<PAGE>
EXHIBIT 10.40
LEASE
from:
ELEVENTH SPRINGHILL LAKE ASSOCIATES LLC
Lessor
to:
OLD LINE BANK
Lessee
Building:
6301 Ivy Lane
Greenbelt, Maryland
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S>
<C>
1. DESCRIPTION
...........................................................
3
2. TERM:
.................................................................
3
3. BASIC RENT:
...........................................................
3
4. USE AND OCCUPANCY
..................................................... 3
5. CARE AND REPAIR OF PREMISES/ENVIRONMENTAL:
............................ 3
6. ALTERATIONS, ADDITIONS OR IMPROVEMENTS:
............................... 5
7. ACTIVITIES INCREASING FIRE INSURANCE RATES:
........................... 5
8. ASSIGNMENT AND SUBLEASE:
.............................................. 5
9. COMPLIANCE WITH RULES AND REGULATIONS:
................................ 9
10. DAMAGES TO BUILDING:
................................................. 9
11. EMINENT DOMAIN:
...................................................... 10
12. INSOLVENCY OF LESSEE:
................................................ 10
13. LESSOR'S REMEDIES ON DEFAULT
......................................... 10
14. DEFICIENCY:
..........................................................
10
15. SUBORDINATION OF LEASE:
.............................................. 11
16. SECURITY DEPOSIT
..................................................... 12
17. RIGHT TO CURE LESSEE'S BREACH:
....................................... 12
18. MECHANIC'S LIENS
..................................................... 12
19. RIGHT TO INSPECT AND REPAIR:
......................................... 12
20. SERVICES TO BE PROVIDED BY LESSOR/LESSOR'S EXCULPATION:
.............. 13
21. INTERRUPTION OF SERVICES OR USE:
..................................... 13
22. BUILDING STANDARD OFFICE ELECTRICAL SERVICE:
......................... 13
23. ADDITIONAL RENT:
..................................................... 15
24. LESSEE'S ESTOPPEL:
................................................... 18
25. HOLDOVER TENANCY:
.................................................... 18
26. RIGHT TO SHOW PREMISES:
.............................................. 18
27. LESSOR'S WORK -- LESSEE'S DRAWINGS:
.................................. 18
28. WAIVER OF TRIAL BY JURY
.............................................. 19
29. LATE CHARGE:
.........................................................
19
30. LESSEE'S INSURANCE:
.................................................. 19
31. NO OTHER REPRESENTATIONS:
............................................ 21
32. QUIET ENJOYMENT:
..................................................... 21
</TABLE>
<PAGE>
<TABLE>
<S>
<C>
33. INDEMNITY:
...........................................................
21
34. ARTICLE HEADINGS:
.................................................... 22
35. APPLICABILITY TO HEIRS AND ASSIGNS:
.................................. 22
36. OUTSIDE PARKING SPACES:
.............................................. 22
37. LESSOR'S LIABILITY FOR LOSS OF PROPERTY:
............................. 22
38. PARTIAL INVALIDITY:
.................................................. 22
39. LESSEE'S BROKER:
..................................................... 22
40. PERSONAL LIABILITY:
.................................................. 23
41. NO OPTION:
...........................................................
23
42. DEFINITIONS:
.........................................................
23
43. LEASE COMMENCEMENT:
.................................................. 24
44. NOTICES:
.............................................................
24
45. ACCORD AND SATISFACTION:
............................................. 24
46. EFFECT OF WAIVERS:
................................................... 25
47. LEASE CONDITION:
..................................................... 25
48. MORTGAGEE'S NOTICE AND OPPORTUNITY TO CURE:
.......................... 25
49. LESSOR'S RESERVED RIGHT:
............................................. 25
50. CORPORATE AUTHORITY:
................................................. 25
51. AFTER-HOURS USE:
..................................................... 26
53. BUILDING PERMIT:
..................................................... 26
54. TERMINATION OPTION:
.................................................. 26
55. RENEWAL OPTIONS:
..................................................... 27
56. BANK APPROVAL:
.......................................................
28
</TABLE>
i
<PAGE>
LEASE, is made the 29st day of December, 2006 between ELEVENTH
SPRINGHILL
LAKE ASSOCIATES LLC (herein referred to as "Lessor") whose address
is c/o
Mack-Cali Realty Corporation, 343 Thornall Street, P.O. Box 7817,
Edison, New
Jersey 08817-7817 and OLD LINE BANK (herein referred to as
"Lessee") whose
address is 1525 Pointer Ridge Place, Bowie, MD 20716.
PREAMBLE
BASIC LEASE PROVISIONS AND DEFINITIONS
In addition to other terms elsewhere defined in this Lease, the
following terms
whenever used in this Lease shall have only the meanings set forth
in this
section, unless such meanings are expressly modified, limited or
expanded
elsewhere herein.
1. ADDITIONAL
RENT shall mean all sums in addition to Fixed Basic Rent
payable
by
Lessee to Lessor pursuant to the provisions of the Lease.
2. BASE PERIOD
COSTS shall mean the following:
A.
Base Operating
Costs: Those Operating Costs incurred during Calendar
Year 2006.
B.
Base Real Estate
Taxes: Those Real Estate Taxes incurred during
Calendar Year 2006.
C.
Base Insurance
Costs: Those Insurance Costs incurred during Calendar
Year 2006.
D.
Base Utility and
Energy Costs: Those Utility and Energy costs incurred
during Calendar Year 2006.
3. BUILDING
shall mean 6301 Ivy Lane, Greenbelt, Maryland.
4. BUILDING
HOLIDAYS shall be those shown on Exhibit E.
5. BUILDING
HOURS shall be Monday through Friday, 8:00 a.m. to 6:00 p.m.,
but
excluding those holidays as set forth on Exhibit E attached hereto
and made
a
part hereof, except that Common Facilities, lighting in the
Building and
Office Building Area shall be maintained for such additional hours
as, in
Lessor's sole judgment, is necessary or desirable to insure
proper
operating of the Building and Office Building Area.
6. COMMENCEMENT
DATE is December 1, 2006 and shall for purposes hereof be
subject to Articles 27 and 43 hereof.
7. DEMISED
PREMISES OR PREMISES shall be deemed to be 2,700 gross rentable
square feet on the first (1st) floor as shown on Exhibit A hereto,
which
includes an allocable share of the Common Facilities as defined in
Article
42(b).
8. EXHIBITS
shall be the following, attached to this Lease and incorporated
herein and made a part hereof.
Exhibit A
Location of Premises Exhibit A-1 Office
Building Area
Exhibit B Rules and Regulations
Exhibit C
Lessor's Work
Exhibit C-1 Air Conditioning
&
Heating
Design Standards
Exhibit D
Cleaning Services
Exhibit E
Building Holidays
Exhibit F
Tenant Estoppel Certificate
Exhibit G
Commencement Date Agreement Exhibit H
Termination Fee Amortization Schedules
9. EXPIRATION
DATE shall be the last day of the month in which the day before
the
five (5) year anniversary of the Commencement Date occurs,
unless
earlier terminated under the terms and conditions of this
Lease.
<PAGE>
10. FIXED BASIC RENT
shall mean: THREE HUNDRED TWENTY-NINE THOUSAND SIX HUNDRED
NINETY-SEVEN AND 00/100 DOLLARS ($329,697.00) for the Term payable
as
follows:
<TABLE>
<CAPTION>
Monthly Per Sq. ft.
Year Annual Rate
Installments
Rent
---- -----------
------------
-----------
<S>
<C>
<C>
<C>
1 $62,100.00
$5,175.00
$23.00
2 $63,963.00
$5,330.25
$23.69
3 $65,880.00
$5,490.00
$24.40
4 $67,851.00
$5,654.25
$25.13
5 $69,903.00
$5,825.25
$25.89
</TABLE>
11. LESSEE'S BROKER
shall mean Commercial 100.
12. LESSEE'S
PERCENTAGE shall be 2.41% subject to adjustment as provided for
in
Article 42(d).
13. OFFICE BUILDING
AREA is as set forth on Exhibit A-1.
14. PARKING SPACES
shall mean a total of eleven (11) spaces as follows:
Garaged: 1
Unassigned: 10
In
consideration of the garaged parking space, Lessee shall pay Lessor
a
fee
of SEVENTY-FIVE AND 00/100 DOLLARS ($75.00) per month, as
Additional
Rent, in the same manner as Fixed Basic Rent.
15. PERMITTED USE
shall be commercial bank, general office use and for no other
purpose.
16. SECURITY DEPOSIT
shall be FIVE THOUSAND ONE HUNDRED SEVENTY-FIVE AND 00/100
DOLLARS ($5,175.00).
17. TERM shall mean
five (5) years from the Commencement Date, plus the number
of
days, if any, to have the Lease expire on the last day of a
calendar
month, unless extended pursuant to any option contained herein or
unless
terminated earlier under the terms and conditions of this
Lease.
-- End of Preamble --
2
<PAGE>
WITNESSETH
For
and in consideration of the covenants herein contained, and upon
the
terms and conditions herein set forth, Lessor and Lessee agree as
follows:
1.
DESCRIPTION:
Lessor hereby leases to Lessee, and Lessee hereby hires from
Lessor, the
Premises as defined in the Preamble which includes an allocable
share of
the
Common Facilities, as shown on the plan or plans, initialed by
the
parties hereto, marked Exhibit A attached hereto and made part of
this
Lease in the Building as defined in the Preamble, (hereinafter
called the
"Building") which is situated on that certain parcel of land
(hereinafter
called "Office Building Area") as described on Exhibit A-1 attached
hereto
and
made part of this Lease, together, with the right to use in common
with
other lessees of the Building, their invitees, customers and
employees,
those public areas of the Common Facilities as hereinafter
defined.
2. TERM:
The
Premises are leased for a term to commence on the Commencement
Date,
and to end at 12:00
midnight on the Expiration Date, all as defined in the
Preamble.
3. BASIC
RENT:
The
Lessee shall pay to the Lessor during the Term, the Fixed Basic
Rent as
defined in the Preamble (hereinafter called "Fixed Basic Rent")
payable in
such
coin or currency of the United States of America as at the time
of
payment shall be legal tender for the payment of public and private
debts.
The
Fixed Basic Rent shall accrue at the Annual Rate as defined in
the
Preamble and shall be payable, in advance, on the first day of
each
calendar month during the Term at the Monthly Installments as
defined in
the
Preamble, except that a proportionately lesser sum may be paid for
the
first and last months of the Term of this Lease if the Term
commences on a
day
other than the first day of the month, in accordance with the
provisions of this Lease herein set forth. Lessor acknowledges
receipt from
Lessee of the first monthly installment by check, subject to
collection,
for
Fixed Basic Rent for the first month of the Lease Term. Lessee
shall
pay
Fixed Basic Rent, and any Additional Rent as hereinafter provided,
to
Lessor at Lessor's above stated address, or at such other place as
Lessor
may
designate in writing, without demand and without counterclaim,
deduction or set off.
4. USE AND
OCCUPANCY:
Lessee shall use and occupy the Premises for the Permitted Use as
defined
in
the Preamble.
5. CARE AND
REPAIR OF PREMISES/ENVIRONMENTAL:
(a)
Lessee shall commit no
act of waste and shall take good care of the
Premises and the fixtures and appurtenances therein, and shall, in
the
use and occupancy of the Premises, conform to all laws, orders
and
regulations of the federal, state and municipal governments or any
of
their departments affecting the Premises and with any and all
environmental requirements resulting from the Lessee's use of
the
Premises, this covenant to survive the expiration or sooner
termination of the Lease. Lessor shall, subject to the same
being
included in Operating Costs, make all necessary repairs to the
Premises, Common Facilities and to the assigned parking areas, if
any,
except where the repair has been made necessary by misuse or
neglect
by Lessee or Lessee's agents, servants, visitors or licensees,
in
which event Lessor shall nevertheless make the repair but Lessee
shall
pay to Lessor, as Additional Rent, immediately upon demand, the
costs
therefor. All improvements made by Lessee to the Premises, which
are
so attached to the Premises, shall become the property of Lessor
upon
installation. Not later than the last day of the Term, Lessee
shall,
at Lessee's expense, remove all Lessee's personal property and
those
improvements made by Lessee which have not become the property
of
Lessor, including trade fixtures, cabinetwork, movable
paneling,
partitions and the like; repair all injury done by or in
connection
with the installation or removal of said property and
improvements;
and surrender the Premises in as good condition as they were at
the
beginning of the Term, reasonable wear and tear and damage by
fire,
the elements, casualty or other cause not due to the misuse or
neglect
by Lessee, Lessee's agents, servants, visitors or licensees
excepted.
All
other property of Lessee remaining on the Premises after the
last
day of the Term of this Lease shall be conclusively deemed
abandoned
and may be removed by Lessor, and Lessee shall reimburse Lessor
for
the cost of such removal. Lessor may have any such property stored
at
Lessee's risk and expense.
<PAGE>
ENVIRONMENTAL
(b) COMPLIANCE WITH
ENVIRONMENTAL LAWS. Lessee shall, at Lessee's own expense,
promptly comply with each and every federal, state, county and
municipal
environmental law, ordinance, rule, regulation, order, directive
and
requirement, now or hereafter existing ("Environmental Laws"),
applicable
to
the Premises, Lessee, Lessee's operations at the Premises, or all
of
them.
(c) Intentionally
omitted.
(d) INFORMATION TO
LESSOR. At no expense to Lessor, Lessee shall promptly
provide all information and sign all documents requested by Lessor
with
respect to compliance with Environmental Laws.
(e) LESSOR AUDIT.
Lessee shall permit Lessor and its representatives access to
the
Premises, from time to time upon reasonable notice (provided that
no
notice need be given in the event of an emergency), to conduct
an
environmental assessment, investigation and sampling, all at
Lessee's own
expense. Lessor shall not conduct any environmental audits at
Lessee's
expense more often than once every three (3) years, unless
Lessor
reasonably believes that there is an environmental condition
affecting the
Premises.
(f) LESSEE
REMEDIATION. Should any assessment, investigation or sampling
reveal
the
existence of any spill, discharge or placement of Contaminants in,
on,
under, or about, or migrating from or onto the Premises, the
Building, or
the
Office Building Area, as a result of the action or omission of
Lessee
or
"Lessee Representative", then, in addition to being in default
under
this
Lease and Lessor having all rights available to Lessor under
this
Lease and by law by reason of such default, Lesee shall, at
Lessee's own
expense, in accordance with Environmental Laws, undertake all
action
required by Lessor and any governmental authority, including,
without
limitation, promptly obtaining and delivering to Lessor an
unconditional No
Further Action Letter. For purposes of this Article, the term
"Lessee's
Representative" shall mean any shareholder, officer, director,
member,
partner, employee, agent, licensee, assignee, sublessee or invitee
of
Lessee, or any third party other than Lessor, or another lessee of
the
Building, or a shareholder, officer, director, member, partner,
employee,
agent, licensee, assignee, sublessee or invitee of such other
lessee. In no
event shally any of Lessee's remedial action involve engineering
or
institutional controls, a groundwater classification exception area
or well
restriction area, and Lessee's remedial action shall meet the
applicable
governmental remediation standards for soil, surface water,
groundwater and
drinking water. Promptly upon completion of all required
investigatory and
remedial activities, Lessee shall, at Lessee's own expense to
Lessor's
satisfaction, restor the affected areas of the Premises, the
Building or
the
Office Building Area, as the case may be, from any damage or
condition
caused by the investigatory or remedial work.
(g) ENIVORNMENTAL
QUESTIONNAIRE. Upon Lessor's request, contemporaneously with
the
signing and delivery of this Lease, and thereafter upon renewal of
the
lease, it at all, Lessee shall complete, execute and deliver to
Lessor and
environmental questionnaire in form and substance satisfactory to
Lessor.
<PAGE>
(h) ENVIRONMENTAL
DOCUMENTS AND CONDITIONS. For purposes of this Article, the
term
"Environmental Documents" shall mean all environmental
documentation
concerning the Building or the Office Building Area, of which the
Premises
is a
part, or its environs, in the possession or under the control
of
Lessee, including, without limitation, plans, reports,
correspondence and
submissions. During the term of this Lease and subsequently,
promptly upon
receipt by Lessee or Lessee's Representatives, Lessee shall deliver
to
Lessor all Environmental Documents concerning or generated by or on
behalf
of
Lessee, whether currently or hereafter existing. In addition,
Lessee
shall promptly notify Lessor of any environmental condition of
which Lessee
has
knowledge, which may exist in, on, under, or about, or may be
migrating
from
or onto the Building or the Office Building Area.
(i) LESSOR'S RIGHT TO
PERFORM LESSEE'S OBLIGATIONS. Notwithstanding anything to
the
contrary set forth in this Lease, in the event, pursuant to this
Lease,
Lessee is required to undertake any sampling, assessment,
investigation or
remediation with respect to the Premises, the Building or the
Office
Building Area, as the case may be, then, at Lessor's discretion,
Lessor
shall have the right, upon notice to Lessee, from time to time, to
perform
such
activities at Lessee's expense, and all sums incurred by Lessor
shall
be
paid by Lessee, as Additional Rent, upon demand.
(j) INDEMNITY. Lessee
shall indemnify, defend and hold harmless Lessor,
Lessor's officers, directors, shareholders, employees and personal
or legal
representatives from and against any and all claims, liabilities,
losses,
damages, penalties and costs, foreseen or unforeseen, including,
without
limitation, counsel, engineering and other professional or expert
fees,
which an indemnified party may incur resulting directly or
indirectly,
wholly or partly from Lessee's actions or omissions with regard to
Lessee's
obligations under this Article.
(k) SURVIVAL. This
Article shall survive the expiration or earlier termination
of
this lease. Lessee's failure to abide by the terms of this Article
shall
be
restrainable or enforceable, as the case may be, by injunction.
(l) INTERPRETATION.
The obligations imposed upon Lessee under subparagraphs (a)
through (j) above are in addition to and are not intended to limit,
but to
expand upon, the obligations imposed upon Lessee under this Article
5. As
used
in this Article, the term "Contaminants" shall include, without
limitation, any regulated substance, toxic substance, hazardous
substance,
hazardous waste, pollution, pollutant, contaminant, petroleum,
asbestos or
polychlorinated biphenyls, as defined or referred to in any
Environmental
Laws. Where a law or regulation defines any of these terms more
broadly
than
another, the broader definition shall apply.
6. ALTERATIONS,
ADDITIONS OR IMPROVEMENTS:
Lessee shall not, without first obtaining the written consent of
Lessor,
make
any structural or Building Systems alterations, additions or
improvements in, to or about the Premises. Building Systems shall
mean any
structural, life safety, plumbing, electrical, heating, ventilation
or air
conditioning system or its components. Lessee shall not, without
first
obtaining the written consent of Lessor (which shall not be
unreasonably
withheld or delayed) make any non-Building Systems alterations,
additions
or
improvements in, to or about the Premises. Lessee may, upon
notification
to
Lessor, perform minor cosmetic improvements, such as painting
and
wallpapering, without prior consent of Lessor.
7. ACTIVITIES
INCREASING FIRE INSURANCE RATES:
Lessee shall not do or suffer anything to be done on the Premises
which
will
increase the rate of fire insurance on the Building.
8. ASSIGNMENT
AND SUBLEASE:
Provided Lessee is not in default of any provisions of this Lease,
Lessee
may
assign or sublease the within Lease to any party subject to the
following:
<PAGE>
a.
In the event
Lessee desires to assign this Lease or sublease all or
part of the Premises to any other party, the terms and conditions
of
such assignment or sublease shall be communicated to the Lessor
in
writing no less than thirty (30) days prior to the effective date
of
any such sublease or assignment, and, prior to such effective
date,
the Lessor shall have the option, exercisable in writing to the
Lessee, to: (i) sublease such space from Lessee at the lower rate
of
(a) the rental rate per rentable square foot of Fixed Basic Rent
and
Additional Rent then payable pursuant to this Lease or (b) the
terms
set forth in the proposed sublease, (ii) recapture in the case
of
subletting, that portion of the Premises to be sublet or all of
the
Premises in the case of an assignment ("Recapture Space") so that
such
prospective sublessee or assignee shall then become the sole Lessee
of
Lessor hereunder, or (iii) recapture the Recapture Space for
Lessor's
own use and the within Lessee shall be fully released from any and
all
obligations hereunder with respect to the Recapture Space.
b.
In the event
that the Lessor elects not to recapture the Lease or
relet the Premises as hereinabove provided, the Lessee may
nevertheless assign this Lease or sublet the whole or any portion
of
the Premises, subject to the Lessor's prior written consent,
which
consent shall not be unreasonably withheld, on the basis of the
following terms and conditions:
i. The Lessee
shall provide to the Lessor the name and address of
the assignee or sublessee.
ii. The assignee or
sublessee shall assume, by written instrument,
all of the obligations of this Lease, and a copy of such
assumption agreement shall be furnished to the Lessor within
ten
(10) days of its execution. Any sublease shall expressly
acknowledge that said sublessee's rights against Lessor shall
be
no greater than those of Lessee. Lessee further agrees that
notwithstanding any such subletting, no other and further
subletting of the Premises by Lessee or any person claiming
through or under Lessee shall or will be made except upon
compliance with and subject to the provisions of this Article
8.
iii. Each sublease shall provide that it is subject and subordinate
to
this Lease and to the matters to which this Lease is or shall
be
subordinate, and that in the event of default by Lessee under
this Lease, Lessor may, at its option, take over all of the
right, title and interest of Lessee, as sublessor, under such
sublease, and such sublessee shall, at Lessor's option, attorn
to
Lessor pursuant to the then executory provisions of such
sublease, except that Lessor shall not (i) be liable for any
previous act or omission of Lessee under such sublease or, (ii)
be subject to any offset not expressly provided in such
sublease
which theretofore accrued to such sublease to which Lessor has
not specifically consented in writing or by any previous
prepayment of more than one month's rent.
iv. The Lessee and
each assignee shall be and remain liable for the
observance of all the covenants and provisions of this Lease,
including, but not limited to, the payment of Fixed Basic Rent
and Additional Rent reserved herein, through the entire Term of
this Lease, as the same may be renewed, extended or otherwise
modified.
v. The Lessee
and any assignee shall promptly pay to Lessor any
consideration received for any assignment and/or all of the
rent,
as and when received, in excess of the Rent required to be paid
by Lessee for the area sublet computed on the basis of an
average
square foot rent for the gross square footage Lessee has
leased.
vi. In any event, the
acceptance by the Lessor of any rent from the
assignee or from any of the subtenants or the failure of the
Lessor to insist upon a strict performance of any of the terms,
conditions and covenants herein shall not release the Lessee
herein, nor any assignee assuming this Lease, from any and all
of
the obligations herein during and for the entire Term of this
Lease.
vii. In Lessor's reasonable judgment, the proposed assignee or
subtenant is engaged in a business or activity, and the
Premises,
or the relevant part thereof, will be used in a manner, which
(a)
is in keeping with the then standard of the Building and (b) is
limited to the Permitted Use.
<PAGE>
viii. The proposed assignee or subtenant shall be an entity which
has
existed for at least one (1) year and is not then an occupant
of
any part of the Building or any other building then owned by
Lessor or its affiliates within a five-mile radius of the
Building.
ix. The proposed
assignee or subtenant is not an entity or a person
with whom Lessor is or has been, within the preceding twelve
(12)
month period, negotiating to lease space in the Building or any
other building owned by Lessor or its affiliates within a
five-mile radius of the Building.
x. There shall
not be more than one (1) subtenant in the Premises.
xi. Lessee shall not
advertise the subtenancy for less than the then
current market rent per rentable square foot for the Premises
as
though the Premises were vacant.
xii. Lessee shall not have (a) publicly advertised the availability
of
the Premises without prior notice to and approval by Lessor,
nor
shall any advertisement state the name (as distinguished from
the
address) of the Building or (b) listed the Premises for
subletting or assignment with other than a broker, agent or
representative who waives any entitlement to a commission or
other fee from Lessor in the event of a recapturing of the
Premises;
xiii. The proposed occupancy shall not, in Lessor's reasonable
opinion, increase the density of population using the Demised
Premises to exceed one (1) person per 250 gross rentable square
feet of space or exceed the parking allocation presently
provided
for in this Lease;
xiv. The proposed assignee or subtenant shall only use the
Premises
for the Permitted Use and shall not be engaged in any of the
following:
(a) educational,
including but not limited to, instructional
facilities and correspondence schools;
(b) employment
agencies;
(c) model
agencies;
(d) photographic
studios or laboratories;
(e) spas, health, physical fitness or
exercise salons;
(f) small loan
offices;
(g) real estate
brokerage or real estate sales offices open to
the general public or construction offices;
(h)
medical or dental
facilities, including professional
offices, treatment facilities, dispensaries or laboratories;
(i) federal, state or
local government offices;
(j) so-called boiler
room operations;
(k) retail stock
brokerage offices; and
(l) religious
organizations making facilities available to
congregations for uses other than business purposes; and
(m) executive office
suite use.
xv. The proposed
assignee or subtenant shall not be entitled,
directly or indirectly, to diplomatic or sovereign immunity and
shall be subject to the service of process in, and the
jurisdiction of, the state courts of Maryland.
xvi. Lessor shall require a FIVE HUNDRED AND 00/100 DOLLAR
($500.00)
payment to cover its handling charges for each request for
consent to any sublet or assignment prior to its consideration
of
the same. Lessee acknowledges that its sole remedy with respect
to any assertion that Lessor's failure to consent to any sublet
or assignment is unreasonable shall be the remedy of specific
performance and Lessee shall have no other claim or cause of
action against Lessor as a result of Lessor's actions in
refusing
to consent thereto.
<PAGE>
c.
If Lessee is a
corporation other than a corporation whose stock is
listed and traded on a nationally recognized stock exchange,
the
provisions of Sub-section a. shall apply to a transfer (however
accomplished, whether in a single transaction or in a series of
related or unrelated transactions) of stock (or any other
mechanism
such as, by way of example, the issuance of additional stock, a
stock
voting agreement or change in class(es) of stock) which results in
a
change of control of Lessee as if such transfer of stock (or
other
mechanism) which results in a change of control of Lessee were
an
assignment of this Lease, and if Lessee is a partnership or
joint
venture, said provisions shall apply with respect to a transfer
(by
one or more transfers) of an interest in the distributions of
profits
and losses of such partnership or joint venture (or other
mechanism,
such as, by way of example, the creation of additional general
partnership or limited partnership interests) which results in
a
change of control of such a partnership or joint venture, as if
such
transfer of an interest in the distributions of profits and losses
of
such partnership or joint venture which results in a change of
control
of such partnership or joint venture were an assignment of this
Lease;
but said provisions shall not apply to transactions with a
corporation
into or with which Lessee is merged or consolidated or to which all
or
substantially all of Lessee's assets are transferred or to any
corporation which controls or is controlled by Lessee or is
under
common control with Lessee, provided that in the event of such
merger,
consolidation or transfer of all or substantially all of
Lessee's
assets (i) the successor to Lessee has a net worth computed in
accordance with generally accepted accounting principles at
least
equal to the greater of (1) the net worth of Lessee immediately
prior
to such merger, consolidation or transfer, or (2) the net worth
of
Lessee herein named on the date of this Lease, and (ii) proof
satisfactory to Lessor of such net worth shall have been delivered
to
Lessor at least 10 days prior to the effective date of any such
transaction.
Notwithstanding the foregoing provisions of this subparagraph (c),
all
times while Lessee is a corporation, the capital stock of which
is
traded on any public securities exchange in the United States
of
America, Lessor's consent shall not be required with respect to
any
assignment of the Lease or subletting of the Premises to a
legally
formed and validly existing entity qualified to transact business
in
the State of Maryland, and having a financial net worth
(including
capital and surplus) at least equal to that of Lessee as existing
at
the date of this Lease (an "Affiliate Transfer"). Lessee will
provide
Lessor a copy of the fully executed instruments covering such
Affiliate Transfer within thirty (30) days after execution
thereof.
However, no assignment of this Lease, nor any subletting of the
Premises in whole or part, whether or not consented to by
Lessor,
shall relieve Lessee from nor diminish Lessee=s obligations under
this
Lease, nor result in any change of use of the Premises from the
Permitted Use.
d. In the event
that any or all of Lessee's interest in the Premises
and/or this Lease is transferred by operation of law to any
trustee, receiver, or other representative or agent of Lessee,
or
to Lessee as a debtor in possession, and subsequently any or
all
of Lessee's interest in the Premises and/or this Lease is
offered
or to be offered by Lessee or any trustee, receiver, or other
representative or agent of Lessee as to its estate or property
(such person, firm or entity being hereinafter referred to as
the
"Grantor"), for assignment, conveyance, lease, or other
disposition to a person, firm or entity other than Lessor (each
such transaction being hereinafter referred to as a
"Disposition"), it is agreed that Lessor has and shall have a
right of first refusal to purchase, take, or otherwise acquire,
the same upon the same terms and conditions as the Grantor
thereof shall accept upon such Disposition to such other
person,
firm, or entity; and as to each such Disposition the Grantor
shall give written notice to Lessor in reasonable detail of all
of the terms and conditions of such Disposition within twenty
(20) days next following its determination to accept the same
but
prior to accepting the same, and Grantor shall not make the
Disposition until and unless Lessor has failed or refused to
accept such right of first refusal as to the Disposition, as
set
forth herein.
Lessor shall have thirty (30) days next following its receipt
of
the written notice as to such Disposition in which to exercise
the option to acquire Lessee's interest by such Disposition,
and
the exercise of the option by Lessor shall be effected by
notice
to that effect sent to the Grantor; but nothing herein shall
require Lessor to accept a particular Disposition or any
Disposition, nor does the rejection of any one such offer of
first refusal constitute a waiver or release of the obligation
of
the Grantor to submit other offers hereunder to Lessor. In the
event Lessor accepts such offer of first refusal, the
transaction
shall be consummated pursuant to the terms and conditions of
the
Disposition described in the notice to Lessor. In the event
Lessor rejects such offer of first refusal, Grantor may
consummate the Disposition with such other person, firm, or
entity; but any decrease in price of more than two percent (2%)
of the price sought from Lessor or any change in the terms of
payment for such Disposition shall constitute a new transaction
requiring a further option of first refusal to be given to
Lessor
hereunder.
<PAGE>
e. Without
limiting any of the provisions of Articles 12 and 13, if
pursuant to the Federal Bankruptcy Code (herein referred to as
the "Code"), or any similar law hereafter enacted having the
same
general purpose, Lessee is permitted to assign this Lease
notwithstanding the restrictions contained in this Lease,
adequate assurance of future performance by an assignee
expressly
permitted under such Code shall be deemed to mean the deposit
of
cash security in an amount equal to the sum of six (6) month's
Fixed
Basic Rent plus an amount equal to the Additional Rent for
the six (6) months preceding the year in which such assignment
is
intended to become effective, which deposit shall be held by
Lessor for the balance of the Term, without interest, as
security
for the full performance of all of Lessee's obligations under
this Lease, to be held and applied in the manner specified for
security in Article 16.
f. Except as specifically set
forth above, no portion of the
Premises or of Lessee's interest in this Lease may be acquired
by
any other person or entity, whether by assignment, mortgage,
sublease, transfer, operation of law or act of the Lessee, nor
shall Lessee pledge its interest in this Lease or in any
security
deposit required hereunder.
9. COMPLIANCE
WITH RULES AND REGULATIONS:
Lessee shall observe and comply with the rules and regulations
hereinafter
set
forth in Exhibit B attached hereto and made a part hereof and with
such
further reasonable rules and regulations as Lessor may prescribe,
on
written notice to the Lessee, for the safety, care and cleanliness
of the
Building and the comfort, quiet and convenience of other occupants
of the
Building. Lessee shall not place a load upon any floor of the
Premises
exceeding the floor load per square foot area which it was designed
to
carry and which is allowed by law. Lessor reserves the right to
prescribe
the
weight and position of all safes, business machines and
mechanical
equipment. Such installations shall be placed and maintained by
Lessee, at
Lessee's expense, in settings sufficient, in Lessor's judgment, to
absorb
and
prevent vibration, noise and annoyance.
10. DAMAGES TO
BUILDING:
If
the Building is damaged by fire or any other cause to such extent
the
cost
of restoration, as reasonably estimated by Lessor, will equal
or
exceed twenty-five percent (25%) of the replacement value of the
Building
(exclusive of foundations) just prior to the occurrence of the
damage, then
Lessor may, no later than the sixtieth (60th) day following the
date of
damage, give Lessee a notice of election to terminate this Lease,
or if the
cost
of restoration will equal or exceed fifty percent (50%) of such
replacement value and if the Premises shall not be reasonably
usable for
the
purpose for which they are leased hereunder, then Lessee may, no
later
than
the sixtieth (60th) day following the date of damage, give Lessor
a
notice of election to terminate this Lease. In either said event
of
election, this Lease shall be deemed to terminate on the thirtieth
(30th)
day
after the giving of said notice, and Lessee shall surrender
possession
of
the Premises within a reasonable time thereafter, and the Fixed
Basic
Rent, and any Additional Rent, shall be apportioned as of the date
of said
surrender and any Fixed Basic Rent or Additional Rent paid for any
period
beyond said date shall be repaid to Lessee. If the cost of
restoration
shall not entitle Lessor to terminate this Lease, or if, despite
the cost,
Lessor does not elect to terminate this Lease, Lessor shall restore
the
Building and the Premises with reasonable promptness, subject to
Force
Majeure, and Lessee shall have no right to terminate this Lease.
Lessor
need
not restore fixtures and improvements owned by Lessee.
In
any case in which all or part of the Premises becomes untenantable
by
Lessee for a consecutive period of more than thirty (30) days as a
result
of
fire, the elements or other insured casualty no caused by the
negligence
or
wrongful conduct of Lessee, Lessee shall be entitled to an
abatement of
the
Fixed Basic Rent and Additional Rent from the date of such damage
to
the
date when the Premises have been substantially restored. The
words
"restoration" and "restore" as used in this Article 10 shall
include
repairs. If the damage results from the fault of the Lessee,
Lessee's
agents, servants, visitors or licensees, Lessee shall not be
entitled to
any
abatement or reduction in Fixed Basic Rent, except to the extent of
any
rent
insurance received by Lessor.
<PAGE>
11. EMINENT
DOMAIN:
If
Lessee's use of the Premises is materially affected due to the
taking by
eminent domain of (a) the Premises or any part thereof or any
estate
therein; or (b) any other part of the Building; then, in either
event, this
Lease shall terminate on the date when title vests pursuant to such
taking.
The
Fixed Basic Rent, and any Additional Rent, shall be apportioned as
of
said
termination date and any Fixed Basic Rent or Additional Rent paid
for
any
period beyond said date, shall be repaid to Lessee. Lessee shall
not be
entitled to any part of the award for such taking or any payment in
lieu
thereof, but Lessee may file a separate claim for any taking of
fixtures
and
improvements owned by Lessee which have not become the Lessor's
property, and for moving expenses, provided the same shall, in no
way,
affect or diminish Lessor's award. In the event of a partial taking
which
does
not effect a termination of this Lease but does deprive Lessee of
the
use
of a portion of the Premises, there shall either be an abatement or
an
equitable reduction of the Fixed Basic Rent, and an equitable
adjustment
reducing the Base Period Costs as hereinafter defined depending on
the
period for which and the extent to which the Premises so taken are
not
reasonably usable for the purpose for which they are leased
hereunder.
12. INSOLVENCY OF
LESSEE:
Either (a) the appointment of a receiver to take possession of all
or
substantially all of the assets of Lessee, or, (b) a general
assignment by
Lessee for the benefit of creditors, or, (c) any action taken or
suffered
by Lessee under any
insolvency or bankruptcy act, shall constitute a
default of this Lease by Lessee, and Lessor may terminate this
Lease
forthwith and upon notice of such termination Lessee's right to
possession
of
the Premises shall cease, and Lessee shall then quit and surrender
the
Premises to Lessor but Lessee shall remain liable as hereinafter
provided
in
Article 14 hereof.
13. LESSOR'S REMEDIES
ON DEFAULT:
If
Lessee defaults in the payment of Fixed Basic Rent, or any
Additional
Rent, or defaults in the performance of any of the other covenants
and
conditions hereof or permits the Premises to become deserted,
abandoned or
vacated, Lessor shall give Lessee written notice of such default,
and if
Lessee does not cure any Fixed Basic Rent or Additional Rent
default within
ten
(10) days or other default within twenty (20) days after giving of
such
notice (or if such other default is of such nature that it cannot
be
completely cured within such period, if Lessee does not commence
such
curing within such fifteen (15) days and thereafter proceed with
reasonable
diligence and in good faith to cure such default), then Lessor
may
terminate this Lease on not less than ten (10) days notice to
Lessee, and
on
the date specified in said notice, Lessee's right to possession of
the
Premises shall cease but Lessee shall remain liable as
hereinafter
provided. If this Lease shall have been so terminated by Lessor
pursuant to
Articles 12 or 13 hereof,
Lessor may at any time thereafter resume
possession of the Premises by any lawful means and remove Lessee or
other
occupants and their effects. Lessee shall pay to Lessor, on demand,
such
normal and customary expenses as Lessor may incur, including,
without
limitation, court costs and reasonable attorney's fees and
disbursements,
in
enforcing the performance of any obligation of Lessee under this
Lease.
<PAGE>
14. DEFICIENCY:
In
any case where Lessor has recovered possession of the Premises by
reason
of
Lessee's default, Lessor may, at Lessor's option, occupy the
Premises or
cause the Premises to be redecorated, altered, divided,
consolidated with
other adjoining premises or otherwise changed or prepared for
reletting,
and
may relet the Premises or any part thereof, as agent of Lessee
or
otherwise, for a term or terms to expire prior to, at the same time
as or
subsequent to, the original Expiration Date of this Lease, at
Lessor's
option and receive the rent therefor.
Rent
so received shall be applied first to the payment of such normal
and
customary expenses as Lessor may have incurred in connection with
the
recovery of possession, redecorating, altering, dividing,
consolidating
with
other adjoining premises, or otherwise changing or preparing
for
reletting, and the reletting, including brokerage and reasonable
attorney's
fees, and then to the payment of damages in amounts equal to the
Fixed
Basic Rent and Additional Rent hereunder and to the costs and
expenses of
performance of the other covenants of Lessee as herein provided.
Lessee
agrees, in any such case, whether or not Lessor has relet, to pay
to Lessor
damages equal to the Fixed Basic Rent and Additional Rent from the
date of
such
default to the date of expiration of the term demised and other
sums
herein agreed to be paid by Lessee, less the net proceeds of the
reletting,
if
any, received by Lessor during the remainder of the unexpired
term
hereof, as ascertained from time to time, and the same shall be
payable by
Lessee on the several rent days above specified. Lessee shall not
be
entitled to any surplus accruing as a result of any such reletting.
In
reletting the Premises as aforesaid, Lessor may grant rent
concessions, and
Lessee shall not be credited therewith. No such reletting shall
constitute
a
surrender and acceptance or be deemed evidence thereof. If Lessor
elects,
pursuant hereto, actually to occupy and use the Premises or any
part
thereof during any part of the balance of the Term as originally
fixed or
since extended, there shall be allowed against Lessee's obligation
for rent
or
damages as herein defined, during the period of Lessor's occupancy,
the
reasonable value of such occupancy, not to exceed, in any event,
the Fixed
Basic Rent and Additional Rent herein reserved and such occupancy
shall not
be
construed as a release of Lessee's liability hereunder.
Alternatively, and in lieu of the immediately preceding paragraph,
in any
case
where Lessor has recovered possession of the Premises by reason
of
Lessee's default, Lessor may at Lessor's option, and at any
time
thereafter, and without notice or other action by Lessor, and
without
prejudice to any other rights or remedies it might have hereunder
or at law
or
equity, become entitled to recover from Lessee, as Damages for
such
breach, in addition to such other sums herein agreed to be paid by
Lessee,
to
the date of re-entry, expiration and/or dispossess, an amount equal
to
the
difference between the Fixed Basic Rent and Additional Rent
reserved in
this
Lease from the date of such default to the date of Expiration of
the
original Term demised and the then fair and reasonable rental value
of the
Premises for the same period. Said Damages shall become due and
payable to
Lessor immediately upon such breach of this Lease and without
regard to
whether this Lease be terminated or not, and if this Lease be
terminated,
without regard to the manner in which it is terminated. In the
computation
of
such Damages, the difference between an installment of Fixed Basic
Rent
and
Additional Rent thereafter becoming due and the fair and
reasonable
rental value of the Premises for the period for which such
installment was
payable shall be discounted to the date of such default at the rate
of not
more
than six percent (6%) per annum.
Lessee hereby waives all right of redemption to which Lessee or any
person
under Lessee might be entitled by any law now or hereafter in
force.
Lessor's remedies hereunder are in addition to any remedy allowed
by law.
15. SUBORDINATION OF
LEASE:
This
Lease shall, at Lessor's option, or at the option of any holder of
any
underlying lease or holder of any mortgages or trust deed, be
subject and
subordinate to any such underlying leases and to any such mortgages
or
trust deed which may now or hereafter affect the real property of
which the
Premises form a part, and also to all renewals, modifications,
consolidations and replacements of said underlying leases and
said
mortgages or trust deed. Although no instrument or act on the part
of
Lessee shall be necessary to effectuate such subordination, Lessee
will,
nevertheless, execute and deliver such further instruments
confirming such
subordination of this Lease as may be desired by the holders of
said
mortgages or trust deed or by any of the lessor's under such
underlying
leases. Lessee hereby appoints Lessor attorney-in-fact,
irrevocably, to
execute and deliver any such instrument for Lessee. If any
underlying lease
to
which this Lease is subject terminates, Lessee shall, on timely
request,
attorn to the owner of the reversion.
<PAGE>
16. SECURITY
DEPOSIT:
Lessee shall deposit with Lessor on the signing of this Lease, the
Security
Deposit as defined in
the Preamble for the full and faithful performance of
Lessee's obligations under this Lease, including without
limitation, the
surrender of possession of the Premises to Lessor as herein
provided. If
Lessor applies any part of said Security Deposit to cure any
default of
Lessee, Lessee shall, on demand, deposit with Lessor the amount so
applied
so
that Lessor shall have the full Security Deposit on hand at all
times
during the Term of this Lease. In the event a bona fide sale,
subject to
this
Lease, Lessor shall have the right to transfer the Security Deposit
to
the
vendee, and Lessor shall be considered released by Lessee from
all
liability for the return of the Security Deposit; and Lessee agrees
to look
solely to the new lessor for the return of the Security Deposit,
and it is
agreed that this shall apply to every transfer or assignment made
of the
Security Deposit to the new lessor. Provided this Lease is not in
default,
the
Security Deposit (less any portions thereof used, applied or
retained
by
Lessor in accordance with the provisions of this Article 16), shall
be
returned to Lessee after the expiration or sooner termination of
this Lease
and
after delivery of the entire Premises to Lessor in accordance with
the
provisions of this Lease. Lessee covenants that it will not assign
or
encumber or attempt to assign or encumber the Security Deposit and
Lessor
shall not be bound by any such assignment, encumbrance or attempt
thereof.
In
the event of the insolvency of Lessee, or in the event of the entry
of a
judgment in any court against Lessee which is not discharged within
thirty
(30)
days after entry, or in the event a petition is filed by or
against
Lessee under any chapter of the bankruptcy laws of the State of
Maryland or
the
United States of America, then in such event, Lessor may require
the
Lessee to deposit additional security in an amount which in
Lessor's sole
judgment would be sufficient to adequately assure Lessee's
performance of
all
of its obligations under this Lease including all payments
subsequently
accruing. Failure of Lessee to deposit the security required by
this
Article 16 within ten (10) days after Lessor's written demand
shall
constitute a material breach of this Lease by Lessee.
17. RIGHT TO CURE
LESSEE'S BREACH:
If
Lessee breaches any covenant or condition of this Lease, Lessor
may, on
reasonable written notice to Lessee (except that no notice need be
given in
case
of emergency), cure such breach at the expense of Lessee and
the
reasonable amount of all expenses, including attorney's fees,
incurred by
Lessor in so doing (whether paid by Lessor or not) shall be
deemed
Additional Rent payable on demand.
18. MECHANIC'S
LIENS:
Lessee shall, within fifteen (15) days after notice from Lessor,
discharge
or
satisfy by bonding or otherwise any mechanic liens for materials
or
labor claimed to have been furnished to the Premises on Lessee's
behalf.
19. RIGHT TO INSPECT
AND REPAIR:
Lessor may enter the Premises but shall not be obligated to do so
(except
as
required by any specific provision of this Lease) at any reasonable
time
on
reasonable notice to Lessee (except that no notice need be given in
case
of
emergency) for the purpose of inspection or the making of such
repairs,
replacement or additions in, to, on and about the Premises or the
Building,
as Lessor deems
necessary or desirable. Lessee shall have no claims or
cause of action against Lessor by reason thereof. When entering
the
Premises, Lessor shall be accompanied by a representative of
Lessee. Lessee
shall make such representative available upon reasonable notice
from Lessor
(except that no notice need be given in case of emergency). Lessor
shall
use
reasonable efforts to minimize its interference with Lessee's
business
operation in the Premises. In no event shall Lessee have any claim
against
Lessor for interruption of Lessee's business, however occurring,
including
but
not limited to that arising from the negligence of Lessor, its
agents,
servants or invitees, or from defects, errors or omissions in
the
construction or design of the Premises and/or the Building,
including the
structural and non-structural portions thereof.
<PAGE>
20. SERVICES TO BE
PROVIDED BY LESSOR/LESSOR'S EXCULPATION:
Subject to intervening laws, ordinances, regulations and executive
orders,
while Lessee is not in default under any of the provisions of this
Lease,
Lessor agrees to furnish, except on holidays, as set forth on
Exhibit E
attached hereto and made a part hereof:
a.
The cleaning services, as set forth on Exhibit D attached hereto
and
made
a part hereof, and subject to the conditions therein stated. Except
as
set
forth on Exhibit D, Lessee shall pay the cost of all other
cleaning
services required by Lessee.
b. Heating,
ventilating and air conditioning (herein "HVAC") as appropriate
for
the season, and as set forth on Exhibit C-1, attached hereto and
made a
part
hereof, together with Common Facilities lighting and electric
energy
all
during Building Hours, as defined in the Preamble.
c.
Cold and hot water for drinking and lavatory purposes.
d.
Elevator service during Building Hours (if the Building contains
an
elevator or elevators for the use of the occupants thereof).
e.
Restroom supplies and exterior window cleaning when reasonably
required.
f.
Notwithstanding the requirements of Exhibit C-1 (as to HVAC) or D
or any
other provision of this Lease, Lessor shall not be liable for
failure to
furnish any of the aforesaid services when such failure is due to
Force
Majeure, as hereinafter defined. Lessor shall not be liable, under
any
circumstances, including, but not limited to, that arising from
the
negligence of Lessor, its agents, servants or invitees, or from
defects,
errors or omissions in the construction or design of the Premises
and/or
the
Building, including the structural and non-structural portions
thereof,
for
loss of or injury to Lessee or to property, however occurring,
through
or
in connection with or incidental to the furnishings of, or failure
to
furnish, any of the aforesaid services or for any interruption to
Lessee's
business, however occurring.
21. INTERRUPTION OF
SERVICES OR USE:
Interruption or curtailment of any service maintained in the
Building or at
the
Office Building Area, if caused by Force Majeure, as
hereinafter
defined, shall not entitle Lessee to any claim against Lessor or to
any
abatement in rent, and shall not constitute a constructive or
partial
eviction, unless Lessor fails to take measures as may be reasonable
under
the
circumstances to restore the service without undue delay. If
the
Premises are rendered untenantable in whole or in part, for a
period of ten
(10)
consecutive business days, by the making of repairs, replacements
or
additions, other than those made with Lessee's consent or caused by
misuse
or
neglect by Lessee, or Lessee's agents, servants, visitors or
licensees,
there shall be a
proportionate abatement of Rent from and after said tenth
(10th) consecutive business day and continuing for the period of
such
untenantability. In no event, shall Lessee be entitled to claim
a
constructive eviction from the Premises unless Lessee shall first
have
notified Lessor in writing of the condition or conditions giving
rise
thereto, and if the complaints be justified, unless Lessor shall
have
failed, within a reasonable time after receipt of such notice, to
remedy,
or
commence and proceed with due diligence to remedy such condition
or
conditions, all subject to Force Majeure as hereinafter
defined.
22. BUILDING STANDARD
OFFICE ELECTRICAL SERVICE:
The
cost of electric current which is supplied by the Lessor for use by
the
Lessee in the Premises, other than for heating or air
conditioning
purposes, shall be reimbursed to the Lessor at terms,
classification and
rates normally charged by the public utility companies serving that
part of
the
municipality where the subject Premises are located, plus if
applicable
the
utility rate charged by the energy supply company.
<PAGE>
a.
From and after
the Commencement Date, Lessee agrees to pay as
Additional Rent an estimated electrical charge of $.10 per square
foot
per month, payable on the first day of each and every month,
until
such time as an electrical survey can be performed pursuant to
Article
22(b) below.
b.
Lessee agrees
that an independent electrical engineering consultant
shall make a survey of electric power demand of the electric
lighting
fixtures and the electric equipment of Lessee used in the Premises
to
determine the average monthly electric consumption thereof, and
the
costs of said survey shall be borne by Lessee. The findings of
said
consultant as to the average monthly electric consumption of
Lessee
shall, unless objected to by Lessee within forty-five (45) days,
be
conclusive and binding on Lessor and Lessee. After Lessor's
consultant
has submitted its report, Lessee shall pay to Lessor, within ten
(10)
days after demand therefor by Lessor, the amount (based on the
monthly
consumption found by such consultant) as owing from the Lease
Term's
Commencement Date, and the then expired months, to include the
then
current month and thereafter adjusted for the estimated
electrical
charges already paid
pursuant to Article 22(a), on the first day of
every month, in advance, the amount set forth as the monthly
consumption in said report. Said amounts shall be treated as
Additional Rent due hereunder. Proportionate sums shall be payable
for
periods of less than a full month if the Term commences or ends on
any
other than the first or last day of the month. If Lessee objects
to
said findings, Lessee shall nevertheless pay and continue to pay
the
amount determined by Lessor's consultant until the issue is
finally
resolved, but Lessee may, at its expense, seek the services of
an
independent electrical consultant who shall make a survey as
provided
above. If Lessor's and Lessee's consultant cannot agree as to
Lessee's
consumption within thirty (30) days of Lessee's consultant's
findings
either Lessor or Lessee may request the American Arbitration
Association at its office nearest the Building to appoint an
electrical engineering consultant whose decision shall be final
and
binding on Lessor and Lessee, and whose cost shall be shared
equally.
Upon the issue being finally resolved, any overpayment made by
Lessee
shall be promptly refunded.
c. In the event that there shall be an increase or decrease in
the
rate schedule (including surcharges or demand adjustments), of
the
public utility for the supply of Building Standard Office
Electrical
Service, or the imposition of any tax with respect to such service
or
increase in any such tax following the Lease Term's commencement,
the
Additional Rent payable hereunder shall be adjusted equitably
to
reflect the increase or decrease in rate or imposition or increase
in
the aforesaid tax. All computations shall be made on the basis
of
Lessee's surveyed usage as if a meter exclusively measuring such
usage
to the Premises was in place.
d. Lessee covenants that it shall notify Lessor immediately upon
the
introduction of any office equipment or lighting different from
that
on the Premises as of Lessor's electrical survey or in addition to
the
aforesaid equipment or lighting on the Premises as of said survey.
The
introduction of any new or different equipment or lighting shall
be
cause for, at Lessor's election, a resurveying of the Premises
at
Lessee's expense. Lessor reserves the right to inspect the Premises
to
insure compliance with this provision.
e. Lessor shall not be liable in any way to Lessee for any
loss,
damage or expense which Lessee may sustain or incur as a result of
any
failure, defect or change in the quantity or character of
electrical
energy available for redistribution to the Premises pursuant to
this
Article 22 nor for any interruption in the supply, and Lessee
agrees
that such supply may be interrupted for inspection, repairs and
replacement and in emergencies. In any event, the full measure
of
Lessor's liability for any interruption in the supply due to
Lessor's
acts or omissions shall be an abatement of Fixed Basic Rent and
Additional Rent, unless Lessor fails to take such measures as may
be
reasonable under the circumstances to restore such service
without
undue delay. In no event shall Lessor be liable for any
business
interruption suffered by Lessee.
f. Lessor, at Lessee's expense, shall furnish and install all
replacement lighting tubes, lamps, ballasts and bulbs required in
the
Premises. Lessee, however, shall have the right to furnish
and/or
install any or all of the items mentioned in this Article
22(f).
g. Lessee's use of electrical service as contemplated herein shall
be
during Building Hours, and any use in excess of said Building
Hours
shall result in an adjustment as set forth in Article 22(a) hereof
to
reflect such additional consumption.
<PAGE>
23. ADDITIONAL
RENT:
It
is expressly agreed that Lessee will pay in addition to the Fixed
Basic
Rent
provided in Article 3 hereof, an Additional Rent to cover
Lessee's
Percentage as defined in the Preamble, of the increased cost to
Lessor, for
each
of the categories enumerated herein, over the "Base Period Costs",
as
defined in the
Preamble for said categories.
a.
OPERATING COST
ESCALATION -- If the Operating Costs incurred for the
Building in which the Premises are located and Office Building
Area
for any Lease Year or Partial Lease Year during the Lease Term
shall
be greater than the Base Operating Costs (adjusted proportionately
for
periods less than a Lease Year), then Lessee shall pay to Lessor,
as
Additional Rent, Lessee's Percentage of all such excess
Operating
Costs. Operating Costs shall include, by way of illustration and
not
of limitation: personal property taxes; management fees; labor,
including all wages and salaries; social security taxes, and
other
taxes which may be levied against Lessor upon such wages and
salaries;
supplies; repairs and maintenance; maintenance and service
contracts;
painting; wall and window washing; laundry and towel service;
tools
and equipment (which are not required to be capitalized for
federal
income tax purposes); trash removal; lawn care; snow removal and
all
other items properly constituting direct operating costs according
to
standard accounting practices (hereinafter collectively referred to
as
the "Operating Costs"), but not including depreciation of Building
or
equipment; interest; income or excess profits taxes; costs of
maintaining the Lessor's corporate existence; franchise taxes;
any
expenditures required to be capitalized for federal income tax
purposes, unless said expenditures are for the purpose of
reducing
Operating Costs within the Building and Office Building Area, or
those
which under generally applied real estate practice are expensed
or
regarded as deferred expenses or are required under any
governmental
or quasi-governmental law, statute, ordinance, rule, order,
requirements or regulation, in which event the costs thereof shall
be
included. Notwithstanding anything contained herein to the
contrary,
any additional costs incurred by Lessor during the 2006 Calendar
Year
by reason of Lessor or any of its vendors entering into new
labor
contracts or renewals or modifications of existing labor
contracts
shall not be included in Base Operating Costs. In addition,
Lessee
shall pay Lessor Lessee's Percentage of all costs and expenses
incurred by Lessor in connection with complying with any
"homeland
security" requirements, and such costs and expenses shall not
be
included in Operating Costs. The Base Operating Costs shall as be
as
defined in the Preamble.
Operating Costs shall also include the total cost and expenses
incurred by Lessor maintaining certain areas of the Capital
Office
Park (the "Business Park") for the following items:
a. The cost of maintaining Business Park signs and lessee
directories; and
b. the cost of water, electricity and other utilities used in
connection with the operation and main
