Exhibit 10.6

 

RAINIER PLAZA

 

BELLEVUE, WASHINGTON

 

 

 

 

 

OFFICE LEASE AGREEMENT

 

BETWEEN

 

EOP-NORTHWEST PROPERTIES, L.L.C.,

a Delaware limited liability company

(“LANDLORD”)

 

AND

 

SAFLINK CORPORATION, a Delaware corporation

(“TENANT”)

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TABLE OF CONTENTS

 

I.

 

BASIC LEASE INFORMATION

   1

II.

 

LEASE GRANT

   3

III.

 

ADJUSTMENT OF COMMENCEMENT DATE; POSSESSION

   3

IV.

 

RENT

   3

V.

 

COMPLIANCE WITH LAWS; USE

   7

VI.

 

SECURITY DEPOSIT

   7

VII.

 

SERVICES TO BE FURNISHED BY LANDLORD

   7

VIII.

 

LEASEHOLD IMPROVEMENTS

   8

IX.

 

REPAIRS AND ALTERATIONS

   8

X.

 

USE OF ELECTRICAL SERVICES BY TENANT

   9

XI.

 

ENTRY BY LANDLORD

   10

XII.

 

ASSIGNMENT AND SUBLETTING

   10

XIII.

 

LIENS

   11

XIV.

 

INDEMNITY AND WAIVER OF CLAIMS

   11

XV.

 

INSURANCE

   12

XVI.

 

SUBROGATION

   12

XVII.

 

CASUALTY DAMAGE

   13

XVIII.

 

CONDEMNATION

   13

XIX.

 

EVENTS OF DEFAULT

   14

XX.

 

REMEDIES

   14

XXI.

 

LIMITATION OF LIABILITY

   15

XXII.

 

NO WAIVER

   15

XXIII.

 

QUIET ENJOYMENT

   15

XXIV.

 

RELOCATION

   16

XXV.

 

HOLDING OVER

   16

XXVI.

 

SUBORDINATION TO MORTGAGES; ESTOPPEL CERTIFICATE

   16

XXVII.

 

ATTORNEYS’ FEES

   16

XXVIII.

 

NOTICE

   16

XXIX.

 

EXCEPTED RIGHTS

   17

XXX.

 

SURRENDER OF PREMISES

   17

XXXI.

 

MISCELLANEOUS

   17

XXXII.

 

ENTIRE AGREEMENT

   19

 

 

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OFFICE LEASE AGREEMENT

 

This Office Lease Agreement (the “Lease”) is made and entered into as of the
14th day of March, 2003, by and between EOP-NORTHWEST PROPERTIES, L.L.C., a
Delaware limited liability company (“Landlord”), and SAFLINK CORPORATION, a
Delaware corporation (“Tenant”).

 

I. Basic Lease Information.

 

  A. “Building” shall mean the building located at 777 108th Avenue NE,
Bellevue, Washington, and commonly known as Rainier Plaza.

 

  B. “Rentable Square Footage of the Building” is deemed to be 431,233 square
feet.

 

  C. “Premises” shall mean the area shown on Exhibit A to this Lease. The
Premises are located on floor 21 and known as suite number 2100. The “Rentable
Square Footage of the Premises” is deemed to be 9,569 square feet, which square
footage was calculated according to BOMA ANSI-Z65.1 (1996) standards. If the
Premises include one or more floors in their entirety, all corridors and
restroom facilities located on such full floor(s) shall be considered part of
the Premises. Landlord and Tenant stipulate and agree that the Rentable Square
Footage of the Building and the Rentable Square Footage of the Premises are
correct and shall not be remeasured.

 

  D. “Base Rent”:

 

Months of Term

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Annual Rate

Per Square Foot

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Annual

Base Rent

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Monthly

Base Rent

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Months 1 – 12

   $ 22.50    $ 215,302.56    $ 17,941.88

Months 13 – 24

   $ 22.75    $ 217,694.76    $ 18,141.23

Months 25 – 38

   $ 23.00    $ 220,086.96    $ 18,340.58

 

       Notwithstanding the Base Rent schedule set forth above, as long as Tenant
is not in default, Tenant shall be entitled to an abatement of Base Rent in the
approximate amount of $598.06 per day for the first 30 consecutive calendar days
of the Term (the “Rent Abatement Period”). The total amount of Base Rent abated
during the Rent Abatement Period shall equal Seventeen Thousand Nine Hundred
Forty-one and 88/100 Dollars ($17,941.88) (the “Abated Base Rent”). During the
Rent Abatement Period, all other costs and charges specified in this Lease shall
remain as due and payable pursuant to the provisions of this Lease. In the event
Tenant defaults at any time during the Term, all Abated Base Rent shall
immediately become due and payable. The payment by Tenant of the Abated Base
Rent in the event of a default shall not limit or affect any of Landlord’s other
rights, pursuant to this Lease or at law or in equity.

 

  E. “Tenant’s Pro Rata Share”: 2.2190%.

 

  F. “Base Year” for Taxes: 2003; “Base Year” for Expenses: 2003.

 

  G. “Term”: A period of 38 months and 0 days. The Term shall commence on April
1, 2003 (the “Commencement Date”), and, unless terminated early in accordance
with this Lease, end on May 31, 2006 (the “Termination Date”). However, if
Landlord is required to Substantially Complete (defined in Section III.A) any
Landlord Work (defined in Section I.O.) prior to the Commencement Date under the
terms of a Work Letter (defined in Section I.O): (1) the date set forth in the
prior sentence as the “Commencement Date” shall instead be defined as the
“Target Commencement Date” by which date Landlord will use reasonable efforts to
Substantially Complete the Landlord Work; and (2) the actual “Commencement Date”
shall be the date on which the Landlord Work is Substantially Complete, as
determined by Section III.A. In such circumstances, the Termination Date will
instead be the last day of the Term as determined based upon the actual
Commencement Date. Landlord’s failure to Substantially Complete the Landlord
Work by the Target Commencement Date shall not be a default by Landlord or
otherwise render Landlord liable for damages. Promptly

 

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       after the determination of the Commencement Date, Landlord and Tenant
shall enter into a commencement letter agreement in the form attached as Exhibit
C.

 

  H. Tenant allowance(s): $57,414.00 (i.e., $6.00 per rentable square foot of
the Premises), as more particularly described in Exhibit D hereof.

 

  I. “Security Deposit”: $18,340.58.

 

  J. “Guarantor(s)”: None as of the date of this Lease.

 

  K. “Broker”: The Staubach Company and Equity Office Properties Management
Corporation

 

  L. “Permitted Use”: general office use.

 

  M. “Notice Addresses”:

 

       Tenant:

 

       On and after the Commencement Date, notices shall be sent to Tenant at
the Premises. Prior to the Commencement Date, notices shall be sent to Tenant at
the following address:

 

 

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Phone #:

 

 

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Fax #:

 

 

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Landlord:

 

With a copy to:

EOP-Northwest Properties, L.L.C.

c/o Equity Office Properties Trust

777 108th Avenue N.E., Suite 2050

Bellevue, Washington 98004

Attention: Building Manager

 

Equity Office Properties

Two North Riverside Plaza

Suite 2200

Chicago, Illinois 60606

Attention: Regional Counsel

 

       Rent (defined in Section IV.A) is payable to the order of Equity Office
Properties at the following address:

 

EOP-Northwest Properties, L.L.C.

Rainier Plaza

Department 11610 - (Lease Id)

PO Box 23044

Chicago, Illinois 60673

 

  N. “Business Day(s)” are Monday through Friday of each week, exclusive of New
Year’s Day, President’s Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day (“Holidays”). Landlord may designate
additional Holidays, provided that the additional Holidays are commonly
recognized by other office buildings in the area where the Building is located.

 

  O. “Landlord Work” means the work that Landlord is obligated to perform in the
Premises pursuant to a separate work letter agreement (the “Work Letter”)
attached as Exhibit D.

 

  P. “Law(s)” means all applicable statutes, codes, ordinances, orders, rules
and regulations of any municipal or governmental entity.

 

  Q. “Normal Business Hours” for the Building are 7:00 A.M. to 6:00 P.M. on
Business Days and 8:00 A.M. to 1:00 P.M. on Saturdays.

 

  R. “Property” means the Building and the parcel(s) of land on which it is
located and, at Landlord’s discretion, the Building garage and other
improvements serving the Building, if any, and the parcel(s) of land on which
they are located.

 

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II. Lease Grant.

 

Landlord leases the Premises to Tenant and Tenant leases the Premises from
Landlord, together with the right in common with others to use any portions of
the Property that are designated by Landlord for the common use of tenants and
others, such as sidewalks, unreserved parking areas, common corridors, elevator
foyers, restrooms, vending areas and lobby areas (the “Common Areas”).

 

III. Adjustment of Commencement Date; Possession.

 

  A. The Landlord Work shall be deemed to be “Substantially Complete” on the
date that all Landlord Work has been performed, other than any details of
construction, mechanical adjustment or any other similar matter, the
noncompletion of which does not materially interfere with Tenant’s use of the
Premises. However, if Landlord is delayed in the performance of the Landlord
Work as a result of any Tenant Delay(s) (defined below), the Landlord Work shall
be deemed to be Substantially Complete on the date that Landlord could
reasonably have been expected to Substantially Complete the Landlord Work absent
any Tenant Delay. “Tenant Delay” means any act or omission of Tenant or its
agents, employees, vendors or contractors that actually delays the Substantial
Completion of the Landlord Work, including, without limitation: (1) Tenant’s
failure to furnish information or approvals within any time period specified in
this Lease, including the failure to prepare or approve preliminary or final
plans by any applicable due date; (2) Tenant’s selection of equipment or
materials that have long lead times after first being informed by Landlord that
the selection may result in a delay; (3) changes requested or made by Tenant to
previously approved plans and specifications; (4) performance of work in the
Premises by Tenant or Tenant’s contractor(s) during the performance of the
Landlord Work; or (5) if the performance of any portion of the Landlord Work
depends on the prior or simultaneous performance of work by Tenant, a delay by
Tenant or Tenant’s contractor(s) in the completion of such work.

 

  B. Subject to Landlord’s obligation, if any, to perform Landlord Work and
Landlord’s obligations under Section IX.B., the Premises are accepted by Tenant
in “as is” condition and configuration. By taking possession of the Premises,
Tenant agrees that the Premises are in good order and satisfactory condition,
and that there are no representations or warranties by Landlord regarding the
condition of the Premises or the Building. If Landlord is delayed delivering
possession of the Premises or any other space due to the holdover or unlawful
possession of such space by any party, Landlord shall use reasonable efforts to
obtain possession of the space. If Landlord is not required to Substantially
Complete Landlord Work before the Commencement Date, the Commencement Date shall
be postponed until the date Landlord delivers possession of the Premises to
Tenant free from occupancy by any party, and the Termination Date, at the option
of Landlord, may be postponed by an equal number of days. If Landlord is
required to Substantially Complete Landlord Work before the Commencement Date,
the Commencement Date and Termination Date shall be determined by Section I.G.

 

  C. If Tenant takes possession of the Premises before the Commencement Date,
such possession shall be subject to the terms and conditions of this Lease and
Tenant shall pay Rent (defined in Section IV.A.) to Landlord for each day of
possession before the Commencement Date. However, except for the cost of
services requested by Tenant (e.g. freight elevator usage), Tenant shall not be
required to pay Rent for any days of possession before the Commencement Date
during which Tenant, with the approval of Landlord, is in possession of the
Premises for the sole purpose of performing improvements or installing
furniture, equipment or other personal property.

 

IV. Rent.

 

  A. Payments. As consideration for this Lease, Tenant shall pay Landlord,
without any setoff or deduction, the total amount of Base Rent and Additional
Rent due for the Term. “Additional Rent” means all sums (exclusive of Base Rent)
that Tenant is required to pay Landlord. Additional Rent and Base Rent are
sometimes collectively referred to as “Rent”. Tenant shall pay and be liable for
all rental, sales and use taxes (but excluding income taxes), if any, imposed
upon or measured by Rent under applicable Law. Base Rent and recurring monthly
charges of Additional Rent shall be due and payable in advance on the first day
of each calendar month without notice or demand, provided that the installment
of Base Rent for the first full calendar month of the Term shall be payable upon

 

3

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       the execution of this Lease by Tenant. All other items of Rent shall be
due and payable by Tenant on or before 30 days after billing by Landlord. All
payments of Rent shall be by good and sufficient check or by other means (such
as automatic debit or electronic transfer) acceptable to Landlord. If Tenant
fails to pay any item or installment of Rent when due, Tenant shall pay Landlord
an administration fee equal to 5% of the past due Rent, provided that Tenant
shall be entitled to a grace period of 5 days for the first 2 late payments of
Rent in a given calendar year. If the Term commences on a day other than the
first day of a calendar month or terminates on a day other than the last day of
a calendar month, the monthly Base Rent and Tenant’s Pro Rata Share of any Tax
Excess (defined in Section IV.B.) or Expense Excess (defined in Section IV.B.)
for the month shall be prorated based on the number of days in such calendar
month. Landlord’s acceptance of less than the correct amount of Rent shall be
considered a payment on account of the earliest Rent due. No endorsement or
statement on a check or letter accompanying a check or payment shall be
considered an accord and satisfaction, and either party may accept the check or
payment without prejudice to that party’s right to recover the balance or pursue
other available remedies. Tenant’s covenant to pay Rent is independent of every
other covenant in this Lease.

 

  B. Expense Excess and Tax Excess. Tenant shall pay Tenant’s Pro Rata Share of
the amount, if any, by which Expenses (defined in Section IV.C.) for each
calendar year during the Term exceed Expenses for the Base Year (the “Expense
Excess”) and also the amount, if any, by which Taxes (defined in Section IV.D.)
for each calendar year during the Term exceed Taxes for the Base Year (the “Tax
Excess”). If Expenses and/or Taxes in any calendar year decrease below the
amount of Expenses and/or Taxes for the Base Year, Tenant’s Pro Rata Share of
Expenses and/or Taxes, as the case may be, for that calendar year shall be $0.
Landlord shall provide Tenant with a good faith estimate of the Expense Excess
and of the Tax Excess for each calendar year during the Term. On or before the
first day of each month, Tenant shall pay to Landlord a monthly installment
equal to one-twelfth of Tenant’s Pro Rata Share of Landlord’s estimate of the
Expense Excess and one-twelfth of Tenant’s Pro Rata Share of Landlord’s estimate
of the Tax Excess. If Landlord determines that its good faith estimate of the
Expense Excess or of the Tax Excess was incorrect by a material amount, Landlord
may provide Tenant with a revised estimate. After its receipt of the revised
estimate, Tenant’s monthly payments shall be based upon the revised estimate. If
Landlord does not provide Tenant with an estimate of the Expense Excess or of
the Tax Excess by January 1 of a calendar year, Tenant shall continue to pay
monthly installments based on the previous year’s estimate(s) until Landlord
provides Tenant with the new estimate. Upon delivery of the new estimate, an
adjustment shall be made for any month for which Tenant paid monthly
installments based on the previous year’s estimate(s). Tenant shall pay Landlord
the amount of any underpayment within 30 days after receipt of the new estimate.
Any overpayment shall be refunded to Tenant within 30 days or credited against
the next due future installment(s) of Additional Rent.

 

       As soon as is practical following the end of each calendar year, Landlord
shall furnish Tenant with a statement of the actual Expenses and Expense Excess
and the actual Taxes and Tax Excess for the prior calendar year. If the
estimated Expense Excess and/or estimated Tax Excess for the prior calendar year
is more than the actual Expense Excess and/or actual Tax Excess, as the case may
be, for the prior calendar year, Landlord shall apply any overpayment by Tenant
against Additional Rent due or next becoming due, provided if the Term expires
before the determination of the overpayment, Landlord shall refund any
overpayment to Tenant after first deducting the amount of Rent due. If the
estimated Expense Excess and/or estimated Tax Excess for the prior calendar year
is less than the actual Expense Excess and/or actual Tax Excess, as the case may
be, for such prior year, Tenant shall pay Landlord, within 30 days after its
receipt of the statement of Expenses and/or Taxes, any underpayment for the
prior calendar year.

 

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  C. Expenses Defined. “Expenses” means all costs and expenses incurred in each
calendar year in connection with operating, maintaining, repairing, and managing
the Building and the Property, including, but not limited to:

 

  1. Labor costs, including, wages, salaries, social security and employment
taxes, medical and other types of insurance, uniforms, training, and retirement
and pension plans.

 

  2. Management fees, the cost of equipping and maintaining a management office,
accounting and bookkeeping services, legal fees not attributable to leasing or
collection activity, and other administrative costs. Landlord, by itself or
through an affiliate, shall have the right to directly perform or provide any
services under this Lease (including management services), provided that the
cost of any such services shall not exceed the cost that would have been
incurred had Landlord entered into an arms-length contract for such services
with an unaffiliated entity of comparable skill and experience.

 

  3. The cost of services, including amounts paid to service providers and the
rental and purchase cost of parts, supplies, tools and equipment.

 

  4. Premiums and deductibles paid by Landlord for insurance, including workers
compensation, fire and extended coverage, earthquake, general liability, rental
loss, elevator, boiler and other insurance customarily carried from time to time
by owners of comparable office buildings.

 

 

  5. Electrical Costs (defined below) and charges for water, gas, steam and
sewer, but excluding those charges for which Landlord is reimbursed by tenants.
“Electrical Costs” means: (a) charges paid by Landlord for electricity; (b)
costs incurred in connection with an energy management program for the Property;
and (c) if and to the extent permitted by Law, a fee for the services provided
by Landlord in connection with the selection of utility companies and the
negotiation and administration of contracts for electricity, provided that such
fee shall not exceed 50% of any savings obtained by Landlord. Electrical Costs
shall be adjusted as follows: (i) amounts received by Landlord as reimbursement
for above standard electrical consumption shall be deducted from Electrical
Costs; (ii) the cost of electricity incurred to provide overtime HVAC to
specific tenants (as reasonably estimated by Landlord) shall be deducted from
Electrical Costs; and (iii) if Tenant is billed directly for the cost of
building standard electricity to the Premises as a separate charge in addition
to Base Rent, the cost of electricity to individual tenant spaces in the
Building shall be deducted from Electrical Costs.

 

  6. The amortized cost of capital improvements (as distinguished from
replacement parts or components installed in the ordinary course of business)
made to the Property which are: (a) performed primarily to reduce operating
expense costs or otherwise improve the operating efficiency of the Property; or
(b) required to comply with any Laws that are enacted, or first interpreted to
apply to the Property, after the date of this Lease. The cost of capital
improvements shall be amortized by Landlord over the lesser of the Payback
Period (defined below) or 5 years. The amortized cost of capital improvements
may, at Landlord’s option, include actual or imputed interest at the rate that
Landlord would reasonably be required to pay to finance the cost of the capital
improvement. “Payback Period” means the reasonably estimated period of time that
it takes for the cost savings resulting from a capital improvement to equal the
total cost of the capital improvement.

 

       If Landlord incurs Expenses for the Property together with one or more
other buildings or properties, whether pursuant to a reciprocal easement
agreement, common area agreement or otherwise, the shared costs and expenses
shall be equitably prorated and apportioned between the Property and the other
buildings or properties. Expenses shall not include: (i) the cost of repairs
reimbursed by Tenant or other third parties; (ii) alterations solely
attributable to tenants of the Building other than Tenant; (iii) costs of
abatement or remediation of “hazardous materials” brought upon, stored, used or
disposed of in or about the Building by LL or by a particular tenant or occupant
of the Building other than Tenant, except to the extent such abatement or
remediation is related to the general repair and maintenance of the Building;
(iv) the cost or expense of any services or benefits provided generally to other
tenants in the Building and not provided or available to Tenant; (v) legal fees
associated with disputes with other tenants in the

 

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       Building; (vi) the cost of capital improvements (except as set forth
above); (vii) depreciation; (viii) interest (except as provided above for the
amortization of capital improvements); (ix) principal payments of mortgage and
other non-operating debts of Landlord; (x) the cost of repairs or other work to
the extent Landlord is reimbursed by insurance or condemnation proceeds; (xi)
costs in connection with leasing space in the Building, including brokerage
commissions; (xii) lease concessions, including rental abatements and
construction allowances, granted to specific tenants; (xiii) costs incurred in
connection with the sale, financing or refinancing of the Building; (xiv) fines,
interest and penalties incurred due to the late payment of Taxes (defined in
Section IV.D) or Expenses; (xv) organizational expenses associated with the
creation and operation of the entity which constitutes Landlord; or (xvi) any
penalties or damages that Landlord pays to Tenant under this Lease or to other
tenants in the Building under their respective leases. If the Building is not at
least 95% occupied during any calendar year or if Landlord is not supplying
services to at least 95% of the total Rentable Square Footage of the Building at
any time during a calendar year, Expenses shall, at Landlord’s option, be
determined as if the Building had been 95% occupied and Landlord had been
supplying services to 95% of the Rentable Square Footage of the Building during
that calendar year. If Tenant pays for its Pro Rata Share of Expenses based on
increases over a “Base Year” and Expenses for a calendar year are determined as
provided in the prior sentence, Expenses for the Base Year shall also be
determined as if the Building had been 95% occupied and Landlord had been
supplying services to 95% of the Rentable Square Footage of the Building. The
extrapolation of Expenses under this Section shall be performed by appropriately
adjusting the cost of those components of Expenses that are impacted by changes
in the occupancy of the Building.

 

  D. Taxes Defined. “Taxes” shall mean: (1) all real estate taxes and other
assessments on the Building and/or Property, including, but not limited to,
assessments for special improvement districts and building improvement
districts, taxes and assessments levied in substitution or supplementation in
whole or in part of any such taxes and assessments and the Property’s share of
any real estate taxes and assessments under any reciprocal easement agreement,
common area agreement or similar agreement as to the Property; (2) all personal
property taxes for property that is owned by Landlord and used in connection
with the operation, maintenance and repair of the Property; and (3) all costs
and fees incurred in connection with seeking reductions in any tax liabilities
described in (1) and (2), including, without limitation, any costs incurred by
Landlord for compliance, review and appeal of tax liabilities. Without
limitation, Taxes shall not include any income, capital levy, franchise, capital
stock, gift, estate or inheritance tax. If an assessment is payable in
installments, Taxes for the year shall include the amount of the installment and
any interest due and payable during that year. For all other real estate taxes,
Taxes for that year shall, at Landlord’s election, include either the amount
accrued, assessed or otherwise imposed for the year or the amount due and
payable for that year, provided that Landlord’s election shall be applied
consistently throughout the Term. If a change in Taxes is obtained for any year
of the Term during which Tenant paid Tenant’s Pro Rata Share of any Tax Excess,
then Taxes for that year will be retroactively adjusted and Landlord shall
provide Tenant with a credit, if any, based on the adjustment. Likewise, if a
change is obtained for Taxes for the Base Year, Taxes for the Base Year shall be
restated and the Tax Excess for all subsequent years shall be recomputed. Tenant
shall pay Landlord the amount of Tenant’s Pro Rata Share of any such increase in
the Tax Excess within 30 days after Tenant’s receipt of a statement from
Landlord.

 

  E. Audit Rights. Tenant may, within 90 days after receiving Landlord’s
statement of Expenses, give Landlord written notice (“Review Notice”) that
Tenant intends to review Landlord’s records of the Expenses for that calendar
year. Within a reasonable time after receipt of the Review Notice, Landlord
shall make all pertinent records available for inspection that are reasonably
necessary for Tenant to conduct its review. If any records are maintained at a
location other than the office of the Building, Tenant may either inspect the
records at such other location or pay for the reasonable cost of copying and
shipping the records. If Tenant retains an agent to review Landlord’s records,
the agent must be with a licensed CPA firm. Tenant shall be solely responsible
for all costs, expenses and fees incurred for the audit. Within 60 days after
the records are made available to Tenant, Tenant shall have the right to give
Landlord written notice (an

 

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       “Objection Notice”) stating in reasonable detail any objection to
Landlord’s statement of Expenses for that year. If Tenant fails to give Landlord
an Objection Notice within the 60 day period or fails to provide Landlord with a
Review Notice within the 90 day period described above, Tenant shall be deemed
to have approved Landlord’s statement of Expenses and shall be barred from
raising any claims regarding the Expenses for that year. If Tenant provides
Landlord with a timely Objection Notice, Landlord and Tenant shall work together
in good faith to resolve any issues raised in Tenant’s Objection Notice. If
Landlord and Tenant determine that Expenses for the calendar year are less than
reported, Landlord shall provide Tenant with a credit against the next
installment of Rent in the amount of the overpayment by Tenant. Likewise, if
Landlord and Tenant determine that Expenses for the calendar year are greater
than reported, Tenant shall pay Landlord the amount of any underpayment within
30 days. The records obtained by Tenant shall be treated as confidential. In no
event shall Tenant be permitted to examine Landlord’s records or to dispute any
statement of Expenses unless Tenant has paid and continues to pay all Rent when
due.

 

V. Compliance with Laws; Use.

 

The Premises shall be used only for the Permitted Use and for no other use
whatsoever. Tenant shall not use or permit the use of the Premises for any
purpose which is illegal, dangerous to persons or property or which, in
Landlord’s reasonable opinion, unreasonably disturbs any other tenants of the
Building or interferes with the operation of the Building. Tenant shall comply
with all Laws, including the Americans with Disabilities Act, regarding the
operation of Tenant’s business and the use, condition, configuration and
occupancy of the Premises. Tenant, within 10 days after receipt, shall provide
Landlord with copies of any notices it receives regarding a violation or alleged
violation of any Laws. Tenant shall comply with the rules and regulations of the
Building attached as Exhibit B and such other reasonable rules and regulations
adopted by Landlord from time to time. Tenant shall also cause its agents,
contractors, subcontractors, employees, customers, and subtenants to comply with
all rules and regulations. Landlord shall not knowingly discriminate against
Tenant in Landlord’s enforcement of the rules and regulations.

 

VI. Security Deposit.

 

The Security Deposit shall be delivered to Landlord upon the execution of this
Lease by Tenant and shall be held by Landlord without liability for interest
(unless required by Law) as security for the performance of Tenant’s
obligations. The Security Deposit is not an advance payment of Rent or a measure
of Tenant’s liability for damages. Landlord may, from time to time, without
prejudice to any other remedy, use all or a portion of the Security Deposit to
satisfy past due Rent or to cure any uncured default by Tenant. If Landlord uses
the Security Deposit, Tenant shall within 5 days restore the Security Deposit to
its original amount. Landlord shall return any unapplied portion of the Security
Deposit to Tenant within 45 days after the later to occur of: (1) the
determination of Tenant’s Pro Rata Share of any Tax Excess and Expense Excess
for the final year of the Term; (2) the date Tenant surrenders possession of the
Premises to Landlord in accordance with this Lease; or (3) the Termination Date.
If Landlord transfers its interest in the Premises, Landlord may assign the
Security Deposit to the transferee and, following the assignment, Landlord shall
have no further liability for the return of the Security Deposit. Landlord shall
not be required to keep the Security Deposit separate from its other accounts.

 

VII. Services to be Furnished by Landlord.

 

  A. Landlord agrees to furnish Tenant with the following services: (1) Water
service for use in the lavatories on each floor on which the Premises are
located; (2) Heat and air conditioning in season during Normal Business Hours,
at such temperatures and in such amounts as are standard for comparable
buildings or as required by governmental authority. Tenant, upon such advance
notice as is reasonably required by Landlord, shall have the right to receive
HVAC service during hours other than Normal Business Hours. Tenant shall pay
Landlord the standard charge for the additional service as reasonably determined
by Landlord from time to time; (3) Maintenance and repair of the Property as
described in Section IX.B.; (4) Janitor service on Business Days. If Tenant’s
use, floor covering or other improvements require special services in excess of
the standard services for the Building, Tenant shall pay the additional cost
attributable to the special services; (5) Elevator service; (6) Electricity to
the Premises for general office use, in accordance with and subject to the terms
and conditions in Article X; and (7) such other services as Landlord reasonably
determines are necessary or appropriate for the Property.

 

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  B. Landlord’s failure to furnish, or any interruption or termination of,
services due to the application of Laws, the failure of any equipment, the
performance of repairs, improvements or alterations, or the occurrence of any
event or cause beyond the reasonable control of Landlord (a “Service Failure”)
shall not render Landlord liable to Tenant, constitute a constructive eviction
of Tenant, give rise to an abatement of Rent, nor relieve Tenant from the
obligation to fulfill any covenant or agreement. However, if the Premises, or a
material portion of the Premises, is made untenantable for a period in excess of
3 consecutive Business Days as a result of the Service Failure, then Tenant, as
its sole remedy, shall be entitled to receive an abatement of Rent payable
hereunder during the period beginning on the 4th consecutive Business Day of the
Service Failure and ending on the day the service has been restored. If the
entire Premises has not been rendered untenantable by the Service Failure, the
amount of abatement that Tenant is entitled to receive shall be prorated based
upon the percentage of the Premises rendered untenantable and not used by
Tenant. In no event, however, shall Landlord be liable to Tenant for any loss or
damage, including the theft of Tenant’s Property (defined in Article XV),
arising out of or in connection with the failure of any security services,
personnel or equipment.

 

VIII. Leasehold Improvements.

 

All improvements to the Premises (collectively, “Leasehold Improvements”) shall
be owned by Landlord and shall remain upon the Premises without compensation to
Tenant. However, Landlord, by written notice to Tenant within 30 days prior to
the Termination Date, may require Tenant to remove, at Tenant’s expense: (1)
Cable (defined in Section IX.A) installed by or for the exclusive benefit of
Tenant and located in the Premises or other portions of the Building; and (2)
any Leasehold Improvements that are performed by or for the benefit of Tenant
and, in Landlord’s reasonable judgment, are of a nature that would require
removal and repair costs that are materially in excess of the removal and repair
costs associated with standard office improvements (collectively referred to as
“Required Removables”). Without limitation, it is agreed that Required
Removables include internal stairways, raised floors, personal baths and
showers, vaults, rolling file systems and structural alterations and
modifications of any type. The Required Removables designated by Landlord shall
be removed by Tenant before the Termination Date, provided that upon prior
written notice to Landlord, Tenant may remain in the Premises for up to 5 days
after the Termination Date for the sole purpose of removing the Required
Removables. Tenant’s possession of the Premises shall be subject to all of the
terms and conditions of this Lease, including the obligation to pay Rent on a
per diem basis at the rate in effect for the last month of the Term. Tenant
shall repair damage caused by the installation or removal of Required
Removables. If Tenant fails to remove any Required Removables or perform related
repairs in a timely manner, Landlord, at Tenant’s expense, may remove and
dispose of the Required Removables and perform the required repairs. Tenant,
within 30 days after receipt of an invoice, shall reimburse Landlord for the
reasonable costs incurred by Landlord. Notwithstanding the foregoing, Tenant, at
the time it requests approval for a proposed Alteration (defined in Section
IX.C), may request in writing that Landlord advise Tenant whether the Alteration
or any portion of the Alteration will be designated as a Required Removable.
Within 10 days after receipt of Tenant’s request, Landlord shall advise Tenant
in writing as to which portions of the Alteration, if any, will be considered to
be Required Removables.

 

IX. Repairs and Alterations.

 

  A. Tenant’s Repair Obligations. Tenant shall, at its sole cost and expense,
promptly perform all maintenance and repairs to the Premises that are not
Landlord’s express responsibility under this Lease, and shall keep the Premises
in good condition and repair, reasonable wear and tear excepted. Tenant’s repair
obligations include, without limitation, repairs to: (1) floor covering; (2)
interior partitions; (3) doors; (4) the interior side of demising walls; (5)
electronic, phone and data cabling and related equipment (collectively, “Cable”)
that is installed by or for the exclusive benefit of Tenant and located in the
Premises or other portions of the Building; (6) supplemental air conditioning
units, private showers and kitchens, including hot water heaters, plumbing, and
similar facilities serving Tenant exclusively; and (7) Alterations performed by
contractors retained by Tenant, including related HVAC balancing. All work shall
be performed in accordance with the rules and procedures described in Section
IX.C. below. If Tenant fails to make any repairs to the Premises for more than
15 days after

 

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       notice from Landlord (although notice shall not be required if there is
an emergency), Landlord may make the repairs, and Tenant shall pay the
reasonable cost of the repairs to Landlord within 30 days after receipt of an
invoice, together with an administrative charge in an amount equal to 10% of the
cost of the repairs.

 

  B. Landlord’s Repair Obligations. Landlord shall keep and maintain in good
repair and working order and make repairs to and perform maintenance upon: (1)
structural elements of the Building; (2) mechanical (including HVAC),
electrical, plumbing and fire/life safety systems serving the Building in
general; (3) Common Areas; (4) the roof of the Building; (5) exterior windows of
the Building; and (6) elevators serving the Building. Landlord shall promptly
make repairs (considering the nature and urgency of the repair) for which
Landlord is responsible.

 

  C. Alterations. Tenant shall not make alterations, additions or improvements
to the Premises or install any Cable in the Premises or other portions of the
Building (collectively referred to as “Alterations”) without first obtaining the
written consent of Landlord in each instance, which consent shall not be
unreasonably withheld or delayed. However, Landlord’s consent shall not be
required for any Alteration that satisfies all of the following criteria (a
“Cosmetic Alteration”): (1) is of a cosmetic nature such as painting,
wallpapering, hanging pictures and installing carpeting; (2) is not visible from
the exterior of the Premises or Building; (3) will not affect the systems or
structure of the Building; and (4) does not require work to be performed inside
the walls or above the ceiling of the Premises. However, even though consent is
not required, the performance of Cosmetic Alterations shall be subject to all
the other provisions of this Section IX.C. Prior to starting work, Tenant shall
furnish Landlord with plans and specifications reasonably acceptable to
Landlord; names of contractors reasonably acceptable to Landlord (provided that
Landlord may designate specific contractors with respect to Building systems);
copies of contracts; necessary permits and approvals; evidence of contractor’s
and subcontractor’s insurance in amounts reasonably required by Landlord; and
any security for performance that is reasonably required by Landlord. Changes to
the plans and specifications must also be submitted to Landlord for its
approval. Alterations shall be constructed in a good and workmanlike manner
using materials of a quality that is at least equal to the quality designated by
Landlord as the minimum standard for the Building. Landlord may designate
reasonable rules, regulations and procedures for the performance of work in the
Building and, to the extent reasonably necessary to avoid disruption to the
occupants of the Building, shall have the right to designate the time when
Alterations may be performed. Tenant shall reimburse Landlord within 30 days
after receipt of an invoice for sums paid by Landlord for third party
examination of Tenant’s plans for non-Cosmetic Alterations. In addition, within
30 days after receipt of an invoice from Landlord, Tenant shall pay Landlord a
fee for Landlord’s oversight and coordination of any non-Cosmetic Alterations
equal to 10% of the cost of the non-Cosmetic Alterations. Upon completion,
Tenant shall furnish “as-built” plans (except for Cosmetic Alterations),
completion affidavits, full and final waivers of lien and receipted bills
covering all labor and materials. Tenant shall assure that the Alterations
comply with all insurance requirements and Laws. Landlord’s approval of an
Alteration shall not be a representation by Landlord that the Alteration
complies with applicable Laws or will be adequate for Tenant’s use.

 

X. Use of Electrical Services by Tenant.

 

  A. Electricity used by Tenant in the Premises shall, at Landlord’s option, be
paid for by Tenant either: (1) through inclusion in Expenses (except as provided
in Section X.B. for excess usage); (2) by a separate charge payable by Tenant to
Landlord within 30 days after billing by Landlord; or (3) by separate charge
billed by the applicable utility company and payable directly by Tenant.
Electrical service to the Premises may be furnished by one or more companies
providing electrical generation, transmission and distribution services, and the
cost of electricity may consist of several different components or separate
charges for such services, such as generation, distribution and stranded cost
charges. Landlord shall have the exclusive right to select any company providing
electrical service to the Premises, to aggregate the electrical service for the
Property and Premises with other buildings, to purchase electricity through a
broker and/or buyers group and to change the providers and manner of purchasing
electricity. Landlord shall be entitled to receive a fee (if permitted by Law)
for the selection

 

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       of utility companies and the negotiation and administration of contracts
for electricity, provided that the amount of such fee shall not exceed 50% of
any savings obtained by Landlord.

 

  B. Tenant’s use of electrical service shall not exceed, either in voltage,
rated capacity, use beyond Normal Business Hours or overall load, that which
Landlord deems to be standard for the Building. If Tenant requests permission to
consume excess electrical service, Landlord may refuse to consent or may
condition consent upon conditions that Landlord reasonably elects (including,
without limitation, the installation of utility service upgrades, meters,
submeters, air handlers or cooling units), and the additional usage (to the
extent permitted by Law), installation and maintenance costs shall be paid by
Tenant. Landlord shall have the right to separately meter electrical usage for
the Premises and to measure electrical usage by survey or other commonly
accepted methods.

 

XI. Entry by Landlord.

 

Landlord, its agents, contractors and representatives may enter the Premises to
inspect or show the Premises, to clean and make repairs, alterations or
additions to the Premises, and to conduct or facilitate repairs, alterations or
additions to any portion of the Building, including other tenants’ premises.
Except in emergencies or to provide janitorial and other Building services after
Normal Business Hours, Landlord shall provide Tenant with reasonable prior
notice of entry into the Premises, which may be given orally. If reasonably
necessary for the protection and safety of Tenant and its employees, Landlord
shall have the right to temporarily close all or a portion of the Premises to
perform repairs, alterations and additions. However, except in emergencies,
Landlord will not close the Premises if the work can reasonably be completed on
weekends and after Normal Business Hours. Entry by Landlord shall not constitute
constructive eviction or entitle Tenant to an abatement or reduction of Rent.

 

XII. Assignment and Subletting.

 

  A. Except in connection with a Permitted Transfer (defined in Section XII.E.
below), Tenant shall not assign, sublease, transfer or encumber any interest in
this Lease or allow any third party to use any portion of the Premises
(collectively or individually, a “Transfer”) without the prior written consent
of Landlord, which consent shall not be unreasonably withheld if Landlord does
not elect to exercise its termination rights under Section XII.B below. Without
limitation, it is agreed that Landlord’s consent shall not be considered
unreasonably withheld if: (1) the proposed transferee’s financial condition does
not meet the criteria Landlord uses to select Building tenants having similar
leasehold obligations; (2) the proposed transferee’s business is not suitable
for the Building considering the business of the other tenants and the
Building’s prestige, or would result in a violation of another tenant’s rights;
(3) the proposed transferee is a governmental agency or occupant of the
Building; (4) Tenant is in default after the expiration of the notice and cure
periods in this Lease; or (5) any portion of the Building or Premises would
likely become subject to additional or different Laws as a consequence of the
proposed Transfer. Tenant shall not be entitled to receive monetary damages
based upon a claim that Landlord unreasonably withheld its consent to a proposed
Transfer and Tenant’s sole remedy shall be an action to enforce any such
provision through specific performance or declaratory judgment. Any attempted
Transfer in violation of this Article shall, at Landlord’s option, be void.
Consent by Landlord to one or more Transfer(s) shall not operate as a waiver of
Landlord’s rights to approve any subsequent Transfers. In no event shall any
Transfer or Permitted Transfer release or relieve Tenant from any obligation
under this Lease.

 

  B. As part of its request for Landlord’s consent to a Transfer, Tenant shall
provide Landlord with financial statements for the proposed transferee, a
complete copy of the proposed assignment, sublease and other contractual
documents and such other information as Landlord may reasonably request.
Landlord shall, by written notice to Tenant within 30 days of its receipt of the
required information and documentation, either: (1) consent to the Transfer by
the execution of a consent agreement in a form reasonably designated by Landlord
or reasonably refuse to consent to the Transfer in writing; or (2) exercise its
right to terminate this Lease with respect to the portion of the Premises that
Tenant is proposing to assign or sublet. Any such termination shall be effective
on the proposed effective date of the Transfer for which Tenant requested
consent. Tenant shall pay Landlord a review fee of $2,000.00 for Landlord’s
review of any Permitted

 

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       Transfer or requested Transfer, provided if Landlord’s actual reasonable
costs and expenses (including reasonable attorney’s fees) exceed $2,000.00,
Tenant shall reimburse Landlord for its actual reasonable costs and expenses in
lieu of a fixed review fee.

 

  C. Tenant shall pay Landlord 50% of all rent and other consideration which
Tenant receives as a result of a Transfer that is in excess of the Rent payable
to Landlord for the portion of the Premises and Term covered by the Transfer.
Tenant shall pay Landlord for Landlord’s share of any excess within 30 days
after Tenant’s receipt of such excess consideration. Tenant may deduct from the
excess all reasonable and customary expenses directly incurred by Tenant
attributable to the Transfer (other than Landlord’s review fee), including
brokerage fees, legal fees and construction costs. If Tenant is in Monetary
Default (defined in Section XIX.A. below), Landlord may require that all
sublease payments be made directly to Landlord, in which case Tenant shall
receive a credit against Rent in the amount of any payments received (less
Landlord’s share of any excess).

 

  D. Except as provided below with respect to a Permitted Transfer, if Tenant is
a corporation, limited liability company, partnership, or similar entity, and if
the entity which owns or controls a majority of the voting shares/rights at any
time changes for any reason (including but not limited to a merger,
consolidation or reorganization), such change of ownership or control shall
constitute a Transfer. The foregoing shall not apply so long as Tenant is an
entity whose outstanding stock is listed on a recognized security exchange, or
if at least 80% of its voting stock is owned by another entity, the voting stock
of which is so listed.

 

  E. Tenant may assign its entire interest under this Lease to a successor to
Tenant by purchase, merger, consolidation or reorganization without the consent
of Landlord, provided that all of the following conditions are satisfied (a
“Permitted Transfer”): (1) Tenant is not in default under this Lease; (2)
Tenant’s successor shall own all or substantially all of the assets of Tenant;
(3) Tenant’s successor shall have a net worth which is at least equal to the
greater of Tenant’s net worth at the date of this Lease or Tenant’s net worth as
of the day prior to the proposed purchase, merger, consolidation or
reorganization; (4) the Permitted Use does not allow the Premises to be used for
retail purposes; and (5) Tenant shall give Landlord written notice at least 30
days prior to the effective date of the proposed purchase, merger, consolidation
or reorganization. Tenant’s notice to Landlord shall include information and
documentation showing that each of the above conditions has been satisfied. If
requested by Landlord, Tenant’s successor shall sign a commercially reasonable
form of assumption agreement.

 

XIII. Liens.

 

Tenant shall not permit mechanic’s or other liens to be placed upon the
Property, Premises or Tenant’s leasehold interest in connection with any work or
service done or purportedly done by or for benefit of Tenant. If a lien is so
placed, Tenant shall, within 10 days of notice from Landlord of the filing of
the lien, fully discharge the lien by settling the claim which resulted in the
lien or by bonding or insuring over the lien in the manner prescribed by the
applicable lien Law. If Tenant fails to discharge the lien, then, in addition to
any other right or remedy of Landlord, Landlord may bond or insure over the lien
or otherwise discharge the lien. Tenant shall reimburse Landlord for any amount
paid by Landlord to bond or insure over the lien or discharge the lien,
including, without limitation, reasonable attorneys’ fees (if and to the extent
permitted by Law) within 30 days after receipt of an invoice from Landlord.

 

XIV. Indemnity and Waiver of Claims.

 

  A. Except to the extent caused by the negligence or willful misconduct of
Landlord or any Landlord Related Parties (defined below), Tenant shall
indemnify, defend and hold Landlord, its trustees, members, principals,
beneficiaries, partners, officers, directors, employees, Mortgagee(s) (defined
in Article XXVI) and agents (“Landlord Related Parties”) harmless against and
from all liabilities, obligations, damages, penalties, claims, actions, costs,
charges and expenses, including, without limitation, reasonable attorneys’ fees
and other professional fees (if and to the extent permitted by Law), which may
be imposed upon, incurred by or asserted against Landlord or any of the Landlord
Related Parties and arising out of or in connection with any damage or injury
occurring in the Premises or any acts or omissions (including violations of Law)
of Tenant, the Tenant Related Parties (defined below) or any of Tenant’s
transferees, contractors or licensees.

 

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  B. Except to the extent caused by the negligence or willful misconduct of
Tenant or any Tenant Related Parties (defined below), Landlord shall indemnify,
defend and hold Tenant, its trustees, members, principals, beneficiaries,
partners, officers, directors, employees and agents (“Tenant Related Parties”)
harmless against and from all liabilities, obligations, damages, penalties,
claims, actions, costs, charges and expenses, including, without limitation,
reasonable attorneys’ fees and other professional fees (if and to the extent
permitted by Law), which may be imposed upon, incurred by or asserted against
Tenant or any of the Tenant Related Parties and arising out of or in connection
with the acts or omissions (including violations of Law) of Landlord, the
Landlord Related Parties or any of Landlord’s contractors.

 

  C. Landlord and the Landlord Related Parties shall not be liable for, and
Tenant waives, all claims for loss or damage to Tenant’s business or loss, theft
or damage to Tenant’s Property or the property of any person claiming by,
through or under Tenant resulting from: (1) wind or weather; (2) the failure of
any sprinkler, heating or air-conditioning equipment, any electric wiring or any
gas, water or steam pipes; (3) the backing up of any sewer pipe or downspout;
(4) the bursting, leaking or running of any tank, water closet, drain or other
pipe; (5) water, snow or ice upon or coming through the roof, skylight, stairs,
doorways, windows, walks or any other place upon or near the Building; (6) any
act or omission of any party other than Landlord or Landlord Related Parties;
and (7) any causes not reasonably within the control of Landlord. Tenant shall
insure itself against such losses under Article XV below.

 

XV. Insurance.

 

Tenant shall carry and maintain the following insurance (“Tenant’s Insurance”),
at its sole cost and expense: (1) Commercial General Liability Insurance
applicable to the Premises and its appurtenances providing, on an occurrence
basis, a minimum combined single limit of $2,000,000.00; (2) All Risk
Property/Business Interruption Insurance, with coverage for broad form water
damage, including earthquake sprinkler damage, written at replacement cost value
and with a replacement cost endorsement covering all of Tenant’s trade fixtures,
equipment, furniture and other personal property within the Premises (“Tenant’s
Property”); (3) Workers’ Compensation Insurance as required by the state in
which the Premises is located and in amounts as may be required by applicable
statute; and (4) Employers Liability Coverage of at least $1,000,000.00 per
occurrence. Any company writing any of Tenant’s Insurance shall have an A.M.
Best rating of not less than A-VIII. All Commercial General Liability Insurance
policies shall name Tenant as a named insured and Landlord (or any successor),
Equity Office Properties Trust, a Maryland real estate investment trust, EOP
Operating Limited Partnership, a Delaware limited partnership, and their
respective members, principals, beneficiaries, partners, officers, directors,
employees, and agents, and other designees of Landlord as the interest of such
designees shall appear, as additional insureds. All policies of Tenant’s
Insurance shall contain endorsements that the insurer(s) shall give Landlord and
its designees at least 30 days’ advance written notice of any change,
cancellation, termination or lapse of insurance. Tenant shall provide Landlord
with a certificate of insurance evidencing Tenant’s Insurance prior to the
earlier to occur of the Commencement Date or the date Tenant is provided with
possession of the Premises for any reason, and upon renewals at least 15 days
prior to the expiration of the insurance coverage. So long as the same is
available at commercially reasonable rates, Landlord shall maintain so called
All Risk property insurance on the Building at replacement cost value, as
reasonably estimated by Landlord. Except as specifically provided to the
contrary, the limits of either party’s’ insurance shall not limit such party’s
liability under this Lease.

 

XVI. Subrogation.

 

Notwithstanding anything in this Lease to the contrary, Landlord and Tenant
shall cause their respective insurance carriers to waive any and all rights of
recovery, claim, action or causes of action against the other and their
respective trustees, principals, beneficiaries, partners, officers, directors,
agents, and employees, for any loss or damage that may occur to Landlord or
Tenant or any party claiming by, through or under Landlord or Tenant, as the
case may be, with respect to Tenant’s Property, the Building, the Premises, any
additions or improvements to the Building or Premises, or any contents thereof,
including all rights of recovery, claims, actions or causes of action arising
out of the negligence of Landlord or any Landlord Related Parties or the
negligence of Tenant or any Tenant Related Parties, which loss or damage is (or
would have been, had the insurance required by this Lease been carried) covered
by insurance.

 

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XVII. Casualty Damage.

 

  A. If all or any part of the Premises is damaged by fire or other casualty,
Tenant shall immediately notify Landlord in writing. During any period of time
that all or a material portion of the Premises is rendered untenantable as a
result of a fire or other casualty, the Rent shall abate for the portion of the
Premises that is untenantable and not used by Tenant. Landlord shall have the
right to terminate this Lease if: (1) the Building shall be damaged so that, in
Landlord’s reasonable judgment, substantial alteration or reconstruction of the
Building shall be required (whether or not the Premises has been damaged); (2)
Landlord is not permitted by Law to rebuild the Building in substantially the
same form as existed before the fire or casualty; (3) the Premises have been
materially damaged and there is less than 2 years of the Term remaining on the
date of the casualty; (4) any Mortgagee requires that the insurance proceeds be
applied to the payment of the mortgage debt; or (5) a material uninsured loss to
the Building occurs. Landlord may exercise its right to terminate this Lease by
notifying Tenant in writing within 90 days after the date of the casualty. If
Landlord does not terminate this Lease, Landlord shall commence and proceed with
reasonable diligence to repair and restore the Building and the Leasehold
Improvements (excluding any Alterations that were performed by Tenant in
violation of this Lease). However, in no event shall Landlord be required to
spend more than the insurance proceeds received by Landlord. Landlord shall not
be liable for any loss or damage to Tenant’s Property or to the business of
Tenant resulting in any way from the fire or other casualty or from the repair
and restoration of the damage. Landlord and Tenant hereby waive the provisions
of any Law relating to the matters addressed in this Article, and agree that
their respective rights for damage to or destruction of the Premises shall be
those specifically provided in this Lease.

 

  B. If all or any portion of the Premises shall be made untenantable by fire or
other casualty, Landlord shall, with reasonable promptness, cause an architect
or general contractor selected by Landlord to provide Landlord and Tenant with a
written estimate of the amount of time required to substantially complete the
repair and restoration of the Premises and make the Premises tenantable again,
using standard working methods (“Completion Estimate”). If the Completion
Estimate indicates that the Premises cannot be made tenantable within 210 days
from the date the repair and restoration is started, then regardless of anything
in Section XVII.A above to the contrary, either party shall have the right to
terminate this Lease by giving written notice to the other of such election
within 10 days after receipt of the Completion Estimate. Tenant, however, shall
not have the right to terminate this Lease if the fire or casualty was caused by
the negligence or intentional misconduct of Tenant, Tenant Related Parties or
any of Tenant’s transferees, contractors or licensees.

 

XVIII. Condemnation.

 

Either party may terminate this Lease if the whole or any material part of the
Premises shall be taken or condemned for any public or quasi-public use under
Law, by eminent domain or private purchase in lieu thereof (a “Taking”).
Landlord shall also have the right to terminate this Lease if there is a Taking
of any portion of the Building or Property which would leave the remainder of
the Building unsuitable for use as an office building in a manner comparable to
the Building’s use prior to the Taking. In order to exercise its right to
terminate the Lease, Landlord or Tenant, as the case may be, must provide
written notice of termination to the other within 45 days after the terminating
party first receives notice of the Taking. Any such termination shall be
effective as of the date the physical taking of the Premises or the portion of
the Building or Property occurs. If this Lease is not terminated, the Rentable
Square Footage of the Building, the Rentable Square Footage of the Premises and
Tenant’s Pro Rata Share shall, if applicable, be appropriately adjusted. In
addition, Rent for any portion of the Premises taken or condemned shall be
abated during the unexpired Term of this Lease effective when the physical
taking of the portion of the Premises occurs. All compensation awarded for a
Taking, or sale proceeds, shall be the property of Landlord, any right to
receive compensation or proceeds being expressly waived by Tenant. However,
Tenant may file a separate claim at its sole cost and expense for Tenant’s
Property and Tenant’s reasonable relocation expenses, provided the filing of the
claim does not diminish the award which would otherwise be receivable by
Landlord.

 

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XIX. Events of Default.

 

Tenant shall be considered to be in default of this Lease upon the occurrence of
any of the following events of default:

 

  A. Tenant’s failure to pay when due all or any portion of the Rent, if the
failure continues for 5 days after written notice to Tenant (“Monetary
Default”).

 

  B. Tenant’s failure (other than a Monetary Default) to comply with any term,
provision or covenant of this Lease, if the failure is not cured within 10 days
after written notice to Tenant. However, if Tenant’s failure to comply cannot
reasonably be cured within 10 days, Tenant shall be allowed additional time (not
to exceed 60 days) as is reasonably necessary to cure the failure so long as:
(1) Tenant commences to cure the failure within 10 days, and (2) Tenant
diligently pursues a course of action that will cure the failure and bring
Tenant back into compliance with the Lease. However, if Tenant’s failure to
comply creates a hazardous condition, the failure must be cured immediately upon
notice to Tenant. In addition, if Landlord provides Tenant with notice of
Tenant’s failure to comply with any particular term, provision or covenant of
the Lease on 3 occasions during any 12 month period, Tenant’s subsequent
violation of such term, provision or covenant shall, at Landlord’s option, be an
incurable event of default by Tenant.

 

  C. Tenant or any Guarantor becomes insolvent, makes a transfer in fraud of
creditors or makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts when due.

 

  D. The leasehold estate is taken by process or operation of Law.

 

  E. In the case of any ground floor or retail Tenant, Tenant does not take
possession of, or abandons all or any portion of the Premises.

 

  F. Tenant is in default beyond any notice and cure period under any other
lease or agreement with Landlord, including, without limitation, any lease or
agreement for parking.

 

XX. Remedies.

 

  A. Upon any default, Landlord shall have the right without notice or demand
(except as provided in Article XIX) to pursue any of its rights and remedies at
Law or in equity, including any one or more of the following remedies:

 

  1. Terminate this Lease, in which case Tenant shall immediately surrender the
Premises to Landlord. If Tenant fails to surrender the Premises, Landlord may,
in compliance with applicable Law and without prejudice to any other right or
remedy, enter upon and take possession of the Premises and expel and remove
Tenant, Tenant’s Property and any party occupying all or any part of the
Premises. Tenant shall pay Landlord on demand the amount of all past due Rent
and other losses and damages which Landlord may suffer as a result of Tenant’s
default, whether by Landlord’s inability to relet the Premises on satisfactory
terms or otherwise, including, without limitation, all Costs of Reletting
(defined below) and any deficiency that may arise from reletting or the failure
to relet the Premises. “Costs of Reletting” shall include all costs and expenses
incurred by Landlord in reletting or attempting to relet the Premises,
including, without limitation, reasonable legal fees, brokerage commissions, the
cost of alterations and the value of other concessions or allowances granted to
a new tenant.

 

  2. Terminate Tenant’s right to possession of the Premises and, in compliance
with applicable Law, expel and remove Tenant, Tenant’s Property and any parties
occupying all or any part of the Premises. Landlord may (but shall not be
obligated to) relet all or any part of the Premises, without notice to Tenant,
for a term that may be greater or less than the balance of the Term and on such
conditions (which may include concessions, free rent and alterations of the
Premises) and for such uses as Landlord in its absolute discretion shall
determine. Landlord may collect and receive all rents and other income from the
reletting. Tenant

 

14

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       shall pay Landlord on demand all past due Rent, all Costs of Reletting
and any deficiency arising from the reletting or failure to relet the Premises.
Landlord shall not be responsible or liable for the failure to relet all or any
part of the Premises or for the failure to collect any Rent. The re-entry or
taking of possession of the Premises shall not be construed as an election by
Landlord to terminate this Lease unless a written notice of termination is given
to Tenant.

 

  3. In lieu of calculating damages under Sections XX.A.1 or XX.A.2 above,
Landlord may elect to receive as damages the sum of (a) all Rent accrued through
the date of termination of this Lease or Tenant’s right to possession, and (b)
an amount equal to the total Rent that Tenant would have been required to pay
for the remainder of the Term discounted to present value at the Prime Rate
(defined in Section XX.B. below) then in effect, minus the then present fair
rental value of the Premises for the remainder of the Term, similarly
discounted, after deducting all anticipated Costs of Reletting.

 

  B. Unless expressly provided in this Lease, the repossession or re-entering of
all or any part of the Premises shall not relieve Tenant of its liabilities and
obligations under the Lease. No right or remedy of Landlord shall be exclusive
of any other right or remedy. Each right and remedy shall be cumulative and in
addition to any other right and remedy now or subsequently available to Landlord
at Law or in equity. If Landlord declares Tenant to be in default, Landlord
shall be entitled to receive interest on any unpaid item of Rent at a rate equal
to the Prime Rate plus 4%. For purposes hereof, the “Prime Rate” shall be the
per annum interest rate publicly announced as its prime or base rate by a
federally insured bank selected by Landlord in the state in which the Building
is located. Forbearance by Landlord to enforce one or more remedies shall not
constitute a waiver of any default.

 

XXI. Limitation of Liability.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE LIABILITY
OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) TO TENANT SHALL BE LIMITED TO THE
INTEREST OF LANDLORD IN THE PROPERTY. TENANT SHALL LOOK SOLELY TO LANDLORD’S
INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST
LANDLORD. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE PERSONALLY
LIABLE FOR ANY JUDGMENT OR DEFICIENCY. BEFORE FILING SUIT FOR AN ALLEGED DEFAULT
BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S) (DEFINED IN ARTICLE
XXVI BELOW) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES (DEFINED IN ARTICLE
XXVI BELOW) ON THE PROPERTY, BUILDING OR PREMISES, NOTICE AND REASONABLE TIME TO
CURE THE ALLEGED DEFAULT. IN ADDITION, TENANT ACKNOWLEDGES THAT ANY ENTITY
MANAGING THE BUILDING ON BEHALF OF LANDLORD, OR WHICH EXECUTES THIS LEASE AS
AGENT FOR LANDLORD, IS ACTING SOLELY IN ITS CAPACITY AS AGENT FOR LANDLORD AND
SHALL NOT BE LIABLE FOR ANY OBLIGATIONS, LIABILITIES, LOSSES OR DAMAGES ARISING
OUT OF OR IN CONNECTION WITH THIS LEASE, ALL OF WHICH ARE EXPRESSLY WAIVED BY
TENANT.

 

XXII. No Waiver.

 

Either party’s failure to declare a default immediately upon its occurrence, or
delay in taking action for a default shall not constitute a waiver of the
default, nor shall it constitute an estoppel. Either party’s failure to enforce
its rights for a default shall not constitute a waiver of its rights regarding
any subsequent default. Receipt by Landlord of Tenant’s keys to the Premises
shall not constitute an acceptance or surrender of the Premises.

 

XXIII. Quiet Enjoyment.

 

Tenant shall, and may peacefully have, hold and enjoy the Premises, subject to
the terms of this Lease, provided Tenant pays the Rent and fully performs all of
its covenants and agreements. This covenant and all other covenants of Landlord
shall be binding upon Landlord and its successors only during its or their
respective periods of ownership of the Building, and shall not be a personal
covenant of Landlord or the Landlord Related Parties.

 

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XXIV. Relocation.

 

[INTENTIONALLY OMITTED]

 

XXV. Holding Over.

 

Except for any permitted occupancy by Tenant under Article VIII, if Tenant fails
to surrender the Premises at the expiration or earlier termination of this
Lease, occupancy of the Premises after the termination or expiration shall be
that of a tenancy at sufferance. Tenant’s occupancy of the Premises during the
holdover shall be subject to all the terms and provisions of this Lease and
Tenant shall pay an amount (on a per month basis without reduction for partial
months during the holdover) equal to 150% of the greater of: (1) the sum of the
Base Rent and Additional Rent due for the period immediately preceding the
holdover; or (2) the fair market gross rental for the Premises as reasonably
determined by Landlord. No holdover by Tenant or payment by Tenant after the
expiration or early termination of this Lease shall be construed to extend the
Term or prevent Landlord from immediate recovery of possession of the Premises
by summary proceedings or otherwise. In addition to the payment of the amounts
provided above, if Landlord is unable to deliver possession of the Premises to a
new tenant, or to perform improvements for a new tenant, as a result of Tenant’s
holdover and Tenant fails to vacate the Premises within 15 days after Landlord
notifies Tenant of Landlord’s inability to deliver possession, or perform
improvements, Tenant shall be liable to Landlord for all damages, including,
without limitation, consequential damages, that Landlord suffers from the
holdover.

 

XXVI. Subordination to Mortgages; Estoppel Certificate.

 

Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of
trust, ground lease(s) or other lien(s) now or subsequently arising upon the
Premises, the Building or the Property, and to renewals, modifications,
refinancings and extensions thereof (collectively referred to as a “Mortgage”).
The party having the benefit of a Mortgage shall be referred to as a
“Mortgagee”. This clause shall be self-operative, but upon request from a
Mortgagee, Tenant shall execute a commercially reasonable subordination
agreement in favor of the Mortgagee. In lieu of having the Mortgage be superior
to this Lease, a Mortgagee shall have the right at any time to subordinate its
Mortgage to this Lease. If requested by a successor-in-interest to all or a part
of Landlord’s interest in the Lease, Tenant shall, without charge, attorn to the
successor-in-interest. Landlord and Tenant shall each, within 15 days after
receipt of a written request from the other, execute and deliver an estoppel
certificate to those parties as are reasonably requested by the other (including
a Mortgagee or prospective purchaser). The estoppel certificate shall include a
statement certifying that this Lease is unmodified (except as identified in the
estoppel certificate) and in full force and effect, describing the dates to
which Rent and other charges have been paid, representing that, to such party’s
actual knowledge, there is no default (or stating the nature of the alleged
default) and indicating other matters with respect to the Lease that may
reasonably be requested.

 

XXVII.   Attorneys’ Fees.

 

If either party institutes a suit against the other for violation of or to
enforce any covenant or condition of this Lease, or if either party intervenes
in any suit in which the other is a party to enforce or protect its interest or
rights, the prevailing party shall be entitled to all of its costs and expenses,
including, without limitation, reasonable attorneys’ fees.

 

XXVIII.   Notice.

 

If a demand, request, approval, consent or notice (collectively referred to as a
“notice”) shall or may be given to either party by the other, the notice shall
be in writing and delivered by hand or sent by registered or certified mail with
return receipt requested, or sent by overnight or same day courier service at
the party’s respective Notice Address(es) set forth in Article I, except that if
Tenant has vacated the Premises (or if the Notice Address for Tenant is other
than the Premises, and Tenant has vacated such address) without providing
Landlord a new Notice Address, Landlord may serve notice in any manner described
in this Article or in any other manner permitted by Law. Each notice shall be
deemed to have been received or given on the earlier to occur of actual delivery
or the date on which delivery is refused, or, if Tenant has vacated the Premises
or the other Notice Address of Tenant without providing a new Notice Address,
three (3) days after notice is deposited in the U.S. mail or with a courier
service in the manner described above. Either party may, at any time, change its
Notice Address by giving the other party written notice of the new address in
the manner described in this Article.

 

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XXIX. Excepted Rights.

 

This Lease does not grant any rights to light or air over or about the Building.
Landlord excepts and reserves exclusively to itself the use of: (1) roofs, (2)
telephone, electrical and janitorial closets, (3) equipment rooms, Building
risers or similar areas that are used by Landlord for the provision of Building
services, (4) rights to the land and improvements below the floor of the
Premises, (5) the improvements and air rights above the Premises, (6) the
improvements and air rights outside the demising walls of the Premises, and (7)
the areas within the Premises used for the installation of utility lines and
other installations serving occupants of the Building. Landlord has the right to
change the Building’s name or address. Landlord also has the right to make such
other changes to the Property and Building as Landlord deems appropriate,
provided the changes do not materially affect Tenant’s ability to use the
Premises for the Permitted Use. Landlord shall also have the right (but not the
obligation) to temporarily close the Building if Landlord reasonably determines
that there is an imminent danger of significant damage to the Building or of
personal injury to Landlord’s employees or the occupants of the Building. The
circumstances under which Landlord may temporarily close the Building shall
include, without limitation, electrical interruptions, hurricanes and civil
disturbances. A closure of the Building under such circumstances shall not
constitute a constructive eviction nor entitle Tenant to an abatement or
reduction of Rent.

 

XXX. Surrender of Premises.

 

At the expiration or earlier termination of this Lease or Tenant’s right of
possession, Tenant shall remove Tenant’s Property (defined in Article XV) from
the Premises, and quit and surrender the Premises to Landlord, broom clean, and
in good order, condition and repair, ordinary wear and tear excepted. Tenant
shall also be required to remove the Required Removables in accordance with
Article VIII. If Tenant fails to remove any of Tenant’s Property within 2 days
after the termination of this Lease or of Tenant’s right to possession,
Landlord, at Tenant’s sole cost and expense, shall be entitled (but not
obligated) to remove and store Tenant’s Property. Landlord shall not be
responsible for the value, preservation or safekeeping of Tenant’s Property.
Tenant shall pay Landlord, upon demand, the expenses and storage charges
incurred for Tenant’s Property. In addition, if Tenant fails to remove Tenant’s
Property from the Premises or storage, as the case may be, within 30 days after
written notice, Landlord may deem all or any part of Tenant’s Property to be
abandoned, and title to Tenant’s Property shall be deemed to be immediately
vested in Landlord.

 

XXXI. Miscellaneous.

 

  A. This Lease and the rights and obligations of the parties shall be
interpreted, construed and enforced in accordance with the Laws of the state in
which the Building is located and Landlord and Tenant hereby irrevocably consent
to the jurisdiction and proper venue of such state. If any term or provision of
this Lease shall to any extent be invalid or unenforceable, the remainder of
this Lease shall not be affected, and each provision of this Lease shall be
valid and enforced to the fullest extent permitted by Law. The headings and
titles to the Articles and Sections of this Lease are for convenience only and
shall have no effect on the interpretation of any part of the Lease.

 

  B. Tenant shall not record this Lease or any memorandum without Landlord’s
prior written consent.

 

  C. Landlord and Tenant hereby waive any right to trial by jury in any
proceeding based upon a breach of this Lease.

 

  D. Whenever a period of time is prescribed for the taking of an action by
Landlord or Tenant, the period of time for the performance of such action shall
be extended by the number of days that the performance is actually delayed due
to strikes, acts of God, shortages of labor or materials, war, civil
disturbances and other causes beyond the reasonable control of the performing
party (“Force Majeure”). However, events of Force Majeure shall not extend any
period of time for the payment of Rent or other sums payable by either party or
any period of time for the written exercise of an option or right by either
party.

 

  E. Landlord shall have the right to transfer and assign, in whole or in part,
all of its rights and obligations under this Lease and in the Building and/or
Property referred to herein, and upon such transfer Landlord shall be released
from any further obligations hereunder, and Tenant agrees to look solely to the
successor in interest of Landlord for the performance of such obligations.

 

17

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  F.  1. Tenant represents that it has dealt directly with and only with the
Broker as a broker in connection with this Lease. Tenant shall indemnify and
hold Landlord and the Landlord Related Parties harmless from all claims of any
other brokers claiming to have represented Tenant in connection with this Lease.
Landlord agrees to indemnify and hold Tenant and the Tenant Related Parties
harmless from all claims of any brokers claiming to have represented Landlord in
connection with this Lease. Landlord agrees to pay a brokerage commission to
Broker in accordance with the terms of a written commission agreement between
Landlord and Broker.

 

  2. Agency Disclosure. At the signing of this Lease, Landlord’s leasing agent,
Shawn Jackson of Equity Office Properties Management Corporation represented (X)
Landlord, (            ) Tenant, or (            ) both Landlord and Tenant. At
the signing of this Lease, Tenant’s agent, Shawn Lorentzen, of The Staubach
Company, represented (            ) Landlord, (X) Tenant, or (            ) both
Landlord and Tenant. Each party signing this document confirms that the prior
oral and/or written disclosure of agency was provided to such party in this
transaction, as required by RCW 18.86.030(1)(g).

 

  3. Landlord and Tenant, by their execution of this Lease, each acknowledge and
agree that they have timely received a pamphlet on the law of real estate agency
as required under RCW 18.86.030(1)(f).

 

  G. Tenant covenants, warrants and represents that: (1) each individual
executing, attesting and/or delivering this Lease on behalf of Tenant is
authorized to do so on behalf of Tenant; (2) this Lease is binding upon Tenant;
and (3) Tenant is duly organized and legally existing in the state of its
organization and is qualified to do business in the state in which the Premises
are located. If there is more than one Tenant, or if Tenant is comprised of more
than one party or entity, the obligations imposed upon Tenant shall be joint and
several obligations of all the parties and entities. Notices, payments and
agreements given or made by, with or to any one person or entity shall be deemed
to have been given or made by, with and to all of them.

 

  H. Time is of the essence with respect to Tenant’s exercise of any expansion,
renewal or extension rights granted to Tenant. This Lease shall create only the
relationship of landlord and tenant between the parties, and not a partnership,
joint venture or any other relationship. This Lease and the covenants and
conditions in this Lease shall inure only to the benefit of and be binding only
upon Landlord and Tenant and their permitted successors and assigns.

 

  I. The expiration of the Term, whether by lapse of time or otherwise, shall
not relieve either party of any obligations which accrued prior to or which may
continue to accrue after the expiration or early termination of this Lease.
Without limiting the scope of the prior sentence, it is agreed that Tenant’s
obligations under Sections IV.A, IV.B., VIII, XIV, XX, XXV and XXX shall survive
the expiration or early termination of this Lease.

 

  J. Landlord has delivered a copy of this Lease to Tenant for Tenant’s review
only, and the delivery of it does not constitute an offer to Tenant or an
option. This Lease shall not be effective against any party hereto until an
original copy of this Lease has been signed by such party.

 

  K. All understandings and agreements previously made between the parties are
superseded by this Lease, and neither party is relying upon any warranty,
statement or representation not contained in this Lease. This Lease may be
modified only by a written agreement signed by Landlord and Tenant.

 

  L. Tenant, within 15 days after request, shall provide Landlord with a current
financial statement and such other information as Landlord may reasonably
request in order to create a “business profile” of Tenant and determine Tenant’s
ability to fulfill its obligations under this Lease. Landlord, however, shall
not require Tenant to provide such information unless Landlord is requested to
produce the information in connection with a proposed financing or sale of the
Building. Upon written request by Tenant, Landlord shall enter into a
commercially reasonable confidentiality agreement covering any confidential
information that is disclosed by Tenant.

 

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XXXII.  Entire Agreement.

 

This Lease and the following exhibits and attachments constitute the entire
agreement between the parties and supersede all prior agreements and
understandings related to the Premises, including all lease proposals, letters
of intent and other documents: Exhibit A (Outline and Location of Premises),
Exhibit A-2 (Legal Description of Property), Exhibit B (Rules and Regulations),
Exhibit C (Commencement Letter), Exhibit D (Work Letter Agreement), Exhibit E
(Additional Provisions) and Exhibit E-1 (Offering Space).

 

Landlord and Tenant have executed this Lease as of the day and year first above
written.

 

LANDLORD:

EOP-NORTHWEST PROPERTIES, L.L.C.,

a Delaware limited liability company

By:

 

EOP Operating Limited Partnership, a

Delaware limited partnership, its sole member

   

By:

 

Equity Office Properties Trust,

a Maryland real estate investment trust,

its general partner

       

By:

 

/s/    SUSAN J. MURPHY

--------------------------------------------------------------------------------

           

Susan J. Murphy

Vice President – Leasing

Seattle Region

TENANT:

SAFLINK CORPORATION,

a Delaware corporation

By:

 

/s/    JON ENGMAN

--------------------------------------------------------------------------------

Name:

 

Jon Engman

--------------------------------------------------------------------------------

Title:

 

CFO

--------------------------------------------------------------------------------

 

19

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THIS PAGE IS REQUIRED IF PROPERTY IS IN WASHINGTON STATE

 

LANDLORD ACKNOWLEDGMENTS

 

STATE OF                     )

 

COUNTY OF                 ) ss:

 

I, the undersigned, a Notary Public, in and for the County and State aforesaid,
do hereby certify that SUSAN J. MURPHY, personally known to me to be the Vice
President-Leasing, Seattle Region, of Equity Office Properties Trust, a Maryland
real estate investment trust, and personally known to me to be the same person
whose name is subscribed to the foregoing instrument, appeared before me this
day in person and acknowledged that as such officer of said entity being
authorized so to do, he executed the foregoing instrument on behalf of said
entity, by subscribing the name of such entity by himself as such officer, as a
free and voluntary act, and as the free and voluntary act and deed of said
entity under the foregoing instrument for the uses and purposes therein set
forth.

 

GIVEN under my hand and official seal this day of                     , 2003.

 

    

--------------------------------------------------------------------------------

     Notary Public     

--------------------------------------------------------------------------------

     Printed Name

Residing at:

--------------------------------------------------------------------------------

    

My Commission Expires:

--------------------------------------------------------------------------------

    

 

TENANT ACKNOWLEDGMENTS

 

STATE OF                     )

 

COUNTY OF                 ) ss:

 

On this the              day of                     , 2003, before me a Notary
Public duly authorized in and for the said County in the State aforesaid to take
acknowledgments personally appeared                          known to me to be
             President of                                 , one of the parties
described in the foregoing instrument, and acknowledged that as such officer,
being authorized so to do, (s)he executed the foregoing instrument on behalf of
said corporation by subscribing the name of such corporation by himself/herself
as such officer and caused the corporate seal of said corporation to be affixed
thereto, as a free and voluntary act, and as the free and voluntary act of said
corporation, for the uses and purposes therein set forth.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

    

--------------------------------------------------------------------------------

     Notary Public     

--------------------------------------------------------------------------------

     Printed Name

Residing at:

--------------------------------------------------------------------------------

    

My Commission Expires:

--------------------------------------------------------------------------------

    

 

 

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EXHIBIT A

 

PREMISES

 

This Exhibit is attached to and made a part of the Lease by and between
EOP-NORTHWEST PROPERTIES, L.L.C., a Delaware limited liability company
(“Landlord”), and SAFLINK CORPORATION, a Delaware corporation (“Tenant”), for
space in the Building located at 777 108th Avenue NE, Bellevue, Washington.

 

1

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EXHIBIT A-2

 

LEGAL DESCRIPTION OF PROPERTY

 

This Exhibit is attached to and made a part of the Lease by and between
EOP-NORTHWEST PROPERTIES, L.L.C., a Delaware limited liability company
(“Landlord”), and SAFLINK CORPORATION, a Delaware corporation (“Tenant”), for
space in the Building located at 777 108th Avenue NE, Bellevue, Washington.

 

Rainier Plaza

Bellevue, Washington

 

That portion of the east 230 feet of Lot 2, Block 2, Cheriton Fruit Gardens,
Plat No. 1, according to the plat thereof recorded in Volume 7 of Plats, page
47, in King County, Washington, lying north of the following described line:

 

Beginning at a point on the west line of the east 230.00 feet of said Lot 2,
which is south 0 degrees 05’54” west along said west line 297.00 feet from the
north line of said Lot 2; thence south 89 degrees 54’06” east 178.00 feet;
thence south 44 degrees 54’06” east 14.14 feet; thence south 89 degrees 54’06”
east 42.00 feet to the east line of said Lot 2 and the end of said described
line; EXCEPT that portion lying within Northeast 8th Street and 108th Avenue
Northeast.

 

(SAID PARCEL ALSO KNOWN AS Parcel A of City of Bellevue Lot Line Revision Number
84-43, recorded under Recording Number 8503079001).

 

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EXHIBIT B

 

BUILDING RULES AND REGULATIONS

 

The following rules and regulations shall apply, where applicable, to the
Premises, the Building, the parking garage (if any), the Property and the
appurtenances. Capitalized terms have the same meaning as defined in the Lease.

 

1. Sidewalks, doorways, vestibules, halls, stairways and other similar areas
shall not be obstructed by Tenant or used by Tenant for any purpose other than
ingress and egress to and from the Premises. No rubbish, litter, trash, or
material shall be placed, emptied, or thrown in those areas. At no time shall
Tenant permit Tenant’s employees to loiter in Common Areas or elsewhere about
the Building or Property.

 

2. Plumbing fixtures and appliances shall be used only for the purposes for
which designed, and no sweepings, rubbish, rags or other unsuitable material
shall be thrown or placed in the fixtures or appliances. Damage resulting to
fixtures or appliances by Tenant, its agents, employees or invitees, shall be
paid for by Tenant, and Landlord shall not be responsible for the damage.

 

3. No signs, advertisements or notices shall be painted or affixed to windows,
doors or other parts of the Building, except those of such color, size, style
and in such places as are first approved in writing by Landlord. All tenant
identification and suite numbers at the entrance to the Premises shall be
installed by Landlord, at Tenant’s cost and expense, using the standard graphics
for the Building. Except in connection with the hanging of lightweight pictures
and wall decorations, no nails, hooks or screws shall be inserted into any part
of the Premises or Building except by the Building maintenance personnel.

 

4. Landlord may provide and maintain in the first floor (main lobby) of the
Building an alphabetical directory board or other directory device listing
tenants, and no other directory shall be permitted unless previously consented
to by Landlord in writing.

 

5. Tenant shall not place any lock(s) on any door in the Premises or Building
without Landlord’s prior written consent and Landlord shall have the right to
retain at all times and to use keys to all locks within and into the Premises. A
reasonable number of keys to the locks on the entry doors in the Premises shall
be furnished by Landlord to Tenant at Tenant’s cost, and Tenant shall not make
any duplicate keys. All keys shall be returned to Landlord at the expiration or
early termination of this Lease.

 

6. All contractors, contractor’s representatives and installation technicians
performing work in the Building shall be subject to Landlord’s prior approval
and shall be required to comply with Landlord’s standard rules, regulations,
policies and procedures, which may be revised from time to time.

 

7. Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by Tenant of merchandise or materials requiring the use of
elevators, stairways, lobby areas or loading dock areas, shall be restricted to
hours designated by Landlord. Tenant shall obtain Landlord’s prior approval by
providing a detailed listing of the activity. If approved by Landlord, the
activity shall be under the supervision of Landlord and performed in the manner
required by Landlord. Tenant shall assume all risk for damage to articles moved
and injury to any persons resulting from the activity. If equipment, property,
or personnel of Landlord or of any other party is damaged or injured as a result
of or in connection with the activity, Tenant shall be solely liable for any
resulting damage or loss.

 

8. Landlord shall have the right to approve the weight, size, or location of
heavy equipment or articles in and about the Premises. Damage to the Building by
the installation, maintenance, operation, existence or removal of property of
Tenant shall be repaired at Tenant’s sole expense.

 

9. Corridor doors, when not in use, shall be kept closed.

 

10. Tenant shall not: (1) make or permit any improper, objectionable or
unpleasant noises or odors in the Building, or otherwise interfere in any way
with other tenants or persons having business with them; (2) solicit business or
distribute, or cause to be distributed, in any portion of the Building,
handbills, promotional materials or other advertising; or (3) conduct or permit
other activities in the Building that might, in Landlord’s sole opinion,
constitute a nuisance.

 

1

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11. No animals, except those assisting handicapped persons, shall be brought
into the Building or kept in or about the Premises.

 

12. No inflammable, explosive or dangerous fluids or substances shall be used or
kept by Tenant in the Premises, Building or about the Property. Tenant shall
not, without Landlord’s prior written consent, use, store, install, spill,
remove, release or dispose of, within or about the Premises or any other portion
of the Property, any asbestos-containing materials or any solid, liquid or
gaseous material now or subsequently considered toxic or hazardous under the
provisions of 42 U.S.C. Section 9601 et seq. or any other applicable
environmental Law which may now or later be in effect. Tenant shall comply with
all Laws pertaining to and governing the use of these materials by Tenant, and
shall remain solely liable for the costs of abatement and removal.

 

13. Tenant shall not use or occupy the Premises in any manner or for any purpose
which might injure the reputation or impair the present or future value of the
Premises or the Building. Tenant shall not use, or permit any part of the
Premises to be used, for lodging, sleeping or for any illegal purpose.

 

14. Tenant shall not take any action which would violate Landlord’s labor
contracts or which would cause a work stoppage, picketing, labor disruption or
dispute, or interfere with Landlord’s or any other tenant’s or occupant’s
business or with the rights and privileges of any person lawfully in the
Building (“Labor Disruption”). Tenant shall take the actions necessary to
resolve the Labor Disruption, and shall have pickets removed and, at the request
of Landlord, immediately terminate any work in the Premises that gave rise to
the Labor Disruption, until Landlord gives its written consent for the work to
resume. Tenant shall have no claim for damages against Landlord or any of the
Landlord Related Parties, nor shall the date of the commencement of the Term be
extended as a result of the above actions.

 

15. Tenant shall not install, operate or maintain in the Premises or in any
other area of the Building, electrical equipment that would overload the
electrical system beyond its capacity for proper, efficient and safe operation
as determined solely by Landlord. Tenant shall not furnish cooling or heating to
the Premises, including, without limitation, the use of electronic or gas
heating devices, without Landlord’s prior written consent. Tenant shall not use
more than its proportionate share of telephone lines and other telecommunication
facilities available to service the Building.

 

16. Tenant shall not operate or permit to be operated a coin or token operated
vending machine or similar device (including, without limitation, telephones,
lockers, toilets, scales, amusement devices and machines for sale of beverages,
foods, candy, cigarettes and other goods), except for machines for the exclusive
use of Tenant’s employees, and then only if the operation does not violate the
lease of any other tenant in the Building.

 

17. Bicycles and other vehicles are not permitted inside the Building or on the
walkways outside the Building, except in areas designated by Landlord.

 

18. Landlord may from time to time adopt systems and procedures for the security
and safety of the Building, its occupants, entry, use and contents. Tenant, its
agents, employees, contractors, guests and invitees shall comply with Landlord’s
systems and procedures.

 

19. Landlord shall have the right to prohibit the use of the name of the
Building or any other publicity by Tenant that in Landlord’s sole opinion may
impair the reputation of the Building or its desirability. Upon written notice
from Landlord, Tenant shall refrain from and discontinue such publicity
immediately.

 

20. Tenant shall not canvass, solicit or peddle in or about the Building or the
Property.

 

21. Neither Tenant nor its agents, employees, contractors, guests or invitees
shall smoke or permit smoking in the Common Areas, unless the Common Areas have
been declared a designated smoking area by Landlord, nor shall the above parties
allow smoke from the Premises to emanate into the Common Areas or any other part
of the Building. Landlord shall have the right to designate the Building
(including the Premises) as a non-smoking building.

 

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22. Landlord shall have the right to designate and approve standard window
coverings for the Premises and to establish rules to assure that the Building
presents a uniform exterior appearance. Tenant shall ensure, to the extent
reasonably practicable, that window coverings are closed on windows in the
Premises while they are exposed to the direct rays of the sun.

 

23. Deliveries to and from the Premises shall be made only at the times, in the
areas and through the entrances and exits designated by Landlord. Tenant shall
not make deliveries to or from the Premises in a manner that might interfere
with the use by any other tenant of its premises or of the Common Areas, any
pedestrian use, or any use which is inconsistent with good business practice.

 

24. The work of cleaning personnel shall not be hindered by Tenant after 5:30
P.M., and cleaning work may be done at any time when the offices are vacant.
Windows, doors and fixtures may be cleaned at any time. Tenant shall provide
adequate waste and rubbish receptacles to prevent unreasonable hardship to the
cleaning service.

 

 

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EXHIBIT C

 

COMMENCEMENT LETTER

(EXAMPLE)

 

Date

 

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Tenant

 

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Address

 

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Re:

  Commencement Letter with respect to that certain Lease dated as of
                         by and between EOP-Northwest Properties, L.L.C., a
Delaware limited liability company, as Landlord, and SAFLINK CORPORATION, a
Delaware corporation, as Tenant, for 9,569 square feet on the 21st floor of the
Building located at 777 108th Avenue NE, Bellevue, Washington.

 

Dear                                   :

 

In accordance with the terms and conditions of the above referenced Lease,
Tenant accepts possession of the Premises and agrees:

 

  1. The Commencement Date of the Lease is                                 ;

 

  2. The Termination Date of the Lease is
                                      .

 

Please acknowledge your acceptance of possession and agreement to the terms set
forth above by signing all 3 counterparts of this Commencement Letter in the
space provided and returning 2 fully executed counterparts to my attention.

 

Sincerely,

 

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Property Manager

Agreed and Accepted:

 

Tenant:

   SAFLINK CORPORATION, a Delaware corporation

By:

  

 

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Name:

  

 

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Title:

  

 

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Date:

  

 

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EXHIBIT D

 

WORK LETTER

 

This Exhibit is attached to and made a part of the Lease by and between
EOP-NORTHWEST PROPERTIES, L.L.C., a Delaware limited liability company
(“Landlord”), and SAFLINK CORPORATION, a Delaware corporation (“Tenant”), for
space in the Building located at 777 108th Avenue NE, Bellevue, Washington.

 

As used in this Workletter, the “Premises” shall be deemed to mean the Premises,
as initially defined in the attached Lease.

 

1. This Work Letter shall set forth the obligations of Landlord and Tenant with
respect to the improvements to be performed in the Premises for Tenant’s use.
All improvements described in this Work Letter to be constructed in and upon the
Premises by Landlord are hereinafter referred to as the “Landlord Work.” Tenant
acknowledges and agrees that the time reasonably required for substantial
completion of the Landlord Work will be at least 25 Business Days following the
issuance of permits for the Landlord Work. It is agreed that construction of the
Landlord Work will be completed at Tenant’s sole cost and expense, subject to
the Allowance (as defined below). Landlord shall enter into a direct contract
for the Landlord Work with a general contractor selected by Landlord. In
addition, Landlord shall have the right to select and/or approve of any
subcontractors used in connection with the Landlord Work.

 

2. Tenant shall be solely responsible for the timely preparation and submission
to Landlord of the final architectural, electrical and mechanical construction
drawings, plans and specifications (called “Plans”) necessary to construct the
Landlord Work, which plans shall be subject to approval by Landlord and
Landlord’s architect and engineers and shall comply with their requirements to
avoid aesthetic or other conflicts with the design and function of the balance
of the Building. Tenant shall be responsible for all elements of the design of
Tenant’s plans (including, without limitation, compliance with law,
functionality of design, the structural integrity of the design, the
configuration of the Premises and the placement of Tenant’s furniture,
appliances and equipment), and Landlord’s approval of Tenant’s plans shall in no
event relieve Tenant of the responsibility for such design. If requested by
Tenant, Landlord’s architect will prepare the Plans necessary for such
construction at Tenant’s cost. Whether or not the layout and Plans are prepared
with the help (in whole or in part) of Landlord’s architect, Tenant agrees to
remain solely responsible for the timely preparation and submission of the Plans
and for all elements of the design of such Plans and for all costs related
thereto. Tenant has assured itself by direct communication with the architect
and engineers (Landlord’s or its own, as the case may be) that the final
approved Plans can be delivered to Landlord on or before February 21, 2003 (the
“Plans Due Date”), provided that Tenant promptly furnishes complete information
concerning its requirements to said architect and engineers as and when
requested by them. Tenant covenants and agrees to cause said final, approved
Plans to be delivered to Landlord on or before said Plans Due Date and to devote
such time as may be necessary in consultation with said architect and engineers
to enable them to complete and submit the Plans within the required time limit.
Time is of the essence in respect of preparation and submission of Plans by
Tenant. If the Plans are not fully completed and approved by the Plans Due Date,
Tenant shall be responsible for one day of Tenant Delay (as defined in the Lease
to which this Exhibit is attached) for each day during the period beginning on
the day following the Plans Due Date and ending on the date completed Plans are
approved. (The word “architect” as used in this Exhibit shall include an
interior designer or space planner.)

 

3. If Landlord’s estimate and/or the actual cost of construction shall exceed
the Allowance, Landlord, prior to commencing any construction of Landlord Work,
shall submit to Tenant a written estimate setting forth the anticipated cost of
the Landlord Work, including but not limited to labor and materials,
contractor’s fees and permit fees. Within 3 Business Days thereafter, Tenant
shall either notify Landlord in writing of its approval of the cost estimate, or
specify its objections thereto and any desired changes to the proposed Landlord
Work. If Tenant notifies Landlord of such objections and desired changes, Tenant
shall work with Landlord to reach a mutually acceptable alternative cost
estimate.

 

4 If Landlord’s estimate and/or the actual cost of construction shall exceed the
Allowance, if any (such amounts exceeding the Allowance being herein referred to
as the “Excess

 

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Costs”), Tenant shall pay to Landlord such Excess Costs, plus any applicable
state sales or use tax thereon, upon demand. The statements of costs submitted
to Landlord by Landlord’s contractors shall be conclusive for purposes of
determining the actual cost of the items described therein. The amounts payable
by Tenant hereunder constitute Rent payable pursuant to the Lease, and the
failure to timely pay same constitutes an event of default under the Lease.

 

5. If Tenant shall request any change, addition or alteration in any of the
Plans after approval by Landlord, Landlord shall have such revisions to the
drawings prepared, and Tenant shall reimburse Landlord for the cost thereof,
plus any applicable state sales or use tax thereon, upon demand. Promptly upon
completion of the revisions, Landlord shall notify Tenant in writing of the
increased cost which will be chargeable to Tenant by reason of such change,
addition or deletion. Tenant, within one Business Day, shall notify Landlord in
writing whether it desires to proceed with such change, addition or deletion. In
the absence of such written authorization, Landlord shall have the option to
continue work on the Premises disregarding the requested change, addition or
alteration, or Landlord may elect to discontinue work on the Premises until it
receives notice of Tenant’s decision, in which event Tenant shall be responsible
for any Tenant Delay in completion of the Premises resulting therefrom. If such
revisions result in a higher estimate of the cost of construction and/or higher
actual construction costs which exceed the Allowance, such increased estimate or
costs shall be deemed Excess Costs pursuant to Paragraph 4 hereof and Tenant
shall pay such Excess Costs, plus any applicable state sales or use tax thereon,
upon demand.

 

6. Following approval of the Plans and the payment by Tenant of the required
portion of the Excess Costs, if any, Landlord shall cause the Landlord Work to
be constructed substantially in accordance with the approved Plans. Landlord
shall notify Tenant of substantial completion of the Landlord Work.

 

7. Landlord, provided Tenant is not in default, agrees to provide Tenant with an
allowance (the “Allowance”) in an amount not to exceed $57,414.00 (i.e., $6.00
per rentable square foot of the Premises) to be applied toward the cost of the
Landlord Work in the Premises. Tenant may apply up to $19,138.00 (i.e., $2.00
per rentable square foot of the Premises) of the Allowance (the “Cabling and
Moving Allowance”) towards the cost of installing cabling in the Premises and
the cost of Tenant moving into the Premises. (collectively, the “Cabling and
Moving Costs”). If the Allowance shall not be sufficient to complete the
Landlord Work, Tenant shall pay the Excess Costs, plus any applicable state
sales or use tax thereon, as prescribed in Paragraph 4 above. If the Cabling and
Moving Allowance shall not be sufficient to cover the Cabling and Moving Costs,
Tenant shall bear the additional cost at Tenant’s sole expense. Any portion of
the Allowance which exceeds the cost of the Landlord Work and/or the Cabling and
Moving Costs or is otherwise remaining after October 31, 2003, shall accrue to
the sole benefit of Landlord, it being agreed that Tenant shall not be entitled
to any credit, offset, abatement or payment with respect thereto. Landlord shall
be entitled to deduct from the Allowance a construction management fee for
Landlord’s oversight of the Landlord Work in an amount equal to 6% of the total
cost of the Landlord Work.

 

8. This Exhibit shall not be deemed applicable to any additional space added to
the Premises at any time or from time to time, whether by any options under the
Lease or otherwise, or to any portion of the original Premises or any additions
to the Premises in the event of a renewal or extension of the original Term of
the Lease, whether by any options under the Lease or otherwise, unless expressly
so provided in the Lease or any amendment or supplement to the Lease.

 

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EXHIBIT E

 

ADDITIONAL PROVISIONS

 

This Exhibit is attached to and made a part of the Lease by and between
EOP-NORTHWEST PROPERTIES, L.L.C., a Delaware limited liability company
(“Landlord”), and SAFLINK CORPORATION, a Delaware corporation (“Tenant”), for
space in the Building located at 777 108th Avenue NE, Bellevue, Washington.

 

I. CONTINGENCY. This Lease is specifically contingent upon Landlord entering
into an agreement with Afin Securities (“Afin”) to terminate its lease of a
portion of the Premises containing approximately 1,340 rentable square feet. If
Afin does not execute such an agreement on or before February 6, 2003, then, at
Landlord’s option, this Lease shall be null and void.

 

II. PARKING.

 

  A. During the initial Term, Landlord shall lease to Tenant, or cause the
operator (the “Operator”) of the garage servicing the Building (the “Garage”) to
lease to Tenant, and Tenant shall have the right to lease from Landlord or such
Operator, up to a maximum of 17 unreserved parking spaces in, or on the roof of,
the Garage (the “Spaces”) for the use of Tenant and its employees. During Months
1-6 of the initial Term, the Spaces shall be leased at the rate of $0.00 per
Space, per month, and during the remainder of the initial Term, the sum of
$75.00 per Space, per month, plus applicable tax thereon. If requested by
Landlord, Tenant shall execute and deliver to Landlord the standard parking
agreement used by Landlord or the Operator (the “Parking Agreement”) in the
Garage for such Spaces.

 

  B. No deductions or allowances shall be made for days when Tenant or any of
its employees does not utilize the parking facilities or for Tenant utilizing
less than all of the Spaces. Tenant shall not have the right to lease or
otherwise use more than the number of reserved and unreserved Spaces set forth
above.

 

  C. Except for particular spaces and areas designated by Landlord or the
Operator for reserved parking, all parking in the Garage and surface parking
areas serving the Building shall be on an unreserved, first-come, first-served
basis.

 

  D. Neither Landlord nor the Operator shall not be responsible for money,
jewelry, automobiles or other personal property lost in or stolen from the
Garage or the surface parking areas regardless of whether such loss or theft
occurs when the Garage or other areas therein are locked or otherwise secured.
Except as caused by the negligence or willful misconduct of Landlord and without
limiting the terms of the preceding sentence, Landlord shall not be liable for
any loss, injury or damage to persons using the Garage or the surface parking
areas or automobiles or other property therein, it being agreed that, to the
fullest extent permitted by law, the use of the Spaces shall be at the sole risk
of Tenant and its employees.

 

  E. Landlord or its Operator shall have the right from time to time to
designate the location of the Spaces and to promulgate reasonable rules and
regulations regarding the Garage, the surface parking areas, if any, the Spaces
and the use thereof, including, but not limited to, rules and regulations
controlling the flow of traffic to and from various parking areas, the angle and
direction of parking and the like. Tenant shall comply with and cause its
employees to comply with all such rules and regulations as well as all
reasonable additions and amendments thereto.

 

  F. Tenant shall not store or permit its employees to store any automobiles in
the Garage or on the surface parking areas without the prior written consent of
Landlord. Except for emergency repairs, Tenant and its employees shall not
perform any work on any automobiles while located in the Garage or on the
Property. If it is necessary for Tenant or its employees to leave an automobile
in the Garage or on the surface parking areas overnight, Tenant shall provide
Landlord with prior notice thereof designating the license plate number and
model of such automobile.

 

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  G. Landlord shall have the right to temporarily close the Garage or certain
areas therein in order to perform necessary repairs, maintenance and
improvements to the Garage or the surface parking areas, if any.

 

  H. Tenant shall not assign or sublease any of the Spaces without the consent
of Landlord. Landlord shall have the right to terminate this Parking Agreement
with respect to any Spaces that Tenant desires to sublet or assign.

 

  I. Landlord may elect to provide parking cards or keys to control access to
the Garage or surface parking areas, if any. In such event, Landlord shall
provide Tenant with one card or key for each Space that Tenant is leasing
hereunder, provided that Landlord shall have the right to require Tenant or its
employees to place a deposit on such access cards or keys and to pay a fee for
any lost or damaged cards or keys.

 

III. RIGHT OF FIRST OFFER.

 

  A. Grant of Option; Conditions. Tenant shall have an on-going right of first
offer (the “Right of First Offer”) with respect to the remaining space on the
21st floor of the Building shown on the demising plan attached hereto as Exhibit
E-1 (the “Offering Space”). Tenant’s Right of First Offer shall be exercised as
follows: (1) when Landlord has a prospective tenant (“Prospect”) who has given
Landlord written correspondence confirming such Propect’s interest in leasing
the Offering Space, or (2) before Landlord has such Propect, within 10 days of
Landlord receiving written notice from Tenant of Tenant’s interest in leasing
the Offering Space, Landlord shall advise Tenant (the “Advice”) of the terms
under which Landlord is prepared to lease the Offering Space to Tenant for the
remainder of the Term, which terms shall reflect the Prevailing Market
(hereinafter defined) rate for such Offering Space as reasonably determined by
Landlord. Tenant may lease such Offering Space in its entirety only, under such
terms, by delivering written notice of exercise to Landlord (the “Notice of
Exercise”) within 5 days after the date of the Advice, except that Tenant shall
have no such Right of First Offer and Landlord need not provide Tenant with an
Advice, if:

 

  1. Tenant is in default under the Lease beyond any applicable cure periods at
the time that Landlord would otherwise deliver the Advice; or

 

  2. the Premises, or any portion thereof, is sublet (other than pursuant to a
Permitted Transfer, as defined in Article XII of the Lease) at the time Landlord
would otherwise deliver the Advice; or

 

  3. the Lease has been assigned (other than pursuant to a Permitted Transfer,
as defined in Article XII of the Lease) prior to the date Landlord would
otherwise deliver the Advice; or

 

  4. Tenant is not occupying the Premises on the date Landlord would otherwise
deliver the Advice; or

 

  5. the Offering Space is not intended for the exclusive use of Tenant during
the Term.

 

  B. Terms for Offering Space.

 

  1. The term for the Offering Space shall commence upon the commencement date
stated in the Advice and thereupon such Offering Space shall be considered a
part of the Premises, provided that all of the terms stated in the Advice shall
govern Tenant’s leasing of the Offering Space and only to the extent that they
do not conflict with the Advice, the terms and conditions of this Lease shall
apply to the Offering Space.

 

  2. Tenant shall pay Base Rent and Additional Rent for the Offering Space in
accordance with the terms and conditions of the Advice, which terms and
conditions shall reflect the Prevailing Market rate for the Offering Space as
determined in Landlord’s reasonable judgment.

 

  3. The Offering Space (including improvements and personalty, if any) shall be
accepted by Tenant in its condition and as-built configuration existing on the
earlier of the date Tenant takes possession of the Offering Space

 

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      or as of the date the term for such Offering Space commences, unless the
Advice specifies any work to be performed by Landlord in the Offering Space, in
which case Landlord shall perform such work in the Offering Space. If Landlord
is delayed delivering possession of the Offering Space due to the holdover or
unlawful possession of such space by any party, Landlord shall use reasonable
efforts to obtain possession of the space, and the commencement of the term for
the Offering Space shall be postponed until the date Landlord delivers
possession of the Offering Space to Tenant free from occupancy by any party.

 

  C. Termination of Right of First Offer. The rights of Tenant hereunder with
respect to the Offering Space shall terminate on the earlier to occur of: (i)
May 31, 2006, (ii) Tenant’s failure to exercise its Right of First Offer within
the 5 day period provided in Section A above; and (iii) the date Landlord would
have provided Tenant an Advice if Tenant had not been in violation of one or
more of the conditions set forth in Section A above. Notwithstanding the
foregoing, if (i) Tenant was entitled to exercise its Right of First Offer, but
failed to provide Landlord with a Notice of Exercise within the five (5) day
period provided in paragraph A above, and (ii) Landlord does not enter into a
lease for the Offering Space with the Prospect or any other prospect within a
period of six (6) months following the date of the Advice, Tenant shall once
again have a Right of First Offer with respect to such Offering Space. In
addition, if Landlord does enter into a lease for the Offering Space, Tenant
shall have a Right of First Offer on such Offering Space (subject to the term
hereof) upon the expiration of the lease with the Prospect.

 

  D. Offering Amendment. If Tenant exercises its Right of First Offer, Landlord
shall prepare an amendment (the “Offering Amendment”) adding the Offering Space
to the Premises on the terms set forth in the Advice and reflecting the changes
in the Base Rent, Rentable Square Footage of the Premises, Tenant’s Pro Rata
Share and other appropriate terms. A copy of the Offering Amendment shall be
sent to Tenant within a reasonable time after Landlord’s receipt of the Notice
of Exercise executed by Tenant, and Tenant shall execute and return the Offering
Amendment to Landlord within 15 days thereafter, but an otherwise valid exercise
of the Right of First Offer shall be fully effective whether or not the Offering
Amendment is executed.

 

  E. Definition of Prevailing Market. For purposes of this Right of First Offer
provision, “Prevailing Market” shall mean the annual rental rate per square foot
for space comparable to the Offering Space in the Building and the Bellevue
central business district under leases and renewal and expansion amendments
being entered into at or about the time that Prevailing Market is being
determined, giving appropriate consideration to tenant concessions, brokerage
commissions, tenant improvement allowances, existing improvements in the space
in question, and the method of allocating operating expenses and taxes.
Notwithstanding the foregoing, space leased under any of the following
circumstances shall not be considered to be comparable for purposes hereof: (i)
the lease term is for less than the lease term of the Offering Space, (ii) the
space is encumbered by the option rights of another tenant, or (iii) the space
has a lack of windows and/or an awkward or unusual shape or configuration. The
foregoing is not intended to be an exclusive list of space that will not be
considered to be comparable.

 

  F. Subordination. Notwithstanding anything herein to the contrary, Tenant’s
Right of First Offer is subject and subordinate to the expansion rights (whether
such rights are designated as a right of first offer, right of first refusal,
expansion option or otherwise) of any tenant of the Building existing on the
date hereof.

 

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EXHIBIT E-1

 

OFFERING SPACE

 

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