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By and Between
THE DISTRICT OF COLUMBIA,
a municipal corporation
CONFERENCE CENTER ASSOCIATES I, L.L.C.,
a District of Columbia limited liability corporation
TABLE OF CONTENTS Page
DEFINITIONS 1.1 OMITfED Annual Rent 1.2 1.3 OMITfED 1.4 OMITfED 1.5 OMITIED Fee Mortgage 1.6 1.7 OMITIED 1.8 Governmental Authorities 1.9 Impositions 1.10 Improvements 1.11 Initial Improvements 1.12 Initial Term 1.13 Land 1.14 Landlord 1.15 Landlord's Default 1.16 Lease 1.17 Lease Commencement Date 1.18 Lease Year 1.19 Leasehold Mortgage 1.20 Leasehold Mortgagee 1.21 Mortgage 1.22 Mortgagee 1.23 New Lease 1.24 Notice of Landlords' Default 1.25 Notice of Tenant's Default 1.26 Notice ofTennination 1.27 Renewal Tenn(s) 1.28 Space Lease 1.29 Space Tenant 1.30 Taking 1.31 Tenant 1.32 Tenant's Default 1.33 Tenn DEMISED PREMISES 2.1 Demise 2.2 Title Assurance 2.3 Quiet Enjoyment TERMS OF LEASE
7 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 10 10
10 10 10 10 10 10 10 10 10 10 10 11 11 11
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3.1 3.2 3.3 3.4 3.5 3.6 4.
Term Renewal Terms Landlord's Surrender of Possession to Tenant Tenant's Surrender of Possession to Landlord Option to Purchase First Refusal Rights
12 12 12 12
4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8
Annual Rent and PILOT Place of Payment Impositions Right to Contest Impositions Landlord to Pay Real Estate Taxes on Land Prorations Books and Records Annual Rent Adjustment
14 14 14 14 15 15 15 15 15 16 16 16 16 17 17 17 17 17 17 18 18 18 18 19 19 20 20 20 21 22 23 24
USE. DEVELOPMENT AND TENANT'S DEVELOPMENT OBLIGATIONS 5.1 Use 5.2 No Nuisance 5.3 Compliance with Law 5.4 Tenant's Development Obligations 5.5 Community Development Corporations 5.6 Phase I Environmental Assessment IMPROVEMENTS 6.1 . Right to Construct Improvements 6.2 Right to Demolish Repairs and Alterations 6.3 6.4 Title to Improvements 6.5 Initial Improvements Landlord Easements 6.6 OBLIGATIONS OF LANDLORD Cooperation in Obtaining Approvals 7.1 Limitation of Landlords Obligation 7.2 7.3 Relocation of Storm Sewer Line FINANCING 8.1 Tenant's Power to Encumber Protection of Leasehold Mortgagees 8.2 8.3 Leasehold Mortgagee's Right to New Lease 8.4 Additional Protection for Leasehold Mortgagees 8.5 Fee Mortgage 8.6 Assignment of Lease to Mortgagee
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ASSIGNMENT AND SUBLEASING Tenant's Right to Assign 9.1 9.2 Effect of Assignment Tenant's Right to Sublease 9.3 9.4 Attornment INSURANCE 10.1 Required Insurance 10.2 Landlord's Right to Procure Insurance 10.3 Insurance Proceeds TAKING 11.1 Total Taking 11.2 Partial Taking 11.3 Substantial Taking 11.4 Temporary Taking 11.5 Allocation of Award 11.6 Notice of Taking 11.7 Dispute Regarding Valuation of Allocation APPRAISAL 12.1 Right of Appraisal 12.2 Selection of Appraiser 12.3 Appraisal Procedure TENANT'S DEFAULT 13.1 Events of Tenant's Default 13.2 Notice of Tenant's Default: Cure Period 13.3 Notice ofTennination 13.4 Tenant to Quit Upon Termination 13.5 Exculpation and Limited-Recourse Nature of Lease 13.6 Additional Cure Rights of Leasehold Mortgagees 13.7 Limitation on Tenant's Liability
24 24 24 24 25 25 25 26 26 26 26 27 27 27 27 28 28 28 28 28 28 29 29 29 30 30 30 30 30 30 31 31 31 31 32 32
14. 14.1 14.2 14.3 14.4 14.5 14.6
LANDLORD'S DEFAULT Landlord's Default Notice of Landlord's Default: Cure Period Tenant's Remedies Notice of Termination Tenant to Quit Upon Termination Tenant's Rights to Cure Landlord's Defaults
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INDEMNIFICATION 15.1 Tenant's Indemnity 15.2 Environmental Laws Defined 15.3 Limitations on the District and the United States 15.4 Anti-deficiency Act and Limitations of Landlord Obligations and Responsibilities FORCE MAJEURE LANDLORD'S REPRESENTATIONS 17.1 Environmental Hazards 17.2 Utility and Access Availability 17.3 Condemnation and Eminent Domain 17.4 Landlord's Additional Representations GENERAL CONDITIONS 18.1 No Brokers 18.2 Estoppel Certificate from Tenant 18.3 Estoppel Certificate from Landlord 18.4 Memorandum of Lease 18.5 Entire Agreement 18.6 Amendment 18.7 No Partnership 18.8 Lease Solely for the Benefit of Parties Hereto 18.9 No Merger 18.10 Severability 18.11 Obligations to Run With Land 18.12 Gender; Number 18.13 Governing Law 18.14 Notice in Event of Litigation, Etc. 18.15 Captions for Convenience 18.16 Counterparts 18.17 Consents Not Unreasonably to be Withheld 18.18 Notices 18.19 No Waiver 18.20 Conflict of Interest 18.21 Freedom of Information Act Notice 18.22 Affirmative Action Plan 18.23 Publicity 18.24 Non-Discrimination 18.25 All Inc1usive Federal and District Laws and Regulations 18.26 Landlord Officials Not Individually Liable 18.27 Anti-Money Laundering Provision
32 32 33 33 33 34 34 34 35 35 35 36 36 36 37 37 37 37 37 38 38 38 38 38 39 39 39 39 39 39 40 40 40 41 41 42 42 42 42
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GROUND LEASE AGREEMENT
of A~ , 2007, by and between the DISTRICT OF COLUMBIA, a municipal corporati n, its successors and assigns, sometimes acting by and through the Department of Housing and Community Development ("Landlord"), and CONFERENCE CENTER ASSOCIATES I, L.L.C., a District of Columbia limited liability corporation ("Tenant").
This GROUND LEASE AGREEMENT (this "Lease") is entered into as of this ( l ~ay
WITNESSETH: That WHEREAS, Landlord and Tenant previously entered into that certain Development Agreement
by and between the District of Columbia Office of Business and Economic Development (predecessor Agency to the Department of Housing and Community Development) and ConferenceCenter Associates, dated for reference purposes as of November 9, 1989 (the "Development Agreement"), as amended, extended and authorized by Landlord as of June 30 2006 for the proposed construction and development of a conference/training center and guest facility to be constructed on certain real property consisting of approximately 5.4846 acres of land located in Ward 5 of the Northeast Quadrant of the District of Columbia between Michigan Avenue, N .E. and Irving Street, N. W., known as Parcel 121\31 and as more particularly described on Exhibit A hereto, together with the improvements thereon in existence at the date of this Lease, all estate, right, title, interest or claim, either at law or in equity of Landlord as such interest and rights shall have been transferred to the Landlord by the United States of America in, of and to the bed of any street, road alley or public space, including vault space adjoining thereto, and the easements, rights of way, licenses and appurtenances thereto (in keeping with applicable District of Columbia and federal laws and regulations) (the "Land" or "Property"); and
WHEREAS, the Development Agreement, labeled Exhibit G, annexed hereto and made a part of this Lease, dated the 9th day of November 1989, by and between the Landlord and the Tenant covering the exclusive right of the Tenant to develop the Property was revived and extended by the Council of the District of Columbia under D.C. Official Code § 10-801 (2001 ed.) dated the 26th day of October, 2006; and WHEREAS, the United States of America, acting by and through the General Services
Administration ("GSA") is the fee title owner of the Land; and
WHEREAS, by virtue of a transfer of jurisdiction from GSA to the Landlord, dated
____ -' and under and pursuant to 40 U.S.C. 122, the Land is now under the jurisdiction of the Landlord; and
WHEREAS, the United States. of America, acting by and through GSA, has entered into that
certain agreement with the Landlord dated March 7, 1990, entitled Statement of Non-disturbance wherein the United States of America granted certain assurances to the Landlord that the United
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States of America would permit and would not otherwise interfere with the development of the Land as aforesaid; and
WHEREAS, Landlord desires to lease to Tenant the Land in keeping with the limitations and
restriction contained in the aforementioned Development Agreement, Transfer of Jurisdiction and Statement of Non -disturbance, and the District of Columbia Council Disposition Approval legislation, and Tenant desires to lease from Landlord the Land.
NOW, THEREFORE, for and in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant hereby agree as follows: to wit,
Definitions. For purposes of this Lease, the following terms shall have the meanings indicated whenever used with initial capital letters: 1.1 OMITTED
1.2 Annual Rent. The Annual Rent shall be $264,000.00 per annum, adjusted and paid as provided in Paragraph 4.1 and specifically shown and charted on Exhibit H, annexed hereto and made a part of this Lease.
Rent Reduction The reduction of Annual Rent provided for in Section 4.8 hereof.
1.4 Development Schedule. The Development Schedule, labeled Exhibit F, annexed hereto and made a part of this Lease, submitted to the Landlord, in connection with the Development Agreement, labeled Exhibit G, annexed hereto, which describes the time for and report dates for: (i) submission of Final Construction Plans, (ii) obtaining of building and other permits associated with the development of the Property by the Tenant, (iii) completion of construction stages, and (iv) final financing agreements between Tenant and acceptable financing entities or mortgagees. 1.5 Construction Period. The period during which the Initial Improvements (defmed below) are to be constructed shall be the "Construction Period" and it shall be deemed completed when appropriate Certificates of Occupancy are issued for all of the Initial Improvements, and the Landlord shall have specifically approved the said facilities for occupation and use in the ordinary course of the regular administrative process within the District of Columbia for the approval of construction for occupancy and use. 1.6 Fee Mortgage. A Mortgage which could encumber the Landlord's fee title to the Land (if such fee title is acquired by the Landlord), which shall be subject to the requirements of Paragraph 8.5, but such Fee Mortgage shall, in no event, encumber the underlying fee of the land, without the prior written approval of the Landlord and the United States Government.
FringeParkingLotLease Page 70f46 April 2007
1.7 Legally Permissible. Where ever the term "legally permissible" is contained in this Lease it refers solely to matters arising to future changes in applicable law or judicial interpretations or judicial findings inconsistent with the terms and conditions of this Agreement. 1.8 Governmental Authorities. Public officials or agencies of the District ofCohunbia the U.S. Government having jurisdiction in respect to the Land or the Improvements. and
1.9 Impositions. All real estate taxes on the Improvements (exclusive of the Land), business taxes, franchise taxes, unincorporated business taxes, income taxes, permitting charges, license fees and taxes, govemmentallevies, and obligations for any and all other governmental charges, general and special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind and nature whatsoever, including, but not limited to, assessments for sidewalks, streets, sewers, water, or any other public improvements, and any other improvements or benefits which shall during the Term hereof, be made, assessed, levied, or imposed upon, or become due and payable in connection with, or a lien upon, the Improvements, or any part thereof, any Improvements, or upon this Lease, the operation of the Improvements or the Tenant. Notwithstanding the foregoing, in no event shall the term "Impositions" be deemed or construed to include, and so long as the Tenant does not own title to the underlying fee, or the Land, Tenant shall not be ob1igated (i) to pay real estate taxes on the Land, if any, which real estate taxes shall be deemed hereby to be the obligation of the Landlord or the U.S. Government as fee owners of the Land, or (ii) any income, profits, earnings, inheritance, devolution, gift, franchise corporate, gross or other receipts, excise, capital levy, or estate taxes, or any other taxes with similar effect, which are attributable to or chargeable to Landlord as a course oflaw. Notwithstanding anything contained herein to the contrary, the Tenant shall be required to make certain payments to the Landlord, deemed "Payment In Lieu of Taxes" ("PILOT") which shall be computed as follows: The PILOT shall be initially determined on the basis of appraisal on the Land (real estate) that adheres, as closely as possible, to the procedures for valuation and assessment of similarly used and situated commercial properties utilized by the District of Columbia Real Property Tax Assessment Office. Such appraisal shall be determined in consultation with Tenant. The PILOT shall be computed at the same tax rate applicable to commercial properties of the same use in the District of Columbia and shall be paid as provided in Paragraph 4.1. The PILOT shall be adjusted every two years of the Initial Term, commencing on the beginning of the third year of the Initial Term and every two years of each Renewal Term, thereafter, utilizing the same appraisal procedure; provided, however, the PILOT shall never be adjusted downward. It is understood and agreed that the taxes of any kind on the improvements shall be the obligation of the Tenant and paid by the Tenant, but because the Land is government owned property there are no official District of Columbia taxes or federal taxes on the Land, but the PILOT is represented by those amounts comparable to such real estate taxes that would otherwise be placed on the Land and any other government impositions on the Land. 1.10 Improvements. Any buildings, fixtures, structures or improvements, or portions thereof hereafter located or constructed on or within the Land during the term of this Lease and any substitutions, replacements or additions thereto. 1.11 Initial Improvements. The conference/training center, guest facility and related amenities constructed or to be constructed on or in the Land as referred to in Paragraph 6.5. The period
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during which the Initial Improvements are to be constructed shall be the "Construction Period" and it shall be deemed completed when appropriate Certificates of Occupancy are issued for all ofthe Initial Improvements, and the Landlord shall have specifically approved the said facilities for occupation and use in the ordinary course of the regular administrative process within the District of Columbia government for the approval of construction for occupancy and use. It is understood that, in addition to the approval of the Landlord hereunder, Tenant must obtain approvals, as required by the District of Columbia Department of Consumer and Regulatory Affairs or the appropriate government agency, as may be required in the ordinary course of business. 1.12 1.13 1.14 1.15 Initial Tenn. The Initial Term shall be as set forth in Paragraph 3.1. Land. Land as defined in the first WHEREAS clause of this Lease. Landlord. The Landlord or lessor hereunder from time to time. Landlord's Default. A default by the Landlord as set forth in Paragraph 14.1.
1.16 Lease. This Ground Lease Agreement (as the same may be amended from time to time) or the leasehold estate created thereby as the context requires. 1.17
Lease Commencement Date. The date first hereinabove appearing.
1.18 Lease Year. Lease Year shall be the annual period of twelve (12) months following the Lease Commencement Date or its anniversary. 1.19 Leasehold Mortgage. The term Leasehold Mortgage shall include both (i) a Mortgage encumbering Tenant's leasehold interest or estate in the Land, provided, however, that the fee title to the Land is held by any third party other than the Landlord or the U.S. government, and/or the Improvements, including any Mortgage taken back by Tenant in connection with a sale of the Tenant's leasehold interestandlor the Improvements and, in addition, (ii) any interest held in Tenant, or any interest held with Tenant in the Land or Improvements, by an equity investor who is providing funding for the development; construction, rehabilitation, alteration, maintenance or operation of the Improvements on the Land or (iii) any loan from an equity investor in Tenant, or an equity investor with Tenant in the Land or Improvements, which is used to fund the development, construction, rehabilitation, alteration, maintenance or operation of the Improvements on the Land. 1.20 Leasehold Mortgagee. Property. The Mortgagee under any Leasehold Mortgage, affecting the
1.21 Mortgage. A mortgage, deed of trust, or other security instrument commonly given to secure loans or advances on, or the unpaid purchase price of, real property and/or leasehold estates in the District of Columbia and the note, credit instrument, security instrument(s) or other evidence of indebtedness secured thereby.
1.22 Mortgagee. The mortgagee, trustee or beneficiary under, or the party secured by, any Mortgage, and its successors and assigns. 1.23 New Lease. A lease of the Land entered into by Landlord with a Leasehold Mortgagee after a termination of this Lease, in accordance with Paragraph 8.3. 1.24 Notice of Landlord's Default. A written notice of a Landlord's Default given to the Landlord by the Tenant pursuant to Paragraph 14.2. 1.25 Notice of Ten ant's Default. A written notice of a Tenant's Default given to the Tenant by the Landlord pursuant to Paragraph 13.2. 1.26 Notice of Termination. A written notice given by the Landlord to the Tenant, or vice versa, advising the recipient of its intention to terminate the Lease pursuant to Paragraph 13.3 or Paragraph 14.4, as the case may be. 1.27 Renewal Term(s). The Renewal Terms are the First, Second, and Third Renewal Terms of the Lease as provided in Paragraph 3 of this Lease, and shall each commence at the termination of the Initial Term, the First Renewal Term and the Second Renewal Term, respectively. 1.28 Space Lease. A lease, license, right of entry, or other agreement between Tenant and a subtenant (and any sublease from a subtenant) for the use and occupancy of space in the . Improvements. 1.29 Space Tenant. A tenant or occupant pursuant to a Space Lease.
1.30 Taking. The acquisition by authority of any governmental or quasi- governmental body or entity by condemnation or in the exercise of its power of eminent domain or by negotiated purchase in lieu thereof. 1.31 The Tenant. The Tenant or lessee hereunder from time to time under this Lease or any Lease covering the Property, now or hereafter. 1.32 Tenant's Default. A default by the Tenant specified in Paragraph 13.1.
1.33 Term. The term of this Lease shall be the Initial Term, and all Renewal Terms as to which Tenant exercises an option granted in Paragraph 3.1.
2.1 Demise. For and in consideration of the Annual Rent and other consideration herein described, due herein paid or promised to be paid by Tenant and the covenants, conditions and agreements herein contained on the part of Tenant to be satisfied and performed, Landlord does hereby release, let and rent to Tenant and Tenant does hereby rent and let as Tenant of Landlord, for the Term, at the rental and other consideration to be paid to the Landlord by the Tenant, as
FringeParkingLotLease Page lOof46
well as upon the terms and conditions all as hereinafter stated, the Land in its "As Is" condition, together with all Improvements thereon, ifany. All present and future rights of Landlord in respect to the aforesaid Land or present and future rights relating to the Land are hereby granted to Tenant during the Term, subject to all requirements and limitations set forth in this Lease and the Transfer of Jurisdiction to the Landlord by GSA. In addition to the foregoing, the Landlord's obligations are only to transfer/grant to Tenant under this Lease whatever interests Landlord has in the underlying fee title to the Property with the limitations prescribed in the Transfer of Jurisdiction and any future interests it may acquire to the underlying fee. 2.2 Title Assurance. Landlord, insofar as it is legally permitted and as limited in the Transfer of Jurisdiction, District ofColwnbia Disposition Approval(s) and existing laws and regulations, represents that to the best of its knowledge and belief the United States of America is seized in fee simple of the Land, that United States of America's title thereto is good of record and in fact, marketable and free of all encwnbrances, restrictions, or liens of any kind, except for the permitted exceptions set forth in the title insurance binder attached hereto and made a part hereof as Exhibit B (except that the Storm Sewer Line existing on the Land at the Lease Commencement Date as more particularly described on Exhibit C hereto shall not be deemed to be a permitted exception). Landlord has full right and power to enter into and implement this Lease and has received all consents and shall use its best efforts to insure that any necessary enabling legislation is effective to permit that execution hereof by the Landlord shall constitute a legally-binding and valid present demise of the Land to Tenant. Landlord is legally permitted and authorized by the Council of the District of Columbia to make the representations contained in this Paragraph 2.2 to the best of its knowledge and belief; and it will, with no warranty whatsoever, execute such documents, as may be reasonably required by the Title Company, assuring the Leasehold Mortgagee of its interest in the Property, and will use its best efforts to cause the United States of America to execute such documents, as may be reasonably required. 2.3 Quiet Enjoyment. Landlord represents, if so legally permitted, that if and so long as this Lease is in full force and effect, Tenant shall be entitled quietly to hold, occupy and enjoy the Land and all rights relating thereto, during the Term without hindrance, ejection, or molestation by Landlord, or the United States of America by any party claiming by, through or under Landlord or the United States of America, or by any party claiming title paramount to United States of America's title, subject to the terms of this Lease, as may be permitted under the terms of that Statement of Non-Disturbance, dated March 7, 1990. Notwithstanding this provision, the exercise of eminent domain or any other governmental taking/restrictions/limitations shall not be circumvented or shall not be intended to be circwnvented hereunder.
TERMS OF LEASE
3.1 Term. The Term of this Lease shall commence on the Lease Commencement Date and shall continue for twenty (20) years from the first day of the Lease Commencement Date unless sooner terminated in accordance with the provisions of this Lease. 3.2 Renewal Terms. The Tenant shall have the right to renew and extend this Lease under the terms hereof for a First, Second and Third Renewal Term, each such Renewal Term to run . for a period of twenty (20) years each, commencing on the expiration of the Initial Term or the
Page II of46
prior Renewal Term as the case may be. The exercise of each Renewal Option shall be made by written notice to the Landlord delivered at least ninety (90) days prior to the end of the preceding term, i.e., the Initial Term or the First Renewal Term or the Second Renewal Term, or any Renewal Term, as the case may be. If the Landlord has declared an Event of Default by the Tenant under the Lease and such Default has not been cured within the applicable cure period, the effectiveness of the Tenant's exercise of renewal shall be deferred until such Default is cured, as prescribed in Paragraph 13.2 of this Lease. 3.3 Landlord's Surrender of Possession To Tenant. Landlord shall peaceably and quietly leave, surrender and yield up to Tenant possession of the Land on the Lease Commencement Date. 3.4 Tenant's Surrender of Possession to Landlord. On or before the last day of the Term or any Renewal Term, Tenant shall peaceably surrender and yield up to Landlord the Land, together with all Improvements, fixtures, and personal property not removed and taken by Tenant. Tenant shall have the express right to remove any fixtures and personal property from the Land and Improvements and to allow any Space Tenants to remove any of their fixtures and personal property that can be removed, so long as damage to the Land and Improvements in connection with such removal is repaired. Tenant shall surrender the Land to Landlord as herein set forth free and clear of all liens and encumbrances other than matters of record, adverse claims or Space Leases. Space Leases shall not extend beyond the expiration date of this Lease without the prior written consent of Landlord.
3.5 Option to Purchase. If at any time during the Term of this Lease or any renewal thereof, the United States Government makes the Land available for purchase by the Landlord, Tenant shall have the option to purchase the Land from Landlord at the Fair Market Value Purchase Price; provided such is afforded by the United States Government. Similarly, if the Landlord shall at any time obtain ownership of the Land, Tenant shall have the option to purchase the Land at the Fair Market Value Purchase Price by giving notice of intent to purchase no later than six months prior to' the expiration of the Term. In either event, Fair Market Value Purchase Price shall be determined by appraisal within 90 days in accordance with Paragraph 12. Tenant shall deposit 5% of said appraised value within 30 days after the appraisal is final and shall close for all cash within 60 days thereafter. If Tenant fails to close for any reason other than a breach by Landlord or the United States Government, the deposit shall serve as liquidated damages and the Lease shall continue in effect in accordance with its terms. Such Option to Purchase the Land, as herein described, shall be subject to obtaining any requisite governmental approvals existing at the time to dispose of District of Columbia property by sale. 3.6 First Refusal Rights. Tenant shall have the right of first refusal on any proposed sale of the fee simple Land or Landlord's fee simple interest therein orLandlord's rights under this Lease, by the Landlord.In keeping with all applicable laws of the District of Columbia and the United States Government. It is hereby understood and agreed, that the Landlord shall not, by any provision of this Lease, be obligated to sell the Land in the event it becomes the owner of the Land. Prior to any transfer by the Landlord of all of its interest in the Land, it must first receive a bona fide written offer (the "Offer") from an unaffiliated third party to purchase the Land. Within ten (10) days of the receipt thereof, it shall deliver a true and complete copy of said offer
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to the Tenant. The Tenant shall have ninety (90) days from receipt of the Offer (the "Study Period") by the Tenant to exercise its right to purchase the Land at the price and on the terms stated in the Offer, provided, however, that closing on such purchase shall take place on the date stated in the Offer or within ninety (90) days following the expiration of the Study Period, whichever is later. The Landlord may not sell a partial interest in the Land without the written consent of the Tenant. Notwithstanding the terms of this provision, any such "Offer of Sale" and Tenant's right of first refusal to purchase the Land from the Landlord must be in keeping with any existing laws and regulations hereinafter enacted or duly adopted governing law or rule on the disposition of Landlord's properties or properties in which it has an interest. Landlord acknowledges that as of the date of this Lease, there are no existing laws which would prohibit the exercise of this right of first refusal, provided Tenant is in compliance with the existing laws at the time of the proposed purchase of the Land by the Tenant. This right of first refusal applies only to the interest of the Landlord in the Lease, and any rights to the Land hereafter acquired, and not to the interest of the United States of America in the Property.
Annual Rent and PILOT.
During the Lease Term and any Renewal Term(s), Tenant agrees to pay the Annual Rent unto the Landlord. However, during the Construction Period for the Improvements, but no longer than twenty-four (24) months from the date of the commencement of construction (as prescribed in the Development Schedule hereto attached), no Rent shall be payable, but shall accrue. After the Construction Period has expired, Annual Rent and PILOT shall be due and payable quarterly in advance. The Annual Rent and PILOT which would be due, but not payable, during the Construction Period for the Improvements shall be aggregated and paid to Landlord in equal quarterly payments commencing at the beginning of the sixth year of the Initial Term and continuing through the end of the Initial Term, without interest. However, it is understood and agreed that the said arrearage during the Construction Period shall be paid in full without interest by the tenth (loth) year of the Initial Term of the Lease.! (b) Except as may otherwise herein be specifically provided in this Lease, the Annual Rent shall be paid to Landlord without notice, demand, abatement, deduction, or set-off. The payment of all rents due hereunder by Tenant to Landlord (or to such depository institution as may be designated from time to time by Landlord) shall be deemed full and complete payment hereunder, and Tenant shall have no duty, responsibility or liability for such funds beyond payment thereof, unless such additional payments are agreed upon between the Landlord and Tenant. (c) During the Initial Term and the first I o years of the First Renewal Term, the Annual Rent shall be adjusted upward every five years by seven and a half (7 Y2%)percent, such adjustment to be applied in each case to the Annual Rent for the preceding five year period. Thereafter, parties shall fix a reasonable adjustment factor based on the market rent for similar land and usage, to be used during each subsequent five year period of the Lease.
!Annual Rent shall be specifically described and charted on Exhibit H, annexed hereto and made a part of this
Lease. All of the specifics mentioned in the Exhibits shan be applied to the Annual Rent due, payable and deferred. April 2007 Page 13 of46
4.2 Place of Payment. Except as set forth in the following sentence, Annual Rent and PILOT required to be paid hereunder shall be paid without demand, deduction or set off at the office of the Landlord, 801 North Capitol Street, 2nd Floor, Development, Finance Division, Department of Housing and Community Development, Washington, DC 20002 or such other place as may be designated by Landlord from time to time. The Tenant may, in its sole discretion, deduct as an offset against Annual Rent due under the Lease, any amounts if any, payable by Landlord to Tenant under this Lease. The Landlord must be provided reasonable prior written notice of any such offsets by the Tenant. 4.3 Impositions. Landlord promptly shall send to Tenant copies of any notices received by Landlord in respect of any Impositions. As part of the consideration for this Lease and subject to all of the provisions hereof at Tenant's own cost and expense, Tenant shall pay all Impositions as the same become due and payable during the Term, and before the assessment of any fme, penalty, interest or other charge which may be added thereto for the nonpayment thereof; except that any Impositions properly allocable to periods before or after the Term shall not be payable by Tenant and shall be paid by Landlord. Tenant shall have the right to receive directly any and all notices of Impositions, and to pay such Impositions directly. Tenant shall furnish to Landlord, upon specific request in each instance, copies of official receipts of the proper Governmental Authorities or other proof reasonably satisfactory to Landlord, evidencing the full payment of any and all such Impositions payable by Tenant hereunder. Notwithstanding the foregoing, ifby law any Imposition may be paid, at the option of the taxpayer, in installments, then Tenant may pay the same in installments whether or not interest accrues thereon, for which Tenant shall be responsible for such accrued interest. 4.4 Right to Contest Impositions. If Tenant disputes the amount or validity of any Impositions payable by Tenant hereunder, then Tenant shall have the right to contest and defend against the same, and in good faith diligently to conduct any necessary proceedings to prevent and avoid the same, in which event Tenant may postpone or defer payment of such Impositions; provided such postponement or deferral is in accordance with procedures prescribed by applicable law; provided such action does not cause the foreclosure of the lien of any such Impositions against the Land. Tenant shall prosecute such contest or defense diligently and expeditiously. Tenant shall have the right, ifpermitted bylaw (whether now existing or later made applicable), to pay under protest any Impositions. Any rebate made on account of any Imposition paid by Tenant, shall belong to and be paid to Tenant, for Tenant's account. Landlord agrees to render Tenant all reasonable and permitted assistance, at Tenant's expense, in contesting the validity or amount of any Impositions payable by Tenant hereunder, including joining in the execution of any documents, signing any protests or pleadings which Tenant may file, or signing any receipts for refunds or rebates ofImpositions, if the Landlord agrees with such contest and is permitted by applicable law to offer the assistance. 4.5 Real Estate Taxes on·Land During Effective Period of Lease. The Landlord represents that the leased real property is not subject to taxation by the District of Columbia or any other government authority because it is owned by the U.S. Government and the District of Columbia, under the Transfer of Jurisdiction. The Landlord shall be responsible for providing suitable information to avoid taxation/assessment on the real property. This exemption does not include
FringeParkingLotLease Page 140f46
taxes or charges attributable to the Improvements as the same become due and payable during the Term, and before the assessment of any fine, penalty, interest or other charge which may be added hereto for the nonpayment thereof. Landlord shall furnish to Tenant, upon specific request in each instance,copies of official receipts of the proper Governmental Authorities or other proof reasonably satisfactory to Tenant, evidencing the exemption of real property taxes or deemed satisfaction of those real estate taxes on the Land. It is understood and agreed that the Landlord as of the date of this Lease is not delinquent in the payment of any assessed property taxes. 4.6 Prorations. Appropriate adjustments and prorations shall be made if the Lease Commencement Date, or date of termination of this Lease is such that an adjustment or proration is necessitated; or if the Annual Rent is to be adjusted following a particular payment but prior to the succeeding payment; or if any payment of Annual Rent or any other amount hereunder by either Landlord or Tenant covers periods for which the party making such payment is not responsible under this Lease. 4.7 Books and Records.
(a) Tenant shall record in books and records of account in a timely manner all elements of income and expense and its bookkeeping procedures shall be in accordance with generally-accepted accounting principles and procedures. Books of account shall be maintained on an accrual basis and shall be maintained for a period of not less than three years after the end of each lease year to which they refer, unless otherwise requested by the Landlord.
(b) Landlord shall have the right following the close of each Lease Year to examine the books and records of Ten ant, at reasonable times and upon reasonable notice. Such examination shall be for the purpose of determining compliance with the lease terms and Landlord shall not disclose the results of such examination to any person other than individuals employed by Landlord and as otherwise required by law.
4.8 Annual Rent Adjustment. Following the Construction Period, but not later than twenty four (24) months from the effective date of the Lease, the Annual Rent shall be subject to a Rent Reduction for the costs of relocation of the Storm Sewer Line in the manner specified in Section 7.3.
USE, DEVELOPMENT AND TENANT'S DEVELOPMENT OBLIGATIONS
5.1 Use. Tenant's initial use of the Land shall be for the construction of the Initial Improvements and the development and operation of Land and Improvements to be used as a conference/training center with a guest facility and related amenities as set forth in Paragraph 6.5. Notwithstanding the immediately preceding sentence with regard to the Tenant's initial intended use of the Land and the Improvements, Tenantnonetheless shall have the right subsequent to the initial intended use of the Land and Improvements to use the Land and Improvements, either alone or in connection with any other real or personal property, for any lawful purpose whatsoever, subject to Landlord's prior consent to such subsequent use. However, in no event shall such eventual use of the property be inconsistent with the United
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States and Landlord's laws and regulations of general application, affecting the Property, including, but not limited to zoning and other building and use restrictions. 5.2 No Nuisance. Tenant shall not suffer any dangerous act to be done or any dangerous condition to exist on the Land or any part thereof unless safeguarded as required by law. Tenant shall not suffer any act to be done on the Land which shall, in law, constitute a nuisance, public or private, or which shall make void or voidable any insurance then in force with respect to the Land. Such Nuisance shall be warranted against by the Landlord, who shall be responsible for its prompt abatement; provided such abatement shall not violate any federal and/or Landlord's Antideficiency Act. 5.3 Compliance with Law. Landlord promptly shall give notice to Tenant of any notice from Governmental Authorities in respect of the Land. Tenant shall comply with all applicable and lawful statutes, regulations, rules, ordinances, orders and requirements of any Governmental Authorities in respect to the Land. Tenant may dispute in good faith the validity of any complaint or action taken pursuant to or under color of any of the foregoing, defend against the same, and, in good faith, diligently conduct any necessary proceedings to prevent and avoid any adverse consequence of the same, during which proceedings Tenant may defer compliance with the disputed complaint or action so long as such deferral will not cause a loss or forfeiture of Landlord's interest in the Land. Tenant shall prosecute such contest diligently and expeditiously without compromising the rights of the Landlord or the United States. <?) 5.4 Tenant's Development Obligations.
(a) Tenant shall substantially complete Initial Improvements within thirty-six (36) months following the Permit Issuance Date, subject to the Force Majeure provision set forth in Article 16 hereof and provided there is no delay in obtaining government approvals for the planned unit development ("PUD"). (b) In the event of a delay in obtaining the necessary approvals in the PUD approval process, or other necessary approvals for commencement of construction and occupancy of six (6) months from the effective date of the Lease, in Tenant's sole discretion, in the event of such delay, Tenant reserves the right to terminate the Lease upon written notice to the Landlord; then Landlord and Tenant shall have no further obligation to one another. 5.5 Community Development Corporations ("CDC"). Landlord agrees to supply Tenant with a list of Community Development Corporations operating in the District of Columbia with an interest in the area in which the Land is located. Tenant agrees to enter into discussions with one or more CDCs with a view to offering it or them a participating interest in the Tenant of the Tenant's interests in the Land and the Improvements equaling not less than 5 % thereof on terms mutually agreeable to the Tenant and the selected CDC. Within one hundred eighty (180) of the date of this Lease, the Tenant shall execute a participation agreement with the selected CDC, subject to Landlord's prior approval, which shall not be unreasonably withheld, conditioned or delayed. Such agreement shall provide for financial sharing opportunities for the CDC in the development and operation of the Improvements located on the Property.
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5.6 Phase I Environmental Assessment. Tenant agrees to conduct a Phase I Environmental Assessment on or before the expiration of four (4) months from the date of this Lease, and provide to Landlord a copy of the same, at no costs to the Landlord.
6.1 Right to Construct Improvements. Subject to the requirements of Paragraphs 5.4 and 6.5 hereof, Tenant shall have the right at any time and from time to time, as often and frequently as Tenant wishes, during the Term, to construct such Improvements as Tenant, in Tenant's sole discretion, shall deem appropriate, without the necessity of securing Landlord's permission or consent, except as such Improvement shall deviate from the purpose of Lease as herein described and approved by the Council of the District of the Columbia. Notwithstanding the foregoing, all plans and specifications for such Improvements (excluding nonstructural changes, repairs and alterations pursuant to Paragraph 6.3) will be submitted to Landlord prior to the commencement of construction. Landlord shall have the right to approve said plans and specifications prior to all construction. Such approval shall not be unreasonably withheld or delayed; if Landlord shall not have given written notice to Tenant, setting forth specific objections to such plans and specifications, they shall be deemed approved thirty (30) days after delivery to Landlord. 6.2 Right to Demolish. Tenant shall have the absolute and unqualified right, at any time and from time to time, as often and frequently as Tenant wishes, during the Term, to demolish tear down, or otherwise remove, and to make such structural changes, repairs and alterations to the Improvements (including any new, replacement or additional Improvements) as Tenant, in Tenant's sole discretion, shall deem appropriate, without the necessity of securing Landlord's permission or consent. Costs of such demolition, tearing down, or removal shall be borne by Tenant and Tenant shall he entitled to the salvage value, if any, there from. Any demolition must have been completed prior to one (1) year from the date of expiration of the Initial Term or any subsequent Renewal Term of this Lease. 6.3 Repairs and Alterations. Tenant shall have the right, at any time and from time to time, as often and frequently as Tenant wishes, to make such nonstructural changes, repairs and alterations to Improvements as Tenant in Tenant's sole discretionshall deem necessary or desirable, without the necessity of securing Landlord's permission or consent. 6.4 Title to Improvements. Title to all Improvements used or erected by or for Tenant on the Land shall be in and remain in Tenant for and during the entire Term, but upon the termination of the Term (except termination resulting from a Taking or from a purchase by the Tenant of the Landlord's reversionary fee interest), shall vest in Landlord to the extent that the Improvements are then upon the Land at no costs to the Landlord. It is understood and agreed that the Landlord must notify Tenant of its right to the Improvements and if the Landlord notifies Tenant that the Improvements must be removed from the Land at any time that the Lease is terminated or expired, and if the Tenant is then in the final year of the Third Renewal Term or at any time, the Tenant must, at its sole cost and expense, remove the Improvements, restore the Land to the pre-existing condition, or in a condition acceptable to Landlord at the end ofthe Term. Notwithstanding the foregoing, at the time or upon occurrence of an event that shall cause title to the Improvements to become the Landlord's property, any and all Improvements shall
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revert to the Landlord and Landlord shall not be required to make any payment to Tenant for such Improvements. The Tenant shall satisfy or be responsible for satisfying all outstanding indebtedness due on the said Improvements, which would be a lien thereon. 6.5 Initial Improvements. Landlord acknowledges that Tenant has submitted to Landlord and Landlord has accepted and fully approved preliminary detailed plans and specifications for the construction of a conference/training center, guest facility and related amenities to he located/constructed on the Land (the "Preliminary Plans") except for those changes set forth on Exhibit D hereto. Within nine (9) months following the Lease Commencement Date, Tenant shall submit to Landlord a final set of detailed plans and specifications which shall be in conformity with the Preliminary Plans as modified by Exhibit D. (the "Final Plans"). Provided that Tenant shall have submitted the Final Plans in accordance with this Paragraph 6.5. Landlord shall be deemed to have approved the same with regard to the general project design. Tenant shall submit the Final Plans to the appropriate District of Columbia agencies to obtain the necessary clearances and the Building Permit to construct the facility which shall be constructed in accordance with the Final Plans as modified pursuant to the aforesaid permitting process (the "Initial Improvements"), subject only to Landlord's approval in the event of a substantive change to the Final Plan. For the purpose of this Lease the term "Permit Issuance Date" shall mean the latter of (i) the date on which the Building Permit for the Initial Improvements was issued by the District of Columbia government or (ii) the date on which the Landlord approves any substantive change to the Final Plans if such change to the Final Plans shall have been necessitated in order to cause the District of Columbia government to issue the Building Permit. 6.6 Landlord Easements. In order to permit the construction and reconstruction of Improvements and the use by Tenant of certain portions of property owned by Landlord, if any, adjacent to the Land, and in addition to any easements required in connection with Landlord's obligations under Paragraph 7.1., Landlord shall, using its best efforts and insofar as it is legally permitted to so do and with the necessary governmental approvals, grant certain easements of necessity to Tenant within or over certain portions of any property adjoining the Land and owned or in the jurisdiction of Landlord, if any, to the extent reasonably requested by Tenant. Such easements shall be granted in recordable form and shall be for a period coterminous with the terms of the Lease.
OBLIGATIONS OF L~DLORD
7.1 Cooperation In Obtaining Approvals. To the extent permitted by law, and recognizing that Landlord is a municipal corporation with jurisdiction over the Land, Landlord shall cooperate fully with Tenant in assisting Tenant to obtain any governmental, civic or other authorizations for the demolition, development and use of the Land and the Improvements including, but not limited to, supporting Tenant's zoning application for the Land. To this end, and without limiting the generality of the preceding sentence, within fifteen (15) days after written request from time to time from Tenant, Landlord or its authorized representative shall, without requiring any additional consideration therefore, execute and return to Tenant, or otherwise join in any applications and attend public and private hearings and meetings for zoning or rezoning approvals, zoning variances or special exceptions; any applications for building, demolition or other permits, approvals or licenses; any grants, dedications, covenants, or
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easements for electric, telephone, gas, water, water and other public utilities and facilities, or access roads or other facilities; any proceedings to close any public alleys or ways adjacent to the Land; applications for any similar authorizations or approvals; and any applications or documents required or requested by any Governmental Authorities in connection with any work which Tenant may do hereunder or in connection with any permitted use by the Tenant under this Lease either alone or in conjunction with other property, including, but not limited to, the right to demolish, remove and construct Improvements. Landlord recognizes that Tenant shall have the right to undertake any and all of the actions in which Landlord has agreed to cooperate, as Landlord may be legally permitted. 7.2 Limitation of Landlord's Obligation. Notwithstanding anything to the contrary contained herein, Landlord shall have no obligation or responsibility to perform or participate in any way in the maintenance or repair of the Land or any Improvements located thereon except to the extent set forth in Paragraph 7.3, except to the extent that Landlord is obligated, by virtue of being a municipality, to repair and to maintain, without limitation, any public facilities, utilities, sidewalks or alleys or roadways that serve the Land and except as provided in any Space Lease wherein Landlord is a Space Tenant. All such maintenance and repairs are to be performed by Tenant at Tenant's sole cost and expense. 7.3 Relocation of Stonn Sewer Line. Landlord and Tenant agree and acknowledge that an existing storm sewer line, as more particularly described on Exhibit C hereto, may conflict with and otherwise interfere with the ability of Tenant to construct the Initial Improvements and may be required to be relocated. Landlord and Tenant further acknowledge that the existence of the said storm sewer line was discovered by Tenant as the result of a land survey performed subsequent to the execution of the Development Agreement. Tenant agrees to perform this work during the Construction Period at a total cost not to exceed $550,000. To the extent that the cost of the relocation exceeds $550,000 it shall be the obligation of the Tenant. Landlord hereby agrees to a Rent Reduction in keeping with the provisions of this Lease so that that Tenant can relocate the storm sewer line to the relocation area as more particularly shown on Exhibit C (the "Relocation Work"). Such work shall be coordinated with the construction of the Improvements so as not delay, hinder or increase the cost of the Improvements. The Tenant shall, consistent with the requirements of this Lease provide the Landlord with cost estimates and work schedules related to the said Relocation Work. These submissions must be prior approved by the Landlord, which approval shall not be unreasonably denied, conditioned or delayed. The Tenant, its agents, and assigns shall be herein granted a right of entry to perform said relocation, but said entry shall be covered by a separate Right of Entry Agreement between the Landlord and Tenant in the event entry shall be required before execution of this Lease. In no event shall the Tenant's delay in the relocation of the storm sewer line cause an enlargement of the completion date or commencement of Annual Rent and Additional Rents, as herein prescribed. Landlord shall, at no costs to Landlord, cooperate with Tenant in working with WASA to mitigate the costs associated with the work described above, as well as cooperate and assist Tenant in obtaining all necessary permits as promptly as possible to allow access to and excavation of public spaces, if necessary, to perform such relocation work without delaying the completion of the Initial Improvements. The Tenant shall be entitled to a dollar for dollar Rent Reduction for the cost of relocation of the Storm Sewer Line not to exceed $550,000.00. Such costs may include, but are not be limited to architectural design, engineering, environmental
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testing, construction, materials, labor and offsite easements necessary to complete the construction of the Storm Sewer Line. Evidence of such costs shall be demonstrated by receipts or invoices paid by Tenant and submitted to Landlord, subject to Landlord's approval. The costs incurred by Tenant shall be applied to and credited against the rent payment due (beginning with the first rent payment) to Landlord and shall reduce or offset the rent owed for any month until the Tenant's entire cost of the Storm Sewer Line is recovered not to exceed $550,000.00.
8.1 Tenant's Power to Encumber. The Landlord recognizes that it will be essential for the Tenant to finance the improvements by placing a deed of trust or mortgage, or other fmancing facility on its leasehold interests in the Property. Landlord expects such deed of trust or mortgage to be placed with an established lending source, which is not disqualified by debarment, at a level not greater than the fair market value of the improvements. Accordingly, Tenant shall, with Landlord's prior approval, which shall not be unreasonably withheld, denied, conditioned or delayed, have the right, exercisable at any time and from time to time, to enter into, and consummate agreements to, mortgage Tenant's interests in the Lease and in the Improvements under one or more Leasehold Mortgages, to assign this Lease as collateral security for such Leasehold Mortgages, and to enter into any and all extensions, modifications, amendments, replacements and refinancing of such Leasehold Mortgages as Tenant may desire, upon the condition that all rights acquired under such Leasehold Mortgage(s) shall be subject to the terms and conditions of this Lease. Such arrangements shall be limited in amount to the fair market value of the Improvements and shall be limited to loans from reputable bona fide lending institutions such as banks, commercial lenders, institutional lenders and insurance companies not subject to debarment restrictions in the District of Columbia, or from equity owners of the Tenant. Tenant shall give Landlord at least thirty (30) days advance notice of its intention to enter into such an arrangement including a description of the amount and nature of the arrangement and the identity of the lenders. Tenant shall also have the power to grant a purchase-money Leasehold Mortgage and become a Leasehold Mortgagee in connection with Tenant's sale of its interest in the Land and Improvements; provided, however, that the Land shall be free and clear of all such Leasehold Mortgages upon the termination of this Lease or any extension hereof or the projected time of expiration/termination of the Lease. Landlord agrees to use its best efforts to approve reasonably promptly any such proposed financing.
8.2 Protection of Leasehold Mortgagees. For each Landlord approved Leasehold Mortgage, if Landlord is given a copy thereof and a written notice specifying the name and address of the Leasehold Mortgagee(s) thereunder and the recording data pertaining to such Leasehold Mortgage, then the following provisions shall apply with respect to such Leasehold Mortgage for so long as it shall remain unsatisfied of record during the Term or any Renewal Term: (a) There, as legally permitted, shall be no cancellation, surrender, acceptance of surrender, or modification of this Lease or attornment of any subtenant (including any and all Space Tenants) to Landlord without the prior written consent of the Leasehold Mortgagee(s), which shall not be unreasonably withheld, delayed, conditioned or denied.
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(b) Landlord shall, concurrently with the delivery to Tenant of any notice required or permitted hereunder, use its best efforts to deliver to each Leasehold Mortgagee a true copy of any Notice of Tenant's Default, or other notices given to Tenant as provided for herein, and no such notice to Tenant shall be effective as to a Leasehold Mortgagee, until a copy of such notice is received by such Leasehold Mortgagee. Each Leasehold Mortgagee shall thereupon have the period set forth in Article 13 below, after receipt of such notice by it or them, to remedy or cause to be remedied the defaults complained of, and Landlord shall accept such remedy by or at the instigation of any such Leasehold Mortgagee as if the same had been done by Tenant. If there is more than one Leasehold Mortgagee, the Leasehold Mortgagee under the Leasehold Mortgage which is prior in lien shall have the prior right to remedy or cure any such default; and the period within which such other Leasehold Mortgagee(s) may remedy such defaults shall be extended for an additional period of thirty (30) days for each Leasehold Mortgagee, successively, within which to effect such remedy or cure. 8.3 Leasehold Mortgagee's Right to Assume the Assignment of the Lease. In the event that Tenant is in default after all cure periods have expired, Landlord reserves the right to either (i) terminate this Lease, or (ii) if prior to its stated expiration date, grant Leasehold Mortgagee the right to assume by assignment all of Ten ant's rights and responsibilities under the Lease upon the written request of a Leasehold Mortgagee or its nominee, for the remainder of the Term, effective as of the date of such assignment, at the rent and upon the terms, provisions, covenants and agreements as herein contained The assignment shall be subject only to the same exceptions to title to which this present Lease with Tenant is subject on the Lease Commencement Date and to any other encumbrances created pursuant to the terms hereto, and to the rights, if any, of any parties then entitled to possession of all or any part of the Land or the Improvements; provided, however, that an assignment of the Lease shall be subject to the following conditions: (a) Said Leasehold Mortgagee or its nominee shall have made written request upon Landlord for such assignment of Lease, within sixty (60) days after the date of such notification of Tenant's default, and such written request shall have been accompanied by tender of payment to Landlord of all sums then due to Landlord under this Lease but remaining unpaid; (b) If more than one Leasehold Mortgagee shall have made a request for an assignment of the Lease, then the assignment of the Lease shall be entered into with the requesting Leasehold Mortgagee whose Leasehold Mortgage has priority with respect to the Property; (c) Said Leasehold Mortgagee or its nominee shall pay to Landlord at the time of the execution and delivery of said assignment of the Lease, any and all sums which would, at the time of execution and delivery thereof, be due pursuant to this Lease but for such default, less the .net income (on a cash basis and excluding depreciation and other non cash adjustments) earned by Landlord in respect of the Land after the default of this Lease. Any excess of such net income over the aforesaid amounts due under the Lease shall be applied in payment of the rental thereafter becoming due after assignment of the Lease; (d) Said Leasehold Mortgagee or its nominee shall fully assume and perform all of Tenant's obligations contained in this Lease that such Leasehold Mortgagee or its nominee can
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perform, and any of Tenant's obligations that such Leasehold Mortgagee or its nominee cannot cure or observe shall be deemed waived by Landlord, if such waiver is now or at anytime thereafter in keeping with applicable federal and local laws and regulations, as of the date of the assignment of the Lease, but in no event shall such waiver apply to obligations involving the use of the Land, prescribed in the transfer of jurisdiction by the United States or such government impositions; and (e) Upon the execution and delivery of assignment of the Lease in accordance with the provisions of this Paragraph 8.3 any Space Leases which theretofore may have been assigned and transferred to Landlord, except which Space Leases shall be occupied and used by the Landlord, its successors and assigns, shall thereupon be assigned and transferred by Landlord to the tenant under the assignment of the Lease. 8.4 Additional Protection for Leasehold Mortgagees. The following additional matters are included herein for the express protection of any Leasehold Mortgagee, as an intended third party beneficiary of this Lease: (a) Landlord shall, at its sole and reasonable discretion, promptly and using reasonable efforts upon request by Tenant, execute, acknowledge and deliver any modifications of this Lease requested from time to time by any Leasehold Mortgagee(s); provided that such modifications do not contravene the provisions of Article 5 hereof and do not decrease the rentals and other sums required to be paid by Tenant hereunder and do not materially decrease Tenant's other obligations or Landlord's rights pursuant to this Lease. "\..,. (b) If agreed to in writing by Tenant, or required by the terms of any Leasehold Mortgage, the proceeds or award from any insurance policies or any Taking may be held by any Leasehold Mortgagee(s) and distributed or applied pursuant to the provisions of the applicable Leasehold Mortgage. (c) Each Leasehold Mortgagee shall be given notice of any arbitration proceedings by the parties hereto, and shall have the right to intervene therein and be made a party to such proceedings, and the parties hereto do hereby consent to such participation by the Leasehold Mortgagee in such actions. In the event such notice is given and Leasehold Mortgagee elects not to intervene or to become a party to such proceedings, such Leasehold Mortgagee nonetheless shall be given notice and a copy of any award or decision made in such proceedings. Landlord agrees to provide estoppel certificates to the Leasehold Mortgagee in connection with Tenant's financing or refinancing on or before the closing date of such transaction certifying there are no defaults under the Development Agreement or this Lease; or, if there are any, provide a specific description thereof and allow a reasonable period of time for the cure of any such defaults. (d) From time to time, and within ten (10) days of request, Landlord, using its best efforts, and Tenant shall execute, acknowledge, and deliver to any or all Leasehold Mortgagees an agreement prepared at the sole expense of Ten ant, in form satisfactory to such Leasehold Mortgagee(s), among Landlord, Tenant and such Leasehold Mortgagee(s), reaffirming the applicability of the provisions of this Paragraph 8.4 to a particular Leasehold Mortgagee.
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8.5 Fee Mortgage. Landlord shall have the right to mortgage the Landlord's reversionary interest in the Land (the 'Fee Mortgage") and to renew, modify, replace, extend or refinance such Fee Mortgage subject, however, to the following conditions: (a) All rights acquired under any Fee Mortgage shall be subject and subordinate to the right, title and interest of Tenant under this Lease or any assignment of the Lease and the terms and conditions set forth herein or therein. Any Fee Mortgage shall provide that the Tenant shall have the right, but not the obligation, to bid at any trustee's sale or foreclosure sale under any Fee Mortgage, or to acquire title to the Land by deed in lieu of foreclosure upon payment of . all sums then due and owing to all Fee Mortgagees. No failure by Tenant to exercise such right shall be deemed to be a waiver of any future opportunity to exercise such right. (b) Any Fee Mortgagee shall not, in the exercise of any of its rights arising or which may arise out of such Fee Mortgage or any instrument modifying or amending the same or in substitution or replacement thereof disturb .or deprive Tenant or any of its Space Tenants or assignees, of its, or their, possession or its, or their, right to possession of the Land and Improvements or of any part thereof. (c) So long as this Lease or any assignment of the Lease shall remain in effect, neither Tenant nor any Space Tenant or assignee shall be made a party in any action or proceeding to foreclose or otherwise enforce said Fee Mortgage, nor shall Tenant's or any Space Tenant's or assignee's possession or right of possession be disturbed or in any manner interfered with, and this Lease or any such assignment of the Lease shall continue in full force and effect under the terms and provisions of this Lease as a direct lease from the Fee Mortgagee under such Fee Mortgage or from the purchaser at foreclosure or trustee's sale thereof to Tenant. (d) Any Fee Mortgagee shall give Tenanta copy of any notices given to Landlord under the Fee Mortgage concurrently with the delivery of such notice to Landlord. Each such notice shall contain a provision giving Tenant the right for a reasonable time to cure any defaults by Landlord. Any payments made by Tenant to cure such defaults, together with any legal costs, Interest or other financing charges or expenses (including assignable overhead) incurred in curing such defaults, may be deducted by Tenant from the Annual Rent to be paid hereunder. (e) Notwithstanding any other provision of this Lease, Tenant shall not terminate this Lease because of a default of Landlord under the Lease unless Tenant shall first have given any Fee Mortgagee, of which Tenant has actual (as opposed to constructive) knowledge, notice of intent to terminate, and such Fee Mortgagee shall have failed to cure the default on which such termination is based within thirty (30) days after such notice from Tenant or, if such default is of a nature that it cannot be cured within such thirty (30) days, such Fee Mortgagee shall have failed to begin to cure such default within said thirty (30) days or thereafter shall have failed actively and diligently in good faith to proceed to cure the default. (f) Upon request from time to time, and within ten days of the receipt of such request, Landlord and Tenant shall execute, acknowledge, and deliver to any Fee Mortgagee an agreement prepared at the sole expense of Landlord, in form satisfactory to such Fee Mortgagee,
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among Landlord, Tenant and such Fee Mortgagee, reaffirming the applicability of all of the provisions of this Paragraph 8.5 to a particular Fee Mortgage and Fee Mortgagee. 8.6 Assignment of Lease to Mortgagee. Notwithstanding anything contained in this Article 8 or in other provisions of the Lease to the contrary, any assignment ofleases with any Mortgagee shall be subject to the provisions of this Lease as it pertains to Term, purposes and requirements of necessary Council of the District of Columbia approvals and other federal approvals, as needed prior to execution of any assignment of Leases or new Leases to Mortgagees.
ASSIGNMENT AND SUBLEASING
9.1 Tenant's Right to Assign. Tenant shall have the right to assign its right, title and interest in and to this Lease in whole or in part, upon securing the prior consent or permission of Laridlord which consent shall not be unreasonably withheld, delayed,conditioned or denied; provided that any such assignment shall at all times be subject to this Lease and the right, title and interest of Landlord in and to the Land; and the proposed assignee agrees to assume and be bound by the terms of this Lease. Landlord acknowledges that the assignment of Tenant's right, title and interest under this Lease to a Leasehold Mortgagee as a condition of obtaining financing shall be permitted. In no event shall this Paragraph 9.1 restrict the right of a Leasehold Mortgagee under this Lease or a new Lease to assign its rights. 9.2 Effect of Assignment. Effective on the date of a permitted assignment by Tenant, the assignee shall be substituted for the assignor in this Lease; the term "Tenant", as used in this Lease, shall mean the assignee and not the assignor; and the assignor shall be relieved of any obligation or responsibility hereunder, relating to any period after the date of assignment. No assignor shall be relieved of any obligation or responsibility hereunder relating to any period before the date of its assignment, as approved by the Landlord. 9.3 Tenant's Right to Sublease. Tenant shall have the right to sublease all or any part of the Land or Improvements, without the necessity of securing the consent or permission of Landlord; provided, however, that any such sublease is to financially and legally responsible sublessees, which could be an approved tenant in its own right. Any sublease shall at all times be subject to this Lease and to the right, title and interest of Landlord in and to the Land; provided that, for each Space Lease, so long as the Space Lease is in full force and effect, such Space Tenant shall not be made a party in any action or proceeding to enforce any rights of Landlord, nor shall such Space Tenant's possession or right of possession be disturbed or in any way interfered with, nor shall the leasehold estate of any such Space Tenant be terminated by reason of any default by Tenant, Tenant covenants and agrees that each Space Lease affecting the Land shall provide that (1) it is subject to this Lease and (2) the Space Tenant will not pay rent or other sums (except security deposits) under the Space Lease for more than two months in advance. Tenant shall, in good faith, use reasonable efforts to enter into Space Leases with financially responsible Space Tenants upon terms and rentals generally competitive with those in use for comparable properties. Landlord agrees that upon receipt from time to time of any request from any Space Tenant and provided that Tenant shall have certified to Landlord that such Space Tenant is not in default under such Space Lease, Landlord will within ten days of request execute and deliver to such Space Tenant a non-disturbance agreement, guaranteeing such Space Tenant the continued
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right to occupy the applicable portions of the Land and Improvements pursuant to the terms of the Space Lease and this Lease. 9.4 Attornment. Any assignee of Tenant, by agreeing to such assignment, agrees to attorn to Landlord. Each Space Lease entered into by Tenant shall provide, to the extent obtainable, that the Space Tenant agrees to attorn to Landlord or any Mortgagee who has acquired the interest of Landlord or Tenant under this Lease.
10.1 The Tenant shall be required to obtain insurance coverages with the insurance companies and in the amounts, as prior approved by Landlord, to cover the following matters and protections. (a) Comprehensive General Liability Coverage. At all times during the term of this Lease, Tenant shall maintain, at its own cost and expense, policies of contractual and comprehensive general liability insurance, including public liability and broad form property damage, with a minimum combined single limit of liability of Three Million Dollars ($3,000,000.00), for personal injuries or deaths of persons occurring in or about the Land or Improvements. The District and the United States shall be named as additional insureds on all such policies. Every five years after the Commencement Date of this Lease the Tenant shall deliver to the District a report from Tenant's insurance expert advising what increase in the minimum liability insurance coverage, if any, is necessary, and this report shall be reviewed by the District's insurance expert. If the two insurance experts are in agreement, the minimum liability insurance coverage shall be adjusted in accordance with their agreement. If they disagree, the minimum liability insurance coverage shall be the average of the minimum coverage limit of the two insurance experts. The report of the Tenant's expert shall be delivered to the District within sixty (60) days after the expiration of each five (5) year term of this lease. The minimum liability insurance coverage shall be adjusted, as provided for above, by the Tenant within thirty (30) days of Tenant's receipt from the District of the adjusted minimum liability insurance coverage as determined by the District's liability insurance expert. If requested, the District shall endeavor to deliver to NPS any such insurance reports or certificates, contemplated under this provision of this Lease. (b) Fire and Casualty Insurance. At all times during the term of this Lease, Tenant shall maintain, at its own cost and expense, fire and extended coverage insurance covering the Improvements, Alterations, furniture, fixtures and equipment against damage or destruction by fire, water, vandalism, or other perils to the full replacement value thereof. The District shall be named as an additional insured in all such policies. The policies shall permit the insurance proceeds collected upon all such policies of insurance to be used to repair and/or replace the Improvements, Alterations, property, furniture, equipment, glass and fixtures so damaged or destroyed. (c) Certificates of Insurance. As of the Commencement Date, and on each anniversary of the Commencement Date during the term of this Lease, Tenant shall provide the District with a certificate of insurance for each policy required under this Lease showing that the coverages required hereunder are in force with premiums paid and that such policies are non-
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cancelable and may not be materially modified except upon thirty (30) days prior notice to the District. (d) Tenant's Release. Tenant hereby releases and indemnifies the District from any and all liability and responsibility to anyone claiming any loss or damage to property arising from a risk insured against under the insurance required to be carried by Tenant. Tenant's insurance policies shall include appropriate clauses waiving all rights of subrogation against the District to Tenant, with respect to losses payable under such policies. (e) Violation of Insurance Requirements. Tenant shall not do or suffer to be done or keep or suffer to be kept anything in or about the Land or Improvements which will contravene any of the insurance coverages required herein and shall immediately cease any such activity or omission that is in violation of such insurance coverage.
(f) Subrogation. All insurance policies and coverages, required under this Lease, shall include provisions waiving any/all rights of subrogation against the United States and the District for any payments for losses provided under such insurance policies and coverages. 10.2 Landlord's Right to Procure Insurance. If Tenant shall fail to maintain any such insurance required hereunder, then Landlord may, at Landlord's election, procure the same, adding the premium cost thereof to the Annual Rent next due hereunder, it being hereby expressly covenanted and agreed that payment by Landlord of any such premium shall not be deemed to waive or release the obligation of Tenant to make payment thereof.
10.3 Insurance Proceeds. Insurance proceeds recovered by reason of the destruction of or damage to the Improvements or any portion thereof shall be paid to, and shall, subject to the rights of any Leasehold Mortgagee(s), be the property of Tenant. Tenant shall, in consultation with the Landlord, be obligated to direct that such proceeds be used to repair and restore the Improvements so damaged, or apply the same first toward the payment of the outstanding principal balance of any Leasehold Mortgage, if it is decided not to repair or restore the Improvements.
11.1 Total Taking. In the event of a Taking of the entire Land or the Improvements, including the entire fee simple title to the Land, as well as the right, title and interest of Ten ant therein, then the rights and obligations of the parties hereunder (except rights and obligations arising prior to such Taking and except rights and obligations provided in this Article II) shall terminate as of the date of such Taking; the parties hereby agree to look solely to the condemnation award or proceeds for compensation in the proportions hereinafter provided for their respective interests in the Land and Improvements; and there shall be an abatement from and after the date of the Taking in the payment of all rentals and other sums payable by Tenant under the provisions of this Lease. The Taking shall be considered to take place upon the earlier of (a) termination of the Tenant's ability to operate the property for its intended use, or (b) the later of acquisition of title by the condemning authority, or acquisition of possession by the condemning authority.
11.2 Partial Taking. In the event of a Taking of any portion of the Land or the Improvements, and if Paragraph 11.3 or Paragraph 11.4 does not apply thereto, then the Annual Rent Amount, the Annual Rent and any other payments owed by Tenant to Landlord hereunder, if any, shall be reduced, as of the date of Taking, either in the same proportion that the ground area of the Land so taken bears to the total ground area of the Land; or in the same proportion that the square footage of the Improvements so taken bears to the square footage of the Improvements immediately prior to such Taking, whichever of such proportions results in a greater reduction in such rental and payments, and there shall be an apportionment of the Taking award or proceeds in accordance with Paragraph 11.5.
11.3 Substantial Taking. In the event of a Taking of a substantial portion, but less than the entire Land or the Improvements, such that it shall no longer be reasonably economical or practical for Tenant, in Tenant's sole judgment, to continue its business on the Land, then Tenant shall have the right, at its option, to terminate this Lease by notice in writing to Landlord within ninety (90) days after Tenant actually receives notice that such Taking has occurred, in which event this Lease shall be terminated, except that the Tenant's interest hereunder shall continue for purposes of the apportionment of the Taking award or proceeds in accordance with Paragraph 11.5.
11.4 Temporary Taking. In the event of a temporary Taking of the right to possession and use of all or part of the Land or the Improvements as to which Paragraphs 11.1, 11.2, and 11.3 are not applicable, then Tenant shall be entitled to the entire Taking award or proceeds to the extent that the award or proceeds relate to a period and the Tenant's interests in the taking within the Term, and there shall be no reduction in the rental payable hereunder. 11.5 Allocation of Award. In the event of a Taking as described in Paragraph 11.1, the net Taking award or proceeds, including damages or interest (after deduction of all expenses, including fees of attorneys, appraisers, and expert witnesses), shall be paid as follows and in the following order of priority (and, in the event of a Taking as described in Paragraph 11.2 or Paragraph 11.3 the apportionment of the Taking award or proceeds shall take into account these priorities to the extent applicable): (a) To any Leasehold Mortgagee, in accordance with thetenns of its Leasehold Mortgage up to the balance due on any loan secured by its Leasehold Mortgage, and if there shall be more than one Leasehold Mortgagee, then such portion of the award shall be distributed among the Leasehold Mortgagees in their order of priority; To Tenant, a sum equal to the value of the Improvements (plus, in the event ofa partial Taking, any consequential damages to the Improvements) and the value toTenant of the unexpired term of the Lease, less the amount paid to the Leasehold Mortgagee; and (c) To Landlord and any Fee Mortgagee, as their interests may appear, a sum equal to the value of the Landlord's reversionary interest in the portion of the Land so taken, taking into account the capitalized value of the rent computed at an interest rate equal to that which comparable properties at the time of the Taking, and discounted to a present value.
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(d) Any remaining balance of the Taking award or proceeds, after the costs associated with such Taking and any amounts used for the rebuilding, repairing, restoring or improving the Improvements, shall be distributed to or retained by Tenant. Tenant shall be entitled to any separately allocated award or proceeds in respect of moving expenses, or loss of good will or profit or in respect of fixtures and other property of Ten ant, and/or the cost or expense for the repair and removal of such fixtures and other property. 11.6 Notice of Taking. Landlord shall give Tenant and any Mortgagees immediate written notice of any pending or threatened Taking. Tenant and any Leasehold Mortgagee shall have the unqualified right to intervene and advocate their interests in any Taking proceedings. 11.7 Dispute Regarding Valuation or Allocation. Provided that Landlord shall not be in breach 0 f the representations, as legally permitted, set forth in Paragraph 17.3 hereof, in the event that Landlord and Tenant have not agreed within thirty (30) days after the occasion for such agreement occurs as to any valuation, allocation, or determination pursuant to this Paragraph 11, then said valuation, allocation or determination shall be made using the appraisal procedure set forth in Paragraph 12 hereof. 12.
12.1 Right of Appraisal. In the event any apportionment, allocation, valuation or price is expressly designated to be established by appraisal under this Lease, such amount shall be determined in the manner set forth in this Paragraph 12. The appraisal procedure shall be invoked by written notice from either party hereto to the other party, which notice shall designate an appraiser. 12.2 Selection of Appraisers. The party to whom such notice is given shall have fifteen (15) days after the receipt of such notice to designate a second appraiser by written notice to the party who invoked the appraisal procedure. If no second appraiser is so designated, the first appraiser shall act singly hereunder. If two appraisers have been designated in accordance with this Paragraph 12.2, the two appraisers, in concert and agreement, shall have fifteen (15) days from the date of the notice designating the second appraiser in which to designate a third appraiser by written notice to both parties hereto. If the two appraisers designated by the parties fail to designate a third appraiser within the required fifteen (15) day period, then either party hereto may request that the president of the Washington D.C. Association of Realtors or any successor organization designate such third appraiser. If no such third appraiser is selected by said .president within fifteen (l5)days of a written request, the first two appraisers shall have five (5) additional days thereafter to attempt to select a third appraiser. If the first two appraisers still have not selected a third appraiser, the first two appraisers shall be dismissed and the process of selecting appraisers shall be commenced again by the designation of an appraiser by the first party who designated an appraiser in accordance with this Paragraph 12.2. 12.3 Appraisal Procedure. The appraisal process shall be completed within a reasonable time after the completion ofthe process of selecting the appraiser or appraisers shall be final and binding upon the parties, and a final judgment thereon may be entered by a court of competent \ jurisdiction on the petition of either party. Each party hereto shall have the right to make written
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submissions to the chosen appraisers so long as such submissions are served on the other party hereto. Each appraiser shall be an MAl or similarly qualified appraiser experienced in the appraisal of commercial real estate in the Metropolitan Washington, DC area. Each appraiser shall make an independent appraisal. The appraised value as determined by the third appraiser shall be the appraised value hereunder except that if the third appraisal is below the lower of the first two appraisals, the lower of the first two appraisals shall be the appraised value, and if the third appraisal is higher than the higher of the first two appraisals, the higher of the first two appraisals shall be the appraised value. If only one appraiser is appointed, Landlord and Tenant each shall pay half the cost of such appraiser. Iftwo or three appraisers are appointed, Landlord and Tenant each shall pay the cost of the appraiser designated by them and one-half of the cost of the third appraiser.
13.1 Events of Tenant's Default. Anyone or more of the following events shall constitute a Tenant's Default hereunder for which the Landlord may seek specific performance or other available legal and equital remedies of default as legally permitted: (a) If default shall be made by Tenant in the due and punctual payment of any Annual Rent or any part thereof or any of the other amounts payable under this Lease, including such PILOT, when and as the same shall become due and payable; (b) If default shall be made by Tenant in the performance to, or in compliance with, any of the other covenants, agreements or conditions contained in this Lease to be performed or complied with by Tenant, including compliance by the Tenant with the terms of the said Development Schedule, annexed to this Lease as Exhibit F; or (c) Default by Tenant under any existing Leasehold Mortgage or other Mortgage affecting the Property or the Improvements, which shall remain uncured by Tenant and result in foreclosure of the Leasehold interests of the Tenant and/or transfer of Improvements and Leasehold Interests in lieu of foreclosure, provided that Landlord has the right but not the obligation to cure on Tenant's behalf, Tenant's default under any such Mortgage.
13.2 Notice of Ten ant's Default; Cure Period. Upon the occurrence of a Tenant's Default, Landlord shall, prior to exercising any remedies hereunder, give to Tenant, pursuant to the notice provisions hereof, a Notice of Tenant's Default, which Notice of Tenant's Default shall at the same time be given to any Leasehold Mortgagees, and which shall provide in the case of a Tenant's Default defined in Paragraph 13.1(a) that Tenant shall cure such default within fifteen (15) days from the date of such Notice of Ten ant's Default and which shall provide in the case of a Tenant's Default described in Paragraph 13. 1(b) that Tenant shall cure such default within a period of thirty (30) days from the date of such Notice of Ten ant's Default. With respect to any Tenant's Default other than a default in the payment of money, which default is of such nature that it cannot, by due diligence, be cured within the foregoing periods of time, if Tenant shall commence the curing of such default within the applicable time period, then Tenant shall be entitled to a reasonable period, to cure such default as may be required by Tenant in the exercise
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of due diligence in endeavoring to cure such default. Any Leasehold Mortgagee shall have the same rights and periods of time within which to cure or commence to cure any Tenant's Default as are available to Tenant plus thirty (30) additional days for each successive Leasehold Mortgagee. 13.3 Notice or Termination. In the event that an event of Ten ant's Default occurs and Landlord gives Tenant and any Leasehold Mortgagee a Notice of Tenant's Default in accordance with Paragraph 13.2. and Tenant and Leasehold Mortgagee fail to cure the specified Default within the time allowed by this Lease, then Landlord may give to Tenant, pursuant to the notice provisions hereof, a Notice of Termination, which shall at the same time be given to any and all Leasehold Mortgagees and which shall provide that, unless the Default specified in the Notice of Tenant's Default and again specified in the Notice of Termination is cured (or a cure is commenced) within five (5) days following the giving of the Notice of Termination, then, upon the expiration of such five (5) day period, the Term of this Lease shall expire and terminate. Upon the occurrence of all of the foregoing events, including the expiration of such five (5) day period, then unless such Default shall have been cured, the Term of this Lease shall expire and terminate with the same force and effect as though the date so specified were the date herein originally fixed as the expiration date of the Term. 13.4 Tenant to Quit Upon Termination. Upon the expiration or termination of this Lease as described in the preceding Paragraph 13.3, Tenant shall quit and peaceably surrender the Land, without further notice, any and all notices to quit, notices of intention to re-enter or any other notices and any Institution of legal proceedings hereby being waived by Tenant. No re-entry by Landlord shall be deemed an acceptance of a surrender of this Lease. 13.5 Exculpation and Limited-Recourse Nature of Lease. Notwithstanding any other provisions of this Lease, Landlord agrees that the obligations of Tenant hereunder shall not constitute a personal obligation of the individuals and officers of the general or limited partners, joint venturers, officers, directors, agents, employees or other representatives of any business entity which at any time constitutes Tenant or any part of Tenant.. 13.6 Additional Cure Rights of Leasehold Mortgagees. The rights of any Leasehold Mortgagees and other provisions regarding default and termination as set forth in Paragraph 8 shall apply in addition to any rights to cure set forth in this Paragraph 13; provided that such rights to Leasehold Mortgagee( s) do not abrogate or diminish the rights of the Landlord as may be prescribed herein and under applicable law. 13.7 Limitation on Tenant's Liability. Notwithstanding any other provision of this Paragraph 13 or any other provision of this Lease, Tenant's liability to Landlord shall be limited to and may be enforced against the Improvements and any other assets of the Tenant, in terms of monetary liabilities, except if such guarantees mentioned in Paragraph 13.5 of this Lease. 14
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14.1 Landlord's Default. Any failure by the Landlord to perform or to comply with, within the applicable time periods, any ofthe covenants, agreements or conditions contained in this Lease to be performed or complied with by Landlord, shall constitute a Landlord's Default. 14.2 Notice of Landlord's Default; Cure Period. Tenant shall, prior to exercising any remedies hereunder, give to Landlord, pursuant to the notice provisions hereof, a Notice of Landlord's default, which Notice of Landlord's Default shall at the same time be given to any Fee Mortgagees, and which shall provide that Landlord shall cure such Default within fifteen (15) days from the date of such Notice of Landlord's Default. With respect to any Event of Landlord's Default if Landlord shall commence the curing of such Default within the period specified in the Notice of Landlord's Default, then Landlord shall be entitled to as long a period to cure such Default as may be required by Landlord in the exercise of due diligence in endeavoring to cure such Default. Any Fee Mortgagee shall have the same rights and periods of time within which to cure or commence to cure any Landlord's Default as are available to Landlord plus thirty (30) additional days for each successive Fee Mortgagee. Notwithstanding anything contained herein to the contrary, the Landlord shall not be required to cure any default or otherwise if such cure shall cause the Landlord to violate the Antideficiency Act of the Landlord. Landlord shall use its best efforts to allocate or cause to be allocated amounts needed for this purpose. 14.3 Tenant Right to Terminate Lease. If the Landlord shall fail to cure the Landlord's Default within the required time period, then the Tenant shall have the following remedies against Landlord in addition to the right to terminate the Lease under Paragraph 14.4. (a) Tenant shall be entitled to an abatement of Annual Rent with reference to the period of Landlord's Default; provided such Landlord's default jeopardizes or renders the Land unsuitable for Tenant purposes or causes an identifiable loss of profits to Tenant's use and occupation of the Land and Tenant's improvements. Tenant's decision to exercise such remedy shall be given by notice in writing to Landlord. Tenant shall have the right, in the name of Landlord, to execute or join in the documents or actions required of Landlord by this Lease and for that purpose Landlord, for this purpose only as may be legally permitted, hereby irrevocably appoints Tenant as attorney-in-fact (which power of attorney shall be deemed coupled with an interest) so to act on behalf of Landlord. Notwithstanding anything contained in this provision or in this Lease to the contrary,the Landlord shall not, unless specifically done so in writing by the landlord, appoint the Tenant to act as its attorney-in-fact in any matter whatsoever, including such matters that would or may acknowledge the Landlord owing or being charged with monetary or other liabilities nor obligate the Landlord to perform or cause to be performed certain actions inconsistent with applicable laws and regulations, and shall in any way obligate the Landlord or transfer any interests of the Landlord in Property. 14.4 Notice ofTennination. In the event that an event of Landlord's Default occurs and Tenant gives Landlord and any Fee Mortgagees a Notice of Landlord's Default in accordance with Paragraph 14.2 and Landlord and any Fee Mortgagees fail to cure the specified Default within the time allowed by this Lease, the Tenant may give to Landlord, pursuant to the notice
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provisions hereto, a Notice of Termination, which shall at the same time be given to any Fee Mortgagees and which shall provide that, unless the Default specified in the Notice of Landlord's Default and again specified in the Notice ofTennination is cured (or a cure is commenced) within five (5) days following the giving of the Notice of Termination, then, upon the expiration of such five (5) day period, the term of this Lease shall expire and terminate, Upon the occurrence of all of the foregoing events, including the expiration of such five (5) day period, then unless such Default shall have been cured, the Term of this Lease shall expire and terminate with the same force and effect as though the date so specified were the date herein originally fixed as the expiration date of the Tenn. 14.5 Tenant to Quit Upon Termination. Upon the expiration or termination of this Lease as described in the preceding Paragraph 14.4. Tenant shall quit and peaceably surrender the Land, without further notice any and all notices to quit, notices of intention to re-enter or any other notices and any institution of legal proceedings hereby being waived. No re-entry by landlord shall be deemed an acceptance of a surrender of this Lease. 14.6 Tenant's Rights to Cure Landlord's Defaults. If Landlord defaults (as described in Paragraph 14.1) beyond any applicable grace period in the doing of any act herein required to be made or done by Landlord and which is capable of being made or done by Tenant, then Tenant may, but shall not be required to, make such payment or do such act, in which event, the amount of the expense shall be paid by Landlord to Tenant or shall be abated by Tenant from the next installment of Annual Rent then coming due. Tenant shall be entitled to pursue any such remedy until such breach is cured by Landlord or expressly waived in writing by Tenant.
INDEMNIFICATION AND LIABILITY LIMITATIONS
15.1. Tenant's Indemnity. Tenant hereby indemnifies and agrees to defend and hold the District and the United States and all of their officers, agents, employees and servants harmless (i) from claims for personal injury, death, or property damage in any way connected with the use of this Land and Improvements by Tenant, its successors, assigns, invitees, licensees, agents, employees, contractors, subcontractors, and/or any persons whomsoever are on the Land and Improvements or connected with the Land and Improvements, and (ii) from all claims, demands, fines, penalties, charges and orders, judgments and enforcement actions of any kind and all costs and expenses incurred in connection therewith, including remediation costs, attorneys' fees and defense costs, arising directly or indirectly, in whole or in part, out of (a) the presence on the Land or Improvements of any Hazardous Substances (as hereinafter defined) or any spilling, leaking, pumping, or other release into the environment (collectively, a "Discharge") of any Hazardous Substance on, under, or from the Land or Improvements in violation of any Environmental Laws (as hereinafter defined), or (b) any activity by any third persons occupying or present on the Land or Improvements regarding the handling of Hazardous Substances in the Land or Improvements. Nothing contained herein shall be construedas providing an indemnity to the Landlord for actions or omissions of the Landlord in the course of the exercise of its governmental functions such as police, fire protection, public health, regulation of commerce and other functions of government unless such claim is based primarily on Tenant's negligence or where the claim on which Landlord seeks indemnity has been caused primarily by Landlord's negligence.
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. April 2007
(a) Hazardous Substances Defined. As used in this Lease, the term "Hazardous Substances" means any substance, material, condition, mixture or waste which is now or hereafter (i) defined as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous Waste,' "restricted hazardous waste," "oil," "pollutant," or "contaminant" under any provision of District, federal, or other Applicable Law; (ii) classified as radioactive material; (iii) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. §1321 or listed pursuant to Section 307 of the Clean Water Act, 33 U.S.C. §1317 ("Clean Water Act"); (iv) defined as a "hazardous waste" pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. ("RCRA"); (v) defined as a "hazardous substance" pursuant to Section 10 1 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq. ("CEPCLA"); (vi) determined to be a "hazardous chemical substance or mixture" pursuant to the Toxic Substances Control Act, 15 U.S.C §2601 et seq. ("TOSCA"); (vii) identified for remediation, storage, containment, removal, disposal, or treatment in any District plan for the Building; or (viii) determined by the District or federal authorities to pose or be capable of posing a risk of injury to human health, safety or property (such substances to include petroleum and petroleum byproducts asbestos, polychlorinated biphenyl, poly-nuclear aromatic hydrocarbons, cyanide, lead, mercury, acetone, styrene and "hazardous air pollutants" listed pursuant to the Clear Air Act, 42 U.S.C. §7412 et seq. ("Clean Air Act"). (b) Environmental Laws Defined. As used in this Lease, "Environmental Laws: means every law, ordinance, regulation, judicial or administrative order or decree, permit, license, approval, authorization and similar requirement of every federal and District governmental agency or other governmental authority relating to any hazardous Substances, including the Clean Water Act, the Clean Air Act, TOSCA, CERCLA, RCRA, the Hazardous Materials Transportation Act (49 U.S.C. §5101 et seq.), the Hazardous Substances Account Act, the Federal Hazardous Substances Act (15 U.S.C. §1261 et seq.), the Underground Storage Tank Act ofl984 (42 U.S.C. §991 et seq.), and the District of Columbia Underground Storage Tank Management Act of 1990 (D.C. Code §6-995.l et seq. (1981 ed.)), and the National Environmental Policy Act ("NEPA"). 15.2. Personal Property. Tenant shall bear the risk of all losses, destruction or damage to any personal property placed by Tenant on the Landor Improvements, and the District shall not be liable for any damage to said personal property of the Tenant for any cause whatsoever. 15.3 Limitations on the District and the United States. The District and the United States shall not be liable to Tenant, its successors, employees, assigns, invitees, licensees, contractors, subcontractors, or any person connected with Tenant or present on the Land or Improvements for any damage, loss or injury to Tenant, its successors, assigns, invitees, licensees, contractors, agents, subcontractors or any person connected with or present on the Land and Improvements, which such loss, injury or damage may occur as a result of the exercise of the Landlord's or the Unites States' rights under this Lease. 15.4 Antideficiency Act and Limitations of Landlord Obligations and Responsibilities. Notwithstanding any other provision(s) of this Lease to the contrary, any and all provisions, which
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obligate the Landlord are and shall remain subject to the limitations of the Antideficiency Act, prescribed under 31 U.S.C. §§ 1341, 1342, 1349, and 1351, as made applicable to the Landlord under D.C. Official Code § 47-105 (2001 ed.). If such provision(s) shall be in violation of the Antideficiency Act, that particular provision as applicable to the Landlord shall be void ab initio.
Any prevention, delay, nonperformance, or stoppage due to any of the following causes shall excuse nonperformance by Tenant hereunder for a period equal to the length of any such prevention, delay, nonperformance or stoppage, except the obligations imposed by this Lease for the payment of rent, hnpositions or insurance premiums. The causes referred to in the preceding sentence are: strikes, lockouts, labor disputes, failure of power, acts of public enemies, riots, insurrections, civil commotion, inability to obtain labor or materials or reasonable substitutes for either, governmental restrictions, regulations or controls, casualties not contemplated by insurance provisions of this Lease, or other causes beyond the reasonable control of the party obligated to perform.
17.1 Environmental Hazards. Landlord hereby, to the best of its knowledge, represents that the Land has not been used for the manufacture, generation, storage or disposal of any Hazardous Material (as defmed below), nor has there been any spill, release, discharge or . leaching of any Hazardous Material from or onto the Land. As used in this Lease, the term "Hazardous Materials" shall include (i) asbestos or asbestos containing materials, (ii) petroleum or petroleum distillates or any oil, petroleum products and their by-products, or (iii) any substance or combination of substances defined as "Hazardous substances", "hazardous wastes", "extremely hazardous waste", "hazardous materials", "toxic substances", or any other category of similar import in any federal or local environmental law or any regulation promulgated pursuant thereto.i In keeping with District of Columbia laws regarding the soil conditions, the Landlord, to the best of its knowledge, advises the Tenant that this is Urban Land, but such shall be confirmed by the Tenant during the permit period and any Feasibility Study, which the Tenant shall provide the Landlord a certified copy of the Report, including soil reports forits files. To confirm the soil condition, the Tenant shall contact the DC Department of Consumer and Regulatory Affairs and the Soil Conservation Service (USDA). This notice of condition of the soil by the Landlord shall not constitute any warranty or representation. In accordance with the District of Columbia Underground Storage Tank Management Act of 1990 Amendment Act of 1992 (the "Act") and the DC Underground Storage Tank Regulations, Landlord informs Tenant that Landlord to the best of its knowledge does not have knowledge of any existence of an "underground storage tank (as defined in the Act and the Regulations), in, on or under the Property, as such information has been provided to the Landlord by the Tenant.
See Hazardous Materials Addendum (Rider) attached hereto and made a part of this Lease " and Provision 15 of this Lease.
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17.2 Utility and Access Availability. Landlord hereby, to the best of its knowledge, represents to Tenant that the Land is presently serviced by and connected to a municipal water and sewerage service and has available to it access to electrical and natural gas service. Landlord also represents, to the best of its knowledge, to Tenant that the Land is served by dedicated and accepted publicly-maintained roads. 17.3 Condemnation and Eminent Domain. Landlord acknowledges that both Landlord and the fee owner, the United States of America, are possessed of the powers of eminent domain and condemnation. Landlord, to the best of its knowledge and belief, therefore represents and warrants' as a material inducement to Tenant entering into this Lease, that it will not institute a Taking (i) in bad faith; (ii) to gain an economic, litigation, or dispute resolution advantage against Tenant; (iii) to increase Landlord's economic yield from the Property; (iv) for any improper purpose; (v) to increase or alter Landlord's benefit of the bargain under and pursuant to this Lease; or (vi) for any purpose other than a legitimate exercise of such Taking powers and to promote a useful civic purpose such as, by way of example and not by way of limitation, the widening or construction of a road, the construction of an interstate highway, or the construction of a mass-transit facility. 17.4 Landlord's Additional Representations. Landlord, to the best of its knowledge and belief, makes the following representations and warranties as of the date of execution of this Lease: (a) Landlord is a duly formed and validly municipal corporation, and has full power and authority, and has obtained all necessary authorizations and consents, to enter into and perform its obligations under this Lease, and the person executing and delivering this Lease on behalf of Landlord is authorized to do so by all necessary government actions, owner permissions and enabling legislation. (b) This Lease is a legal, valid and binding obligation of Landlord enforceable against Landlord and the fee owner in accordance with its terms, except as such enforceability may be limited by bankruptcy, Transfer of Jurisdiction, Statement of Non-disturbance, reorganization, moratorium or similar laws relating to the enforceability of creditor's rights and general principles of equity. (c) The execution and delivery of this Lease by Landlord will not result in a breach of the terms or provisions of, or constitute a default (or a condition that, upon notice or lapse of time, or both, would constitute a default) under its organizational docwnents or any indenture, agreement, instrument or obligation by which landlord is bound, and, to the best of its knowledge, will not constitute a violation of any law, order, rule or regulation applicable to Landlord, GSA or the United States of America. (d) To the best of Landlord's knowledge and belief, and except as contemplated under this Lease, there is no existing, pending, contemplated, threatened or anticipated (i) condemnation of any part of the Land, (ii) widening, change of grade or limitation on use of streets abutting the Land, or (iii) other legal action that would impair the value or use of the Land or prevent the
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construction of the Initial Improvements in accordance with the approved plans and specifications .
(e) Landlord acknowledges that, as of the Lease Commencement Date, Tenant has complied with and is not in breach of the Development Agreement, including all time tables, schedules, and time-related duties or obligations contained or referenced therein or submitted in connection therewith and Landlord shall be estopped from claiming otherwise. It is understood and agreed that, in some instances, the Landlord is relying on the representation of the Tenant, which, if found to be false, shall be regarded as a default under this Lease. (f) Landlord represents that it is a party to a Statement of Non-Disturbance (attached as Exhibit E) with the United States General Services Administration, such Statement remains in full force and effect and that it has not received notice, in writing or otherwise, of its cancellation or amendment. Landlord represents that, acting by and through the Department of Housing and Community Development, successor to the Office of Business and Economic Development, it shall approve of Tenant's right-of-entry to permit the Tenant to enter upon the Property for investigatory purposes, as may be needed prior to execution of the this Lease, so long as the Tenant shall represent to the Landlord that it is exercising due diligence in terms of survey and any necessary environmental assessments. Landlord's Disclaimer. Landlord, by execution of this Lease and representation contained herein, does not in any way represent any act or knowledge, which is or should be attributed or required to be those of the United States. (i) Landlord Warranties Notwithstanding anything to the contrary contained herein, the Landlord does not and shall not make any representations or warranties as to the condition of title of the demised Property.
18.1 No Brokers. Landlord and Tenant each represent and warrant to the other that they have not dealt with any real estate agent or broker in connection with this Lease, and each shall indemnity and save the other harmless from and against any and all liability, costs and expenses (including reasonable attorneys fees) resulting from a breach of such representation or warranty. 18.2 Estoppel Certificate from Tenant. Upon ten (10) days' prior written notice by Landlord from time to time as Landlord reasonably shall require, Tenant shall execute, acknowledge and deliver to Landlord or to any person designated by Landlord, a written Statement certifying (l) whether this Lease has been modified (and, if there have been modifications, identifying the same by the date thereof and specifying the nature thereof), (2) whether Tenant has received any Notice of Default or Notice of Termination of this Lease, (3) whether to the knowledge of Tenant any Tenant's Default exists hereunder, (4) whether Tenant has any specific knowledge of any claims, defenses or offsets against Landlord hereunder, (5) the dates to which the Annual Rent and other amounts, ifany, payable by Tenant hereunder have been paid, (6) that the Lease
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is in full force and effect and that there are no conditions existing which, with the passage of time or the giving of notice or both, would constitute a Tenant's Default, and (7) that the contemplated transfer or financing, if any, does not constitute a Default under the Lease and that no consent of the party so certifying is required for such transfer or financing. 18.3 Estoppel Certificate from Landlord. Upon ten (10) days' prior written notice by Tenant from time to time as Tenant reasonably shall require, Landlord shall use reasonable efforts to execute, acknowledge and deliver to Tenant or to any person designated by Tenant, a written statement certifying (1) whether this Lease has been modified (and, if there have been modifications, identifying the same by the date thereof and specifying the nature thereof), (2) whether any Notice of Default or Notice of Termination of this Lease has been given to Tenant, (3) whether to the knowledge of Landlord any Tenant's Default exists hereunder, (4) whether Landlord has any specific knowledge of any claims against Tenant hereunder, (5) the date to which the Annual Rent and any other amounts, if any, payable by Tenant have been paid, (6) that the Lease is in full force and effect and that there are no conditions existing which, with the passage of time or the giving of notice or both, would constitute a Tenant's Default, and (7) that the contemplated transfer or financing, if any, does not constitute a Default under the Lease and that no consent of the party so certifying is required for such transfer or financing. 18.4 Memorandum of Lease. As an event concurrent with the execution of this Lease, Landlord and Tenant shall execute, in recordable form and for purposes of recordation, a short form of this Lease containing the names of the parties, a description of the Land, the Term of the Lease, a statement of the permitted uses hereunder of the Land, and such other provisions as Tenant reasonably may require. The cost of recording such short form of this Lease shall be borne by the Tenant. 18.5 Entire Agreement. This Lease with exhibits thereto constitutes the entire agreement between Landlord and Tenant and this Lease is intended to be an integration of all prior or contemporaneous agreements, conditions or undertakings between Landlord and Tenant with regard to the leasing of the Land and all other matters addressed herein. There are no promises, agreements, conditions undertakings, warranties or representations, oral or written, express or implied, between the parties other than as herein contained. 18.6 Amendment. No change or modification of this Lease shall be valid unless the same is in writing and signed by both the Landlord and the Tenant. Except as otherwise herein expressly provided, no purported or alleged waiver of any of the provisions of this Lease shall be valid or effective unless contained in a writing signed by the Party against whom it is sought to be enforced. 18.7 No Partnership. Nothing contained in this Lease shall be construed in any manner to create any relationship between Landlord and Tenant other than the relationship oflessor and lessee, and Landlord and Tenant shall not be considered to be partners, co-venturers, associates or affiliates for any purpose. Neither Landlord nor Tenant shall be deemed liable for any debts of any nature incurred by the other. Nothing herein contained shall be construed to confer upon the Landlord any interest in the business of the Tenant, except as it may relate to the Improvements or as a remedy of default by the Tenant.
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18.8 Lease Solely for Benefit of Parties Hereto. Except for any rights specifically granted herein to any Fee Mortgagees or Leasehold Mortgagees, the terms and provisions of this Lease are for the benefit of the parties thereto, their respective successors, permitted assigns and transferees and all persons claiming under or through them, and no other person shall have any right or cause of action on account thereof. 18.9 No Merger. The fee title of the United States of America in and to the Land and the leasehold estate of Tenant shall at all times be separate and apart, and shall in no event be merged, notwithstanding the fact that this Lease or the leasehold estate created hereby, or any interest in either thereto, may be held directly or indirectly by or for the account of any person who shall own the fee estate in the Land or any portion thereof; and no such merger of estates shall occur by operation oflaw, or otherwise, unless and until all persons at the time having any equity or secured financing interest of record in the fee estate and all persons having any equity or secured financing interest of record in the Lease or the leasehold estate, shall join in the execution of a written instrument effecting such merger of estates and shall record such instrument among the land records of the District of Columbia. Notwithstanding anything contained herein to the contrary, such merger estate may occur by operation of law in the event of termination or expiration of any non-freehold interest in the Land and Improvements by any party or parties in any way connected with claiming an interest in the Land and Improvements, but only to the Landlord or the underlying fee holder, the United States of America Government. 18.10 Severability. In the event that anyone or more of the provisions of this Lease shall for any reason be held to be invalid, illegal or unenforceable in Whole or in part or in any respect, or in the event anyone or more of the provisions of this Lease operate or would prospectively operate to invalidate this Lease, then and in either of those events, at the option of Tenant, such provision or provisions only shall be held for invalid and shall not affect any other provision of this Lease or the validity of any of the remaining obligations contained therein and the remaining provisions of this Lease shall remain operative and in full force and effect and shall in no way be affected, prejudiced or disturbed thereby. 18.11 Obligations to Run With Land. The parties hereto covenant and agree that all of the conditions, covenants, agreements, rights, privileges, obligations, duties, specifications and recitals in this Lease contained, shall be construed as covenants running with the land, and as extending to, inuring to the benefit of, and being binding upon Landlord and Tenant and their successors and assigns, to the same extent as if the said successors and assigns were herein named as original parties hereto, all to the end that this Lease shall always bind the owner and holder of any interest whatsoever in or to the Land, and the Improvements thereon, subject to the Statement of Non-Disturbance by the United States Government, herein mentioned. All provisions of this Lease shall be construed to be "conditions" and "covenants" as though language specifically expressing or importing covenants and conditions were used in each separate provision of this Lease. 18.12 Gender; Number. Words of any gender used in this Lease shall be held to include any other gender; words in the singular number shall be held to include the plural; and words in the plural shall be held to include the singular; all when the sense requires.
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18.13 Governing Law. This Lease is made pursuant to, and shall be construed and enforced in accordance with, the laws of the District of Columbia. 18.14 Notice in Event of Litigation, etc. If during the period that this Lease is in effect, Landlord or Tenant receives any notice from any public, quasi-public, or private authority or entity regarding any litigation, governmental action or eminent domain proceeding, which may affect the Land, then such receiving party shall promptly deliver a copy of such notice to the other party. 18.15 Captions for Convenience. The captions, titles and Paragraph or paragraph headings (including the index and table of contents) are inserted only for convenience, and are in no way to be construed as part of this Lease, or as a limitation on the scope of the particular provisions to which they refer. Notwithstanding the foregoing, the captions in the various paragraphs in Article 1 shall constitute the words defined in such paragraph. 18.16 Counterparts. This Lease may be executed in counterparts, each of which shall constitute an original and all of which together shall constitute one agreement. The cover sheet of each such counterpart shall indicate the total number of counterparts executed by the parties, and the recipient of such counterpart. 18.17 Consents Not Unreasonably to Be Withheld. Whenever it is provided in this Lease that any thing or matter is subject to the judgment or satisfaction of Landlord or that the consent, approval, action or permission of Landlord is required, Landlord covenants and agrees that the term ''judgment'' or "satisfaction", as the case may be, shall be deemed to mean "reasonable judgment" or "reasonable satisfaction" and that any such consent, approval, action or permission shall not unreasonably be withheld, conditioned, delayed or denied. 18.18 Notices. All notices, requests, demands or other communications which may be or are required or permitted to be served or given hereunder (in this Lease collectively called "notices") shall be in writing and shall be sent by hand or by registered mail deposited in a depository for the U.S. mail, return receipt requested, postage prepaid, to Landlord or Tenant, at their respective address set forth below, or to such other address as either party may designate by written notice to the other, and such notices shall be deemed given or served on the date of their actual hand delivery (ifby hand) or the third day after they are mailed in accordance herewith (ifby U.S. mail): If to Landlord: GOVERNMENT OF THE DISTRICT OF COLUMBIA The Department of Housing and Community Development Development Finance Division 801 North Capitol Street, NE 2ndFloor Washington, DC 20002.
With copy to:
Office of the Attorney General of the District of Columbia
April 2007 Page 390f46
Economic Development Section District of Columbia Government 801 North Capitol Street, NE Washington, DC 20002
If to Tenant:
Conference Center Associates I., L.L.C. c/o Mariani Architects Engineers 16449 Ed Warfield Road Woodbine, Maryland 21797 Attn: Theodore F. Mariani, FAlA, PE
With copy to:
Arthur K. Mason, Esq. and James M. Sack, Esq. clo Sack Harris and Martin, P.C. Suite 810 8270 Greensboro Drive McLean, Virginia 22102
18.19 No Waiver. No failure by Landlord or Tenant to insist upon the performance of any covenant, agreement, provision or condition of this Lease or to exercise any right or remedy consequent upon a default by Landlord or Tenant hereunder, and no acceptance of full or partial rent during the continuance of any such default shall constitute a waiver of any such default or of such covenant, agreement, provision or condition. No Waiver of any default shaH affect or alter this Lease, but each and every covenant, agreement, provision and condition of this Lease shall continue in full force and effect with respect to any other then existing or subsequent default hereunder. 18.20 Conflict of Interests. Federal and District laws strictly prohibit any person (District of Columbia employees and officials) who exercises or has exercised any functions or responsibilities with respect to this disposition or Lease or who are in positions to participate in a decision making process or gain inside information with regard to such Lease from obtaining a financial interest or benefit herefrom in any manner or respect. Further, as it relates to the procurement of supplies, equipment, construction and services, the same conflict of interest restrictions shall apply. The general conflict of interest prohibitions require that no government official, federal or District of Columbia, shall benefit financially in any manner in this transaction if responsible for any decision directly or indirectly affecting this Lease under which there is a financial gain to that person, official or employee as a result of the execution of this Lease. 18.21 Freedom of Information Act Notice. The District of Columbia Freedom of Information Act of 1976 ("DCFOIA"), Pub. L. 90-614, D.C. Official Code §§ 2-531 et~. (2001 ed.) provides for the disclosure of public information. Specifically, the law provides that "any person has a right to inspect, and at his or her discretion, to copy any public record except as expressly
" ) \..,.
exempt by the Act." Further, a "public record" has been defined by the District of Columbia Public Records Management Act of 1985 as "any document, book, photographic image, electronic data recording paper, sound recording, or other material regardless of form or characteristic, made or received pursuant to law or in connection with the transaction of public business by any officer or employee of the District." D.C. Code § 2-1701 (13) (2001 Ed.). This serves as your Notification that informationldocwnentation submitted to the Department of Housing and Community Development pursuant to this grant, or in connection with the transaction of the business of the Department, is subject to public disclosure in response to a Freedom ofInformation Act request. Any information that is not specifically exempt by D.C. Official Code § 2-534(a) (2001 Ed.) of the DCFOIA may be disclosed upon a proper request. 18.22 Affirmative Action Plan. The Tenant shall comply with any applicable Affirmative Action Program of the District of Columbia, including, but not limited to, the Local Disadvantaged Business Enterprises Act of 1992 (cited below) and the Fair Housing Act, by presenting its Affirmative Action Program proposal to the Landlord for prior approval before commencing work on the Property. The Tenant shall, prior to the transfer of the leasehold interests in the Property, submit to Landlord its Affirmative Action Plan ("AAP"), as may be deemed applicable by the Landlord. The AAP shall be in a form reasonably acceptable to the Landlord and in accord with a Memorandum of Understanding with the Office of Human Rights and Minority Business Development and shall set forth, at a minimum, the following goals, if deemed necessary by the Seller, to remain applicable to the development of the Property: 1. A percentage of all construction trade jobs are to be filled by contractorslsub-contractors described in the Equal Opportunity for Local, Small and Disadvantaged Business Enterprises Act of 1992, as amended, D.C. Act 9-347, D.C. Official Code §§ 2-215.01 et seq. (2001 Ed.); A percentage of the workforce, as approved under the AAP, for all construction trade jobs are to be filled by women; A percentage of all new construction trade jobs, approved under the AAP, of the subcontractors shall be filled by District of Colwnbia residents. All contractors and subcontractors whose contract(s) amount(s) is One Hundred Thousand Dollars ($100,000.00) or more shall enter into a First Source Agreement with DHCD which specifies that the Department of Employment Services ("DOES") will be used as the first source of recruitment, referral and placement of any new employees; and If, as a result of contracts awarded pursuant to the lease of the Property, the contractors and subcontractors exceed Five Hundred Thousand Dollars ($500,000.00) in DC Government contract awards during the 12-inonth period prior to the Closing on this Lease, the affected contractors/subcontractors must participate in a Landlord approved Apprenticeship Program. 18.23 Publicity. The Tenant agrees that any written or printed materials distributed or posted by Borrower which publicizes that the Landlord is providing the Property and other consideration for the development of the Property, and such information shall include that the service, activity, or development is being made possible by the Landlord. Further,
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announcement of all events that publicize the activity or project shall acknowledge involvement by the Landlord. This may include, but is not limited to, newspaper announcements or advertisements, flyers, postings, any radio and television announcements. 18.24 Non-Discrimination. In accordance with the D.C. Human Rights Act of 1977, as amended, D.C. Official Code §§ 2-1401.01 et seq. (the "Act"), the District of Columbia does not discriminate on the basis of actual or perceived: race, color, religion, national origin, sex, age, marital status, personal appearance, sexual orientation, familial status, family responsibilities, matriculation, political affiliation, disability, source of income, or place of residence or business. Sexual harassment is a form of sexual discrimination which is prohibited by the Act. In addition, harassment based on any of the above protected categories is prohibited by the Act. Discrimination in violation of the Act will not be tolerated. Violators will be subject to disciplinary action. 18.25 All Inclusive Federal and District Laws and Regulations. All applicable federal and District laws and regulations shall apply, and any violation of the same by the Tenant shall constitute a default under this Lease and all available remedies of default hereunder shall be available to the Landlord. 18.26 Landlord Officials Not Individually Liable. No member, official agent, or employee the District of Columbia shall have any personal interest, direct or indirect, in the Lease, participate in any decision relating to the Lease which affects his/her personal interests or the interest of any corporation, partnership, or association in which he/she is, directly or indirectly, interested. No member, official, or employee of the Landlord shall be personally liable to the Tenant or any successor in interest in the event of any Default or breach by the Landlord or for any amount which may become due to the Tenant or its successors or assigns on any obligations under the terms of the Lease. 18.27 Anti-Money Laundering Provision. The Tenant agrees to fully comply with all antimoney laundering Federal statutes, laws, and regulations and related Federal statutes, laws, and regulations, including, but not limited to, the following: (a) The requirements of the Bank Secrecy Act (31 U.S.C. § 5318) as amended by the USA PATRIOT ACT of2001, Pub. L. No. 107-56, 115 Stat. 272 (codified throughout Titles 10, 15, 18,22,28,31,42,47,49,50 of U.S. C.). (b) The requirements of applicable Executive Orders administered by the United States Department of the Treasury's Office of Foreign Assets Control pertaining to anti-money laundering. The Tenant agrees to cooperate with the Landlord, its representatives and duly authorized agents, and representatives and duly authorized agents of the United States Government in the collection, enforcement and financial disclosures with respect to this Provision.
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The Tenant agrees that any financial statements, as well as operational statements, of the Tenant furnished to Landlord are true, correct and complete, as of the date of the Tenant's representation or warranty of the same. Further, the Tenant represents and warrants to the Landlord that the Tenant is not in any violation and shall comply with any of the statutes, laws, or regulations contained or described in the above Provision related to the Bank Secrecy Act (31 U.S.C. § 5318) as amended by the USA PATRIOT ACT, Pub. L. No. 107-56, 115 Stat. 272 and Executive Order No. 13324.
IN WITNESS WHEREOF, intending legally to be bound, as of the Lease Commencement Date, Landlord and Tenant have duly executed this Ground Lease Agreement as their free acts and deeds, in duplicate with each being an original, and have delivered the same as such, by affixing their respective hands and seals hereunto as of the date and year adjacent to the respective parties to this Lease.
(Signature Pages Follow on Next Two Pages)
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[LANDLORD SIGNATURE PAGE 1]
...~ LANDLORD: THE DISTRICT OF COLUMBIA, a municipal corporation,
Approved as to Legal Sufficiency:
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TENANT: ENTER ASSOCIATES I, L.L.C.
\ (tf -+-----_~~+--------~ to Tenant.
/'io,.__~'__' __ ~-
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LIST OF EXHIBITS
EXHIBIT A. EXHIBITB. EXHIBITC. EXHIBITD. EXHIBITE. EXHIBITF. EXHIBITG. EXHIBITH.
Land Description Title Insurance Binder Plat Depicting Storm Sewer and Relocated Storm Sewer Modifications to Initial Plans and Specifications Statement of Non-Disturbance Development Schedule Development Agreement Proforma Annual Rent Schedule Subject to Rent Reduction
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