Exhibit 10.23
SUBLEASE AGREEMENT
     This Sublease Agreement (this “Sublease”) is made as of the 25th day of
June, 2008 (the “Effective Date”) between DIECA COMMUNICATIONS INC., a Virginia
corporation (“Tenant”), and K12 INC., a Delaware corporation (“Subtenant”).
R E C I T A L S:
     A. By a certain Deed of Lease dated July 8, 2002, made between TST Woodland
Funding I, L.L.C. (“Original Landlord”), and Tenant, as amended pursuant to the
First Amendment To Deed of Lease (the “First Amendment”) dated March 31, 2005 by
ACP/300 Corporate Park Drive, LLC, a Delaware limited liability company,
successor in interest to Original Landlord (the “Master Landlord”) and Tenant
(collectively, the “Master Lease”), a copy of which is attached hereto as
Exhibit A, the Master Landlord leased to Tenant a portion of the property
located at 2300 Corporate Park Drive in Herndon, Virginia (the “Master
Premises”).
     B. Tenant desires to sublet to Subtenant and Subtenant desires to sublet
from Tenant a portion of the Master Premises. Specifically, Subtenant desires to
sublet from Tenant approximately 6,192 rentable square feet on the fourth (4th)
floor of the building (the “Subleased Premises”), a copy of the floor plan
detailing the Subleased Premises is attached hereto as Exhibit B, per the terms
and conditions contained herein. Such Premises shall not be remeasured by Tenant
during the Term, and if remeasured by Master Landlord, in no event shall
Subtenant’s costs associated with the rentable square footage increase or
decrease.
          NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
A G R E E M E N T:
1. MASTER LEASE
     A. Tenant represents and warrants to Subtenant that attached hereto as
Exhibit A is a true, correct and complete copy of the Master Lease and all
amendments thereto.
     B. Unless otherwise defined herein, all capitalized terms shall have the
defined meanings ascribed to them in the Master Lease.
     C. Except as set forth below and except as otherwise provided in this
Sublease, the terms and conditions of this Sublease shall include all of the
terms of the Master Lease and such terms are incorporated into this Sublease as
if fully set forth herein, except to the extent they are inapplicable to,
inconsistent with, or modified by the

 

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terms of this Sublease and except that: (i) each reference in such incorporated
sections to “Lease” shall be deemed a reference to this “Sublease”; (ii) each
reference to “Landlord” and “Tenant” shall be deemed a reference to “Tenant” and
“Subtenant”, respectively, except as otherwise expressly set forth herein;
(iii) with respect to work, services, utilities, electricity, repairs (or damage
caused by Master Landlord), restoration, insurance, indemnities, reimbursements,
representations, warranties or the performance of any other obligation of Master
Landlord under the Master Lease, whether or not incorporated herein, the sole
obligation of Tenant shall be to request the same in writing from Master
Landlord as and when requested to do so by Subtenant, and to use Tenant’s
commercially reasonable efforts (which shall not include the institution of
legal proceedings by Tenant, but which may include allowing Subtenant, at
Subtenant’s sole cost and expense, to institute legal proceedings in Tenant’s
name (if necessary), by attorneys approved by Tenant, which approval shall not
be unreasonably withheld, conditioned or delayed) to obtain Master Landlord’s
performance; (iv) with respect to any obligation of Tenant to be performed under
this Sublease, wherever the Master Lease grants to “Tenant” a specified number
of days to perform its obligations under the Master Lease, except as otherwise
provided herein, Subtenant shall have three (3) fewer days to perform the
obligation, including, without limitation, curing any defaults; (v) with respect
to any approval required to be obtained from the “Landlord” under the Master
Lease, such approval must be obtained from both Master Landlord and Tenant, and
Tenant’s withholding of approval shall in all events be deemed reasonable if for
any reason Master Landlord’s approval is not obtained; (vi) in any case where
the “Landlord” reserves or is granted the right to manage, supervise, control,
repair, alter, regulate the use of, enter or use the Subleased Premises or any
areas beneath, above or adjacent thereto, such reservation or grant of right of
entry shall be deemed to be for the benefit of both Master Landlord and Tenant;
(vii) in any case where “Tenant” is to indemnify, release or waive claims
against “Landlord”, such indemnity, release or waiver shall be deemed to run
from Subtenant to both Master Landlord and Tenant; and (viii) in any case where
“Tenant” is to execute and deliver certain documents or notices to “Landlord”,
such obligation shall be deemed to run from Subtenant to both Master Landlord
and Tenant.
     D. This Sublease is and at all times shall be subject and subordinate to
the Master Lease and the rights of Master Landlord thereunder. Subtenant hereby
expressly assumes and agrees for the benefit of the Master Landlord: (i) to
comply with all provisions of the Master Lease which are assumed by Subtenant
hereunder; and (ii) to perform all the obligations on the part of the “Tenant”
to be performed under the terms of the Master Lease with respect to the
Subleased Premises during the term of this Sublease. In the event the Master
Lease is terminated or cancelled for any reason whatsoever, this Sublease shall
terminate simultaneously with such termination or cancellation and, unless it is
determined in a final, non-appealable judgment that such termination is a result
of Tenant’s default under the Master Lease, or Tenant’s gross negligence or
willful misconduct, without any liability of Tenant to Subtenant. In the event
of a conflict between the provisions of this Sublease and the Master Lease, as
between Tenant and Subtenant, the provisions of this Sublease shall control.

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     E. The parties acknowledge and agreement that notwithstanding anything to
the contrary in this Sublease or the Master Lease, Section 18 of the First
Amendment shall not apply and have no force nor effect with regard to the
Subtenant.
2. WARRANTY BY LESSOR
Tenant warrants and represents to Subtenant that the Master Lease is in full
force and effect, has not been amended or modified except as expressly set forth
herein, that all obligations of Tenant have been satisfied, that Tenant is not
now, and as of the commencement of the Term hereof will not be, in default or
breach of any of the provisions of the Master Lease, nor to the best of Tenant’s
knowledge is there any event with which the giving of notice or the passage of
time or both would become a default or breach under the Master Lease and that
Tenant has no knowledge of any claim by Master Landlord that Tenant is in
default or breach of any of the provisions of the Master Lease. Tenant has not
received written notice of any violation or alleged violation of law, including
but not limited to the Americans with Disabilities Act of 1990, as may be
amended (“ADA”) with respect to the Subleased Premises. Tenant, as of the
Effective Date, has not received written notice of any mechanic’s liens charged
against the Premises. During the Term of this Sublease, the Tenant agrees not to
amend or modify the Master Lease in such a manner as to increase Subtenant’s
obligations under this Sublease or adversely impact Subtenant’s rights under
this Sublease without prior written notice to and reasonable approval by
Subtenant. During the Term of this Sublease, Tenant shall not voluntarily
terminate the Master Lease with respect to the Subleased Premises, nor will
Tenant knowingly act or knowingly fail to act in such a manner as to cause the
termination of the Master Lease. Should Tenant receive written notice from
Master Landlord regarding any default or other material issue under the Master
Lease or notices of any violations, mechanic’s liens or any other notices
affecting the Subleased Premises, Tenant shall provide a copy such notice(s) to
Subtenant within two (2) business days of Tenant’s receipt of said notice(s).
3. SUBLEASED PREMISES
Tenant hereby subleases to Subtenant on the terms and conditions set forth in
this Sublease the Subleased Premises. Subtenant accepts the Subleased Premises
in their present “As-Is” condition and shall be responsible, at its cost and
expense, for all alterations, improvements, additions and other work desired for
its use and occupancy of the Subleased Premises, except as specifically stated
in this Sublease. For the avoidance of doubt, Tenant shall have no obligation
whatsoever to make or pay the cost of any alterations, improvements or repairs
to the Subleased Premises, including, without limitation, any improvement or
repair required to comply with any law, regulation, building code or ordinance
(including the ADA). In addition, Tenant shall have no obligation to perform any
repairs or any other obligation of Master Landlord required to be performed by
Master Landlord under the terms of the Master Lease and Subtenant shall look
solely to Master Landlord for performance of said obligations. Tenant shall,
however, request performance of the same in writing from Master Landlord
promptly

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after being requested to do so by Subtenant, and shall use Tenant’s commercially
reasonable efforts (which shall not include the institution of legal proceedings
by Tenant, but which may include allowing Subtenant, at Subtenant’s sole cost
and expense, to institute legal proceedings in Tenant’s name (if necessary), by
attorneys approved by Tenant, which approval shall not be unreasonably withheld,
conditioned or delayed) to obtain Master Landlord’s performance. Tenant hereby
assigns to Subtenant, for so long as this Sublease shall be in force and effect,
any and all rights of Tenant under the Master Lease with respect to the
Subleased Premises and causes of action which Tenant may have against Master
Landlord with respect to the Subleased Premises due to default by Master
Landlord under the Master Lease.
4. TERM
The term of this Sublease shall commence on the later of: (a) July 1, 2008; and
(b) the date that Master Landlord consents to this Sublease or possession of the
Subleased Premises is delivered to Subtenant (“Commencement Date”), and end on
July 31, 2010 (“Termination Date”), unless otherwise sooner terminated in
accordance with the provisions of this Sublease. In the event the Term commences
on a date other than the Commencement Date, Tenant and Subtenant shall execute a
memorandum setting forth the actual date of commencement of the term. Possession
of the Subleased Premises shall be delivered to Subtenant on the Commencement
Date; provided, however, once the Master Landlord consents to this Sublease,
Subtenant shall be permitted access to the Subleased Premises within five
(5) business days of such consent in order for Subtenant to complete (through
Subtenant’s contractor or vendor or by Subtenant’s employees or other agents)
the cabling of telephone, computer, security systems, office equipment and the
like; provided that Tenant shall not be required to provide Subtenant with such
access unless Subtenant has demonstrated its compliance with the insurance
requirements provided in Section 13 of this Sublease. Notwithstanding anything
to the contrary in this Sublease, if Tenant fails, for any reason other than the
acts or omissions of either Subtenant or the Master Landlord (including without
limitation the Master Landlord’s failure to timely consent to this Sublease) or
the agents or employees of Subtenant or Master Landlord, to provide possession
of the Subleased Premises on the Commencement Date, the date the Rent (as
defined below) commences will be extended for each day of delay beyond such date
and provided further that if Tenant fails to provide possession of the Subleased
Premises on or before August 1, 2008 (subject to the exceptions set forth
above), then Subtenant shall have the right to terminate this Sublease by
written notice delivered to Tenant on or before August 15, 2008, upon which the
parties shall have no further obligations to each other under this Sublease.
5. RENT
Subtenant does hereby agree, without notice, deduction or offset, to pay to
Tenant, as the monthly rent for the Subleased Premises (“Rent”), the following
amounts for the term of the Sublease:

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July 1, 2008 – June 30, 2009:
  $14,964.00 each month
July 1, 2009 – June 30, 2010:
  $15,562.56 each month
July 1, 2010 – July 31, 2010:
  $16,185.06 each month

Rent includes all Operating Expenses and Taxes contemplated under the Master
Lease and Tenant hereby acknowledges and agrees that Subtenant shall not be
responsible for any other costs not specifically and expressly provided for
herein, including but not limited to costs or charges for Building or common
area maintenance, utilities or taxes. However, except as otherwise expressly
provided in this Sublease, Subtenant shall pay any other additional costs or
expenses incurred under the Master Lease related to the Sublease Premises or
Subtenant’s occupancy thereof (including, without limitation, the cost of all
overtime HVAC, energy and other services costs provided to Subtenant and/or the
Sublease Premises and not included in Operating Expenses or Taxes). Unless such
costs and expenses can be paid directly to Master Landlord, Subtenant shall
reimburse Tenant for such other amounts within ten (10) business days of receipt
of an invoice (attaching the charges of the Master Landlord) from Tenant
therefor. For the purposes of this Sublease and all of Subtenant’s obligations
hereunder, Rent and any other sums due to Tenant from Subtenant under this
Sublease shall together constitute “Rent.”
All payments of Rent due under this Sublease shall be paid in advance at least
three (3) business days prior to when the corresponding payments are due and
payable under the Master Lease. Said payment shall be made to Tenant, and shall
be mailed to the address of Tenant or any other address which Tenant may in
writing designate. The first month’s rent payment in the amount of $14,964.00
shall be due and payable by Subtenant to Tenant upon Subtenant’s execution of
this Sublease.
6. USE OF PREMISES; ACCESS
Notwithstanding anything contrary to the Master Lease, the Subleased Premises
shall be used and occupied only for general office purposes in accordance with
the applicable zoning regulations and for no other use or purpose. Subtenant
shall not use, store or dispose of, in or from the Subleased Premises, any
substances, materials, chemicals or gases which are defined and regulated as
being hazardous or toxic under applicable federal, state or local laws and
regulations except for such substances, materials, chemicals or gases in small
amounts as used in the ordinary course of the operation of Subtenant’s business
which use shall at all times be in strict adherence to and compliance with all
applicable environmental laws and the terms of the Master Lease. Subject to the
terms and conditions of the Master Lease, Subtenant shall have access to the
Subleased Premises twenty-four (24) hours per each day of the year. Tenant shall
provide fifty (50) of its electronic access cards for the Subleased Premises and
shall, at its sole cost and expense, cause the Master Landlord to reprogram the
electric access system such that only the foregoing 50 cards shall provide
access to the Subleased Premises (except with respect to the Master Landlord and
Tenant as permitted and limited by this Sublease), and pay the costs associated
with obtaining such cards if such cards provide access to the Master Premises in
excess of the Subleased Premises.

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7. AGENCY DISCLOSURE
Subtenant and Tenant each warrant that they have dealt with no other real estate
broker(s), finder(s), or other person(s) in connection with this transaction
other than The Staubach Company – Northeast, Inc., as Subtenant’s broker, and
CresaPartners, as Tenant’s agent, both of which shall be compensated by Tenant
pursuant to a separate agreement. Tenant and Subtenant each shall indemnify and
hold the other harmless from any breach by it of this representation.
8. ATTORNEYS’ FEES
If Tenant or Subtenant shall commence an action against the other arising out of
or in connection with this Sublease, the prevailing party shall be entitled to
recover its costs of suit and reasonable attorneys’ fees.
9. FURNITURE
Subtenant shall have the right to utilize certain of the existing workstations
and furniture within the Subleased Premises through the term of the Sublease at
no cost to the Subtenant (excluding certain personal property of the Tenant).
The Master Landlord owns the furniture and workstations and therefore Tenant and
Subtenant have no rights to the furniture after the expiration of the Sublease
term. Attached as Exhibit C is a list of the items of furniture within the
Subleased Premises that Subtenant will retain (the “Sublease Furniture”). Any
items of furniture that had been in the Subleased Premises but are not listed on
Exhibit C as Sublease Furniture shall have been removed by Tenant, at its sole
cost and expense, from the Subleased Premises prior to the Commencement Date.
Subtenant shall have no further obligation to Tenant or Master Landlord
regarding such items of furniture.
10. NOTICES
All notices and demands which may or are to be required or permitted to be given
by either party on the other hereunder shall be in writing. All notices and
demands by the Tenant to Subtenant shall be sent by United States Mail, postage
prepaid, or by nationally recognized overnight carrier addressed to the
Subtenant at the Subleased Premises, and to the address hereinbelow, or to such
other place as Subtenant may from time to time designate in a notice to the
Tenant. All notices and demands by the Subtenant to Tenant shall be sent by
United States Mail, postage prepaid, or by recognized overnight carrier
addressed to the Tenant at the address set forth herein, and to such other
person or place as the Tenant may from time to time designate in a notice to the
Subtenant.

     
To Tenant:
  Covad Communications Company
 
  110 Rio Robles
 
  San Jose, CA 95134

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  Attn: Contract Management/Legal
 
   
To Subtenant:
  K12 Inc.
 
  2300 Corporate Park Drive
 
  Herndon, VA 20171
 
  Attn: Legal Department

11. REMOVAL OF ALTERATIONS
Notwithstanding anything in the Master Lease or this Sublease to the contrary,
Subtenant shall not be required at the termination of the Sublease to remove
alterations, fixtures, equipment and other property at the Subleased Premises
unless such items or alterations are installed by or at the request of
Subtenant. Unless the Master Landlord does not require such restoration or
removal, Subtenant shall be solely responsible for the restoration of any items
or alterations that are removed by or at the request of Subtenant and/or the
removal of any items or alterations that are installed by or at the request of
Subtenant.
12. CONSENTS
Each of the signatories set forth below represents and warrants that it is duly
authorized to execute and deliver this Sublease, to bind the person for which
such signatory signs and that such person has obtained all consents and
approvals necessary to execute and deliver this Sublease. Additionally, except
for the consent of the Master Landlord, each party represents and warrants to
each of the other parties that it has obtained all consents and approvals
necessary to execute and deliver this Sublease.
13. INSURANCE
     A. Subtenant agrees that Subtenant will, at all times during the Term of
this Sublease, maintain and pay for such insurance as is required under the
Master Lease, naming the Master Landlord and Tenant as “additional insureds”
under the policy or policies carried by Subtenant. The Subtenant further
covenants that in the event that the insurance policy evidenced in the
certificate is canceled or materially amended it will advise the Tenant in
writing to this effect forthwith. In the event that Subtenant fails to maintain
the insurance required by this Section, then the Tenant shall have the right to
obtain such insurance on behalf of Subtenant. In the event that Tenant obtains
such insurance on behalf of Subtenant, then Subtenant shall reimburse Tenant for
the cost thereof within five (5) business days of Tenant’s demand for
reimbursement.
     B. Tenant and Subtenant each hereby releases all causes of action and
rights of recovery against each other and their respective agents, officers and
employees for any loss, regardless of cause or origin, to the extent of any
recovery to either party from any policy(s) of insurance carried or required to
be carried hereunder. Tenant and Subtenant agree that any policies presently
existing or obtained on or after the date hereof (including

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renewals of present policies) shall include a clause or endorsement to the
effect that any such release shall not adversely affect or impair said policies
or prejudice the right of the releasor to recover thereunder.
14. PARKING
Subtenant shall be entitled to use parking spaces in accordance with the terms
of the Master Lease, including but not limited to Section 13 of the First
Amendment concerning reserved parking spaces of which Subtenant shall be
entitled to its proportionate share based on the ratio of Subleased Premises to
Master Premises.
15. SIGNAGE
Subtenant shall have the rights to suite entry signage and building directory
signage pursuant to the terms contained in the Master Lease.
16. CONDEMNATION
In the event of damage or destruction of the Subleased Premises or the taking of
all or any part thereof under the power of eminent domain, this Sublease shall
terminate only if the Master Lease is terminated as a result thereof.
17. EMERGENCY POWER SYSTEM
     Subject to the terms and conditions of the Master Lease, Subtenant shall
have the right, with Master Landlord’s consent pursuant to the Master Lease, to
connect certain equipment into the Master Landlord’s emergency power generator
and uninterrupted power supply systems (“Emergency Power System”). Subtenant
shall pay directly to the Master Landlord all costs and expenses related to the
Subtenant’s actual usage of the Emergency Power System. In the event that
Subtenant is not permitted to pay such costs directly, then Tenant shall pay the
costs and expenses of the Emergency Power System and the Subtenant shall
promptly reimburse the Tenant for Tenant’s actual costs incurred with respect to
the Subleased Premises; provided that Tenant submits reasonable supporting
documentation regarding such costs.
18. DEFAULT
Subtenant shall be in material default of its obligations under this Sublease if
any of the following events occur:
          A. Subtenant fails to pay any Rent within five (5) business days after
receipt of written notice from Tenant that such item of Rent is due and unpaid;
or
          B. Subtenant fails to perform any term, covenant or condition of this
Sublease (except those requiring payment of Rent) and fails to cure such breach
within

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thirty (30) days after delivery of a written notice to Subtenant specifying the
nature of the breach; provided, however, that if more than thirty (30) days are
reasonably required to remedy the failure, then Subtenant shall not be in
default if Subtenant commences the cure within the thirty (30) day period and
thereafter diligently completes the cure; or
          C. Subtenant makes a general assignment of its assets for the benefit
of its creditors, including attachment of, execution on, or the appointment of a
custodian or receiver with respect to a substantial part of Subtenant’s property
or any property essential to the conduct of its business; or
          D. Subtenant abandons (without payment of Rent) the Subleased Premises
in violation of the Master Lease; or
          E. Subtenant commits any other act or omission which constitutes a
default under the Master Lease, which has not been cured after delivery of any
written notice required and passage of three-quarters (3/4) of any applicable
grace period provided in the Master Lease as modified, if at all, by the
provisions of this Sublease.
19. SECURITY DEPOSIT
Subtenant shall provide Tenant prior to the execution of this Sublease a
security deposit in the amount of $14,964.00. Tenant may use the security
deposit, or any part of the deposit, to satisfy any default of Subtenant and any
expenses arising from such default. If any portion of the security deposit is so
used or applied, Subtenant shall, within five (5) business days after written
demand therefore, deposit cash with Tenant in an amount sufficient to restore
the security deposit to its original amount. Tenant may commingle the security
deposit with its own funds and Subtenant shall not be entitled to interest on
the security deposit. Any remaining balance of the Security Deposit shall be
returned to Subtenant at such time after the Termination Date that all of
Subtenant’s obligations under this Sublease have been fulfilled, but in no event
later than thirty (30) days following the Termination Date.
20. ASSIGNMENT AND SUBLETTING
Subtenant’s rights to assign, transfer or hypothecate the leasehold estate under
this Sublease, or any interest therein shall be governed by the Master Landlord
pursuant to Article 13 of the Master Lease and by the Tenant pursuant to such
Article 13 as incorporated into this Sublease.
21. ENTIRE AGREEMENT; AMENDMENTS
This Sublease contains all agreements between the parties with respect to any
matter mentioned herein, and no other prior or contemporaneous agreement or
understanding shall be effective. This Sublease may not be amended except by the
written agreement of all parties hereto.

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22. WAIVER
If either Tenant or Subtenant waives the performance of any term, covenant or
condition contained in this Sublease, such waiver shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition contained herein, or constitute a course of dealing contrary to the
expressed terms of this Sublease. The acceptance of Rent by Tenant shall not
constitute a waiver of any preceding breach by Subtenant of any term, covenant
or condition of this Sublease regardless of Tenant’s knowledge of such preceding
breach at the time Tenant accepted such Rent. Failure by Tenant to enforce any
of the terms, covenants or conditions of the Sublease for any length of time
shall not be deemed to waive or decrease the right of Tenant to insist
thereafter upon strict performance by Subtenant. Waiver by Tenant of any term,
covenant or condition contained in this Sublease may only be made by a written
document signed by Tenant, based upon full knowledge of the circumstances.
23. RELATIONSHIP OF PARTIES
This Sublease does not and shall not create the relationship of principal and
agent, or of partnership, or of joint venture, or of any other association
between Tenant and Subtenant, except that of sublandlord and subtenant.
24. NO DRAFTING PRESUMPTION
The parties acknowledge that this Sublease has been agreed to by both the
parties, that both Tenant and Subtenant have consulted with attorneys with
respect to the terms of this Sublease and that no presumption shall be created
against Tenant because Tenant drafted this Sublease.
25. COUNTERPARTS
This Sublease may be executed in one or more counterparts, each of which shall
be deemed an original, and all of which together shall constitute one and the
same instrument.
26. MASTER LANDLORD’S CONSENT
     After its execution by Tenant and Subtenant, this Sublease shall be
effective only upon obtaining the written consent of Master Landlord, or its
duly authorized agent. Promptly after the execution of this Sublease by the
Tenant and Subtenant, Tenant shall use its commercially reasonable efforts to
secure the Master Landlord’s consent to this Sublease and shall keep Subtenant
reasonably apprised of the status of such efforts.

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[SIGNATURE PAGE FOLLOWS]
THIS SUBLEASE SHALL BE OF NO FORCE OR EFFECT UNLESS CONSENTED TO BY MASTER
LANDLORD WITHIN 30 DAYS AFTER EXECUTION HEREOF, IF SUCH CONSENT IS REQUIRED
UNDER THE TERMS OF THE MASTER LEASE.

                     
 
                   
Date:
  6/25/08       Date:   6/26/08    
 
 
 
         
 
   
 
                    Tenant: Dieca Communications, Inc.       Subtenant: K12,
Inc.    
 
                   
By:
  /s/ Jeff Bailey       By:   /s/ John Baule    
 
 
 
         
 
   
 
                   
Title:
  CFO       Title:   Exec VP of Operations & CFO    
 
 
 
         
 
   

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Exhibit A
Master Lease

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Exhibit B
Subleased Premises
(MAP) [w67208w6720804.gif]
Note:
1) Subleased Premises totals 6,192 rentable square feet and is illustrated as
the “Covad” space in this illustration.

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Exhibit C
Sublease Furniture

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FINAL EXECUTED LEASE
DEED OF LEASE
TST WOODLAND FUNDING I, L.L.C.,
a Delaware limited liability company,
Landlord
and
DIECA COMMUNICATIONS, INC.,
a Virginia corporation,
Tenant
South Pointe II
2300 Corporate Park Drive
Woodland Park
Herndon, Virginia 20171
July 8, 2002

 

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TABLE OF CONTENTS

              Page  
ARTICLE 1. BASIC LEASE PROVISIONS
    1  
ARTICLE 2. PREMISES, TERM, RENT
    5  
2.1 Lease of Premises
    5  
2.2 Commencement Date
    5  
2.3 Payment of Rent
    5  
2.4 First Month’s Rent
    6  
ARTICLE 3. USE AND OCCUPANCY
    6  
3.1 Permitted Uses
    6  
3.2 Parking Facilities
    6  
ARTICLE 4. CONDITION OF THE PREMISES
    7  
4.1 Condition
    7  
4.2 Landlord’s Contribution
    7  
4.3 Existing Furnishings
    7  
ARTICLE 5. ALTERATIONS
    8  
5.1 Tenant’s Alterations
    8  
5.2 Manner and Quality of Alterations
    9  
5.3 Removal of Tenant’s Property
    9  
5.4 Mechanic’s Liens
    10  
5.5 Labor Relations
    10  
5.6 Tenant’s Costs
    10  
5.7 Tenant’s Equipment
    10  
5.8 Legal Compliance
    10  
5.9 Floor Load
    11  
ARTICLE 6. REPAIRS
    11  
6.1 Landlord’s Repair and Maintenance
    11  
6.2 Tenant’s Repair and Maintenance
    11  
6.3 Restorative Work
    11  
6.4 Supplemental HVAC Units
    12  
6.5 Emergency Power System
    13  
ARTICLE 7. INCREASES IN TAXES AND OPERATING EXPENSES
    14  
7.1 Definitions
    14  
7.2 Tenant’s Tax Payment
    16  
7.3 Tenant’s Operating Payment
    17  
7.4 Non-Waiver; Disputes
    18  
7.5 Final Year of Term
    19  
7.6 No Reduction in Rent
    19  
ARTICLE 8. REQUIREMENTS OF LAW
    20  
8.1 Compliance with Requirements
    20  
8.2 Fire and Life Safety
    21  
ARTICLE 9. SUBORDINATION
    21  
9.1 Subordination and Attornment
    21  

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              Page  
9.2 Mortgage or Superior Lease Defaults
    22  
9.3 Tenant’s Termination Right
    22  
9.4 Provisions
    23  
ARTICLE 10. SERVICES
    23  
10.1 Electricity
    23  
10.2 Excess Electricity
    24  
10.3 Elevators
    24  
10.4 Heating, Ventilation and Air Conditioning
    24  
10.5 Overtime HVAC
    25  
10.6 Cleaning
    25  
10.7 Water
    25  
10.8 Refuse Removal
    25  
10.9 Directory
    25  
10.10 Tenant Access to Premises
    26  
10.11 Service Interruptions
    26  
ARTICLE 11. INSURANCE; PROPERTY LOSS OR DAMAGE
    26  
11.1 Tenant’s Insurance
    26  
11.2 Waiver of Subrogation
    28  
11.3 Restoration
    28  
11.4 Landlord’s Termination Right
    29  
11.5 Tenant’s Termination Right
    29  
11.6 Final 18 Months
    29  
11.7 Landlord’s Liability
    30  
ARTICLE 12. EMINENT DOMAIN
    30  
12.1 Taking
    30  
12.2 Awards
    31  
12.3 Temporary Taking
    31  
ARTICLE 13. ASSIGNMENT AND SUBLETTING
    31  
13.1 Consent Requirements
    31  
13.2 Tenant’s Notice
       
13.3 Conditions to Assignment/Subletting
    33  
13.4 Binding on Tenant; Indemnification of Landlord
    34  
13.5 Tenant’s Failure to Complete
    34  
13.6 Profits
    35  
13.7 Transfers
    35  
13.8 Assumption of Obligations
    36  
13.9 Tenant’s Liability
    36  
13.10 Listings in Building Directory
    36  
13.11 Lease Disaffirmance or Rejection
    36  
ARTICLE 14. ACCESS TO PREMISES
    37  
14.1 Landlord’s Access
    37  
14.2 Building Name
    38  
ARTICLE 15. DEFAULT
    38  
15.1 Tenant’s Defaults
    38  
15.2 Landlord’s Remedies
    39  

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              Page  
15.3 Landlord’s Damages
    40  
15.4 Interest
    41  
15.5 Other Rights of Landlord
    41  
ARTICLE 16. LANDLORD’S RIGHT TO CURE; FEES AND EXPENSES
    41  
ARTICLE 17. NO REPRESENTATIONS BY LANDLORD; LANDLORD’S APPROVAL
    42  
17.1 No Representations
    42  
17.2 No Money Damages
    42  
17.3 Reasonable Efforts
    42  
ARTICLE 18. END OF TERM
    42  
18.1 Expiration
    42  
18.2 Holdover Rent
    42  
ARTICLE 19. QUIET ENJOYMENT
    43  
ARTICLE 20. NO SURRENDER; NO WAIVER
    43  
20.1 No Surrender or Release
    43  
20.2 No Waiver
    43  
ARTICLE 21. WAIVER OF TRIAL BY JURY; COUNTERCLAIM
    44  
21.1 Jury Trial Waiver
    44  
21.2 Waiver of Counterclaim
    44  
ARTICLE 22. NOTICES
    44  
ARTICLE 23. RULES AND REGULATIONS
    44  
ARTICLE 24. BROKER
    45  
ARTICLE 25. INDEMNITY
    45  
25.1 Tenant’s Indemnity
    45  
25.2 Landlord’s Indemnity
    45  
25.3 Defense and Settlement
    46  
ARTICLE 26. MISCELLANEOUS
    46  
26.1 Delivery
    46  
26.2 Transfer of Real Property
    46  
26.3 Limitation on Liability
    46  
26.4 Rent
    47  
26.5 Entire Document
    47  
26.6 Governing Law
    47  
26.7 Unenforceability
    47  
26.8 Lease Disputes
    47  
26.9 Landlord’s Agent
    47  
26.10 Estoppel
    48  
26.11 Certain Interpretational Rules
    48  
26.12 Parties Bound
    48  
26.13 Memorandum of Lease
    48  
26.14 Counterparts
    49  
26.15 Survival
    49  
26.16 Inability to Perform
    49  
26.17 Substitute Premises
    49  
26.18 Deed of Lease/Landlord’s Agent for Service of Process
    49  
26.19 Lien for Payment of Rent
    49  

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              Page  
26.20 Financial Statements
    49  
ARTICLE 27. SECURITY DEPOSIT
    49  
27.1 Letter of Credit
    49  
27.2 Application of Security
    50  
27.3 Transfer
    51  

     
 
    EXHIBITS
Exhibit A
  Floor Plan
Exhibit B
  Definitions
Exhibit C
  Work Letter
Exhibit D
  Cleaning Specifications
Exhibit E
  Rules and Regulations
Exhibit F
  Commencement Notice
Exhibit G
  Existing Furnishings
 
    RIDERS
Rider No. 1
  Extension Option
Rider No. 2
  Antenna
Rider No. 3
  Exterior Signage

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DEED OF LEASE
     This Deed of Lease (the “Lease”) is made as of the 8th day of July, 2002
(“Effective Date”), between TST WOODLAND FUNDING I, L.L.C (“Landlord”), a
Delaware limited liability company, and DIECA COMMUNICATIONS, INC., (“Tenant”),
a Virginia corporation.
     Landlord and Tenant hereby agree as follows:
ARTICLE 1
BASIC LEASE PROVISIONS

     
 
   
PREMISES
  The rentable area of the portion of the first (1st) floor of the Building, the
entire rentable area of the third (3rd) floor of the Building and the rentable
area of the portion of the fourth (4th) floor of the Building, as more
particularly shown on Exhibit A.
 
   
BUILDING
  The building, fixtures, equipment and other improvements and appurtenances now
located or hereafter erected, located or placed upon the land known as 2300
Corporate Park Drive, Woodland Park, Herndon, Virginia 20171 (commonly known as
South Pointe II).
 
   
REAL PROPERTY
  The Building, the Common Area, the parking facilities and the real property
upon which the Building and the parking facilities stand.
 
   
COMMENCEMENT DATE
  The date which is earlier to occur of (a) the date Tenant (or any person
claiming by, through or under Tenant) occupies any part of the Premises for the
conduct of its business, or (b) the later of (i) the date upon which the Tenant
Improvements (as described in Exhibit C attached hereto) are Substantially
Completed in accordance with the terms of this Lease, or (ii) July 15, 2002.
 
   
RENT COMMENCEMENT
DATE
  The day following the third (3rd) monthly anniversary of the Commencement
Date.
 
   
EXPIRATION DATE
  The last day of the month in which the third (3rd) yearly anniversary of the
Commencement Date occurs, or the last day of any extension term, if the Term of
this Lease is extended in accordance with any express provision hereof.
 
   
TERM
  The period commencing on the Commencement Date and ending

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  on the Expiration Date.
 
   
PERMITTED USES
  Executive and general offices.
 
   
BASE YEAR
  Calendar year 2002.
 
   
TENANT’S PROPORTIONATE SHARE
  23.51%
 
   
AGREED AREA OF
BUILDING
 
159,633 rentable square feet, as measured in accordance with the BOMA standard
of building measurement and mutually agreed to by Landlord and Tenant.
 
   
AGREED AREA OF
PREMISES
 
37,517 rentable square feet, as measured in accordance with the BOMA standard of
building measurement and mutually agreed to by Landlord and Tenant, consisting
of 3,573 square feet of rentable area on the first (1st) floor, 27,752 square
feet of rentable area on the third (3rd) floor and 6,192 square feet of rentable
area on the fourth (4th) floor (the “Fourth Floor Space”), being comprised of
3,044 square foot area designated as “Suite 4A” on Exhibit A and 3,148 square
foot area designated as “Suite 4B” on Exhibit A.
 
   
FIXED RENT
   

                   Fixed Rent per annum     per square foot of rentable area
Lease Year   of Premises
1
  $ 24.00  
2
  $ 24.60  
3 through original Expiration Date
  $ 25.22  

     
 
   
LEASE YEAR
  Each period of twelve (12) successive months commencing on the Commencement
Date or any anniversary thereof, except that the last Lease Year of the Term
might contain fewer than twelve (12) months if the period between the expiration
of the then preceding Lease Year and the Expiration Date contains fewer than
twelve (12) months.

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ADDITIONAL RENT
  All sums other than Fixed Rent payable by Tenant to Landlord under this Lease,
including Tenant’s Tax Payment, Tenant’s Operating Payment, late charges,
overtime or excess service charges, damages, and interest and other costs
related to Tenant’s failure to perform any of its obligations under this Lease.
 
   
RENT
  Fixed Rent and Additional Rent, collectively.
 
   
INTEREST RATE
  The lesser of (i) 4% per annum above the then-current Base Rate, and (ii) the
maximum rate permitted by applicable law.
 
   
SECURITY DEPOSIT
  $375,170.00, in the form of the Letter of Credit.
 
   
TENANT’S ADDRESS FOR NOTICES
  Until Tenant commences business operations from the Premises:
 
   
 
  Dieca Communications, Inc.
 
  3420 Central Expressway
 
  Santa Clara, CA 95051
 
  Attn: Director of Real Estate
 
   
 
  Copy to:
 
   
 
  Dieca Communications, Inc.
 
  3420 Central Expressway
 
  Santa Clara, CA 95051
 
  Attn: Legal Department
 
   
 
  Thereafter:
 
   
 
  Dieca Communications, Inc.
 
  3420 Central Expressway
 
  Santa Clara, CA 95051
 
  Attn: Director of Real Estate
 
   
 
  Copy to:
 
   
 
  Dieca Communications, Inc.
 
  3420 Central Expressway
 
  Santa Clara, CA 95051
 
  Attn: Legal Department

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  and
 
   
 
  Dieca Communications, Inc.
 
  2300 Corporate Park Drive
 
  Woodland Park
 
  Herndon, Virginia 20171
 
   
LANDLORD’S ADDRESS FOR NOTICES
  TST Woodland Funding I, L.L.C.
 
  c/o Tishman Speyer Properties, L.P.
 
  520 Madison Avenue, Sixth Floor
 
  New York, New York 10022
 
  Attn: Chief Financial Officer
 
   
 
  Copies to:
 
   
 
  TST Woodland Funding I, L.L.C.
 
  c/o Tishman Speyer Properties, L.P.
 
  8270 Greensboro Drive, Suite 810
 
  McLean, Virginia 22102
 
  Attn: James A. Evans
 
   
 
  and:
 
   
 
  Tishman Speyer Properties, L.P.
 
  520 Madison Avenue, Sixth Floor
 
  New York, New York 10022
 
  Attn: General Counsel
 
   
TENANT’S BROKER
  Scheer Partners and Liberty Greenfield.
 
   
LANDLORD’S AGENT
  Tishman Speyer Properties, L.P. or any other person designated at any time and
from time to time by Landlord as Landlord’s Agent and their successors and
assigns.
 
   
LANDLORD’S CONTRIBUTION
  $-0-.
 
   
GUARANTOR
  None.

All capitalized terms used in this Lease without definition are defined in
Exhibit B-Definitions or in Exhibit C-Work Letter to this Lease.

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ARTICLE 2
PREMISES, TERM, RENT
     Section 2.1 Lease of Premises. Subject to the terms of this Lease, Landlord
leases to Tenant and Tenant leases from Landlord the Premises for the Term. In
addition, Landlord grants to Tenant the right to use, on a non-exclusive basis
and in common with other tenants, the Common Areas.
     Section 2.2 Commencement Date. Upon the Effective Date, the terms and
provisions hereof shall be fully binding on Landlord and Tenant, including prior
to the occurrence of the Commencement Date. The Term of this Lease shall
commence on the Commencement Date and, unless sooner terminated or extended as
hereinafter provided, shall end on the Expiration Date. If Landlord does not
tender possession of the Premises to Tenant on or before any specified date, for
any reason whatsoever, Landlord shall not be liable for any damage thereby, this
Lease shall not be void or voidable thereby, and the Term shall not commence
until Landlord tenders possession of the Premises to Tenant. No failure to
tender possession of the Premises to Tenant on or before any specified date
shall affect any other obligations of Tenant hereunder. Once the Commencement
Date is determined, Landlord and Tenant shall execute an agreement in the form
of Exhibit F hereto stating the Commencement Date and the Expiration Date, but
the failure to do so will not affect the determination of such dates. For
purposes of determining whether Tenant has accepted possession of the Premises,
Tenant shall be deemed to have done so when Tenant first moves Tenant’s Property
and/or any of its personnel into the Premises and/or commences construction,
except to the extent that Tenant is authorized in this Lease or by Landlord’s
agreement to do any of the foregoing without being deemed to have accepted
possession of the Premises.
     Notwithstanding the foregoing, if the Commencement Date has not occurred by
August 1, 2002 (as such date may be extended by any Tenant Delay and/or
Unavoidable Delay), Tenant shall have the right, as Tenant’s sole remedy, to
terminate this Lease by delivering written notice of such termination (the
“Termination Notice”) to Landlord at any time on or after such date but prior to
the Commencement Date with such termination being effective 30 days after
Landlord’s receipt of the Termination Notice; provided however, if the
Commencement Date occurs within such 30 day period, the Termination Notice shall
be deemed null and void. If Landlord incurs an Unavoidable Delay in connection
with Landlord’s Substantial Completion of the Tenant Improvements due to any
delay in the issuance of any permits or in connection with any governmental
inspections of the Tenant Improvements, Landlord will send Tenant written notice
of such Unavoidable Delay within 2 business days after Landlord obtains actual
knowledge of such Unavoidable Delay. If Landlord fails to send such notice to
Tenant within such 2 business day period, then the delay will not be treated as
an Unavoidable Delay until the day on which Landlord sends such notice to
Tenant.
     Section 2.3 Payment of Rent. Tenant shall pay to Landlord, without notice
or demand, and without any set-off, counterclaim, abatement or deduction
whatsoever, except as may be expressly set forth in this Lease, in lawful money
of the United States by wire transfer of funds or by check, (i) Fixed Rent in
equal monthly installments, in advance, on the first day of

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each month during the Term, commencing on the Commencement Date, and
(ii) Additional Rent, at the times and in the manner set forth in this Lease.
The foregoing and any other provision of this Lease to the contrary
notwithstanding, Landlord hereby waives Tenant’s obligation to pay (a) Fixed
Rent for the entire Premises for the 3 month period that begins on the
Commencement Date; and (b) Fixed Rent for Suite 4A for the 6 month period that
begins on the Commencement Date. Nothing herein contained shall be deemed to
diminish or relieve Tenant of its obligation to pay in accordance with the terms
of this Lease all other sums owed by Tenant to Landlord under the Lease (other
than Base Rent for the aforementioned periods).
     Section 2.4 First Month’s Rent. Tenant shall pay one month’s Fixed Rent
upon the execution of this Lease.
ARTICLE 3
USE AND OCCUPANCY
     Section 3.1 Permitted Uses. Tenant shall use and occupy the Premises for
the Permitted Uses and for no other purpose. Tenant shall not use or occupy or
permit the use or occupancy of any part of the Premises in a manner constituting
a Prohibited Use. If Tenant uses the Premises for a purpose constituting a
Prohibited Use, violating any Requirement, or causing the Building to be in
violation of any Requirement, then Tenant shall promptly discontinue such use
upon notice of such violation. Tenant, at its expense, shall procure and at all
times maintain and comply with the terms and conditions of all licenses and
permits required for the lawful conduct of the Permitted Uses in the Premises,
other than with respect to those licenses and permits that Landlord is
responsible for obtaining and maintaining.
     Section 3.2 Parking Facilities. Tenant shall have the right to use 3.98
parking spaces per 1,000 rentable square feet in the Premises for no additional
Rent (except for Additional Rent payable in accordance with Article 7 below)
during the Term and any extension thereof (except as set forth in Section 4 of
Rider No. 1–Extension Option to the contrary). Parking spaces shall be provided
on an unreserved basis in common with other Building tenants. Notwithstanding
the foregoing, Tenant acknowledges that Landlord may temporarily relocate, or
specifically designate the location of, Tenant’s parking spaces from time to
time as a result of emergencies or repair and maintenance work. Tenant agrees
that it and its employees shall observe reasonable safety precautions in the use
of the parking structure and surface lots, and shall at all times abide by all
reasonable rules and regulations promulgated by Landlord, (or any parking
operator selected by Landlord) governing the use of the parking structure and
surface lots. It is understood and agreed that Landlord does not assume any
responsibility for any damage or loss to any automobiles parked in the parking
structure or surface lots or to any personal property located therein, or for
any injury sustained by any person in or about the parking structure or surface
lots. Any provision of this Lease to the contrary notwithstanding, Landlord and
Tenant acknowledges that the Building parking facilities were designed to
accommodate approximately 3.98 parking spaces per 1,000 rentable square feet in
the Building and that Tenant might have a need for more than 3.98 parking spaces
per 1,000 rentable square feet in the Premises. If Tenant notifies Landlord that
Tenant desires more than 3.98 parking spaces per 1,000 rentable square feet in
the Premises or if Landlord determines on its own that Tenant is consistently
using more

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than 3.98 parking spaces per 1,000 rentable square feet in the Premises,
Landlord have the right to attempt to accommodate Tenant’s parking needs, at
Tenant’s expense, by implementing such parking policies and procedures as
Landlord determines from time to time to be reasonably necessary to accommodate
the parking needs of Tenant and of the other tenants at the Building including,
for example, restriping all or some of the parking areas; specifically
designating the location of Tenant’s parking spaces (provided, however, if
Landlord specifically designates the location of Tenant’s parking spaces, the
percentage of Tenant’s total parking spaces that are located in the parking
garage shall equal or exceed the percentage of all parking spaces at the
Building that are in the parking garage. Thus, if 70% of the Building’s parking
spaces are located in the parking garage, then at least 70% of Tenant’s
designated spaces must be in the parking garage).
ARTICLE 4
CONDITION OF THE PREMISES
     Section 4.1 Condition. Tenant agrees (a) to accept possession of the
Premises upon Substantial Completion of the Premises in accordance with the
terms of the Work Letter attached hereto as Exhibit C, and (b) except for the
Tenant Improvements described in the Work Letter, that Landlord has no
obligation to perform any work, supply any materials, incur any expense or make
any alterations or improvements to prepare the Premises for Tenant’s occupancy.
Tenant’s occupancy of any part of the Premises shall be conclusive evidence, as
against Tenant, that (i) Landlord has Substantially Completed any work to be
performed by Landlord under this Lease, (ii) Tenant has accepted possession of
the Premises in its then current condition and (iii) at the time such possession
was taken, the Premises and the Building were in a good and satisfactory
condition as required by this Lease.
     Section 4.2 Landlord’s Contribution. [Intentionally omitted]
     Section 4.3 Existing Furnishings. Tenant acknowledges that as of the
Commencement Date, the Premises contains or will contain certain furniture,
fixtures and equipment, including, without limitation, the furniture described
on Exhibit G-Existing Furnishings to this Lease (the “Existing Furnishings”).
Tenant shall have the right to use the Existing Furnishings throughout the Term
and any extension thereof, provided that (i) Tenant shall maintain he Existing
Furnishings in good condition and repair at Tenant’s expense, (ii) the Existing
Furnishing shall at all times remain Landlord’s property and shall be during the
Term, (iii) at no time shall Tenant remove any of the Existing Furnishings from
the Premises, and (iv) Tenant shall be surrender the Existing Furnishings to
Landlord upon the expiration or sooner termination of this Lease in good order
and repair, reasonable wear and tear excepted. Within thirty (30) days after
written demand therefor, Tenant shall pay or reimburse Landlord for all personal
property, use and other taxes payable in connection with the Existing
Furnishings.
     Section 4.3 Tenant Access. Subject to the provisions of this paragraph,
Tenant will be allowed to enter into the Premises prior to the Commencement Date
so that Tenant can complete through Tenant’s contractor or vendor the cabling of
telephone, computer, security systems and specialized office equipment, at the
same time that Landlord’s contractors are working in the the

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Premises. Any person granted access on behalf of Tenant pursuant to this
paragraph shall comply with all reasonable requirements that Landlord and
Contractor may impose and shall strictly observe all rules and regulations
promulgated by Contractor and/or Landlord relating to the job site, including
without limitation those relating to safety. If required by Landlord, each
person granted access shall sign a release and waiver of liability form as
reasonably required by Landlord. Tenant shall have the insurance required
pursuant to the Lease in full force and effect (and naming Landlord and any
construction supervisor as additional insureds thereunder) prior to entering the
Building and/or the Premises, and all relevant terms and conditions of this
Lease (excluding the payment of Fixed Rent) shall be fully applicable to
Tenant’s early access of the Building and/or the Premises. Tenant shall
indemnify and hold Landlord and Contractor harmless from and against any cost,
damage, claim, liability or expense (including reasonable attorneys’ fees)
arising out of or in connection with the entry into, or activities at, the
Building and/or the Premises by Tenant and all of Tenant’s employees, agents,
contractors, subcontractors and invitees. Any delay in the construction of the
Tenant Improvements which results from the entry into the Building and/or the
Premises by Tenant or Tenant’s employees, agents, contractors, subcontractors or
invitees or their activities in the Building and/or the Premises, shall
constitute a Tenant Delay. The foregoing license to enter is conditioned upon
Tenant’s workmen and mechanics working in harmony and not interfering with the
Contractor or with any other tenants or their contractors. Contractor shall use
commercially reasonable efforts to facilitate and coordinate with Tenant’s
vendors and contractors. If, at any time, such entry shall cause disharmony or
interference therewith, the license granted by the terms of this paragraph may
be withdrawn by Landlord on twenty-four hours notice to Tenant’s Representative.
Landlord shall not be liable in any way for any injury, loss or damage which may
occur to any of the Tenant’s installation so made, the same being solely at
Tenant’s risk.
ARTICLE 5
ALTERATIONS
     Section 5.1 Tenant’s Alterations.
          (a) Tenant shall not make any alterations, additions or other physical
changes in or about the Premises (collectively, “Alterations”), other than
(A) decorative Alterations such as painting, wall coverings and floor coverings
and (B) Alterations that cost less than $25,000 in the aggregate for a single
project and that do not require the issuance of any building or other permit
(collectively, “Decorative Alterations”), without Landlord’s prior consent,
which consent shall not be unreasonably withheld if such Alterations (i) are
non-structural and do not affect any Building Systems, (ii) affect only the
Premises and are not visible from outside of the Premises, (iii) do not affect
the non-residential use permit issued for the Building or the Premises, and
(iv) do not violate any Requirement.
          (b) Plans and Specifications. Prior to making any Alterations, Tenant,
at its expense, shall (i) submit to Landlord for its approval, detailed plans
and specifications (“Plans”) of each proposed Alteration (other than Decorative
Alterations), and with respect to any Alteration affecting any Building System,
evidence that the Alteration has been designed by, or

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reviewed and approved by, Landlord’s designated engineer for the affected
Building System, (ii) obtain all permits, approvals and certificates required by
any Governmental Authorities, (iii) furnish to Landlord duplicate original
policies or certificates of worker’s compensation (covering all persons to be
employed by Tenant, and Tenant’s contractors and subcontractors in connection
with such Alteration) and commercial general liability (including property
damage coverage) insurance and Builder’s Risk coverage (as described in
Article 11) all in such form, with such companies, for such periods and in such
amounts as Landlord may reasonably require, naming Landlord, Landlord’s Agent,
any Lessor and any Mortgagee as additional insureds, and (iv) furnish to
Landlord reasonably satisfactory evidence of Tenant’s ability to complete and to
fully pay for such Alterations (other than Decorative Alterations). Tenant shall
give Landlord a reasonably detailed description of any Decorative Alteration
made at the Premises within seven (7) days after Landlord’s request therefor.
          (c) Governmental Approvals. Tenant, at its expense, shall, as and when
required, promptly obtain certificates of partial and final approval of such
Alterations required by any Governmental Authority and shall furnish Landlord
with copies thereof, together with “as-built” Plans for such Alterations and, if
Tenant engages the services of an architect (other than Tenant’s in-house
architect(s)) in connection with the Alterations, prepared on an AutoCAD
Computer Assisted Drafting and Design System (or such other system or medium as
Landlord may accept), using naming conventions issued by the American Institute
of Architects in June, 1990 (or such other naming conventions as Landlord may
accept) and magnetic computer media of such record drawings and specifications
translated in DFX format or another format acceptable to Landlord.
     Section 5.2 Manner and Quality of Alterations. All Alterations shall be
performed (a) in a good and workmanlike manner and free from defects,
(b) substantially in accordance with the Plans, and by contractors approved by
Landlord, and (c) in compliance with all Requirements, the terms of this Lease
and all construction procedures and regulations then prescribed by Landlord. All
materials and equipment shall be of first quality and at least equal to the
applicable standards for the Building then established by Landlord, and no such
materials or equipment (other than Tenant’s Property) shall be subject to any
lien or other encumbrance.
     Section 5.3 Removal of Tenant’s Property. Tenant’s Property shall remain
the property of Tenant and Tenant may remove the same at any time on or before
the Expiration Date. If, at the time that Landlord approves any Specialty
Alterations, Landlord informs Tenant that Tenant must remove such Specialty
Alterations on or prior to the Expiration Date, then Tenant shall, at Tenant’s
expense, remove such Specialty Alterations and close up any slab penetrations in
the Premises on or prior to the Expiration Date. Landlord will not require
Tenant to remove any Specialty Alterations and slab penetrations constructed or
installed by Landlord as part of the initial Tenant Improvements at the
Premises. Tenant shall repair and restore, in a good and workmanlike manner, any
damage to the Premises or the Building caused by Tenant’s removal of any
Specialty Alterations or Tenant’s Property or by the closing of any slab
penetrations, and upon default thereof, Tenant shall reimburse Landlord for
Landlord’s cost of repairing and restoring such damage. Any Specialty
Alterations or Tenant’s Property not so removed shall be deemed abandoned and
Landlord may remove and dispose of same, and repair and restore any damage
caused thereby, at Tenant’s cost and without accountability to Tenant.

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All other Alterations shall become Landlord’s property upon termination of this
Lease. Landlord and Tenant agree that none of the initial Tenant Improvements
(as defined in Exhibit C) are Specialty Alterations nor shall Tenant be required
to remove any of the initial Tenant Improvements upon the expiration or earlier
termination of this Lease.
     Section 5.4 Mechanic’s Liens. Tenant, at its expense, shall discharge any
lien or charge recorded or filed against the Real Property in connection with
any work done or claimed to have been done by or on behalf of, or materials
furnished or claimed to have been furnished to, Tenant, within 10 days after
Tenant’s receipt of notice thereof by payment, filing the bond required by law
or otherwise in accordance with law.
     Section 5.5 Labor Relations. Tenant shall not employ, or permit the
employment of, any contractor, mechanic or laborer, or permit any materials to
be delivered to or used in the Building, if, in Landlord’s sole judgment, such
employment, delivery or use will interfere or cause any conflict with other
contractors, mechanics or laborers engaged in the construction, maintenance or
operation of the Building by Landlord, Tenant or others. If such interference or
conflict occurs, upon Landlord’s request, Tenant shall cause all contractors,
mechanics or laborers causing such interference or conflict to leave the
Building immediately.
     Section 5.6 Tenant’s Costs. Tenant shall pay promptly to Landlord, upon
demand, all out-of-pocket costs actually incurred by Landlord in connection with
Tenant’s Alterations, including costs incurred in connection with (a) Landlord’s
review of the Alterations (including review of requests for approval thereof)
and (b) the provision of Building personnel during the performance of any
Alteration, to operate elevators or otherwise to facilitate Tenant’s
Alterations. In addition, if Tenant’s Alterations cost more than $25,000 and
(i) Landlord and Tenant agree that Landlord will supervise the construction of
such Alterations, Tenant shall pay to Landlord, upon demand, an administrative
fee in an amount equal to 5% of the total cost of such Alterations; and
(ii) Landlord does not supervise the construction of such Alterations, Tenant
shall pay to Landlord, upon demand, an administrative fee in an amount equal to
2 1/2% of the total cost of such Alterations.
     Section 5.7 Tenant’s Equipment. Tenant shall provide notice to Landlord
prior to moving any heavy machinery, heavy equipment, freight, bulky matter or
fixtures (collectively, “Equipment”) into or out of the Building and shall pay
to Landlord any costs actually incurred by Landlord in connection therewith. If
such Equipment requires special handling, Tenant agrees (a) to employ only
persons holding all necessary licenses to perform such work, (b) all work
performed in connection therewith shall comply with all applicable Requirements
and (c) such work shall be done only during hours designated by Landlord.
     Section 5.8 Legal Compliance. The approval of Plans, or consent by Landlord
to the making of any Alterations, does not constitute Landlord’s representation
that such Plans or Alterations comply with any Requirements. Landlord shall not
be liable to Tenant or any other party in connection with Landlord’s approval of
any Plans, or Landlord’s consent to Tenant’s performing any Alterations. If any
Alterations made by or on behalf of Tenant, require Landlord to make any
alterations or improvements to any part of the Building in order to comply with
any

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Requirements, Tenant shall pay all costs and expenses incurred by Landlord in
connection with such alterations or improvements.
     Section 5.9 Floor Load. Tenant shall not place a load upon any floor of the
Premises that exceeds 80 pounds per square foot “live load”. Landlord reserves
the right to reasonably designate the position of all Equipment which Tenant
wishes to place within the Premises, and to place limitations on the weight
thereof.
ARTICLE 6
REPAIRS
     Section 6.1 Landlord’s Repair and Maintenance. Landlord shall operate,
maintain and, except as provided in Section 6.2 hereof, make all necessary
repairs (both structural and nonstructural) to (i) the Building Systems, and
(ii) the Common Areas, in conformance with standards applicable to Comparable
Buildings.
     Section 6.2 Tenant’s Repair and Maintenance. Tenant shall promptly, at its
expense and in compliance with Article 5, make all nonstructural repairs to the
Premises and the fixtures, equipment and appurtenances therein (including any
supplemental HVAC (other than as set forth in Section 6.4(b) to the contrary
with respect to the Supplemental HVAC Units), specialty lighting or Specialty
Alteration) (collectively “Tenant Fixtures”) as and when needed to preserve the
Premises in good working order and condition, except for reasonable wear and
tear and damage for which Tenant is not responsible. All damage to the Building
or to any portion thereof, or to any Tenant Fixtures requiring structural or
nonstructural repair caused by or resulting from any act, omission, negligence
or willful misconduct on the part of a Tenant Party or during the moving of
Tenant’s Property or Equipment into, within or out of the Premises by a Tenant
Party, shall be repaired at Tenant’s expense by (i) Tenant, if the required
repairs are nonstructural in nature and do not affect any Building System, or
(ii) Landlord, if the required repairs are structural in nature, involve
replacement of exterior window glass or affect any Building System. All Tenant
repairs shall be of good quality utilizing new construction materials.
     Section 6.3 Restorative Work. Landlord reserves the right to make all
changes, alterations, additions, improvements, repairs or replacements to the
Building and Building Systems, including changing the arrangement or location of
entrances or passageways, doors and doorways, corridors, elevators, stairs,
toilets or other Common Areas (collectively, “Restorative Work”), as Landlord
deems necessary or desirable, and to take all material into the Premises
required for the performance of such Restorative Work provided that (a) the
level of any Building service shall not decrease in any material respect from
the level required of Landlord in this Lease as a result thereof (other than
temporary changes in the level of such services during the performance of any
such Restorative Work) and (b) Tenant is not deprived of reasonable access to
the Premises. Landlord shall use reasonable efforts to minimize interference
with Tenant’s use and occupancy of the Premises during the performance of such
Restorative Work. There shall be no Rent abatement or allowance to Tenant for a
diminution of rental value, no actual or constructive eviction of Tenant, in
whole or in part, no relief from any of Tenant’s other

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obligations under this Lease, and no liability on the part of Landlord by reason
of inconvenience, annoyance or injury to business arising from Landlord, Tenant
or others performing, or failing to perform, any Restorative Work, unless
Landlord has not used reasonable efforts to minimize interference with Tenant’s
use and occupancy of the Premises during the performance of such Restorative
Work and such failure results in Tenant’s use and enjoyment of the Premises
being substantially interfered with.
     Section 6.4 Supplemental HVAC System.
          (a) (i) At any time during the Term, Tenant shall have the right to
elect to use the supplemental HVAC units and the equipment related thereto
located at the Premises on the date of this Lease (collectively, the
“Supplemental HVAC Units”). The foregoing notwithstanding, prior to using any
Supplemental HVAC Units, Tenant shall provide Landlord with all equipment plans
and specifications relating to the loads that would be imposed upon the
Supplemental HVAC System (hereinafter defined), and Landlord shall have the
right to deny Tenant use of the Supplemental HVAC Units if Landlord determines
the Supplemental HVAC System will not or might not be adequate to meet Tenant’s
demand. If Landlord approves of Tenant’s use of the Supplemental HVAC Units,
Landlord’s engineer or contractor will activate Tenant’s use of the Supplemental
HVAC Units. The minimum period for which Tenant can elect to use a Supplemental
HVAC Unit is thirty (30) days and Tenant shall provide Landlord with at least
thirty (30) days prior written notice if Tenant elects at any time to
discontinue using any Supplemental HVAC Unit.
               (ii) If Tenant does not use the Supplemental HVAC System,
Landlord shall have the right to lock-off the Supplemental HVAC Units and/or to
remove the Supplemental HVAC Units from the Premises at Landlord’s expense.
          (b) (i) Except with respect to emergency repairs, Landlord will
maintain, repair and make any capital repairs or replacements of the
Supplemental HVAC Units.
               (ii) If any Supplemental HVAC Units require emergency repairs,
Tenant shall send Landlord prompt written notice of such emergency and Tenant
shall make arrangements for such repairs directly with Landlord’s Supplemental
HVAC Unit contractor. Landlord will provide Tenant with written notice from time
to time of the name and telephone number of Landlord’s Supplemental HVAC Unit
contractor.
               (iii) Landlord will maintain, repair and make any capital repairs
or replacements to any equipment relating to the operation of the Supplemental
HVAC Units that is not located at the Premises, which shall include the cooling
tower(s) located on the roof of the Building that generally serve(s) the
supplemental HVAC units presently located in the Building (collectively, the
“Supplemental Common Equipment”). The Supplemental HVAC Units and the
Supplemental Common Equipment are together called the “Supplemental HVAC
System.”
          (c) Beginning on the date on which Tenant commences to use the
Supplemental HVAC System and continuing thereafter during the Term for so long
as Tenant has elected to use any Supplemental HVAC Unit:

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               (i) Tenant shall pay all costs incurred by Landlord and/or Tenant
during the Term in connection with the ordinary maintenance and emergency and
non-emergency repairs and replacements to the Supplemental HVAC Units (whether
for parts, labor, warranty coverage or otherwise) (the “Supplemental Maintenance
Costs”). If Tenant directly incurs any Supplemental Maintenance Costs, Tenant
shall pay such Supplemental Maintenance Costs as and when due and owing to the
applicable Supplemental HVAC Unit service provider.
               (ii) Tenant shall pay Tenant’s Supplemental Share of all costs
incurred by Landlord in connection with the ordinary maintenance and emergency
and non-emergency repairs and replacements of the Supplemental Common Equipment
(whether for parts, labor, warranty coverage or otherwise) (the “Supplemental
Common Costs”). “Tenant’s Supplemental Share” means a fraction, the numerator of
which shall be the tonnage rating of the Supplemental HVAC Units in the Premises
and the denominator of which shall be the tonnage rating of all supplemental
HVAC units in the Building (exclusive of any such units that are owned by a
tenant of the Building) that any tenant of the Building from time to time elects
to use.
               (iii) In addition to the Supplemental Maintenance Costs and
Tenant’s Supplemental Share, Tenant shall pay to Landlord the monthly
electricity charge for the Supplemental HVAC System as reasonably established
from time to time by Landlord (the “Supplemental Charge”). The current
Supplemental Charge is $70 per ton per month.
               (iv) All sums payable by Tenant to Landlord under this Section
shall constitute Additional Rent and shall be due and payable to Landlord within
thirty (30) days after Landlord sends Tenant an invoice therefor. Landlord will
be entitled to an administrative charge of ten percent (10%) of all costs
payable by Tenant under this Section, other than the Supplemental Charge (the
“Supplemental Administrative Fee”).
          (d) Landlord shall have no liability arising from any failure of the
Supplemental HVAC System or any component thereof to operate properly or at all
at any time including, without limitation, no liability if any such failure
results in the Premises not being reasonably comfortable or useable at all, any
of Tenant’s equipment not functioning or not functioning fully or properly,
Tenant missing or being delayed in meeting any business or other deadlines, or
Tenant incurring any other costs or damages.
          (e) Tenant shall cooperate with Landlord and shall abide by the rules
and regulations which Landlord may reasonably prescribe for the proper
functioning and protection of the Supplemental HVAC System.
     Section 6.5 Emergency Power System.
          (a) The Building is equipped with an emergency power generator and an
uninterrupted power supply system (collectively, the “Emergency Power System”).
At any time during the Term, Tenant shall have the right to elect to connect
certain equipment at the Premises to the Emergency Power System. The foregoing
notwithstanding, prior to connecting any equipment to the Emergency Power
System, Tenant shall provide Landlord with all equipment plans and
specifications relating to the loads that would be imposed upon the Emergency
Power

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System, and Landlord shall have the right to deny Tenant use of the Emergency
Power System to the extent that Landlord determines that Tenant’s usage might or
would exceed the usage allotment that Landlord has determined for the Premises.
If Landlord approves of Tenant’s use of the Emergency Power System, at
Landlord’s election, either Landlord’s contractor will connect Tenant’s approved
equipment to the Emergency Power System or Tenant’s contractor will connect
Tenant’s approved equipment to the Emergency Power System.
          (b) Landlord will operate, maintain, repair and make any capital
repairs or replacements to the Emergency Power System.
          (c) (i) If Tenant elects to connect any equipment to the Emergency
Power System, Tenant shall pay to Landlord Tenant’s EPS Share of all costs and
expenses incurred by Landlord on or after the date on which such equipment is
connected to the Emergency Power System in connection with the operation,
maintenance, repair and replacement of the Emergency Power System (“EPS Costs”).
“Tenant’s EPS Share” means a fraction, the numerator of which shall be the
potential load (as reasonably determined by Landlord) of Tenant’s equipment that
is connected to the Emergency Power System and the denominator of which shall be
the potential load (as reasonably determined by Landlord) of all equipment that
tenants of the Building from time to time elect to have connected to the
Emergency Power System.
               (ii) All sums payable by Tenant to Landlord under this Section
shall constitute Additional Rent and shall be due and payable to Landlord within
thirty (30) days after Landlord sends Tenant an invoice therefor. Landlord will
be entitled to an administrative charge of ten percent (10%) of all costs
payable by Tenant under this Section (the “EPS Fee”).
          (d) Landlord shall have no liability arising from any failure of the
Emergency Power System or any component thereof to operate properly or at all at
any time including, without limitation, no liability if any such failure results
in any of Tenant’s equipment not functioning or not functioning fully or
properly, Tenant losing any data, Tenant missing or being delayed in meeting any
business or other deadlines, or Tenant incurring any other costs or damages.
          (e) Tenant shall cooperate with Landlord and shall abide by the rules
and regulations which Landlord may reasonably prescribe for the proper
functioning and protection of the Emergency Power System.
ARTICLE 7
INCREASES IN TAXES AND OPERATING EXPENSES
          Section 7.1 Definitions. For the purposes of this Article 7, the
following terms shall have the meanings set forth below:
          (a) “Assessed Valuation” shall mean the amount for which the Real
Property is assessed by the County Assessor of Fairfax County for the purpose of
imposition of Taxes.

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          (b) “Base Operating Expenses” shall mean the Operating Expenses for
the Base Year.
          (c) “Base Taxes” shall mean the Taxes payable on account of the Base
Year.
          (d) “Comparison Year” shall mean any calendar year commencing
subsequent to the Base Year.
          (e) “Operating Expenses” shall mean the aggregate of all costs and
expenses paid or incurred by or on behalf of Landlord in connection with the
ownership, operation, repair and maintenance of the Real Property, including
(i) capital improvements only if such capital improvement either (A) is
reasonably intended to result in a reduction in Operating Expenses (as for
example, a labor-saving improvement) provided, the amount included in Operating
Expenses in any Comparison Year shall not exceed an amount equal to the savings
reasonably anticipated to result from the installation and operation of such
improvement, and/or (B) is made during any Comparison Year in compliance with
Requirements, (ii) reasonable rent for the management office, if any, in the
Building, and (iii) all costs relating to the ownership, operation, repair and
maintenance of the Building and any parking facilities serving the Building.
Such capital improvements shall be amortized (with interest at the Base Rate) on
a straight-line basis over its useful life as Landlord shall reasonably
determine, and the amount included in Operating Expenses in any Comparison Year
shall be equal to the annual amortized amount. Operating Expenses shall not
include any Excluded Expenses. If during all or part of the Base Year or any
Comparison Year, Landlord shall not furnish any particular item(s) of work or
service (which would otherwise constitute an Operating Expense) to any leasable
portions of the Building for any reason, then, for purposes of computing
Operating Expenses for such period, the amount included in Operating Expenses
for such period shall be increased by an amount equal to the costs and expenses
that would have been reasonably incurred by Landlord during such period if
Landlord had furnished such item(s) of work or service to such portion of the
Building. In determining the amount of Operating Expenses for the Base Year or
any Comparison Year, if less than 95% of the Building rentable area is occupied
by tenants at any time during any such Base Year or Comparison Year, Operating
Expenses that vary with the Building occupancy level shall be determined for
such Base Year or Comparison Year to be an amount equal to the like expenses
which would normally be expected to be incurred had such occupancy been 95%
throughout such Base Year or Comparison Year.
          (f) “Statement” shall mean a reasonably detailed statement containing
a comparison of (i) the Taxes payable for the Base Year and for any Comparison
Year, or (ii) the Base Operating Expenses and the Operating Expenses payable for
any Comparison Year.
          (g) “Taxes” shall mean (i) all real estate taxes, assessments, sewer
and water rents, rates and charges and other governmental levies, impositions or
charges, whether general, special, ordinary, extraordinary, foreseen or
unforeseen, which may be assessed, levied or imposed upon all or any part of the
Real Property, and (ii) all expenses (including reasonable attorneys’ fees and
disbursements and experts’ and other witnesses’ fees) incurred in contesting any
of the foregoing or the Assessed Valuation of the Real Property. Taxes shall not
include (x) interest or penalties incurred by Landlord as a result of Landlord’s
late payment of Taxes, or (y)

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franchise, transfer, gift, inheritance, estate or net income taxes imposed upon
Landlord. For purposes hereof, “Taxes” for any calendar year shall be deemed to
be the Taxes which are assessed, levied or imposed for such calendar year
regardless of when due or paid. If Landlord elects to pay any assessment in
annual installments, then (i) such assessment shall be deemed to have been so
divided and to be payable in the maximum number of installments permitted by
law, and (ii) there shall be deemed included in Taxes for each Comparison Year
the installments of such assessment becoming payable during such Comparison
Year, together with interest payable during such Comparison Year on such
installments and on all installments thereafter becoming due as provided by law,
all as if such assessment had been so divided. If at any time the methods of
taxation prevailing on the Effective Date shall be altered so that in lieu of or
as an addition to the whole or any part of Taxes, there shall be assessed,
levied or imposed (1) a tax, assessment, levy, imposition or charge based on the
income or rents received from the Real Property whether or not wholly or
partially as a capital levy or otherwise, (2) a tax, assessment, levy,
imposition or charge measured by or based in whole or in part upon all or any
part of the Real Property and imposed upon Landlord, (3) a license fee measured
by the rents, or (4) any other tax, assessment, levy, imposition, charge or
license fee however described or imposed, including business improvement
district impositions then all such taxes, assessments, levies, impositions,
charges or license fees or the part thereof so measured or based shall be deemed
to be Taxes.
     Section 7.2 Tenant’s Tax Payment.
          (a) If the Taxes payable for any Comparison Year exceed the Base
Taxes, Tenant shall pay to Landlord Tenant’s Proportionate Share of such excess
(“Tenant’s Tax Payment”). For each Comparison Year, Landlord shall furnish to
Tenant a statement setting forth Landlord’s reasonable estimate of Tenant’s Tax
Payment for such Comparison Year (the “Tax Estimate”). Tenant shall pay to
Landlord on the 1st day of each month during such Comparison Year an amount
equal to 1/12 of the Tax Estimate for such Comparison Year. If Landlord
furnishes a Tax Estimate for a Comparison Year subsequent to the commencement
thereof, then (i) until the 1st day of the month following the month in which
the Tax Estimate is furnished to Tenant, Tenant shall pay to Landlord on the 1st
day of each month an amount equal to the monthly sum payable by Tenant to
Landlord under this Section 7.2 during the last month of the preceding
Comparison Year, (ii) promptly after the Tax Estimate is furnished to Tenant or
together therewith, Landlord shall give notice to Tenant stating whether the
installments of Tenant’s Tax Estimate previously made for such Comparison Year
were greater or less than the installments of Tenant’s Tax Estimate to be made
for such Comparison Year in accordance with the Tax Estimate, and (x) if there
shall be a deficiency, Tenant shall pay the amount thereof within 30 days after
demand therefor, or (y) if there shall have been an overpayment, Landlord shall
credit the amount thereof against subsequent payments of Rent due hereunder, and
(iii) on the 1st day of the month following the month in which the Tax Estimate
is furnished to Tenant, and on the 1st day of each month thereafter throughout
the remainder of such Comparison Year, Tenant shall pay to Landlord an amount
equal to 1/12 of the Tax Estimate. Notwithstanding the foregoing, Tenant shall
have no obligation to pay Tenant’s Tax Payment for the first 12 months after the
Commencement Date.

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          (b) As soon as reasonably practicable after Landlord has determined
the Taxes for a Comparison Year, Landlord shall furnish to Tenant a Statement
for such Comparison Year. If the Statement shall show that the sums paid by
Tenant under Section 7.2(a) exceeded the actual amount of Tenant’s Tax Payment
for such Comparison Year, Landlord shall credit the amount of such excess
against subsequent payments of Rent due hereunder, or if the Term has expired,
Landlord shall refund the overpayment to Tenant within 30 days after the
year-end Tax reconciliation.. If the Statement for such Comparison Year shall
show that the sums so paid by Tenant were less than Tenant’s Tax Payment for
such Comparison Year, Tenant shall pay the amount of such deficiency within
30 days after delivery of the Statement to Tenant.
          (c) Only Landlord may institute proceedings to reduce the Assessed
Valuation of the Real Property and the filings of any such proceeding by Tenant
without Landlord’s consent shall constitute an Event of Default. If the Taxes
payable for the Base Year are reduced, the Base Taxes shall be correspondingly
revised, the Additional Rent previously paid or payable on account of Tenant’s
Tax Payment hereunder for all Comparison Years shall be recomputed on the basis
of such reduction, and Tenant shall pay to Landlord within 30 days after being
billed therefor, any deficiency between the amount of such Additional Rent
previously computed and paid by Tenant to Landlord, and the amount due as a
result of such recomputations. If Landlord receives a refund of Taxes for any
Comparison Year, Landlord shall credit against subsequent payments of Rent due
hereunder, an amount equal to Tenant’s Proportionate Share of the refund, net of
any expenses incurred by Landlord in achieving such refund, which amount shall
not exceed Tenant’s Tax Payment paid for such Comparison Year. Landlord shall
not be obligated to file any application or institute any proceeding seeking a
reduction in Taxes or the Assessed Valuation. The benefit of any exemption
relating to all or any part of the Real Property shall accrue solely to the
benefit of Landlord and Taxes shall be computed without taking into account any
such exemption or abatement.
          (d) Tenant shall be responsible for any applicable occupancy or rent
tax now in effect or hereafter enacted and, if payable by Landlord, Tenant shall
promptly pay such amounts to Landlord, upon Landlord’s demand.
     Section 7.3 Tenant’s Operating Payment.
          (a) If the Operating Expenses payable for any Comparison Year exceed
the Base Operating Expenses, Tenant shall pay to Landlord Tenant’s Proportionate
Share of such excess (“Tenant’s Operating Payment”). For each Comparison Year,
Landlord shall furnish to Tenant a written statement setting forth Landlord’s
reasonable estimate of Tenant’s Operating Payment for such Comparison Year,
based upon such year’s budget (the “Estimate”). Tenant shall pay to Landlord on
the 1st day of each month during such Comparison Year an amount equal to 1/12 of
Landlord’s estimate of Tenant’s Operating Payment for such Comparison Year. If
Landlord furnishes an Estimate for a Comparison Year subsequent to the
commencement thereof, then (a) until the 1st day of the month following the
month in which the Estimate is furnished to Tenant, Tenant shall pay to Landlord
on the 1st day of each month an amount equal to the monthly sum payable by
Tenant to Landlord under this Section 7.3 during the last month of the preceding
Comparison Year, (b) promptly after the Estimate is furnished to Tenant or
together therewith, Landlord shall give notice to Tenant stating whether the
installments of

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Tenant’s Operating Payment previously made for such Comparison Year were greater
or less than the installments of Tenant’s Operating Payment to be made for such
Comparison Year in accordance with the Estimate, and (i) if there shall be a
deficiency, Tenant shall pay the amount thereof within 30 days after demand
therefor, or (ii) if there shall have been an overpayment, Landlord shall credit
the amount thereof against subsequent payments of Rent due hereunder, and (c) on
the 1st day of the month following the month in which the Estimate is furnished
to Tenant, and on the 1st day of each month thereafter throughout the remainder
of such Comparison Year, Tenant shall pay to Landlord an amount equal to 1/12 of
Tenant’s Operating Payment shown on the Estimate. Notwithstanding the foregoing,
Tenant shall have no obligation to pay Tenant’s Operating Payment for the first
12 months after the Commencement Date.
          (b) On or before May 1st of each Comparison Year, Landlord shall
furnish to Tenant a Statement for the immediately preceding Comparison Year. If
the Statement shows that the sums paid by Tenant under Section 7.3(a) exceeded
the actual amount of Tenant’s Operating Payment for such Comparison Year,
Landlord shall credit the amount of such excess against subsequent payments of
Rent due hereunder, or if the Term has expired, Landlord shall refund the
overpayment to Tenant within 30 days after the year-end Operating Expense
reconciliation. If the Statement shows that the sums so paid by Tenant were less
than Tenant’s Operating Payment for such Comparison Year, Tenant shall pay the
amount of such deficiency within 30 days after Tenant’s receipt of the
Statement.
     Section 7.4 Non-Waiver; Disputes.
          (a) Landlord’s failure to render any Statement on a timely basis with
respect to any Comparison Year shall not prejudice Landlord’s right to
thereafter render a Statement with respect to such Comparison Year or any
subsequent Comparison Year, nor shall the rendering of a Statement prejudice
Landlord’s right to thereafter render a corrected Statement for that Comparison
Year.
          (b) Each Statement sent to Tenant shall be conclusively binding upon
Tenant unless Tenant (i) pays to Landlord when due the amount set forth in such
Statement, without prejudice to Tenant’s right to dispute such Statement, and
(ii) within 60 days after such Statement is sent, sends a notice to Landlord
objecting to such Statement and specifying the reasons therefor. Tenant agrees
that Tenant will not employ, in connection with any dispute under this Section,
any person who is to be compensated in whole or in part, on a contingency fee
basis. If the parties are unable to resolve any dispute as to the correctness of
such Statement within 30 days following such notice of objection, either party
may refer the issues raised to a national firm reasonably acceptable to the
other with at least 200 certified public accountants, provided that the selected
firm does not provide accounting or consulting services to either party and does
not otherwise have an affiliation or business relationship with either party and
the individual auditor’s area of expertise includes lease expense analysis.
Notwithstanding the immediately preceding sentence, the parties hereby agree
that any of the “Big Five” public accounting firms shall be acceptable, provided
such firm has not served as an accountant for Landlord or Tenant within the
preceding 12 month period. The decision of the agreed upon accountants shall be
conclusively binding upon Landlord and Tenant. In connection therewith, Tenant
and such accountants shall execute and deliver to Landlord a confidentiality
agreement, in

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form and substance reasonably satisfactory to Landlord, whereby such parties
agree not to disclose to any third party any of the information obtained in
connection with such review. Tenant shall pay the fees and expenses relating to
such procedure, unless such accountants determine that Landlord overstated
Operating Expenses by more than 5% for such Comparison Year, in which case
Landlord shall pay such fees and expenses.
     Section 7.5 Final Year of Term. If the Expiration Date occurs on a date
other than December 31st, any Additional Rent under this Article 7 for the
Comparison Year in which such Expiration Date occurs shall be apportioned on the
basis of the number of days in the period from January 1st to the Expiration
Date. Upon the expiration or earlier termination of this Lease, any Additional
Rent under this Article 7 shall be paid or adjusted within 30 days after
submission of the Statement.
     Section 7.6 No Reduction in Rent. In no event shall any decrease in
Operating Expenses or Taxes in any Comparison Year below the Base Operating
Expenses or Base Taxes, as the case may be, result in a reduction in the Fixed
Rent or any other component of Additional Rent payable hereunder.
     Section 7.7 Cap on Controllables. Any provision of this Lease to the
contrary notwithstanding, Landlord and Tenant agree as follows:
          (a) For purposes of calculating Tenant’s liability for payment of
Tenant’s Share of Controllable Operating Expenses, Controllable Operating
Expenses for any calendar year after the Base Year shall be deemed not to have
exceeded the Cap. The “Cap” means the product of the Controllable Operating
Expenses incurred during the Base Year multiplied by 105% (compounded annually
for each calendar year (or partial calendar year) after the Base Year for which
the Cap is being determined). For example, if the Controllable Operating
Expenses incurred during the Base Year were $10,000, then the Cap would be
$10,500 (i.e., $10,000 x 105%) for the first calendar year after the Base Year;
$11,025 (i.e., $10,500 x 105%) for the second calendar year after the Base Year;
$11,576.25 (i.e., $11,025 X 105%) for the third calendar year after the Base
Year; and so on.
          (b) “Controllable Operating Expenses” means all Operating Expenses
other than those incurred for: (i) property management fees; (ii) costs incurred
to comply with laws; (iii) [Intentionally Omitted]; (iv) property owner
association dues and charges, (v) insurance premiums, (vi) utility costs, (vii)
[Intentionally Omitted], and (viii) costs incurred for ice and snow removal.
          (c) All payment calculations under this Article shall be prorated for
any partial calendar years during the Term and all calculations shall be based
upon Operating Expenses as grossed-up in accordance with the terms of this
Lease.
          (d) Taxes are not included in Operating Expenses and, therefore,
Tenant’s Tax Payments shall not be affected by the provisions of this Section.

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ARTICLE 8
REQUIREMENTS OF LAW
     Section 8.1 Compliance with Requirements.
          (a) Tenant’s Compliance. Tenant, at its expense, shall comply with all
Requirements applicable to Tenant’s use and occupancy of the Premises; provided,
however, that Tenant shall not be obligated to comply with any Requirements
requiring any structural alterations to the Building unless the application of
such Requirements arises from (i) the specific manner and nature of Tenant’s use
or occupancy of the Premises, as distinct from general office use,
(ii) Alterations made by Tenant, or (iii) a breach by Tenant of any provisions
of this Lease. Any such repairs or alterations shall be made at Tenant’s expense
by Tenant (1) in compliance with Article 5 if such repairs or alterations are
nonstructural and do not affect any Building System, or (2) by Landlord if such
repairs or alterations are structural or affect any Building System. If Tenant
obtains knowledge of any failure to comply with any Requirements applicable to
the Premises, Tenant shall give Landlord prompt notice thereof.
          (b) Hazardous Materials. Tenant shall not cause or permit (i) any
Hazardous Materials to be brought into the Building, (ii) the storage or use of
Hazardous Materials in any manner other than in full compliance with any
Requirements, or (iii) the escape, disposal or release of any Hazardous
Materials within or in the vicinity of the Building. Nothing herein shall be
deemed to prevent Tenant’s use of any Hazardous Materials customarily used in
the ordinary course of office work, provided such use is in accordance with all
Requirements. Tenant shall be responsible, at its expense, for all matters
directly or indirectly based on, or arising or resulting from the presence of
Hazardous Materials in the Building which is caused or permitted by a Tenant
Party. Tenant shall provide to Landlord copies of all communications received by
Tenant with respect to any Requirements relating to Hazardous Materials, and/or
any claims made in connection therewith. Landlord or its agents may perform
environmental inspections of the Premises at any time.
          (c) Landlord’s Compliance. Landlord shall comply with (or cause to be
complied with) all Requirements applicable to the Real Property which are not
the obligation of Tenant, to the extent that non-compliance would materially
impair Tenant’s use and occupancy of the Premises for the Permitted Uses.
          (d) Landlord’s Insurance. Tenant shall not cause or permit any action
or condition that would (i) invalidate or conflict with Landlord’s insurance
policies, (ii) violate applicable rules, regulations and guidelines of the Fire
Department, Fire Insurance Rating Organization or any other authority having
jurisdiction over the Building, (iii) cause an increase in the premiums of fire
insurance for the Building over that payable with respect to Comparable
Buildings, or (iv) result in Landlord’s insurance companies’ refusing to insure
the Building or any property therein in amounts and against risks as reasonably
determined by Landlord. If fire insurance premiums increase as a result of
Tenant’s failure to comply with the provisions of this

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Section 8.1, Tenant shall promptly cure such failure and shall reimburse
Landlord for the increased fire insurance premiums paid by Landlord as a result
of such failure by Tenant.
     Section 8.2 Fire and Life Safety. Landlord has installed a fire alarm and
life safety system in the Premises as part of its completion of the Building
shell work. Any modifications to the fire alarm and life safety systems
installed as part of the Building shell work required by Tenant or completed as
part of the Tenant Improvements shall be at Tenant’s sole cost and expense,
except with respect to any such modifications that are part of the Tenant
Improvements. If the Fire Insurance Rating Organization or any Governmental
Authority or any of Landlord’s insurers requires or recommends any modifications
and/or alterations be made or any additional equipment be supplied in connection
with the sprinkler system or fire alarm and life-safety system serving the
Building by reason of Tenant’s business, any Alterations performed by Tenant or
the location of the partitions, Tenant’s Property, or other contents of the
Premises, Landlord (to the extent outside of the Premises) or Tenant (to the
extent within the Premises) shall make such modifications and/or Alterations,
and supply such additional equipment, in either case at Tenant’s expense.
ARTICLE 9
SUBORDINATION
     Section 9.1 Subordination and Attornment.
          (a) This Lease is subject and subordinate to all Mortgages and
Superior Leases, and, at the request of any Mortgagee or Lessor, Tenant shall
attorn to such Mortgagee or Lessor, its successors in interest or any purchaser
in a foreclosure sale.
          (b) If a Lessor or Mortgagee or any other person or entity shall
succeed to the rights of Landlord under this Lease, whether through possession
or foreclosure action or the delivery of a new lease or deed, then at the
request of the successor landlord and upon such successor landlord’s written
agreement to accept Tenant’s attornment and to recognize Tenant’s interest under
this Lease, Tenant shall be deemed to have attorned to and recognized such
successor landlord as Landlord under this Lease. The provisions of this
Section 9.1 are self-operative and require no further instruments to give effect
hereto; provided, however, that Tenant shall promptly execute and deliver any
instrument that such successor landlord may reasonably request (i) evidencing
such attornment, (ii) setting forth the terms and conditions of Tenant’s
tenancy, and (iii) containing such other terms and conditions as may be required
by such Mortgagee or Lessor, provided such terms and conditions do not increase
the Rent, materially increase Tenant’s obligations or materially and adversely
affect Tenant’s rights under this Lease. Upon such attornment this Lease shall
continue in full force and effect as a direct lease between such successor
landlord and Tenant upon all of the terms, conditions and covenants set forth in
this Lease except that such successor landlord shall not be
               (i) liable for any act or omission of Landlord (except to the
extent such act or omission continues beyond the date when such successor
landlord succeeds to Landlord’s interest and Tenant gives notice of such act or
omission);

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               (ii) subject to any defense, claim, counterclaim, set-off or
offsets which Tenant may have against Landlord;
               (iii) bound by any prepayment of more than one month’s Rent to
any prior landlord;
               (iv) bound by any obligation to make any payment to Tenant which
was required to be made prior to the time such successor landlord succeeded to
Landlord’s interest;
               (v) bound by any obligation to perform any work or to make
improvements to the Premises except for (x) repairs and maintenance required to
be made by Landlord under this Lease, and (y) repairs to the Premises as a
result of damage by fire or other casualty or a partial condemnation pursuant to
the provisions of this Lease, but only to the extent that such repairs can
reasonably be made from the net proceeds of any insurance or condemnation
awards, respectively, actually made available to such successor landlord;
               (vi) bound by any modification, amendment, or renewal of this
Lease made without successor landlord’s consent after Tenant has notice of the
identity of the successor landlord;
               (vii) liable for the repayment of any security deposit or
surrender of any letter of credit, unless and until such security deposit
actually is paid or such letter of credit is actually delivered to such
successor landlord;
               (viii) liable for the payment of any unfunded tenant improvement
allowance, refurbishment allowance or similar obligation; or
               (ix) bound by any provisions of the Lease with respect to the
Existing Furnishings.
          (c) Tenant shall from time to time within 10 days of request from
Landlord execute and deliver any documents or instruments that may be reasonably
required by any Mortgagee or Lessor to confirm any subordination.
     Section 9.2 Mortgage or Superior Lease Defaults. Any Mortgagee may elect
that this Lease shall have priority over the Mortgage and, upon notification to
Tenant by such Mortgagee, this Lease shall be deemed to have priority over such
Mortgage, regardless of the date of this Lease. In connection with any financing
of the Real Property, Tenant shall consent to any reasonable modifications of
this Lease requested by any lending institution, provided such modifications do
not increase the Rent, materially increase the obligations, or materially and
adversely affect the rights, of Tenant under this Lease.
     Section 9.3 Tenant’s Termination Right. As long as any Superior Lease or
Mortgage exists, Tenant shall not seek to terminate this Lease by reason of any
act or omission of Landlord until (a) Tenant shall have given notice of such act
or omission to all Lessors and/or Mortgagees, and (b) a reasonable period of
time shall have elapsed following the giving of notice of such default and the
expiration of any applicable notice or grace periods (unless such act or

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omission is not capable of being remedied within a reasonable period of time),
during which period such Lessors and/or Mortgagees shall have the right, but not
the obligation, to remedy such act or omission and thereafter diligently proceed
to so remedy such act or omission. If any Lessor or Mortgagee elects to remedy
such act or omission of Landlord, Tenant shall not seek to terminate this Lease
so long as such Lessor or Mortgagee is proceeding with reasonable diligence to
effect such remedy.
     Section 9.4 Provisions. The provisions of this Article 9 shall (a) inure to
the benefit of Landlord, any future owner of the Building or the Real Property,
Lessor or Mortgagee and any sublessor thereof and (b) apply notwithstanding
that, as a matter of law, this Lease may terminate upon the termination of any
such Superior Lease or Mortgage.
     Section 9.5 Nondisturbance Agreement. Any provision of this Section to the
contrary notwithstanding, Landlord shall use reasonable efforts (but without
being obligated to commence any legal or arbitration proceeding and without the
expenditure of unreimbursed sums (other than reasonable expenses that a landlord
normally incurs in attempting to obtain a subordination, non-disturbance and
attornment agreement for its tenant, such as Landlord’s attorneys’ fees)) to
obtain for Tenant a subordination, non-disturbance and attornment agreement from
all existing and all future Mortgagees and Lessors, in the standard form
customarily employed by such Mortgagee and/or Lessor, provided that Tenant shall
have no claim against Landlord, and Landlord shall have no liability to Tenant
and the subordination provided for in this Lease shall not be affected in the
event that Landlord is unable to obtain any such agreements.
     Section 9.6 Right to Terminate. Any provision of this Lease to the contrary
notwithstanding, if Landlord does not obtain for Tenant, within 30 days after
the Effective Date (the “Delivery Period”), a subordination, non-disturbance and
attornment agreement from Landlord’s existing Mortgagee, in the standard form
customarily employed by such Mortgagee, Tenant shall have the right, as Tenant’s
sole remedy, to terminate this Lease by delivering to Landlord written notice of
such termination within the 7 day period following the Delivery Period. If
Tenant so elects to terminate this Lease, the termination shall be effective
upon Landlord’s receipt of the aforesaid notice. If Tenant fails to so terminate
this Lease, Tenant shall be deemed to have waived its right to such
subordination, non-disturbance and attornment agreement.
ARTICLE 10
SERVICES
     Section 10.1 Electricity. Subject to any Requirements or any public utility
rules or regulations governing energy consumption, Landlord shall make or cause
to be made, customary arrangements with utility companies and/or public service
companies to furnish electric current to the Premises for Tenant’s use in
accordance with Annex 1 to the Work Letter attached hereto. If Landlord
reasonably determines by the use of an electrical consumption survey or by other
reasonable means that Tenant is using electric current (including overhead
fluorescent fixtures) in excess of .60 kilowatt hours per square foot of usable
area in the Premises per month, as

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determined on an annualized basis (“Excess Electrical Usage”), then Landlord
shall have the right to charge Tenant an amount equal to Landlord’s reasonable
estimate of Tenant’s Excess Electrical Usage, and shall have the further right
to install an electric current meter, sub-meter or check meter in the Premises
(a “Meter”) to measure the amount of electric current consumed in the Premises.
The cost of such Meter special conduits, wiring and panels needed in connection
therewith and the installation, maintenance and repair thereof shall be paid by
Tenant. Tenant shall pay to Landlord, from time to time, but no more frequently
than monthly, for its Excess Electrical Usage at the Premises. The rate to be
paid by Tenant for submetered electricity shall include any taxes or other
charges in connection therewith.
     Section 10.2 Excess Electricity. Tenant shall at all times comply with the
rules and regulations of the utility company supplying electricity to the
Building. Tenant shall not use any electrical equipment which, in Landlord’s
reasonable judgment, would exceed the capacity of the electrical equipment
serving the Premises. If Landlord determines that Tenant’s electrical
requirements necessitate installation of any additional risers, feeders or other
electrical distribution equipment (collectively, “Electrical Equipment”), or if
Tenant provides Landlord with evidence reasonably satisfactory to Landlord of
Tenant’s need for excess electricity and requests that additional Electrical
Equipment be installed, Landlord shall, at Tenant’s expense, install such
additional Electrical Equipment, provided that Landlord, in its sole judgment,
determines that (a) such installation is practicable and necessary, (b) such
additional Electrical Equipment is permissible under applicable Requirements,
and (c) the installation of such Electrical Equipment will not cause permanent
damage to the Building or the Premises, cause or create a hazardous condition,
entail excessive or unreasonable alterations, interfere with or limit electrical
usage by other tenants or occupants of the Building or exceed the limits of the
switchgear or other facilities serving the Building, or require power in excess
of that available from the utility company serving the Building.
     Section 10.3 Elevators. Landlord shall provide elevator service to the
Premises 24 hours per day, 7 days per week, subject to the Rules and Regulations
attached hereto as Exhibit F.
     Section 10.4 Heating, Ventilation and Air Conditioning. Landlord shall
furnish to the Premises heating, ventilation and air-conditioning (“HVAC”) in
accordance with Annex 1 to the Work Letter during Ordinary Business Hours.
Landlord shall have access to all air-cooling, fan, ventilating and machine
rooms and electrical closets and all other mechanical installations of Landlord
(collectively, “Mechanical Installations”), and Tenant shall not construct
partitions or other obstructions which may interfere with Landlord’s access
thereto or the moving of Landlord’s equipment to and from the Mechanical
Installations. No Tenant Party shall at any time enter the Mechanical
Installations or tamper with, adjust, or otherwise affect such Mechanical
Installations. Landlord shall not be responsible if the HVAC System fails to
provide cooled or heated air, as the case may be, to the Premises by reason of
(i) any equipment installed by, for or on behalf of Tenant, which has an
electrical load in excess of the average electrical load and human occupancy
factors for the HVAC System as designed, or (ii) any rearrangement of
partitioning or other Alterations made or performed by, for or on behalf of
Tenant. Tenant shall cooperate with Landlord and shall abide by the rules and
regulations which Landlord may reasonably prescribe for the proper functioning
and protection of the HVAC System. Landlord

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shall not be responsible if the HVAC System fails to provide cooled or heated
air, as the case may be, to the Premises by reason of (i) any equipment
installed by, for or on behalf of Tenant, which has an electrical load in excess
of the average electrical load and human occupancy factors for the HVAC System
as designed, or (ii) any rearrangement of partitioning or other Alterations made
or performed by, for or on behalf of Tenant. Tenant shall cooperate with
Landlord and shall abide by the rules and regulations which Landlord may
reasonably prescribe for the proper functioning and protection of the HVAC
System.
     Section 10.5 Overtime HVAC. The Fixed Rent does not include any charge to
Tenant for the furnishing of HVAC to the Premises during any periods other than
Ordinary Business Hours (“Overtime Periods”). If Tenant desires HVAC services
during Overtime Periods, Tenant shall deliver notice to the Building office
requesting such services by 2:00 p.m. of the Business Day on which or preceding
the date such services are requested; provided, however, that Landlord shall use
reasonable efforts to arrange such service on such shorter notice as Tenant
shall provide. If Landlord furnishes HVAC service during Overtime Periods,
Tenant shall pay to Landlord the cost thereof at the then established rates for
such services in the Building. The current rate charged for HVAC during Overtime
Periods is $45.00 per hour per floor, which rate is subject to change during the
Term.
     Section 10.6 Cleaning. Landlord shall cause the Premises (excluding any
portions thereof used for the storage, preparation, service or consumption of
food or beverages) to be cleaned, substantially in accordance with the standards
set forth in Exhibit D. Any areas of the Premises requiring additional cleaning
such as areas used for preparation or consumption of food, private bathrooms,
computer rooms, mail rooms and trading floors shall be cleaned, at Tenant’s
expense, by Landlord’s cleaning contractor, at rates which shall be competitive
with rates of other cleaning contractors providing comparable services to
Comparable Buildings. Landlord’s cleaning contractor and its employees shall
have access to the Premises at all times except between 8:00 a.m. and 5:30 p.m.
on weekdays which are not Observed Holidays.
     Section 10.7 Water. Landlord, at Landlord’s expense, shall provide water in
the core lavatories, drinking fountains and janitor’s closets on each floor of
the Building. If Tenant requires water in excess of that used by an average
office building tenant of similar size using its premises for ordinary office
use, Tenant shall pay for the cost of bringing water to the Premises and
Landlord may install a meter to measure the water. Tenant shall pay the cost of
such installation, and for all maintenance, repairs and replacements thereto,
and for the reasonable charges of Landlord for the water consumed.
     Section 10.8 Refuse Removal. Landlord shall provide refuse removal services
at the Building. Tenant shall pay to Landlord, Landlord’s reasonable charge for
such removal to the extent that the refuse generated by Tenant exceeds the
refuse customarily generated by general office tenants. Tenant shall not dispose
of any refuse in the Common Areas, and if Tenant does so, Tenant shall be liable
for Landlord’s reasonable charge for such removal.
     Section 10.9 Directory. Landlord shall list Tenant on the Building
directory located in the first floor lobby. The Building directory will be
shared with other Building tenants.

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     Section 10.10 Tenant Access to Premises. Tenant shall have access to the
Premises 24 hours a day, 7 days a week. Outside of Ordinary Business Hours,
Building and floor access will be monitored by an electronic key security and
access system installed and maintained by Landlord. Landlord shall be
responsible for access control to the Building, which access control shall be at
least to the access control standard found at typical Comparable Buildings.
Tenant shall be responsible for access control to the Premises at Tenant’s sole
cost and expense. Landlord will deliver (or cause to be delivered) to Tenant, at
Landlord’s expense, 250 Building access cards. Any additional or replacement
cards will be issued at Tenant’s expense.
     Section 10.11 Service Interruptions. Landlord reserves the right to suspend
any service when necessary, by reason of Unavoidable Delays, accidents or
emergencies, or for Restorative Work which, in Landlord’s reasonable judgment,
are necessary or appropriate until such Unavoidable Delay, accident or emergency
shall cease or such Restorative Work is completed and Landlord shall not be
liable for any interruption, curtailment or failure to supply services. Landlord
shall use reasonable efforts to minimize interference with Tenant’s use and
occupancy of the Premises as a result of any such failure, defect or
interruption of any such service, or change in the supply, character and/or
quantity of, electrical service, and to restore any such services, remedy such
situation and minimize any interference with Tenant’s business. The exercise of
any such right or the occurrence of any such failure by Landlord shall not
constitute an actual or constructive eviction, in whole or in part, entitle
Tenant to any compensation, abatement or diminution of Rent, relieve Tenant from
any of its obligations under this Lease, or impose any liability upon Landlord
or any Indemnified Party by reason of inconvenience to Tenant, or interruption
of Tenant’s business, or otherwise. Landlord shall not be liable in any way to
Tenant for any failure, defect or interruption of, or change in the supply,
character and/or quantity of electrical service furnished to the Premises for
any reason except if attributable to the gross negligence or willful misconduct
of Landlord.
ARTICLE 11
INSURANCE; PROPERTY LOSS OR DAMAGE
     Section 11.1 Tenant’s Insurance.
          (a) Tenant, at its expense, shall obtain and keep in full force and
effect during the Term:
               (i) a policy of commercial general liability insurance on an
occurrence basis against claims for personal injury, bodily injury, death and/or
property damage occurring in or about the Building, under which Tenant is named
as the insured and Landlord, Landlord’s Agent and any Lessors and any Mortgagees
whose names have been furnished to Tenant are named as additional insureds (the
“Insured Parties”). Such insurance shall provide primary coverage without
contribution from any other insurance carried by or for the benefit of the
Insured Parties, and Tenant shall obtain blanket broad-form contractual
liability coverage to insure its indemnity obligations set forth in Article 25.
The minimum limits of liability shall be (a) a combined single limit with
respect to each occurrence in an amount of not less than $1,000,000; and (b)
Umbrella/Excess Liability with limits of not less than $10,000,000 combined

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single limit in excess of the above-referenced commercial general liability. The
deductible or self insured retention for such policy shall not exceed $25,000;
               (ii) insurance against loss or damage by fire, and such other
risks and hazards as are insurable under then available standard forms of
“Special Form Causes of Loss” or “All Risk” property insurance policies,
insuring Tenant’s Property and all Alterations and improvements to the Premises
(including the initial installations) to the extent such Alterations and
improvements exceed the cost of the improvements typically performed in
connection with the initial occupancy of tenants in the Building (“Building
Standard Installations”), for the full insurable value thereof or replacement
cost thereof, having a deductible amount, if any, not in excess of $25,000; and
insurance against loss or damage by fire, and such other risks and hazards as
are insurable under then available standard forms of “Special Form Causes of
Loss” or “All Risk” property insurance policies, insuring the Existing
Furnishings for the full insurable value thereof or replacement cost thereof,
having a deductible amount, if any, not in excess of $25,000;
               (iii) during the performance of any Alteration, until completion
thereof, Builder’s Risk insurance on an “all risk” basis and on a completed
value form including a Permission to Complete and Occupy endorsement, for full
replacement value covering the interest of Landlord and Tenant (and their
respective contractors and subcontractors) in all work incorporated in the
Building and all materials and equipment in or about the Premises;
               (iv) Workers’ Compensation Insurance, as required by law;
               (v) [Intentionally Omitted]; and
               (vi) during the Extension Term, such other insurance in such
amounts as the Insured Parties may reasonably require from time to time, but
only if Landlord has informed Tenant of such other insurance requirements prior
to the date on which Tenant gives Landlord notice that Tenant elects to lease
the Premises for the Extension Term pursuant to Rider No. 1 — Extension Option.
          (b) All insurance required to be carried by Tenant (i) shall contain a
provision that (x) no act or omission of Tenant shall affect or limit the
obligation of the insurance company to pay the amount of any loss sustained, and
(y) shall be noncancellable and/or no material change in coverage shall be made
thereto unless the Insured Parties receive 30 days’ prior notice of the same, by
certified mail, return receipt requested, and (ii) shall be effected under valid
and enforceable policies issued by reputable insurers permitted to do business
in the Commonwealth of Virginia and rated in Best’s Insurance Guide, or any
successor thereto as having a “Best’s Rating” of “A-” or better and a “Financial
Size Category” of at least “X” or better or, if such ratings are not then in
effect, the equivalent thereof or such other financial rating as Landlord may at
any time consider appropriate.
          (c) On or prior to the Commencement Date, Tenant shall deliver to
Landlord appropriate policies of insurance, including evidence of waivers of
subrogation required to be carried pursuant to this Article 11 and that the
Insured Parties are named as additional insureds (the “Policies”). Tenant shall
provide evidence of each renewal or replacement of the Policies and shall use
commercially reasonable efforts to deliver such evidence to Landlord at least 10

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days prior to the expiration of the Policies. Tenant shall also advise all
Insured Parties in writing by certified mail, return receipt requested, at least
30 days in advance of any termination or change to the Policies that would
affect the interest of any of the Insured Parties. In lieu of the Policies,
Tenant may deliver to Landlord a certification from Tenant’s insurance company
(on the form currently designated “Acord 27” (Evidence of Property Insurance)
and “Acord 25-S” (Certificate of Liability Insurance), or the equivalent,
provided that attached thereto is an endorsement to Tenant’s commercial general
liability policy naming the Insured Parties as additional insureds) which shall
be binding on Tenant’s insurance company, and which shall expressly provide that
such certification conveys to the Insured Parties all the rights and privileges
afforded under the Policies as primary insurance.
     Section 11.2 Waiver of Subrogation. Landlord and Tenant shall each procure
an appropriate clause in or endorsement to any property insurance covering the
Real Property and personal property, fixtures and equipment located therein,
wherein the insurer waives subrogation or consents to a waiver of right of
recovery, and Landlord and Tenant agree not to make any claim against, or seek
to recover from, the other for any loss or damage to its property or the
property of others resulting from fire or other hazards to the extent covered by
such property insurance; provided, however, that the release, discharge,
exoneration and covenant not to sue contained herein shall be limited by and be
coextensive with the terms and provisions of the waiver of subrogation or waiver
of right of recovery. Tenant acknowledges that Landlord shall not carry
insurance on, and shall not be responsible for, (i) damage to any Above Building
Standard Installations, (ii) Tenant’s Property, and (iii) any loss suffered by
Tenant due to interruption of Tenant’s business.
     Section 11.3 Restoration.
          (a) If the Premises are damaged by fire or other casualty, or if the
Building is damaged such that Tenant is deprived of reasonable access to the
Premises, the damage shall be repaired by Landlord, to substantially the
condition of the Premises prior to the damage, subject to the provisions of any
Mortgage or Superior Lease, but Landlord shall have no obligation to repair or
restore (i) Tenant’s Property or (ii) except as provided in Section 11.3(b), any
Alterations or improvements to the Premises, to the extent such Alterations or
improvements exceed Building Standard Installations (“Above Building Standard
Installations”). So long as Tenant is not in default beyond applicable grace or
notice provisions in the payment or performance of its obligations under this
Section 11.3, and provided Tenant timely delivers to Landlord either Tenant’s
Restoration Payment (as hereinafter defined) or the Restoration Security (as
hereinafter defined) or Tenant expressly waives any obligation of Landlord to
repair or restore any of Tenant’s Above Building Standard Installations, then
until the restoration of the Premises is Substantially Completed or would have
been Substantially Completed but for Tenant delay, Fixed Rent, Tenant’s Tax
Payment and Tenant’s Operating Payment shall be reduced in the proportion by
which the area of the part of the Premises which is not usable (or accessible )
and is not used by Tenant bears to the total area of the Premises.
          (b) As a condition precedent to Landlord’s obligation to repair or
restore any Above Building Standard Installations, Tenant shall pay to Landlord
upon demand a sum (“Tenant’s Restoration Payment”) equal to the amount, if any,
by which (A) the cost, as

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estimated by a reputable independent contractor designated by Landlord, of
repairing and restoring all Alterations and Tenant Improvements in the Premises
to their condition prior to the damage, exceeds (B) the cost of restoring the
Premises with Building Standard Installations. If Tenant shall fail to deliver
to Landlord either (1) Tenant’s Restoration Payment, or (2) a waiver by Tenant,
in form satisfactory to Landlord, of all of Landlord’s obligations to repair or
restore any of the Above Building Standard Installations, in either case within
15 days after Landlord’s demand therefor, Landlord shall have no obligation to
restore any Above Building Standard Installations and Tenant’s abatement of
Fixed Rent, Tenant’s Tax Payment and Tenant’s Operating Payment shall cease when
the restoration of the Premises (other than any Above Building Standard
Installations) is Substantially Complete.
     Section 11.4 Landlord’s Termination Right. Notwithstanding anything to the.
contrary contained in Section 11.3, if the Premises are totally damaged or are
rendered wholly untenantable, or if the Building shall be so damaged that, in
Landlord’s reasonable opinion, substantial alteration, demolition, or
reconstruction of the Building shall be required (whether or not the Premises
are so damaged or rendered untenantable), then in either of such events,
Landlord may, not later than 60 days following the date of the damage, terminate
this Lease by notice to Tenant, provided that if the Premises are not damaged,
Landlord may not terminate this Lease unless Landlord similarly terminates the
leases of other tenants in the Building aggregating at least 50% of the portion
of the Building occupied for office purposes immediately prior to such damage.
If this Lease is so terminated, (a) the Term shall expire upon the 30th day
after such notice is given, (b) Tenant shall vacate the Premises and surrender
the same to Landlord, (c) Tenant’s liability for Rent shall cease as of the date
of the damage, and (d) any prepaid Rent for any period after the date of the
damage shall be refunded by Landlord to Tenant.
     Section 11.5 Tenant’s Termination Right. If the Premises are totally
damaged and are thereby rendered wholly untenantable, or if the Building shall
be so damaged that Tenant is deprived of reasonable access to the Premises, and
if Landlord elects to restore the Premises, Landlord shall, within 60 days
following the date of the damage, cause a contractor or architect selected by
Landlord to give notice (the “Restoration Notice”) to Tenant of the date by
which such contractor or architect estimates the restoration of the Premises
(excluding any Above Building Standard Installations) shall be Substantially
Completed. If such date, as set forth in the Restoration Notice, is more than
12 months from the date of such damage, then Tenant shall have the right to
terminate this Lease by giving notice (the “Termination Notice”) to Landlord not
later than 30 days following delivery of the Restoration Notice to Tenant. If
Tenant delivers a Termination Notice, this Lease shall be deemed to have
terminated as of the date of the giving of the Termination Notice, in the manner
set forth in the second sentence of Section 11.4.
     Section 11.6 Final 18 Months. Notwithstanding anything to the contrary in
this Article 11, if any damage during the final 18 months of the Term renders
the Premises wholly untenantable, either Landlord or Tenant may terminate this
Lease by notice to the other party within 30 days after the occurrence of such
damage and this Lease shall expire on the 30th day after the date of such
notice. For purposes of this Article, the Premises shall be deemed wholly
untenantable if Tenant shall be precluded from using more than 50% of the
Premises for the conduct of its business and Tenant’s inability to so use the
Premises is reasonably expected to continue for more than 90 days.

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     Section 11.7 Landlord’s Liability. Any Building employee to whom any
property shall be entrusted by or on behalf of Tenant shall be deemed to be
acting as Tenant’s agent with respect to such property and neither Landlord nor
its agents shall be liable for any damage to such property, or for the loss of
or damage to any property of Tenant by theft or otherwise. For example, if a
Tenant employee leaves an envelope with a Building lobby guard for pick-up by a
messenger service, Landlord will not be responsible if such package is
misplaced, stolen, damaged or picked up by the wrong messenger service. None of
the Insured Parties shall be liable for any injury or damage to persons or
property or interruption of Tenant’s business resulting from fire or other
casualty, any damage caused by other tenants or persons in the Building or the
parking facilities or by construction of any private, public or quasi-public
work, or any latent defect in the Premises or in the Building or the parking
facilities (except that Landlord shall be required to repair the same to the
extent provided in Article 6). No penalty shall accrue for delays which may
arise by reason of adjustment of fire insurance on the part of Landlord or
Tenant, or for any Unavoidable Delays arising from any repair or restoration of
any portion of the Building, provided that Landlord shall use reasonable efforts
to minimize interference with Tenant’s use and occupancy of the Premises during
the performance of any such repair or restoration.
     Section 11.8 Landlord’s Insurance. During the Term, Landlord shall maintain
in effect such policies of insurance as are at least in such amounts (and are
subject to no larger deductibles) as are customarily carried by landlords of
Comparable Buildings, including, without limitation, insurance against loss or
damage by fire, and such other risks and hazards as are insurable under then
available forms of “all risk” property insurance policies with extended
coverage, insuring the Building for the full insurable value thereof or
replacement cost thereof (exclusive of footing and foundation costs).
ARTICLE 12
EMINENT DOMAIN
     Section 12.1 Taking.
          (a) Total Taking. If all or substantially all of the Real Property,
the Building or the Premises shall be acquired or condemned for any public or
quasi-public purpose (a “Taking”), this Lease shall terminate and the Term shall
end as of the date of the vesting of title and Rent shall be prorated and
adjusted as of such date.
          (b) Partial Taking. Upon a Taking of only a part of the Real Property,
the Building or the Premises then, except as hereinafter provided in this
Article 12, this Lease shall continue in full force and effect, provided that
from and after the date of the vesting of title, Fixed Rent and Tenant’s
Proportionate Share shall be modified to reflect the reduction of the Premises
and/or the Building and/or Tenant’s loss of any parking rights as a result of
such Taking.
          (c) Landlord’s Termination Right. Whether or not the Premises are
affected, Landlord may, by notice to Tenant, within 60 days following the date
upon which Landlord receives notice of the Taking of all or a portion of the
Real Property, the Building or the

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Premises, terminate this Lease, provided that Landlord elects to terminate
leases (including this Lease) affecting at least 50% of the rentable area of the
Building.
          (d) Tenant’s Termination Right. If the part of the Real Property so
Taken contains more than 20% of the total area of the Premises occupied by
Tenant immediately prior to such Taking, or if, by reason of such Taking, Tenant
no longer has reasonable means of access to the Premises or if Tenant’s parking
rights are totally or substantially curtailed, Tenant may terminate this Lease
by notice to Landlord given within 30 days following the date upon which Tenant
is given notice of such Taking. If Tenant so notifies Landlord, this Lease shall
end and expire upon the 30th day following the giving of such notice. If a part
of the Premises shall be so Taken and this Lease is not terminated in accordance
with this Section 12.1 Landlord, without being required to spend more than it
collects as an award, shall, subject to the provisions of any Mortgage or
Superior Lease, restore that part of the Premises not so Taken to a
self-contained rental unit substantially equivalent (with respect to character,
quality, appearance and services) to that which existed immediately prior to
such Taking, excluding Tenant’s Property and Above Building Standard
Installations.
          (e) Apportionment of Rent. Upon any termination of this Lease pursuant
to the provisions of this Article 12, Rent shall be apportioned as of, and shall
be paid or refunded up to and including, the date of such termination.
     Section 12.2 Awards. Upon any Taking, Landlord shall receive the entire
award for any such Taking, and Tenant shall have no claim against Landlord or
the condemning authority for the value of any unexpired portion of the Term or
Tenant’s Alterations; and Tenant hereby assigns to Landlord all of its right in
and to such award. Nothing contained in this Article 12 shall be deemed to
prevent Tenant from making a separate claim in any condemnation proceedings for
the then value of any Tenant’s Property or Above Building Standard Installations
included in such Taking and for any moving expenses, provided any such award is
in addition to, and does not result in a reduction of, the award made to
Landlord.
     Section 12.3 Temporary Taking. If all or any part of the Premises is Taken
temporarily during the Term for any public or quasi-public use or purpose,
Tenant shall give prompt notice to Landlord and the Term shall not be reduced or
affected in any way and Tenant shall continue to pay all Rent payable by Tenant
without reduction or abatement and to perform all of its other obligations under
this Lease, except to the extent prevented from doing so by the condemning
authority, and Tenant shall be entitled to receive any award or payment from the
condemning authority for such use.
ARTICLE 13
ASSIGNMENT AND SUBLETTING
     Section 13.1 Consent Requirements.
          (a) No Assignment or Subletting. Except as expressly set forth herein,
Tenant shall not assign, mortgage, pledge, encumber, or otherwise transfer this
Lease, whether by operation of law or otherwise, and shall not sublet, or
permit, or suffer the Premises or any part

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thereof to be used or occupied by others (whether for desk space, mailing
privileges or otherwise), without Landlord’s prior consent in each instance. Any
assignment, sublease, mortgage, pledge, encumbrance or transfer in contravention
of the provisions of this Article 13 shall be void and shall constitute an Event
of Default.
          (b) Collection of Rent. If, without Landlord’s consent, this Lease is
assigned, or any part of the Premises is sublet or occupied by anyone other than
Tenant or this Lease is encumbered (by operation of law or otherwise), Landlord
may collect rent from the assignee, subtenant or occupant, and apply the net
amount collected to the Rent herein reserved. No such collection shall be deemed
a waiver of the provisions of this Article 13, an acceptance of the assignee,
subtenant or occupant as tenant, or a release of Tenant from the performance of
Tenant’s covenants hereunder, and in all cases Tenant shall remain fully liable
for its obligations under this Lease.
          (c) Further Assignment/Subletting. Landlord’s consent to any
assignment or subletting shall not relieve Tenant from the obligation to obtain
Landlord’s consent to any further assignment or subletting. In no event shall
any permitted subtenant assign or encumber its sublease or further sublet any
portion of its sublet space, or otherwise suffer or permit any portion of the
sublet space to be used or occupied by others.
     Section 13.2 Tenant’s Notice. If Tenant desires to assign this Lease or
sublet all or any portion of the Premises, Tenant shall give notice thereof to
Landlord, which shall be accompanied by (a) with respect to an assignment of
this Lease, the date Tenant desires the assignment to be effective; (b) with
respect to a sublet of all or a part of the Premises, a description of the
portion of the Premises to be sublet and the commencement and expiration dates
(together with all extension options) of such sublet; and (c) a copy of a bona
fide term sheet or letter of intent pertaining to such proposed assignment or
sublease and executed by Tenant and the proposed assignee or subtenant. If
Tenant desires to assign this Lease or if Tenant desires to sublet as aforesaid
and the term (including, if exercised, any extension option(s)) of the sublease
that will expire during the last 12 months of the then Term, such notice shall,
except with respect to a Permitted Transfer, be deemed an irrevocable offer from
Tenant to Landlord of the right, at Landlord’s option, (1) to terminate this
Lease with respect to such space as Tenant proposes to sublease (the “Partial
Space”), upon the terms and conditions hereinafter set forth, or (2) if the
proposed transaction is an assignment of this Lease, to terminate this Lease
with respect to the entire Premises. Such option may be exercised by notice from
Landlord to Tenant within 30 days after delivery of Tenant’s notice. If Landlord
exercises its option to terminate all or a portion of this Lease, (a) this Lease
shall end and expire with respect to all or a portion of the Premises, as the
case may be, on the date that such assignment or sublease was to commence, (b)
Rent shall be apportioned, paid or refunded as of such date, (c) Tenant, upon
Landlord’s request, shall enter into an amendment of this Lease ratifying and
confirming such total or partial termination, and setting forth any appropriate
modifications to the terms and provisions hereof, and (d) Landlord shall be free
to lease the Premises (or any part thereof) to Tenant’s prospective assignee or
subtenant. Tenant shall pay all costs to make the Partial Space a self-contained
rental unit and to install any required Building corridors.

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     Section 13.3 Conditions to Assignment/Subletting.
          (a) If Landlord does not exercise its termination option provided
under Section 13.2, and provided no Event of Default then exists, Landlord’s
consent to the proposed assignment or subletting shall not be unreasonably
withheld or delayed. Such consent shall be granted or denied within 15 days
after delivery to Landlord of (i) a true and complete statement reasonably
detailing the identity of the proposed assignee or subtenant (“Transferee”), the
nature of its business and its proposed use of the Premises, (ii) current
financial information with respect to the Transferee, including its most recent
financial statements, and (iii) any other information Landlord may reasonably
request, provided that:
               (i) in Landlord’s reasonable judgment, the Transferee is engaged
in a business or activity, and the Premises will be used in a manner, which
(1) is in keeping with the then standards of the Building, (2) is for the
Permitted Uses, and (3) does not violate any restrictions set forth in this
Lease, any Mortgage or Superior Lease or any negative covenant as to use of the
Premises required by any other lease in the Building;
               (ii) the Transferee is reputable with sufficient financial means
to perform all of its obligations under this Lease or the sublease, as the case
may be;
               (iii) [Intentionally Omitted];
               (iv) [Intentionally Omitted];
               (v) [Intentionally Omitted];
               (vi) Tenant shall, upon demand, reimburse Landlord for all
reasonable expenses incurred by Landlord in connection with such assignment or
sublease, including any investigations as to the acceptability of the Transferee
and all legal costs (not to exceed $1,500) reasonably incurred in connection
with the granting of any requested consent; and
               (vii) the Transferee shall not be entitled, directly or
indirectly, to diplomatic or sovereign immunity, regardless of whether the
Transferee agrees to waive such diplomatic or sovereign immunity, and shall be
subject to the service of process in, and the jurisdiction of the courts of, the
District of Columbia.
          (b) with respect to each and every subletting and/or assignment
approved by Landlord under the provisions of this Lease:
               (i) the form of the proposed assignment or sublease shall be
reasonably satisfactory to Landlord;
               (ii) [Intentionally Omitted];
               (iii) no Transferee shall take possession of any part of the
Premises, until an executed counterpart of such sublease or assignment has been
delivered to Landlord and approved by Landlord as provided in Section 13.3;

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               (iv) if an Event of Default occurs prior to the effective date of
such assignment or subletting, then Landlord’s consent thereto, if previously
granted, shall be immediately deemed revoked without further notice to Tenant,
and if such assignment or subletting would have been permitted without
Landlord’s consent pursuant to Section 13.7, such permission shall be void and
without force and effect, and in either such case, any such assignment or
subletting shall constitute a further Event of Default hereunder; and
               (v) each sublease shall be subject and subordinate to this Lease
and to the matters to which this Lease is or shall be subordinate; and Tenant
and each Transferee shall be deemed to have agreed that upon the occurrence and
during the continuation of an Event of Default hereunder, Tenant has hereby
assigned to Landlord, and Landlord may, at its option, accept such assignment
of, all right, title and interest of Tenant as sublandlord under such sublease,
together with all modifications, extensions and renewals thereof then in effect
and such Transferee shall, at Landlord’s option, attorn to Landlord pursuant to
the then executory provisions of such sublease, except that Landlord shall not
be (A) liable for any previous act or omission of Tenant under such sublease,
(B) subject to any counterclaim, offset or defense not expressly provided in
such sublease, which theretofore accrued to such Transferee against Tenant,
(C) bound by any previous modification of such sublease not consented to by
Landlord or by any prepayment of more than one month’s rent, (D) bound to return
such Transferee’s security deposit, if any, except to the extent Landlord shall
receive actual possession of such deposit and such Transferee shall be entitled
to the return of all or any portion of such deposit under the terms of its
sublease, or (E) obligated to make any payment to or on behalf of such
Transferee, or to perform any work in the subleased space or the Building, or in
any way to prepare the subleased space for occupancy, beyond Landlord’s
obligations under this Lease. The provisions of this Section 13.3(b)(v) shall be
self-operative, and no further instrument shall be required to give effect to
this provision, provided that the Transferee shall execute and deliver to
Landlord any instruments Landlord may reasonably request to evidence and confirm
such subordination and attornment.
     Section 13.4 Binding on Tenant; Indemnification of Landlord.
Notwithstanding any assignment or subletting or any acceptance of rent by
Landlord from any Transferee, Tenant shall remain fully liable for the payment
of all Rent due and for the performance of all the covenants, terms and
conditions contained in this Lease on Tenant’s part to be observed and
performed, and any default under any term, covenant or condition of this Lease
by any Transferee or anyone claiming under or through any Transferee shall be
deemed to be a default under this Lease by Tenant. Tenant shall indemnify,
defend, protect and hold harmless Landlord from and against any and all Losses
resulting from any claims that may be made against Landlord by the Transferee or
anyone claiming under or through any Transferee or by any brokers or other
persons claiming a commission or similar compensation in connection with the
proposed assignment or sublease, irrespective of whether Landlord shall give or
decline to give its consent to any proposed assignment or sublease, or if
Landlord shall exercise any of its options under this Article 13.
     Section 13.5 Tenant’s Failure to Complete. If Landlord consents to a
proposed assignment or sublease and Tenant fails to execute and deliver to
Landlord such assignment or sublease within 90 days after the giving of such
consent, then Tenant shall again comply with all

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of the provisions and conditions of Section 13.2 before assigning this Lease or
subletting all or part of the Premises.
     Section 13.6 Profits. If Tenant enters into any assignment or sublease
permitted hereunder or consented to by Landlord, Tenant shall, within 60 days of
Landlord’s consent to such assignment or sublease, deliver to Landlord a list of
Tenant’s reasonable third-party brokerage fees, legal fees, architectural fees
and tenant improvement costs paid or to be paid in connection with such
transaction and any actual costs incurred by Tenant in separately demising the
subleased space (collectively, “Transaction Costs”), together with a list of all
of Tenant’s Property to be transferred to such Transferee. The Transaction Costs
shall be amortized, on a straight-line basis, over the term of any sublease.
Tenant shall deliver to Landlord evidence of the payment of such Transaction
Costs promptly after the same are paid. In consideration of such assignment or
subletting, Tenant shall pay to Landlord:
          (a) In the case of an assignment, on the effective date of the
assignment, 50% of all sums and other consideration paid to Tenant by the
Transferee for or by reason of such assignment (including sums paid for the sale
or rental of Tenant’s Property, less, the then fair market or rental value
thereof) after first deducting the Transaction Costs; or
          (b) In the case of a sublease, 50% of any consideration payable under
the sublease to Tenant by the Transferee which exceeds on a per square foot
basis the Fixed Rent and Additional Rent accruing during the term of the
sublease in respect of the subleased space (together with any sums paid for the
sale or rental of Tenant’s Property, less, the then fair market or rental value
thereof) after first deducting the monthly amortized amount of Transaction
Costs. The sums payable under this clause shall be paid by Tenant to Landlord
monthly as and when paid by the subtenant to Tenant.
     Section 13.7 Transfers.
          (a) Related Entities. If Tenant is a legal entity, the transfer (by
one or more transfers) of a majority of the stock or other beneficial ownership
interest in Tenant (collectively “Ownership Interests”) shall be deemed a
voluntary assignment of this Lease; provided, however, that the provisions of
this Article 13 shall not apply to the transfer of Ownership Interests in Tenant
if and so long as Tenant is publicly traded on a nationally recognized stock
exchange. For purposes of this Section 13.7 the term “transfers” shall be deemed
to include the issuance of new Ownership Interests which results in a majority
of the Ownership Interests in Tenant being held by a person or entity which does
not hold a majority of the Ownership Interests in Tenant on the Effective Date.
          Any provision of this Article to the contrary notwithstanding, Tenant
shall have the right to assign this Lease or to sublease the Premises or a
portion thereof to a business entity into or with which Tenant is merged or
consolidated or to which substantially all of Tenant’s assets are transferred so
long as (i) such transfer was made for a legitimate independent business purpose
and not for the purpose of transferring this Lease, (ii) the successor to Tenant
has a net worth computed in accordance with generally accepted accounting
principles at least equal to the net worth of Tenant immediately prior to such
merger, consolidation or transfer, and (iii) proof satisfactory to Landlord of
such net worth is delivered to Landlord at least 10 days prior to the

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effective date of any such transaction. Tenant may also, upon prior notice to
Landlord, permit any business entity which controls, is controlled by, or is
under common control with the original Tenant (a “Related Entity”) to sublet all
or part of the Premises for any Permitted Use, provided the Related Entity is in
Landlord’s reasonable judgment of a character and engaged in a business which is
in keeping with the standards for the Building and for so long as such entity
remains a Related Entity. Such sublease shall not be deemed to vest in any such
Related Entity any right or interest in this Lease nor shall it relieve,
release, impair or discharge any of Tenant’s obligations hereunder. For the
purposes hereof, “control” shall be deemed to mean ownership of not less than
50% of all of the Ownership Interests of such corporation or other business
entity. Notwithstanding the foregoing, Tenant shall have no right to assign this
Lease or sublease all or any portion of the Premises without Landlord’s consent
pursuant to this Section 13.7 if Tenant is not the initial Tenant herein named
or a person or entity who acquired Tenant’s interest in this ‘ Lease in a
transaction approved by Landlord.
          (b) Applicability. The limitations set forth in this Section 13.7
shall apply to Transferee(s) and guarantor(s) of this Lease, if any, and any
transfer by any such entity in violation of this Section 13.7 shall be a
transfer in violation of Section 13.1.
          (c) Modifications, Takeover Agreements. Any modification, amendment or
extension of a sublease and/or any other agreement by which a landlord of a
building other than the Building agrees to assume the obligations of Tenant
under this Lease shall be deemed a sublease for the purposes of Section 13.1
hereof.
     Section 13.8 Assumption of Obligations. No assignment or transfer shall be
effective unless and until the Transferee executes, acknowledges and delivers to
Landlord an agreement in form and substance reasonably satisfactory to Landlord
whereby the assignee (a) assumes Tenant’s obligations under this Lease and
(b) agrees that, notwithstanding such assignment or transfer, the provisions of
Section 13.1 hereof shall be binding upon it in respect of all future
assignments and transfers.
     Section 13.9 Tenant’s Liability. The joint and several liability of Tenant
and any successors-in-interest of Tenant and the due performance of Tenant’s
obligations under this Lease shall not be discharged, released or impaired by
any agreement or stipulation made by Landlord, or any grantee or assignee of
Landlord, extending the time, or modifying any of the terms and provisions of
this Lease, or by any waiver or failure of Landlord, or any grantee or assignee
of Landlord, to enforce any of the terms and provisions of this Lease.
     Section 13.10 Listings in Building Directory. The listing of any name other
than that of Tenant on the doors of the Premises, the Building directory or
elsewhere shall not vest any right or interest in this Lease or in the Premises,
nor be deemed to constitute Landlord’s consent to any assignment or transfer of
this Lease or to any sublease of the Premises or to the use or occupancy thereof
by others. Any such listing shall constitute a privilege revocable in Landlord’s
discretion by notice to Tenant.
     Section 13.11 Lease Disaffirmance or Rejection. If at any time after an
assignment by Tenant named herein, this Lease is not affirmed or is rejected in
any bankruptcy proceeding or

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any similar proceeding, or upon a termination of this Lease due to any such
proceeding, Tenant named herein, upon request of Landlord given after such
disaffirmance, rejection or termination (and actual notice thereof to Landlord
in the event of a disaffirmance or rejection or in the event of termination
other than by act of Landlord), shall (a) pay to Landlord all Rent and other
charges due and owing by the assignee to Landlord under this Lease to and
including the date of such disaffirmance, rejection or termination, and (b) as
“tenant,” enter into a new lease of the Premises with Landlord for a term
commencing on the effective date of such disaffirmance, rejection or termination
and ending on the Expiration Date, at the same Rent and upon the then executory
terms, covenants and conditions contained in this Lease, except that (i) the
rights of Tenant named herein under the new lease shall be subject to the
possessory rights of the assignee under this Lease and the possessory rights of
any persons claiming through or under such assignee or by virtue of any statute
or of any order of any court, (ii) such new lease shall require all defaults’
existing under this Lease to be cured by Tenant named herein with due diligence,
and (iii) such new lease shall require Tenant named herein to pay all Rent
which, had this Lease not been so disaffirmed, rejected or terminated, would
have become due under the provisions of this Lease after the date of such
disaffirmance, rejection or termination with respect to any period prior
thereto. If Tenant named herein defaults in its obligations to enter into such
new lease for a period of 10 days after Landlord’s request, then, in addition to
all other rights and remedies by reason of default, either at law or in equity,
Landlord shall have the same rights and remedies against Tenant named herein as
if it had entered into such new lease and such new lease had thereafter been
terminated as of the commencement date thereof by reason of Tenant’s default
thereunder.
ARTICLE 14
ACCESS TO PREMISES
     Section 14.1 Landlord’s Access.
          (a) Landlord, Landlord’s agents and utility service providers
servicing the Building may erect, use and maintain concealed ducts, pipes and
conduits in and through the Premises provided such use does not cause the usable
area of the Premises to be reduced beyond a de minimis amount. Landlord shall
promptly repair any damage to the Premises caused by any work performed pursuant
to this Article 14.
          (b) Landlord, any Lessor or Mortgagee and any other party designated
by Landlord and their respective agents shall have the right to enter the
Premises at all reasonable times, upon 24-hours prior notice (which notice may
be oral) except in the case of emergency (for which no notice shall be
required), to examine the Premises, to show the Premises to prospective
purchasers, Mortgagees, Lessors or tenants and their respective agents and
representatives or others and to perform Restorative Work to the Premises or the
Building.
          (c) All parts (except surfaces facing the interior of the Premises) of
all walls, windows and doors bounding the Premises, all balconies, terraces and
roofs adjacent to the Premises, all space in or adjacent to the Premises used
for shafts, stacks, stairways, mail chutes, conduits and other mechanical
facilities, Building Systems; Building facilities and Common

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Areas are not part of the Premises, and Landlord shall have the use thereof and
access thereto through the Premises for the purposes of Building operation,
maintenance, alteration and repair.
     Section 14.2 Building Name. Landlord has the right at any time to change
the name, number or designation by which the Building is commonly known. If
Landlord elects to change the name, number or designation by which the Building
is commonly known, Landlord will endeavor to provide Tenant with at least
15 days prior written notice of such election.
ARTICLE 15
DEFAULT
     Section 15.1 Tenant’s Defaults. Each of the following events shall be an
“Event of Default” hereunder:
          (a) Tenant fails to pay when due any installment of Rent and such
default shall continue for five (5) days after notice of such default is given
to Tenant except that if Landlord shall have given 3 such notices of default in
the payment of any Rent in any 12-month period, Tenant shall not be entitled to
any further notice of its delinquency in the payment of any Rent or an extended
period in which to make payment until such time as 12 consecutive months shall
have elapsed without Tenant having failed to make any such payment when due, and
the occurrence of any default in the payment of any Rent within such 12-month
period after the giving of 3 such notices shall constitute an Event of Default;
or
          (b) Tenant fails to observe or perform any other term, covenant or
condition of this Lease and such failure continues for more than 30 days
(10 days with respect to a default under Article 3) after notice by Landlord to
Tenant of such default, or if such default (other than a default under
Article 3) is of a nature that it cannot be completely remedied within 30 days,
failure by Tenant to commence to remedy such failure within said 30 days, and
thereafter diligently prosecute to completion all steps necessary to remedy such
default, provided in all events the same is completed within 90 days; or
          (c) if Landlord applies or retains any part of the Security Deposit,
and Tenant fails to deposit with Landlord the amount so applied or retained by
Landlord, or to provide Landlord with a replacement Letter of Credit (as
hereinafter defined), if applicable, within 5 days after notice by Landlord to
Tenant stating the amount applied or retained; or
          (d) there shall occur or exist any default under any guaranty of this
Lease, which default is not cured within any applicable notice and/or cure
period set forth in such guaranty.
     Upon the occurrence of any one or more of such Events of Default, Landlord
may, at its sole option, give to Tenant notice of cancellation of this Lease (or
of Tenant’s possession of the Premises), in which event this Lease and the Term
(or Tenant’s possession of the Premises) shall terminate (whether or not the
Term shall have commenced) with the same force and effect as if the date set
forth in the notice was the Expiration Date stated herein; and Tenant shall then
quit and surrender the Premises to Landlord, but Tenant shall remain liable for
damages as provided

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in this Article 15. Any notice of cancellation of the Term (or Tenant’s
possession of the Premises) may be given simultaneously with any notice of
default given to Tenant.
     Section 15.2 Landlord’s Remedies.
          (a) Possession/Reletting. If this Lease and the Term, or Tenant’s
right to possession of the Premises, terminate as provided in Section 15.1:
               (i) Surrender of Possession. Tenant shall quit and surrender the
Premises to Landlord, and Landlord and its agents may immediately, or at any
time after such termination, re-enter the Premises or any part thereof, without
notice, either by summary proceedings, or by any other applicable action or
proceeding, or by force (to the extent permitted by law) or otherwise in
accordance with applicable legal proceedings (without being liable to
indictment, prosecution or damages therefor), and may repossess the Premises and
dispossess Tenant and any other persons from the Premises and remove any and all
of their property and effects from the Premises.
               (ii) Landlord’s Reletting. Landlord, at Landlord’s option, may
relet all or any part of the Premises from time to time, either in the name of
Landlord or otherwise, to such tenant or tenants, for any term ending before, on
or after the Expiration Date, at such rental and upon such other conditions
(which may include concessions and free rent periods) as Landlord, in its sole
discretion, may determine. Landlord shall have no obligation to accept any
tenant offered by Tenant and shall not be liable for failure to relet or, in the
event of any such reletting, for failure to collect any rent due upon any such
reletting; and no such failure shall relieve Tenant of, or otherwise affect, any
liability under this Lease. However, to the extent required by law, Landlord
shall use reasonable efforts to mitigate its damages but shall not be required
to divert prospective tenants from any other portions of the Building. Landlord,
at Landlord’s option, may make such alterations, decorations and other physical
changes in and to the Premises as Landlord, in its sole discretion, considers
advisable or necessary in connection with such reletting or proposed reletting,
without relieving Tenant of any liability under this Lease or otherwise
affecting any such liability.
          (b) Tenant’s Waiver. Tenant, on its own behalf and on behalf of all
persons claiming through or under Tenant, including all creditors, hereby waives
all rights which Tenant and all such persons might otherwise have under any
Requirement (i) to the service of any notice of intention to re-enter or to
institute legal proceedings, (ii) to redeem, or to re-enter or repossess the
Premises, or (iii) to restore the operation of this Lease, after (A) Tenant
shall have been dispossessed by judgment or by warrant of any court or judge,
(B) [Intentionally Omitted], or (C) any expiration or early termination of the
term of this Lease, whether such dispossess, re-entry, expiration or termination
shall be by operation of law or pursuant to the provisions of this Lease. The
words “re-enter,” “re-entry” and “re-entered” as used in this Lease shall not be
deemed to be restricted to their technical legal meanings.
          (c) Tenant’s Breach. Upon the breach or threatened breach by Tenant,
or any persons claiming through or under Tenant, of any term, covenant or
condition of this Lease, Landlord shall have the right to enjoin such breach and
to invoke any other remedy allowed by law or in equity as if re-entry, summary
proceedings and other special remedies were not

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provided in this Lease for such breach. The rights to invoke the remedies set
forth above are cumulative and shall not preclude Landlord from invoking any
other remedy allowed at law or in equity.
     Section 15.3 Landlord’s Damages.
          (a) Amount of Damages. If this Lease and the Term, or Tenant’s right
to possession of the Premises, terminate as provided in Section 15.1, then:
               (i) Tenant shall pay to Landlord all items of Rent payable under
this Lease by Tenant to Landlord prior to the date of termination;
               (ii) Landlord may retain all monies, if any, paid by Tenant to
Landlord, whether as prepaid Rent, a Security Deposit or otherwise, which
monies, to the extent not otherwise applied to amounts due and owing to
Landlord, shall be credited by Landlord against any damages payable by Tenant to
Landlord;
               (iii) Tenant shall pay to Landlord, in monthly installments, on
the days specified in this Lease for payment of installments of Fixed Rent, any
Deficiency; it being understood that Landlord shall be entitled to recover the
Deficiency from Tenant each month as the same shall arise, and no suit to
collect the amount of the Deficiency for any month, shall prejudice Landlord’s
right to collect the Deficiency for any subsequent month by a similar
proceeding; and
               (iv) whether or not Landlord shall have collected any monthly
Deficiency, Tenant shall pay to Landlord, on demand, in lieu of any further
Deficiency and as liquidated and agreed final damages, a sum equal to the amount
by which the Rent for the period which otherwise would have constituted the
unexpired portion of the Term (assuming the Additional Rent during such period
to be the same as was payable for the year immediately preceding such
termination or re-entry, increased in each succeeding year by 4% (on a
compounded basis)) exceeds the then fair and reasonable rental value of the
Premises, for the same period (with both amounts being discounted to present
value at a rate of interest equal to 2% below the then Base Rate) less the
aggregate amount of Deficiencies theretofore collected by Landlord pursuant to
the provisions of Section 15.3(a)(iii) for the same period. If, before
presentation of proof of such liquidated damages to any court, commission or
tribunal, the Premises, or any part thereof, shall have been relet by Landlord
for the period which otherwise would have constituted the unexpired portion of
the Term, or any part thereof, the amount of rent reserved upon such reletting
shall be deemed prima facie, to be the fair and reasonable rental value for the
part or the whole of the Premises so relet during the term of the reletting.
          (b) Reletting. If the Premises, or any part thereof, shall be relet
together with other space in the Building, the rents collected or reserved under
any such reletting and the expenses of any such reletting shall be equitably
apportioned for the purposes of this Section 15.3. Tenant shall not be entitled
to any rents collected or payable under any reletting, whether or not such rents
exceeds the Fixed Rent reserved in this Lease. Nothing contained in Article 15
shall be deemed to limit or preclude the recovery by Landlord from Tenant of the
maximum

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amount allowed to be obtained as damages by any Requirement, or of any sums or
damages to which Landlord may be entitled in addition to the damages set forth
in this Section 15.3.
     Section 15.4 Interest. If any payment of Rent is not paid when due,
interest shall accrue on such payment, from the date such payment became due
until paid at the Interest Rate. Tenant acknowledges that late payment by Tenant
of Rent will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of such costs being extremely difficult and impracticable to fix.
Such costs include, without limitation, processing and accounting charges, and
late charges that may be imposed on Landlord by the terms of any note secured by
a Mortgage covering the Premises. Therefore, in addition to interest, if any
amount is not paid when due, a late charge equal to 5% of such amount shall be
assessed; provided, however, that on 2 occasions during any calendar year of the
Term, Landlord shall give Tenant notice of such late payment and Tenant shall
have a period of 5 days thereafter in which to make such payment before any late
charge is assessed. Such interest and late charges are separate and cumulative
and are in addition to and shall not diminish or represent a substitute for any
of Landlord’s rights or remedies under any other provision of this Lease.
     Section 15.5 Other Rights of Landlord. If Tenant fails to pay any
Additional Rent when due, Landlord, in addition to any other right or remedy,
shall have the same rights and remedies as in the case of a default by Tenant in
the payment of Fixed Rent. If Tenant is in arrears in the payment of Rent,
Tenant waives Tenant’s right, if any, to designate the items against which any
payments made by Tenant are to be credited, and Landlord may apply any payments
made by Tenant to any items Landlord sees fit, regardless of any request by
Tenant. Landlord reserves the right, without liability to Tenant and without
constituting any claim of constructive eviction, to suspend furnishing or
rendering to Tenant any property, material, labor, utility or other service,
whenever Landlord is obligated to furnish or render the same at the expense of
Tenant, in the event that (but only for so long as) Tenant is in arrears in
paying Landlord for such items for more than 5 days after notice from Landlord
to Tenant demanding the payment of such arrears.
ARTICLE 16
LANDLORD’S RIGHT TO CURE; FEES AND EXPENSES
     If Tenant defaults in the performance of its obligations under this Lease,
Landlord, without waiving such default, may perform such obligations at Tenant’s
expense: (a) immediately, and without notice, in the case of emergency or if the
default (i) materially interferes with the use by any other tenant of the
Building, (ii) materially interferes with the efficient operation of the
Building, (iii) results in a violation of any Requirement, or (iv) results or
will result in a cancellation of any insurance policy maintained by Landlord,
and (b) in any other case if such default continues after 10 days from the date
Landlord gives notice of Landlord’s intention to perform the defaulted
obligation. All costs and expenses reasonably incurred by Landlord in connection
with any such performance by it and all costs and expenses, including reasonable
counsel fees and disbursements, incurred by Landlord in any action or proceeding
(including any unlawful detainer proceeding) brought by Landlord to enforce any
obligation of Tenant under this Lease and/or right of Landlord in or to the
Premises, shall be paid

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by Tenant to Landlord on demand, with interest thereon at the Interest Rate from
the date incurred by Landlord. Except as expressly provided to the contrary in
this Lease, all costs and expenses which, pursuant to this Lease are incurred by
Landlord and payable to Landlord by Tenant, and all charges, amounts and sums
payable to Landlord by Tenant for any property, material, labor, utility or
other services which, pursuant to this Lease or at the request and for the
account of Tenant, are provided, furnished or rendered by Landlord, shall become
due and payable by Tenant to Landlord within 10 Business Days after receipt of
Landlord’s invoice for such amount.
ARTICLE 17
NO REPRESENTATIONS BY LANDLORD; LANDLORD’S APPROVAL
     Section 17.1 No Representations. Except as expressly set forth herein,
Landlord and Landlord’s agents have made no warranties, representations,
statements or promises with respect to the Building, the Real Property or the
Premises and no rights, easements or licenses are acquired by Tenant by
implication or otherwise. Tenant is entering into this Lease after full
investigation and is not relying upon any statement or representation made by
Landlord not embodied in this Lease.
     Section 17.2 No Money Damages. In no event shall Landlord be liable for,
and Tenant, on behalf of itself and all other Tenant Parties, hereby waives any
claim for, any indirect, consequential or punitive damages, including loss or
profits or business opportunity, arising under or in connection with this Lease.
     Section 17.3 Reasonable Efforts. For purposes of this Lease, “reasonable
efforts” by Landlord shall not include an obligation to employ contractors or
labor at overtime or other premium pay rates or to incur any other overtime
costs or additional expenses whatsoever.
ARTICLE 18
END OF TERM
     Section 18.1 Expiration. Upon the expiration or other termination of this
Lease, Tenant shall quit and surrender the Premises to Landlord vacant, broom
clean and in good order and condition, ordinary wear and tear and damage for
which Tenant is not responsible under the terms of this Lease excepted, and
Tenant shall remove all of Tenant’s Property and Tenant’s Specialty Alterations.
     Section 18.2 Holdover Rent. Landlord and Tenant recognize that Landlord’s
damages resulting from Tenant’s failure to timely surrender possession of the
Premises may be substantial, may exceed the amount of the Rent payable
hereunder, and will be impossible to accurately measure. Accordingly, if
possession of the Premises is not surrendered to Landlord on the Expiration Date
or sooner termination of this Lease, in addition to any other rights or remedies
Landlord may have hereunder or at law, Tenant shall (a) pay to Landlord for each
month (or any portion thereof) during which Tenant holds over in the Premises
after the Expiration Date or sooner termination of this Lease, a sum equal to
1.5 times the Rent payable under this Lease for

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the last full calendar month of the Term, (b) be liable to Landlord for (i) any
payment or rent concession which Landlord may be required to make to any tenant
obtained by Landlord for all or any part of the Premises (a “New Tenant”) in
order to induce such New Tenant not to terminate its lease by reason of the
holding-over by Tenant, and (ii) the loss of the benefit of the bargain if any
New Tenant shall terminate its lease by reason of the holding-over by Tenant,
and (c) indemnify Landlord against all claims for damages by any New Tenant. No
holding-over by Tenant, nor the payment to Landlord of the amounts specified
above, shall operate to extend the Term hereof. Nothing herein contained shall
be deemed to permit Tenant to retain possession of the Premises after the
Expiration Date or sooner termination of this Lease, and no acceptance by
Landlord of payments from Tenant after the Expiration Date or sooner termination
of this Lease shall be deemed to be other than on account of the amount to be
paid by Tenant in accordance with the provisions of this Section 18.2.
ARTICLE 19
QUIET ENJOYMENT
     Provided this Lease is in full force and effect and no Event of Default
then exists, Tenant may peaceably and quietly enjoy the Premises without
hindrance by Landlord or any person lawfully claiming through or under Landlord,
subject to the terms and conditions of this Lease and to all Superior Leases and
Mortgages.
ARTICLE 20
NO SURRENDER; NO WAIVER
     Section 20.1 No Surrender or Release. No act or thing done by Landlord or
Landlord’s agents or employees during the Term shall be deemed an acceptance of
a surrender of the Premises, and no provision of this Lease shall be deemed to
have been waived by Landlord, unless such waiver is in writing and is signed by
Landlord.
     Section 20.2 No Waiver. The failure of either party to seek redress for
violation of, or to insist upon the strict performance of, any covenant or
condition of this Lease, or any of the Rules and Regulations, shall not be
construed as a waiver or relinquishment for the future performance of such
obligations of this Lease or the Rules and Regulations, or of the right to
exercise such election but the same shall continue and remain in full force and
effect with respect to any subsequent breach, act or omission. The receipt by
Landlord of any Rent payable pursuant to this Lease or any other sums with
knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach. No payment by Tenant or receipt by Landlord of a lesser
amount than the monthly Rent herein stipulated shall be deemed to be other than
a payment on account of the earliest stipulated Rent, or as Landlord may elect
to apply such payment, nor shall any endorsement or statement on any check or
any letter accompanying any check or payment as Rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord’s right to recover the balance of such Rent or pursue any other remedy
provided in this Lease.

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ARTICLE 21
WAIVER OF TRIAL BY JURY; COUNTERCLAIM
     Section 21.1 Jury Trial Waiver. Landlord and Tenant hereby waive trial by
jury in any action, proceeding or counterclaim brought by either party against
the other on any matters in any way arising out of or connected with this Lease,
the relationship of Landlord and Tenant, Tenant’s use or occupancy of the
Premises, or the enforcement of any remedy under any statute, emergency or
otherwise.
     Section 21.2 Waiver of Counterclaim. If Landlord commences any summary
proceeding against Tenant, Tenant will not interpose any counterclaim of any
nature or description in any such proceeding (unless failure to interpose such
counterclaim would preclude Tenant from asserting in a separate action the claim
which is the subject of such counterclaim), and will not seek to consolidate
such proceeding with any other action which may have been or will be brought in
any other court by Tenant.
ARTICLE 22
NOTICES
     Except as otherwise expressly provided in this Lease, all consents,
notices, demands, requests, approvals or other communications given under this
Lease shall be in writing and shall be deemed sufficiently given or rendered if
delivered by hand (provided a signed receipt is obtained) or if sent by
registered or certified mail (return receipt requested) or by a nationally
recognized overnight delivery service making receipted deliveries, addressed to
Landlord and Tenant as set forth in Article 1, and to any Mortgagee or Lessee
who shall require copies of notices and whose address is provided to Tenant, or
to such other address(es) as Landlord, Tenant or any Mortgagee or Lessor may
designate as its new address(es) for such purpose by notice given to the other
in accordance with the provisions of this Article 22. Any such approval,
consent, notice, demand, request or other communication shall be deemed to have
been given on the date of receipted delivery, refusal to accept delivery or when
delivery is first attempted but cannot be made due to a change of address for
which no notice is given of 3 Business Days after it shall have been mailed as
provided in this Article 22, whichever is earlier.
ARTICLE 23
RULES AND REGULATIONS
     All Tenant Parties shall observe and comply with the Rules and Regulations,
as supplemented or amended from time to time. Landlord reserves the right, from
time to time, to adopt additional Rules and Regulations and to amend the Rules
and Regulations then in effect. Nothing contained in this Lease shall impose
upon Landlord any obligation to enforce the Rules and Regulations or terms,
covenants or conditions in any other lease against any other Building tenant,
and Landlord shall not be liable to Tenant for violation of the same by any
other tenant, its employees, agents, visitors or licensees, provided that
Landlord shall enforce the Rules or Regulations against Tenant in a
non-discriminatory fashion.

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ARTICLE 24
BROKER
     Landlord has retained Landlord’s Agent as leasing agent in connection with
this Lease and Landlord will be solely responsible for any fee that may be
payable to Landlord’s Agent. Landlord agrees to pay a commission to Scheer
Partners pursuant to a separate agreement. Each of Landlord and Tenant
represents and warrants to the other that neither it nor its agents have dealt
with any broker in connection with this Lease other than Landlord’s Agent and
Tenant’s Broker and that no other broker, finder or like entity procured or
negotiated this Lease or is entitled to any fee or commission in connection
herewith. Each of Landlord and Tenant shall indemnify, defend, protect and hold
the other party harmless from and against any and all Losses which the
indemnified party may incur by reason of any claim of or liability to any
broker, finder or like agent (other than Landlord’s Agent and Scheer Partners)
arising out of any dealings claimed to have occurred between the indemnifying
party and the claimant in connection with this Lease, and/or the above
representation being false. Landlord will have no liability to Tenant arising
from any commission, fee or other sum that is or might become due and payable to
Liberty Greenfield in connection with this Lease. Landlord and Tenant
acknowledge that any commission, fee or other sum that is or might become due
and payable to Liberty Greenfield in connection with this Lease is to be paid by
Scheer Partners pursuant to the terms of a separate agreement between Scheer
Partners and Liberty Greenfield.
ARTICLE 25
INDEMNITY
     Section 25.1 Tenant’s Indemnity. Tenant shall not do or permit to be done
any act or thing upon the Premises or the Building which may subject Landlord to
any liability or responsibility for injury, damages to persons or property or to
any liability by reason of any violation of any Requirement, and shall exercise
such control over the Premises as to fully protect Landlord against any such
liability. Tenant shall indemnify, defend, protect and hold harmless each of the
Indemnitees from and against any and all Losses, resulting from any claims
(i) against the Indemnitees arising from any negligence or willful misconduct of
(A) all Tenant Parties or (B) both Landlord and Tenant, provided, however, that
Tenant’s liability hereunder with respect to matters judicially determined to
have arisen out of the negligence of Landlord, which determination shall not be
subject to appeal, shall be limited to the amount of insurance coverage carried
by Tenant pursuant to Article 11, (ii) against the Indemnitees arising from any
accident, injury or damage whatsoever caused to any person or to the property of
any person and occurring in or about the Premises, and (iii) against the
Indemnitees resulting from any breach, violation or nonperformance of any
covenant, condition or agreement of this Lease on the part of Tenant to be
fulfilled, kept, observed or performed.
     Section 25.2 Landlord’s Indemnity. Landlord shall indemnify, defend and
hold harmless Tenant from and against all Losses incurred by Tenant arising from
(i) any accident, injury or damage whatsoever caused to any person or the
property of any person in or about the Real Property (exclusive of the Premises)
to the extent attributable to the negligence or willful misconduct of Landlord
or its employees or agents, and/or (iii) any breach, violation or

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nonperformance of any covenant, condition or agreement of this Lease on the part
of Landlord to be fulfilled, kept, observed or performed.
     Section 25.3 Defense and Settlement. If any claim, action or proceeding is
made or brought against any Indemnitee for which Tenant is obligated to
indemnify such Indemnitee under Section 25.1, then upon demand by an Indemnitee,
Tenant, at its sole cost and expense, shall resist or defend such claim, action
or proceeding in the Indemnitee’s name (if necessary), by attorneys approved by
the Indemnitee, which approval shall not be unreasonably withheld (attorneys for
Tenant’s insurer shall be deemed approved for purposes of this Section 25.3).
Notwithstanding the foregoing, an Indemnitee may retain its own attorneys to
participate or assist in defending any claim, action or proceeding involving
potential liability in excess of the amount available under Tenant’s liability
insurance carried under Section 11.1 for such claim and Tenant shall pay the
reasonable fees and disbursements of such attorneys. If Tenant fails to
diligently defend or if there is a legal conflict or other conflict of interest,
then Landlord may retain separate counsel at Tenant’s expense. Notwithstanding
anything herein contained to the contrary, Tenant may direct the Indemnitee to
settle any claim, suit or other proceeding provided that (a) such settlement
shall involve no obligation on the part of the Indemnitee other than the payment
of money, (b) any payments to be made pursuant to such settlement shall be paid
in full exclusively by Tenant at the time such settlement is reached, (c) such
settlement shall not require the Indemnitee to admit any liability, and (d) the
Indemnitee shall have received an unconditional release from the other parties
to such claim, suit or other proceeding.
ARTICLE 26
MISCELLANEOUS
     Section 26.1 Delivery. This Lease shall not be binding upon Landlord or
Tenant unless and until Landlord shall have executed and delivered a fully
executed copy of this Lease to Tenant.
     Section 26.2 Transfer of Real Property. Landlord’s obligations under this
Lease shall not be binding upon the Landlord named herein after the sale,
conveyance, assignment or transfer (collectively, a “Transfer”) by such Landlord
(or upon any subsequent landlord after the Transfer by such subsequent landlord)
of its interest in the Building or the Real Property, as the case may be, and in
the event of any such Transfer, Landlord (and any such subsequent Landlord)
shall be entirely freed and relieved of all covenants and obligations of
Landlord hereunder arising from and after the date of Transfer and the
transferee of Landlord’s interest (or that of such subsequent Landlord) in the
Building or the Real Property, as the case may be, shall be deemed to have
assumed all obligations under this Lease arising from and after the date of
Transfer.
     Section 26.3 Limitation on Liability. The liability of Landlord for
Landlord’s obligations under this Lease shall be limited to Landlord’s interest
in the Real Property and Tenant shall not look to any other property or assets
of Landlord or the property or assets of any direct or indirect partner, member,
manager, shareholder, director, officer, principal, employee or agent of
Landlord (collectively, the “Parties”) in seeking either to enforce Landlord’s
obligations under this Lease or to satisfy a judgment for Landlord’s failure to
perform such obligations; and

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none of the Parties shall be personally liable for the performance of Landlord’s
obligations under this Lease.
     Section 26.4 Rent. All amounts payable by Tenant to or on behalf of
Landlord under this Lease, whether or not expressly denominated Fixed Rent,
Tenant’s Tax Payment, Tenant’s Operating Payment, Additional Rent or Rent, shall
constitute rent for the purposes of Section 502(b)(6) of the United States
Bankruptcy Code.
     Section 26.5 Entire Document. This Lease (including any Schedules and
Exhibits referred to herein and all supplementary agreements provided for
herein) contains the entire agreement between the parties and all prior
negotiations and agreements are merged into this Lease. All of the Schedules and
Exhibits attached hereto are incorporated in and made a part of this Lease,
provided that in the event of any inconsistency between the terms and provisions
of this Lease and the terms and provisions of the Schedules and Exhibits hereto,
the terms and provisions of this Lease shall control.
     Section 26.6 Governing Law. This Lease shall be governed in all respects by
the laws of the Commonwealth of Virginia (but not including the choice of law
rules thereof).
     Section 26.7 Unenforceability. If any provision of this Lease, or its
application to any person or circumstance, shall ever be held to be invalid or
unenforceable, then in each such event the remainder of this Lease or the
application of such provision to any other person or any other circumstance
(other than those as to which it shall be invalid or unenforceable) shall not be
thereby affected, and each provision hereof shall remain valid and enforceable
to the fullest extent permitted by law.
     Section 26.8 Lease Disputes.
          (a) Landlord and Tenant agree that (i) all disputes arising, directly
or indirectly, out of or relating to this Lease, and all actions to enforce this
Lease, shall be dealt with and adjudicated in the state courts of the
Commonwealth of Virginia or the United States District Court for the Eastern
District of Virginia and for that purpose hereby expressly and irrevocably
submits itself to the jurisdiction of such courts; and (ii) to the extent
permitted under applicable law, this consent to personal jurisdiction shall be
self-operative and no further instrument or action, other than service of
process in one of the manners specified in this Lease, or as otherwise permitted
by law, shall be necessary in order to confer jurisdiction upon it in any such
court.
          (b) To the extent that Tenant has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
Tenant irrevocably waives such immunity in respect of its obligations under this
Lease.
     Section 26.9 Landlord’s Agent. Unless Landlord delivers written notice to
Tenant to the contrary, Landlord’s Agent is authorized to act as Landlord’s
agent in connection with the performance of this Lease, and Tenant shall be
entitled to rely upon correspondence received from Landlord’s Agent. Tenant
acknowledges that Landlord’s Agent is acting solely as agent for

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Landlord in connection with the foregoing; and neither Landlord’s Agent nor any
of its direct or indirect partners, members, managers, officers, shareholders,
directors, employees, principals, agents or representatives shall have any
liability to Tenant in connection with the performance of this Lease, and Tenant
waives any and all claims against any and all of such parties arising out of, or
in any way connected with, this Lease, the Building or the Real Property.
     Section 26.10 Estoppel. Within 10 Business Days following request from
Landlord, any Mortgagee or any Lessor, Tenant shall deliver to Landlord a
statement executed and acknowledged by Tenant, in form reasonably satisfactory
to Landlord, (a) stating the Commencement Date, the Rent Commencement Date and
the Expiration Date, and that this Lease is then in full force and effect and
has not been modified (or if modified, setting forth all modifications),
(b) setting forth the date to which the Fixed Rent and any Additional Rent have
been paid, together with the amount of monthly Fixed Rent and Additional, Rent
then payable, (c) stating whether or not, to the best of Tenant’s knowledge,
Landlord is in default under this Lease, and, if Landlord is in default, setting
forth the specific nature of all such defaults, (d) stating the amount of the
Security Deposit, if any, under this Lease, (e) stating whether there are any
subleases or assignments affecting the Premises, (f) stating the address of
Tenant to which all notices and communications under the Lease shall be sent,
and (g) responding to any other matters reasonably requested by Landlord, such
Mortgagee or such Lessor. Tenant acknowledges that any statement delivered
pursuant to this Section 26.10 may be relied upon by any purchaser or owner of
the Real Property or the Building or all or any portion of Landlord’s interest
in the Real Property or the Building or any Superior Lease, or by any Mortgagee,
or assignee thereof or by any Lessor, or assignee thereof.
     Section 26.11 Certain Interpretational Rules. For purposes of this Lease,
whenever the words “include”, “includes”, or “including” are used, they shall be
deemed to be followed by the words “without limitation” and, whenever the
circumstances or the context requires, the singular shall be construed as the
plural, the masculine shall be construed as the feminine and/or the neuter and
vice versa. This Lease shall be interpreted and enforced without the aid of any
canon, custom or rule of law requiring or suggesting construction against the
party drafting or causing the drafting of the provision in question.
     The captions in this Lease are inserted only as a matter of convenience and
for reference and in no way define, limit or describe the scope of this Lease or
the intent of any provision hereof.
     Section 26.12 Parties Bound. The terms, covenants, conditions and
agreements contained in this Lease shall bind and inure to the benefit of
Landlord and Tenant and, except as otherwise provided in this Lease, to their
respective legal representatives, successors, and assigns.
     Section 26.13 Memorandum of Lease. This Lease shall not be recorded;
however, at Landlord’s request, Landlord and Tenant shall promptly execute,
acknowledge and deliver a memorandum with respect to this Lease sufficient for
recording and Landlord may record the memorandum. Within 10 days following the
end of the Term. Tenant shall enter into such documentation as is reasonably
required by Landlord to remove the memorandum of record.

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     Section 26.14 Counterparts. This Lease may be executed in 2 or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
     Section 26.15 Survival. All obligations and liabilities of Landlord or
Tenant to the other which accrued before the expiration or other termination of
this Lease, and all such obligations and liabilities which by their nature or
under the circumstances can only be, or by the provisions of this Lease may be,
performed after such expiration or other termination, shall survive the
expiration or other termination of this Lease. Without limiting the generality
of the foregoing, the rights and obligations of the parties with respect to any
indemnity under this Lease, and with respect to any Rent and any other amounts
payable under this Lease, shall survive the expiration or other termination of
this Lease.
     Section 26.16 Inability to Perform. This Lease and the obligation of Tenant
to pay Rent and to perform all of the other covenants and agreements of Tenant
hereunder shall not be affected, impaired or excused by any Unavoidable Delays.
Landlord shall use reasonable efforts to promptly notify Tenant of any
Unavoidable Delay which prevents Landlord from fulfilling any of its obligations
under this Lease.
     Section 26.17 Substitute Premises. [Intentionally Omitted]
     Section 26.18 Deed of Lease/Landlord’s Agent for Service of Process. For
purposes of Section 55-2, Code of Virginia (1950), as amended, this Lease is and
shall be deemed to be a deed of lease. For purposes of Section 55-218.1, Code of
Virginia (1950), as amended, Landlord’s resident agent for service of process
is: James C. Brincefield, Jr., Attorney at Law, 526 King Street, Alexandria,
Virginia 22314.
     Section 26.19 Lien for Payment of Rent. [Intentionally Omitted]
     Section 26.20 Financial Statements. Tenant agrees to deliver to Landlord by
April 30 of each year a balance sheet of Tenant as of the end of the preceding
calendar year and an income and loss statement of Tenant for the 12 month period
ending on such date.
ARTICLE 27
SECURITY DEPOSIT
     Section 27.1 Letter of Credit. Tenant shall deliver to Landlord, upon
Tenant’s execution of this Lease, a Letter of Credit (as hereinafter defined) in
the amount specified in the Basic Lease Information, as security for the
faithful performance and observance by Tenant of the terms, covenants and
conditions of this Lease. The Letter of Credit shall be in the form of a clean,
irrevocable, non-documentary and unconditional letter of credit (the “Letter of
Credit”) issued by and drawable upon any commercial bank which is a member of
the New York Clearing House Association or other bank satisfactory to Landlord,
trust company, national banking association or savings and loan association with
offices for banking purposes in the Washington, D.C. metropolitan area (or, if
the issuing bank is Wells Fargo, an office in New York City, Washington, D.C. or
San Francisco, California) (the “Issuing Bank”), which has outstanding

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unsecured, uninsured and unguaranteed indebtedness, or shall have issued a
letter of credit or other credit facility that constitutes the primary security
for any outstanding indebtedness (which is otherwise uninsured and
unguaranteed), that is then rated, without regard to qualification of such
rating by symbols such as “+” or “-” or numerical notation, “Aa” or better by
Moody’s Investors Service and “AA” or better by Standard & Poor’s Rating
Service, and has combined capital, surplus and undivided profits of not less
than $2,000,000,000. The Letter of Credit shall (a) name Landlord as
beneficiary, (b) have a term of not less than one year, (c) permit multiple
drawings, (d) be fully transferable by Landlord without the payment of any fees
or charges by Landlord, and (e) otherwise be in form and content satisfactory to
Landlord. If upon any transfer of the Letter of Credit, any fees or charges
shall be so imposed, then Landlord shall pay the first $250 of such fees and
charges and Tenant shall pay any additional fees or charges imposed in
connection with such transfer. The Letter of Credit shall provide that it shall
be deemed ‘ automatically renewed, without amendment, for consecutive periods of
one year each thereafter during the Term (and in no event shall the Letter of
Credit expire prior to the 45th day following the Expiration Date) unless the
Issuing Bank sends duplicate notices (the “Non-Renewal Notices ”) to Landlord by
certified mail, return receipt requested (one of which shall be addressed
“Attention, Chief Legal Officer” and the other of which shall be addressed
“Attention, Chief Financial Officer”), not less than 45 days next preceding the
then expiration date of the Letter of Credit stating that the Issuing Bank has
elected not to renew the Letter of Credit. The Issuing Bank shall agree with all
drawers, endorsers and bona fide holders that drafts drawn under and in
compliance with the terms of the Letter of Credit will be duly honored upon
presentation to the Issuing Bank at an office location in the Washington, D.C.
metropolitan area. The Letter of Credit shall be subject in all respects to the
International Standby Practices 1998, International Chamber of Commerce
Publication No. 500.
     Section 27.2 Application of Security. If (a) an Event of Default by Tenant
occurs in the payment or performance of any of the terms, covenants or
conditions of this Lease, including the payment of Rent, or (b) Tenant fails to
make any installment of Rent as and when due, or (c) Landlord receives a
Non-Renewal Notice, Landlord shall have the right by sight draft to draw, at its
election, all or a portion of the proceeds of the Letter of Credit and
thereafter hold, use, apply, or retain the whole or any part of such proceeds,
as the case may be, (x) to the extent required for the payment of any Fixed Rent
or any other sum as to which Tenant is in default including (i) any sum which
Landlord may expend or may be required to expend by reason of Tenant’s default,
and/or (ii) any damages to which Landlord is entitled pursuant to this Lease,
whether such damages accrue before or after summary proceedings or other reentry
by Landlord, and/or (y) as a cash security deposit, unless and until, in the
case of clause (c) above, Tenant delivers to Landlord a substitute Letter of
Credit which meets the requirements of this Article 27. If Landlord applies or
retains any part of the proceeds of the Letter of Credit, or cash security,
Tenant, upon demand, shall deposit with Landlord the amount so applied or
retained so that Landlord shall have the full amount thereof on hand at all
times during the Term. If Tenant shall comply with all of the terms, covenants
and conditions of this Lease, the Letter of Credit or cash security, as the case
may be, shall be returned to Tenant after the Expiration Date and after delivery
of possession of the Premises to Landlord in the manner required by this Lease.

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     Section 27.3 Transfer. Upon a sale or other transfer of the Real Property
or the Building, or any financing of Landlord’s interest therein, Landlord shall
have the right to transfer the Letter of Credit and any cash security to its
transferee or lender. With respect to the Letter of Credit, within 5 days after
notice of such transfer or financing, Tenant, at its sole cost, shall arrange
for the transfer of the Letter of Credit to the new landlord or the lender, as
designated by Landlord in the foregoing notice or have the Letter of Credit
reissued in the name of the new landlord or the lender. Upon such transfer,
Tenant shall look solely to the new landlord or lender for the return of the
Letter of Credit or such cash security and the provisions hereof shall apply to
every transfer or assignment made of the Letter of Credit or such cash security
to a new landlord. Tenant shall not assign or encumber or attempt to assign or
encumber the Letter of Credit or such cash security and neither Landlord nor its
successors or assigns shall be bound by any such action or attempted assignment,
or encumbrance.
[SIGNATURES FOLLOW]

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     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
day and year first above written.
LANDLORD:
TST WOODLAND FUNDING I, L.L.C.,
a Delaware limited liability company

         
 
       
By:
  /s/ Gary W. Roth    
 
       
 
  Gary W. Roth    
Its:
  Vice President    
 
       
 
       
TENANT:
   
 
        DIECA COMMUNICATIONS, INC.,
a Virginia corporation    
 
       
By:
  /s/ Charles E. Hoffman    
 
       
Its:
  President & CEO    
 
       

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Exhibit A
Floor Plan
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.

A-1

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(MAP) [w67208w6720805.gif]

 

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(MAP) [w67208w6720806.gif]

 

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(MAP) [w67208w6720807.gif]

 

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FIRST AMENDMENT TO DEED OF LEASE
     THIS FIRST AMENDMENT TO DEED OF LEASE (this “First Amendment”) is made this
31st day of March, 2005 (the “Effective Date”), by and between ACP/2300
CORPORATE PARK DRIVE, LLC, a Delaware limited liability company (“Landlord”),
and DIECA COMMUNICATIONS, INC., a Virginia corporation (“Tenant”).
W I T N E S S E T H :
     WHEREAS, pursuant to that certain Deed of Lease dated July 8, 2002 (the
“Original Lease”), TST Woodland Funding I, L.L.C. (“Original Landlord”) leased
to Tenant, and Tenant leased from Original Landlord, approximately 37,517
rentable square feet of space (the “Premises”) on the first (1st), third (3rd)
and fourth (4th) floors of the building located at 2300 Corporate Park Drive,
Herndon, Virginia (the “Building”);
     WHEREAS, Landlord purchased the Building from Original Landlord and
succeeded to the interest of Original Landlord under the Original Lease; and
     WHEREAS, Tenant desires to extend the Term for a period of five (5) years,
commencing on August 1, 2005 and expiring on July 31, 2010, and Landlord is
willing to do so, subject to the terms and conditions set forth in this First
Amendment.
     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration and of the mutual agreements hereinafter set forth, it is
hereby mutually agreed as follows:
     1. Incorporation of Recitals. The foregoing recitals are hereby
incorporated in this First Amendment and made a part hereof by this reference.
     2. Definitions. All capitalized terms used in this First Amendment shall
have the meanings ascribed thereto in the Original Lease, unless otherwise
defined herein. As used herein and in the Original Lease, the term “Lease” shall
mean the Original Lease, as amended by this First Amendment.
     3. Extension Term. The Term is hereby extended for a period of five
(5) years (the “Extension Term”), commencing on August 1, 2005 (the “Extension
Term Commencement Date”) and ending on July 31, 2010 (the “Extension Term
Expiration Date”).
     4. Improvements to the Premises.
          A. Tenant shall retain possession of the Premises on the Extension
Term Commencement Date in its then “as-is” condition, and, except as expressly
set forth in this Paragraph 4, Landlord shall have no obligation to perform or
pay for any work, improvements or alterations in or to the Premises in
connection with this First Amendment or otherwise. Notwithstanding the foregoing
and provided that Tenant is not then in default of its obligations under the
Lease, Landlord shall install in the Premises, at Tenant’s sole cost and
expense, subject to application of the Refurbishment Allowance (hereinafter
defined), the improvements and alterations (the “Tenant Improvements”) described
in the plans and specifications prepared by Tenant’s architect and approved by
Landlord (the “Tenant’s Plans”). Landlord shall provide Tenant with an allowance
of up to Seven Hundred Thirty-One Thousand Five Hundred Eighty-One and 50/100
Dollars ($731,581.50) (or Nineteen and 50/100 Dollars ($19.50) per rentable
square foot of the Premises) (the “Refurbishment Allowance”) to pay for costs
and expenses incurred by Tenant in connection with the design and construction
of the Tenant Improvements. Once Landlord has approved the Tenant’s Plans,
Landlord shall bid the Tenant Improvements work to three (3) general contractors
selected by Landlord who are licensed in Virginia (the “Approved Bidders”). Upon
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Landlord’s receipt of fixed price bids from those of the Approved Bidders which
intend to submit bids for the construction of the Tenant Improvements, Tenant
shall select the contractor which shall undertake construction of the Tenant
Improvements (the “Contractor”) from among the Approved Bidders which Landlord
determines have submitted conforming bids. Subject to Landlord’s approval of the
Tenant’s Plans, construction of the Tenant Improvements work may commence at any
time after the Effective Date. Landlord shall disburse portions of the
Refurbishment Allowance from time-to-time as Landlord incurs costs in connection
with the construction of the Tenant Improvements. The Tenant’s Plans prepared by
Tenant’s architect shall be subject to Landlord’s approval in accordance with
the terms and conditions of the Original Lease, including without limitation
those set forth in Article 5 thereof (captioned, “Alterations”); provided that
Landlord shall approve or reject in its sole discretion all Tenant Improvements
proposed by Tenant which affect the base Building or the mechanical, electrical,
plumbing or other any base Building system therein. The Refurbishment Allowance
shall be used by Tenant solely to pay for the cost of constructing the Tenant
Improvements in the Premises, except as otherwise expressly permitted pursuant
to the terms and conditions of Paragraph 4.C, below.
     B. All costs and expenses incurred in connection with the design and
construction of the Tenant Improvements (the “Construction Costs”) in excess of
the Improvement Allowance shall be paid solely by Tenant on or before the date
such costs are due and payable (or if previously paid by Landlord, shall be
reimbursed to Landlord by Tenant within ten (10) days of receipt by Tenant of
invoices therefor from Landlord), and Tenant agrees to indemnify Landlord from
and against any such costs. All amounts payable by Tenant pursuant to this
Paragraph 4.B shall be deemed to be Additional Rent for purposes of the Lease.
     C. At any time after Tenant has completed the Tenant Improvements and
obtained lien waivers from all contractors who performed construction-related
services, Tenant may; upon ten (10) business days notice to Landlord, cause
Landlord to apply any then-undisbursed portion of the Refurbishment Allowance
toward the next installment of Extension Term Monthly Fixed Rent (hereinafter
defined) and/or Additional Rent coming due under the Lease. In the event that
Landlord has not disbursed all of the Refurbishment Allowance by January 1, 2007
(the “Outside Allowance Date”) in payment of, or reimbursement for, Tenant
Improvements permitted hereunder and/or to defray Extension Term Monthly Fixed
Rent and/or Additional Rent under the Lease, Landlord shall credit such
undisbursed portion of the Refurbishment Allowance against Tenant’s obligation
to pay Rent (including without limitation Extension Term Monthly Fixed Rent
and/or Additional Rent) first owing under the Lease after the Outside Allowance
Date.
     D. Landlord’s designated representative, ACP Mid-Atlantic LLC (the
“Construction Supervisor”), shall supervise the construction of the Tenant
Improvements, and Tenant shall pay the Construction Supervisor a construction
supervisor fee (the “Construction Supervision Fee”) equal to five percent (5%)
of the cost of the Tenant Improvements to cover the Landlord’s cost of
supervision of construction of the Tenant Improvements. In supervising the
construction of the Tenant Improvements, the Construction Supervisor shall
perform the following tasks: (1) prepare the bid package for the construction of
the Tenant Improvements; (2) discuss the bid package with Tenant; (3) submit a
bid package to each of the Approved Bidders; (4) discuss the bid package with
the Approved Bidders; (5) show the Premises to each Approved Bidder; (6) collect
from the Approved Bidders fixed price bids for the construction of the Tenant
Improvements; (7) discuss each bid with Tenant, Landlord and each Approved
Bidder which submitted same; (8) approve the form of construction contract to be
executed by Landlord and the Contractor; (9) oversee the Contractor’s obtaining
of permits for, and the commencement of construction with respect to, the Tenant
Improvements work; (10) supervise construction of the Tenant Improvements;
(11) determine when the Tenant Improvements have been substantially completed by
the Contractor; (12) hold a “walk through” inspection of the Premises with
Tenant and the Contractor; and (13) oversee the completion by the Contractor of
all “punch list” items noted by Tenant and confirmed by Landlord’s architect.
The Construction Supervision Fee shall be
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deducted by the Landlord from the Refurbishment Allowance. Notwithstanding the
foregoing, Tenant shall be required to reimburse Landlord for any reasonable
third-party costs incurred by Landlord in connection with Landlord’s review of
any plans or specifications depicting the Tenant Improvements, within thirty
(30) days after invoice by Landlord; provided however that, before incurring any
such third-party costs, Landlord shall contact Tenant and inform it of the
nature and scope of the third-party services that Landlord intends to retain.
Landlord shall deduct such third-party costs from the Refurbishment Allowance.
          E. Tenant expressly acknowledges and agrees that (1) Landlord shall
undertake the Tenant Improvements in the Premises while Tenant is in. occupancy
thereof; (2) Landlord shall perform construction activities in the Premises
during regular business hours (Monday-Friday, 9:00 a.m. to 5:00 p.m.), unless
Landlord elects in its sole discretion to perform some or all of such work in
the evening and on weekends; (3) Landlord shall not be liable to Tenant for
constructive eviction or for any interference to Tenant’s business operations in
the Premises arising out of Landlord’s construction of the Tenant Improvements;
and (4) no delay by Landlord in substantially completing the Tenant Improvements
shall delay or otherwise affect any of Tenant’s obligations hereunder, including
without limitation its obligation to pay full Extension Term Monthly Fixed Rent
and Additional Rent from and after the Extension Term Commencement Date.
Notwithstanding the provisions of subsection (2), above, at Tenant’s written
request, received by Landlord prior to the execution by Landlord and the
Contractor of a construction contract for the construction of the Tenant
Improvements, Landlord shall cause the Contractor to undertake the construction
of the Tenant Improvements during days and hours other than regular business
hours; provided however that Tenant shall bear all additional and/or increased
costs which arise out of such election by Tenant, including without limitation
an increase in the Contractor’s price to construct the Tenant Improvements and
all engineering, security and other costs incurred by Landlord as a result
thereof. All such additional and/or increased costs shall be paid by Landlord
out of the Refurbishment Allowance. Landlord agrees that, if Tenant elects to
have Landlord undertake the construction of the Tenant Improvements during
regular business hours, Landlord shall use commercially reasonable efforts to
coordinate the scheduling of the Tenant Improvements with Tenant in order to
attempt to minimize the interference to Tenant’s business operations in the
Premises caused by such construction work.
     5. Fixed Rent During Extension Term. Commencing on the Extension Term
Commencement Date, and thereafter on the first day of each and every calendar
month during the Extension Term, Tenant shall pay to Landlord Fixed Rent for the
Premises (“Extension Term Annual Fixed Rent”) in the following amounts, in equal
monthly installments (“Extension Term Monthly Fixed Rent”), in advance, as
follows:

                              Extension Term Annual             Fixed Rent Per
Square   Extension Term   Extension Term         Period   Foot   Annual Fixed
Rent   Monthly Fixed Rent
8/1/05-7/31/06
  $ 25.50     $ 956,683.56     $ 79,723.63  
8/1/06-7/31/07
  $ 26.14     $ 980,600.64     $ 81,716.72  
8/1/07-7/31/08
  $ 26.79     $ 1,005,115.68     $ 83,759.64  
8/1/08-7/31/09
  $ 27.46     $ 1,030,243.56     $ 85,853.63  
8/1/09-7/31/10
  $ 28.15     $ 1,055,999.64     $ 87,999.97  

Tenant shall pay Landlord Extension Term Annual Fixed Rent without deduction,
diminution, setoff, counterclaims or prior notice or demand, in accordance with
the terms and provisions of Article 2 of the Original Lease (captioned,
“Premises, Term, Rent”).
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     6. Additional Rent During Extension Term.
          A. Commencing on January 1, 2007 and continuing thereafter throughout
the Extension Term, Tenant shall pay to Landlord: (i) Tenant’s Proportionate
Share (as such term is defined in Article 1 of the Original Lease) of the amount
of Operating Expenses incurred by Landlord during any calendar year in the
Extension Term which is in excess of the amount of Operating Expenses incurred
by Landlord in the E.T. Base Year (hereinafter defined) in accordance with the
terms and conditions of Section 7.3 of the Original Lease (captioned, “Tenant’s
Operating Payment”); and (ii) Tenant’s Proportionate Share of the amount of
Taxes incurred by Landlord during any calendar year in the Extension Term which
is in excess of the amount of Taxes incurred by Landlord in the E.T. Base Year
in accordance with the terms and conditions of Section 7.2 of the Original Lease
(captioned, “Tenant’s Tax Payment”). As used herein, the term “E.T. Base Year”
shall mean calendar year 2006.
          B. Effective as of January 1, 2007, Section 7.7(a) of the Original
Lease is amended by (1) deleting “105%” in each instance in which such
percentage is used therein and by inserting in lieu thereof “106%”; (2) deleting
the example set forth therein; and (3) inserting the following language
regarding the cumulative nature of the Cap immediately after the word
“determined)” in line 6 thereof: “Notwithstanding the foregoing, for each
calendar year in which Controllable Operating Expenses are less than 106% of
Controllable Operating Expenses for the immediately-preceding calendar year, the
percentage by which actual Controllable Operating Expenses for such year are
below 106% of the prior year’s Controllable Operating Expenses shall be added to
the “Cap” for the next calendar year (and each succeeding calendar year until
actual Controllable Operating Expenses for such year exceed by more than 106%
(plus any unused “carryover” percentage from prior calendar years) of the prior
year’s Controllable Operating Expenses”.
     7. Tenant’s Continuing Obligations. Between the Effective Date and the
Extension Term Commencement Date, Tenant shall continue to pay to Landlord:
(a) all Fixed Rent for the Premises in accordance with the terms and conditions
of Article 2 of the Original Lease; (b) Tenant’s Proportionate Share of
increases in Operating Expenses in accordance with the terms and conditions of
Section 7.3 of the Original Lease; (c) Tenant’s Proportionate Share of increases
in Real Estate Taxes in accordance with the terms and conditions of Section 7.2
of the Original Lease; and (d) any and all other Additional Rent payable to
Landlord under the Original Lease.
     8. Option To Extend Term.
          A. Tenant shall have and is hereby granted the option to further
extend the Term hereof for one (1) additional period of five (5) years
commencing on the date immediately following the Extension Term Expiration Date
(the “Second Extension Term”), provided that: (i) Tenant delivers written notice
(the “Second Extension Notice”) to Landlord, on the date which is twelve
(12) months prior to the Extension Term Expiration Date, time being of the
essence, of Tenant’s irrevocable election to exercise such extension option,
time being of the essence; (ii) no Event of Default has occurred during the
Extension Term and no event exists at the time of the exercise of such option or
arises subsequent thereto, which event by notice and/or the passage of time
would constitute an Event of Default if not cured within the applicable cure
period; and (iii) Tenant has not assigned its interest in the Lease (except to a
Related Entity) or sublet more than thirty percent (30%) of the Premises (except
to a Related Entity).
          B. All terms and conditions of the Lease, including without limitation
all provisions governing the payment of Additional Rent and annual increases in
Annual Fixed Rent, shall remain in full force and effect during the Second
Extension Term, except that (i) Annual Fixed Rent (on a per rentable square foot
basis) payable during the Second Extension Period shall equal the then-current
Fair Market Rental Rate (hereinafter defined) at the time of the commencement of
the Second Extension Period; (ii) Landlord shall provide a “market” improvement
allowance, rental abatement and other tenant concessions
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in connection with the Second Extension Term; and (iii) the “Base Year” for
Tenant’s Proportionate Share of increases in Operating Expenses and Tenant’s
Proportionate Share of increases in Real Estate Taxes shall be calendar year
2011. As used in this Lease, the term “Fair Market Rental Rate” shall mean the
fair market rental rate that would be agreed upon between a landlord and a
tenant entering into a lease renewal for comparable space as to location,
configuration, size and use, in a comparable building as to quality, reputation
and age which is located in the Dulles Toll Road Corridor submarket, with a
comparable build-out and a comparable term assuming the following: (A) the
landlord and tenant are informed and well-advised and each is acting in what it
considers its own best interests; (B) the landlord shall provide a “market”
tenant improvement allowance, free rent period and other tenant concessions
(including, for example, an allowance for architectural and engineering fees)
typically provided to tenants of comparable space in comparable buildings for
leases having terms comparable to the Second Extension Period; and (C) the
tenant will continue to pay its share of increases in Operating Expenses and
Real Estate Taxes as described above.
           C. Landlord and Tenant shall negotiate in good faith to determine the
Annual Fixed Rent for the first year of the Second Extension Term, for a period
of thirty (30) days after the date on which Landlord receives Tenant’s written
notice of Tenant’s irrevocable election to exercise the extension option
provided for under this Paragraph 8. In the event Landlord and Tenant are unable
to agree upon the Annual Fixed Rent for the first year of the Second Extension
Term within said thirty (30)-day period, the Fair Market Rental Rate for the
Premises shall be determined by a board of three (3) licensed real estate
brokers, one of whom shall be named by the Landlord, one of whom shall be named
by Tenant, and the two so appointed shall select a third. Each real estate
broker so selected shall be licensed in the Commonwealth of Virginia as a real
estate broker specializing in the field of office leasing in Fairfax County,
having no fewer than ten (10) years experience in such field, and recognized as
ethical and reputable within the field. Landlord and Tenant agree to make their
appointments promptly within ten (10) days after the expiration of the thirty
(30)-day period, or sooner if mutually agreed upon. The two (2) brokers selected
by Landlord and Tenant shall promptly select a third broker (the “Third Broker”)
within ten (10) days after they both have been appointed, and each broker,
within fifteen (15) days after the third broker is selected, shall submit his or
her determination of the Fair Market Rental Rate. The Third Broker shall
determine which determination of Fair Market Rental Rate made by Landlord’s
broker or Tenant’s broker is closest to the determination of Fair Market Rental
Rate made by the Third Broker (the “Closest Determination”). The Fair Market
Rental Rate hereunder shall be the mean of the Closest Determination and the
determination of Fair Market Rental Value made by the Third Broker. Landlord and
Tenant shall each pay the fee of the broker selected by it, and they shall
equally share the payment of the fee of the Third Broker.
          D. Should the Term of the Lease be extended hereunder, Tenant shall,
if required by Landlord, execute an amendment modifying the Lease within thirty
(30) days after Landlord presents same to Tenant, which agreement shall set
forth the Annual Fixed Rent for the first year of the Second Extension Term and
the other economic terms and provisions in effect during the Second Extension
Term. Should Tenant fail to execute the amendment (which amendment accurately
sets forth the economic terms and provisions in effect during the Second
Extension Term) within thirty (30) days after presentation of same by Landlord,
time being of the essence, Tenant’s right to further extend the Term of the
Lease shall, at Landlord’s sole option, terminate, and Landlord shall be
permitted to lease such space to any other person or entity upon whatever terms
and conditions are acceptable to Landlord in its sole discretion.
     9. Right of First Offer.
          A. Subject to (i) any renewal rights granted by Landlord, before or
after the Effective Date, to any tenant of all or any portion of the Right of
First Offer Space, and (ii) the right of any tenant of the Right of First Offer
Space (or any portion thereof) to negotiate an extension of the term
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of its lease of such space or a new lease demising such space, Tenant shall be
granted during the Extension Term only the following rights with respect to the
Right of First Offer Space. As used herein, the term “Right of First Offer
Space” shall mean the portion, if any, of the First Floor Space (hereinafter
defined) and/or the Fourth Floor Space (hereinafter defined) which Landlord
determines is available for lease by Tenant during the Extension Term and with
respect to which Landlord receives an Offer (hereinafter defined) to lease all
or any portion of such space. As used herein (1) the term “First Floor Space”
means the space located on the first (1st) floor of the Building which is
designated as “First Floor Space” on Exhibit A attached hereto, and (2) the term
“Fourth Floor Space” means the space located on the fourth (4th) floor of the
Building which is designated as “Fourth Floor Space” on Exhibit A-1 attached
hereto. Notwithstanding any provision of the Lease to the contrary, Tenant shall
have no rights with respect to the Right of First Offer Space or any other
rights of first offer or refusal, or first right to negotiate, or any other
expansion rights whatsoever, except as expressly provided in this Paragraph 9.
          B. If, during the Extension Term, Landlord determines that any portion
of the Right of First Offer Space is, or will be, available for lease by Tenant
and thereafter Landlord receives a bona fide offer from a prospective tenant
which is not related to Landlord (a “Prospective Tenant”) to lease all or any
portion of the Right of First Offer Space (an “Offer”), the financial terms of
which Landlord is prepared to accept, Landlord shall notify Tenant in writing of
such Offer (the “ROFO Notice”), and Landlord shall set forth in the ROFO Notice:
(i) a description of the portion of the Right of First Offer Space that is
subject to the Offer (the “Available Space”), (ii) the base rent, tenant
concessions and other terms and conditions pursuant to which Landlord would
agree to lease the Available Space to Tenant (which terms need not be those
contained in the Offer), and (iii) the date on which Landlord anticipates that
the Available Space would become available for lease by Tenant (the “ROFO
Availability Date”). Provided that (A) no Event of Default then exists under the
Lease; (B) Tenant has not assigned the Lease (except to a Related Entity), or
sublet twenty-five percent (25%) or more of the Premises (except to a Related
Entity); (C) not less than thirty-six (36) months remain in the Extension Term
as of the ROFO Availability Date; and (D) Tenant notifies Landlord, in writing,
within five (5) business days after Tenant receives the ROFO Notice, time being
of the essence, of Tenant’s irrevocable election to lease all (but not less than
all) of the Available Space described in the ROFO Notice on the terms and
conditions set forth in the ROFO Notice (the “ROFO Tenant Election Notice”),
Tenant shall have the right to lease all, but not less than all, of the
Available Space described in the ROFO Notice on the terms and conditions set
forth in the ROFO Notice.
          C. In the event that Tenant timely delivers a ROFO Tenant Election
Notice to Landlord, Landlord shall prepare an amendment modifying the Lease to
incorporate the Available Space (the “ROFO Amendment”), which amendment shall
set forth, among other things: (i) the amount of Annual Fixed Rent payable by
Tenant for the Available Space (based on the per rentable square foot rental
rate set forth in the ROFO Notice) during each year of the Right of First Offer
Space Term (hereinafter defined); and (ii) the adjustments to Tenant’s
obligation to pay Additional Rent caused by the addition of the Available Space.
The term of the demise of the Available Space (the “Right of First Offer Space
Term”) shall commence on the date on which Landlord delivers such Available
Space to Tenant (the “ROFO Space Commencement Date”), at which time all of
Tenant’s obligations with respect to the Available Space shall commence,
including the obligation to pay Annual Fixed Rent. The Right of First Offer
Space Term shall be coterminous with the Extension Term, as such term may be
further extended.
          D. In the event that Landlord and Tenant enter in a ROFO Amendment,
and Landlord is unable to deliver to Tenant possession of the Available Space
demised thereunder on the ROFO Availability Date for any reason whatsoever,
including without limitation the failure of an existing tenant to vacate such
space, Landlord shall not be liable or responsible for any claims, damages or
liabilities in connection therewith or by reason thereof, provided that
(i) Landlord shall use reasonable efforts to obtain possession of such space and
deliver same to Tenant as soon as reasonably practicable thereafter; and
(ii) rent shall abate until Landlord delivers the Available Space to Tenant.
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          E. In the event Tenant fails timely to deliver a ROFO Tenant Election
Notice to Landlord or, having done so, Tenant fails to execute the ROFO
Amendment tendered by Landlord within ten (10) days after Landlord tenders such
amendment to Tenant: (i) Landlord may lease the Available Space (or any portion
thereof) described in the ROFO Notice to any person or entity of Landlord’s
choice, on whatever terms and conditions are selected by Landlord in its sole
discretion; and (ii) this Paragraph 9 shall terminate automatically, and Tenant
shall have no further right to lease any Right of First Offer Space.
     10. Monument Sign. In the event that, at any time during the Term, Landlord
elects in its sole discretion to erect a monument sign (the “Monument”) adjacent
to the main entrance of the Building, Tenant, at Tenant’s sole cost and expense,
shall be permitted to install on a non-exclusive basis a plaque or other means
of entity identification selected by Landlord in its sole discretion and bearing
Tenant’s name (the “Monument Signage”) on such Monument, in a location selected
by Landlord. All attributes of the Monument, if constructed by Landlord, shall
be determined by Landlord in its sole discretion. All attributes of the Monument
Signage, including without limitation size, materials, and color and position on
Landlord’s Monument, shall be subject to Landlord’s approval in its sole
discretion. The location of other tenants’ signage on the Monument (if built)
shall be determined by Landlord in its sole discretion. In the event that the
Monument is constructed by Landlord, Tenant’s right to install the Monument
Signage shall be subject to Tenant’s receipt of all necessary permits and
governmental approvals for such installation; provided that the failure to
obtain such permits or approvals shall not affect the Lease (or Tenant’s
obligations thereunder) in any way. Tenant shall be responsible for repairing
and maintaining the Monument Signage in a first-class condition throughout the
Term. The Monument Signage shall be installed by Landlord at Tenant’s sole cost
and expense. The right to install the Monument Signage shall be personal to
Dieca Communications, Inc. and shall not apply to any sublessee, assignee or
other transferee of Tenant; provided that (a) if an affiliate of Tenant occupies
the Premises pursuant to this Lease or a sublease, such affiliate’s name may be
on the Monument Signage in lieu of Tenant’s name; and (b) Tenant may insert its
“Covad” trade name on the Monument Signage in lieu of its corporate name. Tenant
agrees to indemnify Landlord and hold it harmless from and against all claims,
damage or liability (including reasonable attorneys’ fees) sustained or suffered
by Landlord arising out of or related to the installation, maintenance or
removal of the Monument Signage. Tenant shall remove the Monument Signage at the
end of the Term, and shall restore the portion of Landlord’s Monument affected
by such removal to its condition immediately prior to the installation of such
Monument Signage, reasonable wear and tear excepted. If Tenant fails to remove
the Monument Signage from the Monument at the expiration of the Term or fails to
restore the portions of the Monument affected by such removal, Landlord may, but
shall not be obligated to remove the Monument Signage and/or restore the portion
of the Monument affected thereby, and Tenant shall reimburse Landlord for all
costs and expenses incurred by Landlord with respect to such removal and/or
restoration immediately upon demand therefor.
     11. Security Deposit. Within ten (10) days after the Effective Date, time
being of the essence, Tenant shall cause the Issuing Bank to extend until
October 31, 2010 the expiration date under the Letter of Credit, and to issue to
Landlord an amendment to the Letter of Credit, in form and substance acceptable
to Landlord in its sole discretion, by which the Issuing Bank has effected such
extension. Notwithstanding any contrary provision contained in Article 27 of the
Original Lease (captioned, “Security Deposit”), provided that (a) no Event of
Default then exists; (b) no event has occurred which, but for the passage of
time or the giving of notice, would constitute an Event of Default under the
Lease; and (c) Tenant has not assigned the Lease or subleased all or any portion
of the Premises (collectively, the “Reduction Conditions”), then, upon the
earlier to occur of (i) the date which is ten (10) days after that on which
Tenant evidences to Landlord’s reasonable satisfaction that, for four
(4) successive three (3) calendar month periods during the Extension Term,
Guarantor (hereinafter defined) has been Profitable (hereinafter defined); or
(ii) August 31, 2008, the Letter of Credit shall be reduced by an amount (the
“First Reduction Amount”) sufficient to cause the Letter of Credit to be in an
amount equal to three (3) times the then-current Extension Term Monthly Fixed
Rent. As used herein, the term “Profitable” means that, at the end of each three
(3) calendar month period described above, Tenant demonstrates to
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Landlord’s reasonable satisfaction that (A) Guarantor has achieved an after-tax
profit (i.e., net income after taxes) for such period, (B) Guarantor has an
owner’s equity net of unamortized intangibles and. goodwill (i.e., total assets
less total liabilities and less any unamortized intangible assets and any good
will) equal to or greater than such owner’s equity as of the Effective Date, and
(C) the ratio of Guarantor’s total debt (long-term and short term) to owner’s
equity (net of unamortized intangibles and goodwill) is less than 1:2 (i.e.
total debt ¸ owner’s equity and less any unamortized intangible assets and any
good will is less than .50). The foregoing ratios and amounts for each three
(3) calendar month period in question shall be determined based upon Guarantor’s
quarterly financial statements delivered to Landlord which have been prepared in
accordance with generally accepted accounting principles consistently applied
and certified to as such by Guarantor’s chief financial officer. Notwithstanding
the foregoing, the Issuing Bank (as such term is defined in Section 27.1 of the
Original Lease) shall not reduce the Letter of Credit as aforesaid unless and
until Landlord delivers to such bank a written notice confirming that all
conditions precedent to such reduction have been satisfied. In addition,
provided that the Letter of Credit is reduced by the First Reduction Amount
prior to August 31, 2008 in accordance with the provisions of Subparagraph (i),
above, and provided that Guarantor’s Net Worth (hereinafter defined) and
Profitability have not declined between the date of such initial reduction in
the Letter of Credit and August 31, 2008, then within thirty (30) days after
August 31, 2008, provided that the Reduction Conditions are satisfied by Tenant
as of this date, the Letter of Credit shall be further reduced by an amount (the
“Second Reduction Amount”) sufficient to cause the Letter of Credit to be in an
amount equal to two (2) times the then-current Extension Term Monthly Fixed
Rent. In no event shall the Letter of Credit be further reduced by the Issuing
Bank unless and until the Issuing Bank receives from Landlord written
confirmation that Tenant has timely satisfied the conditions set forth above,
and that Tenant is then entitled to a reduction in the Letter of Credit in me
amount of the Second Reduction Amount. As used herein, the term “Net Worth”
means total assets (exclusive of intangible assets, including goodwill) minus
total liabilities.
     12. Second Floor Storage Systems Furniture. Subject to the terms and
conditions set forth below, Tenant shall have and is hereby granted a one-time
right of first offer to use, during the Extension Term,’at no additional cost to
Tenant, the systems furniture currently being stored by Landlord on the second
(2nd) floor of the Building, which furniture consists of approximately
twenty-four (24) work station cubicles (the “Second Floor Storage Systems
Furniture”). In the event that Landlord notifies Tenant in writing that Landlord
intends to utilize the Second Floor Storage Systems Furniture during the
Extension Term, Tenant shall have five (5) business days within which to notify
Landlord in writing (the “Furniture Election Notice”) of Tenant’s election to
use the Second Floor Storage Systems Furniture during the Extension Term. In the
event that Tenant timely delivers the Furniture Election Notice to Landlord,
Landlord, at Tenant’s sole cost and expense, shall deliver the Second Floor
Storage Systems Furniture to the Premises on the Furniture Delivery Date in its
then “as-is” condition. As used herein, the term “Furniture Delivery Date” means
the later to occur of: (i) the Extension Term Commencement Date; or (ii) thirty
(30) days after Landlord’s receipt of the Furniture Election Notice. Tenant
hereby expressly acknowledges and that Landlord shall have no obligation to
provide or purchase any supplemental components that may be necessary to
assemble or otherwise use the Second Floor Storage Systems Furniture. Throughout
the Extension Term, Tenant shall be solely responsible for the installation,
maintenance, repair and/or replacement of the Second Floor Storage Systems
Furniture. At the expiration or other termination of the Extension Term, Tenant
shall surrender and deliver the Second Floor Storage Systems Furniture, to
Landlord in the same condition and repair as it existed on the Extension Term
Commencement Date (except as repaired, rebuilt, or replaced), ordinary wear and
tear excepted. If Tenant fails to properly maintain, repair or replace any of
the Second Floor Storage Systems Furniture, Landlord may (but shall not be
obligated to) undertake such maintenance, repair or replacement, and Tenant
shall reimburse Landlord for all costs incurred by Landlord in connection
therewith within five (5) days after demand by Landlord. Notwithstanding any
contrary provisions contained in the last sentence of Section 4.3 of the
Original Lease, provided (a) no Event of Default then exists, and (b) no event
has occurred which, but for the passage of time or the giving of notice, would
constitute an Event of Default
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under the Lease, Tenant shall have the right, upon delivery of written notice to
Landlord on or before the date which is thirty (30) days prior to the Extension
Term Expiration Date, time being of the essence, to purchase the Existing
Furnishings (as such term is defined in Section 4.3 of the Original Lease) and
the Second Floor Storage Systems Furniture from Landlord for One Dollar ($1.00),
whereupon Landlord and Tenant shall enter into a bill of sale evidencing such
purchase.
     13. Parking.
          A. Notwithstanding any contrary provision contained in Section 3.2 of
the Original Lease (captioned, “Parking Facilities”) , throughout the Extension
Term, Landlord shall provide Tenant with the right to use, without additional
charge, an additional five (5) reserved parking spaces (the “Reserved Parking
Spaces”) in a location selected by Landlord in its sole discretion on the
surface lot adjacent to the Building and/or in the parking facility serving the
Building. Landlord shall have no obligation to “police” the Reserved Parking
Spaces in order to assure that automobiles parked in such Reserved Parking
Spaces belong to Tenant’s employees or guests only.
          B. Tenant agrees that it and its employees shall observe reasonable
safety precautions in the use of the parking garage, and shall at all times
abide by all reasonable rules and regulations promulgated by Landlord or the
parking garage operator governing the use of the parking garage. It is
understood and agreed that Landlord does not assume any responsibility for any
damage or loss to any automobiles parked in the parking garage or to any
personal property located therein, or for any injury sustained by any person in
or about the parking garage.
     14. Exterior Signage.
          A. Paragraph 1 of Rider No. 3 attached to the Original Lease is
amended by deleting the third (3rd) sentence thereof (which begins “The Exterior
Sign shall not exceed...”) and inserting in lieu thereof the following: “The
Exterior Sign shall not exceed its size as of March 1, 2005”.
          B. Exhibit R-3-A attached to the Original Lease is deleted in its
entirety, and Exhibit R-3-A attached hereto is substituted therefor as though
initially attached to the Original Lease.
     15. Landlord’s and Tenant’s Notice Addresses.
          A. Article 1 of the Original Lease is amended by deleting the names
and addresses set forth opposite “Tenant’s Address for Notices”, and inserting
in lieu thereof the following:

             
 
           
 
  “TENANT’S ADDRESS        
 
  FOR NOTICES:   Covad Communications    
 
      Attn: Legal Department    
 
      110 Rio Robles    
 
      San Jose, California 95134”    

          B. Article 1 of the Original Lease is amended by deleting the names
and addresses set forth opposite “Landlord’s Address for Notices”, and inserting
in lieu thereof the following:

             
 
           
 
           
 
  “LANDLORD’S ADDRESS        
 
  FOR NOTICES:   ACP/2350 Corporate Park Drive, LLC    
 
      Attn: Chief Operating Officer    
 
      444 Brickell Avenue    
 
      Suite 900    
 
      Miami, Florida 33131    

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  With copies to:    
 
       
 
  ACP/2350 Corporate Park Drive, LLC    
 
  c/o ACP Mid-Atlantic LLC, as Agent    
 
  Attn: Asset Manager    
 
  2350 Corporate Park Drive    
 
  Suite 110    
 
  Herndon, Virginia 20171    
 
       
 
  and to:    
 
       
 
  Holland & Knight LLP    
 
  2099 Pennsylvania Avenue, NW    
 
  Suite 100    
 
  Washington, DC 20006    
 
  Attn: David S. Kahn, Esq.”    

     16. USA Patriot Act and Anti-Terrorism Laws. As of the Effective Date, the
Original Lease is hereby amended by adding the following language as new
Article 28 thereof:
“ARTICLE 28
USA PATRIOT ACT AND ANTI-TERRORISM LAWS
(a) Tenant represents and warrants to, and covenants with, Landlord that neither
Tenant nor any of its respective constituent owners or affiliates currently are,
or shall be at any time during the Term hereof, in violation of any laws
relating to terrorism or money laundering (collectively, the “Anti-Terrorism
Laws”), including without limitation Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001 and relating to Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (the “Executive Order”) and/or the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (Public Law 107-56) (the “USA Patriot Act”).
(b) Tenant covenants with Landlord that neither Tenant nor any of its respective
constituent owners or affiliates is or shall be during the Term hereof a
“Prohibited Person,” which is defined as follows: (i) a person or entity that is
listed in the Annex to, or is otherwise subject to, the provisions of the
Executive Order; (ii) a person or entity owned or controlled by, or acting for
or on behalf of, any person or entity that is listed in the Annex to, or is
otherwise subject to the provisions of, the Executive Order; (iii) a person or
entity with whom Landlord is prohibited from dealing with or otherwise engaging
in any transaction by any Anti-Terrorism Law, including without limitation the
Executive Order and the USA Patriot Act; (iv) a person or entity who commits,
threatens or conspires to commit or support “terrorism” as defined in Section
3(d) of the Executive Order; (v) a person or entity that is named as a“specially
designated national and blocked person” on the then-most current list published
by the U.S. Treasury Department Office of Foreign Assets Control at its official
website, http://www.treas.gov/offices/eotffc/ofac/sdn/tllsdn.pdf, or at any
replacement website or other replacement official publication of such list; and
(vi) a person or entity who is affiliated with a person or entity listed in
items (i) through (v); above.
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(c) At any time and from time-to-time during the Term, Tenant shall deliver to
Landlord, within ten (10) days after receipt of a written request therefor, a
written certification reasonably acceptable to Landlord evidencing and
confirming Tenant’s compliance with this Article 28.”
     17. Deletion of Tenant’s Termination Right. As of the Effective Date,
Paragraph 9.6 of the Original Lease (captioned “Right to Terminate”) is deleted
in its entirety, and it shall be of no further force or effect.
     18. Guaranty. Simultaneously with Tenant’s execution and delivery to
Landlord of this First Amendment, Covad Communications Group, Inc. (“Guarantor”)
shall execute and deliver to Landlord the Guaranty of Deed of Lease attached
hereto as Exhibit C (the “Guaranty”).
     19. Low Voltage Cabling. All voice, data, video, audio, and other
low-voltage control transport system cabling and/or cable bundles installed in
the Building shall be (a) plenum rated and/or have a composition makeup suited
for its environmental use in accordance with NFPA 70/National Electrical Code;
(b) labeled every 3 meters with the Tenant’s name and origination and
destination points; (c) installed in accordance with all EIA/TIA standards and
the National Electric Code; (d) installed and routed in accordance with a
routing plan showing “as built” or “as installed” configurations of cable
pathways, outlet identification numbers, locations of all wall, ceiling and
floor penetrations, riser cable routing and conduit routing if applicable, and
such other information as Landlord may request. The routing plan shall be
available to Landlord and its agents at the Building upon request.
     20. Brokers. Landlord and Tenant recognize ACP Mid-Atlantic LLC, as
Landlord’s agent, and Liberty-Greenfield, LLP and Scheer Partners, as Tenant’s
agent, as the sole brokers (the “Brokers”) with respect to this First Amendment.
Landlord shall be responsible for the payment of any leasing commission owed to
the Brokers in accordance with the terms of separate commission agreements
entered into between Landlord and the Brokers. Landlord and Tenant each
represent and warrant to the other that no other broker has been employed in
carrying on any negotiations relating to this First Amendment and shall each
indemnify and hold harmless the other from any claim for brokerage or other
commission arising from or out of any breach of the foregoing representation and
warranty.
     21. Counterpart Copies. This First Amendment may be executed in two (2) or
more counterpart copies, all of which counterparts shall have the same force and
effect as if all parties hereto had executed a single copy of this First
Amendment.
     22. Miscellaneous. This First Amendment (a) shall be binding upon and inure
to the benefit of the parties hereto and their respective representatives,
transferees, successors and assigns and (b) shall be governed by and construed
in accordance with the laws of the Commonwealth of Virginia.
     23. Ratification. Except as expressly amended by this First Amendment, all
other terms, conditions and provisions of the Lease are hereby ratified and
confirmed and shall continue in full force and effect.
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     IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to Deed of Lease under seal as of the day and year first hereinabove written.

                                              LANDLORD:                    
 
                                            ACP/2300 CORPORATE PARK DRIVE, LLC,
a                 Delaware limited liability company        
 
                                            By:   ACP/Woodland Park, LLC, a
Delaware limited
liability company, its sole member    
 
                                    WITNESS:           By:   ACP/Woodland Park
Manager, LLC, a
Delaware limited liability company, its
manager
 
                                   
/s/    
              By:   /s/ Doug Fleit                
 
                                   
 
                  Name :  Doug Fleit                
 
                  Title:     Managing Member                
 
                                            TENANT:        
ATTEST:
                                   
 
                                            DIECA COMMUNICATIONS, INC., a
Virginia corporation        
 
                                    /s/           By:   /s/ Charles E. Hoffman  
                   
 
          Name :  CHARLES E. HOFFMAN                
 
          Title:   PRESIDENT & CEO                

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EXHIBIT A
FLOOR PLAN OF FIRST FLOOR SPACE
[Attach]
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EXHIBIT A-l
FLOOR PLAN OF FOURTH FLOOR SPACE
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EXHIBIT B
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EXHIBIT R-3-A
LOCATION OF EXTERIOR SIGNAGE
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EXHIBIT R-3-A
LOCATION OF EXTERIOR SIGNAGE
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EXHIBIT C
GUARANTY OF DEED OF LEASE
     THIS GUARANTY OF DEED OF LEASE (this “Guaranty”) is made and given as of
the ___ day of March, 2005, by COVAD COMMUNICATIONS GROUP, INC., a Delaware
corporation (“Guarantor”), to and for the benefit of ACP/2300 CORPORATE PARK
DRIVE, LLC, a Delaware limited liability company, and its successors and assigns
(“Landlord”).
W I T N E S S E T H:
     WHEREAS, concurrently with the execution of this Guaranty, Landlord and
Dieca Communications, Inc. (“Tenant”) have entered into that certain First
Amendment to Deed of Lease, of even date herewith (the “First Amendment”),
pursuant to which Landlord and Tenant have amended the terms of that certain
Deed of Lease, dated July 8, 2002 (the “Original Lease”) demising certain
premises (the “Premises”) in the building known as South Pointe II located at
2300 Corporate Park Drive, Herndon, Virginia (the “Building”) (the Original
Lease, as amended by the First Amendment, is hereinafter referred to as the
“Lease”); and
     WHEREAS, the Guarantor has a direct and/or indirect financial interest in
Tenant; and
     WHEREAS, the parties recognize that the terms and conditions contained in
the First Amendment were agreed to by Landlord solely because the Guarantor has
agreed to guarantee the performance of the obligations of Tenant and its
respective successors and assigns under the Lease, and such guarantee was and is
a material inducement to the execution and delivery of the First Amendment by
Landlord; and
     WHEREAS, the Guarantor warrants and acknowledges that because of its
financial interest, direct and/or indirect, in Tenant and in the benefits and
advantages which will result from the First Amendment, the Guarantor will be
significantly benefited by the First Amendment.
     NOW, THEREFORE, in consideration of the foregoing and as an inducement for
the granting, execution and delivery of the Lease, the sum of Ten Dollars
($10.00), and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Guarantor hereby unconditionally and
irrevocably guarantees, promises and agrees as follows:
     1. The above recitals are by this reference incorporated herein as if fully
restated herein.
     2. The Guarantor hereby guarantees to Landlord, absolutely, unconditionally
and irrevocably: (a) the full and prompt payment of all sums which may at any
time become due under the Lease, including, but not limited to, monthly rent,
additional rent, and all other sums and charges (including without limitation
Landlord’s attorneys’ fees and disbursements) (hereinafter sometimes
collectively referred to as the “Monetary Obligations”) which Tenant is
obligated to pay to or on behalf of Landlord or to pay to third parties under
the provisions of the Lease, and (b) the full and timely performance and
observance of all of the covenants, terms, conditions and agreements provided in
the Lease to be performed and observed by Tenant (hereinafter sometimes
collectively referred to as the “Non-Monetary Obligations”). The Guarantor
hereby covenants and agrees to and with Landlord that if at any time Tenant
shall fail to make payment when due of any of the Monetary Obligations, or if at
any time Tenant shall fail to perform and observe when and as required any of
the Non-Monetary Obligations, the Guarantor shall forthwith pay the Monetary
Obligations to Landlord and any arrears thereof, and shall
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forthwith faithfully and punctually perform and fulfill all of the Non-Monetary
Obligations and, in addition thereto, shall forthwith pay to Landlord all
reasonable attorneys’ fees and disbursements incurred by Landlord or caused by
any such default or the enforcement of this Guaranty.
     3. This Guaranty is an absolute and unconditional guaranty of payment (and
not merely of collection) and of performance. The liabilities of the Guarantor
are primary, irrevocable and co-extensive with that of Tenant and also joint and
several, and this Guaranty shall be enforceable against the Guarantor without
the necessity of any suit or proceeding on Landlord’s part of any kind or nature
whatsoever against Tenant and without the necessity of any notice of
non-payment, non-performance or non-observance or of any notice of acceptance of
this Guaranty or of any other notice or demand to which the Guarantor might
otherwise be entitled, all of which the Guarantor hereby expressly waives. The
Guarantor hereby expressly agrees that the validity of this Guaranty and the
obligations of the Guarantor hereunder shall in no way be terminated, affected,
diminished or impaired by reason of (a) the assertion of, or the failure to
assert by Landlord, against Tenant any of the rights or remedies reserved to
Landlord pursuant to the terms, covenants and conditions of the Lease, or
(b) any non-liability of Tenant under the Lease, whether by insolvency,
discharge in bankruptcy, or any other defect or defense which may now or
hereafter exist in favor of Tenant.
     4. This Guaranty guarantees the performance of all of the obligations of
Tenant, its successors and assigns, under the Lease.
     5. This Guaranty shall be a continuing guaranty, and it is expressly agreed
that the liability of the Guarantor hereunder shall in no way be affected,
modified or diminished by reason of (a) any sublease of all or any portion of
the Premises or assignment, renewal, modification, amendment, extension or
waiver of the Lease or any of the terms, covenants and conditions thereof, even
if the effect of such sublease, assignment, renewal, modification, amendment,
extension or waiver shall be to increase the obligations of the Guarantor
hereunder, or (b) any extension of time that may be granted by Landlord to
Tenant, or (c) any consent, release, indulgence or other action, inaction or
omission under or in respect of the Lease, or (d) any dealings or transactions
or matter or thing occurring between Landlord and Tenant relating to the
Building or the Lease, or (e) any bankruptcy, insolvency, reorganization,
liquidation, arrangement, assignment for the benefit of creditors, receivership,
trusteeship or similar proceeding affecting Tenant, or (f) any obligation of
Tenant under the Lease having become unenforceable as against Tenant, whether or
not notice of any of the aforesaid (a) through (f) is given to the Guarantor.
     6. Should Landlord be obligated by any bankruptcy or other law to repay to
Tenant or to the Guarantor or to any trustee, receiver or other representative
of any of them, any amounts previously paid, this Guaranty shall be reinstated
in the amount of such repayments. Landlord shall not be required to litigate or
otherwise dispute its obligations to make such repayments if it in good faith
believes that such obligation exists.
     7. No delay on the part of Landlord in exercising any right, power or
privilege under this Guaranty or failure to exercise the same shall operate as a
waiver of or otherwise affect any such right, power or privilege, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
     8. No waiver or modification of any provision of this Guaranty nor any
termination of this Guaranty shall be effective unless in writing and signed by
Landlord; nor shall any such waiver be applicable except in the specific
instance for which it is given.
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Exhibit C, Page 2

 

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     9. All of Landlord’s rights and remedies under the Lease and under this
Guaranty, now or hereafter existing at law or in equity or by statute or
otherwise, are intended to be distinct, separate and cumulative and no exercise
or partial exercise of any such right or remedy therein or herein mentioned is
intended to be in exclusion of or a waiver of any of the others.
     10. The Guarantor agrees that whenever at any time or from time to time the
Guarantor shall make any payment to Landlord or perform or fulfill any term,
covenant or condition hereunder on account of the liability of the Guarantor,
hereunder, the Guarantor will notify Landlord in writing that such payment or
performance, as the case may be, is for such purpose. No such payment or
performance by the Guarantor pursuant to any provision hereof or otherwise shall
entitle the Guarantor, by subrogation or otherwise, to the rights of Landlord to
any payment by Tenant, or out of the property of Tenant, except after payment of
all sums and fulfillment of all covenants, terms, conditions or agreements to be
paid or performed by Tenant and its successors or assigns under the Lease.
     11. The Guarantor agrees that it will, at any time and from time to time,
within ten (10) days following written request by Landlord, execute, acknowledge
and deliver to Landlord a statement certifying that this Guaranty is unmodified
and in full force and effect (or if there have been modifications, that the same
is in full force and effect as modified and stating such modification). The
Guarantor agrees that such certificate may be relied on by anyone holding or
proposing to acquire any interest in the Premises or the Building of which the
Premises is a part from or through Landlord or by the holder of any mortgage or
prospective holder of any mortgage or of any interest therein.
     12. As a further inducement to Landlord to make and enter into the Lease
and in consideration thereof, Landlord and the Guarantor covenant and agree that
in any action or proceeding brought on, under or by virtue of this Guaranty.,
Landlord and the Guarantor shall and do hereby waive trial by jury.
     13. This Guaranty may be enforced by Landlord without the necessity of its
signature appearing hereon.
     14. All notices and other communications permitted or required by the
provisions of this Guaranty shall be in writing and shall be deemed given either
(a) three (3) business days after being mailed through the United States Postal
Service, designated as registered or certified mail, return receipt requested,
bearing adequate postage and addressed as hereinafter provided, or (b) when
delivered by hand or by means of a nationally-recognized commercial delivery
service (such as FedEx) which obtains a signed receipt to confirm delivery.
Rejection or refusal to accept or inability to deliver because of change of
address of which no notice was given as provided herein shall be deemed to be
receipt of the notice or other communication sent. By giving to the other party
hereto at least ten (10) days’ notice thereof, any party hereto shall have the
right from time to time to change its address for purposes of this Guaranty to
any other address. Each notice or other communication to Guarantor or Landlord
shall be addressed, until such notice of change of address, as follows:

     
If to Guarantor:
  Covad Communications Group, Inc.
 
  110 Rio Robles
 
  San Jose, California 95134
 
  Attention: Legal Department
 
   
If to Landlord:
  ACP/2350 Corporate Park Drive, LLC
 
  444 Brickell Avenue, Suite 900
 
  Miami, Florida 33131
 
  Attention: Chief Operating Officer

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Exhibit C, Page 3

 

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and to:
  ACP/2350 Corporate Park Drive, LLC
 
  c/o ACP Mid-Atlantic LLC, as Agent
 
  2350 Corporate Park Drive, Suite 110
 
  Herndon, Virginia 20171
 
  Attention: Asset Manager
 
   
with a copy to:
  Holland & Knight LLP
 
  2099 Pennsylvania Avenue, NW
 
  Suite 100
 
  Washington, DC 20006
 
  Attention: David S. Kahn, Esquire

     16. If any provision of this Guaranty shall be declared to be unenforceable
in whole or in part by a court of competent jurisdiction, that part of the
Guaranty found to be unenforceable shall be deemed stricken and severed and the
remaining provisions and portions shall continue in fall force and effect.
     17. The Guarantor agrees that this Guaranty shall inure to the benefit of,
and may be enforced by, Landlord and its successors and assigns, and shall be
binding upon and enforceable against the Guarantor, and its heirs, successors
and assigns.
     18. This Guaranty, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and construed in
accordance with the laws of Commonwealth of Virginia.
     IN WITNESS WHEREOF, Guarantor has executed this Guaranty of Deed of Lease
under seal on the                      day of March, 2005.

                          Guarantor:    
 
                WITNESS:       COVAD COMMUNICATIONS GROUP, INC.,
a Delaware corporation    
 
               
/s/
      By   /s/ Charles E. Hoffman    
 
               
 
          Name: CHARLES E. HOFFMAN    
 
          Title:   PRESIDENT & CEO    

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Exhibit C, Page 4