Exhibit 10.8

 

DEED OF LEASE

 

between

 

VA Branches, LLC

 

Landlord

 

and

 

Saflink Corporation

 

Tenant

 

Dated: November 10, 2003

 

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OFFICE BUILDING DEED OF LEASE

TABLE OF CONTENTS

1.

  Introductory Provisions    -1-    

(a)    Fundamental Deed of Lease Provisions

   -1-    

(b)    References and Conflicts

   -3-    

(c)    Exhibits

   -3-

2.

  Premises    -3-    

(a)    Demised Premises

   -3-    

(b)    Building

   -3-    

(c)    Tenant’s Proportionate Share

   -3-

3.

  Term    -3-    

(a)    Deed of Lease Term

   -3-    

(b)    Inability to Deliver Possession

   -4-

4.

  Rent    -4-    

(a)    Base Annual Rent

   -4-    

(b)    Adjustments to Base Annual Rent

   -4-    

(c)    Additional Rent

   -5-    

(i)     General

   -5-    

(ii)    Operating Expenses

   -5-    

(iii)   Landlord’s Enforcement Costs

   -6-    

(d)    Additional Rent Estimates and Adjustments

   -6-    

(e)    Prorated Rent

   -6-    

(f)     Payment of Rent

   -7-    

(g)    Survival of Rent Obligation

   -7-

5.

  Security Deposit    -7-    

(a)    Use

   -7-    

(b)    Assignment

   -7-    

(c)    Not Liquidated Damages

   -7-

6.

  Construction of Premises and Occupancy    -7-    

(a)    Delivery and Acceptance

   -7-

7.

  Use of Demised Premises    -8-    

(a)    Use

   -8-    

(b)    Illegal and Prohibited Uses Compliance

   -8-    

(c)    Environmental Protection

   -8-    

(d)    Indemnification

   -8-

8.

  Rules and Regulations    -9-

9.

  Subletting and Assignment    -9-    

(a)    Consent

   -9-    

(b)    Request for Consent

   -10-    

(c)    Landlord’s Termination Right

   -10-    

(d)    Profits

   -10-    

(e)    Tenant Liability

   -11-    

(f)     Assignment by Landlord

   -11-

10.

  Services and Utilities    -11-    

(a)    Building Standard Services and Utilities

   -11-    

(b)    Overtime Services

   -11-    

(c)    Interruption of Service

   -11-    

(d)    Excessive Electrical Usage

   -12-    

(e)    Excessive Heat Generation

   -12-    

(f)     Security

   -12-    

(g)    Utility Selection

   -12-

11.

  Maintenance and Repairs    -12-

12.

  Alterations    -14-

13.

  Signs and Advertisements    -15-

14.

  Excessive Floor Load    -15-

15.

  Moving and Deliveries    -15-

16.

  Tenant’s Responsibility for Damage    -15-

17.

  Access    -16-    

(a)    Access to Building

   -16-    

(b)    Landlord’s Access to Demised Premises

   -16-    

(c)    Restricted Access

   -16-

18.

  Liability    -16-    

(a)    Personal Property

   -16-    

(b)    Criminal Acts of Third Parties

   -16-

 

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(c)    Indemnity

   -17- 19.   Insurance    -17-    

(a)    Insurance Rating

   -17-    

(b)    Liability Insurance

   -17-    

(c)    Property Insurance

   -17-    

(d)    Builder’s Risk Insurance

   -18-    

(e)    Workers’ Compensation Insurance

   -18-    

(f)     Policy Requirements

   -18-    

(g)    Waiver of Subrogation

   -18- 20.   Damage by Casualty    -18-    

(a)    Fire or Casualty Damage

   -18-    

(b)    Substantial Damage

   -18-    

(c)    Insurance Proceeds

   -19- 21.   Condemnation    -19- 22.   Bankruptcy    -19-    

(a)    Events of Bankruptcy

   -19-    

(b)    Termination of Deed of Lease

   -19-    

(c)    Assumption by Trustee

   -20-    

(d)    Liquidated Damages

   -20- 23.   Defaults and Remedies    -20-    

(a)    Default

   -20-    

(b)    Remedies

   -21-    

(c)    Landlord’s Remedies Cumulative

   -22-    

(d)    Non-Waiver

   -22- 24.   Lender Requirements    -23-    

(a)    Subordination

   -23-    

(b)    Attornment

   -23-    

(c)    New Financing

   -23-    

(d)    Financial Statements

   -23- 25.   Estoppel Certificates    -24- 26.   Tenant Holdover    -24-    

(a)    With Landlord Consent

   -24-    

(b)    Without Landlord Consent

   -24- 27.   Relocation    -24- 28.   Quiet Enjoyment    -24- 29.   Limitation
of Landlord’s Liability    -24- 30.   Time of the Essence    -25- 31.   Waiver
of Jury Trial    -25- 32.   Notices    -25-    

(a)    Addresses for Notices

   -25-    

(b)    Effective Date of Notice

   -25- 33.   Postponement of Performance    -25- 34.   Brokers    -25- 35.  
Miscellaneous Provisions    -25-    

(a)    Governing Law

   -25-    

(b)    No Partnership

   -25-    

(c)    No Representation by Landlord

   -25-    

(d)    Exhibits

   -25-    

(e)    Pronouns

   -25-    

(f)     Captions

   -26-    

(g)    Landlord’s Approval

   -26-    

(h)    Invalidity of Particular Provisions

   -26-    

(i)     Covenants

   -26-    

(j)     Interpretation

   -26-    

(k)    Joint and Several Liability

   -26-    

(l)     Counterparts

   -26-    

(m)   Recordation

   -26-    

(n)    Entire Agreement; Modification

   -26-    

(o)    Authority

   -26-    

(p)    Examination of Deed of Lease

   -26-    

(q)    Rule Against Perpetuities

   -27-    

(r)     Confidentiality

   -27-    

(s)    No Defaults

   -27-

 

ii

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36.

   Patriot Act    -27-

37.

   Binding Effect    -27-

 

EXHIBITS

 

Exhibit A. Floor Plan of Demised Premises [§2(a)]

Exhibit B. Space Plan of Demised Premises [§6(a)]

Exhibit C. Construction Schedule [§6(b)]

Exhibit D. Rules and Regulations [§8]

Exhibit E. Certificate of Commencement [§2(a) and §3(b)]

Exhibit F. Legal Description of Property

Addendum

 

iii

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Deed of Lease

 

This Deed of Lease (the “Lease”) is made this 10th day of November, 2003,
between VA Branches, LLC, a Delaware limited liability company (“Landlord”) and
Saflink Corporation, a Delaware corporation (“Tenant”).

 

WITNESSETH:

 

For and in consideration of the covenants herein contained and upon the terms
and conditions herein set forth, the parties agree as follows:

 

1. Introductory Provisions.

 

(a) Fundamental Deed of Lease Provisions. Certain Fundamental Deed of Lease
Provisions are presented in this Section in summary form solely to facilitate
convenient reference by the parties hereto:

 

1.      Demised Premises

  Suite No. 301   [See Section 2(a)]

2.      Building

  Campus South   [See Section 2(a)]

3.      Address

 

1875 Campus Commons Drive

Reston, VA 20191

  [See Section 2(a)]

4.      Rentable Area of Demised Premises

  6,083 Square Feet   [See Exhibit A & Section 2(a)]

5.      Rentable Area of Building

  56,359 Square Feet   [See Section 2(b)]

6.      Proportionate Share

  10.8 percent   [See Section 2(c)]

7.      Deed of Lease Term

  Five (5) years   [See Section 3(a)]

8.      Commencement Date

  On or about February 1, 2004, upon the date of substantial completion of the
tenant improvements and receipt of the Certificate of Occupancy.   [See Section
3(a)]

9.      Rent Commencement Date

  The earlier of (i) Tenant’s occupancy of the Demised Premises, or (ii) the
date of substantial completion of the tenant improvements which date shall not
be later than the issuance of the Certificate of Occupancy for the Demised
Premises.    

10.    Expiration Date

  January 31, 2009 (i.e. Five (5) years after Rent Commencement Date)   [(See
Section 3(a)]

11.    Rental Agent

 

Guardian Realty Management, Inc.

702 Russell Avenue, Suite 400 Gaithersburg, Maryland 20877

  [See Section 4(a)]

12.    Base Annual Rent

  $132,305.25   [See Section 4(a)]

13.    Base Monthly Rent

  $11,025.44   [See Section 4(a)]

14.    Annual Adjustments to Base Annual Rent

  3%   [See Section 4(b)]

 

-1-

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15.    Use of Demised Premises

  General Office Use and light assembly of software packages.   [See Section 7]

16.    Security Deposit

  $11,025.44   [See Section 5(a)]

17.    Base Operating Expense Amount

  Operating Expenses incurred for Calendar year 2004.   [See Section 4(c)]

18.    Additional Rent

  Tenant’s Proportionate Share of increases in operating expenses over the Base
Operating Expense Amount   [See Section 4(c)(ii)]

19.    Date Tenant Space Plans to be Furnished

      [See Section 6(b)]

20.    Standard Building Operating Hours:

 

8:00 a.m. to 6:00 p.m. Monday-Friday

9:00 a.m. to 1:00 p.m. Saturday

  [See Section 10(a)]

21.    Building Holidays

 

New Year’s Day, Memorial Day,

the Fourth of July, Labor Day, Thanksgiving, Christmas

  [See Section 10(a)]

22.    Address for Notices to Tenant before Occupancy of Demised Premises

 

Saflink Corporation

108th Avenue NE

Bellevue, WA 98004

  [See Section 32]

23.    Address for Notices to Tenant after Occupancy of Demised Premises

 

Saflink Corporation

1875 Campus Commons Drive

Suite 301

Reston, VA 20191

  [See Section 32]     and        

Saflink Corporation

108th Avenue NE

Suite 2100

Bellevue, WA 98004

   

24.    Address for Notices to Landlord

 

Guardian Realty Management, Inc

702 Russell Avenue, Suite 400 Gaithersburg, Maryland 20877

  [See Section 32]

25.    Leasing Broker

 

Landlord Broker:

Transwestern Carey Winston, LLC

d/b/a Transwestern Commercial Services 8614 Westwood Center Drive

Suite 800

Vienna, VA 22182

Attn: Alan I. Asman

  [See Section 34]    

Tenant Broker:

The Staubach Company

8000 Towers Crescent Drive

Suite 1100

Vienna, VA 22182

Attn: Kelly Adams

   

26.    Name and Address of Tenant’s Resident Agent

 

Commonwealth Legal Services Corporation

4701 Cox Road

Suite 301

Glen Allen, VA 23060

   

 

-2-

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(b) References and Conflicts. References appearing in Section 1(a) are intended
to designate some of the other places in the Deed of Lease where additional
provisions applicable to the particular Fundamental Deed of Lease Provisions
appear. These references are for convenience only and shall not be deemed all
inclusive. Each reference in this Deed of Lease to any of the Fundamental Deed
of Lease Provisions contained in Section 1(a) shall be construed to incorporate
all of the terms provided for under such provisions, and such provisions shall
be read in conjunction with all other provisions of this Deed of Lease
applicable thereto. If there is any conflict between any of the Fundamental Deed
of Lease Provisions set forth in Section 1(a) and any other provisions of the
Deed of Lease, the latter shall control.

 

(c) Exhibits. The following drawings and special provisions are attached hereto
as exhibits and hereby made a part of this Deed of Lease:

 

Exhibit A. Floor Plan of Demised Premises [§2(a)]

Exhibit B. Space Plan of Demised Premises [§6(a)]

Exhibit C. Construction Schedule [§6(b)]

Exhibit D. Rules and Regulations [§8]

Exhibit E. Certificate of Commencement [§2(a) and §3(b)]

Exhibit F. Legal description of the Property

Addendum

 

2. Premises.

 

(a) Demised Premises. Landlord hereby leases to Tenant, and Tenant hereby rents
from Landlord, the Demised Premises as specified in Section 1(a)(1) located in
the Building specified in Section 1(a)(2) at the address specified in Section
1(a)(3). The Demised Premises shall consist of approximately the square footage
of rentable floor space as specified in Section 1(a)(4) and as shown on floor
plan attached hereto as Exhibit “A”. Landlord’s architect has determined the
exact number of rentable square feet in the Demised Premises in accordance with
the WDCAR Method (hereinafter defined as set forth in Section 1(a)(4). The
parties agree that the rentable square footage of the Demised Premises,
determined pursuant to this section, and the adjusted Base Annual Rent and
Tenant’s Proportionate Share shall be set forth in the Certificate of
Commencement, attached hereto as Exhibit “E”, to be executed by the parties
within fifteen (15) days after the Commencement Date of the Deed of Lease Term.
As used herein, the “WDCAR” shall mean the Washington, D.C. Association of
Realtors Standard Method of Measurement dated January 1989.

 

(b) Building. Landlord and Tenant acknowledge that the gross rentable area in
the Building is specified in Section 1(a)(5). Landlord reserves the right to
modify the rentable area of the Building from time to time during the Deed of
Lease Term as a result of construction of new improvements, the demolition of
existing improvements, or inclusion of improvements not currently within the
boundaries of the Building.

 

(c) Tenant’s Proportionate Share. Tenant’s Proportionate Share of certain
expenses hereinafter made payable to Landlord as Additional Rent is specified in
Section 1(a)(6). Said computation is based upon the ratio of the total rentable
area of the Demised Premises to the rentable area of the Building. The
Proportionate Share shall be modified during the Deed of Lease Term in the event
that the rentable area of the Building is modified as described in Section 2(b)
above.

 

3. Term.

 

(a) Deed of Lease Term. The term of this Deed of Lease (sometimes herein called
the “Lease Term”) shall be the period commencing on the date Landlord delivers
possession of the Demised Premises to Tenant (the “Commencement Date”) and,
subject to sooner termination as herein provided, ending the number of years and
months specified in Section 1(a)(7) after the anticipated Rent Commencement Date
(the “Expiration Date”). The anticipated Rent Commencement Date is set forth in

 

-3-

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Section 1(a)(9). The period commencing with the Rent Commencement Date (on the
first day of the next calendar month in the event the Rent Commencement Date
does not occur on the first day of a month) and ending on the last day of the
twelfth calendar month thereafter shall constitute the first “lease year” as
such term is used herein. Each successive full twelve (12) month period during
the Deed of Lease Term shall constitute a “lease year” and any portion of the
Deed of Lease Term remaining after the last twelve (12) month period during said
Deed of Lease Term shall constitute the last “lease year” for the purposes of
this Deed of Lease.

 

(b) Inability to Deliver Possession. If Landlord shall be unable to tender
possession of the Demised Premises on the Commencement Date set forth in Section
1(a)(8) or by the Rent Commencement Date set forth in Section 1(a)(9), if
Landlord is constructing the tenant improvements, by reason of: (a) the fact
that the Demised Premises are located in a Building being constructed and which
has not been sufficiently completed to make the Demised Premises ready for
occupancy; (b) the holding over or retention of possession of any tenant or
occupant, provided Landlord has used commercially reasonable efforts to remove
holdover tenant; (c) the failure to complete repairs, improvements or decoration
of the Demised Premises or of the Building; or (d) for any other reason,
Landlord shall not be subject to any liability for the failure to tender
possession on said date. In the case of holding over, provided Landlord shall
promptly institute suit for recovery of the Demised Premises and diligently
pursue the same, Landlord shall have no responsibility for any delay in
tendering possession of the Demised Premises. Under any of the aforesaid
circumstances, the rent covenanted to be paid herein shall not commence until
possession of the Demised Premises is tendered to Tenant; provided, however,
that the Rent Commencement Date shall not be postponed by (i) any delays
occasioned by Tenant’s failure to perform any of its obligations with respect to
the construction of the Demised Premises within the time frames for such
performance set forth in Exhibit “C”, or (ii) any delays in construction caused
by any contractors retained by Tenant, or (iii) any delays in construction
resulting from delays in the delivery or installation of improvements specified
in Tenant’s Space Plan which are not Building Standard, provided that Landlord
shall have informed Tenant with prior written notice that such improvements
would result in construction delays prior to final Space Plan approval. No such
failure to give possession on the date set forth in Section 1(a)(8) or the Rent
Commencement Date set forth in Section 1(a) (9)(a) (as applicable, shall in any
other respect affect the validity of this Deed of Lease or the obligations of
Tenant hereunder, nor shall same be construed to modify the Deed of Lease Term,
which in all events shall be the number of years and months set forth in Section
1(a)(7); provided, however, that if Landlord shall not have tendered possession
of the Demised Premises to Tenant on or before June 30, 2004, then Landlord or
Tenant may terminate this Deed of Lease by written notice to Tenant. In such
event, Landlord shall refund any security deposit and advance rental payment
theretofore paid by Tenant, and the parties shall thereupon be relieved of any
and all liability hereunder. If permission is given to Tenant to enter into the
possession (with the exception that Tenant shall have access two (2) weeks prior
to substantial completion of Tenant Improvements in order to install phone, LAN,
etc...) of the Demised Premises prior to the Commencement Date in Section
1(a)(8), or the Rent Commencement Date set forth in Section 1(a)(9) (as
applicable), Tenant covenants and agrees that such occupancy shall be deemed to
be under all the terms, covenants, conditions and provisions of this Deed of
Lease and the Commencement Date or the Rent Commencement Date (as applicable)
will coincide with the date of occupancy. Within fifteen (15) days after the
Rent Commencement Date, Landlord and Tenant shall execute a Certificate of
Commencement in the form of Exhibit “E”.

 

4. Rent.

 

(a) Base Annual Rent. The Base Annual Rent reserved hereunder shall be as
specified in Section 1(a)(12) which shall be payable by Tenant to the Landlord
during each lease year of the Deed of Lease Term in equal monthly installments
of Base Monthly Rent each as specified in Section 1(a)(13). Tenant shall pay the
first monthly installment of Base Annual Rent upon execution of this Deed of
Lease. Tenant shall pay the remaining monthly installments of Base Annual Rent
in advance, without notice or demand, and without set-off, deduction or
abatement of any kind, on or before the first day of each and every calendar
month throughout the entire term of the Deed of Lease, at the office of the
Rental Agent specified in Section 1(a)(l1), or to such other person or at such
other address as Landlord may designate by written notice to Tenant from time to
time.

 

(b) Adjustments to Base Annual Rent. On the first day of the second lease year,
and on the first day of each lease year thereafter during the Deed of Lease Term
(including any extension terms), the Base Annual Rent (then in effect) shall be
increased by three percent (3%) per annum. Landlord shall

 

-4-

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give Tenant written notice of each such adjustment and the amount of Base Annual
Rent payable during the forthcoming lease year.

 

(c) Additional Rent.

 

(i) General. Whenever it is provided by the terms of this Deed of Lease that
Tenant is required to make any payment to Landlord other than of Base Annual
Rent, such payment shall be deemed to be additional rent (“Additional Rent”).
Unless otherwise expressly specified herein, Additional Rent shall be paid by
Tenant upon Tenant’s receipt from Landlord of a statement showing the amount
owed. Additional Rent shall include, but not be limited to:

 

(ii) Operating Expenses. Throughout the Deed of Lease Term, Tenant agrees to pay
to Landlord, as Additional Rent, Tenant’s Proportionate Share, as set forth in
Section 1(a)(6), of any increase in operating expenses during each calendar year
over the Base Operating Expense Amount specified in Section 1(a)(17). Operating
expenses shall be adjusted to reflect a ninety-five percent (95%) occupancy
level in the Building in the event the true occupancy is less than that amount.
The term “operating expenses” shall mean any and all expenses incurred by
Landlord in connection with owning, managing, operating, maintaining, servicing,
insuring and repairing the Building, and the attached land and parking lot, and
its related exterior appurtenances, including but not limited to: (1) wages and
salaries of all employees engaged in the management, operation or maintenance of
the Building, including taxes, insurance and benefits relating hereto; (2) all
supplies, materials, equipment and tools used in the operation or maintenance of
the Building; (3) cost of all maintenance and service agreements for the
Building and the equipment therein, including but not limited to controlled
access and energy management services, window cleaning and elevator maintenance;
(4) cost of all insurance relating to the Building, including the cost of
casualty, liability and rent loss insurance applicable to the Building and
Landlord’s personal property used in connection therewith; (5) general and
special repairs and maintenance; (6) management fees; (7) legal, accounting,
auditing and other professional fees; (8) the cost of any additional services
not provided to the Building at the Commencement Date of the Deed of Lease Term,
but thereafter provided by Landlord in the prudent management of the Building;
(9) reasonable reserves for replacements, repairs and contingencies; (10) costs
for char service and cleaning supplies; (11) costs for utility services such as
electricity, gas, water and sewage (including any costs incurred in changing the
provider providing electricity services); (12) the cost of any capital
improvements or alterations made to the Building after the Commencement Date of
the Deed of Lease Term, that reduce other operating expenses, or which are
required under any governmental law or regulation that was not applicable to the
Building at the time it was constructed, such cost to be amortized over such
period as Landlord shall determine in accordance with GAAP together with
interest on the unamortized balance at the rate paid by Landlord on funds
borrowed for the purpose of constructing such capital improvements; (13)
transportation district fees, parking district fees, and the cost of other
amenities required by law; and (14) “real estate taxes” (as hereinafter
defined). “Operating Expenses” shall not include any of the following except to
the extent that such costs and expenses are included in the operating expenses
described above: capital expenditures; depreciation of the Building or equipment
therein; costs of painting or decorating tenant space; leasing brokerage
commissions; interest and amortization of mortgages; ground rent; the costs of
special services or utilities separately charged to individual tenants of the
Building; the costs of tenant alterations; advertising costs; costs which are
reimbursed by tenants or insurance; interest or penalties resulting from late
payments by Landlord; or debt service payments related to any indebtedness
encumbering the Building.

 

The term “real estate taxes” shall mean all taxes and assessments, general and
special, ordinary and extraordinary, foreseen and unforeseen, now or hereafter
assessed, levied or imposed upon the Building, and the land on which it is
built, including, without limitation, front foot benefit charges and adequate
public facility costs and assessments, together with (i) any tax, assessment, or
other imposition in the nature of a real estate tax, (ii) any ad valorem tax on
rent or any tax on income if imposed in lieu of or in addition to real estate
taxes and assessments, and (iii) any taxes and assessments which may hereafter
be substituted for real estate taxes, including by way of illustration only, any
tax, assessment or other imposition (whether a business rental or other tax) now
or hereafter levied upon Landlord for Tenant’s use or occupancy of or conduct of
business at the Demised Premises, or Tenant’s improvements to or furniture,
fixtures or equipment in the Demised Premises. “Real estate taxes” shall also
include all costs incurred by Landlord in contesting the validity or amount of
any such taxes. “Real estate taxes” shall exclude taxes assessed on taxable
income at either the Federal or state level, gift taxes, estate taxes, and
inheritance taxes.

 

-5-

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(iii) Landlord’s Enforcement Costs. Additional Rent shall include any and all
expenses incurred by Landlord, including reasonable attorneys’ fees and court
costs, for the collection of monies due from Tenant and the enforcement of
Tenant’s obligations under the provisions of this Deed of Lease. When Landlord,
at Tenant’s expense, performs an obligation of Tenant pursuant to the terms of
this Deed of Lease, the costs and expenses (including overhead) incurred by
Landlord in performance of such obligations shall be Additional Rent.

 

(d) Additional Rent Estimates and Adjustments.

 

(i) In order to provide for current monthly payments of Additional Rent,
Landlord shall submit to Tenant prior to January 1st of each year a written
statement of Landlord’s estimate of the amount of the increases described in
Section 4(c)(ii) above, together with the amount of Tenant’s Additional Rent
which is estimated to result from such increases. Tenant shall pay each month
one-twelfth (1/12th) of Tenant’s Proportionate Share of Landlord’s estimate of
the increase in each year of operating expenses over the Base Operating Expense
Amount. Landlord may revise its estimate of operating expenses at any time
during a calendar year by written notice to Tenant, setting forth such revised
estimate and Tenant’s Proportionate Share of the estimated operating expense
increases. In such event, all monthly payments made by Tenant after such notice
shall be in an amount calculated on the basis of such revised estimate. Tenant
shall, in all cases, continue to make monthly payments of Basic Operating
Expenses based on the last estimate from Landlord until it receives a revised or
updated estimate.

 

(ii) If payment of Additional Rent begins on a date other than January 1st under
this Deed of Lease, in order to provide for current payments of Additional Rent
through December 31st of that partial calendar year, Landlord shall submit to
Tenant a statement of Landlord’s estimate of Tenant’s Additional Rent for that
partial year, stated in monthly increments, resulting from the increases
described in Section 4(c)(ii) above. Tenant shall make the monthly incremental
payments of estimated Additional Rent together with its installments of Base
Monthly Rent.

 

(iii) After the end of each calendar year, Landlord will as soon as practicable
submit to Tenant a statement of the actual increases incurred in operating
expenses for the preceding calendar year over the Base Operating Expense Amount.
Tenant shall pay Landlord, within thirty (30) days of Tenant’s receipt of such
statement, Tenant’s Proportionate Share of the excess, if any, of Tenant’s
Proportionate Share of the actual operating expense increases over the amount
paid by Tenant during the previous year as its Proportionate Share of the
projected operating expense increases. If the amount paid by Tenant during the
previous year exceeded Tenant’s Proportionate Share of actual operating expense
increases for the year, the excess shall be credited toward payment of the next
installment of Base Monthly Rent to be paid by Tenant after Tenant receives said
statement from Landlord. If the amount paid by Tenant during the last calendar
year of the Deed of Lease Term exceeds Tenant’s Proportionate Share of actual
operating expense increases for such year, Landlord shall pay Tenant the excess
amount within thirty (30) days after Landlord’s submission to Tenant of the
aforesaid operating expense statement for such calendar year.

 

(iv) Within fifteen (15) business days after receipt of Landlord’s statement
showing actual figures for the year, Tenant shall have the right to request a
statement of operating expenses of the Building prepared by Landlord’s certified
public accountant and copies of real estate tax bills, which shall be supplied
to Tenant within thirty (30) days after Tenant’s written request. No such
request shall extend the time for payments as set forth in Section 4(c) or
Section 4(d)(iii) above. Unless Tenant asserts specific error(s) and supports
such errors, in writing, within fifteen (15) business days after Landlord has
complied with Tenant’s request, Tenant shall waive the right to contest the
statement of actual figures for the year submitted by Landlord. If it shall be
determined that there is an error in Landlord’s statement, Tenant shall be
entitled to a credit for any overpayment. Any payment, refund or credit made
pursuant to Section 4(c) or 4(d) shall be made without prejudice to any right of
Tenant to dispute, or of Landlord to correct, any item(s) as billed pursuant to
the provision hereof; provided however, such right to correct or adjust rental
payments shall terminate at the expiration of two (2) years after the date any
payment shall have become due.

 

(e) Prorated Rent. Any rent payable for a portion of a month shall be prorated
based upon a thirty (30) day calendar month.

 

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(f) Payment of Rent. Any Base Annual Rent or Additional Rent which is not paid
within five (5) days after the same is due shall bear interest at eighteen
percent (18%) per annum or the highest legal rate, whichever is lower. In
addition, in the event Base Annual Rent or Additional Rent is not paid within
five (5) days of its due date, Landlord, at its sole option, may assess a late
charge equal to five percent (5%) of the Base Monthly Rent as liquidated damages
for the additional administrative charges incurred by Landlord as a result of
such late payment. If Landlord receives from Tenant two or more returned or
“bounced” checks in any twelve (12) month period, Landlord may require all
future rent by cashier’s or certified check.

 

(g) Survival of Rent Obligation. The obligation of Tenant with respect to the
payment of Additional Rent shall survive the termination of this Deed of Lease
or assignment thereof.

 

5. Security Deposit.

 

(a) Use. Tenant has deposited with Landlord simultaneously with the execution of
this Deed of Lease, the amount stipulated in Section 1(a)(16) as a deposit (the
“Security Deposit”) to secure the prompt performance of Tenant’s obligations
hereunder. The Security Deposit may be commingled with Landlord’s general funds,
if permitted by law. Landlord shall have the right, but shall not be obligated,
to apply all or any portion of the Security Deposit to cure any Default or to
compensate Landlord for loss or damage sustained by Landlord as a result of a
Default, in which event Tenant shall be obligated to deposit with Landlord the
amount necessary to restore the Security Deposit to its original amount within
seven (7) days after written notice from Landlord. To the extent not forfeited
or otherwise used as provided herein, and provided the Demised Premises are
vacated in good condition, reasonable wear and tear excepted, as described in
Section 11, the Security Deposit shall be returned, without interest, to Tenant
within thirty (30) business days after the expiration or termination of this
Deed of Lease.

 

(b) Exclusivity. Landlord may deliver the Security Deposit to the purchaser or
any assignee of Landlord’s interest in the Demised Premises or the Building,
whereupon Landlord shall be discharged from any further liability with respect
to the Security Deposit. This provision shall apply also to any and all
subsequent transferors of the Landlord’s interest in this Deed of Lease.

 

(c) Not Liquidated Damages. If the Tenant fails to take possession of the
Demised Premises as required by this Deed of Lease, the Security Deposit shall
not be deemed liquidated damages and Landlord’s use of the Security Deposit
pursuant to this Section 5 shall not preclude Landlord from recovering from
Tenant all additional damages incurred by Landlord.

 

6. Construction of Premises and Occupancy.

 

(a) Delivery and Acceptance. Landlord, at Landlord’s expense, shall provide
Tenant with a “turn-key” build-out in accordance with the mutually agreed upon
space plan attached hereto and made a part hereof as Exhibit “B” which has been
executed by Tenant. Said “turn-key” build-out shall include glass side lights in
all offices and small conference room; white suspended ceiling in reception area
to match all areas with the exception of area above the existing reception desk;
built-ins and shelving along lab wall; glass doors between conference rooms; and
reduction in size of the Lab as specified by Tenant. All materials used for
“turn-key” will be building standard materials. The Tenant Improvements shall be
constructed in accordance with all applicable ADA and fire standards. Tenant
shall notify Landlord of any construction defects within ten (10) days after
Landlord’s delivery of the Premises to Tenant. Landlord shall promptly repair
any such defects.

 

(i) Architectural Services. Landlord shall provide architectural services
required in connection with the preparation of the Tenant’s initial Space Plan,
at Landlord’s cost. Landlord shall provide architectural services required in
connection with the construction of the Demised Premises including construction
drawings, which shall be a component of the “turn-key” build-out as referenced
above in 6(a). Landlord and Tenant shall comply with the Construction Schedule
attached hereto and made a part hereof as Exhibit “C”.

 

(ii) Permits. Landlord shall be responsible for obtaining the construction and
occupancy permits for the Demised Premises. Tenant shall be responsible for
obtaining any other permits or licenses necessary for its lawful occupancy of
the Demised Premises. If the occupancy permit is denied for any reason outside
of Landlord’s control, this Deed of Lease will become null and void. In such

 

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event, Landlord shall refund any security deposit and advance rental payment
theretofore paid by Tenant, and the parties shall thereupon be relieved of any
and all liability hereunder.

 

(iii) Construction Services Provided by Tenant: INTENTIONALLY DELETED

 

(iv) Tenant’s Space Plan. Tenant agrees to accept the Demised Premises as
described in Exhibit “B”, Tenant’s Space Plan, attached hereto which Tenant has
executed and approved, and in any other exhibits which may be referenced herein
affecting the construction, remodeling and/or delivery of the Demised Premises.
Landlord may deliver possession of the Demised Premises subject to minor punch
list items to be completed after the Rent Commencement Date and/or any
incomplete work which is to be performed by Landlord. Landlord shall deliver the
Premises with all mechanical and electrical systems in good working order.

 

7. Use of Demised Premises.

 

(a) Use. Tenant shall use and occupy the Demised Premises for the purposes
specified in Section 1(a)(15).

 

(b) Illegal and Prohibited Uses Compliance. Tenant will not use or permit the
Demised Premises or any part thereof to be used in violation of any present or
future applicable law, regulation or ordinance, or of the certificate of
occupancy issued for the Building or the Demised Premises, and shall immediately
discontinue any use of the Demised Premises which is declared by any
governmental authority having jurisdiction to be in violation of law or said
certificate of occupancy. Tenant will not use or permit the Demised Premises to
be used for any purposes that interfere with the use and enjoyment of the
Building by Landlord or the other tenants, or which violate the requirements of
any insurance company insuring the Building or its contents. Tenant shall
refrain from and discontinue such use immediately upon receipt of written notice
from Landlord. Tenant, at its expense, shall comply with the laws, rules or
regulations now or hereinafter enacted of any federal, state or municipal
authority, or the local Fire Underwriters Association, or with any notice from
any public officer pursuant to law, or with any notice from any insurance
company pertaining to Tenant’s occupancy or use of the Demised Premises, whether
such notice shall be served on Landlord or Tenant. Tenant, at Tenant’s expense,
shall, after obtaining Landlord’s prior written consent (which shall not be
unreasonably withheld), make any changes, alterations, renovations or
modifications to the Demised Premises which are necessitated or required by any
such laws, rules, regulations or notices.

 

(c) Environmental Protection. Tenant and Tenant’s employees and agents shall not
dispose of any oil, petroleum or chemical liquids or solids, liquid or gaseous
products or any hazardous waste or hazardous substance including, without
limitation, asbestos (hereinafter collectively referred to as “hazardous
waste”), as those terms are used in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, or in any other federal, state or local
law governing hazardous substances, as such laws may be amended from time to
time (hereinafter collectively referred to as the “Act”), at, upon, under or
within the Demised Premises or the Building or the land upon which it is built
or into the plumbing or sewer or water system servicing the Demised Premises
and/or the Building, nor shall Tenant, its agents or employees cause or permit
the discharge, spillage, uncontrolled loss, seepage or filtration of any
hazardous waste at, upon, under or within the Demised Premises or the Building
or the land or into the plumbing or sewer or water system servicing the same.
Tenant shall comply in all respects with the requirements of the Act and related
regulations. In the event of a release, leaking, spillage or other deposit of
any hazardous waste at, upon, under or within any part of the Demised Premises
or the Building or the land, Tenant shall give immediate notice to the Landlord
of same and promptly, at Tenant’s sole expense, take any and all, necessary
actions to return the Demised Premises and the Building and the land to the
condition existing before the presence of any such hazardous waste, provided,
however, that Tenant shall first obtain Landlord’s written approval for any such
remedial action. Tenant will comply with all laws, perform clean-up activities,
and indemnify the Landlord for any and all discharge, spillage, uncontrolled
loss, seepage or filtration of any hazardous waste that are caused or conducted
by the Tenant, its employees, agents, and/or contractors. Tenant shall not be
liable for pre-existing conditions, migrations of contamination, spillage or
other releases. Landlord represents that, to the best of its actual knowledge,
the Demised Premises is free of any and all environmental contamination as of
the Commencement Date.

 

(d) Indemnification. Tenant shall indemnify, defend and hold harmless Landlord
from and against all costs, expenses, liabilities, losses, damages, injunctions,
suits, fines, penalties, claims, and

 

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demands including reasonable attorneys’ fees, arising out of any violation of or
default in the covenants of Sections 7(b) and (c). The provisions of Sections
7(b) and (c) and this Section 7(d) shall survive the expiration or termination
of the Deed of Lease Term.

 

8. Rules and Regulations. Tenant covenants on behalf of itself, its employees,
agents, and licensees and invitees to comply with the rules and regulations set
forth in Exhibit “D”, which is attached hereto and made a part hereof (the
“Rules and Regulations”). Landlord shall have the right, in its sole discretion,
to make reasonable additions and amendments to the Rules and Regulations from
time to time and Tenant covenants that Tenant, its employees, agents, licensees
and invitees will comply with additions and amendments to the Rules and
Regulations upon Landlord’s provision to Tenant of a written copy of the same.
Any default by Tenant, or any other party set forth above, of any of the
provisions of the Rules and Regulations as set forth on Exhibit “D” or as
amended, from time to time, shall be considered to be a Default under the terms
of this Deed of Lease. Nothing contained in this Deed of Lease shall be
construed to impose upon Landlord any duty or obligation to enforce the Rules
and Regulations, or any amendments or additions thereto, against any other
tenant, and Landlord shall have no liability to Tenant or any other party for
violations of the Rules and Regulations by any party whatsoever. If there is any
inconsistency between this Deed of Lease and the Rules and Regulations, the Deed
of Lease shall govern.

 

9. Subletting and Assignment.

 

(a) Consent. Tenant shall not assign this Deed of Lease, or any of Tenant’s
rights or obligations hereunder, or sublet the Demised Premises or any part
thereof, or permit the Demised Premises to be used by others without the prior
written consent of Landlord, which consent shall not be unreasonably withheld if
all of the following conditions are satisfied:

 

(i) In the reasonable judgment of Landlord, the proposed assignee or subtenant
has sufficient financial net worth and will not adversely affect the character
of the Building and is in keeping with the standards of Landlord in those
respects for the Building, and the nature of the proposed assignee’s or
subtenant’s business and its reputation are in keeping with the character of the
Building and its tenancies;

 

(ii) The purposes for which the proposed assignee or subtenant intends to use
the Demised Premises (or the applicable portion thereof) are uses permitted by
this Deed of Lease and not prohibited by any other lease in the Building;

 

(iii) No uncured default shall have occurred under this Deed of Lease, either at
the time Landlord’s consent to such assignment or subletting is requested, or at
the commencement of the term or effective date of such assignment or subletting,
and Tenant shall comply with all of the terms of this Section 9 in connection
with such assignment or subletting;

 

(iv) In the event of an assignment, the proposed assignee shall assume all of
Tenant’s obligations under this Deed of Lease; and

 

(v) In the event of a subletting, the proposed subtenant shall agree to perform
Tenant’s obligations hereunder with respect to the portion of the Demised
Premises sublet;

 

(vi) Any Building mortgagee whose consent is required shall consent to such
assignment or subletting.

 

If Tenant is a corporation, unincorporated association, partnership or limited
liability company, then the transfer, assignment or hypothecation of any stock
or interest in such corporation, association, partnership or limited liability
company so as to result in a change in the control thereof by the person,
persons or entities owning a controlling interest therein as of the date of this
Deed of Lease, without the prior written consent of Landlord as described above,
shall be deemed an assignment made in breach of this covenant. Tenant shall not
mortgage, pledge or encumber this Deed of Lease without Landlord’s prior written
consent, which may be granted or withheld in Landlord’s sole discretion.
Landlord’s consent in any specific instance to any assignment, mortgage, pledge,
encumbrance, subletting or use of the Demised Premises and its collection and
acceptance of rent from any such approved assignee, subtenant or other occupant
shall neither constitute a waiver of the provisions of this paragraph, nor be
construed as permission for any subsequent assignment, mortgage, encumbrance,
subletting or use

 

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without compliance with this paragraph. Without the prior written consent of
Landlord, this Deed of Lease and the interest of Tenant, or any assignee of
Tenant, shall not pass by operation of law, nor shall it be subject to
garnishment or sale under execution in any suit or proceeding which may be
brought against or by Tenant, or any assignee of Tenant. Notwithstanding the
above, a Sale which results in a change of control (as set forth above) shall
not be deemed an assignment provided (i) the entity which becomes the Tenant has
a net worth in excess of Tenant’s at the time the Lease is executed, (ii) the
use of the Demised Premises remains unchanged, and (iii) Tenant provides
Landlord advance written notice of the sale with sufficient information to allow
Landlord to verify that (i) and (ii) above are correct.

 

(b) Request for Consent. In order to request the consent of Landlord to an
assignment of this Deed of Lease or subletting of all or part of the Demised
Premises, Tenant shall give Landlord written notice (“Tenant’s Request Notice”)
of Tenant’s intent to sublease or assign. Tenant shall then provide the identity
of the proposed assignee or subtenant and its business, all terms of the
proposed assignment or subletting, the commencement or effective date of the
proposed assignment or subletting (the “Proposed Transfer Commencement Date”,
and the area proposed to be assigned or sublet (the “Proposed Transfer Space”).
Tenant shall also transmit therewith the most recent financial statement or
other evidence of financial responsibility of such assignee or subtenant, a
certification executed by Tenant and such proposed assignee or subtenant stating
whether (and to what extent) any premium or other consideration is being paid
for the proposed assignment or subletting, and all other information reasonably
requested by Landlord concerning such proposed assignee or subtenant. Tenant
shall pay all expense not to exceed Five Hundred and 00/100 Dollars ($500.00)
(including reasonable attorneys’ fees) incurred by Landlord in connection with
any request by Tenant for Landlord’s consent to any assignment, subletting,
mortgage, pledge or encumbrance.

 

(c) Landlord’s Termination Right. Landlord shall have the right in its sole and
absolute discretion to terminate this Deed of Lease for the remainder of the
Term with respect to the Proposed Transfer Space if the Proposed Transfer Space
is the entire Demised Premises as of the Proposed Transfer Commencement Date, by
sending Tenant written notice within thirty (30) days after Landlord’s receipt
of Tenant’s Request Notice. If Landlord wants to recapture, Tenant shall have
three (3) business days to rescind the proposed request to sublease. If the
Proposed Transfer Space does not constitute the entire Demised Premises and
Landlord elects to terminate this Deed of Lease with respect to the Proposed
Transfer Space, then (i) Tenant shall tender the Proposed Transfer Space to
Landlord on the Proposed Transfer Commencement Date as if the Proposed Transfer
Commencement Date had been originally set forth in this Deed of Lease as the
expiration date of the Deed of Lease Term with respect to the Proposed Transfer
Space; and (ii) as to all portions of the Demised Premises other than the
Proposed Transfer Space, this Deed of Lease shall remain in full force and
effect, and the Base Annual Rent and Tenant’s Proportionate Share shall be
reduced proportionately based on square footage. Tenant shall pay all expenses
of demising walls and other construction required to permit the operation of the
Proposed Transfer Space separate from the balance of the Demised Premises. If
the Proposed Transfer Space constitutes the entire Demised Premises and Landlord
elects to terminate this Deed of Lease, then: (i) Tenant shall lender the
Demised Premises to Landlord on the Proposed Transfer Commencement Date, and
(ii) the Deed of Lease Term shall terminate on the Proposed Transfer
Commencement Date. If Landlord exercises its right to terminate this Deed of
Lease with respect to the Proposed Transfer Space. Tenant agrees that Landlord
shall have access to the Proposed Transfer Space thirty (30) days prior to the
effective termination date for remodeling or redecorating purposes, or to show
the Proposed Transfer Space to prospective tenants. Landlord shall have the
right to terminate if the sublease and/or assignment is due to a merger or
acquisition or purchase of assets.

 

(d) Profits. In the event of an assignment or sublease made in accordance with
the terms hereof, Tenant shall pay to Landlord monthly (in the case of a
sublease) or when otherwise received by Tenant (in the case of an assignment)
fifty percent (50%) of the “Net Profits” (as defined herein) received by Tenant
in connection with such assignment or sublease. “Net Profits” is defined as the
excess of the rent and/or all other sums collected by Tenant under or in
connection with such an assignment or sublease over and above the Base Annual
Rent and Additional Rent payable by Tenant to Landlord under this Deed of Lease
for the space covered by such assignment or sublease (which shall be the pro
rata portion of the total Base Annual Rent and Additional Rent payable hereunder
in the case of a sublease of a portion of the Demised Premises) and the direct,
out of pocket costs incurred by Tenant in performing alterations or leasehold
improvements for the assignee or subtenant and the leasing commissions paid by
Tenant in connection with such assignment or sublease.

 

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(e) Tenant Liability. In the event of any subletting of the Demised Premises or
assignment of this Deed of Lease by Tenant, with or without Landlord’s consent,
Tenant shall remain liable to Landlord for payment of the Base Annual Rent and
Additional Rent stipulated herein and all other covenants and conditions
contained herein. Tenant assigns to Landlord any rents due from any subtenant as
security for Tenant’s performance of its obligations under this Deed of Lease.
Upon a Default by Tenant, Tenant authorizes each of its subtenants to pay such
rents directly to Landlord if such subtenant receives written notice from
Landlord specifying that such rents shall be paid directly to Landlord.

 

(f) Assignment by Landlord. It is understood and agreed that this Deed of Lease
and all rights of Landlord hereunder shall be fully and freely assignable by
Landlord without notice to, or consent of, Tenant. In the event of the transfer
and assignment by Landlord of its interest in this Deed of Lease, Landlord shall
thereby be released from any responsibility for obligations accruing hereunder
after the date of such transfer, and Tenant agrees to look solely to such
successor in interest of the Landlord for performance of such obligations. The
term “Landlord” as used in this Deed of Lease shall mean the owner of the
Building at the time in question. In the event of a transfer (whether voluntary
or involuntary) by such owner of its interest in the Building, such owner shall
thereupon be released and discharged from all covenants and obligations of the
Deed of Lease thereafter accruing, but such covenants and obligations shall be
binding during the Deed of Lease Term upon each new owner for the duration of
such owner’s ownership.

 

10. Services and Utilities.

 

(a) Building Standard Services and Utilities. Landlord shall furnish sufficient
electric current comparable with other Class A office buildings within Reston,
Virginia for routine and normal requirements for lighting and typical office
equipment and machinery, such as typewriters, calculators, personal computers,
office copiers and similar items, subject to the limitations of Section 10(b),
water for lavatory and drinking purposes, common area lavatory supplies,
Building standard four foot (4’) fluorescent tube replacements, automatically
operated elevator service twenty-four (24) hours a day, seven (7) days a week
(by use of an access card and elevator key), and nightly cleaning and janitorial
services Monday through Friday, all without additional cost to Tenant. Landlord
further agrees to furnish heating and cooling during the appropriate seasons of
the year, between the hours and on the days set forth in Section 1(a)(20),
exclusive of the Building Holidays specified in Section 1(a)(21), with holidays
falling on Saturday observed both on said day and on the preceding Friday, and
holidays falling on Sunday observed on the following Monday. During Standard
Building Operating Hours, the temperature within the Demised Premises shall be
maintained within the range from a minimum of sixty-eight (68) degrees
fahrenheit during winter months to a maximum of seventy-eight (78) degrees
fahrenheit during summer months.

 

(b) Overtime Services. Should Tenant require heating, ventilating and air
conditioning (“HVAC”) services beyond the hours stipulated in Section 10(a),
Landlord will furnish such additional service at the then-prevailing hourly
rate, currently Thirty-Five and 00/100 Dollars ($35.00) per hour, as established
by Landlord from time to time, which shall not exceed the costs in other
comparable Class A office buildings in Reston, Virginia, provided that Tenant
gives Landlord no less than twenty-four (24) hours advance written notice of the
need therefor.

 

(c) Interruption or Reduction of Service. Landlord reserves the right to
interrupt service, if Landlord provides Tenant with twenty-one (21) days of
prior written notice, of the heat, plumbing, air conditioning, cooling,
electric, and sewer and water systems, when necessary, by reason of accident, or
of repairs, alterations, improvements or changes from one utility provider to
another, which in the judgment of Landlord are desirable or necessary to be
made, until such repairs, alterations or improvements shall have been completed;
Landlord shall use reasonable efforts to minimize disruption to Tenant; and
Landlord shall have no responsibility or liability for failure to supply heat,
plumbing, air conditioning, cooling, electric, or sewer and water service, or
any other service or act for the benefit of Tenant, when prevented from so doing
by strikes, accidents or by any other causes beyond Landlord’s reasonable
control, or by orders or regulations of any federal, state, county, or municipal
authority, or by any failure to receive suitable fuel supply, or inability
despite exercise of reasonable diligence to obtain the regularly-used fuel or
other suitable substitute. If any public utility supplying any utility to the
Building, or any law, order or regulation of any federal, state, county or
municipal authority requires that Landlord or Tenant must reduce or maintain a
certain level of consumption of electricity or any other utility, or reduce or
increase the interior temperature of the Demised Premises or the Building, then
Landlord and Tenant shall each abide by such requirement without any reduction
in Base or Additional

 

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Rent or in any of Tenant’s other obligations hereunder. In the event of an
interruption, reduction or failure in the supply of any utilities to the Demised
Premises for a period exceeding ten (10) business days due to causes beyond
Landlord’s reasonable control as herein described, then Tenant shall be entitled
to a rental abatement for that period of time in which there occurred an
interruption, reduction or failure in the supply of utilities.

 

(d) Excessive Electrical Usage.

 

(i) Tenant will not install or operate in the Demised Premises any heavy duty
electrical equipment or machinery, without obtaining the prior written consent
of Landlord. Landlord may require, as a condition of its consent to the
installation of such equipment or machinery, payment by Tenant, as Additional
Rent, for such excess consumption of electricity as may be occasioned by the
operation of said equipment or machinery. Landlord may make periodic inspections
of the Demised Premises at reasonable times to determine that Tenant’s
electrically operated equipment and machinery complies with the provisions of
this Section and Section 10(e).

 

(ii) Landlord shall have the right to require that one or more separate meters
or submeters be installed to record the consumption or use of electricity, or to
cause a reputable independent electrical engineer, which shall be mutually
selected, to survey and determine the quantity of electricity consumed by such
excessive use. The cost of any such survey or meters and of installation,
maintenance and repair thereof shall be paid by Tenant. Tenant agrees to pay
Landlord (or the utility company, if direct service is provided by the utility
company), promptly upon demand therefor, for all such electricity consumption as
shown by said meters, or a flat monthly charge determined by the survey, as
applicable, at the rates charged for such service by the local public utility
company. If Tenant’s cost of electricity based on meter readings is to be paid
to Landlord, Tenant shall pay a service charge related thereto.

 

(e) Excessive Heat Generation. Landlord shall not be liable for its failure to
maintain comfortable atmospheric conditions in all or any portion of the Demised
Premises, due to heat generated by any equipment or machinery installed by
Tenant (with or without Landlord’s consent) that exceeds generally accepted
engineering design practices for normal office purposes. If Tenant desires
additional cooling to offset excessive heat generated by such equipment or
machinery, Tenant shall pay for auxiliary cooling equipment and its operating
costs, including without limitation electricity, gas, oil and water, or for
excess electrical consumption by the existing cooling system, as appropriate.

 

(f) Security. Any security measures that Landlord may undertake are for
protection of the Building only and shall not be relied upon by Tenant to
protect Tenant, its property, its employees or their property.

 

(g) Utility Selection. Landlord may, at any time, in its sole discretion, change
the utility provider which provides electricity or any other utility service to
the Building. In the event of such change, Tenant shall cooperate with Landlord
and allow access to the Demised Premises for purposes of effectuating such
change. Landlord shall provide prior written notice before gaining access to the
Demised Premises for such purposes.

 

11. Maintenance and Repairs.

 

(a) Landlord Responsibilities. Landlord shall make structural repairs to the
Demised Premises necessary for safety and tenantability, and shall maintain and
repair all Building equipment serving the Demised Premises and all exterior
plate glass in the Demised Premises, and the cost of all such repairs or
maintenance shall be included in Building operating expenses unless necessitated
by the act or omission of Tenant, its agents, employees, licensees, invitees or
contractors, in which event Tenant shall pay such cost to Landlord, as
Additional Rent, promptly upon demand. Tenant agrees to report immediately in
writing to Landlord any defective condition in or about the Demised Premises
known to Tenant which Landlord is required to repair. Tenant waives the right to
make repairs at Landlord’s expense under any law, statute or ordinance now or
hereafter in effect. Landlord is responsible for any structural repairs to the
Building and foundation and for utility improvements outside of the Building.

 

(b) Americans with Disabilities Act. Within ten (10) days after receipt, Tenant
shall advise Landlord in writing, and provide copies of (as applicable) any
notices alleging violation of the Americans with Disabilities Act of 1990
(“ADA”) relating to any portion of the Demised Premises or the Building, any
claims made or threatened in writing regarding noncompliance with the ADA and
relating to any portion

 

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of the Demised Premises or the Building, or any governmental or regulatory
actions or investigations instituted or threatened regarding noncompliance with
the ADA and relating to any portion of the Demised Premises or the Building.

 

(c) Tenant Responsibilities. Tenant will keep the Demised Premises and the
fixtures and equipment therein in good order and condition, will take good care
thereof and will suffer no waste or damage thereto. At the expiration or other
termination of the Deed of Lease Term, Tenant will surrender the Demised
Premises broom clean and in as good order and condition in which they were on
the Rent Commencement Date, ordinary wear and tear excepted. All repairs and
maintenance required to be performed by Tenant shall be made or performed
immediately upon the occurrence of the necessity therefor, and shall be made or
performed in a first class manner, using first class materials, by a contractor
approved by Landlord and bonded unless waived by Landlord, and shall be made or
performed in accordance with (i) all laws and all applicable governmental codes
and requirements, and (ii) insurance requirements set forth in this Deed of
Lease or otherwise established by Landlord. Maintenance and repair of equipment
such as auxiliary air-conditioning equipment, private bathroom fixtures and any
other type of special equipment, together with related plumbing or electrical
services, whether installed by Tenant or by Landlord on behalf of Tenant, shall
be the sole responsibility of Tenant, and Landlord shall have no obligation in
connection therewith. Tenant shall be responsible for the replacement of all
light bulbs and tubes in the Demised Premises except Building Standard four foot
(4’) fluorescent tubes. If Tenant refuses or neglects to promptly commence and
complete repairs or maintenance necessary to satisfy the provisions of this
Section, the Landlord may, but shall not be required to, make and complete said
repairs or maintenance and Tenant shall pay the cost therefor (including
reasonable overhead) to Landlord upon demand, as Additional Rent. Upon Tenant’s
written request to Landlord, Landlord’s agent may elect to perform certain
repairs, maintenance and installation in and to the Demised Premises, which are
either desired by Tenant or required to be performed by Tenant as set forth
herein. Tenant shall pay all costs in connection with such repairs, maintenance
and installation, which costs shall include, but not be limited to labor,
materials and a reasonable management fee (as determined by Landlord’s agent and
subject to change from time to time.) Landlord shall have no liability to Tenant
in connection with such repairs, maintenance and installation.

 

(d) Landlord’s Reserved Rights. Landlord reserves the right at any time and from
time to time, as often as Landlord deems desirable, without the same
constituting an actual or constructive eviction and without incurring any
liability to Tenant or otherwise affecting Tenant’s obligations under this Deed
of Lease, to make changes, alterations, additions, improvements, repairs,
relocations or replacements in or to the Building and the fixtures and equipment
thereof, as well as in or to the street entrances, halls, passages, stairways
and other common facilities thereof, and to change the name by which the
Building is commonly known and/or the Building’s address. Landlord reserves the
right from time to time to install, use, maintain, repair and replace pipes,
ducts, conduits, wires and appurtenant meters and equipment for service to other
parts of the Building, above the ceiling surfaces, below the floor surfaces,
within the walls and in the central core areas, and to relocate any pipes,
ducts, conduits, wires and appurtenant meters and equipment included in the
Demised Premises which are located in the Demised Premises or located elsewhere
outside the Demised Premises, and to expand and/or build additional stories on
the Building, Landlord shall use reasonable efforts to minimize interruption of
Tenant’s business. Landlord further reserves the right at any time to alter,
expand or reduce the parking facilities, to change the means of ingress thereto
and egress therefrom and to impose charges for parking in such facilities,
provided Tenant shall not have such charges imposed on it for the duration of
the Lease Term. Nothing contained herein shall be deemed to relieve Tenant of
any duty, obligation or liability with respect to making any repair, replacement
or improvement or complying with any law, order or requirement of any government
or other authority and nothing contained herein shall be deemed or construed to
impose upon Landlord any obligation, responsibility or liability whatsoever, for
the care, supervision or repair of the Building, or any part thereof, other than
as expressly provided in this Deed of Lease.

 

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12. Alterations.

 

(a) Landlord Consent. Tenant will not make any alterations, installations,
changes, replacements, additions or improvements, structural or otherwise
(collectively, “Alterations”) in or to the Demised Premises or any part thereof,
without the prior written consent of Landlord, which may be granted or withheld
for structural Alterations and Alterations which would be visible from the
exterior of the Building. Any construction up-gradings required by any
governmental authority as a result of said Alterations, either in the Demised
Premises or in any other part of the Building, will be paid for by Tenant.
Tenant shall not install any equipment of any nature whatsoever which may affect
the insurance rating of the Building, or which may necessitate any changes,
replacements or additions to the plumbing system, heating system,
air-conditioning system or the electrical system of the Demised Premises,
without the prior written consent of Landlord, which may be granted or withheld
in Landlord’s sole discretion. Tenant shall pay all costs to make such changes,
replacements or additions. Any approved Alterations shall be made by licensed
and bonded contractors and mechanics approved by Landlord, in accordance with
(i) the applicable laws and ordinances of any public authority having
jurisdiction over the Building, (ii) the building code and zoning regulations of
any such authority, and (iii) any rules and regulations established from time to
time by the Underwriters Association of the local area. Prior to commencing
construction of any approved Alteration, Tenant shall obtain any necessary
building permits and shall deliver copies of such permits to Landlord. Landlord,
in Landlord’s sole discretion, may require as a condition precedent to the
commencement of construction of any Alterations that Tenant furnish evidence to
Landlord that Tenant and Tenant’s contractors carry insurance as specified in
Sections 18(b) and 18(d) hereof and such additional insurance as Landlord may
reasonably require. All Alterations shall be performed in a first-class manner,
using first-class materials which are building standard. All Alterations shall
be performed without interference with the work or business operations of
Landlord or of the other tenants of the Building. Tenant and Tenant’s
contractors shall be responsible for the transportation, safe-keeping and
storage of materials and equipment used in the performance of Alterations and
for the removal of waste and debris resulting from the performance of
Alterations (it being agreed that prior to removal, all such materials,
equipment, waste and debris shall be stored safely by Tenant within the Demised
Premises).

 

(b) Surrender. All Alterations, including without limitation wall-to-wall
carpet, blinds, draperies and drapery accessories, to or within the Demised
Premises (whether made with or without Landlord’s consent), shall remain upon
the Demised Premises and be surrendered with the Demised Premises at the
expiration of the Deed of Lease Term without disturbance, molestation or injury,
unless otherwise specified by Landlord. Should Landlord elect that any
Alterations made by Tenant upon the Demised Premises be removed upon the
expiration of the Deed of Lease Term, Tenant agrees that Landlord shall have the
right to cause same to be removed at Tenant’s sole cost and expense. However,
Landlord shall provide written notice to Tenant if Landlord shall require the
removal of any and all Alterations prior to the installation. Tenant agrees to
reimburse Landlord for the cost of (i) such removal, (ii) repairing any damage
resulting therefrom, and (iii) restoring the Demised Premises to its condition
at the commencement of the Deed of Lease Term as initially improved by Landlord,
ordinary wear and tear excepted.

 

(c) Liens. In making any approved Alterations, Tenant shall promptly pay all
contractors, materialmen and laborers, so as to minimize the possibility of a
lien attaching to the Building, or attaching to any portion of the real property
on which the Building is located. Should any such lien be filed, Tenant shall
bond against or discharge the same within ten (10) days after the said filing.
If Tenant shall fail to bond against or discharge any such lien within such ten
(10)-day period, then Landlord may, at its option, discharge such lien at
Tenant’s expense in which event Tenant shall reimburse Landlord for all costs
(including reasonable legal expenses) of discharging such lien upon demand, as
Additional Rent.

 

(d) Indemnity. Tenant will defend, indemnify and hold Landlord harmless from and
against any and all expenses, liens, claims or damages, including attorneys’
fees, for injury to person or property which may or might arise, directly or
indirectly, by reason of the making of any Alterations. If any Alteration is
effected without the prior written consent of Landlord, Landlord may remove or
correct the same and Tenant shall be liable for any and all expenses of this
work. All rights given to Landlord herein shall be in addition to any other
right or remedy of Landlord contained in this Deed of Lease.

 

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13. Signs and Advertisements.

 

(a) Directory Listings and Suite Entrance Signs. Landlord agrees to display, at
Landlord’s expense. Tenant’s name on the Building directory or directories in
the size and style or lettering used by Landlord. The number of individual names
listed on the Building directory or directories shall be subject to such
limitation as shall be established from time to time by Landlord. Tenant may
display its name on the corridor wall adjacent to the Demised Premises, as
directed by Landlord, in Building standard color, size and style of lettering,
to be furnished by Landlord at Landlord’s expense.

 

(b) Landlord Consent. No sign, advertisement or notice shall be inscribed,
painted, affixed or displayed on any part of the outside or the inside of the
Building, or inside of the Demised Premises where it may be visible from outside
or from the public areas of the Building, except with Landlord’s prior written
consent and then only in such location, number, size, color and style (i.e.,
Building standard lettering) as is authorized by Landlord. If any such sign,
advertisement or notice is exhibited without Landlord’s written consent,
Landlord shall have the right to remove same, and Tenant shall be liable for any
and all expenses incurred by Landlord in connection with said removal.

 

(c) Exterior Signs. In the event Landlord shall permit Tenant to install a sign
on the exterior of the Building, Tenant shall obtain Landlord’s written approval
of the plans and specifications for such sign. After construction and prior to
installation of said sign, Tenant shall present the same to Landlord for its
written approval, which approval shall not be withheld so long as the sign
conforms fully to the approved plans and specifications. Tenant shall install
its approved sign at a time mutually agreed upon by Landlord and Tenant, it
being understood and agreed that Landlord shall have the right to supervise such
installation. Throughout the Deed of Lease Term, Tenant shall maintain such sign
in good condition and repair. Upon the termination or expiration of the Deed of
Lease Term, Tenant shall remove such sign, repair any damage occasioned by such
removal, and restore the area of the Building on which such sign was installed
to its condition prior to the installation of such sign. If Tenant fails to do
so, Landlord may do so at Tenant’s expense and Tenant shall pay the cost
therefor (including overhead) to Landlord upon demand, as Additional Rent.
Tenant’s obligations under this Section 13(c) shall survive the termination or
expiration of this Deed of Lease.

 

(d) Advertisements. Tenant shall not publish any advertisement which refers to,
displays or utilizes in any way the Demised Premises, the Landlord or the
Building without the prior review and written consent of Landlord. Tenant shall
be permitted to use the Building address as a locator in its advertisements
without the consent of Landlord.

 

14. Excessive Floor Load. Landlord shall have the right to prescribe the weight
and method of installation and position of safes or other heavy fixtures or
equipment. Tenant will not, without Landlord’s prior written approval, install
in the Demised Premises any fixtures, equipment or machinery that will place a
load upon the floor exceeding the designed floor load capacity. Tenant shall be
liable for all damage done to the Building by installing or removing a safe or
any other article of Tenant’s office equipment, or due to its being in the
Demised Premises. Landlord shall repair any such damage at Tenant’s expense, and
Tenant shall pay the cost therefor to Landlord upon demand, as Additional Rent.
The floor load capacity for the Demised Premises is one hundred psf (100 psf).

 

15. Moving and Deliveries. No freight, furniture or other bulky matter of any
description shall be received into the Building or carried in the elevators,
except at times and by routes authorized by Landlord. Tenant shall give Landlord
at least forty-eight (48) hours telephonic notice prior to moving any freight,
furniture or other bulky material into or out of the Building. All moving of
furniture, material and equipment shall be under the direct control and
supervision of Landlord, who shall, however, not be responsible for any damage
to or charges for moving same. Tenant shall promptly remove from the public
areas within or adjacent to the Building any of Tenant’s property delivered or
deposited there, and shall be responsible for any damage to the Building or the
Demised Premises caused by its moving and deliveries.

 

16. Tenant’s Responsibility for Damage. Any and all injury, breakage or damage
of any type whatsoever to the Demised Premises or to other portions of the
Building, arising from any act or omission of Tenant or its agents, employees,
licensees, invitees or contractors, shall be repaired by Landlord at the sole
expense of Tenant. Tenant shall reimburse Landlord for the costs for such
repairs

 

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within five (5) days of receipt of written notice from Landlord of such costs.
This provision shall be construed as an additional remedy granted to Landlord
and not in limitation of any other rights and remedies which Landlord may have
in said circumstances.

 

17. Access.

 

(a) Access to Building. Tenant shall have access to the building twenty-four
(24) hours per day, seven (7) days per week, by means of a key or an electronic
controlled access system. Landlord reserves the right to require a refundable
deposit on building keys and controlled access cards, which deposit shall be
returned to Tenant at the time such keys and cards are returned to Landlord.
Additional keys or controlled access cards required by Tenant for any reason
will be provided upon Tenant’s payment of a fee as determined by Landlord. The
number of keys and cards-initially provided to Tenant is based on the ratio of
3.6/1,000 rentable square feet or approximately twenty-two (22) keys and cards.

 

(b) Landlord’s Access to Demised Premises. Landlord, its agents, employees and
contractors shall have the right to enter the Demised Premises at all reasonable
times with prior notice, with the exception of an emergency (i) to make
inspections or to make repairs to the Demised Premises or other premises as
Landlord may deem necessary; (ii) to perform nightly cleaning of the Demised
Premises; (iii) to exhibit the Demised Premises to prospective tenants during
the last nine (9) months of the Deed of Lease Term; and (iv) for any purpose
whatsoever relating to the safety, protection or preservation of the Building.
Landlord shall use reasonable efforts to minimize interference to Tenant’s
business when making repairs.

 

(c) Restricted Access. No additional locks, other devices or systems, including
without limitation alarm systems, which would restrict access to or within the
Demised Premises shall be placed upon any doors without the prior written
consent of Landlord. Unless access to the Demised Premises is provided during
the hours when cleaning service is normally rendered, Landlord shall not be
responsible for providing such service to the Demised Premises or to those
portions thereof which are inaccessible. Such inability by Landlord to provide
cleaning service to inaccessible areas shall not entitle Tenant to any
adjustment in Base Rent or Additional Rent. Tenant will be installing its
proprietary security system in the Demised Premises and agrees to provide
Landlord access to this system for Landlord’s use in accordance with the access
provisions set forth above.

 

18. Liability.

 

(a) Landlord’s Liability. Landlord, Landlord’s Rental Agent and their respective
employees and agents shall not be liable to Tenant, any invitee or any other
person or entity for any damage (including indirect and consequential damage),
injury, loss or claim (including claims for the interruption of or loss to
business) based on or arising out of any cause whatsoever (except as otherwise
provided in this Section), including without limitation the following: repair to
any portion of the Demised Premises or the Building, interruption in the use of
the Demised Premises or any equipment therein, any accident or damage resulting
from any use or operation (by Tenant or any other person or entity) of elevators
or heating, cooling, electrical, sewerage or plumbing equipment or apparatus;
termination of this Deed of Lease by reason of damage to the Demised Premises or
the Building; fire, robbery, theft, vandalism, mysterious disappearance or any
other casualty; actions of any other tenant of the Building or of any other
person or entity; failure or inability to furnish any service or utility
specified in this Deed of Lease; and leakage in any part of the Demised Premises
or the Building from water, rain, ice or snow that may leak into, or flow from,
any part of the Demised Premises or the Building, or from drains, pipes or
plumbing fixtures in the Demised Premises or the Building. If any condition
exists that may be the basis of a claim of constructive eviction, then Tenant
shall give Landlord written notice thereof and a reasonable opportunity to
correct such condition, and in the interim Tenant shall not claim that it has
been constructively evicted or is entitled to a rent abatement. Any property
placed by Tenant, its agents, employees or invitees in or about the Demised
Premises or the Building shall be at the sole risk of Tenant, and Landlord shall
not in any manner be responsible therefor. Notwithstanding the foregoing
provisions of this Section, and except as otherwise set forth in Section 17(b),
Landlord shall not be released from liability to Tenant for any physical injury
to any natural person or any property damage caused by Landlord’s gross
negligence or willful misconduct, to the extent such injury is not covered by
insurance (i) carried by Tenant or such person, or (ii) required by this Deed of
Lease to be carried by Tenant.

 

(b) Criminal Acts of Third Parties. Landlord shall not be liable in any manner
to Tenant, its agents, employees, licensees or invitees for any injury or damage
to Tenant, Tenant’s agents, employees,

 

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licensees or invitees or their property caused by the criminal or intentional
misconduct of third parties. All claims against Landlord for any such damage or
injury are hereby expressly waived by Tenant, and Tenant hereby agrees to hold
harmless and indemnify Landlord from the expense of defending all claims made by
Tenant’s agents, employees, licensees or invitees arising out of such acts.

 

(c) Indemnity. Tenant shall reimburse Landlord for, and shall indemnify, defend
upon request and hold Landlord, Landlord’s Rental Agent, and their respective
agents and employees harmless from and against any and all claims, actions,
damages, liabilities, expenses (including attorneys’ fees and court costs) and
losses suffered by or claimed against Landlord, directly or indirectly, based on
or arising out of, in whole or part: (i) any occurrence in, upon or at the
Demised Premises (unless caused by Landlord’s gross negligence or willful
misconduct); (ii) the use and occupancy of the Demised Premises or the business
conducted therein; (iii) any act or omission of Tenant, its agents, employees,
contractors, invitees or licensees, whether inside the Demised Premises or
elsewhere in or upon the Building or the land upon which it is built; or (iv)
any breach of Tenant’s obligations under this Deed of Lease, including failure
to surrender the Demised Premises upon the expiration or earlier termination of
the Deed of Lease Term. Tenant’s obligations under this Section 18(c) shall
survive the expiration or other termination of the Deed of Lease Term. Landlord
shall indemnify Tenant, Tenant’s respective agent and employees and save them
harmless from and against any and all claims, actions, damages, liabilities and
expenses for use by Tenant of the common area’s or any part thereof, or
occasioned wholly or in part by any act or omission of the Landlord, its agents,
contractors, employees, invitees or licensees. In the event that Tenant,
Tenant’s respective agents or employees shall, be made a party to any litigation
commenced by or against Landlord, then Landlord shall protect and hold the same
harmless and shall pay all costs, expenses and reasonable attorneys’ fees
incurred or paid in connection with such litigation.

 

19. Insurance.

 

(a) Insurance Rating. Tenant will not conduct or permit to be conducted any
activity, or place any equipment or property in or around the Demised Premises,
that will increase in any way the rate of fire insurance or other insurance on
the Building, unless consented to by Landlord in writing. Landlord’s consent may
be conditioned upon Tenant’s payment of any costs arising directly or indirectly
from such increase. If any increase in the rate of fire insurance or other
insurance on the Building is stated by any insurance company or by the
applicable Insurance Rating Bureau to be due to Tenant’s activity, equipment or
property in or around the Demised Premises, said statement shall be conclusive
evidence that the increase in such rate is due to such activity, equipment or
property, and Tenant shall be liable for such increase. Any such rate increase
and related costs incurred by Landlord shall be deemed Additional Rent, due and
payable by Tenant to Landlord upon receipt by Tenant of a written statement of
the rate increase and costs. Tenant may contest, at its sole cost and expense,
any insurance rate increase, provided such action by Tenant will not adversely
affect the insurance coverage of Landlord, and that Tenant pays Landlord the
increased cost during the pendency of such a contest.

 

(b) Liability Insurance. Tenant agrees, at its sole cost, to carry and keep in
full force and effect at all times during the term of this Deed of Lease for the
protection of Landlord and Tenant, a broad form commercial general liability
policy insuring against any and all liability for injury to or death of a
person, or persons, and for damage to or destruction of property occasioned by
or arising out of or in connection with the use or occupancy of the Demised
Premises, or by the condition of the Demised Premises, the limits of such policy
to be in an amount not less than One Million Dollars ($1,000,000.00) per
occurrence and Two Million Dollars ($2,000,000.00) in the aggregate. Said policy
shall insure performance by Tenant of the indemnity provisions of Section 18(c),
and shall contain an assumed contractual liability endorsement that refers
expressly to this Deed of Lease. Landlord, Landlord’s mortgagees designated by
Landlord and Landlord’s Rental Agent shall be named as additional insureds.
Tenant shall increase its commercial general liability insurance coverage as
required not more frequently than once each year, if in the opinion of the
mortgagee of the Building or Landlord’s insurance agent the amount of such
insurance coverage at that time is not adequate. Notwithstanding the fact that
any liability of Tenant to Landlord may be covered by Tenant’s insurance,
Tenant’s liability shall in no way be limited by the amount of its insurance
recovery.

 

(c) Property Insurance. Throughout the Deed of Lease Term, Tenant shall maintain
all-risk property insurance on the value of all tenant improvements to the
Demised Premises (whether constructed by Landlord or Tenant), the value of all
Alterations and the value of Tenant’s personal property located within the
Demised Premises.

 

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(d) Builder’s Risk Insurance. During the course of construction of any tenant
improvements or Alterations by Tenant in the Demises Premises, until completion
thereof, Tenant shall maintain builder’s risk insurance on an “all-risk” basis
on a completed value (non-reporting) form for full replacement value, covering
the interests of Landlord and Tenant and their respective contractors and
subcontractors and Landlord’s mortgagee in all work incorporated in the Building
and all materials and equipment in and around the Demised Premises.

 

(e) Workers’ Compensation Insurance. Throughout the Deed of Lease Term, Tenant
shall maintain workers’ compensation insurance as required by law.

 

(f) Policy Requirements. All insurance required under this Deed of Lease shall
be issued by insurance companies authorized to do business in the jurisdiction
where the Building is located. Such companies shall have a policyholder rating
of at least “A” and be assigned a financial size category of at least “Class
XIV” as rated in most recent edition of “Best’s Key Rating Guide” for insurance
companies. All such insurance shall contain only reasonable deductibles. Each
policy shall contain an endorsement requiring 30 days’ written notice from the
insurance company to Landlord before cancellation or any change in the coverage,
scope or amount of any policy. Each policy, or a certificate showing it is in
effect, together with evidence of payment of premiums, shall be deposited with
Landlord at the commencement of the Deed of Lease Term, and renewal certificates
or copies of renewal policies shall be delivered to Landlord at least thirty
(30) days prior to the expiration date of any policy.

 

(g) Waiver of Subrogation. Landlord and Tenant mutually covenant and agree that
each party, in connection with insurance policies required to be furnished in
accordance with the terms of this Deed of Lease, or in connection with insurance
policies which they obtain insuring such insurable interest as Landlord or
Tenant may have in its own properties, whether personal or real, shall expressly
waive any right of subrogation on the part of the insurer against the Landlord
(and Landlord’s Rental Agent and any mortgagee requested by Landlord) or Tenant
as the same may be applicable, which right to the extent not prohibited or
violative of any such policy is hereby expressly waived, and Landlord and Tenant
each mutually waive all right of recovery against each other, their agents, or
employees for any loss, damage or injury of any nature whatsoever to property
for which either party carries, or is required by this Deed of Lease to carry,
insurance.

 

20. Damage by Casualty.

 

(a) Fire or Casualty Damage. If the Demised Premises shall be damaged by fire or
other casualty, then, except as otherwise provided in subparagraphs (b) and (c)
hereof, Landlord, at Landlord’s expense, shall promptly restore the Demised
Premises, and Tenant, at Tenant’s sole expense, shall promptly restore all
leasehold improvements installed in the Demised Premises (whether by Landlord or
Tenant) and its own furniture, furnishings, trade fixtures and equipment. No
penalty shall accrue for reasonable delay which may arise by reason of
adjustment of insurance on the part of Landlord, or on account of labor
problems, or any other cause beyond Landlord’s reasonable control. If the damage
or destruction is such as to make the Demised Premises or any substantial part
thereof untenantable (in Landlord’s judgment), and provided that such damage or
destruction is not due in whole or part to the act or omission of Tenant or
Tenant’s agents, employees or invitees, the Base Annual Rent shall abate
proportionately (based on proportion of the number of square feet rendered
untenantable to the total number of square feet of the Demised Premises), from
the date of the damage or destruction until the date the Demised Premises has
been restored by Landlord. Except as hereinabove set forth, no compensation, or
claim, or diminution of rent will be allowed or paid by Landlord, by reason of
inconvenience, annoyance, or injury to business, arising from the necessity of
repairing the Demised Premises or any portion of the Building of which they are
a part.

 

(b) Substantial Damage. If the Demised Premises are substantially damaged or are
rendered substantially untenantable by fire or other casualty, or if Landlord’s
architect certifies that the Demised Premises cannot be repaired within ninety
(90) working days of normal working hours, said period commencing with the start
of the repair work, or if Landlord shall decide not to restore or repair the
same, or if more than fifty percent (50%) of the GLA of the Building is rendered
untenantable (even if the Demised Premises is undamaged) or if Landlord shall
decide to demolish the Building or not to rebuild it, then Landlord may, within
ninety (90) days after such fire or other casualty, terminate this Deed of Lease
by giving Tenant a notice in writing of such decision, and thereupon the term of
this Deed of Lease shall expire by lapse of time upon the third day after such
notice is given, and Tenant shall vacate the Demised Premises and surrender the
same to Landlord. Upon the termination of this Deed of

 

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Lease under the conditions hereinabove provided, Tenant’s liability for Base
Annual Rent and Additional Rent shall cease as of the day following the
casualty.

 

(c) Insurance Proceeds. The proceeds payable under all casualty insurance
policies maintained by Landlord on the Demised Premises shall belong to and be
the property of Landlord, and Tenant shall not have any interest in such
proceeds. Tenant agrees to look to Tenant’s casualty insurance policies for the
restoration and replacement of all of the improvements installed in the Demised
Premises (by Landlord or Tenant) and Tenant’s fixtures, equipment and
furnishings in the Demised Premises, and in the event of termination of this
Deed of Lease, for any reason, following any such damage or destruction, Tenant
shall promptly assign to Landlord or otherwise pay to Landlord, upon Landlord’s
request, all proceeds of said insurance except those proceeds payable with
respect to Tenant’s trade fixtures and equipment. Notwithstanding anything to
the contrary in this Section 20 or in any other provision of this Deed of Lease,
any obligation (under this Deed of Lease or otherwise) of Landlord to restore
all or any portion of the Demised Premises shall be subject to Landlord’s
receipt of approval of the same by the mortgagee(s) of Landlord (and any
approvals required by applicable laws), as well as receipt from any such
mortgagee(s) of such fire and other hazard insurance policy proceeds as may have
been assigned to any such mortgagee, it being agreed that if Landlord has not
received such approval(s) and proceeds within ninety (90) days after any such
casualty, then Landlord shall have the right to terminate this Deed of Lease, at
any time thereafter, upon notice to Tenant, in which case the rent shall be
apportioned and paid to the date of said fire or other casualty.

 

21. Condemnation. In the event the whole or a substantial part of the Demised
Premises or the Building shall be taken for any public or quasi-public purpose
by any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to said authority to prevent such taking
(collectively referred to herein as a “taking”), Landlord shall have the right
to terminate this Deed of Lease effective as of the date possession is required
to be surrendered to said authority, and rent shall be apportioned as of that
date. For purposes of this Section, a substantial part of the Demised Premises
or the Building shall be considered to have been taken if, in Landlord’s sole
opinion, the taking shall render it commercially undesirable for Landlord to
permit this Deed of Lease to continue or to continue operating the Building.
Tenant shall not assert any claim against Landlord or the taking authority for
any compensation arising out of or related to such taking and Landlord shall be
entitled to receive the entire amount of any award without deduction for any
estate or interest of Tenant; provided, however, that nothing contained in this
Section shall be deemed to prevent Tenant from filing a claim with the taking
authority for an award for the taking of personal property and fixtures
belonging to Tenant and relocation expenses, as long as such award is made in
addition to and separately stated from any award made to Landlord for the
Demised Premises and the Building and does not reduce the amount of Landlord’s
award. If Landlord does not elect to terminate this Deed of Lease, the Base
Annual Rent and Additional Rent payable by Tenant pursuant to Section 4 shall be
adjusted (based on the ratio that the number of square feet of rentable area
taken from the Demised Premises bears to the number of rentable square feet in
the Demised Premises immediately prior to such taking) as of the date possession
is required to be surrendered to said authority. Landlord shall have no
obligation to contest any taking.

 

22. Bankruptcy.

 

(a) Events of Bankruptcy. Any one or more of the following shall be deemed an
“Event of Bankruptcy” under this Deed of Lease: (1) Tenant’s or any guarantor of
Tenant’s obligations under this Deed of Lease (“Tenant’s Guarantor”) becoming
insolvent, as that term is defined in Title 11 of the United States Code (the
“Bankruptcy Code”), or under the insolvency laws of any state, district,
commonwealth or territory of the United States (the “Insolvency Laws”); (2) the
appointment of a receiver or custodian for any or all of Tenant’s or Tenant’s
Guarantor’s property or assets, or the institution of a foreclosure action upon
any of Tenant’s or Tenant’s Guarantor’s real or personal property; (3) the
filing of a voluntary petition under the provisions of the Bankruptcy Code or
Insolvency Laws; (4) the filing of an involuntary petition against Tenant or
Tenant’s Guarantor as the subject debtor under the Bankruptcy Code or Insolvency
Laws, which either (A) is not dismissed within thirty (30) days of filing, or
(B) results in the issuance of an order for relief against the debtor; or (C)
Tenant’s or Tenant’s Guarantor’s making or consenting to an assignment for the
benefit of creditors or a common law composition of creditors.

 

(b) Termination of Deed of Lease. Upon the occurrence of an Event of Bankruptcy
or if Tenant takes advantage of any Insolvency Laws, then in any such event
Landlord at its option and sole

 

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discretion may terminate this Deed of Lease by written notice to Tenant
(subject, however, to applicable provisions of the Bankruptcy Code or Insolvency
Laws during the pendency of any action thereunder involving Tenant as the
subject debtor). If this Deed of Lease is terminated under this Section 22,
Tenant shall immediately surrender and vacate the Demised Premises, waives all
statutory or other notice to quit, and agrees that Landlord’s obligations under
this Deed of Lease shall cease from such termination date, and Landlord may
recover possession by process of law or in any other lawful manner. Furthermore,
if this Deed of Lease terminates under this Section 22(b), Landlord shall have
all rights and remedies against Tenant provided in case of default of Tenant in
the payment of Base Annual Rent and/or Additional Rent.

 

(c) Assumption by Trustee. If Tenant becomes the subject debtor in a case
pending under the Bankruptcy Code, Landlord’s right to terminate this Deed of
Lease under this Section 22 shall be subject to the applicable rights (if any)
of the Trustee in Bankruptcy to assume or assign this Deed of Lease as then
provided for in the Bankruptcy Code. However, the Trustee in Bankruptcy must
give to Landlord and Landlord must receive proper written notice of the
Trustee’s assumption or rejection of this Deed of Lease within sixty (60) days
(or such other applicable period as is provided for in the Bankruptcy Code)
after the date of the Trustee’s appointment, it being agreed that failure of the
Trustee to give notice of such assumption hereof within said period shall
conclusively and irrevocably constitute the Trustee’s rejection of this Deed of
Lease and waiver of any rights of the Trustee to assume or assign this Deed of
Lease. The Trustee shall not have the right to assume or assign this Deed of
Lease unless said Trustee (i) promptly and fully cures all defaults under this
Deed of Lease, (ii) promptly and fully compensates Landlord for all monetary
damages incurred as a result of such default, and (iii) provides to Landlord
adequate assurance of future performance (as defined herein below). For purposes
of this paragraph, the term “promptly” shall mean within a period not more than
sixty (60) days from the date of assumption of this Deed of Lease.

 

(d) Liquidated Damages. It is further stipulated and agreed that, in the event
of the termination of this Deed of Lease by the happening of any event described
in this Section 22, Landlord shall forthwith, upon such termination, and any
other provisions of this Deed of Lease to the contrary notwithstanding, become
entitled to recover, as liquidated damages for such breach of the provisions of
this Deed of Lease, an amount equal to the difference between the then cash
value of the Base Annual Rent reserved hereunder for the unexpired portion of
the Deed of Lease Term demised, and the then cash rental value of the Demised
Premises for such unexpired portion of the Deed of Lease Term hereby demised,
unless the statute which governs or shall govern the proceedings in which such
damages are to be proved limits or shall limit the amount of such claim capable
of so being proved, in which case Landlord shall be entitled to prove as
liquidated damages an amount equal to that allowed by or under any such statute.
The provisions of this Section 22(d) shall be without prejudice to (i)
Landlord’s right to prove in full damages for Base Annual Rent and Additional
Rent accrued prior to the termination of this Deed of Lease, but not paid, or
(ii) any rights given to Landlord by any pertinent statute to prove any amounts
allowed thereby. In making any such computation, the rental value of the Demised
Premises shall be deemed prima facie to be the base rental realized upon any
reletting, if such reletting can be accomplished by Landlord within a reasonable
time after such termination of this Deed of Lease, and the then cash value of
any future rent shall be computed by discounting at a rate equal to one (1)
whole percentage point above the discount rate then in effect at the Federal
Reserve Bank with jurisdiction over banks in the area in which the Building is
located.

 

23. Defaults and Remedies.

 

(a) Default. Each of the following shall be deemed a Default by Tenant and a
breach of this Deed of Lease:

 

(i) A failure by Tenant to pay Base Annual Rent or Additional Rent herein
reserved after five (5) days written notice from Landlord that the same is
overdue or, if Tenant has received two (2) or more such notices during the
immediately preceding twelve (12) month period, then within five (5) days after
the date on which such sum is due; or

 

(ii) An assignment or encumbrance of Tenant’s interest in this Deed of Lease or
the Demised Premises or a subletting of the Demised Premises in violation of
Section 9;

 

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(iii) A failure by Tenant in the observance or performance of any other term,
covenant, agreement or condition of this Deed of Lease on the part of Tenant to
be observed or performed, including the Rules and Regulations, after ten (10)
days written notice;

 

(iv) An Event of Bankruptcy as defined in Section 22;

 

(v) Tenant’s abandonment of the Demised Premises without providing written
notice to Landlord of Tenant’s abandonment of the Demised Premises and
acknowledgement of its intention to continue to perform its obligations under
the Lease;

 

(vi) Any material misrepresentation by Tenant to Landlord in connection with the
negotiation and/or execution of this Deed of Lease; or

 

(vii) A default by Tenant beyond any applicable cure period under any other
lease for space in the Building, provided that Tenant shall have fifteen (15)
days to cure the default (or such longer period not to exceed thirty (30) days
if Tenant has commenced the cure and is diligently proceeding to cure the
default) after receiving written notice from Landlord.

 

(b) Remedies. Upon Default by Tenant of any of the terms or covenants of this
Deed of Lease, Landlord shall be entitled to remedy such default as follows:

 

(i) Termination and Re-entry. Landlord shall have the right, at its sole option,
to terminate this Deed of Lease. In addition, with or without terminating this
Deed of Lease, Landlord may re-enter, terminate Tenant’s right of possession and
take possession of the Demised Premises by such proceedings as may be
applicable. The provisions of this section shall operate as a notice to quit,
any other notice to quit or of Landlord’s intention to re-enter the Demised
Premises being expressly waived. If Landlord elects to terminate this Deed of
Lease and/or elects to terminate Tenant’s right of possession, then all of
Landlord’s obligations as set forth in this Deed of Lease shall cease. Landlord
may relet the Demised Premises or any part thereof, alone or together with other
premises, for such term(s) (which may extend beyond the date on which the Deed
of Lease Term would have expired but for Tenant’s default) and on such terms and
conditions (which may include concessions or free rent and alterations of the
Demised Premises) as Landlord, in its sole discretion, may determine, but
Landlord shall not be liable for, nor shall Tenant’s obligations be diminished
by reason of, Landlord’s failure to relet the Demised Premises or collect any
rent due upon such reletting. Whether or not this Deed of Lease is terminated,
Tenant nevertheless shall remain liable for the Base Annual Rent, Additional
Rent and any other sums or damages which may be due or sustained prior to the
later of termination of this Deed of Lease or Landlord’s recovery of possession
of the Demised Premises, and all costs, fees and expenses (including without
limitation reasonable attorneys’ fees in the event of any dispute regarding the
Deed of Lease, brokerage fees and expenses incurred in placing the Demised
Premises in first-class rentable condition) incurred by Landlord in pursuit of
its remedies and in renting the Demised Premises to others from time to time.
Tenant shall also be liable for additional damages which at Landlord’s election
shall be either Monthly Damages or Present Value Damages. “Monthly Damages”
shall be an amount equal to the Base Annual Rent and Additional Rent which would
have become due during the remainder of the Deed of Lease Term, less the amount
of rental, if any, which Landlord receives during such period from others to
whom the Demised Premises may be rented (other than any additional rent payable
as a result of any failure of such other person to perform any of it
obligations), which damages shall be computed and payable in monthly
installments, in advance, on the first day of each calendar month following
Tenant’s default and continuing until the date on which the Deed of Lease Term
would have expired but for Tenant’s default. Separate suits may be brought to
collect any such Monthly Damages for any month(s), and such suits shall not in
any manner prejudice Landlord’s right to collect any such damages for any
subsequent month(s), or Landlord may defer any such suit until after the
expiration of the Deed of Lease Term, in which event such suit shall be deemed
not to have accrued until the expiration of the Deed of Lease Term. “Present
Value Damages” shall be an amount equal to the present value (as of the date of
Tenant’s default) of the Base Annual Rent and Additional Rent which would have
become due through the date on which the Deed of Lease Term would have expired
but for Tenant’s default, which damages shall be payable to Landlord in a lump
sum on demand. For purpose of this section, present value shall be computed by
discounting at a rate equal to one (1) whole percentage point above the discount
rate then in effect at the Federal Reserve Bank with jurisdiction over banks in
the area in which the Building is located. Tenant waives any right of
redemption, re-entry or restoration of the operation of this Deed of Lease under
any present of future law, including any such right which Tenant would otherwise
have if Tenant shall be dispossessed for any cause.

 

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(ii) Reduction of Tenant’s Rights. Landlord shall have the right to terminate
any renewal or expansion right contained in this Deed of Lease, and to grant or
withhold any consent or approval pursuant to this Deed of Lease in its sole and
absolute discretion, if an Event of Default has occurred. If this Deed of Lease
requires Landlord to be reasonable in giving any prior written consent or
approval of an action by Tenant, Landlord nevertheless shall not be required to
be reasonable in approving the action of Tenant if Tenant took the action
without first seeking Landlord’s prior written consent pursuant to this Deed of
Lease. Landlord shall have no obligation to refund to Tenant or to credit to
Tenant against any other amounts or installments coming due to Landlord
hereunder any amount otherwise owed or creditable by Landlord to Tenant pursuant
to the terms of this Deed of Lease if (i) Tenant is in default hereunder but an
Event of Default has not occurred, unless such default is cured prior to the
expiration of any applicable grace period or (ii) an Event of Default has
occurred. The provisions of this subsection shall apply notwithstanding anything
to the contrary in this Deed of Lease, and whether or not this Deed of Lease
and/or Tenant’s right of possession is terminated as a result of Tenant’s
default.

 

(iii) Right of Landlord to Cure Tenant’s Default. If Tenant fails to make any
payment to any third party or to do any act required to be made or done by
Tenant, then Landlord may, but shall not be required to, make such payment or do
such act. The amount of any resulting expense or cost to Landlord, including
reasonable attorneys’ fees, with interest thereon at the rate of eighteen
percent (18%) per annum or the highest legal rate, whichever is lower, accruing
from the date paid by Landlord, shall be paid by Tenant to Landlord and shall
constitute Additional Rent hereunder, due and payable by Tenant upon receipt of
a written statement of costs from Landlord. The making of such payment or the
doing of such act by Landlord shall not operate to cure Tenant’s default, nor
shall it prevent Landlord from the pursuit of any remedy to which Landlord would
otherwise be entitled.

 

(iv) Lien for Rent. Upon any default by Tenant in the payment of Base Annual
Rent or Additional Rent, Landlord shall have a lien upon the property of Tenant
in the Demised Premises for the amount of any unpaid Base Annual Rent or
Additional Rent. In such event, Tenant shall not remove any of Tenant’s property
from the Demised Premises except with the prior written consent of Landlord, and
Landlord shall have the right and privilege, at its option, to take possession
of all property of Tenant in the Demised Premises, to store the same on the
Demised Premises, or to remove it and store it in such place as may be selected
by Landlord, at Tenant’s risk and expense.

 

(c) Landlord’s Remedies Cumulative. All rights and remedies of Landlord herein
enumerated shall be cumulative and in addition to Landlord’s other rights and
remedies at law or in equity, including those available as a result of any
anticipatory breach of this Deed of Lease. Landlord’s exercise of any such right
or remedy shall not prevent the concurrent or subsequent exercise of any other
right or remedy. For the purposes of any suit brought or based hereon, this Deed
of Lease shall be construed to be a divisible contract, to the end that
successive actions may be maintained on this Deed of Lease as successive
periodic sums mature hereunder.

 

(d) Non-Waiver. No payment by Tenant or receipt by Landlord of lesser amounts of
rent than those herein stipulated shall be deemed to be other than on account of
the earliest unpaid stipulated rent. No endorsement or statement on any check or
any letter accompanying any check or payment as rent shall 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 Deed of Lease. Notwithstanding any request or
designation by Tenant, Landlord may apply any payment received from Tenant to
any payment then due. Re-entry and acceptance of keys shall not be considered an
acceptance of surrender. No waiver of any breach of any covenant, condition or
agreement herein contained on one or more occasions shall operate as a waiver of
the covenant, condition or agreement itself, or of any subsequent breach
thereof. Landlord’s delay or failure to exercise or enforce any of Landlord’s
rights or remedies or Tenant’s obligations shall not constitute a waiver of any
such rights, remedies or obligations. No provision of this Deed of Lease shall
be deemed to have been waived by Landlord unless such waiver shall be in writing
signed by Landlord.

 

(e) Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord under this Deed of Lease within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord specifying wherein Landlord has failed to perform such obligation,
provided, however, that if the nature of Landlord’s obligation is such that more
than thirty (30) days are required for performance, then Landlord shall not be
in default if Landlord commences

 

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performance within such thirty (30) day period and thereafter diligently
prosecutes the same to completion.

 

24. Lender Requirements.

 

(a) Subordination. Tenant agrees that this Deed of Lease is subject and
subordinate to all ground or underlying leases and to all mortgages or deeds of
trust which may now or hereafter be made a lien on the Building, and to all
renewals, modifications, consolidations, replacements and extensions thereof.
This subordination provision shall be self-operative and no further instrument
of subordination shall be required. Tenant agrees to execute and deliver, upon
request, such further instrument or instruments confirming this subordination
(and its agreement to attorn described in Section 24(b)) as shall be desired by
Landlord, or by any ground lessor or any mortgagee or proposed mortgagee; and,
in the event Tenant does not execute and deliver to Landlord such an instrument
within ten (10) days of receipt of Landlord’s request therefor, Tenant hereby
constitutes and appoints Landlord as Tenant’s attorney-in-fact solely to execute
any such instrument or instruments. Tenant shall be liable for any loss incurred
by Landlord resulting from Tenant’s failure to timely execute and deliver any
instrument requested by Landlord confirming such subordination, and shall
reimburse Landlord for the amount of any such loss upon demand, as Additional
Rent. Landlord shall use commercially reasonable efforts to assist Tenant in
obtaining a subordination, non-disturbance and attornment agreement from Lender
on Lender’s standard form. Tenant further agrees that, at the option of the
holder of any mortgage or of the trustee under any deed of trust, this Deed of
Lease may be made superior to said mortgage or first deed of trust.

 

(b) Attornment. In the event any proceedings are brought for the foreclosure of,
or in the event of exercise of the power of sale under, any deed to secure debt
given by Landlord and covering the Demised Premises, Tenant shall attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as the
owner and landlord under this Deed of Lease, provided such owner, as landlord,
shall recognize Tenant’s rights to continue to occupy the Demised Premises and
exercise all of its rights hereunder so long as Tenant complies with the terms
and provisions of this Deed of Lease. Tenant further covenants and agrees to
attorn to any successor to Landlord’s interest in any ground or underlying
lease, and in that event, this Deed of Lease shall continue as a direct lease
between Tenant herein and such landlord or its successor. Notwithstanding any
request or designation by Tenant, Landlord may apply any payment received from
Tenant to any payment then due. Re-entry and acceptance of keys shall not be
considered an acceptance of surrender. No waiver of any breach of any covenant,
condition or agreement herein contained on one or more occasions shall operate
as a waiver of the covenant, condition or agreement itself, or of any subsequent
breach thereof. Landlord’s delay or failure to exercise or enforce any of
Landlord’s rights or remedies or Tenant’s obligations shall not constitute a
waiver of any such rights, remedies or obligations. No provision of this Deed of
Lease shall be deemed to have been waived by Landlord unless such waiver shall
be in writing signed by Landlord.

 

(c) New Financing. In the event that the trust or mortgage lender providing the
first mortgage interim construction financing for the Building and/or the first
mortgage permanent financing for the Building requires, as a condition of such
financing, that modifications to this Deed of Lease be obtained, and provided
that such modifications (i) are reasonable, (ii) do not adversely affect
Tenant’s use of the Demised Premises as herein permitted, (iii) do not
materially alter the approved Space Plan for the Demised Premises, and (iv) do
not increase the rent and other sums required to be paid by Tenant hereunder,
then Landlord may submit to Tenant a written amendment to this Deed of Lease
incorporating such required modifications, and, in the event Tenant does not
execute and return to Landlord such written amendment within seven (7) days
after the same has been submitted to Tenant, then Landlord shall send Tenant a
written notice that Landlord has the right to cancel this Deed of Lease if
Tenant does not execute the amendment within three (3) business days. If Tenant
fails to execute the amendment within such three (3) day period, then Landlord
shall thereafter have the right, at its sole option, to cancel this Deed of
Lease. Such option shall be exercisable by Landlord giving Tenant written notice
of cancellation, immediately whereupon this Deed of Lease shall be canceled and
terminated, and any money or security therefor deposited by Tenant with Landlord
shall be returned to Tenant, subject to the provisions of Section 5 of this Deed
of Lease, and both Landlord and Tenant shall thereupon be relieved from any and
all further liability or obligation hereunder.

 

(d) Financial Statements. Tenant agrees, from time to time but not more often
than once per calendar year, upon not less than fifteen (15) days prior written
notice by Landlord, to deliver to Landlord such financial statements as Landlord
may request (publicly available while Tenant is publicly traded). If Tenant
shall fail to provide Landlord with Tenant’s financial statements within fifteen
(15)

 

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days after receipt of Landlord’s written request therefor, Landlord may collect
as agreed-upon liquidated damages in the amount of the lesser of (i) Five
Hundred Dollars ($500.00) per day for each day after such date that Tenant’s
failure to provide such financial statements continues, or (ii) Three Thousand
Dollars ($3,000.00). Any such liquidated damages shall be payable by Tenant, as
Additional Rent, within ten (10) days after Landlord’s written demand therefor.

 

25. Estoppel Certificates. Tenant agrees, at any time and from time to time,
upon not less than ten (10) days prior written notice by Landlord, to execute,
acknowledge and deliver to Landlord a written estoppel certificate (i)
certifying that this Deed of Lease is unmodified and in full force and effect
(or if there have been modifications, stating the nature of same), (ii) stating
the Commencement Date of the Deed of Lease Term, (iii) stating the amounts of
Base Annual Rent and Additional Rent and the dates to which the Base Annual Rent
and Additional Rent have been paid by Tenant, (iv) stating the amount of any
Security Deposit, (v) stating whether or not to the best knowledge of Tenant,
Landlord is in default in the performance of any covenant, agreement or
condition contained in this Deed of Lease, and, if so, specifying each such
default of which Tenant may have knowledge, (vi) stating that Tenant has no
right to setoff and no defense against payment of the Base Annual Rent or
Additional Rent, (vii) stating the address to which notices to Tenant should be
sent, and (viii) certifying such other matters as may be requested by Landlord.
Any such certificate delivered pursuant hereto may be relied upon by an owner of
the Building, any prospective purchaser of the Building, any mortgagee or
prospective mortgagee of the Building or of Landlord’s interest therein, or any
prospective assignee of any such mortgage. Failure to deliver the aforesaid
certificate within the fifteen (15) business days shall be conclusive upon
Tenant for the benefit of Landlord and any successor to Landlord that this Deed
of Lease is in full force and effect and has not been modified except as may be
represented by the party requesting the certificate

 

26. Tenant Holdover.

 

(a) With Landlord Consent. If Tenant continues, with the knowledge and written
consent of Landlord obtained at least thirty (30) days prior to the expiration
of the Deed of Lease Term, to remain in the Demised Premises after the
expiration of the Deed of Lease Term, and in that event, Tenant shall, by virtue
of this agreement become a tenant by the month at Base Monthly Rent which is one
and one- half (1 1/2) times the Base Monthly Rent applicable to the last month
of the Deed of Lease Term, and otherwise subject to the terms, covenants and
conditions herein specified, commencing said monthly tenancy with the first day
next after the end of the Deed of Lease Term.

 

(b) Without Landlord Consent. In the event that Tenant, without the consent of
Landlord, shall hold over the expiration of the term hereby created, then Tenant
shall become a tenant of sufferance only, at a monthly rent which is two and
one-half (2.5) times the Base Monthly Rent applicable to the last month of the
Deed of Lease Term, and otherwise subject to the terms, covenants and conditions
herein specified. Tenant expressly agrees to hold Landlord harmless from all
loss and damages, direct and consequential (consequential damages shall be
capped at $125,000), which Landlord may suffer in defense of claims by other
parties against Landlord arising out of the holding over by Tenant, including
without limitation attorneys’ fees which may be incurred by Landlord in defense
of such claims. Acceptance of rent by Landlord subsequent to the expiration of
the Deed of Lease Term shall not constitute consent to any holding over.
Landlord shall have the right to apply all payment received after the expiration
date of this Deed of Lease toward payment for use and occupancy of the Demised
Premises subsequent to the expiration of the Deed of Lease Term and toward any
other sums owed by Tenant to Landlord. Landlord, at its option, may forthwith
re-enter and take possession of the Demised Premises without process, or by any
legal process in force.

 

27. Relocation. [Intentionally deleted.]

 

28. Quiet Enjoyment. So long as Tenant shall observe and perform all the
covenants and agreements binding on it hereunder Tenant shall at all times
during the term herein granted, peacefully and quietly have and enjoy possession
of the Demised Premises without any encumbrance or hindrance by, from or through
Landlord, except as provided for elsewhere under this Deed of Lease.

 

29. Limitation of Landlord’s Liability. It is understood and agreed that the
liability of the Landlord hereunder shall be limited solely to its interest in
the Building of which the Demised Premises form a part; and that neither
Landlord nor (if Landlord is a partnership) any partner of Landlord nor (if
Landlord is a corporation) any shareholder of Landlord nor (if Tenant is a
limited liability company) any

 

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member of Landlord shall be personally liable with respect to any claim arising
out of or related to this Deed of Lease.

 

30. Time of the Essence. Landlord and Tenant acknowledge that time is of the
essence in the performance of any and all obligations, terms, and provisions of
this Deed of Lease.

 

31. Waiver of Jury Trial. Landlord and Tenant each hereby waive any right to a
jury trial with respect to this Deed of Lease and/or any matters arising
hereunder.

 

32. Notices.

 

(a) Addresses for Notices. All notices required or desired to be given hereunder
by either party to the other shall be given in person, by United Parcel Service
or Federal Express or by certified or registered mail, return receipt requested,
and addressed as specified in Section 1(a). Either party may, by like written
notice, designate a new address to which such notices shall be directed.

 

(b) Effective Date of Notice. Notice shall be deemed to be effective when
delivered in person or by United Parcel Service or Federal Express, or three (3)
days after mailing, unless otherwise stipulated herein.

 

33. Postponement of Performance. In the event that either party hereto shall be
delayed or hindered in or prevented from the performance of any act required
hereunder by reason of strikes, labor troubles, inability to procure labor or
materials, failure of power, restrictive governmental laws or regulations,
riots, insurrection, war, acts of God, fire or other casualty or other reason of
a similar or dissimilar nature beyond the reasonable control of the party
delayed in performing work or doing acts required under the terms of this Deed
of Lease, then performance of such act shall be excused for the period of the
delay and the period for the performance of any such act shall be extended by a
period equivalent to the period of such delay. The provisions of this paragraph
shall not operate to excuse Tenant from the prompt payment of Base Annual Rent
or Additional Rent and shall not operate to extend the Deed of Lease Term.
Delays or failures to perform resulting from lack of funds shall not be deemed
delays beyond the reasonable control of a party.

 

34. Brokers. Landlord and Tenant each represents and warrants to the other that
it has not employed any broker in connection with this Deed of Lease
transaction, except the broker named in Section 1(a)(25). Said broker shall be
paid a brokerage commission pursuant to a separate agreement between Landlord
and said broker, and Landlord and Tenant each shall indemnify and hold harmless
the other from and against any claims for brokerage or other commission arising
by reason of a breach by the indemnifying party of the aforesaid representation
and warranty.

 

35. Miscellaneous Provisions.

 

(a) Governing Law. The laws of the state in which the Building is located shall
govern the validity, performance and enforcement of this Deed of Lease.

 

(b) No Partnership. Nothing contained in this Deed of Lease shall be deemed or
construed to create a partnership or joint venture of or between Landlord and
Tenant, or to create any other relationship between the parties other than that
of Landlord and Tenant.

 

(c) No Representations by Landlord. Neither Landlord nor any agent of Landlord
has made any representations or promises with respect to the Demised Premises or
the Building except as herein expressly set forth, and no rights, privileges,
easements or licenses are granted to Tenant except as herein expressly set
forth.

 

(d) Exhibits. It is agreed and understood that any Exhibits referred to herein
and attached hereto form an integral part of this Deed of Lease and are hereby
incorporated by reference.

 

(e) Pronouns. Feminine or neuter pronouns shall be substituted for those of the
masculine form, and the plural shall be substituted for the singular number, in
any place or places herein in which the content may require such substitution or
substitutions. Landlord and Tenant herein for convenience have been referred to
in neuter form.

 

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(f) Captions. All section and paragraph captions herein are for the convenience
of the parties only, and neither limit nor amplify the provisions of this Deed
of Lease.

 

(g) Landlord’s Approval. Whenever Landlord’s consent or approval is required
under the terms of this Deed of Lease, Landlord may grant or deny such consent
or approval in its sole discretion unless otherwise specified herein. Tenant
hereby waives any right to damages based upon Landlord’s actually or allegedly
wrongfully withholding or delaying any consent or approval under or in
connection with this Deed of Lease. Tenant’s sole remedy for any wrongfully
withheld or delayed consent or approval shall be a proceeding for specific
performance, or injunction or declaratory judgment.

 

(h) Invalidity of Particular Provisions. If any term or provision of this Deed
of Lease or applications thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remaining terms and provisions of this
Deed of Lease, or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision of this Deed of Lease
shall be valid and enforced to the fullest extent permitted by law.

 

(i) Covenants. The parties hereto agree that all the provisions of this Deed of
Lease are to be construed as covenants and agreements as though the words
importing such covenants and agreements were used in each separate provision
hereof.

 

(j) Interpretation. Although the printed provisions of this Deed of Lease were
drawn by Landlord, this Deed of Lease shall not be construed for or against
Landlord or Tenant, but this Deed of Lease shall be interpreted in accordance
with the general tenor of the language in an effort to reach the intended
result. The deletion of any printed, typed or other portion of this Deed of
Lease, or any earlier draft of this Deed of Lease, shall not evidence an
intention to contradict such deleted portion. Such deleted portion shall be
deemed never to have been inserted in this Deed of Lease.

 

(k) Joint and Several Liability. If more than one natural person and/or entity
shall constitute Tenant or if Tenant is a general partnership or other entity,
the partners or members of which are subject to personal liability, then the
liability of each such person, entity, partner or member shall be joint and
several.

 

(l) Counterparts. This Deed of Lease has been executed in several counterparts,
but all counterparts shall constitute one and the same legal document.

 

(m) Recordation. Tenant shall not record among any public records this Deed of
Lease and/or its Exhibits or any short form of this Deed of Lease without
Landlord’s prior written consent, which may be granted or withheld in Landlord’s
sole discretion.

 

(n) Entire Agreement; Modification. This Deed of Lease and all Exhibits hereto
contain all the agreements and conditions made between the parties and may not
be modified orally or in any other manner than by an agreement in writing,
signed by the parties hereto.

 

(o) Authority. Landlord and Tenant hereby covenant each for itself, that each
has full right, power and authority to enter into this Deed of Lease upon the
terms and conditions herein set forth. If Tenant signs as a corporation, each of
the persons executing this Deed of Lease on behalf of Tenant does hereby
covenant and warrant that Tenant is a duly authorized and existing corporation,
qualified to do business in the jurisdiction in which the Demised Premises is
located, that the corporation has full right and authority to enter into this
Deed of Lease, and that each and both of the persons signing on behalf of the
corporation were authorized to do so. If Tenant signs as a partnership or
limited liability company, each of the persons executing this Deed of Lease on
behalf of Tenant does hereby covenant and warrant that Tenant is a duly formed
and validly existing partnership or limited liability company, as the case may
be, that the partnership or limited liability company has full right and
authority to enter into this Deed of Lease, and that each of the persons signing
on behalf of the partnership or limited liability company were authorized to do
so.

 

(p) Examination of Deed of Lease. Submission of this Deed of Lease for
examination or signature by Tenant shall not constitute reservation of or option
for Deed of Lease, and the same shall not be effective as a Deed of Lease or
otherwise until execution and delivery by both Landlord and Tenant.

 

-26-

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(q) Rule Against Perpetuities. If any interest created by this Deed of Lease has
failed to vest within twenty (20) years from the date of execution hereof, this
Deed of Lease shall immediately terminate twenty (20) years from the date first
set forth hereinabove.

 

(r) Confidentiality. Tenant agrees to keep confidential all terms of this Deed
of Lease, as well as any and all discussions and/or negotiations with Landlord
prior to and related to this Deed of Lease, provided that Tenant shall be
allowed to release such information as is required by the SEC in public filings.

 

(s) No Defaults. Tenant hereby represents and warrants that Landlord is not in
default in the performance or observance of any covenant, agreement or condition
contained in this Deed of Lease and that Tenant has no right to setoff and no
defense against the payment of the Base Annual Rent and Additional Rent.

 

36. Patriot Act Compliance. (a) Tenant will use good faith and commercially
reasonable efforts to comply with the Patriot Act (defined below) and all
applicable requirements relating to money laundering and terrorism of
governmental authorities having jurisdiction over the Tenant and the Demised
Premises. The Landlord shall have the right to audit Tenant’s compliance with
the Patriot Act and such other applicable requirements. If Tenant fails to
comply with the Patriot Act and such other applicable requirements, then
Landlord may, at its option, cause the Tenant to comply therewith and all
reasonable costs and expenses incurred by Landlord in connection therewith shall
be immediately due and payable. For the purposes hereof, “Patriot Act” shall
mean the Uniting and Strengthening American by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA Patriot Act) Act of 2001, as
the same may be amended from time to time and corresponding provisions of future
laws. Tenant’s failure to comply with the Patriot Act shall be a default under
the Lease, and Landlord shall have the right to immediately terminate the Lease
and accelerate the Rent hereunder.

 

(b) Tenant represents that neither Tenant, nor any partner or member of Tenant,
nor any owner of a direct or indirect interest in Tenant (i) is listed on any
Government Lists (defined below), (ii) is a person who has been determined by
competent authority to be subject to the prohibitions contained in Presidential
Executive Orders No. 13224 (Sept. 23, 2001) or any other similar prohibitions
contained in the rules and regulations of OFAC (defined below) or in any
enabling legislation or other Presidential Executive Order in respect thereof,
(iii) has been previously indicted for or convicted of any felony involving a
crime or crimes of moral turpitude or for any Patriot Act Offense (defined
below), or (iv) is not currently under investigation by any governmental
authority for alleged criminal activity. For the purposes hereof, “Government
Lists” means (i) the Specially Designated Nationals and Blocked Persons Lists
maintained by Office of Foreign Asset Control (“OFAC”), (ii) any other list of
terrorists, terrorist organizations or narcotics traffickers maintained pursuant
to any of the Rules and Regulations of OFAC, or (iii) similar lists maintained
by the U.S. Department of State, the U.S. Department of Commerce or any other
governmental authority. For the purposes hereof, “Patriot Act Offense” means any
violation of the Patriot Act or of the criminal laws of the U.S.A. or any of the
several states relating to terrorism of the laundering of monetary instruments,
including the Bank Secrecy Act and the Money Laundering Control Act of 1986.

 

37. Binding Effect. This Deed of Lease shall be binding upon and shall inure to
the benefit of the parties hereto, and to the heirs, executors, administrators,
successors and permitted assigns of said parties. This provision shall not be
deemed to grant Tenant any right to assign this Deed of Lease or to sublet the
Demised Premises.

 

-27-

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IN WITNESS WHEREOF, the parties hereto have executed this Deed of Lease as of
the day and year first above written.

 

WITNESS/ATTEST:

     

LANDLORD:

           

VA Branches, LLC,

a Delaware limited liability company

By: Guardian Realty Management, Inc.

as Agent for the Landlord

    By:   /s/    Illegible               By:   /s/    ANTHONY G.
LABARBERA          

(SEAL)

   

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

         

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

                    Anthony G. LaBarbera    

Title:

  Illegible      

Title:

  President                

Date:

 

11/10/03

   

WITNESS/ATTEST:

     

TENANT:

            Saflink Corporation,
a Delaware corporation     By:   /s/    Illegible               By:   /s/    JON
ENGMAN          

(SEAL)

   

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

         

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

   

Title:

  Senior Director of IT      

Title:

  CFO                

EIN #:

 

95 - 4346070

               

Date:

 

10/31/03

   

 

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SECRETARY’S CERTIFICATE

 

(Corporate Tenant)

 

I, Jon Engman, Secretary of Saflink Corporation, a Delaware corporation, do
hereby certify that the foregoing and annexed Deed of Lease was executed and
delivered pursuant to and in strict conformity with the Saflink Corporation
approval process, in conformity with the laws of the state of incorporation of
said corporation.

 

/s/    JON ENGMAN        

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

Secretary

Date: 11/07/03

 

[Corporate Seal]

 

-29-

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EXHIBIT A

 

Floor Plan of Demised Premises

 

[FLOOR PLAN]

 

[GRAPHIC]

 

-30-

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EXHIBIT B

 

Amended Space Plan of Demised Premises

 

[FLOOR PLAN]

 

[GRAPHIC]

 

TENANT: Saflink Corporation By:   /s/    Illegible            

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

Date:

 

10/31/03

 

-31-

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EXHIBIT C

 

Construction Schedule

 

Tenant has authorized Landlord to provide the Construction Services, and the
following guidelines have been established to better facilitate the design and
construction of the Demised Premises (See Exhibit “A”).

 

IT IS IMPORTANT THAT TENANT READ AND UNDERSTAND THESE GUIDELINES.

 

Tenant is requested to provide the construction project manager, Bill McKenna
(phone number: (301) 417-6161, ext. 127), who is assigned to coordinate the
construction of the Demised Premises, with the name and telephone number of the
contact person authorized by Tenant to receive correspondence related to the
design and construction of the Demised Premises. THE CONTACT PERSON NEEDS TO BE
RESPONSIVE. IT IS IMPORTANT THAT CORRESPONDENCE BE ACTED UPON AS SOON AS
POSSIBLE.

 

I. The preliminary space plan for the Demised Premises shall be developed, at no
cost to Tenant, by the Space Plan Architect (to be determined), the Landlord’s
Space Plan Architect or another space planner that Landlord designates unless
Tenant desires to develop its own plan. Said Space Plan Architect shall develop
one (1) preliminary plan. Landlord shall provide, at no cost to Tenant and prior
to the start of construction drawings, one (1) revision to the preliminary space
plan. The Tenant will have five (5) business days upon receipt of the
preliminary space plan to review and approve such plan. If the one (1) revision
is requested by Tenant, then Tenant shall have three (3) business days to
approve such revised preliminary plan. If additional revisions are requested by
Tenant, Tenant shall pay rent for each day of delay caused by such revisions.
The costs for such additional revisions shall be borne by Tenant.

 

THE SIGNATURE BY TENANT ON THE FINAL SPACE PLAN IS IMPORTANT AND MUST BE
RECEIVED BY LANDLORD WITHIN FIVE (5) DAYS OF TENANT’S RECEIPT OF THE FINAL SPACE
PLAN FROM LANDLORD OR LANDLORD’S SPACE PLAN ARCHITECT.

 

II. The approved final space plan is used to develop construction drawings that
include the floor plan, reflected ceiling plan, electrical plan, plumbing plan,
details, etc.

 

Construction drawings will be provided to Tenant within a reasonable time after
the approved final space plan is received. The construction drawings must be
signed by the Tenant to acknowledge Tenant’s acceptance and approval of the
construction drawings.

 

THE SIGNATURE ON THE CONSTRUCTION DRAWINGS IS IMPORTANT AND MUST BE RECEIVED BY
LANDLORD FROM TENANT WITHIN SEVEN (7) DAYS OF RECEIPT OF SAID CONSTRUCTION
DRAWINGS FROM LANDLORD. CONSTRUCTION OF THE DEMISED PREMISES WILL NOT BEGIN
WITHOUT THE TENANT’S APPROVAL OF THE CONSTRUCTION DRAWINGS.

 

III. For each day Tenant delays returning any signed-off plans after the date
stipulated in this exhibit, Tenant’s occupancy of the Demised Premises may be
delayed by one (1) day. However, any such delay shall not affect the Rent
Commencement date as set forth in Section l(a)(9)(a) of this Deed of Lease, and
Tenant shall pay rent for each such day of delay.

 

IV. The approved construction drawings will be used to request bids from
subcontractors to perform tenant improvement work and to obtain building permits
for the Demised Premises. Additions, deletions, changes or modifications
(hereafter “alterations”) to construction drawings subsequent to Tenant’s signed
acknowledgment of approval are discouraged.

 

In the event Tenant shall desire an alteration to the construction drawings, it
will be necessary to coordinate the alteration with the construction project
manager assigned to coordinate the construction of the Demised Premises.

 

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V. Alteration to construction drawings can be accommodated subject to the
following conditions:

 

A. No alteration will be performed without written request from Tenant and
subsequent written approval by Landlord. Tenant should obtain a written approval
from Landlord for its files.

 

B. Landlord shall have no obligation to approve such alteration except insofar
as, in Landlord’s sole opinion, such changes can be accommodated based upon the
status of the work in progress.

 

C. Tenant shall pay to Landlord, prior to the start of any alteration, the
informal estimate of the cost, including five percent (5%) profit and ten
percent (10%) overhead, of the alteration. It is understood and agreed that the
cost of the alteration shall include an administrative charge of Two Hundred
Dollars ($200.00) per alteration or change order initiated by Tenant after final
approval of the construction drawings and specifications. In the event the cost
of the alteration exceeds the estimate, Tenant shall pay the difference
immediately when invoiced. In the event the cost of the alteration is less than
the estimate, Landlord shall credit Tenant for such difference.

 

D. Any delays in the completion of the Demised Premises resulting from
alterations shall not delay the Rent Commencement Date of the Deed of Lease Term
or the Tenant’s obligation to pay rent.

 

VI. Tenant must provide the Space Plan Architect with Tenant’s selection of the
finishes to be used in the Demised Premises within three (3) business days after
Tenant’s approval of the Construction Drawings. The Space Plan Architect shall
schedule a meeting with Tenant to review and select available finishes.

 

THE INABILITY BY TENANT TO PROVIDE SELECTIONS WITHIN THE SPECIFIED PERIOD OF
TIME MAY CREATE DELAYS IN THE COMPLETION OF THE DEMISED PREMISES. PLEASE NOTE
THAT ANY DELAY IN THE COMPLETION OF THE DEMISED PREMISES RESULTING FROM TENANT’S
INABILITY TO PROVIDE SELECTIONS WITHIN THE SPECIFIED PERIOD OF TIME SHALL NOT
DELAY THE RENT COMMENCEMENT DATE OF THE LEASE TERM OR THE TENANT’S OBLIGATION TO
PAY RENT.

 

(If Tenant experiences any difficulty with the design or construction of the
Demised Premises that is not being acted upon by any of Landlord’s contractors
in a manner acceptable to Tenant, the Landlord should be immediately notified as
outlined in the notice provisions of the Deed of Lease.)

 

-33-

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EXHIBIT D

RULES AND REGULATIONS

 

Tenant shall, and shall insure that Tenant’s agents, servants, employees,
invitees and guests, faithfully keep, observe and perform the following rules
and regulations, and such other reasonable rules and regulations as Landlord may
make, and which in Landlord’s sole judgment are appropriate for the general well
being, safety, care and cleanliness of the Demised Premises and the Building and
its related exterior appurtenances, unless waived in writing by Landlord.

 

(a) The sidewalks, entries, passages, elevators, public corridors, stairways and
other common areas of the Building shall not be obstructed or used for any other
purpose than ingress and egress.

 

(b) Tenant shall not install or permit the installation of any drapes, curtains,
awnings, shades, mylar films, sunfilters, or the like, on or attached to windows
without Landlord’s prior written consent.

 

(c) Tenant shall use reasonable efforts to assure that all window blinds
provided by Landlord are left down at all times.

 

(d) The doors from the corridors to the Demised Premises shall be kept closed
during business hours, except when being used for ingress or egress.

 

(e) Tenant shall not use or operate, within the Demised Premises or elsewhere in
the Building, any supplemental heating devise with an exposed heating element
(“space heater”).

 

(f) Tenant shall not construct, maintain, use or operate, within the Demised
Premises or elsewhere in the Building, any equipment or machinery which produces
music, sound or noise which is audible beyond the Demised Premises.

 

(g) Floor distribution boxes for electric and telephone wires shall remain
accessible at all times.

 

(h) Bicycles, motor scooters or any other type of vehicle shall not be brought
into the lobby or elevators of the Building, or into the Demised Premises, or
parked on the sidewalk or parking spaces, except as required by law. Such
vehicles will be allowed only in areas designated by Landlord.

 

(i) No animal shall be permitted within the Demised Premises or anywhere in the
Building at any time.

 

(j) Tenant will not conduct any activity within the Demised Premises which will
create excessive traffic anywhere in the Building.

 

(k) Parking shall be in designated areas in numbers as allowed by Landlord.

 

(l) Tenant shall not make any room-to-room solicitation of business from other
tenants in the Building and Tenant acknowledges that canvassing and peddling of
any kind in the Building are prohibited. Tenant shall not distribute any
handbills or other advertising matter on automobiles parked in the parking area.

 

(m) Immediately upon the sounding of the Building fire alarm, Tenant, its
agents, employees and invitees shall use marked exits and exit stairways to
evacuate the Building.

 

(n) Smoking of any tobacco product is prohibited throughout the entire Building,
pursuant to the current established county regulations.

 

(o) Eating and drinking are prohibited in the common areas of the Building.

 

Landlord shall in no event be liable to Tenant for its failure to enforce any
rules or regulations or for the breach of any rules or regulations by any other
tenant of the Building.

 

-34-

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EXHIBIT E

 

SAMPLE

 

CERTIFICATE OF COMMENCEMENT

 

THIS CERTIFICATE OF COMMENCEMENT (“Certificate”) is made this      day of
                    , 2003, by and between VA Branches, LLC, a Delaware limited
liability company (“Landlord”), and Saflink Corporation, a Delaware corporation
authorized to conduct business in the Commonwealth of Virginia (“Tenant”).

 

WHEREAS, Landlord and Tenant have entered into a Deed of Lease dated
                    , 2003 (“Lease”);

 

WHEREAS, the Rent Commencement Date of the Deed of Lease Term of the Deed of
Lease, as described in Section 1 thereof, is dependent upon the occurrence of
certain events; and

 

WHEREAS, those certain events have occurred and Landlord and Tenant now desire
to specify the Rent Commencement Date of the Deed of Lease Term for purposes of
establishing the term of the Deed of Lease and the schedule for payment of rent
during said period; and

 

WHEREAS, the rentable square footage of the Demised Premises has been determined
by Landlord’s architect and the parties desire to specify such square footage
and the amount of the Base Annual Rent and Tenant’s Proportionate Share of
certain expenses based thereon.

 

NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Landlord and Tenant warrant and represent each to the other as
follows:

 

  1. The Rent Commencement Date of the Deed of Lease Term is
                    , 2003.

 

  2. The Expiration Date of the Deed of Lease Term is                     ,
2008.

 

  3. The Rentable Area of the Demised Premises is 6,083 square feet.

 

  4. Tenant’s Proportionate Share is 10.8 percent.

 

  5. The Base Annual Rent is $132,305.25.

 

  6. The Base Monthly Rent is $11,025.44.

 

-35-

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

IN WITNESS WHEREOF, Landlord and Tenant do hereby execute this Agreement under
seal on the day and year first above written.

 

WITNESS/ATTEST:

     

LANDLORD:

           

VA Branches, LLC,

a Delaware limited liability company

    By:          

By: Guardian Realty Management, Inc.

as Agent for the Landlord,

       

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

                                 

(SEAL)

           

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

   

Date:

              Anthony G. LaBarbera        

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

                           

Title:

  President                

Date:

                   

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

 

WITNESS/ATTEST:

     

TENANT:

           

Saflink Corporation,

a Delaware

            By:      

(SEAL)

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

         

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

   

Date:

         

Title:

       

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

         

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

 

 

-36-

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EXHIBIT F

Legal Description of Property

 

Reston, Lot 4A, Block 2, Section 908, known as 1875 Campus Commons Drive Reston,
VA 20191

 

Tax Map Reference No.: 026-2-01-0011

 

-37-

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ADDENDUM

 

The foregoing attached Deed of Lease (the “Lease”) dated November 10, 2003, by
and between VA Branches, LLC, a Delaware limited liability company (“Landlord”),
and Saflink Corporation, a Delaware corporation (“Tenant”), is modified,
amended, and/or supplemented as hereinafter set forth, and any language of, or
provision in, said Deed of Lease which is inconsistent or in conflict with the
following shall be deemed appropriately amended or modified.

 

1. Parking. Tenant is allocated (for the entire Deed of Lease Term) up to three
and six tenths (3.6) parking spaces in the Building’s parking facilities per one
thousand (1,000) square feet of rentable floor space in the Demised Premises.
Parking, is free and unassigned during the initial Lease term and any Lease
renewal terms. It is understood and agreed that Landlord assumes no
responsibility and shall not be held liable for any damage or loss to any
automobiles parked in the Building’s parking facilities or to any personal
property located therein, or for any injury sustained by any person in or about
such parking facilities. No independent operator of the Building’s parking
facilities shall be deemed to be an agent of Landlord.

 

2. Rent Abatement. Notwithstanding anything to the contrary in the Lease, the
Base Monthly rent shall be abated for the first (1st) three (3) months after the
Rent Commencement Date provided Tenant has not defaulted under the Lease.

 

3. Recovery Upon Default. If Landlord shall elect to terminate this Lease, in
the event of a default by Tenant hereunder, then Landlord shall have the right
to recover from Tenant, as a separate item and without limiting the amounts set
forth in Section 23 of this Lease, all rent abated pursuant to Paragraph 1 of
this Addendum.

 

4. Option to Renew.

 

(a) Provided that this Lease shall be in full force and effect, Tenant is not
then and has not been in default of the Lease, and Tenant is occupying
ninety-five percent (95%) of the Demised Premises, Tenant shall have the right,
to extend the Lease for one additional period of three (3) years (such
additional period being herein referred to as the “extension term” if exercised,
and included in the definition of the Lease Term). The extension term shall be
on the same terms, covenants and conditions as set forth herein with respect to
the original term of this Lease, except that (a) the Base Annual Rent payable
during the extension term shall be at 100% of the then prevailing market rent,
as determined by mutual agreement or an MAI Appraisal Process, but not less than
rent paid during the last Lease Year of the initial term, and (b) Tenant shall
retain possession of the Demised Premises in its “as-is” condition with the
exception of new paint and carpet, at Landlord’s sole expense using Building
standard paint and carpet.

 

(b) In the event Tenant shall wish to exercise the option to extend, it shall
request in writing (“Initial Term Renewal Request”) from Landlord, a quote of
the Base Annual Rent for the extension term not less than nine (9) months prior
to the expiration of the initial Term of the Lease. Within ten (10) days after
such Initial Term Renewal Request, Landlord shall give Tenant written notice of
such quote. Tenant shall then have ten (10) days after the date of Landlord’s
notice in which to exercise such extension option by written notice to Landlord
accepting the Base Annual Rent quoted by Landlord or stating that Tenant is
exercising the extension option and wishes to have the Base Annual Rent for the
extension term determined by the MAI Appraiser Process. In the event that Tenant
does not exercise the option or provide Landlord with a written response within
said ten (10) day period the extension option shall terminate immediately and
Landlord shall be relieved of any and all liability created by the grant of such
option. The option to extend granted hereby may not be assigned or transferred
by Tenant

 

(c) If Tenant elects to have the Base Annual Rent for the extension term
determined by the MAI Appraisal Process, then the fair market rent for the first
lease year of the extension term shall be independently determined by two (2)
disinterested real estate appraisers, one (1) of whom shall be named by Landlord
and one (1) by Tenant. Said appraisers shall each

 

-38-

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be practicing appraisers in Fairfax County, Virginia, specializing in the field
of commercial real estate, having no less than ten (10) years experience in such
field, recognized as ethical and reputable within their field, and certified as
MAI or an equivalent professional certification. Landlord and Tenant agree to
make their appointments promptly within five (5) days after Landlord’s receipt
of Tenant’s notice to extend, or sooner if mutually agreed upon. Within ten (10)
days after both such appraisers have been appointed, each appraiser shall submit
his or her determination of said fair market rent. The Base Annual Rent for the
first lease year of the extension term shall be the average of the two (2)
determinations; provided, however, that if two of the appraisers are not within
ten percent (10%) of each other, then the two (2) appraisers shall select a
third appraiser with the qualifications described above within five (5) days
after submitting their determinations of the fair market rent. Within ten (10)
days after the third appraiser is selected; such appraiser shall submit his or
her determination of said fair market rent. In such event, the Base Annual Rent
for the first lease year of the extension term shall be the average of the third
appraiser’s determination and the determination of the other two (2) appraisers
which is closest to the third appraiser’s determination. However, the Base
Annual Rent shall not be less than rent paid during the last Lease Year of the
initial term of the Lease Agreement. In arriving at their individual rate
determinations, each appraiser shall consider and analyze all the components of
the Lease and apply them to current market factors. Landlord and Tenant shall
pay the fee of the appraiser selected by it and if a third appraiser is used,
they shall equally share the payment of the fee of the third appraiser.
Notwithstanding the foregoing, Landlord and Tenant may at any time after
appointing the appraisers, agree upon the Base Annual Rent payable during the
first lease year of the extension term and such mutual agreement shall supersede
the appraisers’ determinations.

 

(d) At the commencement of each of the second and each subsequent lease year of
the extension term, the Base Annual Rent shall be adjusted in the manner
described in Section 4(b) of this Deed of Lease.

 

5. Termination Option. Provided that Tenant is not then in default beyond any
applicable cure period, Tenant shall have the right, at Tenant’s sole option, to
terminate this Lease Agreement effective as of the last day of the third (3rd)
year of the Lease Term (the “effective termination date”). Tenant shall give
written notice of its election to exercise such option to Landlord by providing
Landlord written notice at least six (6) months prior to the effective
termination date. If Tenant so exercises its option to terminate this Lease,
Tenant shall pay Landlord a “Termination Fee” equal to the unamortized
transaction costs (at a ten percent (10%) interest rate). The transaction costs
shall include tenant improvement costs, brokerage commissions and rental
abatement in connection with this Lease. The “Termination Fee” is due at the
time notice is given. This option may not be assigned or transferred.

 

6. Right of First Offer. Provided that (i) this Lease shall be in full force and
effect, (ii) Tenant shall not then be in default of the Lease beyond any
applicable period to cure, and (iii) Tenant or any Permitted Affiliates shall
then be occupying ninety percent (90%) of the Demised Premises, then Tenant
shall have a one-time Right of First Offer, subject to the rights of existing
Tenants, to lease any additional adjacent space which becomes available on the
third (3rd) floor of the Building for Tenant’s occupancy only. The terms and
conditions of Tenant’s occupancy shall be upon terms and conditions to be
mutually agreed upon by Tenant and Landlord. Promptly after learning of the
availability for lease of any such space, Landlord shall give written notice to
Tenant. Tenant may then exercise its right of first offer by giving written
notice to landlord within five (5) business days after the date of Landlord’s
notice. Failure by Tenant to respond within said five (5) business day period
shall totally extinguish Tenant’s right of first refusal to lease the space
designated in Landlord’s notice. In the event Landlord and Tenant do not
mutually agree upon the rent terms of the lease for the available space within
thirty (30) days of Tenant’s notice of its intent to exercise its option,
Tenant’s right of first offer shall be totally extinguished.

 

7. Monument Signage.

 

(a) Notwithstanding anything to the contrary in Section 13 of the Lease and
subject to the terms of this Amendment, Tenant shall have the non-exclusive
right, at Tenant’s sole cost and expense, to add their name to the existing
monument signage; provided, Tenant shall first obtain Landlord’s prior written
approval of plans and specifications for said sign (including, without

 

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limitation, the exact wording, size, design, color, and location of such sign),
and Tenant shall obtain all necessary governmental permits for such sign.

 

IN WITNESS WHEREOF, the parties hereto have executed this Addendum.

 

WITNESS/ATTEST:

     

LANDLORD:

           

VA Branches, LLC,

           

a Delaware limited liability company

               

By: Guardian Realty Management, Inc.

as Agent for the Landlord

    By:   /s/    Illegible               By:   /s/    ANTHONY G.
LABARBERA          

(SEAL)

   

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

         

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

                    Anthony G. LaBarbera    

Title:

  Illegible      

Title:

  President    

Date:

 

11/10/03

     

Date:

 

11/10/03

   

WITNESS/ATTEST:

      TENANT:            

Saflink Corporation,

a Delaware Corporation

    By:   /s/    Illegible               By:   /s/    JON ENGMAN          

(SEAL)

   

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Title:

  Senior Director of IT      

Title:

  CFO    

 

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