exv10w40



 





Exhibit
10.40




WATERGATE




LEASE

FOR

OFFICE SPACE




TABLE OF CONTENTS




	 	 	 	 	 	 	 
	ARTICLE	 	PAGE
	1.
	 	DEFINITIONS	 	 	1	 
	2.
	 	TERM	 	 	4	 
	3.
	 	“AS IS” CONDITION; TENANT’S WORK	 	 	4	 
	4.
	 	RENT	 	 	5	 
	5.
	 	ADDITIONAL RENT	 	 	6	 
	6.
	 	USE	 	 	8	 
	7.
	 	CARE OF PREMISES	 	 	8	 
	8.
	 	ALTERATIONS BY TENANT	 	 	8	 
	9.
	 	EQUIPMENT	 	 	9	 
	10.
	 	OWNERSHIP AND REMOVAL OF PROPERTY	 	 	10	 
	11.
	 	LANDLORD’S ACCESS TO PREMISES	 	 	10	 
	12.
	 	SERVICES AND UTILITIES	 	 	10	 
	13.
	 	RULES AND REGULATIONS	 	 	11	 
	14.
	 	REPAIR OF DAMAGE CAUSED BY TENANT: INDEMNIFICATION	 	 	12	 
	15.
	 	LIMITATION ON LANDLORD LIABILITY	 	 	12	 
	16.
	 	FIRE AND OTHER CASUALTY	 	 	12	 
	17.
	 	TENANT INSURANCE	 	 	13	 
	18.
	 	CONDEMNATION	 	 	14	 
	19.
	 	DEFAULT	 	 	14	 
	20.
	 	NO WAIVER	 	 	17	 
	21.
	 	HOLDING OVER	 	 	17	 
	22.
	 	SUBORDINATION	 	 	18	 
	23.
	 	ASSIGNMENT AND SUBLETTING	 	 	18	 
	24.
	 	TRANSFER BY LANDLORD	 	 	20	 
	25.
	 	INABILITY TO PERFORM	 	 	20	 
	26.
	 	ESTOPPEL CERTIFICATES	 	 	20	 
	27.
	 	COVENANT OF QUIET ENJOYMENT	 	 	21	 
	28.
	 	WAIVER OF JURY TRIAL	 	 	21	 
	29.
	 	BROKERS	 	 	21	 
	30.
	 	CERTAIN RIGHTS RESERVED BY LANDLORD	 	 	21	 
	31.
	 	NOTICES	 	 	21	 
	32.
	 	MISCELLANEOUS PROVISIONS	 	 	22	 
	 
	 	A. Benefit and Burden	 	 	22	 
	 
	 	B. Governing Law	 	 	22	 
	 
	 	C. No Partnership	 	 	22	 
	 
	 	D. Delegation by Landlord	 	 	22	 
	 
	 	E. Tenant Responsibility for Agents	 	 	23	 
	 
	 	F. Invalidity of Particular Provisions	 	 	23	 
	 
	 	G. Counterparts	 	 	23	 
	 
	 	H. Entire Agreement	 	 	23	 
	 
	 	I. Amendments	 	 	23	 
	 
	 	J. Mortgagee’s Performance	 	 	23	 
	 
	 	K. Limitation on Interest	 	 	23	 
	 
	 	L. Remedies Cumulative	 	 	23	 
	 
	 	M. Annual Financial Statements	 	 	23	 
	 
	 	N. Signage	 	 	23	 
	33.
	 	LENDER APPROVAL	 	 	23	 
	34.
	 	PARKING	 	 	23	 
	35.
	 	SECURITY DEPOSIT	 	 	24	 
	36.
	 	HAZARDOUS MATERIALS	 	 	24	 
	37.
	 	RELOCATION OF TENANT	 	 	25	 






 









 






	 	 	 	 	 	 	 
	ARTICLE	 	PAGE
	38.
	 	NO RECORDATION	 	 	25	 
	39.
	 	OPTION TO RENEW	 	 	26	 
	40.
	 	CONDITION OF EFFECTIVENESS	 	 	27	 
	 
	 	 	 	 	 	 
	Exhibit A — Premises Plan	 	 	 	 
	Exhibit B — Declaration of Acceptance	 	 	 	 
	Exhibit C — [INTENTIONALLY DELETED]	 	 	 	 
	Exhibit D — Rules and Regulations	 	 	 	 
	Exhibit E — Parking	 	 	 	 






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2600 VIRGINIA AVENUE, NW




OFFICE LEASE




     THIS LEASE (the “Lease”) is made and entered into this 7th day of May, 2004, by and
between TRIZECHAHN WATERGATE OFFICE/RETAIL/LAND LLC, a District of Columbia a limited liability
company (“Landlord”) and GLOBALSECURE HOLDINGS LTD., a Delaware corporation (“Tenant”).



     In consideration of the Rent hereinafter reserved and the agreements hereinafter set forth,
Landlord and Tenant mutually agree as follows:



1. DEFINITIONS.




     Except as otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the meanings assigned to them in this Section:



     A. Alterations: Any improvements, alterations, fixed decorations or modifications, structural
or otherwise, to the Premises, the Building or the Land, as defined below, including but not
limited to the installation or modification of carpeting, partitions, counters, doors, air
conditioning ducts, plumbing, piping, lighting fixtures, wiring, hardware, locks, ceilings and
window and wall coverings.



     B. Base Year: 2004.



     C. Building: The building located at 2600 Virginia Avenue, NW in Washington, DC, in which the
Premises are located. Except as expressly indicated otherwise, the term “Building” shall include
all portions of said building, including but not limited to the Premises, the Common Areas and the
garage.



     D. Common Areas: Those areas of the Building and/or Land, as the case may be, made available
by Landlord for use by Tenant in common with the Landlord, other tenants of the Building and the
employees, agents and invitees of Landlord and of such other tenants.



     E. Consumer Price Index (Regular and Base): [Intentionally omitted]



     F. Default Rate: That rate of interest which is four (4) percentage points above the annual
rate of interest which is publicly announced by Bank of America or its successor entity, if
applicable (“Bank of America”), from time to time as its “prime” rate of interest, irrespective of
whether such rate is the lowest rate of interest charged by Bank of America to commercial
borrowers. In the event that Bank of America ceases to announce such a prime rate of interest,
Landlord, in Landlord’s reasonable discretion, shall designate the prime rate of interest by
another bank located in the Washington, D.C.* metropolitan area, which shall be the prime rate of
interest used to calculate the default rate.



     G. Fiscal Year: Each consecutive twelve (12) month period during the Term of this Lease that
commences on January 1 and concludes on December 31 inclusive.



     H. Ground Leases: All ground and other underlying leases from which Landlord’s title to the
Land and/or the Building is or may in the future be derived. “Ground Lessors” shall denote those
persons and entities holding such ground or underlying leases.



 









 





     I. Holidays: New Year’s Day, Presidents’ Day, Martin Luther King, Jr.’s Birthday, Memorial
Day, Independence Day, Labor Day, Columbus Day, Veteran’s Day, Thanksgiving Day, Christmas Day and
any other holidays designated by an executive order of the President of the United States or by Act
of Congress.



     J. Land:
The real estate that supports the Building, and all associated
easements.

     K.Tenant’s Work: All work to be performed by Tenant pursuant to Section 3 herein below.



     L. Lease Commencement Date: The date this Lease commences, as determined pursuant to
Subsection 2.A. below.



     M. Lease Year: That period of twelve (12) consecutive calendar months that commences on the
first day of the calendar month in which the Rent Commencement Date (defined herein) occurs, and
each consecutive twelve (12) month period thereafter. The earliest such twelve (12) month period
shall be referred to as the “first Lease Year,” and each of the following Lease Years shall
similarly be numbered for identification purposes.



     N. Mortgages: All mortgages, deeds of trust and similar security instruments which may now or
in the future encumber or otherwise affect the Building or the Land, including mortgages related to
both construction and permanent financing. “Mortgagees” shall denote those persons and entities
holding such mortgages, deeds of trust and similar security instruments.



     O. Operating Expenses: All costs and expenses incurred by Landlord during any Fiscal Year, as
defined in Subsection 1.G. above, in managing, operating and maintaining the Building and the Land,
as determined by Landlord in accordance with an accounting system established and regularly applied
by Landlord on a consistent basis. Such costs and expenses shall include, but not be limited to,
the cost of water, gas, sanitary sewer, storm sewer, electricity and other utilities, trash
removal, telephone services, insurance, janitorial and char services and supplies, security
services, labor costs (including social security taxes and contributions and fringe benefits),
charges under maintenance and service contracts (including but not limited to chillers, boilers,
elevators, window and security services), central heating and air conditioning, management fees,
business taxes, license fees, public space and vault rentals and charges, costs, charges and other
assessments made by or for any entity operating a business improvement district in which the
Building is located, condominium fees, assessments, dues, expenses, and other charges which are
paid by Landlord as a result of the Building, the Land or part or all of both being part of a
condominium, and the cost of any equipment or services provided by Landlord in connection with the
servicing, operation, maintenance, repair and protection of the Building and the Land and related
exterior appurtenances (whether or not provided on the Lease Commencement Date). Operating
Expenses shall include the cost of capital improvements made by Landlord to manage, operate or
maintain the Building, together with any financing charges incurred in connection therewith,
provided that such costs shall be amortized over the useful life of the improvements and only the
portion attributable to the Fiscal Year shall be included in Operating Expenses for the Fiscal
Year, except that no portion thereof which is attributable to any capital improvement which is
completed at any time prior to the expiration of the Base Year shall be included in Operating
Expenses for any Fiscal Year (including, but not limited to, the Base Year) and further provided,
that such expenditures shall be limited to (i) those replacements of building elements with other
building elements which serve similar purposes and which are reasonably necessary to keep the
Building in good repair, in Landlord’s judgment, and which will not change the character of the
Building, (ii) improvements or building elements added to the Building which in Landlord’s judgment
will increase the efficiency of the Building (i.e., are anticipated by Landlord to reduce Operating
Expenses as they relate to the item which is the subject of the capital expenditure or to reduce
the rate of increase in the Operating Expenses which relates to the item which is the subject of
the capital expenditure from what it otherwise may have been reasonably anticipated to be in the
absence of such capital expenditure), or (iii) improvements which are required to comply with the
requirements of any laws, regulations, or insurance or utility company requirements. Operating
Expenses shall not include: (i) Real Estate Tax Expenses, (ii) payments of principal and interest
on any Mortgages, (iii) leasing commissions, (iv) costs of preparing, improving or altering any
space in preparation for occupancy of any new or renewal tenant, (v) legal fees incurred by
Landlord in the preparation or negotiation of leases in the Building and amendments thereto, or
(vi)



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expenses in connection with services or other benefits of a type or quantity beyond the scope
of this Lease which are not made
available to Tenant but which are provided to one or more other tenants or occupants of the
Building. In the event that, during any Fiscal Year, Base Year or portion thereof during the Term,
Landlord shall furnish any utility or service which is included in the definition of Operating
Expenses to less than one hundred percent (100%) of the rentable area of the Building because (i)
less than all of the rentable area of the Building is occupied, (ii) any such utility or service is
not desired or required by any tenant, or (iii) any tenant is itself obtaining or providing any
such utility or service, then the Operating Expenses for such Fiscal Year and the Base Year shall
be increased to equal the total expenses that Landlord reasonably estimates it would have incurred
if Landlord had provided all such utilities and services to one hundred percent (100%) of the
rentable area of the Building for the entire Fiscal Year or Base Year. For example, if the average
occupancy rate of the Building during a Fiscal Year is eighty percent (80%), the janitorial
contractor’s charges are $1.00 per occupied rentable square foot per year, and the Building
contains one hundred thousand (100,000) rentable square feet of space, then it would be reasonable
for Landlord to estimate that, if the Building had been one hundred percent (100%) occupied during
the entire Fiscal Year, janitorial charges for such Fiscal Year would have been One Hundred
Thousand Dollars ($100,000) and to compute the Operating Expenses for such Fiscal Year accordingly.
In no event shall the provisions of this paragraph be used to enable, Landlord to collect from the
tenants of the Building more than one hundred percent (100%) of the costs and expenses incurred by
Landlord in managing, operating and maintaining the Building and the Land.



     P. Premises: 2,944 square feet of rentable area on the sixth (6th) floor of the
Building, known as Suite 600, as shown on the floor plan attached hereto as Exhibit A. However,
the area and plan of the Premises may change in the event of the exercise of any option to expand
or contract the Premises set forth in this Lease. The rentable area of the Premises has been
determined in accordance with the Greater Washington Commercial Association of REALTORS® Standard
Method of Measurement dated June 13, 1995 (the “GWCAR Standard Method of Measurement”).



     Q. Premises’ Standard Electrical Capacity: The electrical capacity sufficient to support
Tenant’s balanced consumption of five (5) watts per square foot of rentable area.



     R. Real Estate Tax Expenses: All taxes and assessments, general or special, ordinary or
extraordinary, and foreseen or unforeseen, that are assessed, levied or imposed upon the Building
and/or the Land, under any current or future taxation or assessment system or modification of, or
supplement or substitute for, such system, whether or not based on or measured by the receipts or
revenues from the Building or the Land (including all taxes and assessments for public improvements
or any other purpose and any gross receipts or similar taxes). Real Estate Tax Expenses also shall
include all reasonable expenses incurred by Landlord in obtaining or attempting to obtain a
reduction of any such taxes, rates or assessments, including but not limited to legal fees, but
shall not include any taxes on Tenant’s Personal Property or other tenants’ personal property,
which taxes are the sole obligation of each tenant:



     S. Rent: All Base Rent and Additional Rent.




	 	(1)	 	Base Rent: The amount payable by Tenant pursuant to Subsection 4.A.
below.
	 
	 	(2)	 	Additional Rent: All sums of money payable by Tenant pursuant to this
Lease other than Base Rent.
	 
	 	(3)	 	Monthly Rent: A monthly installment of Base Rent and Additional Rent,
if any, which shall equal one-twelfth (1/12th) of Base Rent and Additional Rent
then in effect.





     T. Tenant’s Personal Property: All equipment, improvements, furnishings and/or other property
now or hereafter installed or placed in or on the Premises by and at the sole expense of Tenant or
with Tenant’s permission (other than any property of Landlord), with respect to which Tenant has
not been granted any credit or allowance by Landlord, and which: (i) is removable without damage to
the Premises, the Building and the Land, and (ii) is not a replacement of any property of Landlord,
whether such replacement is made at Tenant’s expense or otherwise. Notwithstanding any other
provision of this Lease, Tenant’s



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Personal Property shall not include any improvements or other
property installed or placed in or on the Premises as part of Tenant’s Work, whether or not any
such property was purchased or installed at Tenant’s expense.



     U. Unavoidable Delay: Any delays due to strikes, labor disputes, shortages of material, labor
or energy, acts of God, governmental restrictions, enemy action, civil commotion, fire, unavoidable
casualty or any other causes beyond the control of Landlord.



     V. Work Agreement: [INTENTIONALLY DELETED]



2. TERM.




     A. Term of Lease: The term of this Lease (the “Term”) shall commence on a date (the “Lease
Commencement Date”), as defined below, and shall terminate at midnight on June 30, 2009, or such
earlier date on which this Lease is terminated pursuant to the provisions hereof (the “Lease
Expiration Date”). The Lease Commencement Date shall be May 1, 2004. Landlord hereby leases the
Premises to Tenant and Tenant hereby leases the Premises from Landlord for the Term.



     B. Declarations: If requested by Landlord at any time during the Term, Tenant promptly will
execute a declaration in the form attached hereto as Exhibit B.



     C. Effective Date: The rights and obligations set forth in this Lease, except for the
obligation to pay Rent and as otherwise specifically provided herein to the contrary, shall become
effective on the date of final execution of this Lease.



3. “AS IS” CONDITION; TENANT’S WORK.




     Tenant’s accepts the Premises in its “as-is” condition as of the Lease Commencement Date
and Landlord shall have no obligation to make any other improvements or alterations to the
Premises.



     Notwithstanding the foregoing, Landlord shall make available for the performance of Tenant’s
Work (as hereinafter defined) an allowance (the “Tenant Allowance”) in an amount equal to the
product of (a) Seventeen and 50/100 Dollars ($17.50) multiplied by (b) the number of square feet of
rentable area comprising the Premises. Landlord shall pay the Tenant Allowance to Tenant following
Tenant’s completion of Tenant’s Work (as hereinafter defined) and Landlord’s receipt from Tenant of
(i) invoices reasonably evidencing work or services performed with respect to the portion of
Tenant’s Work (as hereinafter defined), (ii) receipted bills or other evidence that the aforesaid
invoices have been paid in full, and (iii) waivers or releases of liens from each of Tenant’s
contractors, subcontractors and suppliers in connection with the work performed or materials
supplied as evidenced by the aforesaid invoices. Tenant shall utilize the Tenant Allowance on or
before the first (1st) anniversary of the Lease Commencement Date. Tenant shall not be entitled to
any Rent abatement, offset or credit if Tenant fails to use any portion of the Tenant Allowance on
or before the first (1st) anniversary of the Lease Commencement Date. Tenant’s construction costs
shall include an amount equal to one percent (1%) of the total cost of Tenant’s Work for Landlord’s
oversight of’ Tenant’s performance and completion of Tenant’s Work.



     Tenant shall improve the Premises in accordance with the Tenant’s Plans (as hereinafter
defined). Tenant shall submit to Landlord Tenant’s final plans and specifications for improvements
to the Premises (the “Tenant’s Plans”), which shall be subject to Landlord’s prior written approval
(the work set forth in the Tenant’s Plans being hereinafter referred to as “Tenant’s Work”), which
approval shall not be unreasonably withheld or delayed with respect to items which do not affect
any of the structural components of the Building or any of the Building’s systems or the exterior
aesthetics of the Building. From and after the date of Landlord’s approval of the Tenant’s Plans,
any changes to the Tenant’s Plans shall not be binding unless approved in writing by both Landlord
and Tenant. Landlord’s approval of the Tenant’s Plans shall constitute approval of Tenant’s design
concept only and shall in no event be deemed a representation or warranty by Landlord as to whether
the Tenant’s Plans comply with any and all legal requirements applicable to the Tenant’s Plans and
Tenant’s Work.



4









 





     In the performance of Tenant’s Work, Tenant shall comply with all applicable laws, codes and
regulations. Tenant shall obtain all permits, certificates and other governmental approvals from
all governmental entities having jurisdiction thereover which are necessary for the prosecution and
completion of Tenant’s Work. Tenant’s Work shall include, but not be limited to,
the cost of all permits and governmental inspections, demolition, fire life safety equipment
installation, sprinkler relocation and all architectural and engineering fees.



     Prior to commencing Tenant’s Work, Tenant shall provide to Landlord the name and address of
each contractor and subcontractor which Tenant intends to employ to perform Tenant’s Work, the use
of which subcontractors and contractors shall be subject to Landlord’s prior written approval,
which shall not be unreasonably withheld, conditioned or delayed if (1) the contractor or
subcontractor is properly licensed, (2) neither Landlord nor any of its affiliates has had any
prior experience with such contractor or subcontractor which was unsatisfactory, and (3) Landlord
knows of no prior unsatisfactory experience that a third party has had with such contractor or
subcontractor. Prior to the commencement of any of Tenant’s Work, Tenant shall deliver to
Landlord, with respect to each contractor and subcontractor which Tenant intends to employ to
perform any of Tenant’s Work, a certificate of insurance from each such contractor or subcontractor
specifying Landlord as a named insured and evidencing that each such contractor or subcontractor
has obtained the following insurance coverages:



               (A) Commercial comprehensive general liability insurance, on a standard ISO form or its
equivalent, which shall include independent contractor’s liability coverage, contractual liability
coverage, products and completed operations coverage, and a “per project” endorsement, to afford
protection, with limits for each occurrence, of not less than Two Million Dollars ($2,000,000)
combined single limit with respect to bodily injury and property damage;



               (B) comprehensive automobile liability insurance for owned, non-owned, and hired vehicles with
limits for each occurrence of not less than One Million Dollars ($1,000,000) with respect to bodily
injury or death and One Million Dollars ($1,000,000) with respect to property damage; and



               (C) worker’s compensation and employer’s liability insurance in form and amounts required by
law and satisfactory to Landlord. Said contractors and subcontractors shall also comply with other reasonable industry requirements of Landlord.






4. RENT.




     From and after June 19, 2004 (the “Rent Commencement Date”), Tenant shall pay to Landlord
such Base Rent and Additional Rent as are set forth in this Section 4 and in Section 5 below.



     A. Base Rent: Base Rent shall equal the following:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Base Rent	 	 	 	 
	Lease	 	Per Square Foot	 	Base Rent	 	Monthly
	Year	 	Per Annum	 	Per Annum	 	Base Rent
	1
	 	$	32.65	 	 	$	96,121.60	 	 	$	8,010.13	 
	2
	 	$	33.47	 	 	$	98,535.68	 	 	$	8,211.31	 
	3
	 	$	34.31	 	 	$	101,008.64	 	 	$	8,417.39	 
	4
	 	$	35.17	 	 	$	103,540.48	 	 	$	8,628.37	 
	5
	 	$	36.05	 	 	$	106,131.20	 	 	$	8,844.27	 






Tenant shall pay Base Rent to Landlord in equal monthly installments (“Monthly Base Rent”) in
advance on the first day of each calendar month during the Term, without notice, except that the
first monthly installment of Base Rent shall be paid upon execution of this Lease. If the Rent
Commencement Date occurs on a date other than the first day of a calendar month, Tenant



5









 








shall receive a credit equal to the Monthly Base Rent multiplied by the number of days in said calendar
month prior to the Rent Commencement Date and divided by the number of days in such month, which
credit shall be applied toward the installment of Monthly Base Rent next due hereunder. If the
Lease Expiration Date occurs after the expiration of the last numbered Lease Year set forth above
in this Section 4.A. for which an amount of Monthly Base Rent is specified, then Monthly Base Rent
shall continue to be payable by Tenant at such rate for each month or portion of a month thereafter which
is prior to the Lease Expiration Date.



     B. Payment: All Base Rent and Additional Rent due and payable to Landlord under this Lease
shall be made payable to TrizecHahn Watergate Office/Retail/Land LLC and delivered to TrizecHahn
Watergate Office/Retail/Land LLC at Bank of America, P.O. Box 631323, Baltimore, MD 21263-1323;
provided, however, that at Landlord’s sole option, following at least thirty (30) days written
notice to Tenant, Tenant shall thereafter make all payments of Base Rent and Additional Rent due
and payable to Landlord under this Lease by means of electronic transfers of funds from Tenant’s
financial institution to Landlord’s designated financial institution. Payments of Rent (other than
in cash), if initially dishonored, shall not be considered rendered until ultimately honored as
cash by Landlord’s depository. Except as expressly set forth otherwise in this Lease, Tenant will
pay all Rent to Landlord without demand, deduction, set-off or counter-claim.



     C. Late Fee: If Tenant fails to make any payment of Rent on or before the date when payment is
due, then Tenant also shall pay to Landlord a late fee equal to five percent (5%) of the amount
that is past due for each month or part thereof until such Rent is fully paid. Said late fee shall
be deemed reimbursement to Landlord for its costs of carrying and processing Tenant’s delinquent
account. Acceptance by Landlord of said late fee shall not waive or release any other rights or
remedies to which Landlord may be entitled on account of such late payment. Notwithstanding the
foregoing, Landlord agrees to waive the late fee required hereunder not more than once each
calendar year provided that (i) Tenant fully pays the Rent then due and payable hereunder within
five (5) days of its due date and, (ii) Tenant is neither in Default of this Lease nor does a
condition exist that could result in a Default of this Lease after notice and opportunity to cure.



     D. Arbitration: Any statement provided to Tenant by Landlord pursuant to Section 5 below shall
be conclusive and binding upon Tenant unless, within thirty (30) days after receipt thereof, Tenant
notifies Landlord of the respects in which the statement is claimed to be incorrect. Unless
otherwise mutually agreed, any such dispute shall be determined by arbitration in the jurisdiction
in which the Premises are located, in accordance with the then current commercial rules of the
American Arbitration Association. The costs of the arbitration shall be divided equally between
Landlord and Tenant, except that each party shall bear the cost of its own legal fees, unless (i)
the arbitration results in a determination that Landlord’s statement contained a discrepancy of
less than five percent (5%) in Landlord’s favor, in which event Tenant shall bear all costs
incurred in connection with such arbitration, including, without limitation, legal fees, or (ii)
the arbitration results in a determination that Landlord’s statement contained a discrepancy of at
least five percent (5%) in Landlord’s favor, in which event Landlord shall bear all costs incurred
in connection with such arbitration, including, without limitation, reasonable legal fees. Pending
determination of any dispute, Tenant shall pay all amounts due pursuant to the disputed statement,
but such payments shall be without prejudice to Tenant’s position. Upon at least fifteen (15) days
notice to Landlord, Tenant shall have reasonable access during normal business hours and at
Tenant’s expense, to appropriate books and records of Landlord relating to the amount of expenses
covered by the disputed statement for the purpose of verifying the statement. Any such review
shall be made only by Tenant’s employees and/or by an auditor hired by Tenant who is employed on
other than a contingent fee basis.



5. ADDITIONAL RENT.




     A. To Cover Consumer Price Index Increases: [Intentionally omitted]




     B. To Cover Increased Operating and Real Estate Tax Expenses:



6









 





          (1) Definitions: As used herein, “Increased Operating Expenses” shall equal the amount by
which Operating Expenses incurred during such Fiscal Year exceed the Operating Expenses incurred
during the Base Year, and “Tenant’s Share of Increased Operating Expenses” shall be that percentage
of Increased Operating Expenses which is the equivalent of the number of square feet of rentable
area in the Premises (2,944 on the Lease Commencement Date) divided by the number of square feet of
rentable area of office space in the Building (197, 196 on the Lease Commencement Date). As used
herein, “Increased Real Estate Tax Expenses” shall equal the amount by which Real Estate
Tax Expenses incurred during such Fiscal Year exceed the Real Estate Tax Expenses incurred during
the Base Year, and “Tenant’s Share of Increased Real Estate Tax Expenses” shall be that percentage of Increased Real Estate Tax
Expenses which is equivalent to the number of square feet of rentable area in the Premises divided
by the number of square feet of rentable area (both office and retail) in the Building (197, 196 on
the Lease Commencement Date). However, in no event shall any of the aforesaid sums be less than
zero.



          (2) Payment of Tenant’s Share: Commencing on the first anniversary date of the Lease
Commencement Date, in addition to all other Rent set forth herein, for each Fiscal Year during the
Term, Tenant shall pay to Landlord as Additional Rent an amount equal to the sum of Tenant’s Share
of Increased Operating Expenses and Tenant’s Share of Increased Real Estate Tax Expenses; provided,
however, that for the Fiscal Years during which the Term begins and ends, Tenant’s Share of the
aforesaid sum shall be prorated based upon the greater of: (i) the number of days during such
Fiscal Year that this Lease is in effect, or (ii) the number of days that Tenant actually occupies
the Premises or any portion thereof.



     C. Statements:




     (1) [Intentionally omitted]




     (2) Commencing with the Fiscal Year which includes the first anniversary of the Lease
Commencement Date, and for each Fiscal Year thereafter, Landlord shall deliver to Tenant a
statement estimating Tenant’s Share of Increased Operating Expenses and Increased Real Estate
Tax Expenses for such Fiscal Year, which Tenant shall pay in equal monthly installments in
advance on the first day of each calendar month during each Fiscal Year. Tenant shall continue
to pay such estimated Increased Operating and Real Estate Tax Expenses until Tenant receives the
next such statement from Landlord, at which time Tenant shall commence making monthly payments
pursuant to Landlord’s new statement. With the first payment of Additional Rent herein which is
due at least thirty (30) days after Tenant’s receipt of a statement from Landlord specifying
Tenant’s Share of estimated Increased Operating and Real Estate Tax Expenses payable during the
Fiscal Year, Tenant shall pay the difference between its monthly share of such sums for the
preceding months of the Fiscal Year and the monthly installments which Tenant has actually paid
for said preceding months.



     D. Retroactive Adjustments: After the end of the Fiscal Year which includes the first
anniversary of the Lease Commencement date, and after the end of each Fiscal Year thereafter,
Landlord shall determine the actual Increased Operating Expenses and Increased Real Estate Tax
Expenses for such Fiscal Year, Landlord shall calculate the foregoing sums and shall provide to
Tenant a statement of Tenant’s Share of Increased Operating Expenses and Increased Real Estate Tax
Expenses for the Fiscal Year. Within thirty (30) days after delivery of any such statement, Tenant
shall pay to Landlord any deficiency between the amount shown as Tenant’s Share of Increased
Operating and Real Estate Tax Expenses for the Fiscal Year and the estimated payments made by
Tenant. Tenant shall be credited with any excess estimated payments toward subsequent Rent
payments by Tenant.



     E. Change In or Contest of Taxes: In the event of any change by any taxing body in the period
or manner in which any of the Real Estate Tax Expenses are levied, assessed or imposed, Landlord
shall have the right, in its sole discretion, to make equitable adjustments with respect to
computing increases in Real Estate Tax Expenses. Real Estate Tax Expenses which are being
contested by Landlord shall be included in computing Tenant’s Share of Increased Real Estate Tax
Expenses under this Section, but if Tenant shall have paid Rent on account of contested Real Estate
Tax Expenses and Landlord thereafter receives a



7









 





refund of such taxes, Tenant shall receive a credit
toward subsequent Rent payments in an amount equal to Tenant’s Share of such refund or if the Term
of this Lease has expired or been terminated, Landlord shall pay the amount of any such refund to
Tenant within thirty (30) days after the later to occur of (i) the -receipt by Landlord of any such
refund of such taxes or (ii) the date of Tenant’s cure of all defaults, if any, under this Lease.



     F. Sales, Use or Other Taxes: If during the Term any governmental authority having
jurisdiction over the Building or the Land levies, assesses or imposes any tax on Landlord, the
Premises, the Building or the Land or the rents payable hereunder, in
the nature of a sales tax, use tax or any tax except (i) taxes on Landlord’s income, (ii)
estate or inheritance taxes, or (iii) Real Estate Tax Expenses, then Tenant shall pay its
proportionate share to Landlord within fifteen (15) days after receipt by Tenant of notice of the
amount of such tax.



6. USE.




     A. Permitted Use: Tenant shall use and occupy the Premises solely for office and
administrative activities directly related thereto and for no other purpose.



     B. Legal and Other Restrictions of Tenant’s Use: In its use of the Premises, Tenant shall
comply with all present and future laws, regulations (including but not limited to fire and zoning
regulations) and ordinances of all other public and quasi-public agencies having jurisdiction over
the Land or the Building. Tenant shall not use the Land, the Building or use or occupy the
Premises for any unlawful, disorderly or hazardous purposes or in a manner which will interfere
with the rights of Landlord, other tenants or their invitees or in any way injure or annoy any of
them or in such a manner as to require structural alterations to the Premises or Building.



7. CARE OF PREMISES.




     Tenant shall at its expense keep the Premises (including all improvements, fixtures and
other property located therein) in a neat and clean condition and in good order and repair, and
will suffer no waste or injury thereto. Tenant shall surrender the Premises at the end of the Term
in as good order and condition as they were in on the Lease Commencement Date, ordinary wear and
tear excepted.



8. ALTERATIONS BY TENANT.




     A. Making of Alterations; Landlord’s Consent: Tenant shall not make or permit to be made
any Alterations without the prior written consent of Landlord both as to whether the Alterations
may be made and as to how and when they will be made, which consent shall not be unreasonably
withheld, conditioned or delayed with respect to any proposed Alterations which do not affect the
structure of the Building or any of its systems, including without limitation, any mechanical,
electrical or plumbing systems and which do not create or expand any obligation of Landlord under
any applicable codes. Landlord shall use reasonable efforts to provide its approval or any
comments with respect to Tenant’s plans and specifications for any Alterations in writing to Tenant
by the tenth (10th) business day after Landlord’s receipt thereof. Any Alterations shall be made
at Tenant’s expense, by its contractors and subcontractors and in accordance with complete plans
and specifications approved in advance in writing by Landlord, and only after Tenant: (i) has
obtained all necessary permits from governmental authorities having jurisdiction and has furnished
copies thereof to Landlord, (ii) has submitted to Landlord an architect’s certificate that the
Alterations will conform to all applicable laws and regulations, and (iii) has complied with all
other requirements reasonably imposed by Landlord, including without limitation any requirements
due to the underwriting guidelines of Landlord’s insurance carriers. Landlord’s consent to any
Alterations and approval of any plans and specifications constitutes approval of no more than the
concept of these Alterations and not a representation or warranty with respect to the quality or
functioning of such Alterations, plans and specifications.



8









 





Tenant shall be and is solely
responsible for the Alterations and for the proper integration thereof with the Building, the
Building’s system’s and existing conditions. Landlord shall have the right, but not the
obligation, to supervise the making of any Alterations. If any Alterations are made without the
prior written consent of Landlord, or which do not conform to plans and specifications approved by
Landlord or to other conditions imposed by Landlord pursuant to this Section, Landlord may, in its
sole discretion, correct or remove such Alterations at Tenant’s expense if Tenant fails to do so
after notice and demand. Following completion of any Alterations, at Landlord’s request, Tenant
either shall deliver to Landlord a complete set of “as
built” plans showing the Alterations or shall reimburse Landlord for any expense incurred by
Landlord in causing the Building plans to be modified to reflect the Alterations.



     B. No Liens: Tenant shall take all necessary steps to ensure that no mechanic’s or
materialmen’s liens are filed against the Premises, the Building or the Land as a result of any
Alterations made by the Tenant. If any mechanic’s lien is filed, Tenant shall discharge the lien
within twenty (20) days thereafter, at Tenant’s expense, by paying off or bonding the lien.



9. EQUIPMENT.




     A. Permitted Equipment: Tenant shall not install or operate in the Premises any equipment
or other machinery that, in the aggregate, will cause Tenant to use more than the Premises’
Standard Electrical Capacity, without: (i) obtaining the prior written consent of Landlord, who may
condition its consent upon the payment by Tenant of Additional Rent for additional consumption of
utilities, additional wiring or other expenses resulting therefrom, (ii) securing all necessary
permits from governmental authorities and utility companies and furnishing copies thereof to
Landlord, and (iii) complying with all other requirements reasonably imposed by Landlord. Prior to
the Lease Commencement Date, Tenant shall provide Landlord with a list of all equipment that Tenant
intends to install or operate in the Premises which operate on more than one hundred twenty (120)
volts, and Tenant shall provide Landlord with an updated list of such equipment prior to the
installation or use of any additional equipment which operates on more than one hundred twenty
(120) volts. Tenant shall not install any equipment or machinery which may necessitate any
changes, replacements or additions to or material changes in the use of water, heating, plumbing,
air conditioning or electrical systems of the Building without obtaining the prior written consent
of Landlord, who may withhold its consent in its absolute discretion.



     B. Payment For Excess Utility Usage: If Tenant’s equipment shall result in electrical demand
in excess of the Premises’ Standard Electrical Capacity, Landlord shall have the right, in its sole
discretion, to install additional transformers, distribution panels, wiring and other applicable
equipment at the expense of Tenant. None of the equipment so installed shall be deemed to be
Tenant’s Personal Property. If at any time during the Term, Tenant’s connected electrical load
from its use of equipment and fixtures (including incandescent lighting and power), as estimated by
Landlord, exceeds the Premises’ Standard Electrical Capacity, then Landlord may, at its option: (i)
install separate electrical meter(s) for the Premises, or (ii) cause a survey to be made by an
independent licensed electrical engineer or consulting firm to determine the amount of electricity
consumed by Tenant beyond the Premises’ Standard Electrical Capacity. Tenant shall reimburse
Landlord for the cost of the installation of said meter(s) or completion of said meter(s) or
survey, and shall pay as Additional Rent the cost of any electricity in excess of an average of the
Premises Standard Electrical Capacity, at the rate charged by the utility company providing such
electricity, assuming continuous business hours, within ten (10) days after receipt of any bill
therefor from Landlord.



     C. Noise; Vibration; Floor Load: Business machines and equipment belonging to Tenant, which
cause noise or vibration that may be transmitted to any part of the Building to such a degree as to
be objectionable to Landlord or to any tenant of the Building, shall be installed and maintained by
Tenant at Tenant’s expense on devices that eliminate the noise and vibration. Tenant shall not
place any load upon the floor of the Premises which exceeds the per square foot load the floor was
designed to carry (eighty (80) pounds per square foot for live loads and twenty (20) pounds per
square foot for dead loads).



9









 





10. OWNERSHIP AND REMOVAL OF PROPERTY.




     A. Landlord’s Property: Any Alterations and other improvements and any equipment,
machinery, furnishings and other property, installed or located in the Premises, the Building or
the Land by or on behalf of Landlord or Tenant, except for Tenant’s Personal Property: (i) shall
immediately become the property of Landlord, and (ii) shall be surrendered to Landlord, with the
Premises as a part thereof at the end of the Term; provided, however, that if Landlord requests
Tenant to remove any Alterations installed by or on behalf of Tenant, Tenant shall cause the same
to be removed at Tenant’s expense on or before the Lease
Expiration Date, or shall reimburse Landlord for the cost of such removal, as elected by
Landlord (unless Landlord expressly waives in writing the right to require such removal at the time
Landlord gives its consent to the making of such Alterations).



     B. Removal of Property At End of Term: Tenant shall remove all of Tenant’s Personal Property,
and, with the exception of any existing cabling and wiring located in the plenum as of the date of
this Lease, all computer cabling and wiring installed by or on behalf of Tenant (irrespective of
whether such cabling and wiring constitutes Tenant’s Personal Property under the terms of this
Lease, and at Tenant’s expense, using a contractor approved in advance by Landlord in writing),
from the Building and the Land on or before the Lease Expiration Date. Any personal property
belonging to Tenant or to any other person or entity which is left in the Building or on the Land
after the date this Lease is terminated for any reason shall be deemed to have been abandoned. In
such event, Landlord shall have the right to dispose of it in whatever manner Landlord considers
appropriate, without waiving its right to claim from Tenant all expenses and damages caused by
Tenant’s failure to remove such property, and Tenant and any other person or entity shall have no
right to compensation from or any other claim against Landlord as a result.



11. LANDLORD’S ACCESS TO PREMISES.




     Landlord may at any reasonable time and upon reasonable advanced notice (oral or written),
enter the Premises to examine them, to make alterations or repairs thereto or for any other
purposes which Landlord considers necessary or advisable provided such entry does not unreasonably
interfere with Tenant’s business operations within the Premises; however, in the case of any
emergency, Landlord and its agents may enter the Premises at any time and in any manner Tenant
shall allow the Premises to be exhibited by Landlord upon reasonable advanced notice (oral or
written): (i) at any reasonable time to representatives of lending institutions or to prospective
purchasers of the Building, and (ii) at any reasonable time, during the final nine (9) months of
the Lease Term, to persons who may be interested in leasing the Premises. Landlord reserves the
right and shall be permitted reasonable access to the Premises to install facilities within and
through the Premises and to install and service any systems deemed advisable by Landlord to provide
services or utilities to any tenant of the Building; provided, however, that such installations
shall be above the ceiling, below the floor or within existing columns within the Premises or at
such other locations within the Premises as do not interfere with Tenant’s Permitted Use of the
Premises in more than a de minimis manner.



12. SERVICES AND UTILITIES.




     A. Services Provided: As long as Tenant is not in Default, as defined in Subsection 19.A.
below, Landlord shall provide the following to Tenant, without additional charge, except as
otherwise provided herein (including, but not limited to, as provided in Sections 5 and 1.O.
hereof):




     (1) Elevator service for common use, subject to call at all times, including Sundays and
Holidays.




     (2) Central heating and air conditioning from 7:00 a.m. until 6:00 p.m. on weekdays and
from 9:00 a.m. until 1:00 p.m. on Saturdays, exclusive of Holidays, during the seasons of the
year and within the temperature ranges usually furnished in comparable office buildings in the
city (or, if not a city, other local jurisdiction) in which the Building is located. Landlord
shall provide heat and air conditioning at other times at Tenant’s expense, provided that Tenant
gives Landlord notice by 1:00 p.m. on weekdays for after-hour service on the next weekday, two
(2) business days’ notice before a Holiday



10









 





for service on such Holiday and two (2) business
days’ notice for after-hour service on Saturday or Sunday. Landlord shall charge Tenant for
such after-hour, Holiday and special weekend service at the prevailing rates charged by Landlord
from time to time to other tenants of the Building; which rate is currently $100.00 per hour per
floor.




     (3) Cleaning and char services in Landlord’s standard manner.




     (4) Electrical facilities to furnish electricity up to the Premises’ Standard Electrical
Capacity (including the replacement of Building standard light bulbs in Building standard light
fixtures, it being agreed that if Landlord replaces any
other light bulbs in the Premises, Tenant shall pay Landlord the cost of such bulbs and all
labor costs incurred by Landlord in connection therewith within fifteen (15) days after
Landlord’s written demand therefor).




     (5) Rest room facilities.




     (6) Routine maintenance, painting and electrical lighting service for all Common Areas of
the Building in such manner as Landlord deems reasonable.




     (7) Reasonable access to the Premises at all times, subject to such security procedures,
restrictions and other regulations as Landlord may promulgate.



     B. Failure to Provide Services: Landlord shall have no liability to Tenant or others based on
any failure by Landlord to furnish the foregoing, due to Unavoidable Delays, repair or maintenance
work or any other reason, and such failure shall neither render Landlord liable for damages to
either person or property, nor be construed as an eviction of Tenant, nor cause a diminution or
abatement of Rent nor relieve Tenant of any of Tenant’s obligations hereunder.



     C. Conservation: Tenant hereby agrees to comply with all energy conservation procedures,
controls and requirements instituted by Landlord pursuant to any government regulations or
otherwise, including but not limited to controls on the permitted range of temperatures, the volume
of energy consumption or the hours of operation of the Building. Institution by Landlord of such
controls and requirements shall not entitle Tenant to terminate this Lease or to an abatement of
any Rent payable hereunder.



     D. Recycling: Without limiting the foregoing, Tenant covenants and agrees, at its sole cost
and expense, to comply with all present and future laws, orders, and regulations of the
jurisdiction in which the Building is located and of the federal, municipal, and local governments,
departments, commissions, agencies and boards having jurisdiction over the Building to the extent
that they or this Lease impose on Tenant duties and responsibilities regarding the collection,
sorting, separation, and recycling of trash. Tenant shall pay all costs, expenses, fines,
penalties, or damages that may be imposed on Landlord or Tenant by reason of Tenant’s failure to
comply with the provisions of this Section 12.D., and, at Tenant’s sole cost and expense, shall
indemnify, defend and hold Landlord harmless (including legal fees and expenses) from and against
any actions, claims, and suits arising from such noncompliance, using counsel reasonably
satisfactory to Landlord.



13. RULES AND REGULATIONS.




Tenant shall abide by and observe the rules and regulations attached hereto as Exhibit D and
such other rules and regulations as may be made by Landlord from time to time, provided that such
rules and regulations shall not be materially inconsistent with the provisions of this Lease.
Nothing contained in this Lease or in any rules and regulations shall be interpreted to impose upon
Landlord any obligations to enforce against any tenant its rules and regulations, or the provisions
of any lease with any other tenant; provided, however, that Landlord agrees to use reasonable
efforts to enforce such rules uniformly among all office tenants of the Building, and Landlord
shall not be liable to Tenant or any other entity for any violation of said rules, regulations or
lease provisions.



11









 








14. REPAIR OF DAMAGE CAUSED BY TENANT: INDEMNIFICATION.




     A. Repairs: Except as otherwise expressly provided in this Lease, all injury, breakage and
damage to the Land, the Building or the Premises, caused by any act or omission of Tenant shall be
repaired by and at the sole expense of Tenant, except Landlord shall have the right, at its option,
to make such repairs and to charge Tenant for all costs and expenses incurred in connection
therewith as Additional Rent payable within ten (10) days after the rendering of a bill therefor.
Tenant shall notify Landlord promptly of any injury, breakage or damage to the Land, the Building,
or the Premises caused by Tenant.



     B. Indemnification: Tenant hereby agrees to indemnify and hold Landlord harmless from and
against all costs, damages, claims, liabilities and expenses, including attorneys’ fees, suffered
by or claimed against Landlord, directly or indirectly, based on, arising out of or resulting from:
(i) Tenant’s use and occupancy of the Premises or the business conducted by Tenant therein
or Tenant’s presence in the Building or on the Land (ii) the making by Tenant of any
Alterations, (iii) any act or omission of Tenant or its employees, agents or invitees, and (iv) any
breach or default by Tenant in the observance or performance of its covenants and obligations under
this Lease.



15. LIMITATION ON LANDLORD LIABILITY.




     A. Liability Standard: Landlord shall not be liable to Tenant or any other individual or
entity for any damage, loss or claim whatsoever, except damages, losses and claims that are the
direct result of Landlord’s gross negligence or willful misconduct; however, in no event shall
Landlord be liable for consequential damages.



     B. Limitation on Total Liability: Notwithstanding any other provision of this Lease, it is
expressly understood and agreed that the total liability of Landlord arising out of or in
connection with this Lease, the relationship of Landlord and Tenant hereunder and/or Tenant’s use
of the Premises, shall be limited to the estate of Landlord in the Building. No other property or
assets of Landlord or any partner or owner of Landlord shall be subject to levy, execution, or
other enforcement proceedings or other judicial process for the satisfaction of any judgment or any
other right or remedy of Tenant arising out of or in connection with this Lease, the relationship
of Landlord and Tenant hereunder and/or Tenant’s use of the Premises.



16. FIRE AND OTHER CASUALTY:




     If the Premises shall be damaged by fire or other casualty, other than as a result of the
negligence or misconduct of Tenant, the Lease shall not terminate and, upon adjustment of insurance
claims, Landlord shall repair the damage, provided that Landlord shall have no obligation to repair
damage to or replace Tenant’s Personal Property. Except as otherwise provided herein, if any part
of the Premises are rendered untenantable by reason of any such damage, Rent shall abate from the
date of the damage to the date the damage is repaired, as determined by Landlord, in the proportion
that the area of the untenantable part bears from time to time to the total area of the Premises.
No compensation or reduction of Rent shall be paid or allowed for inconvenience, annoyance or
injury to Tenant or Tenant’s business arising from any damage to or repair of the Premises or the
Building.



     Notwithstanding the foregoing, if Landlord does not receive sufficient insurance proceeds to
fully repair the damage, or if the Building shall be so damaged that, as determined by Landlord,
substantial reconstruction of the Premises or the Building is required (whether or not the Premises
have been damaged), then Landlord, at its option, may give Tenant, within sixty (60) days after the
casualty, written notice of termination of this Lease, and this Lease and the Term shall terminate
(whether or not the Term has commenced) upon the expiration of thirty (30) days from the date of
the notice, with the same effect as if the new expiration date had been the date initially fixed
for expiration of the Term, and all Rent shall be apportioned as of such date.



     If the Premises or the Building shall be damaged by fire or other casualty due to the
negligence or misconduct of Tenant: (i) Landlord shall have no obligation to repair the Premises or
the Building, (ii) this Lease shall, at Landlord’s option, not terminate,



12









 





(iii) Landlord may at
Tenant’s expense repair the damage, and (iv) Landlord may pursue any legal and equitable remedies
available to it.



17. TENANT INSURANCE.




     A. Types of Insurance Required: Tenant, at its expense, shall obtain and maintain in
effect at all times during the Term an insurance policy providing the following coverage:




     (1) An “all risk” insurance policy covering all of Tenant’s Personal Property within, and
improvements and alterations to, the Premises for not less than the full replacement value
thereof. All proceeds of such insurance shall be used to repair or replace the items so
insured.




     (2) A commercial general liability policy on an occurrence basis, with the following
limits:



	 	 	 	 	 
	Each occurrence limit for bodily injury and property
damage
	 	$	1,000,000	 
	General aggregate
	 	$	2,000,000	 
	Product/completed operations aggregate
	 	$	2,000,000	 
	Fire damage legal liability
	 	$	50,000	 
	Medical payments (any one person)
	 	$	5,000	 






Said insurance shall name Landlord (in care of Landlord’s management agent and referring to the
Building by its address), Landlord’s management agent and Mortgagee as an additional insured. The
policy shall protect Landlord, Landlord’s management agent, and the Mortgagee against any liability
for bodily injury, personal injury, death or property damage occurring upon, in or about the
Premises, the Building or the Land or arising out of or relating to any risks against which Tenant
is required to indemnify Landlord, Landlord’s management agent and the Mortgagee. From time to
time during the Term, Landlord may require Tenant to increase said limits of said insurance to the
limits of liability insurance then customarily required of tenants of other comparable office
buildings in the city (or, if not a city, other local jurisdiction) in which the Building is
located.



     B. Required Provisions of Policies: All insurance policies required to be maintained by Tenant
under this Lease must: (i) be issued by insurance companies reasonably approved by Landlord; (ii)
be in form and have content reasonably satisfactory to Landlord; (iii) be written as primary policy
coverage and not contributing to or in excess of any coverage which Landlord or the Mortgagees may
carry; (iv) contain an express waiver of any right of subrogation by the insurance company against
Landlord, the Mortgagees and the Landlord’s and the Mortgagees’ employees and agents; and (v)
provide that the policy may not be cancelled or permitted to lapse unless Landlord shall have
received at least ten (10) days prior written notice of cancellation or non-renewal. Tenant shall
deliver to Landlord (in care of Landlord’s management agent and referring to the Building by its
address) an ACORD 27 Certificate of each such policy and any renewal policy, together with evidence
of payment of all applicable premiums, at least ten (10) days before the Lease Commencement Date
and at least thirty (30) days before the renewal of any policies. Any insurance required of Tenant
under this Section may be carried under a blanket policy, provided that said policy shall
specifically set forth the amount of insurance allocated to this Lease.



     C. Effect of Tenant’s Activities on Insurance: Tenant shall not conduct or permit to be
conducted any activity, or place any equipment in or about the Land, the Building or the Premises
which will increase the rate of, or make void or voidable, any fire or other insurance maintained
or required to be maintained by Landlord or any Mortgagee on the Building, the Land or the property
kept thereon or therein, which will conflict with the provisions of any such insurance policy or
which will make it impracticable for Landlord to obtain insurance covering any risks against which
Landlord reasonably deems it advisable to obtain insurance. In the event any increases in the
rates of such insurance are, in Landlord’s reasonable judgment, due to Tenant’s presence in the
Building, to any activity conducted or property installed or placed by Tenant on or about the Land,
the Building or the Premises or to Alterations installed by Tenant or at Tenant’s request, Tenant
shall reimburse Landlord for the amount of



13









 





such increases promptly upon demand therefor.
Statements by the applicable insurance company or insurance rating bureau that such increases are
due to any activity, property or improvements shall be conclusive for the purposes of determining
Tenant’s liability hereunder.



     D. Termination Right: Landlord shall have the right to terminate this Lease upon thirty (30)
days notice to Tenant in the event Landlord receives notice from any of Landlord’s insurance
carriers that such carrier intends to cancel its insurance on the Building, or to increase the cost
of such insurance by more than one hundred percent (100%) above the premium payable by Landlord
immediately prior to such notice, due to the activities of Tenant or the presence of Tenant in the
Building. However, Landlord shall not terminate this Lease in the event Landlord is able, with
good faith efforts, to obtain equivalent insurance from an insurance carrier satisfactory to
Landlord at a premium not more than one hundred percent (100%) greater than the premium for the
cancelled insurance; provided that Tenant shall reimburse Landlord for all additional premiums
charged to Landlord by such new insurance carrier. It is expressly understood that Landlord shall
not have the right to terminate this Lease pursuant to
this Subsection D. if any cancellation or rate increase is due to factors generally applicable
to the insurance or rental market, rather than to Tenant’s activities or presence in the Building.



     E. Waiver: Except for gross negligence and intentional acts, Landlord and Tenant hereby each
waive and release each other from any and all liabilities, claims and losses for which Landlord or
Tenant is or may be held liable, to the extent either party: (i) receives insurance proceeds on
account thereof, or (ii) is required to maintain insurance pursuant to this Section, whichever is
greater.



18. CONDEMNATION.




     A. Landlord’s Right to Terminate: If a substantial part of the Premises, the Building or
the Land is taken or condemned by any governmental authority for any purpose or is granted to any
authority in lieu of condemnation (collectively, a “taking”), Landlord shall have the right in its
sole discretion to terminate this Lease by written notice to Tenant, and upon the giving of such
notice, the Term shall terminate as of the date title vests in the authority, and Rent shall be
abated as of that date. For purposes of this Section, a substantial part of the Premises, the Land
or the Building shall be considered to have been taken if, in the sole opinion of Landlord, the
taking shall render it commercially undesirable for Landlord to permit this Lease to continue or to
continue operating the Building.



     B. Adjustment of Rent: If a portion of the Premises is taken and Landlord does not elect to
terminate this Lease pursuant to the preceding paragraph, then Rent shall be equitably adjusted as
of the date title vests in the authority and this Lease shall otherwise continue in full force and
effect.



     C. Division of Award: Tenant shall have no claim against Landlord arising out of or related
to any taking, or for any portion of the amount that may be awarded as a result, and Tenant hereby
assigns to Landlord all its rights, title and interest in and to any such award; provided, however,
that Tenant may assert any claim it may have against the authority for compensation for Tenant’s
Personal Property and for any relocation expenses compensable by statute, as long as such awards
shall be made in addition to and stated separately from the award made for the Land, the Building
and the Premises.



19. DEFAULT.




     A. Default of Tenant: The following events shall be a default by Tenant (a “Default”)
under this Lease:



          (1) Failure of Tenant to Pay Rent as and when due, if the failure continues for three (3)
business days after notice from Landlord specifying the failure.



          (2) Failure of Tenant to comply with or perform any covenant or obligation of Tenant under
this Lease, other than those concerning the payment of Rent, if the failure continues for twenty
(20) days after notice from Landlord to Tenant



14









 





specifying the failure; provided, however, that if
the failure on the part of Tenant is not capable of being cured within such 20-day period but
Tenant expeditiously commences to cure same and diligently proceeds with such cure, Tenant’s time
to cure such failure shall be extended for the time necessary to cure same, but in no event longer
than ninety (90) days, inclusive of the original 20-day period.



          (3) If Tenant’s activities in the Premises results in a continuing or repeated, credible and
significant threat of physical danger to other tenants and/or users of the Building, whether or not
Tenant is capable of controlling such threat, Landlord shall have the right to terminate this Lease
upon ninety (90) days’ prior written notice to Tenant in which Landlord describes in reasonable
detail the nature of the continuing or repeated, credible and significant threat of physical danger
or such shorter notice period as may be required to avoid cancellation of Landlord’s insurance or
an increase in Landlord’s insurance premium; provided, however, that such termination shall be void
and of no force or effect if Tenant ceases the threatening activities prior to the expiration of
such notice period or such threatening activities otherwise cease.



          (4) If Tenant, any guarantor of Tenant’s performance hereunder (a “Guarantor”) or, if Tenant
is a partnership, any partner of Tenant (“Partner”), shall file a voluntary petition in bankruptcy
or insolvency, shall be adjudicated bankrupt or insolvent or shall file a petition or answer
seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any present or future federal, state or other law, or shall make an assignment
for the benefit of creditors, or shall seek or acquiesce in the appointment of any trustee,
receiver or liquidator of Tenant or of any Guarantor or Partner or of all or any part of the
property of Tenant or of such Guarantor or Partner.



          (5) If, within thirty (30) days after the commencement of any proceeding against Tenant or a
Guarantor or Partner, whether by the filing of a petition or otherwise, seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar relief under any
present or future applicable federal, state or other law, such proceeding shall not have been
dismissed or if, within thirty (30) days after the appointment of any trustee, receiver or
liquidator of Tenant or any Guarantor Or Partner, or of all or any part of the property of Tenant
or of any Guarantor or Partner, without the acquiescence of such individual or entity, such
appointment shall not have been vacated or otherwise discharged, or if any execution or attachment
shall have been issued against the property of Tenant or of any Guarantor or Partner, pursuant to
which the Premises shall be taken or occupied or attempted to be taken or occupied.



          (6) If Tenant fails to take possession of the Premises on the Lease Commencement Date or
vacates, abandons or ceases to carry on its ordinary activities in the Premises prior to the Lease
Expiration Date, with or without an intention of paying Rent; provided, however, that if (i) Tenant
gives Landlord at least thirty (30) days prior written notice that it intends to vacate the
Premises, (ii) Tenant pays the full amount of all Rent when due under this Lease while the Premises
are vacant, (iii) the fact that the Premises is vacant does not adversely affect the Building or
other tenants therein and does not result in any liability to, or expenditure of funds by,
Landlord, and (iv) Tenant leaves the Premises in a condition satisfactory to Landlord and continues
to maintain the Premises, in the condition required by this Lease throughout the remainder of the
Term, then, and in such event only, Tenant shall not be deemed to be in Default under this Section
19.A.(6) and Landlord shall have the right, exercisable by sending written notice to Tenant, to
sublet from Tenant for the balance of the Term of this Lease all of the Premises at Tenant’s then
rental rate hereunder, or to terminate this Lease as to all or any portion of the Premises, which
rights of Landlord as to subletting and termination shall be exercisable by Landlord in its sole
discretion.



     B. Remedies Upon Default: Upon the occurrence of a Default, Landlord shall have the right,
then or at any time thereafter:



          (1) Without, demand or notice, to reenter and take possession of all or any part of the
Premises, to expel Tenant and those claiming through Tenant and to remove any property therein,
either by summary proceedings or by any other action at law, in equity or otherwise, with or
without terminating this Lease, without being deemed guilty of trespass and without prejudice to
any other remedies of Landlord for breach of this Lease, and/or



15









 





          (2) To give Tenant written notice of Landlord’s intent to terminate this Lease, and on the
date specified in Landlord’s notice, Tenant’s right to possession of the Premises shall cease and
this Lease shall terminate.



     If Landlord elects to terminate this Lease, everything contained in this Lease on the part of
Landlord to be done shall cease, without prejudice to Landlord’s right to recover from Tenant all

Rent, as set forth in Subsections C. and D. below. If Landlord elects to reenter pursuant to
Subsection B.(1) above, Landlord may terminate this Lease, or, from time to time without
terminating this Lease, may relet all or any part of the Premises as the agent of Tenant, for such
term, at such rental and upon such other provisions as Landlord deems acceptable, with the right to
make any alterations and repairs to the Premises that Landlord deems appropriate, at Tenant’s
expense. No such reentry or taking of possession of the Premises shall be construed as an election
to terminate this Lease, unless notice of such intention is given pursuant to Subsection B.(2)
above, or unless termination be decreed by a court of competent jurisdiction at the instance of
Landlord. Landlord shall in no event be under any obligation to relet any part of the Premises.



     C. Liability of Tenant: If Landlord terminates this Lease or reenters the Premises (with or
without terminating this Lease), Tenant shall remain liable (in addition to all other liabilities
of Tenant accrued at the time of the Default) for the sum of (i) any unpaid Rent accrued prior to
the time of termination and/or reentry, as the case may be, plus interest thereon from the due date
at the Default Rate, (ii) all Base Rent and Additional Rent provided for in this Lease from the
time of termination and/or reentry, as the case may be, until the date this Lease would have
expired had a Default not occurred, plus interest thereon from the due date at the Default Rate,
(iii) any and all expenses (including but not limited to attorneys’ and brokerage fees) incurred by
Landlord in reentering and repossessing the Premises, in correcting any default, in painting,
altering or repairing the Premises in order to place the Premises in first-class rentable condition
(whether or not the Premises are relet), in protecting and preserving the Premises and in reletting
or attempting to relet the Premises, and (iv) any other amounts necessary to compensate Landlord
for any other injury or detriment caused by the Default, minus the net proceeds (after deducting
any rental abatements, tenant improvement allowances and other concessions and inducements)
actually received by Landlord, if any, from any reletting to the extent attributable to the period
prior to the date this Lease would have expired had a Default not occurred. Landlord shall have
the option to recover any damages sustained by Landlord either at the time of reletting, if any, or
in separate actions from time to time as said damages shall have been made more easily
ascertainable by successive relettings or, at Landlord’s option, to defer any such recovery until
the date this Lease would have expired in the absence of a Default, in which event Tenant hereby
agrees that the cause of action shall be deemed to have accrued on the aforesaid date. The
provisions of this Section shall be in addition to, and shall not prevent the enforcement of, any
claim Landlord may have for anticipatory breach of this Lease.



     D. Liquidated Damages: In addition to Landlord’s rights pursuant to Subsection C. above, if
Landlord terminates this Lease, Landlord shall have the right at any time, at its sole option, to
require Tenant to pay to Landlord on demand, as liquidated damages, the sum of (i) the total of the
Base Rent, Additional Rent and all other sums which would have been payable under this Lease from
the date of Landlord’s demand for liquidated damages (“Landlord’s Demand”) until the date this
Lease would have terminated in the absence of the Default, discounted to present value at the rate
of five percent (5%) per annum (the “Discount Rate”), (ii) all unpaid Rent accrued prior to the
time of Landlord’s Demand, plus interest thereon from the due date at the Default Rate, (iii) any
and all expenses (including but not limited to attorneys’ and brokerage fees) incurred by Landlord
in reentering and repossessing the Premises, in correcting any default, in painting, altering or
repairing the Premises in order to place the Premises in first-class rentable condition (whether or
not the premises are relet), in protecting and preserving the Premises and in reletting or
attempting to relet the Premises, and (iv) any other amounts necessary to compensate Landlord for
any other injury or detriment caused by the Default; minus the sum of (a) the net fair market
rental value of the Premises for the period referred to in Subsection D.(i) above, discounted to
present value at the Discount Rate, and (b) any sums actually paid by Tenant to Landlord



16









 





pursuant
to Subsection C. above; provided, however, that if said damages shall be limited by law to a lesser
amount, Landlord shall be entitled to recover the maximum amount permitted by law. The “net fair
market rental value” referred to in Subsection D.(a) above shall be the fair market rental value of
the Premises at the time of Landlord’s Demand, reduced by any rental abatements, tenant improvement
allowances and other concessions and inducements generally provided by landlords seeking to lease
comparable commercial property in the area of the Premises at the time of Landlord’s Demand. If
reletting is accomplished within a reasonable time after Lease termination, the “net fair market
rental value” referred to in Subsection D.(a) above shall be deemed prima facie to be the net
rental income (after deducting any rental abatements, tenant improvement allowances and other
concessions and inducements) realized upon such reletting.



     E. Waiver: Tenant, on its own behalf and on behalf of all persons and entities claiming
through Tenant, including but not limited to creditors of Tenant, hereby waives any and all rights
and privileges which Tenant and such other persons and entities might otherwise have under any
present or future law: (i) to redeem the Premises, (ii) to reenter or repossess the Premises, or
(iii) to restore the operation of this Lease, with respect to any dispossession of Tenant by
judgment or warrant of any court, any
reentry by Landlord or any expiration or termination of this Lease, whether by operation of
law or pursuant to the provisions of this Lease. Tenant hereby expressly waives receipt of a
Notice to Quit.



     F. Lien on Personal Property: [INTENTIONALLY DELETED]



     G. Right of Distress: Landlord shall, to the extent permitted by law, have a right of distress
for Rent.



     H. Right of Landlord to Cure: If Tenant defaults in the making of any payment or in the doing
of any act required to be made or done by Tenant under this Lease, then Landlord may, at its
option, make such payment or do such act, and the expenses thereof, with interest thereon at the
Default Rate, from the date paid by Landlord, shall constitute Additional Rent hereunder due and
payable by Tenant with the next payment of Monthly Base Rent.



     I. Attorneys’ Fees: In the event of any Default hereunder, Tenant shall pay to Landlord all
attorneys’ fees incurred by Landlord in connection with such Default or the enforcement of
Landlord’s rights or remedies arising in connection therewith, whether or not this Lease is
terminated and whether or not Landlord institutes any lawsuit against Tenant as a result of such
Default. In addition to the foregoing, whether or not this Lease is terminated, Tenant shall pay
to Landlord all other costs incurred by Landlord with respect to any lawsuit instituted or action
taken by Landlord to enforce the provisions of this Lease.



     J. Survival: Tenant’s liability pursuant to this Section 19 shall survive the termination of
this Lease, the institution of summary proceedings and/or the issuance of a warrant thereunder.



20. NO WAIVER.




     No failure or delay by Landlord in enforcing its right to strict performance by Tenant of
every provision of this Lease or in exercising any right or remedy hereunder, and no acceptance by
Landlord of full or partial rent during the continuance of any Default, shall constitute a waiver
of the provision or the Default, and no provision shall be waived or modified except by a written
instrument executed by Landlord. No payment by Tenant, or receipt by Landlord, of a lesser amount
than the full Rent shall be deemed to be other than a payment on account, notwithstanding any
endorsement or statement on any check or letter accompanying any payment of any Rent. No waiver of
any Default or settlement of any proceeding instituted on account of any claimed Default shall
affect or alter this Lease or constitute a waiver of any of Landlord’s rights hereunder.



21. HOLDING OVER.




     If Tenant shall be in possession of the Premises after termination of this Lease (whether
by normal expiration of the Term or otherwise), at Landlord’s option: (i) Landlord may deem Tenant
to be occupying the Premises as a tenant from month-to-month, (a) during the first thirty (30) days
of such holdover occupancy at the sum of one hundred fifty percent (150%) of the Monthly



17









 





Base Rent
in effect for the last full month of the Term, plus the monthly installments of Additional Rent
which are then payable pursuant to Section 5.C. of this Lease, and (b) thereafter, at the sum of
one hundred seventy-five percent (175%) of the Monthly Base Rent in effect for the last full month
of the Term, plus the monthly installments of Additional Rent which are then payable pursuant to
Section 5.C. of this Lease, and subject to all of the other provisions of this Lease, as applicable
to a month-to-month tenancy, or (ii) Landlord may exercise any or all remedies for Default and at
law and in equity, including but not limited to an action against Tenant for wrongfully holding
over.



22. SUBORDINATION.




     A. Lease Subordinate: This Lease shall be subject and subordinate to the lien of any and
all Mortgages and to any Ground Leases, and any and all renewals, extensions, modifications,
recastings and refinancings thereof. This clause shall be self-operative, without execution of any
further instrument; but if requested by Landlord or any Mortgagee, Tenant shall promptly execute a
certificate or other document evidencing and providing for such subordination. Landlord shall have
the right to execute said document on behalf of Tenant if Tenant fails to do so within five (5)
days after receipt of the request. Tenant agrees that, if
any Mortgage is foreclosed or Ground Lease terminated, upon request by the purchaser at the
foreclosure sale or Ground Lessor, as the case may be, Tenant shall attorn to and recognize the
purchaser or Ground Lessor as the landlord under this Lease and shall make all payments required
hereunder to such new landlord without any deduction or set-off of any kind whatsoever. Tenant
waives the provisions of any law or regulation, now or hereafter in effect, which may give or
purport to give Tenant any right to terminate or otherwise affect this Lease or the obligations of
Tenant hereunder in the event that any such foreclosure, termination or other proceeding is filed,
prosecuted or completed. Notwithstanding anything herein to the contrary, any Mortgagee may at any
time subordinate the lien of its Mortgage to the operation and effect of this Lease without
Tenant’s consent, by giving Tenant written notice of such subordination, in which event this Lease
shall be deemed to be senior to such Mortgage, and thereafter such Mortgagee shall have the same
rights as it would have had if this Lease had been executed, delivered and recorded before said
Mortgage.



     B. Modifications to Lease: In the event any of Landlord’s insurance carriers or any Mortgagee
requests modifications to this Lease, Tenant shall execute a written amendment incorporating such
requested modifications within thirty (30) days after the same has been submitted to Tenant by
Landlord, provided that such modifications do not materially adversely affect Tenant’s use of the

Premises as herein permitted or increase the rentals and other sums payable by Tenant hereunder.
In the event Tenant refuses or fails to execute such amendment within thirty (30) days, Landlord
shall have the right, at its sole option, in addition to Landlord’s other remedies for Default, to
terminate and cancel this Lease by written notice to Tenant specifying the date on which this Lease
will terminate. From and after said termination date, both Landlord and Tenant shall be relieved
of any and all further obligations hereunder, except liabilities arising prior to the date of
termination.



23. ASSIGNMENT AND SUBLETTING.




     A. No Transfer Without Consent: Tenant shall not, without the prior written consent of
Landlord in each instance (which consent may be withheld in Landlord’s sole and absolute
discretion) (i) assign, mortgage or otherwise encumber this Lease or any of its rights hereunder;
(ii) sublet the Premises or any part thereof or permit the occupancy or use of the Premises or any
part thereof by any persons or entities other than Tenant; or (iii) permit the assignment of this
Lease or any of Tenant’s rights hereunder by operation of law. Any attempted assignment,
mortgaging or encumbering of this Lease or any of Tenant’s rights hereunder and any attempted
subletting or grant of a right to use or occupy all or a portion of the Premises in violation of
the foregoing sentence shall be void. Notwithstanding the foregoing, Landlord agrees that it shall
not unreasonably withhold, condition or delay its consent to a proposed subletting, provided that
all of the following conditions are satisfied: (1) there shall



18









 





be no default at the time of the
proposed subletting, (2) the proposed subtenant shall be creditworthy, (3) the proposed subtenant
shall not be a governmental entity or a person or entity enjoying sovereign or diplomatic immunity,
(4) the use of the Premises by the proposed subtenant shall not attract a volume, frequency or type
of visitor or employee to the Building which is not consistent with the standards of a high-quality
office building, (5) the proposed subtenant shall specifically covenant and agree to perform the
obligations of Tenant hereunder and to occupy the Premises subject to the provisions of this Lease,
and (6) Tenant remains liable for the faithful performance of this Lease. Landlord shall use
reasonable efforts to provide its consent or the denial of its consent to any proposed subtenancy
within thirty (30) days following the date on which Landlord has received all of the following :
(i) written notice of the name of the proposed subtenant, type of business entity and jurisdiction
of formation, (ii) reasonably adequate financial information regarding such proposed subtenant;
(iii) any other information related to the criteria set forth in the previous sentence, as
reasonably requested by Landlord, and (iv) a true copy of the proposed sublease document in its
final form.



     B. Take-Back Rights: In addition, Tenant may not assign this Lease, nor sublet (or permit
occupancy or use of) the Premises, or any part thereof, without giving Landlord thirty (30) days
prior written notice thereof. For thirty (30) days following receipt of said notice, Landlord
shall have the right, exercisable by sending notice to Tenant, to sublet from Tenant (i) all of the
Premises for the balance of the term of this Lease in the event Tenant notified Landlord of
its desire to assign this Lease, or (ii) so much of the Premises as Tenant intends to sublet for
the balance of the term of such sublease in the event Tenant notified Landlord of its desire to
sublet the Premises or permit another to make use thereof, at the same rental Tenant is obligated
to pay to Landlord hereunder. In the event Landlord does not exercise the aforesaid right within
said thirty (30) days, Tenant may attempt to assign, sublet or permit use of this Lease or such
space; provided that Tenant shall obtain the prior written consent of Landlord as set forth in
Subsection A above. In the event that Tenant defaults hereunder, Tenant hereby assigns to Landlord
the Rent due from any assignee or subtenant and hereby authorizes each such party to pay said Rent
to Landlord.



     C. Transfer of Stock: If Tenant and/or any Guarantor is a corporation, then the sale or
transfer of fifty-one percent (51%) or more of Tenant’s shares (excepting shares transferred in the
normal course of public trading). If Tenant and/or any Guarantor is a partnership, the sale or
transfer of the partnership share, or any portion thereof, of any general partner shall be deemed
an assignment of this Lease.



     D. Expenses and Profits; Effect of Consent:




     (1) In the event Landlord permits Tenant to assign or sublet all or a portion of the
Premises to a third party, fifty percent (50%) of any sums that are paid by such third party for
the right to occupy the Premises, in excess of the Rent then in effect shall be paid by Tenant
to Landlord on a monthly basis as Additional Rent.




     (2) Tenant shall be responsible for all costs and expenses, including attorneys’ fees,
incurred by Landlord in connection with any proposed or purported assignment or sublease and an
administrative fee of One Thousand Five Hundred Dollars ($1,500.00).




     (3) The consent by Landlord to any assignment or subletting shall neither be construed as a
waiver or release of Tenant from any covenant or obligation of Tenant under this Lease, nor as
relieving Tenant from giving Landlord the aforesaid thirty (30) days notice of, or from
obtaining the consent of Landlord to, any further assignment or subletting. The collection or
acceptance of Rent from any such assignee or subtenant shall not constitute a waiver or release
of Tenant from any covenant or obligation of Tenant under this Lease, except as expressly agreed
by Landlord in writing.



     E. Permitted Assignments: Notwithstanding the foregoing provisions of this Paragraph Section
23, Landlord agrees that if (i) no default is then continuing beyond any applicable cure period,
(ii) no circumstance shall have occurred which with the giving of notice, the passage of time, or
both would constitute a Default by Tenant, (iii) Tenant or its permitted subtenant or assignee
named herein shall be occupying the entire Premises and actively conducting business therein, and
(iv) the net worth,



19









 





creditworthiness and liquidity factor of any Affiliate (as hereinafter defined)
to which Tenant sells or assigns this Lease are all greater than or equal to the net worth,
creditworthiness and liquidity factor of Tenant as of the date of execution of this Lease, then the
provisions of this Section 23 shall not be applicable with regard to an assignment of this Lease or
a subletting of the Premises to an Affiliate (as hereinafter defined), so long as (1) Tenant
originally named herein shall remain primarily liable under this Lease, notwithstanding any such
assignment or subletting (unless Tenant has merged into such entity, in which case such surviving
entity shall assume all of the obligations of Tenant under this Lease), (2) no other or further
assignment or subletting to other than an Affiliate (as hereinafter defined) shall be permitted
without Landlord’s prior written consent and (3) in the case of an assignment, the assignee
executes an assignment and assumption agreement in Landlord’s then standard form with respect to
the assumption by the assignee of all of Tenant’s then existing and future obligations under this
Lease. An Affiliate, as used herein, shall be a person or entity that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under common control with,
Tenant. “Control” as used herein shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a person or entity, whether through
ownership of voting securities, by contract, or otherwise.



24. TRANSFER BY LANDLORD.




     Landlord (and any successor or affiliate of Landlord) may freely sell, assign or transfer
all or any portion of its interest in this Lease or the Premises, the Building or the Land and, in
the event of any such sale, assignment or transfer, shall be relieved of any and all obligations
under this Lease from and after the date of the sale, assignment or transfer. From and after said
date, Tenant shall be bound to such purchaser, assignee or other transferee, as the case may be, as
though the latter had been the original Landlord hereunder, provided that the purchaser, assignee
or transferee agrees to assume the obligations of Landlord hereunder.



25. INABILITY TO PERFORM.




     This Lease and Tenant’s obligation hereunder shall in no way be affected, impaired or
excused, nor shall Tenant have any claim against Landlord for damages, because Landlord, due to
Unavoidable Delays, is unable to fulfill any of its obligations under this Lease, including, but
not limited to, any obligations to provide any services, repairs, replacements, alterations or
decorations or to supply any improvements, equipment or fixtures.



26. ESTOPPEL CERTIFICATES.




     Tenant shall, without charge, within ten (10) days after receipt of any request therefor,
execute and deliver to Landlord a certificate stating: (i) whether this Lease is unmodified and in
full force and effect (or if there have been modifications, that the Lease is in full force and
effect and setting forth all such modifications); (ii) whether there then exist any defenses
against the enforcement of any right of Landlord hereunder (and, if so, specifying the same in
detail); (iii) the dates to which rent and any other charges hereunder have been paid by Tenant;
(iv) that Tenant has no knowledge of any then uncured defaults under this Lease (or, if Tenant has
knowledge of any such defaults, specifying the same in detail); (v) that Tenant has no knowledge of

any event that will or may result in the termination of this Lease (or if Tenant has such
knowledge, specifying the same in detail); (vi) the address to which notices to Tenant are to be
sent; and (vii) such other information as may be reasonably requested. It is understood that any
such certificate may be relied upon by Landlord, any Mortgagee, prospective Mortgagee, Ground
Lessor, prospective Ground Lessor, or purchaser or prospective purchaser of the Land or the
Building. Landlord also agrees to provide Tenant with similar estoppel certificates from time to
time within ten (10) days following Landlord’s receipt of Tenant’s written request therefor



20









 





27. COVENANT OF QUIET ENJOYMENT.




     Landlord covenants that it has the right to make this Lease and that, if Tenant shall pay
all Rent and perform all of Tenant’s other obligations under this Lease, Tenant shall have the
right, during the Term and subject to the provisions of this Lease, to quietly occupy and enjoy the
Premises without hindrance by Landlord or its successors and assigns.



28. WAIVER OF JURY TRIAL.




     Landlord and Tenant hereby waive trial by jury in any action, proceeding or counterclaim
brought by either of them against the other with respect to any matter arising out of or connected
with this Lease.



29. BROKERS.




     Landlord and Tenant each represents and warrants to the other that, except as hereinafter
set forth, neither of them has employed any broker in procuring or carrying on any negotiations
relating to this Lease. Landlord and Tenant shall indemnify and hold each other harmless from any
loss, claim or damage relating to the breach of the foregoing representation and warranty.
Landlord recognizes only The Staubach Company-Northeast, Inc., as Tenant’s agent, and TrizecHahn
Mid-Atlantic Management Services, LLC, as Landlord’s agent, as brokers with respect to this Lease and agrees to be
responsible for the payment of any leasing commissions owed to said brokers.



30. CERTAIN RIGHTS RESERVED BY LANDLORD.




     Landlord shall have the following rights, exercisable without notice, without liability
for damage or injury to property, person or business and without effecting an eviction,
constructive or actual, or disturbance of Tenant’s use or possession of the Premises or giving rise
to any claim for set-off, abatement of Rent or otherwise:



     A. To change the Building’s name or street address.



     B. To affix, maintain and remove any and all signs on the exterior and interior of the
Building.



     C. To designate and approve, prior to installation, all window shades, blinds, drapes,
awnings, window ventilators, lighting and other similar equipment to be installed by Tenant that
may be visible from the exterior of the Premises or the Building.



     D. To decorate and make repairs, alterations, additions and improvements, whether structural
or otherwise, in, to and about the Building and any part thereof, and for such purposes to enter
the Premises, and, during the continuance of any such work, to close temporarily doors, entry ways,
Common Areas in the Building and to interrupt or temporarily suspend Building services and
facilities, all without affecting Tenant’s obligations hereunder, as long as the Premises remain
tenantable.



     E. To grant to anyone the exclusive right to conduct any business or render any service in the
Building, provided Tenant is not thereby excluded from uses expressly permitted herein.



     F. To alter, relocate, reconfigure and reduce the Common Areas of the Building, as long as the
Premises remain reasonably accessible.



     G. To alter, relocate, reconfigure, reduce and withdraw the Common Areas located outside the
Building, including parking and access roads, as long as the Premises remain reasonably accessible.



     H. To erect, use and maintain pipes and conduits in and through the Premises.



31. NOTICES.




     No notice, request, approval, waiver or other communication which may be or is required or
permitted to be given under this Lease shall be effective unless the same is in writing and
hand-delivered, sent by registered or certified mail, return receipt



21









 





requested, first-class postage
prepaid, or sent with charges prepaid by a nationally recognized air courier service, addressed as
follows:



	 	 	 	 	 
	 

	 	If to Landlord:	 	 
	 
	 	 	 	 
	 

	 	 	 	TRIZECHAHN Watergate Office/Retail/Land LLC
	 

	 	 	 	c/o TrizecHahn Mid-Atlantic Management Services LLC
	 

	 	 	 	1250 Connecticut Avenue, N.W.
	 

	 	 	 	Suite 500
	 

	 	 	 	Washington, D.C. 20036
	 

	 	 	 	Attention: General Manager – Washington
	 
	 	 	 	 
	 

	 	With copy to:	 	 
	 
	 	 	 	 
	 

	 	 	 	TRIZECHAHN Watergate Office/Retail/Land LLC
	 

	 	 	 	c/o TrizecHahn Mid-Atlantic Management Services LLC
	 

	 	 	 	1250 Connecticut Avenue, N.W.
	 

	 	 	 	Suite 500
	 

	 	 	 	Washington, D.C. 20036
	 

	 	 	 	Attention: Regional Counsel
	 
	 	 	 	 
	 

	 	If to Tenant:	 	 






	 	 	 
	Prior to the Lease Commencement Date:

	 	After the Lease Commencement Date:
	GlobalSecure Holdings Ltd.

	 	GlobalSecure Holdings Ltd.
	8401 Corporate Drive

	 	2600 Virginia Avenue; N.W.
	Suite 230

	 	Suite 600
	Landover, Maryland 20785

	 	Washington, D.C. 20037
	Attn: Craig Bandes

	 	Attn: Craig Bandes






	 	 	 	 	 
	 

	 	With copy to:	 	 
	 
	 	 	 	 
	 

	 	 	 	Frederic J. Gruder, Esq.
	 

	 	 	 	775 Park Avenue
	 

	 	 	 	Suite 255
	 

	 	 	 	Huntington, New York 11743






or at any other address of which either party shall notify the other in accordance with this
Section. Such communications, if sent by registered or certified mail, shall be deemed to have
been given four (4) days after the date of mailing, or if sent by a nationally recognized air
courier service, shall be deemed to have been given one (1) business day after the date of deposit
of the notice with such service. If any Mortgagee shall notify Tenant that it is the holder of a
Mortgage affecting the Premises, no notice, request or demand thereafter sent by Tenant to Landlord
shall be effective until a copy of same shall be sent to such Mortgagee in the manner prescribed in
this Section at such address as such Mortgagee shall designate.



32. MISCELLANEOUS PROVISIONS.




     A. Benefit and Burden: The provisions of this Lease shall be binding upon, and shall inure to
the benefit of, the parties hereto and each of their respective successors and permitted assigns.



     B. Governing Law: This Lease shall be construed and enforced in accordance with the laws of the
jurisdiction in which the Building is located.



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



     D. Delegation by Landlord: Wherever Landlord has the authority to take any action under this Lease,
Landlord shall have the right to delegate such authority to others, and Landlord shall be
responsible for the authorized actions of such agents, employees and others, to the same extent as
if Landlord had taken such action itself.



22









 





     E. Tenant Responsibility for Agents: In any case where Tenant is responsible for performing or
refraining from an act or for preventing an action or result from occurring, Tenant shall also be
responsible for any actions taken or omitted by Tenant’s agents, employees, business invitees,
licensees, contractors, subtenants, family members, guests and any other individuals or entities
present in the Building or on the Land at Tenant’s invitation.



     F. Invalidity of Particular Provisions: If any provision of this Lease or the application thereof
to any person, entity or circumstance shall, to any extent, be held invalid or unenforceable, the
remaining provisions and the application of such invalid or unenforceable provisions to persons,
entities and circumstances other than those as to which it is held invalid or unenforceable, shall
not be affected thereby. Each provision of this Lease shall be valid and enforced to the fullest
extent permitted by law.



     G. Counterparts: This Lease may be executed in several counterparts, all of which shall constitute
one and the same document.



     H. Entire Agreement: This Lease, and any exhibits and addenda attached hereto, embody the entire agreement of the
parties hereto, and no representations, inducements or agreements, oral or otherwise, between the
parties not contained in this Lease or in the exhibits or addenda shall be of any force or effect.
No rights, privileges, easements or licenses are granted to Tenant hereby, except as expressly set
forth herein.



     I. Amendments: This Lease may not be modified in whole or in part in any manner other than by an
agreement in writing.



     J. Mortgagee’s Performance: Tenant shall accept performance of any of Landlord’s obligations
hereunder by any Mortgagee.



     K. Limitation on Interest: In any case where this Lease provides for a rate of interest that is
higher than the maximum rate permitted by law, the rate specified herein shall be deemed to equal,
and the party designated as recipient of such interest shall be entitled to receive, the maximum
rate of interest permitted by law.



     L. Remedies Cumulative: All rights and remedies of Landlord shall be cumulative and shall not be
exclusive of any other rights or remedies of Landlord hereunder or now or hereafter existing at law
or in equity.



     M. Annual Financial Statements: Within ten (10) days after a written request by Landlord to Tenant,
but not more frequently than once per year (except in the event of a proposed or actual sale or
refinancing of the Building, the Land, or both), Tenant shall submit to Landlord a financial
statement covering the preceding Fiscal Year, which has either been prepared in accordance with
generally accepted accounting principles by an independent certified public accountant or is
certified as true and correct by an officer of Tenant.



     N. Signage. Landlord shall initially provide, at Landlord’s cost, (i) Building standard entry sign
for Tenant’s Premises, (ii), a directory sign at near the elevators on the sixth (6th) floor
indicating Tenant’s suite number only, and three (3) Building standard directory signage strips.
Any additional request or change in signage thereafter will be at Tenant’s expense.



33. LENDER APPROVAL.




     If the Mortgagee fails to give its consent to this Lease, Landlord shall have the right,
at its sole option, to terminate and cancel this Lease. Such option shall be exercisable by
Landlord by written notice to Tenant of such termination, whereupon this Lease shall be deemed
cancelled and terminated, and both Landlord and Tenant shall be relieved of any and all liabilities
and obligations hereunder.



34. PARKING.




     Parking will be made available to Tenant pursuant to the provisions of Exhibit E attached
hereto.



23









 





35. SECURITY DEPOSIT.




     A. Amount and Uses: Landlord acknowledges receipt from Tenant of Eight Thousand Ten and
13/100 Dollars ($8,010.13) (the “Security Deposit”), to be held by Landlord as Security for the
payment of all Rent payable by Tenant and for the faithful performance by Tenant of all other
obligations of Tenant under this Lease. Said Security Deposit shall be repaid to Tenant after the
termination of this Lease (or any renewal thereof), provided Tenant shall have made all such
payments and performed all such obligations hereunder. Landlord shall not be required to maintain
the Security Deposit in a separate account. The Security Deposit shall not be mortgaged, assigned,
transferred or encumbered by Tenant without the prior written consent of Landlord, and any such act
shall be void. Landlord may, at Landlord’s option, appropriate and apply the entire Security
Deposit, or so
much thereof as Landlord believes may be necessary, to compensate Landlord for the payment of
any past-due Rent and for loss or damage sustained by Landlord due to any Default. In the event
Landlord appropriates or applies the Security Deposit in such a manner, Tenant, within five (5)
days after notice thereof, shall pay to Landlord an amount sufficient to restore the Security
Deposit to the original sum deposited. Tenant’s failure to restore any such deficiency shall
constitute a Default hereunder. In the event of bankruptcy or other debtor-creditor proceedings by
or against Tenant, the Security Deposit shall be applied first to the payment of Rent due Landlord
for all periods prior to the filing of such proceedings.



     B. Transferability: In the event of a sale or transfer of Landlord’s interest in the Building
or of the interest of any successor or assign of Landlord, Landlord (or such successor or assign)
shall have the right to transfer the Security Deposit to any vendee or transferee and shall
thereupon be released automatically from any liability therefor. Tenant shall look solely to the
transferee for the return of the Security Deposit. No Mortgagee or purchaser of any or all of the
Building at any foreclosure proceeding shall (regardless of whether the Lease is at the time
subordinated to the lien of said Mortgage) be liable to Tenant or any other person for any of such
Security Deposit, or any other payment made by Tenant hereunder, unless Landlord has actually
delivered said deposit or other such sum to such Mortgagee or purchaser. In the event of any
rightful and permitted assignment of Tenant’s interest in this Lease, the Security Deposit shall be
deemed to be held by Landlord as a deposit made by the assignee, and Landlord shall have no
liability to the assignor with respect to the return of the Security Deposit.



36. HAZARDOUS MATERIALS.




     A. Definition. As used ‘in this Lease, the term “Hazardous Material” means any flammable
items, explosives, radioactive materials, hazardous or toxic substances, material or waste or
related materials, including any substances defined as or included in the definition of “hazardous
substances”, “hazardous wastes”, “infectious wastes”, “hazardous materials” or “toxic substances”
now or subsequently regulated under any federal, state or local laws, regulations or ordinances
including, without limitation, oil, petroleum-based products, paints, solvents, lead, cyanide, DDT,
printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs and
similar compounds, and including any different products and materials which are subsequently found
to have adverse effects on the environment or the health and safety of persons.



     B. General Prohibition. Tenant shall not cause or permit any Hazardous Material to be
generated, produced, brought upon, used, stored, treated, discharged, released, spilled or disposed
of on, in under or about the Premises, the Building, or the Land (hereinafter referred to
collectively as the “Property”) by Tenant, its affiliates, agents, employees, contractors,
subtenants, assignees or invitees. Tenant shall indemnify, defend and hold Landlord harmless from
and against any and all actions (including, without limitation, remedial or enforcement actions of
any kind, administrative or judicial proceedings, and orders or judgments arising out of or
resulting therefrom), costs, claims, damages (including without limitation, attorneys’,
consultants’, and experts’ fees, court costs and amount paid in settlement of any claims or
actions), fines, forfeitures or other civil, administrative or criminal penalties, injunctive or
other relief (whether or not based upon personal injury, property damage, or



24









 





contamination of, or
adverse effects upon, the environment, water tables or natural resources), liabilities or losses
arising from a breach of this prohibition by Tenant, its affiliates, agents, employees,
contractors, subtenants, assignees or invitees.



     C. Notice. In the event that Hazardous Materials are discovered upon, in, or under the
Property, and any governmental agency or entity having jurisdiction over the Property requires the
removal of such Hazardous Materials, Tenant shall be responsible for removing those Hazardous
Materials arising out of or related to the use or occupancy of the Property by Tenant or its
affiliates, agents, employees, contractors, subtenants, assignees or invitees but not those of its
predecessors. Notwithstanding the foregoing, Tenant shall not take any remedial action in or about
the Property or any portion thereof without first notifying Landlord of Tenant’s intention to do so
and affording Landlord the opportunity to protect Landlord’s interest with respect thereto. Tenant
immediately shall notify Landlord in writing of: (i) any spill, release, discharge or disposal of
any Hazardous Material in, on or under the Property or any portion thereof; (ii) any enforcement,
cleanup, removal or other governmental or regulatory
action instituted, contemplated, or threatened (if Tenant has notice thereof) pursuant to any
laws respecting Hazardous Materials; (iii) any claim made or threatened by any person against
Tenant or the Property or any portion thereof relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from or claimed to result from any Hazardous Materials; and
(iv) any reports made to any governmental agency or entity arising out of or in connection with any
Hazardous Materials in, on under or about or removed from the Property or any portion thereof,
including any complaints, notices, warnings, reports or asserted violations in connection
therewith. Tenant also shall supply to Landlord as promptly as possible, and in any event within
five (5) business days after Tenant first receives or sends the same, copies of all claims,
reports, complaints, notices, warnings or asserted violations relating in any way to the Premises,
the Property or Tenant’s use or occupancy thereof.



     D. Survival. The respective rights and obligations of Landlord and Tenant under this Section
36 shall survive the expiration or earlier termination of this Lease.



37. RELOCATION OF TENANT.




     Landlord shall have the right, at any time during the Term and at its sole cost and
expense, to relocate Tenant to other premises within the Building (the “Relocation Space”)
provided: (1) the Relocation Space will be located on “river” side of the Building and will be
similar to the Premises in area and usable for Tenant’s purpose; (2) Landlord furnishes the
Relocation Space, at Landlord’s sole cost and expense, with new improvements of comparable or
better quality as those improvements provided by Landlord for the Premises; (3) Landlord pays all
of Tenant’s out of pocket expenses reasonably incurred by Tenant and paid to professional movers
and relocation specialists in physically packing and moving Tenant’s personal property and
equipment (including, but not limited to, telephone, computers and other data transmission
equipment, hook-ups and cabling) to the Relocation Space; (4) Landlord shall reimburse Tenant for
the cost of the replacement of any stationary located at the Premises as of the date of Landlord’s
notice, if required, and (5) such move will be made during evenings, weekends or otherwise so as to
incur the least inconvenience to Tenant. Landlord shall provide written notice to Tenant of the
relocation to the Relocation Space not less than sixty (60) days prior to such relocation. Tenant
agrees to execute, upon Landlord’s request, an amendment to this Lease documenting the change in
location. All other terms and provisions of this Lease shall remain in full force and effect.



     In the event that Tenant fails or refuses to relocate to the Relocation Space at the end of
the aforesaid 60-day period, Landlord shall have the right to terminate this Lease by giving ten
(10) days’ written notice of termination to Tenant.



38. NO RECORDATION.




     Tenant shall not record or attempt to record this Lease or any memorandum hereof in any
public records without the prior written approval of Landlord, which may be denied in Landlord’s
sole and absolute discretion. In the event that Landlord grants



25









 





its approval to record this Lease
or a memorandum hereof, Tenant shall pay all recordation fees, taxes and charges in connection with
such recordation.



39. OPTION TO RENEW.




     Provided that GLOBALSECURE HOLDINGS LTD., a Delaware corporation (GSH), INC., a Delaware
non-profit corporation (“GSH”) is not then in default and has not been in default more than twice
during the Term, in each case both at the time of exercise of the Renewal Option, as hereinafter
defined, and at the commencement of the Renewal Period, as hereinafter defined, and is then in
occupancy of the Premises at the time of exercise of the Renewal Option, as hereinafter defined,
and at the time of the commencement of the Renewal Period, as hereinafter defined, GSH shall have
one (1) option (the “Renewal Option”) to extend the Term of the Lease for one (1) additional five
(5) year period (the “Renewal Period”) after the expiration of the initial Term. The Renewal
Option shall be exercisable only by written notice given by GSH to Landlord not later than nine (9)
months, nor earlier than twelve (12) months, prior to the expiration of the initial Term. In
the event that GSH does not timely exercise the Renewal Option, said Renewal Option shall be null
and void and of no further force or effect, time being of the essence in the exercise of the
Renewal Option and it being acknowledged and agreed by GSH that Landlord shall be entitled to rely
on any failure by GSH to give written notice of its exercise of its Renewal Option by the date set

forth herein for such exercise thereof.



     All terms and conditions of this Lease shall be applicable during the Renewal Period except
that the amount of Base Rent charged for the Renewal Period shall be the then “Prevailing Market
Rent”, which shall be the rent for comparable office space in comparable buildings in the “West
End” submarket of Washington, DC taking into account the Base Year and any concessions provided to
Tenant. If within thirty (30) days following delivery of GSH’s notice, Landlord and GSH have not
mutually agreed on the Prevailing Market Rent for the Renewal Period, then within ten (10) days
after the expiration of such thirty-day period, each party shall give written notice to the other
setting forth the name and address of a Broker (as hereinafter defined) selected by such party who
has agreed to act in such capacity, to determine the Prevailing Market Rent. If either party shall
fail to select a Broker as aforesaid, the Prevailing Market Rent shall be determined by the Broker
selected by the other party. Each Broker shall thereupon independently make his determination of
the Prevailing Market Rent within twenty (20) days after the appointment of the second Broker. If
the two Brokers’ determinations are not the same, but the higher of such two values is not more
than one hundred five percent (105%) of the lower of them, then the Prevailing Market Rent shall be
deemed to be the average of the two values. If the higher of such two values is more than one
hundred five percent (105%) of the lower of them, then the two Brokers shall jointly appoint a
third Broker within ten (10) days after the second of the two determinations described above has
been rendered. The third Broker shall independently make his determination of the Prevailing
Market Rent within twenty (20) days after his appointment. The highest and the lowest
determinations of value among the three Brokers shall be disregarded and the remaining
determination shall be deemed to be the Prevailing Market Rent. Within thirty (30) days after the
Prevailing Market Rent is determined as aforesaid, the parties shall execute an amendment to this
Lease setting forth the new Rent to be paid for the Renewal Period.



     For the purposes of this Section 39, “Broker” shall mean a real estate broker licensed in the
District of Columbia, who has been regularly engaged in such capacity in the business of commercial
office leasing in Washington, DC for at least ten (10) years immediately preceding such person’s
appointment hereunder. Each party shall pay for the cost of its Broker and one-half of the cost of
the third Broker.



26









 





40. CONDITION OF EFFECTIVENESS.




     Landlord and Tenant hereby agree that this Lease shall become effective only upon the full
execution and implementation of a third-party lease termination agreement with the tenant currently
occupying the Premises, the Embassy of Luxembourg, on or before the Lease Commencement Date.
Failure of this condition to occur on or before May 15, 2004 shall render this Lease void and
neither Landlord and Tenant nor shall have any liability to the other under this Lease.



[Signatures Appear On Following Page]




27









 








     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under seal as of the day and
year first above written.



	 	 	 	 	 	 	 
	WITNESS:	 	LANDLORD:
	 
	 	 	 	 	 	 
	 	 	 	 	TRIZECHAHN WATERGATE OFFICE/RETAIL/LAND LLC,
	 	 	 	 	a District of Columbia limited liability company
	 
	 	 	 	 	 	 
	By:

	 	/s/  Angela T. Johnson
	 	By:
	 	/s/ Paul L. Schulman
	 

	 	 
	 	 	 	 
	 

	 	 	 	Name:
	 	      Paul L. Schulman

	 

	 	 	 	 	 	 
	 

	 	 	 	Its:
	 	       Vice President

	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/  Teresa C. Crow
	 	By:
	 	/s/  Simon Carney
	 

	 	 
	 	 	 	 
	 

	 	 	 	Name:
	 	     Simon Carney
	 

	 	 	 	 	 	 
	 

	 	 	 	Its:
	 	     Assistant Secretary
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	WITNESS/ATTEST:	 	TENANT:
	 
	 	 	 	 	 	 
	 	 	 	 	GLOBALSECURE HOLDINGS LTD., a Delaware corporation
	 
	 	 	 	 	 	 
	By:

	 	/s/  Francis Duffy
	 	By:
	 	/s/    Craig R. Bandes
	 

	 	 
	 	 	 	 
	 

	 	Francis Duffy	 	Name:
	 	      Craig R. Bandes
	 

	 	 	 	 	 	 
	 

	 	Asst. Secretary	 	Its:
	 	       President & CEO

	 

	 	 	 	 	 	 
	 
	
	 	 	 	By:
	 	/s/    Michael Brigante
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	        Michael Brigante
	 

	 	 	 	 	 	 
	 

	 	 	 	Its:
	 	       Chief Financial Officer

	 

	 	 	 	 	 	 





 









 






EXHIBIT A




PREMISES









A-1









 








EXHIBIT B




DECLARATION BY LANDLORD AND TENANT

AS TO DATE OF DELIVERY AND ACCEPTANCE

OF POSSESSION, LEASE COMMENCEMENT DATE, ETC.




     THIS DECLARATION made this ___day of, ___, 20___is hereby attached to and
made a part of the Office Lease dated the ___day of ___, 2004 (the “Lease”), entered
into by and between TRIZECHAHN WATERGATE OFFICE/RETAIL/LAND LLC, a District of Columbia limited
liability company, as Landlord and GLOBALSECURE HOLDINGS LTD., a Delaware corporation, as Tenant.
All terms used in this Declaration have the same meaning as they have in the Lease.



          (i) Landlord and Tenant do hereby declare that possession of the Premises was accepted by
Tenant on the ___day of ___, 20___;



          (ii) As of the date hereof, the Lease is in full force and effect, and Landlord has fulfilled
all of its obligations under the Lease required to be fulfilled by Landlord on or prior to said
date;



          (iii) The Lease Commencement Date is hereby established to be May 1, 2004;




          (iv) The Rent Commencement Date is hereby established to be June 19, 2004; and



          (v) The Lease Expiration Date is hereby established to be June 30, 2009, unless the Lease is
sooner terminated pursuant to any provision thereof.



	 	 	 	 	 	 	 
	WITNESS:	 	LANDLORD:
	 
	 	 	 	 	 	 
	 	 	 	 	TRIZECHAHN WATERGATE OFFICE/RETAIL/LAND LLC,

a District of Columbia limited liability company
	 
	 	 	 	 	 	 
	By:

	 	 
	 	By:
	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	Name:
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Its:
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 
	 	By:
	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	Name:
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Its:
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	WITNESS/ATTEST:	 	TENANT:
	 
	 	 	 	 	 	 
	 	 	 	 	GLOBALSECURE HOLDINGS LTD., a Delaware corporation
	 
	 	 	 	 	 	 
	By:

	 	 
	 	By:
	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	Name:
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Its:
	 	 
	 

	 	 	 	 	 	 





B-1









 






[NOTE: NOT TO BE EXECUTED AT TIME OF EXECUTION OF LEASE]




D-2









 








EXHIBIT C




[INTENTIONALLY DELETED]




C-1









 








EXHIBIT D




RULES AND REGULATIONS




     The following rules and regulations have been formulated for the safety and well-being of all
the tenants of the Building. Adherence to these rules and regulations by each and every tenant
contributes to safe occupancy and quiet enjoyment of the Building. Any violation of these rules
and regulations by any tenant which continues after notice from Landlord shall be a Default under
such tenant’s lease, at the option of Landlord.



     Landlord may, upon request by any tenant, waive compliance by such tenant of any of the
following rules and regulations, provided that (a) no waiver shall be effective unless signed by
Landlord or Landlord’s authorized agent, (b) no such waiver shall relieve any tenant from the
obligation to comply with such rule or regulation in the future, unless expressly consented to by
Landlord, and (c) no such waiver granted to any tenant shall relieve any other tenant from the
obligation of complying with said rule or regulation unless such other tenant has received a
similar waiver in writing from Landlord.



     1. The sidewalks, entrances, passages, courtyards, elevators, vestibules, stairways,
corridors, halls and other parts of the Building not occupied by any tenant (hereinafter “Common
Areas”) shall not be obstructed or encumbered by any tenant or used for any purposes other than
ingress and egress to and from the tenant’s premises. No tenant shall permit the visit to its
premises of persons in such numbers or under such conditions as to interfere with the use and
enjoyment of the Common Areas by other tenants.



     2. No awnings or other projections shall be attached to the outside walls of the Building
without the prior written consent of Landlord. No drapes, blinds, shades or screens shall be
attached to or hung in, or used in connection with, any window or door of a tenant’s premises,
without the prior written consent of Landlord. Such awnings, projections, curtains, blinds,
screens and other fixtures shall be of a quality, type, design and color acceptable to Landlord and
shall be attached in a manner approved by Landlord.



     3. No sign, advertisement, notice or other lettering shall be exhibited, inscribed, painted or
affixed by any tenant on any part of the outside or inside of the tenant’s premises or in the
Building without the prior written consent of Landlord. In the event of any violation of the
foregoing by any tenant, Landlord may remove the same without any liability and may charge the
expense incurred by such removal to the tenant or tenants responsible for violating this rule. All
interior signs on the doors and directory tablet of the Building shall be inscribed, painted or
affixed by Landlord at the expense of each tenant, and shall be of a size, color and style
acceptable to Landlord.



     4. No show cases or other articles shall be put in front of or affixed to any part of the
exterior of the Building, nor placed in the Common Areas without the prior written consent of
Landlord.



     5. The water and wash closets and other plumbing fixtures shall not be used for any purposes
other than those for which they were constructed, and no sweepings, rubbish, rags or other
substances shall be thrown therein. No tenant shall throw anything out of the doors or windows or
down any corridors of stairs.



     6. There shall be no marking, painting, drilling into or other form of defacing of or damage
to any part of a tenant’s premises or the Building. No boring, cutting or stringing of wires shall
be permitted. No tenant shall construct, maintain, use or operate within its premises or elsewhere
within or on the outside of the Building, any electrical device, wiring or apparatus in connection
with a loud speaker system or other sound system. Upon prior written approval by Landlord, a
tenant may install Muzak or other internal music system within the tenant’s premises if the music
system cannot be heard outside of the premises.



     7. No tenant shall make or permit to be made any disturbing noises or disturb or interfere
with the occupants of the Building or neighboring buildings or premises or those having business
with them, whether by the use of any musical instrument, radio, tape recorder, whistling, singing
or any other way.



D-1









 





     8. No bicycles, vehicles, animals, birds or pets of any kind shall be brought into or kept in
or about a tenant’s premises or in the Building.



     9. No cooking shall be done or permitted by any tenant on its premises, except that, with
Landlord’s prior written approval (including approval of plans and specifications therefor), a
tenant may install and operate for convenience of its employees a lounge or coffee room with a
microwave, sink and refrigerator; provided that in so doing the tenant shall comply with all
applicable building code requirements and any insurance or other requirements specified by
Landlord. No tenant shall cause or permit any unusual or objectionable odors to originate from its
premises.



     10. No space in or about the Building shall be used for the manufacture, storage, sale or
auction of merchandise goods or property of any kind.



     11. No tenant shall buy or keep in the Building or its premises any inflammable, combustible
or explosive fluid, chemical or substance.



     12. No additional locks or bolts of any kind shall be placed upon any of the doors or windows
by any tenant, nor shall any changes be made in existing locks or the mechanisms thereof. The
doors leading to the corridors or main halls shall be kept closed during business hours except as
they may be used for ingress and egress. Each tenant shall, upon the termination of its tenancy,
return to Landlord all keys used in connection with its premises, including any keys to the
premises, to rooms and offices within the premises, to storage rooms and closets, to cabinets and
other built-in furniture, and to toilet rooms, whether or not such keys were furnished by Landlord
or procured by the tenant, and in the event of the loss of such keys, such tenant shall pay to
Landlord the cost of replacing the locks. On termination of a tenant’s lease, the tenant shall
disclose to Landlord the combination of all locks for safes, safe cabinets and vault doors, if any,
remaining in the premises.



     13. All removals, or the carrying in or out of any safes, freight, furniture or bulky matter
of any description, must take place in such manner and during such hours as Landlord may require.
Landlord reserves the right (but shall not have the obligation) to inspect all freight brought into
the Building and to exclude from the Building all freight which violates any of these rules and
regulations or any provision of any tenant’s lease.



     14. Any person employed by any tenant to do janitorial work within the tenant’s premises must
obtain Landlord’s approval prior to commencing such work, and such person shall comply with all
instructions issued by the superintendent of the Building while in the Building. No tenant shall
engage or pay any employees on the tenant’s premises or in the Building, except those actually
working for such tenant on said premises.



     15. No tenant shall purchase spring water, ice, coffee, soft drinks, towels or other like
merchandise or service from any company or person who has, in Landlord’s opinion committed
violations of Building regulations or caused a hazard or nuisance to the Building and/or its
occupants.



     16. Landlord shall have the right to prohibit any advertising by any tenant which, in
Landlord’s opinion, tends to impair the reputation or desirability of the Building as a building
for offices and, upon written notice from Landlord, such tenant shall refrain from and discontinue
such advertising.



     17. Landlord reserves the right to exclude from the Building at all times any person who is
not known or does not properly identify himself to the Building’s management or its agents.
Landlord may at its option require all persons admitted to or leaving the Building to register
between the hours of 6 p.m. and 8 a.m., Monday through Friday, and all times on Saturdays, Sundays
and holidays. Each tenant shall be responsible for all persons for whom it authorized entry into
the Building, and shall be liable to Landlord for all acts of such persons.



     18. Each tenant shall see that all lights are turned off before closing and leaving its
premises at any time.



D-2









 





     19. The requirements of tenants will be attended to only upon application at the office of the
Building. Building employees have been instructed not to perform any work or do anything outside
of their regular duties, except with special instructions from the management of the Building.



     20. Canvassing, soliciting and peddling in the Building is prohibited, and each tenant shall
cooperate to prevent the same.



     21. No water cooler, plumbing or electrical fixture shall be installed by tenant without
Landlord’s prior written consent.



     22. No hand trucks, except those equipped with rubber tires and side guards, shall be used to
deliver or receive any merchandise in any space or in the Common Areas of the Building, either by
tenant or its agents or contractors.



     23. Access plates to under floor conduits shall be left exposed. Where carpet is installed,
carpet shall be cut around the access plates.



     24. Mats, trash and other objects shall not be placed in the public corridors.


     25. [INTENTIONALLY DELETED].



     26. Landlord shall not maintain suite finishes which are non-standard such as kitchens,
bathrooms, wallpaper, special lights, etc. However, should the need for repairs arise, Landlord
shall arrange for the work to be done at tenant’s expense.



     27. Landlord’s employees are prohibited from receiving articles delivered to the Building and,
if any such employee receives any article for any tenant, such employee shall be acting as the
agent of such tenant for such purposes.



     28. No smoking shall be permitted in any of the Common Areas of the Building or in the tenant’s
premises. All cigarettes and related trash shall be disposed of in trash receptacles and not on
the sidewalk, parking lot or grass.



D-3









 





EXHIBIT E




PARKING




1. AVAILABILITY; RENT.




     Landlord agrees that it will provide to Tenant sufficient space to park three (3)
automobiles, either in the garage of the Building or as otherwise provided (in the event repairs or
maintenance are required for the garage). For each month during the Term, Tenant shall pay,
directly to the garage operator for the use of such parking spaces, an amount equal to the product
obtained by multiplying: (i) the number of parking spaces herein designated, by (ii) the market
rent for each such space, as determined from time to time by Landlord or the garage operator. No
specific parking spaces will be allocated for use by Tenant. Landlord reserves the right to
institute either a valet or self-parking system; provided, however, that if at any time during the
Term of the Lease Landlord provides to Tenant any additional spaces, Landlord shall at all times
have the right to reclaim such spaces upon thirty (30) days notice to Tenant.



2. REGULATIONS; LIABILITY.




     Tenant and its employees, agents and invitees shall observe reasonable safety precautions in
the use of the garage and shall at all times abide by all rules and regulations promulgated by
Landlord and/or the garage operator governing use of the garage. Landlord does not assume any
responsibility for, and shall not be held liable for, any damage or loss to any automobiles parked
in the garage or to any personal property located therein, or for any injury sustained by any
person in or about the garage.



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