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EXHIBIT 10.12
LEASE AGREEMENT
by and between
FARRAGUT CENTER LLC
("Landlord")
and
NATIONAL CONSUMER COOPERATIVE BANK
D/B/A NATIONAL COOPERATIVE BANK
("Tenant")
DECEMBER 30, 1999
Property:
1725 Eye Street, N.W.
Washington, D.C.
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TABLE OF CONTENTS
<Table>
<Caption>
Paragraph Page
1. DEFINITIONS.....................................................................................1
2. DEMISED PREMISES...............................................................................16
3. TERM...........................................................................................16
3.1 INITIAL TERM..........................................................................16
3.2 ADJUSTMENT OF LEASE COMMENCEMENT DATE.................................................17
3.3 DECLARATION...........................................................................19
3.4 EFFECTIVE DATE........................................................................19
3.5 PAYMENT FOR TENANT'S OTHER LEASE......................................................19
4. RENT; MONTHLY BASE RENT........................................................................21
5. COST-OF-LIVING ADJUSTMENT [Intentionally omitted.].............................................22
6. INCREASES IN OPERATING EXPENSES, CHAR SERVICE COSTS AND REAL ESTATE TAXES......................22
6.1 TENANT'S SHARE........................................................................22
6.2 MONTHLY PAYMENTS......................................................................22
6.3 EXPENSE STATEMENTS....................................................................23
6.4 REAL ESTATE TAX CONTESTS..............................................................23
6.5 AUDIT PROCEDURES......................................................................24
7. SALES, USE OR OTHER TAXES......................................................................25
8. PERSONAL PROPERTY TAXES........................................................................26
8.1 LEVIED ON TENANT......................................................................26
8.2 LEVIED ON LANDLORD....................................................................26
9. LATE CHARGE; INTEREST..........................................................................27
10. DEPOSITS.......................................................................................27
10.1 FIRST INSTALLMENT OF MONTHLY BASE RENT................................................27
10.2 ......................................................................................28
Landlord Remedies..............................................................................28
11. LAWS AND ORDINANCES............................................................................28
12. USE OF DEMISED PREMISES........................................................................29
13. REPAIRS BY TENANT..............................................................................29
14. REPAIRS BY LANDLORD............................................................................30
15. FURNITURE; FIXTURES; ELECTRICAL EQUIPMENT......................................................31
15.1 FLOOR LOADING.........................................................................31
15.2 OFFICE EQUIPMENT......................................................................32
16. SHELL CONDITION; TENANT'S WORK; ALTERATIONS....................................................33
16.1 SHELL CONDITION; TENANT'S WORK........................................................33
16.2 ALTERATIONS BY TENANT.................................................................39
16.3 COMPLIANCE WITH CODES; NO LIENS.......................................................40
17. OWNERSHIP OF ALTERATIONS AND EQUIPMENT AND OTHER PROPERTY; REMOVAL OF TENANT'S PERSONAL
PROPERTY.......................................................................................41
</Table>
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<Table>
17.1 LANDLORD'S PROPERTY...................................................................41
17.2 REMOVAL...............................................................................42
18. DAMAGE OR DESTRUCTION..........................................................................43
18.1 NOTICE................................................................................43
18.2 RESTORATION...........................................................................43
18.3 TERMINATION...........................................................................44
18.4 NO LIABILITY..........................................................................44
19. CONDEMNATION...................................................................................45
19.1 COMPENSATION AWARD....................................................................45
19.2 TERMINATION...........................................................................45
20. DEFAULTS; LANDLORD'S REMEDIES..................................................................46
20.1 EVENTS OF DEFAULT.....................................................................46
20.2 LANDLORD'S REMEDIES...................................................................48
20.3 EXTENT OF LIABILITIES.................................................................49
20.4 TENANT'S WAIVER.......................................................................50
20.5 LANDLORD'S LIEN. [Intentionally omitted.].............................................50
20.6 REMEDIES CUMULATIVE...................................................................50
20.7 TENANT'S AGENT FOR PROCESS............................................................51
21. UTILITIES AND SERVICES.........................................................................51
21.1 LANDLORD TO FURNISH...................................................................51
21.2 RECYCLING.............................................................................52
21.3 CHARGES TO TENANT.....................................................................53
21.4 REPAIRS; INTERRUPTIONS................................................................53
21.5 GOVERNMENT OR OTHER REQUIREMENTS......................................................54
21.6 ACCESS................................................................................54
21.7 FITNESS FACILITY......................................................................54
22. INSURANCE......................................................................................56
22.1 LIABILITY INSURANCE...................................................................56
22.2 TENANT'S PROPERTY INSURANCE AND OTHER INSURANCE.......................................56
22.3 POLICY REQUIREMENTS...................................................................57
22.4 ADDITIONAL INSURANCE..................................................................58
22.5 EFFECT OF TENANT'S ACTIVITIES ON INSURANCE............................................58
22.6 TERMINATION RIGHT.....................................................................59
22.7 TENANT'S CONTRACTOR'S INSURANCE.......................................................60
22.8 LANDLORD'S INSURANCE..................................................................61
23. WAIVER OF SUBROGATION..........................................................................61
24. PROPERTY AT TENANT'S RISK......................................................................62
25. ASSIGNMENT AND SUBLETTING......................................................................62
25.1 CONSENT REQUIRED......................................................................62
25.2 LANDLORD'S OPTIONS....................................................................64
25.3 COSTS.................................................................................66
26. SIGNS..........................................................................................66
</Table>
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<Table>
27. RULES AND REGULATIONS..........................................................................67
28. LANDLORD ACCESS................................................................................67
29. SUBORDINATION..................................................................................68
29.1 AUTOMATIC SUBORDINATION...............................................................68
29.2 INSTRUMENTS OF SUBORDINATION..........................................................68
30. ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS....................................................70
30.1 ESTOPPEL CERTIFICATE..................................................................70
30.2 FINANCIAL STATEMENTS..................................................................71
31. HOLD-OVER......................................................................................71
32. QUIET ENJOYMENT................................................................................72
33. CERTAIN RIGHTS RESERVED BY LANDLORD............................................................72
34. LANDLORD'S SUCCESSORS..........................................................................74
35. RELOCATION OF TENANT...........................................................................75
36. MODIFICATIONS TO LEASE.........................................................................76
37. ATTORNEYS' FEES................................................................................77
38. NOTICES........................................................................................78
39. REMEDIES CUMULATIVE; NO WAIVER.................................................................78
40. FINAL AGREEMENT................................................................................79
41. WAIVER OF JURY TRIAL...........................................................................79
42. FORCE MAJEURE..................................................................................79
43. GENDER; ASSIGNS AND SUCCESSORS; JOINT AND SEVERAL LIABILITY....................................80
44. SEVERABILITY...................................................................................80
45. TIME IS OF THE ESSENCE.........................................................................81
46. INDEMNITIES....................................................................................81
46.1 TENANT'S INDEMNITY....................................................................81
46.2 LANDLORD'S INDEMNITY..................................................................81
47. LIMITATION ON LANDLORD LIABILITY...............................................................82
48. NO PARTNERSHIP.................................................................................82
49. BROKERAGE......................................................................................83
50. TENANT'S AUTHORITY.............................................................................83
51. APPLICABLE LAW.................................................................................83
52. PARKING........................................................................................83
53. HAZARDOUS MATERIALS............................................................................84
53.1 DEFINITION............................................................................84
53.2 GENERAL PROHIBITION...................................................................84
53.3 NOTICE................................................................................85
53.5 SURVIVAL..............................................................................86
54. LANDLORD'S RIGHT TO TERMINATE [Intentionally omitted.].........................................86
55. OPTION TO EXTEND...............................................................................86
56. CONFERENCE CENTER..............................................................................89
57. STORAGE SPACE..................................................................................90
58. RIGHT OF FIRST OFFER...........................................................................91
</Table>
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<Table>
58.1 AVAILABLE SPACE.......................................................................91
58.2 NOTICE; EXERCISE......................................................................93
58.3 EXECUTION OF LEASE OR LEASE AMENDMENT.................................................93
58.4 MISCELLANEOUS PROVISIONS..............................................................94
59. LENDER APPROVAL................................................................................94
60. ANTENNA LICENSE................................................................................95
</Table>
EXHIBIT A - Floor Plan
EXHIBIT B - Declaration by Landlord and Tenant
EXHIBIT C - Rules and Regulations
EXHIBIT D - Definition of Shell Condition
EXHIBIT E - Cleaning Specifications
EXHIBIT F - Location of Approved Exterior Sign
EXHIBIT G - Contractors Rules and Regulations
EXHIBIT H - Tenant's Standard Office Equipment
EXHIBIT I - Form of Statement As to Increased Operating Expenses, Increased Char
Service Costs and Increased Real Estate Taxes
EXHIBIT J - Construction Schedule
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LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is made this ____ day of __________ 1999, by
and between FARRAGUT CENTER LLC, a District of Columbia limited liability
company, ("Landlord") and NATIONAL CONSUMER COOPERATIVE BANK d/b/a National
Cooperative Bank, a federally chartered institution ("Tenant").
W I T N E S S E T H
1. DEFINITIONS
Except as otherwise expressly provided or unless the context otherwise
requires, the following terms shall have the meanings assigned to them in this
Paragraph:
A. DEFINITIONS OF BUSINESS TERMS
1. Base Rent: The following per annum:
<Table>
<Caption>
Base Rent
Per Square Foot Annual Monthly
Lease Year Per Annum Base Rent Base Rent
- ---------- --------------- --------- ---------
1 $43.75 $2,130,931.25 $177,577.60
2 $44.63 $2,173,793.41 $181,149.45
3 $45.52 $2,217,142.64 $184,761.89
4 $46.43 $2,261,466.01 $188,455.50
5 $47.36 $2,306,763.52 $192,230.29
6 $49.61 $2,416,354.27 $201,362.86
7 $50.60 $2,464,574.20 $205,381.18
8 $51.61 $2,513,768.27 $209,480.69
9 $52.64 $2,563,936.48 $213,661.37
10 $53.69 $2,615,078.83 $217,923.24
</Table>
2. Base Year: Calendar 2001, for purposes of computing
Increased Operating Expenses and Increased Char Service Costs. For purposes of
computing Increased Real Estate Taxes, the Base Year shall mean the District of
Columbia tax year commencing October 1, 2001.
3. Brokers: Trammell Crow Real Estate Services, Inc., as agent
of Landlord and as agent of Tenant.
4. Building: The building located at 1725 Eye Street, N.W.,
Washington, D.C., in which the Demised Premises are
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located. The term "Building" includes all portions of such building, the Demised
Premises, the Common Areas and the garage.
5. [Intentionally omitted.]
6. Demised Premises: Approximately 48,707 rentable square
feet of office space, consisting of (i) the approximately 24,368 rentable square
feet comprising the entire sixth (6th) floor of the Building and (ii) the
approximately 24,339 rentable square feet comprising the entire seventh (7th)
floor of the Building, as measured in accordance with the Greater Washington
Commercial Association of REALTORS(R) Standard Method of Measurement adopted
June 13, 1995 (the "GWCAR Standard Method of Measurement"), as determined by
Landlord, known as suites 600 and 700, as shown on the floor plan attached
hereto as Exhibit A, and modified to include a proportionate share of the
Conference Center (as hereinafter defined in Paragraph 56 hereof) in the
Building, which proportionate share shall be the same percentage as Tenant's
Percentage of Increased Operating Expenses [as defined in Paragraph 1.A.15(1)
hereof]. However, the area and plan of the Demised Premises may change in the
event of the exercise of any option to expand or contract the Demised Premises
set forth in this lease. Tenant shall have the option, exercisable by written
notice to Landlord within thirty (30) days of the Lease Commencement Date, to
verify the rentable floor area of the Demised Premises by having the Demised
Premises remeasured by Tenant's architect in the manner provided for in the
GWCAR Standard Method of Measurement, as modified as set forth hereinabove (the
"Tenant's Remeasurement"). If the rentable area of the Demised Premises
resulting from the Tenant's Remeasurement is within two percent (2%) of the area
of the Demised Premises as stated above (the "Stated Area"), the rentable floor
area of the Demised Premises shall be equal to the Stated Area. If the Tenant's
Remeasurement is not within two percent (2%) of the Stated Area, Landlord and
Tenant shall negotiate in good faith for ten (10) days to attempt to reach
agreement as to the rentable floor area of the Demised Premises. If within such
ten (10) day period the parties have not mutually agreed on the rentable floor
area of the Demised Premises, then within five (5) days following such 10-day
period Landlord's architect and Tenant's architect shall jointly appoint a third
architect. The third architect shall independently make his determination of the
rentable floor area of the Demised Premises within ten (10) days after his
appointment. The highest and the lowest measurements among the three (3)
architects shall be disregarded and the remaining determination shall be deemed
to be the rentable floor area of the Demised Premises. Each party shall pay for
the cost
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of its architect and one-half of the cost of the third (3rd) architect. In the
event that Landlord's architect and Tenant's architect do not agree on a third
architect within such 10-day period, the dispute shall be resolved by
arbitration in accordance with the then prevailing Commercial Rules of The
American Arbitration Association. For purposes of this Paragraph 1.A.6, an
"architect" shall mean an architect certified by The American Institute of
Architects.
Within fifteen (15) days after final determination of the rentable floor
area of the Demised Premises, Landlord shall prepare, and Landlord and Tenant
shall each promptly execute, an amendment to this Lease pursuant to which the
Base Rent, Tenant's Percentage of Increased Operating Expenses, Tenant's
Percentage of Increased Char Service Costs, Tenant's Percentage of Increased
Real Estate Taxes and any other affected provisions of this Lease are
recalculated to reflect such increase or decrease in the rentable floor area of
the Demised Premises, which amendment shall be effective retroactive to the
Lease Commencement Date.
7. Guarantor: [Intentionally omitted.]
8. Land: That parcel of land known as Lot 61 in Square 126 in
Washington, D.C., including all easements, rights and appurtenances thereto.
9. Landlord's Address:
c/o Cafritz Company
Vice President -
Commercial Management
1825 K Street, N.W.
Washington, D.C. 20006
10. Lease Commencement Date: April 2, 2001, as may be adjusted
pursuant to Paragraph 3.
11. Parking Spaces: Thirty-eight (38) initially, and thereafter,
if Tenant leases any Available Space, additional Parking Spaces shall be
provided on the basis of one (1) Parking Space for every 1,500 rentable square
feet comprising the Available Space, which number of Parking Spaces shall be
recalculated to increase or decrease from time to time in the event that the
rentable square footage of the Demised Premises is expanded or reduced, as the
case may be, in accordance with the terms of this Lease, but Tenant's
remeasurement option under Paragraph 1.A.6. hereof shall be inapplicable.
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12. Rent Commencement Date: The same date as the Lease
Commencement Date.
13. Security Deposit: [Intentionally omitted.]
14. Tenant's Legal Notice Address:
Prior to the Lease Commencement Date:
1401 Eye Street, N.W.
Suite 700
Washington, D.C. 20005
Attention: Mr. Stan Sherfy, Vice
President, Facilities and
Services
With a copy to:
Chief Financial Officer
1401 Eye Street, N.W.
Suite 700
Washington, D.C. 20005
Attn: Mr. Richard Reed
On and after the Lease Commencement Date:
At the Demised Premises
Attention: Mr. Stan Sherfy, Vice President, Facilities and
Services
With a copy to:
Chief Financial Officer
1725 Eye Street, N.W.
Suite 700
Washington, D.C. 20036
Attn: Mr. Richard Reed
15. (1) Tenant's Percentage of Increased Operating Expenses:
19.76% of Increased Operating Expenses, which shall be the number of square feet
of rentable area in the Demised Premises divided by the total number of square
feet of rentable area of office space and retail space in the Building (246,527
square feet as of the date of execution of this Lease).
(2) Tenant's Percentage of Increased Char Service Costs:
21.07% of Increased Char Service Costs, which shall
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be the number of square feet of rentable area in the Demised Premises divided by
the total number of square feet of rentable area of office space in the Building
(231,198 square feet as of the date of execution of this Lease).
(3) Tenant's Percentage of Increased Real Estate Taxes:
19.76% of Increased Real Estate Taxes, which shall be the number of square feet
of rentable area in the Demised Premises divided by the total number of square
feet of rentable area of office space and retail space in the Building (246,527
square feet as of the date of execution of this Lease).
(4) Tenant's Percentage of Increased Operating Expenses,
Tenant's Percentage of Increased Char Service Costs, and Tenant's Percentage of
Increased Real Estate Taxes shall each be recalculated to increase or decrease
from time to time in the event that the rentable square footage of the Demised
Premises is expanded or reduced, as the case may be, in accordance with the
terms of this Lease. Landlord shall cause a licensed architect who is not an
employee of Landlord or Landlord's management agent to measure the reduced area
of the Demised Premises or to measure the Available Space (as hereinafter
defined in Paragraph 58.1) which is leased by Tenant, as applicable, in
accordance with the GWCAR Standard Method of Measurement, as modified as set
forth in Paragraph 1.A.6, and Landlord's recalculation based upon such
measurement shall be effective not later than thirty (30) days after such
recalculation takes place. Landlord shall notify Tenant promptly in writing
after any and all such recalculations. Notwithstanding the foregoing, in the
event that Tenant leases any Available Space (as hereinafter defined in
Paragraph 58.1) and such Available Space comprises at least one (1) full floor
of the Building, Tenant shall have the option, exercisable by written notice to
Landlord within thirty (30) days of the Available Space Effective Date (as
hereinafter defined in Paragraph 58.1), to verify the rentable floor area of the
Available Space thus leased by having the Demised Premises remeasured by
Tenant's architect in the manner provided for in Paragraph 1.A.6. hereof, in
which case the procedures set forth in said Paragraph 1.A.6. hereof shall apply.
16. Term: Ten (10) years (subject to extension as hereinafter
provided in Paragraph 3.5), plus all renewal periods of this Lease, if any.
B. ADDITIONAL DEFINITIONS
1. Additional Rent: Any amounts required to be paid by Tenant
under the terms of this Lease (including, but not limited to the payments to be
made pursuant to Paragraphs 6 and 9, but not including Monthly Base Rent) and
any charges or expenses paid or incurred by Landlord on behalf of Tenant for
which Landlord is entitled to be reimbursed under this Lease.
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2. Adjustment Date: [Intentionally omitted.]
3. Alterations: Any improvements, alterations, fixed
decorations or modifications, structural or otherwise, to the Demised Premises,
the Building or the Land, including, but not limited to, the installation,
substitution, alteration, or modification of carpeting, partitions, fixtures,
counters, doors, air conditioning ducts, plumbing, piping, lighting fixtures and
wiring of any kind, hardware, locks, ceilings, window and wall coverings and the
like.
4. Common Areas: Those areas of the Building and/or Land,
as the case may be, made available by Landlord for use by Tenant in common with
Landlord, other tenants of the Building and the employees, agents and invitees
of Landlord and of such other tenants.
5. Consumer Price Index: [Intentionally omitted.]
6. Ground Leases: All ground and other underlying leases
from which Landlord's title to the Land and/or the Building is or may in the
future be derived. "Ground Lessors" shall denote those persons and entities
holding such ground or underlying leases.
7. Holidays: All holidays designated by an executive order
of the President of the United States or by an Act of Congress.
8. (1) Increased Operating Expenses: Operating Expenses
incurred with respect to any calendar year in excess of Operating Expenses
incurred with respect to the Base Year.
(2) Increased Char Service Costs: Char Service Costs any
calendar year in excess of Char Service Costs incurred during the Base Year.
(3) Increased Real Estate Taxes: Real Estate Taxes
incurred with respect to any calendar year in excess of Real Estate Taxes
incurred with respect to the Base Year.
9. Landlord's Work:[Intentionally omitted.]
10. Lease Year: That period of twelve (12) consecutive
calendar months commencing on the first day of the calendar month in which the
Lease Commencement Date occurs, and each consecutive twelve-month period
thereafter.
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11. Monthly Base Rent: Equal monthly installments of one-twelfth
(1/12th) of the Base Rent.
12. Operating Expenses: Any and all expenses incurred by
Landlord in each calendar year as determined in accordance with accounting
procedures established and regularly applied by Landlord in connection with the
operation, management, maintenance and repair of the Building and the Land,
which accounting procedures shall be consistent with accounting procedures used
by landlords of other comparable first-class office buildings in the Central
Business District of Washington, D.C., taking into account the age, finishes on
the Lease Commencement Date, method of construction and system design of such
comparable buildings ("Comparable Buildings"), excluding Char Service Costs
which are treated separately in Paragraph 6 below. By way of example, but
without limitation, Operating Expenses shall include any and all of the
following: salaries, wages, medical, surgical and general welfare benefits
(including health, accident and group life insurance) and other pension
contribution payments for employees of Landlord, employees of Landlord's
management agent, or both, engaged in the operation, management, maintenance or
repair of the Building, but only to the extent that such employees are assigned
full-time to the Building; provided, however, that Operating Expenses shall
include Landlord's reasonable allocation of compensation paid to employees who
are assigned part-time to the operation, management, maintenance or repair of
the Building; payroll taxes with respect to the foregoing employees; license
fees; costs incurred to achieve compliance with governmental laws, rules,
regulations and orders, subject to the limitation set forth hereinbelow with
respect to certain of such costs which constitute capital expenditures;
electricity, water and sewer charges and other utilities (except as charged
directly to tenants); repairs and maintenance but not costs of repairing,
improving or altering any space in preparation for occupancy of any new or
renewal tenant; cost of materials and supplies for Building maintenance; any
local or state surcharges or special charges; utility taxes; capital
expenditures made by Landlord during the Term, provided, that such expenditures
shall be limited to (i) those replacements of Building elements with other
Building elements and improvements which serve similar purposes and which in
Landlord's reasonable judgment will increase the efficiency of the Building
(i.e., are reasonably anticipated by Landlord to reduce Operating Expenses as
they relate to the item which is the subject of the capital expenditure or which
are reasonably anticipated by Landlord to reduce the rate of increase in
Operating Expenses as they relate to the item which is the subject of the
capital expenditure from what it otherwise would have been in the absence of
such capital expenditure) and will not change the character of the Building,
(ii) those replacements and improvements,
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which are required to comply with the requirements of any laws, regulations, or
insurance or utility company requirements, except with respect to conditions
existing as of the Lease Commencement Date, and (iii) those replacements which
replace any Building equipment necessary to operate the Building at the same
quality levels as prior to the replacement, together with any financing charges
incurred in connection therewith, provided that any such capital expenditures
described in items (i), (ii), and (iii) above shall be amortized over the useful
life of the improvements and only the portion attributable to the calendar year
for which the calculation is being made shall be included in Operating Expenses
for that calendar year; premiums for casualty, liability, elevator, worker's
compensation, boiler and machinery, sprinkler leakage, rent loss, use and
occupancy or other insurance; access control system and lobby attendant;
Building supplies; uniforms and dry cleaning; consulting fees to the extent that
they relate to the management or operation of the Building; costs of continuing
education and professional and trade association dues for Building management
staff; concierge expenses; environmental expenses, subject to the exclusions in
Subparagraph 1.B.12.(19) below; vault space rentals and public space rentals;
any costs, charges or other assessments made by or for any entity operating a
business improvement district in which the Building is located; recycling
expenses; personal property taxes; window cleaning; trash removal; snow removal;
repair and maintenance of the grounds, including costs of landscape maintenance
(other than the initial costs of the initial landscaping at the Building),
gardening and planting; service or maintenance contracts with independent
contractors, including, but not limited to access control and energy management
services (it being agreed that if the term of any such service or maintenance
contract does not commence until after the expiration of a warranty period with
respect to any equipment, the Operating Expenses for the Base Year shall be
grossed up to include, as an imputed amount, the cost of service or maintenance
set forth in such service or maintenance contract for the first year of its
term); management fees, which (A) shall be deemed to be, and shall be calculated
as, an amount equal to three percent (3%) of all gross revenues from the
Building during the calendar year for which the management fee is being
calculated (including, but not limited to, the Base Year), notwithstanding the
fact that the rate of the management fee actually paid by Landlord for such
calendar year may be less than or greater than three percent (3%) of all gross
revenues from the Building, and (B) shall be grossed up for any calendar year
(including, but not limited to, the Base Year) to include in gross revenues from
the Building any "free rent" or rent abatement with respect to any portion of
such calendar year; legal and accounting fees (subject to the exclusions set
forth below); costs of operation, use, maintenance, and repair of the Conference
Center (as hereinafter defined in Paragraph 56 hereof), subject to the
limitations on capital expenditures set forth above, and provided that any
income Landlord receives in
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connection with the Conference Center (e.g., fees received from a third party
for use thereof) shall be offset against any Conference Center costs which would
be included in Operating Expenses; rent for a management office in the Building,
except for any portion thereof which is used as a leasing office, provided that
(A) such rent shall not be calculated on more than two thousand five hundred
(2,500) square feet of rentable area and (B) the rent for such management office
shall not exceed the then current rent for space on the floor of the Building on
which the management office is initially located (even if the management office
is later relocated to a different floor of the Building), and further provided,
that Operating Expenses for the Base Year shall be grossed up to include therein
the initial rent for such management office calculated as aforesaid,
notwithstanding the fact that such management office may not have been open in
the Building for all or any portion of the Base Year; rent for the Fitness
Facility in the Building, which shall be deemed to be, and shall be calculated
as, an amount equal to the product of (x) the rentable square footage of the
Fitness Facility multiplied by (y) Twenty-Eight Dollars ($28.00) during every
calendar year for which Operating Expenses are being determined (including, but
not limited to, the Base Year), notwithstanding the fact that the rent which is
charged by Landlord for the Fitness Facility may be at a rate which is less than
or greater than Twenty-Eight Dollars ($28.00) per rentable square foot; costs of
operation, use, maintenance and repair of the Fitness Facility, to the extent
permitted by Paragraph 21.7 hereof, subject to the limitations on capital
expenditures set forth above (it being understood and agreed that all equipment
lease costs which are included in Operating Expenses for the calendar year
following the Base Year shall also constitute the equipment lease costs for the
Base Year); telephone, telegraph, postage, stationery supplies and other
materials and expenses required for the routine operation of the Building, and
all other expenses and charges of any nature whatsoever, whether or not herein
mentioned, which are incurred by Landlord in connection with the operation,
management, maintenance and repair of the Building and the Land. Notwithstanding
anything to the contrary set forth herein, any item which is included in
Operating Expenses for any calendar year during the Term and which is later
recovered by Landlord, shall be credited towards Operating Expenses for the year
in which such item is received, unless received prior to Landlord's issuance of
its annual reconciliation statement with respect to Operating Expenses pursuant
to Paragraph 6.3 hereof, in which latter case Landlord shall have the option of
crediting such recovered item towards Operating Expenses for the year in which
it was received or crediting such recovered item towards Operating Expenses for
the year in which such item has been included in Operating Expenses.
Notwithstanding the foregoing to the contrary, Operating Expenses
shall not include any of the following expenses:
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(1) specific costs for any capital repairs, replacements or
improvements, except as provided above;
(2) expenses for which Landlord is reimbursed or indemnified
(either by an insurer, condemnor, tenant, warrantor or otherwise) to the extent
of funds received by Landlord (or would be received by Landlord from its
casualty insurer if Landlord had in effect the casualty insurance required
hereunder);
(3) expenses incurred in leasing or procuring tenants (including
lease commissions, attorneys' fees, advertising expenses and expenses of
renovating space for tenants);
(4) costs paid by specific tenants other than through
pass-through provisions in their leases which are comparable to Paragraph 6
hereof;
(5) costs incurred in the initial construction of the Building,
including depreciation of such costs;
(6) the cost of any goods and services provided in or to the
Building by Landlord or by any entity controlled by or affiliated with Landlord
or any of Landlord's principals to the extent that any such cost exceeds an
arm's-length price at market rates;
(7) costs incurred by or for the account of Landlord for
operation of the parking garage, including, but not limited to, striping, power
cleaning and personnel costs (but not maintenance and repairs in the parking
garage with respect to items such as, without limitation, pipes, lights and
wiring, and subject, in any event, to the limitations on capital expenditures
set forth in this Paragraph 1.B.12.);
(8) the cost of repairs, restoration, replacement or other work
occasioned by the exercise by governmental authorities of the right of eminent
domain (whether such taking be total or partial) to the extent of condemnation
proceeds received;
(9) costs incurred in connection with disputes with and/or
evictions of tenants or other occupants based upon (i) the monetary provisions
of their leases and (ii) provisions of their Leases which contain obligations
which are only for the potential benefit of Landlord and not for the potential
benefit of the Building or any other tenant of the Building;
(10) costs incurred in connection with negotiations or disputes
with purchasers or mortgagees of any interest in the Building;
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(11) the cost of allowances, concessions, and tenant space
improvement expenses incurred in connection with leasing space in the Building
to a specific tenant and preparing such space for permits, licenses, inspections
and such tenant's use, including costs of design and construction incurred in
completing, fixturing, furnishing, renovating or otherwise improving, decorating
space for any such tenant of the Building or moving such tenant into such space;
(12) costs incurred as capital expenditures for alteration of the
Building and which are not allowed as Operating Expenses pursuant to this
Paragraph 1.B.12;
(13) costs (including attorneys' fees) incurred in connection
with the sale, financing, refinancing, or change of ownership of the Building;
(14) fines, interest, penalties, legal fees or costs of
litigation incurred due to unjustified late payment of taxes, utility bills and
other costs incurred by Landlord's negligent failure to make such payments when
due, provided that Tenant was then current in the payment of all Rent due and
payable under this Lease;
(15) costs for accounting services that are not related to
operation of the Building or administration of tenant leases;
(16) costs in connection with creating and maintenance of the
entity comprising Landlord and which are not related to operation of the
Building or administration of tenant leases;
(17) costs of Landlord's (and its management agent's) general
overhead and administration;
(18) rental and other related costs incurred in lieu of equity or
permanent financing in connection with leasing air conditioning systems,
elevators, or other equipment ordinarily considered to be of a capital nature,
except to the extent that such costs would otherwise be includable in Operating
Expenses as capital expenditures pursuant to this Paragraph 1.B.12;
(19) costs incurred for removal or other remediation of Hazardous
Materials present in, or about or below the Land or the Building;
(20) cost of ground rent (except to the extent that it includes
Real Estate Taxes, insurance premiums or the like), and
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principal and interest and other finance charges under a loan secured by a
mortgage or deed of trust on the Building;
(21) the cost of advertising expenses and promotional costs
incurred in connection with promoting the Building or procuring tenants for the
Building;
(22) the cost of utilities incurred by or on behalf of and
passed on to retail tenants of the Building;
(23) costs, fines or penalties incurred due to the violation
by Landlord of any law, order, regulation or other governmental rule or
authority, if such violation was not caused by any act or omission on the part
of Tenant;
(24) any compensation paid to clerks, attendants or other
persons in commercial concessions operated for profit by Landlord;
(25) non-cash items, such as deductions for depreciation and
amortization of the Building and the Building equipment, interest on capital
invested, bad debt losses, rent losses and reserves for such losses;
(26) costs or expenses due to Landlord's gross negligence or
willful misconduct;
(27) Real Estate Taxes;
(28) that portion, if any, of increases in insurance premiums
which it is the obligation of any other tenant in the Building to pay pursuant
to a provision in such other tenant's lease similar to Paragraph 22.6 hereof;
(29) costs, other than those incurred in ordinary maintenance
(for such objects as may be located within the Common Areas) for sculptures,
paintings or other objects of art in the event that any of same are of
investment quality, but not including Building signage and holiday decorations;
or
(30) costs relating to another Building tenant's or occupant's
space which (A) were incurred in rendering a service in excess of the service
that Landlord is required to provide to Tenant under this Lease or (B) were
otherwise in excess of the Building standard services then being provided by
Landlord to all tenants or other occupants of the Building, whether or not such
other tenant or occupant is actually charged therefor by Landlord.
"Char Service Costs" are any and all expenses incurred with
respect to each calendar year for char service in or
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about office space in the Building, as determined in accordance with accounting
procedures established and regularly applied by Landlord, which shall be
consistent with those used by landlords of Comparable Buildings.
In the event that, during any calendar year or portion thereof
during the Term (including the Base Year), Landlord shall furnish any utility or
service which is included in the definition of Operating Expenses or Char
Service Costs to less than ninety-seven percent (97%) of the rentable area of
the Building because (i) less than all of the rentable area of the Building is
occupied, (ii) any such utility or service is not desired or required by any
tenant, or (iii) any tenant is itself obtaining or providing any such utility or
service, then the Operating Expenses or Char Service Costs, or both, as
applicable, for such calendar year shall be increased to equal the total
expenses that Landlord reasonably estimates it would have incurred if Landlord
had provided all such utilities and services to ninety-seven percent (97%) of
the rentable area of the Building for the entire calendar year. For example, if
the average occupancy rate of the Building during a calendar year is eighty
percent (80%), the janitorial contractor's charges are $1.00 per occupied
rentable square foot per year, and the Building contains one hundred thousand
(100,000) rentable square feet of space, then it would be reasonable for
Landlord to estimate that, if the Building had been ninety-seven percent (97%)
occupied during the entire calendar year, janitorial charges for such calendar
year would have been Ninety-Seven Thousand Dollars ($97,000) and to compute the
Char Service Costs for such calendar year accordingly. In no event shall the
provisions of this paragraph be used to enable Landlord to collect from the
tenants of the Building more than one hundred percent (100%) of the costs and
expenses incurred by Landlord in managing, operating and maintaining the
Building and the Land.
13. Real Estate Taxes: Taxes and assessments, general or
special, ordinary or extraordinary, foreseen or unforeseen, assessed, levied or
imposed upon the Building or the Land, or assessed, levied or imposed upon the
fixtures, machinery, equipment or systems in, upon or used in connection with
the operation of the Building or the Land under the current or any future
taxation or assessment system or modification of, supplement to, or substitute
for such system, and whether or not based on or measured by the receipts or
revenues from the Building or the Land (including all taxes and assessments for
public improvements or any other governmental purpose and any gross receipts or
similar taxes). Real Estate Taxes shall include the reasonable expenses
(including but not limited to attorneys' fees) incurred by Landlord in obtaining
or attempting to obtain a reduction of such taxes, rates or assessments. Any
refund of Real Estate Taxes shall be credited towards Real Estate Taxes incurred
with respect to the calendar year
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in which such refunded amounts were actually received. Except for taxes, fees,
charges and impositions described in the next sentence, Real Estate Taxes shall
not include any inheritance, estate, succession, transfer, gift, franchise,
corporation, income, profit recordation, unincorporated business income tax or
capital levy taxes and fines, interest or penalties incurred by Landlord for
failure to timely pay Real Estate Taxes, so long as Tenant was then current in
the payment of all Base Rent due under this Lease and all Additional Rent due
under Paragraph 6 of this Lease. If at any time during the Term the method of
taxation shall be altered so that in lieu of or as a substitute for the whole or
any part of any Real Estate Taxes levied, assessed or imposed there shall be
levied, assessed or imposed (i) a tax, license fee, excise or other charge on
the rents received by Landlord with respect to the Building, or (ii) any other
type of tax or other imposition in lieu of, or as a substitute for, the whole or
any portion of any Real Estate Taxes, then the same shall be included as Real
Estate Taxes for the purposes hereof. Landlord shall include in Real Estate
Taxes only that portion of any assessment levied or imposed on the Building or
the Land equal to the full amount of the assessment divided by the maximum
number of calendar years (or portions thereof) that Landlord is permitted to pay
such assessment.
14. Rent: All Base Rent and Additional Rent.
15. Tenant's Personal Property: All equipment, machinery,
improvements, furniture, furnishings and other property now or hereafter
installed or placed in or on the Demised Premises by and at the sole expense of
Tenant or with Tenant's permission (other than any property of Landlord) and
which (a) is not used, or was not procured for use, in connection with the
operation, maintenance or protection of the Demised Premises, the Building, or
the Land, and (b) is removable without damage to the Demised Premises, the
Building, or the Land, and (c) is not a replacement of any property of Landlord,
whether such replacement is made at Tenant's expense or otherwise.
Notwithstanding any other provision of this Lease, Tenant's Personal Property
shall not include any Alterations or any leasehold improvements with respect to
which Tenant has been granted any credit or allowance by Landlord or which is
installed in or on the Demised Premises as part of Tenant's Work; provided,
however, that any of Tenant's modular furniture, the costs of which are payable
out of the Tenant Allowance, as such term is defined in Paragraph 16.1 hereof,
shall be considered as items of Tenant's Personal Property.
2. DEMISED PREMISES
For and in consideration of the Rent reserved and the mutual covenants
contained in this Lease, Landlord does hereby lease and demise unto Tenant, and
Tenant does hereby lease and accept from
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Landlord, the Demised Premises for the Term and upon the terms and conditions
set forth in this Lease. It is specifically understood that for purposes of
calculating any payments or prorations hereunder, the number of rentable square
feet set forth in Paragraph 1.A.6 above shall control. Any approximations of
such square footage shall in no way affect the payment of Rent under this Lease
should any variance be found to exist between said approximation and the actual
square footage.
3. TERM
3.1 INITIAL TERM. The Term shall begin on the Lease Commencement Date
and shall end at 11:59 p.m. on (a) the day preceding the tenth (10th)
anniversary of the Lease Commencement Date, if the Lease Commencement Date
occurs on the first day of a month or (b) the last day of the month which
includes the tenth (10th) anniversary of the Lease Commencement Date, if the
Lease Commencement Date occurs on a day which is other than the first day of a
month, in each case, subject to extension as hereinafter provided in Paragraph
3.5, unless sooner terminated in accordance with the terms of this Lease or
extended pursuant to Paragraph 55 hereof.
3.2 ADJUSTMENT OF LEASE COMMENCEMENT DATE.
(a) If Tenant commences beneficial use of the Demised Premises
prior to the calendar date specified as the Lease Commencement Date, the Lease
Commencement Date shall be the date Tenant commences beneficial use of the
Demised Premises. Tenant shall be deemed to have commenced beneficial use of the
Demised Premises on the earlier to occur of (i) the date of substantial
completion of Tenant's Work (including the substantial completion of
installation of modular furniture) or (ii) the date on which any of Tenant's
employees begin to conduct any of Tenant's business operations in any portion of
the Demised Premises, and such beneficial use shall be deemed to be an
acceptance of the nature and sufficiency of the Demised Premises, subject to (i)
such items, if any, as are set forth on a punch-list which shall be prepared
pursuant to an inspection which shall be conducted by Tenant and Landlord
jointly within two (2) business days following the date of Landlord's delivery
of the Demised Premises to Tenant in Shell Condition [which shall consist of the
condition described in Exhibit D attached hereto and made a part hereof plus,
subject to the terms and conditions set forth in Paragraph 16.1 hereof, the
Internal Stairwell (as hereinafter defined)], (ii) latent defects, if any, which
are reported to Landlord by Tenant in writing not later than the first (1st)
anniversary of the date of Landlord's delivery of the Demised Premises to Tenant
in Shell Condition (as hereinafter defined) and (iii) such damage, if any, as is
caused by Landlord or its contractors while performing any work in the Demised
Premises
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following Landlord's providing Tenant with Adequate Access (as hereinafter
defined) and following Landlord's delivery of the Demised Premises to Tenant in
Shell Condition.
(b) (i) In the event that Landlord does not deliver the
Demised Premises to Tenant in Shell Condition, or, in lieu thereof, Landlord
does not provide Tenant with access to the Demised Premises which is adequate to
permit Tenant to perform the Tenant's Work in the Demised Premises (the
"Adequate Access") before October 2, 2000 for any reason, including, but not
limited to, the existence of any circumstance which would otherwise be subject
to the provisions of Paragraph 42 hereof, but excluding any reason which is the
result of any act or omission on the part of Tenant which delays, impedes,
interferes with or precludes Landlord's delivery of the Demised Premises to
Tenant in Shell Condition or the provision by Landlord to Tenant of Adequate
Access [including, but not limited to, Tenant's failure to deliver any of the
permit-ready construction documents or finish specifications which it is
required to deliver to Landlord with respect to the Internal Stairwell (as
hereinafter defined) by the time required by Paragraph 16.1 hereof], then the
Lease Commencement Date shall be delayed on a day-for-day basis for each day
from October 2, 2000 until the earlier of the date of Landlord's delivery of the
Demised Premises to Tenant in such Shell Condition or the date of Landlord's
provision of such Adequate Access. During any period in which Landlord has
provided Tenant with Adequate Access but has not yet delivered the Demised
Premises to Tenant in Shell Condition, coordination of work in the Demised
Premises by Landlord and by Tenant shall be coordinated by Landlord's contractor
and governed by the Contractors Rules and Regulations (as hereinafter defined).
In the event that Landlord does not deliver the Demised
Premises to Tenant in such Shell Condition on or before April 1, 2001 for any
reason (including, but not limited to, the existence of any circumstance which
would otherwise be subject to the provisions of Paragraph 42 hereof, but
excluding any reason which is the result of any act or omission on the part of
Tenant which delays, impedes, interferes with or precludes Landlord's delivery
of the Demised Premises to Tenant in Shell Condition), then Tenant shall have
the right to terminate this Lease by written notice to Landlord, which notice
from Tenant shall be given, if at all, not later than April 11, 2001, in which
event Landlord shall return to Tenant the first installment of Monthly Base Rent
which has been paid by Tenant, together with all interest thereon as provided in
Paragraph 10.1 hereof, and thereafter neither Landlord nor Tenant shall have any
further liability or obligation to the other under or with respect to this
Lease.
(ii) The Lease Commencement Date shall be delayed on a
day-for-day basis due to any delay in the substantial
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completion of Tenant's Work (as defined in Paragraph 16 hereof) to the extent
that such delay results in the Demised Premises not being legally occupiable by
Tenant, which delay is the direct result of the failure of Landlord to fulfill
any obligation which Landlord has (A) under any applicable law, code or
regulation with respect to the Building or any portion thereof, or (B) under
this Lease (any such delay being hereinafter referred to as a "Landlord Delay"),
except for any delay which consists of a delay in Landlord's delivery of the
Demised Premises in Shell Condition, or in Landlord's provision of Adequate
Access [which circumstances are addressed solely by Paragraph 3.2(b) hereof],
and in the event that one or more Landlord Delays result in substantial
completion of Tenant's Work (as defined in Paragraph 16 hereof) being delayed
beyond June 1, 2001, Landlord shall pay to Tenant a penalty in the amount of Two
Thousand Dollars ($2,000) per day for each day after June 1, 2001 that
substantial completion of Tenant's Work does not occur solely as a result of one
or more Landlord Delays; provided, however, that the Lease Commencement Date
shall not be delayed as set forth above, and Landlord shall not be obligated to
pay any penalty to Tenant, if substantial completion of Tenant's Work occurs
later than June 1, 2001 solely because of one or more Landlord Delays in the
event that the reason for the Landlord Delay(s) is due to any circumstance which
is subject to Paragraph 42 hereof.
3.3 DECLARATION. Landlord and Tenant agree to execute a Declaration,
in the form attached hereto as Exhibit B, to confirm the Lease Commencement
Date, the Rent Commencement Date, and the Term. Failure to execute the
Declaration shall not affect the commencement or expiration of the Term.
3.4 EFFECTIVE DATE. The rights and obligations set forth in this
Lease, except for the obligation to pay Base Rent and the Additional Rent
provided for in Paragraphs 5 and 6 hereof and as otherwise specifically provided
herein to the contrary, shall become effective on the date of final execution of
this Lease.
3.5 PAYMENT FOR TENANT'S OTHER LEASE. Landlord shall have no
liability or obligation under this Paragraph 3.5 unless and until all of the
conditions set forth below in this Paragraph 3.5 have occurred. In the event
that any of said conditions fails to occur (irrespective of by whom or what
circumstances such failure was caused), then Landlord shall not have any
liability or obligation under this Paragraph 3.5.
Subject to the foregoing and the conditions set forth in this
Paragraph 3.5, Landlord shall credit or pay to Tenant (as hereinafter provided)
an amount not to exceed Seven Hundred Thousand Dollars ($700,000.00) in the
aggregate as reimbursement to Tenant for a portion (the "Landlord Reimbursement
Portion") of the cancellation payment paid by Tenant (the "Cancellation
Payment"), rent paid by Tenant (the "Rent Reimbursement Payment"), or both,
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under that certain Office Lease dated May 29, 1991, by and between 14th & Eye
Streets Joint Venture, as landlord thereunder (the "Eye Street Landlord"), and
National Cooperative Bank, as tenant thereunder, for premises leased to Tenant
at 1401 Eye Street, N.W., Washington, D.C. (the "Eye Street Lease"), solely for
obligations of Tenant first arising under the Eye Street Lease on and after
April 2, 2001, subject to the following conditions: (a) this Lease shall
be non-contingent, binding on both parties, and in full force and effect
according to its terms; (b) no Event of Default by Tenant, nor any circumstance
which with the giving of notice, the passage of time, or both, would constitute
an Event of Default, shall then exist under this Lease; (c) Landlord shall have
received from Tenant a copy of a written receipt from the Eye Street Landlord
(or other reasonable written proof, as determined by Landlord in its sole but
reasonable discretion) evidencing its receipt from Tenant of the sum of (i)
Seven Hundred Thousand Dollars ($700,000) (the "Tenant's Initial Payment"),
comprising a Cancellation Payment, Rent Reimbursement Payment or any combination
thereof, plus (ii) the full amount in excess of said Seven Hundred Thousand
Dollars ($700,000) which is claimed by Tenant under this Paragraph 3.5 as the
Landlord Reimbursement Portion, which Tenant's Initial Payment and Landlord
Reimbursement Portion shall have in fact been paid by Tenant to the Eye Street
Landlord, and copies of all written agreements between Tenant and the Eye Street
Landlord concerning the termination, modification or assignment of the Eye
Street Lease; and (d) the Lease Commencement Date as to the entire Demised
Premises under this Lease shall have occurred and Tenant shall be in occupancy
of the Demised Premises, shall be conducting its business therein, and shall
have commenced paying Rent under this Lease (as provided in this Lease), unless
the failure to satisfy the conditions of this clause (d) shall result from
Landlord's failure to fulfill any obligation which Landlord has (A) under any
applicable law, code or regulation with respect to the Building or any portion
thereof, or (B) under this Lease. If all of the foregoing conditions have been
satisfied, the Landlord Reimbursement Portion shall be credited or paid by
Landlord to Tenant, as follows: (1) to the extent that the Landlord
Reimbursement Portion does not exceed One Hundred Seventy-Seven Thousand Five
Hundred Seventy-Seven and 60/100 Dollars ($177,577.60), Landlord shall abate
Monthly Base Rent for the initial month of the Term in the amount of Five
Thousand Nine Hundred Nineteen and 25/100 Dollars ($5,919.25) per day
(calculated on the basis of one-thirtieth (1/30) of $177,577.60) for an
aggregate of not more than thirty (30) days, until the Landlord Reimbursement
Portion has been fully credited, in which case the Term of this Lease shall be
extended by one (1) day for each day or portion thereof that such credit has
been applied to the Landlord Reimbursement Portion, and during such extended
portion of the Term, Tenant shall pay to Landlord as Monthly Base Rent an amount
equal to one-thirtieth (1/30) of the product of (x) the then escalated Base Rent
per square foot per annum for the original Demised Premises
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multiplied by (y) forty-eight thousand seven hundred seven (48,707) rentable
square feet (irrespective of the then actual rentable area of either the then
Demised Premises or the original Demised Premises), and (2) to the extent that
the Landlord Reimbursement Portion exceeds $177,577.60, then (x) the provisions
of the immediately preceding clause (1) of this sentence shall fully apply AND
(y) in addition, Landlord shall pay to Tenant the difference between the
Landlord Reimbursement Portion and said $177,577.60 on the seventh (7th)
business day following satisfaction of all of the aforesaid conditions,
including, without limitation, the occurrence of the Lease Commencement Date
under this Lease, and (z) Tenant shall be responsible, at its sole cost and
expense, for that portion of all sums payable to the Eye Street Landlord as a
Cancellation Payment, Rent Reimbursement Payment or combination thereof in
excess of One Million Four Hundred Thousand Dollars ($1,400,000.00).
Notwithstanding anything to the contrary set forth in this
Paragraph 3.5, in the event that Tenant receives from the Eye Street Landlord or
any other source any refund, credit or other reimbursement of any amount paid by
Tenant to the Eye Street Landlord as a Cancellation Payment, Rent Reimbursement
Payment, or both, pursuant to the Eye Street Lease, then, in either such event,
either the amount to be credited by Landlord or payable by Landlord under this
Paragraph 3.5 (if not theretofore credited or paid under this Paragraph 3.5)
shall be reduced in an amount equal to the amount of such refund, credit or
other reimbursement, or Tenant shall reimburse Landlord (if theretofore paid by
Landlord under this Paragraph 3.5) in an amount equal to the amount of such
refund or credit, on the seventh (7th) business day following the date of
Tenant's receipt of such refund or credit.
4. RENT; MONTHLY BASE RENT.
The first full payment of Monthly Base Rent shall be due and payable
upon the execution of this Lease and each subsequent payment of Monthly Base
Rent shall be due and payable on the first day of each and every month following
the Rent Commencement Date during the Term. If the Rent Commencement Date is a
date other than the first day of a month, then Monthly Base Rent for the period
commencing with and including the Rent Commencement Date and ending on and
including the day prior to the first day of the following month shall be
prorated at the rate of one-thirtieth (1/30th) of the Monthly Base Rent per day
and the full Monthly Base Rent paid by Tenant shall be applied to such prorated
amount and the balance credited against Tenant's obligation to pay Monthly Base
Rent for the following month. All payments of Rent shall be payable to Landlord
or its designated agent, c/o Cafritz Company, Attn: Financial Services
Department, 1825 K Street, N.W., Washington, D.C. 20006, in lawful money of the
United States, without previous notice or demand and without deduction, set-off
or counterclaim whatsoever, except as expressly set forth herein. Landlord shall
have the right
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to change the place where Rent shall be paid, by written notice to Tenant.
5. COST-OF-LIVING ADJUSTMENT [Intentionally omitted.]
6. INCREASES IN OPERATING EXPENSES, CHAR SERVICE COSTS AND REAL ESTATE
TAXES
6.1 TENANT'S SHARE. Commencing on the first anniversary of the Lease
Commencement Date, for each calendar year or fraction thereof during the Term,
Tenant shall pay to Landlord Tenant's Percentage of Increased Operating
Expenses, Tenant's Percentage of Increased Char Service Costs, and Tenant's
Percentage of Increased Real Estate Taxes.
6.2 MONTHLY PAYMENTS. Prior to determination of the actual amount
payable by Tenant under Paragraph 6.1, commencing on the first anniversary of
the Lease Commencement Date, Tenant shall make monthly installment payments
toward such share on an estimated basis, based on Landlord's reasonable estimate
of Tenant's Percentage of Increased Operating Expenses, Tenant's Percentage of
Increased Char Service Costs, and Tenant's Percentage of Increased Real Estate
Taxes for such calendar year. Tenant shall pay Landlord, commencing with the
first installment of Monthly Base Rent payable on or after the first anniversary
of the Lease Commencement Date (said first anniversary to be determined without
regard to any abatement of Monthly Base Rent hereunder), and on the first day of
each month thereafter, (i) one-twelfth (1/12th) of Landlord's estimate of
Tenant's Percentage of Increased Operating Expenses, (ii) one-twelfth (1/12th)
of Landlord's estimate of Tenant's Percentage of Increased Char Service Costs,
and (iii) one-twelfth (1/12th) of Landlord's estimate of Tenant's Percentage of
Increased Real Estate Taxes. If Landlord does not determine its estimate for the
then current year of Tenant's Percentage of Increased Operating Expenses,
Tenant's Percentage of Increased Char Service Costs, and Tenant's Percentage of
Increased Real Estate Taxes until after the first anniversary of the Lease
Commencement Date, the first such installments after such estimate shall include
the monthly payments retroactive to the first anniversary of the Lease
Commencement Date.
6.3 EXPENSE STATEMENTS. After the end of the calendar year which
includes the first anniversary of the Lease Commencement Date, and after the end
of each calendar year thereafter, Landlord shall determine the Increased
Operating Expenses, Increased Char Service Costs and Increased Real Estate Taxes
for such calendar year. Landlord shall provide to Tenant after the end of each
calendar year a statement which is substantially similar to the form of
statement which is attached hereto as Exhibit I and made a part hereof, based
upon a statement prepared by a certified public accountant who is not an
employee of Landlord or Landlord's management agent, of the amount payable as
Tenant's Percentage of
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Increased Operating Expenses, Tenant's Percentage of Increased Char Service
Costs and Tenant's Percentage of Increased Real Estate Taxes. Within thirty (30)
days after the delivery of such statement, but in no event sooner than the date
which is the anniversary of the Lease Commencement Date, Tenant shall pay to
Landlord any deficiency between the amount shown as Tenant's Percentage of
Increased Operating Expenses, Tenant's Percentage of Increased Char Service
Costs and Tenant's Percentage of Increased Real Estate Taxes and the estimated
payments made by Tenant toward such amounts in accordance with Paragraph 6.2. In
the case of excess estimated payments, such excess shall be credited to the
installment(s) of Rent next coming due under this Lease, unless the term of this
Lease shall have expired, in which event Landlord shall refund such excess,
without interest, within thirty (30) days following the later to occur of (i)
delivery of the expense statement or (ii) the cure by Tenant of any default
which is then pending. In the event the Term commences or expires during a
calendar year, Tenant's Percentage of Increased Operating Expenses, Tenant's
Percentage of Increased Char Service Costs and Tenant's Percentage of Increased
Real Estate Taxes shall be determined by multiplying the amount of each
applicable Tenant's Percentage for the full calendar year by a fraction, the
numerator of which is the number of calendar months during such calendar year
falling within the Term and the denominator of which is 12. Tenant's liability
for the final payment of Tenant's Percentage of Increased Operating Expenses,
Tenant's Percentage of Increased Char Service Costs and Tenant's Percentage of
Increased Real Estate Taxes shall survive the expiration of the Term.
6.4 REAL ESTATE TAX CONTESTS. If there is any change by the taxing
body in the period for which any of the Real Estate Taxes are levied, assessed
or imposed, Landlord shall have the right, in its sole but reasonable
discretion, to make appropriate adjustments with respect to computing increases
in Real Estate Taxes provided Tenant is not thereby unduly prejudiced. Real
Estate Taxes which are being contested by Landlord shall be included for
purposes of computing Tenant's Percentage of Increased Real Estate Taxes under
this paragraph, but if Tenant shall have paid an amount of Real Estate Taxes
because of such inclusion of contested Real Estate Taxes and Landlord thereafter
receives a refund of such Taxes, Tenant shall be credited with the excess in an
amount proportionate with the refund of Increased Real Estate Taxes (and any
interest thereon) received by Landlord, reduced by the proportionate cost of
obtaining such refund. The credit shall be applied to the installment(s) of Rent
next coming due under this Lease, unless the Term of this Lease shall have
expired, in which event Landlord shall refund such excess, together with only
such proportionate share of the interest thereon which is actually paid by the
Government of the District of Columbia to Landlord within thirty (30) days
following the later to occur of (i) Landlord's receipt of its refund or (ii) the
cure by Tenant of any default which is then pending. Landlord
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shall have no obligation to contest, object to or litigate any levying,
assessment or imposition of Real Estate Taxes, and may settle, compromise,
consent to, waive or otherwise determine any such Real Estate Taxes without the
consent of Tenant.
6.5 AUDIT PROCEDURES. Each Operating Expenses, Char Services and Real
Estate Taxes statement given by Landlord pursuant to this Lease shall be
conclusive and binding upon Tenant unless, within one hundred twenty (120) days
after the receipt of the statement, Tenant shall notify Landlord in writing that
it disputes the correctness of the statement, specifying the particular respects
in which the statement is claimed to be incorrect. Tenant shall have the right
to employ an independent auditor reasonably acceptable to Landlord and employed
only on a non-contingent fee basis to assist Tenant to inspect and audit
Landlord's books and records relating to Operating Expenses, Char Services and
Real Estate Taxes for the calendar year in question. If Tenant elects to employ
such independent auditor, Tenant shall provide Landlord not less than fifteen
(15) days notice of the date(s) on which such accountant desires to examine
Landlord's books and records during regular business hours, and Landlord shall
cooperate with Tenant and such auditor, and shall provide same with access to
Landlord's books and records. All information provided by Landlord pursuant to
this Paragraph 6.5 shall be confidential, and shall not be disclosed by Tenant
or such auditor to any third party (other than arbitrators appointed in the
event of a dispute as hereinafter provided). If as a result of such audit,
Tenant continues to dispute the correctness of the statement, and if such
dispute shall not have been settled by agreement, either party may submit the
dispute to arbitration within sixty (60) days after Landlord's receipt of
written notice from Tenant that Tenant disputes the statement in question. The
decision of any board of arbitration pursuant to an arbitration conducted in
accordance with the commercial arbitration rules of the American Arbitration
Association, shall be binding on all parties. Pending the resolution of such
dispute by agreement or arbitration as aforesaid, Tenant shall pay all Rent and
Additional Rent due under this Lease, including the amount of Tenant's
Percentage of Increased Operating Expenses, the amount of Tenant's Percentage of
Increased Char Service Costs, the amount of Tenant's Percentage of Increased
Real Estate Taxes, or all of them, as the case may be, as are claimed by
Landlord in accordance with the statement, without prejudice to Tenant's
position, as herein provided. If the dispute shall be resolved in Tenant's favor
and it is determined that the Tenant's Percentage of Operating Expenses,
Tenant's Percentage of Increased Char Service Costs or Tenant's Percentage of
Real Estate Taxes set forth on the annual statement delivered by Landlord in any
category were more than 105% of Tenant's Percentage of the Operating Expenses,
Tenant's Percentage of Increased Char Service Costs or Tenant's Percentage of
Real Estate Taxes, respectively, set forth on the corrected statement, Landlord
shall promptly pay to Tenant the
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amount of Tenant's overpayment and Tenant's costs (including reasonable
attorneys' and accountants' fees) directly related to the audit and arbitration
proceeding. If the dispute shall be resolved in Tenant's favor and it is
determined that the delivered statement was not more than 105% of the corrected
statement in any category, each party shall pay its own costs related to the
arbitration (and share equally any common costs, but not the cost of Tenant's
accountant), and Landlord shall promptly pay to Tenant the amount of Tenant's
overpayment. If the dispute shall be resolved in Landlord's favor, Tenant shall
promptly pay all costs and expenses (including reasonable attorneys' and
accountants' fees) incurred by Landlord in connection with such dispute,
including those directly related to the arbitration.
7. SALES, USE OR OTHER TAXES
If during the Term, any governmental authority having jurisdiction
levies, assesses or imposes any tax on Landlord, the Demised Premises, the Land
or the Building or the rents payable hereunder, in the nature of a sales tax, a
use tax (including a gross receipts tax) or any other tax except (a) income
taxes (including corporate franchise or unincorporated business taxes); (b)
estate or inheritance taxes; or (c) Real Estate Taxes, Tenant shall pay the same
to Landlord as Additional Rent at the time of, and together with, the first
payment of Monthly Base Rent due following receipt by Tenant of written notice
of the amount of such tax. If any such tax is levied, assessed or imposed and
the amount of the tax required to be paid by Tenant is not ascertainable because
the tax relates to more than the Demised Premises or the rents payable
hereunder, then Tenant shall pay such share of the total taxes that Landlord
shall reasonably estimate.
8. PERSONAL PROPERTY TAXES
8.1 LEVIED ON TENANT. Tenant shall pay, before delinquency, all
taxes, assessments, license fees and other charges that are levied or assessed
against Tenant's Personal Property installed or located in or on the Demised
Premises and against the value of leasehold improvements (unless already
included in the determination of real Estate Taxes) that become payable during
the Term. On demand by Landlord, Tenant shall furnish Landlord with satisfactory
evidence of these payments.
8.2 LEVIED ON LANDLORD. If any taxes on Tenant's Personal Property
are levied against Landlord or Landlord's property, or if the assessed value of
the Land or the Building is increased by the inclusion of a value placed on
Tenant's Personal Property, and if Landlord pays the taxes on any of these items
or the taxes based on the increased assessment of these items, Tenant, on
demand, shall reimburse Landlord for the sum of the taxes levied against
Landlord, or the proportion of the taxes resulting from the
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increase in Landlord's assessment. Landlord shall have the right to pay these
taxes regardless of the validity of the levy. Tenant shall have the right to
contest any taxes levied against Tenant or Landlord for which Tenant is
responsible under this Paragraph 8, at Tenant's expense, and Landlord agrees to
cooperate (at no expense to, and with no liability to, Landlord) as a result of
any such contest; provided, however, that (i) Landlord shall have the right to
pay such taxes and to be reimbursed as Additional Rent hereunder by Tenant,
unless it is legally permissible for Landlord to not pay same without incurring
any interest, late charge, fine, penalty or other liability, and (ii) Tenant
shall indemnify, defend and hold harmless Landlord and Landlord's management
agent, from all penalties, liabilities, damages, costs, expenses, suits, claims
and demands resulting from such contest(s) by Tenant.
9. LATE CHARGE; INTEREST
Except as otherwise specifically provided herein, all payments of
Additional Rent shall be paid to Landlord, without notice or demand, and without
any setoff, deduction or counterclaim whatsoever, with the installment of
Monthly Base Rent next due after such Additional Rent, but not earlier than ten
(10) business days after Tenant's receipt of written demand therefor from
Landlord with regard to (i) any amount other than Additional Rent payable
pursuant to Paragraph 6 hereof, and (ii) changes to this Lease regarding amounts
of Additional Rent payable pursuant to Paragraph 6 hereof. Nothing contained in
Paragraphs 6, 7, and 8 shall be construed at any time to reduce the amount of
Monthly Base Rent as increased each year. Notwithstanding any dispute which may
arise in connection with the computation or estimate of the amount of Additional
Rent due, Tenant shall be obligated to pay the amount specified by Landlord,
pending the resolution of any dispute. Any installment of Monthly Base Rent or
Additional Rent not paid within five (5) days of the due date thereof shall be
subject to a late charge of five percent (5%) of such installment. In addition,
such unpaid installment shall bear interest until paid at the rate of eighteen
percent (18%) per annum. Notwithstanding the foregoing, on not more than one (1)
occasion during any consecutive period of twenty-four (24) months, Landlord
shall waive any late charge or interest to which it would otherwise be entitled
pursuant to this Paragraph 9 if any installment of Monthly Base Rent, Additional
Rent which was not paid on its due date is paid not later than the tenth (10th)
business day following such due date. In the event any payment from Tenant by
check is returned by the financial institution on which it is drawn for any
reason, a service charge of One Hundred Dollars ($100.00) shall be due and
payable as Additional Rent in addition to the late charge set forth above. In
addition, Tenant shall pay to Landlord, within ten (10) days of receipt of an
invoice therefor, any fee imposed upon Landlord by its bank as a result of any
returned check. Tenant's obligations to pay any amounts of
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Additional Rent shall survive the expiration or termination of this Lease.
10. DEPOSITS
10.1 FIRST INSTALLMENT OF MONTHLY BASE RENT. Landlord acknowledges
receipt of the Monthly Base Rent for the first month following the Rent
Commencement Date. Prior to Landlord applying it to the first installment of
Monthly Base Rent, this sum shall be held by Landlord, in an interest-bearing
money-market account in a Federally insured financial institution, with all
interest thereon accruing to the benefit of Tenant, as security for the payment
and performance by Tenant of all of Tenant's obligations, covenants, conditions
and agreements under this Lease.
10.2 LANDLORD REMEDIES. No right or remedy available to Landlord in
this Lease shall preclude or extinguish any other right to which Landlord may be
entitled. It is understood that if Tenant fails to perform its obligations and
to take possession of the Demised Premises as provided in this Lease, the first
installment of Monthly Base Rent shall not be deemed liquidated damages.
Landlord may apply such sums to reduce Landlord's damages and such application
of funds shall not preclude Landlord from recovering from Tenant all additional
damages incurred by Landlord.
11. LAWS AND ORDINANCES
Tenant will, at its own cost, promptly comply with and carry out all
orders, requirements or conditions now or hereafter imposed upon Tenant or the
Demised Premises by the ordinances, laws, rules, orders or regulations of the
Federal government and the municipality, county or state in which the Demised
Premises is located, whether required of Landlord or otherwise, in the conduct
of Tenant's business except that Landlord shall comply with any orders affecting
structural elements, Common Areas and Building systems or portions thereof
installed by Landlord or any of its contractors, unless the orders are due to
Tenant's particular business or use of the Demised Premises.
Landlord shall be responsible for compliance of the Land and the Common
Areas of the Building with the Americans with Disabilities Act (the "ADA"), and
Tenant shall be responsible, at its sole cost and expense, for compliance of the
Demised Premises with the ADA with respect to any Alterations to the Demised
Premises (including, but not limited to, Tenant's Work), special needs of any of
Tenant's personnel and new or changed interpretations of, or amendments of, the
ADA, as it existed on the date of execution of this Lease.
Landlord agrees to endeavor to maintain the structural components of the
Building, the Common Areas and Building systems in
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compliance with all orders, requirements or conditions now or hereafter imposed
upon Landlord or the Building by the ordinances, laws, rules, orders or
regulations of the United States of America or the Government of the District of
Columbia, including, without limitation, all applicable building codes, fire and
life safety requirements and the ADA, and shall promptly take such actions as
are necessary to comply with any such orders, requirements or conditions as
apply to the structural components of the Building, the Common Areas and
Building systems after obtaining actual knowledge of the need for such actions,
all costs of which shall be included in Operating Expenses, except as expressly
excluded therefrom pursuant to Paragraph 1.B.12. hereof, unless any such action
is the obligation of Tenant under this Lease.
12. USE OF DEMISED PREMISES
The Demised Premises shall be used and occupied by Tenant solely for
the purpose of general office use and for no other purpose whatsoever. The
Demised Premises shall not be used for any illegal purpose or in violation of
any regulation of any governmental body, or in any manner to knowingly (i)
create any nuisance or trespass; (ii) vitiate any insurance; or (iii) alter the
classification or increase the rate of any type of insurance on the Building or
any part thereof.
13. REPAIRS BY TENANT
Subject to the provisions of Paragraphs 18 and 23 hereof, Tenant
agrees to maintain the Demised Premises and the fixtures therein in good order,
repair and condition, during the Term at its sole cost and expense except to the
extent that damage thereto is caused by the negligence or willful misconduct of
Landlord or its agents, employees or contractors, and will, at the expiration or
other termination of the Term, surrender and deliver the same and all keys,
locks and other fixtures connected therewith (except only Tenant's Personal
Property) in the same good order, repair and condition as they are now in or
shall be in at the Lease Commencement Date, except as repaired, rebuilt,
restored, altered or added to as permitted or required by this Lease, and
ordinary wear and tear and damage by casualty covered by the insurance that
Landlord is required to maintain hereunder or which Landlord has in force and
effect at the time of such casualty excepted. Tenant shall make all repairs to
the Demised Premises necessitated by any act or omission of Tenant or its
agents, employees, or invitees, except to the extent covered by the policies of
insurance which Landlord is required to carry hereunder or which Landlord has in
force and effect at the time.
In addition, all damage to the Demised Premises or the Building,
caused by moving the property of Tenant into, in or out of the Building and all
breakage, damage or injury done by Tenant or
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the agents, servants, employees, invitees, visitors or guests of Tenant caused
by the negligence or willful misconduct of Tenant or any of its agents,
servants, employees or visitors shall be repaired by Tenant, at the sole cost
and expense of Tenant, but only if and to the extent that such damage is not of
the type covered by any casualty insurance which Landlord is required to carry
under this Lease or which Landlord has in force and effect at the time. In the
event Tenant shall fail to do so after written notice from Landlord, then
Landlord shall have the right to make such necessary repairs or alterations and
any charge or cost so incurred by Landlord shall be paid by Tenant as Additional
Rent. This provision shall be construed as an additional remedy granted to
Landlord and not in limitation of any other rights or remedies which Landlord
has or may have in said circumstances.
14. REPAIRS BY LANDLORD
Landlord agrees to endeavor to maintain the structural components of
the Building, the Common Areas and Building systems, in good order, repair and
condition, in the standard of Comparable Buildings during the Term, and shall
make such repairs thereto as become necessary after obtaining actual knowledge
of the need for such repairs, all costs of which shall be included in Operating
Expenses, except as expressly excluded therefrom pursuant to Paragraph 1.B.12
hereof, unless the need for any such maintenance or repair is brought about by
any act or omission of Tenant, its agents, employees or invitees, and not
covered by the policies of insurance which Landlord is required to maintain
hereunder or which Landlord has in force and effect at the time, in which event,
Tenant shall have the obligation to make, at its sole cost and expense, such
structural repairs. Except as provided in the preceding sentence, Landlord shall
have no duty to Tenant to maintain or to make any repairs or improvements
(except for Landlord's Work) to the Demised Premises. Landlord shall not be
liable for any damage caused to the person or property of Tenant, its agents,
employees, sublessees, contractors or invitees, due to the improper construction
or repair of the Demised Premises or the Building or any part or appurtenances
or arising from the leaking of gas, water, sewer or steam pipes, or from
electricity, or from any other cause whatsoever, except for actual damages (but
in no event any consequential damages) resulting directly from the negligence or
willful misconduct of Landlord, its agents, employees or contractors and not
covered by the policies of insurance which Tenant is required to maintain
hereunder, or which Tenant has in force and effect at the time. Tenant agrees to
report promptly in writing to Landlord any defective condition in or about the
Demised Premises or the Building which becomes known to Tenant, and a failure to
report timely shall relieve Landlord of such obligation until it obtains actual
knowledge of the need for such repair.
15. FURNITURE; FIXTURES; ELECTRICAL EQUIPMENT.
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15.1 FLOOR LOADING. Tenant shall not place a load upon the floor of
the Demised Premises contrary to the weight, method of installment and position
prescribed by Landlord. Landlord hereby advises Tenant that, as of the date of
execution of this Lease, the average permissible floor load for the Building is
eighty (80) pounds per square foot for live loads and twenty (20) pounds per
square foot for dead loads. Landlord agrees that, provided that Tenant furnishes
Landlord with Tenant's Plans (as hereinafter defined in Paragraph 16.1)
concerning the location of any equipment which Tenant proposes to install at the
Demised Premises which will exceed the floor load capacity of the Demised
Premises, Landlord shall perform the reinforcement work necessary to support
such additional floor load and Landlord shall deduct the incremental cost
thereof (that is, the cost thereof which is in addition to the cost of
construction of the base Building in order to support such additional floor
load) from the Tenant Allowance (as hereinafter defined in Paragraph 16.1).
Business machines, mechanical equipment and materials belonging to Tenant which
cause vibration, noise, cold, heat or fumes that may be transmitted to the
Building or to any other leased space therein to such a degree as to be
objectionable to Landlord or to any other tenant in the Building shall be
placed, maintained, isolated, stored and/or vented by Tenant at its sole expense
so as to absorb and prevent such vibration, noise, cold, heat or fumes. Tenant
shall defend, indemnify and hold Landlord harmless against any and all
liability, damage, cost, expense, injury, suits, claims or demands (including
reasonable attorneys' fees) resulting from the moving of Tenant's equipment,
furnishings and materials into or out of the Demised Premises or from the
storage or operation of the same, except to the extent covered by the policies
of insurance which Landlord is required to carry hereunder or which Landlord has
in force and effect at the time. Any and all damage or injury to the Demised
Premises, the Building or the Land caused by such moving, storage or operation
shall be promptly repaired by Tenant at Tenant's sole cost except to the extent
covered by the policies of insurance which Landlord is required to carry
hereunder or which Landlord has in force and effect at the time, subject to and
in compliance with the provisions of the Lease.
15.2 OFFICE EQUIPMENT. Tenant will not install or operate in the
Demised Premises any electrically operated equipment, computers or other
machinery, other than personal computers, word processing equipment or adding
machines and such other small electrically operated office equipment as is
commonly used in modern offices (specifically excluding computers or any other
electrically operated equipment using more than 120 volts), without first
obtaining the prior written consent of Landlord, which may condition such
consent upon the payment by Tenant of Additional Rent in compensation for such
excess consumption of water and/or electricity or wiring as may be occasioned by
the
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operation of such equipment or machinery; nor shall Tenant install any other
equipment whatsoever which will or may cause noise or vibrations that may be
transmitted to areas outside of the Demised Premises to such a degree as to be
objectionable to Landlord or any other tenant in the Building, or which will or
may necessitate any changes, replacements or additions to or require the use of
the water system, plumbing system, heating system, air conditioning system,
security system or the electrical system of the Demised Premises without the
prior written consent of Landlord. Notwithstanding anything to the contrary set
forth in this Paragraph 15.2 above, Landlord hereby agrees that the office
equipment listed on Exhibit H hereto ("Tenant's Standard Office Equipment") does
not violate this covenant nor shall the use and operation of Tenant's Standard
Office Equipment result in the imposition of any Additional Rent for excess
consumption of water or electricity.
In the event that Landlord has a basis for believing that any
equipment or other machinery, other than Tenant's Standard Office Equipment,
causes Tenant to use more electricity than the average consumption per square
foot used by all users of electricity in the Building (the "Average Office
Electricity Use"), Landlord shall have the right to cause a survey to be made by
an independent electrical engineer or consulting firm to determine the amount of
electricity consumed by Tenant in excess of the Average Office Electricity Use,
and in the event that such survey confirms that Tenant is using more electricity
than the Average Office Electricity Use because of the presence of equipment or
other machinery other than Tenant's Standard Office Equipment, (i) Tenant shall
reimburse Landlord for the cost of completion of said survey, (ii) Landlord
shall have the right to install one or more separate electrical meters for the
Demised Premises and Tenant shall reimburse Landlord for the cost thereof
(including installation), (iii) Landlord shall have the right, in its sole
discretion, to install additional transformers, distribution panels, wiring and
other applicable equipment at the expense of Tenant, and (iv) Tenant shall pay
as Additional Rent the cost of any electricity in excess of the Average Office
Electricity Use, at the rate charged by the utility company providing such
electricity, assuming continuous business hours, within ten (10) business days
after receipt of any bill therefor from Landlord. None of the equipment so
installed by Landlord pursuant to this paragraph shall be deemed to be Tenant's
Personal Property.
16. SHELL CONDITION; TENANT'S WORK; ALTERATIONS
16.1 SHELL CONDITION; TENANT'S WORK. Landlord acknowledges that it has
received from Tenant and has approved the location and size of the opening (but
not the design) for the
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Internal Stairwell (as hereinafter defined). Landlord shall deliver the Demised
Premises to Tenant in Shell Condition on or before October 2, 2000, provided
that (A) neither the location nor size of the opening for the Internal Stairwell
(as hereinafter defined) changes (which change may not occur in any event
without the prior written approval of Landlord, which may be withheld or denied
in Landlord's sole and absolute discretion), and (B) Tenant delivers to Landlord
permit-ready construction documents with respect to the construction of the
Internal Stairwell (as hereinafter defined) on or before April 1, 2000, time
being of the essence in Tenant's performance of this obligation and this
obligation not being subject to the provisions of Paragraph 42 hereof; provided,
however, that in the event that Tenant does not deliver such construction
documents to Landlord on or before April 1, 2000, Tenant's right to have
Landlord install the Internal Stairwell shall cease and be of no further force
or effect. As used in this Lease, the term "Internal Stairwell" shall mean an
internal stairwell between the sixth (6th) floor and the seventh (7th) floor in
the location approved by Landlord(the "Internal Stairwell"), which shall be
installed at Landlord's expense, in addition to the Tenant Allowance (as defined
below). Such Interior Stairwell, if designed by Tenant's architect in accordance
with all applicable requirements of the District of Columbia Building Code,
shall be constructed in accordance with the decorative finishes (that is, paint
and wallpaper), and in a manner, which are reasonably consistent with the
decorative finishes and manner of construction of Tenant's stairwell in its
existing leased premises in the building located at 1401 Eye Street, N.W.,
Washington, D.C., as the latter exists on the date of execution of this Lease.
The design of the Internal Stairwell shall be subject to Landlord's Approval in
accordance with the terms of this Lease. Following Landlord's delivery of the
Internal Stairwell to Tenant, Tenant shall be responsible, at its sole cost and
expense, for all maintenance, repair, replacement and liability of any nature
whatsoever resulting in any manner from the performance of Tenant's Work (as
hereinafter defined). Landlord is under no obligation to make any other
improvements of any nature to the Demised Premises. Attached hereto as Exhibit J
is Landlord's proposed construction schedule (the "Construction Schedule") for
the base Building, which Landlord is furnishing to Tenant solely for
informational purposes so that Tenant may be able to monitor the progress of
construction of the base Building, it being understood and agreed that Landlord
shall have no obligation whatsoever to accomplish any of the specific portions
of the work described on the Construction Schedule by the anticipated dates set
forth therein, and Landlord shall have no liability for any failure to do so,
and that Landlord's sole liability for any failure to accomplish any item(s)
described on
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the attached Construction Schedule shall be as is set forth in Paragraph 3.2.(b)
of this Lease.
Notwithstanding the foregoing, Landlord shall make available for
the performance of Tenant's Work (as hereinafter defined) an allowance (the
"Tenant Allowance") in an amount equal to the sum of (A) Four Hundred Dollars
($400.00) plus (B) the product of (a) Sixty Dollars ($60.00) multiplied by (b)
the number of square feet of rentable area comprising the Demised Premises, as
determined pursuant to Paragraph 1.A.6 hereof (it being understood and agreed
that, as set forth in Paragraph 58.1, the Tenant Allowance shall not be
applicable to any Available Space, as defined in said Paragraph 58.1). Landlord
shall pay the Tenant Allowance to Tenant, Tenant's general contractor, Tenant's
modular furniture supplier or any combination of the foregoing, as directed in
writing by Tenant at the time of Tenant's submission of its payment requests to
Landlord, following Tenant's completion of items of Tenant's Work (as
hereinafter defined) and for use as a deposit on the purchase of the portion of
Tenant's Work consisting of modular furniture [which deposit shall not exceed
thirty percent (30%) of the cost of such modular furniture] and Landlord's
receipt from Tenant of (a) invoices reasonably evidencing work or services
performed with respect to Tenant's Work (as hereinafter defined), (b) receipted
bills or other evidence that the aforesaid invoices have been paid in full, and
(c) waivers or releases of liens from each of Tenant's contractors,
subcontractors and suppliers in connection with the work performed or materials
supplied as evidenced by the aforesaid invoices; provided, however, that with
respect to the use of a portion of the Tenant Allowance as a deposit on the
purchase of modular furniture, in lieu of providing the documentation described
in the foregoing clauses (a), (b) and (c) at the time that a portion of the
Tenant Allowance is requested, Tenant shall furnish a copy of an invoice for the
deposit or a copy of its contract for the purchase of the modular furniture
which sets forth a deposit concurrently with its request for payment of such
portion of the Tenant Allowance to the supplier of such modular furniture and
shall furnish Landlord with a receipted bill or other evidence that the deposit
has been paid, within fifteen (15) days following Landlord's payment of such
portion of the Tenant Allowance; further provided, that any waiver or release of
liens provided by Tenant to Landlord may be conditioned on payment of an amount
specified therein and Tenant shall have the right to provide waivers or releases
of liens from any subcontractor or supplier within thirty (30) days following
submission to Landlord of the draw request with respect to which such waiver or
release of liens applies, so long as Tenant has submitted to Landlord,
concurrently with such draw request, a waiver or release of lien
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from Tenant's general contractor which includes the amount which is the subject
of the deferred waiver or release of lien from a subcontractor. Payment of
portions of the Tenant Allowance pursuant to the terms of this Paragraph 16.1
shall not be requested more often than once during any calendar month, and,
commencing with the second (2nd) request, each request shall be delivered to
Landlord not sooner than thirty (30) days following the date of the previous
request. Landlord shall make payment of the appropriate amount of the Tenant
Allowance requested by Tenant in each request within thirty (30) days following
Landlord's receipt of the request with all of the conditions set forth in this
Paragraph 16.1 having been satisfied by Tenant.
Tenant shall improve the Premises in accordance with the Tenant's
Plans (as hereinafter defined). Tenant shall submit to Landlord Tenant's final
plans and specifications for improvements to the Demised Premises (the "Tenant's
Plans"), which shall be subject to Landlord's prior written approval (the work
set forth in the Tenant's Plans being hereinafter referred to as "Tenant's
Work"), which approval shall not be unreasonably withheld, conditioned or
delayed with respect to items which do not affect any of the structural
components of the Building or any of the Building's systems or the exterior
aesthetics of the Building. Landlord's approval (or disapproval, with a
reasonably detailed explanation of the reason(s) therefor) of Tenant's Plans
shall be provided promptly, and in all events within ten (10) business days
after Tenant's submission of Tenant's Plans to Landlord. From and after the date
of Landlord's approval of the Tenant's Plans, any changes to the Tenant's Plans
shall not be binding unless approved in writing by both Landlord (which approval
by Landlord shall not be unreasonably withheld, conditioned or delayed as to
items which, in Landlord sole opinion, do not affect any of the structural
components of the Building or any of the Building's systems or the exterior
aesthetics of the Building) and Tenant. Landlord's approval of the Tenant's
Plans shall constitute approval of Tenant's design concept only and shall in no
event be deemed a representation or warranty by Landlord as to whether the
Tenant's Plans comply with any and all legal requirements applicable to the
Tenant's Plans and Tenant's Work.
In the performance of Tenant's Work, Tenant shall comply with all
applicable laws, codes and regulations. Tenant shall obtain all permits,
certificates and other governmental approvals from all governmental entities
having jurisdiction thereover which are necessary for the prosecution and
completion of Tenant's Work. Tenant's Work shall include, but not be limited to,
the cost of all permits and governmental inspections, all architectural and
engineering fees, and a fee to Landlord in
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the amount of Seventeen Thousand Dollars ($17,000). Landlord and Tenant shall
reasonably assist and cooperate with each other with respect to obtaining
permits, certificates and other governmental approvals, at no cost to Landlord.
Prior to commencing Tenant's Work (or any portion thereof),
Tenant shall provide to Landlord the name and address of each contractor and
subcontractor which Tenant intends to employ to perform such portion of Tenant's
Work, the use of which subcontractors and contractors shall be subject to
Landlord's prior written approval, which shall not be unreasonably withheld,
conditioned or delayed. Disapproval of any contractor or subcontractor shall be
deemed reasonable if, among other things, (1) the contractor or subcontractor is
not properly licensed, (2) Landlord has had any prior experience with such
contractor or subcontractor which was unsatisfactory to Landlord, and (3)
Landlord knows of any prior unsatisfactory experience that a third party has had
with such contractor or subcontractor. Landlord's approval (or disapproval) of
such contractor shall be provided promptly, and in all events within five (5)
business days after Tenant's request therefor. Prior to the commencement of any
of Tenant's Work, Tenant shall deliver to Landlord, with respect to each
contractor and subcontractor which Tenant intends to employ to perform any of
Tenant's Work, a certificate of insurance from each such contractor or
subcontractor specifying Landlord as a named insured and evidencing that each
such contractor or subcontractor has obtained the insurance coverages set forth
in Paragraph 22.7 of this Lease. Notwithstanding the foregoing, Landlord hereby
agrees and acknowledges that the following contractors are approved by Landlord:
Hitt Contracting, Inc., Rand Construction Company, F.J. Corbett Construction and
James G. Davis Construction Company; provided, however, that, if, in Landlord's
sole opinion, there has been a substantial change in the financial condition or
general performance level of such contractor(s) as of the date that Tenant
submits Tenant's Plans to Landlord, then Landlord may withdraw its approval of
such contractor(s) upon written notice to Tenant. Landlord shall have the right
to require a payment or performance bond with respect to the general contractor
and with respect to any subcontractor whose contract(s) exceeds $100,000.
In its performance of Tenant's Work, Tenant shall:
(a) have the right to use water and electricity necessary
for the performance of Tenant's Work, without charge, and, when its construction
activities are concluded each day, (i) Tenant shall use diligent efforts to
ensure that all lights are turned off in the Demised Premises and (ii) Tenant
shall ensure
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that the water spigots serving the Demised Premises are turned off;
(b) have access to the mechanical and electrical rooms serving
the Demised Premises;
(c) have the use of the freight elevator in accordance with the
Contractors Rules and Regulations and at no lower priority than other tenants or
prospective tenants, or other contractors or subcontractors, of the Building;
(d) following delivery of materials to the Demised Premises
for performance of Tenant's Work, air conditioning to the Demised Premises,
which Tenant acknowledges shall consist solely of the base Building air
conditioning system being operational during the Building's business hours, from
8:00 a.m. until 8:00 p.m. Monday through Friday and from 9:00 a.m. until 4:00
p.m. on Saturdays, without charge to Tenant and without any representation or
responsibility by Landlord as to the adequacy or sufficiency of the air
conditioning for any particular purpose. Tenant shall supply whatever filters
and maintenance may be required in the Demised Premises for the operation of the
air conditioning system therein, at Tenant's sole cost.
Notwithstanding anything contained herein to the contrary set
forth herein, Tenant shall have the right to apply a portion of the Tenant
Allowance to the costs of Tenant's (i) furniture, (ii) telephone and computer
equipment, (iii) telephone and computer cabling and wiring, and (iv) other
move-related expenses; provided, however, that in no event shall the costs of
items described in clause (iv) of this sentence (other than modular furniture)
which are payable out of the Tenant Allowance exceed an amount equal to the
product of (a) Five Dollars ($5.00) multiplied by (b) the number of rentable
square feet comprising the Demised Premises, and Tenant shall ensure that the
use of the Tenant Allowance results in the leasehold improvements and modular
furniture which constitute Tenant's Work having an appearance and quality which
are at least equal to the appearance and quality of Tenant's existing leased
premises in the building located at 1401 Eye Street, N.W., Washington, D.C. Any
portion of the Tenant Allowance which is unused as of the Lease Commencement
Date shall be credited against the installment(s) of Base Rent and Additional
Rent next coming due.
16.2 ALTERATIONS BY TENANT. Except for Tenant's Work, with respect to
which the rights and obligations of Landlord and Tenant concerning approval
thereof are set forth in Paragraph 16.1 hereof, Tenant will not make or permit
any Alterations to
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the Demised Premises or to the Building without the prior written consent of
Landlord, which in the case of non-structural Alterations will not be
unreasonably withheld, conditioned or delayed. If Landlord consents to any
Alterations, Landlord may impose any conditions it deems reasonably appropriate,
including, without limitation, the approval of plans and specifications,
supervision of the work by Landlord's architect or contractor (at Tenant's
reasonable expense) and, except with respect to Tenant's initial improvements to
any Available Space (as hereinafter defined in Paragraph 58.1) which Tenant
leases, a fee to Landlord in an amount to be determined by Landlord in its
reasonable discretion, but not to exceed five percent (5%) of the hard costs of
the Alterations, and satisfactory evidence from Tenant of Tenant's ability to
pay for such Alterations (including, but not limited to, a payment or
performance bond with respect to any general contractor and with respect to any
subcontractor whose contract(s) exceeds $100,000.00). Whenever Tenant submits
plans and specifications to Landlord for Landlord's approval, Landlord shall,
within ten (10) business days after Landlord's receipt of same, notify Tenant of
any corrections or revisions which Landlord desires to make in said plans and
specifications, and Tenant agrees to comply with all such corrections or
revisions which Landlord may reasonably require. Notwithstanding the foregoing
provisions of this Paragraph 16.2, (a) Landlord's prior written consent with
respect to an Alteration shall not be required if such Alteration (i) has an
estimated cost to complete of less than Five Thousand Dollars ($5,000), (ii) is
not structural, (iii) does not require any governmental approval, (iv) is not
visible from the exterior of the Demised Premises, (v) does not burden or cause
any material or adverse impact on Building systems or any other space in the
Building, and (vi) at least three (3) business days before commencing the work,
Tenant notifies Landlord of the planned Alteration, and (b) Landlord agrees that
it shall not unreasonably withhold its consent with respect to a proposed
Alteration (i) which involves structural work affecting non-load-bearing
structural elements of the Building, (ii) which does not excessively burden or
cause any material or adverse impact on Building systems or any other space in
the Building (it being agreed that Tenant shall correct to Landlord's
satisfaction any impact on Building structural or mechanical components or
systems), and (iii) as to which Tenant satisfies all other conditions specified
in this Paragraph 16 with respect to such work; provided, however, that in
exercising its consent right as herein provided, it shall be reasonable for
Landlord to take into account all relevant factors, including, but not limited
to, the requirements of pertinent loan documents applicable to the Building, and
the potential impact on insurance ratings, coverage and costs.
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Within thirty (30) days following completion of (i) Tenant's Work
and (ii) any Alterations thereafter which require Landlord's approval hereunder,
Tenant shall deliver to Landlord a complete set of "as-built" plans showing
Tenant's Work or Alterations, as applicable, in hard copy and an acceptable (in
Landlord's reasonable opinion) electronic version (except that an electronic
version shall not be required if Cafritz Company acts as the construction
manager with respect to such Alterations), and in the event that Tenant does not
furnish such "as-built" plans within thirty (30) days following completion of
the Tenant's Work or Alterations, as applicable, Tenant shall reimburse Landlord
for any expenses incurred by Landlord in causing the Building plans to be
modified to reflect such Tenant's Work, Alterations or both; provided, however,
that Tenant shall not be required to provide Landlord with "as-built" plans with
respect to any Alterations which consist solely of the installation of modular
furniture, unless a permit is required from the Government of the District of
Columbia for the lawful installation of such modular furniture or any affiliated
work resulting from such installation.
16.3 COMPLIANCE WITH CODES; NO LIENS. Alterations may be made only at
Tenant's expense (except to the extent that the costs of same are payable out of
the Tenant Allowance) by contractors or subcontractors approved in writing by
Landlord, in its reasonable discretion and only after Tenant shall have obtained
any necessary permits from governmental authorities having jurisdiction, and
furnished copies of the permits to Landlord. All Alterations must conform to all
rules and regulations established from time to time by the Board of Fire
Underwriters having jurisdiction or similar body exercising similar functions
and to all laws, regulations and requirements of federal, state, county and
municipal governments. Tenant shall obtain and deliver to Landlord written,
unconditional waivers of mechanic's and materialmen's liens against the Building
and the Land from all contractors, subcontractors and material suppliers for all
work performed and materials furnished in connection with completed Alterations.
Notwithstanding the foregoing, if any mechanic's lien is filed against the
Landlord with respect to its interest in the Building or the Land for work or
materials done for or furnished to Tenant, or claimed to have been done for or
furnished to Tenant, the lien shall be discharged by Tenant within ten (10) days
thereafter, solely at Tenant's expense, by paying off or bonding the lien. If
Tenant fails to discharge such lien Landlord may do so and treat the cost
thereof as Additional Rent; but such discharge by Landlord shall not be deemed
to waive the default of Tenant in not discharging the same. Tenant will defend,
indemnify and hold Landlord harmless from and against any and all liabilities,
reasonable costs and expenses (including reasonable attorneys' fees), liens,
suits, claims, demands or damage to persons or property which may arise from the
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making of any Alterations, except to the extent the same are covered (or would
be covered) by the policies of insurance which Landlord is required to carry
hereunder or which Landlord has in force and effect at the time. If any
Alteration is made without the prior written consent of Landlord, Landlord may
correct or remove the Alteration at Tenant's expense, and all reasonable costs
and expenses incurred by Landlord in connection with the removal of any
mechanic's lien or the correction or removal of any Alteration shall be payable
to Landlord by Tenant as Additional Rent within thirty (30) days after receipt
of written demand therefor from Landlord.
17. OWNERSHIP OF ALTERATIONS AND EQUIPMENT AND OTHER PROPERTY; REMOVAL OF
TENANT'S PERSONAL PROPERTY.
17.1 LANDLORD'S PROPERTY. Any Alterations and other property installed
or located in the Demised Premises by or on behalf of either party (i) shall
(except for Tenant's Personal Property) immediately become the property of
Landlord and be subject to this Lease, and (ii) shall remain upon and be
surrendered to Landlord with the Demised Premises as a part thereof upon the
expiration or termination of the Term; provided, however, that Tenant shall have
the right to remove, prior to the expiration of the Term, Tenant's Personal
Property (except that if Tenant is then in default in the payment of any Rent
due under this Lease, Tenant shall not have the right to remove Tenant's
Personal Property unless Tenant cures such default within five (5) business days
following the date of expiration or termination of the Term, in which case
Tenant shall have the right to remove Tenant's Personal Property on or before
such fifth (5th) business day following the date of expiration or termination of
the Term), and provided further, that if Landlord shall elect that any
Alterations (including Tenant's Work to the extent permitted below) be removed
at the expiration of the Term, Tenant shall cause the same to be removed at
Tenant's expense and shall surrender the Demised Premises to Landlord in the
condition in which the Demised Premises were originally received from Landlord,
except as repaired, rebuilt, restored, altered or added to as permitted or
required under this Lease and except for ordinary wear and tear and casualty
which is covered (or would be covered) by the policies of insurance which
Landlord is required to carry hereunder or which Landlord has in force and
effect at the time, or shall reimburse Landlord for the reasonable cost of doing
so. Notwithstanding anything to the contrary set forth in this Lease, (i) Tenant
shall not be obligated to remove the Internal Stairwell upon the expiration of
the Term if Tenant has installed such Internal Stairwell in a location which has
been approved by Landlord in writing, and (ii) Tenant shall not be obligated to
remove any of Tenant's Work or any Alterations except for items which are not
part of a standard office buildout, as determined by Landlord in its reasonable
discretion, and as such items are identified by Landlord in a written notice to
Tenant at the time that Landlord approves Tenant's Plans (with respect to
Tenant's
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Work) or Tenant's plans and specifications with respect to future alterations.
17.2 REMOVAL. Tenant shall remove all of Tenant's Personal Property
(including, but not limited to, all modular furniture) from the Demised Premises
at the expiration or termination of this Lease; provided, however, that if not
later than the three hundred fiftieth (350th) day prior to the expiration of the
Term (as the Term may be extended pursuant to Paragraph 55 hereof), Landlord, in
its sole and absolute discretion, instructs Tenant in writing to leave in place
all of Tenant's modular furniture, then, upon the expiration or earlier
termination of the Term of this Lease, such modular furniture shall remain in
the Demised Premises and immediately become the property of Landlord, which
Landlord may dispose of, retain, demolish or otherwise alter in any way which
Landlord deems appropriate, in its sole discretion. Any property belonging to
Tenant or any other person, which is left in the Demised Premises after the date
Tenant vacates the Demised Premises and the Lease has expired or is terminated
for any reason, shall be deemed to have been abandoned. In such event, Landlord
shall have the right to declare itself owner of such property and to dispose of
it in whatever manner Landlord considers appropriate without waiving its right
to claim from Tenant all reasonable expenses and damage caused by Tenant's
failure to remove the property, and Tenant shall not have any right to
compensation or claim against Landlord as a result.
18. DAMAGE OR DESTRUCTION
18.1 NOTICE. If the Demised Premises or any part thereof shall be
damaged by fire or any other cause, Tenant shall give prompt notice thereof to
Landlord.
18.2 RESTORATION. If restoration of the Demised Premises is possible
(and provided that such damage was not caused by any act or omission
constituting gross negligence or willful misconduct of Tenant, its agents,
servants or invitees), in accordance with Landlord's reasonable estimate, within
a period of six (6) months [or if the damage affects more than fifty percent
(50%) of the Demised Premises or more than fifty percent (50%) of the Building,
then within a period of nine (9) months] from the date of the damage: (i)
Landlord shall restore the Demised Premises at Landlord's expense up to the
limit of insurance proceeds received subject to any prior rights of any
mortgagee to such proceeds [provided, however, that Landlord shall have no
obligation to repair damage to or replace Tenant's Personal Property, any
Alterations (other than Tenant's Work which is paid for out of the Tenant
Allowance) or any other property located in the Demised Premises, except for
modular furniture which is installed in the Demised Premises and is paid for out
of the Tenant Allowance, the restoration of which modular furniture shall be
within Landlord's
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restoration obligation pursuant to this Paragraph 18.2 (notwithstanding the fact
that such modular furniture constitutes Tenant's Personal Property under this
Lease)]; and (ii) if the Demised Premises are untenantable for Tenant's
permitted uses, in whole or in part, during such restoration, the Monthly Base
Rent and Additional Rent hereunder shall be abated proportionately to the extent
and for the period of such untenantability, that is, the Rent abated shall be
that portion which the amount of square foot area which is unusable bears to the
total square foot area of the Demised Premises; provided that if more than fifty
percent (50%) of the Demised Premises are partially damaged or destroyed and
such partial damage or destruction renders the Demised Premises unusable for
Tenant's business operations, then Monthly Base Rent and Additional Rent for the
Demised Premises shall be abated entirely until the restoration is completed. If
such damage or destruction shall result from any act or omission constituting
gross negligence or willful misconduct of Tenant, or Tenant's agents or
employees, Tenant shall not be entitled to any abatement of Monthly Base Rent
and Additional Rent.
18.3 TERMINATION. If restoration is not possible, in accordance with
Landlord's reasonable estimate, within a period of six (6) months [or if the
damage affects more than fifty percent (50%) of the Demised Premises or more
than fifty percent (50%) of the Building, then within a period of nine (9)
months] from the date of the damage, then either Landlord or Tenant shall have
the right to terminate this Lease by giving written notice thereof to the other
party within ninety (90) days after the occurrence of such damage, in which
event this Lease and the tenancy hereunder, shall terminate as of the date
specified in such notice, which date shall be no later than one hundred twenty
(120) days after the occurrence of such damage. If neither party exercises its
right of termination, then Landlord shall restore the Demised Premises as
provided in this Paragraph 18. Notwithstanding anything to the contrary herein,
if neither party exercises its termination right and Landlord commences
restoration of the Demised Premises, but such restoration is not completed
within one hundred eighty (180) days [or if the damage affects more than fifty
percent (50%) of the Demised Premises or more than fifty percent (50%) of the
Building, then within a period of two hundred seventy (270) days] from the date
of the casualty, Tenant shall have the right to terminate this Lease by written
notice given to Landlord within ten (10) days following the expiration of said
one hundred eighty (180) day period or two hundred seventy (270) day period, as
applicable, which notice shall be effective of the ninetieth (90th) day
following Tenant's giving of such notice. In case the Building generally is so
severely damaged by fire or other casualty (although the Demised Premises may
not be affected) that Landlord shall decide in its sole discretion not to
rebuild or reconstruct the Building, then this Lease, and the tenancy hereunder,
shall terminate on the date
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specified by Landlord in a notice which shall be given no later than ninety (90)
days after the casualty.
18.4 NO LIABILITY. No compensation or claim or diminution of rent will
be allowed or paid by Landlord by reason of inconvenience, annoyance or injury
to business, arising from the necessity of repairing the Demised Premises or any
portion of the Building, however the necessity may occur, as determined in the
sole discretion of Landlord. Landlord shall have no obligation to replace or
repair Tenant's Personal Property unless such damage is due to the negligence or
willful misconduct of Landlord, its agents, employees or contractors and is not
covered by Tenant's insurance.
19. CONDEMNATION.
19.1 COMPENSATION AWARD. If the Demised Premises or any part thereof
shall be taken or threatened to be taken by any governmental or
quasi-governmental authority pursuant to the power of eminent domain, or by deed
in lieu thereof, Tenant agrees to make no claim for compensation in the
proceedings, and hereby assigns to Landlord any rights which Tenant may have to
any portion of any award made as a result of any such taking, and this Lease
shall terminate as to the portion of the Demised Premises actually taken by the
condemning authority and Monthly Base Rent and Additional Rent shall be adjusted
to such date. The foregoing notwithstanding, Tenant shall be entitled to claim
in the condemnation proceedings, such awards as may be allowed for its
relocation expenses and for movable trade fixtures installed by it which shall
not, under the terms of this Lease, be or become the property of Landlord at the
termination or expiration hereof, but only if such awards shall be made by the
condemnation court in addition to and stated separately from the award made by
it for the Land and the Building or part thereof so taken. In no event shall
Tenant be entitled to any award for the unexpired portion of the Term of this
Lease.
19.2 TERMINATION. If the nature, location or extent of any proposed
condemnation affecting the Building or the Land is such that Landlord elects to
demolish all or a portion of the Building, then Landlord shall provide Tenant
with written notice of such election, and Tenant or Landlord each may terminate
this Lease by giving at least sixty (60) days written notice of termination to
the other party at any time after such condemnation and this Lease shall
terminate on the date specified in such notice, which termination date shall be
not later than one hundred twenty (120) days after such condemnation. In such
event, Monthly Base Rent and Additional Rent shall be adjusted to such date.
20. DEFAULTS; LANDLORD'S REMEDIES.
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20.1 EVENTS OF DEFAULT. Any of the following occurrences or acts shall
constitute an event of default ("Event of Default") under this Lease:
(a) If Tenant shall fail to pay any Monthly Base Rent or any
Additional Rent when the same shall become due and payable and such failure
continues for a period of five (5) business days after written notice to Tenant
of such failure; or
(b) If Tenant shall fail to observe or perform any of the
covenants, conditions and agreements of this Lease (other than as specified in
Paragraphs 20.1(a), 20.1(c) through (g), 16.3, 29.1, 30.1, 30.2, 35 and 36) and
such failure shall continue for a period of thirty (30) days after written
notice to Tenant of such failure; provided, however, that if such failure is not
reasonably capable of being cured within such thirty (30) day period, then so
long as Tenant has commenced curative action within such period and thereafter
continues to pursue diligently such curative action, such thirty (30) day period
shall be extended for the period necessary to cure such default, but not more
than ninety (90) days, inclusive of the original 30-day period; or
(c) [Intentionally omitted.]
(d) If the Demised Premises shall become vacant, deserted or
abandoned for a period of at least thirty (30) consecutive days; provided,
however, that if (i) Tenant gives Landlord at least thirty (30) days prior
written notice that it intends to vacate the Demised Premises, (ii) Tenant pays
the full amount of all Rent when due under this Lease while the Demised Premises
are vacant, (iii) the fact that the Demised Premises are vacant does not
adversely affect the Building or other tenants therein in other than a DE
MINIMIS manner and does not result in any liability to, or expenditure of funds
by, Landlord, and (iv) Tenant leaves the Demised Premises in a condition
satisfactory to Landlord, in its reasonable judgment, and continues to maintain
the Demised Premises in a condition satisfactory to Landlord, in its reasonable
judgment, throughout the remainder of the Term, then, and in such event only,
Tenant shall not be deemed to be in default under this Paragraph 20.1(d) and,
subject to the rights of any subtenant or assignee pursuant to a sublease or
assignment which was consented to by Landlord pursuant to this Lease, Landlord
shall have the right, exercisable by sending written notice to Tenant not sooner
than the sixtieth (60th) day after the date of vacating of the Demised Premises
by Tenant, to sublet from Tenant for the balance of the Term of this Lease all
or any portion of the Demised Premises at Tenant's then rental rate hereunder,
or to terminate this Lease as to all or any portion of the Demised Premises,
which rights of Landlord as to subletting and termination shall be exercisable
by Landlord in its sole discretion, and in the event of any such subletting to
Landlord, Landlord and Tenant shall be relieved of all of their respective
obligations with respect to the portion of the
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Demised Premises which are the subject of such subletting which would accrue
after the date of such subletting, except for Landlord's obligation to pay
subrent to Tenant for such sublet portion of the Demised Premises at Tenant's
then rental rate hereunder; or
(e) If Tenant shall file a petition in bankruptcy or for
reorganization or for an arrangement pursuant to any federal or state bankruptcy
law or any similar federal or state law, or shall be adjudicated a bankrupt or
become insolvent or shall make an assignment for the benefit of creditors or
shall admit in writing its inability to pay its debts generally as they become
due; or
(f) If a petition or answer proposing the adjudication of
Tenant as a bankrupt or its reorganization pursuant to any federal or state
bankruptcy law or any similar federal or state law shall be filed in any court
and Tenant shall consent to or acquiesce in the filing thereof or such petition
or answer shall not be discharged or denied within thirty (30) days after the
filing thereof; or
(g) If a receiver, trustee or liquidator of Tenant, of all
or substantially all of the assets of Tenant, or of the Demised Premises or
Tenant's estate therein shall be appointed in any proceeding brought by Tenant,
or if any such receiver, trustee or liquidator shall be appointed in any
proceeding brought against Tenant and shall not be discharged within thirty (30)
days after such appointment.
In the event that Tenant shall have committed the same default
three (3) or more times during any period of twenty-four (24) months, or if
Tenant commits any combination of defaults four (4) or more times during any
such 24-month period, then any cure periods set forth above shall not apply and
an Event of Default shall have been deemed to have occurred upon the occurrence
of the last such default, i.e., the third (3rd) time that the same default
occurs or the occurrence of the fourth (4th) of any combination of defaults, as
the case may be, during a 24-month period.
20.2 LANDLORD'S REMEDIES. If an Event of Default shall have occurred
and is continuing Landlord shall have the following rights and remedies then or
at any time thereafter, the election of which, singly or one or more in
combination with each other, shall be at the sole option of Landlord:
(a) To make any payment required to be made by Tenant or to
do any act required to be done by Tenant, provided that the making of any such
payment or the expense of doing such act by Landlord shall constitute Additional
Rent hereunder due and payable together with interest and late charges in
accordance with Paragraph 9 hereof, but the making of such payment or the doing
of such act by
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Landlord shall not operate to cure such Event of Default or to estop Landlord
from the pursuit of any remedy to which Landlord would otherwise be entitled.
(b) To terminate this Lease by written notice to Tenant,
whereupon this Lease shall end and all rights of Tenant (but not the liability
of Tenant) hereunder shall expire and terminate. Upon such termination by
Landlord, Tenant will at once surrender possession of the Demised Premises to
Landlord and remove all of Tenant's Personal Property therefrom, and Landlord
may forthwith re-enter and repossess the Demised Premises and remove all persons
and effects therefrom, by summary proceeding, ejectment or other legal action or
by using such force as may be permitted. Landlord shall be under no liability by
reason of any such reentry, repossession or removal.
(c) To enter upon and take possession of the Demised
Premises and expel or remove Tenant and any other person who may be occupying
the Demised Premises or any part thereof, without being liable for prosecution
or any claim for any damages or liability therefor and without terminating this
Lease, and, if Landlord so elects, make such Alterations and repairs as, in
Landlord's absolute discretion, may be necessary to relet the Demised Premises
or any part thereof, without notice to Tenant, for such rent and such use, and
for such period of time and subject to such terms and conditions as Landlord may
deem advisable, and receive the rent therefor. Upon each such reletting, all
rent received by Landlord from such reletting shall be applied, first, to the
payment of any indebtedness, including interest thereon, other than any Rent;
second, to the payment of any reasonable costs and expenses of such reletting,
including brokerage fees, reasonable attorneys' fees and the costs of
Alterations and repairs, such costs and expenses to be amortized over the term
of the new lease, with the portion applicable to the unexpired term of this
Lease (the "Unexpired Portion") only, to be charged to Tenant; third, to the
payment of any Monthly Base Rent and Additional Rent due and unpaid, together
with interest and late charges; and the residue, if any, shall be held by
Landlord and applied in payment of future Rent as the same may become due and
payable hereunder. Tenant agrees to pay Landlord, on demand, any deficiency that
may arise by reason of such reletting. Landlord shall not be liable for any
failure to relet the Demised Premises or any part thereof or for any failure to
collect any rent due upon any such reletting. Notwithstanding any such reletting
without termination, Landlord may at any time thereafter elect to terminate this
Lease for such prior default.
20.3 EXTENT OF LIABILITIES. If Landlord terminates this Lease pursuant
to Paragraph 20.2 hereof:
(a) Tenant shall remain liable for and shall pay on demand
by Landlord (i) the full amount of all Monthly Base Rent and
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Additional Rent which would have accrued until the date on which this Lease
would have expired had such termination not occurred, and any and all damages
and the Unexpired Portion of reasonable expenses incurred by Landlord in
reentering and repossessing the Demised Premises, in making good any default of
Tenant, in making any Alterations to the Demised Premises, in protecting and
preserving the Demised Premises, and in reletting the Demised Premises, and the
Unexpired Portion of any and all reasonable expenses which Landlord may incur to
procure the occupancy of any new tenant, LESS (ii) the net proceeds of any
reletting of the Demised Premises which has occurred at the time of the
aforesaid demand by Landlord to Tenant. Tenant agrees to pay to Landlord the
difference between items (i) and (ii) above for the period through and including
the date on which this Lease would have expired if it had not been terminated.
Landlord shall be entitled to any excess with no credit to Tenant. Landlord may,
in its sole discretion, make demand on Tenant as aforesaid on any one or more
occasions, and any suit brought by Landlord to enforce collection of such
difference for any one month shall not prejudice Landlord's right to enforce the
collection of any difference for any subsequent month or months. Tenant's
liability shall survive the institution of summary proceedings and the issuance
of any warrant hereunder.
(b) If Landlord determines that it is impracticable or extremely
difficult to fix the actual damages, then, as an alternative to the remedy set
forth in subparagraph (a), Tenant will pay to Landlord on demand, liquidated and
agreed final damages for Tenant's default calculated in accordance with this
paragraph. Liquidated damages hereunder shall be an amount equal to the excess,
if any, of (i) all Monthly Base Rent and Additional Rent payable under this
Lease from the date of such demand for what would be the then unexpired term of
this Lease in the absence of such termination, discounted to present value at
the rate of five percent (5%) per annum calculated on a monthly basis (the
"Discount Rate") over (ii) the then fair market rental value of the Demised
Premises (as reasonably determined by Landlord), discounted to present value at
the Discount Rate. If any law shall limit the amount agreed upon, Landlord shall
be entitled to the maximum amount allowable under such law. Nothing herein shall
be construed to affect or prejudice Landlord's right to prove, and claim in
full, unpaid rent accrued prior to termination of this Lease.
20.4 TENANT'S WAIVER. In the event of an occurrence of an Event of
Default, Tenant, on its own behalf and on behalf of all persons claiming through
or under Tenant, including, but not limited to, all creditors, does hereby
specifically waive any and all rights and privileges which Tenant and all such
persons might otherwise have under any present or future law (a) to the service
of any notice to quit or of Landlord's intention to re-enter or to institute
legal proceedings, which notice may otherwise be required to be given, (b) to
redeem the Demised Premises, (c) to re-enter or
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repossess the Demised Premises, (d) to restore the operation of this Lease with
respect to any dispossession of Tenant by judgment or warrant of any court or
judge, or any re-entry by Landlord, or any expiration or termination of this
Lease, whether such dispossession, re-entry, expiration or termination shall be
by operation of law or pursuant to the provisions of this Lease or (e) to the
benefit of any law which exempts property from liability for debt or for
distress for rent.
20.5 LANDLORD'S LIEN. [Intentionally omitted.].
20.6 REMEDIES CUMULATIVE. Pursuit of any of the foregoing remedies
shall not preclude Landlord from pursuing any other remedies herein or at law or
in equity provided, nor shall pursuit of any remedy by Landlord constitute a
forfeiture or waiver of any Monthly Base Rent or Additional Rent due hereunder
or of any damages accruing to Landlord by reason of Tenant's violation of any
provisions of this Lease.
20.7 TENANT'S AGENT FOR PROCESS. Tenant hereby appoints Stan Sherfy
and/or its registered agent as its agent to receive service of all dispossessory
or restraint proceedings and notices hereunder and under this Lease, and if such
person cannot then be served, such service or notice may be made by attaching
the same to the main entrance of the Demised Premises, provided that a copy of
any such proceedings or notices shall be mailed to Tenant's Legal Notice
Address.
21. UTILITIES AND SERVICES
21.1 LANDLORD TO FURNISH. Landlord covenants and agrees that it will,
without additional charge, other than as included in Operating Expenses, furnish
the following services during the Term at a level commensurate with the level at
which such services are provided in Comparable Buildings.
(a) (i) At least one (1) elevator, for common use, subject
to call at all times, including Saturdays, Sundays and Holidays, and (ii) at
least four (4) elevators for common use, subject to call at all times from 6:00
a.m. until 8:00 p.m. Monday through Friday and from 9:00 a.m. until 4:00 p.m. on
Saturdays, subject, as to this clause (ii), to temporary interruptions for
maintenance, repairs and replacements (it being understood and agreed that the
phrase "for common use, subject to call at all times" shall not preclude
Landlord from requiring the use of a card key for operation of the elevators
between the hours of 6:00 p.m. through 8:00 a.m. Monday through Friday and all
day on Saturdays, Sundays and Holidays);
(b) Janitorial and char services in accordance with the
cleaning specifications which are attached hereto as Exhibit E
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and made a part hereof in a manner comparable to the manner in which such
services are provided in Comparable Buildings, Monday through Friday of each
week after 6:00 p.m., except Holidays;
(c) Central heating and air conditioning from 8:00 a.m. until
8:00 p.m. on weekdays and from 9:00 a.m. until 4:00 p.m. on Saturdays, exclusive
of Holidays, during the seasons of the year and within the temperature ranges
furnished in Comparable Buildings; provided, however, that on any weekday or
Saturday on which it is reasonably capable of being anticipated that the
temperature will exceed 90EF and on "Code Red" days (as such term "Code Red"
days is utilized in the District of Columbia), Landlord shall operate the air
conditioning serving the Demised Premises commencing at 6:00 a.m. Landlord shall
provide heat and air conditioning at other times at Tenant's expense, provided
that Tenant delivers to Landlord written notice by 12:00 p.m. (Noon) on weekdays
for after-hour service on that weekday, and by 12:00 p.m. (Noon) on the
immediately preceding business day for after-hour service on a Saturday, Sunday
or Holiday.
(d) Replacement of light tubes for Building standard lighting
fixtures;
(e) Restroom facilities and necessary lavatory supplies,
including hot and cold running water at the points of supply, provided for
general use, excluding any equipment or appliance requiring heavier than normal
use of water, and routine maintenance for all public areas of the Building;
(f) Reasonable access to the Demised Premises 365 days a year,
24 hours a day, subject to such access control procedures, restrictions and
other regulations as Landlord may promulgate;
(g) A number of directory listings for Tenant in the Building
lobby directory which is equal to the same proportion as the rentable square
footage comprising the Demised Premises bears to the rentable square footage of
office area in the Building;
(h) Landlord shall provide Tenant with after-hours access to
the Building via an electronic or other access control system, including after
hours electronically restricted elevator service.
21.2 RECYCLING.2 RECYCLING. Without limiting the
foregoing, Tenant covenants and agrees, at its sole cost and expense, to comply
with all present and future laws, orders, and regulations of the jurisdiction in
which the Demised Premises are located, federal, municipal, and local
governments, departments, commissions, agencies and boards to the extent that
they or this Lease impose on Tenant duties and responsibilities regarding the
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collection, sorting, separation, and recycling of trash. Tenant shall pay all
costs, expenses, fines, penalties, or damages that may be imposed on Landlord or
Tenant by reason of Tenant's failure to comply with the provisions of this
Section and, at Tenant's sole cost and expense, shall indemnify, defend and hold
Landlord harmless (including reasonable legal fees and expenses) from and
against any actions, claims, and suits arising from such noncompliance, using
counsel reasonably satisfactory to Landlord.
21.3 CHARGES TO TENANT. Overtime HVAC services will be provided upon
Tenant's request and will be charged to Tenant at Landlord's actual cost,
without mark-up. As of the date of Landlord's execution of this Lease, Landlord
anticipates that the initial rate for overtime HVAC services will be Thirty-Five
Dollars ($35.00) per hour per floor, irrespective of whether such overtime HVAC
services are requested for all or only one (1) or more portions of a floor.
21.4 REPAIRS; INTERRUPTIONS. Landlord reserves the right to interrupt,
curtail, stop or suspend (i) the furnishing of heat and air conditioning,
electrical services, elevator, janitor and char services and (ii) the operation
of the water and sewer systems, when necessary by reason of accident or
emergency, or for repairs, alterations, replacements or improvements which in
the reasonable judgment of Landlord are desirable or necessary to be made, or in
the event of difficulty or inability in securing supplies or labor by Landlord,
or any other cause, until the cause has been removed. There shall be no
diminution or abatement of Monthly Base Rent or Additional Rent or other
compensation due from Tenant to Landlord hereunder, and Landlord shall have no
responsibility or liability for any such interruption, curtailment, stoppage or
suspension of services or systems as provided in this paragraph, except that
Landlord shall expeditiously commence and exercise reasonable diligence to
eliminate the cause of same, provided that Landlord shall perform any work
hereunder in such a manner as to minimize disruption of Tenant's business
operations. Notwithstanding the foregoing, in the event any utility service is
interrupted (A) for a period of ten (10) consecutive business days and such
interruption is not due to the fault of Tenant or any circumstance which would
be governed by the provisions of Paragraph 42 hereof, Tenant shall be permitted
to abate Base Rent and Additional Rent coming due under Paragraph 6 hereof
commencing on the eleventh (11th) consecutive business day of such interruption,
or (B) for a period of five (5) consecutive business days and such interruption
is not due to the fault of Tenant but is due to a circumstance which would be
governed by the provision of Paragraph 42 hereof, Tenant shall be permitted to
abate Base Rent and Additional Rent coming due under Paragraph 6 hereof
commencing on the sixth (6th) consecutive business day of such interruption, if,
in each case [i.e., in the case of an interruption which is described in clause
(A) of this sentence and in the case of an interruption which is described in
clause (B) of
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this sentence], such abatement shall continue until such utility is restored but
only in those circumstances where the interruption of the utility materially
adversely affects Tenant's ability to conduct business in the Demised Premises.
21.5 GOVERNMENT OR OTHER REQUIREMENTS. If any public utility,
insurance carrier, or governmental body shall require Landlord or Tenant to
restrict the consumption of any utility or reduce any service to the Demised
Premises or the Building, Landlord and Tenant shall comply with such
requirements whether or not the utilities and services referred to in this
paragraph are thereby reduced or otherwise affected, without any abatement,
reduction, set-off, rebate or adjustment of the Monthly Base Rent or Additional
Rent.
21.6 ACCESS. Provided Landlord gives Tenant prior notice, which notice
may be given verbally (except that in the case of emergency, such notice may be
given to any of the persons named in Paragraph 1.A.14. hereof or to anyone else
of whom Landlord has been given prior written notice), Landlord and its agents
shall be permitted reasonable access to the Demised Premises and the right to
install facilities within or through the Demised Premises in order to install
and service the systems deemed necessary by Landlord to provide to other tenants
of the Building the services and utilities referred to in this paragraph.
Landlord shall promptly repair any damage to the Demised Premises or Tenant's
Personal Property caused by any work performed by Landlord pursuant to this
Paragraph 21.6. Landlord shall perform any such work in such a manner as to
minimize disruption of Tenant's business operations.
21.7 FITNESS FACILITY. Landlord will construct, at Landlord's expense
(including, but not limited to, the construction costs of the initial buildout),
a fitness center in the Building not exceeding 3,000 rentable square feet and of
not less than 2,400 rentable square feet (the "Fitness Facility"). The Fitness
Facility shall be operated and maintained for the exclusive use of Landlord, its
agents, employees or invitees and the office tenants of the Building, including
Tenant and its employees; provided, however, that (i) Landlord shall not be
required to provide an attendant for the Fitness Facility, and (ii) such use
shall be at Tenant's sole risk and Landlord assumes no liability therefor.
Admission to the Fitness Facility will be obtained through the use of the
Building security system. Use of the Fitness Facility and the hours of operation
thereof will be subject to such rules and regulations that Landlord or its agent
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may promulgate, and amend, from time to time. It is understood that no person
shall be entitled to use the Fitness Facility until (a) such person has signed a
waiver to be prepared by Landlord, and (b) if Landlord charges a fee for the use
of the Fitness Facility, until such person has paid such fee; it being
understood and agreed that Landlord shall not charge any fees for use of the
Fitness Facility, other than for specialty services. The Fitness Facility shall
contain separate men's and women's locker rooms each containing no less than two
(2) shower stalls, which will be kept clean and tidy throughout each day of the
week. Cleaning will be extended to weekends and Holidays if permitted use
warrants. All expenses of operating the Fitness Facility (including, but not
limited to, equipment leases) other than the initial construction and the
initial equipment installed therein shall be includable in Operating Expenses
(it being agreed that all equipment installed in the Fitness Facility shall be
leased and not purchased by Landlord). Any fees charged by Landlord for use of
the Fitness Facility, other than specialty fees for specific services (which
will be applied to the cost of such specific services) shall be an offset
against Operating Expenses. Tenant agrees to indemnify and hold harmless
Landlord for any loss, liability or other cost (including, but not limited to,
reasonable attorneys' fees) Landlord may suffer arising out of any injury to any
employee, agent or invitee of Tenant in the Fitness Facility irrespective of
whether such person is authorized to use the Fitness Facility; provided,
however, that the foregoing shall not apply to any such injury that results from
Landlord's, its agents', employees' or contractors' failure to properly maintain
the Fitness Facility or the equipment installed therein or from the negligence
or willful misconduct of Landlord or its agents, employees or contractors.
Landlord reserves the right to change the location (but not the maximum or
minimum size) of the Fitness Facility within the Building at any time and from
time to time; provided that Landlord provides Tenant with prior written notice
of such relocation, and that Landlord promptly commences and diligently pursues
to completion such relocation such that the Fitness Facility shall not be out of
operation for more than twenty (20) days as the result of any such relocation
thereof by Landlord.
22. INSURANCE.
22.1 LIABILITY INSURANCE.
(a) Tenant, at Tenant's expense, shall carry and keep in full
force and effect at all times during the Term of this Lease for the protection
of Landlord and Tenant, an
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Insurance Services Office ("ISO") commercial general liability insurance policy,
or its equivalent, or such successor comparable form of coverage in the broadest
form then available written on an "occurrence basis", including, without
limitation, blanket contractual liability coverage, broad form property damage
coverage, independent contractor's coverage and personal injury coverage, of not
less than $3,000,000 combined single limit per occurrence for bodily injury
(including death) or property damage, with an insurance company reasonably
approved by Landlord, and deliver to Landlord a copy of said policy or
certificate showing the same to be in full force and effect.
(b) If Tenant makes use of any automobile(s) in the normal
course of its business, Tenant shall carry and maintain comprehensive automobile
liability insurance for owned, non-owned, and hired vehicles with limits for
each occurrence of not less than One Million Dollars ($1,000,000) with respect
to bodily injury or death and One Million Dollars ($1,000,000) with respect to
property damage.
22.2 TENANT'S PROPERTY INSURANCE AND OTHER INSURANCE. Tenant agrees
that it shall, at all times during the Term of this Lease, at Tenant's own
expense, keep in full force and effect the following coverages:
(a) "All-risk" or "special" insurance coverage for property
damage, with full replacement cost endorsement, covering all of Tenant's
Personal Property in the Demised Premises and all leasehold improvements in the
Demised Premises, regardless of whether installed by Landlord, Tenant or by
whomever else installed; provided, however, that Tenant shall not be obligated
to insure, and instead Landlord shall insure, all leasehold improvements and
modular furniture installed in the Demised Premises and paid for out of the
Tenant Allowance, notwithstanding the fact that such modular furniture
constitutes Tenant's Personal Property under this Lease; further provided, that
Tenant shall be responsible for insuring (and for the restoration of any
casualty damage to) all materials which constitute a portion of the leasehold
improvements and modular furniture which comprise Tenant's Work until such items
are permanently installed within the Demised Premises. All proceeds of such
insurance shall be used to repair or replace the items so insured.
(b) Business interruption coverage in an amount sufficient to
continue in business for a period of nine (9) months, including loss of rents
coverage payable to Landlord.
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Tenant's insurance shall be primary to any other policies that may be in effect.
(c) Workers' compensation and employer's liability insurance
in form and amounts required by law and reasonably satisfactory to Landlord.
22.3 POLICY REQUIREMENTS. The insurance policies required by
Paragraphs 22.1 and 22.2 hereof and any other insurance policies carried by
Tenant with respect to the Demised Premises shall (i) be issued in form
reasonably acceptable to Landlord by good and solvent insurance companies
qualified and licensed to do business in the jurisdiction in which the Building
is located and having a Best's rating of at least A-XII; (ii) designate as
additional insureds (with respect to liability policies) and as loss payee (with
respect to casualty policies) Landlord, Cafritz Company, mortgagees and ground
lessors with respect to the Land or the Building, and any other parties in
interest from time to time designated in writing by notice from Landlord to
Tenant; (iii) be written as primary policy coverage and not contributing to or
in excess of any coverage which Landlord may carry; (iv) provide for thirty (30)
days prior written notice to Landlord of any cancellation or non-renewal of such
policy or any defaults thereunder; and (v) contain an express waiver of any
right of subrogation by the insurance company against Landlord, Cafritz Company,
mortgagees and ground lessors with respect to the Land or the Building, and the
employees and agents of each of the foregoing. Neither the issuance of, nor
failure to carry any insurance policy required hereunder nor the minimum limits
specified herein with respect to Tenant's insurance coverage shall be deemed to
limit or restrict in any way Tenant's liability arising under or out of this
Lease.
On or before the Lease Commencement Date and, thereafter, not
less than thirty (30) days before the expiration of the insurance policy in
question, Tenant shall deliver to Landlord a certificate of insurance issued by
the insurer or its agent, together with evidence satisfactory to Landlord of the
payment of all premiums for such policy, as to (1) each policy of insurance
required to be maintained by Tenant under this Lease, and (2) upon request of
Landlord, each policy of insurance required by Paragraph 22.7 hereof to be
maintained by any contractor then performing work on the Demised Premises. Such
certificate shall name the Landlord and Landlord's managing agent, mortgagees
and others reasonably designated by Landlord, as additional insureds.
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22.4 ADDITIONAL INSURANCE. Tenant, at its expense, shall obtain such
additional amounts of insurance and such additional types of coverage as
Landlord may reasonably request from time to time, but not more than once per
calendar year, based upon the amounts and types of coverages required with
respect to Comparable Buildings in Washington, D.C.
22.5 EFFECT OF TENANT'S ACTIVITIES ON INSURANCE. Tenant shall not
conduct or permit to be conducted any activity, or place any equipment in or
about the Land, the Building or the Demised Premises which will increase the
rate of, or make void or voidable, any fire or other insurance maintained or
required to be maintained by Landlord or any mortgagee on the Building, the Land
or the property kept thereon or therein, which will conflict with the provisions
of any such insurance policy of which Tenant has been given written notice by
Landlord or which will make it impracticable for Landlord to obtain insurance
covering any risks against which Landlord reasonably deems it advisable to
obtain insurance. In the event any increases in the rates of such insurance are,
in Landlord's reasonable judgement, due to Tenant's presence in the Building, to
any activity conducted or property installed or placed by Tenant on or about the
Land, the Building or the Demised Premises or to Alterations installed by Tenant
or at Tenant's request in the Demised Premises, Tenant shall reimburse Landlord
for the amount of such increases promptly upon demand therefor. Statements by
the applicable insurance company or insurance rating bureau that such increases
are due to any activity, property or improvements shall be conclusive for the
purposes of determining Tenant's liability hereunder.
22.6 TERMINATION RIGHT. Landlord shall have the right to terminate
this Lease upon ninety (90) days notice to Tenant in the event Landlord receives
notice from any of Landlord's insurance carriers that such carrier intends to
cancel its insurance on the Building, or to increase the cost of such insurance
by more than one hundred percent (100%) above the premium payable by Landlord
immediately prior to such notice, due to the activities of Tenant or the
presence of Tenant in the Building; provided, however, that if Landlord receives
written notice from its insurance carrier that such carrier intends to cancel
its insurance on the Building or to increase the cost of such insurance by more
than one hundred percent (100%) above the premium payable by Landlord
immediately prior to such notice and Landlord is provided with the opportunity
to cure such condition or circumstance by a specific date in order to avoid such
cancellation or increase, Landlord shall, within two (2) business
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days following Landlord's receipt of same, provide Tenant with a copy of such
notice and Tenant shall have the right to effect the cure of such condition or
circumstance prior to the date specified in the insurance carrier's notice to
Landlord. However, Landlord shall not terminate this Lease in the event Landlord
is able, with good faith efforts, to obtain equivalent insurance from an
insurance carrier satisfactory to Landlord at a premium not more than one
hundred percent (100%) greater than the premium for the canceled insurance;
provided that Tenant shall reimburse Landlord for all additional premiums
charged to Landlord by such new insurance carrier. It is expressly understood
that Landlord shall not have the right to terminate this Lease pursuant to this
Paragraph 22.6 if any cancellation or rate increase is due to factors generally
applicable to the insurance or rental market, rather than to Tenant's activities
or presence in the Building. Landlord shall not have the right to terminate this
Lease pursuant to this Paragraph 22.6 based upon Landlord's insurance carrier's
intended cancellation of its insurance on the Building or intended increase in
the cost of such insurance by more than one hundred percent (100%) above the
premium payable by Landlord immediately prior to such notice if Tenant's use of
the Demised Premises is in accordance with the provisions of Paragraph 12 hereof
and Tenant is otherwise in compliance with all of its obligations under this
Lease and under all laws and governmental regulations which are applicable with
respect to the Demised Premises.
22.7 TENANT'S CONTRACTOR'S INSURANCE. (a) Tenant shall require any
contractor of Tenant performing work on the Demised Premises to carry and
maintain, at no expense to Landlord:
(i) Commercial comprehensive general liability insurance, on a
standard ISO form or its equivalent, which shall include independent
contractor's liability coverage, contractual liability coverage, products and
completed operations coverage, and a "per project" endorsement, to afford
protection, with limits for each occurrence, of not less than Five Million
Dollars ($5,000,000) combined single limit with respect to bodily injury and
property damage;
(ii) comprehensive automobile liability insurance for owned,
non-owned, and hired vehicles with limits for each occurrence of not less than
Three Million Dollars ($3,000,000)with respect to bodily injury or death and One
Million Dollars ($1,000,000) with respect to property damage; and
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(iii) workers' compensation and employer's liability insurance in form
and amounts required by law and satisfactory to Landlord.
(b) Tenant shall require and cause all of its contractor(s)
performing work or services in or to the Demised Premises (i) to waive
subrogation against Landlord, and its partners, directors, officers, employees,
agents and mortgagees, and (ii) to hold harmless, defend and indemnify Landlord,
and its partners, directors, officers, employees, agents and mortgagees, against
any and all claims arising from any contractor's work or operations, except such
injuries as are caused by Landlord's and its agents', employees' or contractors'
sole negligence or willful misconduct, and such waiver shall be so stated in all
insurance policies which such contractor(s) are required to provide in
accordance with this Paragraph 22.7(b).
(c) Tenant shall not permit or suffer any contractor to commence any
work in the Building or the Demised Premises until Tenant has provided Landlord
with a valid copy of such contractor's certificate of insurance satisfying the
above requirements.
22.8 LANDLORD'S INSURANCE.
Landlord shall maintain in force throughout the Term such "all-risk"
property insurance, commercial general liability insurance, and contractual
liability insurance insuring performance by Landlord of its indemnity
obligations under this Lease, with respect to the Building as are required by
any first mortgagee or ground lessor or, if at any time there is no first
mortgagee and no ground lessor, Landlord shall maintain in force such property
insurance and liability insurance as Landlord, in its reasonable judgment,
determines to be appropriate based upon coverages in force with respect to
Comparable Buildings; provided, however, that (i) in no event shall the property
insurance be less than what would be required to prevent Landlord from being
considered a co-insurer and (ii) all property damage insurance policies shall
either permit or contain an express waiver of any right of recovery (by
subrogation or otherwise) by the insurance company against Tenant.
23. WAIVER OF SUBROGATION.
Notwithstanding anything to the contrary contained in this Lease,
Landlord and Tenant each hereby release the other and its agents and employees,
from any claims for damage or loss to
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any person or to the Demised Premises, the Building, the Land and any property
contained therein or thereon, caused by or resulting from any risks insured
against under any insurance policies carried by Landlord or Tenant (or required
to be carried by Landlord or Tenant pursuant to this Lease) and in force at the
time of any such damage or loss, regardless of the cause of the damage or loss
(including the negligence of Landlord or Tenant or their respective agents or
employees) to the extent of proceeds actually recovered, or which would be
recovered if the party made prompt application therefor.
24. PROPERTY AT TENANT'S RISK.
All personal property in the Demised Premises, shall remain at
Tenant's sole risk and Landlord shall not assume any liability or be liable for
any damage to or loss of such personal property, arising from the bursting,
overflowing or leaking of the roof or of water, sewer or steam pipes, or from
heating or plumbing fixtures or from the handling of electric wires or fixtures
or from any other cause whatsoever, except with respect to actual damages (but
in no event any consequential damages) resulting directly from the negligence or
willful misconduct of Landlord, its agents, employees or contractors.
25. ASSIGNMENT AND SUBLETTING.
25.1 CONSENT REQUIRED.
(a) Tenant shall not (i) assign, transfer, mortgage or
otherwise encumber, this Lease or any of its rights hereunder, (ii) sublet the
Demised Premises or any part thereof, or permit the use of the Demised Premises
or any part thereof by any persons other than Tenant or its employees, agents
and invitees, or (iii) permit the assignment or other transfer of this Lease or
any of Tenant's rights hereunder by operation of law, in each case without the
prior written consent of Landlord, which consent may be granted or denied at the
sole and absolute discretion of the Landlord. The consent by Landlord to any
assignment, transfer, or subletting to any person is not to be construed as a
waiver or release of Tenant from any provision of this Lease nor as a waiver of
the necessity for such consent in a subsequent instance. In the event of any
subletting, transfer or assignment, Tenant shall remain fully liable as a
principal and not as a guarantor or surety under this Lease. Even if the
Landlord accepts or collects rent from any such assignee, transferee, subtenant
or occupant, Tenant will not be released from any provision of this Lease.
Following the occurrence and
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during the continuation of an Event of Default hereunder, Tenant hereby assigns
to Landlord the rent due from any subtenant of Tenant and hereby authorizes each
such subtenant to pay said rent directly to Landlord. Payment of such rent
directly to Landlord shall not establish a landlord and tenant relationship
between Landlord and said subtenant. Notwithstanding the foregoing, Landlord
agrees that it shall not unreasonably withhold, condition or delay its consent
to a proposed subletting or assignment, provided that (A) such proposed
assignment or subletting satisfies the requirements of any then existing
mortgagee of the Building or ground lessor (it being agreed by Landlord that if
it denies, withholds or conditions its consent to a proposed subletting or
assignment based upon such subletting or assignment not satisfying the
requirements of any mortgagee of the Building or ground lessor, Landlord shall,
within fifteen (15) business days following a written request therefor from
Tenant to Landlord, furnish Tenant with a copy of the relevant provision(s) from
the loan document or other agreement with or, instruction from, the mortgagee or
ground lessor which supports Landlord's denial, withholding or conditioning of
Landlord's consent), and (B) all of the following conditions are satisfied: (1)
there shall be no default at the time of the proposed subletting or assignment,
(2) the proposed subtenant shall be creditworthy, (3) the proposed subtenant or
assignee, as the case may be, shall not be a governmental entity or a person or
entity enjoying sovereign or diplomatic immunity, (4) the use of the Demised
Premises by the proposed subtenant or assignee, as the case may be, is not
anticipated to attract a volume, frequency or type of visitor to the Building
which is not consistent with the standards of Comparable Buildings, nor shall
the proposed subtenant or assignee be inconsistent with the standards of a
high-quality office building, in each case, as of the date of execution of this
Lease by Landlord, (5) the proposed subtenant or assignee, as the case may be,
shall specifically covenant and agree to perform the obligations of Tenant
hereunder with respect to the subleased space, in the case of a subletting and
to occupy the Demised Premises subject to the provisions of this Lease, and (6)
Tenant remains liable for the faithful performance of this Lease.
(b) For purposes of this paragraph a transfer or transfers of
fifty percent (50%) or more in interest of Tenant (whether stock, partnership
interest or other form of ownership or control) by any person or persons having
an interest in ownership or control of Tenant, or the merger of Tenant into
another organization after which merger Tenant shall not be the surviving
entity, shall be deemed an assignment of this Lease for which the Landlord's
consent must be obtained; provided, however, that the provisions of
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this Paragraph 25.1(b) shall not be applicable (i) so long as National
Cooperative Bank, a federally chartered institution ("NCB"), remains the tenant
under this Lease or (ii) at any time that the shares of stock or other ownership
interests in Tenant are publicly traded on a national or regional stock
exchange.
(c) Any lawful levy or sale or execution or other legal
process shall be classified as an assignment within the meaning of this Lease,
as shall be an adjudication in bankruptcy, voluntary or involuntary, or an
appointment of a receiver by a state or Federal Court, or insolvency of Tenant,
or the execution of a deed or other instrument for the benefit of creditors.
25.2 LANDLORD'S OPTIONS.
(a) If Tenant desires to sublet at least ninety-five percent
(95%) of the rentable square footage of the Demised Premises or assign this
Lease, Tenant shall give written notice thereof to Landlord and Landlord may
terminate this Lease effective sixty (60) days after notification by Landlord to
Tenant provided, however, that if Tenant notifies Landlord within ten (10)
business days after receipt of Landlord's notice that it is withdrawing its
request to sublet the Demised Premises or assign this Lease, Landlord's notice
of termination shall be of no force and effect.
(b) If Tenant desires to sublet part of the Demised Premises
for any period which includes any portion of the last thirty (30) days of the
Term of this Lease, Tenant shall first offer in writing to sublet the space to
Landlord at the rate of Rent (pro-rated based on square footage) and upon the
other terms, covenants and conditions set forth in this Lease. Said writing
shall also fully set forth the identity of the proposed third party subtenant
and the rent, terms and conditions of such proposed sublease with the third
party subtenant (collectively, the "Third Party Terms"). Landlord shall have
thirty (30) days following receipt of Tenant's offer in which to (i) elect to
(A) sublease said part of the Demised Premises, at the rate of Rent (pro-rated
based on square footage) and upon the other terms, covenants and conditions set
forth in this Lease or (B) terminate this Lease and (ii) notify Tenant in
writing that Landlord is in concept willing to consent to an assignment or
sublease, subject to the provisions of Paragraph 25.1(a) hereof; provided,
however, that if Tenant notifies Landlord within ten (10) business days after
receipt of Landlord's notice that Tenant is withdrawing its request to sublet
the Demised Premises, Landlord's notice of termination or election to sublet, as
the case may be, shall be of no force and effect. If Landlord accepts such
sublease or terminates this Lease, Landlord may then freely sublet such space on
any terms and conditions it selects. If Landlord shall fail to give notice of
election to sublet the space or to terminate this Lease within the applicable
time limit, Tenant may sublet such space
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to the third party at a rent and upon such terms and conditions not more
favorable to such third party than the Third Party Terms as contained in the
writing submitted by Tenant to Landlord as aforesaid, provided however that any
such sublease shall nonetheless be subject to the prior written consent of
Landlord in accordance with the provisions of this Paragraph 25. In the event
that Tenant requests Landlord to consent to a sublease for a portion of the
Demised Premises which comprises at least ten thousand (10,000) square feet, or
of all of the Demised Premises, or of an assignment of this Lease, Landlord
shall approve, deny or provide Tenant with comments with respect to the proposed
sublease or assignment and proposed subtenant or assignee, as applicable, within
fifteen (15) business days following the date on which Tenant provides Landlord
with a copy of the proposed sublease or assignment document, a copy of the
proposed subtenant's or assignee's, as applicable, then current financial
statement and a description of its business activities, and such other
information as Landlord may reasonably require.
(c) If Tenant subleases all or part of the Demised Premises or
assigns this Lease at a rent (or other charges) in excess of the sum of (i) the
Rent payable to Landlord hereunder plus (ii) all reasonable expenses actually
incurred by Tenant in connection with such subleasing or assignment for
brokerage commissions, attorneys' fees (including, but not limited to, those
payable pursuant to Paragraph 25.3 hereof), advertising and marketing expenses,
moving allowances, the administrative fee payable to Landlord pursuant to
Paragraph 25.3 hereof and improvement allowances in connection with such
sublease or assignment, Landlord shall be entitled to receive fifty percent
(50%) of such excess, whether such excess is paid in the form of increased rent,
a lump sum or any other form. Landlord, upon reasonable prior notice but not
more often than twice per year, shall have the right to inspect Tenant's books
and records with respect to any subleased space. If an audit reveals an
underpayment to Landlord which is agreed to by Tenant or which is confirmed by a
court of competent jurisdiction, Tenant shall, within thirty (30) days, pay
Landlord the amount necessary to satisfy such deficiency. If any audit reveals
an error of more than five percent (5%) of the total rent payable to Tenant from
any subtenant which is agreed to by Tenant or which is confirmed by a court of
competent jurisdiction, then Tenant shall promptly pay all reasonable costs and
expenses of the audit.
(d) In the event that Landlord consents to a proposed sublease
or assignment by Tenant, Landlord shall have the right to require Tenant to use
Landlord's form of sublease or assignment document, as the case may be, to
document such transaction, provided the same contains commercially reasonable
terms and conditions.
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(e) In the event that Landlord consents to a proposed sublease
by Tenant, Landlord shall make available to such subtenant the services which
are available to Tenant with respect to the Demised Premises, but such subtenant
shall have no privity with Landlord and no right to proceed against Landlord
directly in the event of any failure or interruption of such services; rather,
in the event of any such failure or interruption, subtenant's sole right shall
be to request that Tenant pursue such rights as Tenant may have under this Lease
with respect to any such failure or interruption of services.
25.3 COSTS. Tenant agrees to pay to Landlord as Additional Rent
hereunder an administrative fee in the amount of One Thousand Five Hundred
Dollars ($1,500), plus reasonable attorneys' fees incurred by Landlord, in
connection with any request by Tenant for Landlord to give its consent to any
assignment, transfer, mortgage, encumbrance, or subletting by Tenant.
26. SIGNS.
No sign, advertisement or notice shall be affixed or displayed on the
windows or exterior walls of the Demised Premises or on any public area of the
Building, except the directories and the office doors, and then only in such
places, numbers, size, colors, formats and styles, and with such method of
installation, as are approved by Landlord in its sole and absolute discretion
and which conform to all applicable laws and/or ordinances. Landlord shall, at
all times, have the right to remove any sign, advertisement or notice, which is
placed without Landlord's prior written approval. Tenant shall be liable for any
and all expenses incurred by Landlord in connection with such removal.
Provided that (i) Tenant is leasing the entire two (2) floors of the
Building which comprise the Demised Premises and (ii) Tenant (and not any
subtenant or assignee of Tenant) is occupying at least fifty percent (50%) in
the aggregate of the rentable area of such two (2) floors, Tenant shall have the
right to display its sign on the facade of the Building at street level in the
location set forth on Exhibit F attached hereto and made a part hereof, which
sign shall be not more than twelve inches (12") in height and not more than
fourteen inches (14") in width (the "Approved Exterior Sign"). Tenant shall
submit to Landlord Tenant's Plans and Specifications for the Approved Exterior
Sign, which Plans and Specifications (including, but not limited to, the
materials, design, color and method of fabrication of the Approved Exterior
Sign) shall be subject to Landlord's prior written approval, in Landlord's sole
and absolute discretion. Tenant shall be responsible for the installation,
maintenance, repair and replacement of such Approved Exterior Sign and shall
bear all costs
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thereof. At all times during the Term that the Approved Exterior Sign is
displayed on the Building, Tenant shall ensure that the Approved Exterior Sign
complies with all applicable laws and governmental regulations and shall
maintain such Approved Exterior Sign in compliance with the requirements of this
Lease.
27. RULES AND REGULATIONS.
Tenant shall comply with the rules and regulations set forth in
Exhibit C attached hereto and with the Contractors Rules and Regulations set
forth in Exhibit G attached hereto and with any additions thereto and
modifications thereof adopted from time to time by Landlord which are generally
applicable to all office tenants in the Building, and of which Tenant is
notified, and each such rule or regulation shall be deemed to be a covenant of
this Lease to be performed and observed by Tenant. Landlord shall use reasonable
efforts to avoid discrimination among tenants in its enforcement of the rules
and regulations. Notwithstanding anything to the contrary in this Lease, in the
event of a conflict between the terms of this Lease and the Rules and
Regulations set forth in Exhibit C hereto, the terms of this Lease shall be
controlling.
28. LANDLORD ACCESS.
Landlord may enter the Demised Premises upon reasonable prior notice
to Tenant, except in case of any emergency and at reasonable hours (i) to
exhibit the same to prospective purchasers, mortgagees or, during the last
twelve (12) months of the Term, prospective tenants, (ii) to inspect the Demised
Premises to see that Tenant is complying with all its obligations hereunder,
(iii) to make repairs required of Landlord under and in accordance with the
terms hereof or (iv) to make repairs to any adjoining property of Landlord or
any entity affiliated with Landlord.
In its exercise of rights pursuant to this Paragraph 28, (i) Landlord
covenants to use all reasonable and diligent efforts to minimize interference
with Tenant's business operations in the Demised Premises during any such
entries, and (ii) Landlord shall be responsible for all damages to the Demised
Premises, Tenant's Personal Property or the Building caused by the negligence or
willful misconduct of Landlord or its employees, agents or contractors during
such entries for which Tenant is not insured or required to be insured under
this Lease.
29. SUBORDINATION.
29.1 AUTOMATIC SUBORDINATION. This Lease is subject and subordinate to
the lien of any and all mortgages (which term "mortgages" shall include deeds of
trust and similar security instruments) and ground or other underlying leases
which may now or
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hereafter encumber or otherwise affect the Land, the Building, or both, as well
as the obligation to pay any and all renewals, extensions, modifications,
recastings or refinancing thereof; provided, however, that in the event the
mortgagee under any such mortgage, or ground lessor under any such ground lease,
shall require this Lease to be superior and paramount to such mortgage or ground
lease, Tenant agrees to execute and deliver any documents required for such
purpose within five (5) business days after delivery of such documents to
Tenant.
29.2 INSTRUMENTS OF SUBORDINATION. This paragraph shall be
self-operative and no further instruments of subordination need be required by
any mortgagee, trustee or Ground Lessor. Nevertheless, if requested by Landlord,
Tenant shall promptly execute any certificate or other document specified by
Landlord in confirmation of this subordination. Tenant agrees that, if any
proceedings are brought for the foreclosure of any such mortgage, Tenant, if
requested to do so by the purchaser at the foreclosure sale, shall attorn to the
purchaser, shall recognize the purchaser as Landlord under this Lease, and shall
make all payments required hereunder to such new Landlord without deduction or
setoff. Tenant waives the provisions of any law or regulation, now or hereafter
in effect, which may give or purport to give Tenant any right to terminate or
otherwise adversely affect this Lease or the obligations of Tenant hereunder in
the event that any such foreclosure or termination or other proceeding is
prosecuted or completed. Landlord shall (a) obtain from the current mortgagee of
the Building and the Land (the "Current Mortgagee"), within thirty (30) days
from the date of Landlord's execution of this Lease, a non-disturbance agreement
for the benefit of Tenant in the Current Mortgagee's then current form,(b)
obtain from the first future mortgagee of the Building and the Land following
the Current Mortgagee (such first future mortgagee being hereinafter referred to
as the "First Subsequent Mortgagee"), within thirty (30) days following the date
of recordation of a mortgage or deed of trust pursuant to which such First
Subsequent Mortgagee is the mortgagee or beneficiary, a non-disturbance
agreement for the benefit of Tenant in such First Subsequent Mortgagee's then
current form; provided, however, that for this obligation of Landlord to apply,
Tenant's net worth and creditworthiness at the time of recordation of the
mortgage or deed of trust for the benefit of the First Subsequent Mortgagee must
both be at least equal to the net worth and creditworthiness, respectively, of
Tenant on the date of Tenant's execution of this Lease, and (c) use commercially
reasonable efforts to obtain from any future mortgagee or ground lessor of the
Building and the Land (other than the First Subsequent Mortgagee) a
non-disturbance agreement for the benefit of Tenant in such future mortgagee's
or ground lessor's, as the case may be, then current form [or, if Landlord is
not obligated to obtain a non-disturbance agreement from such First Subsequent
Mortgagee pursuant
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to the immediately preceding clause (b), then Landlord shall nevertheless use
commercially reasonable efforts to obtain from such First Subsequent Mortgagee a
non-disturbance agreement for the benefit of Tenant in such First Subsequent
Mortgagee's usual form]; provided, however, that (i) notwithstanding any other
provision of this Paragraph 29, this Lease shall not be subordinate to the deed
of trust for the benefit of the Current Mortgagee or a deed of trust or
mortgage, as applicable, for the benefit of the First Subsequent Mortgagee in
the event that Landlord is required by Paragraph 29.2(b) to obtain a
non-disturbance agreement from such First Subsequent Mortgagee, unless Landlord
obtains from the Current Mortgagee or First Subsequent Mortgagee, as applicable,
a non-disturbance agreement in the then-current form of such Current Mortgagee
or First Subsequent Mortgagee, as applicable, (ii) in the event that Landlord
does not obtain a non-disturbance agreement which it is obligated to obtain
pursuant to Paragraph 29.2(a) hereof or Paragraph 29.2(b) hereof, as applicable,
then Tenant's sole remedy shall be that this Lease shall not be subject and
subordinate to the lien of the deed of trust or mortgage for the benefit of the
Current Mortgagee or First Subsequent Mortgagee, as applicable, and Landlord
shall have no liability to Tenant on account of Landlord's failure to obtain a
non-disturbance agreement, (iii) Tenant shall pay all costs actually incurred by
Landlord which are imposed by the Current Mortgagee or any future mortgagee or
ground lessor, as the case may be [other than the First Subsequent Mortgagee, if
Landlord is required by Paragraph 29.2(b) hereof to obtain a non-disturbance
agreement from such First subsequent Mortgagee], with respect to such
non-disturbance agreement and (iv) in the event that Landlord does not obtain
any such non-disturbance agreement from any future mortgagee or ground lessor,
as the case may be, this Lease shall be and remain subject and subordinate to
the lien of said mortgage or ground lease, as the case may be, and to any and
all renewals, extensions, modifications, recastings and refinancings thereof.
30. ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS.
30.1 ESTOPPEL CERTIFICATE. Tenant shall, without charge, at any time
and from time to time, within five (5) business days of Landlord's request or
within five (5) business days of the request of any ground lessor, if any, the
holder of any indebtedness secured by the Land, the Building, or both, any
purchaser of the Land, the Building, or both, or any person designated by
Landlord, execute, acknowledge and deliver to such requesting party a written
estoppel certificate certifying, as of the date of such estoppel certificate,
the following: (a) whether or not Tenant is in possession of the Demised
Premises; (b) whether or not this Lease is unmodified and in full force and
effect (or if there has been a modification, that the Lease is in full force and
effect as modified and setting forth such
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modifications); (c) whether or not the Term has commenced and the full rental is
now accruing; (d) the amounts of Monthly Base Rent and Additional Rent currently
due and payable by Tenant; (e) whether or not Tenant has accepted possession of
the Demised Premises and is currently operating its business therein; (f)
whether or not any improvements required by the Lease have been made by Landlord
to the satisfaction of Tenant; (g) whether or not there are then existing any
setoffs, charges, liens, claims or defenses against the enforcement of any right
hereunder, including Monthly Base Rent or Additional Rent (and, if so,
specifying the same in detail); (h) that no Monthly Base Rent (except the first
installment thereof) has been paid more than thirty (30) days in advance of its
due date; (i) that Tenant has no knowledge of any then uncured defaults by
Landlord of its obligations under this Lease (or, if Tenant has such knowledge,
specifying the same in detail); (j) that Tenant is not in default; (k) that the
address to which notices to Tenant should be sent is as set forth in the Lease
(or, if not, specifying the correct address); and (l) any other certifications
reasonably requested by Landlord. Any statement delivered pursuant to this
paragraph may be relied on by an owner of the Building, any prospective
purchaser of the Building, any ground lessor or prospective ground lessor, any
mortgagee or prospective mortgagee of the Building, the Land or both or of
Landlord's interest therein, or any prospective assignee of such mortgagee.
Tenant hereby agrees and acknowledges that any statement delivered to Tenant by
Landlord pursuant to this Paragraph 30.1 shall be deemed to be true and correct
if not returned to Landlord within five (5) business days following its initial
receipt by Tenant.
30.2 FINANCIAL STATEMENTS. Tenant covenants and agrees that at any
time, within thirty (30) days after notice and demand by Landlord, Tenant will
furnish to Landlord certified financial statements as of the end of Tenant's
last calendar year and Tenant consents to the delivery of same by Landlord to
lenders or prospective lenders or purchasers of all or part of the Building, the
Land or both or of any interest therein.
31. HOLD-OVER.
If Tenant shall not immediately surrender the Demised Premises on the
day after the expiration or termination of the Term, then Tenant shall, by
virtue of this Lease, become a Tenant at sufferance at a monthly rental equal to
(i) for each of the first three (3) months following the expiration or
termination of the Term, one hundred fifty percent (150%) of the Monthly Base
Rent due under the terms of this Lease for the month preceding the expiration or
termination of the Term, together with all
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Additional Rent payable under this Lease, and (ii) thereafter, two hundred
percent (200%) of the Monthly Base Rent due under the terms of this Lease for
the month preceding the expiration or termination of the Term, together with all
Additional Rent payable under this Lease. Tenant, as a tenant at sufferance,
shall be subject to all of the conditions and covenants of this Lease (including
payment of Additional Rent) as though the tenancy had originally been a monthly
tenancy. During any holdover period each party shall give to the other at least
thirty (30) days prior written notice to quit the Demised Premises, except in
the event of a nonpayment of Monthly Base Rent or of Additional Rent when due,
or of the breach of any other covenant by Tenant, in either of which events
Tenant shall not be entitled to any notice to quit, the usual thirty (30) days
notice to quit being expressly waived; provided, however, that in the event that
Tenant shall hold over after expiration of the Term, then at any time prior to
the acceptance, Landlord, at its election or option, may re-enter and take
possession of the Demised Premises forthwith, without process, or by any legal
action or process in force in the jurisdiction in which the Building is located.
32. QUIET ENJOYMENT
Landlord covenants that it has the right to make this Lease and that,
if Tenant pays all of the Monthly Base Rent and the Additional Rent, performs
all of its obligations provided for hereunder and observes all of the other
provisions hereof, Tenant shall have the right, during the Term and subject to
the provisions of this Lease, to quietly occupy and enjoy the Demised Premises
without hindrance by Landlord or its successors and assigns, subject to the
provisions of this Lease, including, without limitation, Paragraphs 29 and 31
hereof.
33. CERTAIN RIGHTS RESERVED BY LANDLORD
Landlord shall have the following rights, exercisable without notice
and without liability to Tenant for damage or injury to property, person or
business and without effecting any eviction, constructive or actual, or
disturbance of Tenant's use or possession of the Demised Premises or giving rise
to any claim for setoff or abatement of Monthly Base Rent or Additional Rent:
(a) To change the Building's name or street address upon ninety (90)
days' written notice to Tenant; provided, however, that in the event that such
change of the Building's name or address is not mandated by any governmental
agency, Landlord shall reimburse Tenant for the reasonable costs of a
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quantity of Tenant's new stationery, business cards and marketing materials
(collectively, "Tenant's Stationery") equal to the amount of Tenant's Stationery
then on hand at the time of such change of the Building's name or address by
Landlord;
(b) To affix, maintain and remove any and all signs on the exterior
and interior of the Building, except that Landlord shall not remove any of
Tenant's signage which is permitted by Paragraph 26 hereof so long as the same
is installed, maintained and repaired in accordance with the requirements of
this Lease and all applicable laws and governmental regulations.
(c) To designate and approve, prior to installation, all window
shades, blinds, drapes, awnings, window ventilators, lighting and other similar
equipment to be installed by Tenant that may be visible from the exterior of the
Demised Premises or the Building.
(d) To decorate or to make repairs, alterations, additions or
improvements, whether structural or otherwise, in and about the Building, or any
part thereof, including, but not limited to, the installation of a sprinkler
system and sprinkler heads, and for such purposes to enter the Demised Premises
and, during the continuance of any such work, to temporarily close doors, entry
ways, common or public spaces and corridors in the Building and to interrupt or
temporarily suspend Building services and facilities, all without affecting any
of Tenant's obligations hereunder, so long as the Demised Premises are
reasonably accessible.
(e) To grant to anyone the exclusive right to conduct any business or
render any service in the Building, provided Tenant is not thereby excluded from
uses expressly permitted herein.
(f) To alter, relocate, reconfigure and reduce the Common Areas of
the Building, as long as the Demised Premises remain reasonably accessible,
except that (i) there shall be no reduction in the size of the Conference Center
(as hereinafter defined in Paragraph 56) other than in a DE MINIMIS amount and
(ii) the Fitness Facility shall not be reduced below the minimum size provided
for in Paragraph 21.7 hereof.
(g) To alter, relocate, reconfigure, reduce and withdraw the Common
Areas located outside the Building, including parking and access roads, as long
as the Demised Premises remain reasonably accessible (provided that Tenant's
right to the
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Parking Spaces set forth in Paragraph 1.A.11, above shall remain unmodified).
(h) To erect, use and maintain pipes and conduits in and through the
Demised Premises.
(i) To operate and maintain, or cause to be operated and maintained,
the Common Areas in a manner deemed by Landlord to be reasonable and appropriate
and in the best interest of the Building, but all Common Areas shall be subject
to the exclusive control and management of Landlord.
Notwithstanding the foregoing, (A) Landlord shall not make any change
which would otherwise be permitted by this Paragraph 33 if such change, upon
completion of the work to make such change, would materially and adversely
affect Tenant's use and enjoyment of the Demised Premises, and (B) provided that
Tenant is leasing all of the Demised Premises and has not subleased more than
twenty percent (20%) of the rentable floor area comprising the Demised Premises,
Landlord shall not change the name of the Building to the name of any bank,
savings and loan or other financial institution. In addition, in exercising its
rights under this Section 33, (i) Landlord shall perform any such work in such a
manner as to minimize disruption of Tenant's business operations, (ii) no such
work shall result in the permanent reduction of the area or reconfiguration of
the Demised Premises other than on a de minimis basis (both as to the area which
is affected and the effect of such permanent reduction), and (iii) Landlord
shall, at its expense, repair any damage which it causes to the Demised Premises
in Landlord's exercise of its rights under this Paragraph 33.
34. LANDLORD'S SUCCESSORS
Landlord (and any successor or affiliate of Landlord) may freely sell,
assign or otherwise transfer all or any portion of its interest under this Lease
or in the Demised Premises or the Building or the Land, and in the event of any
such sale, assignment or other transfer, the party originally executing this
Lease as Landlord, and any successor or affiliate of such party, shall without
further agreement between Landlord and Tenant or between Landlord and/or Tenant
and the person who is the purchaser, assignee or other transferee of Landlord,
be relieved of any and all of its obligations under this Lease (except that the
transferor shall remain liable for that portion of any overpayments of estimated
increases in Tenant's Percentage of Increased Operating Expenses, Tenant's
Percentage of Increased Char Service Costs and Tenant's Percentage of Increased
Real
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Estate Taxes made by Tenant prior to the transfer), and Tenant shall
thereafter be bound to such purchaser, assignee or other transferee, with the
same effect as though the latter had been the original Landlord hereunder,
provided that the purchaser, assignee or other transferee assumes and agrees to
carry out all the obligations of Landlord hereunder arising after the date of
such sale, assignment or transfer; further provided, that the foregoing
limitation shall not be interpreted to preclude Tenant's right to pursue a claim
for fraudulent conveyance of Landlord's assets in the amount of any final,
non-appealable judgment which (i) Tenant holds against Landlord at the time of
such sale, assignment or transfer, or (ii)Tenant obtains in any litigation
initiated by Tenant against Landlord which is pending in a court of competent
jurisdiction at the time of such sale, assignment or transfer.
35. RELOCATION OF TENANT
Landlord reserves the right, which shall be exercisable on not more
than one (1) occasion, either at Landlord's sole option at any time prior to
Tenant's possession of the Demised Premises or at any time during the Term, to
relocate all or any full floor of the Demised Premises to any other full floor
space(s) within the Building which is or are contiguous to each other or to the
Demised Premises, as Landlord deems necessary or advisable; provided, however,
that Landlord's relocation of the Demised Premises shall occur, if at all, only
in accordance with the following terms and conditions: (i) such relocation may
only occur to a floor or floors in the Building which is or are higher than the
sixth (6th) and seventh (7th) floors and must result in the two (2) floors
comprising the relocated Demised Premises being contiguous to each other; (ii)
Tenant's option to lease Available Space (as hereinafter defined in Paragraph
58.1 hereof) shall be automatically recast to apply only to a floor which is
contiguous to the relocated Demised Premises; and (iii) any such relocation
shall be at Landlord's sole cost and expense [including, if the relocation is
after the completion of Tenant's Work, the costs of moving Tenant's personal
property, the costs of making such improvements and alterations to the
relocation space as are necessary to cause the appearance of the relocation
space to be as substantially similar to the Demised Premises originally
described herein as reasonably practicable (which costs shall include, but not
be limited to, the cost of relocating the Internal Stairwell to the relocation
space), the costs of moving Tenant's telephone system and the cost of reprinting
Tenant's stationery, and if the relocation is prior to the completion of
Tenant's Work, then such costs and expenses shall include all of the
aforementioned costs (except for moving
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of Tenant's Personal Property), as well as all architectural and engineering
fees incurred by Tenant with respect to the redesign of Tenant's Work in the
relocated Demised Premises]; further provided, that if the relocation is
subsequent to Landlord's delivery of the Demised Premises to Tenant in Shell
Condition, and as a result of such relocation at such time Tenant incurs the
obligation to pay any holdover premium or penalty to the Eye Street Landlord
pursuant to the Eye Street lease which is in addition to such holdover premium
or penalty as Tenant would have incurred in the absence of such relocation (such
additional portion being hereafter referred to as the "Additional Holdover
Payment"), then Landlord shall pay to Tenant such Additional Holdover Payment as
is directly caused by the relocation. Landlord shall provide written notice to
Tenant of relocation not less than ninety (90) days prior to the relocation, if
the relocation is prior to the completion of Tenant's Work, or, if the
relocation is subsequent to the completion of Tenant's Work, then Landlord shall
provide written notice to Tenant of relocation not less than one hundred twenty
(120) days prior to the relocation. Tenant agrees to execute, upon Landlord's
request, an Agreement and Modification of Lease documenting the change in
location. All other terms and provisions of the Lease shall remain in full force
and effect.
In the event Tenant fails or refuses to relocate at the end of the
aforesaid 90-day period, Landlord may terminate this Lease by giving ten (10)
days' written notice of termination to Tenant.
36. MODIFICATIONS TO LEASE
In the event any of Landlord's insurance carriers or any Mortgagee
requests modifications to this Lease, Tenant shall execute a written amendment
incorporating such requested modifications within ten (10) days after the same
has been submitted to Tenant by Landlord, provided that such modifications (i)
do not materially adversely affect Tenant's use of the Premises as herein
permitted, (ii) increase the rentals and other sums payable by Tenant hereunder,
(iii) do not affect any other economic terms of this Lease (including, but not
limited to, the Tenant Allowance), (iv) do not affect the area, configuration or
location of the Demised Premises, (v) do not affect the Term of this Lease
(including the Renewal Options, as hereinafter defined), (vi) do not affect
Tenant's right to lease Available Space(as hereinafter defined),(vii) do not
affect Tenant's right to receive a non-disturbance agreement from the Current
Mortgagee and the First Subsequent Mortgagee, if applicable, upon the terms and
conditions set forth in Paragraph 29.2 hereof or Landlord's
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obligation to use commercially reasonable efforts to seek a non-disturbance
agreement from any other future mortgagee upon the terms and conditions set
forth in Paragraph 29.2 hereof, and (viii) do not materially adversely affect
any of Tenant's other rights or obligations under this Lease. In the event
Tenant refuses or fails to execute such amendment within such 30-day period,
Landlord shall have the right, at its sole option, in addition to Landlord's
other remedies for an Event of Default, to terminate and cancel this Lease by
written notice to Tenant specifying the date on which this Lease will terminate.
From and after said termination date, both Landlord and Tenant shall be relieved
of any and all further obligations hereunder, except liabilities arising prior
to the date of termination.
37. ATTORNEYS' FEES
In the event of any default hereunder, Tenant shall pay to Landlord
all reasonable attorneys' fees incurred by Landlord in connection with such
default or the enforcement of Landlord's rights or remedies arising in
connection therewith, whether or not this Lease is terminated and whether or not
Landlord institutes any lawsuit against Tenant as a result of such default. In
the event that either party initiates litigation against the other party, the
prevailing party in such litigation, based upon a judgment by a court of
competent jurisdiction, shall be entitled to recover from the non-prevailing
party the prevailing party's court costs and reasonable attorneys' fees in
connection with such litigation; provided, however, that in the event that any
such litigation is resolved without a final determination by a court in a manner
which results in the non-initiating party paying substantially all of the money
which was sought by the initiating party in such litigation or taking
substantially the same action as was sought by the initiating party in such
litigation, then, in either of such cases, the non-initiating party shall pay to
the initiating party the initiating party's court costs and reasonable
attorneys' fees in connection with such litigation.
38. NOTICES
All notices required or desired to be given by either party to the
other shall be addressed and sent, by registered or certified mail, return
receipt requested, first-class postage prepaid, or by personal delivery, or
overnight mail or courier that provides written notice of delivery to the
Landlord's Address, or Tenant's Legal Notice Address, as the case may be. Either
party may, by written notice to the other, designate a new address to which such
notices shall be directed. Such
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communications, if sent by overnight courier, shall be deemed to have been given
on the next business day, or if sent by registered or certified mail, shall be
deemed to have been given two (2) business days after the date of mailing, and
if sent by personal delivery, shall be deemed to have been given on the date the
same was received or rejected. If any mortgagee shall notify Tenant that it is
the holder of a mortgage affecting the Demised Premises and requires copies of
notices, no notice, request or demand thereafter sent by Tenant to Landlord
shall be effective until a copy of same shall be sent to such mortgagee in the
manner prescribed in this Section at such address as such mortgagee shall
designate.
39. REMEDIES CUMULATIVE; NO WAIVER
All rights and remedies given herein and/or by law or in equity to
Landlord are separate, distinct and cumulative, and none of them, whether
exercised by Landlord or not, shall be deemed to be in exclusion of any other.
No failure of Landlord to exercise any power given Landlord hereunder, and no
custom or practice of the parties at variance with the terms hereof shall
constitute a waiver of Landlord's right to demand exact compliance with the
terms hereof. Receipt by Landlord of any Monthly Base Rent or Additional Rent
with knowledge of the breach of any provisions hereof shall not constitute a
waiver of such breach and no waiver by Landlord of any provision hereof shall be
deemed to have been made unless made in writing.
40. FINAL AGREEMENT
This Lease, including all Addenda and Exhibits hereto, is intended by
the parties as the final expression of their agreement and as a complete and
exclusive statement of the terms between the parties having been incorporated
herein. No course of prior dealings between the parties or their affiliates
shall be relevant or admissible to determine the meaning of any of the terms of
this Lease. No representations, understandings or agreements have been made or
relied upon in the making of this Lease other than those specifically set forth
herein. This Lease can only be modified by a writing signed by all of the
parties hereto or their duly authorized agents.
41. WAIVER OF JURY TRIAL
Landlord and Tenant each hereby waives all right to trial by jury in
any claim, action, proceeding or counterclaim by either party against the other
on any matters arising out of or in any way connected with this Lease, the
relationship of
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Landlord and Tenant, or Tenant's use or occupancy of the Demised Premises.
42. FORCE MAJEURE
Landlord shall not be required to perform any of its obligations under
this Lease, nor, except as specifically provided herein, be liable for loss or
damage for failure to do so, nor shall Tenant thereby be released from any of
its obligations under this Lease, where such failure arises from or through any
cause beyond the reasonable control of Landlord.
Tenant shall not be required to perform any of its non-monetary
obligations under this Lease, nor shall Tenant be liable for loss or damage for
failure to do so, nor shall Tenant thereby be released from any of its
obligations under this Lease, where such failure arises from or through any
cause beyond the reasonable control of Landlord, but in no event shall this
Paragraph 42 be interpreted to relieve Tenant of any of its obligations to pay
Rent in the amounts and when due under this Lease.
43. GENDER; ASSIGNS AND SUCCESSORS; JOINT AND SEVERAL LIABILITY
Feminine or neuter pronouns may be substituted for those of the
masculine form, and the plural may be substituted for the singular number, in
this Lease where the context may require. The term "Landlord" means only the
owner of the Landlord's interest in this Lease; and, in the event of the sale,
assignment or transfer by such owner of the Landlord's interest in this Lease,
such owner shall thereupon be released and discharged of all covenants and
obligations of Landlord thereafter accruing, except that the transferor shall
remain liable for that portion of any overpayments of estimated increases in
Tenant's Percentage of Increased Operating Expenses, Tenant's Percentage of
Increased Char Service Costs and Tenant's Percentage of Increased Real Estate
Taxes made by Tenant prior to the transfer. If two or more individuals,
corporations, partnerships or other business associations (or any combination of
two or more thereof) shall sign this Lease as Tenant, the liability of each such
individual, corporation, partnership or other business association to pay the
Rent and perform all other obligations hereunder shall be deemed to be joint and
several and all notices, payments and agreements given or made by, with or to
any one of such individuals, corporations, partnerships or other business
associations shall be deemed to have been given or made by, with or to all of
them. In like manner, if Tenant shall be a
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partnership or other business association, the members of which are, by virtue
of statute or federal law, subject to personal liability, the liability of each
such member shall be joint and several.
44. SEVERABILITY
If any term, covenant or condition of this Lease or the application
thereof to any person or circumstance shall be held invalid or unenforceable,
the remainder of this Lease or the application of such term, covenant or
condition to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby and each term, covenant
or condition of this Lease shall be valid and enforced to the fullest extent
permitted by law.
45. TIME IS OF THE ESSENCE [Intentionally omitted.]
46. INDEMNITIES
46.1 TENANT'S INDEMNITY. Subject to Paragraph 23, Tenant agrees it
will defend all actions against Landlord (including any partners, officers,
directors, employees, agents, or mortgagees) and that it will indemnify to the
fullest extent permitted by law and save Landlord harmless from and against any
and all liabilities, losses, damages, causes of action, suits, claims, demands,
judgments, costs and expenses of any kind (including court costs and reasonable
attorneys' fees) (except consequential damages) relating to or arising from or
in connection with (i) Tenant's possession, use, occupancy, management, repair,
maintenance or control of the Demised Premises or any portion thereof; (ii) any
act or omission of Tenant or Tenant's agents, sublessees, contractors, employees
or, within the Demised Premises, invitees; (iii) any default, violation or
injury to person or property or loss of life sustained in or about the Demised
Premises unless due to the negligence or willful misconduct of Landlord, its
agents, employees or contractors; (iv) any violation or breach of this Lease by
Tenant; (v) any other matter arising from Tenant's occupancy or use of the
Demised Premises or any act or omission of Tenant, its agents, sublessees,
contractors, employees or, within the Demised Premises, invitees; (vi) any
discrimination by Tenant, or any of its servants, agents or employees, against
any employee of Tenant, any applicant for employment with Tenant, or any other
person, because of race, color, religion, sex, national origin or any other
classification protected by law; and (vii) any sexual harassment of any person
by Tenant or any of its servants, agents or employees.
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46.2 LANDLORD'S INDEMNITY Subject to Paragraph 23, Landlord hereby
agrees to indemnify and defend Tenant (including any officers, directors, agents
or employees) and hold Tenant harmless from and against any cost, loss, cause of
action, suit, claim, demand, judgment, damage, liability or expense incurred by
Tenant (including reasonable attorneys' fees), except for consequential damages,
which results from any willful misconduct or negligence of Landlord or its
agents, employees or contractors, or from any violation or breach of this Lease
by Landlord.
47. LIMITATION ON LANDLORD LIABILITY
Notwithstanding any provision to the contrary contained herein, Tenant
shall look solely to the estate and property of Landlord in and to the Land and
the Building in the event of any claim against Landlord arising out of or in
connection with this Lease, the relationship of Landlord and Tenant, or Tenant's
use of the Demised Premises, and Tenant agrees that the liability of Landlord
arising out of or in connection with this Lease, the relationship of Landlord
and Tenant, or Tenant's use of the Demised Premises, shall be limited to such
estate and property of Landlord in and to the Land and the Building; provided,
however, that the foregoing limitation shall not be interpreted to preclude
Tenant's right to pursue a claim for fraudulent conveyance of Landlord's assets
in the amount of any final, non-appealable judgment which (i) Tenant holds
against Landlord at the time of a sale, assignment or other transfer of
Landlord's interest in the Demised Premises, the Building or the Land, or
(ii)Tenant obtains in any litigation initiated by Tenant against Landlord which
is pending in a court of competent jurisdiction at the time of such sale,
assignment or other transfer of Landlord's interest in the Demised Premises, the
Building or the Land. No properties or assets of Landlord other than the estate
and property of Landlord in the Land and the Building (subject to the provision
in the immediately preceding sentence) and no property owned by any partner or
owner of Landlord shall be subject to levy, execution or other enforcement
proceedings or other judicial process for the satisfaction of any judgment or
for the satisfaction of any other remedy of Tenant arising out of or in
connection with this Lease, the relationship of Landlord and Tenant or Tenant's
use of the Demised Premises.
48. NO PARTNERSHIP
Nothing contained in this Lease shall be deemed or construed to create
a partnership or joint venture between Landlord and Tenant or create any other
relationship between the parties hereto other than that of Landlord and Tenant.
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49. BROKERAGE
Landlord and Tenant each represent that they have had no dealings with
any real estate broker, finder or other person, with respect to this Lease in
any manner, except the Broker. Each party agrees to indemnify and hold harmless
the other against and from any claim for brokerage commissions or other fees and
all costs, expenses and liabilities in connection therewith, including, without
limitation, reasonable attorneys' fees and expenses, arising out of any dealings
which the indemnifying party had with any broker, finder or other persons other
than the Broker. Landlord shall pay any commissions or fees that are payable to
the Broker with respect to this Lease in accordance with the provisions of a
separate commission contract.
50. TENANT'S AUTHORITY
If Tenant is a corporation or if Tenant is a partnership, it shall,
concurrently with the signing of this Lease, at Landlord's option, furnish to
Landlord certified copies of the resolutions of its board of directors (or of
the executive committee of its board of directors) or partnership consent
authorizing Tenant to enter into this Lease. Moreover, Tenant hereby represents
and warrants that the individual executing this Lease is duly authorized to
execute and deliver this Lease and that Tenant is a duly organized corporation
or partnership under the laws of the state of its incorporation or formation, is
qualified to do business in the jurisdiction in which the Building is located,
is in good standing under the laws of the state of its incorporation or
formation and the laws of the jurisdiction in which the Building is located, and
has the power and authority to enter into this Lease, and that all corporate or
partnership action requisite to authorize Tenant to enter into this Lease has
been duly taken.
51. APPLICABLE LAW
This Lease shall be construed under the laws of the jurisdiction in
which the Building is located.
52. PARKING
At the commencement of the Term, Tenant shall have the right to obtain
parking space contracts in the Building garage for the Parking Spaces. Tenant
shall pay to the garage operator the market rate for each such Parking Space, as
determined from time to time by the garage operator; provided, however, that
said market rate shall not be changed by the garage operator more than once each
calendar year for any rate category such as monthly spaces or reserved spaces.
No specific parking spaces will be designated for use by Tenant. Tenant, its
agents, servants, invitees, employees, licensees, subtenants, assignees,
customers, clients, guests and
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visitors shall observe reasonable safety precautions in the use of the garage or
parking lot and shall at all times abide by all rules and regulations
promulgated by Landlord or the garage operator governing use of the garage or
parking lot. Landlord does not assume any responsibility for, and shall not be
held liable for, any damage or loss to any automobile parked in the garage or
parking lot, or to any personal property located therein, or for any injury
sustained by any person in or about the garage or parking lot; provided, however
that this sentence shall not be interpreted to release Landlord from any
liability which it may otherwise have under this Lease.
53. HAZARDOUS MATERIALS
53.1 DEFINITION. As used in this Lease, the term "Hazardous Material"
means any flammable items, explosives, radioactive materials, hazardous or toxic
substances, material or waste or related materials, including any substances
defined as or included in the definition of "hazardous substances", "hazardous
wastes", "infectious wastes", "hazardous materials" or "toxic substances" now or
subsequently regulated under any federal, state or local laws, regulations or
ordinances including, without limitation, oil, petroleum-based products, paints,
solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia
compounds and other chemical products, asbestos, PCBs and similar compounds, and
including any different products and materials which are subsequently found to
have adverse effects on the environment or the health and safety of persons.
53.2 GENERAL PROHIBITION. Tenant shall not cause or knowingly permit
any Hazardous Material to be generated, produced, brought upon, used, stored,
treated, discharged, released, spilled or disposed of on, in, under or about the
Demised Premises, the Building, or the Land (hereinafter referred to
collectively as the "Property") by Tenant, its affiliates, agents, employees,
contractors, subtenants, assignees or invitees, except that Tenant may store and
use small quantities of normal and customary office and cleaning products in the
Demised Premises, provided that the same are handled in accordance with
applicable law and governmental regulations. Tenant shall indemnify, defend and
hold Landlord harmless from and against any and all actions (including, without
limitation, remedial or enforcement actions of any kind, administrative or
judicial proceedings, and orders or judgments arising out of or resulting
therefrom), costs, claims, damages (including without limitation, reasonable
attorneys', consultants', and experts' fees, court costs and amount paid in
settlement of any claims or actions), fines, forfeitures or other civil,
administrative or criminal penalties, injunctive or other relief (whether or not
based upon personal injury, property damage, or contamination of, or adverse
effects upon, the environment, water
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tables or natural resources), liabilities or losses arising from a breach of
this prohibition by Tenant, its affiliates, agents, employees, contractors,
subtenants, assignees or invitees.
53.3 NOTICE. In the event that Hazardous Materials are discovered
upon, in, or under the Property, and any governmental agency or entity having
jurisdiction over the Property requires the removal of such Hazardous Materials,
Tenant shall be responsible for removing those Hazardous Materials arising out
of or related to the use or occupancy of the Property by Tenant or its
affiliates, agents, employees, contractors, subtenants, assignees or invitees
but not those of its predecessors. Notwithstanding the foregoing, Tenant shall
not take any remedial action in or about the Property or any portion thereof
without first notifying Landlord of Tenant's intention to do so and affording
Landlord the opportunity to protect Landlord's interest with respect thereto.
Tenant immediately shall notify Landlord in writing of: (i) any spill, release,
discharge or disposal of any Hazardous Material in, on or under the Property or
any portion thereof; (ii) any enforcement, cleanup, removal or other
governmental or regulatory action instituted, contemplated, or threatened (if
Tenant has notice thereof) pursuant to any laws respecting Hazardous Materials;
(iii) any claim made or threatened by any person against Tenant or the Property
or any portion thereof relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from or claimed to result from any
Hazardous Materials; and (iv) any reports made to any governmental agency or
entity arising out of or in connection with any Hazardous Materials in, on under
or about or removed from the Property or any portion thereof, including any
complaints, notices, warnings, reports or asserted violations in connection
therewith. Tenant also shall supply to Landlord as promptly as possible, and in
any event within five (5) business days after Tenant first receives or sends the
same, copies of all claims, reports, complaints, notices, warnings or asserted
violations relating in any way to the Demised Premises, the Property or Tenant's
use or occupancy thereof.
53.4 LANDLORD'S OBLIGATIONS. In the event that Landlord obtains actual
knowledge of the presence of Hazardous Materials in the Demised Premises or in
any of the Common Areas of the Building which are utilized by Tenant in a
quantity and of a nature that violate any applicable governmental requirements
and that were not introduced to the Building by Tenant, Landlord shall take such
action, if any, as may be required to comply with such governmental
requirements.
53.5 SURVIVAL. The respective rights and obligations of Landlord and
Tenant under this Paragraph 53 shall survive the expiration or earlier
termination of this Lease.
54. LANDLORD'S RIGHT TO TERMINATE [Intentionally omitted.]
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55. OPTION TO EXTEND
Provided that NCB is not then in default and has not been in default
more than once during the period of the preceding two (2) years with respect to
the payment of Rent under this Lease, and there is then no uncured Event of
Default and there have not been more than two (2) Events of Default during the
period of the preceding two (2) years, with respect to any obligations of Tenant
under this Lease other than the payment of any Rent under this Lease, in each
case both at the time of exercise of the Renewal Option, as hereinafter defined,
in question, and at the date of commencement of the Renewal Period, as
hereinafter defined, in question (such date of commencement of a Renewal Period
being hereinafter referred to as a "Renewal Period Commencement Date"), and has
not then subleased more than twenty percent (20%) of the rentable area of the
Demised Premises at the time of exercise of the Renewal Option, as hereinafter
defined, in question, and at the time of the Renewal Period Commencement Date in
question, NCB shall have two (2) successive options (the "Renewal Options") to
extend the Term of the Lease for two (2) successive additional five (5) year
periods (the "Renewal Periods") after the expiration of the initial Term. Each
Renewal Option shall be exercisable only by written notice given by NCB to
Landlord not later than twelve (12) months, nor earlier than fifteen (15)
months, prior to the expiration of the initial Term, or the Renewal Period then
in effect, as the case may be. In the event that NCB does not timely exercise a
Renewal Option, said Renewal Option and all successive Renewal Options shall be
null and void and of no further force or effect, time being of the essence in
the exercise of each Renewal Option and it being acknowledged and agreed by NCB
that Landlord shall be entitled to rely on any failure by NCB to give written
notice of its exercise of its Renewal Option by the date set forth herein for
such exercise thereof.
All terms and conditions of this Lease shall be applicable during the
Renewal Period except that (i) for the first (1st) Renewal Period only, Landlord
shall make available for Tenant's refurbishment of the improvements in the
Demised Premises (including, but not limited to, modular furniture) an allowance
in an amount equal to the product of (a) Twenty Dollars ($20.00) multiplied by
(b) the then rentable square footage of the Demised Premises (the "Refurbishment
Allowance"), not more than twenty percent (20%) of which Refurbishment Allowance
may be used for items such as a telephone system, telephone and computer cabling
and wiring and other items which do not constitute refurbishment of the
improvements (including, but not limited to, modular furniture) in the Demised
Premises, (ii) the Base Year for purposes of determining Increased Operating
Expenses, Increased Char Service Costs and Increased Real Estate Taxes shall be
calendar year 2011, with
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respect to the first (1st) Renewal Period, and calendar year 2016, with respect
to the second (2nd) Renewal Period, as applicable, and Tenant's obligation to
pay such Increased Operating Expenses, Increased Char Service Costs and
Increased Real Estate Taxes for a Renewal Period shall commence on the first
anniversary of the Renewal Period Commencement Date for such Renewal Period and
(iii) the amount of Base Rent charged for each Renewal Period shall be the then
"Prevailing Market Rent", which shall be the rent for comparable office space in
comparable buildings in Washington, D.C.; provided, however, that in no event
shall the Prevailing Market Rent be less than the Base Rent payable under the
Lease during the last Lease Year of the initial Term of this Lease or of the
Renewal Period then in effect, as the case may be. The Refurbishment Allowance
shall be paid by Landlord to Tenant in a single payment by the ninetieth (90th)
day preceding the Renewal Period Commencement Date for the first (1st) Renewal
Period. Thereafter, following Tenant's completion of the Refurbishment Work,
Tenant shall furnish to Landlord(a) invoices reasonably evidencing the
Refurbishment Work, (b) receipted bills or other evidence that the aforesaid
invoices have been paid in full, and (c) waivers or releases of liens from each
of Tenant's contractors, subcontractors and suppliers in connection with the
work performed or materials supplied as part of the Refurbishment Work, as
evidenced by the aforesaid invoices. In the event that Tenant has not delivered
to Landlord the items described in clauses (a), (b) and (c) of the immediately
preceding sentence as to Refurbishment Work in an amount equal to the
Refurbishment Allowance not later than the first (1st) anniversary of the
Renewal Period Commencement Date for the first (1st) Renewal Period, Tenant
shall repay to Landlord, not later than thirty (30) days following said first
(1st) anniversary of the Renewal Period Commencement Date for the first (1st)
Renewal Period, that portion of the Refurbishment Allowance as to which Tenant
has not furnished Landlord with such evidence of Refurbishment Work having been
completed and the items described in the foregoing clauses (a), (b) and (c).
The determination of the Prevailing Market Rent shall take into
account the fact and amount of the Refurbishment Allowance; whether Landlord
will be providing Tenant with any rent abatement and whether Tenant will be
paying any annual escalations in Base Rent; whether Landlord or Tenant is paying
for services which are provided to the Demised Premises; the Base Year for
Operating Expenses, Char Service Costs and Real Estate Taxes; whether Landlord
is paying any leasing commissions and, if so, the full amount thereof; and such
other concessions as are then being offered with respect to comparable office
space in comparable buildings in Washington, D.C. If within sixty (60) days
following delivery of NCB's notice, Landlord and NCB have not mutually agreed on
the Prevailing Market Rent for the Renewal Period in question, then within ten
(10) days after the expiration of such sixty-day
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period, each party shall give written notice to the other setting forth the name
and address of a Leasing Broker (as hereinafter defined) selected by such party
who has agreed to act in such capacity, to determine the Prevailing Market Rent.
If either party shall fail to select a Leasing Broker as aforesaid, the
Prevailing Market Rent shall be determined by the Leasing Broker selected by the
other party. Each Leasing Broker shall thereupon independently make his
determination of the Prevailing Market Rent within twenty (20) days after the
appointment of the second Leasing Broker. If the two Leasing Brokers'
determinations are not the same, but the higher of such two values is not more
than one hundred five percent (105%) of the lower of them, then the Prevailing
Market Rent shall be deemed to be the average of the two values. If the higher
of such two values is more than one hundred five percent (105%) of the lower of
them, then the two Leasing Brokers shall jointly appoint a third Leasing Broker
within ten (10) days after the second of the two determinations described above
has been rendered. The third Leasing Broker shall independently make his
determination of the Prevailing Market Rent within twenty (20) days after his
appointment. The highest and the lowest determinations of value among the three
Leasing Brokers shall be disregarded and the remaining determination shall be
deemed to be the Prevailing Market Rent.
Within thirty (30) days after the Prevailing Market Rent is determined
as aforesaid, the parties shall execute an amendment to this Lease setting forth
the new Rent to be paid for the Renewal Period.
For the purposes of this Paragraph 55, "Leasing Broker" shall mean a
real estate broker licensed in the District of Columbia, who has been regularly
engaged in such capacity in the business of commercial office leasing in the
District of Columbia for at least ten (10) years immediately preceding such
person's appointment hereunder. Each party shall pay for the cost of its Leasing
Broker and one-half of the cost of the third Leasing Broker.
56. CONFERENCE CENTER
Landlord covenants to construct prior to the Lease Commencement Date
and maintain throughout the Term in the Building a conference center (the
"Conference Center") which shall be modeled after the conference center in the
Building located at 1350 Eye Street, N.W., Washington, D.C. (the "1350
Conference Center"), as such 1350 Conference Center exists on the date of
execution of this Lease, with respect to quality of finishes and furniture;
provided, however, that the Conference Center shall (i) lawfully accommodate at
least one hundred fifty (150) people, seated "theater style", in one open room,
(ii) have storage capability for foldable chairs to accommodate at least one
hundred fifty (150) people and a reasonable
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number of foldable tables, (iii) have the capability for use of audio/video
equipment, with the wiring thereof to be at Tenant's sole cost and expense, (iv)
contain conduit for telephone lines (which telephone lines shall be separately
arranged by Tenant at Tenant's sole cost and expense), and (v) contain a
built-in projection screen, all as determined by Landlord. Landlord shall
provide the set-up, break-down and cleaning of all chairs, tables and other
equipment in the Conference Center used by Tenant and shall provide maintenance
service following Tenant's use of the Conference Center, and Tenant shall
reimburse Landlord for all costs of such set-up, break-down, cleaning and
maintenance service (including, but not limited to, overtime costs incurred by
Landlord) within ten (10) business days following Landlord's issuance of an
invoice to Tenant for such costs. All costs of operation, use, maintenance,
repair and replacement of the conference center in the Building shall be
includable in Operating Expenses, except to the extent specifically excluded
therefrom pursuant to Paragraph 1.B.12. hereof or charged directly to Tenant
pursuant to the immediately preceding sentence of this Paragraph 56 or to other
tenants of the Building pursuant to similar provisions in their leases.
Landlord shall designate a representative to coordinate scheduling of
the use of the Conference Center by tenants of the Building. Priority regarding
the reservation of and use of the Conference Center shall be on a "first-come,
first-served" basis, and if available when requested, Tenant and other tenants
of the Building shall have the right to reserve the Conference Center for
monthly meetings for one (1) day per month for the following six (6) months (in
additional to whatever reservations Tenant and such other tenants may wish to
make for available times); furthermore, the use of and reservation of the
Conference Center shall be pursuant to rules and regulations regarding the
Conference Center which shall be determined by, and applied by, Landlord in its
sole and absolute discretion; provided, however, that Landlord shall use
reasonable efforts not to discriminate in its application of such rules and
regulations.
57. STORAGE SPACE
Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, in its then "as is" condition that certain storage space comprising
approximately five hundred (500) usable square feet of floor area in a location
to be determined by Landlord in its sole discretion(the "Storage Space"), at a
rental of Six Hundred Twenty-Five Dollars ($625.00) per month (the "Storage
Space Rent"). The Storage Space shall (i) be configured such that Tenant shall
not be required to share the area comprising the Storage Space with any other
party, (ii) contain unfinished walls, (iii) contain a door with a lock, (iv)
contain an overhead light, and (v) be "non-damp", but shall not be required to
be humidified, air-conditioned
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or ventilated. Landlord's access to the Storage Space shall be subject to the
same requirements as those set forth in Paragraph 28 hereof with respect to
Landlord's access to the Demised Premises. The Storage Space Rent shall be
payable in consecutive monthly installments at the times and in the manner that
Base Rent is payable under this Lease. All other terms of this Lease shall apply
to the Storage Space, except Paragraphs 4, 6, 16.1, 21.1 and 46 hereof.
Notwithstanding anything contained herein to the contrary, Tenant
shall use the Storage Space solely for purposes of storing equipment, inventory,
documents, furniture and other items normally used in Tenant's business. Any
boxes shall not be stacked more than seven feet (7') high. All items stored in
the Storage Space shall be elevated at least four inches (4") above the floor on
wooden pallets or by other similar means and shall be at least eighteen inches
(18") below the bottom of any sprinklers located in the ceiling of the Storage
Space, if any, but in any event all such items shall be stored in a manner in
compliance with all applicable laws, codes and regulations and no such items
shall obstruct any sprinkler heads.
58. RIGHT OF FIRST OFFER
58.1 AVAILABLE SPACE. Provided that Tenant is not then in default and
has not been in default more than once during the period of the preceding two
(2) years with respect to the payment of Rent under this Lease, and there is
then no uncured Event of Default and there have not been more than two (2)
Events of Default during the period of the preceding two (2) years, with respect
to any obligations of Tenant under this Lease other than the payment of any Rent
under this Lease, in each case both at the time of Landlord's Offer, as
hereinafter defined, and at the time of the commencement of the Term as to the
Available Space, as hereinafter defined, and has not then subleased more than
twenty percent (20%) of the rentable floor area comprising the Demised Premises
at the time of Landlord's Offer, as hereinafter defined, and at the time of the
commencement of the term as to the Available Space, as hereinafter defined, then
solely during the period commencing on the first day of the fifth (5th) Lease
Year and ending on the last day of the seventh (7th) Lease Year (the "Expansion
Period"), Tenant shall have a one-time (as to each component of the Available
Space) right to receive from Landlord, not earlier than one (1) year, and at
least ninety (90) days, prior to the date said Available Space will become
available prior to the next leasing of said Available Space by Landlord, an
offer to lease the Available Space to Tenant on the terms set forth in
Landlord's Offer, which offer (i) shall not vary the terms of this Lease as they
apply to the original
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Demised Premises, (ii) shall not vary any of the terms of this Lease as they
apply to the Available Space, except as to any economic terms of this Lease
[including, but not limited to, any tenant allowance, improvements (or lack
thereof) to the Available Space to be made by Landlord (it being understood and
agreed that the Tenant Allowance provided for in Paragraph 16.1 hereof shall not
be applicable to any Available Space), and the base year for the purpose of
calculating Increased Operating Expenses, Increased Char Service Costs and
Increased Real Estate Taxes, all with respect to the Available Space and not as
to the original Demised Premises] and (iii) shall include as the Base Rent for
the Available Space the then Prevailing Market Rent (as defined in Paragraph 55
hereof) and which offer shall be accepted or rejected at Tenant's option.
"Available Space" means only that OFFICE space located on one (1) floor of the
Building which is contiguous to a portion of the Demised Premises and which is
designated by Landlord as containing the Available Space, as said space may
become available for lease after the expiration of the fourth (4th) Lease Year.
The Available Space shall be offered to and accepted (if at all) by
Tenant on the terms and conditions set forth in Landlord's offer to Tenant as to
such Available Space ("Landlord's Offer"); provided, however, that if Landlord
and NCB have not agreed upon the Prevailing Market Rent for such Available Space
within fifteen (15) days of Landlord's Available Space Offer, each party shall
select a Leasing Broker (as such term "Leasing Broker" is defined in Paragraph
55 hereof) to determine the Prevailing Market Rent for such Available Space as
of the proposed commencement date of the term for the Available Space (the
"Available Space Effective Date"), and the Prevailing Market Rent shall then be
determined according to the procedures set forth in Paragraph 55 of this Lease.
Landlord and NCB hereby expressly agree that if the Base Rent for any Available
Space has not been determined prior to the Available Space Effective Date, then
NCB shall pay Base Rent in the amount set forth in Landlord's Offer, and the
Base Rent for such Available Space shall be retroactively adjusted to the Base
Rent for such Available Space once determined by Landlord and NCB pursuant to
the terms of this Paragraph 58.1, if the Base Rent as thus determined is
different from the Base Rent proposed in Landlord's Offer.
In its leasing of space on the floor of the Building which Landlord
designates as containing the Available Space, Landlord shall ensure that a
portion of the space on said floor which Landlord designates as containing the
Available Space, which portion shall comprise not less than five thousand
(5,000) rentable square feet, becomes available for offer to Tenant pursuant to
this
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Paragraph 58 during the period commencing on the first day of the fifth (5th)
Lease year and concluding on the last day of the seventh (7th) Lease Year.
58.2 NOTICE; EXERCISE. Tenant shall give to Landlord written notice of
Tenant's exercise of its option to so lease the Available Space within fifteen
(15) days after the date on which Landlord gives Landlord's Offer to Tenant. If
Tenant shall fail to exercise its option to lease the Available Space within
said fifteen (15) days after the date on which Landlord's Offer is so given by
Landlord, then Landlord shall be free to offer to lease and to lease such
Available Space to others and Tenant's right to lease said Available Space which
has been offered to Tenant shall be void and of no force or effect for the
remainder of the Term of this Lease (Tenant's right hereunder being a one-time
right as to each component of such Available Space which has been offered to
Tenant), and Landlord may lease said Available Space to others upon such terms
and for such periods as shall be acceptable to Landlord (it being agreed that
time shall be of the essence in Tenant's delivery of the aforesaid notice to
Landlord and that, if such written notice is not so delivered within the time
aforesaid, Landlord will rely to its detriment on Tenant's failure to give such
written notice)
58.3 EXECUTION OF LEASE OR LEASE AMENDMENT. Within fifteen (15) days
(subject to written extension by Landlord) after the date on which Landlord
delivers an amendment to this Lease to Tenant, Landlord and Tenant shall execute
an amendment to this Lease setting forth the terms set forth in Landlord's Offer
as to the Available Space. If Tenant shall fail to execute said lease amendment
(or said new lease, as the case may be) for the Available Space within such
fifteen (15) day period after the date on which Landlord delivers an amendment
to this Lease to Tenant (as the same may be extended as aforesaid), then
Landlord shall have the right, at Landlord's option exercisable by written
notice to Tenant: (a) to cancel the exercise by Tenant of Tenant's option and to
offer to lease and to lease such Available Space to others upon such terms and
conditions as shall be acceptable to Landlord, and to hold Tenant liable for any
damages to Landlord from such cancellation, or (b) to not cancel the exercise by
Tenant of Tenant's option, in which case Tenant shall remain bound by the
exercise thereof.
58.4 MISCELLANEOUS PROVISIONS. Any lease of Available Space entered
into pursuant to the terms of this Paragraph 58 shall be effective upon the date
of the amendment to this Lease and the term thereof and the obligation to pay
rental thereunder shall commence upon the date determined pursuant to the
provisions of Landlord's Offer, as set forth in such amendment. During the
period that any Landlord's Offer is outstanding, Landlord may proceed with
negotiations with prospective tenants other than Tenant with respect to any or
all of the Available Space in question, provided that
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Landlord may only enter into leases with respect to any such Available Space
upon complying with all of the terms and conditions regarding Tenant's right of
first offer, as set forth in this Paragraph 58.
Tenant may only take Available Space hereunder in whole but not in
part; provided, however, that with respect to only the first (1st) component of
Available Space which is offered to Tenant pursuant to this Paragraph 58, if
such first component comprises more than five thousand (5,000) rentable square
feet and Tenant accepts Landlord's offer with respect to such first component of
Available Space, Tenant shall have the right to lease less than all of such
first component of the Available Space provided that (i) the portion taken by
Tenant comprises at least five thousand (5,000) rentable square feet and (ii)
the remaining portion of such first component of Available Space (i.e., the
portion which had been offered to Tenant and which Tenant does not elect to
lease) is capable of being leased and demised by Landlord without suffering any
adverse consequences with respect to the costs of leasing and demising such
remaining space, the rental rate which would be achievable therefor, the time to
lease such remaining portion, or any combination of the foregoing, all as
determined by Landlord in its reasonable judgment. Tenant's right under this
Paragraph 58 to lease any portion of the Available Space, other than the first
(1st) portion thereof which shall comprise not less than five thousand (5,000)
rentable square feet and become available to Tenant during the Expansion Period,
shall be subject to the then existing right of any other tenant in the Building
to extend or renew the term of its lease pursuant to an option contained in its
lease.
59. LENDER APPROVAL
If the Mortgagee fails to give its consent to this Lease, Landlord
shall have the right, at its sole option, to terminate and cancel this Lease.
Such option shall be exercisable by Landlord by written notice to Tenant of such
termination, which notice shall be given by Landlord, if at all, not later than
the thirtieth (30th) day following execution of this Lease by Landlord,
whereupon this Lease shall be deemed cancelled and terminated, and both Landlord
and Tenant shall be relieved of any and all liabilities and obligations
hereunder.
60. ANTENNA LICENSE
Subject to the terms of this Paragraph 60, Landlord hereby grants to
Tenant a license during the Term, provided that Tenant is not in default under
this Lease, to install and operate one (1) satellite dish antenna which is not
larger than eighteen inches (18") by twenty-three inches (23") (solely for
Tenant's business as conducted within the Demised Premises, and not for any
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resale or other commercial purpose) on the roof of the Building in accordance
with specifications and at a location approved by Landlord in writing in
advance, in Landlord's sole discretion (such antenna being hereinafter referred
to as the "Antenna"). Landlord shall have the right, following such notice to
Tenant as is reasonable under the circumstances, to relocate the Antenna to
another location on the roof of the Building, which shall be accomplished at
Landlord's sole expense, and which right shall not be exercised by Landlord in a
manner which would (i) unreasonably interfere with Tenant's business operations
within the Demised Premises, or (ii) deprive Tenant of a clear reception, within
the requirements of the Federal Communications Commission governing the Antenna.
Any provision hereof to the contrary notwithstanding, Landlord shall
have the right, in its sole discretion, to require Tenant to use a contractor
specified by Landlord to install the Antenna, all at Tenant's sole but
reasonable cost and expense, or to have a contractor specified by Landlord
supervise the installation of the Antenna by Tenant's contractor and in such
event Tenant agrees to pay Landlord's contractor's reasonable supervision fees.
In addition to all other Rent payable hereunder, in the event that
Tenant undertakes installation of the Antenna and continues to have such Antenna
installed or located on the roof of the Building, then Tenant also shall pay to
Landlord a license fee, as Additional Rent hereunder, for the operation of the
Antenna (the "Antenna Fee"), commencing on the first day of the month in which
the Antenna is installed. The Antenna Fee shall be in the amount of Nine Hundred
Dollars ($900.00) per month and shall be payable on or before the first day of
each month during the Term, without demand, deduction, set-off or counterclaim,
during the first four (4) Lease Years of the Term, and thereafter the Antenna
Fee shall be redetermined as of the first day of the fifth (5th) Lease Year and
the first day of each fourth (4th) Lease Year thereafter during the Term
(including the Renewal Periods, if applicable), which redetermined antenna fee
shall be the greater of (i) the Antenna Fee then in effect on the last day of
the then expiring period, or (ii) one hundred percent (100%) of the then
prevailing market rate for roof-top antenna space at comparable office buildings
in Washington, D.C., which prevailing market rate shall be determined in the
same manner and utilizing the same procedures as apply to the determination of
the Prevailing Market Rent for a Renewal Period pursuant to Paragraph 55 hereof.
This Paragraph 60 shall be subject at all times to the following
conditions (the failure of any of which shall be a material breach of this
Paragraph 60 by Tenant and shall give Landlord the right to terminate Tenant's
access and use of the roof for the Antenna):
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(a) The Antenna shall be installed and at all times operated,
maintained and repaired by Tenant, at Tenant's sole cost and expense. All
penetrations into any Building surfaces shall be sealed so as to prevent any
water leakage. Tenant shall not undertake or engage in any installation of the
Antenna without first submitting to Landlord detailed working plans of all such
installations and obtaining prior written approval of Landlord.
(b) Throughout the period of such installation, and thereafter during
any operation, maintenance or repair of the Antenna, Tenant shall install and
utilize, at Tenant's sole expense, such screening supports, walk boards, and
such other materials as may be reasonably required by Landlord to protect the
Building or any part thereof, the Building generally, pedestrians, vehicles on
adjacent roadways and any other property or owners of property adjacent to the
Building.
(c) The Antenna installed or operated by Tenant hereunder shall be
installed, operated, maintained and repaired by Tenant in a good and workmanlike
manner and in a manner which shall not impair the structure, value, rental value
or rentability of, or detract from the appearance of, the Building or any part
thereof.
(d) The Antenna installed or operated by Tenant hereunder shall be
installed, operated, maintained and repaired by Tenant in a manner which shall
not cause a violation of any mortgage, deed of trust, ground lease or other
financing instrument now existing or hereafter recorded with respect to the
Building or any agreements or warranties with respect to the Building or any
part thereof as are now or hereafter shall be held by or entered into by
Landlord or Landlord's management agent; provided, however, that this
subparagraph (d) shall not be utilized for the purpose of depriving Tenant of
the ability to place an Antenna on the roof of the Building which otherwise
satisfies all of the criteria and conditions of this Paragraph 60.
(e) The Antenna installed or operated by Tenant hereunder shall be
installed, operated, maintained and repaired by Tenant in a manner which shall
not interfere with or disturb Landlord or any tenant or other occupant of the
Building.
(f) The Antenna shall not cause interference with any other Antenna
of any nature in, on or about the Building or any other equipment owned by any
other person, irrespective of where located and irrespective of whether such
person has any interest in the Building. In the event Tenant's Antenna causes
such interference, Tenant agrees it will take all steps necessary to correct and
eliminate the interference consistent with appropriate government rules and
regulations upon receipt of written
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notification of the interference. If the interference is not corrected within
one (1) business day of receipt of notification, Tenant will cease operation of
the equipment causing such interference until such interference is cured.
(g) Neither the Antenna nor Tenant shall interfere with the use of
the roof of the Building or any other part of the Building by Landlord or any
tenant or occupant of the Building or any other person or entity.
(h) Prior to the installation of the Antenna, Tenant shall obtain,
and shall thereafter comply with and keep in force throughout the Term, all
permits, licenses, inspections and other governmental requirements and
authorizations required by all governmental authorities having jurisdiction over
the Building, the Antenna, Tenant, or the business operations in which the
Antenna shall be utilized.
(i) The installation, operation, maintenance and repair of the
Antenna shall be performed by Tenant in accordance with all applicable laws,
regulations and other requirements of all federal and local governmental and
quasi-governmental entities and authorities.
Tenant acknowledges and agrees that Landlord has not made any
representation, warranty or other statement to Tenant (and none is implied)
regarding the feasibility of installing or operating the Antenna hereunder.
Landlord agrees to permit Tenant reasonable, non-exclusive access to
and use of portions of the Building as necessary so as to facilitate the
installation, operation, maintenance, repair, and removal of the Antenna in
accordance with this Paragraph 60, the locations of which shall be determined by
Landlord. Notwithstanding the foregoing, if Landlord shall require Tenant to be
accompanied to the roof of the Building by an employee, agent or contractor of
Landlord, then Tenant shall notify Landlord in advance when Tenant requires
access to the roof of the Building and shall not attempt to gain such access to
the roof of the Building without being accompanied by an employee, agent or
contractor of Landlord.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease under seal
as of the day and year first hereinabove written.
WITNESS: LANDLORD:
FARRAGUT CENTER LLC, a
District of Columbia limited
liability company
By:
--------------------------
Calvin Cafritz
Managing Member
ATTEST: TENANT:
[Corporate Seal] NATIONAL CONSUMER COOPERATIVE
BANK d/b/a/ National
Cooperative Bank, a federally
chartered institution
By: By:
----------------------- --------------------------
Its Its
-------------------- -----------------------
122048
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EXHIBITS
EXHIBIT DESCRIPTION
A Floor Plan
B Declaration to Confirm Lease Commencement Date
C Rules and Regulations
D Definition of Shell Condition
E Cleaning Specifications
F Location of Approved Exterior Sign
G Contractors Rules and Regulations
H Tenant's Standard Office Equipment
I Form of Statement As to Increased Operating
Expenses, Increased Char Service Costs and Increased
Real Estate Taxes
J Construction Schedule
<Page>
EXHIBIT A
FLOOR PLAN
[Not included in Edgar version of document]
A-1
<Page>
EXHIBIT B
DECLARATION BY LANDLORD AND TENANT
Attached to and made part of the Lease entered into by and between FARRAGUT
CENTER LLC, a District of Columbia limited liability company, as Landlord, and
NATIONAL CONSUMER COOPERATIVE BANK d/b/a/ National Cooperative Bank, a federally
chartered institution, as Tenant.
Landlord and Tenant do hereby declare that:
1. The execution date of the Lease is ___________________________.
2. The Lease Commencement Date is _______________________________.
3. The Rent Commencement Date is ________________________________.
4. The Lease Expiration Date is _________________________________.
5. The Lease is in full force and effect as of the date hereof, Landlord
has fulfilled all of its obligations under the Lease required to be
fulfilled by Landlord on or prior to such date, and Tenant has no
right of set-off against any rentals.
WITNESS: LANDLORD:
FARRAGUT CENTER LLC, a
District of Columbia limited
liability company
By:
--------------------------
Calvin Cafritz
Managing Member
B-1
<Page>
ATTEST: TENANT:
[Corporate Seal] NATIONAL CONSUMER COOPERATIVE
BANK d/b/a/ National
Cooperative Bank, a federally
chartered institution
By: By:
----------------------- --------------------------
Its: Its:
------------------- ----------------------
[NOTE: NOT TO BE SIGNED AT TIME OF EXECUTION OF LEASE]
B-2
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EXHIBIT C
RULES AND REGULATIONS
The following rules and regulations have been formulated for the safety and
well-being of all the tenants of the Building.
Landlord may, upon request by any tenant, waive the compliance by such
tenant of any of the following rules and regulations, provided that (a) no
waiver shall be effective unless signed by Landlord or Landlord's authorized
agent, (b) any such waiver shall not relieve the tenant from the obligation to
comply with such rule or regulation in the future unless expressly consented to,
in writing by Landlord, and (c) no waiver of a rule or regulation granted to any
tenant shall relieve any other tenant from the obligation unless such other
tenant has received a similar waiver in writing from Landlord.
1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls or other parts of the Building not occupied by any
tenant (hereinafter "Common Areas") shall not be obstructed or encumbered by any
tenant or (with respect to Common Areas other than the Fitness Facility and the
Conference Center) used for any purpose other than ingress and egress to and
from the tenant's Demised Premises. Landlord shall have the right to control and
operate the Common Areas, and the facilities furnished for the common use of the
tenant in such manner as Landlord, in its sole discretion, deems best for the
benefit of the tenants generally. No tenant shall permit the visit to its
Demised Premises of persons in such number or under such conditions as to
interfere with the use and enjoyment by other tenants of the Common Areas.
2. No awnings or other projections shall be attached to the outside walls
of the Building. No drapes, blinds, shades or screens shall be attached to or
hung in, or used in connection with, any window or door of a tenant's Demised
Premises.
3. Except as set forth in the Lease: (i) no sign, advertisement, notice
or other lettering or material(s) shall be exhibited, inscribed, painted or
affixed by any tenant on any part of the outside or inside of the tenant's
Demised Premises, the Building or elevators; (ii) in the event of the violation
of the foregoing by any tenant, Landlord may remove same without any liability,
and may charge the expense incurred by such removal to the tenant or tenants
violating this rule; and (iii) all interior signs on the doors and directory
table shall be inscribed, painted or affixed for each tenant by Landlord at the
expense of such tenant, and shall be of a size, color and style acceptable to
Landlord.
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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 Common Areas, other
than as provided in the Lease.
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 or placed therein.
All damages resulting from any misuse of the fixtures shall be borne by the
tenant whose employees, agents, visitors or licensees shall have caused the
same.
6. Except in connection with Tenant's Work and Alterations, there shall
be no marking, painting, drilling into or other form of defacing or damage of
any part of a tenant's Demised Premises or the Building. No boring, cutting or
stringing of wires shall be permitted. No tenant shall construct, maintain, use
or operate within its 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. Landlord will, however, permit a
tenant to install muzak or other internal or intercom communication system
within the tenant's Demised Premises if the music system cannot be heard outside
of the Demised Premises.
7. No tenant shall make or permit to be made any disturbing noises or
disturb or interfere with the occupants of the Building or neighboring Buildings
or premises or those having business with them, whether by the use of any
musical instrument, radio, tape recorder, whistling, singing or any other way.
No tenant shall throw anything out of the doors or windows, off the balconies or
down the corridors or stairs.
8. No bicycles, vehicles or animals, birds or pets of any kind shall be
brought into or kept in or about a tenant's Demised Premises. No cooking shall
be done or permitted by any tenant on its Demised Premises, except that a tenant
may install and operate for the convenience of its employees, visitors and
business guests, a lounge or coffee room with microwave oven, sink (subject to
the provision of Paragraph 16 hereof) and refrigerator. No tenant shall cause or
permit any unusual or objectionable odors to originate from its Demised
Premises. Each tenant shall be obligated to maintain sanitary conditions in any
area approved by the Landlord for food and beverage preparation and consumption.
9. No space in or about the Building shall be used by any tenant for the
manufacture, storage, or sale or auction of merchandise, goods or property of
any kind.
10. [Intentionally omitted.]
C-2
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11. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by any tenant, nor shall any changes be made in existing
locks or the mechanism thereof, without Landlord's prior written consent, which
may be granted, denied or conditioned in Landlord's sole and absolute
discretion. The doors leading to the Common Areas shall be kept closed during
business hours except as they may be used for ingress and egress. Each tenant
shall, upon the expiration or termination of its tenancy, return to Landlord all
keys used in connection with its Demised Premises, including any keys to the
Demised Premises, to rooms and offices within the Demised Premises, to storage
rooms and closets, to cabinets and other built-in furniture, and to toilet rooms
whether or not such keys were furnished by Landlord or procured by tenant, and
in the event of the loss of any such keys, such tenant shall pay to Landlord the
cost of replacing the locks. On the expiration or termination of a tenant's
lease, the tenant shall disclose to Landlord the combination of all locks for
safes, safe cabinets and vault doors, if any, remaining in the Demised Premises.
12. All deliveries and removals, or the carrying in or out of any safes,
freight, furniture or bulky matter or material of any description, must take
place in such manner and during such hours as Landlord may reasonably require.
Landlord reserves the right to inspect all freight, furniture or bulky matter or
materials to be brought into the Building and to exclude from the Building all
or any of such which violates any of these rules and regulations or the Lease.
13. Any person employed by any tenant to do janitorial work within the
tenant's Demised Premises must obtain Landlord's written consent prior to
commencing such work, 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. No tenant shall engage or pay any employees of
Landlord or its management agent on the tenant's Demised Premises, except those
actually working for such tenant on said Demised Premises.
14. No tenant shall purchase spring water, ice, coffee, soft drinks,
towels, or other like merchandise or service from any company or person whose
repeated violations of Building regulations have caused, in Landlord's sole
opinion, a hazard or nuisance to the Building and/or its occupants.
15. Landlord shall have the right to prohibit any advertising by any
tenant which is visible outside of the Demised Premises and which, in Landlord's
sole opinion, tends to impair the reputation of the Building or its desirability
as a Building for offices, and upon written notice from Landlord, such tenant
shall refrain from or discontinue such advertising.
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16. Landlord 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 its agents. Landlord may at its option require all
persons admitted to or leaving the Building between the hours of 6:00 p.m. and
8:00 a.m., Monday through Friday, and at all times on Saturdays, Sundays and
holidays, to register.
17. Each tenant, before closing and leaving its Demised Premises at any
time, shall use reasonable efforts to assure that all lights are turned off and
the Demised Premises are locked.
18. The requirements of tenants will be attended to only upon application
at the office of the Building. Building employees shall not perform, and shall
not be requested by any tenant to perform, any work or do anything outside of
their regular duties, unless under special instructions from the Building
management.
19. Canvassing, soliciting and peddling in the Building is prohibited and
each tenant shall reasonably cooperate to prevent the same.
20. Except in connection with Tenant's Work or Alterations, no water
cooler, plumbing or electrical fixtures shall be installed by the tenant without
Landlord's prior written consent.
21. There shall not be used in any space, or in the Common Areas of the
Building, either by any tenant or by jobbers or others in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and side guards.
22. Mats, trash or other objects shall not be placed in the Common Areas.
23. Landlord shall not maintain or repair suite finishes or fixtures which
are non-standard, including, but not limited to, kitchens, bathrooms, wallpaper,
and special lights. However, should the need for maintenance or repairs arise,
Landlord shall, at tenant's request, arrange for the work to be done at the
tenant's expense.
24. No space demised to any tenant shall be used, or permitted to be used,
for lodging or sleeping or for any immoral or illegal purpose.
C-4
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25. Employees of Landlord other than those expressly authorized are
prohibited from receiving any packages or other articles delivered to the
Building for any tenant and, should any such employee receive any such package
or article, he or she in so doing shall be the agent of such tenant and not
Landlord.
26. No tenant shall install or permit or allow installation of a
television antenna in the windows or upon the exterior of its Demised Premises
or the Building.
27. No tenant shall tie in, or permit others to tie in, to the electrical
or water supply of the Building without prior written consent Landlord.
28. [Intentionally omitted.]
29. No vending machines shall be permitted to be placed or installed in
any part of the Building by any tenant, other than within the Demised Premises
for use by Tenant's employees and business visitors. Landlord reserves the right
to place or install vending machines in any of the Common Areas of the Building,
except for the lobby of the Building.
30. [Intentionally omitted.]
31. No smoking shall be permitted in any of the Common Areas of the
Building, in the Premises or on any portion of the Land. All cigarettes, cigars
and related trash shall be disposed of in trash receptacles and not on the
sidewalk, parking lot or grass.
32. Landlord reserves the right to rescind, amend, alter or waive any of
the foregoing rules and regulations at any time when, in its sole judgment, it
deems it necessary, desirable or proper for its best interest and for the best
interests of the tenants, which rules and regulations are generally applicable
to all office tenants in the Building, and no such rescission, amendment,
alteration or waiver or any rule or regulation in favor of one tenant shall
operate as an alteration or waiver in favor of any other tenant. Landlord shall
not be responsible to any tenant for the non-observance or violation by any
other tenant of any of these rules and regulations at any time.
C-5
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EXHIBIT D
DEFINITION OF SHELL CONDITION
SHELL BUILDING DESCRIPTION
A. ARCHITECTURAL ITEMS
1. All perimeter and core walls to be primed drywall ready for paint.
2. All columns to be furred with plumb drywall enclosures.
3. Provide 1" mini-blinds at all perimeter windows.
4. All core doors to be primed and ready for final paint or stain, at
Landlord's option.
5. Concrete slabs to ACI 201 levelness (1/4" per 10 feet non-cumulative).
6. Painted (or better) elevator door and jambs.
7. Core graphics for all stairs, mechanical, electrical, and other
required locations (ADA code compliant).
8. Complete core toilet rooms.
9. Elevator lobby ceiling drywall material.
B. MECHANICAL
1. VAV system served by chilled water source air handling units at PH.
AHU's to have centrifugal fan, isolation and variable frequency
drives. The air handling units shall be built-up of multiple sections
to allow incremental portions of a floor to be operated in an
after-hours mode.
2. DDC control system to all VAV boxes with thermostats provided at each
location.
3. All interior zones to include ductwork to VAV boxes only.
4. All exterior zones to provide ductwork to VAV boxes.
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5. All ductwork to be wrapped with insulation to be designed to ASHRAE
standards by Landlord's engineer (as such ASHRAE standards exist on
the date of such design).
6. Condenser water riser with taps, valves and blank flanges at each
floor.
7. Wet stacks with sanitary waste, vent and cold water stubbed and valved
to tenant space.
8. Stub-out from toilet exhaust for future tenant exhaust tie-in.
9. VAV boxes in a quantity and type as indicated in the base building
plans delivered to Tenant.
10. Anchor all VAV boxes tight to deck to allow minimum 6 1/2" clear below
for light fixtures. However, there shall not be less than 6" clearance
in any event.
11. Building Automation System (DDC-EMS).
C. ELECTRICAL
1. Buss Riser with future taps at each floor.
2. High voltage panel (480/277V) sized for 3.0 watts per foot lighting
plus HVAC loads, complete with breakers.
3. K-type transformer feeding low voltage panels (208/120V) sized for 5.0
watts per foot. Complete with breakers and oversize neutrals.
4. Isolated ground riser with lug on each floor.
5. Emergency power circuits in 277V and 120V sized for code requirements.
D. SPRINKLER SYSTEM
1. Provide fully monitored, automatic sprinkler system per NFPA and local
code.
2. Stand pipes at each stairwell with Fire Department connections,
control assembly, express drain and flow and tamper switches.
3. On-floor steel sprinkler distribution grid in a ration of 1/200 sf
with upturned pendant heads. All grid and
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lightings to be hung to allow minimum 6" clearance for light fixtures.
4. All core areas to have installed heads (fully recessed with covers).
E. FIRE ALARM SYSTEM
1. Provide fully supervised, voice alarm system conforming to local code
and ADA requirements for all core and proposed tenant areas.
2. System to have adequately sized panels, modules and associated
infrastructure to support all tenant devices required by DC code.
F. ELEVATORS
1. All cabs to comply with DC code and ADA requirements.
2. All cabs to have floor by floor lockout capability in the controllers
along with receiving wiring in the traveling cables to support card
readers and security phones in each cab.
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EXHIBIT E
CLEANING SPECIFICATIONS
[Not included in Edgar version of document]
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EXHIBIT F
LOCATION OF APPROVED EXTERIOR SIGN
[Not included in Edgar version of document]
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EXHIBIT G
CONTRACTORS RULES AND REGULATIONS
[Not included in Edgar version of document]
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EXHIBIT H
TENANT'S STANDARD OFFICE EQUIPMENT
[Not included in Edgar version of document]
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EXHIBIT I
FORM OF STATEMENT AS TO INCREASED OPERATING EXPENSES, INCREASED
CHAR SERVICE COSTS AND INCREASED REAL ESTATE TAXES
[Not included in Edgar version of document]
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EXHIBIT J
CONSTRUCTION SCHEDULE
[Not included in Edgar version of document]
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