lessor,
(1) commercial general liability insurance, including
contractor's liability coverage, contractual
liability coverage, completed operations coverage,
broad form property damage endorsement and
contractor's protective liability coverage, to
afford protection with limits, for each occurrence,
of not less than One Million Dollars ($1,000,000.00)
with respect to bodily injury or death, and One
Million Dollars ($1,000,000.00) with respect to
property damage; and
(2) worker's compensation or similar insurance in form
and amounts required by law.
(E) Lessee Property Insurance. Lessee will, during the term of this
Lease, carry and maintain an all risk insurance policy covering all items of
Pre-occupancy Tenant Work, Alterations, trade fixtures and personal property
from time to time in or upon the Demised Premises, and in an amount not less
than the full replacement cost thereof from time to time during the term of this
Lease, and providing protection against perils included within the standard form
of an all risk insurance policy.
19. REQUIREMENTS FOR LESSEE'S INSURANCE POLICIES
The company or companies writing any insurance which Lessee is
required to carry and maintain or cause to be carried or maintained pursuant to
this Lease shall be a good and responsible insurance company, licensed to do
business in the State of
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Maryland. Lessor's approval of any such insurance company shall be required if
such insurance company does not have at least an "A-XII" rating by A.M. Best
Co. or an equivalent rating by another comparably recognized insurance rating
service. Lessee's commercial general liability and all risk insurance policies
shall contain a provision by which the insurer agrees that such policy shall
not be cancelled except after thirty (30) days' written notice to Lessor.
Lessee agrees to provide to Lessor prior to taking possession of the Demised
Premises, and from time to time as may be required, the certificates evidencing
such insurance.
Any insurance carried or to be carried by Lessee hereunder shall be
primary over any policy that might be carried by Lessor. If Lessee shall fail
to perform any of its obligations regarding the acquisition and maintenance of
insurance, Lessor may perform the same and the cost of same shall be deemed
additional rent and shall be payable upon Lessor's demand.
20. LIABILITY FOR DAMAGE TO PERSONAL PROPERTY AND PERSON
Lessee shall protect its property and insure the same to its own
satisfaction. All personal property of Lessee, its employees, agents, business
invitees, licensees, customers, clients, family members, guests or trespassers,
in and on the Demised Premises shall be and remain in and on the Demised
Premises and the Building at the sole risk of said parties and unless such
parties establish that there has been negligence or a willful act or failure to
act on the part of Lessor, its agents or employees causing a hereinafter
described act or event, Lessor shall not be liable to any such person or party
for any damage to, or loss of personal property thereof, including loss or
damage arising from (a) any act, including theft, or any failure to act, of any
other persons, (b) the leaking of the roof, (c) the bursting, rupture, leaking
or overflowing of water, sewer or steam pipes, (d) the rupture or leaking of
heating or plumbing fixtures, including security and protective systems, (e)
short-circuiting or malfunction of electrical wires or fixtures, including
security and protective systems or (f) the failure of the heating or air
conditioning systems. Lessor shall also not be liable for the interruption or
loss to Lessee's business arising from any of the above-described acts or
causes.
Lessor shall not be liable for any personal injury to Lessee, Lessee's
employees, agents, business invitees, licensees, customers, clients, family
members, guests or trespassers arising from the use, occupancy and condition of
the Demised Premises or the Building, unless such party establishes that there
has been negligence or a willful act or failure to act on the part of Lessor,
its agents or employees.
21. DAMAGE TO THE BUILDING AND/OR THE DEMISED PREMISES
Lessor shall maintain an all-risk insurance policy covering the
Building in an amount sufficient to prevent Lessor from becoming a co-insurer
or in such greater amount as may be required by Lessor's mortgagee, as well as
a commercial general liability policy of insurance with limits of coverage from
time to time prevailing for owners or
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managers of first-class office buildings in the Bethesda-Chevy Chase market
area (the cost of all premiums for which shall be included in Operating
Expenses).
If the Demised Premises shall be damaged by fire or other casualty
insured against by Lessor's fire and all-risk coverage insurance policy
covering the Building, and the Demised Premises can be fully repaired, in
Lessor's reasonable opinion, within one hundred eighty (180) days from the date
of such damage, Lessor, at Lessor's expense, shall repair such damage;
provided, however, Lessor shall have no obligation (a) to repair any damage to,
or to replace, Lessee's non-building standard tenant improvements or any other
property located in the Demised Premises, the repair of which shall be the
responsibility of, and shall be undertaken by Lessee, or (b) to repair if such
damage occurs during the last year of the lease term, excluding any renewal
option which is unexercised at the date of such damage, or (c) to repair if the
mortgagee does not allow the insurance proceeds to be used for such purposes.
Except as otherwise provided herein, if the entire Demised Premises shall be
rendered untenantable by reason of any such damage to the Demised Premises or
the Building, then Monthly Rent and additional rent shall abate for the period
from the date of such damage to the date when such damage shall have been
repaired, and if only a part of the Demised Premises shall be so rendered
untenantable either by damage directly to the Demised Premises or to the
Building's common elements which thereby causes the Demised Premises to be
partially untenantable, then Monthly Rent and additional rent shall abate for
such period in the proportion which the area of the part of the Demised
Premises so rendered untenantable bears to the total area of the Demised
Premises; provided, however, if, prior to the date when all of such damage
shall have been repaired, any part of the Demised Premises so rendered
untenantable shall be rendered tenantable and shall be used or occupied by
Lessee or any person claiming through or under Lessee, then the amount by which
the Monthly Rent and additional rent shall abate shall be equitably apportioned
for the period from the date of any such use or occupancy to the date when all
such damage shall have been repaired. No compensation or claim or reduction of
rent will be allowed or paid by Lessor by reason of inconvenience, annoyance,
or injury to business arising from the necessity of repairing (in accordance
with this Section) the Demised Premises or any portion of the Building of which
they are a part.
Notwithstanding the foregoing, if, prior to or during the term of this
Lease, (a) the Demised Premises shall be so damaged that, in Lessor's
reasonable opinion, the Demised Premises cannot be fully repaired within one
hundred eighty (180) days from the date the damage occurred, or (b) the
Building shall be so damaged by fire or other casualty that, in Lessor's
reasonable opinion, substantial repair or reconstruction of the Building shall
be required (whether or not the Demised Premises shall have been damaged or
rendered untenantable) then, in any of such events, Lessor, at its option, may
give to Lessee (provided Lessor shall elect to terminate the leases of
similarly situated tenants in the Building for the same or substantially the
same reason), within sixty (60) days after such fire or other casualty, a
thirty (30) days' notice of termination of this Lease and, in the event such
notice is given, this Lease shall terminate (whether or not the term shall have
commenced) upon the expiration of such thirty (30) days with the same effect as
if the
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date of expiration of such thirty (30) days were the date definitely fixed for
expiration of the term of the Lease, and the then-applicable Monthly Rent and
additional rent shall be apportioned as of such date, including any rent
abatement as provided above. In any circumstances where Lessor is either
obligated to repair and restore the Demised Premises, or where Lessor elects to
repair and restore the Demised Premises, this Lease shall continue in full
force and Lessor shall proceed diligently and in good faith to perform such
work within the estimated time for completion thereof.
22. DEFAULT OF LESSEE
(A) Termination of Lease. This Lease shall, at the option of
Lessor, cease and terminate if (i) Lessee shall fail to pay rent, including any
installment of Monthly Rent, costs of Pre-occupancy Tenant Work payable to
Lessor, if any, or any sums, charges, expenses and costs of any kind or nature
identified in this Lease as additional rent, although no legal or formal demand
has been made, and such failure to pay rent shall continue for a period of five
(5) business days after written notice addressed to Lessee has been delivered
by Lessor to Lessee in accordance with Section 31 below, or (ii) Lessee shall
violate or fail to perform any of the other conditions, covenants or agreements
of this Lease made by Lessee, and any violation or failure to perform any of
those conditions, covenants or agreements shall continue for a period of
fifteen (15) days after written notice thereof has been delivered by Lessor to
Lessee, or, in cases where the violation or failure to perform cannot be
corrected within fifteen (15) days, Lessee does not begin to correct the
violation or failure to perform within fifteen (15) days after receiving
Lessor's written notice and/or Lessee thereafter does not diligently pursue the
correction of the violation or failure to perform. Any said violation or
failure to perform or to pay any rent, if left uncorrected after the expiration
of the applicable notice and cure period, shall operate as a notice to quit,
any further notice to quit or notice of Lessor's intention to reenter being
hereby expressly waived. Lessor may thereafter proceed to recover possession
under and by virtue of the provisions of the laws of the State of Maryland or
by such other proceedings, including re-entry and possession, as may be
applicable. If Lessor elects to terminate this Lease, everything herein
contained on the part of Lessor to be done and performed shall cease without
prejudice to the right of Lessor to recover from Lessee all rent accruing up to
and through the date of termination of this Lease or the date of recovery of
possession of the Demised Premises by Lessor, whichever is later. Should this
Lease be terminated before the expiration of the term of this Lease by reason
of Lessee's default as hereinabove provided, or if Lessee shall abandon or
vacate the entire Demised Premises for ninety (90) or more consecutive days
before the expiration or termination of the term of this Lease without actively
marketing the Demised Premises for sublease, the Demised Premises may be relet
by Lessor for such rent and upon such terms as are commercially reasonable
under the circumstances, and Lessee shall be liable for all damages sustained
by Lessor and all costs of reletting and repossessing the Demised Premises,
including, without limitation, deficiency in rent, reasonable attorneys' fees,
brokerage fees, and expenses of placing the Demised Premises in rentable
condition. Any damage or loss of rent sustained by Lessor may be recovered by
Lessor, at Lessor's option, at the time of the reletting, or in separate
actions, from time
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to time, as said damage shall have been made more easily ascertainable by
successive relettings, or, at Lessor's option, may be deferred until the
expiration of the term of this Lease, in which event the cause of action shall
not be deemed to have accrued until the date of expiration of said term. In no
event shall Lessee be entitled to receive the excess, if any, of net rent
collected after reletting over the sums payable by Lessee to Lessor hereunder.
(B) Repeated Defaults. If Lessee shall be in default of this Lease
for the same or substantially the same reason more than three (3) times during
any twelve (12) month period during the term of this Lease, then, at Lessor's
election, Lessee shall not have any right to cure such repeated default, any
other terms and conditions of this Section 22 notwithstanding. In the event of
Lessor's election not to allow a cure of a repeated default, Lessor shall have
all of the rights provided for in such section of this Lease for an uncured
default.
(C) Waiver. If either party shall institute legal or
administrative proceedings against the other and a compromise or settlement
thereof shall be made, the same shall not constitute a waiver of the other
party's obligations to comply with any covenant, agreement or condition, nor of
any of the first party's rights hereunder. No waiver by either party of any
breach of any covenant, condition, or agreement specified herein shall operate
as an invalidation or as a continual waiver of such covenant, condition or
agreement itself, or of any subsequent breach thereof. No payment by Lessee or
receipt by Lessor of a lesser amount than the amount of rent due Lessor shall
be deemed to be other than on account of the earliest stipulated rent, nor
shall any endorsement or statement on any check or letter accompanying a check
for payment of such rent be deemed an accord and satisfaction, and Lessor may
accept such check or payment without prejudice to Lessor's right to recover the
balance of such rent or to pursue any other remedy provided for in this Lease
or in the governing law of the jurisdiction in which the Building is located.
No re-entry by Lessor, and no acceptance by Lessor of keys from Lessee, shall
be considered an acceptance of a surrender of the Lease.
(D) Right of Lessor to Cure Lessee's Default. If Lessee defaults
in the making of any payment to any third party, or doing any act required to
be made or done by Lessee relating to the Demised Premises which default shall
continue beyond the expiration of any applicable notice and cure period, then
Lessor may, but shall not be required, make such payment or do such act, and
the amount of the expense thereof, if made or done by Lessor, with interest
thereon at a rate equal to two (2) percentage points above the then applicable
prime rate of interest per annum as published in the Money Rates section of The
Wall Street Journal, or its successors, accruing from the date paid by Lessor,
shall be paid by Lessee to Lessor and shall constitute additional rent
hereunder due and payable by Lessee upon receipt of a written statement of
costs from Lessor. The making of such payment or the doing of such act by
Lessor shall not operate to cure Lessee's default, nor shall it prevent Lessor
from the pursuit of any remedy to which Lessor would otherwise be entitled.
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(E) Late Payment. If Lessee fails to pay, within five (5) days of
the date due and payable, any installment of Monthly Rent, costs of
Pre-occupancy Tenant Work, additional rent or other charges to be paid by
Lessee pursuant to this Lease, then Lessee shall pay to Lessor upon written
demand by Lessor rendered to Lessee within forty-five (45) days after the date
such installment became due and payable (provided, however, that Lessor shall
not be required to render such written demand more than three (3) times in any
one calendar year) a late charge of two and one-half percent (2-1/2%) of the
amount due but not paid, and in addition such unpaid amount shall bear interest
at a per annum rate equal to two (2) percentage points above the then prime
rate of interest per annum as published in the Money Rates section of The Wall
Street Journal, or its successors, accruing from the date such installment or
payment became due and payable to the date of payment thereof by Lessee. Such
late charge and interest shall constitute additional rent due and payable to
Lessor by Lessee upon the date of payment of the delinquent payment referenced
above.
(F) Enforcement of Lease. If Lessor or Lessee incurs any
collection or other costs necessary to enforce the obligations of the other
arising under this Lease or the relationship it creates, including costs of
litigation (which shall include fees and costs accruing before trial, after
trial, on appeal and during any bankruptcy proceeding), then the non-prevailing
party shall immediately reimburse the prevailing party for all such reasonable
costs, including reasonable attorneys' fees and expenses, all of which, if due
to Lessor, shall constitute additional rent due and payable under this Lease.
(G) Cumulative Remedies. In the event of a breach by Lessee of any
of the covenants or provisions hereof, Lessor shall have the right of
injunction and the right to invoke any remedy allowed at law or in equity as if
reentry, summary proceedings and other remedies were not provided for herein.
Mention in this Lease of any particular remedy shall not preclude Lessor from
any other remedy, in law or in equity. Lessee hereby expressly waives any and
all rights of redemption granted by or under any present or future laws in the
event of Lessee being evicted or dispossessed for any cause, or in the event of
Lessor obtaining possession of the Demised Premises, by reason of the violation
by Lessee of any of the covenants and conditions of this Lease, or otherwise.
23. BANKRUPTCY
(A) Events of Bankruptcy. The following shall be "Events of
Bankruptcy" under this Lease:
(i) Lessee's becoming insolvent, as that term is defined
in Title 11 of the United States Code, entitled Bankruptcy, 11 U.S.C. Sec. 101
et seq. (the "Bankruptcy Code"), or under the insolvency laws of any State,
District, Commonwealth or Territory of the United States (the "Insolvency
Laws");
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(ii) the appointment of a receiver or custodian for all or
a substantial portion of Lessee's property or assets, or the institution of a
foreclosure action upon all or a substantial portion of Lessee's real or
personal property;
(iii) the filing of a voluntary petition by Lessee under
the provisions of the Bankruptcy Code or Insolvency Laws;
(iv) the filing of an involuntary petition against Lessee
as the subject debtor under the Bankruptcy Code or Insolvency Laws, which is
either not dismissed within thirty (30) days of filing, or results in the
issuance of an order for relief against the debtor, whichever is earlier; or
(v) Lessee's making or consenting to an assignment of
substantially all of its assets for the benefit of creditors or a common law
composition of creditors.
(B) Lessor's Remedies.
(i) Termination of Lease. The occurrence of an Event of
Bankruptcy shall be deemed a default under this Lease and Lessor shall have the
right to terminate this Lease by giving written notice to Lessee whereupon
Lessee shall be immediately obligated to quit the Demised Premises and Lessor
shall have all the rights and remedies as provided in Section 22; provided,
however, and notwithstanding the foregoing, Lessor shall not have the right to
terminate this Lease while a case in which Lessee is the subject debtor under
the Bankruptcy Code is pending, unless Lessee or Lessee's trustee in bankruptcy
is unable to comply with the provisions of Section 23(B)(ii), (iii), and (iv)
below.
(ii) Assumption or Assignment by Trustee. In the event
Lessee becomes the subject debtor in a case pending under the Bankruptcy Code,
Lessor's right to terminate this Lease pursuant to this Section 23 shall be
subject to the rights of the Trustee in bankruptcy to assume or assign this
Lease. The Trustee shall not have the right to assume or assign this Lease
unless the Trustee (a) promptly cures all defaults under this Lease, (b)
promptly compensates Lessor for monetary damages incurred as a result of such
default, (c) provides "adequate assurance of future performance" (as
hereinafter defined) and (d) complies with the provisions of Section 7 hereof.
(iii) Adequate Assurance of Future Performance. Lessor and
Lessee hereby agree in advance that the phrase "adequate assurance of future
performance," as used in this Section 23(B), shall mean that all of the
following minimum criteria must be met: (a) the Trustee must pay to Lessor, at
the time the next payment of rent is then due under this Lease, in addition to
such payment of rent, an amount equal to the next three (3) months rent due
under this Lease, said amount to be held by Lessor in escrow until either the
Trustee or Lessee defaults in its payment of rent or other obligations under
this Lease (whereupon Lessor shall have the right to draw upon such escrowed
funds) or until the expiration of this Lease (whereupon the funds shall be
returned to Trustee or Lessee);
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(b) the Lessee or Trustee must agree to pay to Lessor, at any time the Lessor
is authorized to and does draw upon the funds escrowed pursuant to clause (a)
above, the amount necessary to restore such escrow account to the original
level required by said provision; (c) Lessee must pay the cost of all services,
if any, provided by Lessor for which Lessee is charged other than pursuant to
Section 4 hereof (whether directly or through agents or contractors, and
whether or not the cost of such services is to be passed through to Lessee) in
advance of the performance or provision of such services; (d) the Trustee must
agree that Lessee's business shall be conducted in a first class manner, and
that no liquidation sales, auctions, or other non-first class business
operations shall be conducted on the Demised Premises; (e) the Trustee must
agree that the use of the Demised Premises as stated in this Lease will remain
unchanged; and (f) the Trustee must agree that the assumption or assignment of
this Lease will not violate or affect the rights of other tenants in the
Building.
(iv) Failure to Provide Adequate Assurance. In the event
Lessee is unable (a) to cure its defaults, (b) to reimburse Lessor for its
monetary damages, (c) to pay when due the rent due under this Lease, or any
other payments required of Lessee under this Lease, or (d) to meet the criteria
and obligations imposed by Sections 23(B)(ii) and (iii) above, then Lessee
agrees in advance that it has not met its burden to provide adequate assurance
of future performance, and this Lease may be terminated by Lessor in accordance
with Section 23(B)(i) above.
24. SUBORDINATION
This Lease is subject and subordinate to the lien of all and any
mortgages (which term "mortgages" shall include both construction and permanent
financing and shall include deeds of trust and similar security instruments)
which may now or hereafter encumber or otherwise affect the real estate
(including the Building) of which the Demised Premises is a part, and to all
and any renewals, extensions, modifications, recastings or refinancings
thereof. This subordination provision is self-operative and no further
instrument is required to effect it; however, in confirmation of such
subordination, Lessee shall, at Lessor's request, promptly execute any
requisite or appropriate certificate or other document, including without
limitation, a Subordination, Non-Disturbance and Attornment Agreement
materially and substantially in the form attached hereto as Exhibit F, it being
understood and agreed that such Subordination, Non-Disturbance and Attornment
Agreement will, in fact, be executed by Lessor's permanent lender and Lessee in
connection with the closing on Lessor's initial permanent financing.
Lessee agrees that in the event that any proceedings are brought for
the foreclosure of any such mortgage, Lessee shall attorn to the purchaser at
such foreclosure sale, if requested to do so by such purchaser. Lessee shall
also recognize such purchaser as the Lessor under this Lease. Lessee waives the
provisions of any statute or rule of law, now or hereafter in effect, which may
give or purport to give Lessee any right to terminate or otherwise adversely
affect this Lease and the obligations of Lessee hereunder in the event that any
such foreclosure proceeding is prosecuted or completed. Lessee's
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obligations under this paragraph are conditioned upon the purchaser at a
foreclosure sale recognizing this Lease and assuming the obligations of Lessor
hereunder.
In the event Lessee shall not have been required to execute a
Subordination, Non-Disturbance and Attornment Agreement as provided in the
first paragraph of this Section 24 in connection with the closing on any
financing subsequent to Lessor's initial permanent financing, then Lessor will
use its good faith efforts to obtain a non-disturbance agreement in favor of
Lessee, in the mortgagee's customary form, from any mortgagee holding any such
mortgage, but the failure to obtain the same shall in no way affect the
continued validity of this Lease in any way whatsoever. Lessor represents that
the permanent lender's commitment for Lessor's initial permanent financing
provides for a loan term of ten (10) years, and Lessor has no current intention
of refinancing the initial permanent financing prior to the expiration of its
said term.
If the Building, the Demised Premises or any part respectively thereof
is at any time subject to a mortgage or a deed of trust or other similar
instrument, and this Lease or the rents are assigned to such mortgagee, trustee
or beneficiary, and the Lessee is given written notice thereof, including the
post office address of such assignee, then Lessee shall not terminate this
Lease for any default on the part of Lessor without first giving written notice
by certified or registered mail, return receipt requested, to such Assignee,
Attention: Mortgage Loan Department. The notice shall specify the default in
reasonable detail, and afford such assignee a reasonable opportunity to make
performance, at its election, for and on behalf of Lessor.
25. CONDEMNATION
If the whole or a substantial part of the Demised Premises, or the
Building shall be condemned or acquired in lieu of condemnation by any
governmental authority for any public or quasi-public use or purpose, then the
term of this Lease shall cease and terminate as of the date when title vests in
such governmental authority. Lessee shall have no claim against Lessor or the
condemning authority for any portion of the amount of the condemnation award or
settlement that Lessee claims as its damages arising from such condemnation or
acquisition, or for the value of any unexpired term of the Lease. Lessee may
make a separate claim against the condemning authority for a separate award for
the value of any of Lessee's Pre-occupancy Tenant Work or Alterations, tangible
personal property and trade fixtures, for moving and relocation expenses and
for such business damages and/or consequential damages as may be allowed by
law, provided the same shall not diminish Lessor's award.
If less than a substantial part of the Demised Premises is condemned
or acquired in lieu of condemnation by any governmental authority for any
public or quasi-public use or purpose, the rent shall be equitably adjusted on
the date when title vests in such governmental authority and the Lease shall
otherwise continue in full force and effect. In such event, Lessor shall be
responsible, at its cost and expense, for demising such condemned portion of
the Demised Premises and the remaining portion of the Demised
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Premises retained by Lessee, which work shall be accomplished in a good and
workmanlike manner and in accordance with all applicable codes. For purposes of
this section, a "substantial part of the Demised Premises" shall be considered
to have been taken if twenty-five percent (25%) or more of the Demised Premises
are condemned or acquired in lieu of condemnation.
If twenty-five percent (25%) or more of the Building is condemned
(whether or not the Demised Premises shall have been condemned) Lessor may
elect to demolish the remainder of the Building, in which event this Lease
shall be terminated.
26. RULES AND REGULATIONS
Lessee, its agents and employees shall abide by and observe the rules
and regulations attached hereto as Exhibit C. Lessee, its agent and employees
shall abide by and observe such other reasonable rules and regulations from the
time of actual notice as may be promulgated from time to time by Lessor for the
operation and maintenance of the Building, provided (i) a copy thereof is sent
to Lessee, and (ii) any such new rules and regulations do not impose any
material financial obligations upon Lessee or materially interfere with
Lessee's right to use the Demised Premises in accordance with this Lease.
Nothing contained in this Lease shall be construed to impose upon Lessor any
duty or obligation to enforce such rules and regulations, or the terms,
conditions or covenants contained in any other lease as against any other
tenant, and Lessor shall not be liable to Lessee for violation of the same by
any other tenant, any other tenant's employees, agents, business invitees,
licensees, customers, clients, family members or guests. Lessor shall not
discriminate against Lessee in the enforcement of any rule or regulation.
27. NO PARTNERSHIP
Nothing contained in this Lease shall be deemed or construed to create
a partnership or joint venture of or between Lessor and Lessee, or to create
any other relationship between the parties hereto other than that of Lessor or
Lessee.
28. NO REPRESENTATIONS BY LESSOR
Neither Lessor nor any agent or employee of Lessor has made any
representations or promises with respect to the Demised Premises or the
Building except as herein expressly set forth, and no rights, privileges,
easements or licenses are acquired by Lessee except as herein set forth.
Lessee, by taking possession of the Demised Premises, shall accept the same in
the then "as is" condition, except for latent defects and Excluded Items.
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29. BROKER AND AGENT
Lessor and Lessee each represents and warrants one to another that,
except as hereinafter set forth, neither of them has employed any broker in
carrying on the negotiations, or had any dealings with any broker, relating to
this Lease. Lessor represents that it has employed its Management Agent as its
broker, and Lessor recognizes that Cassidy & Pinkard Incorporated has
co-brokered this lease transaction on behalf of Lessee, and that Lessor shall
be responsible for any commissions due to said brokers pursuant to separate
agreements. Lessor shall indemnify and hold Lessee harmless, and Lessee shall
indemnify and hold Lessor harmless, from and against any claim or claims for
brokerage or other commission arising from or out of any breach of the
foregoing representation and warranty by the respective indemnitors.
Lessor appoints and Lessee recognizes, until such time as Lessor
otherwise notifies Lessee in writing, The Chevy Chase Land Company of
Montgomery County, Maryland as Lessor's exclusive agent (herein referred to in
this Lease as "Agent" or "Management Agent") for the management and operations
of the Building and for the service of process, issuance and receipt of all
notices, and instituting and processing all legal actions on behalf of Lessor
under this Lease.
30. WAIVER OF JURY TRIAL
Lessor and Lessee hereby waive trial by jury in any action, proceeding
or counterclaim brought by either of the parties hereto against the other on or
in respect of any matter whatsoever arising out of or in any way connected with
this Lease, the relationship of Lessor and Lessee hereunder, Lessee's use or
occupancy of the Demised Premises, and/or any claim of injury or damage.
31. NOTICES
All notices or other communications hereunder shall be in writing and
shall be deemed duly given if delivered by certified mail, return receipt
requested, or by registered mail, postage prepaid, or by messenger or overnight
courier, or by telegram or facsimile transmission, in each case with proof or
confirmation of delivery requested: (i) if to Lessor, c/o The Chevy Chase Land
Company of Montgomery County, Maryland, Suite 540, Two Wisconsin Circle, Chevy
Chase, Maryland 20815; and (ii) if to Lessee, at 7475 Wisconsin Avenue, Suite
600, Bethesda, Maryland 20814 prior to the Commencement Date and at the Demised
Premises thereafter. The party to receive notices and the place notices are to
be sent for either Lessor or Lessee may be changed by notice given pursuant to
the provisions of this section. Notices shall be deemed given on the date of
receipt or on the date delivery is refused.
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32. ESTOPPEL CERTIFICATES
Lessee agrees, at any time and from time to time, upon not less than
ten (10) business days' prior written notice by Lessor, to execute, acknowledge
and deliver to Lessor or other designated recipient either a statement in
writing, materially and substantially in the form of the Statement of Tenant In
Re: Lease attached hereto as Exhibit G, or if otherwise requested by Lessor a
statement in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if there have been modifications, that the Lease is in
full force and effect as modified and stating the modifications) (ii)
certifying whether or not the Lessee has accepted possession of the Demised
Premises and whether or not any improvements required by the terms of this
Lease to be made by Lessor have been completed, and if not specifying such
improvements remaining to be completed, (iii) stating that no rent has been
paid more than thirty (30) days in advance of its due date (except for monthly
payments of Lessee's proportionate share of estimated Operating Expenses and
Operating Costs and any credits due Lessee as a result of any overpayment of
Lessee's proportionate share of actual Operating Expenses and Operating Costs),
and the dates to which the rent and other charges hereunder have been paid by
Lessee, (iv) stating whether or not the Lessee has any charge, lien or claim of
setoff under this Lease or otherwise against rents or other charges due or to
become due hereunder, and if so, specifying each such charge, lien, or claim of
setoff, (v) stating that the address to which notices to Lessee should be sent
is as set forth in this Lease unless changed pursuant to Section 31 above, (vi)
as to any such designated recipient which is a party secured or to be secured
by a mortgage or deed of trust upon the Building, agreeing not to pay rent more
than thirty (30) days in advance or to amend this Lease without the consent of
the designated recipient, and (vii) as to any such designated recipient which
is a party secured or to be secured by a mortgage or deed of trust upon the
Building, agreeing that the Lessee will not seek to terminate this Lease by
reason of any act or omission of the Lessor until the Lessee shall have given
written notice of such act or omission to the designated recipient by certified
or registered mail, return receipt requested, at the address furnished to the
Lessee and until a reasonable period of time shall have elapsed following the
giving of such notice, during which period the designated recipient shall have
the right, but shall not be obligated, to remedy such act or omission;
provided, however, that such recipient shall, within fifteen (15) days after
receipt of such notice from Lessee, advise Lessee in writing as to whether or
not such recipient will attempt to cure such default on the part of Lessor; it
being understood and agreed that in no event shall the designated recipient act
prior to the expiration of any notice and cure period applicable to any such
act or omission of Lessor. Any such statement delivered pursuant hereto may be
relied upon by any owner of the Building, any prospective purchaser of the
Building, any mortgagee or prospective mortgagee of the Building or of Lessor's
interest, or any prospective assignee of any such mortgage.
33. HOLDING OVER
In the event that Lessee shall not immediately surrender the Demised
Premises on the date of expiration of the term of this Lease or any extension
period thereof, Lessee
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shall, by virtue of this section of the Lease, become a lessee by the month and
hereby agrees to pay to Lessor a Monthly Rent equal to one and one-half (1 1/2)
times the amount of (a) the Monthly Rent in effect during the last month of the
term of this Lease, plus (b) the one-twelfth (1/12th) payment made with Monthly
Rent pursuant to the section of this Lease entitled "RENTAL ESCALATION FOR
INCREASES IN EXPENSES." The month-to-month tenancy shall commence with the
first day next after the expiration of the term of this Lease. Lessee as a
month-to-month tenant shall continue to be subject to all of the conditions and
covenants of this Lease, except that (if applicable) Lessee shall have no right
to renew or extend the term of this Lease. Lessee shall give to Lessor at least
thirty (30) days' written notice of any intention to quit the Demised Premises.
Lessee shall be entitled to thirty (30) days' written notice to quit the
Demised Premises, except in the event of nonpayment of the modified Monthly
Rent in advance, in which event Lessee shall not be entitled to any notice to
quit, the usual thirty (30) days' notice to quit being hereby expressly waived.
In the event that Lessee shall hold over after the expiration of the
term of the Lease or extension period thereof, and if Lessor shall desire to
regain possession of the Demised Premises promptly at the expiration of the
term of this Lease or extension period thereof, then at any time prior to
Lessor's acceptance of modified Monthly Rent from Lessee as a month to month
tenant hereunder, Lessor, at its option, may forthwith reenter and take
possession of the Demised Premises without process, or by any legal process in
force in the jurisdiction in which the Building is located.
34. PARKING
At the commencement of the term of this Lease, Lessee shall have the
option to lease up to seventy-five (75) spaces in the Building's parking
garage, and, until December 31, 2014, so long as this Lease shall remain in
full force and effect until that date, up to twenty-five (25) spaces in the
parking garage in the adjacent building known as and situated at Three Bethesda
Metro Center, such parking to be for use only by Lessee, its employees and
permitted sublessees, it being understood, however, that such parking spaces
shall not be leased to Lessee on a reserved or designated space basis unless
expressly so elected by Lessee, it being agreed that Lessee may elect to lease
up to twenty-five (25) spaces in the Building's parking garage on a reserved or
designated space basis. If Lessee shall elect to exercise said option, it shall
do so by giving written notice thereof to Lessor not later than thirty (30)
days following the Commencement Date of this Lease. If Lessee elects not to
lease its full allocation of parking spaces, then the number of parking spaces
actually leased by Lessee shall be allocated seventy-five percent (75%) as to
the Building's parking garage, and twenty-five percent (25%) as to the parking
garage at Three Bethesda Metro Center. Any such lease of parking spaces shall
be with the manager of said parking garage, and shall be on a monthly basis,
upon the same terms as leased to other monthly users, and at the same
prevailing rate charged by the garage operator from time to time to other
monthly users. The currently estimated monthly rate for each parking space is
$105.00 for an unreserved parking space and $210.00 for a reserved parking
space.
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35. OPTION TO EXTEND TERM
Lessee shall have the option to extend the term of this Lease for two
(2) consecutive periods of five (5) years each (the first such 5-year period
being hereinafter referred to as the "First Renewal Term," the second such
5-year period being hereinafter referred to as the "Second Renewal Term," and
each such 5-year period being hereinafter alternatively referred to as a
"Renewal Term") if, and only if this Lease shall then be in full force and
effect and Lessee is not in default under any of the provisions of this Lease
beyond the expiration of any applicable notice or grace period, both at the
time of notice of exercise of each such option herein contained and at the
expiration of the initial term or the First Renewal Term, as the case may be.
Each Renewal Term shall be upon the same terms and conditions as contained in
this Lease, except that the Monthly Rent to be paid throughout each Renewal
Term shall be the fair market rent (inclusive of periodic escalations thereof,
if any, and taking into account then prevailing tenant concession packages on
5-year leases) prevailing, as of the date the rent determination is made for
space to be delivered at commencement of the respective Renewal Term, for
comparable space in comparable office buildings in the Bethesda-Chevy Chase
market area as such fair market rent and concessions may be mutually agreed
upon between Lessor and Lessee, and Base Operating Expenses and Base Operating
Costs for the respective Renewal Term shall be the Operating Expenses and
Operating Costs, respectively, actually incurred by Lessor in the calendar year
in which the expiration of the initial term of this Lease or the First Term, as
the case may be, occurs; provided, however, that in the event Lessor and Lessee
fail to agree upon such fair market rent and concessions within thirty (30)
days after Lessor's receipt of Lessee's notice of its exercise of the
respective option to extend ("Lessee's Renewal Notice"), then unless Lessee
shall rescind the exercise of its respective renewal option by written notice
delivered to Lessor within forty (40) days after Lessor's receipt of Lessee's
Renewal Notice, time being of the essence, such fair market rent and
concessions shall be determined in accordance with the "3-broker method" set
forth in this Section 35; and provided further that in no event shall the
Monthly Rent be less than that payable immediately prior to the commencement of
the respective Renewal Term (the "Minimum Renewal Rent").
If Lessee shall elect to exercise either such option, it shall do so
by delivering a Lessee's Renewal Notice to Lessor not later than twelve (12)
months prior to the expiration date of the initial term of this Lease or the
First Renewal Term, as the case may be, time being of the essence. If Lessee
shall fail to give such timely notice, then Lessee's option and any remaining
option to extend the term of this Lease beyond the expiration of the initial
term or the First Renewal Term, as the case may be, shall thereupon terminate
and this Section 35 shall be of no further force or effect.
It is understood and agreed that the foregoing option to so extend the
term of this Lease is not assignable, and that the same shall be deemed null
and void upon any assignment or transfer of this Lease by Lessee other than to
a subsidiary or affiliate of Lessee.
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The aforesaid "3-broker method" shall be implemented as follows:
Lessor shall promptly appoint a commercial real estate broker with at least ten
(10) years of professional experience as a licensed broker of commercial real
estate in the Washington Metropolitan Area and recognized as reputable within
the field and the Lessee shall similarly promptly appoint a broker with at
least ten (10) years of professional experience as a licensed broker of
commercial real estate in the Washington Metropolitan Area and recognized as
reputable within the field. The two (2) brokers so appointed will perform
independent fair market rent appraisals and will attempt to mutually agree upon
said fair market rent for the Demised Premises (taking into account then
prevailing tenant concession packages on 5-year leases). If the two (2) brokers
so appointed are unable to agree upon said fair market rent on or before two
(2) months prior to the expiration date of the initial term of this Lease or
the First Renewal Term, as the case may be, then they shall appoint a third
broker with at least ten (10) years of professional experience as a licensed
broker of commercial real estate in the Washington Metropolitan Area and
recognized as reputable within the field, and the average of the fair market
rent determined by two (2) of the three (3) brokers closet in their
determination shall be binding on Lessor and Lessee; provided, however, that in
the event the fair market rent so determined for the respective Renewal Term
shall be greater than the Minimum Renewal Rent for the respective Renewal Term,
then Lessee may rescind the exercise of its respective renewal option by
written notice delivered to Lessor within five (5) business days after receipt
of written notice of the broker's determination, time being of the essence. In
any event, the fees and expenses of each of the first two (2) brokers shall be
paid by the party appointing the broker, and the fees and expenses of the third
broker, if appointed, shall be shared equally by Lessor and Lessee.
36. RIGHT OF FIRST NEGOTIATION
If this Lease shall then be unassigned (except to a subsidiary or
affiliate of Lessee), in full force and effect and Lessee is not in default
under any of the provisions of this Lease beyond the expiration of any
applicable notice or grace period (it being understood and agreed that the
right granted to Lessee in this Section 37 is not assignable and that the same
shall be deemed null and void upon any assignment or transfer of this Lease by
Lessee to a party other than a subsidiary or affiliate of Lessee), Lessor
agrees that at each time during the initial term of this Lease, but subject to
the continued occupancy thereof by initial tenants and any rights of first
negotiation or expansion options granted to Hanger Orthopedic Group or USWEB
Corporation as to any third (3rd) or fourth (4th) floor space, additional space
on the third (3rd), fourth (4th) or fifth(5th) floors of the Building becomes
available to Lessor for leasing to third parties, then Lessor shall give to
Lessee written notice of such availability as soon as practicable but not more
than twelve (12) months prior to the date of availability, accompanied by
Lessor's opinion (acting reasonably and in good faith) as to the fair market
rent for such available space, which shall be the fair market rent prevailing
(taking into account then prevailing tenant concession packages including,
without limitation, rental abatement (if any) and construction allowance (if
any) on leases having a term most nearly equal to the remaining term of this
Lease) for comparable space in comparable office buildings in the
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Bethesda-Chevy Chase market area, but in no event less than the Monthly Rent
(expressed as an annual rental rate per square foot) then payable under this
Lease. Lessee shall then have a period of fifteen (15) days in which to notify
Lessor in writing of Lessee's election to lease such available space at said
rental, time being of the essence; provided, however, that from and after the
commencement of the seventh (7th) Lease Year, any such election by Lessee must
be accompanied by written notice of Tenant's irrevocable election to extend the
term of this Lease for the First Renewal Term pursuant to Section 35 above.
Should Lessee fail to notify Lessor in writing within the said fifteen (15)-day
period of Lessee's election to lease such available space (and, if so
applicable, to so extend the term of this Lease), time being of the essence,
then Lessee's right to lease such available space shall thereupon terminate and
be of no force or effect, and Lessor shall be free to lease such available
space to any party upon any terms and conditions, subject to Lessee's rights
herein with respect to such space the next time it becomes available to Lessor
for leasing to third parties.
Should Lessee notify Lessor in writing within the said fifteen
(15)-day period of Lessee's election to lease such available space (and, if so
applicable, to so extend the term of this Lease), and if Lessor and Lessee
shall fail to agree on the said fair market rent for such available space
within thirty (30) days after Lessor's receipt of Lessee's written notification
of its election to lease such available space, then such fair market rent
(taking into account the said tenant concessions) shall be determined, within
sixty (60) days after Lessor's receipt of Lessee's written notification of its
election to lease such available space, as nearly as practicable in accordance
with the "3-broker method" set forth in Section 35 above. Within ten (10) days
after such determination of the fair market rent for the available space,
Lessee shall have the right to rescind its exercise of its election to lease
such available space by written notice to Lessor within the said ten (10)-day
period, time being of the essence. If Lessee fails to so rescind its exercise
of its election to lease such available space, then Lessee's election shall be
deemed irrevocable, and Lessor shall prepare, and Lessor and Lessee shall
promptly execute and deliver, an addendum to this Lease amending the
appropriate provisions hereof. If Lessee so rescinds its election to lease such
available space, then Lessor shall be free to lease such available space to any
party upon any terms and conditions.
37. COVENANTS OF LESSOR
Lessor covenants that it has the right to make this Lease for the term
of the Lease aforesaid, and that if Lessee shall pay the rent and shall perform
all of the covenants, agreements and conditions specified in this Lease to be
performed by Lessee, Lessee shall, for the term of the Lease, freely, peaceably
and quietly occupy and enjoy the full possession of the Demised Premises
without molestation or hindrance by Lessor, its agents or employees.
Lessor reserves the right to (i) change the Building's name or street
address, (ii) subject to the provisions of Section 12 above, to affix, maintain
and remove any and all signs on the exterior and in the common areas of the
Building, and (iii) decorate and
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make repairs, alterations, additions and improvements to and about the common
areas of the Building, and such work shall not be deemed a violation by Lessor
of its covenant of quiet enjoyment hereunder as long as the Demised Premises
remain reasonably accessible. All such repairs, alterations, additions and
improvements shall be consistent with the character of the Building as a
first-class office building in the Bethesda Central Business District.
38. GENDER
Feminine or neuter pronouns shall be substituted for those of the
masculine form, and the plural shall be substituted for the singular number, in
any place or places herein in which the context may require such substitution
or substitutions.
39. CORPORATE OR LIMITED LIABILITY COMPANY LESSEE
If Lessee is or will be a corporation or limited liability company,
the persons executing this Lease on behalf of Lessee hereby represent and
warrant that Lessee is a duly incorporated or organized or a duly qualified (if
foreign) corporation or limited liability company authorized to do business in
the State of Maryland; and that the person or persons executing this Lease on
behalf of Lessee is an officer or member or are officers or members of Lessee,
and that he, she or they as such officers or members are duly authorized to
sign and execute this Lease. Upon request of Lessor to Lessee, Lessee shall
deliver to Lessor documentation satisfactory to Lessor evidencing Lessee's
compliance with the provisions of this section. Further, Lessee warrants and
represents that any financial statements heretofore or hereafter provided to
Lessor in connection with this Lease are accurate and not materially
misleading.
Lessor hereby represents and warrants that it is a duly organized
limited liability company under the laws of the State of Maryland; and that the
person or persons executing this Lease on behalf of Lessor are officers of
Lessor's managing member, and that he, she or they are duly authorized to sign
and execute this Lease.
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40. BENEFIT AND BURDEN
The terms and provisions of this Lease shall be binding upon and shall
inure to the benefit of the parties hereto and each of their respective
representatives, successors and permitted assigns. Lessor may freely and fully
assign its interest hereunder. In the event of any sale or transfer of the
Building by operation of law or otherwise by the party named as Lessor
hereunder (or any subsequent successor, transferee or assignee) then provided
the successor assumes, in writing, all of Lessor's obligations hereunder
arising after the date of such sale or transfer, said party, whose interest is
thus sold or transferred shall be and is completely released and forever
discharged from and in respect to all covenants, obligations and liabilities as
Lessor hereunder arising after the date of such sale or transfer.
In the event Lessor shall be in default under this Lease, and if as a
consequence of such default, Lessee shall recover a money judgment against
Lessor, such judgment shall be satisfied only out of the proceeds of sale
received upon execution of such judgment against the right, title and interest
of Lessor in the Building as the same may then be constituted and encumbered,
and Lessor shall not be liable for any deficiency. In no event shall Lessee
have the right to levy upon any property of Lessor other than its interest in
the Building.
41. LENDER APPROVAL
The terms and conditions of this Lease are contingent upon the consent
of Lessor's permanent lender within thirty (30) days from the date of full
execution and delivery of this Lease by Lessor and Lessee. The consent of
Lessor's construction lender is not required.
42. GOVERNING LAW
This Lease and the rights and obligations of Lessor and Lessee
hereunder shall be governed by the laws of the jurisdiction in which the
Building is located.
43. RULE AGAINST PERPETUITIES
If and to the extent this Lease would, in the absence of the
limitation imposed by this Section 43, be invalid or unenforceable as being a
violation of the Rule Against Perpetuities or any other rule of law relating to
the vesting of interest in real property or suspension of the power of
alienation of real property, then it is agreed that notwithstanding any other
provision of this Lease to the contrary, if the term of this Lease has not
commenced within ten (10) years after the date of this Lease, this Lease shall
automatically terminate on the tenth (10th) anniversary of the date hereof.
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44. ROOFTOP RIGHTS
(A) Subject to the following terms and conditions, Lessee shall
have the right to the use of a commercially reasonable portion of the rooftop
space of the Building for the installation of Communications Equipment (as
hereinafter defined), subject further to the then availability of mutually
agreeable area(s) of the roof of the Building. Such use of the rooftop space of
the Building by Lessee shall be subject to the payment by Lessee to Lessor of a
license fee in the amount of Five Hundred and 00/100 Dollars ($500.00) per
month during the first (1st) Lease Year, subject to annual escalations equal to
two and one-half percent (2-1/2%) of the license fee payable for the
immediately preceding yearly period, the payment of which shall constitute
additional rent and in the event of nonpayment thereof by Lessee, Lessor shall
have all the rights and remedies set forth in this Lease with respect to
nonpayment of rent. For purposes of this section, "Communications Equipment"
shall mean one (1) 24" diameter satellite dish or similar rooftop
telecommunications equipment, together with all cabling and wiring ancillary
thereto. Any rights granted hereunder shall be non-exclusive, and nothing
herein shall prevent Lessor from granting other rooftop rights in the Building.
(B) Lessee may elect its Communication Equipment rights by
delivering written notice of its election to Lessor, which notice shall specify
(i) the precise Communications Equipment Lessee desires to install, including
complete technical and design specifications, and the method of installation,
(ii) the proposed roof location of the Communications Equipment, and (iii) such
other information as Lessor may reasonably request. Within thirty (30) days
after Lessor's receipt of Lessee's notice, Lessor shall confirm to Lessee in
writing whether or not Lessor approves such installation of the Communications
Equipment specified in Lessee's notice. Lessor's approval shall not be
unreasonably withheld, and if Lessor fails to respond to Lessee's notice within
the said 30-day period, Lessor's approval shall be deemed granted. Lessor's
approval shall not be deemed or construed as a representation or warranty of
any kind as to the suitability of the roof of the Building for the installation
of the Communications Equipment or the quality of its transmissions or
receptions.
(C) In the event Lessee installs any Communications Equipment
pursuant to this section, Lessee shall be responsible for obtaining and
maintaining all approvals, permits and licenses required by any federal, state
or local government for the installation and operation of the Communications
Equipment and pay all fees attendant thereto. If the Communications Equipment
is installed, Lessee shall have sole responsibility for the maintenance, repair
and replacement thereof, including the cabling and wiring components thereof.
Any Communications Equipment installed pursuant to this section shall be
installed as an Alteration in accordance with the section of this Lease
entitled "ALTERATIONS" and located in such a manner that it is not visible from
the ground from any line of sight. Further, the water tight integrity of the
Building roof must be maintained.
(D) If the insurance premium or real estate tax assessment charged
to Lessor with respect to the Building increases as a result of the presence or
operation of the
52
<PAGE> 57
Communications Equipment, Lessor shall submit a bill for such increase to
Lessee and Lessee shall pay the amount of such increase as additional rent
within fifteen (15) days after Lessor delivers a bill for such increase. In the
event use of the Communications Equipment by Lessee ceases for any reason
whatsoever, the Lessee's obligation to pay any license fee to Lessor for
rooftop rights shall cease and terminate, and Lessee shall otherwise have
neither a claim for abatement or diminution of rent, nor a claim for damages,
on account of such cessation of use.
(E) Lessee covenants that the ownership, installation, use,
maintenance and removal of the Communications Equipment will be at its sole
cost and risk. Lessee covenants that if installed, it will not permit the
Communications Equipment to be used by others without the express prior written
consent of Lessor. Lessee agrees to indemnify and save Lessor harmless from and
against all claims, actions, damages, liability and expenses, including
reasonable attorney's fees, arising from or relating to the ownership,
installation, use and operation, maintenance and repair, and removal of the
Communications Equipment. To insure such indemnity, all of Lessee's insurance
policies required under this Lease shall include the Communications Equipment
as an insured risk.
(F) In the event the Communications Equipment is installed and the
installation or use thereof causes damage to the structure, the roof membrane,
or to the mechanical or electrical systems of the Building, or materially
interferes with any services provided by Lessor to any tenant of the Building,
Lessor may, upon written notice to Lessee, immediately revoke Lessee's
permission to use the Communications Equipment, in which case, and provided
Lessor and Lessee shall first attempt, acting reasonably and in good faith, to
relocate Lessee's Communications Equipment so as to avoid such interference,
Lessee shall immediately cease use of and remove the Communications Equipment.
Any failure by Lessee to comply with the provisions of this section after the
expiration of the applicable notice and cure period shall be a default of this
Lease, and Lessor may (i) require Lessee to immediately cease use of and remove
the Communications Equipment, and/or (ii) avail itself of any and all remedies
provided by this Lease and at law.
(G) Upon the expiration or earlier termination of the term of the
Lease, Lessee shall remove any Communications Equipment then installed, if any.
The ancillary cabling and wiring shall become the property of Lessor and remain
in the Building. In the event Lessee fails to so remove the Communications
Equipment, Lessor may remove and dispose of the Communications Equipment, at
Lessee's cost and expense, without liability for any property of Lessee or any
third party disposed of or removed by Lessor.
(H) Lessor makes no warranties or representations concerning the
suitability of the Building for the installation or operation of the
Communications Equipment or the quality of transmissions or reception of any
Communications Equipment.
(I) Lessee's rights granted in this section shall become null and
void and of no further force and effect if Lessee (i) assigns this Lease
(excluding an assignment to a
53
<PAGE> 58
subsidiary or affiliate of Lessee), (ii) subleases more than fifty percent
(50%) of the Demised Premises (excluding a sublease to a subsidiary or
affiliate of Lessee), or (iii) is in default of this Lease beyond the
applicable notice and cure period.
45. GUARANTY OF CORPORATE GUARANTOR
As a material inducement to Lessor to enter into this Lease with
Lessee, CoSTAR GROUP, INC., a Delaware corporation (the "Corporate Guarantor"),
of which Lessee is a wholly-owned subsidiary, as evidenced by its corporate
execution of this Lease, hereby guarantees and assumes responsibility for the
full performance of all the obligations of Lessee hereunder. If default shall
at any time be made by Lessee in the payment of Monthly Rent or any sums,
charges, expenses and costs of any kind or nature identified in this Lease as
additional rent, or in the performance of any other covenants contained in this
Lease, the Corporate Guarantor will pay to Lessor the Monthly Rent or any item
of additional rent due and any arrears thereof, and all sums and damages that
may arise in consequence of any default by Lessee hereunder. This guaranty
shall be a continuing guaranty, and the validity, force and effect of this
guaranty shall in no way be affected or diminished by reason of any extension
of time that may be granted by Lessor to Lessee. Further, this guaranty is a
guaranty of payment and not of collection, and it may be enforced by Lessor
without first resorting to or exhausting any remedies which it may have against
Lessee or security or collateral for the performance of Lessee's obligations
under this Lease. Lessor shall not be required to institute or promote any
proceedings against Lessee as a condition to enforcement of this guaranty. The
persons executing this Lease on behalf of the Corporate Guarantor hereby
represent and warrant that they are officers of the Corporate Guarantor, and
that they, as such officers, are duly authorized to sign and execute this Lease
for the purposes set forth in this Section 45.
46. ENTIRE AGREEMENT
This Lease, together with Exhibits A, B, C, D, E, F, G, and H attached
hereto and made a part hereof, contains and embodies the entire agreement of
the parties hereto, and no representations, inducements, or agreements, oral or
otherwise, between the parties not contained and embodied in this Lease and
Exhibits shall be of any force or effect, and the same may not be modified,
changed or terminated in whole or in part in any manner other than by an
agreement in writing duly signed by all parties hereto.
(SIGNATURE PAGES FOLLOW)
54
<PAGE> 59
IN WITNESS WHEREOF, Lessor, Lessee and the Guarantor have caused this
Lease to be signed in their names by their duly authorized representatives and
delivered as their act and deed, intending to be legally bound by its terms and
provisions.
LESSOR:
NEWLANDS BUILDING VENTURE, LLC
a Maryland limited liability company
By: The Chevy Chase Land Company
of Montgomery County, Maryland,
Managing Member
Attest:
/s/ David G. Dolan /s/ Edward Hall Asher
By:
------------------------------ ----------------------------
Vice President Name: Edward Hall Asher
(SEAL) Title: President
STATE OF MARYLAND
COUNTY OF MONTGOMERY, ss:
I, __________Donna Geraci________________________________, a Notary
Public in and for the State of Maryland, do hereby certify that ________Edward
Hall Asher__________, who is personally well known to me as the person who
executed the foregoing and annexed Lease, dated the 12____ day of
____August__________, 1999, on behalf of the Lessor, to acknowledge the same,
personally appeared before me in said jurisdiction and acknowledged said Lease
to be the act and deed of The Chevy Chase Land Company of Montgomery County,
Maryland, as Managing Member of and for and on behalf of the Lessor, and
delivered the same as such.
GIVEN under my hand and seal this _12____ day of
_______August__________, 1999.
___Donna Geraci___________________
Notary Public
My commission expires: 5/01/03
55
<PAGE> 60
LESSEE:
Attest: COSTAR REALTY INFORMATION, INC.
a Delaware corporation
/s/ Carla Garrett By: /s/ Andrew Florance
----------------------------------------- --------------------------
Secretary Name: Andrew C. Florance
(SEAL) Title: CEO
STATE OF MARYLAND )
COUNTY OF MONTGOMERY ) ss:
I, ___________Georgeann Murrell_______________________________, a
Notary Public in and for the jurisdiction aforesaid, do hereby certify that
_______Andrew Florance__________________________, who is personally well known
to me to be the person who executed the foregoing and annexed Lease, dated the
_____ day of ______________, 1999, on behalf of Lessee, to acknowledge the
same, personally appeared before me in said jurisdiction and acknowledged said
Lease to be the act and deed of CoStar Realty Information, Inc. and delivered
the same as such.
GIVEN under my hand and seal this _12____ day of
___August_____________, 1999.
_________/s/ Georgeann Murrell_______
Notary Public
My commission expires: 4/1/03
56
<PAGE> 61
GUARANTOR:
Attest: COSTAR GROUP, INC.
a Delaware corporation
/s/ Carla Garrett By: /s/ Andrew Florance
---------------------------------------- ---------------------------
Secretary Name: Andrew Florance
(SEAL) Title: CEO
STATE OF MARYLAND )
COUNTY OF MONTGOMERY ) ss:
I, ____Georgeann Murrell______________________________________, a
Notary Public in and for the jurisdiction aforesaid, do hereby certify that
________Andrew Florance_________________________, who is personally well known
to me to be the person who executed the foregoing and annexed Lease, dated the
_____ day of ______________, 1999, on behalf of the Guarantor, to acknowledge
the same, personally appeared before me in said jurisdiction and acknowledged
said Lease to be the act and deed of CoStar Group, Inc., in its capacity as the
Guarantor, and delivered the same as such.
GIVEN under my hand and seal this _12____ day of
______August__________, 1999.
_____/s/ Georgeann Murrell___________
Notary Public
My commission expires: 4/1/03
57
<PAGE> 62
THE FRANCIS G. NEWLANDS BUILDING
EXHIBIT "B"
AIR-CONDITIONED SHELL
The following improvements or items are to be provided by Lessor at
its cost and expense:
[SEE ATTACHED BASE BUILDING TENANT WORK DELINEATION SCHEDULE]
B-1
<PAGE> 63
THE FRANCIS G. NEWLANDS BUILDING
EXHIBIT "C"
RULES AND REGULATIONS
1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls or other parts of the Building not occupied by
any lessee shall not be obstructed or encumbered by any lessee or used for any
purpose other than ingress and egress to and from the demised premises; and if
the demised premises are situated on the ground floor of the Building the
lessee thereof shall, at said lessee's own expense, keep the sidewalks and curb
directly in front of said demised premises clean and free from ice and snow.
Lessor shall have the right to control and operate the public portions of the
Building, and the facilities furnished for the common use of the lessees, in a
manner consistent with the standards for the operation of a first-class office
building in the Bethesda-Chevy Chase Central Business District. No lessee shall
permit the visit to the demised premises of persons in such numbers or under
such conditions as to interfere with the use and enjoyment by other lessees of
the entrances, corridors, elevators and other public portions or facilities of
the Building.
2. No awnings or other projections shall be attached to the outside
walls of the Building without the prior written consent of the Lessor. No
drapes, blinds, shades, or screens shall be attached to or hung in, or used in
connection with any window or door of the demised premises, without the prior
written consent of the Lessor, which consent shall not be unreasonably
withheld, conditioned or delayed. Such awnings, projections, curtains, blinds,
shades, screens or other fixtures must be of a quality, type, design and color,
and attached in the manner approved by Lessor.
3. Except as provided in the Lease, no sign, advertisement, notice or
other lettering shall be exhibited, inscribed, painted or affixed by any lessee
on any part of the outside or inside of the demised premises or Building
without the prior written consent of the Lessor. In the event of the violation
of the foregoing by any lessee, Lessor may remove same without any liability,
and may charge the expense incurred by such removal to the lessee or lessees
violating this rule. Interior signs on doors and directory tablet shall be
inscribed, painted or affixed for each lessee by the Lessor at the expense of
such lessee, and shall be of a size, color and style acceptable to the Lessor.
4. No show cases or other articles shall be put in front of or affixed
to any part of the exterior of the Building, nor placed in the halls, corridors
or vestibules without the prior written consent of the Lessor.
5. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein. Subject
to the insurance and
C-1
<PAGE> 64
waiver of subrogation provisions of the Lease, all damages resulting from any
misuse of the fixtures shall be borne by the lessee who, or whose servants,
employees, agents, visitors or licensees, shall have caused the same.
6. Except as incidental to normal office use (such as cabling, the
hanging of pictures, bulletin boards, etc.), and except for Lessee's rights to
exterior signage provided in the Lease, there shall be no marking, painting,
drilling into or in any way defacing any part of the demised premises or the
Building, and the boring, cutting or stringing of wires shall not be permitted.
Lessee shall not construct, maintain, use or operate within the demised
premises or elsewhere within or on the outside of the Building, any electrical
device, wiring or apparatus in connection with a loud speaker system or other
sound system which can be heard outside the demised premises.
7. No bicycles, vehicles, animals, birds or pets of any kind (except
for seeing-eye dogs) shall be brought into or kept in or about the demised
premises, and no cooking shall be done or permitted by any lessee on said
premises, except in connection with an office kitchen facility within the
demised premises for use by lessee's employees, clients or invitees and
approved by Lessor in accordance with the applicable terms of the Lease. No
lessee shall cause or permit any unusual or objectionable odors to be produced
upon or permeate from the demised premises.
8. No space in the Building shall be used for manufacturing or for the
sale of merchandise, goods or property of any kind at auction, nor shall any
space leased for general office purposes be used for the storage of
merchandise.
9. No lessee shall make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or premises of those having business with them whether by the use of
any musical instrument, radio, unmusical noise, whistling, singing, or in any
other way. No lessee shall throw anything out of the doors or windows or down
the corridors or stairs.
10. No inflammable, combustible or explosive fluid, chemical or
substance shall be brought or kept upon the demised premises other than in
accordance with Environmental Regulations.
11. Unless lessee shall furnish to Lessor keys or a master key to
access the same, no additional locks or bolts of any kind shall be placed upon
any of the doors or windows by any lessee, nor shall any changes be made in
existing locks or the mechanism thereof. The doors leading to the common
corridors or main halls on any multi-tenanted floor shall be kept closed during
business hours except as they may be used for ingress or egress. Each lessee
shall, upon the termination of his tenancy, restore to Lessor all keys of
stores, offices, storage, and toilet rooms either furnished to, or otherwise
procured by, such lessee, and in the event of the loss of any keys, so
furnished, such lessee shall pay to the Lessor the cost thereof.
C-2
<PAGE> 65
12. All removals, or the carrying in or out of any safes, freight,
furniture or bulky matter of any description must take place during the hours
which the Lessor or its Agent may reasonably determine from time to time. The
Lessor reserves the right to inspect all freight to be brought into the
Building and to exclude from the Building all freight which violates any of
these Rules and Regulations or the lease of which these Rules and Regulations
are a part.
13. Any person employed by any lessee to do janitor work within the
demised premises must obtain Lessor's consent and such person shall, while in
the Building and outside of said demised premises, comply with all instructions
issued by the Superintendent of the Building.
14. No lessee shall purchase spring water, ice, coffee, soft drinks,
towels, or other like service, from any company or persons not approved by the
Lessor, which approval will not be unreasonably withheld, conditioned or
delayed.
15. Lessor shall have the right to prohibit any advertising by any
lessee which, in Lessor's reasonable opinion, tends to impair the reputation of
the Building or its desirability as a building for offices, and upon written
notice from Lessor, lessee shall refrain from or discontinue such advertising.
16. The Lessor reserves the right to exclude from the Building at all
times any person who is not known or does not properly identify himself to the
building management or watchman on duty. Lessor may at its option require the
registration of all persons admitted to or leaving the Building between the
hours of (i) 6:00 p.m. and 8:00 a.m., Monday through Friday, (ii) 6:00 p.m.
Friday and 8:00 a.m. Saturday, (iii) 2:00 p.m. Saturday and 12:00 a.m. Sunday,
and (iv) all day Sunday and legal holidays.
17. The demised premises shall not be used for lodging or sleeping or
for any immoral or illegal purpose.
18. Each lessee, before closing and leaving the demised premises at
any time, shall see that all windows are closed.
19. The requirements of lessees will be attended to upon verbal or
written application at the office of the Building. Employees shall not perform
any work or do anything outside of their regular duties, unless under special
instruction from the management of the Building.
20. Canvassing, soliciting and peddling in the Building is prohibited
and each lessee shall cooperate to prevent the same.
21. No water cooler, plumbing or electrical fixtures shall be
installed by any lessee unless approved by Lessor, which approval shall not be
unreasonably withheld, conditioned or delayed.
C-3
<PAGE> 66
22. There shall not be used in any space, or in the public halls of
the Building, either by any lessee or by jobbers or others, in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber
tires and side guards.
23. Access plates to under floor conduits shall be left exposed. Where
carpet is installed, carpet shall be cut around access plates. Where lessee
elects not to provide removable plates in its carpet for access into the under
floor duct system, it shall be the lessee's responsibility to pay for the
removal and replacement of the carpet for any access needed into the duct
system at any time in the future.
24. Mats, trash or other objects shall not be placed in the public
corridors.
25. The Lessor does not maintain or clean suite finishes which are
non-standard: such as kitchens, bathrooms, wallpaper, special lights, etc.
However, should the need for repairs arise, the Lessor will arrange for the
work to be done at the lessee's expense.
26. Drapes installed by the lessee for its use which are visible from
the exterior of the Building must be approved by Lessor in writing and be
cleaned by the lessee. Lessor's approval thereof shall not be unreasonably
withheld, conditioned or delayed.
27. The Lessor will furnish and install light bulbs for the building
standard fluorescent or incandescent fixtures only. For special fixtures the
lessee will stock his own bulbs, which will be installed by the Lessor when so
requested by the lessee.
28. The Lessor may, upon request by any lessee, waive the compliance
by such lessee of any of the foregoing rules and regulations, provided that (i)
no waiver shall be effective unless signed by Lessor or Lessor's authorized
agent, (ii) any such waiver shall not relieve such lessee from the obligation
to comply with such rule or regulation in the future unless expressly consented
to by Lessor, and (iii) no waiver granted to any lessee shall relieve any other
lessee from the obligation of complying with the foregoing rules and
regulations unless such other lessee has received a similar waiver in writing
from Lessor.
C-4
<PAGE> 67
THE FRANCIS G. NEWLANDS BUILDING
EXHIBIT "D"
DECLARATION AS TO COMMENCEMENT DATE
Attached to and made a part of the Lease, dated the _____ day of
____________, 1999 entered into by and between Newlands Building Venture, LLC,
as Lessor, and Co-Star Realty Information, Inc., as Lessee.
Lessor and Lessee do hereby declare and evidence that possession of
the Demised Premises was accepted by Lessee on the ____ day of ___________,
1999. The Building and the Lessor's Work required to be completed by Lessor to
the extent described in Section 8 of the Lease have been satisfactorily
completed by Lessor and accepted by Lessee, subject to the Excluded Items, and
either one hundred twenty (120) days have expired or Lessee has occupied the
Demised Premises for the conduct of its business. The Lease is now in full
force and effect. For the purpose of this Lease, the Commencement Date is
established as being on the _____ day of ___________, 1999 and the Lease shall
expire on the last day of ____________, 2009, subject to extension as provided
in Section 35 of the Lease. Pursuant to the final space measurement provided
for in Section 1 of the Lease, the exact area of the Demised Premises is ___
rentable square feet. Accordingly, the Monthly Rent payable pursuant to Section
4 of the Lease is as set forth in the schedule contained in Section 4(B) of the
Lease or is adjusted as follows pursuant to said Section 4(B) of the Lease:
Lease Period Monthly Rent
Further, Lessee's proportionate share of Operating Expenses pursuant to Section
5 of the Lease is ___%, and Lessee's proportionate share of Operating Costs
pursuant to said Section 5 of the Lease is ___%.
LESSEE: LESSOR:
COSTAR REALTY NEWLANDS BUILDING VENTURE, LLC
INFORMATION, INC.
By: The Chevy Chase Land Company
of Montgomery County, Maryland,
Managing Member
By: By:
------------------------- ---------------------------
Name: Name:
Title: Title:
D-1
<PAGE> 68
THE FRANCIS G. NEWLANDS BUILDING
EXHIBIT "E"
SPECIFICATIONS FOR OFFICE CLEANING
I. DEMISED PREMISES: (Includes office areas, kitchens, stock rooms,
Xerox rooms and conference rooms.
Daily:
-----
1. Collect trash.
2. Empty ash trays; damp wipe clean.
3. Dust furniture, desks, machines, phones, file
cabinets, window ledges, etc. (Papers left on desks
will not be disturbed.)
4. Vacuum carpet; dry sweep resilient tile and wood floors, spot
clean.
5. Spot clean walls, doors and partitions.
Weekly:
------
1. Vacuum upholstered furniture.
Monthly:
-------
1. Recondition resilient tile floors.
2. Dust picture frames, charts, graphs, etc.
3. Vacuum air vents.
Quarterly:
---------
1. Clean partitions.
2. Dust vertical surfaces; walls, etc.
WINDOWS:
As Needed:
---------
1. Dust and clean venetian blinds.
E-1
<PAGE> 69
DOORS & LIGHTS:
--------------
Daily:
-----
1. Turn off lights and check all doors on completion of work.
TRASH:
Daily:
-----
1. Deposit all trash in the designated area.
NOTE: Only trash placed in waste containers, or clearly marked
"TRASH" will be removed.
PRIVATE LAVATORIES AND KITCHENS:
Daily:
-----
1. Remove all trash, garbage and refuse.
II. PUBLIC AREAS:
(A) Lavatories:
Daily:
-----
1. Clean and disinfect all toilet bowls, wash bowls and urinals.
2. Resupply all dispensers.
As Needed:
---------
1. Wash or wipe all surfaces in rest rooms.
(B) Corridors:
Daily:
-----
1. Collect trash.
2. Empty ash trays; damp wipe clean.
3. Vacuum carpet, dry sweep resilient tile and wood floors, spot clean.
4. Spot clean walls and doors.
5. Spot clean carpet.
E-2
<PAGE> 70
*Where possible, spots and spills that are soluble and
respond to standard spotting procedures will be removed.
Should Lessee install specialty items which will increase in
any way the rate being charged by the cleaning contractor for the Demised
Premises, Lessee shall be liable for such increases and will reimburse Lessor
for any additional cost. Such specialty items include, without limitation,
items such as floor coverings other than carpet or vinyl tile (that is,
hardwood floors, marble floors, etc.), raised panel doors, millwork which
requires any care or maintenance other than dusting, and lighting fixtures such
as wall sconces and pendant lighting.
E-3
<PAGE> 71
THE FRANCIS G. NEWLANDS BUILDING
EXHIBIT "F"
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this
"AGREEMENT") is made by and between TEACHERS INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA, a New York corporation with offices at 730 Third Avenue, New York,
New York 10017 ("LENDER") _______________, a [an] [individual] name of state
[corporation] [limited liability company] [general partnership] [limited
partnership] [d/b/a ____________] with its principal place of business at
__________________ ("TENANT"), and NEWLANDS BUILDING VENTURE, LLC, a Maryland
limited liability company with offices at Two Wisconsin Circle, Suite 540, Chevy
Chase, Maryland 20815 ("Borrower").
RECITALS:
A. Lender has made or is about to make a loan (together with all
advances and increases, the "LOAN") to Borrower.
B. Borrower, as landlord, and Tenant have entered into a lease
dated _________________ as amended by amendments dated _____________________
(the "LEASE") which leased to Tenant [Suite No. _________] [Floor _________]
[Store No. ______________] (the "LEASED SPACE") located in the Property
(defined below).
C. The Loan is or will be secured by the [Open-End] Mortgage,
Assignment of Leases and Rents, Fixture Filing Statement and Security Agreement
recorded or to be recorded in the official records of the County of
______________, State or Commonwealth of ___________________ (together with all
advances, increases, amendments or consolidations, the "MORTGAGE") and the
Assignment of Leases and Rents recorded or to be recorded in such official
records (together with all amendments or consolidations, the "ASSIGNMENT"),
assigning to Lender the Lease and all rent, additional rent and other sums
payable by Tenant under the Lease (the "RENT").
D. The Mortgage encumbers the real property, improvements and
fixtures located at ____________________ in the City of _________________,
County of ________________, State or Commonwealth of ______________________,
commonly known as and described on EXHIBIT "A" (the "PROPERTY").
IN CONSIDERATION of the mutual agreements contained in this Agreement,
Lender and Tenant agree as follows:
F-1
<PAGE> 72
1. The Lease and all of Tenant's rights under the Lease are and will
remain subject and subordinate to the lien of the Mortgage and Tenant will not
subordinate the Lease to any other lien against the Property without Lender's
prior consent as long as the Mortgage remains in effect.
2. This Agreement constitutes notice to Tenant of the Mortgage and
the Assignment and, upon receipt of notice from Lender, Tenant will pay the
Rent as and when due under the Lease to Lender and the payments will be
credited against the Rent due under the Lease. Borrower, by its execution of
this Agreement, hereby evidences its consent to the provisions hereof.
3. Tenant does not have any right or option to purchase any portion
of or interest in the Property.
4. Tenant and Lender agree that if Lender exercises its remedies
under the Mortgage or the Assignment and if Tenant is not then in default under
this Agreement and if Tenant is not then in default beyond any applicable grace
and cure periods under the Lease:
(a) Lender will not name Tenant as a party to any judicial or
non-judicial foreclosure or other proceeding to enforce the Mortgage unless
joinder is required under applicable law but in such case Lender will not seek
affirmative relief against Tenant, the Lease will not be terminated and
Tenant's possession of the Leased Space will not be disturbed;
(b) If Lender or any other entity (a "SUCCESSOR LANDLORD")
acquires the Property through foreclosure, by other proceeding to enforce the
Mortgage or by deed-in-lieu of foreclosure (a "FORECLOSURE"), Tenant's
possession of the Leased Space will not be disturbed and the Lease will
continue in full force and effect between Successor Landlord and Tenant; and
(c) If, notwithstanding the foregoing, the Lease is terminated
as a result of a Foreclosure, a lease between Successor Landlord and Tenant
will be deemed created, with no further instrument required, on the same terms
as the Lease except that the term of the replacement lease will be the then
unexpired term of the Lease. Successor Landlord and Tenant will execute a
replacement lease at the request of either.
5. Upon Foreclosure, Tenant will recognize and attorn to Successor
Landlord as the landlord under the Lease for the balance of the term. Tenant's
attornment will be self-operative with no further instrument required to
effectuate the attornment except that at Successor Landlord's request, Tenant
will execute instruments reasonably satisfactory to Successor Landlord
confirming the attornment.
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6. Successor Landlord will not be:
(a) liable for any act or omission of any prior landlord under the
Lease occurring before the date of the Foreclosure except for repair and
maintenance obligations of a continuing nature imposed on the landlord under
the Lease;
(b) required to credit Tenant with any Rent paid more than one
month in advance or for any security deposit unless such Rent or security
deposit has been received by Successor Landlord;
(c) bound by any amendment, renewal or extension of the Lease that
is inconsistent with the terms of this Agreement or is not in writing and
signed both by Tenant and landlord;
(d) bound by any reduction of the Rent unless the reduction is in
connection with an extension or renewal of the lease at prevailing market terms
or was made with Lender's prior consent, including the renewal option as may be
expressly set forth in the Lease dated ___________, 1999.
(e) bound by any reduction of the term(1) of the Lease or any
termination, cancellation or surrender of the Lease unless (i) any such
termination, cancellation or surrender of the Lease results from a breach by
Tenant or Borrower of their respective duties and obligations under the Lease
(subject to Paragraph 8 below) or pursuant to the casualty damage or
condemnation provisions of the Lease, or (ii) the reduction, termination,
cancellation or surrender occurred during the last 6 months of the term or was
made with Lender's prior consent;
(f) except for any offset rights as may be expressly set forth ONLY
in the Lease dated ______________, 1999, subject to any credits, offsets,
claims, counterclaims or defenses that Tenant may have that arose prior to the
date of the Foreclosure or liable for any damages Tenant may suffer as a result
of any misrepresentation, breach of warranty or any act of or failure to act by
any party other than Successor Landlord;
(g) bound by any obligation to make improvements to the Property,
including the Leased Space, to make any payment or give any credit or allowance
to Tenant provided for in the Lease or to pay any leasing commissions arising
out of the Lease, except that Successor Landlord will be:
(i) bound by any such obligations provided for in the
Lender approved form lease; and
-----------------------------------
(1) For purposes of this subparagraph "the term of the Lease" includes any
renewal term after the right to renew has been exercised.
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<PAGE> 74
(ii) bound to comply with the casualty and condemnation
restoration provisions included in the Lease provided that
Successor Landlord receives the insurance or condemnation
proceeds; or
(h) liable for obligations under the Lease with respect to any
off-site property or facilities for the use of Tenant (such as off-site leased
space or parking) unless Successor Landlord acquires in the Foreclosure the
right, title or interest to the off-site property.
7. Borrower and Tenant agree that they shall not amend the Lease in
any monetary or material non-monetary respect without the prior consent of
Lender.
8. Lender will have the right, but not the obligation, to cure any
default by Borrower, as landlord, under the Lease. Tenant will notify Lender of
any default that would entitle Tenant to terminate the Lease or abate the Rent
and any notice of termination or abatement will not be effective unless Tenant
has so notified Lender of the default and Lender has had a 30-day cure period
(or such longer period as may be necessary if the default is not susceptible to
cure within 30 days) commencing on the latest to occur of the date on which (i)
the cure period under the Lease expires; (ii) Lender receives the notice
required by this paragraph; and (iii) Successor Landlord obtains possession of
the Property if the default is not susceptible to cure without possession.
9. All notices, requests or consents required or permitted to be
given under this Agreement must be in writing and sent by certified mail,
return receipt requested or by nationally recognized overnight delivery service
providing evidence of the date of delivery, with all charges prepaid, addressed
to the appropriate party at the address set forth above.
10. Subject to any offset rights as may be expressly set forth ONLY in
the Lease dated _________________, 1999, any claim by Tenant against Successor
Landlord under the Lease or this Agreement will be satisfied solely out of
Successor Landlord's interest in the Property and Tenant will not seek recovery
against or out of any other assets of Successor Landlord. Successor Landlord
will have no liability or responsibility for any obligations under the Lease
that arise subsequent to any transfer of the Property by Successor Landlord.
11. This Agreement is governed by and will be construed in accordance
with the laws of the state or commonwealth in which the Property is located.
12. Lender and Tenant waive trial by jury in any proceeding brought by,
or counterclaim asserted by, Lender or Tenant relating to this Agreement.
13. If there is a conflict between the terms of the Lease and this
Agreement, the terms of this Agreement will prevail as between Successor
Landlord and Tenant.
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<PAGE> 75
14. This Agreement binds and inures to the benefit of Lender and
Tenant and their respective successors, assigns, heirs, administrators,
executors, agents and representatives.
15. This Agreement contains the entire agreement between Lender and
Tenant with respect to the subject matter of this Agreement, may be executed in
counterparts that together constitute a single document and may be amended only
by a writing signed by Lender and Tenant.
16. [INCLUDE ONLY IN SNDA'S SIGNED POST-CLOSING] Tenant certifies
that: other than noted as Exceptions below, the Lease represents the entire
agreement between the landlord under the Lease and Tenant regarding the Leased
Space; the Lease is in full force and effect; neither party is in default under
the Lease beyond any applicable grace and cure periods and no event has
occurred which with the giving of notice or passage of time would constitute a
default under the Lease; Tenant has entered into occupancy and is open and
conducting business in the Leased Space; and all conditions to be performed to
date by the landlord under the Lease have been satisfied.
Exceptions (if any):
IN WITNESS WHEREOF, Lender, Tenant and Borrower have executed and
delivered this Agreement as of __________________, 199_.
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA, a New
York corporation
By:
----------------------------
Name:
-----------------------
Title:
----------------------
Insert Name of Tenant
a [an] [individual] [corporation]
-----------------
[limited liability company] [general partnership]
[limited partnership] (d/b/a/ ]
----------------------
By:
----------------------------
Name:
-----------------------
Title:
----------------------
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<PAGE> 76
NEWLANDS BUILDING VENTURE, a Maryland limited
liability company
By: The Chevy Chase Land Company of Montgomery
County, Maryland, Managing Member
By:
------------------------------------
Name:
Title:
[OBSERVE ALL STATE SPECIFIC REQUIREMENTS FOR EXECUTION OF A
RECORDABLE DOCUMENT AND ADD STATE-APPROVED FORMS OF
ACKNOWLEDGEMENT]
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<PAGE> 77
ACKNOWLEDGMENT
State of
County of
On this the _______ day of _______________, 199___ before me, the
undersigned officer, personally appeared __________________________ who
acknowledged himself to be the ___________________ of ______________________, a
corporation, and that he, as such ____________________________ being authorized
so to do, executed the foregoing instrument for the purposes therein contained,
by signing the name of the corporation by himself as___________________.
In witness whereof I hereunto set my hand and official seal.
-----------------------------------
-----------------------------------
Title of Officer
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<PAGE> 78
EXHIBIT "A"
PROPERTY DESCRIPTION
F-8
<PAGE> 79
THE FRANCIS G. NEWLANDS BUILDING
EXHIBIT "G"
STATEMENT OF TENANT IN RE: LEASE
[Tenant's Letterhead]
Date
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017
Attn: _____________________
Re: TIAA Appl. #
TIAA Mtge. #
Name of Project
Address (Including zip code)
Tenant's Floor and Suite #
Ladies and Gentlemen:
It is our understanding that you have committed to place a mortgage
upon the subject premises and as a condition precedent thereof have required
this certification of the undersigned.
The undersigned, as lessee, under that certain lease dated
__________________, made with ___________________, as lessor, hereby ratifies
said lease and certifies that:
1. the "Commencement Date" of said lease is
_____________________; and
2. the undersigned is presently solvent and free from
reorganization and/or bankruptcy and is in occupancy, open,
and conducting business with the public in the premises; and
3. the operation and use of the premises do not involve the
generation, treatment, storage, disposal or release of a
hazardous substance or a solid waste into the environment
other than to the extent necessary to conduct its ordinary
course of business in the premises and in accordance with all
applicable environmental laws, and that the premises are
being operated in accordance with all applicable
environmental laws, zoning ordinances and building codes; and
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<PAGE> 80
4. the current base rental payable pursuant to the terms of said
lease is $________________ per annum; and further, additional
rental pursuant to Section 5 of said lease is payable as
follows: ______________________; and
5. said lease is in full force and effect and has not been
assigned, modified, supplemented or amended in any way
(except by agreement(s) dated ______________), and to the
best of Lessee's knowledge, neither party thereto is in
default thereunder; and
6. the lease described above represents the entire agreement
between the parties as to the leasing of the premises; and
7. the term of said lease expires on ____________; and
8. except as may be set forth on any punch list attached hereto,
all conditions under said lease to be performed by the lessor
have been satisfied, except for __________________________;
and
9. all required contributions by lessor to lessee on account of
lessee's improvements have been received, except for
____________________; and
10. on this date there are no existing defenses or offsets,
claims or counterclaims which the undersigned has against the
enforcement of said lease by the lessor, except for
__________________________; and
11. no rental has been paid in advance and no security (except
the security deposit in the amount of $_______________ and
the advance rent in the amount of $___________) has been
deposited with lessor; and
12. according to the Lease, the floor area of lessee's premises
is __________________ rentable square feet; and
13. the most recent payment of current basic rental was for the
payment due on ___________________, 19__, and all basic
rental and additional rental payable pursuant to the terms of
the lease have been paid up to said date; and
14. the undersigned acknowledges notice that lessor's interest
under the lease and the rent and all other sums due
thereunder will be assigned to you as part of the security
for a mortgage loan by you to lessor. In the event that
Teachers Insurance and Annuity Association of America, as
lender, notifies the undersigned of a default under the
mortgage and demands that the undersigned pay its rent and
all other sums due under the lease to
G-2
<PAGE> 81
lender, lessee agrees that it shall pay its rent and all such other
sums to lender.
Very truly yours,
------------------------------
(Lessee)
By:
------------------------
Its:
------------------------
G-3
<PAGE> 82
THE FRANCIS G. NEWLANDS BUILDING
EXHIBIT "H"
HVAC CRITERIA
The Newlands Building HVAC system is designed in accordance with the following
criteria:
- Outside Ambient Conditions: ASHRAE one percent conditions of 93.0 +/-
dB and 75.0 degreesF wb coincident. This condition will be exceeded
one percent of the year.
- Inside Condition: 75 degreesF +/- 2, 50% RH +/- 5%.
- Tenant Lighting Load: 2.0 watts/SF.
- Tenant Receptacle Load: 3.0 watts/SF.
- Ventilation Air: Per 96 BOCA and ASHRAE standard 62-89 (20 CFM/person
and 143 SF/person).
The system as designed will provide a typical floor capacity of 54 tons for
18350 SF or 340 SF/ton. This capacity and design criteria is consistent with
that provided in similar, Class A office buildings.
H-1