**Exhibit 10.3**

** **

[Net Lease]

 

**LEASE AGREEMENT**

 

THIS LEASE AGREEMENT ismade this 11th day of August, 1995, between Security Capital Industrial Trust (“Landlord”),and the Tenant named below.

 
| **Tenant:**                                                                                                                                                                  | Government Technology Services, Inc. |                                                                                                        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|-------------------------------------------------------------------------------------------------------------|
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Tenant’s representative, address, and phone no.:**                                                                                                                    | ** **                           | Tom Smudz, Chief Financial Officer  4100 Lafayette Center Drive, Chantilly, Virginia 22021-0808             |   |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Premises:**                                                                                                                                                                | ** **                           | Approximately 204,649 square feet, as shown on  Exhibit A.                                                  |   |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Project:**                                                                                                                                                                 | ** **                           | Chantilly Distribution Center                                                                               |   |   |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Building:**                                                                                                                                                                | ** **                           | Building 1 of Chantilly Distribution Center                                                                 |   |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Tenant’s Proportionate Share of Project:**                                                                                                                            | ** **                           | 58.29%                                                                                                      |   |   |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Tenant’s Proportionate Share of Building:**                                                                                                                           | ** **                           | 58.29%                                                                                                      |   |   |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Lease Term:**                                                                                                                                                              | ** **                           | Beginning on the Commencement Date and ending on the  last day of the 120th full calendar month thereafter. |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Commencement Date:**                                                                                                                                                       | ** **                           | See Addendum 2                                                                                              |   |   |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Initial Monthly Base Rent:**                                                                                                                                               | ** **                           | See Addendum 1                                                                                              |   |   |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Initial Estimated Monthly Operating Expense  Payments:**(estimates only and subject to adjustment to actual  costs and expenses according to the provisions of this Lease) | ** **                           | 1. Utilities:                                                                                               | $Paid directly by Tenant |   |
|                                                                                                                                                                         |                                 |                                                                                                        |
| 2. Common Area Charges:                                                                                                                                                      | $5,627.85                            |                                                                                                        |
|                                                                                                                                                                         |                                 |                                                                                                        |
| 3. Taxes:                                                                                                                                                                    | $8,527.04                            |                                                                                                        |
|                                                                                                                                                                         |                                 |                                                                                                        |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| ** **                                                                                                                                                                   | ** **                           | 4. Insurance:                                                                                               | $852.70 |   |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| ** **                                                                                                                                                                   | ** **                           | 5. Others (Management Fee):                                                                                 | $2,046.49 |   |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Initial  Estimated Monthly Operating Expense Payments:**                                                                                                                   | ** **                           |                                                                                                        |   | $17,054.08 |
| ** **                                                                                                                                                                   | ** **                           |                                                                                                        |   |   |
| **Initial  Monthly Base Rent and Operating Expense Payments:**                                                                                                               | ** **                           |                                                                                                        |   | $75,720.13 |

 

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| **Security  Deposit:** | ** ** | $117,332.10 (See Paragraph 5)                                                                         |
|------------------------|------------|-------------------------------------------------------------------------------------------------------|
| ** **             | ** ** |                                                                                                  |   |   |
| **Broker:**            | ** ** | Barnes, Morris, Pardoc & Foster Inc. Landlord  shall pay Broker pursuant to a separate agreement. |
| ** **             | ** ** |                                                                                                  |   |   |
| **Addenda:**           | ** ** | 1-8, Exhibit A, B and C                                                                               |

 

1.              **Granting Clause**.In consideration of the obligation of Tenant to pay rent as herein provided andin consideration of the other terms, covenants, and conditions hereof, Landlordleases to Tenant, and Tenant leases from Landlord, the Premises, to have and tohold for the Lease Term and any renewal term, as the case may be, subject tothe terms, covenants and conditions of this Lease.

 

2.              **Acceptance of Premises**.   Tenant shall accept the Premises, subject toall applicable laws, ordinances, regulations, covenants and restrictions asprovided in Addendum 2.  Landlord hasmade no representation or warranty as to the suitability of the Premises forthe conduct of Tenant’s business, and Tenant waives any implied warranty thatthe Premises are suitable for Tenant’s intended purposes.  Except as provided in Paragraph 10, in noevent shall Landlord have any obligation for any defects in the Premises or anylimitation on its use.  The taking ofpossession of the Premises shall be conclusive evidence that Tenant accepts thePremises and that the Premises were in good condition at the time possessionwas taken except for items that are Landlord’s responsibility under Paragraph10 and any punchlist items agreed to in writing by Landlord and Tenant pursuantto the provisions of Addendum 2.

 

3.              **Use**.  The Premises shall be used only for thepurpose of receiving, storing, shipping and selling (but limited to non-retailsales) products, materials and merchandise made and/or distributed by Tenantand for such other lawful purposes as may be incidental thereto includinggeneral office use, assembly and light manufacturing.  Tenant shall not conduct or give notice of anyauction, liquidation sale open to the general public, or going out of businesssale on the Premises.  Tenant will usethe Premises in a careful, safe and proper manner and will not commit wastethereon.  Tenant shall not permit anyobjectionable or unpleasant odors, smoke, dust, gas, noise, or vibrations toemanate from the Premises, or take any other action that would constitute anuisance or would disturb, unreasonably interfere with, or endanger Landlord orany tenants of the Project.  Outsidestorage, including without limitation, storage of trucks and other vehicles,except for overnight parking of operational vehicles, is prohibited withoutLandlord’s prior written consent. Tenant, at its sole expense, shall use and occupy the Premises in compliancewith all laws, including, without limitation, the Americans With DisabilitiesAct, orders, judgments, ordinances, regulations, codes, directives, permits,licenses, covenants and restrictions now or hereafter applicable to thePremises (collectively, “Legal Requirements”).  The Premises shall not be used as a place ofpublic accommodation under the Americans With Disabilities Act or similar statestatutes or local ordinances or any regulations promulgated thereunder, all asmay be amended from time to time unless Tenant shall have fully complied withits obligations under the preceding and succeeding sentences of this Paragraph3.  Tenant shall, at its expense, makeany alterations or modifications, within or without the Premises, that arerequired by Legal Requirements related to Tenant’s use or occupation of thePremises.  Tenant will not use or permitthe Premises to be used for any purpose or in any manner that would void Tenant’sor Landlord’s insurance, increase the insurance risk, or cause the disallowanceof any sprinkler credits.  If anyincrease in the cost of any insurance on the Premises or the Project is causedby Tenant’s use or occupation of the Premises, then Tenant shall pay the amountof such increase to Landlord.

 

4.              **Base Rent**.  Tenant shall pay Base Rent in the amount setforth on Addendum I attached hereto.  One-halfof the first month’s Base Rent and one-half of the first monthly installment ofestimated Operating Expenses (as hereafter defined) shall be due and payable onthe date Landlord acquires the Project and one-half shall be payable on theCommencement Date, and Tenant promises to pay to Landlord in advance, withoutdemand, deduction or set-off, monthly installments of Base Rent on or beforethe first day of each calendar month succeeding

 

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the Commencement Date.  Paymentsof Base Rent for any fractional calendar month shall be prorated.  All payments required to be made by Tenant toLandlord hereunder shall be payable at such address as Landlord may specifyfrom time to time by written notice delivered in accordance herewith.  The obligation of Tenant to pay Base Rent andother sums to Landlord and the obligations of Landlord under this Lease areindependent obligations.  Tenant shallhave no right at any time to abate, reduce, or set-off any rent due hereunderexcept as may be expressly provided in this Lease.  Tenant waives and releases all statutory liensand offset rights as to rent.  If Tenantis delinquent in any monthly installment of Base Rent or of estimated OperatingExpenses for more than 5 business days, Tenant shall pay to Landlord on demanda late charge equal to 5 percent of such delinquent sum.  The provision for such late charge shall be inaddition to all of Landlord’s other rights and remedies hereunder or at law andshall not be construed as a penalty.

 

5.             **SecurityDeposit**.  The Security Depositshall be due and payable on the date hereof.  The Security Deposit shall be held by Landlordas security for the performance of Tenant’s obligations under this Lease.  The Security Deposit is not an advance rentaldeposit or a measure of Landlord’s damages in case of Tenant’s default.  Upon each occurrence of an Event of Default(hereinafter defined), Landlord may use all or part of the Security Deposit topay delinquent payments due under this Lease, and the cost of any damage,injury, expense or liability caused by such Event of Default, without prejudiceto any other remedy provided herein or provided by law.  Tenant shall pay Landlord on demand the amountthat will restore the Security Deposit to its original amount.  Landlord’s obligation respecting the SecurityDeposit is that of a debtor, not a trustee; no interest shall accrue thereon.  The Security Deposit shall be the property ofLandlord, but shall be paid to Tenant when Tenant’s obligations under thisLease have been completely fulfilled, to the extent that any portion of theSecurity Deposit has not been previously returned to Tenant, as provided below. Landlord shall be released from anyobligation with respect to the Security Deposit upon transfer of this Lease andthe Premises to a person or entity assuming Landlord’s obligations under thisParagraph 5.  If, after Lease Year Three,Tenant is able to demonstrate two consecutive prior years of: (i) net income inexcess of $6,000,000.00, (ii) total stockholder’s equity in excess of $70,000,000and (iii) a positive net cash flow, and Tenant is not in default of this Lease,then Landlord shall return to Tenant 50% of the Security Deposit (the “DepositReturn”), Landlord agrees that, at the end of the Lease Term, any SecurityDeposit returned to Tenant shall be returned with interest as follows: (i) forthe period from the day after Landlord’s receipt of the Security Deposit untilthe date of Substantial Completion, an amount equal to 5% per annum compoundedannually based on the original Security Deposit, and (ii) for the period fromthe date of the Deposit Return until termination of the Lease, an amount equalto 5% per annum compounded annually based on the remaining Security Deposit.

 

6.             **OperatingExpense Payments**.  During eachmonth of the Lease Term, on the same date that Base Rent is due, Tenant shallpay Landlord an amount equal to 1/12 of the annual cost, as estimated byLandlord from time to time, of Tenant’s Proportionate Share (hereinafterdefined) of Operating Expenses for the Project.  Payments thereof for any fractional calendarmonth shall be prorated.  The term “OperatingExpenses” means all costs and expenses incurred by Landlord with respect to theownership, maintenance, and operation of the Project including, but not limitedto costs of: Taxes (hereinafter defined) and fees payable to tax consultantsand attorneys for consultation and contesting taxes; insurance; utilities;maintenance, repair and replacement of all portions of the Project, includingwithout limitation, paving and parking areas, roads, roofs, alleys, anddriveways, mowing, landscaping, exterior painting, utility lines, heating,ventilation and air conditioning systems, lighting, electrical systems andother mechanical and building systems; amounts paid to contractors andsubcontractors for work or services performed in connection with any of theforegoing; charges or assessments of any association to which the Project issubject and which may be used as an alternative method for Landlord to receiveOperating Expenses; property management fees payable to a property manager,including any affiliate of Landlord, (which shall not exceed 3 % of total rentper year) or an administration fee of 15 percent of Operating Expenses payableto Landlord; security services, if any; trash collection, sweeping and removal;and additions or alterations made by Landlord to the Project or the Building inorder to comply with Legal Requirements (other than those expressly requiredherein to be made by Tenant) or that are appropriate to the continued operationof the Project or the Building as a bulk warehouse facility in the market area,provided that the cost of additions or alterations that are required to be

 

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capitalized for federalincome tax purposes shall be amortized on a straight line basis over a periodequal to the lesser of the useful life thereof for federal income tax purposesor 10 years.  Operating Expenses do notinclude costs, or expenses, depreciation or amortization for capital repairsand capital replacements required to be made by Landlord under Paragraph 10 ofthis Lease, debt service under mortgages or ground rent under ground leases,costs of restoration to the extent of net insurance proceeds received byLandlord with respect thereto, leasing commissions, or the costs of renovatingspace for tenants.

 

If Tenant’s totalpayments of Operating Expenses for any year are less than Tenant’sProportionate Share of actual Operating Expenses for such year, then Tenantshall pay the difference to Landlord within 30 days after Landlord providesTenant with written evidence thereof, and if more, then Landlord shall retainsuch excess, notify Tenant in writing of same and credit it against Tenant’snext payments.  For purposes ofcalculating Tenant’s Proportionate Share of Operating Expenses, a year shallmean a calendar year except the first year, which shall begin on theCommencement Date, and the last year, which shall end on the expiration of thisLease.  With respect to OperatingExpenses which Landlord allocates to the entire Project, Tenant’s “ProportionateShare” shall be the percentage set forth on the first page of this Lease asTenant’s Proportionate Share of the Project as reasonably adjusted by Landlordin the future for changes in the physical size of the Premises or the Project;and, with respect to Operating Expenses which Landlord allocates only to theBuilding, Tenant’s “Proportionate Share” shall be the percentage set forth onthe first page of this Lease as Tenant’s Proportionate Share of the Building asreasonably adjusted by Landlord in the future for changes in the physical sizeof the Premises or the Building.  Landlordmay equitably increase Tenant’s Proportionate Share for any item of expense orcost reimbursable by Tenant that relates to a repair, replacement, or servicethat benefits only the Premises or only a portion of the Project or Buildingthat includes the Premises or that varies with occupancy or use.  Upon written request from Tenant, Landlordshall provide back-up documentation setting forth the calculation of any equitableincrease of Tenant’s Proportionate Share.  The estimated Operating Expenses for thePremises set forth on the first page of this Lease are only estimates, andLandlord makes no guaranty or warranty that such estimates will be accurate.

 

7.             **Utilities**.  Landlord shall be responsible for all waterand sewer tap fees associated with the hookup of basic services to thePremises.  Tenant shall pay for allwater, gas, electricity, heat, light, power, telephone, sewer, sprinklerservices, refuse and trash collection, and other utilities and services used onthe Premises, all maintenance charges for utilities, and any storm sewercharges or other similar charges for utilities imposed by any governmentalentity or utility provider, together with any taxes, penalties, surcharges orthe like pertaining to Tenant’s use of the Premises.  To the extent possible, all utilities shall beseparately metered and billed directly to Tenant.  Landlord shall not be liable for anyinterruption or failure of utilities or any other service to the Premises andno such interruption or failure shall result in the abatement of renthereunder.  Tenant agrees to limit use ofwater and sewer for normal restroom use.

 

8.             **Taxes**. Landlord shall pay all ad valoremreal estate taxes, assessments and governmental charges (collectively referredto as “Taxes”) that accrue against the Project during the Lease Term, whichshall be included as part of the Operating Expenses charged to Tenant.  Landlord may contest by appropriate legalproceedings the amount, validity, or application of any Taxes or liens thereof. All capital levies or other taxesassessed or imposed on Landlord upon the rents payable to Landlord under thisLease and any franchise tax, any excise, transaction, sales or privilege tax,assessment, levy or charge measured by or based, in whole or in part, upon suchrents from the Premises and/or the Project or any portion thereof shall be paidby Tenant to Landlord monthly in estimated installments or upon demand, at theoption of Landlord, as additional rent; provided, however, in no event shall Tenantbe liable for any net income taxes imposed on Landlord unless such net incometaxes are directly and identifiably in substitution for any Taxes payablehereunder.  If any such tax or excise islevied or assessed directly against Tenant, then Tenant shall be responsiblefor and shall pay the same at such times and in such manner as the taxingauthority shall require.  Tenant shall beliable for all taxes levied or assessed against any personal property orfixtures placed in the Premises, whether levied or assessed against Landlord orTenant.

 

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9.             **Insurance**. Landlord shall maintain all riskproperty insurance covering the full replacement cost of the Building.  Landlord may, but is not obligated to,maintain such other insurance and additional coverages as it may deemnecessary, including, but not limited to, commercial liability insurance andrent loss insurance.  All such insuranceshall be included as part of the Operating Expenses charged to Tenant.  The Project or Building may be included in ablanket policy (in which case the cost of such insurance allocable to theProject or Building will be determined by Landlord based upon the insurer’scost calculations).  Tenant shall alsoreimburse Landlord for any increased premiums or additional insurance whichLandlord reasonably deems necessary as a result of Tenant’s use of thePremises, if Tenant’s actual use of the Premises differs from the permitteduses set forth in Paragraph 3 hereof.

 

Tenant, at its expense,shall maintain during the Lease Term: all risk property insurance covering thefull replacement cost of all property and improvements installed or placed inthe Premises by Tenant at Tenant’s expense; worker’s compensation insurancewith no less than the minimum limits required by law; employer’s liabilityinsurance with such limits as required by law; and commercial liabilityinsurance, with a minimum limit of $1,000,000 per occurrence and a minimumumbrella limit of $4,000,000, for a total minimum combined general liabilityand umbrella limit of $5,000,000 for property damage, personal injuries, ordeaths of persons occurring in or about the Premises.  Landlord may from time to time requirereasonable increases in any such limits.  The commercial liability policies shall nameLandlord as an additional insured, insure on an occurrence and not aclaims-made basis, be issued by insurance companies which are reasonablyacceptable to Landlord, not be cancelable unless 30 days prior written noticeshall have been given to Landlord, contain a hostile fire endorsement and acontractual liability endorsement and provide primary coverage to Landlord (anypolicy issued to Landlord providing duplicate or similar coverage shall bedeemed excess over Tenant’s policies).  Suchpolicies or certificates thereof shall be delivered to Landlord by Tenant uponcommencement of the Lease Term and upon each renewal of said insurance.

 

The all risk propertyinsurance obtained by Landlord and Tenant shall include a waiver of subrogationby the insurers and all rights based upon an assignment from its insured,against Landlord or Tenant, their officers, directors, employees, managers,agents, invitees and contractors, in connection with any loss or damage therebyinsured against.  Neither party nor itsofficers, directors, employees, managers, agents, invitees or contractors shallbe liable to the other for loss or damage caused by any risk coverable by allrisk property insurance, and each party waives any claims against the otherparty, and its officers, directors, employees, managers, agents, invitees andcontractors for such loss or damage.  Thefailure of a party to insure its property shall not void this waiver.  Landlord and its agents, employees andcontractors shall not be liable for, and Tenant hereby waives all claimsagainst such parties for, business interruption and losses occasioned therebysustained by Tenant or any person claiming through Tenant resulting from anyaccident or occurrence in or upon the Premises or the Project from any causewhatsoever, including without limitation, damage caused in whole or in part,directly or indirectly, by the negligence of Landlord or its agents, employeesor contractors; provided, however, such waiver shall only apply to claims inexcess of $1,000, which is the deductible under Tenant’s property insurancepolicy.

 

Tenant and itssubtenants, assignees, invitees, employees, contractors and agents shall not beliable for, and Landlord hereby waives all claims against such parties forbusiness interruption and loses occasioned thereby sustained by Landlord or anyperson claiming through Landlord resulting from any accident or occurrence inor upon the Premises or in or about the Project from any cause whatsoever,including, without limitation, damage caused in whole or in part, directly orindirectly, by the negligence of Tenant or its subtenants, assignees, invitees,employees, contractors or agents; provided, however, such waiver shall onlyapply to claims in excess of the commercially reasonable deductible underLandlord’s insurance policy.

 

10.           **Landlord’s Repairs**. Landlord shall maintain, at its expense,the structural soundness of the roof, foundation, and exterior walls of theBuilding in good repair, reasonable wear and tear and damages caused by the grossnegligence or wilful misconduct of Tenant, its agents and contractors excluded. The term “walls” as used in thisParagraph 10 shall not include windows, glass or plate glass, doors or overheaddoors, special store fronts,

 

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dock bumpers, dock plates or levelers, or officeentries.  Tenant shall promptly giveLandlord written notice of any repair required by Landlord pursuant to thisParagraph 10, after which Landlord shall promptly repair.

 

11.           **Tenant’s Repairs**. Landlord, at Tenant’s expense asprovided in Paragraph 6, shall maintain in good repair and condition theparking areas and other common areas of the Building, including, but notlimited to driveways, alleys, landscape and grounds surrounding the Premises.  Subject to Landlord’s obligation in Paragraph 10,Tenant, at its expense, shall maintain in good repair and condition allportions of the Premises.  If Tenantfails to perform any repair for which it is responsible, Landlord may performthe repair and be reimbursed by Tenant within 10 days after demand therefor.  Subject to Paragraphs 9 and 15, Tenant shallbear the full cost of any repair to any part of the Building or Project thatresults from damage caused by the gross negligence or willful misconduct ofTenant, its agents, contractors, or invitees and any repair that benefits onlythe Premises.  Heating, ventilation andair conditioning systems and other mechanical and building systems serving thePremises shall be maintained at Tenant’s expense pursuant to maintenanceservice contracts entered into by Tenant.  To the extent that a warranty exists and is ineffect for any such improvements and is unassignable to Tenant, Landlord agreesto undertake all reasonable efforts to enforce such warranty for Tenant’sbenefit.  The scope of services andcontractors under such maintenance contracts shall be reasonably approved byLandlord.  At Landlord’s request, Tenantshall enter into a joint maintenance agreement with any railroad that servicesthe Premises.

 

12.           **Tenant-Made Alterationsand Trade Fixtures**.** **Any alterations, additions,or improvements made by or on behalf of Tenant to the Premises (“Tenant-MadeAlterations”) shall be subject to Landlord’s prior written consent, which shallnot be unreasonably withheld, delayed or conditioned for Tenant-MadeAlternations which do not affect the structural components of the Building orpierce the roof membrane.  Tenant shallcause, at its expense, all Tenant-Made Alterations to comply with insurancerequirements and with Legal Requirements and shall construct at its expense anyalteration or modification required by Legal Requirements as a result of anyTenant-Made Alterations.  All Tenant-MadeAlterations shall be constructed in a good and workmanlike manner bycontractors reasonably acceptable to Landlord and only good grades of materialsshall be used.  All plans and specificationsfor any Tenant-Made Alterations shall be submitted to Landlord for itsapproval, and Landlord may monitor construction of the Tenant-Made Alterations;and Tenant shall reimburse Landlord for its costs in reviewing plans anddocuments and in monitoring construction; provided, however, that suchreimbursements shall not exceed $2,000 per occurrence for actual expensesincurred by Landlord.  Tenant shallprovide Landlord with the identities and mailing addresses of all personsperforming work or supplying materials, prior to beginning such construction, andLandlord may post on and about the Premises notices of non-responsibilitypursuant to applicable law.  Landlord’sright to review plans and specifications and monitor construction shall besolely for its own benefit, and Landlord shall have no duty to see that suchplans and specifications or construction comply with applicable laws, codes,rules, or regulations.  At Landlord’srequest, Tenant shall obtain payment and performance bonds for any Tenant-MadeAlterations which bonds shall be delivered to Landlord prior to commencement ofwork on the Tenant-Made Alterations and shall be in form and substancesatisfactory to Landlord.  Uponcompletion of any Tenant-Made Alterations, Tenant shall deliver to Landlordsworn statements setting forth the names of all contractors and subcontractorswho did work on the Tenant-Made Alterations and final lien waivers from allsuch contractors and subcontractors.

 

Landlord hereby grantsTenant the right to install, maintain and replace from time to time an antennaedevice (hereinafter “Antenna”) on the roof of the Premises, subject tothe following: (a) applicable governmental laws; (b) the right of Landlord tosupervise any roof penetrations; (c) compliance with the conditions of any roofbond maintained by Landlord on the Premises; and (d) the Antenna not beingvisible at street level from the front of the Building.  Tenant shall be responsible for the repair ofany damage to any portion of the Premises caused by Tenant’s installation, useor removal of the Antenna.  The Antennashall remain the exclusive property of Tenant, and Tenant shall have the rightto remove same at any time during the term of the Lease so long as Tenant isnot in default under the Lease.  Tenantshall protect, defend, indemnify and hold harmless Landlord from and againstany and all claims, damages, liabilities, costs orexpenses of every kind and nature (including without

 

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limitation reasonable attorney fees) imposed upon orincurred by or asserted against Landlord arising out of Tenant’s installation,maintenance, use or removal of the Antenna.

 

Tenant, at its own costand expense, may erect such shelves, bins, machinery and trade fixtures(collectively “Trade Fixtures”) in the ordinary course of its business providedthat such items do not alter the basic character of the Premises, do notoverload or damage the Premises, and may be removed without injury to thePremises, and provided that the construction, erection, and installation thereofcomplies with all Legal Requirements and with Landlord’s requirements.  Subject to Paragraphs 21 and 38 below, uponthe expiration of the Lease Term, Tenant shall remove its Trade Fixtures andshall repair any damage caused by such removal, by the last day of the LeaseTerm.

 

13.           **Signs**.  Tenant shall not make any changes to theexterior of the Premises, install any exterior lights, decorations, balloons,flags, pennants, banners, or painting, or erect or install any signs, windowsor door lettering, placards, decorations, or advertising media of any typewhich can be viewed from the exterior of the Premises, without Landlord’s priorwritten consent which shall not be unreasonably withheld, delayed or conditioned,provided that all applicable sign ordinances are met and provided further that,in Landlord’s reasonable opinion, any such signage will materially conform withthe Landlord’s signage criteria for the Project, which will be uniformlyapplied among tenants in the Project.  Subjectto the conditions set forth above and subject to approval of location, Tenantshall have the right to install a monument sign at the Building and displayTenant’s name and logo on the Building.  Landlordshall provide Tenant up to $20,000 as a signage allowance, and such allowanceshall be payable to Tenant within 20 days after receipt of a “paid” invoice forsignage costs from Tenant.  Upon vacationof the Premises, Tenant shall remove all signs and repair, paint, and/orreplace the building facia surface to which its signs are attached.  Tenant shall obtain all applicablegovernmental permits and approvals for sign and exterior treatments.  All signs, decorations, advertising media,blinds, draperies and other window treatment or bars or other securityinstallations visible from outside the Premises shall be subject to Landlord’sapproval and conform in all respects to Landlord’s requirements.

 

14.           **Parking**.  Tenant and its employees, representatives,agents and invitees shall be entitled to park in common with other tenants ofthe Project in those areas designated for nonreserved parking.  A portion of the parking area shall be fencedin for Tenant’s sole and exclusive benefit. Landlord may allocate additional parking spaces among Tenant and othertenants in the Project if Landlord determines that such parking facilities are becomingcrowded.  Landlord shall not beresponsible for enforcing Tenant’s parking rights against any third parties.

 

15.           **Restoration**.  If at any time during the Lease Term thePremises are damaged by a fire or other casualty, Landlord shall notify Tenantwithin 45 days after such damage as to the amount of time Landlord reasonablyestimates it will take to restore the Premises.  If the restoration time is estimated to exceed4 months, either Landlord or Tenant may elect to terminate this Lease uponnotice to the other party given no later than 45 days after Landlord’s notice.  If neither party elects to terminate thisLease or if Landlord estimates that restoration will take 4 months or less,then, subject to receipt of sufficient insurance proceeds, Landlord shallpromptly restore the Premises excluding the improvements installed by Tenant orby Landlord and paid by Tenant, subject to delays arising from the collectionof insurance proceeds or from Force Majeure events.  Tenant at Tenant’s expense shall promptlyperform, subject to delays arising from the collection of insurance proceeds,or from Force Majeure events, all repairs or restoration not required to bedone by Landlord and shall promptly re-enter the Premises and commence doingbusiness in accordance with this Lease.  Notwithstandingthe foregoing, either party may terminate this Lease if the Premises aredamaged during the last year of the Lease Term and Landlord reasonablyestimates that it will take more than one month to repair such damage.  Tenant shall pay to Landlord with respect toany damage to the Premises the amount of the commercially reasonably deductibleunder Landlord’s insurance policy (up to $10,000) within 10 days afterpresentment of Landlord’s invoice.  Ifthe damage involves the premises of other tenants, Tenant shall pay the portionof the deductible that the cost of the restoration of the Premises bears to thetotal cost of restoration, as determined by Landlord.  Base Rent and Operating Expenses shall beabated for

 

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the period of repair and restoration in the proportion which the areaof the Premises, if any, which is not usable by Tenant bears to the total areaof the Premises.  Such abatement shall bethe sole remedy of Tenant, and except as provided herein, Tenant waives anyright to terminate the Lease by reason of damage or casualty loss.

 

16.           **Condemnation**.  If any part of the Premises or the Projectshould be taken for any public or quasi-public use under governmental law,ordinance, or regulation, or by right of eminent domain, or by private purchasein lieu thereof (a “Taking” or “Taken”), and the Taking would prevent ormaterially interfere with Tenant’s use of the Premises or in Landlord’sjudgment would materially interfere with or impair its ownership or operationof the Project, then upon written notice by Tenant to Landlord, or by Landlordto Tenant, as the case may be this Lease shall terminate and Base Rent shall beapportioned as of said date.  If part ofthe Premises shall be Taken, and this Lease is not terminated as providedabove, the Base Rent payable hereunder during the unexpired Lease Term shall bereduced to such extent as may be fair and reasonable under thecircumstances.  In the event of any suchTaking, Landlord shall be entitled to receive the entire price or award fromany such Taking without any payment to Tenant, and Tenant hereby assigns toLandlord Tenant’s interest, if any, in such award.  Tenant shall have the right, to the extentthat same shall not diminish Landlord’s award, to make a separate claim againstthe condemning authority (but not Landlord) for such compensation as may beseparately awarded or recoverable by Tenant for moving expenses and damage toTenant’s Trade Fixtures, if a separate award for such items is made to Tenant.

 

17.           **Assignment****and Subletting**.  Without Landlord’s prior written consentwhich shall not be unreasonably withheld, delayed or conditioned provided thatthe conditions set forth on Addendum 3 are met, Tenant shall not assign thisLease or sublease the Premises or any part thereof or mortgage, pledge, orhypothecate its leasehold interest or grant any concession or license withinthe Premises and any attempt to do any of the foregoing shall be void and of noeffect.  For purposes of this paragraph,a transfer of the ownership interests controlling Tenant shall be deemed anassignment of this Lease unless such ownership interests are publicly traded.  Notwithstanding the above, Tenant may assignor sublet the Premises, or any part thereof, to any entity controlling Tenant,controlled by Tenant or under common control with Tenant (a “Tenant Affiliate”),without the prior written consent of Landlord.  Tenant shall reimburse Landlord for all ofLandlord’s reasonable out-of-pocket expenses in connection with any assignmentor sublease, not to exceed $1,000 per occurrence.  Upon Landlord’s receipt of Tenant’s writtennotice of a desire to assign or sublet the Premises, or any part thereof (otherthan to a Tenant Affiliate), Landlord may, by giving written notice to Tenantwithin 30 days after receipt of Tenant’s notice, terminate this Lease withrespect to the space described in Tenant’s notice, as of the date specified inTenant’s notice for the commencement of the proposed assignment or sublease.

 

Notwithstanding anyassignment or subletting, Tenant and any guarantor or surety of Tenant’sobligations under this Lease shall at all times remain fully responsible andliable for the payment of the rent and for compliance with all of Tenant’sother obligations under this Lease (regardless of whether Landlord’s approvalhas been obtained for any such assignments or sublettings).  In the event that the rent due and payable bya sublessee or assignee (or a combination of the rental payable under suchsublease or assignment plus any bonus or other consideration therefor orincident thereto) exceeds the rental payable under this Lease, then Tenantshall be bound and obligated to pay Landlord as additional rent hereunder allsuch excess rental and other excess consideration (after deducting Tenant’sbrokerage commissions, reasonable attorney’s fees and reasonable costs ofimprovements made by Tenant in connection therewith) within 10 days followingreceipt thereof by Tenant.

 

If this Lease be assignedor if the Premises be subleased (whether in whole or in part) or in the eventof the mortgage, pledge, or hypothecation of Tenant’s leasehold interest orgrant of any concession or license within the Premises or if the Premises beoccupied in whole or in part by anyone other than Tenant, then upon a defaultby Tenant hereunder Landlord may collect rent from the assignee, sublessee,mortgagee, pledgee, party to whom the leasehold interest was hypothecated,concessionee or licensee or other occupant and, except to the extent set forthin the preceding paragraph, apply the amount collected to the next rent payablehereunder; and all such rentals collected by Tenant shall be held in trust forLandlord and immediately forwarded to Landlord.  No such

 

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transaction or collection of rent or applicationthereof by Landlord, however, shall be deemed a waiver of these provisions or arelease of Tenant from the further performance by Tenant of its covenants,duties, or obligations hereunder.

 

18.          **Indemnification**. Except for the negligence of Landlord,its agents, employees or contractors, and to the extent permitted by law,Tenant agrees to indemnify, defend and hold harmless Landlord, and Landlord’sagents, employees and contractors, from and against any and all losses,liabilities, damages, costs and expenses (including attorneys’ fees) resultingfrom claims by third parties for injuries to any person and damage to or theftor misappropriation or loss of property occurring in or about the Project andarising from the use and occupancy of the Premises or from any activity, work,or thing done, permitted or suffered by Tenant in or about the Premises or dueto any other act or omission of Tenant, its subtenants, assignees, invitees,employees, contractors and agents.  Thefurnishing of insurance required hereunder shall not be deemed to limit Tenant’sobligations under this Paragraph 18.

 

19.           **Inspection and Access**.  After providing reasonable notice to Tenant,except in the case of an emergency, Landlord and its agents, representatives,and contractors may enter the Premises at any reasonable time to inspect thePremises and to make such repairs as may be required or permitted pursuant tothis Lease and for any other business purpose.  Landlord and Landlord’s representatives mayenter the Premises during business hours for the purpose of showing thePremises to prospective purchasers and, during the last year of the Lease Term,to prospective tenants.  Except in anemergency situation, Landlord shall provide Tenant with reasonable opportunity toaccompany Landlord on any such entry into the Premises.  Landlord may erect a suitable sign on thePremises stating the Premises are available to let or that the Project isavailable for sale.

 

20.           **Quiet Enjoyment**. If Tenant shall perform all of thecovenants and agreements herein required to be performed by Tenant, or ifTenant is not in default hereunder after any applicable cure periods, Tenantshall, subject to the terms of this Lease, at all times during the Lease Term,have peaceful and quiet enjoyment of the Premises against any person claimingby, through or under Landlord.

 

21.           **Surrender**.  Upon termination of the Lease Term or earliertermination of Tenant’s right of possession, all Tenant-Made Alterations exceptfor the Initial Tenant Improvements as defined in Addendum 2, shall be removedby Tenant at Tenant’s expense and Tenant shall repair any damage caused by suchremoval.  Notwithstanding the above, atTenant’s request, Landlord will inform Tenant at the time of Landlord’sapproval of Tenant-Made Alterations whether Landlord will require removal ofsuch Tenant-Made Alterations at the end of the Lease Term.  Any Trade Fixtures or Tenant-Made Alterationsnot so removed by Tenant as permitted or required herein shall be deemedabandoned and may be stored, removed, and disposed of by Landlord at Tenant’sexpense, and Tenant waives all claims against Landlord for any damagesresulting from Landlord’s retention and disposition of such property.  All obligations of Tenant hereunder not fullyperformed as of the termination of the Lease Term shall survive the terminationof the Lease Term, including without limitation, indemnity obligations, paymentobligations with respect to Operating Expenses and obligations concerning thecondition and repair of the Premises.

 

22.           **Holding Over**.  If Tenant retains possession of the Premisesafter the termination of the Lease Term, unless otherwise agreed in writing,such possession shall be subject to immediate termination by Landlord at anytime, and all of the other terms and provisions of this Lease (excluding anyexpansion or renewal option or other similar right or option) shall beapplicable during such holdover period, except that Tenant shall pay Landlord fromtime to time, upon demand, as Base Rent for the holdover period, an amountequal to 150% of the Base Rent in effect on the termination date, computed on amonthly basis for each month or part thereof during such holding over.  All other payments shall continue under theterms of this Lease.  In addition, Tenantshall be liable for all damages incurred by Landlord as a result of suchholding over.  No holding over by Tenant,whether with or without consent of Landlord, shall operate to extend this Leaseexcept as otherwise expressly provided, and this Paragraph 22 shall not beconstrued as consent for Tenant to retain possession of the Premises.

 

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23.           **Eventsof Default**.** **Eachof the following events shall be an event of default (“Event of Default”) byTenant under this Lease:

 

(i)           Tenant shall fail to pay anyinstallment of Base Rent or any other payment required herein when due, andsuch failure shall continue for a period of 5 business days from the date ofLandlord’s written notice to Tenant of such failure to pay; provided, however,that Landlord shall not be obligated to provide written notice more than 2times in any 12-month period or more than 7 times over the Lease Term, and thefailure of Tenant to pay in a timely fashion any additional installment of BaseRent or other payment when due shall constitute an Event of Default withoutrequirement of notice or an opportunity to cure.

 

(ii)          Tenant or any guarantor or surety ofTenant’s obligations hereunder shall (A) make a general assignment for thebenefit of creditors; (B) commence any case, proceeding or other action seekingto have an order for relief entered on its behalf as a debtor or to adjudicateit a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,liquidation, dissolution or composition of it or its debts or seekingappointment of a receiver, trustee, custodian or other similar official for itor for all or of any substantial part of its property (collectively a “proceedingfor relief”); (C) become the subject of any proceeding for relief which is notdismissed within 60 days of its filing or entry; or (D) die or suffer a legaldisability (if Tenant, guarantor, or surety is an individual) or be dissolvedor otherwise fail to maintain its legal existence (if Tenant, guarantor orsurety is a corporation, partnership or other entity).

 

(iii)          Any insurance required to bemaintained by Tenant pursuant to this Lease shall be cancelled or terminated orshall expire or shall be reduced or materially changed, except, in each case,as permitted in this Lease.

 

(iv)         Tenant shall not occupy or shall vacatethe Premises or shall fail to operate its business at the Premises for thepermitted use set forth herein, whether or not Tenant is in monetary or otherdefault under this Lease.

 

(v)          Tenant shall attempt or there shalloccur any assignment, subleasing or other transfer of Tenant’s interest in orwith respect to this Lease except as otherwise permitted in this Lease.

 

(vi)         Tenant shall fail to discharge any lienplaced upon the Premises in violation of this Lease within 30 days after Tenantreceives notice that any such lien or encumbrance is filed against thePremises.

 

(vii)        Tenant shall fail to comply with anyprovision of this Lease other than those specifically referred to in thisParagraph 23, and except as otherwise expressly provided herein, such defaultshall continue for more than 30 days after Landlord shall have given Tenantwritten notice of such default.

 

24.           **Landlord’s Remedies**.  Upon each occurrence of an Event of Defaultand so long as such Event of Default shall be continuing, Landlord may at anytime thereafter at its election: terminate this Lease or Tenant’s right ofpossession, (but Tenant shall remain liable as hereinafter provided) and/orpursue any other remedies at law or in equity. Upon the termination of this Lease or termination of Tenant’s right ofpossession, it shall be lawful for Landlord, without formal demand or notice ofany kind, to re-enter the Premises by summary dispossession proceedings or anyother action or proceeding authorized by law and to remove Tenant and allpersons and property therefrom.  IfLandlord re-enters the Premises, Landlord shall have the right to keep in placeand use, or remove and store, all of the furniture, fixtures and equipment atthe Premises.

 

If Landlord terminatesthis Lease pursuant to this Paragraph 24, Landlord may recover from Tenant thesum of: all Base Rent and all other amounts accrued hereunder to the date ofsuch termination; the cost of reletting the whole or any part of the Premises,including without limitation brokerage fees and/or leasing

 

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commissions incurred by Landlord, and costs ofremoving and storing Tenant’s or any other occupant’s property, repairing,altering, remodeling, or otherwise putting the Premises into rentablecondition, and all reasonable expenses incurred by Landlord in pursuing itsremedies, including reasonable attorneys’ fees and court costs; and the excessof the then present value of the Base Rent and other amounts payable by Tenantunder this Lease as would otherwise have been required to be paid by Tenant toLandlord during the period following the termination of this Lease measuredfrom the date of such termination to the expiration date stated in this Lease,over the present value of any net amounts which Tenant establishes Landlord canreasonably expect to recover by reletting the Premises for such period, takinginto consideration the availability of acceptable tenants and other marketconditions affecting leasing.  Suchpresent values shall be calculated at a discount rate equal to the 90-day U.S.Treasury bill rate at the date of such termination.

 

If Landlord terminatesTenant’s right of possession (but not this Lease), Landlord may, but shall beunder no obligation to, relet the Premises for the account of Tenant for suchrent and upon such terms as shall be satisfactory to Landlord without therebyreleasing Tenant from any liability hereunder and without demand or notice ofany kind to Tenant.  For the purpose ofsuch reletting Landlord is authorized to make any repairs, changes,alterations, or additions in or to the Premises as Landlord deems reasonablynecessary or desirable.  If the Premisesare not relet, then Tenant shall pay to Landlord as damages a sum equal to theamount of the rental reserved in this Lease for such period or periods, plusthe cost of recovering possession of the Premises (including reasonableattorneys’ fees and costs of suit), the unpaid accrued Base Rent and otheramounts accrued hereunder at the time of repossession, and the costs incurredin any attempt by Landlord to relet the Premises.  If the Premises are relet and a sufficient sumshall not be realized from such reletting [after first deducting therefrom, forretention by Landlord, the unpaid Base Rent and other amounts accrued hereunderat the time of reletting, the cost of recovering possession (includingreasonable attorneys’ fees and costs of suit), all of the costs and expense ofrepairs, changes, alterations, and additions, the expense of such reletting(including without limitation brokerage fees and leasing commissions) and thecost of collection of the rent accruing therefrom] to satisfy the rent providedfor in this Lease to be paid, then Tenant shall immediately satisfy and pay anysuch deficiency.  Any such payments dueLandlord shall be made upon demand therefor from time to time and Tenant agreesthat Landlord may file suit to recover any sums falling due from time to time.  Notwithstanding any such reletting withouttermination, Landlord may at any time thereafter elect in writing to terminatethis Lease for such previous breach.

 

Exercise by Landlord ofany one or more remedies hereunder granted or otherwise available shall not bedeemed to be an acceptance of surrender of the Premises and/or a termination ofthis Lease by Landlord, whether by agreement or by operation of law, it beingunderstood that such surrender and/or termination can be effected only by thewritten agreement of Landlord and Tenant.  Any law, usage, or custom to the contrarynotwithstanding, Landlord shall have the right at all times to enforce theprovisions of this Lease in strict accordance with the terms hereof; and thefailure of Landlord at any time to enforce its rights under this Lease strictlyin accordance with same shall not be construed as having created a custom inany way or manner contrary to the specific terms, provisions, and covenants ofthis Lease or as having modified the same.  Tenant and Landlord further agree thatforbearance or waiver by Landlord to enforce its rights pursuant to this Leaseor at law or in equity, shall not be a waiver of Landlord’s right to enforceone or more of its rights in connection with any subsequent default.  A receipt by Landlord of rent or other paymentwith knowledge of the breach of any covenant hereof shall not be deemed awaiver of such breach, and no waiver by Landlord of any provision of this Leaseshall be deemed to have been made unless expressed in writing and signed byLandlord.  The terms “enter,” “re-enter,”“entry” or “re-entry,” as used in this Lease, are not restricted to theirtechnical legal meanings.  Any relettingof the Premises shall be on such terms and conditions as Landlord in its solediscretion may determine (including without limitation a term different thanthe remaining Lease Term, rental concessions, alterations and repair of thePremises, lease of less than the entire Premises to any tenant and leasing anyor all other portions of the Project before reletting the Premises).  Landlord shall not be liable, nor shall Tenant’sobligations hereunder be diminished because of, Landlord’s failure to relet thePremises or collect rent due in respect of such reletting.

 

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25.            **Tenant’sRemedies/Limitation of Liability**. Landlord shall not be in default hereunder and Tenant shall not have anyremedy or cause of action unless Landlord fails to perform any of itsobligations hereunder within 30 days after written notice from Tenantspecifying such failure (unless such performance will, due to the nature of theobligation, require a period of time in excess of 30 days, then after suchperiod of time as is reasonably necessary).  All obligations of Landlord hereunder shall beconstrued as covenants, not conditions; and, except as may be otherwiseexpressly provided in this Lease, Tenant may not terminate this Lease forbreach of Landlord’s obligations hereunder.  All obligations of Landlord under this Leasewill be binding upon Landlord only during the period of its ownership of thePremises and not thereafter.  The term “Landlord”in this Lease shall mean only the owner, for the time being of the Premises,and in the event of the transfer by such owner of its interest in the Premises,such owner shall thereupon be released and discharged from all obligations ofLandlord thereafter accruing, but such obligations shall be binding during theLease Term upon each new owner for the duration of such owner’s ownership.  Any liability of Landlord under this Leaseshall be limited solely to its interest in the Project, and in no event shallany personal liability be asserted against Landlord in connection with thisLease nor shall any recourse be had to any other property or assets ofLandlord.

 

26.            **Waiver of Jury Trial**.  TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIALBY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHERSOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISINGOUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED ORDELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

 

27.            **Subordination**.  This Lease and Tenant’s interest and rightshereunder are and shall be subject and subordinate at all times to the lien ofany first mortgage, now existing or hereafter created on or against the Projector the Premises, and all amendments, restatements, renewals, modifications,consolidations, refinancing, assignments and extensions thereof, without thenecessity of any further instrument or act on the part of Tenant.  Tenant agrees, at the election of the holderof any such mortgage, to attorn to any such holder.  Landlord agrees to use commercially reasonableefforts to obtain for Tenant a non-disturbance and attornment agreement fromany current or future holder of a mortgage on the Project.  Tenant agrees upon demand to execute,acknowledge and deliver such instruments, confirming such subordination andsuch instruments of attornment as shall be requested by any such holder.  Tenant hereby appoints Landlord attorney infact for Tenant irrevocably (such power of attorney being coupled with aninterest) to execute, acknowledge and deliver any such instrument andinstruments for and in the name of the Tenant and to cause any such instrumentto be recorded.  Notwithstanding theforegoing, any such holder may at any time subordinate its mortgage to thisLease, without Tenant’s consent, by notice in writing to Tenant, and thereuponthis Lease shall be deemed prior to such mortgage without regard to their respectivedates of execution, delivery or recording and in that event such holder shallhave the same rights with respect to this Lease as though this Lease had beenexecuted prior to the execution, delivery and recording of such mortgage andhad been assigned to such holder.  Theterm “mortgage” whenever used in this Lease shall be deemed to include deeds oftrust, security assignments and any other encumbrances, and any reference tothe “holder” of a mortgage shall be deemed to include the beneficiary under adeed of trust.

 

28.            **Mechanic’s Liens**.** **Tenant has no express or implied authority to createor place any lien or encumbrance of any kind upon, or in any manner to bind theinterest of Landlord or Tenant in, the Premises or to charge the rentalspayable hereunder for any claim in favor of any person dealing with Tenant, includingthose who may furnish materials or perform labor for any construction orrepairs.  Tenant covenants and agreesthat it will pay or cause to be paid all sums legally due and payable by it onaccount of any labor performed or materials furnished in connection with anywork performed on the Premises and that it will save and hold Landlord harmlessfrom all loss, cost or expense based on or arising out of asserted claims orliens against the leasehold estate or against the interest of Landlord in the Premisesor under this Lease.  Tenant shall giveLandlord immediate written notice of the placing of any lien or encumbranceagainst the Premises and cause such lien or encumbrance to be discharged within30 days of the filing or recording thereof; provided, however, Tenant maycontest such liens or

 

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encumbrances as long assuch contest prevents foreclosure of the lien or encumbrance and Tenant causessuch lien or encumbrance to be bonded or insured over in a manner satisfactoryto Landlord within such 30 day period.

 

29.           **Estoppel Certificates**.  Tenant agrees, from time to time, within 10business days after request of Landlord, to execute and deliver to Landlord, orLandlord’s designee, any estoppel certificate requested by Landlord, statingthat this Lease is in full force and effect, the date to which rent has beenpaid, that Landlord is not in default hereunder (or specifying in detail thenature of Landlord’s default), the termination date of this Lease and suchother matters pertaining to this Lease as may be requested by Landlord.  Tenant’s obligation to furnish each estoppelcertificate in a timely fashion is a material inducement for Landlord’sexecution of this Lease.  No cure orgrace period provided in this Lease shall apply to Tenant’s obligations totimely deliver an estoppel certificate.

 

30.           **Environmental Requirements**.  Except for Hazardous Material contained inproducts used by Tenant in de minimis quantities for ordinary cleaning andoffice purposes, Tenant shall not permit or cause any party to bring anyHazardous Material upon the Premises or store or use any Hazardous Material inor about the Premises without Landlord’s prior written consent.  Tenant, at its sole cost and expense, shalloperate its business in the Premises in compliance with all EnvironmentalRequirements and shall immediately remediate any Hazardous Materials releasedon or from the Project by Tenant, its agents, employees, contractors,subtenants or invitees.  The term “EnvironmentalRequirements” means all applicable present and future statutes, regulations,ordinances, rules, codes, judgments, orders or other similar enactments of anygovernmental authority or agency regulating or relating to health, safety, orenvironmental conditions on, under, or about the Premises or the environment,including without limitation, the following: the Comprehensive EnvironmentalResponse, Compensation and Liability Act (“CERCLA”); the Resource Conservationand Recovery Act; and all state and local counterparts thereto, and any regulationsor policies promulgated or issued thereunder.  The term “Hazardous Materials” means andincludes petroleum (as defined in CERCLA) and any substance, material, waste,pollutant, or contaminant listed or defined as hazardous or toxic, under anyEnvironmental Requirements.

 

Tenant shall indemnify,defend, and hold Landlord harmless from and against any and all losses(including, without limitation, diminution in value of the Premises or theProject and loss of rental income from the Project), claims, demands, actions,suits, damages (including, without limitation, punitive damages), expenses(including, without limitation, remediation, corrective action, or cleanupexpenses), and costs (including, without limitation, actual attorneys’ fees,consultant fees or expert fees) which are brought or recoverable against, orsuffered or incurred by Landlord as a result of any release of HazardousMaterials for which Tenant is obligated to remediate as provided above or anyother breach of the requirements under this Paragraph 30 by Tenant, its agents,employees, contractors, subtenants, assignees or invitees, regardless ofwhether Tenant had knowledge of such noncompliance.  The obligations of Tenant under this Paragraph30 shall survive any termination of this Lease.

 

When available, Landlordwill deliver to Tenant a true and complete copy of the final Phase 1Environmental Site Assessment prepared on behalf of Landlord (the “Report”),Tenant agrees to keep the Report confidential and not to disclose the contentsthereof to any other party (except Tenant’s advisors with respect to thisleasing transaction) without the prior written consent of Landlord.  Tenant acknowledges that Landlord has made norepresentation or warranty with respect to the accuracy or completeness of anyinformation or conclusions contained in such environmental Report.  Landlord shall also provide to Tenant copiesof all other final and fully executed environmental reports prepared on behalfof Landlord during Landlord’s inspection period for the Project, provided thatTenant agrees to keep such reports confidential, except as provided above.

 

Landlord, upon deliveryof the Report, will represent to Tenant that to the best of Landlord’s thencurrent, actual knowledge, based only upon and except as disclosed in theReport, there are no Hazardous Materials in reportable quantities on theProject.  The phrase “the current, actualknowledge of Landlord” shall mean and refer only to the best of the current, actualknowledge of the officers of Landlord having direct, operational responsibilityfor the Project, with the express limitations and qualifications that theknowledge of any contractor or consultant

 

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shall not be imputed to Landlord, and none of suchofficers has made any special investigation or inquiry, and none of suchofficers has any duty or obligation of diligent investigation or inquiry, orany other duty or obligation, to acquire or to attempt to acquire informationbeyond or in addition to the current, actual knowledge of such persons.

 

Landlord shall haveaccess to, and a right to perform inspections and tests of, the Premises todetermine Tenant’s compliance with Environmental Requirements, its obligationsunder this Paragraph 30, or the environmental condition of the Premises.  Access shall be granted to Landlord uponLandlord’s prior notice to Tenant and at such times so as to minimize, so faras may be reasonable under the circumstances, any disturbance to Tenant’soperations.  Such inspections and testsshall be conducted at Landlord’s expense, unless such inspections or testsreveal that Tenant has not complied with any Environmental Requirement, inwhich case Tenant shall reimburse Landlord for the reasonable cost of suchinspection and tests.  Landlord’s receiptof or satisfaction with any environmental assessment in no way waives anyrights that Landlord holds against Tenant.

 

31.           **Rules and Regulations**.  Tenant shall, at all times during the LeaseTerm and any extension thereof, comply with all reasonable rules andregulations at any time or from time to time established by Landlord coveringuse of the Premises and the Project.  Thecurrent rules and regulations are attached hereto.  In the event of any conflict between saidrules and regulations and other provisions of this Lease, the other terms andprovisions of this Lease shall control. Landlord shall not have any liability or obligation for the breach ofany rules or regulations by other tenants in the Project, but shall equitablyenforce the rules and regulations among all tenants in the Project.

 

32.           **Security Service**.  Tenant acknowledges and agrees that, whileLandlord may patrol the Project, Landlord is not providing any security serviceswith respect to the Premises and that Landlord shall not be liable to Tenantfor, and Tenant waives any claim against Landlord with respect to, any loss bytheft or any other damage suffered or incurred by Tenant in connection with anyunauthorized entry into the Premises or any other breach of security withrespect to the Premises.

 

33.           **Force Majeure**.  Except for monetary payments required underthis Lease, neither party shall be held responsible for delays in theperformance of its obligations hereunder when caused by strikes, lockouts,labor disputes, acts of God, inability to obtain labor or materials orreasonable substitutes therefor, governmental restrictions, governmentalregulations, governmental controls, delay in issuance of permits, enemy orhostile governmental action, civil commotion, fire or other casualty, and othercauses beyond the reasonable control of such party (“Force Majeure”).

 

34.           **Entire Agreement**.  This Lease, together with all attachments,addenda and exhibits hereto, constitutes the complete agreement of Landlord andTenant with respect to the subject matter hereof.  No representations, inducements, promises oragreements, oral or written, have been made by Landlord or Tenant, or anyoneacting on behalf of Landlord or Tenant, which are not contained herein, and anyprior agreements, promises, negotiations, or representations are superseded bythis Lease.  This Lease may not beamended except by an instrument in writing signed by both parties hereto.

 

35.           **Severability**.  If any clause or provision of this Lease isillegal, invalid or unenforceable under present or future laws, then and inthat event, it is the intention of the parties hereto that the remainder ofthis Lease shall not be affected thereby. It is also the intention of the parties to this Lease that in lieu ofeach clause or provision of this Lease that is illegal, invalid orunenforceable, there be added, as a part of this Lease, a clause or provisionas similar in terms to such illegal, invalid or unenforceable clause orprovision as may be possible and be legal, valid and enforceable.

 

36.           **Brokers**.  Each party represents and warrants to theother that it has dealt with no broker, agent or other person in connectionwith this transaction and that no broker, agent or other person brought aboutthis transaction, other than the broker, if any, set forth on the first page ofthis Lease, and each party agrees to

 

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indemnify and hold the other harmless from and against any claims byany other broker, agent or other person claiming a commission or other form ofcompensation by virtue of having dealt with such party with regard to thisleasing transaction.

 

37.           **Miscellaneous**. (a) Any payments or charges due from Tenantto Landlord hereunder shall be considered rent for all purposes of this Lease.

 

(b)           If and when included within the term “Tenant,”as used in this instrument, there is more than one person, firm or corporation,each shall be jointly and severally liable for the obligations of Tenant.

 

(c)           All notices required or permitted tobe given under this Lease shall be in writing and shall be sent by registeredor certified mail, return receipt requested, or by a reputable nationalovernight courier service, postage prepaid, or by band delivery addressed tothe parties at their addresses below, and with a copy sent to Landlord at 14100East 35th Place, Aurora, Colorado 80011 and a copy to Tenant’s counsel atDickstein, Shapiro & Morin, L.L.P., 2101 L Street, N.W., Washington, D.C.20037-1526, Attention: Timothy C. Hutchens.  Either party may by notice given aforesaidchange its address for all subsequent notices.  Except where otherwise expressly provided tothe contrary, notice shall be deemed given upon delivery.

 

(d)           Except as otherwise expresslyprovided in this Lease, Landlord retains the absolute right to withhold anyconsent or approval.

 

(e)           At Landlord’s request from time totime Tenant shall furnish Landlord with true and complete copies of its mostrecent annual and quarterly financial statements prepared by Tenant or Tenant’saccountants and any other financial information or summaries that Tenanttypically provides to its lenders or shareholders.

 

(f)            Neither this Lease nor a memorandumof lease shall be filed by or on behalf of Tenant in any public record.  Landlord may prepare and file, and uponrequest by Landlord Tenant will execute, a memorandum of lease.

 

(g)           The normal rule of construction tothe effect that any ambiguities are to be resolved against the drafting partyshall not be employed in the interpretation of this Lease or any exhibits oramendments hereto.

 

(h)           The submission by Landlord to Tenantof this Lease shall have no binding force or effect, shall not constitute anoption for the leasing of the Premises, nor confer any right or impose anyobligations upon either party until execution of this Lease by both parties.

 

(i)            Words of any gender used in thisLease shall be held and construed to include any other gender, and words in thesingular number shall be held to include the plural, unless the contextotherwise requires.  The captionsinserted in this Lease are for convenience only and in no way define, limit orotherwise describe the scope or intent of this Lease, or any provision hereof,or in any way affect the interpretation of this Lease.

 

(j)            Any amount not paid by Tenant within10 days after its due date in accordance with the terms of this Lease shallbear interest from such due date until paid in full at the lesser of thehighest rate permitted by applicable law or the prime rate of interest asdefined by NationsBank N.A. plus 31/4 % per year.  It is expressly the intent of Landlord andTenant at all times to comply with applicable law governing the maximum rate oramount of any interest payable on or in connection with this Lease.  If applicable law is ever judiciallyinterpreted so as to render usurious any interest called for under this Lease,or contracted for, charged, taken, reserved, or received with respect to thisLease, then it is Landlord’s and Tenant’s express intent that all excessamounts theretofore collected by Landlord be credited on the applicableobligation (or, if the obligation has been or would thereby be paid in full,refunded to Tenant), and the provisions of this Lease immediately shall bedeemed reformed and the amounts thereafter collectible hereunder reduced,without the necessity of the execution of any new document, so

 

15

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as to comply with the applicable law, but so as topermit the recovery of the fullest amount otherwise called for hereunder.

 

(k)         Construction and interpretation of thisLease shall be governed by the laws of the state in which the Project islocated, excluding any principles of conflicts of laws.

 

(1)          Time is of the essence as to theperformance of both Landlord’s and Tenant’s obligations under this Lease.

 

(m)         All exhibits and addenda attachedhereto are hereby incorporated into this Lease and made a part hereof.  In the event of any conflict between suchexhibits or addenda and the terms of this Lease, such exhibits or addenda shallcontrol.

 

38.           **IntentionallyOmitted**.

 

39.           **Limitation of Liability ofTrustees, Shareholders, and Officers of Security Capital Industrial Trust**. Any obligation or liability whatsoeverof Security Capital Industrial Trust, a Maryland real estate investment trust,which may arise at any time under this Lease or any obligation or liabilitywhich may be incurred by it pursuant to any other instrument, transaction, orundertaking contemplated hereby shall not be personally binding upon, nor shallresort for the enforcement thereof be had to the property of, its trustees,directors, shareholders, officers, employees or agents, regardless of whethersuch obligation or liability is in the nature of contract, tort, or otherwise.

 

40.           **Acquisition of Premisesand Approvals Contingency**. Tenant acknowledges that Landlord does not currently own the Premises.  Notwithstanding anything in the Lease to thecontrary, Landlord’s obligations under the Lease are conditioned and contingentupon Landlord or its nominee or assignee acquiring fee simple title to thePremises no later than November 15, 1995.  Landlord shall promptly notify Tenant of itsacquisition of fee simple title to the Premises.  If Landlord has not acquired fee simple titleto the Premises by November 15, 1995, Tenant shall have the right to terminatethis Lease for the ensuing two business days, by written notice to Landlord, berelieved of all obligations hereunder and receive a return of the SecurityDeposit and all deposited Base Rent and Operating Expenses.  If Tenant fails to terminate the Lease as setforth above, the Lease shall continue in full force and effect; provided,however, that Tenant shall have a right to terminate the Lease, subject to theconditions and time restrictions set forth above, on the 30th day followingNovember 15, 1995 and every 30th day thereafter, until Landlord obtains feesimple title to the Property.  Landlordagrees to keep Tenant generally apprised of its due diligence review, andagrees to use reasonable efforts to notify Tenant of material issues relatingto Landlord’s acquisition of the Project. No expenditure of any sum or incurring of any liability of Tenant formerchandise, fixtures, equipment, labor, materials or otherwise shall affectthe rights of Landlord hereunder.

 

41.           **Assignment Provision**.  Landlord shall have the right, at any time,to assign this Lease to any entity, including Galaxy Investments, Inc.,provided that such assignee assumes all of Landlord’s obligations under theLease.

 

16

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IN WITNESS WHEREOF,Landlord and Tenant have executed this Lease as of the day and year first abovewritten,

 

 
| TENANT:                                                |                | LANDLORD:                                                   |
|--------------------------------------------------------|---------------------|-------------------------------------------------------------|
|                                                   |                |                                                        |
| GOVERNMENT TECHNOLOGY SERVICES, INC.                   |                | SECURITY CAPITAL INDUSTRIAL TRUST                           |
|                                                   |                |                                                        |
| By:                                                    | /s/ Thomas L. Smudz |                                                        | By: | /s/ Robert Steubens |
| Title:                                                 | EVP & CFO       |                                                        | Title: | Senior Vice President |
|                                                   | 8-11-95             |                                                        |   |   |
| Address:                                               |                | Address:                                                    |
|                                                   |                |                                                        |
| 4100 Lafayette Center Drive  Chantilly, Virginia 22021 |                | 1800 Diagonal Road  Sixth Floor  Alexandria, Virginia 22314 |

 

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Rules and Regulations

 

1.                                     Thesidewalk, entries, and driveways of the Project shall not be obstructed byTenant, or its agents, or used by them for any purpose other than ingress andegress to and from the Premises.

 

2.                                     Exceptas otherwise provided in the Lease, Tenant shall not place any objects, outdoorfurniture, etc., in the parking areas, landscaped areas or other areas outsideof its Premises, or on the roof of the Project.

 

3.                                     Exceptfor seeing-eye dogs, no animals shall be allowed in the offices, halls, orcorridors in the Project.

 

4.                                     Tenantshall not disturb the occupants of the Project or adjoining buildings by theuse of any radio or musical instrument or by the making of loud or impropernoises.

 

5.                                     IfTenant desires telegraphic, telephonic or other electric connections in thePremises, Landlord or its agent will direct the electrician as to where and howthe wires may be introduced; and, without such direction, no boring or cuttingof wires will be permitted.  Any suchinstallation or connection shall be made at Tenant’s expense.

 

6.                                     Tenantshall not install or operate any steam or gas engine or boiler, or othermechanical apparatus in the Premises, except as specifically approved in theLease.  The use of oil, gas orinflammable liquids for heating, lighting or any other purpose is expresslyprohibited.  Explosives or other articlesdeemed extra hazardous shall not be brought into the Project.

 

7.                                     Parkingany type of recreational vehicles is specifically prohibited on or about theProject.  Except for the overnightparking of operative vehicles, no vehicle of any type shall be stored in theparking areas at any time.  In the event thata vehicle is disabled, it shall be removed within 48 hours.  There shall be no “For Sale” or otheradvertising signs on or about any parked vehicle.  All vehicles shall be parked in the designatedparking areas in conformity with all signs and other markings.  All parking will be open parking, and noreserved parking, numbering or lettering of individual spaces will be permittedexcept as specified by Landlord.

 

8.                                     Tenantshall maintain the Premises free from rodents, insects and other pests.

 

9.                                     Landlordreserves the right to exclude or expel from the Project any person who, in thejudgment of Landlord, is intoxicated or under the influence of liquor or drugsor who shall in any manner do any act in violation of the Rules and Regulationsof the Project.

 

10.                               Tenantshall not cause any unnecessary labor by reason of Tenant’s carelessness orindifference in the preservation of good order and cleanliness.  Landlord shall not be responsible to Tenantfor any loss of property on the Premises, however occurring, or for any damagedone to the effects of Tenant by the janitors or any other employee or person.

 

11.                               Tenantshall give Landlord prompt notice of any defects in the water, lawn sprinkler,sewage, gas pipes, electrical lights and fixtures, heating apparatus, or anyother service equipment affecting the Premises, if known.

 

12.                               Tenantshall not permit storage outside the Premises, including without limitation,outside storage of trucks and other vehicles, or dumping of waste or refuse orpermit any harmful materials to be placed in any drainage system or sanitarysystem in or about the Premises.

 

13.                               Allmoveable trash receptacles provided by the trash disposal firm for the Premisesmust be kept in the trash enclosure areas, if any, provided for that purpose.

 

14.                               Noauction, public or private, will be permitted on the Premises or the Project.

 

15.                               Noawnings shall be placed over the windows in the, Premises except with the priorwritten consent of Landlord.

 

16.                               ThePremises shall not be used for lodging, sleeping or cooking (other than forincidental meals) or for any immoral or illegal purposes or for any purposeother than that specified in the Lease.  Nogaming devices shall be operated in the Premises.

 

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17.                               Tenantshall ascertain from Landlord the maximum amount of electrical current whichcan safely be used in the Premises, taking into account the capacity of theelectrical wiring in the Project and the Premises and the needs of othertenants, and shall not use more than such safe capacity.  Landlord’s consent to the installation ofelectric equipment shall not relieve Tenant from the obligation not to use moreelectricity than such safe capacity.

 

18.          Tenant assumes full responsibility forprotecting the Premises from theft, robbery and pilferage.

 

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ADDENDUM 1

 

BASE RENT ADJUSTMENTS

 

ATTACHED TO AND A PART OFTHE LEASE AGREEMENTDATED AUGUST 11, 1995 BETWEENGOVERNMENT TECHNOLOGY SERVICES, INC.ANDSECURITY CAPITAL INDUSTRIAL TRUST

 

Base Rent shall equal the following amounts for the respective periodsset forth below:

 
| **Period**    | ** ** | **Per Square Ft Per Year** | *** *** | **Monthly Rent */** | *** *** |
|---------------|------------|----------------------------|--------------|---------------------|--------------|
| Lease Year 1  |       | $                          | 3.44         |                | $            | 58,666.05 |   |
| Lease Year 2  |       | $                          | 3.54         |                | $            | 60,371.46 |   |
| Lease Year 3  |       | $                          | 3.65         |                | $            | 62,247.40 |   |
| Lease Year 4  |       | $                          | 3.76         |                | $            | 64,123.35 |   |
| Lease Year 5  |       | $                          | 3.87         |                | $            | 65,999.30 |   |
| Lease Year 6  |       | $                          | 3.90         |                | $            | 66,510.93 |   |
| Lease Year 7  |       | $                          | 4.02         |                | $            | 68,557.42 |   |
| Lease Year 8  |       | $                          | 4.14         |                | $            | 70,603.91 |   |
| Lease Year 9  |       | $                          | 4.26         |                | $            | 72,650.40 |   |
| Lease Year 10 |       | $                          | 4.39         |                | $            | 74,867.43 |   |

 

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*/   MonthlyBase Rent will be adjusted based on a final determination of the square footageof space contained in the Premises.

 

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ADDENDUM 2

 

CONSTRUCTION -SHORT FORM

(ALLOWANCE)

 

ATTACHED TO AND APART OF THE LEASE AGREEMENT

DATED AUGUST 11,1995 BETWEEN

GOVERNMENTTECHNOLOGY SERVICES, INC.

and

SECURITY CAPITALINDUSTRIAL TRUST

 

(a)    Within 15 days following execution of thisLease, Landlord shall use its best efforts to enter into a contract with MorganGick and Associates (“Gick”) at Landlord’s cost and expense (except for anycosts and expenses related to the mezzanine, which shall be the responsibilityof Tenant), which will provide for Gick to prepare all necessary plans andspecifications for construction of the “Base Building” and the “Initial Tenant Improvements”as such terms are defined below in a timely manner in order to meet theanticipated Substantial Completion Date set forth in this Addendum 2.  The Building (including the Base Building andthe Initial Tenant Improvements) shall be designed and constructedsubstantially in accordance with the Outline Specifications attached hereto at ExhibitB.

 

(b)   The “Base Building” shall generally refer tothe site work, the foundation, floors, demising walls, access doors, dockdoors, sprinkler system, roof support and roof, all as more particularlydescribed and delineated on Exhibit B.  “Initial Tenant Improvements” shall generallyrefer to the interior lighting, HVAC system, warehouse heating, interiorplumbing and electrical, any office or other finished areas, wall insulationand dock equipment and the mezzanine, which shall be specifically subject tothe special provisions regarding the mezzanine provided for in this Addendum 2*,*all as more particularly delineated anddescribed in Exhibit B.

 

(c)    The plans and specifications for the InitialTenant Improvements shall be prepared by Gick at the reasonable direction ofTenant, subject to periodic review by Landlord and Tenant.  Landlord shall provide Tenant with finalplans (the “Final Plans”) including plans and specifications for the BaseBuilding and Initial Tenant Improvements which are consistent with the OutlineSpecifications and Tenant’s reasonable direction concerning the Initial TenantImprovements.  Tenant shall adviseLandlord within 7 business days of its approval or disapproval of the FinalPlans.  Tenant’s right to disapprove theproposed Final Plans shall be limited to factors which would materially andadversely affect the basic nature or appearance of the Premises or Tenant’sability to use the Premises, and any such disapproval shall be in writing andshall specify those elements of the Final Plans objected to by Tenant.  To the extent that the Final Plans aresubstantially consistent with the Outline Specifications, Tenant shall not beentitled to object thereto.  If Tenantshall not object in writing within the time period set forth above, then suchFinal Plans or portion thereof not objected to by Tenant shall be deemedapproved.

 

(d)           If Tenant shall desire any changes tothe approved Final Plans, Tenant shall so advise Landlord in writing andLandlord shall determine whether such changes can be made in reasonable andfeasible manner.  Any and allout-of-pocket costs of reviewing any requested changes, and any and all costsof making any changes to the Initial Tenant Improvements which Tenant mayrequest and which Landlord may agree to shall be at Tenant’s sole cost andexpense and shall be paid to Landlord upon demand and before execution of thechange order.  Prior to instituting anychange which would extend the date on which the Premises will be Substantially Complete,as defined below.  Tenant approval of thechange, as well as the anticipated impact of the change on the CommencementDate, shall be specifically set forth in writing signed by both Landlord andTenant.

 

(e)   Landlord, at its cost and expense, shallobtain all building and other permits necessary for the construction anddelivery of the Base Building and the Initial Tenant Improvements.

 

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(f)      Landlord shall use reasonable efforts toobtain a minimum of 3 bids for the Initial Tenant Improvements from generalcontractors it reasonably believes are qualified and capable to construct theInitial Tenant Improvements.  The generalcontractor need not be the same for the Base Building and the Initial Tenant Improvements.  Landlord and Tenant shall review all bids;provided, however, that Landlord retains the ultimate decision as to which bidto accept so long as Landlord’s selected bid is no greater than 15% above thelowest hid and Landlord sets forth in writing prudent business reasons whyLandlord has decided to select other than the lowest bidder.  Any bid which Landlord desires to select whichis more than 15% above the lowest bid, shall be subject to Tenant’s consent,which shall not be unreasonably withheld. Landlord shall contract with the selected general contractor toconstruct, install and deliver the Initial Tenant Improvements.

 

(g)     Tenant, at its cost, shall have the rightto retain a “Construction Manager” to provide construction managementconsulting services.  The ConstructionManager shall monitor the design and construction process on behalf of Tenant.  The Landlord will permit the ConstructionManager to attend all design and construction meetings, review all contractorbids, inspect the progress or construction and to monitor the construction ofthe Initial Tenant Improvements with Landlord.

 

(h)     Landlord shall use all reasonable effortsto ensure that the Premises are Substantially Completed, as defined below, byJune 1, 1996.  Such date, unless anearlier date is otherwise agreed to in writing between Landlord and Tenant,shall be the “Commencement Date” provided the Premises are SubstantiallyComplete on such date unless the completion of such improvements was delayeddue to Tenant’s fault, including as a result of changes made by Tenant ordelays in the construction of the mezzanine as set forth below, in which casethe Commencement Date shall be the date such improvements would have beencompleted but for the delays caused by Tenant. “Substantial Completion” shallbe deemed to have occurred when (i) the construction of the Base Building andInitial Tenant Improvements are completed in accordance with the Final Plans asreasonably determined by Gick, subject to minor punch list items which do notinterfere with Tenant’s use and enjoyment of the Premises, (ii) all utilitiesare available to the Premises, (iii) the Building’s parking areas and loadingareas are available for use by Tenant, and (iv) temporary (if applicable) orpermanent certificates of occupancy (if applicable) shall have been issued forthe Building and the Premises.  IfSubstantial Completion or an earlier Commencement Date does not occur by July15, 1996, or an extended date as set forth below based on Tenant delays, thenthe Commencement Date shall be no earlier than October 15, 1996, unlessrequested by Tenant.  If SubstantialCompletion or an earlier Commencement Date does not occur by February 1, 1997,subject to Force Majeure delays, Tenant shall have the right in its solediscretion to cancel this Lease for a 10 day period following such date, andreceive a return of the Security Deposit and all deposited Base Rent, and bereleased from all liability hereunder.

 

(i)      Landlord shall pay for the Initial TenantImprovements up to $3.50 per square foot of the Premises (the “Allowance”).  To the extent the costs of the Initial TenantImprovements exceed the Allowance, Tenant shall be obligated to pay such amountin cash prior to occupying the Premises.

 

(j)      As an additional improvement item, and aspart of the Initial Tenant Improvements, the plans and specifications shallprovide for an approximately 15,000 square foot mezzanine space at the rear ofthe Premises.  The mezzanine will be bidas an “add alternate” and the general contractor for the Base Building willconstruct the mezzanine.  Tenant shall beresponsible for all design, architectural, engineering and construction costswith respect to the mezzanine, including any additional Base Building orInitial Tenant Improvement costs which result from such construction.  Tenant, upon receipt of an invoice fromLandlord or Gick, will promptly pay for all design, architectural andengineering costs for the mezzanine which will not be included in the mezzanineconstruction escrow.  Prior tocommencement of the construction of the mezzanine, Tenant will deposit withLandlord an amount equal to 110% of the accepted bid for the mezzanineconstruction.  Any costs in excess of theescrowed amount shall be paid by Tenant within 5 business days of demandtherefor.  Upon receipt of final lienwaivers from all contractors, Landlord will return to Tenant any unused portionof the 110% escrow.  Each day of delay toSubstantial Completion which results from the construction of the mezzanine,which shall be determined in writing by Gick, shall serve to extend by one daythe July 15, 1996 date set forth in paragraph (h) above.

 

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(k)     The failure of Tenant to take possession ofor to occupy the Premises at the time of Substantial Completion shall not serveto relieve Tenant of obligations arising on the Commencement Date or delay thepayment of rent by Tenant.  Subject toapplicable ordinances and building codes governing Tenant’s right to performwork in the Premises and subject to the provisions of Paragraph 12 of theLease, Tenant shall have the right, which may be temporarily revoked forreasonably limited periods of time by Landlord from time to time for legitimateconstruction purposes, to install its racking, machinery, equipment, fixtures,or other property on the Premises during the 30 days prior to SubstantialCompletion with the understanding that, during such period, Landlord shall becompleting the Base Building and Initial Tenant Improvements, and that Tenantdoes hereby agree to assume all risk of loss or damage to such improvements,machinery, equipment, fixtures, and other property and to indemnify, defend,and hold Landlord harmless from any loss or damage to such property, and allliability, loss, or damage arising from any injury to the Project or theproperty of Landlord, its contractors, subcontractors, or materialmen, whetheror not any such loss, damage or liability was caused by Landlord’s negligence;provided, however, that any waiver of claims contained herein shall only beapplicable in excess of the $1,000 property deductible.  Delay in putting Tenant in possession of thePremises shall not serve to extend the term of this Lease or to make Landlordliable for any damages arising therefrom.

 

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ADDENDUM 3

 

ASSIGNMENT AND SUBLETTING (CONSENT)

 

ATTACHED TO AND A PART OF THE LEASE AGREEMENT

DATED AUGUST 11, 1995, BETWEEN

GOVERNMENT TECHNOLOGY SERVICES, INC.

and

SECURITY CAPITALINDUSTRIAL TRUST

 

Notwithstanding the terms of Paragraph 17 of the Lease:

 

(a)           Excepting Tenant’sabsolute right to assign or sublet the Premises to a Tenant Affiliate, Landlordshall not unreasonably withhold, delay or condition its consent to Tenant’srequest for permission to assign the Lease or sublease all or part of thePremises.  It shall be reasonable for theLandlord to withhold its consent to any assignment or sublease in any of thefollowing instances:

 

(i)            The assignee or sublessee is notcreditworthy in the sole but reasonable judgment of Landlord;

 

(ii)           The intended use of the Premises bythe assignee or sublessee is not among the uses permitted pursuant to Paragraph3 of the Lease;

 

(iii)          The intended use of the Premises bythe assignee or sublessee would materially increase the pedestrian or vehiculartraffic to the Premises or the Project;

 

(iv)          Occupancy of the Premises by theassignee or sublessee would, in Landlord’s opinion, violate any agreementbinding upon Landlord or the Project with regard to the identity of tenants,usage in the Project, or similar matters;

 

(v)           The identity or business reputationof the assignee or sublessee will, in the good faith judgment of Landlord, tendto damage the goodwill or reputation of the Project;

 

(vi)          The assignment or sublet is to anothertenant in the Project and is at rates which are below those charged by Landlordfor comparable space in the Project;

 

(vii)         In the case of a sublease, thesubtenant has not acknowledged that the Lease controls over any inconsistentprovision in the sublease; or

 

(viii)        The proposed assignee or sublessee is agovernment entity.

 

The foregoingcriteria shall not exclude any other reasonable basis for Landlord to refuseits consent to such assignment or sublease.

 

(b)           Any approvedassignment or sublease shall be expressly subject to the terms and conditionsof this Lease.

 

(c)           Tenant shall provideto Landlord all information concerning the assignee or sublessee other than aTenant Affiliate, as Landlord may request.

 

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(d)             Landlord may revoke its consentimmediately and without notice if, as of the effective date of the assignmentor sublease, there has occurred and is continuing any default under the Lease.

 

(e)             Landlord’s agreement to notunreasonably withhold its consent shall only apply to the first assignment orsublease under the Lease and to any subsequent proposed assignment or sublet ofat least 50% of the Premises.

 

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ADDENDUM 4

 

TWO RENEWALOPTIONS AT MARKET

 

ATTACHED TO AND APART OF THE LEASE AGREEMENT

DATED AUGUST 11,1995, BETWEEN

GOVERNMENTTECHNOLOGY SERVICES, INC.

and

SECURITY CAPITALINDUSTRIAL TRUST

 

(a)             Provided that as of the time of thegiving of the First Extension Notice and the Commencement Date of the FirstExtension Term, (x) Tenant is the Tenant originally named herein, (y) Tenantactually occupies 60% of the Premises initially demised under this Lease andany space added to the Premises, and (z) no Event of Default exists or wouldexist but for the passage of time or the giving of notice, or both; then Tenantshall have the right to extend the Lease Term for an additional term of *5*years (such additional term ishereinafter called the “First Extension Term”) commencing on the dayfollowing the expiration of the Lease Term (hereinafter referred to as the “CommencementDate of the First Extension Term”).  Tenantshall give Landlord notice (hereinafter called the “First Extension Notice”)of its election to extend the term of the Lease Term at least 12 months, butnot more than 15 months, prior to the scheduled expiration date of the LeaseTerm.

 

(b)             Provided that as of the time of thegiving of the Second Extension Notice and the Commencement Date of the SecondExtension Term, (x) Tenant is the Tenant originally named herein, (y) Tenantactually occupies 60% of the Premises initially demised under this Lease andany space added to the Premises, and (z) no Event of Default exists or wouldexist but for the passage of time or the giving of notice, or both and providedTenant has exercised its option for the First Extension Term; then Tenant shallhave the right to extend the Lease Term for an additional term of 5 years (suchadditional term is hereinafter called the “Second Extension Term”) commencingon the day following the expiration of the First Extension Term (hereinafterreferred to as the “Commencement Date of the Second Extension Term”).  Tenant shall give Landlord notice(hereinafter called the “Second Extension Notice”) of its election toextend the term of the Lease Term at least 12 months, but not more than 15months, prior to the scheduled expiration date of the First Extension Term.

 

(c)             The Initial Base Rent payable byTenant to Landlord during the First Extension Term shall be equal to $4.70 persquare foot per year, and the Base Rent shall be increased by 3% at the beginning of each year ofthe First Extension Term.

 

(d)             The Base Rent payable by Tenant toLandlord during the Second Extension Term shall be the greater of (i) the BaseRent applicable to the last year of the First Extension Term and (ii) 90% of the then prevailing marketrate for comparable space in the Project and comparable buildings in thevicinity of the Project, taking into account the size of the Lease, the lengthof the renewal term, the credit of Tenant and market escalations.  In the event Landlord and Tenant fail toreach an agreement on such rental rate and execute the Amendment (definedbelow) at least 4 months prior to the expiration of the Lease, then Tenant’sexercise of the renewal option shall be deemed withdrawn and the Lease shallterminate at the end of the First Extension Term unless the arbitrationprovisions set forth below are invoked by Tenant or Landlord.

 

(e)             The determination of Base Rent doesnot reduce the Tenant’s obligation to pay or reimburse Landlord for operatingexpenses and other reimbursable items as set forth in the Lease, and Tenantshall reimburse any pay Landlord as set forth in the Lease with respect to suchoperating expenses and other items with respect to the Premises during theFirst Extension Term and Second Extension Term without regard to any cap onsuch expenses set forth in the Lease.

 

(f)              Except for the Base Rent asdetermined above, Tenant’s occupancy of the Premises during the Extension Termshall be on the same terms and conditions as are in effect immediately prior tothe expiration of

 

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the initial Lease Term; provided, however, Tenantshall have no further right to any allowances, credits or abatements or anyoptions to expand, contract, renew or extend the Lease.

 

(g)             If Tenant does not give the FirstExtension Notice within the period set forth in paragraph (a) above, Tenant’sright to extend the Lease Term for the First Extension Term and the SecondExtension Term shall automatically terminate.  If Tenant does not give the Second ExtensionNotice within the period set forth in paragraph (b) above, Tenant’s right toextend the Lease Term for the Second Extension Term shall automaticallyterminate.  Time is of the essence as tothe giving of the First Extension Notice and Second Extension Notice.

 

(h)             Landlord shall have no obligationto refurbish or otherwise improve the Premises for the Extension Term.  The Premises shall be tendered on theCommencement Date of the First Extension Term and Second Extension Term in “as-is”condition.

 

(i)              If the Lease is extended foreither the First Extension Term or Second Extension Term, then Landlord shallprepare and Tenant shall execute an amendment to the Lease confirming theextension of the Lease Term and the other provisions applicable thereto (the “Amendment”).

 

(j)              If Tenant exercises its right toextend the term of the Lease for the First Extension Term or second ExtensionTerm pursuant to this Addendum, the term “Lease Term” as used in the Lease,shall be construed to include, when practicable, the First Extension Term orSecond Extension Term, as applicable, except as provided in (f) above.

 

(k)             Arbitration to determine the FairMarket Rent shall be in accordance with the Real Estate Valuation ArbitrationRules of the American Arbitration Association.  Unless otherwise required by state law,arbitration shall be conducted in the metropolitan area where the Project islocated by a single arbitrator unaffiliated with either party.  If the prevailing market rates has not beenagreed upon, either party may elect to arbitrate by sending written notice tothe other party and the Regional Office of the American Arbitration Associationat any time between 3 and 4 months prior to scheduled termination of the Leaseinvoking the binding arbitration provisions of this paragraph.  If timely written notice is not given, thearbitration provisions shall be of no force or effect.  Landlord and Tenant shall each submit to thearbitrator their respective proposal of fair market rate.  The arbitrator must choose between theLandlord’s proposal and the Tenant’s proposal and may not compromise betweenthe two or select some other amount.  Notwithstandingany other provision herein, the 90% of the fair market rate determined by thearbitrator shall not be less than, and the arbitrator shall have no authorityto determine a fair market rate which, when 90% of such rate is calculatedwould be less than the Base Rent in effect as of the scheduled expiration ofthe Lease Term.  The cost of thearbitration shall be borne equally by the parties.  If the arbitrator has not determined the FairMarket Rent as of the end of the Lease Term, Tenant shall pay 105 percent ofthe Base Rent in effect under the Lease as of the end of the Lease Term untilthe Fair Market Rent is determined as provided herein.  Upon such determination, Landlord and Tenantshall make the appropriate adjustments to the payments between them.

 

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ADDENDUM 5

 

RIGHT OF FIRSTOFFER

 

ATTACHED TO AND APART OF THE LEASE AGREEMENT

DATED AUGUST 11,1995, BETWEEN

GOVERNMENTTECHNOLOGY SERVICES, INC.

and

SECURITY CAPITALINDUSTRIAL TRUST

 

(a)             “Offered Space” shall meanall or any portion of the space in the Building leased to MJD Investments, Inc.

 

(b)             Provided that as of the date of thegiving of Landlord’s Notice, (x) Tenant or Tenant’s Affiliate is the Tenantoriginally named herein, (y) Tenant actually occupies all of the Premisesoriginally demised under this Lease and any premises added to the Premises, and(z) no Event of Default or event which but for the passage of time in thegiving of notice, or both, would constitute an Event of Default has occurred andis continuing, if at any time during the Lease Term any lease for any portionof the Offered Space shall expire, then Landlord, before offering such OfferedSpace to anyone, other than the tenant then occupying such space (or itsaffiliates), shall offer to Tenant the right to include the Offered Spacewithin the Premises on the same terms and conditions upon which Landlordintends to offer the Offered Space for lease.

 

(c)             Such offer shall be made byLandlord to Tenant in a written notice (hereinafter called the “First OfferNotice”) which offer shall designate the space being offered and shallspecify the terms which Landlord intends to offer with respect to any suchOffered Space.  Tenant may accept theoffer set forth in the First Offer Notice by delivering to Landlord anunconditional acceptance (hereinafter called “Tenant’s Notice”) of suchoffer within 10 business days after delivery by Landlord of the First OfferNotice to Tenant.  Time shall be of theessence with respect to the giving of Tenant’s Notice.  If Tenant does not accept (or fails to timelyaccept) an offer made by Landlord pursuant to the provisions of this Addendumwith respect to the Offered Space designated in the First Offer Notice,Landlord shall be under no further obligation with respect to such space byreason of this Addendum.

 

(d)             Tenant must accept all OfferedSpace offered by Landlord at any one time if it desires to accept any of suchOffered Space and may not exercise its right with respect to only part of suchspace.  In addition, if Landlord desiresto lease more than just the Offered Space to one tenant, Landlord may offer toTenant pursuant to the terms hereof all such space which Landlord desires tolease, and Tenant must exercise its rights hereunder with respect to all suchspace and may not insist on receiving an offer for just the Offered Space.

 

(e)             If Tenant at any time declines anyOffered Space offered by Landlord, Tenant shall be deemed to have irrevocablywaived all further rights under this Addendum with respect to the specifiedOffered Space, and Landlord shall be free to lease the Offered Space to thirdparties including on terms which may be less favorable to Landlord than thoseoffered to Tenant.

 

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ADDENDUM 6

 

CANCELLATIONOPTION

 

ATTACHED TO AND APART OF THE LEASE AGREEMENT

DATED AUGUST 11,1995, BETWEEN

GOVERNMENTTECHNOLOGY SERVICES, INC.

and

SECURITY CAPITALINDUSTRIAL TRUST

 

Provided no Event of Default shall then exist and no condition shallthen exist which with the passage of time or giving of notice, or both, wouldconstitute an Event of Default, Tenant shall have the right at any time on orbefore the last day of the Sixth Lease Year to send Landlord written notice(the “Termination Notice”) that Tenant has elected to terminate thisLease effective on the last day of the Seventh Lease Year (the “Effective Date”).

 

If Tenant elects to terminate this Lease pursuant to the immediatelypreceding sentence, the effectiveness of such termination shall be conditionedupon Tenant paying to Landlord $766,246.00 plus the sum of any unamortizedleasing commissions, calculated on a straight-line basis with no interest, lessan amount equal to 6 months of interest on the Termination Fee, calculated at10% per annum using simple interest calculations (the “Termination Fee”)contemporaneously with Tenant’s delivery of the Termination Notice to Landlord. Landlord and Tenant shall be relieved ofall obligations accruing under this Lease after the effective date of suchtermination but not any obligations accruing under the Lease prior to theeffective date of such termination.

 

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ADDENDUM 7

 

PREMISESRELOCATION

 

ATTACHED TO AND APART OF THE LEASE AGREEMENT

DATED AUGUST 11,1995, BETWEEN

GOVERNMENTTECHNOLOGY SERVICES, INC.

and

SECURITY CAPITALINDUSTRIAL TRUST

 

1.             Premises Relocation.  If Tenantdetermines that its business requirements necessitate a relocation of the operationsconducted at the Premises, Landlord shall work with Tenant in good faith tolocate a new facility for Tenant within Landlord’s portfolio.  Provided that a lease is entered into for newspace within Landlord’s portfolio, Landlord agrees to terminate the balance ofthe existing term of this Lease effective at the commencement of the new Leasewith Landlord.  Any lease on such newspace shall be subject to the agreement of the parties, each acting in theirsole discretion.

 

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ADDENDUM 8

 

RIGHT OF FIRSTOFFER TO PURCHASE

 

ATTACHED TO AND APART OF THE LEASE AGREEMENT

DATED AUGUST 11,1995, BETWEEN

GOVERNMENTTECHNOLOGY SERVICES, INC.

and

SECURITY CAPITALINDUSTRIAL TRUST

 

1.             Provided that Landlord is the owner of the approximately7 acre tract of land located along Lee Jackson Memorial Highway as illustratedon Exhibit C (the “Option Parcel”), Tenant shall have the right to purchase theOption Parcel prior to Landlord listing the Option Parcel for sale to themarket.  The Option Parcel shall beoffered to Tenant by Landlord (“Landlord’s Offer”) at the price which Landlordintends to offer such Option Parcel to the market.

 

2.             Tenant shall have 20 business days from the date ofreceipt of Landlord’s Offer to unconditionally accept or decline Landlord’sOffer.  Landlord’s Offer will be deemedaccepted by Tenant unless Landlord receives timely written notice to thecontrary.  If Tenant declines Landlord’sOffer, Landlord shall be under no further obligation to Tenant with respect tothe Option Parcel.

 

3.             If Landlord’s Offer is accepted, closing shall takeplace no later than 45 days following the acceptance of Landlord’s Offer.  The closing shall be conducted through anescrow established at a title company acceptable to both Landlord and Tenant.  All deliveries shall be deposited in escrowand all closing deliveries and disbursements shall be made through the escrow.

 

4.             Landlord shall convey to Tenant fee simple title to theOption Parcel by Bargain and Sale Deed (warranting title by, through, or underLandlord, but not otherwise) subject only to all matters of record and thosematters which a correct survey would show but free and clear of any liens orany other exceptions created by, under, or through Landlord except onlyexceptions that do not impair the use or value of the Option Parcel and towhich like properties are commonly subject.  Landlordshall assign to Tenant all its right, title and interest in and to all contracts,warranties, permits, approvals, and other intangible property related to theOption Parcel except for any tradename or other similar rights related to theOption Parcel, which Landlord shall retain.

 

5.             Real estate taxes and assessments shall be pro rated tothe date of closing.  Tenant shall paythe transfer taxes, the cost of the title policy and one-half of any otherclosing or escrow costs or fees.  Landlordshall pay one- half of any closing or escrow costs or fees.  Each party shall be responsible for the feesof its attorneys and consultants.

 

6.             Landlord makes no, and at closing Tenant shall waive inwriting reasonably satisfactory to Landlord any, warranty or representationwith respect to the Premises (other than title to the Premises as providedabove), including without limitation, any representation or warranty as to theenvironmental or physical condition of the Premises.  Except for such warranty, Tenant is relying onits own inspection and review of the Premises.

 

7.             Landlord may conduct the sale as a tax-free exchangepursuant to Section 1031 of the Internal Revenue Code.  Such exchange shall be conducted through aqualified intermediary, at no cost to Tenant, and without affecting Landlord’sobligations to Tenant.  Tenant shall notbe required to take title to any other property in connection with a Section1031 exchange.

 

8.             Tenant may conduct the purchase as a tax-free exchangepursuant to Section 1031 of the Internal Revenue Code.  Such exchange shall be conducted through orqualified intermediary at no cost to Landlord, and without

 

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affecting Tenant’s obligations to Landlord.  Landlord shall not be required to take titleto any other property in connection with a Section 1031 exchange.

 

9.             Tenant’s exercise of the Purchase Option is irrevocableexcept as provided herein.  Time is ofthe essence.

 

10.           Only the Tenant originally namedherein may exercise this option.  Theoption is not assignable and shall terminate automatically upon any terminationof the Lease other than as a result of default by Landlord.

 

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FIRST AMENDMENT TOLEASE

 

FIRST AMENDMENT TO LEASE is entered into as of the 24th day of JANUARY, 1997, by and between SCI Development ServicesIncorporated, (the “Lessor”) and Government Technology Services, Inc. (the “Lessee”).

 

W I T N E S S E TH:

 

WHEREAS, Lessor or its predecessors in interest, and Lessee haveentered into a Lease, dated as of the 11th day of August, 1995, pursuant towhich Lessor leased to Lessee certain premises (the “Premises” or “Leased Premises”)located at 3900 A Stonecroft Boulevard, Chantilly, Virginia (such lease, asheretofore and hereafter modified, being herein referred to as the “Lease”).

 

WHEREAS, Lessor and Lessee desire to modify its terms and conditions asset forth below.

 

**1.      CommencementDate. **The commencementdate shall be hereby amended to be December 10, 1996.

 

2.       Except as modifiedherein, the Lease, and all of the terms and conditions thereof, shall remain infull force and effect and the same are hereby ratified and confirmed.

 

IN WITNESS WHEREOF, the parties hereto have signed this First Amendmentto Lease as of the day and year first above written.

 

|       | SCI DEVELOPMENT SERVICES INCORPORATED |
|------------|---------------------------------------|
|       |                                  |
|       | **LESSOR:**                           |
|       |                                  |
|       |                                  |
|       | By:                                   | /s/ Robert J. Watson |   |
|       | Name:                                 | ROBERT J. WATSON |   |
|       | Title:                                | MANAGING DIRECTOR |   |
|       |                                  |
|       |                                  |
|       | GOVERNMENT TECHNOLOGY SERVICES, INC.  |
| ** ** | ** **                            |
| ** ** | **LESSEE:**                           |
| ** ** | ** **                            |
|       |                                  |
|       | By:                                   | /s/ Peter E. JAnke |   |
|       | Name:                                 | Peter E. JAnke |   |
|       | Title:                                | EVP & CFO |   |
|            |                                       |  |  |  |  |

 

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FIRST AMENDMENT TO LEASE AGREEMENT

 

THIS FIRST AMENDMENT TO LEASE AGREEMENT (the “First Amendment”) ismade and entered into effective as of the 18th**day of October, 1995, by and between SECURITY CAPITAL INDUSTRIALTRUST (the “Landlord”), and GOVERNMENT TECHNOLOGY SERVICES, INC. (the “Tenant”).

 

W I T N E S S E T H:

 

WHEREAS, Landlord and Tenant have heretofore made and entered into thatcertain Lease Agreement, dated as of the 11th day of August, 1995 (the “Lease”),pursuant to which Landlord leased to Tenant approximately 204,649 square feetof space (the “Premises”) located at Building 1 of Chantilly DistributionCenter (the “Project”), situated in Chantilly, Virginia, said Premisesbeing depicted on Exhibit A attached to the Lease;

 

WHEREAS, Landlord and Tenant desire to amend the Lease on the terms andconditions set forth below;

 

NOW THEREFORE, for and inconsideration of the sum of Ten and No/100 Dollars ($10.00) each to the otherin hand paid, the mutual covenants and agreements of the Lease and this FirstAmendment, and other good and valuable considerations, the receipt andsufficiency of which are hereby acknowledged, Landlord and Tenant hereby agreeas follows:

 

1.            In the second, fourth and fifth sentences of Paragraph40 of the Lease, the words “December 31, 1995” shall be substituted for thewords “November 15, 1995”.

 

2.            In Addendum 2 to the Lease, entitled “Construction -Short Form”, existing Paragraph (h) shall be deleted in its entirety,and replaced with the following provision:

 

(h)           The “Commencement Date” shallbe the later of October 15, 1996 or the date of Substantial Completion (as definedherein); provided, however, that if Substantial Completion occurs later thanOctober 15, 1996 due to Tenant’s fault, including as a result of changes madeby Tenant or delays in the construction of the mezzanine as set forth below,the Commencement Date shall be the later of October 15, 1996 or the dateSubstantial Completion would have occurred but for the delays caused by Tenant.“Substantial Completion” shall be deemed to have occurred when (i) theconstruction of the Base Building and Initial Tenant Improvements are completedin accordance with the Final Plans as reasonably determined by Gick, subject tominor punch list items which do not interfere with Tenant’s use and enjoymentof the Premises, (ii) all utilities are available to the Premises, (iii) theBuilding’s parking areas and loading areas are available for use by Tenant, and(iv) temporary (if applicable) or permanent certificates of occupancy (ifapplicable) shall have been issued for the Building and the Premises.  If Substantial Completion or an earlierCommencement Date does not occur by February 1, 1997, subject to Force Majeuredelays, Tenant shall have the right in its sole discretion to cancel this Leasefor a 10-day period following such date, and receive a return of the Security Depositand all deposited Base Rent, and be released from all liability hereunder.

 

3.            Except as otherwise specifically provided for herein, alldefined terms used in this First Amendment shall have the same respectivemeanings as are provided for such defined terms in the Lease.  Except as modified herein, the Lease and allof the terms and conditions thereof, shall remain in full force and effect.  In the event of any conflict between the termsand provisions of the Lease and the terms and provisions of this First Amendment,the terms and provisions of this First Amendment shall supersede and control.  This First Amendment shall be construed underand enforceable in accordance with the laws of the State of Virginia; and shallbe binding upon and inure to the benefit of Landlord and Tenant and theirrespective successors and permitted assigns under the Lease.  This First Amendment may be executed in anynumber of counterparts, each of which shall be deemed to be an original, andall of such counterparts shall constitute one agreement.  To facilitate execution of this Amendment,the parties may execute and exchange by telephone facsimile counterparts of thesignature pages.

 

4.            Any obligation or liability whatsoever of SecurityCapital Industrial Trust, a Maryland real estate investment trust, which mayarise at any time under the Lease or this First Amendment, or any obligation orliability which may be incurred by it pursuant to any other instrument,transaction or undertaking contemplated hereby, shall not be personally bindingupon, nor shall resort for the enforcement thereof be had to the property of,its trustees, directors, shareholders, officers, employees, or agentsregardless of whether such obligation or liability is in the nature ofcontract, tort or otherwise.

 

IN WITNESS WHEREOF, theparties hereto have executed this First Amendment to be effective as of the dayand year first above written.

 
| GOVERNMENT TECHNOLOGY SERVICES, INC. | SECURITY CAPITAL INDUSTRIAL TRUST |
|--------------------------------------|-----------------------------------|
|                                 |                              |
| By:                                  | /s/ Thomas L. Smudz               |   | By: | /s/ Robert A Kritt |   |
| Name:                                | Thomas L. Smudz                   |   | Name: | Robert A. Kritt |   |
| Title:                               | EVP & CFO                     |   | Title: | Vice President |   |
| 10/17/95                             |                              |
|                                 | “Tenant”                |   |   | “Landlord” |   |
|                                      |                                   |  |  |  |  |  |  |  |  |

 

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SECOND AMENDMENT TO LEASE

 

THIS SECOND AMENDMENT TO LEASE is entered into as ofthe          day of May, 1997,by and between SCI Development Services Incorporated (“Lessor”) and Government TechnologyServices, Inc. (“Lessee”).

 

W I T N E S S E T H:

 

WHEREAS, Lessor’s**predecessor in interest and Lesseehave entered into a Lease Agreement dated August 11, 1995 and amended by FirstAmendment to Lease dated January 22, 1997, pursuant to which Lessor leased toLessee certain premises located at 3900 A Stonecroft Boulevard, Chantilly,Virginia (such Lease Agreement, as so amended, being herein referred to as the “Lease”).

 

WHEREAS, Lessor and Lessee desire to amend the terms and conditions ofthe Lease as set forth below.

 

1.              AMENDMENT*.*  Addendum 8 to theLease is hereby deleted and is of no force or effect.

 

2.              RATIFICATION. Except as expressly amended herein, theLease, and all of the terms and conditions thereof, shall remain in full forceand effect and the same are hereby ratified and confirmed.

 

IN WITNESS WHEREOF, theparties hereto have signed this Second Amendment to Lease as of the day andyear first above written.

 

|       | LESSOR:                                |
|------------|----------------------------------------|
|       |                                   |
|       | SCI DEVELOPMENT SERVICES  INCORPORATED |
|       |                                   |
|       |                                   |
|       | By:                                    | /s/ M. Marc Jason |   |
|       | Name:                                  | M. Marc Jason |   |
|       | Title:                                 | Vice President |   |
|       |                                   |
|       | LESSEE:                                |
| ** ** | ** **                             |
| ** ** | GOVERNMENT TECHNOLOGY SERVICES, INC.   |
| ** ** | ** **                             |
| ** ** | ** **                             |
|       | By:                                    | /s/ H. Robert Boehm |   |
|       | Name:                                  | H. Robert Boehm |   |
|       | Title:                                 | V.P. Human Resources |   |
|            |                                        |  |  |  |  |

 

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**THIRDAMENDMENT TO LEASE AGREEMENT**

 

This**THIRD AMENDMENT TO LEASE AGREEMENT**(the “**Third Amendment**”) is madeand entered into as of June 1, 2004, by and between **CHANTILLY DISTRIBUTION, INC.**, a Delaware corporation (“**Landlord**”), and **GTSI CORP.**, a Delaware corporation (“**Tenant**”).

 

**Recitals**

 

1.     Security Capital Industrial Trust (“**SCI Trust**”) and Government Technology Services, Inc. (“**GTS, Inc.**”) entered into that certain August 11, 1995 LeaseAgreement, as amended by that certain First Amendment to Lease dated as ofJanuary 22, 1997, and as further amended by that certain Second Amendment toLease dated as of May 29, 1997 (collectively, the “**Lease**”),pursuant to which GTS, Inc. leased approximately 204,649 square feet (“**Premises**”) of that certain building known as Building 1 ofthe Chantilly Distribution Center, located in Chantilly, Virginia (the “**Building**”).  Landlordand GTS, Inc. further are parties to that certain June 11, 2003 License to UseRooftop Space, with respect to the Building rooftop.

 

2.     Landlord is successor-in-interest to SCITrust and Tenant is successor-in-interest to GTS, Inc.

 

3.     Landlord recaptured as of June 1, 200461,788 square feet of the Premises (the “**Recapture Space**”)as permitted by the Lease (the “**Recapture**”) andLandlord and Tenant have agreed upon a certain allocation of costs relating tosuch Recapture.  The Recapture Space andthe remaining Premises (the “**Revised Premises**”)are as set forth in the attached Exhibit A.

 

4.     Landlord and Tenant desire to amend theterms of the Lease on the terms and conditions hereinafter set forth.

 

**NOWTHEREFORE,** in consideration of the above recitals which bythis reference are incorporated herein and made a substantive part hereof, themutual covenants and conditions contained herein and other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged,Landlord and Tenant, intending to be legally bound hereby, agree as follows:

 

1.     **Capitalized Terms;Recitals; Exhibits**.  Allcapitalized terms not defined in this Third Amendment shall have the samemeaning as in the Lease.  The precedingrecitals and attached Exhibits are deemed to be a material part hereofand are hereby incorporated herein by this reference.

 

2.     **Recapture**.  Effective as of June 1, 2004 (the “**Recapture Date**”):

 

1

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a)       Landlord recaptured the Recapture Spacefrom the Premises and the Premises were accordingly reduced;

 

b)       any references in the Lease to the “**Premises**” shall be deemed to refer to the Revised Premises;

 

c)       Landlord and Tenant acknowledge and agreethat the Revised Premises shall consist of approximately 142,861 square feet,as set forth in Exhibit A;

 

d)       “**Tenant’s ProportionateShare of the Project**” as set forth in the Lease shall be amended tostate that the Tenant’s Proportionate Share of the Project is 40.71%.

 

e)       “**Tenant’s ProportionateShare of the Building**” as set forth in the Lease shall be amended tostate that the Tenant’s Proportionate Share of the Building is 40.71%.

 

f)        Section 2 of the Lease is deleted andrestated as:

 

Tenantacknowledges possession of the Revised Premises as of the Recapture Date andTenant acknowledges and agrees that such possession shall be subject to allapplicable laws, ordinances, regulations, covenants, and restrictions asprovided in Addendum 2 of the Lease.  Landlordhas made no representation or warranty as to the suitability of the RevisedPremises for the conduct of Tenant’s business, and Tenant waives any impliedwarranty that the Premises are suitable for Tenant’s intended purposes.  Except as provided in Paragraph 10 of theLease, in no event shall Landlord have any obligation for any defects in theRevised Premises or any limitation on its use.  The continuation of possession of the RevisedPremises shall be conclusive evidence that Tenant accepts the Premises and thatthe Premises were in good condition at the time possession was taken and as ofthe Recapture Date except for items that are Landlord’s responsibility underParagraph 10 of the Lease and any punchlist items agreed to in writing byLandlord and Tenant pursuant to the provisions of Addendum 2 of the Lease.

 

g)       The Base Rent table set forth in AddendumI of the Lease is amended to state the following with respect to Base Rentduring the Lease Years stated below:

 
| **Period**   | ** ** | **Per  Square Ft Per Year** | ** ** | **Monthly  Rent** | ** ** |
|--------------|------------|-----------------------------|------------|-------------------|------------|
| Lease Year 8 | ** ** | $                           | 4.14       | ** **        | $          | 49,287.05 | ** ** |
|              |            |                             |            |                   |            |  |  |

 

2

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| Lease Year 9  | ** ** | $ | 4.26 | ** ** | $ | 50,715.66 | ** ** |
|---------------|------------|---|------|------------|---|-----------|------------|
| Lease Year 10 | ** ** | $ | 4.39 | ** ** | $ | 52,263.32 | ** ** |

 

3.     **Recapture Space**.

 

a)          Subject to the provisions of thisThird Amendment, Tenant releases, quitclaims, and surrenders to Landlord, itssuccessors and assigns, its leasehold interest with respect to the RecaptureSpace and all of the estate and rights of Tenant in and to the such leaseholdinterest and the Recapture Space and Tenant forever releases and dischargesLandlord from any and all claims, demands or causes of action whatsoeveragainst Landlord or its successor and assigns arising out of or in connectionwith the Recapture Space or such leasehold interest or any obligations to beobserved or performed by Landlord under the Lease after the Recapture Date withrespect to the Recapture Space.

 

b)         Subject to the provisions of this ThirdAmendment, Landlord recaptures the Recapture Space from and after the RecaptureDate, and effective as of the Recapture Date, forever releases and dischargesTenant from any obligations to be observed and performed by the Tenant underthe Lease with respect to the Recapture Space after the Recapture Date (subjectto Tenant having fulfilled the agreements set forth herein and that Tenant’srepresentations and warranties set forth herein are true and correct).  Notwithstanding the foregoing, nothing hereinshall release Tenant from:

 

(1) any ofTenant’s indemnification obligations under the Lease with respect to theRecapture Space accruing prior to the Recapture Date including but not limitedto, Tenant’s indemnity pursuant to Section 18 of the Lease (as furtherdescribed therein), and Tenant’s obligation with respect to brokers as providedin Section 36 of the Lease (as further described therein), nor any otherobligation arising from or related to Tenant’s possession and occupancy of theRecapture Space prior to the Recapture Date; nor

 

(2) any of Tenant’sobligations pursuant to Sections 6, 7, and 8 of the Lease (as further describedtherein) to the extent such obligations accrued prior to the Recapture Date.

 

4.     **Recapture Costs and Work**.

 

a)       Tenant shall surrender the RecaptureSpace as of the Recapture Date in the condition required pursuant to the Leaseupon surrender of the Premises, except as otherwise provided in this ThirdAmendment.

 

b)      Landlord and Tenant acknowledge and agreethat with respect to the work and costs related to the Recapture and subject tothe Payment Conditions (as defined

 

3

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hereinafter), Landlord shall undertake the followingwork at its sole cost and expense: (i) construct a demising wall between theRevised Premises and the Recapture Space; (ii) separate the electrical servicebetween the Revised Premises and the Recapture Space; (iii) provide anelectrical feed for the material handling charging station that will berelocated at Tenant’s sole expense from the Recapture Space to the RevisedPremises; and (iv) remove the existing Tenant chain link fence and gate in theBuilding parking lot and relocate such fence and gate to locations reasonablydetermined by Landlord to correspond with the Revised Premises.  Tenant acknowledges and agrees that suchrelocation of the fence and gate locations shall cause a proportionatereduction in the parking lot areas reserved for Tenant’s use to reflect thedifference in size between the Premises and the Revised Premises.

 

c)       Landlord and Tenant acknowledge and agreethat with respect to the Recapture, Tenant shall undertake the following work,for which Landlord shall reimburse Tenant for costs actually and reasonablyincurred, subject to the Payment Conditions (as defined hereinafter) and thefollowing limitations: (i) disconnecting and reinstalling overhead door contacts,pedestrian door contacts, motion detectors, and CCTV equipment, not to exceed $4,080.00;and (ii) relocating Tenant’s T-1 telephone service, not to exceed $4,798.00.  Landlord’s repayment obligations set forth inthe preceding sentence are expressly conditional upon: (v) there not existingat the time of such payment an Event of Default or a condition that with thegiving of notice and/or the passage of time would constitute an Event ofDefault; (w) Landlord’s receipt of paid receipts from Tenant which arereasonably acceptable to Landlord with respect to any claimed third-partyexpense submitted for reimbursement; (x) partial lien waivers covering workwith respect to which any materialman or contractor was previously paid pursuantto an earlier payment by Landlord (and final unconditional lien waivers withrespect to final contract payments upon final completion of such work) in formacceptable to Landlord in its sole discretion; (y) as-built plans (upon finalcompletion) covering all architectural work and mechanical, electrical,plumbing and structural engineering, and (z) receipt of any licenses or permitsrequired by any applicable governmental authority for Tenant’s legal occupancyof the Revised Premises and use of the equipment installed therein (the “**PaymentConditions**”).

 

d)      Tenant acknowledges and agrees that Tenant’swork to the Revised Premises related to or arising from the Recapture shall besubject to the requirements of the Lease with respect to Tenant-MadeAlterations.

 

5.**     Landlord’s Registered****Agent for Service of Process**.  Landlord hereby designates Commonwealth LegalServices Corporation, 4701 Cox Road, Suite 301, Glen Allen, VA 23060-6802, as “**Landlord’s****Registered Agent for Service of Process**.”****Serviceof process upon Landlord shall be served upon Landlord’s Registered Agent forService of Process, with a copy (which shall not constitute notice) to Landlordat the address designated for notices from Tenant and a copy to Covington &Burling, 1201 Pennsylvania Avenue, N.W., Washington, D.C. 20004, Attention:Robert J. Gage.

 

4

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6.     **Brokerage**.  Tenant represents and warrants to Landlordthat it has not dealt with any real estate broker or agent in connection withthis Third Amendment and Tenant knows of no real estate broker or agent who isor might be entitled to a commission in connection herewith.  Tenant agrees to indemnify, defend and holdLandlord harmless from and against any claims made by any broker or finder (notretained by Landlord) for a commission in connection with this Third Amendmentand/or Tenant’s leasing of any space referred to herein.

 

7.     **Default**.  Any default by Tenant under the terms of thisThird Amendment shall constitute a default under the Lease, and any default byTenant under the terms of the Lease shall constitute a default under this ThirdAmendment.  In the event of a defaultunder this Third Amendment or the Lease, Landlord shall have the right, at itssole option, to exercise any rights set forth herein or in the Lease in theevent of a default, or as otherwise permitted pursuant to applicable law.  Whether or not it elects to terminate theLease, upon such default, Landlord may re-enter and take possession of thePremises and/or the Revised Premises and the provisions of this Section shalloperate as a notice to quit.

 

8.     **Ratification**.  Except as expressly modified and amended bythe provisions of this Third Amendment, all terms, covenants and conditions ofthe Lease shall remain in full force and effect in accordance with their terms.

 

9.     **CounterpartExecution**.  This Third Amendment may be executed in one ormore counterparts, each of which shall be deemed an original, but all of which,when executed and delivered, together shall constitute one and the samedocument.

 

10.   **Time andApplicable Law**.  Time is of the essence of this Third Amendment,the Lease, and all of its provisions.  ThisThird Amendment and the Lease shall in all respects be governed by the laws ofthe state in which the Building is located.

 

11.   **EntireAgreement**.  This Third Amendment, together with itsexhibits, contains all agreements of the parties to this Third Amendment andsupersedes any previous negotiations.  Therehave been no representations made by the Landlord or understandings made betweenthe parties other than those set forth in the Lease (as hereby amended) and itsexhibits.  The Lease may not be modifiedexcept by a written instrument duly executed by the parties hereto.

 

12.   **Payments**.  All payments to Landlord pursuant to thisThird Amendment other than Base Rent shall constitute additional rent under theLease, and in the event of nonpayment of either Base Rent or additional rent byTenant, Landlord shall have all of the rights and remedies as set forth in thisThird Amendment and the Lease.  In theevent of nonpayment by Landlord of any amounts required pursuant to Section4(c) hereof, Tenant shall provide written notice to Landlord of suchnon-payment.  If Landlord fails to makepayment within ten (10) business days following such written notice, Tenantshall thereafter have all of the rights and remedies provided by the Lease, asamended hereby, and applicable law.

 

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13. **Tenant’sAuthority**.   Tenantrepresents and warrants that (a) Tenant is the rightful owner of all of theTenant’s interest in the Lease and that Tenant has full power and authority toexecute and perform this Third Amendment and has taken all action necessary toauthorize the execution and performance of this Third Amendment; (b) Tenant hasnot made any disposition, assignment, lease, or conveyance of the Lease orTenant’s interest therein or any claim, demand, obligation, liability, actionor cause of action arising from the Lease; (c) no other person or entity has aninterest in the Lease, collateral or otherwise; (d) there are no outstandingcontracts for the supply of labor or material and no work has been done or isbeing done in, to or about the Recapture Space which has not been fully paidfor and for which appropriate waivers of mechanic’s liens have not beenobtained; and (e) Tenant is not currently subject to the provisions of the UnitedSlates Bankruptcy Code or other law of the United States or any state thereoffor the protection of debtors.   IfTenant signs as a corporation each of the persons executing this ThirdAmendment on behalf of Tenant represents and warrants that Tenant has been andis qualified to do business in the state in which the Building is located, thatthe corporation has full right and authority to enter into this ThirdAmendment, and that all persons signing on behalf of the corporation wereauthorized to do so by appropriate corporate actions.  If Tenant signs as a partnership, trust orother legal entity, each of the persons executing this Third Amendment onbehalf of Tenant represents and warrants that Tenant has complied with allapplicable laws, rules and governmental regulations relative to its right to dobusiness in the state and that such entity on behalf of the Tenant wasauthorized to do so by any and all appropriate partnership, trust or otheractions.  If requested by Landlord,Tenant agrees to furnish promptly upon request a corporate resolutionevidencing the due authorization of Tenant to enter into this Third Amendment.

 

14. **Miscellaneous**.  This Third Amendment(i) shall be binding uponand inure to the benefit of Landlord and Tenant, and their respectivesuccessors, assigns and related entities (subject to any restrictions set forthin the Lease) and (ii) shall be governed by and construed in accordance withthe laws of the Commonwealth of Virginia and may be executed in multiplecounterparts or by facsimile transmissions, each of which shall be treated asan original of this Third Amendment for all purposes, and all of which shallconstitute one (1) agreement binding upon all of the parties hereto,notwithstanding that all the parties are not signatory to the original or the samecounterpart or facsimile transmission. Each such counterpart or facsimile transmission shall be admissible intoevidence as an original hereof against the party who executed it.

 

15. **Limitationof Liability**.  Redress forany claim against Landlord under the Lease and this Third Amendment shall belimited to and enforceable only against and to the extent of Landlord’sinterest in the Building.  Theobligations of Landlord under the Lease and this Third Amendment are not intendedto and shall not be personally binding upon, nor shall any resort be had toprivate properties of, any of Landlord’s trustees or board of directors orofficers, as the case may be, its investment manager, the general partnersthereof, or any beneficiaries, stockholders, employees, or agents of Landlordor of the investment manager.

 

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16. **Waivers**. Landlord and Tenant each agree to andthey hereby do waive trial by jury in any action, proceeding or counterclaimbrought by either of the parties hereto against the other on any matterswhatsoever arising out of or in any way connected with this Third Amendment orthe Lease.

 

**[Signatures contained on nextpage]**

 

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**INWITNESS WHEREOF**, Landlordand Tenant have caused this Third Amendment to be executed as of the day andyear as first above written.

 
| **WITNESS:**     | LANDLORD                          |                      |
|------------------|-----------------------------------|---------------------------|
|             |                              |                      |
|             | **CHANTILLY DISTRIBUTION, INC.,** |                      |
|             | a Delaware corporation            |                      |
|             |                              |                      |
|             |                              |                      |
|             | By:                               | RREEF MANAGEMENT COMPANY, |   |
|             |                              | a Delaware corporation    |   |
|             |                              |                      |
|             |                              |                      |
| By:              | /s/William B. Murray              |                      | By: | /s/Patrick N. Connell |   |   |
| Name:            | William B. Murray                 | Name:                     | Patrick N. Connell |   |
| Title:           | Property Manager                  | Title:                    | Vice President - Regional Manager |   |
|             | Dated:                            | 10/7/04                   |   |   |
|             |                              |                      |
|             |                              |                      |
| **ATTEST:**      | TENANT                            |                      |
|             |                              |                      |
|             | **GTSI CORP.,**                   |                      |
|             | a Delaware corporation            |                      |
|             |                              |                      |
|             |                              |                      |
| By:              | /s/Charles Deleon                 |                      | By: | /s/Thomas A. Mutryn |   |   |
| Name:            | CHARLES DELEON                    | Name:                     | THOMAS A. MUTRYN |   |   |
| Title:           | CORPORATE SECRETARY               | Title:                    | SR VP & CFO |   |   |
|             | Dated:                            | 10/5/04                   |   |   |
|             |                              |                      |
| [Corporate Seal] |                              |                      |
| Dated:           | 10/5/04                           |                      |
|                  |                                   |                           |  |  |  |  |  |  |  |  |

 

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