Exhibit 10.7


 


DEED OF LEASE


 


between


 


ARLINGTON OFFICE, L.L.C.,


 


as Landlord,


 


and


 


WATSON WYATT & COMPANY,


 


as Tenant,


 


for space in “Arlington Gateway”


located at


901 North Glebe Road


Arlington, Virginia


 


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TABLE OF CONTENTS


 


	
  Article

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS

  	
   

  
	
  2.

  	
  TERM

  	
   

  
	
  3.

  	
  WORK AGREEMENT;
  SHELL CONDITION

  	
   

  
	
  4.

  	
  RENT

  	
   

  
	
  5.

  	
  ADDITIONAL
  RENT

  	
   

  
	
  6.

  	
  USE

  	
   

  
	
  7.

  	
  CARE OF PREMISES

  	
   

  
	
  8.

  	
  ALTERATIONS BY TENANT

  	
   

  
	
  9.

  	
  EQUIPMENT

  	
   

  
	
  10.

  	
  OWNERSHIP
  AND REMOVAL OF PROPERTY

  	
   

  
	
  11.

  	
  ACCESS TO PREMISES

  	
   

  
	
  12.

  	
  SERVICES AND UTILITIES

  	
   

  
	
  13.

  	
  RULES AND REGULATIONS

  	
   

  
	
  14.

  	
  INDEMNIFICATION

  	
   

  
	
  15.

  	
  LIMITATION ON LANDLORD
  LIABILITY

  	
   

  
	
  16.

  	
  FIRE AND OTHER CASUALTY

  	
   

  
	
  17.

  	
  INSURANCE

  	
   

  
	
  18.

  	
  CONDEMNATION

  	
   

  
	
  19.

  	
  DEFAULT OF TENANT

  	
   

  
	
  20.

  	
  DEFAULT OF LANDLORD

  	
   

  
	
  21.

  	
  HOLDING
  OVER

  	
   

  
	
  22.

  	
  SUBORDINATION

  	
   

  
	
  23.

  	
  ASSIGNMENT AND SUBLETTING

  	
   

  
	
  24.

  	
  TRANSFER BY LANDLORD

  	
   

  
	
  25.

  	
  INABILITY TO PERFORM

  	
   

  
	
  26.

  	
  ESTOPPEL CERTIFICATES

  	
   

  
	
  27.

  	
  COVENANT OF QUIET ENJOYMENT

  	
   

  
	
  28.

  	
  WAIVER OF JURY TRIAL

  	
   

  
	
  29.

  	
  BROKERS

  	
   

  
	
  30.

  	
  CERTAIN RIGHTS
  RESERVED BY LANDLORD

  	
   

  
	
  31.

  	
  NOTICES

  	
   

  
	
  32.

  	
  MISCELLANEOUS PROVISIONS

  	
   

  
	
  33.

  	
  [Intentionally
  omitted.]

  	
   

  
	
  34.

  	
  PARKING.

  	
   

  
	
  35.

  	
  STORAGE
  SPACE

  	
   

  
	
  36.

  	
  HAZARDOUS
  MATERIALS

  	
   

  
	
  37.

  	
  STANDARD
  FOR CONDUCT AND CONSENT

  	
   

  
	
  38.

  	
  NO
  RECORDATION

  	
   

  
	
  39.

  	
  SIGNS

  	
   

  
	
  40.

  	
  EXERCISE
  FACILITY

  	
   

  



 


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  41.

  	
  EXPANSION
  SPACE OPTIONS

  	
   

  
	
  42.

  	
  [Intentionally
  omitted.]

  	
   

  
	
  43.

  	
  ACCESS
  KEYS

  	
   

  
	
  44.

  	
  LANDLORD
  REPRESENTATIONS

  	
   

  
	
  45.

  	
  OPTIONS TO
  EXTEND

  	
   

  
	
  46.

  	
  ROOF RIGHTS

  	
   

  
	
  47.

  	
  RIGHT OF
  FIRST REFUSAL AND FIRST RIGHT OF AVAILABILITY

  	
   

  
	
  48.

  	
  RESTRICTION
  OF USE BY CERTAIN HUMAN RESOURCES CONSULTING FIRMS

  	
   

  
	
  49.

  	
  TERMINATION
  OPTION.

  	
   

  
	
  50.

  	
  CONTRACTION
  OPTION

  	
   

  
	
  51.

  	
  RESTRICTION
  OF USE BY GSA

  	
   

  
	
  52.

  	
  PAYMENT OF
  TENANT’S TERMINATION FEE UNDER TENANT’S CURRENT LEASES

  	
   

  
	
  SIGNATURES

  	
   

  



 


 


	
  Exhibit
  A – Premises Plan

  	
   

  
	
  Exhibit
  B – Declaration of Delivery

  	
   

  
	
  Exhibit
  C – Work Agreement

  	
   

  
	
  Exhibit
  D – Rules and Regulations

  	
   

  
	
  Exhibit
  E – Shell Condition

  	
   

  
	
  Exhibit
  F – Form of Subordination, Nondisturbance and Attornment Agreement

  	
   

  
	
  Exhibit
  G – Form of Tenant Estoppel Certificate

  	
   

  
	
  Exhibit
  H – [Intentionally omitted.]

  	
   

  
	
  Exhibit
  I – Cleaning and Char Specifications

  	
   

  
	
  Exhibit
  J-1 – Approved Exterior Signage Location for West Side of Building

  	
   

  
	
  Exhibit J-2 – Approved
  Exterior Signage Location for North Side of Building

  	
   

  
	
  Exhibit J-3 – Approved Lobby Sign Location

  	
   

  
	
  Exhibit K – Minimum Exercise
  Equipment

  	
   

  
	
  Exhibit L – Legal description of Land

  	
   

  
	
  Exhibit
  M – Site Plan

  	
   

  
	
  Exhibit
  N – Specialized Human Resources Consulting Firms or Human Capital Consulting
  Firms Which are Competitors of Watson Wyatt

  	
   

  



 


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DEED OF LEASE


 


THIS DEED OF LEASE (the “Lease”) is made and entered into as of April 27, 2004,
by and between ARLINGTON OFFICE, L.L.C., a Delaware limited
liability company (“Landlord”),
and WATSON WYATT & COMPANY,
a Delaware corporation
(“Tenant”).


 


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


 


1.                                      DEFINITIONS.


 


Lease Specific


 


A.                                   Building:  a twelve (12) story building to contain
approximately three hundred six thousand nine hundred twenty-one (306,921)
square feet of office rentable area and three hundred twenty-five thousand four
hundred seventy-nine (325,479) square feet of total rentable area (both office
and retail) as of the date hereof and located at 901 North Glebe Road,
Arlington, Virginia.  Except as
otherwise expressly provided in this Lease, the term “Building” shall include
all portions of said building, including, but not limited to, the Premises, the
Common Areas and the garage.


 


B.                                     Premises: 
approximately one
hundred nineteen thousand one hundred eleven (119,111) square
feet of rentable area comprising (i) the entire fourth (4th) floor
of the Building containing approximately 28,591 square feet of rentable area,
(ii) the entire fifth (5th) floor of the Building containing
approximately 28,591 square feet of rentable area, (iii) the entire sixth (6th)
floor of the Building containing approximately 28, 591 square feet of rentable
area, (iv) the entire seventh (7th) floor of the Building containing
approximately 28,591 square feet of rentable area, and (v) approximately four thousand seven hundred forty-seven
(4,747) square feet of rentable area located on the eighth (8th)
floor of the Building (the “Initial Eighth Floor Space”), all as more
particularly designated on Exhibit A; provided, however, that with
respect to the Initial Eighth Floor Space, the location of said Initial Eighth
Floor Space shall be mutually agreed upon by Landlord and Tenant but shall
include a portion of the front window line of the Building, shall have elevator
lobby exposure and shall be of a configuration which (a) is in full compliance
with the requirements of all applicable Laws (as hereinafter defined) and (b)
results in both the Initial Eighth Floor Space and the remainder of the eighth
(8th) floor of the Building being in marketable configurations.  Tenant may elect to increase or decrease the
total rentable area of the Premises by up to ten percent (10%) of the aggregate
rentable area identified above, by delivering notice to Landlord on or prior to
July 31, 2004, which notice shall specify the portion of the subject floors of
the Building upon which Tenant elects to add rentable area to, or remove
rentable area from, the Premises.  Any
expansion in the rentable area of the Premises which Tenant elects to make
shall be on the eighth (8th) floor of the Building.  Any reduction in the rentable area of the
Premises which Tenant elects to make shall first include the Initial Eighth
Floor Space, and if such reduction is larger than the Initial Eighth Floor
Space, shall include, at Tenant’s election, a portion of the space located on
the fourth (4th) floor of the Building or a portion of the space
located on the seventh (7th) floor of the Building.  Any such expansion or reduction in the size
of the Premises elected by Tenant in accordance with the foregoing shall permit
the balance of space outside the Premises on the subject floor of the Building
on which Tenant elects the subject


 

















 


expansion or contraction, to be in a
marketable configuration.  In the event
Tenant elects to increase or decrease the total rentable area of the Premises
in accordance with the foregoing, then Landlord shall deliver notice to Tenant,
within thirty (30) days after its receipt of Tenant’s corresponding notice, of
the number of rentable square feet contained in the subject space which Tenant
elects to add to or remove from the Premises. 
Following Landlord’s delivery of such notice to Tenant, Landlord and
Tenant shall diligently cooperate to agree upon the number of rentable square
feet in the subject space which Tenant elects to add to, or remove from, the
Premises.  Landlord and Tenant agree
that; (i) any remeasurement of the Building and/or any portion thereof shall be
made only with respect to the useable area of the same in accordance with the
Building Owners and Managers Association International Standard Method for
Measuring Floor Area in Office Buildings, ANSI/BOMA Z65.1-1996 (the “BOMA Standard”);
and (ii) the load factors to be used to convert usable area to rentable area
for the Building and any space therein are agreed to be 10 and 24/100 percent
(10.24%) for full floors in
the Building and fourteen and 53/100 percent (14.53%) for multi-tenanted floors
in the Building. Except in connection with an arbitration in
accordance with the following terms of this Section, Landlord waives the right
to remeasure the Building and any space therein.  Tenant shall have the right to remeasure the Building and/or the
Premises through that date which occurs sixty (60) days after the date upon
which Tenant commences business operations in the Premises.  Following Tenant’s remeasurement of the
Building and/or the Premises, if Tenant disputes the amount of the rentable
area in the Building and/or the Premises described above, and Landlord and
Tenant fail to reach agreement regarding the total rentable area within the
Building and/or Premises within sixty (60) days after the date Tenant delivers
to Landlord notice of Tenant’s objection to the amount of the rentable area in
the Building and/or the Premises described above, then such dispute, at the
election of either party, shall be resolved by arbitration in accordance with
the method described below.  Within ten
(10) days after the expiration of the above-referenced sixty (60) day period,
each party shall give notice to the other setting forth the name and address of
a licensed (or registered, as applicable) architect selected by such party who
has agreed to act in such capacity, to determine the subject measurement in
accordance with the foregoing terms.  If
either party shall fail to select an architect as aforesaid, the subject
measurement shall be determined by the architect selected by the other, subject
to the foregoing terms of this Section. 
Each architect shall thereupon independently make his/her determination
of the subject measurement within thirty (30) days after the appointment of the
second architect.  If the two
architects’ determinations are not the same, but the higher of such two
determinations is not more than one hundred two percent (102%) of the lower of
them with respect to the Building and/or the Premises, as the case may be, then
the subject measurement shall be deemed to be the average of the two
determinations with respect to the Building and/or the Premises, as the case
may be.  If the higher of such two
determinations is more than one hundred two percent (102%) of the lower of
them, then the two architects shall jointly appoint a third licensed (or
registered, as applicable) architect within ten (10) days after the second of
the two determinations described above has been rendered.  The third architect shall independently make
his/her determination of the subject measurement within thirty (30) days after
his/her appointment.  The highest and
the lowest determinations of the subject measurements among the three
architects shall be disregarded and the remaining determination shall be deemed
to be the subject measurement.  Each
party shall pay for the cost of its architect and one-half of the cost of the
third architect.  Notwithstanding anything in the
contrary set forth in this Lease, in the event it is determined that the
amounts of rentable area in the Building and/or the Premises set forth above are different from
those which would have resulted had the BOMA Standard and the above-referenced
load factors been correctly calculated, then (i) Rent theretofore
paid by Tenant to Landlord during the Term shall be retroactively adjusted to reflect the number of rentable
square area of the Building and the Premises, as remeasured under the BOMA
Standard and the above-referenced load factors, and (a) any


 


2

















 


deficiency due to the retroactively adjusted
square footage calculations shall be paid by Tenant to Landlord within thirty
(30) days after Landlord’s notice to Tenant setting forth the rentable floor
area of the Premises, or (b) any excess Rent theretofore paid by Tenant due to
the retroactively adjusted square footage calculations shall be credited
towards the payments of Rent next coming due hereunder; (ii) Tenant’s Share of
Increased Operating Expenses and Tenant’s Share of Increased Real Estate Tax
Expenses shall be appropriately adjusted based upon the revised square footage
calculations; (iii) the Tenant Allowance shall be appropriately adjusted based
on the revised square footage calculations and Landlord shall pay to Tenant any
underpayment thereof and Tenant shall pay to Landlord any excess payment
thereof, as applicable; and (iv) Landlord and Tenant shall promptly execute an
amendment to this Lease implementing the appropriate revisions to this document
based upon the
measurement and certification of the square footage calculations with respect
to the Premises and the Building.


 


C.                                     Complex: 
that certain complex of three (3) buildings (of which the Building and
the Land are a part) known as Arlington Gateway, and including all easements,
rights, and appurtenances thereto (including private streets, storm detention
facilities, and any other service facilities).


 


D.                                    Term: 
Approximately twelve (12) years, as more particularly defined in Section
2.G. hereof, as may be extended pursuant to Section 45 hereof.


 


E.                                      Anticipated Turnover Date:  January 15, 2005.  The Lease Commencement Date shall be the date defined as such in
Section 2.G. hereof.


 


F.                                      Base Rent: 
As set
forth in Section 4.A
below, and
subject to adjustment as set forth in Section 1.B. above.


 


G.                                     Base Rent Annual Escalation Percentage:  Two and one-half percent (2.50%), as set
forth in Section 4.A. hereof.


 


H.                                    Operating Expenses Base Year:  The one (1) year period beginning on the first day of the calendar
month following the date upon which Tenant commences its business operations in
the Premises, provided that in no event shall such one (1) year period begin
later than that date which occurs two hundred seventy (270) days after the
Lease Commencement Date.


 


I.                                         Real Estate Tax Expenses Base Year:  The one (1) year period beginning on the first day of the calendar
month following the date upon which Tenant commences its business operations in
the Premises, provided that in no event shall such one (1) year period begin
later than that date which occurs two hundred seventy (270) days after the
Lease Commencement Date.


 


J.                                        [Intentionally omitted]


 


K.                                    Brokers: 
Jones Lang LaSalle, as agent of Landlord, and Equis Corporation, as
agent of Tenant.


 


L.                                      Tenant Notice Address: Prior to the date upon which Tenant
commences business operations in the Premises, Watson Wyatt & Company, 1717 H Street, N.W., Suite 800,
Washington, D.C. 20008, Attention:  Michael Brendes, Director
of Real Estate, with a copy to Watson Wyatt & Company,


 


3

















 


1717 H Street, N.W., Suite 800, Washington, D.C. 20008, Attention: General Counsel, and with a copy to Watt, Tieder, Hoffar and Fitzgerald, 7929 Westpark
Drive, Suite 400, McLean, Virginia 22102, Attention: Thomas Galli; and following Tenant’s
commencement of business operations in the Premises, Watson Wyatt & Company,
at the Premises, Attention: Director
of Real Estate, with a copy to Watson Wyatt & Company, at the Premises,
Attention:  General Counsel, and with a
copy to Watt, Tieder, Hoffar & Fitzgerald, 7929 Westpark Drive, Suite 400,
McLean, Virginia 22102, Attention: Thomas Galli.


 


M.                                 Landlord Notice Address: JBG/Commercial
Management, L.L.C., 4445 Willard Avenue, Suite 400, Chevy Chase, Maryland
20815, Attention:  Mr. Thomas A. O’Neil,
with a copy to: Greenstein DeLorme & Luchs, P.C., 1620 L Street, N.W.,
Suite 900, Washington, D.C. 20036, Attention: Abraham J. Greenstein, Esq.


 


N.                                    Landlord Payment Address:  Arlington Office, L.L.C. and delivered to
Arlington Office, L.L.C. at JBG/Commercial Management, L.L.C., Attention:  Accounts Receivable Department, at the
following address: 4445 Willard Avenue, Suite 400, Chevy Chase, Maryland, or
such other address as Landlord specifies in a notice to Tenant.


 


O.                                    Building Hours:  8:00 a.m. to  6:00 p.m. on
Monday through Friday (excluding Holidays) and 9:00 a.m. to 1:00 p.m. on
Saturday (excluding Holidays).


 


P.                                      [Intentionally Omitted]


 


Q.                                    Parking Permits:  Parking permits
for the use of 2.1 parking spaces in the  Garage  for each 1,000 square feet of
rentable area comprising the Premises.


 


General


 


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


 


S.                                      Common Areas:  Those areas of the Building, Land and, to the extent available for use by easement or otherwise,
the Complex,
made available by Landlord for use by Tenant in common with Landlord, other
tenants of the Building and the employees, agents, subtenants, assignees,
contractors, clients, licensees, customers, invited guests, and invitees of
Landlord, Tenant
and of such other tenants.


 


T.                                     Default Rate:  That rate of interest which is three (3) percentage points above
the annual rate of interest which is publicly announced by Bank of America or
its successor entity, if applicable (“Bank of America”), from time to time as
its “prime” rate of interest, irrespective of whether such rate is the lowest
rate of interest charged by Bank of America to commercial borrowers.  In the event that Bank of America ceases to
announce such a prime rate of interest, Landlord, in Landlord’s reasonable
discretion, shall designate the prime rate of interest by another bank located
in the Washington, D.C. metropolitan area, which shall be the prime rate of
interest used to calculate the Default Rate.


 


4

















 


U.                                    Ground Leases:  All ground and other underlying leases from which Landlord’s
title to the Land and/or the Building is or may in the future be derived.  “Ground Lessors” shall denote the landlord under
such ground or underlying leases.  Landlord hereby warrants
and represents to Tenant that no Ground Lease exists as of the date of this
Lease.


 


V.                                     Holidays: 
New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and
Christmas Day and such other Federal government holidays as Tenant generally
provides to its employees.


 


W.                                Land:  The real estate that
supports the Building, which real estate is more particularly described in Exhibit
L attached hereto, and made a part hereof.


 


X.                                    Tenant’s Work:  All work to be performed by Tenant under the Work Agreement (as
defined in Exhibit C).


 


Y.                                     Lease Commencement Date:  The date the Term commences, as determined pursuant to Section
2.G. below.


 


Z.                                     Lease Year: 
That period of twelve (12) consecutive calendar months that commences on
the Lease Commencement Date, and each consecutive twelve (12) month period
thereafter; provided, however, that if the Lease Commencement Date is not the
first day of a month, then the second Lease Year shall commence on the first
day of the month following the month in which the first anniversary of the
Lease Commencement Date occurs.  The
earliest such twelve (12) month period shall be referred to as the “first Lease
Year,” and each of the following Lease Years shall similarly be numbered for
identification purposes.


 


AA.                         Mortgages:  All mortgages, deeds
of trust and similar security instruments which may now or in the future
encumber Landlord’s interest
in the Building and
the Land, including mortgages related to both construction and permanent
financing.  “Mortgagees” shall denote
those persons and entities holding such mortgages, deeds of trust and similar
security instruments. Landlord
hereby represents to Tenant that no Mortgage encumbers Landlord’s interests in
the Building or the Land other than that Credit Line Deed of Trust and Security
Agreement dated January 31, 2003 executed by Landlord in favor of John H. Gardner,
as trustee, for the benefit of BFV Interim Finance b.v., and recorded at Deed
Book 3539, Page 48 among the land records of Arlington County, Virginia, a copy
of which Landlord delivered to Tenant prior to the date of this Lease.


 


BB.                             Operating Expenses:  All costs
and expenses actually incurred by Landlord during any (“calendar”) year in managing,
operating and maintaining the Building, the Land and certain expenses with
respect to shared areas within the Complex (as detailed below) which shall be
allocated to the Building and included in Operating Expenses to the extent
provided under that Amended and Restated Declaration of Easements, Covenants,
Restrictions and Agreements dated October 21, 2003, among Arlington Office,
L.L.C., Arlington Residential, L.L.C., and Arlington Hotel, L.L.C., recorded
among the land records of Arlington County, Virginia, in Book 3612 at page 950,
as document number 2003294456, as the same may be amended from time to time
(provided that the Building’s liability for any items which would constitute
Operating Expenses shall not be increased as a result of any such amendment),
all as


 


5

















 


determined in accordance with generally
accepted accounting principles consistently applied by Landlord.  Such costs and expenses shall include, but
not be limited to, the cost of water, gas, sanitary sewer, storm sewer,
electricity and other utilities, trash removal, telephone services, insurance
of types and in amounts customarily carried for Comparable Buildings (provided that Landlord may include in
Operating Expenses the premiums for insurance policies in amounts which do not
exceed 115% of the amounts customarily carried for Comparable Buildings, with
Tenant having the burden of proof for the amount of any such policy customarily
carried for Comparable Buildings), janitorial and char services
and supplies, on-site security services, labor costs (including social security
taxes and contributions and fringe benefits), charges under maintenance and
service contracts (including, but not limited to, chillers, boilers, elevators,
window and security services), central heating and air conditioning, management
fees not to exceed the market
rate (for
Comparable Buildings, not to exceed 3%) of the gross receipts
from the operation of the Building in any calendar year, business taxes,
license fees, and charges, costs, charges and other assessments made by or for
any entity operating a business improvement district in which the Building is
located.  Operating Expenses shall
include all actual costs and expenses for operating, maintaining and repairing
the external common areas of the Complex (net of income from such operations of the same) and
any shared garage (net of income from operation of the same).  Notwithstanding
anything to the contrary set forth in this Lease, Operating
Expenses shall not include: 
(i) Real Estate Tax Expenses; (ii) payments of principal,
interest, fees or other charges or amounts on
any Mortgages, or any other
loan or financing; (iii) leasing commissions;
(iv) costs of preparing, improving or altering any space in preparation
for occupancy of any new or renewal tenants; (v) amounts of a capital nature or which would be capitalized
under
generally accepted accounting principles including, without limitation,
capital repairs, capital improvement, capital equipment and capital tools,
except for those (A) installed
or acquired to reduce Operating Expenses (amortized at an annual rate
reasonably calculated to equal the amount of Operating Expenses to be saved in
each calendar year throughout the term of this Lease, as reasonably determined
at the time Landlord elected to proceed with the capital improvement or
acquisition of the capital equipment to reduce Operating Expenses), together with
interest at the actual but reasonable interest rate incurred by Landlord, to
the extent of the savings realized, or (B) incurred after the Lease
Commencement Date in order to comply with any Law that was not in effect prior
to the Lease Commencement Date, provided that such capital costs shall be
amortized over their useful life as reasonably determined, together with
interest at the actual but reasonable interest rate incurred by Landlord; all
other capital expenditures and improvements shall be excluded from Operating
Expenses; (vi) the costs of services and utilities
separately paid by particular tenants; (vii) costs which are payable to
Landlord by insurers or by governmental authorities or any other source;
(viii) marketing costs;
(ix) costs of any equipment, services or utilities which are provided solely to
one or more retail tenants; (x) amounts reimbursable to Landlord (either by an
insurer, tenant, warrantor or otherwise); (xi) expenses incurred in leasing or
procuring tenants; (xii) net basic rents under ground leases; (xiii) all costs
specially billed to and paid by specific tenants; (xiv) depreciation or capital
costs of any equipment, machinery, fixtures or improvements therein, as well as
rental of equipment which, if purchased, would constitute a capital item, other than those
permitted in item (v)
above; (xv) compensation paid to officers of Landlord or officers of the management
agent who do not perform property management related activities; (xvi) the cost of tools, equipment
and material used
in the construction of any
improvements; (xvii) amounts resulting from negligence or willful misconduct on the part of
Landlord or any of its employees, agents or invitees or on the part of any
tenant or occupant of space in the Building or any of their respective
employees, agents or invitees; (xviii) amounts resulting from
negligence or willful misconduct on the part of any person or entity which is
not identified in the preceding item to the extent Landlord fails to recover
the same notwithstanding its commercially reasonable and diligent efforts;
(xix) costs for any structural


 


6

















 


maintenance, replacement or redesign other
than those for which Tenant is expressly liable pursuant to the terms of this
Lease; (xx) legal
fees and other expenses
incurred in connection with negotiations or disputes; (xxi) costs or expenses associated
with the enforcement of provisions of any leases or other agreements; (xxii) amounts relating to the
defense of title or interest in property; (xxiii) amounts incurred by Landlord in connection
with the  construction of the Building, the Complex
and related facilities; (xxiv) amounts incurred for the correction of defects in design and/or
construction and/or in design
and/or construction of Landlord’s Work (but not the costs of wear
and tear); (xxv) amounts
incurred in connection with casualty or the exercise of eminent
domain; (xxvi) any
compensation paid to clerks, attendants or other persons in commercial
concessions; (xxvii) increased
insurance premiums caused by
acts of others; (xxviii) moving expenses of tenants; (xxvix)
costs arising from the presence of hazardous materials or substances,
including, without limitation, hazardous substances in the groundwater or soil,
not caused by the acts or omissions of Tenant, its agents, employees,
contractors, licensees or invitees; (xxx) costs incurred for any items to the extent recovered under a
manufacturer’s, materialmen’s, vendor’s or contractor’s warranty or other agreement; (xxxi) costs of
acquisition of sculpture, paintings or other objects of art; (xxxii) income, excess
profits, franchise
taxes or other such taxes
imposed on or measured by
income; (xxxiii) costs relating to maintaining any entity’s
existence, either as a corporation, partnership, trust or other entity, such as
trustee’s fees, annual fees, partnership organization or administration
expenses, deed recordation expenses, and legal and accounting fees for such
purposes; (xxxiv) costs incurred to achieve compliance with
any governmental laws, ordinances, rules, regulations or orders with respect to
conditions existing in violation thereof on the Rent Commencement Date; (xxxv) any penalties,  fees, interest and other amounts
incurred because of Landlord’s failure to timely comply with laws or pay
any Operating Expenses or Real Estate Tax Expenses, provided that Tenant was not then in default beyond
the expiration of the applicable cure period with respect to Tenant’s
obligation to pay Tenant’s Share of Increased Operating Expenses under Section
5 of this Lease; (xxxvi) accounting fees, other than those
attributable to reviewing and preparing operating statements for the Building
or the Complex (but with respect to the Complex, only to the extent necessary
to determine the proportionate amount of any expenses which are allocable to
the Building) or other purposes relating to the operation (but not the sale or
the financing) of the Building or the Complex and not income tax returns; (xxxvii) imputed rent for a management
office in the Complex,
unless imputed rent for a management office in the Building is included in
Operating Expenses for the Operating Expenses Base Year, the size of which
office shall not exceed 1,000 rentable square feet, and the rent for which
office shall not exceed market rate of rent for comparable space in Comparable
Buildings, provided that any increase in such imputed rent shall not exceed two
and one half percent (2.5%) per annum; (xxxviii) Landlord’s general overhead expenses; (xxxix)
electricity which is separately sub-metered in premises leased by other tenants
and amounts collected by
Landlord from other tenants for excess electrical usage; (xl)
amounts incurred in connection
with selling, syndicating, financing, mortgaging or hypothecating any interest
in property, including, but not limited to, closing costs, title insurance
premiums, transfer, recordation taxes, brokers’ commissions and advertising
expenses; (xli) rentals for items (except when needed in connection
with normal repairs and
maintenance of permanent systems) which if purchased, rather than rented, would
be of a capital nature which is specifically excluded in item (v) above; (xlii)
depreciation, amortization and interest payments, except as permitted in item
(v) above or except on equipment, materials, tools, supplies and vendor-type
equipment purchased by Landlord to enable Landlord to supply services Landlord might
otherwise contract for with a third party where such depreciation, amortization
and interest payments would otherwise have been included in the charge for such
third party’s services, all as determined in accordance with generally accepted
accounting principles, consistently applied, and when depreciation or
amortization is permitted or required, the item shall be amortized over its
reasonably anticipated useful


 


7

















 


life; (xliii) non-cash items, such as bad debt losses and rent losses;
(xliv) reserves, except when and to the extent actually used for the payment of
Operating Expenses; (xlv) amounts incurred in connection with repairs or
replacements to improvements or equipment to the extent such amounts result
from deficiency in design, construction, workmanship or materials; (xlvi) costs
of signs identifying any entity or person, except directional signs and signs
containing information as to where to obtain services, whether emergency or
otherwise, and signs required by any Law; (xlvii) amounts incurred in
connection with lease, sublease and/or assignment negotiations and transactions
with present or prospective tenants or other
occupants; (xlviii) amounts incurred in connection with events, including, but
not limited to, shows, promotions, kiosks, displays, filming, photography,
private events or ceremonies; (xlix) amounts incurred in connection with a
casualty or the exercise by governmental authorities of the right of eminent
domain; (l) amounts incurred in connection with the provision of services,
utilities or other benefits which are not offered to Tenant, or are greater in
quantity, when measured on a per rentable square foot basis, or higher in
quality than those delivered to Tenant, or for which Tenant is charged
directly, but which are provided to another tenant or occupant regardless of
whether or not such amounts are recovered by Landlord; (li) amounts incurred
due to the violation by any tenant of the terms and conditions of any lease of
space; (lii) amount of the management fee paid or computed on a basis different
than the basis used for calculation of the same for the Operating Expenses Base
Year and in all events to the extent such management fee is in excess of three
percent (3%) of gross revenue from the Building, assuming that the Building was
100% occupied with all tenants paying rent on their respective premises for the
entire Operating Expenses Base Year; (liii) salaries, wages, fees, benefits and
other compensation paid to the extent customarily included in or covered by a
management fee paid or charged by landlords of Comparable Buildings in
connection with the management of such properties, provided that in no event
shall Operating Expenses include salaries and/or benefits attributable to
personnel above the level of Building manager, and in the event any employee of
the Building also provides labor or services with respect to other buildings,
the salary and other benefits of such employee shall be equitably allocated
among the buildings for which such employee provides labor or services; (liv)
rent and other amounts incurred in connection with any space for leasing
personnel, or, except as provided in (xxxvi), any other space occupied by
Landlord or any affiliate or subsidiary of Landlord; (lv) amounts paid to
Landlord or to subsidiaries or affiliates of Landlord for goods and/or services
to the extent the same exceed the costs of goods and/or services rendered by
unaffiliated third parties of similar experience on a competitive basis; (lvi)
amounts incurred in connection with a violation of any agreement or in
connection with any violation of applicable laws; (lvii) with respect to all
assessments and premiums which can be paid in installments, any amount in
excess of the maximum number of installments permitted by Law and not included
as Operating Expenses except in the year in which the assessment or premium
installment is actually paid; (lviii) amounts which are customarily included in
or covered by the management fee paid or charged by landlords of Comparable
Buildings, including without limitation, all expenses of a centralized office,
compensation (including benefits) of management personnel above the level of
property manager, and costs of preparation of accounts receivable and accounts
payable records; (lix) amounts arising from charitable or political
contributions; (lx) amounts arising from earthquake insurance; (lxi) amounts
(including
in connection therewith all attorneys’ fees and costs of settlement judgments and payments
in lieu thereof) incurred in connection with negotiations, claims, potential
claims, disputes, potential disputes, litigation or arbitrations, including
those involving tenants and other occupants of the Building, any employee,
agent, contractor or subcontractor of Landlord or any of its affiliates or
subsidiaries, or actual or prospective tenants, purchasers or mortgagees of the
Building; (lxii) amounts incurred in connection with any bankruptcy proceeding;
(lxiii) amounts payable in connection with any indemnity obligation or for
damages; (lxiv) amounts paid for entertainment, dining and travel; (lxv)
amounts incurred


 


8

















 


in connection with any audits performed for a particular tenant; (lxvi)
amounts paid in connection with the use or lease of properties and/or
facilities owned by governmental authorities, including, without limitation,
vault rent or vault charges; (lxvii) amounts incurred by Landlord for the use
of common areas in the Building or elsewhere in the Complex to the extent
Landlord receives income for such use; (lxviii) amounts incurred in installing, operating, maintaining and owning any specialty items or services not normally installed,
operated and maintained in Comparable Buildings and not necessary for
Landlord’s operation, repair and maintenance of, and the providing of required services for,
the Building, including, but not limited to, any observatory, beacon(s),
broadcasting facilities, cafeteria or other dining facilities, conference
facilities, athletic or recreational club facilities (except that Operating
Expenses may include the reasonable cost of maintaining the exercise facility
maintained by Landlord in the Building in accordance with the terms of this
Lease, only to the extent the use of such facility is provided at no cost to
all tenants in the Building and use of the same is limited to tenants of the
Building), child care center, kiosks, promotions, displays, or any other
facilities similar to any of the foregoing; (lxix) amounts expressly excluded
from Operating Expenses elsewhere in this Lease; (lxx) amounts or taxes
expressly excluded from “Real Estate Tax Expenses” in this Lease; and (lxxi)
amounts associated with or relating to separate items or categories or
subcategories of Operating Expenses to the extent such items, categories or
subcategories were not part of Operating Expenses during the entire Operating
Expenses Base Year, unless retroactively included in Operating Expenses for the
Operating Expenses Base Year.


 


CC.                             Premises’ Standard Electrical Capacity: 
The electrical capacity sufficient to support Tenant’s balanced
consumption of six (6) watts of low voltage per square foot of rentable area
and two and one-half (2.5) watts of high voltage per square foot of rentable
area.


 


DD.                           Real Estate Tax Expenses:  (1)
All real estate taxes, arena taxes, solid waste taxes and related charges,
front foot benefit charges, special user fees, rates, and assessments
(including general and special assessments, if any), ordinary and
extraordinary, foreseen and unforeseen, which are imposed upon Landlord or
assessed against the Building or the Land or Landlord’s personal property used
in connection therewith; (2) any other present or future taxes or governmental
charges that are imposed upon Landlord or assessed against the Building or the
Land which are in the nature of or in substitution for real estate taxes, including
any tax levied on or measured by the rents payable by tenants of the Building,
all taxes and assessments for public improvements or any other purpose and any
gross receipts or similar taxes; and (3) reasonable expenses (including, without limitation,
attorneys’ and consultants’ fees and court costs) incurred in protesting or
seeking a reduction of real estate taxes, whether or not such reduction is
ultimately successful; provided, however, that Tenant shall be credited for
Tenant’s proportionate share of any refund received, including any interest
thereon which is actually received by Landlord, and Tenant’s right to receive
its portion of such refund shall survive the termination or expiration of this
Lease.  Notwithstanding anything to the contrary set forth in this Lease,
Real Estate Tax Expenses
shall not include: (i)
any profits or excess profits
taxes or excess profits taxes, franchise taxes, gift taxes, capital stock
taxes, inheritance and succession taxes, estate taxes, transfer taxes, recordation taxes, capital
gains taxes, franchise taxes, corporate or unincorporated business taxes, or other taxes to the extent
applicable to general or net income (as opposed to rents or
receipts), (ii) business
license fees or business
entity fees; (iii) any items included in Operating Expenses; (iv) any item expressly excluded
from Operating Expenses pursuant to this Lease (other than “Real Estate Tax
Expenses”); (v) any taxes imposed in connection with personal property owned,
leased or used by any tenant or other occupant in the Building or the Complex;
(vi) penalties incurred
as a result of negligence, inability (except to the extent that Tenant was then
in default beyond the expiration of the applicable cure


 


9

















 


period with respect to its payment of Tenant’s Share of Increased Real
Estate Tax Expenses) or unwillingness to make payments of , and/or to file any tax or informational returns with respect to,
any amounts, when due; (vii) any amounts incurred for real or personal
property taxes, leasehold
taxes in lieu thereof and any assessments upon or allocable to parking
facilities, or taxes or assessments levied in lieu thereof, or in addition
thereto; (viii) taxes or assessments imposed or levied in connection with
entitlements relative to real property which are granted after the date of
execution of this Lease; provided, however, that in no event shall Landlord
include in Real Estate Tax Expenses (A) any taxes or assessments based upon
increases in the FAR which was available to the Building but which was not
incorporated into the Building until after the Lease Commencement Date or (B)
any amounts payable to any governmental agencies in connection with obtaining
governmental approval to develop and construct the Building; (ix) taxes,
assessments or charges imposed or levied in connection with development or
renovation of or
damage to real property, including improvements, or any new construction, other
than in connection with restoration work to repair damage after a casualty; (x)
any other taxes
or assessments charged or levied which are not directly incurred as a result of the operation
or operation of the Building or the Land; or (xi) costs, expenses, taxes or assessments associated with
or relating to separate items or categories or subcategories of Real Estate Tax
Expenses to the extent such items, categories or subcategories were not part of
Real Estate Tax Expenses for the entire Base Year, unless retroactively
included in Real Estate Tax Expenses for the Real Estate Tax Expenses Base Year. 
Landlord shall contest and diligently pursue a reduction and/or
elimination of any such Real Estate Tax Expenses if Landlord reasonably
determines to initiate efforts to obtain any such reduction or elimination.


 


EE.                               Rent:  All Base Rent and
Additional Rent.


 


(1)                                  Base Rent: 
The amount payable by Tenant pursuant to Section 4.A below.


 


(2)                                  Additional Rent:  All sums of money payable by Tenant pursuant to this Lease other
than Base Rent.


 


(3)                                  Monthly Rent:  A monthly installment of Base Rent and Additional Rent, if any,
which shall equal one-twelfth (1/12th) of Base Rent and Additional Rent then in
effect.


 


FF.                               Tenant’s Personal Property:  All trade equipment,
furnishings and/or other personal
property now or hereafter installed or placed in or on the
Premises by Tenant or with Tenant’s permission (other than any property of
Landlord), excluding, among other things, built-in mill work in offices and
conference rooms, built-in reception desks, and built-in kitchen cabinets and appliances.


 


GG.                             Unavoidable Delay:  Any delays
due to strikes, labor disputes, shortages of material, labor or energy, acts of
God, governmental restrictions, delays in obtaining building permits beyond the
customary time for receipt of the particular type of permit and despite the
permit applicant’s timely application for, and diligent pursuit of, same, enemy
action, civil commotion, fire, unavoidable casualty or any other causes, with respect to Landlord’s
obligations, beyond the reasonable control of Landlord or, with
respect to Tenant’s obligations, beyond the reasonable control of Tenant.


 


HH.                           Work Agreement:  Exhibit C
attached to this Lease, the terms of which are hereby expressly incorporated in
this Lease.


 


II.                                     Landlord’s Work:  All work to be performed by Landlord under the Work Agreement,
and Section 3 below.


 


10

















 


2.                                      TERM.


 


A.                                   Certain Definitions.


 


A.1                             The term “Substantially Complete” or “Substantial
Completion” of the Tenant’s Work shall mean: 
(i) Tenant has been tendered continuous and uninterrupted access to the
Premises commencing on the date the same is delivered to Tenant and thereafter;
(ii) all systems in the Building are operational to the extent necessary to
service the Premises; (iii) Landlord has completed all the work required to be
performed by Landlord in accordance with the Work Agreement in accordance with
the Work Agreement, with the exception of “punchlist” items which will not
unreasonably interfere with Tenant’s use or occupancy of the Premises or
Tenant’s use of the Garage or Common Areas as permitted under this Lease; (iv)
Landlord has obtained a certificate of occupancy for the Building, or a
temporary certificate of occupancy for that portion of the Building that
includes all of the Premises, the Garage and all Common Areas in the Building;
(v) Tenant has been provided with the number of parking privileges to which it
is entitled under this Lease; (vi) Tenant has completed the Tenant’s Work,
excluding “punch-list” items; and (vii) Tenant has installed its furniture,
fixtures, telephones, communications systems and free-standing workstations in
the Premises.


 


A.2                             The term “Force Majeure Delay” shall mean any delay in the Substantial
Completion of the Tenant’s Work which is attributable to any: (i) delay or
failure to perform attributable to any strike, lockout or other labor or
industrial disturbance (whether or not on the part of the employees of either
party hereto), civil disturbance, act of the public enemy, war, riot, sabotage,
blocking, embargo, inability to secure customary materials, supplies or labor
through ordinary sources by reason of regulation or order of any government or
regulatory body; (ii) delay attributable to the failure of Tenant to secure
building permits and approvals (including any failure to obtain a temporary
certificate of occupancy) within the same time period that normally prevailed
for obtaining such permits and approvals at the time this Lease was negotiated (excluding Tenant’s unreasonable applications
or unreasonable requests or requirements in connection with Tenant’s submission
of applications for permits or other approvals in connection with Tenant’s
Work), provided that if Tenant fails to apply for the same by the Turnover
Date, then the Force  Majeure
Delays described in this item (ii) shall not exceed thirty (30) days, and
provided, further, that if Tenant fails to apply for the same by that date
which occurs forty-seven (47) days after the Turnover Date, then no Force
Majeure Delay shall be deemed to have occurred with respect to the matters
described in this item (ii);
(iii) delay in completing the plans for the Tenant’s Work and/or the
construction of the Tenant’s Work because of changes in Laws; or (iv) delay
attributable to lightning, earthquake, fire, storm, hurricane, tornado, flood,
washout, explosion, or any other similar cause beyond the reasonable control of
the party from whom performance is required, or any of its contractors or other
representatives.  Except as otherwise
expressly set forth in this Lease, any prevention, delay or stoppage due to any
Force Majeure Delay shall excuse the performance of the party affected for a
period of time equal to any such prevention, delay or stoppage, except the
obligations of either party to pay money pursuant to this Lease.


 


A.3                             The term “Landlord Delay” shall mean any delay in
the Substantial Completion of the Tenant’s Work which is due to any act or
omission of Landlord, its agents, employees, contractors, subcontractors or
licensees (including acts or omissions while acting as agent, employee,
contractor or subcontractor for Tenant). 
The term Landlord Delay shall include, but shall not be limited to, any:
(i) delay in the giving of authorizations, approvals or disapprovals required
of Landlord by the respective dates


 


11

















 


therefore
as set forth in the Work Agreement or this Lease; (ii) delay due to the failure
of Landlord to grant authorizations or approvals for unreasonable reasons;
(iii) delay attributable to the acts or failures to act of Landlord, its
agents, employees, contractors, subcontractor or licensees where such acts or
failures to act delay the Substantial Completion of the Tenant’s Work; (iv)
delay by Landlord in completing the Landlord’s Work to the extent necessary to
allow Tenant to commence the construction of the Tenant’s Work upon the
Turnover Date, and thereafter continue construction of the same without
interruption for failure of any portion of the Landlord’s Work to be completed;
(v) delay attributable to the failure or refusal of Landlord or any of its
agents, employees, contractors, subcontractors or licensees to permit Tenant,
its agents, employees, contractors, subcontractors or licensees reasonable
access to and use of the Building or any Building facilities or services (which
access shall be coordinated with Landlord), including elevators, and loading
docks, which access and use are required for the orderly and continuous
performance of the work necessary to complete the Tenant’s Work or to install
Tenant’s furniture, fixtures, equipment and personal property; (vi) delay
attributable to Landlord providing Tenant incorrect or incomplete Base Building
Plans (as defined in the Work Agreement), in which case, in addition to such
delay being deemed a Landlord Delay, Landlord shall increase the Tenant
Allowance by an amount sufficient to reimburse Tenant for the reasonable actual
increased costs incurred by Tenant as a direct result thereof; and (vii)
failure of Landlord to deliver the Base Building Plans to Tenant within thirty
(30) days after the date of this Lease.


 


B.                                     General.  In the event that the use of
the freight elevator is not sufficient to meet Tenant’s requirements, Landlord
shall cause to be made operational, and shall allow Tenant to have priority
usage of, two passenger elevators in the elevator bank that services the
Premises, which usage shall be coordinated with Landlord), in order to assist
Tenant in the expeditious construction of the Tenant’s Work and the installation
of Tenant’s fixtures, furniture, equipment and personal property.  In no event shall Tenant’s remedies or
entitlements for the occurrence of a Landlord Delay be abated, deferred, or
diminished or rendered inoperative because of a prior, concurrent, or
subsequent delay resulting from any action or inaction of Tenant.


 


C.                                     Force Majeure Delays and
Landlord Delays Occurring After Lease Commencement Date.  If
an event occurs after the Lease Commencement Date, which would otherwise have
constituted a Landlord Delay had it occurred prior to the Lease Commencement
Date, then Rent payable by Tenant under this Lease shall be abated beginning on
the Rent Commencement Date by one (1) day for each such day of Landlord
Delay.  In addition, the Rent
Commencement Date shall be extended by one (1) day for each day of Force
Majeure Delay that begins to occur prior to the occurrence of the Rent
Commencement Date.  Notwithstanding the
foregoing provisions of this Section 2.C., in the event that both of the
circumstances described in the two immediately preceding sentences occur with
respect to the same day or period of time, and one of such circumstances
constitutes a Landlord Delay and one or more other such circumstances
constitutes a Force Majeure Delay, both with respect to the same day or period
of time, then the Rent payable by Tenant under this Lease shall be abated
beginning on the Rent Commencement Date by one (1) day for each such day of
Landlord Delay, but the Rent Commencement Date shall not also be extended by
one (1) day for each day of Force Majeure Delay which occurred during the same
day or period of time.


 


D.                                    Landlord’s Work.  In the event that (a) Landlord
fails to meet the
Key Milestone Date (as defined in Section 1.d of the Work Agreement attached to
this Lease as Exhibit C) set forth in Section 1.d.(i),  (b) at any time on
and after September 1, 2004, it is determined by the Consultants Procedure (as


 


12

















 


hereinafter defined) that the Turnover Date
(as defined in Section 1.d.(ii) of the Work Agreement attached to this Lease as
Exhibit C) will not occur on or before May 15, 2005, (c) following the
occurrence of a casualty which destroys or substantially destroys the Building,
whether such casualty occurs before or after September 1, 2004, it is
determined by the Consultants Procedure (as hereinafter defined) that the
Turnover Date will not occur on or before May 15, 2005, or (d) the Turnover
Date does not in fact occur on or before May 15, 2005; then in any of the
events described in the immediately preceding clauses (a), (b), (c) and (d), Tenant shall have the right to
terminate this Lease by delivering notice to Landlord within twenty (20) days
following the applicable event described in the foregoing clauses (a), (b), (c)
or (d).  It is hereby agreed that for
purposes of the foregoing, neither the date of November 1, 2004 nor the date of
May 15, 2005 shall be extended by Force Majeure Delays or Unavoidable Delays.


 


As used in
this Lease, the term “Consultants Procedure” shall mean a procedure pursuant to
which Tenant advises Landlord in writing that Tenant wishes to have a Qualified
Consultant (as hereinafter defined) selected by Tenant and a Qualified
Consultant selected by Landlord (the “Consultants Procedure Initiation Notice”)
determine (i) whether the Turnover Date will not occur on or before May 15,
2005, in the case of a Consultants Procedure pursuant to this Section 2.D., or
(ii) whether restoration of the Premises will be completed by a particular date
contemplated by Section 16 of this Lease, as applicable.  Within twenty (20) days following Landlord’s
receipt of a Consultants Procedure Initiation Notice, Landlord shall designate
a Qualified Consultant (as hereinafter defined) to take part in the applicable
Consultants Procedure and if Landlord fails to designate its Qualified
Consultant by the delivery of notice to Tenant within the above-referenced
20-day period, then Tenant’s Qualified Consultant shall make the applicable
determination provided for in the immediately preceding sentence by himself or
herself.  In the event that Landlord
designates a Qualified Consultant by the delivery of notice to Tenant within
the above-referenced 20-day period and Tenant’s Qualified Consultant and
Landlord’s Qualified Consultant do not agree on whether the Turnover Date will
occur on or before May 15, 2004 (with respect to a Consultants Procedure
pursuant to this Section 2.D.) or whether Landlord will complete the
restoration of the Building by the applicable date set forth in Section 16
hereof (with respect to a casualty governed by said Section 16), then Tenant’s
Qualified Consultant or Landlord’s Qualified Consultant will notify a third
Qualified Consultant, as hereinafter provided, and such third Qualified Consultant
shall be required to make the determination as to whether the Turnover Date
will occur on or before May 15, 2005 or whether the restoration of the Building
by Landlord will occur by the applicable date provided for in Section 16
hereof, as applicable, and the determination of such third Qualified Consultant
shall be binding upon Landlord and Tenant. 
The third Qualified Consultant who shall be notified of the necessity of
making a determination pursuant to this paragraph shall be Jim Davis, or if
said Jim Davis is unable or unwilling to serve as the third Qualified
Consultant or has been requested to bid on the performance of Tenant’s Work,
then the third Qualified Consultant shall be David Orr, and if said David Orr
is unable or unwilling to serve as the third Qualified Consultant, then the
third Qualified Consultant shall be Jeb Turner, or if said Jeb Turner is unable
or unwilling to serve as the third Qualified Consultant, then the third
Qualified Consultant shall be A.S. McGoughan, Jr.  All Qualified Consultants shall make their determinations
utilizing their commercially reasonable judgment and taking into account all
relevant facts, including, but not limited to, in connection with a Consultants
Procedure with respect to whether the Turnover Date will occur on or before May
15, 2004, all information provided by Landlord’s general contractor concerning
the status of Landlord’s Work, Landlord’s general contractor’s plan to make up
time in the event of any delay in its schedule in the performance of Landlord’s
Work and the reasons for Landlord’s failure to date to perform the Landlord’s
Work in accordance with the schedule initially proposed by Landlord to Tenant.


 


13

















 


The term
“Qualified Consultant” shall mean a person who is unaffiliated with Landlord or
Tenant, who has not less than ten (10) years experience regarding the
construction of multi-story commercial office buildings in the Washington, D.C.
metropolitan area and who is, in the case of Landlord, a person who is neither
(and never has been) employed by, nor an independent contractor for, Landlord’s
general contractor, and in the case of Tenant, a person who is neither (and
never has been) an employee of, nor an independent contractor with, Tenant’s
construction manager, project manager or general contractor in connection with
Tenant’s Work.  If the Consultants
Procedure involves two (2) Qualified Consultants [or one (1) Qualified
Consultant if Landlord does not designate its Qualified Consultant within the
20-day period within which it is required to do so, as the case may be], then
the Consultants Procedure shall be completed and a determination made within
ten (10) business days following the appointment of the second Qualified
Consultant [or if Landlord fails to designate its Qualified Consultant within
the aforesaid 20-day period, then within ten (10) business days following the
expiration of such 20-day period].  If
the Consultants Procedure involves a third Qualified Consultant, then such third
Qualified Consultant shall make his or her required determination pursuant to
this Section 2.D. within ten (10) business days after being designated to do
so.


 


E.                                      Outside Lease Commencement Date.  In the event the Lease Commencement Date
does not occur by the three hundred fiftieth (350th) day following
the Turnover Date as a result of Landlord Delays, Tenant shall have the right
to terminate this Lease by delivering notice of such termination to Landlord,
which notice shall be delivered by Tenant, if at all, not later than the three
hundred eightieth (380th) day following the Turnover Date.


 


F.                                      Reimbursement Obligations.


 


(1)                                  In the event Tenant terminates this Lease pursuant to Sections D or E
above, Landlord shall, within ten (10) days following Landlord’s receipt of
Tenant’s request from time-to-time, (i) reimburse Tenant for all costs and
expenses incurred by Tenant in connection with the design and construction of
the Tenant’s Work and all other costs and expenses incurred by Tenant in
connection with its negotiation and execution of this Lease and all related
documentation and the transactions contemplated thereby, (ii) indemnify,
protect, defend (with counsel reasonably satisfactory to Tenant) and hold
Tenant harmless from and against any and all costs, expenses, losses, damages,
penalties and liabilities suffered or incurred by or rendered against Tenant as
a result of or in connection with Tenant’s failure to vacate “Tenant’s Current
Space” (as defined below) by the “Holdover Date” (as defined below), and (iii)
reimburse Tenant for all rental obligations accruing from the Holdover Date
under “Tenant’s Current Leases” (as defined below) and any other lease pursuant
to which Tenant occupies space in substitution of all or a portion of Tenant’s
Current Space (the “Substitution Lease”) which are in excess of the amount of
Base Rent which would have been payable by Tenant under this Lease had the
Lease Commencement Date occurred on July 15, 2005 and had there been no Free
Rent Period in effect thereafter (the “Existing Lease Excess Rental
Obligations”); provided, however, that in the event Tenant terminates this
Lease pursuant to Section 2.D.(a) hereof, then (y) Landlord’s liability under
Subsection F(1)(i) above shall be limited to costs and expenses incurred by
Tenant in connection with the design of the Tenant’s Work, in amount not to
exceed One Hundred Seventy-Five Thousand Dollars ($175,000.00), and attorneys’
fees incurred by Tenant in connection with the negotiation and documentation of
this Lease, and matters pertaining thereto, in an amount not to exceed One
Hundred Thousand Dollars ($100,000.00); and (z) Landlord’s liability with
respect to the matters addressed in Subsection F(1)(iii) above for Existing
Lease Excess Rental Obligations shall not exceed such Existing Lease Excess
Rental Obligations for three (3) months, that is, from August 1, 2005 through
September 30, 2005.


 


14

















 


Tenant
currently anticipates that its move to the Premises will occur over some
weekends prior to completion of the Tenant’s Work and over at least four
weekends following completion of the Tenant’s Work, but prior to the occurrence
of the Rent Commencement Date. Accordingly, Landlord agrees that in the event
Landlord is liable for matters identified in Subsections F(1)(ii) and (iii)
above, Landlord’s liability shall extend to the last day of the calendar month
during which the 196th day after the Turnover Date occurs.


 


(2)                                  In the event that the Turnover Date does not occur on or before January
15, 2005, then Landlord shall, within ten (10) days following Landlord’s
receipt of Tenant’s request from time to time, fulfill the obligations set
forth in clauses (ii) and (iii) of Section 2.F(1) and Landlord shall also
reimburse Tenant for all increased costs incurred by Tenant resulting from a
delay in the occurrence of the Turnover Date from January 15, 2005 to the date
on which the Turnover Date actually occurred, including without limitation
increased costs of Tenant’s Work resulting from such delay.


 


(3)                                  With respect to Landlord’s payment obligations in the event that Tenant
terminates this Lease pursuant to Sections D. or E. above or the Turnover Date
does not occur on or before January 15, 2005, (A) Landlord may offset against
its foregoing obligations, all amounts, if any, then payable by Tenant to
Landlord; (B) Tenant shall deliver to Landlord reasonable evidence of amounts
owing or payment of amounts pursuant to Tenant’s Current Lease and/or any
Substitution Lease with respect to corresponding amounts owing by Landlord
pursuant to the foregoing; (C) Landlord shall not be obligated pursuant to the
foregoing with respect to any net increased obligation of Tenant under Tenant’s
Current Leases which results from any amendment to an Existing Tenant Lease
executed by Tenant after the date of this Lease; (D) Landlord shall not be
liable for any consequential damages incurred by Tenant, but Landlord shall be
liable for such consequential damages, if any, as are payable by Tenant to its
landlord under Tenant’s Current Leases (as defined below) and/or Substitution
Leases, subject to clauses (B) and (C) of this Section 2.F.(3), if (i) the
Turnover Date does not occur on or before April 15, 2005, or (ii) Landlord
Delays occur after the Turnover Date; and (E) Tenant shall furnish to Landlord,
not later than ten (10) business days following any payment made by Landlord to
Tenant pursuant to this Section 2.F., reasonable evidence of payment of the
corresponding amount paid by Landlord to Tenant having been made by Tenant to
the landlord under Tenant’s Current Leases and/or any Substitution Lease, as
applicable.  In the event that Tenant
receives from the landlord under the Tenant’s Current Leases or any Substitution
Lease or any other source, any refund, credit or other reimbursement of any
amount paid by Landlord pursuant to this Section 2.F as a holdover premium,
holdover penalty, any other form of compensation with respect to Tenant’s
tenancy in such space following the Holdover Date (other than base rent and
additional rent in the nature of pass-throughs) or any combination of the
foregoing pursuant to such Tenant’s Current Leases or any Substitution Lease,
then, in any such event, the amount payable by Landlord under this Section
2.F(3) shall be reduced by an amount equal to the amount of such refund, credit
or other reimbursement which was received by Tenant, or Tenant shall reimburse
Landlord (if theretofore paid by Landlord under this Section 2.F(3)) in an
amount equal to the amount of such refund, credit or other reimbursement.


 


(4)                                  Notwithstanding the foregoing, (i) in the event of the termination of
this Lease by Tenant pursuant to Sections 2.D.(b), (c) or (d) hereof, Landlord
shall not be responsible to indemnify, protect, defend and hold Tenant harmless
from and against any such costs, expenses, losses, damages, penalties or
liabilities, including rental obligations, suffered or incurred by or rendered
against Tenant which accrue as a result of Tenant’s failure to vacate Tenant’s
Current Space or any other space occupied by Tenant in substitution of all or a
portion of Tenant’s Current Space by that date which occurs twelve (12) months
after Tenant’s termination of this Lease pursuant to any of Sections D or E
above, and (ii) in the event that the Turnover Date occurs, then, irrespective
of when the Turnover Date occurs,


 


15

















 


Landlord shall not be responsible to indemnify, protect, defend or hold
Tenant harmless from and against any such costs, expenses, losses, damages,
penalties or liabilities, including rental obligations, suffered or incurred by
or rendered against Tenant which accrue as a result of Tenant’s failure to
vacate Tenant’s Current Space or any space occupied by Tenant in substitution
of all or any portion of Tenant’s Current Space after the last day of
the calendar month during which the 196th day after the Turnover Date occurs.  The term “Tenant’s Current
Space” shall mean that space which Tenant currently leases at 1717 H Street,
N.W., Washington, D.C. pursuant to those certain leases (collectively, the
“Tenant’s Current Leases”) dated (A) January 9, 1998, as amended by that
certain letter dated February 24, 1999 and by that First Amendment to Lease
dated July 13, 2000 pursuant to which Tenant exercised its option to expand its
leased premises thereunder to include the fifth (5th) and sixth (6th)
floors in the building in which the leased premises is located, and (B) June
16, 2000, as amended by that certain First Amendment to Lease dated June 9,
2003, between Tenant, as lessee, and Marvin N. Robertson and Katheryn M.
Robertson, Trustees under Trust Indenture made by Mathilda M. Kirchner dated
November 28, 1953, Marvin M. Robertson and Katheryn M. Robertson, Trustees
under Trust Indenture made by Cecelia E. Goodman dated November 28, 1953,
Marvin M. Robertson, Katheryn M. Robertson and George W. Lemm, Trustees under
the Will of Katheryn Lemm (Trust Estates 2 through 4), Marvin M. Robertson,
Katheryn M. Robertson and George W. Lemm, Trustees under Trust Indenture made
by John C. Goodman dated August 14, 1959 (Trust Estates 1 through 4), Marvin M.
Robertson, Katheryn M. Robertson and George W. Lemm, Trustees under Trust
Indenture made by Mathilda M. Kirchner dated August 14, 1959 (Trust Estates 4,
5 and 6), Marvin M. Robertson, Katheryn M. Robertson and George W. Lemm,
Trustees under Trust Indenture made by Cecelia E. Goodman dated August 14, 1959
(Trust Estates 1 through 6), Marvin M. Robertson and Katheryn M. Robertson, as
Trustees under the Trust Indenture made by Henry J. Kirchner (Trust Estates 1
and 2), dated December 5, 1956, Marvin M. Robertson, Michael A. Maiatico and
Ann T. Maiatico, Trustees under Trust Indenture No. I made by Walter M.
Macnichol dated September 21, 1959 (Trust Estates 1 through 8), Marvin M.
Robertson, Katheryn M. Robertson and George W. Lemm, Trustees under Trust
Indenture No. II made by Walter M. Macnichol dated September 21, 1959, and
Marvin M. Robertson and George W. Lemm, Trustees under Trust Indenture made by
William F. Glockner dated May 7, 1965 (Trust Estates 3 through 9 and 11), as
Lessor.  The term “Holdover Date” shall
mean July 31, 2005.  Landlord
acknowledges that in material consideration for Landlord’s execution of this
Lease, and in reliance thereon, Tenant will exercise its right to advance the
expiration date of the term of Tenant’s Current Leases in order that they shall
terminate on the Holdover Date. 
Landlord’s obligations under this Subsection F shall not be subject to
any Unavoidable Delay or any Force Majeure Delay.


 


Tenant
hereby represents and warrants to Landlord that the copies of Tenant’s Current
Leases which Tenant has delivered to Landlord prior to the execution of this
Lease are true and complete copies of such Tenant’s Current Leases.


 


G.                                     Term of Lease:  The
term of this Lease (the “Term”) shall commence on the Lease Commencement
Date (as defined
below), and
shall terminate at Midnight on the last day of the twelfth (12th) Lease Year (the “Lease Expiration Date”),
or such earlier date on which this Lease is terminated pursuant to the
provisions hereof.  The “Lease Commencement
Date” shall be that date which
occurs one hundred sixty-six (166) days following the Turnover Date (as such term
is defined in the Work Agreement); provided, however, the Lease Commencement Date shall be delayed
by one (1) day for each day of delay in the Substantial Completion of the
Tenant’s Work when such delay is caused by any “Force Majeure Delay” or
“Landlord Delay.  Landlord hereby agrees
to indemnify, protect, defend (with counsel reasonably satisfactory to Tenant)
and hold Tenant harmless from and against any and all


 


16

















 


losses, damages, liabilities, claims, costs and expenses suffered or
incurred by Tenant in connection with Landlord Delays, excluding consequential
damages (except to the extent specifically provided for in Section 2.F.(3)
hereof).


 


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


 


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


 


J.                                        Landlord’s liability pursuant to this
Section 2 shall survive the termination of this Lease.


 


3.                                      WORK
AGREEMENT; SHELL CONDITION.


 


A.                                   Landlord’s Work: 
Landlord agrees to construct the Building and all Common Areas and to
perform all Landlord’s Work as defined in, and in accordance with the
provisions of, the Work Agreement.


 


Following delivery of possession of the Premises to Tenant by Landlord,
Tenant shall perform Tenant’s Work (as defined in, and in accordance with the
provisions of, the Work Agreement).


 


B.                                     Sprinkler Work: 
Landlord shall coordinate with Tenant regarding the placement of the
main sprinkler loop and sprinkler heads in order to accommodate Tenant’s plans
for the ceiling in the Premises.


 


4.                                      RENT.


 


From and after the Rent Commencement Date (as defined below), Tenant
shall pay to Landlord Base Rent and Additional Rent as are set forth in this
Section 4 and in Section 5 below, subject only to such rights of abatement and
offset as are specifically set forth in this Lease.


 


A.                                   Base Rent: 
Base Rent shall equal the following amounts, as the same may be adjusted
pursuant to Section 1.B. above:


 


17

















 


	
  Lease Year

  	
   

  	
  Base Rent

  Per Square Foot

  Per Annum

  	
   

  	
  Base Rent

  Per Annum

  	
   

  	
  Monthly

  Base Rent

  	
   

  
	
  1

  	
   

  	
  $

  	
  32.50

  	
   

  	
  $

  	
  3,871,107.50

  	
   

  	
  $

  	
  322,592.29

  	
   

  
	
  2

  	
   

  	
  $

  	
  33.31

  	
   

  	
  $

  	
  3,967,587.41

  	
   

  	
  $

  	
  330,632.28

  	
   

  
	
  3

  	
   

  	
  $

  	
  34.14

  	
   

  	
  $

  	
  4,066,449.54

  	
   

  	
  $

  	
  338,870.80

  	
   

  
	
  4

  	
   

  	
  $

  	
  34.99

  	
   

  	
  $

  	
  4,167,693.89

  	
   

  	
  $

  	
  347,307.82

  	
   

  
	
  5

  	
   

  	
  $

  	
  35.86

  	
   

  	
  $

  	
  4,271,320.46

  	
   

  	
  $

  	
  355,943.37

  	
   

  
	
  6

  	
   

  	
  $

  	
  36.76

  	
   

  	
  $

  	
  4,378,520.36

  	
   

  	
  $

  	
  364,876.70

  	
   

  
	
  7

  	
   

  	
  $

  	
  37.68

  	
   

  	
  $

  	
  4,488,102.48

  	
   

  	
  $

  	
  374,008.54

  	
   

  
	
  8

  	
   

  	
  $

  	
  38.62

  	
   

  	
  $

  	
  4,600,066.82

  	
   

  	
  $

  	
  383,338.40

  	
   

  
	
  9

  	
   

  	
  $

  	
  39.59

  	
   

  	
  $

  	
  4,715,604.49

  	
   

  	
  $

  	
  392,967.04

  	
   

  
	
  10

  	
   

  	
  $

  	
  40.58

  	
   

  	
  $

  	
  4,833.524.38

  	
   

  	
  $

  	
  402,793.70

  	
   

  
	
  11

  	
   

  	
  $

  	
  43.08

  	
   

  	
  $

  	
  5,131,301.80

  	
   

  	
  $

  	
  427,608.49

  	
   

  
	
  12

  	
   

  	
  $

  	
  44.16

  	
   

  	
  $

  	
  5,259.941.76

  	
   

  	
  $

  	
  438,328.48

  	
   

  



 


The foregoing amounts were
calculated based on the assumption that the Premises shall contain one hundred
nineteen thousand one hundred eleven (119,111) rentable square feet measured in
accordance with the BOMA Standard and the load factors identified above. Tenant shall pay
Base Rent to Landlord in equal monthly installments (“Monthly Base Rent”) in
advance on the first day of each calendar month during the Term, without
notice.  Tenant shall have no obligation for the payment of
the installments of Monthly Base Rent and monthly installments of Additional Rent pursuant to Section 5
hereof for the first six (6) months following the Lease
Commencement Date (the “Free Rent Period”), as may be extended in accordance with the terms set forth below
in this Lease.  The day
following the last day of the Free Rent Period is referred to in this Lease as
the “Rent Commencement Date”.  During
such Free Rent Period, the Monthly Base Rent and monthly installments of Additional Rent  shall be abated; provided, however, that
(i) the Free Rent Period shall not affect the Lease Commencement Date pursuant
to Section 2 hereof,  and (ii) Tenant shall remain
obligated during the Free Rent Period to perform all of Tenant’s obligations
under this Lease except as expressly aforesaid.  The Free
Rent Period shall be extended in
the event Landlord fails to
deliver to Tenant by the thirtieth (30th) day following the date of
execution and delivery of this Lease by Tenant a subordination, non-disturbance
and attornment agreement in the form of Exhibit E attached hereto, with respect
to each Mortgage and Ground Lease in effect as of the date of this Lease, duly
executed on behalf of Landlord and the holder of each such Mortgage and Ground
Lease, notarized and in form recordable among the land records of Arlington,
County, Virginia, by one (1) day for each day in the period beginning on the
thirty-first (31st) day following the date of execution and delivery
of this Lease by Tenant and ending on the date Tenant receives all of the
above-referenced subordination, non-disturbance and attornment agreements.  If the first day following the last day of
the Free Rent Period is a date other than the first day of a month, then
Monthly Base Rent and monthly
installments of Additional Rent pursuant to Section 5 hereof for
the period commencing with and including such date and ending on and including
the day prior to the first day of the following month shall be prorated, based on the actual number of days
in such period relative to the actual


 


18

















 


number of days in the subject
calendar month, and shall be due and payable on the first day
following the last day of the Free Rent Period.


 


B.                                     Payment:  All
Base Rent and Additional Rent due and payable to Landlord under this Lease
shall be paid to Landlord at the Landlord Payment Address.  Payments of Rent (other than in cash), if
initially dishonored, shall not be considered rendered until ultimately honored
as cash by Landlord’s depository.  Payments of amounts owing by
Landlord to Tenant (other than in cash), if initially dishonored, shall not be
considered rendered until ultimately honored as cash by Tenant’s depository or
credited against Rent payable by Tenant under this Lease.  Except as expressly set forth
otherwise in this Lease, Tenant will pay all Rent to Landlord without demand,
deduction, set-off or counter-claim, except as expressly set forth otherwise in this Lease, Landlord
will pay all amounts owing by Landlord to Tenant without demand, deduction,
set-off or counter-claim. 
If any sum payable by Tenant under this Lease is paid by check which is
returned due to insufficient funds, stop payment order, or otherwise,
then:  (a) such event shall be treated
as a failure to pay such sum when due; and (b) if such circumstance occurs more
than once during the Term, in addition to all other rights and remedies of
Landlord hereunder, Landlord shall be entitled to impose, as Additional Rent, a
returned check charge of Fifty Dollars ($50.00) to cover Landlord’s
administrative expenses and overhead for processing. 
If any sum
payable by Landlord under this Lease is paid by check which is returned due to
insufficient funds, stop payment order, or otherwise, then such event shall be
treated as a failure to pay such sum when due.


 


C.                                     Late Fee:  If
Tenant fails to make any payment of Rent on or before the date when payment is
due, which failure continues
for more than ten (10) days after Landlord’s delivery to Tenant of notices, then
Tenant also shall pay to Landlord a late fee equal to three percent (3%) of the
amount that is past due.  Said late fee
shall be deemed reimbursement to Landlord for its costs of carrying and processing
Tenant’s delinquent account.  If Landlord fails to make any
payment to Tenant owing by Landlord to Tenant under this Lease on or before
the date when payment is due, and such failure continues for a period of ten
(10) days after Tenant’s delivery to Landlord of notice of the same, then
Landlord shall pay to Tenant a late fee equal to three percent (3%)
of the amount that is past due. 
Said late fee shall be deemed reimbursement to Tenant for its costs of
carrying and processing Landlord’s delinquent account.


 


5.                                      ADDITIONAL
RENT.


 


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


 


(1)                                  Definitions:  As
used herein, “Increased Operating Expenses” shall equal the amount by which
Operating Expenses incurred for
a calendar year during the Term exceed the Operating Expenses for the Operating
Expenses Base Year, and “Tenant’s Share of Increased Operating Expenses” shall
be that percentage of Increased Operating Expenses which is the equivalent of
the number of square feet of rentable area in the Premises divided by the
number of square feet of rentable area in the Building.  As used herein, “Increased Real Estate Tax
Expenses” shall equal the amount by which Real Estate Tax Expenses for a calendar year
during the Term exceed the Real Estate Tax Expenses for the Real Estate
Tax Expenses Base Year, and “Tenant’s Share of Increased Real Estate Tax
Expenses” shall be that percentage of Increased Real Estate Tax Expenses which
is equivalent to the number of square feet of rentable area in the Premises divided
by the number of square feet of rentable area in the Building.  If Real Estate Tax Expenses for the Real Estate
Tax Expenses Base Year are increased subsequent to the initial determination
thereof for any reason, such
increased amount of


 


19

















 


additional Real Estate Tax Expenses shall be
deemed to constitute part of Real Estate Tax Expenses for the Real Estate
Tax Expenses Base Year for all purposes of this Lease.


 


(2)                                  Calculation Requirements:  Operating Expenses and Real
Estate Tax Expenses shall be calculated based on an accrual method of
accounting.  When depreciation or
amortization is permitted to be included in Operating Expenses, the subject item shall be amortized on a straight line basis over its
reasonably anticipated useful life in accordance with generally accepted
accounting principles, to the extent applicable.  Operating Expenses for the Operating Expenses Base Year and each
calendar year and Real Estate Tax Expenses for the Real Estate Taxes Base Year
and each calendar year shall be appropriately grossed-up employing sound
accounting and management principles to reflect the amount of Operating
Expenses and Real Estate Tax Expenses that would have been incurred for the
Operating Expenses Base Year, the Real Estate Tax Expenses Base Year, and the
subject calendar year, respectively, had: (a) the Building been one hundred
percent (100%) leased and occupied during the entire subject year, in the case
of Operating Expenses; and (b) the Building having been one hundred percent
(100%) leased and one hundred percent (100%) of the Building and all tenant
improvements in all rentable space in the Building been completed and fully
assessed during the entire subject year, in the case of Real Estate Tax Expenses;
provided, however, that following the gross-up of Operating Expenses for the
Operating Expenses Base Year, such Operating Expenses will be adjusted and
again grossed up after all Operating Expenses for such Operating Expenses Base
Year are known to Landlord.  Landlord
agrees that since one of the purposes of Operating Expenses, Real Estate Tax
Expenses and the gross up provisions set forth herein is to allow Landlord to
require Tenant to pay for increases in costs and taxes attributable to the
Premises, Landlord agrees that: (i) Landlord shall not collect any Operating
Expenses or Real Estate Tax Expenses in excess of the amounts actually incurred
for each of same; and (ii) Landlord shall promptly pay to Tenant, Tenant’s
Share of any refund Landlord receives in connection with any amounts previously
included in Operating Expenses or Real Estate Tax Expenses.  In the event Landlord incurs costs or
expenses associated with or relating to separate items or categories or
subcategories of Operating Expenses which were not part of Operating Expenses
during the entire Operating Expense Base Year, Operating Expenses for the
Operating Expenses Base Year shall be deemed increased by the amounts Landlord
would have incurred during the Operating Expenses Base Year with respect to
such amounts had such separate items or categories or subcategories of
Operating Expenses been included in Operating Expenses during the entire
Operating Expenses Base Year.  As an
illustration of the foregoing, in the event any portion of the Building is
covered by a warranty at any time during the Operating Expenses Base Year,
Operating Expenses for the Base Year shall be deemed increased by such amount
as Landlord would reasonably have incurred during the Operating Expenses Base
Year with respect to the items or matters covered by the subject warranty, had
such warranty not been in effect at any time during the Operating Expense Base
Year.  To the extent that an expense or
other amount is not specifically included or excluded as a component of
Operating Expenses or Real Estate Tax Expenses in the definition of “Operating
Expenses” or “Real Estate Tax Expenses”, whether such expense or other amount
shall be treated as an Operating Expense or component of Real Estate Tax
Expenses shall be determined in accordance with generally accepted accounting
principles, consistently applied.  In
all instances, the calculation of Operating Expenses and Real Estate Tax
Expenses of each calendar year shall be consistent with the calculation of
Operating Expenses for the Operating Expenses Base Year and Real Estate Tax
Expenses for the Real Estate Tax Expenses Base Year, including, but not limited
to, the type of expenditures to be included in Operating Expenses and Real
Estate Tax Expenses and the allocation of any Operating Expenses and Real
Estate Tax Expenses to the Building.  In
the event Operating Expenses for any calendar year during the Term are
determined


 


20

















 


to be less than Operating Expenses for the Base Year, Tenant shall
receive a credit in the amount of Tenant’s Share of such difference against
installments of Tenant’s Share of Increased Real Estate Taxes for the
corresponding period, if any. 
Similarly, in the event Real Estate Tax Expenses for any calendar year
during the Term are determined to be less than Real Estate Tax Expenses for the
Base Year, Tenant shall receive a credit in the amount of Tenant’s Share of
such difference against installments of Tenant’s Share of Increased Operating
Expenses for the corresponding period, if any.


 


(3)                                  Payment of Tenant’s Share: 
Commencing on the first anniversary of the Rent Commencement Date, in
addition to all other Rent set forth herein, for each calendar year during the
Term, Tenant shall pay to Landlord as Additional Rent an amount equal to
Tenant’s Share of Increased Operating Expenses and an amount equal to Tenant’s
Share of Increased Real Estate Tax Expenses; provided, however, that (a) if Operating Expenses for any
calendar year are less than Operating Expenses for the Operating Expenses Base
Year, then Tenant shall receive a credit in the amount of Tenant’s Share of
such difference against Tenant’s Share of Increased Real Estate Tax Expenses
for the corresponding period, (b) if Real Estate Tax Expenses for any calendar
year are less than the Real Estate Tax Expenses for the Real Estate Tax Expense
Base Year, then Tenant shall receive a credit in the amount of Tenant’s Share
of such difference against Tenant’s Share of Increased Operating Expenses for
the corresponding period, and (c) for the calendar years during
which Tenant’s obligations under this Section 5.A.(3) begins and the Term ends,
Tenant’s Share of Increased Operating Expenses and Tenant’s Share of Increased
Real Estate Tax Expenses shall be prorated based upon:  (i) the number of days during such
calendar year during the period commencing on the first anniversary of the Rent
Commencement Date and ending on December 31 of said calendar year (in the case
of the calendar year during which Tenant’s obligations under this Section
5.A.(3) begins) or (ii) in the case of the calendar year during which the Term
ends, the greater of the number of days during such calendar year during the period commencing on the first day of
such calendar year that this Lease is in effect and ending on the date upon which
the Term expires or is earlier terminated or the number of days
during such calendar year that Tenant actually occupies the Premises or any
portion thereof.


 


B.                                     Statements:  Each time Landlord provides
Tenant with an actual and/or estimated statement of Operating Expenses or Real
Estate Tax Expenses for a calendar year, such statement shall be itemized on a
line item by line item basis, showing the applicable expense or tax for the
subject calendar year, for the calendar year prior to the subject calendar
year, and for the applicable “Base Year”. 
Commencing
with the calendar year which includes the first anniversary of the Lease
Commencement Date, and for each calendar year during the Term thereafter,
Landlord shall deliver to Tenant a statement estimating Tenant’s Share of
Increased Operating Expenses for
the calendar year (or Tenant’s Share of the amount by which Operating Expenses
for such calendar year are less than Operating Expenses for the Operating
Expenses Base Year) and Tenant’s Share of Increased Real Estate
Tax Expenses for such calendar year (or Tenant’s Share of the amount by which Real Estate Tax Expenses for
such calendar year are less than Real Estate Tax Expenses for the Real Estate
Tax Expenses Base Year).  Within thirty (30) days
following Tenant’s delivery to Landlord of Tenant’s request, Landlord shall
deliver to Tenant a statement of Operating Expenses and Real Estate Tax
Expenses for the calendar year in which the Lease Commencement Date
occurs.  Subject to the foregoing,
Tenant shall pay in equal monthly installments in advance on the first day of
each calendar month occurring during
each calendar year, (i) the
amount reflected in


 


21

















 


Landlord’s statement of Tenant’s Share of Increased Operating Expenses,
less Tenant’s Share of the amount, if any, by which Real Estate Tax Expenses
for the Real Estate Taxes Base Year will exceed Real Estate Tax Expenses for
the subject calendar year, plus (ii) the amount reflected in Landlord’s
statement of Tenant’s Share of Increased Real Estate Tax Expenses for such
calendar year, less Tenant’s Share of the amount, if any, by which Operating
Expenses for the Operating Expenses Base Year will exceed Operating Expenses
for the subject calendar year.  Tenant shall continue to pay such estimated
Tenant’s Share of Increased Operating Expenses and Tenant’s Share of Increased
Real Estate Tax Expenses, with corresponding credits described in the preceding
sentence, until Tenant receives the next such statement from Landlord, at which
time Tenant shall commence making monthly payments pursuant to Landlord’s new
statement; provided, however,
Landlord shall not deliver more than two (2) such statements in any calendar
year.  With the first
payment of Additional Rent herein which is due at least thirty (30) days after
Tenant’s receipt of a statement from Landlord specifying Tenant’s Share of
estimated Increased Operating Expenses and Tenant’s Share of estimated Increased
Real Estate Tax Expenses payable during the calendar year, taking into
consideration the credits described above, Tenant shall pay the difference
between Tenant’s monthly share of such sums for the preceding months of the
calendar year and the monthly installments which Tenant has actually paid for
said preceding months.  Alternatively, Tenant shall receive
appropriate credits against Rent next payable by it after its receipt of the
above-referenced statement from Landlord in the event the same specifies an
overcharge to Tenant.  Notwithstanding
the foregoing provisions of this Section 5.C., in determining Tenant’s Share of
Increased Operating Expenses for any calendar  year, the portion of Operating Expenses for such calendar  year which constitutes
Controllable Operating Expenses (as hereinafter defined) shall not exceed one
hundred six
percent (106%)
of the amount of Controllable Operating Expenses (as hereinafter defined) for
the immediately preceding calendar
year (the
“Controllable Operating Expenses Cap”); provided, however, Landlord may only include the
portion of Controllable Operating Expenses from any calendar year which was in
excess of the Controllable Operating Expenses Cap for such calendar  year in Operating
Expenses for any future calendar year(s) which occurs within three calendar
years thereafter until fully charged, so long as such Controllable Operating
Expenses for any such future calendar year(s) do not equal or exceed the
Controllable Operating Expenses Cap for such future calendar year(s).  As used herein, “Controllable Operating
Expenses” shall mean all Operating Expenses except for the following to the extent
permitted to be included in Operating Expenses:  (i) license and permit fees of any nature; (ii) utility company charges for utility
services; (iii) insurance premiums; (iv) the cost to remove snow and ice; (v) increased
labor costs due to the requirement for use of labor subject to collective
bargaining, which requirement was not in effect as of the Rent Commencement
Date; and (vi) costs of
compliance with governmental requirements which were not in effect on the Rent Commencement Date.


 


C.                                     [Intentionally omitted.]


 


D.                                    Retroactive Adjustments:  Within one hundred twenty (120) days
after the end of each calendar year that occurs after the date of this Lease through the calendar year
in which the Term expires, Landlord shall determine the actual
Operating Expenses and Real Estate Tax Expenses for such calendar year,
Landlord shall calculate the foregoing sums and Landlord shall provide to
Tenant a statement (in
the form as is described in the first sentence of Section 5.B above
of Tenant’s Share of Increased Operating Expenses and Tenant’s Share of
Increased Real Estate Tax Expenses for the calendar year, or the amount by which Operating
Expenses for such calendar year are less than the amount of Operating Expenses
for the Operating Expenses Base Year and the amount by which Real Estate Tax
Expenses for the subject calendar year are less than the amount of Real Estate
Tax Expenses for the Real Estate Tax Expenses Base Year;
provided, however, that Landlord’s failure to deliver such statement within the
aforesaid 120-day period shall not be deemed a waiver of Landlord’s right to
receive payment of Tenant’s Share of Increased Operating Expenses and Tenant’s
Share of 


 


22

















 


Increased Real Estate Tax Expenses for the
calendar year at issue unless Tenant provides Landlord with thirty (30) days
notice of Landlord’s failure to provide such statement within such 120-day
period and such failure continues for thirty (30) days following such notice to
Landlord; further provided, except as otherwise provided in Section 5.F, below,
the requirement to provide such statement within 120 days after the end of each
calendar year shall not be deemed to preclude Landlord from submitting a
corrected statement to Tenant in the event that the amount of any Operating
Expense is not known by Landlord until a later date as a result of final
adjudication of any litigation or administrative proceeding or Landlord’s
receipt of an invoice following the expiration of such 120-day period.  Such statement shall be: (a) accompanied by
bills for Real Estate Tax Expenses; and (b) prepared or reviewed by an independent firm of
certified public accountants, which may be Beers & Cutler or any other
regionally or nationally recognized independent firm of certified public
accountants..  Landlord shall respond to
any request by Tenant for information concerning such statement or any other matters pertaining to
Operating Expenses and/or Real Estate Tax Expenses, within ten (10) days following
Tenant’s delivery of its request therefor. 
Within thirty (30) days after delivery of any such statement, Tenant
shall pay to Landlord any deficiency between the sum of the amount shown as Tenant’s Share of
Increased Operating Expenses and Tenant’s Share of Increased Real Estate Tax
Expenses for the calendar year and the estimated payments thereof made by
Tenant, provided that if Real Estate Tax Expenses for the subject calendar year
are less than Real Estate Tax Expenses for the Real Estate Tax Expenses Base
Year and/or Operating Expenses for the subject calendar year are less than
Operating Expenses for the Operating Expenses Base Year, then Tenant shall
receive a credit in the amount of Tenant’s Share of each such difference
against Rent next payable, to the extent not already credited to Tenant
pursuant to Sections 1.A.(2) or 1.A.(3) hereof, provided that if the Lease Term
has expired or been earlier terminated, then Landlord shall pay the amount of
each such difference to Tenant promptly following the end of the subject
calendar year.  Tenant shall receive a
credit against Rent next payable in an amount equal to the sum of (i) all excess estimated
payments, plus (ii) Tenant’s
Share of the amount by which Operating Expenses for the subject calendar year
are less than the amount of Operating Expenses for the Operating Expenses Base
Year and Tenant’s
Share of the amount by which Real Estate Tax Expenses for the subject calendar
year are less than the amount of Real Estate Tax Expenses for the Real Estate
Tax Expense Base Year.


 


E.                                      Change In or Contest of
Taxes:  In the event of any change by any taxing
body in the period or manner in which any of the Real Estate Tax Expenses are
levied, assessed or imposed, Landlord shall make equitable adjustments with
respect to computing Real Estate Tax Expenses. 
Real Estate Tax Expenses which are being contested by Landlord shall be
included in computing Tenant’s Share of Increased Real Estate Tax Expenses
under this Section 5, but if Tenant shall have paid Rent on account of
contested Real Estate Tax Expenses and Landlord thereafter receives a refund of
such Real Estate Tax Expenses Tenant shall receive a credit against Rent next
payable in an amount equal to Tenant’s Share of such refund (including Tenant’s Share of such interest
thereon as has been received by Landlord from the taking authority), unless the
Term has expired or terminated, in which event Landlord shall refund the amount
to Tenant within thirty (30) days following Landlord’s receipt thereof.


 


F.                                      Audit/Arbitration:  Landlord shall maintain at
all times during the Term within the Washington
metropolitan area, complete and accurate records with respect to Operating
Expenses and Real Estate Tax 
Expenses.  Notwithstanding
anything to the contrary set forth in this Lease, in the event of any dispute regarding amounts owing by either party pursuant to this Section 5 Tenant
shall have the right, after reasonable notice and at reasonable times, to
inspect and photocopy, at Tenant’s sole cost, Landlord’s accounting records
with respect to the calculation of Operating Expenses and Real Estate Tax 


 


23

















 


Expenses at Landlord’s office in the Washington metropolitan area.  Landlord shall reasonably cooperate with
Tenant in any such examination.  If,
after such inspection and photocopying, Tenant continues to dispute amounts
owing by the parties under this Section 5, Tenant shall be entitled to audit
Landlord’s records to determine the proper amounts owing by the parties under
this Section 5.  Tenant shall not be
permitted to conduct more than one such review and audit described above in any
calendar year.  Landlord shall be
required to maintain records of all Operating Expenses, Real Estate Tax
Expenses, and other amounts pertaining to rent adjustments for a period of
eighteen (18) months following the expiration of the three year period
described below within which Tenant may notify Landlord of the respects in
which a year-end reconciliation statement is claimed to be incorrect.  The payment by Tenant of any amounts with
respect to Tenant’s Share of Increased Operating Expenses or Increased Real
Estate Tax Expenses shall not preclude Tenant from questioning the correctness
of any statement for same provided by Landlord.  Any year-end reconciliation statement provided by Landlord to Tenant
pursuant to Section 5.D shall be (a) conclusive and binding upon Tenant unless
(1) within three (3) years after Tenant’s receipt of the same, Tenant notifies
Landlord of the respects in which the statement is claimed to be incorrect, or
(2) Landlord notifies Tenant of any change pursuant to the following terms of
this Section 5.F, and (b) conclusive and binding upon Landlord unless, (1) within one year after the end of the subject calendar year
thereof, Landlord notifies Tenant of any change in said statement, or (2) with respect
to Real Estate Tax Expenses, provided
that Landlord receives a notice of a retroactive adjustment in the amount of
such Real Estate Tax Expenses,
and Landlord delivers such notice to Tenant and notifies Tenant of the
corresponding change to the amount of Real Estate Tax Expenses for the subject
calendar year within thirty (30) days after Landlord receives such notice of
retroactive adjustment to Real Estate Tax Expenses for the subject calendar
year, in which event Tenant shall again be permitted to review and audit
Landlord’s records with respect to Real Estate Tax Expenses for the subject
calendar year.  Notwithstanding anything
to the contrary set forth in this Section 5, in the event that,
pursuant to this Section 5.F, Tenant reviews and/or audits any statement provided by
Landlord for Operating Expenses, Real Estate Tax Expenses or both, then, in connection
with the first such audit, Tenant shall also have the right to review and/or audit
the Operating Expenses (if Tenant’s review and/or audit is of Operating Expenses) for
the Operating Expenses Base Year and Tenant shall also have the right to review and/or audit
the Real Estate Tax Expenses (if Tenant’s review and/or audit is of Real Estate Tax Expenses)
for the Real Estate Tax Expenses Base Year at the time of such review and/or audit by
Tenant.  Unless otherwise mutually
agreed, any such dispute shall be determined by arbitration in the jurisdiction
in which the Premises are located, in accordance with the then current
commercial rules of the American Arbitration Association.  The costs of the arbitration shall be
divided equally between Landlord and Tenant, except that each party shall bear
the cost of its own legal fees, unless (i) the arbitration results in a
determination that the amount
owing by Tenant set forth in Landlord’s statement contained a
discrepancy of less than five percent (5%) in Landlord’s favor, in which event (1) Tenant shall bear
all reasonable costs
incurred by both parties
in connection with such arbitration (including, but not limited to, the
reasonable costs incurred to perform and respond to Tenant’s review and audit
preceding such arbitration), including, without limitation, reasonable legal
fees, or (ii) the arbitration results in a determination that the amount owing by Tenant set forth
in Landlord’s statement contained a discrepancy of at least five
percent (5%) in Landlord’s favor, in which latter event (1) Landlord shall bear
all reasonable costs
incurred by both parties
in connection with such arbitration (including, but not limited to, the
reasonable costs incurred to perform and respond to Tenant’s review and audit
preceding such arbitration), including, without limitation, reasonable legal
fees, (2) Landlord shall pay interest to Tenant on the amount of the overcharge
from the date of Tenant’s notice of the respects in which Landlord’s statement
was deemed to be incorrect until reimbursement of such overcharges made by
Landlord to


 


24

















 


Tenant or until the amount thereof is taken as a credit by
Tenant against Rent payable
by it, as
applicable, said interest to be at the “prime” rate of interest (as defined in
Section 1.T hereof),  and
(3) Tenant shall, notwithstanding the provisions of the first sentence of this
Section 5.F., have the right to review (or again review, as the case may be)
the statements issued by Landlord for the two (2) years immediately preceding
the year which was the subject of the Landlord’s statement which had been
challenged by Tenant in such arbitration. 
In the event that the result of any arbitration is a determination that
Tenant owes any additional amount for Tenant’s Share of Increased Operating
Expenses or additional amount for Tenant’s Share of Increased Real Estate Tax
Expenses to Landlord because Landlord’s statement(s) understated either or both
of same, the Tenant shall pay interest on the undercharged amount to Landlord
at the “prime” rate of interest from the date of Tenant’s notice of the
respects in which Landlord’s statement was believed to be incorrect until the
date of payment by Tenant of such undercharged amount.  Pending determination of any dispute, Tenant
shall pay all amounts due pursuant to the disputed statement, but such payments
shall be without prejudice to Tenant’s position.  Upon at least fifteen (15) days notice to Landlord, Tenant shall
have reasonable access during normal business hours and at Tenant’s expense, to
all pertinent books and records of Landlord relating to the amount of expenses and other covered by
the disputed statement, for the purpose of verifying the statement.  Any such review shall be made only by
Tenant’s employees and/or by an auditor hired by Tenant who is a Certified
Public Accountant and who is not paid on a contingency fee basis (with the
exception of Equis Corporation, which may be paid on a contingency fee basis).


 


6.                                      USE.


 


A.                                   Permitted Use: 
Tenant shall use and occupy the Premises solely for general (non-medical
and non-GSA, as defined in Section 51 below) office purposes and purposes incidental thereto, which
incidental uses shall, at Tenant’s election, include: computer facilities;
air-conditioning equipment, telephone switch and other equipment and services
relating to Tenant’s business; lunchroom facilities (including vending
machines); coffee bars; physical fitness training rooms; training facilities;
and duplicating and other printing operations.  Tenant may use, on a
non-exclusive basis (other than those installed for Tenant’s exclusive use)
with Landlord and other tenants in the Building and at no cost to Tenant, the
Common Areas  and  plenums, risers, electric closets, ducts
or pipes within the Building in connection with the use and occupancy of the
Premises, subject to Landlord’s reasonable right of approval, but such approval
is subject to the requirement that Tenant shall have use of each such facility
or area at least in proportion to Tenant’s Share of space available from
time-to-time to all tenants of the Building. 
Tenant may have non-exclusive use of the stairways and stairwells for
travel between floors on which the Premises is located.  Tenant shall also have the right, with the
prior approval of Landlord, which shall not be unreasonably withheld,
conditioned or delayed, (i) to install a system providing for Tenant’s access
from the fire stairwells to floors of the Building occupied by Tenant, and (ii)
to paint or otherwise decorate the fire stairwells in the Building between
floors upon which portions of the Premises are located.


 


B.                                     Legal and Other
Restrictions of Use:  Tenant shall not use or occupy the Premises
for any unlawful purpose, or in any manner that will violate the certificate of
occupancy for the Premises or the Building or that will constitute waste,
nuisance or unreasonable annoyance to Landlord or any other tenant or user of
the Building.  Landlord shall use commercially reasonable
efforts to prevent occupants of the Building from using space controlled by
them for any unlawful purpose or in any way that will violate the certificate of occupancy for the
spaces occupied
or controlled by
them or in a manner that will


 


25

















 


constitute waste, nuisance or unreasonable annoyance to Tenant.  Subject to Landlord’s obligations
set forth in this Lease and except as otherwise provided in Section 16 (Fire
and Other Casualty) and Section 18 (Condemnation), Tenant shall
comply with all present and future laws [including, without limitation, the
Americans with Disabilities Act (the “ADA”) and the regulations promulgated
thereunder, as the same may be amended from time to time], ordinances (including,
without limitation, zoning ordinances and land use requirements), regulations,
orders and recommendations (including, without limitation, those made by any
public or private agency having authority over insurance rates) (collectively,
“Laws”), but Tenant has no obligation to make structural repairs except to the
extent the same pertain to Tenant’s particular use (as opposed to office use
generally) and occupancy of the Premises, all of which shall be complied with
in a timely manner at Tenant’s sole expense, except to the extent that any such Laws require compliance with
the same prior to occupancy of the Premises or pertain generally to the entire
Building or the entire floor(s) of the Building upon which the Premises is
located or pertains to any Building system or any structural aspect of the
Building.  In such latter events, Landlord
shall promptly take all actions necessary to comply with the subject Laws, at
its sole cost and expense, applicable to the Common Areas, any portion of the
Building outside the Premises, the Building systems and the Landlord’s
Work.  Tenant shall have the right to
contest, by appropriate legal proceedings which shall be conducted diligently
and in good faith in the name of Landlord or Tenant or both, and without cost
or expense to Landlord, the validity or applicability of any Law of the nature
hereinabove referred to with respect to which Tenant is required to comply
pursuant to the terms of this Lease, and Tenant shall indemnify Landlord
against, and hold Landlord harmless from, any liability, costs (including, but
not limited to, court costs and reasonable attorneys’ fees), damages, claims or
causes of action resulting from such delay in compliance with such Laws,
excluding consequential damages.  In the
event Tenant shall so contest the same, Tenant shall have the right to delay
observance thereof and compliance therewith until such contest is finally
determined and is no longer subject to appeal. 
Subject to the satisfaction by Landlord of its obligations under this Lease,
if any such Law requires an occupancy or use permit or license
for the Premises or the operation of the business conducted therein (including
a certificate of occupancy or nonresidential use permit), then Tenant shall
obtain and keep current such permit or license at Tenant’s expense and shall
promptly deliver a copy thereof to Landlord. 
Similarly, Landlord
shall not permit use of any space in the Building above the first floor of the Building for the sale of
goods to the
public at large or for the sale at auction of goods or property of any kind.  Tenant
shall not use any space in the Premises for the sale of goods to the public at large
or for the sale at auction of goods or property of any kind.  Tenant shall not conduct any operations,
sales, promotions, advertising or special events in, on or about the Building
outside of the Premises.


 


C.                                     Landlord’s Compliance with
Laws:  Landlord shall, at its own expense (and not
as an Operating Expense), comply with all Laws respecting all matters of
occupancy, condition or maintenance of the Common Areas and the Building (other
than the portions of the Premises for which Tenant is responsible pursuant to
the preceding section),
including, without limitation, the provisions of the ADA, all zoning and other
land use laws, all environmental laws and all laws pertaining to indoor air
quality.


 


7.                                      CARE
OF PREMISES.


 


A.                                   Maintenance and Repairs By
Tenant:  Subject to Landlord’s obligations set forth in this Lease and
except as otherwise provided in this Lease, including, without limitation, in
Section 16 (Fire and Other Casualties) and Section 18 (Condemnation), Tenant
shall at its expense (i) keep
the interior and non-structural portions of the Premises (including all of
Tenant’s Personal Property located therein) in


 


26

















 


a neat and clean condition and in good order
and repair, and (ii)
maintain all fixtures and equipment for operation of the Premises, in clean, safe and
sanitary condition, take good care thereof and make all required repairs and
replacements thereto; and
(iii) surrender the Premises at the end of the Term in as good
order and condition, ordinary wear and tear and damage by fire and other
casualty and eminent domain excepted. 
Tenant shall not be responsible for repairs to the Premises to the
extent that any damages are caused by the acts or omissions of Landlord or any other occupant of the Building or the Complex, or any of
their respective employees, agents, contractors or invitees.


 


B.                                     Maintenance and Repairs by
Landlord:  Landlord shall maintain, operate, repair, replace and keep in
good operating order and in a condition comparable to other Comparable
Buildings (as defined below), the Building and all parking and
other Common Areas within the Building and on the Land and to the extent within
Landlord’s reasonable control, the Complex, including all structural aspects of the
Building, all Building systems, the Landlord’s Work, striping,
landscaping, replacement of light sources, leveling, repaving and removal of
snow and ice, all in accordance with standards applicable to first-class office
buildings in Arlington, Virginia, taking into account the age, finishes, method
of construction and system design of the Building and of such comparable
buildings (“Comparable Buildings”).  Landlord’s
obligation shall include, without limitation, the lobbies, elevators, stairs,
parking areas, grounds, loading areas and corridors, the roofs, foundations,
load-bearing elements of the Building, conduits and structural walls and other
structural elements, the underground utility and sewer pipes of the Building,
all base building mechanical, electrical, plumbing, the Building’s HVAC system
and the sprinkler system and other fire and life-safety systems (all costs of
which shall be included In Operating Expenses except to the extent limited by
Section 1.BB. hereof).  All operations, repairs, 
maintenance and other matters required of Landlord pursuant to
this Section 7.B. or elsewhere in this Lease shall be performed in accordance
with standards applicable to Comparable Buildings, and performed in a timely
and diligent fashion.  Landlord agrees
to diligently attend to any routine repairs or maintenance needs brought to its
attention by Tenant.


 


8.                                      ALTERATIONS
BY TENANT.


 


A.                                   Making of Alterations;
Landlord’s Consent:  Tenant shall not make or authorize to be made
any Alterations without the prior consent of Landlord (which consent shall not be
unreasonably withheld, conditioned or delayed) both as to whether
the Alterations may be made and as to how and when they will be made; provided,
however, that Landlord shall retain sole and absolute (but good faith) discretion
to withhold its consent to any Alteration: (i) to the exterior of the Building; (ii) to the structure of the Building (provided
that Landlord shall not unreasonably withhold, condition or delay its consent
with respect to any core
drilling by Tenant or any reinforcement of floors or the roof of the Building
to accommodate systems installed in and/or serving the Premises, including high
density file systems, supplemental HVAC systems and an emergency generator); or
(iii) which will have a material adverse effect on the
electrical, mechanical, heating, ventilating, air conditioning, or plumbing
systems of the Building or on any of the structural components of the
Building.  Within thirty (30) days after
Landlord’s delivery to Tenant of its request together with reasonable evidence
of payment of same, Tenant shall reimburse Landlord for all reasonable costs
incurred by Landlord and payable to independent third parties in connection
with Landlord’s review of Alterations for which Tenant requested Landlord’s
approval.  Within ten (10) business days after Tenant’s
delivery to Landlord of Tenant’s request for Landlord’s approval of any
Alteration proposed by Tenant, together with plans and specifications for same
to the extent
customarily prepared for similar Alterations, Landlord shall deliver to Tenant
notice of Landlord’s


 


27

















 


approval or disapproval of the same. In the event Landlord previously
disapproved of the proposed Alterations and Tenant thereafter revises Tenant’s
proposal and submits the same to Landlord for approval, then, within three (3)
business days after Tenant’s delivery to Landlord of Tenant’s revised request
for Landlord’s approval of the subject Alterations, together with revised plans
and specifications for the same to the extent customarily prepared for similar
Alterations, Landlord shall deliver to Tenant notice of Landlord’s approval or
disapproval of the same.  Each notice of
disapproval delivered by Landlord shall set forth with reasonable particularity
the reasons for disapproval and all modifications requested by Landlord with
respect to the Alterations proposed by Tenant. 
Landlord’s failure to timely reply to Tenant’s request for Landlord’s
approval within the above-referenced ten (10) business days period or three (3)
business day period, as the case may be, shall be deemed Landlord’s approval of
the subject Alterations.  Except as
specified in any notice of disapproval timely and properly delivered by
Landlord, in accordance with the foregoing, all matters set forth in Tenant’s
request for approval of the subject Alterations shall be deemed approved by Landlord
after Landlord’s delivery of its subject notice of approval or disapproval or
after the time set forth above within which Landlord must approve or disapprove
such Alterations has expired without Landlord having delivered to Tenant notice
of approval or disapproval of the same. 
Landlord shall diligently cooperate in good faith with Tenant with
respect to the preparation of plans and specifications for Alterations, the
procurement of all approvals and certificates required in connection therewith,
and construction of the same.  Notwithstanding the foregoing,
Tenant shall have the right, after providing at least ten (10) days prior
notice to Landlord, but without the necessity of obtaining Landlord’s consent,
to recarpet, repaint, or make “cosmetic” or “decorative” nonstructural
Alterations in and to the Premises that (I) do not require the issuance of a
building permit, and (II) do not cost, when aggregated with all other
“cosmetic” and “decorative” non-structural alterations made during the previous
twelve (12) months, more than One Hundred Thousand Dollars ($100,000.00).


 


Any Alterations shall be made at Tenant’s expense, by its contractors
and subcontractors, in a good and workmanlike manner, and in accordance with
complete plans and specifications (to the extent the same are customarily prepared for comparable
Alterations) approved in advance in writing by Landlord (to the extent such approval is
required under this Lease), and which approval shall not be
unreasonably withheld, conditioned or delayed as provided in the immediately
preceding paragraph of this Section 8.A., and only after Tenant has
obtained all necessary permits from governmental authorities having
jurisdiction and has furnished copies thereof to Landlord.  Landlord’s consent to any Alterations and
approval of any plans and specifications constitutes approval of no more than
the concept of these Alterations and not a representation or warranty with
respect to the quality or functioning of such Alterations, plans and
specifications.  Tenant shall be and is
solely responsible for the proper integration of Alterations with the Building, the Building’s
systems and existing conditions.  Prior
to commencing any Alterations involving structural, electrical, mechanical or
plumbing work, the heating, ventilation and air conditioning system of the
Premises or the Building, or the roof of the Building, Tenant shall provide to
Landlord the name and address of each contractor and subcontractor which Tenant
intends to employ to perform such Alteration, the use of which subcontractors
and contractors shall be subject to Landlord’s prior approval, which shall not
be unreasonably withheld, conditioned or delayed if the contractor or
subcontractor is properly licensed; provided, however, that if Landlord reasonably determines
that the performance of any such Alterations by any particular contractor(s) or
subcontractor(s) would violate any warranty with respect to any portion of the
Building or the Complex, then Landlord may require Tenant to use Landlord’s contractor
for the performance of such Alteration.   If Landlord so requires Tenant to use Landlord’s
contractor for the performance of any Alterations, Landlord shall
cause its contractor to limit
its charges for the subject work to the amount otherwise payable by


 


28

















 


Tenant to contractors that would have been selected by Tenant for performance of the subject
work, and Landlord
shall be responsible for all
acts and omissions of the contractor designated by it for the subject work.   If
any Alterations which require Landlord’s approval are made without the prior
consent of Landlord, or which do not conform to plans and specifications
approved by Landlord or to other conditions imposed by Landlord pursuant to this
Section 8, Landlord may, in its sole discretion, following the expiration of the
applicable cure period for the subject default by Tenant (or such shorter time
as Landlord reasonably determines in the event of any Alteration which, if not
more expeditiously removed, would create an imminent threat to the health or
safety of the occupants of the Building or an imminent threat to the condition
of the Building or Landlord’s ability to fulfill its obligations under this
Lease, other leases of space in the Building or any combination thereof, each
of the foregoing being hereinafter referred to as an “Imminent Threat”), and
following at least ten (10) days prior notice delivered to Tenant, except in
the event of an Imminent Threat, correct or remove such Alterations
at Tenant’s expense.  Following
completion of any Alterations, except with respect to cosmetic or decorative
nonstructural Alterations which do not require Landlord’s approval, at
Landlord’s request, Tenant shall deliver to Landlord a complete set of construction plans
showing the Alterations.  Landlord shall receive no fee for supervision, profit, overhead,
general conditions or otherwise in connection with Alterations or other work performed by Tenant
or on Tenant’s behalf by someone other than Landlord or Landlord’s management
agent, except to the extent otherwise provided in the Work Agreement with
respect to the initial construction of alterations in the Premises, but
Landlord shall retain the right to receive a fee for Alterations or other work
performed by Landlord at Tenant’s request.


 


B.                                     No Liens: 
Tenant shall take all necessary steps to ensure that no mechanic’s or
materialmen’s liens are filed against the Premises, the Building or the Land as
a result of any Alterations made by the Tenant.  If any such mechanic’s
lien is filed, Tenant shall discharge the lien within fifteen (15) days after its receipt of notice of the
same from Landlord, at Tenant’s expense, by paying off or bonding
the lien.  If Landlord gives its consent
to the making of any Alteration, such consent shall not be deemed to be an
agreement or consent by Landlord to subject its interest in the Premises or the
Building to any liens which may be filed in connection therewith, nor shall
Landlord’s receipt of any fee in connection with any Alterations or Tenant’s
Work or Landlord’s payment of any allowance to Tenant with respect to any work
performed in or with respect to the Premises by or on behalf of Tenant be
deemed to constitute a basis for Landlord’s interest in the Premises or the
Building to be subjected to any lien.


 


9.                                      EQUIPMENT.


 


A.                                   Permitted Equipment:  Tenant shall not install or operate
in the Premises any equipment or other machinery that, in the aggregate, will
cause Tenant to use more than the Premises’ Standard Electrical Capacity
without obtaining the prior written consent of Landlord, which consent shall
not be unreasonably withheld, conditioned or delayed.  If Landlord gives such consent and Tenant uses more
than the Premises’ Standard Electrical Capacity, then Tenant shall pay to
Landlord the cost
for additional consumption of utilities, additional wiring or other expenses
resulting therefrom.  Prior to the Lease
Commencement Date, Tenant shall provide Landlord with a list of all equipment
that Tenant intends to initially install and operate in the Premises which
operate on more than one hundred twenty (120) volts.  Tenant shall not install any equipment or machinery which may
necessitate any changes, replacements or additions to the water, heating,
plumbing, air conditioning or electrical systems of the Building without
obtaining the prior consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed;
provided, however, that Landlord’s consent shall not be required for the
installation or relocation


 


29

















 


of electrical outlets, switches or fixtures if the same is performed in
accordance with all applicable Laws. 
Tenant will deliver notice (which may be given orally) to Landlord of
Tenant’s installation or relocation of electrical outlets, switches or fixtures
at least two (2) business days prior to such installation or relocation.  Landlord hereby represents to Tenant that
customary amounts of equipment and machinery customarily used for general
office purposes shall not necessitate any material changes, replacements or
additions to or in the use of any
systems in the Building. 
Landlord agrees and acknowledges that Landlord shall include in all
leases of space in the Building provisions which are substantially comparable
to those set forth above in this Section 9.A. in substance or effect, and
Landlord shall enforce such provisions in such leases in a non-discriminatory
manner.


 


B.                                     Payment For Excess Utility
Usage:  If at any time during the Term, Tenant’s
connected electrical load from its use of equipment and fixtures (including
incandescent lighting and power), as reasonably estimated by Landlord, exceeds the
Premises’ Standard Electrical Capacity, then Landlord may, at its option:  (i) install separate electrical
meter(s) for the Premises, or (ii) cause a survey to be made by an
independent electrical engineer or consulting firm to determine the amount of
electricity consumed by Tenant beyond the Premises’ Standard Electrical
Capacity.  If such meter(s) or survey
confirms that Tenant’s connected electrical load from its use of equipment and
fixtures (including incandescent lighting and power) exceeds the Premises’
Standard Electrical Capacity, then Tenant shall reimburse Landlord for the reasonable cost of the
installation of said meter(s) or completion of said meter(s) or survey, and
shall pay as Additional Rent the cost of any electricity in excess of the
Premises Standard Electrical Capacity, at the rate charged by the utility
company providing such electricity, assuming continuous business hours, within thirty (30) days after receipt
of any bill therefore
from Landlord.


 


Landlord agrees and acknowledges that Landlord shall include in all
leases of space in the Building provisions which are substantially comparable
to those set forth above in this Section 9.B. in substance and effect, and
Landlord shall use reasonable efforts to enforce such provisions in such leases
in a non-discriminatory manner.


 


C.                                     Noise; Vibration; Floor
Load:  Business machines and equipment belonging to
Tenant, which cause noise or vibration that may be transmitted to any part of
the Building to such a degree as to be reasonably objectionable to Landlord or to any tenant
of the Building, shall be installed and maintained by Tenant at Tenant’s
expense on devices that eliminate the noise and vibration.  Tenant shall not place any load upon the
floor of the Premises which exceeds the per square foot load the floor was
designed to carry (eighty (80) pounds per square foot for live loads and twenty
(20) pounds per square foot for dead loads), except as specifically approved by
Landlord in writing, which approval Landlord shall have no obligation to
provide.


 


D.                                    Additional HVAC: 
Landlord acknowledges that Tenant shall, at Tenant’s sole cost and
expense, install, operate, repair, replace and maintain a supplemental heating
and air conditioning system (“Additional HVAC Equipment”) on the roof of the
Building at locations selected
by Tenant and approved by Landlord (which approval shall not be
unreasonably withheld, conditioned or delayed); provided,
however, that (i) Tenant shall be solely responsible, at its costs, for the
installation, maintenance and repair of any Additional HVAC Equipment, and (ii)
Tenant shall be responsible,
at its cost, for the operation of such Additional HVAC Equipment
(including, but not limited to, all costs of electrical consumption with
respect to Additional HVAC Equipment), and (iii) Tenant’s installation of
Additional HVAC Equipment shall be subject to Landlord’s prior approval, which approval shall not be


 


30

















 


unreasonably withheld, conditioned or delayed, in accordance with the standards set forth in the first
paragraph of Section 8.A. hereof.


 


E.                                      Generator Equipment: Tenant shall have the right to install an
emergency generator and an associated fuel tank (collectively, the “Generator
Equipment”) at a mutually agreeable location in the garage of the Building (the
“Generator Space”), and Tenant shall be responsible, at Tenant’s sole cost and
expense, for the installation, operation, maintenance, repair and replacement
of the Generator Equipment; provided, however, that in the event that the
location of the Generator Equipment in the garage of the Building is determined
by Arlington County, Virginia not to be legally permissible, then the Generator
Space shall be a mutually agreeable location on the roof of the Building, and,
in such case, Landlord shall reimburse Tenant for all costs of such installation
which are in excess of the costs for such installation which would have been
incurred by Tenant had the Generator Space been in the garage of the
Building.  The type, timing, method of
installation, and all items related to the Generator Space shall be subject to
the prior approval of Landlord, which approval shall not be unreasonably withheld, conditioned or
delayed.  Tenant shall have the right to
use its proportionate share (based on Tenant’s Share for purposes of
determining Tenant’s Share of Increased Operating Expenses) of the space in the
risers in the
Building for installation of conduits between the Generator Equipment
and the Premises.  Tenant shall comply with
Landlord’s reasonable and
customary requirements regarding Tenant’s use, operation and
maintenance of the Generator Equipment with respect to noise, vibration,
screening and testing.  At any time
during the Term, Landlord shall have the right, in Landlord’s reasonable
judgment, by providing Tenant with prior notice and paying the reasonable cost
of relocation of the Generator Equipment, to relocate the Generator Equipment
from the Generator Space to another area which shall permit the Generator
Equipment to continue to serve the Premises as it had prior to such relocation.  In addition, Landlord and Tenant acknowledge
that the installation of the Generator Equipment shall include the installation
of connecting conduits, all actual costs of installation, operation,
maintenance, repair, replacement and removal of which shall be paid solely by
Tenant.  The use of riser space for the
installation of conduits between the Generator Equipment and the Premises shall
not adversely affect the operating systems or structural components of the
Building and shall be subject to Landlord’s prior approval, which approval shall not be
unreasonably withheld, conditioned or delayed in accordance with the standards
set forth in the first paragraph of Section 8.A. hereof.  The installation and placement of the
Generator Equipment shall comply with all applicable Laws.  The Generator Equipment shall be considered
Tenant’s Personal Property.  Prior to the expiration of the Term,
Tenant shall remove
the Generator Equipment and restore the Generator Space and any
damage to the Land, the Building, or the Premises caused by Tenant’s connecting
conduits at the Lease Expiration Date to their reasonable condition, reasonable wear and tear and
insured casualty excepted.  If the
Generator Space includes more than one (1) parking space in the Garage, then
Tenant shall pay to Landlord, on the first day of each month occurring during
the Term, a monthly charge for the Generator Space equal to the number of
parking spaces included in the Generator Space to the extent in excess of one
(1), multiplied by the rate for reserved parking spaces in the Building, which
rate shall not exceed the rate for reserved parking spaces permitted to be
charged by Landlord to Tenant pursuant to Section 34 below.


 


F.                                      Telecommunications: 
Tenant and telecommunications companies engaged by Tenant, including but
not limited to local exchange telecommunications companies and alternative
access vender services companies shall have a reasonable and necessary right of
access to and within the Building and the Land at no additional fee, cost or
expense for the installation and operation of telecommunications lines and
systems including, but not limited to, voice, video, data, and any other
telecommunications


 


31

















 


services provided over wire, fiber optic,
microwave, wireless and any other transmission systems, for part or all of
Tenant’s telecommunications within the Building, with Landlord’s prior consent,
which shall not be unreasonably withheld, conditioned or delayed.  If Landlord owns or acquires ownership of
the telephone cables in the Building at any time, Landlord shall permit Tenant
to connect to such cables on such terms and conditions as Landlord may
reasonable prescribe.


 


10.                               OWNERSHIP
AND REMOVAL OF PROPERTY.


 


A.                                   Landlord’s Property:  Any
Alterations installed by or on behalf of Tenant shall remain the Property of Tenant, and Tenant shall
have the right to remove the
same and shall repair all damage to the Premises, the Building or both caused
by such removal or, at Tenant’s election surrender the same to Landlord with
the Premises, in which event the same shall become the property
of Landlord; provided, however, that if Landlord reasonably requires in accordance
with the terms of this Section 10 below and consistent with the custom and
practice of landlords in Comparable Buildings, as a condition to Landlord’s
approval of the installation of the same, that Tenant remove any
Alterations installed by or on behalf of Tenant, then Tenant shall, at Tenant’s
election, either (i) cause the same to be removed at Tenant’s
expense on or before the Lease Expiration Date, or (ii) reimburse
Landlord for the reasonable
costs incurred by Landlord for removal of the subject Alteration which Landlord
required that Tenant remove;
which reimbursement shall be made by Tenant to Landlord within thirty (30) days after Tenant’s receipt of Landlord’s
request together with invoices evidencing the subject of costs incurred by
Landlord.  Notwithstanding
the foregoing, (a) Tenant shall not be required to remove any Alterations which
constitute improvements which are typically found in office space in Comparable
Buildings, or any reinforcement of floor slabs or other structural aspects of the Building, flooring
and track for high density file systems, supplemental/auxiliary HVAC units, UPS
systems, cables, mill work or plumbing (collectively, the “Typical
Improvements”).  Alterations which Landlord may require be
removed by Tenant as a condition to Landlord’s approval of the same are
hereinafter referred to as “Items Subject to Removal”.  Landlord shall, together with its consent to the subject Alterations, specify
the extent to which it will require Tenant to remove the Items
Subject to Removal in question at the end of the Term, and if Landlord fails so
to specify, Tenant shall have no further obligation to remove the same.


 


B.                                     Removal of Property At End
of Term:  All personal property and all business and
trade fixtures, machinery and equipment, furniture, partitions and Alterations
owned by Tenant or installed by Tenant in the Premises or elsewhere in the
Building are and shall remain the property of Tenant, and may be removed by
Tenant at any time during the Term. 
Tenant shall remove all of Tenant’s Personal Property, from the Premises on or before
the Lease Expiration Date.  Notwithstanding anything to the
contrary set forth in this Lease, Tenant shall have no obligation to remove
wiring or cabling from within the Premises or the Building.  If any personal property belonging to Tenant or to
any other person or entity is left in the Building or on the Land after the
date this Lease is terminated for any reason and Tenant vacates the same,
Landlord shall have the right,
following at least thirty (30) days prior notice to Tenant, to
store such property at Tenant’s reasonable cost and/or to dispose of it in whatever
manner Landlord considers appropriate, without waiving its right to claim from
Tenant all expenses and damages caused by Tenant’s failure to remove such
property, and Tenant and any other person or entity shall have no right to
compensation from or any other claim against Landlord as result.


 


32

















 


11.                               ACCESS
TO PREMISES.


 


A.                                   Landlord Access:  Upon such notice to Tenant as is reasonable
under the circumstances, which shall be at least two (2) business days,
which notice may be given orally and, which notice shall not be required in the
event of an emergency), Landlord may enter the Premises to examine them and to make
alterations or repairs described
below; provided,
however, in the case of any emergency, Landlord and its agents may enter the
Premises at any time and in any manner. 
Upon at least two (2)
business days following notice delivered to Tenant, unless (x) other
arrangements are made with Tenant, which other arrangements Tenant agrees to
reasonably consider at the time of any request for same by Landlord, Tenant
shall allow the Premises to be exhibited by Landlord, or (y) Tenant elects to
defer such access to avoid interference with special events or circumstances
then occurring in the Premises (which shall include, but not be limited to,
conferences and meetings, work in connection with upcoming pubic filings or in
connection with transactions, and work necessary in order for Tenant to meet
key client delivery dates):  (i) to
representatives of lending institutions or to prospective purchasers of the
Building provided a
representative of Landlord shall accompany its visitors to the Premises and
Landlord shall be responsible for the conduct of such representatives and
visitors, and (ii) during the last twelve (12) months of the Term, to persons who may
be interested in leasing the Premises. 
Subject to the foregoing provisions of this Section 11, Landlord
reserves the right and shall be permitted reasonable access to the Premises (1) to install
facilities above the ceilings, behind the walls, and below the floor slabs (or any
combination thereof) of the Premises, (2) to make repairs, alterations, additions and improvements, whether structural or
otherwise, in or about the Building or any part thereof, outside the Premises;
provided, however, the same shall not (a) unreasonably interfere with Tenant’s
use of or operations in the Premises, or (b) result in an obstruction of access
to or visibility of the Premises, or (c) reduce the usable area of the
Premises.  Notwithstanding the
foregoing, Tenant shall have priority use of all areas within the Premises
which Landlord desires to use for the performance and/or installation of the
work and improvements described in this Section.  For example, in the event Tenant has installed cables or conduits
between the ceiling in the Premises and the floor slab above such ceiling,
Landlord may not make any installation which may interfere with such cables or
conduits.  Upon completion of work described
in this Section, Landlord shall diligently proceed to restore the areas of the
Premises affected by such work as nearly as possible to the condition that
existed immediately prior to the commencement of the subject work. Landlord
agrees that in the exercise of its rights pursuant of this Section 11, Landlord
shall use reasonable efforts to minimize disruption of business operations in the Premises.  Landlord hereby agrees to reimburse Tenant
from time to time promptly following Tenant’s delivery to Landlord of Tenant’s
request together with invoices evidencing the same, for all reasonable costs
incurred by Tenant in connection with any action taken by Landlord pursuant to
this Section 11.A., including without limitation, additional costs incurred by Tenant
in connection with the performance of any Alterations in the Premises
including, but not limited to, the reasonable fees paid by Tenant to any third
party architect or engineer engaged by Tenant to review of plans for work
Landlord desires to perform in the Premises.  Notwithstanding the foregoing, Tenant may
maintain a locked facility in which classified work is being conducted or in
which such work is stored.
Tenant shall provide
prior notice to Landlord of the location of same prior to locking off such
area, in which case Landlord shall not enter such area without being
accompanied by a representative of Tenant.  Tenant
hereby authorizes Landlord and any of its employees, agents and contractors to
break any such locks and the doors and walls to which they are attached in the
event of an emergency.


 


B.                                     Tenant’s Access.  Tenant
shall be granted access to the Premises, the Building, and the parking
facilities in which Tenant is granted parking rights under this Lease,
twenty-four (24) hours per day, seven (7) days per week, every day of
the year.  Landlord shall maintain a
card key access system


 


33

















 


or a comparable access
system at the main entry for the Building, and shall maintain a similar system
of access to the parking facilities in which Tenant is granted parking rights
under this Lease.  Such access system
for the Building shall lock-off elevator access to the floors on which any portion of the Premises is located after the normal hours of
operation of the Building, and shall permit access to such floors by Tenant and
its personnel, as well as any other persons, who hold access key cards.


 


12.                               SERVICES
AND UTILITIES.


 


A.                                   Services Provided: 
Landlord shall operate,
maintain and repair, the Building and the Common Area in a first class manner
and condition comparable to the operation, maintenance and repair of Comparable
Buildings.  The obligations of Landlord
to operate, maintain and repair the Building and the Common Areas shall include
the provision of the following to Tenant, without additional
charge, except as otherwise provided herein (including, but not limited to, as
provided in Sections 5 and 1.BB. hereof):


 


(1)                                  Elevator service for common use, with at
least two (2) passenger elevators  subject to call at
all times, including Sundays and Holidays, and at least five (5) passenger elevators subject to call during
Building Hours, provided that no more than one elevator may be taken out of
service at any time for maintenance (which maintenance shall be diligently
pursued to completion by Landlord), it being understood and
agreed by Landlord that it shall not render the remaining elevators (that is,
elevators which are in addition to the two aforementioned elevators) out of
service for purposes other than testing, maintenance, repair, or replacement or
pursuant to the order of any governmental agency having jurisdiction with
respect to the elevators.  Tenant shall
have the ability to periodically “lock off” elevators to its floors.


 


(2)                                  Central heating and air conditioning during
Building Hours, exclusive of Holidays, during the seasons of the year and
within the temperature ranges usually furnished in Comparable Buildings
sufficient to ensure comfortable occupancy within the Premises during all seasons
of the year, and in accordance with the specifications set forth on Exhibit
E attached hereto.  Landlord shall
provide heat and air conditioning at other times requested by Tenant.  Landlord shall charge Tenant for such after Business Hours
service (provided that such
rates shall not exceed the lower of (i) Twenty-Five Dollars ($25.00) per
hour, per full floor, to which the subject service is provided, and (ii) the
actual costs incurred by Landlord to provide such service, including, a
depreciation mark-up as reasonably determined by Landlord.  The above-referenced depreciation shall be
based on the useful life of equipment in the Building used to provide the
subject service and shall be prorated on an hourly basis using the total
reasonably anticipated lifetime hours of usage for the subject equipment.  In any event, Tenant shall only be
responsible for an equitable share of the charge imposed by Landlord to supply
heating or air conditioning after Business Hours to the extent other occupants
of the Building have also requested the provision of the same during the time
provided to Tenant.


 


(3)                                  Ventilation to the Premises.


 


(4)                                  Water and indoor air quality testing on an annual basis by an
independent contractor, which testing shall be consistent with then-current
OSHA, EPA and ASHRAE standards, with each resulting report delivered to Tenant
promptly following Landlord’s receipt of the same, and which testing shall be
performed at Landlord’s sole cost.


 


(5)                                  Cleaning and char services in accordance
with the cleaning and char specifications set forth on Exhibit I
attached hereto and made a part hereof, which services Landlord shall provide
in a manner commensurate with the provision of such services in Comparable
Buildings.  If Tenant requires any janitorial or cleaning
services in excess
of the amounts provided by Landlord in accordance with the


 


34

















 


foregoing (such as cleaning services beyond normal office janitorial
services for areas such as kitchens, computer rooms, or other special use areas), Landlord will provide
such excess services to Tenant within a reasonable period after Tenant’s
request and Tenant shall reimburse Landlord for all additional reasonable costs
incurred by Landlord to provide the same.


 


(6)                                  Landlord shall provide electricity to
the Premises and
the Common Areas at all times, with the amount of electricity supplied to the
Premises to be in the amount at least equal to the Premises Standard Electrical
Capacity and with the amount of such electricity supplied to the Common Area
sufficient to service the same in accordance with standards for common areas in
Comparable Buildings.  Tenant shall not
be charged for excess electrical consumption until total consumption exceeds
eight (8.0) watts connected load per rentable square foot in the Premises.


 


(7)                                  Replacement of Building standard light bulbs in Building standard light fixtures, it
being agreed that if Landlord replaces any other light bulbs in the Premises, Tenant shall pay Landlord the reasonable cost of
such bulbs.


 


(8)                                  Rest room facilities and necessary lavatory
supplies, including hot and cold running water at the points of supply,
provided for general use, on
each floor of the Building on which any portion of the Premises is located.


 


(9)                                  Hot and cold water for kitchens and water for drinking fountains.


 


(10)                            Repair, maintenance and, as necessary, replacement of (1) all of the
exterior and structural elements of the Building and the Common Areas,
including exterior windows and mechanical, plumbing and electrical systems installed in the Building, but excluding those portions of any mechanical,
plumbing or electrical systems that exclusively serve the Premises, such as (by
means of illustration only) supplemental heating, ventilation and air-conditioning
systems, kitchen plumbing and equipment, plumbing for non-Building standard
restrooms exclusively used by Tenant (but including those restrooms provided as
part of the Landlord’s Work, and wall plugs and switches within the
Premises).Landlord shall not be responsible for Tenant’s obligations with
respect to the Premises and equipment exclusively serving the Premises as set
forth in this Lease.


 


(11)                            Reasonable access to the Premises, Garage and Common Areas
at all times, subject to such access control procedures, restrictions and other
regulations as Landlord may promulgate and which are generally applicable to
all office tenants of the Building.  The Building systems shall
be capable of being utilized by Tenant twenty-four (24) hours per day, 365 days
per year without prior notice to Landlord.


 


(12)                            A concierge in the main lobby of the Building during Business Hours, and
during such additional hours as Landlord may reasonably elect, consistent with
practices in Comparable Buildings.


 


(13)                            Access control service and equipment consistent with that provided at
Comparable Buildings, which shall include the engagement of a professional firm
to provide a guard which continuously monitors the Common Areas in and
immediately adjacent to the Building from 6:00 P.M. through midnight each day,
and shall include a camera system to monitor Common Areas in the Building  and that portion of the Garage which is designated for use by
tenants of the Building.


 


B.                                     Failure to Provide
Services:                                     If any of the services described in this Section 28, or Tenant’s access to the Premises, the Garage or other Common Areas
are interrupted, Landlord will use its best efforts to resume the service or
access to the extent the same is within the reasonable control of Landlord, and
Landlord will use all due diligence to cause others to resume the service or
access to the extent the same is beyond the reasonable control of
Landlord.  Except as otherwise provided
in this Lease, Landlord
shall have no liability to Tenant or others based on any failure by Landlord to
furnish the foregoing due to Unavoidable Delays and such failure shall neither
render Landlord liable for damages to


 


35

















 


either person or property, nor be construed
as an eviction of Tenant, nor cause a diminution or abatement of Rent nor
relieve Tenant of any of Tenant’s obligations hereunder.  In the event Tenant is prevented from using, and does not use, the
Premises or any portion thereof, for five (5) consecutive
business days or five (5)
business days in any twelve (12) month period (the “Eligibility Period”)
as a result of any matter which substantially interferes with Tenant’s use of
the same, if the reason for the suspension or the continuation of the
suspension is anything other than an Unavoidable Delay, provided that any
matter caused by the acts or omissions of tenants or other occupants of the
Building shall not be deemed to result in an Unavoidable Delay for purposes of
this Section, then the Rent (including parking charges) shall be abated or reduced, as the case may be,
after the expiration of the Eligibility Period for such time that Tenant
continues to be so prevented from using, and does not use, the Premises, or a
portion thereof, in the proportion that the rentable area of the portion of the
Premises that Tenant is prevented from using, and does not use, bears to the
total rentable area of the Premises. 
However, in the event that Tenant is prevented from conducting, and does
not conduct, its business in any portion of the Premises for a period of time in excess of the
Eligibility Period, and the remaining portion of the Premises is not sufficient
to allow Tenant to effectively conduct its business therein, and if Tenant does not
conduct its business from such remaining portion, then for such time after expiration of
the Eligibility Period during which Tenant is so prevented from effectively
conducting its business therein, the Rent for the entire Premises (including all of
Tenant’s parking charges) shall be abated; provided, however, if Tenant reoccupies and conducts its
business from any portion of the Premises during such period, the
Rent (including parking
charges) allocable to such reoccupied portion, based on the proportion that the
rentable area of such reoccupied portion of the Premises bears to the total
rentable area of the Premises, shall be payable by Tenant from the date
such business operations commence. 
Notwithstanding the foregoing, the Eligibility Period shall not be
applicable to the extent that the abatement of Tenant’s Rent (including parking
charges) during the Eligibility Period is covered by insurance obtained by
Landlord as part of Operating Expenses. 
If Tenant’s right to abatement occurs during the Free Rent Period, then
the Free Rent Period shall be extended for the number of days that the abatement
period overlapped the Free Rent Period.


 


C.                                     Recycling: 
Without limiting the foregoing but subject to the terms of this Lease, Tenant
covenants and agrees, at its sole cost and expense, to comply with all present
and future applicable Laws
of the jurisdiction in which the Building is located and of the federal,
municipal, and local governments, departments, commissions, agencies and boards
having jurisdiction over the Building to the extent that any of them impose on
Tenant duties and responsibilities regarding the collection, sorting,
separation, and recycling of trash.


 


13.                               RULES
AND REGULATIONS.


 


Tenant shall abide by and observe the rules and regulations attached
hereto as Exhibit D and such other customary rules and regulations as
may be made by Landlord from time to time and which are generally applicable to
all office tenants of the Building and comparable to those generally adopted
for Comparable Buildings, provided that such rules and regulations (including those attached hereto as
Exhibit D) are not inconsistent with the provisions of this
Lease.  Landlord agrees that the rules and regulations shall not be changed, revised or enforced in a
manner which may interfere with Tenant’s permitted use of the Premises or in a
manner that may decrease the level of services or utilities to be provided by Landlord under this
Lease.  In the event of a conflict
between the provisions of this Lease and the provisions of the rules
and regulations, the provisions
of this Lease shall control.  Landlord
shall


 


36

















 


not be liable to Tenant or any other entity
for any violation of said rules, regulations or lease provisions, provided
Landlord uses its commercially reasonable efforts to cause compliance by the
entity which violates the same after Landlord obtains knowledge of such
violation.  Landlord
shall not enforce any rule or regulation in a manner which
unreasonably discriminates against Tenant. 
Landlord shall not discriminate against Tenant in the application of the
rules and regulations.


 


14.                               INDEMNIFICATION.


 


A.                                   Liability Standard.  In no event shall Tenant be
liable for consequential damages, except those resulting from a breach by
Tenant of any of its obligations under Sections 21 or 36 hereof.


 


B.                                     Indemnification By Tenant:  Subject to the waiver of subrogation provisions set
forth in this Lease, and the
waivers by Landlord of other liabilities of
Tenant set forth in this
Lease, including, without limitation, Landlord’s waiver of
liability by Tenant
for damage to the Building,
the Land and/or any other portion of the Complex and/or all other property
of Landlord; Tenant
hereby agrees to
indemnify and hold Landlord
harmless from and
against all costs, damages, claims, liabilities and expenses, including
reasonable attorneys’ fees, suffered by or claimed against Landlord, directly
or indirectly, based on,
arising out of or
resulting from:  (i) any breach or
default by Tenant in the observance or performance of its covenants and obligations under this
Lease, provided, however, that in no event shall Tenant be liable for consequential damages, except those
resulting from a breach by Tenant of any of its obligations under Sections 21
or 36 hereof; and (ii) the negligence or willful misconduct of
Tenant.  Notwithstanding the foregoing, in no event shall Tenant be
liable for consequential damages or for any injury to person or damage to property caused by any act,
omission or neglect of Landlord, its agents, servants, employees,
customers, invitees or licensees or arising out of the operation or management
or control of the Building and the Common Areas or arising out of a default by Landlord
in the performance of any of its obligations under this Lease.


 


C.                                     Indemnification by Landlord:  Subject to
the waiver of subrogation provisions set forth in this Lease and other waivers by Tenant of
Landlord’s liability set forth in this Lease (including, without limitation, Tenant’s waiver
of liability by Landlord for damage for Tenant’s personal property) Landlord
hereby agrees to indemnify and hold Tenant harmless from and against all costs, damages,
claims, liabilities and expenses, including reasonable attorneys’ fees, suffered by or
claimed against Tenant,
directly or indirectly, based on, arising out of or resulting from: (1) any breach or
default by Landlord
in the observance or performance of its covenants and obligations under this
Lease, and (2)
the negligence or willful misconduct of Landlord; provided, however, that in no
event shall Landlord be liable for consequential damages (except to the extent
specifically provided in Section 2.F.(3) hereof) or for any injury to person or
damage to property caused by any act, omission or neglect of Tenant, its
agents, servants, employees, customers, invitees or licensees or out of any
default by Tenant in the performance of any of its obligations under this
Lease.


 


15.                               LIMITATION
ON LANDLORD LIABILITY.


 


A.                                   Liability
Standard:  In no event shall Landlord be liable for
consequential damages, except to the extent specifically provided in Section
2.F.(3) hereof.


 


37

















 


B.                                     Limitation on Total Liability:  Notwithstanding
any other provision of this Lease, it is expressly understood and agreed that
the total liability of Landlord arising out of or in connection with this
Lease, the relationship of Landlord and Tenant hereunder and/or Tenant’s use of
the Premises, shall be limited to the interest of Landlord in the Building, the Land and the Complex, and all
proceeds from same, no other property or assets of Landlord or
any partner or owner of Landlord shall be subject to levy, execution, or other
enforcement proceedings or other judicial process for the satisfaction of any
judgment or any other right or remedy of Tenant arising out of or in connection
with this Lease, the relationship of Landlord and Tenant hereunder and/or
Tenant’s use of the Premises.  
Notwithstanding the foregoing, Tenant shall have no right to seek
recourse against any proceeds received by the entity comprising the “Landlord”
from the sale of its interest in the Building, the Land or the Complex
following the sale of such Landlord’s interest therein, except as the same
relate to claims against the entity comprising the “Landlord” which has sold
its subject interest, which claims accrued prior to such sale and which claims
are (A) set forth in a complaint filed by Tenant in any litigation against
Landlord which is pending at the time of such sale or (B) with respect to
claims not in excess of One Million Dollars ($1,000,000.00), are (i) made in
writing to said selling entity, setting forth a general description of the
nature of such claims, together with (ii) the filing of a lawsuit against said
entity in the court of appropriate jurisdiction, all within one (1) year
following such sale or transfer.


 


16.                               FIRE
AND OTHER CASUALTY.


 


A.                                   If the Building or the Complex
shall be damaged, this Lease shall not terminate except as otherwise provided in this
Lease and Landlord shall promptly commence and diligently proceed to repair
the damage, provided that Landlord shall have no obligation to repair damage to
or replace Tenant’s Personal Property.  Landlord’s restoration
obligations hereunder shall be effective regardless of any delays in obtaining
insurance proceeds.  All Alterations
shall be restored by Landlord in accordance with the as-built plans for the
same.  Except as otherwise
provided herein, if any part of the Premises are rendered untenantable by
reason of any such damage, Rent shall abate from the date of the damage to the
date the damage is repaired, in the proportion that the rentable area of the
portion of the Premises that Tenant is prevented from using, and does not use,
bears to the total rentable area of the Premises.  However, in the event the remaining portion of the Premises is
not sufficient to allow Tenant to effectively conduct its business therein, and
if Tenant does not conduct its business from such remaining portion, then the
Rent for the entire Premises (including all of Tenant’s parking charges) shall
be abated; provided, however, if Tenant reoccupies and conducts its business
from any portion of the Premises, then Rent (including parking charges)
applicable to such reoccupied portion, based on the proportion that the
rentable area of such
reoccupied portion of the Premises bears to the total rentable area of the
Premises, shall be payable by Tenant from the date such business operations
commence.  If Tenant’s right to
abatement occurs during the Free Rent Period, then the Free Rent Period shall
be extended for the number of days that the abatement period overlaps the Free
Rent Period.  Tenant’s right to
abatement shall commence upon the occurrence of damage and shall continue until
Tenant has been given sufficient time, and sufficient access to the Premises,
to rebuild the portion of the Premises it is required to rebuild, to install
its property, furniture, fixtures and equipment and to move in over one (1)
weekend, provided that such time for Tenant to rebuild the portion of the
Premises which it is required to rebuild shall not exceed one hundred eighty
(180) days from the date upon which Tenant is given sufficient access to the
Premises for such rebuilding.


 


B.                                     Notwithstanding
anything herein to the contrary, (i) if the Building is damaged (whether or not
the Premises has been damaged) to such an extent that Landlord decides, in its reasonable


 


38

















 


discretion,
not to rebuild or reconstruct the Building, then Landlord, at its option,
may give Tenant, within ninety (90) days after the casualty, notice of
termination of this Lease, provided that Landlord simultaneously terminates all
other leases at the Building, and this Lease and the Term shall terminate
(whether or not the Term has commenced) upon the date reasonably selected by Tenant in
accordance with the terms of Section 16.E below, with the same
effect as if the new expiration date had been the Lease Expiration Date, and
all Base Rent and Additional Rent shall be apportioned as of such date; or (ii)
if Landlord reasonably estimates
to Tenant in writing (provided
that if Tenant disagrees with such estimate, then Tenant shall have the right
to elect that such estimate be determined pursuant to the Consultants Procedure)
that the restoration of the Premises and, to the extent required
for lawful occupancy of the Premises, the Building, cannot be completed by the
two hundred seventieth (270th) day following the date of the damage, then either
Landlord or Tenant may terminate this Lease by notice to the other of them, which notice
shall be given by Landlord, if
at all, within ninety (90) days following the date of the damage, and which
notice shall be given by Tenant, if at all, within ninety (90) days following the
date of such estimate.  Such estimate
shall be provided by Landlord within ninety (90) days following the date of the
casualty.  If neither Landlord nor
Tenant has terminated this Lease in accordance with the terms of the preceding
sentence, and if the restoration of the Premises and the Building has not been
completed by the ninetieth (90th) day following the date which
Landlord estimated (or such estimate as was determined by the Consultants
Procedure if Tenant disagreed with Landlord’s estimate and Tenant elected to
have such estimate determined, and such estimate was determined, by the
Consultants Procedure) for completion of restoration of the Premises and the
Building (the “ Estimated Date of Completion”) (which Estimated Date of
Completion may be later than the two hundred seventieth (270th) day following
the date of the casualty) (or
if it is determined pursuant to the Consultants Procedure that the restoration
of the Premises and Building will not be completed by the ninetieth (90th)
day following the Estimated Date of Completion), then Tenant may
terminate this Lease by delivering
notice to Landlord, which notice shall be given by Tenant, if at all, no later than thirty
(30) days following such Estimated Date for Completion.   Tenant
shall thereafter have the same right to terminate this Lease within twenty (20)
days following the expiration of the ninety (90) day period after the Estimated
Date for Completion and within twenty (20) days following the expiration of
every 90-day period thereafter, if all damage required to be restored by
Landlord is not then restored at the end of each such 90-day period.  In the event of any
termination of this Lease, all
prepaid amounts shall be promptly refunded to Tenant in full.


 


C.                                     Destruction Near End of
Term.  Notwithstanding anything to the contrary
contained in this Section 16 above, if: 
(i) the Premises is damaged or destroyed or any other portion
of  the Building or the Garage or the
Complex is damaged or destroyed, such that Tenant’s access to or use of the Premises or
use of the Building’s systems
or the use of Tenant’s parking rights is substantially impaired; and (ii) in
the reasonable judgment of Landlord or a certified contractor
engaged by Tenant, the
remaining term of this Lease following the restoration of the same shall be less than two (2) years, Landlord or Tenant may, at its option, elect to terminate
this Lease by delivering notice to the other within sixty (60) days
following Tenant’s receipt of Landlord’s determination (or within sixty
(60)  days following the thirtieth (30th) day after the date of the
casualty, in the event that Landlord’s determination is not timely
delivered).  Termination by Landlord in
connection with a casualty near the end of the term of this Lease as set forth
above shall not be effective in the event that (1) Tenant then has, or
would with the passage of time have, the right to extend the term of this
Lease, and (2) Tenant delivers notice to Landlord, within sixty (60) 
days after Tenant’s receipt of Landlord’s termination notice, that Tenant is
exercising such extension right, in which case Landlord shall be obligated to
repair and restore the
Building and Complex to the extent provided in Section 16.A. hereof.


 


39

















 


D.                                    Effective Termination Date.  The
effective date of any termination by Landlord or Tenant under this
Section 16 shall be the date on which Tenant reasonably ceased, or ceases,
to use the Premises for its ordinary business operations as a result of the
casualty.  In the event that Tenant is
still so using the Premises at the time of the notice of termination, such
effective date shall be the date reasonably selected by Tenant to find,
negotiate for, build-out and relocate to, substitute space, but in no event
later than twelve (12) months following the date of the casualty.


 


E.                                      In no event shall Tenant have any liability to Landlord or otherwise for
damage to the Premises, the Building, the Complex or any other property of
Landlord, by any cause covered by insurance obtained by Landlord or required to
be obtained by Landlord under the terms of this Lease, including any such
damage caused by Tenant or anyone claiming by or through Tenant or any of their
respective employees, agents, contractors or invitees.


 


17.                               INSURANCE.


 


A.                                   Tenant’s Insurance:


 


(a)
Throughout the Term, Tenant shall obtain and maintain (1) commercial general
liability insurance (written on an occurrence basis) including contractual
liability coverage insuring the obligations assumed by Tenant under this Lease
(including those set forth in Sections 14. and 36.B.), premises and operations
coverage, broad form property damage coverage and independent contractors
coverage, and containing an endorsement for personal injury, and (2) worker’s compensation insurance.  Such commercial general liability insurance
shall be in minimum amounts typically carried by prudent tenants engaged in
similar operations, but in no event shall be in an amount less than One Million
Dollars ($1,000,000.00) combined single limit per occurrence with a Two Million
Dollars ($2,000,000.00) annual aggregate, and
Tenant shall also obtain and maintain umbrella excess liability insurance with
a policy limit of not less than Two Million Dollars ($2,000,000.00).  Such worker’s compensation insurance shall
carry minimum limits as defined by the law of the jurisdiction in which the
Building is located (as the same
may be amended from time to time).


 


(b)                                 The insurance carried by Tenant pursuant to Subsection 17.A.(a)(1) hereof shall: 
(1) be issued by a company that is licensed to do business in the
jurisdiction in which the Building is located, that has a rating equal to or
exceeding A-/IX from Best’s Insurance Guide; (2) with respect to the insurance
described in Subsection 17.A.(a)(1) above, name Landlord, the
managing agent of the Building (which Landlord requests by delivery of notice to Tenant)  and the holder of any Mortgage
(which Landlord requests by delivery of notice to Tenant) as additional insureds,
but not loss payees; (3) with respect to the insurance described in Section 17.A.(a)(1)
above, contain an endorsement that such policy shall remain in
full force and effect notwithstanding that the insured may have waived its
right of action against any party prior to the occurrence of a loss (Tenant
hereby waiving its right of action and recovery against and releasing Landlord
and its employees and agents (including, but not limited to, Landlord’s
managing agent) from any and all liabilities, claims and losses for which they
may otherwise be liable to the extent Tenant is covered by insurance carried or
would have been covered by insurance it is required to carry under this Lease);
(4) with respect to the
insurance described in Subsection 17.A.(a)(1) above, provided
that the insurer thereunder waives all right of recovery by way of subrogation
against Landlord, its partners, agents (including, but not limited to,
Landlord’s managing agent), employees, and representatives, in connection with
any loss or damage covered by such policy; (5) with  respect to the insurance described in Section 17.A.(a)(1) above,
be primary and non-contributory; (6) with
respect to the


 


40

















 


insurance
described in Section 17.A.(a)(1) above, contains
an endorsement for cross liability and severability of interests; and (7) with respect to the insurance
described in Section 17.A.(a)(1) above, contain an endorsement
prohibiting cancellation, failure to renew, reduction of amount (below the amount of same required
to be carried by Tenant under this Lease) of insurance or material change in
coverage without the insurer first giving Landlord thirty (30) days’ prior
written notice of such proposed action. 
Tenant’s policy shall contain a commercially reasonable deductible provision.  Landlord reserves the right from time to
time to require Tenant to obtain higher minimum amounts or different types of
insurance, if it becomes customary for other landlords of Comparable Buildings
to require similar sized tenants in similar industries to carry insurance of
such higher minimum amounts or of such different types of insurance.  Notwithstanding anything to the contrary set forth in this Lease,
any insurance coverage required to be carried by Tenant under this Lease may be
maintained under a “blanket policy” maintained by Tenant or by any affiliate of
Tenant, so long as such “blanket policy” shall provide the subject coverage
described herein on a per location basis. 
In the event Landlord (or any other entity, as required under this Lease)
shall have been named as an additional insured in any of Tenant’s insurance
policies, Landlord shall promptly endorse (and cause each such other entity
named as an additional insured to promptly endorse) to the order of Tenant,
without recourse, any check, draft or order for the payment of money
representing the proceeds or any such policy or any other payment growing out
of or connected with said policy and Landlord hereby irrevocably waives (and
shall cause each such other entity named as an additional insured to
irrevocably waive in writing delivered to Tenant, promptly following Tenant’s
request) any and all rights in and to such proceeds and payments.  Tenant shall deliver a
certificate (on an Acord Form) of all such insurance evidencing payment therefor
to Landlord concurrently with Tenant’s execution of this Lease and at least
annually thereafter following
Landlord’s request. 
Tenant shall give Landlord prompt notice in case of fire in the Premises.  Neither the issuance of any insurance policy
required under this Lease nor the minimum limits specified herein shall be
deemed to limit or restrict in any way Tenant’s liability arising under or out
of this Lease.


 


(c)                                  Notwithstanding anything to the contrary set forth above in this Section
17.A, provided the net worth of Tenant shall equal or exceed One Hundred Fifty
Million Dollars ($150,000,000.00), Tenant may elect to self-insure with respect
to the risks it would otherwise have been insured under the policies required
by the foregoing terms of this Section 17.A, and in such event, Tenant shall
have no obligation to comply with the foregoing terms of this Section 17.A.


 


B.                                     Landlord’s Insurance:


 


(a)                                  Throughout the Term,
Landlord shall obtain and maintain: (1) commercial general liability insurance
(written on an occurrence basis) including contractual liability coverage
insuring the obligations assumed by Landlord under this Lease (including those
set forth in Section 14, premises and operations coverage, broad form property
damage coverage and independent contractor coverage, and containing an
endorsement for personal injury; (2) rental interruption insurance for the
Building with coverage for interruption of rent for a period of one year;
(3)  all-risk, physical damage insurance
with extended coverage, covering the Building, the Garage, and all Landlord’s
fixtures and other personal property located thereon, for one hundred percent
(100%) of the replacement cost thereof; 
(4) worker’s compensation insurance; and (5) other types of insurance,
and with such policy limits, protecting the Building, the Complex and Landlord
as are normally and customarily carried by sophisticated landlords of
Comparable Buildings.  Such commercial
general liability insurance shall be in minimum amounts typically carried
by prudent landlords of Comparable Buildings, but in no event shall be in an amount
less than Ten Million Dollars ($10,000,000.00) combined single limit per
occurrence, with a Ten Million Dollar


 


41

















 


($10,000,000.00),
annual aggregate, and Landlord shall also obtain and maintain umbrella excess
liability insurance with a policy limit of not less than Ten Million Dollars
($10,000,000.00).  Such rent
interruption insurance shall insure loss of rent for space in the Building
for  the period of one (1) year.  Such property insurance for the Building,
the Garage and Landlord’s other property therein shall be written on a
replacement cost basis, with a commercially reasonable deductible.  Such worker’s compensation insurance shall
carry minimal limits as defined by the law of the jurisdiction in which the
Building is located (as the same may be amended from time to time).


 


(b)                                 The insurance carried
by Landlord pursuant to Section 17.B.(a) hereof shall: (1) be issued by a company
that is licensed to do business in the jurisdiction in which the Building is
located, and that has a rating equal to or exceeding A-/VI from Best’s Insurance Guide; (2)
with respect to the insurance policies identified in Subsections 17.B.(a) (1), (2), (3) and (5)
above, name Tenant as an additional insured; (3) with respect to the
insurance policies identified
in Subsections 17.B.(a) (1), (2), (3) and (5) above, contain an endorsement
that such policy shall remain in full force and effect notwithstanding that the insured
may have waived its right of action against any party prior to the occurrence of a loss (Landlord hereby
waiving its right of action and recovery against and releasing
Tenant and its employees and
agents from any and all liabilities, claims and losses for which they may otherwise be
liable to the extent Landlord is covered by insurance carried or which would have been covered by
insurance required to be
carried by Landlord under this Lease); (4) with respect to the insurance
policies identified in
Subsections 17.B.(a)(1), (2), (3) and (5) above,  provides that the insurer thereunder waives all right of
recovery by way of subrogation against Tenant, its partners, agents, employees
and representatives, in connection with any loss or damage covered by such
policy, or; (5) with respect to the insurance policies as identified in
Subsections 17.B.(a) (1), (2), (3) and (5) above, be primary and
non-contributory; (6) with respect to the insurance policies identified in
Subsections 17.B.(a)(1), (2), (3) and (5) above, contains an endorsement for
cross liability and severability of interests; (7) with respect to the
insurance policies identified in Subsections 17.B.(a)(1), (2), (3) and (5)
above, contain an endorsement prohibiting cancellation, reduction of amount
(below the amount of same required to be carried by Landlord under this Lease)
of insurance or material change in coverage without the insurer first giving
Tenant thirty (30) days prior notice of such proposed action.  Landlord’s policies shall contain a
commercially reasonable deductible provision. 
Tenant reserves the right from time to time to require Landlord to
obtain higher minimum amounts of insurance if it becomes customary for other
landlords of Comparable Buildings to carry insurance of such minimum
amounts.  Landlord shall deliver a
certificate (on Acord Form 27) of all such insurance and receipts evidencing
payment therefor to Tenant concurrently with Landlord’s execution of this Lease
and at least annually thereafter promptly following Tenant’s request.  Landlord shall give Tenant prompt notice in
case of fire in the Building outside the Premises.  Neither the issuance of any insurance policy required under this
Lease nor the minimum limit specified therein shall be deemed to limit or
restrict in any way Landlord’s liability arising under or out of this Lease.


 


C.                                     Effect of Activities on
Insurance:  In the event any increases in the rates of
insurance incurred by Landlord
are due to any activity conducted or property installed or placed by Tenant on
or about the Land, the Building or the Premises in violation of the terms of this Lease, then Tenant
shall reimburse Landlord for the amount of such increases within thirty (30) days after
Tenant’s receipt of Landlord’s request together with invoices and reasonable
proof of the basis for such increases; provided, however, that
Landlord shall not have the right to require Tenant to reimburse Landlord for
the amount of such increases pursuant to this Section 17.C. if Tenant is
conducting only the Permitted Use pursuant to


 


42

















 


Section 6.A. of this Lease at the Premises,
and such use is being conducted in accordance with all applicable laws and
governmental regulations and in accordance with the provisions of this
Lease.  In the event any increases in
the rates of insurance incurred by Tenant are due to any activity conducted or
property installed or placed by Landlord or permitted to be placed by Landlord,
on or about the Land or the Building in violation of the terms of this Lease,
then Landlord shall reimburse Tenant for the amount of such increase within
thirty (30) days after Landlord’s receipt of Tenant’s request together with
invoices and reasonable proof for the basis of such increases.


 


D.                                    Mutual Waiver of
Subrogation:  Notwithstanding anything to the contrary set forth in this
Lease, each party shall be relieved from all obligations and liabilities with
respect to any matters arising to the extent the same are covered by insurance
carried by the other party or required
to be carried by the other
party pursuant to this Lease, even if the same result from the acts or omissions of a party or anyone claiming by or through such
party or any of their
respective agents, contractors, employees or invitees.  Landlord and Tenant further agree that each
will not make any claim against or seek to recover from the other for any loss,
cost, damage, liability, expense or peril covered by insurance. 
The terms of this Section shall survive the expiration of the Term or
earlier termination of this Lease.


 


18.                               CONDEMNATION.


 


A.                                     Right to Terminate:  If
a substantial part of the Premises is taken or condemned by any governmental or
quasi-governmental authority for any purpose or is granted to any authority in
lieu of condemnation (collectively, a “taking”), Landlord shall have the right
in its reasonable discretion to terminate this Lease by notice to Tenant and
Base Rent and Additional Rent payable pursuant to Section 5 hereof shall be prorated through the date
of the taking.  Landlord agrees to
exercise its right to terminate set forth in this Section 18.A. in an
nondiscriminatory fashion among leases affecting the Building.  Notwithstanding the foregoing, in the event
that (i) more than five percent (5%) of the rentable area of the Premises is
taken, or (ii) parking spaces for more than twenty percent (20%) of the
Parking Permits allocated to Tenant are taken and Landlord is unable to provide
alternative parking to Tenant within a one (1) block radius of the Building prior to the date of the taking,
or (iii) by reason of such taking, Tenant is denied reasonable access to
the Premises on a permanent basis, then Tenant shall have the right to
terminate this Lease by
delivering notice to Landlord, which notice must be given 
by that date which occurs thirty (30) days following the
date of such taking.


 


B.                                     Adjustment of Rent:  If
a portion of the Premises is taken and neither party elects to terminate this
Lease pursuant to Section 18.A. hereof, then (i) Base Rent and Additional Rent payable pursuant to
Section 5 hereof shall be equitably adjusted as of the date title vests in the
authority, (ii) Landlord shall
diligently proceed to restore the remaining portion of the Premises and the
Building and, to the extent within Landlord’s reasonable control, the Complex, as nearly as possible
to the same condition that existed prior to the subject taking, and (iii)
this Lease shall otherwise continue in full force and effect.


 


C.                                     Division of Award:  Any award for the taking of all or
any part of the Buildings,
Garage or other part of the Complex, or any payment made under threat of the exercise of such power shall be the property of
Landlord, and Tenant hereby assigns to Landlord all of its right, title and
interest in and to any such award, except for any portions of such award which
are specifically allocated by the condemning authority as compensation for; (i)
the taking of Tenant’s personal property and/or trade fixtures; and (ii)


 


43

















 


moving expenses.  Tenant shall be entitled to any compensation
separately awarded to Tenant for the matters set out in (i) through (ii)
above.


 


19.                               DEFAULT OF TENANT.


 


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


 


(1)                                  Failure of Tenant to pay Rent as and when
due; provided, however, no Default shall be deemed to have occurred unless such
failure continues for a period of ten (10) days after notice thereof from Landlord to
Tenant.


 


(2)                                  Failure of Tenant to comply with or perform
any covenant or obligation of Tenant under this Lease, if the failure continues
for thirty (30) days after notice from Landlord to Tenant specifying the
failure [except that if the failure on the part of Tenant is not reasonably  capable of being
cured within such 30-day period but Tenant expeditiously commences to cure same
following its receipt of
notice from Landlord and diligently proceeds with such cure,
Tenant’s time to cure such failure shall be extended for the time reasonably necessary
to cure same, other than (i) those concerning the payment of Rent and (ii)
those set forth in clauses (4), (5), (6) and (7) of this Section 19.A.


 


(3)                                  [Intentionally omitted.]


 


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


 


(5)                                  If, within one hundred twenty (120) days after the commencement
of any proceeding against Tenant or any Partner, whether by the filing of a
petition or otherwise, seeking any reorganization, liquidation, dissolution or
similar relief under any present or future applicable federal, state or other
Laws, such proceeding shall not have been dismissed or if, within one hundred twenty (120)
days after the appointment of any trustee, receiver or liquidator of Tenant or
any Partner, or of all or any part of the property of Tenant or of any Partner,
without the acquiescence of such individual or entity, such appointment shall
not have been vacated or otherwise discharged, or if any execution or attachment
shall have been issued against the property of Tenant or of any Partner,
pursuant to which the Premises shall be taken or occupied or attempted to be
taken or occupied.


 


(6)                                  The failure of
Tenant to promptly commence, following its receipt of notice from Landlord of
Tenant’s default under Section 36 hereof, to commence the cure of the subject
default and thereafter use commercially reasonable efforts to cure the same as
soon as reasonably practicable, provided that no Default shall be deemed to
have occurred under this Subsection unless such failure continues for a period
of five (5) days following Tenant’s receipt of a second notice from Landlord of
the failure.


 


(7)                                  Failure of Tenant
to comply with the terms of Section 17 hereof, which failure continues for a
period of five (5) business days after Tenant’s receipt of notice from Landlord
of the subject failure, provided that no Default shall be deemed to have
occurred under this Subsection unless such failure continues for a period of
five (5) business days following Tenant’s receipt of a second notice from
Landlord of the subject failure following the expiration of the
above-referenced five (5) business day period.


 


44

















 


Notwithstanding the foregoing to the contrary, in the event Landlord delivers to Tenant notice alleging a failure by
Tenant to comply
with its obligations
under this Lease and if
Tenant after its receipt of such
notice commences an action for
declaratory judgment (or other appropriate relief) seeking a determination that
Tenant has not breached
Tenant’s obligations hereunder with respect to the matter specified in
Landlord’s notice, then the subject notice delivered by Landlord
shall be deemed not to have
been delivered for purposes of this Section 19.A until such action is dismissed or
nonappealable or is not in fact appealed from, and Tenant shall thereupon be
afforded the cure period described in this Section 19.A above, provided,
however, that if at any time during the pendency of such action, (i) Tenant
withdraws or dismisses such action or (ii) the action is dismissed with
prejudice as a result of a motion to dismiss filed by Landlord and is not
appealed by Tenant, then the subject notice shall be deemed to have been
delivered when it was actually delivered.


 


B.                                     Remedies Upon Default: 
Upon the occurrence of a Material Default (as defined below), Landlord
shall have the right, then or at any time thereafter:


 


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


 


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


 


The term “Material
Default”  as used herein shall mean a
Default described in Subsection 19.A(1) above for an amount in excess of One
Hundred Thousand Dollars ($100,000.00), a Default described in Subsection
19.A.(6) above, or a Default described in Subsection 19.A(7) above.


 


If
Landlord elects to reenter pursuant to Section 19.B.(1) above, which must be
done in accordance with legal process, Landlord may terminate this Lease, or,
from time to time without terminating this Lease, may relet all or any part of
the Premises as the agent of Tenant, for such term, at such rental and upon
such other provisions as Landlord deems acceptable, with the right to make any
alterations and repairs to the Premises that Landlord reasonably deems
appropriate in order to place the Premises in rentable condition, at Tenant’s
reasonable expense.  No such reentry or
taking of possession of the Premises shall be construed as an election to terminate
this Lease, unless notice of such intention is given pursuant to Subsection
B.(2) above, or unless termination be decreed by a court of competent
jurisdiction at the instance of Landlord. 
If Landlord leases the Premises or any portion thereof for a term which
is beyond the then remaining Term of this Lease, then the costs of reletting
shall be amortized on a straight-line basis over the full term of such new
lease, and Tenant shall only be liable for the amortized portion thereof
attributable to the remaining Term of this Lease.


 


Landlord shall use commercially reasonable efforts to mitigate its
damages resulting from a Default
by Tenant under this Lease, and the following provisions shall apply to
Landlord’s obligation to


 


45

















 


mitigate damages in connection with Landlord’s leasing of the Premises
to a prospective tenant (a “Substitute Tenant”):


 


(1)                                  Landlord shall have no obligation to solicit or entertain negotiations
with any other prospective tenants for the Premises until Landlord shall have
issued written notice to Tenant terminating this Lease, and if, following such
notice of termination of this Lease by Landlord, Landlord solicits or
entertains negotiations with any other prospective tenants for the Premises,
including, but not limited to, exhibiting the Premises to any such prospective
tenants, Landlord shall have no liability to Tenant in connection with such
solicitation or entertainment of negotiations or such showing of the Premises
based upon any claims of interference with business relations, invasion of
privacy or similar theories with respect to such showing of the Premises and
such solicitation or entertainment of negotiations.


 


(2)                                  Landlord shall not be obligated to enter into a lease with any proposed
Substitute Tenant (a) whose use would violate any restriction, covenant, or
requirement contained in the lease of another tenant of the Building, or which
would be incompatible with the operation of the Building as a high quality
building or (b) which does not have, in Landlord’s reasonable opinion,
sufficient financial resources or operating experience to operate the Premises
in a high quality manner.


 


(3)                                  Landlord shall have no obligation to lease
the Premises in preference to other space then-available in the Building
comparable to the Premises, including size and improvements.


 


(4)                                  Landlord shall not be obligated to lease the
Premises to a Substitute Tenant for a rental less than the lower of (i) the
rent payable under this Lease for the Premises, or (ii) the fair market rental
then prevailing for comparable space in Comparable Buildings, provided that if
Landlord reasonably determines that Tenant will not likely be able to pay
amounts owing by it under this Section 19 in light of Tenant’s then-current net
worth, then Landlord shall not be obligated to lease the Premises to a
Substitute Tenant for rental less than the fair market rental then prevailing
for comparable space in Comparable Buildings, nor shall Landlord be obligated
to enter into a new lease with a Substitute Tenant under any terms and
conditions that are unacceptable to Landlord under then commercially reasonable
current leasing policies for comparable space in Comparable Buildings.


 


(5)                                  Landlord shall not be obligated to enter
into a new lease with a Substitute Tenant if Landlord would have the right to
reasonably withhold Landlord’s consent to an assignment or subletting to such
Substitute Tenant in accordance with the provisions of clauses (i), (ii) or
(iv), or any combination thereof, of Section 23.A. of this Lease.


 


C.                                     Liability of Tenant:  If
Landlord terminates this Lease or reenters the Premises (with or without
terminating this Lease), Tenant shall remain liable (in addition to all other
liabilities of Tenant
accrued at the time of the Material Default) for the sum of (i) any unpaid
Rent accrued prior to the time of termination and/or reentry, as the case may
be, plus interest thereon from the due date at the Default Rate, (ii) all
Base Rent and Additional Rent provided for in this Lease from the time of
termination and/or reentry, discounted to present value at the rate of eight
percent (8%) per annum (the “Discount Rate”) calculated on a monthly basis, as
the case may be, until the date this Lease would have expired had a Material
Default not occurred, plus interest thereon from the due date at the Default
Rate, and (iii) any and all reasonable expenses (including but not limited to reasonable attorneys’
and brokerage fees) incurred by Landlord in reentering and repossessing the
Premises, in correcting any default, in painting, altering or repairing the
Premises in order to place the Premises in rentable condition (whether or not
the Premises are relet), in protecting and preserving the Premises and in
reletting or attempting to relet the Premises with such costs prorated as set
forth in Section 19.B above,
minus the proceeds realized by


 


46

















 


Landlord from any reletting. If Landlord leases the Premises or
any portion thereof for a term which is beyond the then remaining Term, then
the costs of reletting shall be amortized on a straight-line basis over the
full term of such new lease, and Tenant shall only be liable for the amortized
portion thereof attributable to the remaining Term.  Landlord shall have the option to recover
any damages sustained by Landlord either at the time of reletting, if any, or
in separate actions from time to time as said damages shall have been made more
easily ascertainable by successive relettings or, at Landlord’s option, to
defer any such recovery until the date this Lease would have expired in the
absence of a Material Default, in which event Tenant hereby agrees that the
cause of action shall be deemed to have accrued on the aforesaid date.  The provisions of this Section 19.C. shall
be in addition to, and shall not prevent the enforcement of, any claim Landlord
may have for anticipatory breach of this Lease.


 


D.                                    Liquidated
Damages:  In addition to Landlord’s
rights pursuant to Section 19.C. above, if Landlord terminates this Lease in
accordance with the terms of Section 19.B above, Landlord shall have the right
at any time, at its sole option, to require Tenant to pay to Landlord on
demand, as liquidated damages, the sum of (i) the total of the Base Rent,
Additional Rent and all other sums which would have been payable under this
Lease from the date of Landlord’s demand for liquidated damages (“Landlord’s
Demand”) until the date this Lease would have terminated in the absence of the
Material Default, discounted to present value at the Discount Rate,
(ii) all unpaid Rent accrued prior to the time of Landlord’s Demand, plus
interest thereon from the due date at the Default Rate, and (iii) any and
all reasonable and actual expenses (including, but not limited to, reasonable
attorneys’ and brokerage fees) incurred by Landlord in reentering and
repossessing the Premises, in correcting any default, in painting, altering or
repairing the Premises in order to place the Premises in rentable condition
(whether or not the Premises are relet), in protecting and preserving the
Premises and in reletting or attempting to relet the Premises; minus the sum of (a) the net fair market
rental value of the Premises for the period referred to in Section
19.D.(i) above, discounted to present value at the Discount Rate, and (b)
any sums actually paid by Tenant to Landlord pursuant to Section 19.C. above;
provided, however, that if said damages shall be limited by law to a lesser
amount, Landlord shall be entitled to recover the maximum amount permitted by
law.  The “net fair market rental value”
referred to in Section 19.D.(a) above shall be the fair market rental value of
the Premises at the time of Landlord’s Demand, reduced by any rental
abatements, tenant improvement allowances and other concessions and inducements
generally provided by landlords seeking to lease comparable commercial property
in the area of the Premises at the time of Landlord’s Demand.


 


E.                                      [Intentionally Omitted.]


 


F.                                      Waiver of Lien. 
Landlord hereby agrees to waive and does hereby waive any and all rights
granted by or under any present or future Laws to levy any lien or security
interest on any goods, merchandise, equipment, fixtures, furniture or other
property of Tenant.


 


G.                                     No Right of Distress.  Landlord
hereby waives all rights of distress for Rent which may be permitted or
otherwise provided by applicable Law.


 


H.                                    Counterclaims.  If Landlord shall commence any
proceeding for non-performance by Tenant of any of its obligations under this
Lease, Tenant will not interpose any counterclaim or setoff of whatever nature
or description in any such proceeding unless Tenant’s failure to do so would
impair Tenant’s ability to pursue a separate action or process on such claim.  The provisions of the foregoing


 


47

















 


sentence shall not be construed as a waiver of Tenant’s right to assert
such a claim in any separate action brought by Tenant.


 


I.                                         Right of Landlord to Cure.  If
Tenant defaults in the doing of any act required to be made or done by Tenant
under this Lease, other than
with respect to the payment of amounts, then Landlord may, at its
option, following ten (10) days prior notice to Tenant, which notice is delivered after
the expiration of all applicable cure periods with respect to the subject
matter, or such shorter period of time in the event of an
emergency as Landlord may reasonably
determine, in Landlord’s reasonable discretion, as appropriate under the
circumstances, do such act, and the expenses thereof, shall constitute
Additional Rent hereunder due and payable by Tenant, within thirty (30) days after
Landlord’s delivery to Tenant of Landlord’s request together with
paid invoices for the
subject amounts for which
Landlord seeks reimbursement. 
In the event Tenant fails to timely pay such amounts within the
above-referenced thirty (30) day period, then interest shall accrue thereon at
the Default Rate beginning on the first day following the expiration of the
above-referenced thirty (30) day period until fully paid by Tenant to Landlord.


 


J.                                        Attorneys’ Fees.  In
the event of any Default hereunder, Tenant shall pay to Landlord all reasonable
attorneys’ fees incurred by Landlord in connection with such Default or the
enforcement of Landlord’s rights or remedies arising in connection therewith,
whether or not this Lease is terminated and whether or not Landlord institutes
any lawsuit against Tenant as a result of such Default.  In addition to the foregoing, whether or not
this Lease is terminated, Tenant shall pay to Landlord all other reasonable costs
incurred by Landlord with respect to any lawsuit instituted or action taken by
Landlord to enforce the provisions of this Lease.  Notwithstanding the foregoing, if any of the rights and remedies
of Landlord granted under this Section 19.I. are specifically prohibited by
applicable law, then all limitations and prohibitions which are imposed upon
Landlord under such law shall prevail for the purpose of determining Landlord’s
rights and remedies under this Lease.


 


K.                                    Disputes
Regarding Performance.  If at any time a dispute shall arise as to
any amount to be paid by Tenant to Landlord under the provisions of this Lease,
Tenant shall have the right to make payment “under protest”, such payment not
being regarded as a voluntary payment, and there shall survive the right on the
part of Tenant to institute suit for recovery of such sum. If it shall be
adjudged or determined that there was no legal obligation on the part of Tenant
to pay such sum or any portion thereof, Tenant shall be entitled to recover the
sum or so much thereof as it was not required to pay, together with interest
thereon at the Default Rate.  If at any
time a dispute arises between the parties hereto as to the performance by
Tenant of any other matter which Landlord claims is required to be performed by
Tenant under the provisions of this Lease, then Tenant may perform the subject
matter and pay the cost thereof “under protest”, the performance of the subject
matter in no event being regarded as voluntary performance, and there shall
survive the right on the part of Tenant to institute suit for recovery of the
cost of the subject matter.  If it shall
be adjudged that there was no obligation on the part of Tenant to perform the
subject matter or any portion thereof, Tenant shall be entitled to recover from
Landlord all costs incurred in connection with the subject matter or so much
thereof as Tenant was not required to perform under this Lease, together with
interest thereon accrued at the Default Rate.


 


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


 


48

















 


20.                               DEFAULT OF LANDLORD. 


 


A.                                   Landlord
Default.  A “Landlord Default” shall occur under this Lease
in the event Landlord breaches
any representation or warranty made by it under this Lease or
Landlord fails to perform or
observe any matter required to be performed or observed by it under this Lease
within thirty (30) days after Landlord’s receipt of notice from Tenant
specifying Landlord’s failure to perform; provided, however, that if the nature
of Landlord’s obligation is such that more than thirty (30) days are
required for its performance, then a Landlord Default shall not be deemed to
have occurred so long as Landlord shall commence such performance expeditiously
after its receipt of notice from Tenant and thereafter diligently pursues the same
to completion.  Notwithstanding the
foregoing or any other provision in this Lease, if the subject failure by
Landlord to observe or perform any matter required to be performed or observed
by it under this Lease would constitute an emergency or would materially impair
Tenant’s ability to conduct its business operations in all or any portion of
the Premises, and Tenant notifies Landlord of such circumstance (which notice
may be telephonic in the event of an emergency) and, unless Landlord shall,
diligently and promptly following Tenant’s notification of Landlord, undertake
action to cure the subject failure on a expedited basis (which action may
include, but not be limited to, ordering parts, engaging consultants,
preparation of the site for necessary work or any combination of the
foregoing), Tenant may, in addition to all other rights available to Tenant under this
Lease, at law or in equity, give Landlord notice (which notice may also be
telephonic in the event of an emergency but shall also be simultaneously given
in writing) of such failure and if Landlord does not cure such circumstance
within five (5) business days after such notice, then Tenant may cure the
subject matter at Landlord’s cost by taking whatever action is reasonably
necessary to cure the same.  Landlord
shall reimburse to Tenant, within thirty (30) days after Tenant’s delivery to
Landlord of Tenant’s request together with reasonable evidence of payment of
such amounts, all costs incurred by Tenant in curing the subject matter.  If Landlord fails to pay all such amounts to
Tenant within the above-referenced thirty (30) day period, then interest shall
accrue thereon at the Default Rate from the first day following the expiration
of the above-referenced thirty (30) day period until fully paid by Landlord or
offset by Tenant against Rent in accordance with the terms of Section 20.C
below.


 


B.                                     Tenant’s Remedies.  Following the occurrence of a
Landlord Default, Tenant shall have the right, in addition to all other rights
and remedies available to Tenant under this Lease and/or at law and/or in
equity, to pursue, without notice or demand, any one or more of the rights or
remedies set forth below in this Section, each and all of which shall be
cumulative and non-exclusive.  All costs
incurred by Tenant (including, without limitation, reasonable attorneys’ fees)
in enforcing any of such rights or remedies shall be paid by Landlord to Tenant
upon demand.  Additionally, in the event
a Landlord Default shall (i) occur with respect to a matter in the Premises, or
(ii) materially interfere with the use of the Premises and/or any business
operations conducted therein, then Tenant may cure the subject Landlord Default
by taking whatever action is reasonably necessary to cure the same.  In such event, Landlord shall reimburse to
Tenant, within thirty (30) days after Tenant’s delivery to Landlord of Tenant’s
request, together with reasonable evidence of payment of same, all reasonable
costs incurred by Tenant to cure the subject Landlord Default.  In the event Landlord fails to reimburse
such amount to Tenant within the above-referenced thirty (30) days, then
interest shall accrue on such amount at the Default Rate, beginning on the
first day following the expiration of the above-referenced thirty (30) day
period and ending on the date Landlord fully pays such amount, together with
such interest to Tenant, or Tenant fully offsets the amount of same together
with interest accrued thereon against Rent in accordance with the


 


49

















 


terms of Section 20.C
below.  In the event Tenant exercises its rights to
cure a Landlord Default pursuant to the foregoing, then, Tenant shall be
responsible for all losses, damages and liabilities incurred by Landlord,
excluding consequential damages, resulting from claims by other tenants in the
Building directly related to the action taken by Tenant to cure the subject
Landlord Default, only to the extent the same exceed that which Landlord would
otherwise have incurred had Landlord taken action to cure the subject Landlord
Default.  In the event any mechanic’s
lien is filed against the Building for any work performed by Tenant to cure a
Landlord Default pursuant to the foregoing, then Tenant shall be responsible to
remove such lien from the Building in accordance with the terms of Section 8.B of this Lease.


 


C.                                    Tenant shall have the following offset
rights against Rent payable by it under the Lease:


 


I                                                                                            (1)                                  In the event Landlord fails to pay to Tenant
the amounts, together with interest accrued thereon, described in Section 20.A
above within the thirty (30) day period referenced therein, then Tenant shall
have the right to offset such amounts which remain unpaid, together with
interest accrued thereon, against Rent payable under this Lease.


 


(2)                                  In the event Landlord fails to pay to Tenant
the amounts, together with interest accrued thereon, described in Section 20.B
above in curing a Landlord Default within the thirty (30) day period referenced
therein, Tenant shall have the right to offset such amounts which remain
unpaid, together with interest accrued thereon, against Rent payable under this
Lease.


 


(3)                                  Tenant shall have the right to offset
against Rent any portion of the Improvement Allowance (as defined in Exhibit
C attached to this Lease) which Landlord fails to timely pay to Tenant in
accordance with terms of the Work Agreement attached to this Lease as Exhibit
C and which remains unpaid, together with interest accrued at the Default
Rate from the date the subject amount was payable by Landlord to Tenant until
fully offset by Tenant against Rent payable under this Lease.


 


(4)                                  In the event Landlord fails to pay to Tenant
the amount of any award rendered in favor of Tenant against Landlord, within
thirty (30) days after the same is rendered in favor of Tenant by a court of
competent jurisdiction, with all applicable appeal periods having expired, then
Tenant shall have the right to offset against Rent payable by Tenant under this
Lease the amount of such award which remains unpaid, together with interest
accrued thereon at the Default Rate from first day following the expiration of
the above-referenced thirty (30) day period until fully offset by Tenant
against Rent payable under this Lease.


 


D.                                    Landlord’s Bankruptcy.  If, pursuant to an order, judgment or decree
entered by any court of competent jurisdiction, a receiver, trustee or
liquidator of Landlord, or all or substantially all of the assets of Landlord
shall be appointed, or Landlord shall be adjudicated as bankrupt as a result of
voluntary or involuntary proceedings, or a petition seeking reorganization of
Landlord or an arrangement with its creditors or a petition to take advantage
of any insolvency law shall be filed, and (a) this Lease or any covenant
therein shall be rejected by order of any court of competent jurisdiction or by
operation of law, or (b) Tenant’s rights or obligations or Landlord’s
obligations under this Lease (including any obligation to perform, provide or
pay for any service) shall be modified adversely to Tenant, or (c) Landlord is
otherwise in default under this Lease, it shall be deemed a Landlord Default
and, then, notwithstanding anything to the contrary set forth in this Lease, in
addition to any rights Tenant may have under this Lease, (i) Tenant shall
have the right to set off against all amounts due and owing by Tenant


 


50

















 


under
this Lease (1) any and all losses, liabilities, damages, costs and expenses
suffered or incurred by Tenant and all amounts payable by Landlord to Tenant in
connection with such non-performance of Landlord’s obligations under this
Lease, and (2) any and all losses, liabilities, damages, costs and expenses
suffered or incurred by Tenant and all amounts payable by Landlord to Tenant in
connection with the non-performance of Landlord’s obligations under this Lease
following any rejection of this Lease in any such proceeding, and
(ii) Tenant shall have the right to terminate this Lease by delivering
notice to Landlord or the trustee or receiver (if appointed) stating the date
of termination, and on the date specified in such notice this Lease shall
terminate and any rent paid for a period after such date of termination shall
be refunded to Tenant on demand.  The
exercise by Tenant of any right under this Section shall not preclude the
assertion by Tenant of any claim it may have in any proceeding referenced
above.


 


E.                                      Attorneys’
Fees:  In the event of any Landlord
Default, Landlord shall pay to Tenant all reasonable attorneys’ fees incurred
by Tenant in connection with such Landlord Default or the enforcement of
Tenant’s rights and remedies arising in connection therewith, whether or not
this Lease is terminated and whether or not Tenant institutes any lawsuit
against Landlord as the result of such Landlord Default.  In addition to the foregoing, whether or not
this Lease is terminated, Landlord shall pay to Tenant all other reasonable
costs incurred by Tenant with respect to any lawsuit instituted or action taken
by Tenant to enforce the provisions of this Lease.  Notwithstanding the foregoing, if any of the rights and remedies
of Tenant granted under Section 20.D are specifically prohibited by applicable
law, then all limitations and prohibitions which are imposed upon Tenant under
such law shall prevail for the purpose of determining Tenant’s rights and
remedies under this Lease.


 


F.                                      Survival:  Landlord’s and Tenant’s liability pursuant
to this Section 20 shall survive the termination of this Lease, the institution
of any summary proceeding and/or the issuance of a warrant thereunder.


 


21.                               HOLDING
OVER.


 


If
Tenant shall be in possession of the Premises after the expiration of the
Term or the earlier termination of this Lease pursuant to Section 49 below, as
applicable, of any portion of
the Premises (such portion of
the Premises in which Tenant holds over is hereinafter referred to as
the “Holdover Space”) with or
without the express or implied consent of Landlord, such tenancy shall not constitute a
renewal thereof or an extension for any further term, and in such case, Tenant
shall pay Base Rent for the Holdover Space equal to the product of (a)
the rate of Base Rent in
effect for the month preceding Tenant’s holdover, multiplied by (b) the number
of rentable square feet in the Holdover Space; provided, however, the rate of
Base Rent used for purposes of the foregoing with respect to any portion of the
Holdover Space shall increase to one hundred fifty percent (150%)
of the rate of
Base Rent applicable during
the last full month of the
term of this Lease (the “Holdover Rate”), beginning on the earlier to occur of
(i) the sixth (6th) month anniversary of the
last day of the
term of this Lease or the
earlier termination of this Lease pursuant to Section 49 below, as applicable,
and (ii) the date upon which Landlord is required to deliver possession of the Holdover Space to a bona fide
third party pursuant to the terms of a lease executed between Landlord and such third party; provided that
Landlord delivered notice to Tenant of the execution of such lease on or before
Landlord executed the same, which notice shall have identified the date upon
which Landlord is required to deliver possession of the subject portion of the
Holdover Space to such bona fide third-party tenant.  Tenant’s tenancy under this Section 21 shall be subject to every
other applicable term,
covenant and agreement contained in this Lease, including, but not limited to,
the obligation of Tenant to pay Additional Rent pursuant to Section 5 hereof. Landlord
may exercise any or all


 


51

















 


remedies
for Default and at law and in equity, including but not limited to an action
against Tenant for wrongfully holding over. 
Any such holdover shall be deemed to be a tenancy-at-sufferance and not
a tenancy-at-will or tenancy from month-to-month, without an obligation to
provide notice to Tenant under Section 19 above.  In no event shall any holdover be deemed a permitted extension or
renewal of the Term, and nothing contained herein shall be construed to constitute
Landlord’s consent to any holdover or to give Tenant any right with respect
thereto.


 


22.                               SUBORDINATION.



 


A.                                     Lease Subordinate:  Subject to the terms of this Section
22, this Lease shall be subordinate to the lien of any first lien Mortgage
and to any first priority Ground
Lease which encumbers the
Building and the Land, and any and all renewals, extensions,
modifications, recastings and refinancings thereof.  In the event Landlord delivers to Tenant a subordination,
attornment and non-disturbance agreement required under the following terms of
this Section, fully executed by Landlord and the subject Mortgagee or Ground
Lease, as the case may be, with signatures acknowledged, and Tenant fails to
execute and deliver same to Landlord, then: 
(i) this Lease shall be subordinate to the lien of the subject Mortgage
or Ground Lease, without execution of any further instrument; (ii) if the
subject Mortgage is foreclosed or Ground Lease is terminated, upon request by
the purchaser at the foreclosure sale or Ground Lessor, as the case may be,
Tenant shall attorn to and recognize the purchaser or Ground Lessor as the
landlord under this Lease and make all payments required hereunder to such new
landlord; and (iii) Tenant shall be deemed to have waived the provisions of any
Law now or hereafter in effect, which may give or purport to give Tenant a
right to terminate this Lease or the obligations of Tenant hereunder with
respect to any such foreclosure, termination or other proceeding filed,
prosecuted or completed. 
Notwithstanding anything herein to the contrary, any Mortgagee may at
any time subordinate the lien of its Mortgage to the operation and effect of
this Lease without Tenant’s consent, by giving Tenant notice of such
subordination, in which event this Lease shall be deemed to be senior to such
Mortgage, and thereafter such Mortgagee shall have the same rights as it would
have had if this Lease had been executed, delivered and recorded before said
Mortgage.  The subordination of
this Lease to any Mortgage
or Ground Lease is subject to
the condition that Tenant
shall not be named or joined in any action or proceeding to foreclose any such
Mortgage to terminate any such Ground Lease.  Notwithstanding the foregoing, in consideration of, and as a
condition precedent to, the subordination of this Lease to any first lien
Mortgage or first priority Ground Lease and Tenant’s agreement to be bound by
the terms of this Section 22.A:  (a)
Landlord shall obtain from the holder of the existing Mortgage which encumbers
the Building and the Land, and each Mortgagee that places a lien on the
Building and the Land prior to the execution and delivery of this Lease, a non-disturbance agreement
for the benefit of Tenant in the form which is attached hereto as Exhibit F
and made part hereof, and (b)
with respect to all
future Mortgages and future
Ground Leases on the Building, the Land or both, Landlord shall
obtain from the holder of the
same a  non-disturbance
agreement for the benefit of Tenant which shall be in the form which is attached hereto as Exhibit F or in other
commercially reasonable form which includes the substantive terms of Exhibit F attached
hereto or terms which are substantively equivalent, except that, solely with
respect to (i) insurance proceeds in excess of Three Million Dollars
($3,000,000.00) and (ii) any condemnation proceeds, a provision which is the
substantive equivalent of Paragraph FIRST in Exhibit F may also
provide that the Lease shall be subject to the terms of the Security Instrument
(as defined in said Exhibit
F) securing a loan by a first lien priority Mortgagee (a “First
Mortgagee”) with respect to such First Mortgagee’s right set forth in the
Security Instrument to determine whether any such insurance proceeds or
condemnation proceeds shall be applied to the repayment of the loan which is


 


52

















 


secured by the subject Security Instrument, or shall be applied to the
cost of restoration of the Building, or both, and, if both, then in what
proportion such amount shall be allocable, but such First Mortgagee’s right
shall not include the right to disburse or authorize the disbursement of any
such proceeds to Landlord unless Landlord has fulfilled its obligations under
Sections 16 or 18, as applicable, of this Lease.  All non-disturbance agreements delivered to Tenant shall have an
express acknowledgement by the parties thereunder of all rights of Tenant under
this Lease to offset and deduct amounts owing by Landlord to Tenant against
Rent payable by Tenant under this Lease to the extent provided herein, including, without limitation, the amounts of any portion of the Improvement
Allowance and other inducements, if any, payable to Tenant to the extent Landlord fails to timely
pay the subject amounts to
Tenant, all together with interest accrued thereon at the Default Rate.


 


B.                                     Notices from Holders of Mortgages and Ground Leases.  Tenant is irrevocably
authorized to rely upon and comply with any notice received by Tenant from any
underlying lessor, mortgage holder or lienholder of the Project or any portion
thereof requiring payment to it of any rental or other sum which is due and
payable by Tenant under this Lease, or with respect to the performance of any
of Tenant’s other obligations under this Lease.  Tenant shall have no duty to inquire as to whether the subject
underlying lessor, mortgage holder or lienholder was authorized or entitled to
deliver the subject notice.


 


23.                               ASSIGNMENT
AND SUBLETTING. 


 


A.                                     No Transfer Without
Consent:  Except as specifically set forth in this
Section 23, Tenant shall not, without the prior consent of Landlord in each
instance (which shall not
be unreasonably withheld, conditioned or delayed with
respect to a proposed assignment of this Lease which is unrelated to a mortgage
or other encumbrance and with respect to a proposed sublease) (i) assign,
mortgage or otherwise encumber this Lease or any of its rights hereunder; or
(ii) sublet the Premises or any part thereof or permit the occupancy or
use of the Premises or any part thereof by any persons or entities other than
Tenant.  Any attempted assignment,
mortgaging or encumbering of this Lease or any of Tenant’s rights hereunder and
any attempted subletting or grant of a right to use or occupy all or a portion
of the Premises in violation of the foregoing sentence shall be void.  Notwithstanding any of the foregoing to the
contrary, Landlord shall not unreasonably withhold, condition or delay its
consent to any proposed subletting of all or any portion of the Premises or to
any proposed assignment of this Lease which is unrelated to a mortgage or other
encumbrance.  Without limiting the
generality of the immediately preceding sentence and except as otherwise expressly provided in this Section 23
below, it is specifically agreed that it shall be reasonable for
Landlord to withhold its consent if: 
(i) the proposed subtenant or assignee is engaged in a business, or the
Premises will be used in a manner, that is inconsistent with the first-class
image of the Building; or (ii) the proposed use of the Premises is not for
office use; or (iii) the initial Tenant does not remain fully liable for the
payment of all rent and other charges payable by Tenant under this Lease and
for the performance of all other obligations of Tenant under this Lease except
as expressly provided below; or (iv) the proposed subtenant or assignee is a
GSA Tenant (as hereinafter defined in Section 51), unless to a GSA Tenant which
then leases, subleases or occupies space in the Building and for which Tenant
has obtained and delivered to Landlord the written consent of all tenants in
the Building whose leases require the consent of the tenant thereunder; or (v)
the proposed subtenant or assignee is a Specialized Human Resources Consulting
Firm (as hereinafter defined in Section 48), except that this clause (v) shall
be inapplicable if Tenant waives in writing the provisions of Section 48 hereof
as to such proposed subtenant with respect to such proposed sublease or
assignee with respect to such proposed assignment.


 


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If at any time during the Term Tenant desires to assign, sublet or
mortgage all or part of this Lease or the Premises to any party other than a
transferee permitted under Section 23.F. below, then in connection with
Tenant’s request to Landlord for Landlord’s consent thereto, Tenant shall give
notice to Landlord in writing (“Tenant’s Request Notice”) containing:  the identity of the proposed assignee,
subtenant or other party and a description of its business; the material terms of the
proposed assignment, subletting or other transaction; the commencement date of
the proposed assignment, subletting or other transaction; the area proposed to
be assigned, sublet or otherwise encumbered; the most recent financial
statement or other evidence of financial responsibility of such proposed
assignee or
subtenant or other party; and a certification executed by Tenant stating
whether or not any premium or other consideration is being paid for the
assignment, sublease or other transaction, after deduction of any Transfer
Costs (as defined in Section 23.C. below). 
Within fifteen
(15) days after delivery to
Landlord of Tenant’s request
for Landlord’s consent to any sublease or any assignment which is unrelated to
a mortgage or other encumbrance, or any sublease proposed by Tenant under this
Section, Landlord shall deliver to Tenant notice of Landlord’s approval or
disapproval of the same.  Any notice of
disapproval shall set forth with reasonable particularity the reasons for
Landlord’s disapproval of the subject action. 
Except as specified in any notice of disapproval timely and properly
delivered by Landlord in accordance with the foregoing, the subject action
proposed by Tenant shall be deemed approved by  Landlord. 
Landlord’s failure to deliver to Tenant Landlord’s notice of approval or
disapproval of the subject sublease or assignment which is unrelated to a
mortgage or other encumbrance within the above-referenced fifteen (15) day
period shall be deemed Landlord’s approval thereof.  Notwithstanding anything to the contrary set forth in this Lease,
Landlord shall not have the right to recapture the Premises or any portion of
the Premises or to terminate this Lease in the event of any action proposed by
Tenant pursuant to this Section 23.


 


B.                                     [Intentionally Omitted]


 


C.                                     Transfer of Ownership
Interests:  The provisions of this Section 23.C. are in
all events subject to the provisions of Section 23.F hereof.  If Tenant is a partnership, then any event
(whether voluntary, concurrent or related) resulting in a dissolution or,
except as hereinafter provided, a merger, consolidation or other
reorganization, of Tenant, or any
withdrawal or change (whether voluntary, involuntary or by operation of law) of
partners owning a controlling interest in Tenant shall be deemed a voluntary
assignment of this Lease subject to the provisions of this Section 23.  If Tenant is a corporation  (or a partnership with a corporate general
partner), then any event (whether voluntary, concurrent or related) resulting
in a dissolution of Tenant or the sale or transfer or relinquishment of the
interest of shareholders who, as of the date of this Lease, own a controlling
interest of the capital stock of Tenant shall be deemed a voluntary assignment
of this Lease subject to the provisions of this Section 23; provided, however,
that this sentence shall not apply to corporations whose stock is traded
through a national or regional exchange or over-the-counter market.  Notwithstanding anything to the contrary set forth
in this Lease, Landlord’s consent shall not be required with respect to:  (i) a public offering of the stock of
Tenant; (ii) a transfer of stock or other interests in Tenant between current shareholders or other
holders of interests
in Tenant or any guarantor of Tenant’s obligations under this Lease,
and (iii) the sale of additional shares or other interests
in Tenant to those
currently not shareholders or other holders of interests in Tenant provided there
is no change in control in Tenant. 
Further, the pledge, hypothecation, encumbrance or conditional
assignment of stock or other interests in Tenant or all or substantially all of
the assets of Tenant, in connection with a bona fide business purpose, shall be
permitted without Landlord’s consent.  If
Tenant is a limited liability company, then any dissolution of Tenant or a
withdrawal


 


54

















 


or change, whether voluntary, involuntary or
by operation of law, of members owning a controlling interest in Tenant shall
be deemed a voluntary assignment of this Lease which is subject to the
provisions of this Section 23.


 


D.                                    Expenses and Profits;
Effect of Consent:


 


(1)                                  With respect to any assignment or sublease which is subject to the
approval of
Landlord and which is approved
by Landlord, Tenant shall pay to Landlord on a monthly basis as
Additional Rent fifty percent (50%) of all Net Profits (as hereinafter defined)
received by Tenant
from such transaction.  For purposes
hereof, the term “Net Profits” means the aggregate amounts of all fixed minimum
rent and
pass-through charges in the case of a subletting, and the purchase price expressly paid, if any, for
Tenant’s interest in this Lease in the case of an assignment (provided that no portion of any purchase price
for acquisition of Tenant’s business or substantially all the assets of Tenant
shall be taken into consideration for purposes of this Section 23, and any
purchase price expressly paid for Tenant’s interest in this Lease in connection
with an assignment of Tenant’s interest in this Lease shall exclude any
reasonable portion thereof attributable to the acquisition of furniture, leasehold improvements and/or other property
of Tenant) paid by any subtenant or assignee in connection with such
transaction), less
all “Transaction Costs”, as hereinafter defined.  For purposes hereof, “Transaction Costs” means (a) the amounts paid to
Landlord by Tenant with respect to the subject portion of the Premises during
the period of the assignment or sublease term; (b) improvement allowances or other economic
concessions granted by Tenant to the assignee or sublessee; (c) all amounts
paid by Tenant to buy-out or take over the previous lease of the assignee or
sublessee; (d) all amounts paid by Tenant to advertise the subject portion of
the Premises for assignment or sublease; (e) brokerage commissions paid by
Tenant in connection with the assignment of sublease; (f) legal
fees paid by Tenant in
connection with the assignment or sublease; and (g) all other costs and amounts incurred
by Tenant in connection with the
assignment or sublease.


 


(2)                                  Tenant shall be responsible for all reasonable costs and expenses,
including reasonable attorneys’ fees, incurred by Landlord in connection with
any proposed assignment or sublease for which Landlord’s consent is required
under this Section 23.


 


(3)                                  The consent by Landlord to any assignment or subletting shall neither be
construed as a waiver or release of Tenant from any covenant or obligation of
Tenant under this Lease, nor as relieving Tenant from giving Landlord the
aforesaid fifteen (15) days notice of, or from obtaining the consent of
Landlord to, any further assignment or subletting which requires Landlord’s
consent under this Section 23.  The collection or acceptance of
Rent from any such assignee or subtenant shall not constitute a waiver or
release of Tenant from any covenant or obligation of Tenant under this Lease,
except as expressly agreed by Landlord in writing.


 


E.                                      Conditions of Assignment
or Sublease: All
restrictions and obligations imposed pursuant to this Lease on Tenant shall, to the extent accruing from and
after the effective date of the subject assignment, be deemed to
extend to any assignee and Tenant shall cause such person to comply with such
restrictions and obligations,
except to the extent Tenant is relieved from liability for obligations under
this Lease pursuant to this Section 23.  Any assignee shall be deemed to have assumed all the obligations of Tenant under this
Lease to the extent accruing
from and after the effective date of the subject assignment,  and at Landlord’s request shall execute
promptly a document confirming such assumption.  In the event an
assignee of Tenant’s interest in this Lease shall have a net worth which is
equal to or exceeds the net worth of Tenant existing as of the date of this
Lease, as reflected in financial statements of such assignee prepared by an
independent certified public accountant in accordance with


 


55

















 


generally accepted accounting principles and delivered to Landlord,
then Tenant shall be relieved from all liability under this Lease to the extent
the assignee assumes liability for the same in writing delivered to
Landlord.  Each sublease is subject to the condition
that if the Term is terminated or Landlord succeeds to Tenant’s interest in the
Premises by voluntary surrender or otherwise, at Landlord’s sole option exercised by the delivery of notice
by Landlord to the subject subtenant within ten (10) business days after the
Term is terminated, the subtenant shall be bound to Landlord for
the balance of the term of such sublease and shall attorn to and recognize
Landlord as its landlord under the then executory terms of such sublease.


 


F.                                      Permitted Transfer: 
Notwithstanding anything contained in this Section 23 to the contrary,
Tenant may, without Landlord’s prior consent, assign or transfer its entire
interest in this Lease or sublease all or any portion of the Premises:  (a) to an entity (herein sometimes referred to as a
“successor entity”)
into or with which Tenant shall be merged or consolidated, or to which
substantially all of the assets of Tenant may be transferred, provided that
such successor entity
shall have a net worth immediately following the merger or consolidation which
is at least equal to the net worth of Tenant as of the date of this Lease and provided that the successor
corporation shall assume in writing all obligations and liabilities of Tenant
under this Lease or shall
assume the same by operation of law, to the extent accruing from and after the
effective date of the subject transaction; or (b) to an entity (herein
sometimes referred to as a “related entity”) which shall control, be controlled by or be
under common control with Tenant.  In
the event of any such assignment, transfer or subletting described in (b) above,
Tenant shall remain fully liable for the payment of all rent and other charges
required hereunder and for the performance of all obligations to be performed
by Tenant hereunder; provided,
however, in the event of an assignment or transfer described in (b) above to an
entity which has a net worth equal to or in excess of the net worth of Tenant
existing as of the date of this Lease, as reflected in the financial statements
for the assignee or transferee prepared by an independent certified public
accountant in accordance with generally accepted accounting practices and
delivered to Landlord, then Tenant shall be released from all liability under
this Lease to the extent such assignee or transferee assumes in writing all
obligations of Tenant under this Lease.  For purposes of clause (b) above, “control” shall be deemed to be
ownership, direct
or indirect, of the power to
direct or cause the direction of the management and policies of a person or
entity, whether through the ownership of voting securities, by contract or otherwise
to the extent
not restricted by applicable law. 
Tenant shall deliver to Landlord notice of its assignment or
sublease described in this Section 23.F within two (2) business
days after the same becomes effective, together with sufficient information regarding the
transaction as is reasonably necessary to confirm that the transaction meets
the qualifications set forth in this Section 23.F. 
Notwithstanding anything to the contrary set forth in this Lease, (i)
Tenant may permit any personnel of any “related entity” or any business partner
or client of Tenant to occupy space in the Premises without the receipt of
Landlord’s consent.


 


24.                               TRANSFER
BY LANDLORD. 


 


Landlord (and any successor or affiliate of Landlord) may freely sell,
assign or transfer all its interest in this Lease, the Building and the Land and, in
the event of any such sale, or transfer to a party that expressly and unconditionally assumes in
writing, delivered to Tenant and executed for the benefit of Tenant,  all obligations of Landlord under this
Lease accruing from and after the date of the sale, assignment or transfer,
Landlord shall be relieved of any and all obligations under this Lease to the extent accruing from
and after the date of the sale, assignment or transfer. As to any claim Tenant may have
against Landlord arising from any matter accruing prior to the transfer of its
interest in the Building and


 


56

















 


the Land, subject to the terms of Section 15 above and subject to the
rights of any First Mortgagee as set forth in Section 22 hereof, Tenant shall
have the right to attach the proceeds to which Landlord is entitled from the
transfer of the same, Landlord’s interest in all other proceeds of the Building
and the Land, and subject to the rights of any First Mortgagee as set forth in
Section 22 hereof, and all proceeds payable to Landlord under insurance
policies.  Provided the above-referenced
assumption agreement between Landlord and the assignee is delivered to Tenant
within two (2) business days after the date of the subject sale, assignment or
transfer, then from and after the
date of such sale, assignment
or transfer, Tenant shall be bound to such purchaser, assignee or
other transferee, as the case may be, as though the latter had been the
original Landlord hereunder.


 


25.                               INABILITY
TO PERFORM. 


 


This Lease and the
obligation of Landlord and
Tenant hereunder shall in no way be affected, impaired or excused,
nor shall either party
have any claim against the
other party for damages, because the other party, due to Unavoidable Delays, is unable
to fulfill any of its obligations under this Lease, including, but not limited
to, any obligations to provide any services, repairs, replacements, alterations
or decorations or to supply any improvements, equipment or fixtures; provided,
however, that the foregoing shall not apply to (i) Tenant’s termination right due to Landlord’s
failure to timely restore the Premises following any casualty or (ii) to any termination rights
Tenant has under
Sections 2, 12, 16 or 18
above; provided, however, in no event shall financial incapability excuse the
performance of either party.


 


26.                               ESTOPPEL
CERTIFICATES. 


 


Each of
Landlord and Tenant shall, without charge, within twenty (20) days after receipt of any request therefor, execute and
deliver to the other
a certificate stating, to the extent of the providing party’s actual knowledge:  (i) whether this Lease is unmodified
and in full force and effect against
it (or if there have been modifications, that this Lease is in
full force and effect and setting forth all such modifications);
(ii) whether there then exist any defenses against the enforcement of any
right of to the other
hereunder (and, if so, specifying the same in detail); (iii) the dates to
which rent and any other charges hereunder have been paid by Tenant;
(iv) that it
has no knowledge of any then uncured defaults under this Lease (or, if it has knowledge of
any such defaults, specifying the same in detail); (v) that it has no
knowledge of any event that will or may result in the termination of this Lease
(or if it has such knowledge, specifying the same in detail); (vi) the address
to which notices to it
are to be sent; and (vii) such other   factual information concerning this Lease as may be reasonably
requested.  It is understood that any
such certificate may be relied upon by the requesting party, any actual or prospective lenders
(including a Mortgagee), any actual or prospective Ground Lessor, any actual or
prospective purchaser of the Land and/or the Building, any actual prospective purchaser of any interest in Landlord or
Tenant, any actual or prospective assignee of an interest in this Lease, and
any actual prospective subtenant or licensee of all or a portion of the
Premises.  Attached hereto
as Exhibit G is a copy of the estoppel certificate which is acceptable
to the current holder of the Mortgage encumbering the Building. 
No party may request an estoppel certificate from the other more than
one time in any calendar year, except in connection with a sale or financing,
in which case no party may request estoppel certificates from the other more
than three (3) times in any calendar year.


 


57

















 


27.                               COVENANT
OF QUIET ENJOYMENT. 


 


Landlord covenants,
represents and warrants that it has the right to make this Lease
and that Tenant shall have the right, during the Term and subject to the
provisions of this Lease
(including Section 19 above), to quietly occupy and enjoy the
Premises without hindrance by Landlord or anyone claiming by or through Landlord or any of their
successors and assigns.


 


28.                               WAIVER
OF JURY TRIAL. 


 


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


 


29.                               BROKERS.



 


Landlord
and Tenant each represents and warrants to the other that, except as hereinafter
set forth, neither of them has employed any broker in procuring or carrying on
any negotiations relating to this Lease. 
Landlord and Tenant shall indemnify and hold each other harmless from
any loss, claim or damage relating to the breach of the foregoing
representation and warranty by
it.  Landlord recognizes
only the Broker(s) (as set forth in Section 1.K. hereof) as broker(s) with
respect to this Lease and agrees to be responsible for the payment of any
leasing commissions owed to said broker(s).


 


30.                               CERTAIN
RIGHTS RESERVED BY LANDLORD. 


 


Landlord shall have the following rights, exercisable without notice
except as otherwise set forth herein:


 


A.                                   To change the street address for the
Building; provided, however, that unless such change was governmentally
mandated, Landlord shall reimburse Tenant for all reasonable costs incurred by
Tenant for printing, mailing and other reasonable matters directly related to
such change and Landlord shall provide Tenant with at least one hundred twenty
(120) days prior notice of such change in the Building’s street address.


 


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


 


C.                                     To grant to a tenant of the Building the exclusive right to conduct its
business in the Building, so long as the same is consistent with the character
of the Building, provided the Tenant is not thereby excluded from the uses
expressly permitted herein; provided, however, that in no event shall Landlord
grant such exclusive right to conduct business in the Building with respect to
office space in the Building to more than four (4) tenants.  Landlord hereby represents and warrants to
Tenant that, as of the date of this Lease, there is no other tenant that has
been granted an exclusive right to conduct its business with respect to office
space in the Building, but (a) certain exclusive rights to conduct a particular
use in the retail space of the Building are in the process of being granted,
and may in the future


 


58

















 


be granted, to retail tenants of the Building, and (b) the leasing of
space in the Building to GSA tenants has been and will be prohibited in each
lease for space in the Building.


 


D.                                    Subject to the terms of Section 11(a) and upon reasonable prior notice
to Tenant, to alter, relocate, reconfigure and reduce the Common Areas in the
Building in a non-material manner, so long as access to the Premises is not
modified or inhibited (other than to a non-material extent) and there is no
diminution of type and quality of amenities initially provided, except on a
temporary basis and then only to a non-material extent.


 


E.                                      Subject to the terms of Section 11(a) and upon reasonable prior notice
to Tenant, to construct improvements on the Land and in the Common Areas
outside the Building in a non-material manner, so long as access to the
Premises is not modified or inhibited (other than to a non-material extent) and
there is no diminution of type and quality of amenities initially provided,
except on a temporary basis and then only to a non-material extent.


 


F.                                      To prohibit smoking in the entire Building (including the Premises), so
long as such prohibitions are in accordance with applicable Laws.


 


31.                               NOTICES.



 


No notice, request, approval, waiver or other communication which may
be or is required or permitted to be given under this Lease shall be effective
unless the same is in writing and hand-delivered, sent by registered or
certified mail, return receipt requested, first-class postage prepaid, or sent
with charges prepaid by a nationally recognized air courier service for overnight delivery,
addressed to Landlord at the Landlord Notice Address or to Tenant at the Tenant
Notice Address, as applicable,   or
at any other address of which either party shall notify the other in accordance
with this Section 31.  Such
communications, if sent by registered or certified mail, shall be deemed to
have been given three (3) business days after the date of mailing, or if sent
by a nationally recognized air courier service for overnight delivery, shall be deemed to have been
given one (1) business day after the date of deposit of the notice with such
service for overnight delivery,
and otherwise, notices shall be effective upon receipt.  If a Mortgagee which holds a first priority
Mortgage on the Land and/or the Building for which a subordination, attornment
and non-disturbance agreement has been fully executed and delivered to Tenant,
shall request that Tenant deliver to it notices delivered by Tenant to Landlord
which identify (i) a default by Landlord under this Lease for which Tenant may
exercise a right to terminate this Lease if such default is not cured as
provided in this Lease, or (ii) the election of Tenant to exercise its
“off-set” rights under Section 20 below, then Tenant shall simultaneously
deliver a copy of each such notice to such Mortgagee at its address in the
continental United States identified in such Mortgagee’s request delivered to
Tenant.


 


32.                               MISCELLANEOUS
PROVISIONS. 


 


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


 


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


 


59

















 


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


 


D.                                    Delegation by Landlord: 
Wherever Landlord has the authority to take any action under this Lease,
Landlord shall have the right to delegate such authority to others by the delivery of notice to
Tenant. Tenant may rely on such notices until its receipt of notice from
Landlord of its revocation of such delegation of authority to the subject
individual identified in Landlord’s prior notice to Tenant, and
Landlord shall be responsible for the authorized actions of such agents,
employees and others, to the same extent as if Landlord had taken such action
itself.


 


E.                                      [Intentionally Omitted.]


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


M.                                  No Waiver.  No failure or delay by Landlord or Tenant in enforcing its right
to strict performance by
the other of every provision of this
Lease or in exercising any right or remedy hereunder, and no


 


60

















 


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


 


N.                                    Construction of Lease: 
There shall be no presumption that this Lease be construed more strictly
against the party who itself or though its agent prepared it.  Landlord and Tenant hereby agree that all
parties hereto have participated in the preparation of this Lease and that each
party had the opportunity to consult legal counsel before the execution of this
Lease.


 


O.                                    Annual Financial Statements:  At any time
that Tenant is neither (i) a company, the stock or other ownership interests in
which are publicly traded on a national stock exchange, nor (ii) a company that
has its financial statements consolidated with the financial statements of a
company, the stock or other ownership interests in which are publicly traded on
a national stock exchange, Tenant shall, within thirty (30) business days
following Landlord’s request therefor, submit to Landlord Tenant’s financial
statement covering the preceding calendar year, certified by Tenant’s President
or Chief Financial Officer (or, at Tenant’s option, an independent certified
public accountant) as being true and correct in all material respects, which
financial statement shall be prepared in accordance with generally accepted
accounting principles by an independent certified public accountant; provided,
however, that (a) Landlord shall not request such financial statement from
Tenant more than once in any calendar year; and (b) Landlord shall preserve the
confidentiality of the information contained in such financial statement,
except that Landlord shall be permitted to provide copies of such financial
statement to (i) employees of Landlord and Landlord’s asset manager, property
manager, accountants and attorneys who provide services to Landlord and have a
reasonable need to have access to such information, (ii) prospective purchasers
of the Land, the Building or both, and (iii) prospective lenders to Landlord,
all of whom shall be advised by Landlord of the provisions of this Section
32.O., but Landlord’s indemnification obligations set forth in the following
sentence of this Section O. shall not be diminished by Tenant’s permission for
Landlord to make copies of Tenant’s financial statement available to any such
persons.  Landlord shall indemnify,
protect, defend, and hold harmless Tenant from and against any and all damages,
losses, claims, liabilities and costs suffered or incurred by Tenant in
connection with the failure to maintain the confidentiality of the information
contained in such financial statements by any individual or entity to which
Landlord shall have provided such information. 
If Tenant is a company that has its financial statements consolidated
with the financial statements of a company, the stock or other ownership
interests in which are publicly traded on a national stock exchange, then
Tenant shall, within thirty (30) days following Landlord’s request therefor,
meet with Landlord to reasonably address Tenant’s financials in the context of
the financial statements of the company with which Tenant’s financials are
consolidated.


 


P.                                      Effect of Deletion of
Language:  The deletion of any printed, typed or other
portion of this Lease shall not evidence the parties’ intention to contradict
such deleted portion.  Such deleted
portion shall be deemed not to have been inserted in this Lease.


 


Q.                                    Authority:  Tenant represents and warrants to Landlord that as of the date of final execution of this Lease,
the person that
executed this Lease on its behalf is duly authorized to so act;
that


 


61

















 


Tenant is duly organized, is qualified to do
business in the jurisdiction in which the Building is located, is in good
standing under the Laws of the state of its organization and the Laws of the
jurisdiction in which the Building is located, and has the power and authority
to enter into this Lease; and that all action required to authorize Tenant and
such person to enter into this Lease has been duly taken.


 


R.                                     Appointment of Resident
Agent:  For purposes of §55-218.1 of the Code of
Virginia, Landlord appoints as its resident agent Corporate Services Company.


 


S.                                      Deed of Lease:  This Lease, for purposes of applicable law, shall be deemed a deed of
lease executed under seal.


 


T.                                     Qualified Leases:  Landlord intends that all payments made to Landlord under
this Lease will qualify as rents from real property for purposes of Section
512(b)(3) of the Internal Revenue Code of 1986, as amended (“Qualified
Rents”).  If Landlord, in its reasonable discretion,
advises Tenant that there is any material risk that all or a material part of any
payments made to Landlord under
this Lease will not qualify as Qualified Rents, Tenant agrees (i) to cooperate
with Landlord to
restructure this Lease in such manner as may be necessary to enable such
payments to be treated as Qualified Rents, provided such restructuring or
assignment will not have an
economic impact on Tenant or
any of its rights or obligations under this Lease. 
Landlord agrees to promptly reimburse Tenant for all reasonable costs
incurred by Tenant in connection with Tenant’s cooperation pursuant to the
foregoing.


 


U.                                    Professional
Fees.  In the event that either party brings any arbitration or
other legal proceeding against the other: 
(i) for the recovery of any sum due under this Lease;
(ii) because of the breach of any provisions of this Lease; (iii) for any other
relief against the other party under this Lease; or (iv) with respect to
any other matters arising from or related to this Lease, then all reasonable costs and expenses, including, without
limitation, reasonable professional fees such as appraisers’, accountants’, and
attorneys’ fees, incurred by the prevailing party therein shall be paid by the other party. 
The provisions of this Section shall survive the expiration of the Term
of this Lease or earlier termination of this Lease.


 


V.                                     When
Payment is Due.  Whenever a payment is required to be made by one party to
the other under this Lease, but a specific date for payment or a specific
number of days within which payment is to be made is not set forth in this
Lease, or the words “immediately,” “promptly” and/or “on demand,” or their
equivalent, are used to specify when such payment is due, then such payment
shall be due thirty (30) days after the party which is obligated to make
such payment receives notice from the other party demanding such payment.


 


W.                                Survival: 
Subject to the terms of Section 15, 23 and 24 above, the effective
expiration of the Term or earlier termination of this Lease shall not discharge
Landlord or Tenant liability for their respective obligations and liabilities
that accrue to the day which expiration or earlier termination.  Further, any obligation of Landlord or Tenant
which by its nature or under the circumstances, be, or by the provisions of
this Lease may be performed after the expiration of the term or earlier
termination of this Lease, and in liability of for a payment which shall have
accrued with respect to any period ending at a time prior to such expiration or
earlier termination, shall survive the expiration of the Term or earlier
termination of this Lease.


 


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33.                               [Intentionally Omitted] 


 


34.                               PARKING. 


 


A.                                   Use of Parking.


 


(1)                                  During the Term, Tenant shall have the right
to use the Parking Permits (as defined in Section 1.Q hereinabove) for the
parking of passenger automobiles in the parking garage (the “Garage”) in the Building to be constructed by
Landlord in accordance with
the Base Building Plans (as
defined in Exhibit C attached to this Lease and made a part hereof),
which Parking Permits shall be on a non-exclusive, first-come, first-served
basis for the unreserved parking of passenger automobiles in the Garage. 
Notwithstanding anything to the contrary set forth in this Lease, in no
event shall Landlord grant rights for, or otherwise permit, the parking of such
number of vehicles in the Garage such that all Parking Permits purchased by
Tenant may not be used to passenger automobiles in the Garage at any time
during any day, and Landlord shall not “over-sell” parking privileges in the
Garage such that the holder of any Parking Permit purchased pursuant to this
Section 34 may not drive his/her vehicle out of the Garage within a reasonable
time after entering such vehicle.  The
Garage shall be operated with personnel comparable in number to that which
staff parking garages in Comparable Buildings and with sufficient personnel in
order that anyone who parks a vehicle in the Garage may exit the Garage within
a reasonable time after entering his/her vehicle.  Except as specifically set forth in Section
34.B. hereof, the charge for all such Parking Permits for Tenant’s use pursuant
to the provisions of this Lease for both
reserved parking spaces and unreserved parking spaces, as applicable, shall be
the prevailing market rate charged  in Comparable Buildings for the respective type of parking space.  Landlord shall have the right to valet park vehicles in the
Garage; provided, however, the vehicles of personnel who work in the Premises,
hold monthly parking spaces and are identified by Tenant to Landlord in writing
shall not be valet parked if they are identified as such by a means which
Landlord shall establish prior to the Lease Commencement Date.  Landlord shall have no right to valet park
the vehicles of personnel working in the Premises without the prior consent of
Tenant, which consent may be withheld in Tenant’s sole and absolute
discretion.  Tenant and its employees
shall observe reasonable precautions in the use of the Garage and shall at all
times abide by all reasonable rules and regulations governing the use of the Garage
promulgated by   Landlord or the operator of the Garage (the “Garage Operator”), which rules and regulations
shall be consistent with rules and regulations that are adopted by landlords
and parking garage operators for parking garages in Comparable Buildings.  The Garage will remain open on Monday
through Friday (excluding Holidays) and during the Building Hours.  At all times when the Garage is closed,
monthly permit holders shall be afforded access to the Garage by means of a
magnetic card, which shall not be the same access key card given to such permit
holder for access to the Building. 
Landlord does not assume any responsibility for any damage or loss to
any automobile or personal property in or about the Garage, except to the
extent otherwise provided under Section 14.C above.  In the event that Tenant purchases less than the number of Parking Permits set
forth above, at any time, then Tenant shall thereafter have the right to
purchase such Parking Permits or any portion thereof, upon at least sixty (60)
days prior notice to Landlord.  At any time during the Term, Tenant may
decrease the number of Parking Permits purchased by it.  Tenant shall have the right to access such
Garage at all times by
means of an electronic access gate operated by electronic access cards, which Landlord shall activate to permit access to
the Garage for each Parking Permit purchased by Tenant.  Landlord reserves the right to reasonably modify the
manner in which the Garage is accessed during the Term.


 


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(2)                                  Landlord shall maintain a specific section within the Garage located
near elevator banks on the main floor of the Garage for visitor parking to
serve tenants of the Building.  Subject
to the terms of this Section, Tenant’s customers and visitors shall have the
right to use available spaces in the Garage for the purpose of parking their
vehicles therein while visiting the Premises. 
Tenant’s customers and visitors shall pay the then current hourly
parking fees established by Landlord and/or the Garage Operator, for the
privilege of using the Garage, which hourly parking fees shall not exceed the
prevailing market rate for hourly parking in Comparable Buildings; provided,
however, that if Tenant elects to establish a parking validation program and if
Tenant’s clients and visitors follow reasonable and customary procedures
established therefor by Landlord and/or the Garage Operator, which shall
include obtaining a validation stamp from Tenant on such customer’s parking
ticket, which procedures may be subject to change from time to time, then (i)
Tenant’s customers and visitors will receive a discount of the then current
hourly parking fees payable by visitors to the Building in such amount as is
agreed to by Tenant and Landlord (or Landlord’s garage operator), which
discount shall be no less than such discounts generally provided to
significant-sized tenants by landlords for visitor parking in Comparable
Buildings.


 


(3)                                  Landlord’s granting of parking rights
hereunder does not create a bailment between the parties, it being expressly
agreed that the only relationship created between Landlord and Tenant hereby is
that of right grantor and right grantee. 
All motor vehicles which are the subject of Parking Permits issued by Landlord
pursuant to this Lease (including all contents thereof) shall be in the Garage
at the sole risk of their owners, except to the extent otherwise provided in
Section 14.C above, and Landlord is not responsible for the protection and
security of such vehicles.


 


(4)                                  Subject to the terms of Section 13, in its use of the Garage, Tenant will follow
all reasonable rules
and regulations
enacted by Landlord, provided
Landlord delivers to Tenant at least thirty (30) days prior notice,
and which are
generally applicable to all vehicle parkers with respect to the Garage.


 


B.                                     Rates.  Subject to the terms of this Section
34 and Section 13 above, Landlord reserves the right for itself
or the Garage Operator to establish rates and fees for the use of the Garage
and to establish and modify or amend, on a reasonable basis, rules and regulations
governing the use of such parking areas. 
The charge for such Parking Permits shall not exceed the
following rates: (i) during
the first year of the Term,
the monthly charge for non-reserved Parking Permits shall be Eighty-Five
Dollars ($85.00),
(ii) during the second year of
the Term, the monthly charge for non-reserved Parking Permits shall be
Eighty-Seven and 55/100 Dollars ($87.55), (iii) during the third year of the
Term, the monthly charge for non-reserved Parking Permits shall be Ninety and
18/100 Dollars ($90.18), (iv) in no event shall the monthly charge for
non-reserved Parking Permits during the period beginning on the first day of
the fourth year of the Term and ending on the last day of the tenth year of the
Term, exceed One Hundred and Fifty Dollars ($150.00), and (v) after the last day of the third year of the Term, the
monthly charge for Parking Permits shall not be more than the lower of (A) the
prevailing rate charged for parking spaces in Comparable Buildings or (B) the
monthly charge imposed on any other tenant in the Building for Parking
Permits.  Landlord shall make available
to Tenant five (5) parking spaces on a reserved basis, and the monthly charge for such
reserved spaces shall not exceed two hundred percent (200%) of the monthly charge payable
by Tenant for Parking Permits
during the corresponding
period.  Landlord shall
have the right to revoke a user’s parking privileges in the event such user on three (3) occasions fails
after notice of such failure to
abide by the reasonable
rules and regulations governing the use of such parking areas. Tenant shall be
prohibited from using the Garage for purposes other than for parking registered
vehicles.  The storage or repair of
vehicles in the Garage shall be prohibited.


 


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C.                                     No Transfers. 
Tenant shall not assign, sublet or transfer any of its right to use
Parking Permits without Landlord’s prior consent except in connection with any
subletting or assignment permitted pursuant to the provisions of Section 23
hereof.  Any other attempted assignment,
sublet, or transfer shall be void.


 


35.                               STORAGE SPACE.


 


Landlord
agrees to make available to Tenant storage space in the Building containing
approximately one thousand (1,000) usable square feet.  Such storage space shall be made available
by Landlord to Tenant on the Lease Commencement Date and no rent shall be
payable by Tenant to Landlord for the same for the period beginning on the date
the same is delivered by Landlord to Tenant through the Rent Commencement
Date.  The annual gross rent for the
storage space leased by Tenant shall be Fifteen Dollars ($15.00) per usable
square foot in such space for the one-year period beginning on the Rent
Commencement Date.  Such monthly gross
rent for storage space leased by Tenant shall be increased by three percent
(3%) on each anniversary of the Rent Commencement Date.  Tenant shall not be required to pay any
portion of Operating Expenses or Real Estate Tax Expenses attributable to the
storage space leased by it.  In no event
shall Tenant’s Share be increased as a result of Tenant’s lease of storage
space in the Building.  Landlord shall
notify Tenant of the availability of storage space in the Building as and when
it becomes available.  All storage space
leased by Tenant shall be built out by Landlord, at Landlord’s cost, to contain
only the following: the storage space shall consist of cinder block walls, if
located in the Garage, and the storage space shall have a steel, locked door
and shall contain reasonable lighting, a reasonable number of electrical
outlets and an exhaust fan for ventilation. 
Tenant shall have the right at any time to cancel its lease of all or
any portion of storage space leased by it on not less than thirty
(30) days prior notice to Landlord.


 


36.                               HAZARDOUS
MATERIALS.  


 


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


 


B.                                     General Prohibition.  Tenant shall not cause or permit any Hazardous Material to be generated,
produced, brought upon, used, stored, treated, discharged, released, spilled or
disposed of on, in under or about the Premises, the Building, or the Land
(hereinafter referred to collectively as the “Property”) by Tenant or Tenant’s
Invitees other than (i) reasonable
quantities of customary office products, and (ii) reasonable quantities of fuel, lubricant and other
materials customarily used in connection with the maintenance and operation of
the equipment permitted to be installed by Tenant, which equipment shall include without
limitation, the Generator Equipment (as defined in Section 9.E above) and
supplemental HVAC equipment; provided that the same are stored,
used and disposed of in accordance with all applicable laws and governmental
regulations.  Notwithstanding anything to the
contrary set forth in this Lease, Tenant shall have the right to contest any
claims or notices regarding the


 


65

















 


introduction of Hazardous Materials by Tenant or Tenant’s Invitees to
the Property in violation of the terms of this Lease.   Tenant shall indemnify, defend and hold Landlord, Landlord’s
managing agent and all Mortgagees harmless from and against any and all actions
(including, without limitation, remedial or enforcement actions of any kind,
administrative or judicial proceedings, and orders or judgments arising out of
or resulting therefrom), costs, claims, damages (including without limitation,
attorneys’, consultants’, and experts’ fees, court costs and amount paid in
settlement of any claims or actions), fines, forfeitures or other civil,
administrative or criminal penalties, injunctive or other relief (whether or
not based upon personal injury, property damage, or contamination of, or
adverse effects upon, the environment, water tables or natural resources), liabilities
or losses arising from a breach of this prohibition by Tenant or Tenant’s
Invitees.


 


C.                                     Notice.  In
the event that Hazardous Materials are discovered upon, in, or under the
Property, and any governmental agency or entity having jurisdiction over the
Property requires the removal of such Hazardous Materials, Tenant shall be
responsible for removing such
Hazardous Materials introduced
by Tenant or Tenant’s Invitees. 
Notwithstanding the foregoing, Tenant shall not take any remedial action
in or about the Property or any portion thereof without first notifying
Landlord of Tenant’s intention to do so and affording Landlord the opportunity
to protect Landlord’s interest with respect thereto.  Tenant promptly
shall notify Landlord in writing of any of the following after obtaining actual
knowledge thereof: (i) any spill, release, discharge or disposal of any
Hazardous Material in, on or under the Property or any portion thereof caused by Tenant or Tenant’s
Invitees; (ii) any enforcement, cleanup, removal or other
governmental or regulatory action instituted or threatened (if Tenant has
notice thereof) pursuant to any laws respecting Hazardous Materials against Tenant with respect to
Hazardous Materials introduced to the Property in violation of the terms of
this Lease by Tenant or Tenant’s Invitees; (iii) any claim
made by any person against Tenant or the Property or any portion thereof
relating to damage, contribution, cost recovery, compensation, loss or injury
resulting from or claimed to result from any Hazardous Materials introduced to the Property in
violation of the
terms of this Lease by Tenant or Tenant’s  Invitees; and (iv) any reports made to any
governmental agency or entity arising out of or in connection with any
Hazardous Materials in, on under or about or removed from the Property or any
portion thereof, including any complaints, notices, warnings, reports or
asserted violations in connection therewith, which Hazardous Materials were introduced to the Property in violation of
the terms of this Lease by Tenant or Tenant’s  Invitees.  Tenant also shall supply to Landlord within
five (5) business days after Tenant first receives the same, copies of all
claims, reports, complaints, notices, warnings or asserted violations relating
in any way to the introduction
of Hazardous Materials to the Property in violation of the terms of this
Lease by Tenant or Tenant’s Invitees.


 


D.                                    Landlord’s
Obligations:  In the event that Hazardous
Materials are discovered upon, in, or under the Property, and any governmental
agency or entity having jurisdiction over the Property requires the removal of
such Hazardous Materials, then, subject to Tenant’s obligations under
Subsection 36.C above, Landlord shall be responsible for removing such
Hazardous Materials.  Landlord shall
promptly notify Tenant in writing of any of the following after obtaining
actual knowledge thereof:  (i) any
spill, release, discharge or disposal of any Hazardous Materials in, on or
under the Property or Complex or any portion thereof; (ii) any enforcement,
cleanup, removal or other governmental or regulatory action instituted pursuant
to any laws respecting Hazardous Materials on the Property or Complex; (iii)
any claim made by any person against Landlord or the Property or the Complex or
any portion thereof relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from or claimed to result from any
Hazardous Materials; (iv) any reports made to any governmental agency or entity
arising out of or in connection with any Hazardous Materials in, on, under or
about, or removed from the Property, the Complex or any portion thereof,
including any complaints, notices, warnings, reports or asserted


 


66

















 


violations in connection therewith.  Landlord shall also supply to Tenant, within
five (5) business days after Landlord first receives same, copies of all
claims, reports, complaints, notices, warnings or asserted violations relating
in any way to existence of Hazardous Materials on the Property, the Complex or
a portion thereof.


 


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


 


37.                               STANDARD FOR CONDUCT AND CONSENT.


 


Regardless
of any reference to the words “sole” or “absolute” in this Lease (except for
(i) Alterations to the exterior of the Building, (ii) Alterations to the
structure of the Building, except for Tenant’s reinforcement of floors or the
roof of the Building in connection with the systems installed in the Premises
or to serve the Premises), and (iii) Alterations that will have a material
adverse effect on the Building systems, whereupon each such case Landlord’s
duty is to act in good faith and in compliance with this Lease), any time the
consent of Landlord or Tenant is required, such consent shall not be
unreasonably withheld, conditioned or delayed. 
Unless another time frame is expressly provided in this Lease, then within
ten (10) days after the requesting party’s receipt of the other party’s request
for consent to any matter relative to this Lease and/or Tenant’s use or
occupancy of the Premises, the non-requesting party shall deliver to the
requesting party notice of the non-requesting party’s approval or disapproval
of the same.  Any notice of disapproval
shall set forth with reasonable particularity the reasons for the
non-requesting party’s disapproval of the subject matter.  Except as specified in any notice of
disapproval timely and properly delivered by the non-requesting party in
accordance with the foregoing, the subject matter shall be deemed approved by
the non-requesting party.  The
non-requesting party’s failure to reply to the requesting party’s request for
approval of the subject matter within the above-referenced ten (10) day period
shall be deemed the non-requesting party’s approval thereof.  Whenever this Lease grants Landlord or
Tenant the right to take action, exercise discretion, establish rules and
regulations or make allocations or other determinations, Landlord and Tenant
shall act reasonably and in good faith.


 


38.                               RECORDATION.



 


Tenant reserves the
right to record a
memorandum of this Lease
in any public records without the prior approval of Landlord, except as to the
content of such memorandum, as to which such approval shall not be unreasonably
withheld, conditioned or delayed.  In
the event that Tenant records
a memorandum hereof, Tenant shall pay all recordation fees, taxes and charges
in connection with such recordation.


 


39.                               SIGNS.



 


A.                                   Building Signage: 
Landlord will, at Landlord’s cost, (i) install and maintain in the main lobby of the Building,
directory signs, consistent with the first class character of the Building and
shall provide Tenant with Tenant’s Share of lines on such directory, (ii) list
Tenant’s name and the names of Tenant’s subtenants and their respective employees designated by Tenant,
on the lines specified in the immediately preceding clause (i), and (iii) provide
Building standard signage on the suite entry doors of the Premises.  All signs permitted to be installed by
Tenant shall be designed and installed in accordance with all applicable Laws
and shall not be subject to the prior approval of Landlord, except with respect
to matters which affect reinforcement of the structure of the Building, and
Landlord’s approval of such


 


67

















 


structural reinforcement shall not be
unreasonably withheld, conditioned or delayed.  Except as otherwise provided in this
Section 39, no other sign, advertisement or notice shall be
inscribed, painted, affixed or otherwise displayed on any part of the exterior
of the Premises or the Building
or on exterior windows and exterior doors (and on any of the doors and windows
of the Premises which abut any of the Common Areas in the case of
multi-tenanted floors on which Tenant leases any portion of the Premises),
without the prior approval of Landlord, which may be granted or withheld in
Landlord’s sole and absolute discretion. 
If any such item that has not been approved by Landlord is so displayed,
then Landlord shall have the right to remove such item at Tenant’s expense or
to require Tenant to do the same. 
Landlord reserves the right to install and display signs, advertisements
and notices on any part of the exterior or interior of the Building; provided,
however, that (1) no
sign shall obstruct or block any windows or doors of the Premises, (2) no sign shall be placed on the
exterior of the Building, other than (i) on the parapet above first floor
retail space in the Building, (ii) above the window line of the highest floor
of the Building, with only one sign permitted on each side of the top floor of
the Building, (iii) a plaque installed at the main entrance of the Building to
identify Nixon & Vanderhye, P.C., and (iv) directional signage placed on
the exterior of the Building for ESI, Inc., and (3) no sign which is placed in
or on the exterior of the Building or any portion of the Complex shall identify
any
Specialized Human Resources Consulting Firm (as defined in Section 48 below).


 


B.                                     Approved Exterior Signage
and Approved Lobby Sign:  Notwithstanding the foregoing, Tenant shall
have (i) the exclusive right
to place signage on the exterior of the Building above the window line of the top
floor of the Building, (ii) the right to install one sign on the West side
of the Building  above the window line of the top floor of
the Building, in the location shown on Exhibit J-1 attached hereto and made a part hereof, and to install one
sign on the North side of the
Building above the window line of the top floor of the Building, in the
location shown on Exhibit J-2 attached hereto and made a part hereof
(collectively, the “Approved Exterior Signage”), and (ii) the right to install
one sign in the main lobby of the Building in the location and of
a size shown on Exhibit J-3
attached hereto and made a part hereof (the “Approved Lobby Sign”). 
The Approved Exterior Signage shall contain Tenant’s name and/or
corporate logo.  The
Approved Lobby Sign shall contain
Tenant’s name and/or corporate
logo.  Tenant shall submit
to Landlord Tenant’s plans and specifications for the Approved Lobby Sign,
which plans and specifications (including, but not limited to, the materials,
design, color and method of fabrication thereof) shall be subject to Landlord’s
prior approval, which approval
which shall not be
unreasonably withheld,
conditioned or delayed. 
Landlord shall have no right to limit or approve the Approved Exterior
Signage except with respect to local requirements for structural reinforcement
of the Building to accommodate such signage and the design of the same, for
which Landlord’s approval shall not be unreasonably withheld, conditioned or
delayed.  Tenant shall be responsible
for the installation, maintenance, repair and replacement of such Approved
Exterior Signage and shall bear all costs thereof.  At all times during the Term that the Approved Exterior Signage
is displayed on the Building, Tenant shall ensure that the Approved Exterior
Signage complies with all applicable laws and governmental regulations and
shall maintain such Approved Exterior Signage in compliance with the
requirements of this Lease.


 


C.                 Landlord’s Removal of
Approved Lobby Signage:  Landlord shall have the right, at its sole
expense, to remove the Approved Lobby Signage at any time during which the
Premises contains less than fifty-seven thousand (57,000) rentable square feet,
provided that signage of comparable size is placed in the location in which the
Approved Lobby Signage is located pursuant to a right granted by Landlord in a
lease for space in the Building with a bona fide unaffiliated third party for
space greater in size than the then-current size of the Premises.


 


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D.                                    Landlord’s Required
Reduction of Approved Exterior Signage:


 


(a)                                  Landlord shall have the right, at its
expense, to remove the Approved Exterior Signage at any time during which the
Premises contains less than fifty-seven thousand (57,000) rentable square feet,
provided that, within two (2) years after such removal, signage is placed on
the exterior of the Building above the window line of the top floor of the
Building pursuant to a right granted by Landlord under a lease executed with a
bona fide unaffiliated third party for space in the Building, which space is
larger in size than the then-current Premises. 
In the event Landlord  removes
Approved Exterior Signage and the signage described above for an affiliated
third party is not placed on the exterior of the Building above the window line
of the top floor of the Building within two (2) years after the date of such
removal, then Landlord shall, within sixty (60) days after Tenant’s delivery of
notice to Landlord and at Landlord’s sole expense, reinstall Approved Exterior
Signage.


 


(b)                                 Landlord shall have the right, at its
expense, to reduce the size of the Approved Exterior Signage to Tenant’s
Allocation of Exterior Signage Area (as defined below), at any time during
which the Premises shall contain less than eighty seven thousand five hundred
(87,500) rentable square feet, provided that, within two (2) years after such
election by Landlord, signage is placed on the exterior of the Building above
the window line of the top floor of the Building, pursuant to a lease executed
by Landlord with a bona fide unaffiliated third party for space in the
Building, which space is larger in size than the then-current Premises.  In the event Landlord shall so elect,
Landlord shall be responsible, at its sole cost, to remove the Approved
Exterior Signage required to be removed in order that the remaining Approved
Exterior Signage is in conformance with the limitation to Tenant’s Allocation
of Exterior Signage Rights. 
Notwithstanding the foregoing, in the event Landlord elects to reduce
the size of the Approved Exterior Signage in accordance with the foregoing, and
the existing Approved Exterior Signage is comprised of more than one sign, then
Tenant shall designate those sign(s) comprising the Approved Exterior Signage
which shall remain on the exterior of the Building in conformance with the
foregoing.  Notwithstanding anything to
the contrary set forth in this Section 39; (x) if Landlord elects to reduce the
size of the Approved Exterior Signage in accordance with the foregoing, then,
Tenant shall have the right to install the Approved Exterior Signage removed by
Landlord with other Approved Exterior Signage in conformance with the terms of
this Section 39, including the limitations of the same to Tenant’s Allocation
of Exterior Signage Rights, and (y) if Landlord elects to reduce the size of
the Approved Exterior Signage in accordance with the foregoing, and signage of
the above-referenced unaffiliated third party is not placed on the exterior of
the Building above the window line of the top floor of the Building within two
(2) years after the date upon which the subject Approved Exterior Signage is
removed, then Landlord shall, within sixty (60) days after Tenant’s delivery of
notice to Landlord and at Landlord’s sole expense, reinstall all Approved
Exterior Signage.  The term “Tenant’s
Allocation of Exterior Signage Rights” as used herein shall mean the maximum
size of signs permitted to be installed on the exterior of the Building, multiplied
by a fraction, the numerator of which shall be the number of rentable square
feet in the Premises, and the denominator of which shall be the sum of the
number of rentable square feet in the Premises and the number of rentable
square feet in the space leased by the subject bona fide independent third
party pursuant to its lease with Landlord. 
Notwithstanding the foregoing, Tenant shall have the first choice of
that side of the Building on which it shall place the Approved Exterior Signage
it is permitted to place on the exterior of the Building.  In no event shall Landlord place or permit
more than one (1) sign above the window line of the top floor any side of the
Building.


 


69

















 


40.                               EXERCISE FACILITY.  


 


From and after the Lease Commencement Date, Landlord shall provide an
exercise center and a locker room facility, located in the Building (the
“Exercise Facility”),
which shall (a) contain an
aggregate of approximately one thousand three hundred (1,300) rentable square
feet, (b) be operated and maintained in a high quality condition and otherwise
in a manner consistent with the maintenance and operation of exercise
facilities in Comparable Buildings, and (c) shall be operated and
maintained  for the exclusive use
of office tenants of the Building, including Tenant and its employees;
provided, however, that (i) Landlord shall not be required to provide an
attendant for the Exercise Facility, (ii) Landlord assumes no liability for such use, and (iii) the
use of the Exercise Facility shall be limited to those parties who physically
occupy space in the Building and shall not be available for use by any person
who occupies so-called “virtual space,” i.e., utilizes a portion of the
services or facilities at the Premises without having a physical office therein
which is used on a regular basis (a “Virtual User”).  Admission to the Exercise Facility will be obtained through the
use of the Building security system.  Subject to the terms of Section 13
above, use of the Exercise Facility and the hours of operation
thereof will be subject to such reasonable rules and regulations that Landlord may
promulgate, and amend, from time to time, which rules and regulations shall be consistent with those for
exercise facilities operated in Comparable Buildings.  It is understood that no person shall be
entitled to use the Exercise Facility until such person has signed a waiver in reasonable form consistent with
terms generally adopted by landlords for exercise facilities operated in Comparable Buildings.  Landlord
shall not charge any fees for use of the Exercise Facility.  The Exercise Facility shall contain separate
men’s and women’s locker rooms, each containing no less than two (2) shower
stalls (as well as sinks and toilets), which will be kept operational, clean and
tidy by Landlord throughout each day of the week, and in a manner consistent with the operation of exercise
facilities in Comparable Buildings.  Cleaning will be extended to weekends and Holidays if permitted
use warrants same.  Subject to the terms of Section 1.BB
above, all reasonable out-of-pocket expenses of operating the
Exercise Facility (including, but not limited to, equipment leases but
excluding any rental payments for the premises occupied by the Exercise
Facility), other than costs of the initial construction and the initial
equipment installed therein, shall be includable in Operating Expenses (it
being agree that all equipment installed in the Exercise Facility shall be
leased and not purchased by Landlord). All electronic fitness equipment in the
Exercise Facility shall be replaced once every five (5) years.  Landlord reserves the right, at its sole cost which shall not
be included in Operating Expenses, to change the location of the
Exercise Facility within the Building at any time and from time to time,
provided (1) the size of the
exercise facility shall not be reduced, (2)  Landlord
provides Tenant with at least
thirty (30) days prior notice of such relocation and (3) Landlord promptly
commences and diligently pursues to completion such relocation, such that the
Exercise Facility shall not be out of operation for more than ten (10) days  as the result of any
such relocation thereof by Landlord. 
The Exercise Facility shall contain substantially the same equipment as
is described on Exhibit K attached hereto and made a part hereof or such
equipment as Landlord, in its reasonable discretion, determines is as good or
better than such equipment with respect to function and quality.


 


41.                               EXPANSION SPACE OPTIONS.  


 


A.                                   Expansion Space. 
Tenant shall have two (2) “Expansion Space Options”, as follows:


 


(i)                                     Tenant
shall have a one-time option to lease from Landlord certain space on the eighth
(8th) floor of the Building (“Expansion Space #1”), comprising not less than five
thousand (5,000) rentable


 


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square feet and not more than seven thousand
five hundred (7,500) rentable square feet, at a location contiguous to the
Initial Eighth Floor Space (except as provided below), as such Expansion Space
#1 is reasonably designated
by Landlord, which space (A)
shall have a demising wall which connects the corridor wall in the Common Areas
of the floor on which Expansion Space #1 is located to a mullion in a straight
line, except for a deviation of not to exceed ten feet (10’) and (B) shall
result in the remainder of the space located on the floor on which Expansion
Space #1 is located and which is not then leased by Tenant being in marketable
condition; provided, however, that in the event that Tenant does not lease all
or any portion of the Initial Eighth Floor Space and Tenant does not lease all
space on the Seventh (7th) floor of the Building, then Expansion
Space #1 shall be all space on the seventh (7th) floor of the
Building which is not leased by Tenant (even if such Expansion Space #1 is less
than five thousand (5,000) rentable square feet) or, if at such time no
rentable square footage is available for Expansion Space #1 on the seventh (7th)
floor of the Building, then Landlord shall reasonably designate space on the
eighth (8th) floor of the Building as Expansion Space #1 in
accordance with the foregoing criteria.  Expansion Space #1, if and when so leased by Tenant, shall
become part of the Premises and shall be subject to the terms and conditions of
this Lease, except as set forth in this Section 41;  and


 


(ii)           Tenant shall have a one-time option
to lease from Landlord certain space on the eighth (8th) floor of the Building
(“Expansion Space #2”), comprising not less than five thousand (5,000) rentable
square feet and not more than seven thousand five hundred (7,500) rentable
square feet on the eighth (8th) floor of the Building, which Expansion Space #2
shall be contiguous (except as provided below) to Tenant’s portion of the
Premises then located on the eighth (8th) floor of the Building, which
Expansion Space #2 shall be in a location reasonably designated by Landlord,
which space (A) shall have a demising wall which connects the corridor wall in
the Common Areas of the floor on which Expansion Space #2 is located to a
mullion in a straight line, except for a deviation of not to exceed ten feet
(10’), and (B) shall result in the remainder of the space located on the floor
on which Expansion Space #2 is located and which is not then leased by Tenant
being in marketable condition; provided, however, that in the event that Tenant
does not lease all or any portion of the Initial Eighth Floor Space, then
Expansion Space #2 shall be all space on the seventh (7th) floor of the
Building which is not leased by Tenant (even if such Expansion Space #2 is less
than five thousand (5,000) rentable square feet), or, if at such time no
rentable square footage is available for Expansion Space #2 on the seventh
(7th) floor of the Building, then Landlord shall reasonably designate space on
the eighth (8th) floor of the Building as Expansion Space #2 in accordance with
the foregoing criteria.  Notwithstanding
the foregoing, in the event that Tenant exercises its option to lease both
Expansion Space #1 and Expansion Space #2, Tenant acknowledges that the
aggregate number of square feet of rentable space in Expansion Space #1 and
Expansion Space #2 shall not exceed the number of square feet of rentable space
on the eighth (8th) floor of the Building which is not then already leased to
Tenant pursuant to this Lease.


 


B.                                     Terms and Conditions
Applicable to Expansion Space #1 and Expansion Space #2.


 


(i)                                     Provided that Tenant provides notice
to Landlord in accordance with the terms of Section 41.C. hereof, Landlord
shall deliver possession of the Expansion Space to Tenant, in its then “as-is”
condition except that the Expansion Space shall be in good condition, reasonable wear
and tear excepted, in compliance with all applicable Laws existing at the time
the subject Expansion Space was improved, improved at least to the extent of
the Landlord’s Work required to be performed by Landlord with respect to the
Premises, broom-clean and free of all removable shelving, personal property and
trash, on a date upon which Landlord shall deliver the subject Expansion Space
to Tenant (the “Expansion Space Commencement Date”) which, as to Expansion
Space #1, is identified in a
notice


 


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delivered by Landlord to Tenant by the last day of the forty-sixth (46th)
full calendar month of the Term, and which designated date is not later than the last day of the
seventy-fifth (75th) full calendar month of the Term and not earlier
than the first (1st) day of the sixty-first (61st) full calendar
month of the Term, and, as to Expansion Space #2, is identified in a notice delivered
by Landlord to Tenant by the last day of the seventieth (70th) full
calendar month of the Term, and which designated date is not
later than the last day of the ninety-ninth (99th) full calendar
month of the Term, and not earlier than the first day of the eighty-fifth (85th)
full calendar month of the Term.  Such
notice delivered by Landlord to Tenant shall specify Landlord’s estimate of the
Prevailing Market Rent for the subject Expansion Space for the period beginning
on the Expansion Space Commencement Date for the subject Expansion Space and
ending on the last day of the Term.  In
the event Landlord fails to timely and properly deliver notice with respect to
the Expansion Space in accordance with the foregoing, then the Expansion Space
Rent Abatement Period for the subject Expansion Space shall be extended by the
period, as to Expansion Space #1, beginning on the first day of the
forty-seventh (47th) full calendar month of the Term and ending upon
the date on which Landlord timely and properly delivers such notice to Tenant,
and, as to Expansion Space #2, beginning on the first day of the seventy-first
(71st) full calendar month of the Term and ending upon the date on
which Landlord timely and properly delivers such notice to Tenant.


 


(ii)                                  The Term as to the Expansion Space, in
question, leased by Tenant
pursuant to this Section 41 shall commence on the Expansion Space Commencement
Date as to the Expansion Space in question. 
Tenant shall have no obligation to pay Rent for the subject Expansion
Space with respect to the sixty-one (61) day period (such 61 day period with
respect to an Expansion Space is herein referred to as “Expansion Space Rent
Abatement Period”) beginning on the Expansion Space Commencement Date for the
same, it being agreed that such Rent shall be abated.  The Term as to each Expansion Space in question leased by Tenant hereunder shall
continue for the remainder of the Term.


 


(iii)                               The Base Rent
for each such Expansion Space shall be equal to the Prevailing Market Rent (as
defined in Section 45 hereof) for such Expansion Space for the period beginning
on the Expansion Space Commencement Date for the same and ending on the last
day of the then-current Term, which Prevailing Market Rent shall be determined
in accordance with subsection 45(5) hereof.


 


(iv)                              All
construction and improvements to be performed with respect to the Expansion
Space in question shall be performed by Tenant, at its expense, in accordance with plans
which shall be subject to the terms of this Lease, including, but not limited
to, Sections 8 and 10 hereof (such work being referred to herein as the
“Expansion Space Work”).  
Notwithstanding the foregoing, Landlord shall be responsible for the
construction and installation of work necessary to separately demise the
subject Expansion Space from adjacent rentable area and from Common Areas, and
all Common Areas reasonably required. 
Such work shall be performed by Landlord in first-class condition and in
accordance with all applicable Laws and all terms of this Lease.


 


(v)                                 From and after the applicable Expansion
Space Commencement Date, such Expansion Space shall be included in the term
“Premises” as used in this Lease, and subject to abatement during the
applicable Expansion Space Rent Abatement Period, Tenant’s Share of Increased
Operating Expenses and Tenant’s Share of Increased Real Estate Tax Expenses
shall be increased proportionately. Such adjustments to Tenant’s Share of Increased Operating Expenses
and Tenant’s Share of Increased Real Estate Tax Expenses, as they relate to the
subject Expansion Space, and the fact that the “base year” for purposes of
calculating the amount of the same will not correspond to the “base year” for
new transactions for comparable space in Comparable Buildings, shall be taken
into consideration in establishing the Prevailing Market Rent for the subject
Expansion Space, determined in accordance with the terms of Subsection 45(2)
below.


 


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D.                                    Notice; Exercise.  Tenant shall give to
Landlord notice of Tenant’s
exercise of its option to so lease the Expansion Space  which (i) as to Expansion Space #1, shall be
given by the later to occur of the date which
occurs one (1) year prior to the date identified as the Expansion Space
Commencement Date for Expansion Space #1 in the corresponding notice delivered
by Landlord pursuant to Section 41.B(i) above, and (2) the date which occurs
ten (10) months after the date upon which Tenant receives Landlord’s
corresponding notice for Expansion Space #1 delivered in accordance with
Subsection 41.B(1) above; and (ii) as to Expansion Space #2,
shall be given by
the later to occur of
(1) the date which occurs one (1) year prior to the date identified as the
Expansion Space Commencement Date for Expansion Space #2 in the corresponding
notice delivered by Landlord to Tenant in accordance with Subsection 41.B (i)
above, and (2) the date which occurs ten (10) months after the date upon which
Tenant receives Landlord’s corresponding notice for Expansion Space #2
delivered in accordance with Subsection 41.B(i) above. 
If Tenant does not timely give any such notice to
Landlord, then Landlord shall be free to offer to lease and to lease such
Expansion Space #1 or Expansion Space #2, as the case may be, to others and Tenant’s Expansion Space Option for
Expansion Space #1 or Expansion Space #2, as the case may be, shall be void and
of no force or effect for the remainder of the Term of this Lease and Landlord
may lease said Expansion Space #1 or Expansion Space #2, as the case may be, to
others under such terms and for such periods as shall be acceptable to Landlord
(it being agreed that time shall be of the essence in Tenant’s delivery of
each of the aforesaid notices to Landlord and that, if any such notice is not
so delivered in the time aforesaid, Landlord will rely to its detriment on Tenant’s failure to
give such notice).  Notwithstanding anything to the contrary
contained in this Lease, (x) Tenant’s failure to exercise any Expansion Space
Option pursuant to this Section 41 shall not affect its right to exercise any
subsequent Expansion Space Option, and (y) Tenant may only exercise the
Expansion Space Option for Expansion Space #2 if Tenant has either waived or failed
to timely exercise its right to terminate this Lease effective as of the last
day of the seventh (7th) Lease Year pursuant to Section 49 below,
and Tenant has either waived or failed to timely exercise its right to
terminate this Lease with respect to a portion of the Premises effective as of
the last day of the seventh (7th) Lease Year pursuant to Section 50
below.  If a Material
Default exists at the time Tenant delivers to Landlord notice of Tenant’s
exercise of an Expansion Space Option, then Landlord may elect to invalidate
Tenant’s exercise of the subject Expansion Space Option by delivering notice to
Tenant within five (5) business days after Landlord’s receipt of Tenant’s
notice of exercise.  If such invalidation
notice (i) is timely and properly delivered by Landlord to Tenant in accordance
with the terms of this Lease, (ii) describes the subject Material Default in
reasonable detail, and (iii) states that Landlord has elected pursuant to that
notice and the terms of this Section 41, to invalidate Tenant’s exercise of the
subject Expansion Space Option, then Tenant’s notice of exercise of the subject
Expansion Space Option shall be invalid; provided, however, such invalidation
shall not prevent Tenant from later exercising an Expansion Space Option
through the last day permitted for the same under this Section 41.  If Landlord does not timely and properly
deliver any such notice of invalidation to Tenant during the existence of a
Material Default, then Tenant’s prior exercise of the subject Expansion Space
Option shall remain valid and in effect. 
It is agreed that time shall be of the essence in Landlord’s delivery of
an invalidation notice to Tenant in accordance with this Section 41, and if any
such notice is not so timely and properly delivered within the period specified
above, Tenant will rely to its detriment on Landlord’s failure to give such
notice.


 


E.                                      Execution of Lease
Amendment.  Within thirty (30) days after the date Tenant gives notice to
Landlord of the exercise of any of Tenant’s such options hereunder, Landlord and Tenant shall execute
an amendment to this Lease setting forth the terms set forth in this Section 41
as to the Expansion Space


 


73

















 


in question. 
Notwithstanding the failure of either party to execute the
above-referenced amendment within the above-referenced thirty (30) day period,
both parties shall be bound by Tenant’s exercise of the subject option.


 


42.                               [Intentionally omitted.] 


 


43.                               ACCESS KEYS.  


 


Landlord agrees, at its cost, to provide Tenant with four (4) access control key
cards for each 1,000 rentable square feet comprising the Premises.  Such access control keys shall be provided
as of the Lease Commencement Date, or
such later date as Tenant may request.  Additional access
controlled key cards shall be provided by Landlord to Tenant upon Tenant’s
request, and the
cost of the same
shall be reimbursed by Tenant to Landlord as Additional Rent hereunder, at
Landlord’s reasonable
cost therefore.


 


44.                               LANDLORD REPRESENTATIONS.  


 


Landlord
hereby represents, warrants and covenants to and with Tenant that, as of the
date of Landlord’s execution of this Lease: (i) Landlord has the full right,
power and authority to enter into this Lease and to perform each and all of the
terms, provisions, covenants, agreements, matters and things herein provided to
be performed by Landlord and to execute and deliver all documents provided
herein to be executed and delivered by Landlord; (ii) this Lease does not, nor
will the performance by Landlord of its obligations hereunder, contravene any
provision of any existing law, covenant, indenture or agreement binding upon
Landlord or upon the Building,
the Land or, to the best of Landlord’s knowledge, the Complex; (iii) the
signatories of this Lease on behalf of Landlord are authorized to sign this
Lease on Landlord’s behalf; (iv) there is no litigation pending, or to the best
of Landlord’s actual knowledge, threatened pertaining to Landlord, the
Building, the Land or the Complex; (v) to the best of Landlord’s knowledge, as
of the date of this Lease, there are no suits, judgments or notices relating to
any violation of the health, pollution control, building, fire or zoning laws
or regulations relating to the use and maintenance of the Building, the Land, or the Complex;
(vi) the Building, the Land
and the Complex will, as of the Lease Commencement Date, comply
with all applicable laws, orders, rules and regulations (including the
provisions of the ADA); and (vii) to the best of Landlord’s knowledge, except
as may be set forth in that certain environmental report dated April 4, 2001
and prepared by ATC Associates, Inc. (the “Report”) no Hazardous Materials
exist in, on or under
the Building or on
the Land or the Complex, and,
to the best of Landlord’s knowledge, no Hazardous Materials, including, without
limitation, those identified in the Report, exist in, on or under the Building,
the Land or the Complex in violation of any applicable laws; (viii) no document
recorded against the Property conflicts with any of the terms of this
Lease;  (ix) all applicable Laws permit
the use and occupancy
of the Premises by Tenant as permitted in this Lease;  (x) Landlord is duly organized, is qualified to do business in
the jurisdiction in which the Building is located, is in good standing under
the Laws of the state of Landlord’s formation and the Laws of the jurisdiction
in which the Building is located; and (xi) all action required to authorize
Landlord and the signatory to
this Lease on behalf of the Landlord has been duly taken, including,
without limitation, the procurement of all approvals required from the holder
of any Mortgage
and Ground Lease affecting the Building or the Land.  Landlord shall indemnify, protect, defend and
hold harmless Tenant and its shareholders, subsidiaries,
affiliates, officers, directors, partners, employees, agents and trustees from,
against, for and in respect of, any and all claims, damages, losses,
obligations, liabilities, actions or causes of actions, penalties and costs and
expenses suffered, sustained, incurred or required to be paid (including,
without limitation,


 


74

















 


reasonable
attorney’s fees) because of, or arising out of, a breach of the foregoing
representations and warranties by Landlord.  The obligations of
Landlord under this Section 44 shall survive the expiration or earlier
termination of this Lease.


 


45.                               OPTIONS TO EXTEND.  


 


Landlord hereby grants to Tenant, two (2) options (the “Renewal Options”), each
to extend the Term for a five (5) year period (the “Renewal Terms”) after the
expiration of the initial Lease Term, or after the expiration of the initial
Renewal Term, as the case may be.  If
exercised, and if the conditions applicable thereto have been satisfied, the Renewal
Term shall commence immediately following the end of the initial Term or the
initial Renewal Term, as the case may be. 
The Renewal Options herein granted to Tenant shall be subject to, and shall be exercised in
accordance with, the following terms and conditions:


 


(1)  Tenant may exercise a
Renewal Option with respect to
all or a portion of the then-current Premises so along as the same contains at
least two (2) full contiguous floors in the Building.  Each
Renewal Option shall be exercisable only by notice given by Tenant to Landlord not
later than nineteen (19) months prior to the expiration of the initial Term or
the initial Renewal Term, as the case may be.


 


(2)  All terms and conditions of
this Lease shall be applicable during each Renewal Term, including, but not
limited to, those set forth in Section 5 hereof except that the amount of Rent charged for each of the Renewal Terms shall be equal to ninety-five
percent (95%) of the “Prevailing Market Rent”
(as hereafter defined) for the
portion of the Premises
for which Tenant has exercised the subject
Renewal Term.


 


(3)  If Tenant’s notice is not given timely, then Tenant’s subject
Renewal Option, and any subsequent Renewal Option, shall be of no further force or effect (it being
agreed that time shall be of the essence in Tenant’s delivery of such notice of exercise of its
Renewal Options to Landlord and that, if such notice is not so delivered within
the time aforesaid, Landlord will rely to its detriment on Tenant’s  failure to give such notice). If a Material
Default exists at the time Tenant delivers to Landlord notice of Tenant’s
exercise of a Renewal Option, then Landlord may elect to invalidate Tenant’s
exercise of the subject Renewal Option by delivering notice to Tenant within
five (5) business days after receipt of Tenant’s notice of exercise.  If such invalidation notice (i) is timely
and properly delivered by Landlord to Tenant in accordance with the terms of
this Lease, (ii) describes the subject Material Default in reasonable detail,
and (iii) states that Landlord has elected pursuant to that notice and the
terms of this Section 45, to invalidate Tenant’s exercise of the subject
Renewal Option, then Tenant’s notice of exercise of the subject Renewal Option
shall be invalid; provided, however, such invalidation shall not prevent Tenant
from later exercising any Renewal Option through the last day permitted for the
same under this Section 45.  If Landlord
fails to timely and properly deliver notice of invalidation with respect to a
prior exercise by Tenant of a Renewal Option, then Tenant’s prior exercise of
such Renewal Option shall remain valid and in effect.  It is agreed that time shall be of the essence in Landlord’s
delivery of an invalidation notice to Tenant in accordance with the foregoing,
and if any such notice is not so timely and properly delivered within the
period specified above, Tenant will rely to its detriment on Landlord’s failure
to give such notice.


 


(4)  The term “Prevailing Market Rent” for
purposes of this Lease shall mean what a willing, comparable, new,
non-expansion, non-renewal, non-equity tenant would pay, and a willing landlord
of a comparable building located within the Ballston, Virginia submarket would
accept, at arm’s length, for a


 


75

















 


comparable
amount of office space for a comparable period of time, in either case giving
appropriate consideration to: 
(i) the age, condition and location of the Building; (ii) the
annual rental rates per rentable square foot; (iii) the standard of
measurement by which the rentable square footage is measured; (iv) the
ratio of rentable square feet to usable square feet; (v) the type of
escalation clauses (including, without limitation, type, base year and stop);
(vi) the extent of building services; (vii) the extent of liability
under the escalation clauses (e.g.
whether determined on a “net lease” basis or by increases over a particular
base year or base dollar amount); (viii) abatement provisions reflecting
free rent and/or no rent during the period of construction or any other period
during the lease term; (ix) brokerage commissions, if any, which would be
payable by Landlord in a comparable transaction; (x) length of the lease
term; (xi) size and location of space being leased; (xii) building
standard work letter and/or tenant improvement allowances, if any;
(xiii) other economic concessions, if any; (xiv) Tenant’s
creditworthiness; and (xv) other general applicable conditions of tenancy
for a comparable new transaction, so that Tenant will obtain the same rent and
other economic benefits that Landlord would otherwise give to any comparable
prospective tenant and so that Landlord will make the same economic payments
and concessions that Landlord would otherwise make in a comparable new
transaction.  If, for example, after
applying the criteria set forth above, comparable leases provide a new tenant
with comparable space at Thirty Dollars ($30.00) per rentable square foot,
with a Ten Dollars ($10.00) operating expense allowance, three
(3) months at no rent to construct improvements, four (4) months free
rent, Fifty Dollars ($50.00) per rentable square foot tenant improvement
allowance, a “lease takeover” obligation in the amount of One Hundred Thousand
Dollars ($100,000.00), a brokerage commission of Fifty Thousand Dollars
($50,000.00), and certain other generally applicable economic terms, the
Prevailing Market Rent shall not be Thirty Dollars ($30.00) per rentable
square foot only, but shall be the equivalent of Thirty Dollars ($30.00) per
rentable square foot, a Ten Dollar ($10.00) operating expense allowance,
three (3) months at no rent to construct improvements or three
(3) months additional free rent in lieu of such construction period, an
additional four (4) months free rent, Fifty Dollars ($50.00) per
rentable square foot tenant improvement allowance or payment in lieu of such
allowance, One Hundred Thousand Dollars ($100,000.00) cash payment in lieu
of a lease takeover, Fifty Thousand Dollars ($50,000.00) cash payment in
lieu of a brokerage commission (or, if a broker is retained by Tenant with
respect to the subject space, a cash payment equal to the difference between
Fifty Thousand Dollars ($50,000.00) and the commissions payable to Tenant’s
broker), and the other generally applicable economic terms; provided, however,
that in no event shall the foregoing example be deemed to state or imply any
obligation on the part of Landlord to make any cash payment to Tenant or to
provide any of the types of concessions set forth in such example.


 


(5)  Determination.  Landlord shall estimate the Prevailing
Market Rent by using its good faith judgment. 
Landlord shall provide Tenant with notice of Landlord’s estimate within
ten (10) days after Tenant provides notice to Landlord exercising Tenant’s
corresponding option right which requires a calculation of the Prevailing
Market Rent.  Tenant shall have ten
(10) days (the “Tenant’s Review Period”) after receipt of Landlord’s
notice of the new rental rate within which to accept such rental rate.  In the event Tenant fails to accept, prior
to the expiration of the Tenant’s Review Period, in writing such rental rate
proposed by Landlord, then such proposal shall be deemed rejected and Landlord
and Tenant shall attempt in good-faith to agree upon such Prevailing Market
Rent.  If Landlord and Tenant fail to
reach agreement by that date which occurs ten (10) days following Tenant’s
Review Period (the “Outside Agreement Date”), then such determination shall be
submitted to arbitration in accordance with the terms set forth below.   Within ten
(10) days after the Outside Agreement Date, each party shall give written
notice to the other setting forth the name and address of a Broker (as
hereinafter defined) selected by


 


76

















 


such party who has agreed to
act in such capacity, to determine the Prevailing Market Rent for the subject
space.  If either party shall fail to
select a Broker as aforesaid, the subject Prevailing Market Rent shall be
determined by the Broker selected by the other party.  Each Broker shall thereupon independently make his determination
of the subject Prevailing Market Rent within twenty (20) days after the
appointment of the second Broker.  If
the two Brokers’ determinations are not the same, but the higher of such two
values is not more than one hundred two percent (102%) of the lower of them,
then the subject Prevailing Market Rent shall be deemed to be the average of
the two values.  If the higher of such
two values is more than one hundred two percent (102%) of the lower of them,
then the two Brokers shall jointly appoint a third Broker within ten (10) days
after the second of the two determinations described above has been
rendered.  The third Broker shall
independently make his determination of the subject Prevailing Market Rent
within twenty (20) days after his appointment. 
The highest and the lowest determinations of value among the three
Brokers shall be disregarded and the remaining determination shall be deemed to
be the subject Prevailing Market Rent. 
For the purposes of this Section 45(5), “Broker” means a real estate
broker licensed in the Commonwealth of Virginia, who has been regularly engaged
in such capacity in the business of commercial office leasing in Arlington,
Virginia for at least ten (10) years immediately preceding his/her appointment
hereunder. 
Except as otherwise provided below, each party shall pay for the cost of
its Broker and one-half of the cost of the third Broker.  Notwithstanding anything to the contrary set
forth in this Lease, Tenant may elect to invalidate its exercise of the subject
option/right for which arbitration was engaged under this Section 45(5), by
delivering notice to Landlord within thirty (30) days following Tenant’s
receipt of the notice of determination by the arbitrators.  In the event Tenant so elects, then Tenant
(i) shall reimburse Landlord for all reasonable fees, costs and expenses
incurred by Landlord for its Broker in connection with the subject arbitration
and (ii) reimburse Landlord for all reasonable fees, costs and expenses
incurred by Landlord for the third (3rd) broker in connection with
the subject arbitration, within thirty (30) days following Landlord’s demand
therefor and if Landlord has not already paid such costs, Tenant shall pay all
costs of the third (3rd) broker directly.


 


46.                               ROOF RIGHTS.  


 


A.                                   Subject to the terms of this Section
46, Tenant shall have the right to install, without the payment of any
additional rent or licensing fees, and maintain at a location on the roof of
the Building chosen by Tenant
and approved by Landlord (the “Satellite Area”) certain
telecommunications and related equipment, together with the cables extending
from such telecommunications and related equipment to the Premises
(collectively, the “Telecommunications and Related Equipment”).  The location, size, weight, height and all
other features and specifications of such Telecommunications and Related
Equipment and the manner of the initial installment of the same shall be
subject to Landlord’s prior approval, which approval shall not be unreasonably withheld conditioned or delayed.  Notwithstanding the foregoing, Tenant shall
not be entitled to install any such Telecommunications and Related Equipment
(i) which occupies an area of more than approximately one hundred (100) square
feet on the roof of the
Building, (ii) if such installation would materially adversely
affect (or in a manner that would  adversely affect) any warranty with respect to the
roof of the Building, (iii) if such installation would adversely affect (or in
a manner that would materially adversely affect) the structure or any of the
building systems of the Building, or if such installation would require (or in
a manner that would require) any structural alteration to the Building, or (iv)
if such installation would violate (or in a manner that would violate) any
applicable federal, state or local law, rule or regulation. 
Tenant shall
obtain and maintain at Tenant’s
expense, and submit
to Landlord copies of, all permits and approvals relating to such
Telecommunications and Related Equipment and such installation and maintenance
(including, without limitation, any permit required if a


 


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crane is necessary to place such Telecommunications
and Related Equipment on the roof), and shall pay all taxes and fees related thereto. 
Such Telecommunications and Related Equipment shall be installed, at
Tenant’s sole cost and expense, by a qualified contractor chosen by Tenant and
approved in advance by Landlord, which approval shall not be unreasonably
withheld, conditioned
or delayed.  In the event Tenant shall
require penetration of the roof membrane of the Building in connection with the
installation of any Telecommunication and Related Equipment, then Tenant shall
use Landlord’s roof contractor for work with respect to such penetration of the
roof membrane, and Landlord shall cause such contractor to charge an amount to
Tenant for the performance of such work which is equal to the amount which
would be payable for such work on an arm’s-length, competitive basis for the
performance of such work in the Washington, D.C. metropolitan area, failing
which Landlord shall be responsible for the payment of all amounts charged to
Tenant by such contractor for the subject work to the extent in excess of such
arm’s-length, competitive amount for performance of the subject work.  Tenant shall obtain Landlord’s prior consent, which shall not be unreasonably
withheld, conditioned or delayed, to the manner and time in which
such installation work is to be done.  Tenant shall screen the Telecommunications and
Related Equipment from view from the grounds adjacent to the
Building in a manner and with materials acceptable to Landlord in its reasonable discretion. 
The Telecommunications and Related Equipment shall not be for any purpose other
than communication related to the operation of Tenant’s business and the business of other permitted occupants of the
Premises (and not for commercial resale purposes). 
All plans and specifications concerning such installation shall be
subject to Landlord’s prior approval, which approval shall not be unreasonably
withheld, conditioned or
delayed and Tenant shall reimburse Landlord’s reasonable expenses
incurred to third parties in such review. 
All repairs and installations required after the initial installation of
the Telecommunications and Related Equipment also shall be subject to
Landlord’s prior approval,
which shall not be withheld,
conditioned or delayed.


 


B.                                     Except in the circumstance of an emergency, Tenant shall deliver to Landlord notice prior to Tenant’s access to the
Telecommunications and Related Equipment. 
Any such access by Tenant shall be subject to reasonable rules and
regulations established from time to time by Landlord in accordance with the terms of
Section 13 above


 


C.                                     At all times
during the Term, Tenant shall (i) maintain the Telecommunications and Related Equipment in
clean, good and safe condition,
and (ii) comply with all requirements of laws, ordinances, rules and
regulations of all public authorities with respect to the Telecommunications
and Related Equipment.  Tenant shall not install or operate the
Telecommunications and Related Equipment in a manner that will interfere with
the operation of any other antenna installed on the roof of the Building prior
to the installation of the Telecommunications and Related Equipment, and Tenant
shall use commercially reasonable efforts to avoid interference with other
antennae installed on the roof of the Building [after the initial installation
of the Telecommunications and Related Equipment], provided that such
commercially reasonable efforts shall not require that Tenant be prevented from
using the Telecommunications and Related Equipment for their intended
purpose.  Tenant shall be responsible,
at its sole cost, for repairs to the Building made necessary by reason of the
refurbishing, installation, maintenance, operation or removal of the
Telecommunications and Related Equipment or any replacements thereof.  At the expiration or earlier termination of the
Term, Tenant shall remove the
Telecommunications and Related Equipment from the Building.


 


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D.                                    It is expressly understood that by granting
Tenant rights under this Section 46, Landlord makes no representation as to the
legality of such Telecommunications and Related Equipment or its
installation.  In the event that any
federal, state, county, regulatory or other authority requires the removal or
relocation of such Telecommunications and Related Equipment, Tenant shall
remove or relocate such Telecommunications and Related Equipment at Tenant’s
sole cost and expense, and Landlord shall under no circumstances be liable to
Tenant therefor.


 


E.                                      Subject to the terms of this Lease, Tenant shall indemnify and hold Landlord
harmless from and against all costs, damages, claims, liabilities and expenses
(including attorneys’ fees) suffered by or claimed against Landlord, directly
or indirectly, based on, arising out of or resulting from any act or omission
by Tenant or Tenant’s employees, agents, assignees, subtenants, contractors,
clients, guests, licensees, customers or invitees with respect to the
installation, use, operation, maintenance, repair or disassembly of such Telecommunications and
Related Equipment and related equipment.


 


F.                                      The
Telecommunications and Related Equipment may be used by Tenant and other permitted occupants of the
Premises only in the conduct of their customary business.


 


G.                                     Tenant shall maintain such insurance as is
appropriate with respect to the installation, operation and maintenance of the
Telecommunications and Related Equipment. 
Landlord shall have no liability on account of any damage to or interference
with the operation of the Telecommunications and Related Equipment except for
physical damage caused by Landlord or any of its employees, agents or contractors, and
Landlord expressly makes no representations or warranties with respect to the
capacity for such Telecommunications and Related Equipment placed on the roof
of the Building to receive or transmit signals.  The operation of the Telecommunications and Related Equipment
shall be at Tenant’s sole and absolute risk.


 


47.                               RIGHT OF FIRST REFUSAL AND FIRST RIGHT OF AVAILABILITY.


 


A.                                   Right of First Refusal.  Subject
to the terms of
this Section 47A, Tenant
shall have a right of first
refusal to lease any space located on the eighth (8th) floor of
the Building which is or
becomes available for lease


 


A.1                             Procedure for Offer.  Landlord shall deliver notice
to Tenant (the “First Refusal Notice”) from
time to time of each bona-fide offer Landlord is willing to accept from an
independent third party for all or any of the portion of the space on the
eighth (8th) floor of the Building which is not then included in the
Premises (the portion of the space on the eighth (8th) floor of the
Building which is the subject of any such bona-fide offer is hereinafter
referred to as the “First Refusal Space”). The First Refusal Notice shall
describe the First Refusal Space (including, without limitation, Landlord’s
determination of the rentable and usable square footage thereof) and shall set
forth the terms of the subject bona fide offer which Landlord is willing to
accept, which terms shall include the material terms for the subject
transaction, including economic terms based on full service rental rates,
operating expenses, allocations, free rent and no rent periods, costs
reimbursable by Landlord, discounts, improvement allowances, other allowances
and other inducements proposed for the subject First Refusal Space.  Tenant shall have the right to lease the space
described in the First Refusal Notice upon the terms set forth in such
notice; provided, however, at Tenant’s option, if at least two (2) years remain
in the Term (as the same then exists, including any Renewal Period with respect
to which Tenant has exercised its Renewal Option, even if said Renewal Period
has not yet commenced), then the term for the subject First Refusal Space shall
be coterminous with the Term. In the event Tenant elects to have the term for
the subject First Refusal Space be coterminous with the Term, then the free
rent and no rent periods, improvement allowances, other allowances and other
inducements reflected in the subject First Refusal Notice shall be pro-rated


 


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based on the length of the term of the lease
proposed for the First Refusal Space in the subject First Refusal Notice
relative to the period beginning on the date upon which Landlord proposes to
deliver the subject First Refusal Space as set out in the subject First Refusal
Notice and the last day of the Term.


 


A.2                             Procedure for Acceptance.  If
Tenant desires to exercise its right of first refusal to lease the space described
in a First Refusal Notice, Tenant shall deliver to Landlord its notice of exercise within
fifteen (15) days of Tenant’s receipt of the First Refusal Notice.  If Tenant timely exercises its right of
first refusal as set forth herein, Landlord and Tenant shall, within ten
(10) days after Landlord’s receipt of Tenant’s notice of exercise, execute an
amendment to this Lease covering the space described in the
subject First Refusal
Notice.  If Tenant does not notify
Landlord within the above-referenced fifteen (15) day period of Tenant’s election to lease the
space described in the subject
First Refusal Notice, then Landlord shall be free to lease the subject space
to any independent third party which will deliver to Landlord a corresponding
bona fide offer for the subject First Refusal Space at a net effective rent
which is no more favorable than by a margin of five percent (5%) of the net
effective rent which is contained in the applicable First Refusal Notice.  If Landlord wishes to offer the subject space
on terms more
favorable to the prospective tenant, than those contained in the applicable
First Refusal Notice, by a margin of five percent (5%) or greater, then Landlord must first make such offer to
Tenant by delivering another First Refusal Notice to Tenant setting forth such
more favorable net effective rent, and Tenant shall have ten (10) business
days from Tenant’s receipt of such First Refusal Notice to elect
to lease the First Refusal
Space upon the terms set forth in such First Refusal Notice.  If Tenant does not so timely elect
to lease the space described
in such First Refusal Notice, Landlord shall again be free to lease the subject space
to any independent third party
upon the terms set forth in the last First Refusal Notice delivered to Tenant.


 


Notwithstanding anything
to the contrary set forth in this Section 47. A .2, if Landlord does not
lease the space described in a First Refusal Notice within one hundred eighty
(180) days after Tenant’s receipt of such First Refusal Notice, Landlord must
again offer the subject space to Tenant in accordance with the right of first
refusal granted to Tenant in this Section  47.A.2.  If a Material Default exists at the time
Tenant delivers to Landlord notice of Tenant’s exercise of a right of first
refusal set forth in this Section 47.A, then Landlord may elect to invalidate
Tenant’s exercise of the subject right of first refusal by delivering notice (a
“Invalidation Notice”) to Tenant within five (5) business days after receipt of
Tenant’s notice of exercise.  If such
Invalidation Notice (i) is timely and properly delivered by Landlord to Tenant
in accordance to the terms of this Lease, (ii) describes the subject Material
Default in reasonable detail, and (iii) states that Landlord has elected
pursuant to that Invalidation Notice and the terms of this Section 47.A, to
invalidate Tenant’s exercise of the subject right of first refusal under this
Section 47.A, then Tenant’s notice of exercise of the subject right of first
refusal shall be invalid; provided, however, such invalidation shall not
prevent Tenant from later exercising any right of first refusal under this
Section 47.A through the last day permitted for the same under this Section
47.A.  If Landlord fails to timely and
properly deliver an Invalidation Notice in accordance with the foregoing with
respect to the prior exercise by Tenant of a right of first refusal under this
Section 47.A, then the earlier exercise by Tenant of its subject right of first
refusal shall remain valid and in effect. 
It is agreed that time shall be of the essence in Landlord’s delivery of
an Invalidation Notice to Tenant in accordance with the foregoing, and if any
such notice is not so timely and properly delivered within the period specified
above, Tenant will rely to its detriment on Landlord’s failure to give such
notice.


 


B.                                     First Right of Availability.  Tenant shall be entitled to request from Landlord from time to
time a report (an “Availability Report”) with respect to the availability of
space on the third (3rd), fourth (4th),


 


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seventh (7th), eighth (8th) and
ninth (9th) floors of the Building, and the date as of which each
such space will be available.  Space
shall be “available” only to the extent it is not subject to expansion,
extension, first offer, first refusal or any other rights of other tenants in
the Building which do not contradict Tenant’s expansion options/rights under
this Lease.  Landlord shall provide
Tenant such report within ten (10) business days after Tenant delivers its
request to Landlord.  Tenant shall have
the option, exercisable by notice delivered to Landlord within thirty
(30) days after Tenant’s receipt of Landlord’s notice of available space
in the Building, to add any such available space to the Premises as it first
becomes available.  Any such available
space shall be leased to Tenant at the Prevailing Market Rent for the same for
a term coterminous with the balance of the then-current term of this Lease
provided that two (2) years remain in the Term (as the same then exists,
including any Renewal Period with respect to which Tenant has exercised its
Renewal Option, even if said Renewal Period is not commenced) (or such shorter
time period as may be necessary to prevent any conflict with another tenant’s
rights to such space or to prevent a conflict with Tenant’s expansion options
under Lease, if they have not expired). Notwithstanding anything to the
contrary set forth in this Section 47.B.2, Tenant may not exercise during the
fifth (5th) Lease Year or the sixth (6th) Lease Year its
option to add available space to the Premises pursuant to this Section 47.B.
unless Tenant has either waived or failed to timely exercise its right to
terminate this Lease effective as of the last day of the seventh (7th)
day Lease Year pursuant to Section 49 below, unless Tenant has either waived or
failed to timely exercise its right to terminate this Lease with respect to a
portion of the Premises effective as of the last day of the seventh (7th)
Lease Year pursuant to Section 50 below. 
Nothing contained herein shall reduce the amount of space subject to the
expansion options granted to Tenant under this Lease.  If a Material Default exists
at the time Tenant delivers to Landlord notice of Tenant’s exercise of an
option/right set forth in this Section 47.B, then Landlord may elect to
invalidate Tenant’s exercise of the subject option/right by delivering notice
to Tenant within five (5) business days after receipt of Tenant’s notice of
exercise.  If such Invalidation Notice
(i) is timely and properly delivered by Landlord to Tenant in accordance with
the terms of this Lease, (ii) describes the subject Material Default in
reasonable detail, and (iii) states that Landlord has elected pursuant to that
notice  and the terms of this Section 47.B,
to invalidate Tenant’s exercise of the subject option/right under this Section
47.B, then Tenant’s notice of exercise of the subject option/right shall be
invalid; provided, however, such invalidation shall not prevent Tenant from
later exercising any option/right under this Section 47.B through the last day
permitted for the same under this Section 47.B.  It is agreed that time shall be of the essence in Landlord’s
delivery of an invalidation notice to Tenant in accordance with the foregoing,
and if any such notice is not so timely and properly delivered within the
period specified above, Tenant will rely to its detriment on Landlord’s failure
to give such notice.


 


C.                                     Nothing set forth in this Section shall be
construed to give Tenant
a superior right to lease any First
Refusal Space or Available Space or any other space in the
Building that is leased to another tenant and that is subject to any written
option on the part of such other tenant to renew or extend the term thereof, so long as the subject space was previously offered
to Tenant in accordance with the terms of this Section 47.  Landlord may proceed with
negotiations with prospective tenants other than Tenant with respect to all of the
First Refusal Space or Available Space in question, provided that Landlord
may only enter into leases
with respect to any such First Refusal Space or Available Space
upon complying with all of the terms and conditions as set forth in this Section 47.


 


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D.                                    Within thirty (30) days after Tenant gives notice to Landlord of the
exercise of an option hereunder, Landlord and Tenant shall execute an amendment to this Lease setting forth the terms for as to the subject First Refusal Space or
Available Space, as the case may be. 
Notwithstanding the failure of either party to execute the
above-referenced amendment within the above-referenced thirty (30) day period,
both parties shall be bound by Tenant’s exercise of its right to lease the
First Refusal Space or Available Space, as the case may be.


 


48.                               RESTRICTION OF USE BY
CERTAIN SPECIALIZED HUMAN RESOURCES CONSULTING FIRMS OR HUMAN CAPITAL
CONSULTING FIRMS.  


 


Landlord hereby agrees that, so long as the Premises shall contain at
least fifty-seven thousand (57,000) rentable square feet, it will not lease to, or knowingly permit occupancy
of, any space in the Building to, or consent to any sublease or other agreement for use of space in
the Building or assignment of a lease for space in the Building to
any companies/firms listed on Exhibit N attached hereto and made a part
hereof, as said Exhibit N may be modified by Tenant, from time to time,
to add human resources consulting firms or human capital consulting firms
specializing in benefits, healthcare, and human resource technology (a
“Specialized Human Resources Consulting Firm or Human Capital Consulting Firm”)
and in the case of any such modification, the restrictions set forth in this
Section 48 shall apply to any such additional Specialized Human Resources
Consulting Firm or Human Capital Consulting Firm beginning on the day after the
date of Landlord’s receipt of such modified list; provided, however, that with
respect to a proposed assignment of, or any sublease under, those certain
leases for space in the Building between Landlord and (i) Nixon &
Vanderhye, P.C. (the “Nixon Lease”) and (ii) ESI, Inc. (the “ESI Lease”) to any
Specialized Human Resources Consulting Firm or Human Capital Consulting Firm,
Landlord, subject to the following terms of this Section 48, shall be deemed to
have fulfilled its obligations under this Section 48 if Landlord initially
refuses to consent to any such assignment or sublease by written notice to the
tenant under the Nixon Lease or the tenant under the ESI Lease, as applicable
(the “Refusal Notice”), but later consents to same if the tenant under the
Nixon Lease or the tenant under the ESI Lease, as applicable, contends that
Landlord’s denial or withholding of its consent is unreasonable or
discriminatory and Landlord concludes, in good faith and on the advice of
counsel, that such contention of the tenant under the Nixon Lease or the tenant
under the ESI Lease, as applicable, is not without any merit whatsoever;
further provided, that in lieu of Landlord’s exercise of its right to approve a
proposed sublease or proposed assignment pursuant to the Nixon Lease or the ESI
Lease pursuant to this Section 48, if Landlord has the right, under the Nixon
Lease or under the ESI Lease, as applicable, (A) in the case of a proposed
sublease, to sublease the space which is the subject of the proposed sublease
or terminate the Nixon Lease or ESI Lease, as applicable, with respect to such
proposed sublet space, or (B) in the case of a proposed assignment, to take an
assignment of, or terminate, the Nixon Lease or the ESI Lease, as applicable
(any such right of Landlord with respect to the sublease by Landlord of any
such space or the termination by Landlord of the Nixon Lease or the ESI Lease
with respect to any such space being hereinafter referred to as the “Landlord’s
Recapture Right”), then Tenant shall have the right to, in the case of a
proposed sublease, sublease (or Lease the subject space from Landlord, as the
case may be) the proposed sublet space upon the same terms and conditions as
were set forth in the proposed sublease, and in the case of a proposed
assignment of the Nixon Lease or the ESI Lease, Tenant shall have the right to
accept such assignment of the Nixon Lease or the ESI Lease, as applicable (or
lease the same from Landlord, as the case may be) upon the same terms and
conditions as were proposed with respect to a third party.


 


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Simultaneously with Landlord’s issuance of the Refusal Notice to the
tenant under the Nixon Lease or the tenant under the ESI Lease, as applicable,
Landlord shall notify Tenant of the proposed assignment or sublease to which
the Refusal Notice pertains and shall advise Tenant in such notice whether or
not Landlord has a Landlord’s Recapture Right with respect to such proposed
assignment or sublease, and, if Landlord does have such a Landlord’s Recapture
Right with respect to same, Landlord shall include in such notice to Tenant the
terms and conditions set forth in the proposed sublease and the terms and
conditions upon which the assignment of the Nixon Lease or the ESI Lease was
proposed with respect to a third party, as applicable (such notice from
Landlord to Tenant being hereinafter referred to as a “Landlord’s Section 48
Notice”).  Within five (5) business days
following Tenant’s receipt of a Landlord’s Section 48 Notice, Tenant shall
advise Landlord in writing (a “Tenant’s Section 48 Response”) as to which of
the following options Tenant selects in the event that the tenant under the Nixon
Lease or the tenant under the ESI Lease, as applicable, contends that
Landlord’s denial or withholding of its consent, as set forth in the Refusal
Notice, is unreasonable or discriminatory and that Landlord has concluded, in
good faith and on the advice of counsel, that such contention of the tenant
under the Nixon Lease or the tenant under the ESI Lease, as applicable, is not
without any merit whatsoever:


 


(a)                                  if Landlord has advised Tenant in the
Landlord’s Section 48 Notice that Landlord does not have a Landlord’s Recapture
Right with respect to the proposed assignment of, or sublease under, the Nixon
Lease or the ESI Lease, as applicable, then Tenant shall, at its sole option,
in Tenant’s Section 48 Response, either (i) waive the provisions of this Section
48 which would prohibit such proposed assignment or sublease solely with
respect to such proposed assignment or sublease, in which case Landlord shall
not be obligated to disapprove or withhold its consent to such proposed
assignment or sublease and shall not be entitled to the indemnification from
Tenant provided for in this Section 48 with respect to such assignment or
sublease, or (ii) advise Landlord that Tenant does not waive the provisions of
this Section 48 with respect to such proposed assignment or sublease in
Tenant’s Section 48 Response, solely with respect to such proposed assignment
or sublease, in which case the indemnification provided for in this Section 48
shall apply if Landlord disapproves or withholds its consent to such proposed
assignment or sublease; and


 


(b)                                 in the event that Landlord advises Tenant in
Landlord’s Section 48 Notice that Landlord does have a Landlord’s Recapture
Right with respect to the proposed assignment or sublease, Tenant shall, at its
sole option, in Tenant’s Section 48 Response either (i) elect to accept a
sublease upon the same terms and conditions as were set forth in the proposed
sublease, as identified in the Landlord’s Section 48 Notice, or accept an
assignment of the Nixon Lease or the ESI Lease, as applicable (or lease the
same from Landlord, as the case may be) upon the same terms and conditions as
were proposed with respect to a third party, and (ii) decline to enter into
such sublease or accept such assignment, and if Tenant elects the option
provided for in the immediately preceding clause (ii) of this clause (b), then
Tenant shall simultaneously advise Landlord in Tenant’s Section 48 Response
whether Tenant does or does not waive the provisions of this Section 48 with
respect to such proposed assignment or sublease, solely with respect thereto,
and if Tenant does not so waive the provisions of this Section 48 with respect
to such proposed assignment or sublease, then the indemnification provided for
in this Section 48 shall apply if Landlord disapproves or withholds its consent
to such proposed assignment or sublease.


 


In
the event that clause (a) above is applicable and Tenant does not make either
of the elections required therein, then Tenant shall be deemed to have elected
to not waive the provisions of this Section 48 with


 


83

















 


respect
to the proposed sublease or assignment, in which case the indemnification
provisions of this Section 48 shall apply. 
In the event that clause (b) of this paragraph is applicable and Tenant
does not make any of the elections set forth therein, then Tenant shall be
deemed to have (x) elected not to exercise the right to sublease the proposed
sublet space, or to accept an assignment of the Nixon Lease or the ESI Lease or
to lease the subject space directly from Landlord (as the case may be) upon the
terms and conditions set forth in an offer from a third party and (y) elected
not to waive the provisions of this Section 48 with respect to the proposed
sublease or assignment, in which case the indemnification provisions of this
Section 48 shall apply.


 


In the event that (1)(x) Landlord does not have a Landlord’s Recapture
Right with respect to a proposed assignment of, or sublease under, the Nixon
Lease or the ESI Lease, as applicable, or (y)(i) Landlord does have a
Landlord’s Recapture Right with respect to such proposed assignment of, or
sublease under, the Nixon Lease or the ESI Lease, as applicable, and (ii)
Tenant does not exercise its right as set forth in this Section 48 to sublease
or lease the proposed sublease space upon the same terms and conditions as were
set forth in the proposed sublease, or, in the case of a proposed assignment of
the Nixon Lease or the ESI Lease, as applicable, does not accept such
assignment of the Nixon Lease of the ESI Lease, as applicable, or lease the
subject space from Landlord, as the case may be, upon the same terms and
conditions as were proposed with respect to a third party, and, (2) in the case
of any of the circumstances described in clause (x) or clause (y) of this
sentence, Landlord disapproves or withholds its consent to the proposed
assignment of, or sublease under, the Nixon Lease or the ESI Lease, as
applicable; then, in such event, Tenant shall indemnify, defend and hold Landlord
harmless in the event of any claim, action, suit or demand against Landlord, or
any claims, liability, damages, costs or expenses (including, but not limited
to, court costs and reasonable attorneys’ fees, but excluding any consequential
damages) incurred by Landlord, as a result of any claim by the tenant under the
Nixon Lease or the tenant under the ESI Lease to the extent based in whole or
in part upon the restrictions on leasing set forth in this Section 48;
provided, however, that in the event that Tenant notifies Landlord in a
Tenant’s Section 48 Response, within the five (5) business day period following
Tenant’s receipt of a Landlord’s Section 48 Notice, as set forth in the second
paragraph of this Section 48, that Tenant has waived the provisions of this
Section 48 which prohibit such proposed assignment or sublease solely with
respect to such proposed assignment or sublease, then Landlord shall not be
obligated to disapprove or withhold its consent to such proposed assignment or
sublease and shall not be entitled to the indemnification from Tenant provided
for in this Section 48 with respect to such assignment or sublease.  Landlord’s covenant as set forth in this
Section 48 shall cease and terminate and be of no further force or effect if
Tenant assigns this Lease except pursuant to Section 23.F. hereof. Landlord
hereby represents and warrants to Tenant that as of the date of its execution
of this Lease, it has not entered into any lease with a tenant which would
violate the terms and provisions of this Section 48.


 


Landlord covenants and agrees, that, within fifteen (15) days following
the date of this Lease, Landlord shall issue to the tenant under the Nixon
Lease and the tenant under the ESI Lease letters advising each of said tenants
that pursuant to a provision in each such tenant’s lease which is comparable to
Section 30.C. of this Lease, Landlord has granted an exclusive right to Tenant
to conduct in the Building the business of a human resources consulting firm or
human capital consulting firm specializing in benefits, healthcare, and human
resource technology.  Within five (5)
business days following Landlord’s receipt of documentary evidence that both of
such letters have been delivered, Landlord shall deliver to Tenant a written
certification that such delivery has occurred, which certification


 


84

















 


shall be accompanied by a copy of the form of
letter that was issued to the tenant under the Nixon Lease and the tenant under
the ESI Lease.


 


49.                               TERMINATION OPTION. 


 


Notwithstanding anything in this Lease to the contrary, Tenant shall have the
right, exercisable at Tenant’s
sole option, to terminate this Lease, said right of Tenant to be
exercisable by giving notice thereof (the “Termination Notice”) to Landlord,
which Termination Notice shall set forth a date of termination (the
“Termination Date”) which is specified to be the last day of the seventh (7th)
Lease Year or the last day of
the ninth (9th) Lease Year, and which notice shall be
given, if at all, not later than eighteen (18) months prior to the Termination
Date specified in the Termination Notice. 
In the event that Tenant
exercises its termination option hereunder, this Lease shall continue in full
force and effect until the Termination Date, whereupon Tenant shall surrender
possession of the Premises (including, but not limited to, any space leased by
Tenant pursuant to Sections 41 and 47 hereof) in accordance with the provisions
of this Lease, this Lease shall terminate with respect to the Premises
(including, but not limited to, any space leased by Tenant pursuant to Sections
41 and 47 hereof) as if the Termination Date were the Lease Expiration Date set
forth herein, and all Rent shall be prorated as of the Termination Date, and
neither party shall have any obligations hereunder accruing after the
Termination Date.  In the event Tenant exercises its termination option
hereunder, then,
on the date which occurs sixty
(60) days prior to
the Termination Date,
Tenant shall pay to Landlord
an amount equal to the sum of (a) the then unamortized sum (i.e., amortized
over the initial twelve (12) year Term of this Lease, at the rate of eight
percent (8%) per annum) of (i) the Tenant Allowance (as such term is defined in
Exhibit C excluding any increase
in the amount of same pursuant to the terms of Exhibit C or the terms of this
Lease and any tenant allowance with respect to Expansion Space or
Available Space, if any, paid
by Landlord to Tenant, (ii) all reasonable brokerage commissions paid by Landlord with
respect to this Lease and any amendments hereto and (iii) all reasonable
attorneys’ fees paid
by Landlord in connection with the preparation and negotiation of this Lease
and any amendments hereto (which attorneys’ fees shall not exceed Twenty-Five
Thousand Dollars ($25,000.00) with respect to the initial Lease); together with
(b) the amount of six (6) times the amount of the Monthly Base Rent for the
seventh Lease Year if the
Termination Date is the last day of the seventh (7th) Lease Year, or the amount of three
(3) times the amount of the Monthly Base Rent for the ninth (9th)
Lease Year if the Termination Date is the last day of the ninth (9th)
Lease Year (the items set forth in clauses (a) and (b) of this
Section 49 being hereinafter collectively referred to as the “Termination
Expenses”).  The Termination Expenses
payable by Tenant to Landlord pursuant to the immediately preceding sentence
shall be in addition to the Rent coming due between the date of the Termination
Notice and the Termination Date.


 


50.                               CONTRACTION OPTION. 


 


Notwithstanding anything in this Lease to the contrary, Tenant shall have the
right, exercisable at Tenant’s
sole option, to terminate this Lease,  effective
as of the last day of the
seventh (7th) Lease Year or the last day of the ninth (9th)
Lease Year, with respect to up to two (2) floors in the Premises (such space with respect to which Tenant
elects to
terminate this Lease is hereinafter referred to as the “Contraction
Space”).  Tenant may exercise such right
by delivering
notice thereof (the “Contraction Notice”) to Landlord, which Contraction Notice
shall set forth a date of termination (the “Contraction Date”) which is
specified to be the last day the seventh (7th) Lease Year or the last day of the ninth (9th)
Lease Year, and which notice shall be given, if at all, not later
than sixteen (16) months prior to
the Contraction


 


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Date specified in the Contraction
Notice.  The Contraction Space shall (i) be located on the upper-most floors
of the Building on which the Premises is located or on the lower-most floors of
the Building on which the Premises is located, (ii) be contiguous space and
(iii) with respect to any portion of the Contraction Space located on a floor upon
which Tenant shall retain space as part of the Premises following the
Contraction Date, the portion of the Premises which is not part of the
Contraction Space located on such floor shall be in a location that is
reasonably marketable following the deduction of the Contraction Space.  In the event that Tenant exercises its
contraction option under this
Section 50, (A) this Lease shall continue in full force and
effect with respect to the
Contraction Space until the Contraction Date, whereupon Tenant
shall surrender possession of the Contraction Space in accordance with the
provisions of this Lease, (B)
this Lease shall terminate with respect to only the Contraction Space as if the Contraction
Date were, as to the Contraction Space, the Lease Expiration Date set forth
herein, and (C)
all Rent pursuant to Section 5 hereof with respect to the Contraction Space
shall be prorated as of the Contraction Date, and neither party shall have any
obligations hereunder accruing after the Contraction Date with respect to the Contraction
Space.  In the event Tenant exercises its contraction option
under this Section 50, then
Tenant shall pay
to Landlord on the date which
occurs sixty (60) days prior to the Contraction Date, the following
amounts:


 


(I).                                 with respect to the Premises initially
demised under this Lease (the “Initial Premises”), but not any Expansion Space,
First Refusal Space or Available Space which is leased by Tenant (hereinafter
collectively referred to as “Future Leased Space”), an amount equal to the sum
of (a) the then unamortized sum (i.e., amortized over the initial twelve (12)
year Term of this Lease, at the rate of eight percent (8%) per annum) of the
Pro Rata Portion (as hereinafter defined) of (i) the Tenant Allowance (as
defined in Exhibit C) as to the Initial Premises paid by Landlord to Tenant, (ii)
all reasonable brokerage
commissions paid
by Landlord with respect to this Lease and any amendments hereto which relate
to the Initial Premises, excluding amendments which relate to Future Leased
Space, and (iii) all reasonable attorneys’ fees paid by Landlord in connection with the preparation
and negotiation of this Lease (which attorneys’ fees shall not exceed
Twenty-Five Thousand Dollars ($25,000.00)) with respect to this Lease); and


 


(II).                             with respect to all Future Leased Space, an
amount equal to the sum of (a) the then unamortized sum [i.e., amortized over
the term of this Lease with respect to the particular portion of the Future
Leased Space at issue, at the rate of eight percent (8%) per annum] of the Pro
Rata Portion (as hereinafter defined) of (i) any tenant allowance with respect
to such Future Leased Space paid by Landlord to Tenant, (ii) all reasonable
brokerage commissions paid by Landlord with respect to such Future Leased
Space, and (iii) all reasonable attorneys’ fees paid by Landlord in connection
with the preparation and negotiation of any amendment to this Lease with
respect to such Future Leased Space;


 


together
with (b) (i) the amount of two
(2) times the
amount of the Monthly Base Rent for the seventh (7th) Lease Year) allocable to the Contraction Space
in the event the Contraction Date is the last day of the seventh (7th)
Lease Year, or (ii) the amount of the Monthly Base Rent for one month for the
ninth (9th) Lease Year allocable to the Contraction Space if the
Contraction Date is the last day of the ninth (9th) Lease Year and
(c) (i) in the event that the Contraction Date is the last day of the seventh
(7th) Lease


 


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Year, an amount which is equal to 60/144ths
of the Tenant’s Current Leases Termination Amount (as defined in Section 52
hereof), or (ii) in the event that the Contraction Date is the last day of the
ninth (9th) Lease Year, an amount which is equal to 36/144ths of the
Tenant’s Current Leases Termination Amount (the items set forth in clauses (a), (b) and
(c) of this Section 50 being hereinafter collectively referred to as the
“Contraction Expenses”).  As used in
this Section 50, the term “Pro Rata Portion” shall mean with respect to the
Initial Premises, a fraction, the numerator of which is the rentable square
footage of the Contraction Space which is included in the Initial Premises and
the denominator of which is the rentable square footage comprising the Premises
as of the Lease Commencement Date or, should a remeasurement of such Initial
Premises occur pursuant to Section 1.B. hereof, then as of the date that the
remeasured rentable square footage of the Initial Premises is finally
determined, and, with respect to any Future Leased Space, a fraction, the
numerator of which is the rentable square footage of the Contraction Space
which is included in the Future Leased Space and the denominator of which is
the rentable square footage comprising the portion of the Future Leased Space
as to which such Pro Rata Portion is applicable.  The Contraction Expenses payable by Tenant to Landlord pursuant
to the immediately preceding sentence shall be in addition to the Rent coming
due between the date of the Contraction Notice and the Contraction Date. 
In the event Tenant exercises its option to contract the Premises under
this Section 50 with respect to a portion of the Premises located on a floor of
the Building upon which Tenant will retain space as part of the Premises
located on such floor following the Contraction Date, then Tenant shall be
responsible to construct Common Areas on the subject floor to a reasonable
standard, at Tenant’s sole expense.


 


51.                               RESTRICTION OF USE BY GSA. 


 


Tenant
hereby agrees that it shall not, at any time during the Term, assign this Lease
to, or sublease or license the use of any portion of the Premises to, the
United States General Services Administration (“GSA”) or any agency or entity
on whose behalf GSA negotiates or executes leases or any federal agency which
has independent leasing authority (each of the foregoing being referred to in
this Lease as a “GSA Tenant”).


 


52.                               PAYMENT OF TENANT’S
TERMINATION FEE UNDER TENANT’S CURRENT LEASES. 


 


Landlord
acknowledges that Tenant in connection with the exercise by Tenant of its
rights to terminate Tenant’s Current Leases in accordance with their terms, has
an obligation to pay, pursuant to Tenant’s Current Leases, as defined in
Section 2.F.(4) hereof, a termination fee of Three Million One Hundred Sixty-Three
Thousand Three Hundred Seventy-Eight and 88/100 Dollars ($3,163,378.88) (the
“Tenant’s Current Leases Termination Amount”). 
Notwithstanding anything to the contrary contained in this Lease,
Landlord shall pay to Tenant on or before said January 10, 2005, the Tenant’s
Current Leases Termination Amount. 
Tenant covenants and agrees that, following Tenant’s receipt of said
payment from Landlord, Tenant shall pay the Tenant’s Current Leases Termination
Amount to the landlord under Tenant’s Current Leases not later than the time
required under Tenant’s Current Leases, and, following such payment by Tenant
pursuant to Tenant’s Current Leases, Tenant shall, on or before February 10,
2005, deliver to Landlord evidence of such payment, either in the form of a receipt,
a copy of Tenant’s check therefor or a copy of the confirmation of the wire
transfer therefor, as the case may be.


 


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


 


	
  WITNESS:

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARLINGTON OFFICE, L.L.C.,

  
	
   

  	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  JBG/Company Manager, L.L.C.,

  	
   

  
	
   

  	
   

  	
   

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  	
  Its Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Sharon M. Oliver

  	
   

  	
   

  	
  By:

  	
  /s/ Brian P. Coulter

  	
  [SEAL]

  
	
  Name:

  	
  Sharon M. Oliver

  	
   

  	
   

  	
   

  	
  Brian P. Coulter

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WITNESS:

  	
  TENANT:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WATSON WYATT & COMPANY,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Brendes

  	
   

  	
  By:

  	
   

  	
  /s/ Carl
  D.. Mautz

  	
  [SEAL]

  
	
  Name:

  	
  Michael Brendes

  	
   

  	
   

  	
  Carl D.. Mautz

  	
   

  
	
   

  	
   

  	
   

  	
  Vice President and Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  230638v9

  	
   

  	
   

  	
   

  
										



 


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