Exhibit
10.4


 


DEED OF LEASE


 


by
and between


 


PETULA ASSOCIATES, LTD.


 


(“Landlord”)


 


and


 


GOVERNMENT
TECHNOLOGY SERVICES, INC.


 


(“Tenant”)


 


dated


 


December 10, 1997


 


11/13/97


 





















 


TABLE OF CONTENTS


 


	
  1.

  	
  DEMISE

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  TERM

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  RENT

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  PERMITTED USE

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  EXPENSES

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  ADDITIONAL RENT

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  SORTING AND
  SEPARATION OF REFUSE AND TRASH

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  HAZARDOUS SUBSTANCES

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  INSURANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  DAMAGE OR DESTRUCTION

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  ASSIGNMENT AND SUBLETTING

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  CARE OF PREMISES

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  ALTERATION BY TENANT

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  CONDEMNATION

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  SUBORDINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  ACCESS TO PREMISES

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  RULES AND REGULATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  COVENANTS OF RIGHT TO
  LEASE

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  MECHANICS LIENS

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  EXPIRATION
  OF LEASE AND SURRENDER OF POSSESSION

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  DEFAULT-REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  RE-ENTRY BY LANDLORD

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  ADDITIONAL RIGHTS TO
  LANDLORD

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  SUCCESSORS, ASSIGNS
  AND LIABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  MORTGAGEE’S APPROVAL

  	
   

  
	
   

  	
   

  	
   

  
	
  28.

  	
  ESTOPPEL CERTIFICATES

  	
   

  



 


i





















 


	
  29.

  	
  DEFAULT RATE OF INTEREST

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
  EXCULPATORY PROVISIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
  MORTGAGEE PROTECTION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
  RECIPROCAL
  COVENANT ON NOTIFICATION OF ADA VIOLATIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
  LAWS THAT GOVERN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  34.

  	
  FINANCIAL STATEMENTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  35.

  	
  PARKING

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  36.

  	
  SIGNAGE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  37.

  	
  RECORDATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  38.

  	
  FORCE MAJEURE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  39.

  	
  LANDLORD’S LIEN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  40.

  	
  BROKERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  41.

  	
  CONFIDENTIALITY

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  42

  	
  LEASE/DEED OP LEASE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  43

  	
  RIGHT OF FIRST OFFER

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  44.

  	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  45.

  	
  ROOF-TOP EQUIPMENT

  	
   

  	
   

  



 


	
  EXHIBIT

  	
  A

  	
  -

  	
  Land

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  B

  	
  -

  	
  Work Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  B-1

  	
  -

  	
  Current Site Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  B-2

  	
  -

  	
  Form of Environmental Certification

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  B-3

  	
  -

  	
  Current Specification

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  C

  	
  -

  	
  Declaration of Lease Commencement

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  D

  	
  -

  	
  Rules and Regulations

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  E

  	
  -

  	
  Avion® Signage Program

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  F

  	
  -

  	
  License Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  F-1

  	
  -

  	
  Location of License Area

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  F-2

  	
  -

  	
  Intentionally Deleted

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  F-3

  	
  -

  	
  Minimum Equipment Requirements

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  F-4

  	
  -

  	
  Contractor Insurance Requirements

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  G

  	
  -

  	
  Non-Disturbance Agreement

  	
   

  



 


ii





















 


DEED OF LEASE


 


THIS DEED OF LEASE (“Lease”) is made this 10th day of December, 1997,
by and between PETULA ASSOCIATES, LTD., whose address for the purpose of this
Lease shall be 711 High Street, Des Moines, Iowa 50392-1370, Attn: CRE
Equities/Mid-Atlantic Team, hereinafter referred to as “Landlord”, and
GOVERNMENT TECHNOLOGY SERVICES, INC., hereinafter referred to as “Tenant”.


 


IT IS AGREED AS FOLLOWS:


 


1.             DEMISE.


 


Landlord does hereby lease to Tenant and Tenant does
hereby lease from Landlord the premises consisting of the Improvements to be
constructed upon the land (“Land”) described on Exhibit A attached hereto and
made a part hereof and any selected parking located on the Land which Tenant is
entitled to utilize pursuant to Section 35 hereof (the Improvements, together
with the portion of the Land on which the Improvements and any related parking
are located, is herein referred to as the “Premises” or the “Property”).


 


Improvements.  The Improvements (also referred to in Exhibit
B as the “Base Building Work”) shall mean the building to be constructed on the
Land in accordance with the Work Agreement attached hereto as Exhibit B, to
contain approximately one hundred thousand five hundred (100,500) rentable
square feet as defined by the Building Owners and Managers Association
International’s Standard Method for Measuring Floor Area in Office Buildings dated
June 7, 1996, as approved by the American National Standards Institute, Inc.
(ANSI/BOMA Z65.1-1996) (the “BOMA method”). 
Upon substantial completion of the Improvements, the rentable area of
the Improvements shall be determined in accordance with the BOMA method by the
Architect (as herein defined).  The
rentable area of the Improvements as so determined shall be controlling for
purposes of establishing the Rent hereunder.


 


2.             TERM.


 


(A)          Initial
Term


 


(1)                                  The
term of this Lease (“Lease Term”) shall, subject to Section 2(C) hereof and
Section 10(c) of Exhibit B hereto, be for a period of 120 months, commencing on
the date of Substantial Completion of the Improvements and the Tenant Work (all
as more fully set forth in Exhibit B) (“Commencement Date”) and ending at 11:59
p.m. on the day (“Expiration Date”) immediately preceding the tenth (10th)
anniversary of the Commencement Date; provided that, if the Commencement Date
is a day other than the first (1st) day of a calendar month, the Expiration
Date shall be the last day of the month in which the tenth (10th) anniversary
of the Commencement Date shall occur. 
Except as provided below, Tenant shall not be obligated to pay Rent
until possession of the Premises is tendered to Tenant with the Improvements
and the Tenant Work therein Substantially Complete.  If the Commencement Date is a date other than
the first day of the month,


 





















 


Rent for the month in which the Commencement Date
occurs shall be prorated on a daily basis.


 


(2)                                  If
Tenant occupies the Premises prior to the Commencement Date, other than for
purposes of installation of telephones, cabling, special equipment, trade
fixtures and furniture in accordance with Section 12(a) of Exhibit B, such
occupancy shall be subject to all provisions hereof and shall not advance the
last day of the Lease Term, and Tenant shall pay Rent for such period at the
initial monthly rate set forth below.


 


(3)                                  If
Landlord is delayed in Substantially Completing the Landlord’s Work (as defined
in Exhibit B) or in tendering possession of the Premises with the Landlord’s
Work therein Substantially Complete, in whole or part, by a Tenant Delay, Rent
and Additional Rent shall, nonetheless, commence on that date on which the
Improvements and the Tenant Work would have been Substantially Completed but
for the Tenant Delay (e.g., if there are two (2) days of Tenant Delay
and the Premises are tendered to Tenant with the Improvements and the Tenant
Work Substantially Complete on December 15, Rent and Additional Rent shall
accrue from December 13th).


 


(4)                                  Subject
to the terms of the last sentence of this Section 2(a)(4), notwithstanding
anything herein contained to the contrary, if construction of the Improvements
has not commenced on or before the Commencement Deadline, Tenant shall have the
right to terminate this Lease by written notice (“Tenant’s Commencement
Termination Notice”) delivered to Landlord not earlier than the Commencement
Deadline and not later than ten (10) calendar days after the Commencement
Deadline (but in all events not later than commencement of construction of the Improvements),
in which event (i) this Lease shall cease and terminate without payment to
Tenant of any penalty, compensation or any portion of the Allowance (as herein
defined), and without reimbursement of any costs, damages, expenses or fees
suffered or incurred by or on behalf of Tenant, as if the date on which.  Tenant’s Commencement Termination Notice is
delivered to Landlord was the Expiration Date, and (ii) Landlord shall return
to Tenant any Security Deposit and any prepaid Rent.  As used herein, the term “Commencement Deadline”
shall mean August 1, 1998 [subject to a day-for-day extension for each day of
delay attributable to Tenant Delays, which Commencement Deadline shall not be
subject to delay for “Force Majeure” (as defined in Section 36 below)];
provided that, if Tenant fails to timely terminate this Lease pursuant to this
Section 2(A)(4), then for purposes of Section 2(A)(5), the term “Commencement
Deadline” shall mean the date on which the Permit (as defined in Exhibit B) is
issued by Fairfax County.  Despite the
foregoing, in the event that the “Construction Lender” (as defined in Section
16(B)(3) below) has foreclosed upon


 


2





















 


the Property or has accepted a deed in lieu of
foreclosure, and, subject to the provisions of Section 38 below, is diligently
pursuing completion of the work to be performed by Landlord under Exhibit B
hereto, Tenant shall not have the right to terminate the Lease pursuant to the
provisions of this Section 2(A)(4).


 


(5)                                  Notwithstanding
anything herein contained to the contrary, if the Landlord’s Work (exclusive of
“long-lead” items and Punch List Work items, as defined herein) is not
Substantially Complete within eleven (11) months after the Commencement
Deadline (subject to a day-for-day extension for each day of delay which occurs
after the Commencement Deadline and is attributable to Tenant Delays, the “Completion
Deadline”) and, as a  result,
Tenant is unable to lawfully (and, in fact, does not) occupy the Premises and
use the Premises for the uses permitted hereby, Tenant shall have the right to
deliver a sixty (60) day written notice of  termination
(“Tenant’s Completion Termination Notice”) delivered to Landlord not earlier
than the Completion Deadline nor later than ten (10) calendar days after the
Completion Deadline (but in all events not later than commencement of the
Tenant’s Work).  If Tenant timely
delivers the Tenant’s Completion Termination Notice and the Landlord’s Work
(exclusive of “long-lead” items and Punch List Work items, as defined herein)
is not Substantially Complete within sixty (60) days after delivery of Tenant’s
Completion Termination Notice (subject to a day-for-day extension for each day
of delay which occurs after such delivery of Tenant’s Completion Termination
Notice and which is attributable to Tenant Delays), and, as a result, Tenant is
unable to lawfully (and, in fact, does not) occupy the Premises and use the
Premises for the uses permitted hereby , this Lease shall automatically cease
and terminate without payment of penalty or compensation as if the date on
which such 60-day period (as the same may be extended as aforesaid) expires was
the Expiration Date, and Landlord shall return to Tenant any Security Deposit
and any prepaid Rent.


 


(B)           Commencement
Certificate.


 


At the request of Landlord at any time after the
Commencement Date has occurred, Tenant hereby agrees to execute a declaration
in the form attached hereto as Exhibit C (“Declaration”) as incorporated
herein by reference.  Tenant’s failure to
execute the Declaration shall not affect the Commencement Date or the Lease
Term, as same are determined by the terms of this Lease.


 


(C)           Extension
Period.


 


(1)                                  Provided
no Event of Default is in existence under this Lease at the time of the
exercise of the


 


3





















 


Extension Option or thereafter (through and including
the commencement date of the Extension Period), and provided that this Lease
shall not theretofore have been terminated, Tenant shall have one (1) non-recurring
option (the “Extension Option”) to extend the Expiration Date of the Lease Term
for a period of five (5) consecutive years (the “Extension Period”).  The Extension Period shall commence on the day
following the Expiration Date determined under Section 2(A) [as the same may be
extended pursuant to Section 10(c) of Exhibit B hereto] and end on the fifth
(5th) anniversary of the scheduled Expiration Date determined under Section
2(A) [as the same may be extended pursuant to Section 10(c) of Exhibit B hereto].
 The Extension Period shall be upon the
same terms and conditions contained herein except that (A) the Rent payable in
the Extension Period shall be adjusted on the first (1st) day of the Extension
Period to equal one hundred percent (100%) of the then-prevailing fair market
rental rate for the premises (the “New Rental Rate”), and shall thereafter be
subject to adjustment in accordance with the provisions of Section 3(B) hereof
and (B) Tenant shall have no option to extend the Expiration Date of the Lease
Term beyond the last day of the Extension Period.


 


(2)                                  Tenant
may exercise the Extension Option only by delivering binding written notice
(the “Extension Option Notice”) to Landlord of Tenant’s election to exercise
the Extension Option not later than twelve (12) months prior to the
commencement of the Extension Period; provided that (i) Tenant’s Extension
Option Notice shall be ineffective unless the same designates Tenant’s broker
for purposes of arbitration if the parties are unable to agree on the New
Rental Rate, and (ii) if Tenant delivers its Extension Option Notice to
Landlord more than twelve (12) months in advance, Tenant may elect to rescind
its Extension Option Notice at any time which is at least three hundred fifteen
(315) days prior to the commencement of the Extension Period (and in all events
prior to the execution of a binding agreement to extend this Lease for the
Extension Period), on the condition that Tenant reimburses Landlord upon demand
for any out-of-pocket costs incurred by or on behalf of Landlord in connection
with the determination of the New Rental Rate and/or preparation of a lease
amendment extending this Lease for the Extension Period.  Landlord and Tenant agree to negotiate in
good faith for a period of thirty (30) days to attempt to reach agreement on
the New Rental Rate applicable to the Extension Period, promptly following
delivery of Tenant’s Extension Option Notice. 
If the parties fail to agree on such New Rental Rate within said thirty
(30) day period, the determination of fair market rental rate for the Premises
shall be arbitrated by brokers as set forth below (each party hereby agreeing
to submit the determination of the fair market rental rate for the Premises to
arbitration in the manner provided herein,


 


4





















 


if the parties are unable to agree on the New Rental
Rate within said thirty (30) day period).  Landlord shall designate the broker appointed
by it within ten (10) business days after the expiration of the aforesaid
thirty (30) day period, and each party shall by written notice (a copy of which
shall be provided to the other party hereto) instruct their respective brokers
to commence such arbitration within ten (10) business days after the expiration
of the aforesaid thirty (30) day period.


 


(3)                                  In
the event the Tenant designates a broker and the Landlord fails to so designate
a broker within the aforesaid ten (10) business day period, the broker appointed
by the Tenant shall proceed to make his valuation, in which case the fair
market rental rate of the Premises shall be as determined by such broker (such
determination to be binding on Landlord and Tenant).  In the event each party designates a broker as
aforesaid, each broker shall proceed to make an independent determination of
the then-prevailing fair market rental rate of the Premises within thirty (30)
days after appointment of Landlord’s broker.


 


(4)                                  Each
broker shall render a separate written report, within thirty (30) days after
appointment of Landlord’s broker, of such broker’s estimate of the then-prevailing
fair market rental rate for the Premises as of the commencement of the
Extension Period.  If the values
contained in the written reports differ by five percent (5%) or less of the greater
of such values, the New Rental Rate shall be one hundred percent (100%) of the
arithmetic average of such values (such determination to be binding on Landlord
and Tenant).  If the values contained in
the written reports differ to a greater extent than set forth above, the
brokers shall, within five (5) days, promptly jointly appoint a third
broker.  If the two brokers so appointed
shall fail to agree upon the selection of a third broker within ten (10) days
after the expiration of such 30-day period, then either party, upon written
notice to the other, may request such appointment by the American Arbitration Association
(or any organization successor thereto).  The parties shall cooperate to expedite such appointment.  Within twenty (20) days of his appointment,
the third broker shall render a written report of his opinion of the value of
the then-prevailing fair market rental rate for the Premises as of the
commencement of the Extension Period. 
One hundred percent (100%) of the arithmetic average of the values in
the three (3) evaluation reports shall then be the New Rental Rate for the
Extension Period (which determination shall be binding on Landlord and Tenant);
provided, however, that if the lowest or highest of the three (3) evaluations,
or both, varies by more than ten (10%) from the middle evaluation, such
evaluation or evaluations so varying shall be disregarded in computing said
average.


 


5





















 


(5)                                  In
the event the New Rental Rate has not been determined on or before the
commencement of the Extension Period, the Rent payable by Tenant until such
determination shall be deemed equal to the Rent payable by Tenant pursuant to
Section 3(A) immediately prior to the commencement of the Extension Period (as the
same may be adjusted hereunder); provided, however, within fifteen (15) days of
such determination, Tenant shall pay Landlord the excess of (i) the monthly
installments of monthly Rent as calculated for the first (1st) year of the
Extension Period, above (ii) the monthly installments of Rent actually paid by
the Tenant, in respect of each month commencing on or after the commencement of
the Extension Period but prior to such determination, or Landlord shall credit
Tenant for any excess rent paid by Tenant if the rental rate has declined, and
Tenant shall thereafter pay Rent for such Extension Period as determined and
adjusted hereunder.


 


(6)                                  All
valuations of the fair market rental rate of the Premises shall be in writing
and shall be expressed in terms of an annual rent.  Each broker’s determination shall be based on
all relevant factors affecting fair market rental rate, including, but not
limited to (and without limiting the scope of such relevant factors), other
terms of this Lease which are applicable to the Extension Period (including,
but not limited to, the services provided by Landlord and those which are provided
by Tenant, and the absence of any concessions such as free rent or construction
allowance), the duration of the Extension Period, the age and quality of the
Building (as defined in Exhibit B) and the Premises, current “market”
concessions, the fact that the determination is for a renewal, the fact that
the determination is for a renewal as of a future date, and (if true) that no
brokerage commission will be payable with respect to the Extension Period.  To the extent a reasonable sample is
available, each broker shall use as a basis for comparison the rent for leases
entered into for comparable space in comparable buildings in the submarket of
Chantilly, Virginia in which the Premises is located, within the period which commences
twelve (12) months prior to the date of such determination, which leases shall
commence at approximately the same time as the Extension Period.


 


(7)                                  Each
broker appointed hereunder shall be an independent, licensed real estate broker
in the Commonwealth of Virginia, not affiliated with either party, specializing
in commercial real estate in chantilly, Virginia, having not less than ten (10)
years relevant experience, and shall be qualified by experience and ability to
appraise the fair market rental for the Premises.  The party appointing each broker shall be
obligated, promptly after receipt of the valuation report prepared by the
broker appointed by such party, to deliver a copy of such valuation report to
the other party in the manner provided elsewhere in this Lease for the delivery
of notices.


 


6





















 


If a third broker is appointed, the third broker shall
be directed, at the time of his appointment, to deliver copies of his valuation
report, promptly upon its completion, to Landlord and Tenant in the manner
provided elsewhere in this Lease for the delivery of notices.  The fees and other costs of each of the first
two brokers shall be borne by the party appointing each such broker, with the
fees and other costs of the third broker being shared equally by Landlord and
Tenant.


 


(8)                                  Unless
otherwise agreed in writing by Landlord and Tenant at the time the New Rental
Rate is determined, it is understood that the New Rental Rate shall be the initial
Rent for the first (1st) Lease Year of the Extension Period, and that such Rent
shall be subject thereafter to annual escalations, on each successive anniversary
of the commencement of the Extension Period, based on the provisions of Section
3(B).


 


(9)                                  Tenant’s
failure to timely deliver the Tenant’s Extension Option Notice shall render the
Extension Option null and void.


 


3.             RENT.


 


(A)                              Rent.  Tenant shall pay for the use and occupancy of
the Premises an annual base rental (“Rent”) equal to Ten and Fifteen One
Hundred Dollars ($10.15) per rentable square foot of the Improvements payable
in equal monthly installments.  Rent
shall be paid on the first day of each month in advance without demand or
notice (except as otherwise expressly provided herein), deduction, offset, or
counterclaim during the Lease Term.  Rent
for any period during the Lease Term which is less than one month shall be a
pro rata portion of the monthly installment, provided that if the Commencement
Date is not the first (1st) day of a calendar month, such pro rata portion
shall be added to the Rent for the first (1st) Lease Year.  Rent shall be payable in lawful money of the
United States to Landlord at the address stated herein or to such other persons
or at such other places as Landlord may designate in writing.


 


(B)                                Escalation
of Rent.  Commencing on the first day
of the second Lease Year (as hereinafter defined) and on the first day of each
Lease Year thereafter during the Lease Term (each an “Adjustment Date”), Tenant
shall pay to Landlord on the first day of each month as Rent an amount (the “Adjustment
Amount”) equal to the sum of (i) the Rent in effect immediately preceding the
current Adjustment Date plus (ii) three percent (38) of the Rent in effect
immediately preceding such Adjustment Date. 
The Adjustment Amount shall then be deemed to be the Rent in effect and
shall be deemed to be the Rent in effect for purposes of calculating the next
Adjustment Amount.


 


“Lease Year” shall mean the twelve (12) month periods
within the Lease Term, the first Lease Year commencing on the Commencement Date
and terminating on the last day of the twelfth full calendar month after the
Commencement Date,


 


7





















 


with each subsequent Lease Year commencing on the date
immediately following the last day of the preceding Lease Year and continuing
for a period of twelve (12) full calendar months, except that the last Lease
Year of the Lease Term shall terminate on the date this Lease expires or is
otherwise terminated.


 


(C)                                Place
of Payment.  Rent, Additional Rent
and other sums owed by Tenant shall be paid to Landlord at the offices of
Landlord’s property manager at 1115 30th Street, N.W., Washington, D.C. 20007
or at such place as Landlord may designate from time to time in writing.


 


(D)                               Late
Charge.  Tenant hereby acknowledges
that late payment by Tenant of Rent, Additional Rent or other sums due
hereunder will cause Landlord to incur collection costs not contemplated by
this Lease.  Therefore, if any
installment of Rent, Additional Rent or any other sum due from Tenant shall not
be received by Landlord when such amount is due, Tenant shall pay to Landlord a
late charge of five percent (5%) of such overdue amount; provided that,
Landlord agrees to waive the imposition of such late charge on the first (1st)
occasion in any twelve (12) month period on the conditions that no such late
charge waiver has been granted or exercised in the preceding twelve (12)
months, and the overdue payment is paid within five (5) business days after
notice from Landlord that the payment was not paid when due.  Additionally, Tenant shall pay to Landlord the
Default Rate (as set forth in Section 29) on all sums in default.  Acceptance of such late charge and/or the
Default Rate by Landlord shall in no event constitute a waiver of Tenant’s
default with respect to such overdue amount, or prevent Landlord from
exercising any other right or remedy available to Landlord.


 


(E)                                 Security
Deposit.


 


(1)                                  Purpose
of Security Deposit.  The Security
Deposit shall be held by Landlord as security for Tenant’s faithful performance
of Tenant’s obligations hereunder, with such Security Deposit securing Tenant’s
obligations hereunder subject to the terms and conditions set forth in this
Section 3(E).


 


(2)                                  Required
Amount.  Tenant shall, at all times,
ensure that the aggregate amount of all Permitted Security (as herein defined)
held by Landlord from time to time (the “Security Deposit”) is equal to the
then-current Required Amount.  If, as a
result of the application of all or any part of the Security Deposit in
accordance with the terms hereof, the Security Deposit shall be less than the
then-current Required Amount, Tenant shall, within fifteen (15) days of
Landlord’s written demand, provide Landlord with additional Permitted Security
equal to the amount of the deficiency. 
Tenant’s failure to restore the Security Deposit to the then-current Required
Amount when and as required hereby shall constitute a material breach of this
Lease.  As used herein, the term “Required
Amount” shall initially mean the sum of Two Million


 


8





















 


Dollars ($2,000,000.00).  The “Required Amount” shall be reduced on each
Reduction Date by Two Hundred Thousand Dollars ($200,000).  “Reduction Date” shall mean the first (1st)
day of each Lease Year commencing on or after the first (1st) day of the second
(2nd) Lease Year, on which no Event of Default is in existence hereunder.


 


(3)                                  Initial
Deposits.  Tenant shall deposit with
Landlord upon execution hereof Permitted Security in the amount of Six Hundred
Thousand Dollars ($600,000.00).  Landlord
agrees to provide Tenant with written notice (the “LC Notice”) of the date that
construction of the Improvements either (x) is estimated to commence, or (y)
has already commenced.  Upon the later to
occur of the date that is two (2) days prior to the date construction is
scheduled to commence on the Improvements pursuant to the Work Agreement (Exhibit
B), or the date which is ten (10) days after the date that Tenant receives the
LC Notice, Tenant shall deposit with Landlord additional Permitted Security in
the amount of One Million Four Hundred Thousand Dollars ($1,400,000.00), to
increase the total amount of Permitted Security to Two Million Dollars
($2,000,000.00).


 


(4)                                  Permitted
Security.  Tenant shall provide the
Security Deposit to Landlord in the form of one or more letters of credit (“LC”)
meeting the criteria set forth in Section 3(E)(7) (“Permitted Security”);
provided that, the aggregate number of LCs forming a part of the security
Deposit shall at no time exceed four (4).  Tenant shall immediately notify Landlord in
writing if Tenant acquires actual knowledge (from a source other than Landlord)
that any LC provided to Landlord no longer constitutes Permitted Security.


 


(5)                                  Qualified
Issuer.  As used herein, the term “Qualified
Issuer” shall mean a federally-insured commercial bank or other
federally-insured financial institution which has an office (whether of its own
or a correspondent bank) located in the greater Washington, D.C. metropolitan
area at which Permitted Security (or a sight draft drawn thereon) may be
presented for payment (a “DC Payment Office”), and which has a Qualified Credit
Rating.  whether an institution is a Qualified
Issuer shall be subject to continuous review (i.e., an institution shall
no longer be considered a Qualified Issuer at any time after the loss of
federal insurance, the closure of all DC Payment Offices, or loss of a
Qualified Credit Rating).  As used
herein, the term “Qualified Credit Rating” shall mean at least Prime-2 (or
then-current equivalent) by Moody’s Investor Services, Inc., at least A-2 (or
then-current equivalent) by Standard & Poor’s Corporation, or B- by Lace
Financial Corporation.  Landlord hereby
acknowledges that, as of the date of this Lease, Landlord considers Deutsche
Bank to be a Qualified Issuer.


 


9





















 


(6)                                  Substitute
Security.  If the Security Deposit
is, at any time, less than the Required Amount (whether due to application of
the Security Deposit pursuant to the terms hereof, the loss of a Qualified
Credit Rating by the issuer of some or all of assets delivered to Landlord for
purposes of forming a part of the Security Deposit, or otherwise), Tenant shall
deliver to Landlord additional Permitted Security sufficient to restore the
Security Deposit to the Required Amount, not later than fifteen (15) business
days after Landlord’s written demand.


 


(7)                                  Special
LC Requirements.   Each LC forming all
or a part of the Security Deposit shall meet each of the following criteria:


 


(A)                              the
LC shall be transferable, fully-funded, and run in favor of Landlord;


 


(B)                                the
LC shall be issued by a Qualified Issuer (as herein defined);


 


(C)                                the
LC shall be irrevocable for a period of one (1)  year, and
provide that it is automatically renewable for successive one (1) year periods unless
the issuer notifies Landlord by certified mail, return receipt request, at
least thirty (30) days in advance of the expiration date thereof, that the
issuer will not renew the LC;


 


(D)                               the
LC shall be in such form, and shall contain such terms, as are reasonably
acceptable to Landlord, providing, among other things, in substance that:


 


(1)                                  Landlord
and its successors and assigns shall have the right to draw down an amount up
to the then-current face amount of the letter of credit upon presentation to
the issuing bank of Landlord’s own declaration signed or purportedly signed by
or on its behalf, reading as follows:


 


(i)                                     that
the declarant has authority to make the declaration on behalf of the Landlord;


 


(ii)                                  that
the declaration is made pursuant to the terms of the letter of credit number;
and


 


(iii)                               that
Landlord is entitled to draw down the letter of credit under the terms of
Section 3(E)(9)(A) or 3(E)(9)(B) of the lease made between Landlord and Tenant.


 


(2)                                  The
LC will be honored by the issuer without inquiry as to the accuracy of the
accompanying declaration, and regardless


 


10





















 


of
whether Tenant disputes the content of such declaration; and


 


(3)                                  In
the event of a transfer of Landlord’s interest in the Premises, Landlord shall have
the right to transfer the LC to the transferee.


 


(4)                                  Notwithstanding
the foregoing, Landlord agrees that the terms of the LC may limit draws upon
the LC pursuant to Section 3(E)(9)(A) to not more than Two Hundred Thousand
Dollars ($200,000.00) in any period of ten (10) consecutive days.


 


(8)                                  Treatment
of Cash Security Deposit.  Any cash
sums forming all or a part of the Security Deposit as a result of a draw upon a
letter of credit shall be kept in a separately designated security deposit
account in a federally-insured bank (which may include other security
deposits), with interest thereon accruing forming a part of the Security
Deposit.


 


(9)                                  Right
to Draw Upon security Deposit.


 


(A)          Upon the occurrence of any monetary
Event of Default, Landlord and its successors and assigns shall have the right
to negotiate, present for payment, draw upon, use, apply or retain all or a
portion of the Security Deposit for the payment of the Rent, Additional Rent or
other charge, payment or sum due to Landlord from Tenant, provided in no event
shall the amount of any such draw exceed the amount required to cure such
monetary Event of Default.


 


(B)                                Upon
(i) Tenant’s failure, within fifteen (15) business days after delivery of
written notice to Landlord from the issuer of an LC forming all or a part of
the Security Deposit that the issuer will not renew the LC, to deliver to Landlord
additional Permitted Security in an amount equal to the LC which will not be renewed,
or (ii) Tenant’s failure, within fifteen (15) business days after written
notice from Landlord that the some or all of the assets delivered to Landlord
to form a part of the Security Deposit no longer meet the criteria to be
considered Permitted Security (whether due to a reduction in an LC issuer’s
credit rating or otherwise), to deliver to Landlord additional Permitted
Security sufficient to restore the Security Deposit to the Required Amount, Landlord
and its successors and assigns shall have the right to negotiate, present for payment,
and/or draw upon any portion of the Security Deposit (or any LC then held by Landlord
and formerly constituting a part of the Security Deposit) not in the form of
cash, and to hold the proceeds of such negotiation,


 


11





















 


presentment or draw (together with all cash already
forming a part of the Security Deposit) as a cash Security Deposit; provided
that, Tenant shall substitute additional Permitted Security for the cash so
held upon Landlord’s demand (in which event Landlord shall return to Tenant the
portion of the cash held equal to the amount of such additional Permitted
Security).


 


(10)                            Transfer
of Security Deposit.


 


(A)                                              Tenant acknowledges and agrees
that Landlord shall have the right to transfer the Security Deposit to any assignee
or other transferee of Landlord’s interest in the Property, subject to the
terms hereof, and that the provisions hereof shall apply to every such
assignment or transfer to a new Landlord.  Upon delivery of the Security Deposit to any
assignee or other transferee of Landlord’s interest in the Premises, Landlord shall
thereupon be discharged from any further liability with respect to the Security
Deposit.


 


(B)                                Each
Permitted Security forming a part of the Security Deposit shall expressly
permit transfer of such Permitted Security (whether by endorsement without
recourse, delivery, assignment, or re-issuance in the name of the new
Landlord), and shall require the issuer to acknowledge and accept the transfer
upon execution and delivery of a form of transfer agreement which complies with
the issuer’s reasonable requirements and payment of a reasonable and customary
transfer fee (which fee, if such fee exceeds One Hundred Dollars ($100.00) and
is paid by Landlord, shall be repaid by Tenant to Landlord upon demand).  If any
issuer fails, within ten (10) days after being notified of such transfer and
delivery of the transfer agreement and payment of the transfer fee, to
acknowledge and accept the transfer of the Permitted Security which it has issued,
Tenant shall deliver to Landlord additional Permitted Security equal to the amount
of Permitted Security for which such Issuer has failed to acknowledge and
accept the transfer (Tenant hereby acknowledging and agreeing that Tenant shall
be solely responsible for any and all fees in excess of One Hundred Dollars
($100.00) charged by the issuer of such additional Permitted Security.


 


(11)                            Return
of Security Deposit.  If Tenant
performs all of Tenant’s obligations hereunder, the Security Deposit, or so
much thereof as has not theretofore been applied by Landlord, shall be returned
with any unpaid interest accrued thereon (if any) to Tenant  (or at Landlord’s option, to the last
assignee, if any, of Tenant’s interest hereunder) within thirty (30) days of
the later of (i) the last day of the Lease Term,


 


12





















 


(ii) the date Tenant vacated the Premises, or (iii)
the date Tenant has fulfilled all its obligations hereunder.


 


(12)                            Covenant
Against Assignment or Encumbrance.  Tenant
further covenants that it will not assign, encumber or otherwise transfer any
or all of Tenant’s interest in any portion of the Security Deposit, and
acknowledges that neither Landlord nor its successors or assigns will be bound
by any attempted assignment, encumbrance or other transfer.


 


(13)                            No
Trust Relationship.  No trust
relationship is created herein between Landlord and Tenant regarding the
Security Deposit.


 


(14)                            Rights
Against Mortgagee.  Tenant hereby
agrees not to look to any mortgagee as mortgagee, mortgagee-in-possession or
successor in title to the Premises for accountability for the Security Deposit
unless (but only to the extent) the Security Deposit has actually been received
by said mortgagee as security for Tenant’s performance of this Lease.  Notwithstanding the foregoing, this Section
3(E)(14) shall not apply to Principal Mutual Life Insurance Company or any of its
wholly-owned subsidiaries, it being understood and agreed that, if Principal
Mutual Life Insurance Company or its wholly-owned subsidiaries are the mortgagee-in-possession
or successor in title to the Premises, such party shall be responsible to
account for and apply the Security Deposit in accordance with the terms of this
Lease (regardless of whether such party has actually received the Security
Deposit).


 


4.             PERMITTED USE.


 


Tenant covenants that the Premises will be used solely
(if at all) for the following uses (collectively, the “Permitted Use”):  (1) general office purposes;  (2) warehouse use; (3) cafeteria use; (4)
sales presentations; (5) equipment demonstrations; (6) seminars; (7) consulting
purposes; and (8) catalogue, mail and telephone sales.  Tenant further covenants that the Premises
will not be used or occupied for any unlawful purposes.  Tenant agrees to and shall use the Premises
solely for the purpose of conducting the Permitted Use and for no other
business or purpose.  Tenant acknowledges
that the Permitted Use is not a use granted exclusively to Tenant and that
Landlord reserves the right to lease premises in the Property to others for the
same or a similar permitted use.  Tenant
further acknowledges that it has received no written or oral inducements from
Landlord or any of Landlord’s representatives concerning this Lease (other than
as specifically set forth herein) or that Tenant will be granted any such
exclusive rights.  Tenant shall not
commit or allow to be committed any waste upon the Premises, or any public or
private nuisance.


 


13





















 


5.            EXPENSES.


 


(A)         Taxes


 


(1)                                  Landlord
shall pay all taxes applicable to the Property which are payable during the
Lease Term.


 


(2)                                  As
used herein, the term “taxes” shall mean real estate taxes, assessments
(whether general or special), sewer rents, rates and charges, transit and transit
district taxes, taxes based upon the receipt of Rent or other payments
hereunder, and any other federal, state or local governmental charge, general, special,
ordinary or extraordinary (but not including income or franchise taxes,
inheritance, estate or gift taxes, net profit taxes or any other taxes imposed upon
or measured by Landlord’s net income or profits, except as provided herein),
which may now or hereafter be levied, assessed or imposed against the Property
or Premises (“Taxes”).  If the Property
is assessed as part of a larger parcel of land, Taxes shall only include the
portion thereof which is allocable to the Property.  The allocation referenced in the preceding sentence
shall be based on the ratio of the rentable area of the Improvements to the
rentable area of all improvements upon such larger parcel of land, in the following
manner: (i) until the construction commences for improvements other than the
Improvements on such parcel of land, (A) the assessment for improvements shall
be entirely allocated to the Property, and (B) the assessment for the land
shall be allocated based on the sum of (1) the rentable area of the Improvements,
plus (2) the rentable areas of the other proposed improvements on such land as
set forth on that certain site plan which is entitled “Site/Grading Plan, GTSI
Headquarters @ Avion, Parcel “D-l”,” prepared by Rinker-Detwiler &
Associates, P.C.  as Job Number 97-065-H,
dated October     , 1997, (the “current Site Plan”)
attached hereto as Exhibit B-1 (as such rentable areas may be modified from
time to time)]; and (ii) once the construction of improvements other than the
Improvements on such parcel of land has commenced, the assessment for
improvements and land shall be allocated as stated on the relevant tax bill(s)
or assessor’s worksheet(s) (or, if not separately allocated, based on the sum
of (1) the rentable area of the Improvements, plus (2) the rentable areas of
the proposed improvements on such land for which construction has
commenced).  To the extent any Tax may be
paid without penalty or interest in installments over a number of years, such
Tax shall be included in Taxes for any year only to the extent of the
installments allocable to such year (as if Landlord had elected to pay such Tax
over the longest possible period, whether or not Landlord has so elected).  Provided Tenant shall timely pay its Pro Rata
Share of Taxes, “Taxes” shall exclude any penalties or interest thereon.  As of the date hereof, Landlord estimates
that the Taxes for calendar year 1999 will be $80,400.00.  Landlord agrees to deliver


 


14





















 


a copy of each assessment
notice on the Property promptly following the receipt thereof.  Additionally, Landlord shall have no
obligation to protest Taxes, but if Landlord does protest Taxes, the actual
out-of-pocket cost of such protest shall also be deemed Taxes.  Landlord shall advise Tenant upon request (to
be made not more than fourteen (14) days in advance of the filing deadline for
protest of the current tax assessment) whether Landlord intends to protest the current
tax assessment.  If Landlord advises
Tenant that Landlord does not intend to protest such current tax assessment,
Tenant shall have the right to challenge or appeal such assessment in Landlord’s
name but at Tenant’s sole expense, and Landlord shall cooperate in such
challenge or appeal (including executing such forms as may be reasonably
necessary to institute and prosecute such action); provided that, Tenant shall
have no right to challenge or appeal any Tax assessment during the last two (2)
years of the Lease Term.


 


(B)                              Landlord
shall provide insurance for the Property as set forth in Subsection 9(A) (“Insurance”).  If Landlord has a net worth in excess of
Fifty Million Dollars ($50,000,000.00), Landlord shall have the right to
self-insure (in which event, Operating Expenses shall include the reasonable
costs which would have been incurred if Landlord had obtained the insurance set
forth in Section 9(A) from a third party); provided that, in all events
Landlord may self-insure the first Fifty Thousand Dollars ($50,000.00) of
liability risk with regard to the Property (whether through deductibles,
co-insurance or otherwise).


 


(C)                                (1)           Landlord shall provide for the
following throughout the Lease Term as they relate to the Premises: (a)
landscaping; (b) property management; and (c) the maintenance, repair and/or
replacement of the Premises and Improvements as follows: (i) the roof; (ii) all
structural components of the Premises and Improvements; (iii) the parking lot
(except as expressly provided in Section 35 hereof), (iv) sidewalks, alleys and
any and all access drives, including the removal of snow and ice therefrom
(provided that, Tenant shall have the right to perform its own snow removal, at
Tenant’s sole cost and risk, if Landlord fails to promptly commence snow
removal when and as reasonably required to permit access to the Premises); (v)
fire sprinkler and fire control systems (if any); (vi) exterior plate glass;
(vii) life safety systems and equipment; and (viii) repairs of items under
warranty.  Landlord agrees to maintain
the foregoing systems and components in a first-class manner throughout the
Lease Term; provided that, Landlord shall have no liability for failure to
maintain or repair the same unless and until Landlord shall fail to perform
such maintenance or make such repairs within a reasonable time after acquiring
actual knowledge of the need for such maintenance or repairs.


 


15





















 


(2)                                Tenant
(and not Landlord) shall provide throughout the Lease Term, at Tenant’s sole
expense, all other maintenance, repair and/or replacement (as and when
reasonably required) of the Premises and Improvements (including, but not
limited to, (a) heating and air conditioning equipment, lines and fixtures; (b)
plumbing equipment, lines and fixtures, excluding fire sprinkler and fire
control systems (if any); (c) electrical equipment, lines and fixtures; (d) all
other utility equipment, lines and fixtures; and (e) all ingress-egress doors
to the Property), all as reasonably required in order to maintain the
Improvements and the Tenant Work in good working order and condition.  Notwithstanding the foregoing, Landlord shall
perform any of the services listed in this Section 5(c)(2) upon Tenant’s
written request, in which event all reasonable costs, expenses and fees
incurred by or on behalf of Landlord to perform the same shall constitute
Operating Expenses.


 


(D)                             Tenant
shall pay all utility bills incurred, including, but not limited to, water,
gas, electricity, fuel, light, heat and power bills, when and as due.  If Tenant shall fail to pay any utility bill
when and as due, Landlord shall have the right to pay such utility bill on
Tenant’s behalf (in which event the amount so paid shall be deemed Additional
Rent which shall be repaid by Tenant upon demand). Landlord shall not be liable
for any failure to furnish, or for any loss, injury or damage caused by or
resulting from any variation, interruption or failure of utility services.  In the event of (i) any interruption of
essential utilities or services due to Landlord’s gross negligence or willful
misconduct, which interruption or failure continues for more than three (3)
consecutive business days, then, provided such interruption or failure shall
render a material portion of the Premises untenantable, all Rent and Additional
Rent payable hereunder with respect to such portion of the Premises shall
thereafter be abated until such portion of the Premises is tenantable.


 


(E)                               Tenant,
at Tenant’s sole expense, shall comply with all laws, rules, orders, ordinances,
directions, regulations and requirements of federal, state, county, and
municipal authorities now in force or which may hereafter be in force, with
respect to the use, repair, replacement, maintenance, occupancy or alteration
of the Premises by Tenant or Tenant’s Agents (as herein defined); provided that,
Tenant shall have no obligation to perform structural alterations or
improvements, unless such structural alterations or improvements (i) are
required by law as a result of Tenant’s or Tenant’s Agents’ specific use or
manner of use of the Premises, or repair of the Premises, or (ii) would not
have been required to be performed but for additions, alteration, improvements
or modifications made by or on behalf of Tenant.  Landlord shall perform all structural
alterations or improvements which are not Tenant’s responsibility pursuant to
the terms hereof.


 


(F)                                 Except
as otherwise expressly provided herein, the Tenant will keep, maintain and
preserve the Premises in a good


 


16





















 


condition, ordinary wear
and tear excepted, and shall provide all services, maintenance and repair
require to keep the Premises in such condition. 
Without limiting the foregoing, Tenant, at its sole cost and expense,
will provide janitorial service for the Premises and interior and exterior
window washing for the Premises.  Except
as provided in Section 5(c)(l) above, Tenant, at the Tenant’s sole cost and
expense, shall also make all interior repairs and replacements to the Premises,
including, but not limited to, interior walls, doors and windows, floors, floor
coverings and light bulbs.


 


(G)                                All
costs, expenses and fees incurred by or on behalf of Landlord in connection
with providing any of the items in Subsections 5(B) and 5(C), to the extent
paid by or on behalf of Landlord shall be referred to as “Operating Expenses”;
provided that, the amount of the property management fee included in Operating
Expenses shall not exceed (i) Two Thousand Five Hundred Fifty-One Dollars
($2,551.00) per month during the first (1st) calendar year of the Lease Term
(which amount, as of the date of this Lease, is deemed by Landlord and Tenant
to be the fair market value of the goods and services provided in exchange for
such property management fee), and (ii) in any subsequent calendar year, the
fair market value of the goods and services provided in exchange therefor.  For purposes of determining the fair market
value of the goods and services provided in exchange for the property
management fee, not more often than once every third (3rd) calendar year
Landlord shall, upon Tenant’s written request, conduct a survey of the property
management fees paid to first-class property management companies serving the
Chantilly, Virginia submarket with respect to single-story, single-tenant
buildings located in a similar office parks in the Chantilly, Virginia
submarket which are leased with similar tenant responsibilities, and shall
provide to Tenant a copy of such survey. 
In the event of any dispute between Landlord and Tenant on the fair
market value of the goods and services provide in exchange for the property
management fee, Landlord and Tenant shall submit such dispute to binding
arbitration pursuant to the Uniform Arbitration Act as adopted by the
Commonwealth of Virginia, Va. Code Ann. §§8.01-581.01 et  seq. (as
the same may be amended from time to time). 
Tenant further acknowledges that the portion allocable to the Premises
of the reasonable costs incurred in connection with the operation and
management of, and providing and obtaining maintenance, landscaping, utilities
and repairs for Avion® Business Park shall constitute Operating
Expenses.


 


6.             ADDITIONAL RENT.


 


(A)                            Tenant
shall pay its Pro Rata Share of Taxes and Operating Expenses (“Tenant’s Share”).  As soon as practicable each year during the
Lease Term, Landlord shall furnish to Tenant a detailed estimate of Tenant’s
Share for the timeframe in question (broken down on a category by category
basis). Tenant acknowledges that Landlord has provided Tenant with a non-binding
estimate of the Tenant’s Share for calendar year 1999, prior to the execution
hereof.  Tenant shall pay to


 


17





















 


Landlord the estimate for
Tenant’s Share in equal monthly installments at the same time and place as Rent
is to be paid.  Landlord will furnish a
statement of the actual Tenant’s Share no later than April 1 of each year
during the Lease Term, including the year following the year in which the Lease
expires or is otherwise terminated.  In the
event that Landlord is, for any reason, unable to furnish the statement of the
actual Tenant’s Share within the time specified above, Landlord will furnish
such statement as soon thereafter as practicable with the same force and effect
as the statement would have had if delivered within the time specified
above.  Tenant will pay to Landlord any
deficiency as shown by such statement within thirty (30) days of receipt of
such statement.  Provided no Event of
Default by Tenant is in existence under this Lease, Landlord will refund to
Tenant any excess as shown by such statement within thirty (30) days of the
date of the statement; provided that, if an Event of Default by Tenant is in
existence, Landlord shall refund to Tenant the amount of such excess at such
time as all Events of Default have been cured. 
Landlord will keep books and records showing the Operating Expenses in
accordance with generally accepted accounting principles.


 


(B)                                Any
and all payments (other than Rent) required to be made by Tenant pursuant to
this Lease shall be deemed additional Rent (“Additional Rent”).  Landlord shall have the same rights and
remedies for said payments as for Rent.


 


(C)                                Pro
Rata Share.  Tenant’s pro rata share
is 100% (“Pro Rata Share”).


 


(D)                               Tenant’s
Right to Audit.  If Tenant disputes
any Operating Expenses or Taxes statement, Tenant must provide Landlord with
specific written objections within one hundred eighty (180) days after
receiving the statement (failing which, the statement will be deemed
conclusive).  Within 30 days after receiving
these objections, Landlord will either adjust the disputed statement in
response to Tenant’s objection(s) and credit any overpayment to Tenant as
stated above, or notify Tenant that it believes Tenant’s objection is without
merit (it being agreed that, if Landlord fails to respond within such 30-day
period, Landlord shall be deemed to have agreed to adjust the disputed
statement in response to Tenant’s objection(s) and credit any overpayment to
Tenant as stated above).  If Tenant
timely disputes a statement and Landlord notifies Tenant that Tenant’s
objection is without merit, Tenant may — if no Event of Default by Tenant is
then in existence — cause (i) qualified accounting employees of Tenant, or (ii)
an independent, certified public accountant (“CPA”) to audit the supporting
data for the disputed statement (in which event, such supporting data shall be made
available to the employee or CPA). 
However, Tenant may not exercise its audit right unless the audit
commences within thirty (30) days after Landlord notifies Tenant that Tenant’s
objection is without merit, nor may Tenant audit any statement more than once
(it being understood that the foregoing prohibition against multiple audits of
the same statement shall not be deemed to prohibit the examination of the same
documents more than once in the course of the same


 


18





















 


audit).  Any CPA selected by Tenant to conduct an
audit must have least 5 years experience performing operating expense
pass-through audits for commercial office buildings in the metropolitan
Washington, D.C. area, and must be approved by Landlord.  Landlord’s approval will not be unreasonably
withheld or delayed, if such CPA (a) is not compensated on a contingency fee
basis, and (b) signs a confidentiality agreement in form reasonably acceptable
to Landlord (Landlord hereby agreeing that no such confidentiality agreement
shall prohibit the disclosure, in any action or suit instituted by Tenant
against Landlord with regard to the audited Operating Expenses or Taxes, of
information required to institute or prosecute such action or suit, but such
confidentiality agreement may require Tenant and the CPA to agree to reasonable
protective orders in connection therewith). 
Each audit under this Section 6(D) must be conducted at Landlord’s
property manager’s Washington, D.C. area office.  If Landlord does not agree with the audit
results of the CPA Tenant selects, or Tenant’s employee(s), Landlord and Tenant
will endeavor to resolve their differences (failing which, the dispute will be
conclusively determined based on an independent audit by a third-party CPA
selected by the parties or, failing agreement, appointed by the American
Arbitration Association or any recognized successor thereto upon application by
either party).  The parties will make any
necessary adjustments in accordance with the third-party CPA audit.  Tenant must pay all costs and expenses of
Tenant’s audit (including, but not limited to, reasonable copying charges),
unless the amounts paid by Tenant to Landlord for the year in question exceeded
the amounts to which Landlord was entitled by more than 6%, in which event
Landlord will reimburse Tenant for the reasonable costs incurred in connection
with Tenant’s audit.  If the third-party
CPA audit shows Tenant has underpaid Operating Expenses or Taxes (or both), in
addition to paying to Landlord the underpayment amount, Tenant shall reimburse
Landlord upon demand for all reasonable costs, expenses and fees incurred by
Landlord in connection with such dispute.  If a third-party CPA ultimately resolves the
dispute, the losing party shall pay the costs incurred in connection with the
third-party CPA audit (including, but not limited to, reasonable copying
charges).  Tenant has no right to
withhold or reduce any performance by Tenant under the Lease pending or based
upon any audit under this Section 6(D).


 


7.             SORTING AND
SEPARATION OF REFUSE AND TRASH.


 


Tenant shall be
responsible for contracting for all trash removal services.  Tenant covenants and agrees, as its sole cost
and expense, to comply with all present and future laws, orders and regulations
of all state, federal, municipal and local governments, departments,
commissions and boards regarding the collection, sorting, separation and
recycling of waste products, garbage, refuse and 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 7, 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


 


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arising from such noncompliance,
utilizing counsel reasonably satisfactory to Landlord.


 


8.            HAZARDOUS
SUBSTANCES.


 


(A)                              The
term “Hazardous Substances” shall mean pollutants, contaminants, toxic or
hazardous wastes, or any other substances, the use and/or the removal of which is
required or the use of which is restricted, prohibited or penalized by any “Environmental
Law”, which term shall mean any federal, state or local law, regulation, order,
ordinance or other statute of a governmental or quasi-governmental authority
relating to pollution or protection of the environment.  Tenant hereby agrees that (A) no activity
will be conducted on the Premises that will produce any Hazardous Substances,
except for such activities that are part of the ordinary course of Tenant’s
business activities (the “Permitted Activities”) provided said Permitted
Activities are conducted in accordance with all Environmental Laws and have
been acknowledged and consented to in advance in writing by Landlord (such
consent not to be unreasonably withheld); Tenant shall be responsible for
obtaining any required permits and paying any fees and providing any testing
required by any governmental agency in connection with the Permitted
Activities; (B) the Premises will not be used in any manner for the storage of
any Hazardous Substances except for the temporary storage of such materials
(the “Permitted Materials”) that are used in the ordinary course of the
Permitted Activities, provided such Permitted Materials are properly stored in
a manner and location meeting all Environmental Laws and acknowledged and
consented to in advance in writing by Landlord (such consent not to be
unreasonably withheld); Tenant shall be responsible for obtaining any required
permits and paying any fees and providing any testing required by any
governmental agency in connection with the Permitted Materials; (C) no portion
of the Premises will be used as a landfill or a dump; (D) Tenant will not
install any underground tanks of any type; (E) Tenant will not cause any
surface or subsurface conditions to exist or come into existence that
constitute, or with the passage of time may constitute a public or private
nuisance; (F) Tenant will not knowingly or negligently permit any Hazardous
Substances to be brought onto the Premises by or on behalf of Tenant, except
for the Permitted Materials described above, and if so brought thereon, the
same shall be immediately removed, with proper disposal, and all required
cleanup procedures shall be diligently undertaken pursuant to all Environmental
Laws.  Landlord or Landlord’s
representative shall have the right but not the obligation to enter the
Premises for the purpose of inspecting the storage, use and disposal of
Permitted Materials to ensure compliance with all Environmental Laws.  Should it be determined, in Landlord’s sole
(but reasonable) opinion, that said Permitted Materials are being improperly
stored, used, or disposed of, then Tenant shall immediately take such
corrective action as is reasonably requested by Landlord.  Should Tenant fail to take such corrective
action within ten (10) days (or such shorter period as is reasonable under the
circumstances), Landlord shall have the right to perform such work and


 


20





















 


Tenant shall promptly
reimburse Landlord for any and all actual, out-of-pocket costs associated with
said work.  If at any time during or
after the Lease Term, the Premises are found to be contaminated by Hazardous
Materials as a consequence of the acts or omissions of Tenant or any of Tenant’s
Agents, or any surface or subsurface conditions exist at the Property as a
consequence of the acts or omissions of Tenant or any of Tenant’s Agents,
Tenant shall diligently institute proper and thorough cleanup procedures at
Tenant’s sole cost, and Tenant agrees to indemnify, defend and hold harmless
Landlord, its lenders, any managing agents and leasing agents of the Property,
and their respective agents, partners, officers, directors and employees, from
all claims, demands, actions, liabilities, costs, expenses, penalties (whether
civil or criminal), damages (actual or punitive) and obligations of any nature
arising from or as a result of such contamination or conditions.  The foregoing indemnification and the
responsibilities of Tenant shall survive the termination or expiration of this
Lease.


 


(B)                                Except
with regard to the use, storage and disposal, in accordance with applicable
law, of Hazardous Substances utilized in the ordinary course of the
maintenance, repair and/or operation of the Property (“Landlord’s Permitted
Substances”), Landlord agrees that it will be fully responsible for all costs,
expenses, damages or liabilities which may occur from the use, storage,
disposal, release, spill or discharge of Hazardous Substances by Landlord or its
agents, representatives, employees or contractors while acting within the scope
of their employment, and it shall indemnify, defend and hold harmless Tenant
and its agents, employees, partners, officers, directors, invitees, assignees,
sublessees, contractors and others for whose actions Tenant is responsible
(collectively, “Tenant’s Agents”) from all claims, demands, actions,
liabilities, reasonable costs, reasonable expenses, penalties (whether civil or
criminal), damages (actual or punitive) and obligations of any nature to the
extent arising from or as a result of any violation of this Section 8(B).  The foregoing indemnification and the
responsibilities of Landlord shall survive the termination or expiration of
this Lease.


 


(C)                                During
and after the Lease Term, Tenant and Landlord shall each promptly provide the
other with copies of all summons, citations, directives, information inquiries
or requests, notices of potential responsibility, notices of violation or
deficiency, orders or decrees, claims, complaints, investigations, judgments,
letters, notices of environmental liens, and other communications, issued or
threatened in writing, from the United States Environmental Protection Agency,
Occupational Safety and Health Administration, the Commonwealth of Virginia
Department of Environmental Quality, or other federal, state or local agency or
authority, or any other entity or individual, whether public or private,
concerning (i) any Hazardous Substance regarding the Property or the Premises;
(ii) the imposition of any environmental lien on the Property or the Premises;
or (iii) any alleged violation of or responsibility under any Environmental
Law, with respect to the Property.


 


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9.                                       INSURANCE.


 


(A)          INSURANCE BY LANDLORD.


 


Landlord shall, during
the Lease Term, procure and keep in force the following insurance (it being
understood that the cost of commercially reasonable premiums and deductibles
incurred or paid by or on behalf of Landlord in connection therewith will be
deemed Additional Rent payable by Tenant pursuant to Section 5 and Section 6
(Tenant hereby acknowledging that, as of the date hereof, Landlord’s deductible
in connection with its casualty insurance is $10,000 per occurrence, and such
deductible is commercially reasonable)):


 


(1)                                  Property
insurance insuring the Premises and Improvements and rental income insurance (i.e.,
loss of rents insurance) for perils covered by the causes of loss - special
form (all risk) and in addition coverage for flood, earthquake and boiler and machinery
(if applicable).  Such coverage (except
for flood and earthquake) shall be written on a replacement cost basis equal to
ninety percent (90%) of the full insurable replacement value of the foregoing
and shall not cover Tenant’s equipment, trade fixtures, inventory, fixtures or
personal property located on or in the Premises.


 


(2)                                  Commercial
general liability insurance against any and all claims for death, bodily injury
and property damage occurring in or about the Premises or the land.  Such insurance shall have a combined single
limit of not less than One Million Dollars ($1,000,000) per occurrence per
location with a Two Million Dollars ($2,000,000) aggregate limit, and shall
name Tenant as an additional insured.


 


(3)                                  Such
other insurance as Landlord deems reasonably necessary and prudent, consistent
with the insurance customarily maintained by comparable buildings in the Chantilly
submarket of Fairfax County, Virginia, or as reasonably required by Landlord’s
beneficiaries or mortgagees of any deed of trust or mortgage encumbering the
Premises.


 


(B)          INSURANCE BY TENANT.


 


Tenant shall,
during the Lease Term, procure and keep in force the following insurance:


 


(1)                                  Commercial
general liability insurance naming Landlord and Landlord’s managing agent for
the Premises as additional insureds against any and all claims for death,
bodily injury and property damage occurring in, or about the Premises arising
out of Tenant’s use and occupancy of the Premises.  Such insurance shall have a combined single
limit of not less than One Million Dollars ($1,000,000) per occurrence with Two
Million Dollars ($2,000,000) aggregate limit and excess


 


22





















 


umbrella liability
insurance in the amount of Two Million Dollars ($2,000,000).  If Tenant has other locations that it owns or
leases, the policy shall include an aggregate limit per location endorsement
conforming to the foregoing.  Such
liability insurance shall be primary and not contributing with any insurance
available to Landlord and Landlord’s insurance shall be in excess thereto.  In no event shall the limits of such
insurance be considered as limiting the liability of Tenant under this lease.


 


(2)                                Personal
property insurance insuring all equipment, trade fixtures, inventory, fixtures
and personal property located on or in the Premises for perils covered by the
cause of loss - special form (all risk) and in addition, coverage for flood,
earthquake and boiler and machinery (if applicable).  Such insurance shall be written on a
replacement cost basis in an amount equal to ninety percent (90%) of the full replacement
value of the aggregate of the foregoing.


 


(3)                                Workers’
compensation insurance in accordance with statutory law and employers’ liability
insurance with a limit of not less than $100,000 per accident, $500,000 for a
disease policy limit, and $100,000 for disease limit for each employee.


 


(4)                                Business
interruption insurance in such amounts, if any, that Tenant in its prudent
business judgment, elects to maintain, from time to time, it being understood
and agreed that if there is any conflict between the provisions of this Section
9(B)(4) and the provisions of Section 9(B)(5),the provisions of this Section
9(6)(4) shall govern and control.


 


(5)                                Such
other insurance as Landlord deems necessary and prudent, consistent with the
insurance customarily required to be maintained by tenants of comparable buildings
in the Chantilly submarket of Fairfax County, Virginia, or as reasonably
required by Landlord’s beneficiaries or mortgagees of any deed of trust or
mortgage encumbering the Property.


 


The policies required to
be maintained by Tenant and the policies required to be maintained by Landlord
shall each be issued by companies rated AX or better in the most current issue
of Beat’s Insurance Reports.  Insurers
shall be licensed or authorized to do business in the state in which the
Premises is located and domiciled in the United States.  Any deductible amounts under any of Tenant’s
insurance policies required hereunder shall not exceed $10,000. Certificates of
insurance (certified copies of the policies shall be provided upon Landlord’s
request) shall be delivered to Landlord prior to the Commencement Date and
annually thereafter at least thirty (30) days prior to the expiration date of the
old policy.  Tenant shall have the right
to provide insurance coverage which it is obligated to


 


23





















 


carry pursuant to the
terms hereof in a blanket policy, provided such blanket policy expressly
affords coverage to the Premises, and to Landlord, as required by this Lease.  Each policy of insurance shall provide
notification to Landlord at least ten (10) days prior to any cancellation or
modification to reduce the insurance coverage. 
In the event Tenant does not purchase the insurance required by this
Lease or fails to keep the same in full force and effect, Landlord may (but
shall not be obligated to), upon forty-eight (48) hours notice (or, in the case
of the lapse of Tenant’s general liability insurance, without notice), purchase
the required insurance and pay the premium. 
The Tenant shall repay to Landlord, as Additional Rent the amount so
paid promptly upon demand.  In addition,
Landlord may recover from Tenant and Tenant agrees to pay, as Additional Rent,
any and all reasonable expenses (including reasonable attorneys’ fee) and
damages which Landlord may sustain by reason of the failure of Tenant to obtain
and maintain such insurance.


 


(C)          SUBROGATION.


 


Landlord and Tenant
mutually waive their respective rights of recovery against each other for any
loss of, or damage to, either parties’ property, to the extent that such loss
or damage is insured by an insurance policy required to be in effect at the
time of such loss or damage.  Each party
shall obtain any special endorsements, if required by its insurer, whereby the
insurer waives its rights of subrogation against the other party.  This clause shall not apply in those cases
where waiver of subrogation would cause either parties’ insurance to be voided
or otherwise made uncollectible.


 


10.          DAMAGE OR
DESTRUCTION.


 


If (i) the Premises shall
be materially damaged or destroyed during the last year of the Lease Term (it
being agreed that, if the Extension Option was exercised prior to such damage
or destruction and Tenant’s right of rescission thereof has lapsed or is waived
in writing by Tenant not later than the earlier of (x) 315 days in advance of
the Expiration Date, or (y) thirty (30) days after the date of such damage or
destruction, the last year of the Lease Term shall be deemed to be the last
year of the Extension Period), or (ii) the Premises is damaged or destroyed to
such extent that the damage or destruction cannot be repaired within a period
of three hundred sixty-five (365) days of the date of such damage or
destruction, either Landlord or Tenant may terminate this Lease by written
notice (the “Damage Notice”) delivered to the other within sixty (60) days of
the date of such damage or destruction (and in such event this Lease shall
terminate as of date of such damage or destruction as if such date were the
Expiration Date hereof).  In addition,
Landlord, at its sole option, shall have the right to cancel and terminate this


 


24





















 


Lease, by written notice
(the “Section 10 Notice”) delivered to Tenant not later than sixty (60) days
after the date of damage or destruction, in the event (i) the Premises is
materially damaged or destroyed, (ii) the unexpired portion of the Lease Term
which will remain after completion of rebuilding or restoration of the Premises
(based on the estimated time for rebuilding or restoration from a reputable,
independent contractor) is less than forty-two (42) months [it being agreed
that, for purposes of the foregoing calculation, if the Extension Option was
exercised prior to such damage or destruction and Tenant’s right of rescission
thereof has lapsed or is waived in writing by Tenant not later than the earlier
of (x) 315 days in advance of the Expiration Date, or (y) thirty (30) days
after the date of such damage or destruction, less than forty-two (42)  months of the Extension Period will
remain unexpired after completion of rebuilding or restoration of the Premises,
based upon the estimated time for such rebuilding or restorationl, and (iii)
Tenant shall fail to execute and deliver to Landlord within thirty (30) days
after the date that Tenant received the Section 10 Notice an extension of the
Lease Term equal to the amount of time by which the remaining Lease Term
(which, if the Extension option is not exercised prior to such damage or
destruction or if Tenant’s right of rescission thereof has not lapsed or is not
waived in writing by Tenant within thirty (30) days after the date of such
damage or destruction, shall exclude the Extension Period, and in all events
shall exclude the estimated time to rebuild or restore the Premises) is less
than forty-two (42) months, upon the same terms and conditions set forth herein
except that the Rent for the period of such extension shall equal the
then-escalated Rent in effect immediately prior to the expiration of the Lease
Term, subject to escalation in the same manner in effect immediately prior to
the expiration of the Lease Term.  If
Landlord delivers neither the Damage Notice or the Section 10 Notice to Tenant
within sixty (60) days after the date of the damage or casualty, Landlord shall
be deemed to have waived its right to terminate this Lease in connection with
such damage or destruction.  If this
Lease is not terminated, then Landlord shall repair and restore the Premises
(exclusive of Tenant’s equipment, trade fixtures, inventory, fixtures and
personal property) with all reasonable speed (but in all events not later than
twelve (12) months after the date of the damage) to substantially the same
condition as immediately prior to such damage or destruction, and the Rent and
Additional Rent or a just and proportionate part thereof, according to Tenant’s
ability to utilize the Premises in its damaged condition, shall be abated until
the Premises shall have been repaired and restored by Landlord.


 


11.          INDEMNIFICATION.


 


(A)                            Subject
to the terms of Section 9(C), Tenant shall and does hereby indemnify, hold
harmless, and defend Landlord (except for Landlord’s gross negligence or
willful misconduct) against all costs, damages, injury, claims, liabilities or
expenses (including, but not limited to, reasonable


 


25





















 


attorneys’ fees), losses
and court costs with respect to injury or death to any person or for damage to
or loss of use of any property arising out of any occurrence in, on or about
the Property or on account of the use, condition, occupational safety or
occupancy of the Property, to the extent caused or contributed to by Tenant or
Tenant’s Agents, or arising out of any occurrence in, upon or at the Premises,
or on account of the use, condition, occupational safety or occupancy of the
Premises.  To the fullest extent
permitted by applicable law, it is the intent of the parties hereto that the
indemnity contained in this Section shall not be limited or barred by reason of
any ordinary negligence on the part of Landlord or Landlord’s agents, but
nothing herein contained shall be deemed to require Tenant to indemnify
Landlord against the negligence of Landlord or Landlord’s agents except to the
extent Tenant is insured against liability arising therefrom.  Such indemnification shall include and apply
to (but shall not be limited to) reasonable attorneys’ fees, investigation
costs, and other costs actually and reasonably incurred by Landlord.  Subject to the terms of Section 9(C), Tenant
shall and does hereby further indemnify, defend and hold harmless Landlord from
and against any and all costs, damages, injury, claims, liabilities or expenses
arising from any breach or default in the performance of any obligation on
Tenant’s part to be performed under the terms of this Lease.  The provisions of this Section shall survive
the expiration or termination of this Lease with respect to any damage, injury,
death, breach or default occurring prior to such expiration or
termination.  This Lease is made on the
express conditions that, except as expressly set forth in this Lease, Landlord
shall not be liable for, or suffer loss by reason of, injury to person or
property, from whatever cause, in any way connected with the condition, use,
occupational safety or occupancy of the Premises specifically including,
without limitation, any liability for injury to the person or property of
Tenant or Tenant’s Agents.


 


(B)                                Subject
to the terms hereof (including, but not limited to, Section 9(C) hereof),
Landlord shall and does hereby indemnify and hold harmless Tenant from and
against all costs, damages, injury, claims, liabilities, expenses (including,
but not limited to, reasonable attorneys’ fees), losses and court costs to the
extent caused by or contributed to by any gross negligence or willful
misconduct of Landlord or its agents or employees acting within the scope of
their employment.  Such indemnification
shall include and apply to (but shall not be limited to) reasonable attorneys’
fees, investigation costs, and other costs actually and reasonably incurred by
Tenant.  Subject to the terms of Section
9(C), Landlord shall further and does hereby indemnify, defend and hold
harmless Tenant from and against any and all costs, damages, injury, claims,
liabilities or expenses arising from any breach or default


 


26





















 


 


in the performance of any
obligation on Landlord’s part to be performed under the terms of this
Lease.  To the fullest extent permitted
by applicable law, it is the intent of the parties hereto that the indemnity
contained in this paragraph shall not be limited or barred by reason of any
ordinary negligence on the part of Tenant or Tenant’s Agents, but nothing
herein contained shall be deemed to require Landlord to indemnify Tenant
against the negligence of Tenant or Tenant Agents except to the extent Landlord
is insured against liability arising therefrom.  The provisions of this Section shall survive
the expiration or termination of this Lease with respect to any damage, injury,
death, breach or default occurring prior to such expiration or termination.  This Lease is made on the express conditions
that, except as expressly set forth in this Lease, Tenant shall not be liable
for, or suffer loss by reason of, injury to person or property, from whatever
cause, in any way connected with the condition, use, occupational safety or
occupancy of the common areas of Avion® Business Park specifically including,
without limitation, any liability for injury to the person or property of
Landlord or Landlord’s agents or employees.


 


12.          ASSIGNMENT
AND SUBLETTING.


 


(A)                              Tenant
shall not assign, encumber, mortgage, pledge, license, hypothecate or otherwise
transfer the Premises or this Lease, in whole or in part, or sublease all or
any part of the Premises, or permit the use or occupancy of any part of the
Premises by any person or entity other than Tenant and its employees, without
the prior written consent of Landlord, which may be granted or withheld in
Landlord’s sole discretion; provided that, subject to Landlord’s termination
right as set forth below, Landlord agrees not to unreasonably withhold, delay
or condition its consent to any sublease or assignment (each a
“Transfer”).  Notwithstanding anything
herein contained to the contrary, it shall be deemed reasonable for Landlord to
withhold its consent to a proposed Transfer if Landlord reasonably determines
that: (1) the proposed Transferee or its business is not of a type and quality
suitable for a building of comparable quality and type, (2) the proposed Transferee is a governmental or
quasi-governmental authority, a foreign government or international agency or
other organization entitled to sovereign or other immunity, (3) the proposed
operations of the proposed assignee or subtenant would materially and adversely
interfere with the ability of other tenants of the Building to utilize their
premises for the uses (“Comparable Uses”) that are consistent with the type of
uses found in buildings that are of similar quality and type as the Building,
(4) the proposed assignee has not been demonstrated to Landlord’s satisfaction
to have sufficient financial capability and stability to perform its
obligations under such proposed assignment, or (5) the


 


27





















 


proposed Transferee is
proposing to engage in a use which (i)  is
not a Permitted Use, (ii) is not permitted pursuant to applicable law to be
conducted by the proposed Transferee or within the Premises (or such lesser
portion as is being sublet) or both, (iii) will violate any covenant,
condition, restriction or other matter of record affecting title to the Property,
or (iv) will violate any “exclusive use” or other restrictive covenant of any
other lease of any portion of the Property (so long as such exclusive use or
restrictive covenant does not restrict the ability of Tenant to engage in the
Permitted Use).


 


(B)                                (1)          Tenant must request Landlord’s consent
to an assignment or sublease in writing at least thirty (30) days prior to the
commencement date of the proposed sublease or assignment, which request must
include (a) the name and address of the proposed assignee or subtenant, (b) the
nature and character of the business of the proposed assignee or subtenant, (c)
financial information (including financial statements) of the proposed assignee
or subtenant, and (d) a copy of the proposed sublet or assignment agreement,
which must be in substance and form reasonably acceptable to Landlord.  Tenant shall also provide any additional
information Landlord reasonably requests regarding such proposed assignment or
subletting.


 


(2)                               Within
twenty-one (21) days after Landlord receives Tenant’s request for consent to a
proposed assignment or subletting (with all required information included),
Landlord shall have the option: (i) to grant its consent to such proposed
assignment or subletting, or (ii) to deny or condition its consent to such
proposed assignment or subletting (it being understood that such consent will
not, subject to Landlord’s right of termination, be unreasonably withheld,
conditioned or delayed), or (iii) at Landlord’s sole discretion, to terminate
this Lease effective as of the commencement date of such proposed assignment,
or, if a sublease, to sublease the portion of the Premises proposed to be
subleased, on the same terms and conditions set forth in the proposed sublease
for which Landlord’s consent is sought.  If
Landlord fails to respond to Tenant within such period of time, Tenant may
deliver to Landlord a second (2nd) request for such consent, which notice shall
specifically state that the failure by Landlord to respond within five (5) business
days shall be deemed Landlord’s election to grant its consent thereto, and in
the absence of a response to such second (2nd) notice, Landlord shall be deemed
to have granted its consent thereto. 
Landlord acknowledges that as of the date of this Lease, Tenant has
delivered to Landlord a list containing the names of the entities identified


 


28





















 


by Tenant as Tenant’s
current direct competitors.  At least
seven (7) days prior to the date that Landlord enters into a lease or grants
any party (other than Tenant) the right to use any portion of the Premises,
Landlord shall deliver a written notice (the “Competitor Request Notice”) to
Tenant which requests that Tenant provide Landlord with a written list of Tenant’s
then direct competitors.  If within seven
(7) days after the date that Tenant receives a Competitor Request Notice,
Tenant delivers to Landlord a list of direct competitors, then such list shall
be deemed the then-current “Competitor List”, provided that if Tenant fails to
deliver to Landlord such list within seven (7) days after the date Tenant
receives a Competitor Request Notice, then the then current Competitor List
shall be deemed to be the most recent list of direct competitors that has been
delivered to Landlord by Tenant. 
Landlord acknowledges and agrees that, so long as (x) GTSI is the Tenant
hereunder, and (y) GTSI utilizes the Premises for sales, marketing or training
purposes or for its executive offices, Landlord may not (i) lease space recaptured
pursuant to the foregoing clause 12(B)(2)(iii) or the following Section
12(B)(3) to any direct competitor of GTSI on the then current Competitor List
or (ii) permit any direct competitor of GTSI on the then current Competitor
List to use any portion of the Premises.  For purposes of this Section 12(B)(2) and
Section 12(E), (i) the term “GTSI” shall include Government Technology
Services, Inc. and any organization successor thereto by means of merger,
consolidation or reorganization, and (ii) the terms “direct competitor” and “direct
competitors” shall mean business operations that have been identified by Tenant
in writing on the most recent Competitor List as direct competitors in
accordance with the foregoing provisions, which operations engage in the resale
of computers to the United States government (it being understood that computer
manufacturers, and any division of any company which otherwise qualifies as a
direct competitor of GTSI but the division of which is to be located within the
recaptured space does not engage in the resale of computers to the United
States government, shall not be prohibited by the preceding provisions of this
Section 12(B)(2)).


 


(3)                                  Tenant
shall additionally have the right to deliver to Landlord advance written notice
(each an “Intent Notice”) of Tenant’s intent to assign or sublease before
Tenant identifies the proposed assignee or sublessee.  Each Intent Notice shall include the terms
and conditions upon which Tenant proposes to assign or sublease.  Landlord may exercise its recapture right
pursuant to the foregoing Section 12(B)(2)(iii), with


 


29





















 


respect to the space
Tenant intends to sublet or assign as identified in Tenant’s Intent Notice,
within twenty-one (21) days after delivery of Tenant’s Intent Notice, but if
Landlord fails to exercise such right within such 21-day period, Landlord shall
have no right to exercise such recapture right, with respect to any proposed
assignment or sublet of the space identified in Tenant’s Intent Notice on the
terms and conditions described in such Intent Notice, during the sixty (60) day
period following the expiration of such 21-day recapture period (or any earlier
date on which Landlord notifies Tenant that it will not exercise its recapture
right at that time).


 


(C)           Each sublease and/or assignment is
also subject to all of the following terms and conditions:


 


(1)                                  Tenant
shall pay to Landlord as Additional Rent fifty percent (50%) of the amount (the
“sublet profit”), if any, by which the rent (net of any rent abatements), any
additional rent and any other sums paid by the assignee or subtenant to Tenant
under such assignment or sublease (after deducting therefrom the reasonable out-of-pocket
costs incurred by Tenant in the subject transaction, including, but not limited
to, brokerage commissions, hard and soft construction expenses, tenant
concessions (exclusive of non-cash concessions, such as free rent), and
reasonable legal fees) exceeds the total of (i) the Rent plus (ii) any Additional
Rent payable by Tenant hereunder, which is allocable to the portion of the
Premises and/or the Lease Term which is the subject of such assignment or
sublease.  The foregoing payments shall
be made on a monthly basis by Tenant in each month in which a sublet profit is
received.  In the event that Tenant
receives any consideration in connection with a merger, consolidation,
reorganization of Tenant, or in connection with a sale of all or substantially
all of Tenant’s assets or stock, then the provisions of this Section 12(c)(1)
shall not be applicable to such consideration.


 


(2)                                  No
consent to any assignment or sublease shall constitute a further waiver of the
provisions of this Section, and all subsequent assignments or subleases may be
made only upon the terms and conditions of this Section 12 and, where required,
with the prior written consent of Landlord in accordance herewith.  In no event shall any consent by Landlord be
construed to permit reassignment or resubletting by a permitted assignee or sublessee.


 


(3)                                  No
sublease or assignment by Tenant shall relieve Tenant of any liability
hereunder.


 


 


30





















 


(4)                                  Any
assignment or sublease made without Landlord’s prior written consent (if such
consent is required) shall be void, and shall, at the option of the Landlord,
constitute an Event of Default under this Lease.


 


(5)                                  No
assignment or sublease shall be granted for any term which extends beyond the
Lease Term.


 


(6)                                  Tenant
shall reimburse Landlord upon demand for all reasonable costs, expenses and
fees incurred by or on behalf of Landlord in connection with any proposed assignment
or sublease by Tenant (including, but not limited to, Landlord’s reasonable
attorneys fees and out-of-pocket expenses, if any), up to a maximum of One
Thousand Five Hundred Dollars ($1,500.00) per proposed Transfer.


 


(D)                               The
following events also constitute an “Assignment” which is subject to the terms
of this Section and for which Landlord’s prior written consent is
required:  (i) if Tenant is a corporation
and any part or all of Tenant’s shares of stock, or the shares of stock or
other ownership interests of any corporation or other entity owning shares of
Tenant’s stock, shall in any one or more instances be issued, or transferred by
sale, assignment, conveyance, operation of law (including, but not limited to,
transfer as a result of or in conjunction with any merger, reorganization or
recapitalization) or other disposition, or otherwise changed, so as to result
in less than fifty-one (51%) of such shares, or other ownership interests, or
less than fifty-one percent (51%) of any class of such shares or other
ownership interests, being owned by the present (i.e., as of the date
hereof) owners thereof; (ii) if Tenant is a partnership and any general
partnership interest(s), or the stock or other ownership interests of any
corporation or other entity owning any such general partnership interests(s),
in the partnership shall in any one or more instances be issued, or transferred
by sale, assignment, conveyance, operation of law (including, but not limited
to, transfer as a result of or in conjunction with any merger, reorganization
or recapitalization) or other disposition, or otherwise changed, so as to
result in less than fifty-one percent (51%) of such general partnership
interests(s), stock (or any class of such stock) or other ownership interests
being owned by the present (i.e., as of the date hereof) owners thereof;
(iii) if Tenant is a limited liability company or any other type of entity, and
any interest(s) of any member or other equity owner, or the ownership interests
of any entity owning any membership interest(s) or other equity interest in the
Tenant, shall in any one or more instances be issued, or transferred by sale,
assignment, conveyance, operation of law (including, but not


 


31





















 


limited to, transfer as a
result of or in conjunction with any merger, reorganization or
recapitalization) or other disposition, or otherwise changed, so as to result
in less than fifty-one percent (51%) of such membership interests or other such
equity and/or ownership interests being owned by the present (i.e., as
of the date hereof) owners thereof; or (iv) if effective control of the
corporation, partnership, limited liability company or other form of Tenant
shall be taken from those exercising such control as of the date hereof.  Notwithstanding anything herein contained to
the contrary, this Section 12(D) shall not be deemed to apply to Tenant if Tenant
is a corporation the shares of which are traded on a nationally-recognized
exchange and which is required to make public disclosures regarding ownership
and financial condition.


 


(E)                                 Notwithstanding
any other provision of this Lease to the contrary, GTSI (as defined in Section
12(B)(2)), while it is the Tenant and no Event of Default is in existence
hereunder, shall have the right to (1) assign this Lease or to sublet all or
any portion of the Premises, in either case without the consent of Landlord, to
any successor to GTSI by merger, consolidation or reorganization, and to any
affiliate that is wholly-owned by or under common ownership with GTSI (as part
of a single group of interlocking companies), or to any wholly-owned and
controlled division or sub-entity of GTSI, or (2) sublet up to twenty percent
(20%) of the Premises in the aggregate (collectively, the “Permitted
Sublettings”) without the consent of Landlord, subject to the satisfaction of
the following conditions: (a) the proposed assignee or sublessee (the “Transferee”)
and its business shall be of a type and quality suitable for a building of
comparable quality and type, (b) the proposed Transferee shall not be a
governmental or quasi-governmental authority, a foreign government or international
agency or other organization entitled to sovereign or other immunity, (c) the
proposed operations of the proposed assignee or subtenant will not materially
and adversely interfere with the ability of other tenants of the Building to
utilize their premises for the Comparable Uses, (d) GTSI shall notify Landlord
not less than ten (10) days in advance of the effective date of such assignment
or sublease of GTSI’s intent to enter into such assignment or sublease (failing
which, Landlord shall be entitled, and GTSI shall pay to Landlord as liquidated
damages, the sum of Five Hundred Dollars ($500.00) for each failure to so
notify Landlord), (e) occupancy of the Premises by such Transferee will not
violate existing law, (f) there will be no use of the Premises in violation of
the terms hereof, (g) with respect to an assignment, such Transferee shall
expressly assume all of the obligations of the Tenant hereunder on a form
reasonably acceptable to Landlord, and (h) no such assignment or subletting
shall relieve GTSI of any agreement, covenant, duty, liability or obligation


 


32





















 


hereunder.  Landlord acknowledges and agrees that
Landlord’s right to recapture pursuant to this Section 12 shall not apply to
any assignment or sublease to any successor to GTSI by merger, consolidation or
reorganization, or to affiliate that is wholly-owned by or under common
ownership with GTSI (as part of a single group of interlocking companies), or
to any wholly-owned and controlled division or sub-entity of GTSI, which may be
made without Landlord’s consent under the terms hereof, nor to the Permitted
Sublettings.


 


(F)                                 Tenant
hereby assigns to the Landlord absolutely the rent due from each assignee and
subtenant and Tenant hereby authorizes each such assignee and subtenant to pay
said rent directly to Landlord for credit, as and when collected by the
Landlord (and net of the Landlord’s reasonable collection costs), against the
Rent and Additional Rent payable hereunder; provided that, for all periods in
which no Event of Default shall be in existence hereunder, Landlord shall
permit Tenant to continue to collect the rent from such assignees and
subtenants.


 


13.           CARE OF
PREMISES.


 


Except to the extent the
obligation of Landlord pursuant to the express terms hereof, Tenant covenants
and agrees that during the Lease Term it will keep the Premises and every part
thereof in good order, condition and repair (subject to reasonable wear and
tear, and damage by fire or other casualty which is not Tenant’s obligation to
repair), and that it will in all respects and at all times duly comply with all
applicable laws, and all covenants, conditions and restrictions applicable to
the Property.


 


14.           ALTERATION
BY TENANT.


 


(A)                              Tenant
is hereby given the right, at its sole cost and expense, at any time during the
Lease Term, to make non-structural alterations or improvements to the interior
of the Improvements which Tenant deems necessary or desirable for its purposes;
provided, however, that no alterations or improvements shall be made without
the prior written approval of Landlord, which written approval shall not be
unreasonably withheld, conditioned or delayed so long as the proposed
alterations do not affect the structure of the Property or the systems serving
the same, do not require any alterations to be made to portions of the Property
outside the Premises, and will not materially and adversely interfere with the
ability of other tenants of the Building to utilize their premises for the
Comparable Uses.  Landlord’s approval of
any plans, specifications or work drawings shall create no responsibility or
liability on the part of the Landlord for their completeness, design
sufficiency or compliance with any laws, rules and regulations of governmental
agencies or authorities.  Notwithstanding
the foregoing, Landlord’s consent shall not


 


33





















 


be required for purely
cosmetic decorations nor for non-structural alterations costing less than
Twenty-Five Thousand Dollars ($25,000.00) in the aggregate, so long as (1)
Tenant notifies Landlord of its intent to carry out such alterations at least
ten (10) days in advance, (2) the proposed alterations do not affect the
structure of the Property or the systems serving the same, do not require any
alterations to be made to portions of the Property outside the Premises, do not
require the issuance of a building permit, and will not adversely affect any
other tenant or occupant of the Property, and (3) Tenant provides Landlord with
reasonable assurances against the attachment of any mechanics’ or materialmen’s
liens to the Property.  Landlord agrees
to respond to any request for consent to any alteration costing less than Fifty
Thousand Dollars ($50,000) within five (5) business days after delivery to
Landlord of Tenant’s request for consent accompanied by detailed plans and
specifications for the proposed alteration.


 


(B)                                All
work herein permitted shall be done and completed by the Tenant in a good and
workmanlike manner and in compliance with all requirements of law and of
governmental rules and regulations. 
Tenant agrees to and does hereby indemnify the Landlord against all
mechanics’ or other liens arising out of any of such work, and also against any
and all costs, damages, injury, claims, liabilities or expenses which arise out
of any such work.  The Landlord agrees to
join with the Tenant in applying for all permits necessary to be secured from
governmental authorities and to promptly execute such consents as such
authorities may reasonably require in connection with any of the foregoing
work.


 


(C)                                Upon
written notice to Tenant within ninety (90) days after expiration of the Lease
Term, Landlord may require that Tenant remove, at Tenant’s sole cost and
expense, any or all alterations, improvements or additions to the Improvements,
and restore the Improvements to their prior condition.  Notwithstanding the foregoing, Landlord shall
have no right to require removal of the Tenant Work, or any subsequent alteration,
addition, improvement or modification in or to the Premises for which Landlord’s
consent is required, unless Landlord expressly reserves (in writing) the right
to require such removal at the time Landlord’s consent to the plans and
specifications therefor is given.  Unless
Landlord requires their removal in accordance with the foregoing, all alterations,
additions and improvements which may be made on the Improvements (other than
video/surveillance equipment installed by or on behalf of Tenant at Tenant’s
expense, exclusive of the Tenant’s Allowance) shall become the property of
Landlord and remain upon and be surrendered with the Improvements.  Tenant shall also repair any damage to the
Improvements or Tenant Work caused by the installation or removal of Tenant’s
trade fixtures, furnishings and


 


34





















 


equipment, or any alterations or other improvements
made to the Improvements or Tenant Work by or on behalf of Tenant.


 


15.           CONDEMNATION.


 


(A)                               If
the Premises shall be wholly taken by exercise of right of eminent domain, then
this Lease shall terminate from the day the possession of the whole of the
Premises shall be required under the exercise of such power of eminent domain.  Any award for the taking of all or part of the
Premises under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of the Landlord.  Tenant reserves such separate rights as it may
have against the condemning authority to claim damages for loss of its trade
fixtures and the cost of removal and relocation expense, provided such Tenant
rights do not, in any way, diminish the award to which Landlord would otherwise
be entitled or reduce the amounts payable to Landlord pursuant to this
subsection.


 


(B)                                 If
such part of the Improvements shall be condemned so as to substantially and materially
hamper the operation of Tenant’s business, then the Rent and Additional Rent
payable hereunder shall be reduced in the proportion that the remaining area of
the Improvements bears to the original area of the Improvements.


 


16.           SUBORDINATION.


 


(A)                              Provided
that (i) Landlord enters into a mortgage which encumbers all or any portion of
the Property, and (ii) Landlord’s mortgagee shall have executed and delivered
to Tenant a written subordination, attornment and non-disturbance agreement
meeting the criteria set forth in Section 16(B) (the “Approved Agreement”), (x)
this Lease shall be subject and subordinate to the lien of such mortgage (and
to any and all advances made thereunder) ; however, Landlord’s mortgagee shall
have the right, without Tenant’s consent, to require this Lease be superior to
any such mortgage, and (y) Tenant agrees to execute such Approved Agreement.  Notwithstanding anything herein to the
contrary, if Principal Mutual Life Insurance Company (“PMLIC”) or any party
that is related to or affiliated with PMLIC is the mortgagee, the form of the
subordination and non-disturbance agreement that will be entered into shall be
the form that is attached hereto as Exhibit G.


 


	
   

  	
  (B)

  	
  (1)

  	
  The subordination of this Lease to any mortgage
  shall be conditioned upon Landlord obtaining from the holder of such mortgage
  a commercially reasonable form of written non-disturbance agreement which
  provides (A) in the event of a foreclosure or other action taken under the
  mortgage by the holder thereof, this Lease and the rights of Tenant hereunder
  shall not be 

  



 


35





















 


	
   

  	
   

  	
   

  	
  disturbed but shall continue in full force and
  effect so long as Tenant shall not be in default hereunder beyond the
  applicable notice and cure period (if any), and (B) such holder will agree
  that in the event it shall be in possession of the Premises, that so long as
  Tenant shall observe and perform all of the obligations of Tenant to be
  performed pursuant to this Lease (subject to applicable notice and cure
  rights), such Mortgagee will perform all obligations of Landlord required to
  be performed under this Lease.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  Tenant hereby acknowledges that it has been informed
  that Principal Mutual Life Insurance Company currently is the beneficiary of
  a deed of trust which encumbers the Land.  Tenant further acknowledges and agrees that
  the form of subordination, non-disturbance and attornment agreement attached
  hereto as Exhibit G (the “Approved SNDA”) constitutes a commercially
  reasonable form of non-disturbance agreement.  Landlord hereby agrees that, if Principal
  Mutual Life Insurance Company fails to execute and deliver the Approved SNDA
  to Tenant within five (5) days after Landlord and Tenant execute and deliver
  this Lease, Tenant may deliver to Landlord a five (5) day written notice of
  termination (the “SNDA Termination Notice”) within ten (10) days after the
  expiration of the first 5-day period.  Provided
  the Tenant’s SNDA Termination Notice is timely delivered, and further
  provided that such SNDA Termination Notice shall state, inter  alia,
  that the failure by Principal Mutual Life Insurance Company to execute and
  deliver the Approved SNDA within five (5) days after delivery of the SNDA
  Termination Notice will result in a termination of this Lease, if Principal
  Mutual Life Insurance Company fails to execute and deliver the Approved SNDA
  to Tenant within five (5) days after delivery of the SNDA Termination Notice
  this Lease shall cease and terminate without payment of penalty or compensation
  as if the fifth (5th) day after the date on which Tenant’s SNDA Termination
  Notice is delivered to Landlord was the Expiration Date, and Landlord shall
  return to Tenant any Security Deposit and any prepaid Rent,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

  	
  Tenant hereby acknowledges that it has been informed
  that Landlord intends to obtain a construction loan to finance the
  construction of the Improvements and/or the Tenant Work from a third-party
  construction lender (the “Construction Lender”).  Landlord hereby agrees that, if the Construction
  Lender fails to execute and deliver to Tenant a commercially reasonable form
  of non-disturbance agreement (a “Construction SNDA”, which form shall
  provide, inter  alia, that if the Construction Lender forecloses
  upon the Property or accepts a deed to the Property in lieu of foreclosure, 

  



 


36





















 


	
   

  	
   

  	
   

  	
  the Construction Lender will, subject to the
  provisions of Section 38 below, diligently pursue completion of the
  construction of the Improvements and the Tenant Work beginning upon the
  Construction Lender’s obtaining possession of the Property, provided that (i)
  Tenant attorns to the Construction Lender as substitute landlord, (ii) Tenant
  agrees not to terminate this Lease, provided that, subject to the provisions
  of Section 38 below, the Construction Lender is diligently pursuing
  completion of the work to be performed by Landlord under Exhibit B, and (iii)
  Tenant is not in default beyond the expiration of any applicable cure period,
  on or before August 1, 1998, Tenant may deliver to Landlord a five (5) day
  written notice of termination (the “Construction SNDA Termination Notice”) on
  or before August 11, 1998.  Provided
  the Tenant’s Construction SNDA Termination Notice is timely delivered, and
  further provided that such Construction SNDA Termination Notice shall state, inter
  alia, that the failure by the Construction Lender to execute and
  deliver the Construction SNDA within five (5) days after delivery of the
  Construction SNDA Termination Notice will result in a termination of this
  Lease, if the Construction Lender fails to execute and deliver the
  Construction SNDA to Tenant within five (5) days after delivery of the
  Construction SNDA Termination Notice this Lease shall cease and terminate
  without payment of penalty or compensation as if the fifth (5th) day after
  the date on which Tenant’s Construction SNDA Termination Notice is delivered
  to Landlord was the Expiration Date, and Landlord shall return to Tenant any
  Security Deposit and any prepaid Rent.

  



 


(C)                                In
the event any proceedings are brought for foreclosure, or in the event of the
exercise of the power of sale under any mortgage made by the Landlord covering
the Premises, Tenant shall attorn to the purchaser at any such foreclosure, or
to the grantee of a deed in lieu of foreclosure, and recognize such purchaser
or grantee as the Landlord under this Lease.


 


(D)                               Tenant
hereby agrees that no mortgagee or its successor shall be (i) bound by any
payment of Rent or Additional Rent for more than one (1) month in advance, (ii)
bound by any amendment or modification of this Lease made without the consent
of Landlord’s mortgagee or its successor (which consent, if PMLIC is the
mortgagee, shall not be unreasonably withheld, conditioned or delayed), (iii)
liable for damages for any breach, act or omission of any prior landlord, (iv)
bound to effect or pay for any construction for Tenant’s occupancy (it being
understood and agreed that such mortgagee or its successor shall be obligated
to perform the initial construction of the Improvements in accordance with the
provisions of Exhibit B to the extent


 


37





















 


not previously completed), or (v) subject to any claim
of offset or defenses that Tenant may have against any prior landlord.  Notwithstanding anything herein contained to
the contrary, (x) the foregoing clause (iv) shall not apply to Principal Mutual
Life Insurance Company or its wholly-owned subsidiaries or to any Construction
Lender, and (y) with respect to any mortgage, secured in whole or part by the
Property, under which PMLIC or any of its wholly-owned subsidiaries is the
mortgagee or beneficiary, the disposition of any casualty proceeds and
condemnation awards shall, in the first instance, be controlled by the terms of
this Lease and not such lender’s loan documents, and such lender will be
obligated to return the Security Deposit, whether or not received by such
lender.  Upon Tenant’s written request,
Landlord agrees to exercise reasonable efforts (the same not to include
refinancing, payment of money or posting of security by Landlord) to obtain the
agreement of any future mortgagee (other than Principal Mutual Life Insurance
Company or its wholly-owned subsidiaries or any Construction Lender) to include
in its non-disturbance agreement such mortgagee’s agreement that (a) clause
(iv) of this Section 16(D) will be inapplicable, (b)the disposition of any
casualty proceeds and condemnation awards shall, in the first instance, be controlled
by the terms of this Lease and not such lender’s loan documents, and (c) the
lender will be obligated to return the Security Deposit, whether or not
received by such lender, but the refusal of any such future mortgagee to agree
to such provisions shall not entitle Tenant to refuse to execute a commercially
reasonable form of written non-disturbance agreement which complies with
Section 16(B).


 


(E)                                 The
word “mortgage” as used herein includes mortgages, deeds of trust and any
sale-leaseback transactions, or other similar instruments, and modifications,
extensions, renewals, and replacements thereof, and any and all advances
thereunder.


 


17.                                 ACCESS TO PREMISES.


 


Landlord and its authorized agents shall have access
to the Premises, upon forty-eight (48) hours’ notice (but without notice in the
event of an emergency) at any and all reasonable times to inspect the same, to
make any repair or alteration to the Premises, to exhibit and show the Premises
to prospective tenants during the last three hundred fifteen (315) days of the
Lease Term, and for other purposes pertaining to the rights of the Landlord.  Tenant may require an authorized
representative of Tenant accompany any entry into the Premises, provided Tenant
makes such representative available upon reasonable prior notice.  Tenant shall also have the right to restrict
access to secure areas, so long as (i) Tenant accepts all responsibility and
liability arising from Landlord’s inability to access such areas, and (ii) a
senior employee of Landlord or Landlord’s managing


 


38





















 


agent is provided access to such secure area upon 48-hours’
notice for purposes of verifying the condition and use thereof.  In exercising Landlord’s rights under this
Section 17, Landlord agrees to exercise commercially reasonable efforts to
avoid any unreasonable interference with the operation of Tenant’s business in
the Premises.


 


18.                                 RULES AND REGULATIONS.


 


Tenant agrees to comply with the current rules and
regulations set forth in the attached Exhibit D and made a part hereof by
reference.  Tenant further agrees to
comply with future rules and regulations promulgated by Landlord concerning the
Premises, to the extent (i) such future rules and regulations do not increase
Tenant’s obligations or decrease Tenant’s rights hereunder, (ii) such future
rules and regulations are not in conflict with the express terms of this Lease,
and (iii) such future rules and regulations are imposed on all comparable
tenants in Avion® Business Park.


 


19.                                 COVENANTS OF RIGHT TO LEASE.


 


Landlord covenants that it owns the fee interest in
the Land subject to existing covenants, conditions and restrictions of record,
that it has good and sufficient right to enter into this Lease, subject to
approval from Landlord’s mortgagee, and that Landlord alone has the right to
lease the Premises for the Lease Term. 
Tenant acknowledges that Landlord has provided to Tenant a current title
report for the Land (the “Title Report”) prior to the date hereof, and Landlord
represents that, to the best of Landlord’s actual knowledge as of the date
hereof, Landlord has not entered into any proffers with respect to the Land
that are binding upon the Land or the occupants thereof which either are not
disclosed on the Title Report or have not been disclosed in writing to Tenant
prior to the date hereof.  Landlord
further covenants that upon Tenant performing the terms and obligations of
Tenant under this Lease, Tenant shall be entitled to have quiet enjoyment of
the Premises and the Property throughout the Lease Term and any renewal or
extension thereof, without hindrance or molestation by Landlord or anyone
lawfully claiming by, through or under Landlord, subject to the terms of this
Lease; provided that, nothing herein contained shall be deemed to constitute a
guaranty that neighboring tenants will not utilize portions of Tenant’s
parking, but, subject to the provisions of Section 36 below, Landlord agrees to
consult with Tenant on measures to assure Tenant of the parking it
requires.  Subject to the terms hereof,
Tenant shall be entitled to use, and will have access to, the Premises three
hundred sixty-five (365) days per year, twenty-four (24) hours per day.


 


20.                                 MECHANICS LIENS.


 


Neither Tenant nor anyone claiming by, through, or
under Tenant or this Lease, shall have the right to file or place any mechanics


 


39





















 


lien or other lien of any kind or character whatsoever
upon the Premises or upon any improvement thereon, or upon the leasehold
interest of Tenant therein.  Notice is hereby
given that no contractor, subcontractor, or anyone else who may furnish any
material, service or labor for any Property improvements, alteration, repairs
or any part thereof, shall at any time be or become entitled to any lien
thereon.  For the further security of
Landlord, Tenant covenants and agrees to give actual notice thereof in advance
to any and all contractors and subcontractors who may furnish or agree to
furnish any such material, service or labor. 
Tenant shall cause any such lien imposed to be released of record by
payment or posting of the proper bond reasonably acceptable to Landlord within
ten (10) days after the earlier of imposition of the lien or written request by
Landlord.  If Tenant fails to remove any
lien within the ten (10) day period, then Landlord, upon ten (10) days prior
notice to Tenant, may do so at Tenant’s expense and Tenant’s reimbursement to
Landlord for such amount, including, but not limited to, reasonable attorneys
fees and costs, shall be deemed Additional Rent.


 


21.           EXPIRATION OF LEASE AND SURRENDER OF
POSSESSION.


 


(A)                              Holding
Over.  Tenant will, at the expiration or
termination of this Lease by lapse of time or otherwise, yield up immediate
possession of the Premises to Landlord in the condition required under this Lease.  If Tenant retains possession of the Premises
or any part thereof after such expiration or termination, then Landlord may, at
its option, serve written notice upon Tenant that such holding over constitutes
(i) creation of a month-to-month tenancy, upon the terms and conditions set
forth in this Lease, or (ii) creation of a tenancy at sufferance, upon the
terms and conditions set forth in this Lease; provided, however, that the
monthly Rent (or daily Rent under (ii)) shall, in addition to all other sums
which are to be paid by Tenant hereunder, be equal to one hundred ten percent
(110%) of the sum of Rent plus Additional Rent owed monthly to Landlord under
this Lease immediately prior to such expiration or termination (prorated in the
case of (ii) on the basis of a 365 day year for each day Tenant remains in
possession); provided further that, if Landlord shall institute any action,
case or suit to recover possession of the Premises (whether styled as an
unlawful detainer action or otherwise), the monthly Rent (or daily Rent under
(ii)) payable pursuant to the preceding sentence shall increase, effective as
of the date on which such action, case or suit is filed with the court, to one
hundred fifty percent (150%) of the sum of Rent plus Additional Rent owed
monthly to Landlord under this Lease immediately prior to such expiration or
termination (prorated in the case of (ii) on the basis of a 365 day year for
each day Tenant remains in possession). 
If no such notice is served, then a tenancy at sufferance shall be
deemed to be created at the Rent in the preceding sentence.  Tenant shall also pay to Landlord as


 


40





















 


Additional Rent all damages sustained by Landlord
resulting from retention of possession by Tenant, including the loss of any
proposed subsequent tenant for any portion of the Premises,  The provisions of this Section shall not
constitute a waiver by Landlord of any right of re-entry as herein set forth;
nor shall receipt of any Rent or any other act in apparent affirmance of the
tenancy operate as a waiver of Landlord’s right to terminate this Lease for a
breach of any of the terms, covenants, or obligations herein on Tenant’s part
to be performed.


 


(B)                                Subject
to Section 14(C) and the following Section 21(C), upon the expiration of this
Lease, by lapse of time or otherwise, any and all buildings, improvements or
additions erected on the Premises by Tenant shall, at the option of Landlord,
be and become the property of the Landlord without any payment therefor and
Tenant shall, at the option of Landlord, surrender said Premises, together with
all buildings, improvements or additions thereon, whether erected by Tenant or
Landlord, ordinary wear and tear excepted.


 


(C)                                Tenant
may install in the Premises adequate furnishings, furniture, equipment
(including, but not limited to, security cameras on the exterior of the
Building), fixtures, machinery and other personal property for the operation of
its business (collectively, “Tenant’s Property”), and upon the expiration or
termination of this Lease by lapse of time or otherwise, Tenant shall remove
Tenant’s Property at Tenant’s sole cost. 
Upon removal of Tenant’s Property, Tenant shall repair any damage to the
Premises caused by the installation or removal thereof at Tenant’s sole cost.


 


22.                                 DEFAULT-REMEDIES.


 


(A)                              The
occurrence of one or more of the following events shall constitute a material
default and breach of this Lease by Tenant (“Event of Default”):


 


(1)                                  Failure
by Tenant to make payment of any Rent, Additional Rent, or any other payment
required to be made by Tenant hereunder, as and when due, and such a failure
shall continue for a period of five (5) business days after written notice of
such failure from Landlord; provided that, if two (2) such notices have been
delivered within the twelve (12) months immediately preceding any failure to
make any payment when and as due, such failure shall, without notice or demand,
be deemed an Event of Default;


 


(2)                                  The
making by Tenant (or any guarantor) of any assignment or arrangement for the
benefit of creditors;


 


41





















 


(3)                                  The
levying of an attachment, execution of other judicial seizure upon the Tenant’s
property in or interest under this Lease, which is not satisfied or released or
the enforcement thereof superseded by an appropriate proceeding within sixty
(60) days thereafter;


 


(4)                                  The
appointment of a receiver or trustee to take possession of the property of
Tenant (or any guarantor) or of Tenant’s (or any guarantor’s) business or
assets and the order or decree appointing such receiver or trustee shall have
remained in force undischarged for sixty (60) days after the entry of such
order or decree;


 


(5)                                  The
vacating or abandonment of the Premises, unless (i) Tenant notifies Landlord of
its intent to vacate or abandon not less than ten (10) days in advance thereof,
(ii) Tenant obtains and maintains all necessary endorsements to ensure that
Tenant’s insurance shall remain in effect with regard to the Premises, notwithstanding
such vacating or abandonment of the Premises, and (iii) Tenant takes all
necessary steps to ensure there will be no unauthorized access to the Premises
during the period of any such vacancy or abandonment;


 


(6)                                  The
failure by Tenant to maintain any insurance required herein, which failure
continues for more than two (2) business days after written notice from Landlord
advising Tenant of such failure;


 


(7)                                  An
assignment, subletting, pledge, mortgage, or other transfer of this Lease or
the Premises by Tenant, or any transfer of any interest in the Tenant, in violation
of Section 12 of this Lease; and/or


 


(8)                                  The
failure by Tenant to perform or observe any other term, covenant, agreement or
condition to be performed or kept by the Tenant under the terms, conditions, or
provisions of this Lease, which failure is not cured within ten (10) days after
written notice thereof from Landlord (or such longer time as may be reasonably required
to cure such failure through the exercise of due diligence, unless (i) such
failure is a willful repudiation of the Lease authorized by Tenant’s Board of
Directors, (ii) such failure cannot, based on objective evidence, be cured,
(iii) such failure relates to the existence of a generally-recognized, imminent
danger to the health or safety of occupants of the Premises due to a hazardous
condition on the Premises, or (iv) such failure subjects Landlord to criminal
prosecution).


 


42





















 


 


(B)                                If
an Event of Default shall have occurred, Landlord shall have (in addition to
all other rights and remedies provided by law or otherwise provided by this
Lease) the right, at the option of the Landlord, then or at any time thereafter
while such Event of Default shall continue, to elect any one or more of the
following:


 


(1)                                  To
continue this Lease in full force and effect (so long as  Landlord does not terminate this Lease),
and Landlord shall have the right to collect Rent, Additional Rent and other
charges when due for the remainder of the Lease Term; and/or


 


(2)                                  To
cure such default or defaults at its own expense and without prejudice to any
other remedies which it might otherwise have; and any reasonable payment made
or reasonable expenses incurred by Landlord in curing such default, with interest
thereon at the Default Rate (as hereafter defined), to be and become Additional
Rent to be paid by Tenant with the next installment of Rent falling due
thereafter (but in no event earlier than fifteen (15) days, nor later than
thirty (30) days, after the date on which Landlord invoices Tenant for the
same); and/or


 


(3)                                  To
re-enter the Premises in accordance with applicable law, and dispossess Tenant
and anyone claiming through or under Tenant by summary proceedings or
otherwise, and remove their effects, and take complete possession of the
Premises and either (a) declare this Lease terminated and the Lease Term ended,
or (b) elect to continue this Lease in full force and effect, but with the
right at any time thereafter that such Event of Default remains uncured to
declare this Lease terminated and the Lease Term ended.  In such re-entry, Landlord may, as permitted
by applicable law, remove all persons from the Premises, and Tenant hereby
covenants in such event, for itself and all others occupying the Premises under
Tenant, to peacefully yield up and surrender the Premises to Landlord.  If Landlord elects to terminate this Lease
and/or elects to terminate Tenant’s right of possession, every obligation of
Landlord contained in this Lease shall, upon entry of a final, non-appealable
judgment terminating this Lease or Landlord’s reentry onto the Premises in
accordance with applicable law, cease without prejudice to Tenant’s liability
for all Rent, Additional Rent, and other sums owed by Tenant herein.


 


Should Landlord declare this Lease terminated and the
Lease Term ended (pursuant to Section 22(B)(3)(a) above), the Landlord shall be
entitled to recover from Tenant the Rent, Additional Rent, and all other sums
due and owing by Tenant


 


43





















 


to the date of termination, plus the reasonable costs
of curing all Tenant’s defaults existing at or prior to the date of
termination, plus the reasonable costs of recovering possession of the
Premises, plus the reasonable costs of reletting the Premises including, but
not limited to repairs to the Premises, costs to prepare and refinish the
Premises for reletting, leasing commissions, rental concessions, and legal fees
and costs, plus other actual damages suffered or incurred by Landlord due to
all Events of Default and any late fees or other charges incurred by Landlord
under any mortgage, plus the deficiency, if any, between Tenant’s Rent and
Additional Rent for the balance of the Lease Term and the rent obtained by
Landlord under another lease for the Premises, for the balance of the Lease
Term remaining under this Lease on the date of termination.


 


Should Landlord elect to continue this Lease (pursuant
to Section 22(B)(3)(b) above), Landlord shall be entitled to recover from Tenant
the Rent, Additional Rent and all other sums due and owing by Tenant up to the
date of dispossession, plus the reasonable costs of curing all Events of
Default existing at or prior to the date of dispossession, plus the Rent,
Additional Rent and all other sums owed by Tenant on a continuing basis as said
amounts accrue to the end of the Lease Term, less the rental which Landlord
receives during such period, if any, from others to whom the Premises may be
relet, plus the reasonable cost of recovering possession of the Premises, plus
the reasonable costs of reletting including, but not limited to repairs to the
Premises, costs to prepare and refinish the Premises for reletting, leasing
commissions, rental concessions, and legal fees and costs.  Any suit brought by Landlord to enforce
collection of such deficiency for any one month shall not prejudice Landlord’s
right to enforce the collection of any deficiency for any subsequent month in
subsequent separate actions, or Landlord may defer initiating any such suit
until after the expiration of the Lease Term (in which event such deferral
shall not be construed as a waiver of Landlord’s rights as set forth herein and
Landlord’s cause of action shall be deemed not to have accrued until the
expiration of the Lease Term), and it being further understood that if Landlord
elects to bring suits from time to time prior to reletting the Premises,
Landlord shall be entitled to its full damages through the date of the award of
damages without regard to any rent, additional rent or other sums that are or
may be projected to be received by Landlord upon a subsequent reletting of the
Premises.  In the event that Landlord
relets the Premises together with other premises or for a term extending beyond
the scheduled expiration of the Lease Term, it is understood that Tenant will
not be entitled to apply against Landlord’s damages any rent, additional rent
or other sums generated or projected to be generated by either such other
premises or the period extending beyond the


 


44





















 


scheduled expiration of the Lease Term.  Landlord shall use commercially reasonable
efforts to relet and rent the Premises with or without advertising for the
remainder of the Lease Term, or for such longer or shorter period as Landlord
shall deem advisable.


 


In lieu of the amounts recoverable by Landlord
pursuant to the two immediately preceding paragraphs, but in addition to other
remedies and amounts otherwise recoverable by Landlord in this Lease, Landlord may,
at its sole election, (i) terminate this Lease, (ii) collect all Rent,
Additional Rent, and other sums due and owing by Tenant up to the date of
termination, and (iii) provided Landlord terminates Tenant’s right to
possession of the Premises, accelerate and collect the present value of the
positive difference (if any) between (x) the sum of all Rent, Additional Rent
and all other sums required to be paid by Tenant through the remainder of the
Lease Term, and (y) the fair market rental value of the Premises for the
remainder of the Lease Term, net of a reasonable vacancy and concession
allowance determined by Landlord in its reasonable discretion (the present
value of such difference being herein referred to as the “Accelerated Rent”),
which Accelerated Rent shall be discounted to present value using an interest
rate equal to six and one-half percent (6.5%) per annum (“Present Value
Accelerated Rent”).  In the event
Landlord is successful in reletting the Premises for any part of the remainder
of the Lease Term prior to payment of the Present Value Accelerated Rent, the
fair market rental value shall be deemed to equal the rents reserved under such
reletting, and Landlord shall not be obligated to pay over the proceeds of such
reletting in whole or part.  In no event
shall Landlord be liable for, nor shall Tenant’s obligations hereunder be
diminished by reason of, any failure by Landlord to relet all or any portion of
the Premises or to collect any rent due upon such reletting.


 


(C)                                Tenant,
on its own behalf and on behalf of all persons claiming through or under
Tenant, including all creditors, does hereby specifically waive and surrender
any and all rights and privileges, so far as is permitted by law, which Tenant
and all such persons might otherwise have under any present or future law (1)
to the service of any notice to quit or of Landlord’s intention to re-enter or
to institute legal proceedings, which notice may otherwise be required to be
given, (2) to redeem the Premises, (3) to re-enter or repossess the Premises,
(4) to restore the operation of this Lease, with respect to any dispossession
of Tenant by judgment or warrant of any court or judge, or any re-entry by
Landlord, or any expiration or termination of this Lease, whether such
dispossession, re-entry, expiration or termination shall be by operation of law
or pursuant to the provisions of this Lease, or (5) which exempts property from
liability for debt or for distress for rent. 
Landlord and


 


45





















 


Tenant each hereby consents to the exercise of
personal jurisdiction over it by any federal or local court in the jurisdiction
in which the Premises is located.


 


(D)                               If
Tenant fails to take possession of the Premises upon the commencement of the
Lease Term, Landlord and Tenant acknowledge that this Lease Agreement may be
construed as a contract to or for lease, as opposed to a contract of lease.  Accordingly, Landlord and Tenant agree that,
if Tenant defaults under this Lease (beyond the applicable notice and cure
period, if any) prior to the Lease Commencement Date, or if Tenant fails to
accept possession of the Premises when tendered by Landlord (it being acknowledged
and agreed that any such failure by Tenant to accept possession of the Premises
when tendered by Landlord shall be an Event of Default hereunder, but that
Tenant shall not be required to actually occupy the Premises in order for
Tenant to accept possession thereof), Landlord shall be entitled to terminate
Tenant’s right to possession of the Premises pursuant to the Lease Agreement
and to recover from Tenant, subject to the conditions and limitations set forth
in Section 22(B), contract damages resulting from Tenant’s default and/or
failure to accept possession of the Premises in an amount equal to all of the rents
and other sums required to be paid under the Lease (as if Tenant had taken
possession of the Premises when tendered by Landlord) from the date on which
Landlord tenders possession of the Premises to Tenant until the date on which the
Premises are relet (if ever) or any earlier date on which the Lease would have
expired by its terms, plus (but without duplication) all of the damages
reserved to Landlord in Section 22(B) of this Lease (including, but not limited
to, any rent deficiency upon any reletting, costs of reletting, and court costs
and attorneys’ fees incurred to relet the Premises and/or to enforce Landlord’s
rights under the terms of this Lease).


 


(E)                                 Landlord
Default.


 


(1)                                  Subject
to the terms hereof, if (i) Landlord shall default in the performance of any
covenant or provision of this Lease pertaining to the provision of services by
Landlord or performance of repairs or maintenance on Landlord’s part to be
performed (which default shall not be occasioned by (a) the acts or omissions
of Tenant or Tenant’s agents, assignees, contractors, employees, invitees,
licensees, sublessees or others for whose actions Tenant is responsible or over
whose actions Tenant can reasonably be expected to exercise control, or (b)
circumstances, events or facts beyond Landlord’s reasonable control), (ii)
Landlord shall fail to remedy such default within ten (10) days after Tenant
shall have given Landlord written notice of such


 


46





















 


default specifying the same in detail and specifying
that the failure to cure the same within ten (10) days shall be deemed a Landlord
Default hereunder, and (iii) such default shall substantially impair Tenant’s use
and enjoyment of the Premises, then upon the expiration of such 10-day cure
period the Tenant shall (as Tenant’s sole and exclusive remedies) be entitled
to exercise the remedies set forth in this Section 22(E).  Notwithstanding the foregoing, in the event that
any such default is not reasonably susceptible of cure within such ten (10) day
cure period, such cure period shall automatically be deemed to be extended for
such additional period as shall be reasonably required to cure such default,
provided that Landlord commences such cure within such 10-day period and diligently
pursues such cure thereafter.  Any such
default on the part of Landlord which is not cured within such 10-day cure
period (as the same may be extended pursuant to the preceding sentence) shall
be deemed a “Landlord Default”.


 


(2)                                  Subject
to the terms hereof, in the event of a Landlord Default, Tenant shall, provided
that no Event of Default by Tenant is in existence hereunder, have the right
(but not the obligation) to remedy such Landlord Default and charge Landlord
for the reasonable cost of such remedy, which charges shall be payable by
Landlord within thirty (30) days of Tenant’s demand therefor; provided that,
(i) Tenant’s actions to cure any Landlord Default shall conform and comply in
all respects with the terms of this Lease (including, but not limited to, the
applicable provisions of Section 14), (ii) the charges payable by Landlord
pursuant to this Section 22(E) shall constitute Operating Expenses to the
extent the same would constitute Operating Expenses under Section 5 hereof if
incurred directly by Landlord (it being agreed, however, that any additional
incremental increase in such costs which is reasonably attributable solely to
the Landlord Default (i.e., if Landlord had performed directly it would
have been able to render performance at a lower cost) shall be excluded from
Operating Expenses), and (iii) Tenant shall have no right to remedy any
Landlord Default if (a) such remedy will or may materially and adversely
interfere with the ability of other tenants of the Building to utilize their
premises for the Comparable Uses or invalidate or impair any warranty
applicable to any portion of the Building, the Building structure or any system
serving any of the same, or (b) such Landlord Default arises from or out of, or
in connection with, any fire or other casualty damage to, or condemnation of,
the Building.


 


47





















 


(3)                                  In
the event Tenant engages in self-help as provided in subparagraph 22 (E) (2)
above and Landlord disagrees with the propriety of Tenant’s actions and/or the level
of expenses incurred by Tenant, and refuses to reimburse Tenant for its costs,
the parties agree to submit such dispute to arbitration; provided that, this
subparagraph 22(E)(3) shall not be deemed to require that Tenant refrain from
curing a Landlord Default in compliance with this Section 22(E) until such
dispute is submitted to arbitration, nor shall this subparagraph 22(E)(3) be
deemed to preclude Landlord from submitting to arbitration, after the exercise
of such remedy by Tenant, any dispute regarding the existence of a Landlord
Default or arising from the exercise of (or the costs of exercising) such
remedy by Tenant.


 


(4)                                  Notwithstanding
anything herein contained to the contrary, in the event the Building, or any part
thereof, or the land on which the Building is constructed, or the Landlord’s
estate in the Building, is at any time subject to a mortgage or deed of trust (each
a “Mortgage”), and/or (ii) this Lease, or the Rent payable under this Lease, is
assigned to a mortgagee or the trustee(s) under a deed of trust (each a “Mortgagee”),
then Tenant shall have no right to exercise any remedy under this Section 22(E)
unless and until Tenant shall first deliver written notice, in the manner
provided elsewhere in this Lease for the delivery of notices, to such
Mortgagee, specifying the Landlord Default in reasonable detail, and affording
such Mortgagee the same notice and cure period set forth above for the cure of
a Landlord Default (it being understood and agreed that no such Mortgagee shall
be obligated to cure any Landlord Default). 
Tenant further agrees to deliver to each such mortgagee or trustee a
copy of any notice delivered to Landlord pursuant to the provisions of this
Section 22(E).


 


23.                                 RE-ENTRY BY LANDLORD.


 


No re-entry by Landlord or any action brought by
Landlord to remove Tenant from the Premises shall operate to terminate this
Lease unless Landlord shall have given written notice of termination to Tenant,
in which event Tenant’s liability shall be as above provided.  Subject to the express limitations and
conditions set forth herein, no right or remedy herein granted to Landlord or
Tenant is intended to be exclusive of any other right or remedy, and each and
every right and remedy herein provided shall be cumulative and in addition to
any other right or remedy hereunder or now or hereafter existing in law or
equity or by statute.  In the event of
termination of this Lease, Tenant waives


 


48





















 


any and all rights to redeem the Premises either given
by any statute now or herein enacted.


 


24.                                 ADDITIONAL RIGHTS TO LANDLORD.


 


(A)                              In
addition to any and all other remedies, Landlord or Tenant may restrain any
threatened breach of any covenant, condition or agreement herein contained, but
except as otherwise expressly set forth herein the mention herein of any
particular remedy or right shall not preclude the Landlord or Tenant from any
other remedy or right it may have either at law or equity, or by virtue of some
other provision of this Lease; nor shall the consent to one act, which would
otherwise be a violation or waiver of or redress for one violation either of
covenant, promise, agreement, undertaking or condition, prevent a subsequent
act which would originally have constituted a violation from having all the
force and effect of any original violation.


 


(B)                                Receipt
by Landlord of Rent or other payments from the Tenant shall not be deemed to
operate as a waiver of any rights of the Landlord to enforce payment of any Rent,
Additional Rent, or other payments previously due or which may thereafter
become due, or of any rights of the Landlord to terminate this Lease or to
exercise any remedy or right which otherwise might be available to the
Landlord, the right of Landlord to declare a forfeiture for each and every breach
of this Lease is a continuing one for the life of this Lease.


 


(C)                                Intentionally
Deleted.


 


(D)                               Intentionally
Deleted.


 


25.                                 SUCCESSORS, ASSIGNS AND LIABILITY.


 


The terms, covenants, conditions and agreements herein
contained and as the same may from time to time hereafter be supplemented,
modified or amended, shall apply to, bind, and inure to the benefit of the
parties hereto and their legal representatives, successors and assigns,
respectively, subject to Section 12 hereof. 
In the event either party now or hereafter shall consist of more than
one person, firm or corporation, then and in such event all such person, firms
and/or corporations shall be jointly and severally liable as parties hereunder.


 


26.                                 NOTICES.


 


All notices and demands required to be given to either
party hereunder shall be in writing and shall be deemed to have been given upon
the earlier to occur of delivery or refusal of delivery (or inability to
deliver at the last address provided by the recipient to the sender), provided
that such notice or demand is sent by certified United States mail, postage
prepaid, return


 


49





















 


receipt requested, or by personal delivery, or by a
nationally recognized overnight delivery service which provides evidence of
delivery, delivery prepaid, addressed to the party to whom directed at the
address set forth below or at such other address as may be from time to time
designated in writing by the party changing such address.


 


	
  Landlord

  	
  Tenant

  
	
   

  	
   

  
	
  Petula Associates, Ltd.

  	
  If Prior to the Commencement

  
	
  711 High Street

  	
  Date:

  
	
  Des Moines, Iowa 50392-1370

  	
  Government Technology

  
	
  Attn: CRE Equities/Mid-Atlantic Team

  	
  4100 Lafayette Center Drive

  
	
   

  	
  Chantilly, VA 20151-1200

  
	
   

  	
   

  
	
  With a copy
  to:

  	
  With a copy to:

  
	
   

  	
   

  
	
  Trammell Crow Real Estate

  	
  Government Technology

  
	
  Services, Inc.

  	
  Services, Inc.

  
	
  1115 30th Street, N.W.

  	
  4100 Lafayette Center Drive

  
	
  Washington, D.C. 20007

  	
  Chantilly, Virginia 20151-1200

  
	
  Attn:     Property
  Manager/Avion

  	
  Attn: General Counsel

  
	
   

  	
   

  
	
   

  	
  If after the Commencement

  
	
   

  	
  Date:

  
	
   

  	
   

  
	
   

  	
  Tenant at the Premises

  
	
   

  	
  Attn: Director of Facilities

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Tenant at the Premises

  
	
   

  	
  Attn: General Counsel

  



 


27.           MORTGAGEE’S APPROVAL.


 


Tenant hereby agrees that, if Landlord’s mortgagee
shall require modifications of the terms and provisions of this Lease, Tenant
shall not unreasonably withhold, condition or delay its execution and delivery
of the agreements required to effect such Lease modification (it being
understood that any such reasonable modification(s) shall be executed and
delivered within thirty (30) days after Landlord’s request therefor).  In no event, however, shall Tenant be
required to agree to modify any provision of this Lease relating to the amount
of Rent, Additional Rent or other charges reserved herein, the size and/or
location of the Premises, the Improvements or the Lease Term, or to any
modification which would conflict with the express terms hereof, nor shall any
such modification diminish Landlord’s obligations or Tenant’s rights hereunder
or increase Tenant’s obligations hereunder.


 


50





















 


28.                                 ESTOPPEL CERTIFICATES.


 


Within fifteen (15) days after delivery of a  written request from the other party
hereto (the “Requesting Party”), the party receiving such request (the “Receiving
Party”) agrees to execute, acknowledge and deliver to the Requesting Party (or,
if Landlord is the Requesting Party, any proposed mortgagee or purchaser) a
statement in writing, in form reasonably satisfactory to the Requesting Party,
certifying whether this Lease is in full force and effect and, if it is in full
force and effect, what modifications (if any) have been made to this Lease to
the date of the certification, whether or not any defaults or offsets exist
with respect to this Lease and, if there are, what they are claimed to be, and
setting forth the date(s) to which Rent or other charges have been paid in
advance, if any.  The failure of Tenant
to execute, acknowledge, and deliver to Landlord a statement requested pursuant
to this Section 28, which failure shall continue for more than five (5) days
after a second (2nd) written
notice from Landlord (delivered not earlier than the expiration of the initial
15-day period) demanding such statement, shall constitute an acknowledgment by
Tenant that this Lease is unmodified and in full force and effect and that the
Rent and other charges have been duly and fully paid to and including the
respective due dates immediately preceding the date of Landlord’s notice to
Tenant and shall constitute as to any person, a waiver of any defaults which
may exist prior to such notice.


 


29.                                 DEFAULT RATE OF INTEREST.


 


All amounts owed by one party to the other pursuant to
any provision of this Lease shall bear interest from the date due until paid at
five percent (5%) per annum above the generally prevailing “prime rate” as
published in the “Money Rates” section of the Wall
Street Journal (Eastern Edition) on the due date of such sum (or, if
not a business day, the next business day), unless a lesser rate shall then be
the maximum rate permissible by law, in which event said lesser rate shall be
charged (“Default Rate”); provided that, interest shall not accrue on any
payment which is paid within five (5) business days after written notice that
such payment is due and payable, unless two (2) or more such notices have been
delivered to the party from whom payment is due within the twelve (12) months
immediately preceding the due date of the current payment.


 


30.                                 EXCULPATORY PROVISIONS.


 


It is expressly understood and agreed by and between
the parties hereto, anything herein to the contrary notwithstanding, that each
and all of the representations, warranties, covenants, undertakings,
indemnities and agreements herein made on the part of Landlord while in form
purporting to be the representations, warranties, covenants, undertakings,
indemnities and agreements of Landlord are nevertheless each and every one of
them made and intended, not as personal representations, warranties, covenants,


 


51





















 


undertakings, indemnities and agreements by Landlord
or for the purpose or with the intention of binding Landlord personally, but
are made and intended for the purpose only of subjecting Landlord’s interest in
the Premises to the terms of this Lease and for no other purpose whatsoever,
and in case of default hereunder by Landlord, Tenant shall look solely to the
interests of Landlord in the Property. 
Landlord shall not have any personal liability to pay any indebtedness
accruing hereunder or to perform any covenant, either express or implied,
herein contained.  All such personal
liability of Landlord, if any, is expressly waived and released by Tenant and
by all persons claiming by, through or
under Tenant.  Notwithstanding the
foregoing, this Section 30 shall be inapplicable to any judgment for monetary
damages entered against Landlord and in favor of Tenant, to the extent Tenant’s
damages were found to have been proximately caused by Landlord’s fraud or
Landlord’s misapplication of insurance proceeds or a condemnation award.


 


31.                                 MORTGAGEE PROTECTION.


 


Tenant agrees to give any holder of any first mortgage
or first trust deed in the nature of a mortgage (both hereinafter referred to
as a “First Mortgage”) against the Premises, or any interest therein, by
registered or certified mail, a copy of any notice or claim of default served
upon Landlord by Tenant, provided that prior to such notice, Tenant has been
notified in writing of the address of such First Mortgage holder.  Tenant further agrees that if Landlord shall
have failed to cure any such default within twenty (20) days after such notice
to Landlord (or if such default cannot be cured or corrected within that time,
then such additional time as may be necessary if Landlord has commenced within
such twenty (20) days and is diligently pursuing the remedies or steps
necessary to cure or correct such default), then the holder of the First
Mortgage shall have an additional thirty (30) days within which to cure or
correct such default (or if such default cannot be cured or corrected within
that time, then such additional time as may be necessary if such holder of the
First Mortgage has commenced with such thirty (30) days and is diligently
pursuing the remedies or steps necessary to cure or correct such default,
including the time necessary to obtain possession if possession is necessary to
cure or correct such default).


 


32.                                 RECIPROCAL COVENANT ON NOTIFICATION OF
ADA VIOLATIONS.


 


Within ten (10) days after receipt, Landlord and
Tenant shall advise the other party in writing, and provide the other with
copies of (as applicable), any notices alleging violation of the Americans with
Disabilities Act of 1990 (“ADA”) relating to any portion of the Premises or the
Improvements; any claims made or threatened in writing regarding noncompliance
with the ADA and relating to any portion of the Premises or the Improvements;
or any governmental or regulatory actions or investigations


 


52





















 


instituted or threatened regarding noncompliance with
the ADA and relating to any portion of the Premises or the Improvements.


 


33.                                 LAWS THAT GOVERN.


 


The terms and conditions of this Lease shall be
governed by the laws of the jurisdiction in which the Premises is located.


 


34.                                 FINANCIAL STATEMENTS.


 


Within ten (10) business days of Landlord’s request,
Tenant shall deliver to Landlord the current financial statements of Tenant,
and financial statements for the two (2) years prior to the current year.  The financial statements shall include a
balance sheet, profit and loss statement, and statement of cash flows for each
year, accompanied by an opinion from a certified public accountant certifying
that the financial statements are prepared in accordance with generally
accepted accounting principles consistently applied.  If Tenant fails to deliver such financial
statements within two (2) business days after Landlord’s second (2nd) request
for such financial statements, an amount equal to $250 per day shall be charged
as Additional Rent for each day thereafter on which Tenant fails to deliver to
Landlord the financial statements required herein.  Notwithstanding the foregoing, this Section
34 shall not be deemed to apply to GTSI or to any other publicly traded
corporation so long as GTSI or such publicly traded corporation, as applicable,
publicly discloses its financial condition.


 


35.                                 PARKING.


 


In connection with construction of the Improvements,
Landlord shall construct on the Premises in accordance with the Work Agreement
attached hereto as Exhibit B, surface parking at a ratio equal to not less than
4 spaces per 1,000 square feet of net rentable area in the Improvements.  Tenant shall have the right to park in the parking
facilities free of charge (other than payment of Tenant’s Pro Rata Share of
Operating Expenses).  If, after Landlord
completes construction of the second building (the “Second Building”)
contemplated by the Current Site Plan (as defined herein) and executes a lease
therefor, Tenant determines that use of parking on the Property by third
parties is leaving Tenant with insufficient parking spaces for its employees
and visitors, Tenant shall have the right to install professional signs and
stencils on Tenant’s parking spaces, identifying such spaces as reserved for
the exclusive use of Tenant and its employees and invitees.  Tenant shall have the right, at any time, to
install professional signs and stencils identifying Tenant’s executive and
visitor parking spaces.  Tenant shall
have the right to tow any vehicle parked in Tenant’s parking spaces in
violation of Tenant’s posted signs, provided that such signs warn that
violators will be towed and provide such other information as is required by
law to allow such towing.  Landlord and
Tenant acknowledge that Tenant’s parking area  will be as shown


 


53





















 


cross-hatched on the Current Site Plan (subject to
modification in accordance with Exhibit B). 
Tenant shall, at all times and at Tenant’s sole expense, maintain its
parking signs and stencils in a first-class condition.


 


36.           SIGNAGE.


 


(A)                              Landlord
shall permit Tenant to place two (2) signs containing Tenant’s logo upon the
Improvements subject to Landlord’s approval as to design, method of attachment,
placement, size, color and style (such approval not to be unreasonably
withheld, conditioned or delayed), it being further agreed that Landlord shall
not withhold its approval as to the design, color, size, or style of such signs
to the extent that such signs comply with the signage requirements of Exhibit E
hereto.  So long as Tenant shall occupy
at least fifty percent (50%) of the Building, no other tenant shall be
permitted to place signage on the Building.


 


(B)                                So
long as Tenant occupies at least seventy-five percent (75%) of the Building,
Tenant shall also have the exclusive right, subject to approval by Fairfax
County and receipt of all necessary approvals, easements, licenses and permits (which
the parties agree to cooperate to obtain), to install and maintain one (1)
monument sign containing Tenant’s name and/or logo on the Land adjacent to
Stonecroft Boulevard (in a location mutually-agreed by Landlord and Tenant [and
to be tentatively agreed by the parties not later than when Landlord’s proposed
site plan is submitted for Fairfax County approval], each hereby agreeing to
negotiate the same in good faith and further agreeing not to unreasonably withhold,
condition or delay their agreement to the same).  If Tenant occupies less than seventy-five
percent (75%) of the Building, Landlord shall have the right to install and maintain
its own monument sign on the Land adjacent to Stonecroft Boulevard (in a
location mutually-agreed by Landlord and Tenant, each hereby agreeing to
negotiate the same in good faith and further agreeing not to unreasonably withhold,
condition or delay their agreement to the same).  If Tenant occupies less than seventy-five
percent (75%) of the Building, and Fairfax County does not permit installation
of a second monument sign on the Land adjacent to Stonecroft Boulevard, Tenant
agrees to provide Landlord with fifty percent (50%) of the signage space on its
monument sign and Landlord agrees to reimburse Tenant for (i) any modifications
to such monument sign reasonably required in connection therewith and (ii)
fifty percent (50%) of the original cost of constructing and installing the
monument sign.


 


(C)                                In
the event Landlord, in Landlord’s sole discretion, installs a monument or
directional signage at the entrance to the parking areas from Avion Parkway,
Tenant shall be entitled to have sign space on such directional sign equal


 


54





















 


to that of the other tenants occupying improvements on
Parcel D-l, Avion Development, as shown on plat attached to Deed of Division
recorded in Deed Book 7375 at page 562, among the land records of Fairfax
County, Virginia (“Parcel D-l”); provided that, Tenant’s signage thereon shall
be uppermost in location on such directional sign.  Tenant shall reimburse Landlord for its
proportionate share (based on the proportion of signage space allowed thereon)
of all costs, expenses and fees attributable to such directional sign.


 


(D)                               Tenant
shall obtain and pay for all governmental approvals, permits and/or licenses
required in connection with any signage installed by or on behalf of
Tenant.  In addition, all such signage
shall be subject to Landlord’s prior approval (not to be unreasonably withheld,
conditioned or delayed), and must comply with the established signage program
at Avion Business Park  (a copy of which
is attached hereto as Exhibit E) and with all covenants, conditions and restrictions
of record.  The cost of Tenant’s signage
shall be borne by Tenant (it being understood, however, that Tenant may elect
to be reimbursed from the Allowance (as defined in Exhibit B) for the cost of
Tenant’s permitted signage.


 


(E)                                 If
any signage (other than signage on the interior of the Premises which is not
visible from outside the Premises) is exhibited without Tenant first obtaining
the Landlord’s written consent thereto, Landlord shall have the right, upon ten
(10) days written notice to Tenant, to remove the same and Tenant shall be
liable for any and all expenses incurred by Landlord in connection with such
removal.  Tenant shall maintain all of
its signage in a good state of repair and save the Landlord harmless from any
loss, cost or damage as a result of the construction, installation,
maintenance, existence or removal of the same, and Tenant shall repair any
damage which may have been caused by the construction, installation, operation,
existence, maintenance or removal of such signage.  Upon vacating the Premises, Tenant shall
remove all of its signage and repair all damage caused by the installation,
operation and/or removal thereof, at the Tenant’s sole expense.


 


37.           RECORDATION.


 


Except to the extent required by law, Tenant shall not
record this Lease among or in any public records.


 


38.           FORCE MAJEURE.


 


This Lease and the obligations of the parties
hereunder shall not be affected or impaired because the Landlord or Tenant (as
applicable) is unable to fulfill any of its obligations hereunder or is delayed
in doing so, to the extent such inability or delay


 


55





















 


is caused by reason of war, civil unrest, strike,
labor troubles, unusually inclement weather, governmental delays, inability to
procure services or materials despite reasonable efforts, third party delays,
acts of God, or any other cause (s) beyond the reasonable control of the
Landlord or Tenant (as applicable) (which causes are referred to collectively
herein as “Force Majeure”).  The time
specified for the performance of an obligation of Landlord or Tenant (as
applicable) in this Lease shall be extended one day for each day of delay
suffered by Landlord or Tenant (as applicable) in the performance of such
obligation as a result of any Force Majeure cause, provided that the party from
whom performance is due exercises commercially reasonable efforts to mitigate
the effects of such Force Majeure cause. 
Notwithstanding the foregoing, but subject to the terms of the sentence
which immediately follows this sentence, (i) this Section 38 shall have no
application to, nor shall the time for the performance of Landlord’s or Tenant’s
obligations hereunder be extended with respect to, any obligation for the
payment of money or the surrender of the Premises upon the expiration of the
Lease Term, and (ii) this Section 38 shall be disregarded for purposes of
determining Tenant’s termination rights pursuant to Section 2(A)(4) and for
determining the liquidated damages, if any, to which Tenant may be entitled
pursuant to Section 10(c) of Exhibit B (it being understood that Force Majeure
shall have no application to Section 2(A)(4), and is independently treated in
Section 10(c) of Exhibit B).  Notwithstanding
anything herein to the contrary, (x) if the Construction Lender has foreclosed
upon the Property or has accepted a deed in lieu of foreclosure, and (y) such
Construction Lender is diligently pursuing completion of the work to be
performed by Landlord under Exhibit B hereto, this Section shall apply to
Tenant’s right to terminate pursuant to Section 2(A)(4).


 


39.           LANDLORD’S LIEN.


 


As security for the performance of Tenant’s
obligations, Tenant grants to Landlord a lien upon and a security interest in
Tenant’s existing or hereafter acquired personal property, inventory,
furniture, furnishings, fixtures, equipment, licenses, permits, and all other
tangible and intangible property, assets and accounts, and all additions,
modifications, products and proceeds thereof, including, without limitation,
such tangible property which has been used at the Premises, purchased for use
at the Premises, located at any time in the Premises or used or to be used in
connection with the business conducted or to be conducted in the Premises,
whether or not the same may thereafter be removed from the Premises.  Such lien shall be in addition to all rights
of distraint available under applicable law. 
Within five (5) days after request from time to time, Tenant shall
execute, acknowledge and deliver to Landlord a financing statement and any
other document evidencing or establishing such lien and security interest which
may be requested by Landlord.  During the
Lease Term, Tenant shall not sell, transfer or remove from the Premises any of
the aforementioned tangible property without Landlord’s


 


56





















 


prior written consent, unless the same shall be
promptly replaced with similar items of comparable value.  In order to further assure Tenant’s
performance of its obligations under this Lease, Tenant covenants that during
the Lease Term, it will not convey or otherwise transfer its assets or permit
its assets to be encumbered to the extent that any such conveyance, transfer or
encumbrance is not done in the ordinary course of Tenant’s business or would
materially and adversely affect the net worth of Tenant.  Notwithstanding anything herein to the
contrary, said lien shall be subordinated to the rights of any lessor of any
equipment or personal property under any equipment lease, the rights of the
seller under any conditional sales contract, and to the properly perfected lien
of any bona  fide third party lender providing financing to Tenant
in the ordinary course of Tenant’s business. 
Landlord also shall, to the extent permitted by law, have (in addition
to all other rights) a right of distress for rent as security for all Rent,
Additional Rent and any other sums payable under this Lease.


 


40.           BROKERS.


 


Tenant represents and warrants to Landlord, and
Landlord represents and warrants to Tenant, that neither it nor its officers or
agents nor anyone acting on its behalf has dealt with any real estate broker
other than Trammell Crow Real Estate Services, Inc. and Cambridge Property
Group Limited Partnership in the negotiating or making of this Lease, and each
agrees to indemnify and hold the other party, and its respective agents,
employees, partners, directors, shareholders and independent contractors
harmless from all liabilities, costs, demands, judgments, settlements, claims
and losses, including reasonable attorneys fees and costs, incurred in
conjunction with any such claim or claims of any other broker or brokers
claiming to have interested Tenant in the Property or Premises or claiming to
have caused Landlord or Tenant to enter into this Lease.  Landlord acknowledges that it has agreed to
pay Trammell Crow Real Estate Services, Inc. and Cambridge Property Group
Limited Partnership a commission with respect to this Lease, pursuant to a
separate agreement.


 


41.           CONFIDENTIALITY.


 


Tenant agrees that this Lease is confidential and,
agrees to exercise reasonable, good faith efforts not to disclose the contents
of this Lease to any third party, except Tenant’s brokers, lawyers, architects,
engineers, and other consultants engaged in connection with this Lease
transaction; provided that, this Section 41 shall not prohibit the disclosure
of the terms of this Lease to the U.S. Government or Tenant’s lenders, to the
extent required by law or contract between Tenant and such party.


 


57





















 


42.                                 LEASE/DEED OF LEASE.


 


To the extent required under applicable law to make
this Lease legally effective, this Lease shall constitute a deed of lease
executed under seal.


 


43.                                 RIGHT OF FIRST OFFER.


 


(A)                              Subject
to the terms hereof and provided no Event of Default then remains uncured under
the Lease, Landlord agrees that it will not sell the Premises (or, if the
Premises is Landlord’s sole asset, transfer all of Landlord’s capital stock)
during the Lease Term unless it first extends a bona  fide  offer to sell the Premises to Tenant at a
price and on such terms and conditions as Landlord may describe in a written “offer
to sell” given to Tenant in the same fashion as notices given pursuant to the
provisions of Section 26 of this Lease. 
Landlord shall, not less than fifteen (15) days prior to Landlord’s
general circulation of offering materials for the Premises, deliver to Tenant
the offer to sell (“Sale Offer Notice”). 
Tenant shall have fifteen days after receipt of the Sale Offer Notice to
(i) exercise its right of first offer by agreeing to the economic terms of the
purchase and sale and giving Landlord written notice of Tenant’s election to
acquire the Premises (“Sale Election Notice”) or (ii) not to exercise its right
of first offer for the acquisition of the premises, it being understood and agreed
that if no notice is received from Tenant during said fifteen day period,
Tenant shall be deemed not to have elected to purchase the Premises.  Within 30 days after receipt of Tenant’s Sale
Election Notice, Landlord will provide Tenant with an agreement of purchase and
sale, which Landlord and Tenant will negotiate and execute within thirty (30)
days of Tenant’s delivery of the Sale Election Notice.  In the event Tenant fails to execute the
agreement of purchase and sale within said thirty (30) day period after giving
its Sale Election Notice or in the event Tenant does not deliver the Sale
Election Notice, then Landlord shall have the right thereafter to sell the
Premises to any third party purchaser free and clear of any rights by Tenant
under this Section 43; provided that, before entering into a contract to sell
the Premises at a price which is less than ninety-five percent (95%) of the
price at which the Premises was offered to Tenant in Landlord’s Sale Offer
Notice, Landlord shall again offer to sell the Premises to Tenant in accordance
with this Section 43 (in which event Tenant shall exercise its rights under
this Section 43 by delivery of the Sale Election Notice within three (3)
business days after delivery of the Sale Offer Notice).


 


(B)                                Subject
to the terms hereof and provided no Event of Default has occurred under the
Lease, Landlord agrees that, during the first (1st) six and one-half (6-1/2)
years of the Lease Term, before executing any lease for space in any other


 


58





















 


building constructed on Parcel D-l (an “Adjacent
Building”), Landlord will provide Tenant with a bona  fide offer
to lease such Adjacent Building at a rental rate and on such other terms and
conditions as Landlord describes in a written “offer to lease” (the “Lease
Offer Notice”) delivered to Tenant in the same fashion as notices given
pursuant to the provisions of Section 26 of this Lease.  Tenant shall have fifteen days after receipt
of the Lease Offer Notice to (i) exercise its right of first offer by agreeing
to the economic terms of the lease and giving Landlord written notice of Tenant’s
election to lease such Adjacent Building (“Lease Election Notice”) or (ii) not
to exercise its right of first offer for the lease of the Adjacent Building, it
being understood and agreed that if no notice is received from Tenant during
said fifteen day period, Tenant shall be deemed not to have elected to lease
the Adjacent Building.  Within 30 days
after receipt of Tenant’s Lease Election Notice, Landlord will provide Tenant
with a lease agreement, which Landlord and Tenant will negotiate and execute
within thirty (30) days of Tenant’s delivery of the Lease Election Notice.  In the event Tenant fails to execute the
lease agreement within said thirty (30) day period after giving its Lease
Election Notice or in the event Tenant does not deliver the Lease Election
Notice, then Landlord shall have the right thereafter to lease all or any part
of the Adjacent Building to any third party free and clear of any rights by Tenant
under this Section 43.  Notwithstanding
anything herein contained to the contrary, Tenant acknowledges that (i) its
rights under this Section 43(B) are subject and subordinate to any now-existing
expansion rights in or to such Adjacent Building, and to any expansion or
renewal rights granted to future tenants of such Adjacent Building, and (ii)
this Section 43(B) shall be inapplicable to the initial “lease-up” of any “pre-leased”
or “build-to-suit” Adjacent Building.


 


44.                                 MISCELLANEOUS.


 


(A)                              In
the event that Tenant desires to store or maintain the type or character of
goods or materials in the Premises which cause an increase in insurance
premiums, Tenant shall first obtain the written consent of Landlord and Tenant shall
reimburse Landlord for any increase in premiums caused thereby.


 


(B)                                Unless
the context clearly denotes the contrary, the words “Rent” and “Additional Rent”
as used in this Lease not only includes cash rental for the Premises, but also
all other payments and obligations to pay assumed by the Tenant, whether such
obligations to pay run to the Landlord or to other parties.


 


(C)                                In
any litigation between the parties arising out of this Lease, or in connection with any consultations with counsel


 


59





















 


and other actions taken or notices delivered in
relation to a default by any party to this Lease, the non-prevailing party
shall pay to the prevailing party all reasonable expenses and costs including
reasonable attorneys’ fees incurred by the prevailing party in connection with
the default and/or litigation, as the case may be (including fees and costs in
preparation for and at trial, and on appeal, if applicable) (“Legal Costs”).  The Legal Costs shall be payable on demand,
and, if the prevailing party is Landlord, the Legal Costs shall be deemed
Additional Rent, subject to all of Landlord’s rights and remedies provided
herein.


 


(D)                               It
is mutually agreed by and between Landlord and Tenant that the respective
parties hereto shall, and they hereby do, waive trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other on any matter whatsoever arising out of or in any way connected with this
Lease, the relationship of Landlord and Tenant, Tenant’s use of or occupancy of
the Premises or any claim of injury or damage and any emergency statutory or any
other statutory remedy.  If Landlord
commences any summary proceeding for nonpayment of Rent or Additional Rent,  Tenant will not interpose any counterclaim of
whatever nature or description in any such proceeding, unless such counterclaim
is a mandatory counterclaim which would be waived if not interposed in such
proceeding.


 


(E)                                 If
any term or provision of this Lease is declared invalid or unenforceable, the remainder
of this Lease shall not be affected by such determination and shall continue to
be valid and enforceable.


 


(F)                                 Landlord
and Tenant warrant that this agreement is being executed with full corporate
authority and that the officers whose signatures appear hereon are duly
authorized and empowered to make and execute this Lease in the name of the corporation
by appropriate and legal resolution of its Board of Directors.


 


(G)                                This
Lease contains the entire agreement between the parties hereto.  No representations, inducements, promises or agreements,
oral or otherwise, between the parties not embodied herein shall be of any
force or effect, and all reliance by Tenant with respect to any
representations, inducements, promises or agreements is based solely on those contained
in this Lease.  Any modification to this
Lease must be in writing and duly executed by the parties hereto.


 


45.                                 ROOF-TOP EQUIPMENT.


 


Tenant shall have the right to utilize a  portion of the roof of the Building for
purposes of installing and operating one or more satellite dishes or antennas,
subject to the terms of the attached


 


60





















 


Exhibit F. 
Landlord and Tenant shall each complete, execute and deliver to other
the attached Exhibit F prior to Tenant making any installation upon the
Building roof.  Nothing herein contained
shall be deemed to grant Tenant the exclusive right to utilize the roof of the
Building.


 


IN WITNESS WHEREOF,
Landlord and Tenant have executed this Lease under seal on this 10th
day of December, 1997.


 


	
  WITNESS/ATTEST:

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  PETULA ASSOCIATES, LTD., an Iowa

  corporation

  
	
  /s/ Susie Wieland

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Ripson

  	
  (Seal)

  
	
   

  	
   

  	
  MICHAEL D. RIPSON

  	
   

  
	
   

  	
  Title:

  	
  VICE PRESIDENT

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ H. L. Minear

  	
  (Seal)

  
	
   

  	
   

  	
  H. L. Minear

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WITNESS/ATTEST:

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
  GOVERNMENT TECHNOLOGY SERVICES,

  INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
  By:

  	
  /s/ M. Dendy Young

  	
  (Seal)

  
	
   

  	
  Title: 

  	
  CEO

  	
   

  
							



 


61





















 


FIRST AMENDMENT TO LEASE
AGREEMENT


 


THIS FIRST AMENDMENT TO
LEASE AGREEMENT (this “Amendment”) is made entered into as of April 30,  2003 by and between AG/ARG Avion, LLC and
GTSI Corp (“Tenant”).


 


WITNESSETH:


 


WHEREAS, Landlord and Tenant entered into that certain
Lease Agreement dated as of December 10, 1997 (the “Lease”) for 102,022 feet of
space (the “Premise”) in a facility at 3901 Stonecroft Boulevard, Chantilly,
Virginia 20151 (the “Building”);


 


WHEREAS, Tenant desires to install a satellite dish on
the roof of the Building and Landlord agrees to allow such installation, upon
the terms and conditions and as more particularly set forth herein below.


 


NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein below and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, Landlord and Tenant, intending legally to be bound, hereby
agrees as follows:


 


1.             Communications
Equipment. Tenant shall have the right to install and maintain one (1) satellite
dish (the “Communications Equipment”) on the roof of the Building throughout
the Lease Term, subject to the following terms and conditions:


 


(a)           The
location, size, weight, height and all other features and specifications of the
Communications Equipment and the manner of initial installation of the same
shall be subject to Landlord’s prior written approval, which approval may be
granted or withheld in Landlord’s sole and absolute discretion; provided,
however, that in no event shall (i) the diameter of any satellite dish exceed
twenty-four (24”), and (ii) any portion of the Communications Equipment extend
over the top of the roof of the Building.  Tenant shall reimburse Landlord for Landlord’s
expenses incurred in such review.  All
repair and installation required after the initial installation of the
Communications Equipment also shall be subject to Landlord’s prior written
approval (to be granted or withheld in Landlord’s sole and absolute
discretion), which approval shall be at Tenant’s sole cost and expense.


 


(b)           Tenant, at
its sole cost and expense, shall procure all necessary governmental permits and
licenses for the construction and maintenance of the Communications Equipment,
and shall at all times comply with all requirements of laws, ordinances,
orders, rules and regulations of all public authorities and insurance companies
which shall impose any order or duty upon Landlord or Tenant with respect to or
affecting the Communications Equipment or arising out of Tenant’s use or manner
of use thereof.  The failure by Tenant to
procure any such permits shall not in any way affect Tenant’s obligations under
this Lease.


 


(c)           Tenant
shall pay and discharge all costs and expenses incurred by Landlord in
connection with the furnishing, installation, maintenance, operation and
removal of the Communications Equipment within fifteen (15) business days after
written demand therefore.


 





















 


(d)           Installation
of the Communications Equipment shall be at Tenant’s sole expense and risk.  The Communications Equipment shall be approved
by Landlord and shall be screened from view from the grounds adjacent to the
Building in a manner and with materials acceptable to Landlord in its sole
discretion.  Tenant shall not disturb the
roof membrane or make any other penetration on the roof or the exterior facade
of the Building except as otherwise approved in writing by Landlord in its sole
discretion.  Tenant shall be permitted
access to the roof only upon prior notice to Landlord, provided that, at
Landlord’s option, Tenant is accompanied by Landlord’s agent or representative.
 Any change or attachment to the roof
system to which Landlord may consent in its sole and absolute discretion shall
be performed at Tenant’s cost by a contractor selected and/or approved by Landlord.


 


(e)           Tenant
shall maintain the Communications Equipment in a clean and safe manner throughout
the entire Lease Term, and shall comply with all applicable laws, ordinances
and regulations, as well as such rules and regulations as Landlord had adopted or
shall adopt from time to time.  In
addition, all repairs to the Building made necessary by reason of the
furnishing, installation, maintenance, operation or removal of the
Communications Equipment or any replacements thereof (including, without
limitation, any invalidation of the roof warranty due to Tenant’s actions)
shall be at Tenant’s sole cost.  Not
later than the expiration or termination of this Lease, Tenant agrees that it will
remove promptly the Communications Equipment and any wiring or accessories
associated with the Communications Equipment and shall repair any damage to the
Building or Land caused by the installation or removal of the Communications
Equipment and related equipment and restore the Building to its preexisting
condition.  In the event Tenant fails to
remove the Communications Equipment and associated equipment, Landlord may
remove and dispose of the Communications Equipment and associated equipment and
charge Tenant the entire cost thereof.


 


(f)            Landlord
may notify Tenant when in Landlord’s reasonable judgment it is necessary to
move any Communications Equipment to another part of the roof or to another
location on the Land, provided that such relocation will not materially
adversely affect Tenant’s ability to use such Communications Equipment, in
which event Tenant shall promptly move such Communications Equipment to such
location as designated by Landlord or, if applicable, remove such Communications
Equipment altogether.  If it becomes
unlawful for Tenant’s Communications Equipment to remain on the roof for any
reason, then Tenant shall promptly remove same after receipt of notice from
Landlord demanding such removal thereof.  Tenant hereby acknowledges and agrees that the
requirement that Tenant relocate or remove altogether any Communications Equipment
shall not result in any credit or abatement in the rent payable under this
Lease.


 


(g)           Landlord
may, at Tenant’s expense, install checkmeters or submeters to the electrical circuits
serving the Communications Equipment.  Tenant
shall reimburse Landlord, as additional rent, for all amounts incurred in
connection with the electricity consumed by the Communications Equipment,
including not only the cost of the electricity consumed, but also the cost of
the measurement of such consumption.


 


(h)           Tenant’s
Communications Equipment shall not interfere with the operation of the
property, the structure of the Building, any of the Building systems, or the
equipment (including airwaves reception and other equipment) of any other
tenant in the Building.


 


(i)            Tenant
shall maintain such insurance as is appropriate with respect to the
installation, operation and maintenance of the Communications Equipment.  Landlord shall have no liability on account of
any damage to or interference with the operation of the Communications
Equipment except for physical damage caused by Landlord’s gross negligence or
willful misconduct and Landlord expressly makes no representations or
warranties with respect to the capacity for Communications Equipment placed on
the roof of the Building to receive or transmit signals.  The


 





















 


operation of the Communications Equipment shall be at Tenant’s sole and
absolute risk.  Tenant shall in no event
interfere with the use of any other communications equipment located on the
roof of the Building.


 


(j)            The
Communications Equipment may be used by Tenant only in the conduct of Tenant’s
business at the Premises.


 


(k)           In
the event that a default occurs under the Lease (as amended hereby) beyond any
applicable notice and/or cure period, then, in addition to all other rights and
remedies of Landlord, Landlord, in its sole and absolute discretion, may
terminate Tenant’s rights pursuant to this Paragraph by written notice to
Tenant.  Within five (5) business days
after such notice, Tenant shall remove the Communications Equipment and any
wiring or accessories associated with the Communications Equipment and shall
repair any damage to the Building or Land caused by the installation or removal
of the Communications Equipment and related equipment and restore the Building
to its preexisting condition.  In the
event Tenant fails to remove the Communications Equipment and associated
equipment, Landlord may remove and dispose of the Communications Equipment and
associated equipment and charge Tenant the entire cost thereof.


 


(1)                                  Tenant’s
rights under this Section may be exercised only by Tenant and may not be
exercised by any other person or entity.


 


2.              Ratification. Except as otherwise
expressly modified by the terms of this Amendment, the Lease shall remain
unchanged and continue in full force and effect.  All Terms, covenants and conditions of the
Lease not expressly modified herein are hereby confirmed and ratified and
remain in full force and effect, and as further amended hereby, constitute valid
and binding obligations of Tenant enforceable according to the terms thereof.


 


3.              Authority.
Tenant and each of the persons executing this Amendment on behalf of Tenant covenants
and warrants that Tenant has full right and authority to enter into this Amendment,
and that the person signing on behalf of Tenant is authorized to do so behalf
of Tenant.


 


4.              Binding
Effect. All of the covenants contained in this Amendment, including but not
limited to, all covenants of the Lease as modified hereby, shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
heirs, legal representatives and permitted successors and assigns.


 


5.              Effectiveness.
The submission of this Amendment shall not constitute an offer, and this Amendment
shall not be effective and binding unless and until fully executed and
delivered by each of the parties hereto.


 


6.              Counterparts.
This Amendment may be executed in multiple counterparts, each of which shall be
an original, but all of which shall constitute on and the same Amendment.


 


7.              Recital.
The forgoing recital are intended to be a material part of this Amendment and
are incorporated herein by this reference.


 


8.              Defined
Terms. Unless otherwise provided herein, all terms used in this Amendment that
are defined in the Lease shall have the meanings provided in the Lease.


 





















 


IN WITNESS WHEREOF,
Landlord and Tenant executed this Amendments as of the date first above
written.


 


	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  AG/ARG AVION, L.L.C

  
	
   

  	
   

  
	
  WITNESS:

  	
  By:

  	
  /s/ David Fisher

  	
   

  
	
   

  	
  Name:

  	
  David Fisher

  	
   

  
	
  /s/ Nancy Feene

  	
   

  	
  Title:

  	
  Senior VP

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
  ATTEST:

  	
  GTS1 Corp.

  
	
   

  	
  3901 Stonecroft Boulevard

  Chantilly, VA 20151

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott Decker

  	
   

  
	
   

  	
  Name:

  	
  Scott Decker

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Sr. Director, Operations