Document:

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                                                                    EXHIBIT 10.2

                                 TRUST AGREEMENT

                                       FOR

               THE MEN'S WEARHOUSE, INC. 401(K) SAVINGS PLAN TRUST

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                                 TRUST AGREEMENT

                                       FOR

               THE MEN'S WEARHOUSE, INC. 401(K) SAVINGS PLAN TRUST

                                TABLE OF CONTENTS

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<S>                                                                             <C>
PURPOSE AND DEFINITIONS                                                          1

ARTICLE I       TRUST FUND                                                       2
       1.1      TITLE                                                            2
       1.2      TRUST FUND                                                       2
       1.3      TAX STATUS OF TRUST                                              2
       1.4      APPOINTMENT OF AND ACCEPTANCE BY TRUSTEE                         3
       1.5      ADMINISTRATOR SHALL DIRECT TRUSTEE                               3
       1.6      SIGNING AUTHORITY; TRUSTEE'S RELIANCE                            3
       1.7      ACCEPTANCE OF ASSETS                                             3
       1.8      FUNDING POLICY                                                   3

ARTICLE II      INVESTMENTS                                                      4
       2.1      TITLE TO ASSETS                                                  4
       2.2      ADMINISTRATOR AUTHORITY                                          4
       2.3      MEMBER DIRECTION WITHIN SPONSOR SELECTED
                INVESTMENT OPTIONS                                               4
       2.4      INDEPENDENT INVESTMENT MANAGER                                   5
       2.5      TRUSTEE INVESTMENT AUTHORITY                                     5
       2.6      SPONSOR STOCK                                                    6
       2.7      PROXIES AND OTHER INCIDENTS OF OWNERSHIP                         7
       2.8      INSURANCE PRODUCTS                                               9
       2.9      MEMBER LOANS                                                     9

ARTICLE III     TRUSTEE'S POWERS                                                10
       3.1      GENERAL TRUSTEE'S POWERS                                        10
       3.2      ADDITIONAL POWERS                                               12
       3.3      ADMINISTRATOR/SPONSOR DIRECTIONS                                13

ARTICLE IV      TRUSTEE'S DUTIES                                                14
       4.1      POWERS SUBJECT TO DUTIES                                        14
       4.2      RECORDS                                                         14
       4.3      ACCOUNTS                                                        14
       4.4      VALUATION OF SPECIAL ASSETS                                     14
       4.5      REPORTS                                                         15
       4.6      DIRECTIONS TO TRUSTEE                                           15
       4.7      AUTHORIZED REPRESENTATIVE                                       15
       4.8      WIRE TRANSFERS                                                  15
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<S>                                                                             <C>
ARTICLE V       RESTRICTIONS ON DISTRIBUTION                                    16
       5.1      PERSONS TO RECEIVE PAYMENT                                      16
       5.2      ASSIGNMENT AND ALIENATION PROHIBITED                            16
       5.3      QUALIFIED DOMESTIC RELATIONS ORDERS                             17

ARTICLE VI      RESIGNATION, REMOVAL AND SUCCESSION                             17
       6.1      RESIGNATION OR REMOVAL OF TRUSTEE                               17
       6.2      DESIGNATION OF SUCCESSOR TRUSTEE                                17
       6.3      SUCCESSOR'S POWERS                                              17
       6.4      SUCCESSOR'S DUTIES                                              18

ARTICLE VII     AMENDMENT                                                       18
       7.1      POWER TO AMEND                                                  18
       7.2      LIMITATION ON AMENDMENT                                         18
       7.3      CONFORMITY WITH LAW                                             18

ARTICLE VIII    LIABILITIES                                                     18
       8.1      DECLARATION OF INTENT                                           18
       8.2      GENERAL LIMITATIONS OF LIABILITY                                19
       8.3      LIABILITY OF THE TRUSTEE                                        19
       8.4      INDEMNIFICATION                                                 20

ARTICLE IX      DURATION AND TERMINATION                                        20
       9.1      IRREVOCABILITY                                                  20
       9.2      TERMINATION                                                     20
       9.3      DURATION                                                        21

ARTICLE X       MISCELLANEOUS                                                   21
       10.1     EMERGENCIES AND OTHER DELEGATIONS                               21
       10.2     EXPENSES AND TAXES                                              21
       10.3     PARTIES TO PROCEEDINGS                                          22
       10.4     ADOPTION BY AFFILIATED EMPLOYER                                 22
       10.5     PARTICIPATION BY AFFILIATES                                     22
       10.6     WITHDRAWAL OF AN AFFILIATE                                      22
       10.7     MULTIPLE PLANS                                                  22
       10.8     SUCCESSOR SPONSOR                                               22
       10.9     LOCATING MEMBERS AND BENEFICIARIES                              23
       10.10    USE OF TRUST FUNDS                                              23
       10.11    LOCATION OF TRUST ASSETS                                        23
       10.12    PARTIAL INVALIDITY                                              23
       10.13    COUNTERPARTS                                                    24
       10.14    SUCCESSORS AND ASSIGNS                                          24
       10.15    RELATION TO THE PLAN                                            24
       10.16    CONSTRUCTION AND JURISDICTION                                   24
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       10.17    ALTERNATE DISPUTE RESOLUTION                                    24
                SIGNATURE PAGE                                                  25
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                                 TRUST AGREEMENT
                                       FOR
               THE MEN'S WEARHOUSE, INC. 401(K) SAVINGS PLAN TRUST

This Trust Agreement (the "Trust Agreement") is made by and between The Men's
Wearhouse, Inc. (the "Sponsor"), sponsor of The Men's Wearhouse, Inc. 401(k)
Savings Plan (the "Plan"), and Union Bank of California, N.A., a national
banking association ("Union Bank of California" or the "Trustee"), and shall be
effective on the Trustee's receipt of Plan assets to be held in trust hereunder.

WHEREAS, the Sponsor has previously established a trust to fund benefits under
the Plan (the "Trust"); and

WHEREAS, the Sponsor desires to amend and restate the Trust and to continue the
Trust with Union Bank of California as the trustee of the Trust.

NOW, THEREFORE, for the consideration set forth herein, the parties agree as
follows:

                             PURPOSE AND DEFINITIONS

The Sponsor has adopted the Plan for the exclusive benefit of certain of its
employees ("Members") and their beneficiaries ("Beneficiaries"). The Plan
provides that, from time to time, cash and other assets shall be contributed to
the Trust by the Sponsor to be held and administered as a trust for the uses and
purposes of the Plan. Subject to specific conditions set forth in this Trust
Agreement, the Trustee agrees that it will hold in trust and will invest cash
and other property of the Plan received by and administratively acceptable to
the Trustee (the "Trust Assets" or the "Trust Fund") and will administer such
Trust Assets in accordance with the amended and restated terms and conditions of
the Trust stated below. The Trustee shall have no liability or responsibility
for any Plan assets not received by the Trustee. The Sponsor intends that the
Plan shall qualify under section 401 of the Internal Revenue Code of 1986, as
amended (the "Code"), and that the Trust shall constitute a part of the Plan,
and continue its tax exempt status under Code section 501.

Incorporation of Definitions Used in the Plan. Unless otherwise defined herein,
the definitions stated in the Plan are hereby incorporated by reference into
this Trust Agreement.

Definitions:

         (a)      "Administrator" shall mean the committee appointed by the
Board of Directors of the Sponsor that is responsible for the administration of
the Plan.

         (b)      "Business Day" shall mean a day of the week during which both
the Trustee and the New York Stock Exchange is open for business.

         (c)      "Code" shall mean the Internal Revenue Code of 1986, as it may
be amended from time to time.

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         (d)      "Directing Party" shall mean the person with the power to
direct investments.

         (e)      "Employer" or "Employers" means the Sponsor, K&G Men's
Company, Inc., a Delaware corporation, TMW Purchasing LLC, a Delaware limited
liability company, TMW Marketing Company, Inc., a California corporation, The
Men's Wearhouse of Texas LP, a Delaware limited partnership, TMW Merchants LLC,
a Delaware limited liability company, The Men's Wearhouse of Michigan, Inc., a
Delaware corporation, Twin Hill Acquisition Company, Inc., Eddie Rodriguez
Company, Inc., a Delaware corporation, TMW Ventures, Inc., a Delaware
corporation, TMW Finance LP, a Delaware limited partnership, and any other
business organization that adopts the Plan.

         (f)      "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as it may be amended from time to time.

         (g)      "Investment Manager" shall mean a person or entity, other than
the Trustee, who is appointed by the Sponsor or Administrator to manage all or a
portion of the investments of the Trust Fund.

         (h)      "Plan" shall mean The Men's Wearhouse, Inc. 401(k) Savings
Plan.

         (i)      "Sponsor" shall mean The Men's Wearhouse, Inc., a Texas
corporation.

         (j)      "Sponsor Stock" shall mean the common stock of the Sponsor.

         (k)      "Trustee" shall mean UNION BANK OF CALIFORNIA or its successor
in interest, or any successor appointed pursuant to this Trust Agreement.

         (l)      "Trust Fund" shall mean the assets held by the Trustee
pursuant to this Trust Agreement.

                                    ARTICLE I

                                   TRUST FUND

1.1      Title. The title of the trust created by this Trust Agreement is the
Men's Wearhouse, Inc. 401(k) Savings Plan Trust.

1.2      Trust Fund. The Trust Fund shall consist of such sums of money or other
property as shall from time to time be paid or delivered to the Trustee pursuant
to the Plan, plus all income and gains, less losses, distributions and expenses
chargeable thereto. The Trust Fund shall be held in trust and dealt with in
accordance with the provisions of this Trust Agreement.

1.3      Tax Status of Trust. The Sponsor intends by this Trust Agreement to
create a trust forming a part of the Plan which shall meet the requirements for
qualification under section 401(a) of the Code and which shall be exempt from
tax pursuant to section 501(a) of the Code.

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1.4      Appointment of and Acceptance by Trustee. The Sponsor hereby appoints
Union Bank of California as nondiscretionary trustee of the Trust. The Trustee
shall function as a directed Trustee as defined in section 403(a) of ERISA.
Union Bank of California hereby accepts the Trust imposed upon it by this Trust
Agreement and covenants and agrees to perform the same as herein expressed.

1.5      Administrator Shall Direct Trustee. The Sponsor authorizes the
Administrator to direct and instruct Trustee as provided in this Agreement.

1.6      Signing Authority; Trustee's Reliance. A duly authorized officer of the
Sponsor shall certify in writing to the Trustee the names and specimen
signatures of the Administrator, and the Sponsor or Administrator shall notify
the Trustee in writing of all those who are authorized to act on behalf of the
Sponsor or Administrator (collectively, "Authorized Representative") and give
the Trustee their names and specimen signatures, which shall be updated as
necessary by the Sponsor or Administrator. The Sponsor or Administrator shall
promptly notify the Trustee if any person so designated is no longer authorized
to act on behalf of the Sponsor or Administrator. Until the Trustee receives
written notice that a person is no longer authorized to act on behalf of the
Sponsor or Administrator, the Trustee may continue to rely on the Sponsor's or
Administrator's designation of the identity and authority of such person, and
any directions given by such Authorized Representative.

1.7      Acceptance of Assets. All contributions or transfers shall be received
by the Trustee in cash or in any other property administratively acceptable to
the Trustee. The Trust shall consist of the contributions and transfers received
by the Trustee, together with the income and earnings from them and any
increments to them. The Trustee shall administer the Trust without distinction
between principal and income. The Trustee shall have no duty to compute any
amount to be transferred or paid to it by the Employer and it shall not be
responsible for the collection of any contributions or transfers to the Trust
and the Trustee shall have no duty to see that the contributions received comply
with the provisions of the Plan, or to see that funds deposited with it are
deposited in accordance with the provisions of the Plan.

1.8      Funding Policy. The Administrator shall have the responsibility for
establishing and carrying out a funding policy and method, as specified in
section 402(b)(1) of ERISA, consistent with the objectives of the Plan and the
requirements of ERISA, taking into consideration the Plan's short-term and
long-term financial needs. The Administrator shall assure that sufficient
liquidity shall be maintained to meet the reasonably anticipated requirements of
the Trust Fund for payment of expenses of administration, investment and
management, and for distribution of benefits to Members, former Members and
Beneficiaries.

The funding and investment policies established by the Administrator may be
modified at any time by the Administrator, who shall furnish written notice of
any such changes affecting the operation of the Trust to the Trustee.

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                                   ARTICLE II

                                   INVESTMENTS

2.1      Title to Assets. The Trustee is vested with title to all the assets of
the Trust Fund and shall have full power and authority to do all acts necessary
to carry out its duties hereunder. Members, former Members, and Beneficiaries
shall not have any right or interest in the Trust Fund except as provided in the
Plan. Prior to the time of distribution, neither a Member, former Member, nor a
Beneficiary (nor a legal representative of a Member, former Member, or a
Beneficiary) shall have any right, by way of anticipation or otherwise, to
assign, encumber, or in any manner dispose of any interest in the Trust except
as permitted under the Plan or as required by applicable law or directed by a
court of competent jurisdiction.

2.2      Administrator Authority. Except as provided below, the Administrator
shall have all power over, and responsibility for, the management, disposition,
and investment of the Trust Assets, and the Trustee shall comply with proper
directions (whether transmitted in writing, electronically, via
teletransmission, digitally, or in any other form acceptable to Trustee) of the
Administrator concerning those assets. The Administrator shall not issue
directions in violation of the terms of the Plan and Trust or prohibited by the
fiduciary responsibility rules of ERISA. Except to any extent required by ERISA,
or otherwise provided in this Trust Agreement, the Trustee shall have no duty or
responsibility to review, initiate action, or make recommendations regarding
Trust Assets and shall retain all such assets until directed in writing by the
Administrator to dispose of them.

2.3      Member Direction Within Sponsor Selected Investment Options. To the
extent the Plan provides for Member, former Member or Beneficiary direction of
investments among investment alternatives and their underlying investment
vehicles chosen by the Administrator ("Investment Options"), the Member, former
Member or Beneficiary shall have full investment authority over the investment
of assets allocated to such account (the "Member Directed Account" or "Account")
in that the Member, former Member or Beneficiary shall select among the
Investment Options. Such Member Directed Accounts are intended to qualify as
ERISA section 404(c) accounts. To the extent allowed under the Code, ERISA and
applicable regulations thereunder, neither the Employer, the Administrator nor
the Trustee shall have any responsibility for monitoring the directions of the
Member, former Member or Beneficiary, nor shall they be liable in any manner for
investment or other losses or have any other liability for following the
directions of the Member, former Member or Beneficiary or any agent designated
by them.

The Administrator shall establish uniform and nondiscriminatory rules for the
operation of Member Directed Accounts. Member Directed Accounts shall be subject
to the provisions of the Plan. The Trustee shall invest in the Investment
Options in accordance with investment directions given by the Members, former
Members, and Beneficiaries for whose accounts such assets are held, to the
extent consistent with its duties under ERISA. All such directions by the
Members, former Members, or Beneficiaries to the Trustee will be made in writing
or by telephone or in such other manner as is reasonably acceptable to the
Trustee. As provided under ERISA section 404(c) and the regulations thereunder,
the Trustee, the Employer, and the Administrator will not be liable for any
loss, or with respect to any breach of part 4 of Title I of

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ERISA, that is the direct and necessary result of the Member's, former Member's,
or Beneficiary's exercise of control over a Member Directed Account, and the
Trustee will not be liable for failing to invest any assets of the Trust Fund
under the management and control of the Sponsor or the Administrator, a Member,
a former Member, a Beneficiary or an Investment Manager in the absence of
investment directions regarding such assets, so long as the Trustee acts in good
faith and in accordance with the responsibilities, obligations and duties placed
on it under ERISA. In the absence of directions from a Member, former Member or
Beneficiary, the Administrator shall direct the investment of the Member
Directed Account. The Trustee shall have no duty or responsibility to review or
make recommendations regarding investments made in Investment Options at the
direction of the Member, former Member, Beneficiary, Administrator or Employer
and that are in accordance with the provisions of the Trust, ERISA and the Code.
The Trustee shall not comply with any directions which are contrary to the
provisions of the Trust, ERISA or the Code and the Trustee shall not incur any
liability to the Member, former Member, Beneficiary, Administrator or Employer
for acting in accordance with the provisions of this sentence.

2.4      Independent Investment Manager. The Sponsor or Administrator may
appoint one or more Investment Managers as defined in section 3(38) of ERISA to
direct the Trustee in the investment of all or a specified portion of the assets
of the Trust Fund. The Administrator may also remove any Investment Manager. The
Administrator shall promptly notify the Trustee in writing of the appointment or
removal of any Investment Manager.

The Administrator shall cause the Investment Manager to acknowledge to the
Trustee in writing that the Investment Manager is a fiduciary with respect to
the Plan and Trust. If the foregoing conditions are met, the Investment Manager
shall have the power to manage, acquire, retain, or dispose of any Trust Assets
subject to the Investment Manager's management and direction the Trustee will be
obligated to follow the investment directions of the Investment Manager with
respect to the assets of the specified portion of the Trust Fund until the
Trustee receives written notice that such Investment Manager has resigned or has
been removed or replaced by the Sponsor. The Trustee shall not be liable for the
acts or omissions of such Investment Manager, or be under an obligation to
review the investments of, or to invest or otherwise manage any asset of the
Trust that is subject to the management and direction of such Investment
Manager. The Investment Manager shall only make directions which are in
compliance with the applicable provisions of ERISA and any regulations or
rulings issued thereunder. An Investment Manager who engages any investment
advisor or investment counselor that it deems necessary or appropriate, may
provide that directions concerning the investment and reinvestment of the assets
of the Trust Fund under its management and control to be made directly to the
Trustee by such advisor or counselor as the Investment Manager's agent;
provided, however, that prior to any such direction by the investment advisor or
investment counselor, the Trustee receives written notice from the Investment
Manager that the directions of such agent will be considered the directions of
the Investment Manager and that the Investment Manager will be responsible for
the directions of such agent.

2.5      Trustee Investment Authority. The Administrator may also delegate its
investment authority to the Trustee for all or part of the Trust. Such
delegation must be in writing and delivered to the Trustee. Upon acceptance of
such delegation, the Trustee shall have full power

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and authority to invest and reinvest the portion of the Trust so designated by
the Administrator in investments of any kind permitted under this Trust
Agreement.

The Administrator is responsible for providing the Trustee with the funding
policy and investment guidelines for the Trust, and the Trustee's responsibility
for investment of the assets in the portion of the Trust for which Trustee has
investment discretion shall be subject to, and is limited by, the funding policy
and investment guidelines issued to it by the Administrator, and by the
fiduciary standards of ERISA.

To the extent the Trustee is a discretionary Trustee with the power to manage
and control all or a portion of the investments of the Trust Fund, it shall
invest and reinvest the principal and income with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. The Trustee acknowledges that
it is a fiduciary with respect to Trust Assets for which it is a discretionary
Trustee. The Trustee shall be responsible for proper diversification of the
Trust only if all of the Plan's assets are subject to the Trustee's management.
The Administrator, and not the Trustee, shall be responsible for the funding
policy, for overall diversification of Plan assets, and for overall compliance
of the Trust with statutory limitations on the amount of the Trust's investment
in securities of the Sponsor ("Sponsor Stock").

2.6      Sponsor Stock. The Directing Party may direct investment of up to the
entire amount of the Trust Assets over which Directing Party has investment
authority into Sponsor Stock if permitted by applicable law. The Directing Party
shall not authorize or direct the investment of Trust Assets in Sponsor Stock
unless the Administrator is satisfied that the Sponsor Stock are exempt from
registration under the Federal Securities Act of 1933, as amended, and are
exempt from qualification under the California Corporate Securities Law of 1968,
as amended, and of any other applicable blue sky law, or in the alternative that
the Sponsor Stock have been so registered and/or qualified. The Administrator
shall also specify what restrictive legend on transfer, if any, is required to
be set forth on the certificates for the Sponsor Stock and the procedure to be
followed by the Trustee to effectuate a resale of such Sponsor Stock. The
Directing Party shall not direct the investment in Sponsor Stock if such
investment would be prohibited by ERISA. The Directing Party shall only direct
the investment of funds into Sponsor Stock if (i) those securities are traded on
an exchange permitting a readily ascertainable fair market value, or (ii) the
Administrator shall have obtained a current valuation by an independent
appraiser, and periodically (but no less frequently than annually) supplies
updated independent valuations while the Sponsor Stock remain in the Trust. In
determining the value of Sponsor Stock not traded on an exchange on a periodic
basis, the Trustee may conclusively rely on the independent appraisal or other
form of valuation acceptable to the Trustee and submitted to it by the
Administrator.

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2.7      Proxies and other Incidents of Ownership.

Funds Other Than Sponsor Stock

The Trustee shall deliver or cause to be delivered, to the Administrator or the
designated Investment Manager, all notices, prospectuses, financial statements,
proxies and proxy soliciting materials relating to investments, other than
Sponsor Stock held hereunder. Except for those Trust Fund assets for which Union
Bank of California is the Investment Manager, the Trustee shall not vote any
proxy or tender offer election, participate in any voting trust, exercise any
option or subscription right or join in, dissent from or oppose any merger,
reorganization, consolidation, liquidation or sale with respect to any asset
held hereunder except in accordance with the timely written instructions of the
Administrator. If no such written instructions are received, such proxies
elections and voting trust votes shall not be voted; such options or
subscription rights shall not be exercised; and such mergers, reorganizations,
consolidation, liquidations or sales shall not be joined, dissented from or
opposed.

Sponsor Stock

(a)      VOTING OF SPONSOR STOCK. When the Sponsor files preliminary or final
proxy solicitation materials with the Securities and Exchange Commission, the
Sponsor shall cause a copy of all materials to be simultaneously sent to the
Trustee. Based on these materials, the Trustee shall prepare a voting
instruction form. At the time of mailing of notice of each annual or special
stockholders' meeting of the Sponsor, the Sponsor shall cause a copy of the
notice and all proxy solicitation materials to be sent to each Member or former
Member with an interest in Sponsor Stock held in the Trust, together with the
foregoing voting instruction form to be returned to the Trustee or its designee.
The form shall show the number of full and fractional shares of the Sponsor
Stock credited to each Member's or former Member's Account. The Sponsor shall
provide the Trustee with a copy of any materials provided to the Members and
former Members and shall certify to the Trustee that the materials have been
mailed or otherwise sent to the Members and former Members.

         Each Member and former Member with an interest in Sponsor Stock held in
the Trust shall have the right to direct the Trustee as to the manner in which
the Trustee is to vote the number of shares of the Sponsor Stock reflecting such
Member's or former Member's proportional interest in the Sponsor Stock held in
the Trust. Directions from a Member or former Member to the Trustee concerning
the voting of the Sponsor Stock shall be communicated in writing, or by mailgram
or similar means. These directions shall be held in confidence by the Trustee
and shall not be divulged to the Sponsor, or any officer or employee thereof, or
any other person except to the extent that the Sponsor must have the safeguarded
information in order to comply with federal laws or state laws not preempted by
ERISA. Upon its receipt of the directions, the Trustee shall vote the shares of
the Sponsor Stock reflecting the Member's or former Member's proportional
interest in the Sponsor Stock held in the Trust as directed by the Member or
former Member. Except as otherwise provided by law, the Trustee shall vote
shares of the Sponsor Stock reflecting such Member's or former Member's
proportional interest in the Sponsor Stock held in the Trust for which it has
received no directions from the Member or former Member in the same proportion
on each issue as it votes those shares for which it received voting directions
from Members and

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former Members. The Trustee shall vote shares of the Sponsor Stock not credited
to Members' or former Members' Accounts in the same proportion on each issue as
it votes those shares credited to Members' and former Members' Accounts for
which it received voting directions from Members and former Members.

         (b)      TENDER OFFERS. Upon commencement of a tender offer for any
securities held in the Trust that are Sponsor Stock, the Sponsor shall notify
each Member and former Member of the tender offer and utilize its best efforts
to timely distribute or cause to be distributed to each Member and former Member
the same information that is distributed to other stockholders of the Sponsor in
connection with the tender offer, and, after consulting with the Trustee, shall
provide and pay for a means by which the Member or former Member may direct the
Trustee whether or not to tender the Sponsor Stock credited to the Member's or
former Member's Accounts. The Sponsor shall provide the Trustee with a copy of
any material provided to the Members and former Members and shall certify to the
Trustee that the materials have been mailed or otherwise sent to Members and
former Members.

         Each Member and former Member shall have the right to direct the
Trustee to tender or not to tender some or all of the shares of the Sponsor
Stock reflecting his proportional interest in the Sponsor Stock held in the
Trust. Directions from a Member or former Member to the Trustee concerning the
tender of the Sponsor Stock shall be communicated in writing, or by mailgram or
such similar means as is agreed upon by the Trustee and the Sponsor under the
preceding paragraph. These directions shall be held in confidence by the Trustee
and shall not be divulged to the Sponsor, or any officer or employee thereof, or
any other person except to the extent that the consequences of such directions
are reflected in reports regularly communicated to any such persons in the
ordinary course of the performance of the Trustee's services hereunder. The
Trustee shall tender or not tender shares of Sponsor Stock as directed by the
Member or former Member. To the extent that Members or former Members fail to
affirmatively direct the Trustee or fail to issue valid directions to the
Trustee to tender shares of the Sponsor Stock credited to their Accounts, those
Members or former Members will be deemed to have instructed the Trustee not to
tender those shares. Accordingly, the Trustee shall not tender shares of Sponsor
Stock credited to a Member's or former Member's Accounts for which it has
received no directions or invalid directions from the Member or former Member.

         The Trustee shall tender that number of shares of the Sponsor Stock not
credited to Members' or former Members' Accounts which is determined by
multiplying the total number of shares of the Sponsor Stock not credited to
Members' or former Members' Accounts by a fraction of which the numerator is the
number of shares of the Sponsor Stock credited to Members' or former Members'
accounts for which the Trustee has received valid directions from Members or
former Members to tender (which directions have not been withdrawn as of the
date of this determination) and of which the denominator is the total number of
shares of the Sponsor Stock credited to Members' or former Members' Accounts.

         A Member or former Member who has directed the Trustee to tender some
or all of the shares of the Sponsor Stock credited to the Member's or former
Member's Accounts may, at any time prior to the tender offer withdrawal date,
direct the Trustee to withdraw some or all of the tendered shares, and the
Trustee shall withdraw the directed number of shares from the tender

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offer prior to the tender offer withdrawal deadline. Prior to the withdrawal
deadline, if any shares of the Sponsor Stock not credited to Members' or former
Members' Accounts have been tendered, the Trustee shall redetermine the number
of shares of the Sponsor Stock that would be tendered under this Section if the
date of the foregoing withdrawal were the date of determination, and withdraw
from the tender offer the number of shares of the Sponsor Stock not credited to
Members' or former Members' Accounts necessary to reduce the amount of tendered
Sponsor Stock not credited to Members' or former Members' Accounts to the amount
so redetermined. A Member or former Member shall not be limited as to the number
of directions to tender or withdraw that the Member or former Member may give to
the Trustee.

         A direction by a Member or former Member to the Trustee to tender
shares of the Sponsor Stock reflecting the Member's or former Member's
proportional interest in the Sponsor Stock held in the Trust shall not be
considered a written election under the Plan by the Member or former Member to
withdraw, or have distributed, any or all of his withdrawable shares. The
Trustee shall credit to each proportional interest of the Member or former
Member from which the tendered shares were taken the proceeds received by the
Trustee in exchange for the shares of the Sponsor Stock tendered from that
interest.

         (c)      SHARES CREDITED. For all purposes of this Section 2.7, the
number of shares of the Sponsor Stock deemed "credited" to a Member's or former
Member's Accounts as of the relevant date (the record date or the date specified
in the tender offer) shall be calculated by reference to the number of shares
reflected on the books of the transfer agent as of the relevant date. In the
case of a tender offer, the number of shares credited shall be determined as of
a date as close as administratively feasible to the relevant date.

         (d)      CONVERSION. All provisions in this Section 2.7 shall also
apply to any securities received as a result of a conversion of the Sponsor
Stock.

2.8      Insurance Products. The Trustee shall not invest assets of the Trust in
insurance products.

2.9      Member Loans. Where loans are made to Plan Members or Beneficiaries
("Member Loans"), all fiduciary duties and responsibilities for administration
of the Trust with respect to any Member Loans shall rest with the Administrator
or a named fiduciary which shall be appointed by the Administrator (the "Loan
Fiduciary"). These duties shall include but not be limited to the review and
acceptance or rejection of loan applications, making of the Member Loans,
determination of allowable Member Loan amount, the determination of any grace
period for delinquent loans in accordance with regulations, after which Trustee
shall declare default and issue tax reports, and determination of when to
foreclose on collateral securing defaulted loans. Additionally, the Loan
Fiduciary shall establish the interest rate to be charged for the Member Loan,
the maturity date of the loan, the amount which may be loaned, and the amount of
the affected vested account balance which may secure the Member Loan under
applicable laws and regulations. In the absence of a formal appointment of a
Loan Fiduciary, the Administrator shall be the Plan's Loan Fiduciary. All loan
documents shall be prepared by the Trustee upon written direction of the Loan
Fiduciary unless otherwise authorized by the Loan Fiduciary and agreed to by the
Trustee. The Loan Fiduciary may appoint an agent to perform ministerial duties
with respect to the Plan loan program.

                                       9
<PAGE>

                                   ARTICLE III

                                TRUSTEE'S POWERS

3.1      General Trustee's Powers. Except as otherwise provided and subject to
any proper direction, applicable limitations in ERISA or other applicable law,
the Trustee shall have full power and authority with respect to property held in
the Trust to do all such acts, take all proceedings, and exercise all such
rights and privileges, whether specifically referred to or not in this document,
as could be done, taken or exercised by the absolute owner, including, without
limitation, the following:

         (a)      To invest and reinvest the Trust Assets or any part thereof in
any one or more kind, type, class, item or parcel of property, real, personal or
mixed, tangible or intangible; or in any one or more kind, type, class, or item
of obligation, secured or unsecured; or in any combination of them (including
those issued by the Trustee or any of its affiliates) and to retain the property
for the period of time that the Directing Party deems appropriate, despite
fluctuations in the market price of the property;

         (b)      To acquire and sell options to buy securities ("call" options)
and to acquire and sell options to sell securities ("put" options); to enter
into commodity contracts, financial futures contracts and foreign exchange
contracts and to take appropriate actions in connection with such contracts;

         (c)      To buy, sell, assign, transfer, acquire, loan, lease (for any
purpose, including mineral leases, and for terms within or extending beyond the
life of this Trust), exchange and in any other manner to acquire, manage, deal
with and dispose of all or any part of the Trust property, for cash or credit
and upon any reasonable terms and conditions;

         (d)      To make deposits, within the meaning of section 408(b)(4) of
ERISA, with any bank or other financial institution, including any such facility
of the Trustee or an affiliate thereof, provided that the deposit in an interest
bearing account or a time certificate of deposit bears a reasonable rate of
interest;

         (e)      To invest funds in any mutual fund whether or not sponsored or
advised by Union Bank of California or any affiliate thereof, for which Union
Bank of California or its affiliate renders services. Union Bank of California
or its affiliates may be compensated for providing such services to such mutual
fund, in addition to any Trustee's fees received pursuant to this Trust
Agreement;

         (f)      To invest and reinvest the Trust Assets, or any part thereof,
in any one or more collective investment funds, including group trusts that
consist exclusively of assets of exempt pension and profit sharing trusts and
individual retirement accounts qualified and tax exempt under the Code, that are
maintained by the Trustee or any affiliate thereof or any other bank or trust
company. The documents establishing and amending any such collective investment
funds are hereby incorporated herein and adopted into this Trust Agreement and
the Plan by this reference. The combining of money and other assets of the Trust
with money and other assets of

                                       10
<PAGE>

other qualified trusts in such fund or funds is specifically authorized.
Notwithstanding anything to the contrary in this Trust Agreement, the Trustee
shall have full investment responsibility over assets of the Trust invested in
its collective investment funds. The Trustee or its affiliates shall be entitled
to receive compensation for providing administration, advisory or other services
directly from the collective investment funds in addition to any Trustee's fees
received pursuant to this Trust Agreement.

         If the Plan and Trust for any reason lose their tax exempt status, and
the Trust assets have been commingled with assets of other employers' tax exempt
trusts in the Trustee's collective investment funds, the Administrator shall
immediately notify the Trustee of such plan disqualification or loss of tax
exempt status and the Trustee shall liquidate, within 30 days of notice of such
loss of tax exempt status, the Trust's units of the collective investment
fund(s) and invest the proceeds in a money market fund pending investment or
other instructions from the Administrator. The Trustee shall not be liable for
any loss or gain or taxes, if any, resulting from said liquidation;

         (g)      To borrow or raise money for the purposes of the Trust from
any source (other than in a prohibited transaction as defined in sections 406 of
ERISA or 4975 of the Code, unless an exemption applies); to pay interest; to
execute promissory notes and to secure the repayment thereof by pledging all or
any part of the Trust Fund;

         (h)      Except as related to Sponsor Stock pursuant to Section 2.6, to
take all of the following actions as directed by the fiduciary or other person
with investment discretion over the Trust Assets: to vote upon or tender any
stocks, bonds or other securities and to give general or special proxies or
powers of attorney with or without power of substitution, except that Trustee
shall vote all proxies for securities in Investment Options as directed by
Administrator; to exercise any conversion privileges, subscription rights or
other options of which Trustee receives actual notice, and to make any payments
incidental thereto; to consent to or otherwise participate in corporate
reorganizations or other changes affecting corporate securities and to delegate
discretionary powers and to pay any assessments or charges in connection
therewith; and generally to exercise any of the powers of an owner with respect
to stocks, bonds, securities or other property held in Trust;

         (i)      To accept investment directions acceptable to the Trustee,
which shall be (i) in writing; (ii) immediately confirmed in writing if Trustee
agrees to accept oral directions; (iii) by facsimile; (iv) confirmed by an
eligible trade report if effected through the Institutional Delivery System (DTC
ID or comparable system). All other instructions shall be in writing. The
Trustee shall, as promptly as possible, comply with such directions, it being
understood that Trustee shall in no event be required to transact directed
trades on days which are not Business Days;

         (j)      To make, execute, acknowledge and deliver any and all
documents of transfer and conveyance and any and all other instruments that may
be necessary or appropriate to carry out the powers herein granted;

                                       11
<PAGE>

         (k)      To pay or cause to be paid from the Trust any and all real or
personal property taxes, income taxes or other taxes or assessments of any or
all kinds levied or assessed upon or with respect to the Trust or Plan; and

         (l)      To do all other acts necessary or desirable for the proper
administration of the Trust Fund, as if the Trustee were the absolute owner
thereof.

         3.2      Additional Powers. In addition to the other powers enumerated
above, and whether or not the Administrator has retained investment authority or
such authority has been delegated to the Member, former Member or an Investment
Manager pursuant to Article II, the Trustee in any and all events is authorized
and empowered:

         (a)      To cause all or any part of the Trust to be held in the name
of the Trustee (which in such instance need not disclose its fiduciary capacity)
or, as permitted by applicable law, in the name of any nominee, and to acquire
for the Trust any investment in bearer form. Trustee may combine certificates
representing such investments with certificates of the same issuer that it holds
in other fiduciary capacities; or it may deposit or arrange for the deposit of
such securities in a qualified central depository even though such securities
may then be merged and held in bulk in the name of the nominee of the depository
along with other securities deposited by other persons. Additionally, Trustee
may deposit or arrange for deposit of any securities issued by the United States
government or one of its agencies or instrumentalities in such a depository or
with a Federal Reserve Bank. However, the books and records of the Trust shall
at all times show that all such investments are a part of the Trust and the
Trustee shall hold evidences of title to all such investments;

         (b)      To serve as custodian with respect to the Trust assets with
the exception of Member Loan repayments, which may be held by the Plan's Loan
Fiduciary from time to time pending delivery to the Trustee, provided Union Bank
of California is the sole Trustee;

         (c)      To employ such agents and counsel as may be reasonably
necessary in managing and protecting the Trust assets and to pay them reasonable
compensation from the Trust; and to employ any broker-dealer or similar agent,
including a broker-dealer or similar agent affiliated with the Trustee, and pay
to such broker-dealer or similar agent from the Trust reasonable commissions or
reasonable compensation;

         (d)      To settle, compromise or abandon all claims and demands in
favor of or against the Trust; and to charge any premium on bonds purchased at
par value to the Trust;

         (e)      To abandon, compromise, contest, arbitrate or settle claims or
demands; to prosecute, compromise and defend lawsuits, but without obligation to
do so, all at the risk and expense of the Trust;

         (f)      To tender its defense to the Sponsor in any legal proceeding
where the interests of the Trustee and the Sponsor are not adverse. However, any
legal counsel selected to defend the Trustee must be reasonably acceptable to
the Trustee, and the Trustee may elect to choose

                                       12
<PAGE>

counsel other than that selected by the Sponsor. The Sponsor may satisfy all or
any part of its obligations under this section through insurance arrangements
acceptable to the Trustee;

         (g)      To exercise and perform any and all of the other powers and
duties specified in this Trust Agreement or the Plan;

         (h)      To permit, during the Trustee's normal business hours, such
inspections of documents at the principal office of the Trustee as are required
by applicable law, subpoena, or upon demand by United States agency;

         (i)      To comply with all requirements imposed by ERISA, the Code or
other applicable provisions of law;

         (j)      To retain all or any portion of the Trust in cash temporarily
awaiting investment or for the purpose of making benefit distributions or other
payments, without liability for interest thereon, notwithstanding the Trustee's
receipt of indirect compensation known as float from such uninvested cash or
uncashed benefit checks;

         (k)      To exercise all the further rights, powers, options and
privileges granted, provided for, or vested in trustees generally under
applicable federal or state laws, as amended from time to time, it being
intended that, except as herein otherwise provided, the powers conferred upon
the Trustee herein shall not be construed as being in limitation of any
authority conferred by applicable law, but shall be construed as in addition
thereto;

         (l)      To seek written instructions from the Administrator,
Investment Manager, or other fiduciary on any matter and await their written
instructions without incurring any liability therefor;

         (m)      To impose a reasonable charge to cover the cost of furnishing
to Members, former Members or Beneficiaries upon their written request documents
as required under section 104(b)(4) of ERISA;

         (n)      To pay from the Trust the expenses reasonably incurred in the
administration of the Trust to the extent such expenses are not paid by the
Sponsor;

         (o)      To seek the advice of its counsel or the Sponsor's counsel,
and Trustee shall be protected to the extent permitted by applicable law in
acting upon advice of counsel; and

         (p)      In addition to the powers listed herein, to do all other acts
necessary or desirable for the proper administration of the Trust, as though the
absolute owner thereof.

3.3.     Administrator/Sponsor Directions. As directed by the Administrator or
the Sponsor, the Trustee shall also be authorized and empowered:

         (a)      To cause the benefits provided under the Plan to be paid
directly to or for the persons entitled thereto under the Plan, and in the
amounts and in the manner specified, and to charge such payments against the
Trust;

                                       13
<PAGE>

         (b)      To compensate such executive, consultant, actuarial,
accounting, investment, appraisal, administrative, clerical, secretarial,
custodial, depository and legal firms, personnel and other employees or
assistants as are engaged by the Sponsor or Administrator exclusively in
connection with the administration of the Plan and to pay from the Trust the
necessary expenses of such firms, personnel and assistants, to the extent not
paid by the Sponsor and not prohibited by applicable law;

         (c)      To pay from the Trust to reimburse the Sponsor for the
expenses reasonably incurred in the administration of the Trust paid by Sponsor
unless prohibited by the Plan or by applicable law.

         (d)      To maintain insurance for such purposes, in such amounts and
with such companies as the Administrator shall elect, including insurance to
cover liability or losses occurring by reason of the acts or omissions of
fiduciaries (but only if such insurance permits recourse by the insurer against
the fiduciary in the case of a breach of a fiduciary obligation by such
fiduciary).

                                   ARTICLE IV

                                TRUSTEE'S DUTIES

4.1      Powers Subject to Duties. The Trustee shall exercise any of the
foregoing powers from time to time as required by applicable law.

4.2      Records. The Trustee shall maintain or cause to be maintained suitable
records, data and information relating to its functions hereunder. The Trustee
shall keep accurate and detailed accounts of all investments, receipts,
disbursements and other actions hereunder which shall be reflected as provided
in Section 2.10. Its books and records relating thereto shall be open to
inspection and audit at all reasonable times by the Employer, the Administrator
or their duly authorized representatives.

4.3      Accounts. Periodically, as specified by the Employer and within sixty
(60) days after the close of each Plan Year and within sixty days after the
resignation of the Trustee as provided in Article VII hereof, the Trustee shall
render to the Employer, Investment Manager a written report setting forth the
transactions effected by the Trustee during the period since it last furnished
such a report and any gains or losses resulting from same, any payments or
disbursements made by the Trustee during such period, the assets of the Trust
Fund as of the last day of such period (at cost and at fair market value), and
any other information about the Trust Fund that the Administrator may reasonably
request. The Trustee will certify the accuracy of the report if such
certification is required by any applicable federal or state law or regulation.

The Administrator, Employer, and Investment Manager (other than the Trustee
acting in such capacity) shall have ninety (90) days after the their receipt of
each such report within which to file with the Trustee written objections to
such report.

4.4      Valuation of Special Assets. Notwithstanding anything herein to the
contrary, the Trustee shall have no duty or responsibility to obtain valuations
of any Trust assets whose value is not

                                       14
<PAGE>

readily determinable on an established market. The Sponsor, Administrator, or
Investment Manager shall have sole responsibility to supply periodic valuations
of such assets to the Trustee in a timely manner. The Sponsor or the Trust as
appropriate, shall bear sole responsibility for the cost of obtaining said
valuations. The Trustee may conclusively rely on such valuations provided by the
Sponsor, Investment Manager, or Administrator. If they fail to provide such
values, the Trustee may take whatever action it deems reasonable, including
employment of attorneys, appraisers or other professionals, the expense of which
will be borne by the Trust.

4.5      Reports. The Trustee shall file such descriptions and reports and shall
furnish such information and make such other publications, disclosures,
registrations and other filings as are required of the Trustee by ERISA or other
applicable law, except for filings in connection with Sponsor Stock, which shall
be the sole responsibility of the Sponsor.

4.6      Directions to Trustee. The Trustee is authorized to act upon proper
directions of the Employer, the Administrator, Investment Manager, any other
fiduciary, Member, former Member, Beneficiary, Directing Party, and their
Authorized Representatives, as applicable, including directions given by
photostatic teletransmission using facsimile signature, or those instructions
which are digitally recorded on the UBOC Voice Response Unit ("VRU") or internet
website. The Trustee is also authorized to act on oral instructions in its
discretion prior to receipt of written or photostatic teletransmission
instructions. The Trustee is hereby authorized to record conversations and
facsimile transmissions made in connection with the Trust.

The Trustee shall not be liable for losses attributable to any directions, lack
of directions or exercise of control by a party with investment discretion over
the Trust or any part thereof. Likewise, the Trustee shall have no duty or
responsibility to review or make recommendations regarding investments made at
the direction of any party with investment discretion over the Trust or any
portion thereof.

4.7      Authorized Representative. The Sponsor or the Administrator shall
inform the Trustee in writing of the appointment of any Authorized
Representative to whom the Sponsor or the Administrator has given authorization
to direct the Trustee with respect to the Trust, any change in tax status, or
any other change in circumstances which could affect the Trustee's
administration or management of the Trust.

The Trustee may rely on such designations and follow any instructions of such
Authorized Representatives, whether oral, by facsimile or in writing as though
they were Sponsor's, Administrator's, Investment Manager's, Member's or former
Member's instructions, as applicable.

Any transactions initiated by the Trustee before receiving actual notice of any
change with respect to (a) such Authorized Representative(s) or their authority,
(b) the termination of the Account, or (c) termination of the fiduciary status
of the Sponsor or Administrator, shall be valid and binding on the Sponsor or
their successors and assigns, and the Trust.

4.8      Wire Transfers. The Trustee shall follow the Employer's or
Administrator's wire transfer instructions in compliance with the security
procedures promulgated by the Trustee and agreed to

                                       15
<PAGE>

by the Sponsor. The Trustee shall perform a telephonic verification to Employer
or Employer's Authorized Representative or such other security procedure, as
Trustee may require, prior to wiring funds or following facsimile directions.
The Employer assumes all risk of delay of transfer if the Trustee is unable to
reach the Employer or the Employer's Authorized Representative, or in the event
of delay as a result of attempts to comply with any security procedure selected
by the Employer.

                                    ARTICLE V

                          RESTRICTIONS ON DISTRIBUTION

5.1      Persons to Receive Payment.

         (a)      The Trustee, upon the written direction of the Administrator
or by any other method authorized by the Administrator and agreed to by the
Trustee, shall make distributions from the Trust Fund to such persons, in such
manner, in such amounts (but not exceeding the then value of the Trust Fund),
and for such purposes as may be specified in the direction of the Administrator.
The Trustee shall, except as otherwise provided below, pay all amounts payable
hereunder only to, or for the benefit of, the person or persons designated under
the Plan or deposit to the Member's, former Member's or Beneficiary's checking
or savings account or Individual Retirement Account as directed by the
Administrator and not to any other person or corporation, and only to the extent
of assets held in the Trust for the benefit of the Member or former Member. The
Administrator's instructions to the Trustee to make distributions or not to make
distributions, and the amount thereof, shall be conclusive on all parties,
including but not limited to Members, former Members and Beneficiaries.

         (b)      In the event any controversy shall arise as to the person or
persons to whom any distribution or payment is to be made by the Trustee, or as
to any other matter arising in the administration of the Plan or Trust, the
Trustee may retain the amount in controversy pending resolution of the
controversy or the Trustee may file an action seeking declaratory relief and/or
may interplead the Trust Assets or funds in issue, and name as necessary parties
the Employer and/or any or all persons making conflicting demands.

         (c)      Whether a distribution or payment check has been issued or
not, the Trustee shall not be liable for the payment of any interest or income
on any amount paid or withheld or interpleaded under subsection (b).

         (d)      The expenses of the Trustee for taking any action under
subsection (b) shall be charged by the Trustee to the Trust, unless paid by the
Sponsor within thirty (30) days of the billing of such amount.

5.2      Assignment and Alienation Prohibited.

No benefit or interest available hereunder will be subject to assignment or
alienation, either voluntarily or involuntarily, except as provided in Section
5.3. Notwithstanding the, foregoing, the Sponsor may agree to allow Members,
former Members and Beneficiaries to borrow from the

                                       16
<PAGE>

Plan, and to secure their loans with their vested Account balances, to the
extent provided under the Plan and this Trust Agreement.

5.3      Qualified Domestic Relations Orders.

The preceding Section shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Member or former
Member pursuant to a domestic relations order, unless such an order is
determined by the Administrator to be a Qualified Domestic Relations Order, as
defined in ERISA and in section 414 (p) of the Code. Any domestic relations
order entered before January 1, 1985 will be treated as a Qualified Domestic
Relations Order if payment of benefits has commenced as of such date, and may be
treated as a Qualified Domestic Relations Order if payment of benefits had not
commenced as of such date, even though the order does not satisfy the
requirements of section 414(p). The Administrator shall direct the Trustee, in
writing, as to the disposition of any domestic relations order and shall direct
the Trustee as to any distributions necessary pursuant to any order determined
by the Administrator to be a Qualified Domestic Relations Order.

                                   ARTICLE VI

                       RESIGNATION, REMOVAL AND SUCCESSION

6.1      Resignation or Removal of Trustee. The Trustee may resign at any time
upon ninety (90) days' prior written notice to the Sponsor, which notice may be
waived by the Sponsor. The Sponsor may remove the Trustee upon ninety (90) days'
prior written notice to the Trustee, which notice may be waived by the Trustee.
However, notwithstanding the foregoing or any other provision of the Plan or
this Trust Agreement to the contrary, the Trustee shall have an unrestricted
right of immediate resignation effective upon thirty (30) days' prior written
notice to the Sponsor with respect to any portion of the Trust Assets consisting
of Sponsor Stock.

6.2      Designation of Successor Trustee. Upon notice of Trustee's resignation
or removal, Sponsor shall promptly designate a Successor Trustee who will accept
transfer of the assets of the Trust. If no Successor Trustee is designated
within ninety (90) days of notice of Trustee's resignation or removal or if a
Successor Trustee designated by the Sponsor has not accepted its appointment,
within ninety (90) days after the Trustee gives notice of its resignation or
receives notice of removal, the Trustee may, at the expense of the Trust, apply
to a court of competent jurisdiction to appoint a Successor Trustee. The
references to ninety (90) days in this Section 6.2 shall be deemed to be
references to thirty (30) days in the case of the Trustee's resignation pursuant
to the third sentence of Section 6.1 with respect to any portion of the Trust
consisting of Sponsor Stock. Until a Successor Trustee is appointed, the Trustee
shall be entitled to be compensated for its services according to its published
fee schedule then in effect for acting as Trustee in accordance with the Plan
and Trust.

6.3      Successor's Powers. A Successor Trustee shall have the same powers and
duties as those conferred upon the original Trustee hereunder. A resigning
Trustee shall transfer the Trust Assets and shall deliver the books, accounts
and records of the Trust to the Successor Trustee as soon as practicable. The
resigning Trustee is authorized, however, to reserve such amount as

                                       17
<PAGE>

may be necessary for the payment of its fees and expenses incurred prior to its
resignation or removal, and the Trust Assets shall remain liable to reimburse
the resigning or removed Trustee for any costs, expenses or attorneys' fees or
losses incurred, whether before or after resignation or removal, due solely to
Trustee's holding title to and administration of Trust Assets.

6.4      Successor's Duties. A Successor Trustee shall have no duty to audit or
otherwise inquire into the acts and transactions of its predecessor.

                                   ARTICLE VII

                                    AMENDMENT

7.1      Power to Amend. The Trustee and the Sponsor shall have the right at any
time and from time to time to modify or amend this Trust Agreement in whole or
in part, upon written agreement by both parties.

7.2      Limitation on Amendment. No amendment shall be made at any time under
which any part of the Trust may be diverted to purposes other than for the
exclusive benefit of Members, former Members and their Beneficiaries or which
shall decrease the percentage or amount of the vested interest of any Member or
former Member.

7.3      Conformity with Law. Notwithstanding anything herein to the contrary,
this Trust Agreement may be amended prospectively or retroactively at any time
by the Sponsor and the Trustee if deemed necessary to conform to the provisions
and requirements of ERISA or the Code or regulations promulgated pursuant
thereto in order to maintain the tax-exempt status of this Trust thereunder, or
to conform to the provisions and requirements of any law, regulation, order or
ruling affecting the character or purpose of the Plan or Trust.

                                  ARTICLE VIII

                                   LIABILITIES

8.1      Declaration of Intent. In keeping with the public policy expressed in
section 410(a) of ERISA, nothing in this Article purports to relieve a fiduciary
from liability for any responsibility, obligation or duty under Part 4 of Title
I of ERISA. However, to the full extent permitted in section 405 of ERISA and
otherwise as not prohibited by applicable law, it is the intent of this Article
to relieve each fiduciary from all liability for any acts or omissions of any
other fiduciary or any other person and to declare the absence of liabilities of
all persons referred to in this Article to the extent not imposed by applicable
law or by provisions of this Trust Agreement. Each of the following Sections, in
declaring such limitations, is set forth without limiting the generality of this
Section but in each case shall be subject to the provisions, limitations and
policies set forth in this Section. Additionally, to the full extent permitted
in ERISA section 404(c), no fiduciary shall be liable for any investment
selection, investment loss or by reason of any breach of fiduciary duty or
breach of this Agreement which results from Member's, former Member's or
Beneficiary's exercise of control over the assets of his or her Account.

                                       18
<PAGE>

8.2      General Limitations of Liability

         (a)      A fiduciary shall not be liable with respect to a breach of
fiduciary duty under Title I of ERISA if such breach was committed before he,
she or it became a fiduciary or after he, she or it ceased to be a fiduciary.

         (b)      No fiduciary shall be liable for any act or omission of any
other person to whom fiduciary responsibilities (other than Trustee
responsibilities) are allocated by the Trust Agreement or by a named fiduciary,
except as provided in section 405(c) of ERISA.

8.3      Liability of the Trustee.

         (a)      The Trustee is not a party to the Plan and shall have no
powers, duties or responsibilities with regard to the administration of the Plan
or to determine the rights or benefits of any person having or claiming an
interest under the Plan or in the Trust or under this Trust Agreement or to
control any disposition of the Trust or part thereof which is directed by the
Administrator.

         (b)      The Trustee shall have no liability for the adequacy or
timeliness of contributions for the purposes of the Plan or for enforcement of
the payment thereof.

         (c)      The Trustee shall have no liability for the acts or omissions
of the Employer, the Administrator, a Member, former Member or Beneficiary, or
any Investment Manager (other than the Trustee acting in such capacity) or
Authorized Representative.

         (d)      The Trustee shall have no liability for following proper
directions of any party given authority to direct the Trustee pursuant to the
Trust Agreement or designated as an Authorized Representative.

         (e)      During such period or periods of time, if any, as a Directing
Party is directing the investment and management of Trust Assets, the Trustee
shall have no obligation to determine the existence of any conversion,
redemption, exchange, subscription or other right relating to securities
purchased on the directions of a Directing Party, if notice of any such right
was given prior to the purchase of such securities. If such notice is received
by the Trustee after the purchase of such securities, the Trustee shall notify
the Directing Party. The Trustee shall have no obligation to exercise any such
right unless it is informed of the existence of the right and is instructed to
exercise such right, in writing, by the Directing Party within a reasonable time
prior to the expiration of such right.

         (f)      If a Directing Party directs the Trustee to purchase
securities issued by any foreign government or agency thereof, or by any
corporation domiciled outside of the United States, it shall be the
responsibility of such Directing Party to advise the Trustee in writing with
respect to any laws or regulations of any foreign countries or any United States
territories or possessions which shall apply, in any manner whatsoever, to such
securities, including, but not limited to, receipt of dividends or interest or
reclamation of foreign taxes by the Trustee for such securities. If the Trustee
is directed not to reclaim foreign taxes, the Trustee shall have no
responsibility to reclaim any such taxes. Any expenses, costs or extraordinary
fees incurred by the Trustee for the reclamation of foreign taxes shall be
charged to the Trust.

                                       19
<PAGE>

8.4      Indemnification.

         (a)      The Trustee shall not be liable for, and the Sponsor agrees to
indemnify and hold harmless the Trustee, its officers, directors, employees and
agents from and against any loss, liability, claims, demands, damages and
expenses (including reasonable attorneys' fees and other costs incurred by the
Trustee to third parties), any claims of breach of fiduciary duty brought by any
person or entity, lawsuits, disputes of any kind, and any taxes or penalties
incurred by the Trustee, which may arise from (i) any acts taken in good faith
in accordance with directions (or any action omitted in good faith in the
absence of such directions) from the Administrator, Sponsor, Investment Manager
(other than the Trustee acting in such capacity), Authorized Representative,
Member, former Member, Beneficiary, Loan Fiduciary or any other person
designated to act on their behalf which the Trustee reasonably believes to have
been given by them; (ii) the negligence or willful misconduct of the
Administrator, Sponsor, Investment Manager (other than the Trustee acting in
such capacity), Member, former Member, Beneficiary, Authorized Representative,
Loan Fiduciary or any other person designated to act on their behalf, or (iii)
any act or omission by the Sponsor, Administrator, Investment Manager (other
than the Trustee acting in such capacity), Member, former Member, Beneficiary,
Authorized Representative, Loan Fiduciary (other than the Trustee acting in such
capacity) or any other person designated to act on their behalf and which
results in loss to the Trust, except in the event of the Trustee's negligence,
willful misconduct or material breach of this Agreement which directly relates
to and causes the loss to the Trust.

         (b)      The Sponsor may satisfy all or any part of its obligations
hereunder through insurance arrangements acceptable to the Trustee.

         (c)      The indemnifications and releases provided herein shall
survive termination of this Trust Agreement, and shall apply to the parties'
successors and assigns.

                                   ARTICLE IX

                            DURATION AND TERMINATION

9.1      Irrevocability. This Trust is hereby declared to be irrevocable, except
with respect to Section 9.2 below. It is intended that this Trust shall be
tax-exempt and that the Plan and Trust shall qualify under sections 401(a) and
501(a) of the Code.

9.2      Termination. This Trust Agreement and the Trust may be terminated at
any time by the Sponsor. Upon such termination, the Trust assets shall be
distributed by the Trustee as and when directed by the Administrator in
accordance with the provisions of this Trust Agreement; provided, however, that
the Trustee shall not be required to make any distribution prior to receipt of a
determination letter from the Internal Revenue Service that the termination does
not adversely affect the tax-exempt status of the Plan and Trust. In the event
the Administrator requests distribution of the Trust assets without receipt of a
favorable determination letter on Plan termination, the Sponsor shall indemnify
and hold the Trustee harmless against all claims, liability, costs and fees,
including but not limited to any attorneys' fees and costs, any taxes or
penalties, and any claims of breach of fiduciary duty brought by any person or
entity relating to

                                       20
<PAGE>

or resulting from such distribution. From the date of termination of the Plan
and until the final distribution of the Trust, the Trustee shall continue to
have all powers provided under this Trust that are necessary or desirable for
the orderly liquidation and distribution of the Trust. In no instance, upon any
termination and subsequent distribution, shall the Trust or any part of it be
used for, or diverted to, purposes other than for the exclusive benefit of
Members, former Members, and their Beneficiaries, and for defraying the
administrative expenses of the Plan and Trust until all Plan liabilities have
been satisfied.

9.3      Duration. This Trust shall continue in full force and effect for the
maximum period of time permitted by applicable law, unless this Trust is sooner
terminated in accordance with the Plan, the Code and ERISA.

                                    ARTICLE X

                                  MISCELLANEOUS

10.1     Emergencies and Other Delegations. In reference to situations involving
emergencies and the delegation of duties:

         (a)      In case of an emergency, the Trustee may, but shall not be
required to, act in the absence of directions from any person having the power
to direct the Trustee with respect to the matter involved and shall incur no
liability in so acting or not acting, except as to the Trustee's gross
negligence or willful misconduct. Such actions shall be conclusive on the
Administrator, the Member, the former Member and the Sponsor if written notice
of the proposed action is given prior to the action being taken, and the Trustee
receives no immediate response. Notwithstanding the foregoing, the Trustee shall
not be liable for failure to take any action in connection with Trust assets if
no direction is received.

         (b)      Notwithstanding any other provision in this Trust Agreement,
the Employer shall have the right, but not the obligation, to liquidate Trust
assets of a Member's or former Member's Account for purposes of payment of
distributions, or expenses and fees.

10.2     Expenses and Taxes.

         (a)      The Trust, or at the Sponsor's option, the Sponsor, shall
quarterly pay the Trustee its reasonable expenses in administering the Trust and
reasonable compensation for its services as Trustee at a rate to be agreed upon
by the parties to this Trust Agreement, based upon Trustee's published fee
schedule. However, the Trustee reserves the right to alter this rate of
compensation at any time by providing the Sponsor with notice of such change at
least one-hundred twenty (120) days prior to its effective date. Reasonable
compensation shall include compensation for any extraordinary services or
computations required.

         (b)      Reasonable counsel fees, reasonable costs, expenses and
charges of the Trustee incurred or made in the performance of its duties,
including but not limited to expenses relating to investment of the Trust such
as broker's commissions, stamp taxes, and similar items and all taxes of any and
all kinds that may be levied or assessed under existing or future laws upon or
in

                                       21
<PAGE>

respect to the Trust or the income thereof shall constitute a charge upon the
Trust except to the extent that the Sponsor elects to pay such fees, costs and
expenses directly.

10.3     Parties to Proceedings. In any judicial, mediation, arbitration or
administrative proceedings, only the affected Employer and the Trustee shall be
necessary parties and no Member. Former Member or other person having or
claiming any interest in the Trust shall be entitled to any notice or service of
process (except as required by applicable law). Any judgment, decision or award
entered in any such proceeding or action shall be conclusive upon all interested
persons.

10.4     Adoption by Affiliated Employer. Any employer affiliated with Employer
("Affiliated Employer") may adopt the Employer's Plan with the approval of both
the Administrator and the Employer, and the Affiliated Employer shall
concurrently become a party to this Trust Agreement by giving written notice of
its adoption of the Plan and this Trust Agreement to the Trustee. Upon such
written notice, the Affiliated Employer shall be deemed a signatory to this
Trust Agreement.

10.5     Participation by Affiliates. The Sponsor is solely responsible for
supervising the process by which such Affiliated Employer participates in the
Plan and for ensuring the qualified status of the Plan and the tax-exempt status
of the Trust are not thereby adversely affected. The Administrator shall keep
records showing the assets attributable to each such Affiliated Employer
contributing to the Trust and the Trustee shall account separately within the
Trust for the assets attributable to each Affiliated Employer.

10.6     Withdrawal of an Affiliated Employer. In the event that an Affiliated
Employer elects, with the consent of the Sponsor, to withdraw from participation
in the Plan and so notifies the Trustee, the Trustee shall upon receipt of (a) a
certification by the Administrator setting forth the Trust assets allocable to
such withdrawal and (b) certified copies of the resolution of the Board of
Directors of the Employer approving the withdrawal or termination and approving
the instructions of the Administrator with regard to the segregation of the
assets of the Trust, segregate such assets and, on receipt of written directions
from the Administrator, make disposition thereof in accordance with Section 9.2
hereof or hold such segregated assets in a separate trust governed by the same
provisions as this Trust Agreement.

10.7     Multiple Plans. With the consent of the Trustee, the Sponsor may direct
that the assets of two or more qualified plans maintained by the Sponsor and
Affiliated Employers be maintained as one Trust and their assets be commingled.

10.8     Successor Employer. If any successor to an Employer continues the Plan
adopted by the Employer, such successor shall concurrently become a successor
first party to this Trust Agreement. The Successor Employer shall immediately
provide the Trustee with any required documentation if Authorized
Representatives have changed.

10.9     Locating Members and Beneficiaries. The Sponsor and Administrator will
be responsible for locating Members, former Members and Beneficiaries to
facilitate benefit payments and for compliance with reporting and disclosure
requirements.

                                       22
<PAGE>

10.10    Use of Trust Funds.

         (a)      Notwithstanding anything to the contrary contained in this
Trust Agreement, or in any amendment thereto, it shall be impossible, except as
otherwise provided under ERISA, at any time prior to the satisfaction of all
liabilities with respect to the Members, former Members and Beneficiaries of the
Plan, for any part of the Trust Fund, other than such part as is required to pay
taxes and expenses of administration of the Plan and the Trust (including the
payment of Trustee's fees), to be used for, or diverted to, purposes other than
for the exclusive benefit of the Members, former Members and Beneficiaries.

         (b)      The Employer shall have no beneficial interest in the assets
of the Trust, and no part of the Trust shall ever revert to or be repaid to the
Employer, directly or indirectly, except that upon written request, the Employer
shall have a right to recover:

              (1)   an Employer's contribution or payment made by a mistake of
                    fact or law (within the meaning of section 403 of ERISA),
                    this Section shall not prohibit the return of such
                    contribution to the Employer (to the extent of such mistake
                    of fact or law) within one year after the payment of such
                    contribution to the Trust;

              (2)   an Employer's contribution or payment is conditioned upon
                    the deductibility of such amount under section 404 of the
                    Code, then, to the extent the deduction is disallowed, this
                    Section shall not prohibit the return of such contribution
                    to the Employer within one year after such determination of
                    disallowance of the deduction; and

              (3)   any residual assets due to a section 415 excess contribution
                    upon termination of the Plan if all liabilities of the Plan
                    to Members, former Members and their Beneficiaries have been
                    satisfied and the reversion does not contravene any
                    provision of law.

10.11.   Location of Trust Assets. Except as authorized by the Secretary of
Labor by regulation, the indicia of ownership of any assets of the Trust and
Plan shall not be maintained outside the jurisdiction of the District Courts of
the United States.

10.12    Partial Invalidity. If any provision of this Trust Agreement is held to
be illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of this Trust Agreement, unless such illegality
or invalidity prevents accomplishment of the objectives and purposes of this
Trust Agreement and the Plan. In the event of any such holding, the parties will
immediately attempt to negotiate acceptable amendments to this Trust Agreement
as necessary to remedy any such defect.

10.13    Counterparts. This Trust Agreement may be executed in several
counterparts, each of which shall be deemed an original, and such counterparts
shall constitute but one instrument which may be sufficiently evidenced by any
one counterpart.

10.14    Successors and Assigns. This Trust Agreement shall inure to the benefit
of, and shall be binding upon, the parties and their successors and assigns.

                                       23
<PAGE>

10.15    Relation to the Plan. This Trust Agreement and the Plan are both part
of and constitute a single integrated employee benefit plan and trust and shall
be construed together. In the event of any conflict between the provisions of
the Plan and this Trust Agreement, the provisions of this Trust Agreement shall
control with respect to all rights, duties, responsibilities, obligations,
powers and authorities of the Trustee, and the Trustee shall have no duty to
inquire into, nor shall it have any obligation or liability with respect to, the
provisions of the Plan.

10.16    Construction and Jurisdiction. This Trust Agreement shall be construed,
administered and enforced according to ERISA and the Code and where state law is
applicable, under California laws, fairly and equitably, and in accordance with
the purposes of the Plan. Jurisdiction for any dispute hereunder shall be in the
state of California.

10.17    Alternate Dispute Resolution. If a dispute arises out of or relates to
this Agreement, or the performance or breach thereof, the parties agree first to
try in good faith to settle the dispute by mediation under the Commercial
Mediation Rules of the American Arbitration Association. Thereafter, any
remaining unresolved controversy or claim arising out of or relating to this
Agreement, or the performance or breach thereof, shall be decided by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. The sole arbitrator shall be a retired or former Judge
or other qualified panelist associated with the American Arbitration
Association. Judgment upon any award rendered by the arbitrator shall be final
and may be entered in any court having jurisdiction and the parties waive their
right to jury trial. Each party shall bear its own costs, attorneys' fees and
its share of arbitration fees. The Alternate Dispute Resolution provisions in
this Agreement do not constitute a waiver of the parties' rights to a judicial
forum in instances where arbitration would be void under applicable law, and do
not preclude the Trustee from exercising its rights to interplead the funds of
the Trust at the cost of the Trust.

            * * * * * * * * Signature Page Follows * * * * * * * * *

                                       24
<PAGE>

                                 Signature Page

The parties have signed this Trust Agreement on the dates indicated below.

SPONSOR:

THE MEN'S WEARHOUSE, INC.

By:   /s/DIANA M. WILSON
      -----------------------------------
Name: Diana M. Wilson
Its:  Vice President, PAO                            Date: 2/13/2004

TRUSTEE:

UNION BANK OF CALIFORNIA, N.A.

By:   /s/ JUAN MOLINA
      ----------------------------------
Name: Juan Molina
Its:  Vice President & Adm. Mgr.                     Date: 2/17/2004

By:   /s/ SHULAMITH PHILOSOPH
      ----------------------------------
Name: Shulamith Philosoph
Its:  V.P., Compliance                               Date: 2/17/2004exv10w37

 

Exhibit 10.37

CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	 	 	PAGE
	1.	 	REFERENCE DATA	 	1
	2.	 	DESCRIPTION OF DEMISED PREMISES, BUILDING, STORAGE SPACE, EXPANSION PREMISES
AND RIGHTS TO LEASE ADDITIONAL SPACE
	 	1
	 	 	
2.1
	 	Demised Premises, Building, and Storage Space
	 	1
	 	 	
2.2
	 	Appurtenant Rights
	 	2
	 	 	
2.3
	 	Exclusions and Reservations
	 	3
	 	 	
2.4
	 	First Expansion Premises
	 	3
	 	 	
2.5
	 	Second Expansion Premises
	 	5
	 	 	
2.6
	 	Intentionally Omitted
	 	7
	 	 	
2.7
	 	Expansion Option Premises
	 	7
	 	 	
2.8
	 	Right to Lease Available Space
	 	10
	3.	 	TERM OF LEASE	 	14
	 	 	
3.1
	 	Definition of Lease Year
	 	14
	 	 	
3.2
	 	Term
	 	14
	 	 	
3.3
	 	Declaration Fixing Term Commencement Date, Rent
Commencement Date and Termination Date
	 	15
	 	 	
3.4
	 	Extension Term
	 	15
	4.	 	DELIVERY OF POSSESSION; LANDLORD’S WORK; INITIAL TENANT IMPROVEMENTS	 	16
	 	 	
4.1
	 	Delivery of Possession
	 	16
	 	 	
4.2
	 	Landlord’s Work
	 	17
	 	 	
4.3
	 	Tenant’s Work
	 	17
	 	 	
4.4
	 	Coordination of Contractors; Landlord Delay; Tenant Delay
	 	18
	 	 	
4.5
	 	Tenant Improvements Allowance
	 	20
	 	 	
4.6
	 	Life Safety Improvements Allowance
	 	20
	5.	 	USE OF PREMISES	 	20
	 	 	
5.1
	 	Permitted Use
	 	20
	 	 	
5.2
	 	Prohibited Uses
	 	21
	 	 	
5.3
	 	Licenses and Permits
	 	21
	6.	 	RENT AND RENTAL CREDIT	 	21
	 	 	
6.1
	 	Rent
	 	21
	 	 	
6.2
	 	Rental Credit
	 	22
	 	 	
6.3
	 	Rentable Area
	 	23
	7.	 	RENTAL ESCALATION	 	23
	 	 	
7.1
	 	Definitions
	 	23
	 	 	
7.2
	 	Adjustment of Yearly Rental Rate
	 	23
	 	 	
7.3
	 	Recapture of Deferred Rental Escalation
	 	24
	 	 	
7.4
	 	Example of Rental Escalation
	 	24
	 	 	
7.5
	 	Second Example of Rental Escalation
	 	25
	8.	 	SERVICES FURNISHED BY LANDLORD	 	25
	 	 	
8.1
	 	Electric Current
	 	25
	 	 	
8.2
	 	Water
	 	26
	 	 	
8.3
	 	Elevators; Cleaning
	 	26

-i-

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	PAGE
	 	 	
8.4
	 	Heat; Air Conditioning
	 	26
	 	 	
8.5
	 	Additional Heat, Cleaning and Air Conditioning Services
	 	27
	 	 	
8.6
	 	Additional Air Conditioning Equipment
	 	27
	 	 	
8.7
	 	Repairs
	 	27
	 	 	
8.8
	 	Interruption or Curtailment of Services
	 	28
	 	 	
8.9
	 	Energy Conservation
	 	29
	 	 	
8.10
	 	Rooftop Communications
	 	29
	 	 	
8.11
	 	Exterior Tenant Identification Signage
	 	30
	 	 	
8.12
	 	Maintenance of Exterior Common Areas
	 	31
	 	 	
8.13
	 	Maintenance of Interior Common Areas
	 	31
	 	 	
8.14
	 	Maintenance of Landscaping
	 	31
	 	 	
8.15
	 	Building Access
	 	31
	9.	 	OPERATING COSTS AND REAL ESTATE TAXES	 	31
	 	 	
9.1
	 	Definitions
	 	31
	 	 	
9.2
	 	Tax Payment Obligation
	 	36
	 	 	
9.3
	 	Operating Cost Payment Obligation
	 	36
	 	 	
9.4
	 	Part Years
	 	36
	 	 	
9.5
	 	Annual Statement; Audit Rights
	 	36
	 	 	
9.6
	 	Information Meetings and Adjustment of Operating Cost Payment Obligation
	 	37
	 	 	
9.7
	 	Survival
	 	38
	10.	 	CHANGES OR ALTERATIONS BY LANDLORD	 	38
	11.	 	FIXTURES, EQUIPMENT AND IMPROVEMENTS—REMOVAL BY TENANT; WAIVER OF LANDLORD’S LIEN
	 	38
	12.	 	ALTERATIONS AND IMPROVEMENTS BY TENANT	 	39
	 	 	
12.1
	 	General Provisions
	 	39
	 	 	
12.2
	 	Alterations Outside of the Premises
	 	39
	 	 	
12.3
	 	Tenant’s Obligation to Remove
	 	40
	13.	 	TENANT’S CONTRACTORS—MECHANICS’ AND OTHER LIENS—STANDARD OF TENANT’S
PERFORMANCE—COMPLIANCE WITH LAWS
	 	40
	14.	 	REPAIRS BY TENANT—FLOOR LOAD	 	41
	 	 	
14.1
	 	Repairs by Tenant
	 	41
	 	 	
14.2
	 	Floor Load—Heavy Machinery
	 	41
	15.	 	INSURANCE, INDEMNIFICATION, EXONERATION AND EXCULPATION	 	41
	 	 	
15.1
	 	General Liability Insurance
	 	41
	 	 	
15.2
	 	Tenant’s Property Insurance
	 	41
	 	 	
15.3
	 	Insurance Requirements
	 	42
	 	 	
15.4
	 	Tenant Indemnity
	 	42
	 	 	
15.5
	 	Landlord Indemnity
	 	42
	 	 	
15.6
	 	Intentionally Omitted
	 	42
	 	 	
15.7
	 	Bursting of Pipes,
etc.
	 	42
	 	 	
15.8
	 	Repairs and Alterations—No Diminution of Rental Value
	 	42
	 	 	
15.9
	 	Landlord’s Insurance
	 	43
	16.	 	ASSIGNMENT, MORTGAGING AND SUBLETTING	 	43
	 	 	
16.1
	 	General Prohibition
	 	43
	 	 	
16.2
	 	Transfer or Assignment – Merger or Consolidation
	 	44
	 	 	
16.3
	 	Landlord’s Consent – Acknowledgment of Conditions Fulfilled
	 	44
	 	 	
16.4
	 	Consideration for Assignment or Sublease; Profit Sharing
	 	45

-ii-

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	PAGE
	 	 	
16.5
	 	Permitted Assignments and Subleases
	 	46
	 	 	
16.6
	 	Intentionally Omitted
	 	46
	 	 	
16.7
	 	Miscellaneous
	 	46
	 	 	
16.8
	 	Special Non-Disturbance
	 	47
	17.	 	MISCELLANEOUS COVENANTS	 	49
	 	 	
17.1
	 	Rules and Regulations
	 	49
	 	 	
17.2
	 	Intentionally Omitted
	 	49
	 	 	
17.3
	 	Intentionally Omitted
	 	50
	 	 	
17.4
	 	Signs, Blinds and Drapes
	 	50
	 	 	
17.5
	 	Estoppel Certificate
	 	50
	 	 	
17.6
	 	Prohibited Materials and Property
	 	50
	 	 	
17.7
	 	Requirements of Law—Fines and Penalties
	 	51
	 	 	
17.8
	 	Tenant’s Acts—Effect on Insurance
	 	51
	 	 	
17.9
	 	Landlord Access to Premises
	 	51
	18.	 	DAMAGE BY FIRE, ETC.	 	51
	 	 	
18.1
	 	Restoration
	 	52
	 	 	
18.2
	 	Landlord Right to Terminate
	 	52
	 	 	
18.3
	 	Tenant Right to Terminate
	 	52
	 	 	
18.4
	 	Rent Abatement
	 	52
	19.	 	WAIVER OF CLAIMS; SUBROGATION	 	52
	20.	 	CONDEMNATION - EMINENT DOMAIN	 	53
	21.	 	DEFAULT	 	54
	 	 	
21.1
	 	Conditions of Limitation - Re-entry - Termination
	 	54
	 	 	
21.2
	 	Intentionally Omitted
	 	54
	 	 	
21.3
	 	Damages - Termination
	 	54
	 	 	
21.4
	 	Fees and Expenses
	 	55
	 	 	
21.5
	 	Waiver of Redemption
	 	56
	 	 	
21.6
	 	Remedies Not Exclusive
	 	56
	 	 	
21.7
	 	Grace Period
	 	56
	22.	 	END OF TERM - ABANDONED PROPERTY	 	56
	23.	 	SUBORDINATION	 	57
	24.	 	QUIET ENJOYMENT	 	58
	25.	 	ENTIRE AGREEMENT — WAIVER — SURRENDER	 	58
	 	 	
25.1
	 	Entire Agreement
	 	58
	 	 	
25.2
	 	No Waiver
	 	59
	 	 	
25.3
	 	Surrender
	 	59
	26.	 	FORCE MAJEURE - EXCULPATORY CLAUSE	 	59
	27.	 	BILLS AND NOTICES	 	60
	28.	 	PARTIES BOUND — SEIZING OF TITLE	 	60
	29.	 	MISCELLANEOUS	 	61
	 	 	
29.1
	 	Separability
	 	61

-iii-

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	PAGE
	 	 	
29.2
	 	Captions, etc.
	 	61
	 	 	
29.3
	 	Broker
	 	61
	 	 	
29.4
	 	Time is of the Essence
	 	61
	 	 	
29.5
	 	Arbitration
	 	61
	 	 	
29.6
	 	Governing Law
	 	62
	 	 	
29.7
	 	Representation of Authority
	 	62
	 	 	
29.8
	 	Survival
	 	62
	 	 	
29.9
	 	Leasing Requirement
	 	62
	30.	 	LANDLORD DEFAULT	 	62
	31.	 	SECURITY DEPOSIT	 	63
	32.	 	PARKING	 	64

EXHIBITS

	 	 	 	 	 
	Exhibit 1	 	
Lease Data
	 	E1-1
	Exhibit 2	 	
Site Plan of the Land and Plan of Initial Premises,
Storage Space, First
Expansion Premises, Second Expansion Premises, and
Expansion Option Premises
	 	E2-1
	Exhibit 3	 	
Rentable Area Schedule
	 	E3-1
	Exhibit 4	 	
Specifications for Office Cleaning
	 	E4-1
	Exhibit 5	 	
Broker Determination of Fair Market Rental Value
	 	E5-1
	Exhibit 6	 	
Form of Letter of Credit
	 	E6-1
	Exhibit 7-A	 	
Description of Landlord’s Renovation Work
	 	E7-A-1
	Exhibit 7-B	 	
Description of Landlord’s Pre-Occupancy Work
	 	E7-B-1
	Exhibit 7-C	 	
Description of Base Building Core and Shell
	 	E7-C-1
	Exhibit 8	 	
Intentionally Omitted
	 	E8-1
	Exhibit 9	 	
Rooftop Plan Showing the Antenna Area
	 	E9-1
	Exhibit 10	 	
Rules and Regulations
	 	E10-1
	Exhibit 11	 	
Form of SNDA
	 	E11-1
	Exhibit 12	 	
Legal Description of Land
	 	E12-1
	Exhibit 13	 	
Tenant’s Design Development Plans
	 	E13-1
	Exhibit 14-A	 	
Rooftop Terrace Reservation Rules
	 	E14-A-1
	Exhibit 14-B	 	
2004 Allocation of Rooftop Terrace Exclusive Rights
	 	E14-B-1
	Exhibit 15	 	
Form of Special Non-Disturbance Agreement
	 	E15-1

-iv-

 

Execution Counterpart

     THIS LEASE is made and entered into on the Execution Date as stated in
Exhibit 1 and between the Landlord and the Tenant named in Exhibit 1.

Landlord does hereby demise and lease to Tenant, and Tenant does hereby hire
and take from Landlord, the Initial Premises, upon and subject to the
covenants, agreements, terms, provisions and conditions of this Lease for the
term hereinafter stated:

	1.	 	REFERENCE DATA

     Each reference in this Lease to any of the terms and titles contained in
any Exhibit attached to this Lease shall be deemed and construed to incorporate
the data stated under that term or title in such Exhibit.

	2.	 	DESCRIPTION OF DEMISED PREMISES, BUILDING, STORAGE SPACE, EXPANSION
PREMISES AND RIGHTS TO LEASE ADDITIONAL SPACE

     2.1 Demised Premises, Building, and Storage Space.

          (a) The Premises. The Premises shall initially constitute the Initial
Premises as described in Exhibit 1 and shown on Exhibit 2 (the “Lease Plan”).
The Rentable Area of each floor of the Building, as determined in accordance
with the Measurement Method, is set forth on the chart attached hereto as
Exhibit 3 (the “Rentable Area Schedule”).

          (b) The Building. By transmittal dated July 23, 2003 from Michael J.
Litchman, Esq. to Jeremy B. Fox, Esq., Landlord has delivered to Tenant a copy
of Landlord’s owner’s title policy for the Land and Building. Landlord is not
aware of any recorded matters encumbering title to the Land or the Building,
other than as disclosed on such title policy.

          (c) The Storage Space. Commencing on the date that is forty-five days
after notice from Tenant requesting delivery thereof, but in no event later
than the date that is two (2) months prior to the Rent Commencement Date (the
“Storage Space Commencement Date”), Landlord shall lease to Tenant and Tenant
shall lease from Landlord certain space consisting of approximately 1,000
usable square feet on the second lower level of the Building, as shown on
Exhibit 2 (the “Storage Space”). Except as otherwise expressly provided in
this Article 2.1(c), it is agreed that Tenant is accepting the Storage Space in
“as is” condition. Landlord shall deliver the Storage Space to Tenant on the
Storage Space Commencement Date with (i) a demising partition constructed of
either finished drywall or CMU to secure and separate the Storage Space from
other storage space and to create an access corridor, (ii) a solid core wood
door or hollow metal door and frame with all necessary hardware including a
lockset, and (iii) a light switch located adjacent to the strike side of the
door connected to existing lighting fixtures within the Storage Space. Tenant
anticipates installing in the Storage Space additional lighting, HVAC and
shelving, which work shall be performed subject to and in accordance with this
Lease. The Storage Space shall be used for storage purposes ancillary to
Tenant’s use of the Premises. Tenant’s rights and obligations with respect to
the Storage Space shall be upon and subject to all of the terms and conditions
of this Lease, and the Storage Space shall be considered part of the Premises
for all purposes of this Lease, except as otherwise set forth herein.
Commencing on the Rent Commencement Date, Tenant shall pay the Storage Rent
with respect to the Storage Space in the amount set forth in Exhibit 1, payable
in monthly installments of one twelfth (1/12) each in accordance with the
provisions of Article 6, and such amount shall be subject to increase, on the
first day of each succeeding Lease Year, pursuant to Article 7 on the same
basis as Yearly Rent with respect to the Premises. Landlord shall maintain the
Storage Space in a manner consistent with the management of storage areas in
other first class buildings in the downtown Washington, DC area, and otherwise
in accordance with the terms and conditions of this Lease. The square footage
of the Storage
Space is not included in the calculation of the Rentable Area of the
Premises. Landlord shall have the right to relocate the Storage Space, as a
single unit, to another comparable storage space in the Building, so long

 

 

as
such replacement storage space contains comparable improvements and equipment
(including any HVAC equipment) as contained in the original Storage Space and
has reasonable access to a Building freight elevator. Any such relocation
shall be implemented only following reasonable prior notice to Tenant, and
shall be at Landlord’s sole cost and expense. Subject to the terms and
conditions of this Article 2.1(c), Tenant shall have the right to lease
additional storage space in the Building provided that (i) there is then no
Event of Default that remains uncured and (ii) the ratio of the total usable
area of the Storage Space leased by Tenant from time to time to the total
usable area of storage space in the Building does not exceed the ratio of the
Rentable Area of office space in the Building leased by Tenant from time to
time to the total Rentable Area of the Building (such limit is hereinafter
referred to as “Tenant’s Storage Space Limit”). In the event that Landlord has
any additional storage space available for lease at any time during the term of
this Lease (except that storage space used by a departing tenant shall not be
considered available if Landlord desires to lease such storage space to the
successor occupant(s) of the space leased by such departing tenant), provided
that the Storage Space then leased by Tenant under this Lease, as increased by
the usable area of such available storage space, is smaller than Tenant’s
Storage Space Limit, Landlord shall notify Tenant of the availability of such
storage space, specifying the location and size of such storage space, and
Landlord’s estimate of the fair market storage rent at which Landlord is
willing to lease such space. Tenant shall have the right to lease such storage
space at the then fair market storage rent therefor, by giving written notice
to Landlord within ten (10) business days after receipt of such notice from
Landlord. If Tenant shall timely elect to lease the additional storage space,
such space shall be added to and considered part of the Storage Space under
this Lease for all purposes, including, without limitation, the adjustment of
the Storage Rent to reflect the addition of such additional storage space. If
Tenant shall disagree with Landlord’s determination of the fair market storage
rent, and the parties are unable to reach agreement within thirty (30) days
after Landlord’s notice, either party may submit such dispute to a Broker
Determination as defined in Article 2.7(g) pursuant to Exhibit 5 within thirty
(30) days after such initial 30 day period.

     2.2 Appurtenant Rights.

          (a) Common Areas. Tenant shall have, as appurtenant to the Premises,
rights to use in common with others entitled thereto, subject to the rules and
regulations specified in Exhibit 10, and such other reasonable rules from time
to time made by Landlord of which Tenant is given reasonable prior written
notice:

		
	 	     (i) the common lobbies, hallways, stairways and elevators of
the Building, serving the Premises in common with others,

		
	 	     (ii) common walkways necessary for access to the Building,

		
	 	     (iii) the Building’s fitness facility, as shown on the Lease
Plan, Exhibit 2;

		
	 	     (iv) the Building’s “ground floor terrace,” as shown on the
Lease Plan, Exhibit 2;

		
	 	     (v) if the Premises includes less than the entire Rentable
Area of any floor, the common toilets and other common facilities
of such floor;

		
	 	     (vi) the rooftop terrace for the Building, at times other
than the times provided for Tenant’s exclusive use thereof in
Article 2.2(b) below, and subject to the exclusive rights granted
by Landlord to other tenants in accordance with Article 2.2(b)
below; and
	 
	 	     (vii) the common area panels, equipment rooms, shafts,
stacks, pipes, conduits, and ducts in the Building for the
installation, operation, maintenance and repair of the wires,
cables, panels and equipment of Tenant serving the Premises.

2

 

     Landlord shall impose no usage fees in connection with the use by tenants
in the Building, and their employees, of the aforesaid fitness facility and
“ground floor terrace,” and costs and expenses associated therewith shall be
recoverable by Landlord as Operating Costs to the extent permitted under
Article 9 below.

          (b) Rooftop Terrace. Landlord maintains and operates, in an area on the
roof of the Building, a rooftop terrace that, on terms and conditions set forth
in this paragraph (b), shall be made available from time to time during the
term for Tenant’s exclusive use. Landlord shall make such rooftop terrace
available for Tenant’s exclusive use, without the imposition of a usage fee,
not fewer than twenty (20) times during any Lease Year (prorated for partial
Lease Years to an amount equal to 20/365 multiplied by the number of days in
such partial Lease Year), for private functions and meetings, subject to the
reservation procedures specified in Exhibit 14-A and the rules and regulations
specified in Exhibit 10, and such other reasonable rules and regulations
pertaining to the use of the rooftop terrace of which Tenant is given
reasonable prior written notice. The initial allocation of exclusive use of
the rooftop terrace for calendar year 2004 is attached hereto and made a part
hereof as Exhibit 14-B. Notwithstanding anything contained herein to the
contrary, Landlord shall not grant more occasions of exclusive use of the
rooftop terrace to other tenants in the Building collectively (and if Landlord
desires to grant more occasions of exclusive use to other tenants collectively,
Landlord shall increase Tenant’s exclusive use rights in order to comply with
the requirements of this sentence). Except as set forth in this Article
2.2(b), Landlord shall operate and maintain the rooftop terrace as a Building
common area, in a first class manner, and costs and expenses associated
therewith shall be recoverable by Landlord as Operating Costs to the extent
permitted under Article 9 below.

          (c) 8th and 9th Floor Terraces. Tenant shall have the exclusive right,
throughout the term of this Lease, to the use of the eighth (8th) floor
terrace, as shown on Exhibit 2. Such use shall be subject to the rules and
regulations specified in Exhibit 10, and such other reasonable rules issued
from time to time by Landlord provided that Tenant is given reasonable advance
written notice of such rules. Tenant shall maintain such terraces in a neat
and tidy condition. Subject to such obligations of Tenant, Landlord shall
maintain such terrace to the same first class standard as the common areas of
the Building, and the costs of such maintenance shall be included in Operating
Costs to the extent permitted under Article 9 below. Upon the expansion of the
Premises to include the ninth (9th) floor of the Building, Tenant shall have
the exclusive right to the use of the ninth (9th) floor terrace, on the same
basis as the 8th floor terrace.

     2.3 Exclusions and Reservations. Except as otherwise expressly provided
herein, there shall be excluded from the Premises, and Landlord hereby reserves
to itself, the ceiling and floor slabs, and the exterior windows and perimeter
walls of the Premises except the inner surfaces thereof, any balconies or
terraces (except to the extent the same are shown as part of the Premises on
the Lease Plan (Exhibit 2)), and any space located within the perimeter walls
of the Premises and serving the Building generally and not exclusively the
Premises, including, without limitation, space used for shafts, stacks, pipes,
conduits, wires and appurtenant fixtures, fan rooms, ducts, electric or other
utilities. Notwithstanding anything to the contrary contained in this Lease,
Tenant shall permit Landlord to erect, use and maintain pipes, ducts and
conduits in and through the Premises, provided the same do not reduce the floor
area of the Premises by more than a de-minimus amount or adversely affect the
appearance or Tenant’s use and enjoyment thereof by more than a de-minimus
amount.

     2.4 First Expansion Premises.

          (a) Delivery of First Expansion Premises. Landlord shall deliver
possession of the First Expansion Premises, as defined in Exhibit 1, to Tenant
on the First Expansion Premises Commencement Date (as such date may be adjusted
as provided hereinbelow), in broom clean condition, vacant of any tenant or
occupant, and free of personal property and otherwise in its then “as is”
condition. If Landlord is unable to deliver the First Expansion Premises in
such condition as of May 1, 2006, Landlord shall promptly deliver a written
notice to Tenant setting forth the revised estimated First Expansion Premises
Commencement Date, which estimated First Expansion Premises Commencement Date
shall in no

3

 

event be sooner than fifteen (15) days after the date of such
notice from Landlord. If the conditions to occurrence of the First Expansion
Premises Commencement Date will not occur on or before the expiration of such
fifteen day period, then Landlord may from time to time (but not more than
twice) further revise the estimated First Expansion Premises Commencement Date
by no more than two (2) business days by giving Tenant at least five (5)
business days’ prior notice of such further revised estimated First Expansion
Premises Commencement Date. Tenant agrees that a notice received by Tenant
directly from the current occupant of the First Expansion Premises, delivered
in accordance with the notice provisions set forth in Article 27, shall satisfy
Landlord’s notice obligations hereunder. However, the First Expansion Premises
Commencement Date shall be deemed to have occurred, notwithstanding anything to
the contrary provided above, at such time as Tenant takes possession of the
First Expansion Premises. Following any request by Tenant, Landlord shall
advise Tenant of any written notice received by Landlord from the existing
tenant of the First Expansion Premises to the effect that such space will not
be timely surrendered.

          (b) Consequences of Delivery Delay. Notwithstanding any provision
contained herein to the contrary, if delivery of possession of the First
Expansion Premises is delayed for any reason beyond May 1, 2006, then and in
such event Tenant shall be entitled to one day of abatement of Monthly Rent
Payments applicable to the First Expansion Premises for each day of delay until
the occurrence of the First Expansion Premises Commencement Date. The foregoing
right to abate Monthly Rent Payments applicable to the First Expansion Premises
shall be Tenant’s sole and exclusive remedy for Landlord’s failure to timely
deliver the First Expansion Premises to Tenant, and Tenant shall not otherwise
have any claim against Landlord, nor shall Landlord have any liability to
Tenant, by reason thereof. However, if the inability to deliver possession of
the First Expansion Premises is due to the holding over by the then current
occupant thereof, Landlord will diligently pursue the prosecution of an action
for possession, in accordance with Landlord’s good faith judgment. The failure
to have so timely delivered possession of the First Expansion Premises shall in
no way affect the validity of this Lease or the obligations of Tenant
hereunder, nor shall the same be construed in any way to extend the term of
this Lease.

          (c) Terms and Conditions. On the First Expansion Premises Commencement
Date, as determined pursuant to paragraph (a) above, the Premises under this
Lease shall be expanded to include the First Expansion Premises. Once
incorporated into the Premises, Tenant’s rights and obligations with respect to
the First Expansion Premises shall be subject to and with the benefit of all of
the terms and conditions of this Lease, except that (i) as of the First
Expansion Premises Rent Commencement Date, the Yearly Rent applicable to the
First Expansion Premises shall equal the rate of Yearly Rent per square foot
then payable with respect to the Initial Premises, and shall escalate
thereafter, on the first day of each succeeding Lease Year, in accordance with
the provisions of Article 7; (ii) as of the First Expansion Premises Rent
Commencement Date, Tenant shall commence payment of such additional amount of
Monthly Rent Payments with respect to the First Expansion Premises and Tenant’s
Proportionate Share shall be revised to reflect the addition of the First
Expansion Premises to the Premises; and (iii) as of the First Expansion
Premises Commencement Date, Landlord shall make available the First Expansion
Rent Abatement to Tenant, subject to and in accordance with the provisions of
paragraph (f) below, and the Life Safety Improvements Allowance, subject to and
in accordance with the provisions of Section 4.6 below. Promptly after the
First Expansion Premises Commencement Date, Landlord and Tenant agree to enter
into an amendment to this Lease memorializing the addition of the First
Expansion Premises to this Lease and the amendment of the applicable defined
terms hereunder, including, without limitation, Rentable Area of the Premises,
Yearly Rent, and Tenant’s Proportionate Share, but failure of the parties to
execute such an amendment shall have no effect on the effectiveness of the
expansion of the Premises to include the First Expansion Premises, and the
economic terms associated therewith, as set forth above.

          (d) Landlord’s Pre-Occupancy Work; Consequences of Landlord Delay. Any
delay in the conduct by Tenant or Tenant’s contractors of Tenant’s Work as a
result of any act or omission of Landlord or its contractors, including without
limitation, any delay caused by Landlord’s performance of Landlord’s
Pre-Occupancy Work, shall be deemed “Landlord Delay” if and to the extent that,
as a result thereof,

4

 

		
	 	     (i) Tenant otherwise would have substantially
completed Tenant’s Work in the First Expansion Premises and
commenced occupancy of the First Expansion Premises for the
conduct of business on or before the scheduled First
Expansion Premises Rent Commencement Date as defined in
Exhibit 1 (i.e., 4 months following the First Expansion
Premises Commencement Date), but Tenant is actually
delayed, beyond such scheduled First Expansion Premises
Rent Commencement Date, from so substantially completing
Tenant’s Work and from commencing occupancy of the First
Expansion Premises for the conduct of business or

		
	 	     (ii) even though Tenant would not otherwise have
completed Tenant’s Work in the First Expansion Premises and
commenced occupancy of the First Expansion Premises for the
conduct of business by such scheduled First Expansion
Premises Rent Commencement Date, Tenant is further delayed
from substantially completing Tenant’s Work in the First
Expansion Premises and commencing occupancy of the First
Expansion Premises for the conduct of business.

Any delay in the conduct of such work, which is associated with the need to
fulfill the responsibilities set forth in Article 4.4(a), shall not in any
event be deemed “Landlord Delay.” In addition, without limiting the foregoing,
if Landlord fails to substantially complete Landlord’s Pre-Occupancy Work in
the First Expansion Premises by the scheduled First Expansion Premises Rent
Commencement Date as defined in Exhibit 1 (i.e., 4 months following the First
Expansion Premises Commencement Date), then if and to the extent that as a
result thereof, Tenant is actually delayed, beyond such scheduled First
Expansion Premises Rent Commencement Date, from commencing occupancy of the
First Expansion Premises for the conduct of business, such delay shall be
deemed “Landlord Delay.” In the event of Landlord Delay, defined as aforesaid,
the First Expansion Premises Rent Commencement Date shall be extended one (1)
day for each day of such Landlord Delay.

          (e) First Expansion Work. Tenant anticipates the need to perform certain
leasehold improvements to the First Expansion Premises commencing upon the
First Expansion Premises Commencement Date (the “First Expansion Work”). The
First Expansion Work shall be performed by Tenant subject to and in accordance
with all of the terms and conditions of this Lease, including, without
limitation, Articles 4, 12 and 13. The First Expansion Work shall be performed
in a good and workmanlike manner, using only new first-class materials. Tenant
covenants that the hard costs of the First Expansion Work shall at least equal
$40.00 per square foot of Rentable Area of the First Expansion Premises.
Promptly after request by Landlord, Tenant shall deliver to Landlord invoices
for the First Expansion Work evidencing the costs for the First Expansion Work.

          (f) First Expansion Rent Abatement. Commencing on the First Expansion
Commencement Date, Landlord shall provide rental abatement to Tenant in the
amount of One Million Two Hundred Ninety Eight Thousand Three Hundred Fifty
Dollars ($1,298,350), based upon Fifty Dollars ($50) per square foot of the
Rentable Area of the First Expansion Premises (the “First Expansion Rental
Abatement”). The First Expansion Rent Abatement shall be offset and applied
against the Monthly Rent Payments next due with respect to the Initial Premises
and the First Expansion Premises.

     2.5 Second Expansion Premises.

          (a) Delivery of Second Expansion Premises. Landlord shall deliver
possession of the Second Expansion Premises, as defined in Exhibit 1, to Tenant
on the Second Expansion Premises Commencement Date (as such date may be
adjusted as provided hereinbelow), in broom clean condition, vacant of any
tenant or occupant, and free of personal property and otherwise in its then “as
is” condition. If Landlord is unable to deliver the Second Expansion Premises
in such condition as of May 1, 2007, Landlord shall promptly deliver a written
notice to Tenant setting forth the revised estimated Second

5

 

Expansion Premises
Commencement Date, which estimated Second Expansion Premises Commencement Date
shall in no event be sooner than fifteen (15) days after the date of such
notice from Landlord. If the conditions to occurrence of the Second Expansion
Premises Commencement Date will not occur on or before the expiration of such
fifteen day period, then Landlord may from time to time (but not more than
twice) further revise the estimated Second Expansion Premises Commencement Date
by no more than two (2) business days by giving Tenant at least five (5)
business days’ prior notice of such further revised estimated Second Expansion
Premises Commencement Date. Tenant agrees that a notice received by Tenant
directly from the current occupant of the Second Expansion Premises, delivered
in accordance with the notice provisions set forth in Article 27, shall satisfy
Landlord’s notice obligations hereunder. However, the Second Expansion
Premises Commencement Date shall be deemed to have occurred, notwithstanding
anything to the contrary provided above, at such time as Tenant takes
possession of the Second Expansion Premises. Following any request by Tenant,
Landlord shall advise Tenant of any written notice received by Landlord from
the existing tenant of the Second Expansion Premises to the effect that such
space will not be timely surrendered.

          (b) Consequences of Delivery Delay. Notwithstanding any provision
contained herein to the contrary, if delivery of possession of the Second
Expansion Premises is delayed for any reason beyond May 1, 2007, then and in
such event Tenant shall be entitled to one day of abatement of Monthly Rent
Payments applicable to the Second Expansion Premises for each day of delay
until the occurrence of the Second Expansion Premises Commencement Date. The
foregoing right to abate Monthly Rent Payments applicable to the Second
Expansion Premises shall be Tenant’s sole and exclusive remedy for Landlord’s
failure to timely deliver the Second Expansion Premises to Tenant, and Tenant
shall not otherwise have any claim against Landlord, nor shall Landlord have
any liability to Tenant, by reason thereof. However, if the inability to
deliver possession of the Second Expansion Premises is due to the holding over
by the then current occupant thereof, Landlord will diligently pursue the
prosecution of an action for possession, in accordance with Landlord’s good
faith judgment. The failure to have so timely delivered possession of the
Second Expansion Premises shall in no way affect the validity of this Lease or
the obligations of Tenant hereunder, nor shall the same be construed in any way
to extend the term of this Lease.

          (c) Terms and Conditions. On the Second Expansion Premises Commencement
Date, as determined pursuant to paragraph (a) above, the Premises under this
Lease shall be expanded to include the Second Expansion Premises. Once
incorporated into the Premises, Tenant’s rights and obligations with respect to
the Second Expansion Premises shall be subject to and with the benefit of all
of the terms and conditions of this Lease, except that (i) as of the Second
Expansion Premises Rent Commencement Date, the Yearly Rent applicable to the
Second Expansion Premises shall initially equal $28.00 per square foot of the
Second Expansion Premises, and shall escalate thereafter, on the first day of
each succeeding Lease Year, in accordance with the provisions of Article 7;
(ii) as of the Second Expansion Premises Rent Commencement Date, Tenant shall
commence payment of such additional amount of Monthly Rent Payments with
respect to the Second Expansion Premises and Tenant’s Proportionate Share shall
be revised to reflect the addition of the Second Expansion Premises to the
Premises; and (iii) as of the Second Expansion Premises Commencement Date,
Landlord shall make available the Second Expansion Rent Abatement to Tenant,
subject to and in accordance with the provisions of paragraph (f) below, and
the Life Safety Improvements Allowance, subject to and in accordance with the
provisions of Section 4.6 below. Promptly after the Second Expansion Premises
Commencement Date, Landlord and Tenant agree to enter into an amendment to this
Lease memorializing the addition of the Second Expansion Premises to this Lease
and the amendment of the applicable defined terms hereunder, including, without
limitation, Rentable
Area of the Premises, Yearly Rent, and Tenant’s Proportionate Share, but
failure of the parties to execute such an amendment shall have no effect on the
effectiveness of the expansion of the Premises to include the Second Expansion
Premises, and the economic terms associated therewith, as set forth above.

          (d) Landlord’s Pre-Occupancy Work; Consequences of Landlord Delay. Any
delay in the conduct by Tenant or Tenant’s contractors of Tenant’s Work as a
result of any act or omission of Landlord or its contractors, including without
limitation, any delay caused by Landlord’s performance of

6

 

Landlord’s
Pre-Occupancy Work, shall be deemed “Landlord Delay” if and to the extent that,
as a result thereof,

		
	 	     (i) Tenant otherwise would have substantially
completed Tenant’s Work in the Second Expansion Premises
and commenced occupancy of the Second Expansion Premises
for the conduct of business on or before the scheduled
Second Expansion Premises Rent Commencement Date as defined
in Exhibit 1 (i.e., 4 months following the Second Expansion
Premises Commencement Date), but Tenant is actually
delayed, beyond such scheduled Second Expansion Premises
Rent Commencement Date, from so substantially completing
Tenant’s Work and from commencing occupancy of the Second
Expansion Premises for the conduct of business or

		
	 	     (ii) even though Tenant would not otherwise have
completed Tenant’s Work in the Second Expansion Premises
and commenced occupancy of the Second Expansion Premises
for the conduct of business by such scheduled Second
Expansion Premises Rent Commencement Date, Tenant is
further delayed from substantially completing Tenant’s Work
in the Second Expansion Premises and commencing occupancy
of the Second Expansion Premises for the conduct of
business.

Any delay in the conduct of such work, which is associated with the need to
fulfill the responsibilities set forth in Article 4.4(a), shall not in any
event be deemed “Landlord Delay.” In addition, without limiting the foregoing,
if Landlord fails to substantially complete Landlord’s Pre-Occupancy Work in
the Second Expansion Premises by the scheduled Second Expansion Premises Rent
Commencement Date as defined in Exhibit 1 (i.e., 4 months following the Second
Expansion Premises Commencement Date), then if and to the extent that as a
result thereof, Tenant is actually delayed, beyond such scheduled Second
Expansion Premises Rent Commencement Date, from commencing occupancy of the
Second Expansion Premises for the conduct of business, such delay shall be
deemed “Landlord Delay.” In the event of Landlord Delay, defined as aforesaid,
the Second Expansion Premises Rent Commencement Date shall be extended one (1)
day for each day of such Landlord Delay.

          (e) Second Expansion Work. Tenant anticipates the need to perform certain
leasehold improvements to the Second Expansion Premises commencing upon the
Second Expansion Premises Commencement Date (the “Second Expansion Work”). The
Second Expansion Work shall be performed by Tenant subject to and in accordance
with all of the terms and conditions of this Lease, including, without
limitation, Articles 4, 12 and 13. The Second Expansion Work shall be
performed in a good and workmanlike manner, using only new first-class
materials. Tenant covenants that the hard costs of the Second Expansion Work
shall at least equal $32.00 per square foot of Rentable Area of the First
Expansion Premises. Promptly after request by Landlord, Tenant shall deliver
to Landlord invoices for the Second Expansion Work evidencing the costs for the
Second Expansion Work and the satisfaction of the foregoing covenant of Tenant.

          (f) Second Expansion Rent Abatement. Commencing on the Second Expansion
Commencement Date, Landlord shall provide rental abatement to Tenant in the
amount of Four Hundred Ninety-Nine Thousand Five Hundred Ninety Dollars
($499,590.00), based upon Forty-Five Dollars ($45.00) per square foot of the
Rentable Area of the Second Expansion Premises (the “Second Expansion
Rental Abatement”). The Second Expansion Rent Abatement shall be offset
and applied against the Monthly Rent Payments next due with respect to the
Initial Premises, the First Expansion Premises and the Second Expansion
Premises.

     2.6 Intentionally Omitted.

     2.7 Expansion Option Premises.

7

 

          (a) Expansion Option. Subject to the terms and conditions of this Article
2.7, provided that there is not then an Event of Default as of the date Tenant
exercises such right or as of the Expansion Option Premises Commencement Date,
Tenant shall have the right to expand the Premises to include the Expansion
Option Premises, as defined in Exhibit 1. If Tenant shall give Landlord
written notice electing to expand the Premises on or before the later to occur
of (i) April 1, 2007, or (ii) the date that is ten (10) business days after a
written reminder notice from Landlord, which notice from Landlord shall be
given no sooner than October 1, 2006, then, subject to Tenant’s rescission
right contained in paragraph (g) below, Landlord shall deliver possession of
the Expansion Option Premises to Tenant on the Expansion Option Premises
Commencement Date in broom clean condition, vacant of any tenant or occupant,
and free of personal property and otherwise in its then “as is” condition. If
Tenant shall fail to timely deliver such notice electing to so expand the
Premises, Tenant shall be deemed to have waived such right, and Landlord shall
thereafter be free to lease all or any portion of the Expansion Option Premises
to such parties and on such terms as Landlord shall determine in its sole
discretion.

          (b) Delivery of Expansion Option Premises. If Landlord is unable to
deliver the Expansion Option Premises in the condition set forth in paragraph
(a) above as of May 1, 2008, Landlord shall promptly deliver a written notice
to Tenant setting forth the revised estimated Expansion Option Premises
Commencement Date, which estimated Expansion Option Premises Commencement Date
shall in no event be sooner than fifteen (15) days after the date of such
notice from Landlord. If the conditions to occurrence of the Expansion Option
Premises Commencement Date will not occur on or before the expiration of such
fifteen day period, then Landlord may from time to time (but not more than
twice) further revise the estimated Expansion Option Premises Commencement Date
by no more than two (2) business days by giving Tenant at least five (5)
business days’ prior notice of such further revised estimated Expansion Option
Premises Commencement Date. Tenant agrees that a notice received by Tenant
directly from the current occupant of the Expansion Option Premises shall
satisfy Landlord’s notice obligations hereunder. However, the Expansion Option
Premises Commencement Date shall be deemed to have occurred, notwithstanding
anything to the contrary provided above, at such time as Tenant takes
possession of the Expansion Option Premises. Following any request by Tenant,
Landlord shall advise Tenant of any written notice received by Landlord from
the current tenant of the Expansion Option Premises to the effect that such
space will not be timely surrendered.

          (c) Consequences of Delivery Delay. Notwithstanding any provision
contained herein to the contrary, if delivery of possession of the Expansion
Option Premises is delayed for any reason beyond May 1, 2008, then and in such
event Tenant shall be entitled to one day of abatement of Monthly Rent Payments
applicable to the Expansion Option Premises for each day of delay until the
occurrence of the Expansion Option Premises Commencement Date. The foregoing
right to abate Monthly Rent Payments applicable to the Expansion Option
Premises shall be Tenant’s sole and exclusive remedy for Landlord’s failure to
timely deliver the Expansion Option Premises to Tenant, and Tenant shall not
otherwise have any claim against Landlord, nor shall Landlord have any
liability to Tenant, by reason thereof. However, if the inability to deliver
possession of the Expansion Option Premises is due to the holding over by the
then current occupant thereof, Landlord will diligently pursue the prosecution
of an action for possession, in accordance with Landlord’s good faith judgment.
The failure to have so timely delivered possession of the
Expansion Option Premises shall in no way affect the validity of this
Lease or the obligations of Tenant hereunder, nor shall the same be construed
in any way to extend the term of this Lease.

          (d) Landlord’s Pre-Occupancy Work; Consequences of Landlord Delay. Any
delay in the conduct by Tenant or Tenant’s contractors of Tenant’s Work as a
result of any act or omission of Landlord or its contractors, including without
limitation, any delay caused by Landlord’s performance of Landlord’s
Pre-Occupancy Work, shall be deemed “Landlord Delay” if and to the extent that,
as a result thereof,

		
	 	     (i) Tenant otherwise would have substantially
completed Tenant’s Work in the Expansion Option Premises
and commenced occupancy of the Expansion Option Premises
for the conduct of business on or before the

8

 

		
	 	scheduled
Expansion Option Premises Rent Commencement Date as defined
in Exhibit 1 (i.e., 4 months following the Expansion Option
Premises Commencement Date), but Tenant is actually
delayed, beyond such scheduled Expansion Option Premises
Rent Commencement Date, from so substantially completing
Tenant’s Work and from commencing occupancy of the
Expansion Option Premises for the conduct of business or

		
	 	     (ii) even though Tenant would not otherwise have
completed Tenant’s Work in the Expansion Option Premises
and commenced occupancy of the Expansion Option Premises
for the conduct of business by such scheduled Expansion
Option Premises Rent Commencement Date, Tenant is further
delayed from substantially completing Tenant’s Work in the
Expansion Option Premises and commencing occupancy of the
Expansion Option Premises for the conduct of business.

Any delay in the conduct of such work, which is associated with the need to
fulfill the responsibilities set forth in Article 4.4(a), shall not in any
event be deemed “Landlord Delay.” In addition, without limiting the foregoing,
if Landlord fails to substantially complete Landlord’s Pre-Occupancy Work in
the Expansion Option Premises by the scheduled Expansion Option Premises Rent
Commencement Date as defined in Exhibit 1 (i.e., 4 months following the
Expansion Option Premises Commencement Date), then if and to the extent that as
a result thereof, Tenant is actually delayed, beyond such scheduled Expansion
Option Premises Rent Commencement Date, from commencing occupancy of the
Expansion Option Premises for the conduct of business, such delay shall be
deemed “Landlord Delay.” In the event of Landlord Delay, defined as aforesaid,
the Expansion Option Premises Rent Commencement Date shall be extended one (1)
day for each day of such Landlord Delay.

          (e) Expansion Option Premises Work. Tenant anticipates the need to perform
certain leasehold improvements to the Expansion Option Premises commencing upon
the Expansion Option Premises Commencement Date (the “Expansion Option Premises
Work”). The Expansion Option Premises Work shall be performed by Tenant
subject to and in accordance with all of the terms and conditions of this
Lease, including, without limitation, Articles 4, 12 and 13. The Expansion
Option Work shall be performed in a good and workmanlike manner, using only new
first-class materials.

          (f) Terms and Conditions. On the Expansion Option Premises Commencement
Date, as determined pursuant to this Article 2.7, the Premises under this Lease
shall be expanded to include the Expansion Option Premises. Once incorporated
into the Premises, Tenant’s rights and obligations with respect to the
Expansion Option Premises shall be subject to and with the benefit of all of
the terms and conditions of this Lease, except that (i) as of the Expansion
Option Premises Rent Commencement Date, the Yearly Rent applicable to the
Expansion Option Premises shall equal the fair market rental value thereof
considering the terms of this Lease applicable thereto, which shall be
determined pursuant to paragraph (g) below; (ii) as of the Expansion Option
Premises Rent Commencement Date, Tenant shall commence payment of such
additional amount of Yearly Rent with respect to the Expansion Option Premises
and
Tenant’s Proportionate Share shall be revised to reflect the addition of
the Expansion Option Premises to the Premises; and (iii) Landlord shall make
available to Tenant the Life Safety Improvements Allowance, subject to and in
accordance with the provisions of Section 4.6 below. Promptly after the
Expansion Option Premises Commencement Date, Landlord and Tenant agree to enter
into an amendment to this Lease memorializing the addition of the Expansion
Option Premises to this Lease and the amendment to the applicable defined terms
hereunder, including, without limitation, Rentable Area of the Premises, Yearly
Rent and Tenant’s Proportionate Share, but failure of the parties to execute
such an amendment shall have no effect on the effectiveness of the expansion of
the Premises to include the Expansion Option Premises, and the economic terms
associated therewith, as set forth above.

          (g) Determination of Yearly Rent. Promptly after receiving Tenant’s notice
electing to exercise its right to expand the Premises to include the Expansion
Option Premises, but not in any event

9

 

sooner than April 1, 2007, Landlord shall
provide Tenant with written notice of Landlord’s good faith determination of
the fair market rental value of the Expansion Option Premises taking into
account the factors, and describing any components thereof, as contemplated in
paragraph 4 of Exhibit 5, including, without limitation the fact that no Life
Safety Improvements Work will have been performed therein, and the amount of
the Life Safety Improvements Allowance that will be provided therefor in
Article 4.6 below. If Tenant shall disagree with Landlord’s determination of
the fair market rental value of the Expansion Option Premises and the parties
are unable to reach agreement within thirty (30) days after Landlord’s notice
as aforesaid, Tenant may rescind its election to lease the Expansion Option
Premises by sending Landlord notice of such rescission not later than the
expiration of the aforesaid thirty (30) day period, and Landlord shall
thereafter be free to lease all or any portion of the Expansion Option Premises
to such parties and on such terms as Landlord shall determine in its sole
discretion. If Tenant shall not so rescind, Tenant shall be deemed to have
leased the Expansion Option Premises, and either party may submit such dispute
regarding the fair market rental value to a broker determination (the “Broker
Determination”) pursuant to the provisions of Exhibit 5.

     2.8 Right to Lease Available Space.

          (a) Potential Available Space. Subject to the terms and conditions of this
Article 2.8, including, without limitation the conditions set forth in
paragraphs (h) and (i) below, Landlord shall make available to Tenant, for
incorporation into the Premises upon terms and conditions provided below, all
or any portion of the Rentable Area of the second (2nd), third (3rd) and fourth
(4th) floors of the Building, and the portion of the first (1st) floor of the
Building exclusive of the Second Expansion Premises (collectively, “Potential
Available Space”), following the initial occupancy thereof by such tenants or
other occupants, to which Landlord first leases such space following the date
hereof, provided, however that if such space is subject to Superior Expansion
Rights (as hereinafter defined), then it shall not constitute Potential
Available Space until it shall be unencumbered by all such Superior Expansion
Rights. “Superior Expansion Rights” as used in this Lease, shall mean and
refer to the following rights to expand the size of the premises leased by a
tenant to which Landlord first leases space in the Building following the date
hereof, whether by “must take” expansion, option to expand or first right to
lease or otherwise. If the premises leased to such tenant includes a partial
floor in the Building, such tenant may be granted Superior Expansion Rights by
Landlord to lease the remainder of such floor. In addition, if the premises
leased to such tenant includes one or more full floors in the Building, such
tenant may be granted Superior Expansion Rights by Landlord to lease space in
the Building up to fifty percent (50%) of the full floor Rentable Area leased
by such tenant.

          (b) Available Expiring Space, Available Early Termination Space, Available
Recapture Space. Any Potential Available Space that is to become available for
lease by Tenant under this Article 2.8 by virtue of the occurrence of the
scheduled expiration of the term of the lease applicable to such space shall be
hereinafter referred to as “Available Expiring Space.” If Landlord is to come
into possession of Potential Available Space by virtue of the default or
bankruptcy of a tenant, or the surrender of Potential Available Space by such
tenant prior to the expiration of the term of its lease (which shall include a
consensual surrender and termination entered into with Landlord), such
space shall be hereinafter referred to as “Available Early Termination Space.”
Finally, if a lease of Potential Available Space hereinafter entered into by
Landlord contains assignment and subletting provisions granting Landlord the
right to recapture space in the event of a proposed assignment or subletting by
the tenant under such lease, then if the tenant under such lease proposes an
assignment or sublease, which proposed sublease or assignment triggers
Landlord’s right to recapture thereunder, then, the space as to which Landlord
is entitled to recapture shall be hereinafter referred to as “Available
Recapture Space.” Available Expiring Space, Available Early Termination Space
and Available Recapture Space shall sometimes be collectively referred to as
“Available Space.”

          (c) Landlord’s Offer Notice – Timing. Landlord shall give Tenant notice
(“Landlord’s Offer Notice”), in accordance with paragraph (d) below, of the
opportunity to expand the Premises to include Available Space as follows:

10

 

		
	 	     (1) for Available Expiring Space, Landlord’s Offer Notice
must be given not earlier than nineteen (19) months nor later than
eleven (11) months prior to the scheduled expiration date of the
pertinent lease;
	 
	 	     (2) for Available Early Termination Space, Landlord’s Offer
Notice may be given (a) in the case of a default by such tenant,
after Landlord has conditionally (as described below) decided to
terminate such lease (subject to the right of such tenant to cure
such default), (b) or in the case of a rejection of the lease by
such tenant in bankruptcy, promptly after Landlord has received
notice of such rejection, or (c) in the case of a consensual
termination, after Landlord and such tenant have conditionally (as
described below) agreed upon the terms of such termination,
provided that in the cases of (a) and (c) above, Landlord’s
decision to take action to terminate a lease may be conditioned
upon whether or not Tenant elects to lease the space in question;
and
	 
	 	     (3) for Available Recapture Space, Landlord’s Offer Notice
must be given not later than ten (10) days prior to the expiration
of any rights that Landlord has to recapture Available Space
pursuant to the assignment and subletting provisions of the lease
in question.

          (d) Landlord’s Offer Notice – Contents. Each Landlord’s Offer Notice shall
specify the size and location of the Available Space, the Yearly Rent that will
be applicable thereto, the term of the lease with respect to the Available
Space, and the date that Landlord anticipates that the Available Space will be
available for delivery to Tenant, which in the case of Available Early
Termination Space arising as a result of a consensual termination, shall not be
sooner than six (6) months from the date of Landlord’s Offer Notice. Except as
otherwise provided in clause (3) below, the term for the applicable Available
Space shall be for the remainder of the term of this Lease unless the space in
question is encumbered by Superior Expansion Rights of which fact Landlord
shall specify in Landlord’s Offer Notice. In addition, each Landlord’s Offer
Notice shall specify the following as respects the three types of Available
Space hereunder:

		
	 	     (1) Landlord’s Offer Notice with respect to Available
Expiring Space shall set forth a Yearly Rent which constitutes
Landlord’s good faith determination of ninety five percent (95%)
of the fair market rental value of the Available Expiring Space,
taking into account all relevant factors, and describing any
components thereof, as contemplated in paragraph 4 of Exhibit 5;

		
	 	     (2) Landlord’s Offer Notice with respect to Available Early
Termination Space shall set forth a Yearly Rent which constitutes
Landlord’s good faith determination of ninety five percent (95%)
of the fair market rental value of the Available Early
Termination Space, taking into account all relevant factors,
and describing any components thereof, as contemplated in
paragraph 4 of Exhibit 5;

		
	 	     (3) Landlord’s Offer Notice with respect to Available
Recapture Space shall set forth a Yearly Rent equal to the Yearly
Rent that Landlord would otherwise have been entitled to be paid
by the tenant from which Landlord would recapture the Available
Recapture Space (“Compensatory Yearly Rent”), which Yearly Rent
shall be appropriately adjusted by Landlord (if and to the extent
such lease did not require such tenant to pay its proportionate
share of Operating Expenses and/or Taxes), and shall also include
a true, correct and complete copy of the lease for the Available
Recapture Space. Landlord’s Offer Notice shall also contain
Landlord’s good faith non-binding estimate of Compensatory
Recapture Transaction Costs (as defined below), and shall contain
reasonable supporting evidence for the Compensatory Yearly Rent
and Landlord’s estimate of the Compensatory Recapture Transaction
Costs. The term of such lease shall be coterminous with the
period as to which the recapture relates (typically the remainder

11

 

		
	 	of the term of the lease with respect to which Landlord would
exercise the recapture rights). If the remaining term of the
original lease for the Available Recapture Space was shorter than
the term of this Lease, but Tenant elects, pursuant to clause
(e)(3) below, to make the term for such Available Recapture Space
coterminous with the term of this Lease, Yearly Rent for such
Available Recapture Space, for the period after the expiration of
the period to which the recapture relates, shall be equal to
ninety-five percent (95%) of the then fair market rental value of
the Available Recapture Space, taking into account all relevant
factors, as contemplated in paragraph 4 of Exhibit 5. The
aforesaid determination of the fair market rental value of the
Available Recapture Space shall take place not sooner than twelve
(12) months prior to the expiration of the period with respect to
which Compensatory Yearly Rent was payable. If Landlord incurs
actual, direct, out-of-pocket, reasonable transaction costs or
losses in connection with such recapture, such as but not limited
to construction costs associated with subdividing space or
otherwise necessary to implement the transaction, legal fees,
brokerage commissions, reimbursements or other amounts payable to
the tenant or associated with the recapture, then Tenant shall
reimburse Landlord, within 30 days after the later of invoice
(together with supporting documentation) and delivery of
possession of such Available Space to Tenant the aggregate amount
of such cost or loss (“Compensatory Recapture Transaction Costs”),
and Landlord’s Offer Notice shall include a non-binding estimate
thereof.

          (e) Tenant’s Election; Landlord’s Delivery of Available Space.

		
	 	     (1) If Tenant desires to expand the Premises to include the
Available Space specified in Landlord’s Offer Notice, Tenant must
give notice of such election (“Tenant’s Available Space Election
Notice”): (A) within thirty (30) days after the giving of
Landlord’s Offer Notice with respect to Available Expiring Space,
(B) within thirty (30) days after the giving of Landlord’s Offer
Notice with respect to Available Early Termination Space and (C)
within ten (10) days after the giving of Landlord’s Offer Notice
with respect to Available Recapture Space. As set forth in
paragraph (g) below, if Tenant fails to timely dispute Landlord’s
good faith determination of 95% of the fair market rental value of
the Available Space in question, then for purposes of establishing
Yearly Rent applicable thereto and the other components of fair
market rental value, Landlord’s determination shall be binding.

		
	 	     (2) If the Available Space comprises less than fifty percent
(50%) of the Rentable Area of the floor on which such Available
Space is located, or if the Available Space is Available Recapture
Space, then Tenant must timely elect, in Tenant’s Available Space
Election Notice, to lease all of the Available Space or none of
the Available Space. If the Available Space is not Available
Recapture Space, and comprises fifty percent
(50%) or more of the Rentable Area of the floor on which such
Available Space is located, then Tenant may elect, in Tenant’s
Available Space Election Notice, to lease less than all of the
offered Available Expiring Space or Available Early Termination
Space, except that (A) in no event may Tenant elect to lease less
than fifty percent (50%) of the Rentable Area of any floor of the
Building unless such smaller area comprises all of the aforesaid
Available Space on such floor of the Building, (B) if the
Available Space consists of space on multiple floors, Tenant must
elect to lease all or none of the portion of the Available Space
on each floor and (C) in all cases, the portion of the Available
Space on a floor not leased by Tenant shall be independently
leaseable space, as reasonably determined by Landlord (which shall
be understood to include, without limitation, that such remaining
space shall have a proportion of windowed offices relative to the
Rentable Area thereof which is comparable to the floor as a whole,
and cannot lack reasonable means of ingress, egress or access to
the Common Areas, common facilities and/or core areas of the
Building located on such floor of the Building, such as access to
bathrooms, elevators, etc.).

12

 

		
	 	     (3) Tenant may elect, in Tenant’s Available Space Election
Notice with respect to Available Recapture Space for a term that
is for the remainder of the term of the lease to which such
recapture relates, but is otherwise shorter than the current term
of this Lease, to lease the Available Recapture Space for a term
that is coterminous with the term of this Lease, and the Yearly
Rent for such longer period shall be ninety-five percent (95%) of
fair market rental value as provided in paragraph (d)(3) above.
Unless Tenant expressly makes such election, the term of the lease
for the Available Recapture Space shall be limited to the
remainder of the term of the lease to which such recapture
relates.

		
	 	     (4) If Tenant timely gives Tenant’s Available Space Election
Notice, then Landlord shall deliver possession of the Available
Space in question, or the portion thereof elected by Tenant, on
the date set forth in Landlord’s Offer Notice that such space was
anticipated to become available, provided that if delivery of
possession of the space is delayed, Tenant shall not have any
claim against Landlord, nor shall Landlord have any liability to
Tenant, by reason thereof. Landlord shall not extend the
occupancy rights of the tenant nor allow a holdover of the tenant
in the space. If the tenant does not vacate the premises by the
date set forth in Landlord’s Offer Notice, Landlord will
diligently pursue the prosecution of an action for possession in
accordance with Landlord’s good faith judgment. If the Available
Space is not available for delivery within six (6) months after
the date originally anticipated by Landlord, as set forth in
Landlord’s Offer Notice, Tenant shall have the right to rescind
its election to lease such Available Space by written notice to
Landlord within 30 days after the expiration of such six (6) month
period, unless Landlord delivers the Available Space to Tenant
prior to receipt of such notice. The Available Space shall be
delivered to Tenant in broom clean condition, vacant of tenants or
occupants, free of personal property, and otherwise in its then
“as is” condition. Landlord shall have no obligation to perform
any work or improvements in connection with the delivery of the
Available Space to Tenant other than any Pre-Occupancy Work that
may not have otherwise been completed with respect to such
Available Space (excluding any Available Recapture Space for which
no Pre-Occupancy Work shall be required), provided that completion
of such Pre-Occupancy Work shall not be a condition to the payment
of Rent for such Available Space, unless Tenant is unable to
legally occupy such Available Space until such work is completed.
Except for Tenant’s right to rescind its election to lease the
Available Space as aforesaid, the failure to have so delivered
possession of the Available Space on the applicable Available
Space Commencement Date shall in no way affect the validity of
this Lease or the obligations of Tenant hereunder, nor shall the
same be construed in any way to extend the term of this Lease. On
the date that possession of such Available Space has been so
delivered, the Premises shall be expanded to include the Available
Space in question. Once
incorporated into the Premises, Tenant’s rights and
obligations with respect to the Available Space shall be subject
to and with the benefit of all of the terms and conditions of this
Lease, except as otherwise expressly set forth in this Article
2.8.

          (f) Tenant’s Notice. If Tenant fails to deliver Tenant’s Available Space
Election Notice within the applicable time period specified in clause (e)
above, or having timely delivered such notice, thereafter rescinds its election
as aforesaid, then Tenant shall be deemed to have waived its right to expand
the Premises to include such Available Space, and Landlord shall thereafter be
entitled to lease all or any portion of such Available Space to such parties
and on such terms as Landlord shall determine in its sole discretion, and the
Available Space in question shall not be considered Potential Available Space
again, unless and until such space again satisfies the requirements for
Potential Available Space set forth in this Article 2.8 following the
subsequent leasing of such space.

          (g) Yearly Rent Determination. If Tenant disputes Landlord’s good faith
determination of ninety five percent (95%) of the fair market rental value of
the Available Space for purposes of establishing Yearly Rent applicable
thereto, then Tenant’s notice electing to exercise its right to

13

 

expand the Premises to include Available Space (excluding with respect to
Available Recapture Space, the Yearly Rent for which shall be determined as set
forth in clause (d)(3) above), must expressly indicate such dispute, or
Landlord’s determination shall be binding upon Landlord and Tenant. If Tenant
timely disputes Landlord’s determination of the fair market rental value of
applicable Available Space, and the parties are unable to agree upon such fair
market rental value within thirty (30) days after the date of Tenant’s notice
of election as aforesaid, Tenant may rescind its election to lease any such
Available Space by sending Landlord notice of such rescission not later than
the expiration of the aforesaid thirty (30) day period, whereupon if Tenant
does so timely rescind, Landlord shall thereafter be free to lease all or any
portion of the Available Space to such parties and on such terms as Landlord
shall determine in its sole discretion, and the Available Space in question
shall not be considered Potential Available Space again, unless and until such
space again satisfies the requirements for Potential Available Space set forth
in this Article 2.8 following the subsequent leasing of such space. If Tenant
shall not so rescind, then either party may submit such dispute to a Broker
Determination pursuant to the provisions of Exhibit 5.

          (h) Conditions to Exercise. Notwithstanding any
contrary provision of this Article 2.8 or any other provision of this Lease,
Tenant’s right to expand the Premises to include the Available Space is
conditioned upon (which condition may be waived by Landlord in its sole
discretion) the absence, on the date Tenant notifies Landlord that it is
exercising such right and on the date upon which the Available Space would
otherwise have been incorporated into the Premises of (i) any Event of Default
under this Lease, and (ii) any sublease or subleases of more than, in the
aggregate, twenty-five percent (25%) of the Rentable Area of the Premises,
excluding subleases to an Affiliate and excluding a sublease of the entire
Rentable Area of the Premises for the entire remaining term of this Lease, less
one day.

          (i) Limitations on Expansion. If, upon the last date
by which Tenant may give notice to Landlord to elect to expand the Premises to
include Available Space, there are fewer than thirty-one (31) months (but more
than twenty-five (25) months) remaining in the term of this Lease, and the
Premises either then comprise 210,000 or more rentable square feet, or with the
expansion of the Premises by the Available Space, the Premises would comprise
210,000 or more rentable square feet, then as a condition to so expanding the
Premises, Tenant must extend the term of this Lease in accordance with Article
3.4. If, upon the last date by which Tenant may give notice to Landlord to
elect to expand the Premises to include Available Space, there are fewer than
twenty-five (25) months (but more than nineteen (19) months) remaining in the
term of this Lease, then if the Premises have ever been previously expanded to
include more than the Initial Premises, the First Expansion Premises and the
Second Expansion Premises, whether by virtue of Tenant’s expansion rights under
this Article 2.8 or otherwise (but the Premises then include fewer than 210,000
rentable square feet), then as a condition to so further expanding the
Premises, Tenant must extend the term of this Lease in accordance with Article
3.4. If, upon the last date by which Tenant may give notice to Landlord to
elect to expand the Premises to include Available Space, there are fewer than
nineteen (19) months remaining in the term of this Lease, Tenant shall have no
further rights to expand the Premises under this Article 2.8.

3. TERM OF LEASE

     3.1 Definition of Lease Year. As used in this Lease the term “Lease Year”
shall mean each twelve (12) month period during the term commencing upon the
Rent Commencement Date, and each successive anniversary thereof, except that if
the Rent Commencement Date does not occur on the first day
of a calendar month, the first Lease Year, and each Lease Year thereafter,
shall end on the last day of the month in which such anniversary occurs.

     3.2 Term. The term of this Lease shall be a period commencing on the Term
Commencement Date and ending on the Termination Date as stated in Exhibit 1 or
on such earlier date upon which said term may expire or be terminated pursuant
to any of the provisions of this Lease or pursuant to law (which date for the
termination of the terms hereof will hereafter be called “Termination Date”).

14

 

     3.3 Declaration Fixing Term Commencement Date, Rent Commencement Date and
Termination Date. As soon as may be practicable after the execution date
hereof, each of the parties hereto agrees, upon demand of the other party to
join in the execution, in recordable form, of a statutory notice, memorandum,
etc. of lease and/or written declaration in which shall be stated the Term
Commencement Date, the Rent Commencement Date, the Termination Date, the terms
and conditions regarding the First Expansion Premises, the Second Expansion
Premises, the Expansion Option Premises, the Available Space, the Extension
Term, and any other provision customarily included in such memoranda. Either
party may record such memorandum of lease among the land records of the
District of Columbia at such party’s expense. If this Lease is terminated
before the term expires, then upon Landlord’s request the parties shall
execute, deliver and record an instrument acknowledging such fact and the date
of termination of this Lease, and Tenant hereby appoints Landlord its
attorney-in-fact in its name and behalf to execute such instrument if Tenant
shall fail to execute and deliver such instrument after Landlord’s request
therefor within ten (10) days.

     3.4 Extension Term.

          (a) Provided that, at the time of such exercise, (i) this Lease is in full
force and effect, and (ii) no Event of Default shall have occurred that is then
continuing (either at the time of exercise or at the commencement of the
Extended Term), and (iii) there shall not then be in effect any sublease or
subleases of more than, in the aggregate, twenty-five percent (25%) of the
Rentable Area of the Premises, excluding subleases to an Affiliate and
excluding a sublease of the entire Rentable Area of the Premises for the entire
remaining term of this Lease, less one day (any of which conditions described
in clauses (i), (ii), and (iii) may be waived by Landlord at any time in
Landlord’s sole discretion), Tenant shall have the right and option to extend
the term of this Lease for one period (the “Extended Term”) of five (5) years,
by giving written notice to Landlord prior to the expiration of the applicable
extension notice deadline date set forth in paragraph (c) below. The giving of
such notice of extension by Tenant shall automatically extend the term of this
Lease for the Extended Term, subject to Tenant’s rescission right set forth in
paragraph (b) below, and no instrument of renewal or extension need be
executed. Notwithstanding the foregoing, Landlord and Tenant will execute an
amendment to this Lease, setting forth the new Yearly Rent and any other
matters as they shall mutually agree, as soon as practicable. In the event
that Tenant fails timely to give such notice to Landlord, this Lease shall
automatically terminate at the end of the original term, and Tenant shall have
no further option to extend the term of this Lease. The Extended Term shall
commence on the day immediately succeeding the expiration date of the original
term, and shall end on the day immediately preceding the fifth
(5th)
anniversary of the first day of the Extended Term. The Extended Term shall be
on all the terms and conditions of this Lease, except: (i) during the Extended
Term, Tenant shall have no further option to extend the term, (ii) the Yearly
Rent for the Extended Term shall be ninety-five percent (95%) of the fair
market rental value of the Premises as of the commencement of the Extended
Term, determined pursuant to paragraph (b), and (iii) all of the terms of this
Lease that are expressly applicable only to either the initial Term, or to the
initial occupancy of the Premises by Tenant, shall not be applicable with
respect to the Extended Term.

          (b) Promptly after receiving Tenant’s notice electing to extend the term
of this Lease pursuant to paragraph (a) above, but in no event sooner than the
last date by which Tenant may give Landlord notice to extend the term of this
Lease, Landlord shall provide Tenant with Landlord’s good faith determination
of ninety five percent (95%) of the fair market rental value of the space that
then comprises
the Premises for the Extended Term, taking into account the factors, and
describing any components thereof, as contemplated in paragraph 4 of Exhibit 5.
If Tenant shall disagree with Landlord’s determination of ninety five percent
(95%) of the fair market rental value, and the parties are unable to reach
agreement within thirty (30) days after Landlord’s notice as aforesaid, Tenant
may rescind its election to extend the term of the Lease for the Extended Term
by sending Landlord notice of such rescission not later than the expiration of
the aforesaid thirty (30) day period. If Tenant shall not so rescind, Tenant
shall be deemed to have extended the term for the Extended Term, and either
party may submit such dispute to Broker Determination pursuant to the
provisions of Exhibit 5.

15

 

          (c) Except as otherwise provided in this paragraph (c), the deadline by
which Tenant must deliver written notice to Landlord of Tenant’s election to
exercise the extension option is the later to occur of the date that is (i)
nineteen (19) months prior to the end of the term, or (ii) ten (10) business
days after written notice from Landlord, which notice may be given by Landlord
no sooner than twenty-five (25) months prior to the end of the term. In the
event that Tenant has expanded the Premises to include any Available Space, but
the Rentable Area of the Premises is then less than 210,000 rentable square
feet, then the deadline by which Tenant must deliver such notice is the later
to occur of the date that is (i) twenty-five (25) months prior to the end of
the term, or (ii) ten (10) business days after written notice from Landlord,
which shall be given by Landlord no sooner than thirty-one (31) months prior to
the end of the term. In the event that the Premises are then comprised of
210,000 or more rentable square feet in the Building, then the deadline by
which Tenant must deliver such notice is the later to occur of the date that is
(i) thirty-one (31) months prior to the end of the term, or (ii) ten (10)
business days after written notice from Landlord, which shall be given by
Landlord no sooner than thirty-seven months (37) months prior to the end of the
term.

4. DELIVERY OF POSSESSION; LANDLORD’S WORK; INITIAL TENANT IMPROVEMENTS

     4.1 Delivery of Possession (a) Term Commencement Date;
Delays. Landlord shall deliver possession of the Initial Premises to
Tenant on the Term Commencement Date contemplated in Exhibit 1 in broom clean
condition, vacant of any tenant or occupant, and free of personal property and
otherwise in its then “as is” condition. If Landlord is unable to deliver the
Initial Premises in such condition to Tenant as of December 1, 2003, then
Landlord shall promptly deliver a written notice to Tenant setting forth the
revised estimated Term Commencement Date, which estimated Term Commencement
Date shall in no event be sooner than fifteen (15) days after the date of such
notice from Landlord. If the conditions to occurrence of the Term Commencement
Date will not occur on or before the expiration of such fifteen day period,
then Landlord may from time to time (but not more than twice) further revise
the estimated Term Commencement Date by no more than two (2) business days by
giving Tenant at least five (5) business days’ prior notice of such further
revised estimated Term Commencement Date. Notwithstanding anything to the
contrary set forth in this paragraph (a), except as otherwise set forth in the
last sentence of this paragraph (a), in no event shall the postponement of the
Term Commencement Date pursuant hereto result in the occurrence of the Term
Commencement Date during the period (the “Blackout Period”) from December 13,
2003 through January 1, 2004 (both dates inclusive), and if by operation of
this paragraph (a), the Term Commencement Date would otherwise fall within the
aforesaid period, then the Term Commencement Date shall instead occur on
January 2, 2004. Tenant agrees that a notice received by Tenant directly from
the current occupant of the Initial Premises, delivered in accordance with the
notice provisions set forth in Article 27, shall satisfy Landlord’s notice
obligations hereunder. However, the Term Commencement Date shall be deemed to
have occurred (even during the Blackout Period), notwithstanding anything to
the contrary provided above, at such time as Tenant takes possession of the
Premises.

          (b) Consequences of Delivery Delay. Notwithstanding
any provision contained herein to the contrary, if delivery of possession of
the Premises is delayed for any reason beyond December 1, 2003, then and in
such event Tenant shall be entitled to one day of abatement of Monthly Rent
Payments applicable to the Initial Premises for each day of delay until the
occurrence of the Term Commencement Date. The foregoing right to abate Monthly
Rent Payments applicable to the Initial
Premises shall be Tenant’s sole and exclusive remedy for Landlord’s
failure to timely deliver the Initial Premises to Tenant, and Tenant shall not
otherwise have any claim against Landlord, nor shall Landlord have any
liability to Tenant, by reason thereof. However, if the inability to deliver
possession of the Initial Premises is due to the holding over in the Initial
Premises by the current occupant of the Initial Premises, Landlord will
diligently pursue the prosecution of an action for possession, in accordance
with Landlord’s good faith judgment. The current occupant of the Initial
Premises has no right to occupy the Initial Premises beyond November 30, 2003.
The failure to have so timely delivered possession of the Initial Premises
shall in no way affect the validity of this Lease or the obligations of Tenant
hereunder, nor shall the same be construed in any way to extend the term of
this Lease.

16

 

     4.2 Landlord’s Work.

          (a) Landlord’s Renovation Work. Landlord shall
complete the improvements to the Building described in Exhibit 7-A (the
“Landlord’s Renovation Work”) at Landlord’s sole cost and expense. Landlord’s
Renovation Work shall be performed in a good and workmanlike manner, using new
first class materials and in accordance with all applicable building codes,
laws, rules and regulations (including the Americans with Disabilities Act
(“ADA”)). Landlord shall not materially reduce the scope or quality of the
Landlord’s Renovation Work described in Exhibit 7-A, provided that Landlord may
modify the plans therefor or substitute materials in connection therewith so
long as the general scope and quality is maintained. In the event that
Landlord’s Renovation Work is not substantially complete on or before September
1, 2004, except as a result of Force Majeure or Tenant Delay, Landlord shall
pay to Tenant, promptly after completion of Landlord’s Renovation Work, an
amount equal to $200.00 for each day after September 1, 2004 that Landlord had
failed to complete Landlord’s Renovation Work. Following request by Tenant,
but not sooner than the plans and specifications are completed, Landlord will
furnish Tenant a copy of Landlord’s plans and specifications for Landlord’s
Renovation Work.

          (b) Landlord’s Pre-Occupancy Work. Landlord shall
perform the improvements to the Building set forth on Exhibit 7-B (“Landlord’s
Pre-Occupancy Work”) with respect to the Initial Premises. Landlord shall
perform the Pre-Occupancy Work in a good and workmanlike manner, using new
first class materials and in accordance with all laws, rules and regulations,
including, without limitation, the ADA). Landlord shall use commercially
reasonable efforts to complete Landlord’s Pre-Occupancy Work with respect to
the Initial Premises, on or before the Rent Commencement Date. Following
request by Tenant, but not sooner than the plans and specifications are
completed, Landlord will furnish Tenant a copy of Landlord’s plans and
specifications for Landlord’s Pre-Occupancy Work.

     4.3 Tenant’s Work.

          (a) Preparation of Tenants Plans and Specifications.
Tenant shall be solely responsible for the timely preparation and submission to
Landlord of the architectural, electrical and mechanical construction drawings,
plans and specifications necessary to construct the Initial Premises, First
Expansion Premises, Second Expansion Premises and Expansion Option Premises for
Tenant’s initial occupancy, which shall be subject to approval by Landlord.
Once approved by Landlord, the aforesaid drawings, plans and specifications
shall be collectively referred to herein as the “Plans.” Landlord’s approval
of Tenant’s proposed Plans shall not be unreasonably withheld, conditioned or
delayed, and is solely given for the benefit of Landlord and neither Tenant nor
any third party shall have the right to rely upon Landlord’s approval of the
Plans for any purpose whatsoever. Without limiting the foregoing, Tenant shall
be responsible for all elements of the design of the Plans (including, without
limitation, compliance with law, functionality of design, the structural
integrity of the design, the configuration of the Premises and the placement of
Tenant’s furniture, appliances and equipment), and Landlord’s approval of the
Plans shall in no event relieve Tenant of the responsibility for such design.
Tenant shall include, without limitation, the Life Safety Improvement Work (as
defined in Article 4.6) in the Plans. Tenant shall use, and Landlord hereby
approves, OPX PLLC as Tenant’s architect and either KEG or Tolk, Inc. as its
engineer for the preparation of the Plans for the Initial Premises. Tenant may
designate another architect or engineer to prepare the Plans for the Initial
Premises or any other later incorporated portions of the Premises, subject to
Landlord’s approval, which shall not be unreasonably withheld, conditioned or
delayed.

          (b) Timetable for Submission and Approval of Tenant’s Plans and
Specifications. Tenant shall submit to Landlord, for Landlord’s
review and approval, which shall not be unreasonably withheld, conditioned or
delayed, Tenant’s interim or progress plans in stages, as such plans are
developed, including, without limitation, the initial schematic plans, fit
plans and design developments plans for the Initial Premises and any other
later incorporated portions of the Premises. Tenant furnished design
development plans for the Initial Premises, a description of which is attached
hereto as Exhibit 13, on September 29, 2003, which shall be reviewed by
Landlord as contemplated below. Tenant shall also furnish Landlord, for
informational purposes only, with 50% progress of the proposed final Plans when
the same are available. Landlord shall respond to Tenant’s interim or progress
plans (which in the case of the

17

 

Initial Premises are the design development
plans described above) within a commercially reasonable period of time, but in
no event more than seven (7) business days after receipt thereof. Landlord
acknowledges that, following the delivery of the design development plans on
September 29, 2003, the next set of plans Landlord will receive for approval
for Tenant’s Work in the Initial Premises shall be the proposed final Plans for
such work. If Landlord should withhold or condition consent to Tenant’s
proposed Plans or any revision thereof, notice thereof by Landlord to Tenant
shall be accompanied by a reasonably specific statement of reasons therefor.
At Tenant’s sole cost and expense, Tenant shall cause the plans to be revised
in a manner sufficient to remedy Landlord’s objections and/or respond to
Landlord’s concerns, and Tenant shall resubmit the revised plans to Landlord.
Landlord shall respond to Tenant’s revised plans within a commercially
reasonable period of time, but in no event more than four (4) business days
after receipt thereof, provided that Tenant has clearly indicated the nature
and extent of the revisions contained in such revised plans. If Landlord shall
again find it if necessary to withhold or condition consent to Tenant’s
proposed plans, Landlord shall do so in writing, stating the reasons therefor.
Tenant shall again revise such plans and resubmit them to Landlord pursuant to
the foregoing procedures, until the plans have been consented to or deemed
consented to by Landlord. Landlord’s failure to respond to Tenant’s plans or
any revised iterations thereof within the time periods set forth above shall be
deemed to be Landlord’s approval thereof.

          (c) Performance of Tenant’s Work. After approval of
the Plans as provided above, Tenant shall commence and exercise reasonable
diligence to complete the work specified therein (such work with respect to the
Initial Premises is hereinafter referred to as “Tenant’s Initial Work”, and
collectively with the First Expansion Work, Second Expansion Work and Expansion
Option Premises Work is referred to as “Tenant’s Work”) using a general
contractor first approved by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed. Landlord hereby approves Hitt Contracting as
Tenant’s contractor. All of Tenant’s Work shall be completed substantially in
accordance with the Plans as well as all of conditions and the requirements
associated with alterations and improvements made by or on behalf of Tenant set
forth in Articles 12 and 13. Landlord shall cooperate with Tenant to obtain
the certificate of occupancy for the Premises, at no cost to Landlord. Tenant
shall provide Landlord with copies of the certificates of occupancy, or other
documentation from the appropriate governmental authorities evidencing Tenant’s
permission to occupy the Premises, promptly after completion of each portion of
Tenant’s Work. Nothing herein shall be construed as permitting Tenant to
occupy all or any portion of the Premises for which Tenant has not obtained a
certificate of occupancy or other documentation, or otherwise failed to comply
with applicable legal requirements. Tenant may perform Tenant’s Work during
normal business hours, except for work that is particularly likely to disturb
other tenants or the normal operation by Landlord of a first class office
building; any such disturbing work shall be performed during after building
business hours.

     4.4 Coordination of Contractors; Landlord Delay; Tenant Delay.

          (a) Coordination of Contractors. The parties
anticipate that Landlord’s Renovation Work and Landlord’s Pre-Occupancy Work
will be ongoing past the applicable Term Commencement Date with respect to the
Initial Premises, First Expansion Premises, Second Expansion Premises, and
Expansion Option Premises. Landlord and Tenant shall meet regularly prior to
and during such periods to discuss the scheduling of Landlord’s Renovation Work
and Landlord’s Pre-Occupancy Work and Tenant’s Work. Landlord and Tenant shall
reasonably cooperate with each other to coordinate each party’s respective contractors to allow each party’s respective work
to commence and continue without impairment, interference or delay. Landlord
shall provide Tenant with access to the areas of the Building outside of the
Premises reasonably required by Tenant’s contractors to complete Tenant’s Work,
including, without limitation, access to loading docks and freight elevators,
subject to the rules and regulations specified in Exhibit 10, and such other
reasonable rules from time to time made by Landlord of which Tenant is given
reasonable prior written notice. Landlord shall also provide utilities
necessary for Tenant to perform Tenant’s Work, at no additional charge. Tenant
shall provide Landlord with access to those portions of the Premises reasonably
required by Landlord’s contractors to complete Landlord’s Pre-Occupancy Work,
provided that Landlord shall not store materials and equipment in the Premises
in connection with

18

 

Landlord’s Pre-Occupancy Work without Tenant’s prior
consent, which shall not be unreasonably withheld, conditioned or delayed.

          (b) Landlord Delay; Consequence of Landlord Delay. Any
delay in the conduct by Tenant or Tenant’s contractors of Tenant’s Work as a
result of any act or omission of Landlord or its contractors, including without
limitation, any delay caused by Landlord’s performance of Landlord’s
Pre-Occupancy Work, shall be deemed “Landlord Delay” if and to the extent that,
as a result thereof,

		
	 	     (i) Tenant otherwise would have substantially
completed Tenant’s Work in the Initial Premises and
commenced occupancy of the Initial Premises for the conduct
of business on or before the scheduled Rent Commencement
Date as defined in Exhibit 1 (i.e., 6 months following the
Term Commencement Date), but Tenant is actually delayed,
beyond such scheduled Rent Commencement Date, from so
substantially completing Tenant’s Work and from commencing
occupancy of the Initial Premises for the conduct of
business or

		
	 	     (ii) even though Tenant would not otherwise have
completed Tenant’s Work in the Initial Premises and
commenced occupancy of the Initial Premises for the conduct
of business by such scheduled Rent Commencement Date,
Tenant is further delayed from substantially completing
Tenant’s Work in the Initial Premises and commencing
occupancy of the Initial Premises for the conduct of
business.

As an illustration of paragraph (b)(i) above, if Tenant otherwise could have
substantially completed Tenant’s Work and commenced occupancy of the Initial
Premises five (5) days prior to the scheduled Rent Commencement Date, but due
to acts or omissions of Landlord referred to above in this paragraph (b),
Tenant is delayed in doing so for a period of seven (7) days, then the Rent
Commencement Date shall be extended for two (2) days.

As an illustration of paragraph (b)(ii) above, if Tenant otherwise could have
substantially completed Tenant’s Work and commenced occupancy of the Initial
Premises five (5) days following the scheduled Rent Commencement Date, but due
to acts or omissions of Landlord referred to above in this paragraph (b),
Tenant is delayed in doing so for a period of seven (7) days, then the Rent
Commencement Date shall be extended for seven (7) days.

Any delay in the conduct of such work, which is associated with the need to
fulfill the responsibilities set forth in paragraph (a) above, shall not in any
event be deemed “Landlord Delay.” In addition, without limiting the foregoing,
if Landlord fails to substantially complete Landlord’s Pre-Occupancy Work in
the Initial Premises by the scheduled Rent Commencement Date as defined in
Exhibit 1 (i.e., 6 months following the Term Commencement Date), then if and to
the extent that as a result thereof, Tenant is actually delayed, beyond such
scheduled Rent Commencement Date, from commencing occupancy of the Initial
Premises for the conduct of business, such delay shall be deemed “Landlord
Delay.” In the event of Landlord Delay, defined as aforesaid, the Rent
Commencement Date shall be extended one (1) day for each day of such Landlord
Delay.

          (c) Tenant Delay. Any delay in the conduct by Landlord
or Landlord’s contractors of Landlord’s Pre-Occupancy Work or Landlord’s
Renovation Work as a result of any act or omission of Tenant or its
contractors, including without limitation, any failure of Tenant to provide
Landlord with access to the Premises as contemplated in this Article 4.4 shall
be deemed a “Tenant Delay.” Notwithstanding anything to the contrary provided
in the Lease, if and to the extent Landlord’s Renovation Work or Landlord’s
Pre-Occupancy Work is delayed by Tenant Delay, then any deadline for the
substantial completion thereof, or consequence associated with the delay in the
substantial completion thereof, shall be modified to be postponed by the time
period that Landlord is actually delayed in substantially completing such work.
Any delay in the conduct of Landlord’s Renovation Work or Landlord’s
Pre-Occupancy Work,

19

 

which is associated with the need to fulfill the
responsibilities set forth in paragraph (a) above, shall not in any event be
deemed Tenant Delay.

          (d) Responsibility to Notify of Anticipated Delay.
Landlord and Tenant agree that, in order to give each party the earliest
possible opportunity to avoid causing delay to the other party, whether in
connection with Landlord’s Renovation Work, Landlord’s Pre-Occupancy Work,
Tenant’s Work or otherwise, each party will, as soon as a party becomes aware
of the basis for a potential delay claim against the other party, give notice
to the other party so that such party may endeavor to mitigate or eliminate
such delay. If a party is in fact aware of such basis and fails to notify the
other party within a reasonable period of time, and if and to the extent such
failure results in the delaying party not being able to avoid or minimize the
period of delay, then for purposes of this Lease (including paragraphs (b) and
(c) above), the actual Landlord Delay or Tenant Delay, as the case may be,
shall be reduced by the number of days of delay that reasonably would have been
avoided had the notice been timely provided.

     4.5 Tenant Improvements Allowance. Landlord shall make payment to Tenant,
within five (5) business days of the dates hereinafter set forth, of the
respective sums (collectively, the “Tenant Improvements Allowance”) as an
allowance to help defray the cost and expense to be incurred by Tenant to
perform Tenant’s Work in the Initial Premises, the First Expansion Premises and
the Second Expansion Premises. The dates and the payment amount corresponding
thereto are as follows:

          (a) Term Commencement Date: $563,790.00

          (b) Rent Commencement Date: $432,200.00

          (c) First Expansion Premises Rent Commencement Date: $95,800.00

          (d) Second Expansion Premises Rent Commencement Date: $35,790.00

If Landlord fails to make timely payment to Tenant of any component of the
Tenant Improvements Allowance, and such failure continues for thirty (30) days
following notice by Tenant to Landlord of such delinquency, then Tenant shall
be entitled to offset the delinquent amount against Monthly Rent Payments
otherwise payable under this Lease.

     4.6 Life Safety Improvements Allowance. Tenant’s Work in each
applicable portion of the Premises shall include the following base building
fire and life safety improvements: A sprinkler loop on each floor with basic
distribution for one upturned sprinkler head for every 225 square feet and
alarm strobes and horns as required by code (the aforesaid work being referred
to herein as “Life Safety Improvements Work”). Landlord shall provide to Tenant
in respect of the Life Safety Improvements Work the following allowance (“Life
Safety Improvements Allowance”): One Hundred Eighty-Six Thousand Five Hundred
Fifty Eight and 75/100 Dollars ($186,558.75) for the Initial Premises;
Forty-Five Thousand Four Hundred Forty Two and 25/100 ($45,442.25) for the
First Expansion Premises; Nineteen Thousand Four Hundred Twenty Eight and
50/100 Dollars ($19,428.50) for the Second Expansion Premises; and Sixty Three
Thousand Eight Hundred Thirty One and 25/100 Dollars ($63,831.25) for the
Expansion Option Premises. Each applicable Life Safety Improvements Allowance
shall be paid to Tenant within thirty (30) days after receipt of a request for
reimbursement by Tenant accompanied by an architect’s
certificate demonstrating that the Life Safety Improvements Work, in the
applicable portion of the Premises, is complete.

5. USE OF PREMISES

     5.1 Permitted Use. Tenant shall use the Premises during the term hereof only
for general office and administrative purposes, and uses ancillary thereto to
the extent such ancillary uses are consistent with the usual and customary uses
of a first-class office building in downtown Washington, D.C. and to the

20

 

extent
permitted by law, including but not limited to training and seminars, internal
and client conferences, and food preparation and dispensing for employees and
clients (excluding, however, cooking, frying, etc., to the extent such use
reasonably requires special exhaust venting, which Tenant hereby acknowledges
the Building is not engineered to provide) and for no other purposes (the
“Permitted Use”). Service and utility areas (whether or not a part of the
Premises) shall be used only for the particular purpose for which they were
designed. Landlord acknowledges that Tenant conducts meetings and training
sessions as part of its business, and that part of the Premises will contain
common areas for such purposes as well as an employee lounge. Landlord
acknowledges that the Permitted Use shall include Tenant’s conduct of such
meetings, which may involve catering or other food service, subject to the
terms and conditions hereof.

     5.2 Prohibited Uses. Notwithstanding any other provision of this Lease, Tenant
shall not use, or suffer or permit the use or occupancy of, or suffer or permit
anything to be done in or anything to be brought into or kept in or about the
Premises or the Building or any part thereof (including, without limitation,
any materials, appliances or equipment used in the construction or other
preparation of the Premises and furniture and carpeting) which may injure or
cause any waste in or to the Premises, or any other part of the Building, or
constitute a nuisance to any other tenant or tenants or other persons in the
Building. Nor shall Tenant cause or permit any potentially harmful air
emissions to emanate from or permeate the Premises. Tenant shall not suffer or
permit the Premises or any fixtures, equipment or utilities therein or serving
the same, to be overloaded, damaged or defaced.

     5.3 Licenses and Permits. If any governmental license or permit shall be
required for the proper and lawful conduct of Tenant’s business, and if the
failure to secure such license or permit would in any way affect Landlord, the
Premises, the Building or Tenant’s ability to perform any of its obligations
under this Lease, Tenant, at Tenant’s expense, shall duly procure and
thereafter maintain such license and, upon written request by Landlord, submit
the same to inspection by Landlord. Tenant, at Tenant’s expense, shall at all
times comply with the terms and conditions of each such license or permit.
Tenant shall furnish all data and information to governmental authorities as
required in accordance with legal, regulatory, licensing or other similar
requirements as they relate to Tenant’s use or occupancy of the Premises or the
Building. Upon written request by Landlord, Tenant shall provide copies of such
data and information to Landlord.

6. RENT AND RENTAL CREDIT

     6.1 Rent.

          (a) Commencing on the Rent Commencement Date, and continuing thereafter
for the remainder of the term of this Lease, the Yearly Rent and Storage Rent,
at the rate stated in Exhibit 1 but subject to escalation as set forth in
Article 7, shall be payable by Tenant to Landlord by monthly payments, in the
amount of one-twelfth (1/12) of the applicable Yearly Rent and Storage Rent, in
advance and without demand on the first day of each month for and in respect of
such month.

          (b) If, by reason of any provisions of this Lease, the Rent Commencement
Date or the Termination Date shall occur on any day other than the first day of
a calendar month, the Yearly Rent and Storage Rent, together with the monthly
amount properly allocable for the Tax Payment Obligation and
the Operating Cost Payment Obligation for such calendar month, shall be
prorated. For all purposes under this Lease, the monthly payment of Yearly
Rent, Storage Rent, Tax Payment Obligation and the Operating Cost Payment
Obligation, as may be applicable to the Premises and Storage Space from time to
time shall be collectively referred to as “Monthly Rent Payments”. All other
sums due under this Lease from Tenant shall be sometimes collectively referred
to as “Additional Rent”, and collectively with the Monthly Rent Payments, such
sums are sometimes referred to as “Rent”.

          (c) The Rent shall be payable to Landlord or, if Landlord shall so direct
in writing within a reasonable period of time prior to the date payment is due,
to Landlord’s agent or nominee, in

21

 

lawful money of the United States which
shall be legal tender for payment of all debts and dues, public and private, at
the time of payment, (which may be by good check), at the office of the
Landlord or such place as Landlord may designate, and the Rent and other
charges in all circumstances shall be payable without any setoff or deduction
whatsoever, except as otherwise expressly provided in this Lease. Rent and any
other sums due hereunder not paid within five (5) days after written notice
from Landlord that the same is past due, shall accrue interest for each month
or fraction thereof from the due date until paid computed at the annual rate of
three percentage points over the so-called prime rate then currently from time
to time charged to its most favored corporate customers by the largest national
bank (N.A.) located in the city in which the Building is located, or at any
applicable lesser maximum legally permissible rate for debts of this nature.
Notwithstanding the foregoing, if Landlord shall send two such notices during
any twelve-month period, any subsequent late payment of Rent during such
twelve-month period shall bear interest from the date due without requirement
of written notice from Landlord.

     6.2 Rental Credit. Tenant shall be entitled, on the date each of Tenant’s
monthly payments of Yearly Rent is due and payable hereunder commencing on the
Rent Commencement Date, for the initial fifteen (15) year term of this Lease,
to a monthly rental credit (the “Rental Credit”) set forth below. The Rental
Credit is an integral part of the Yearly Rent calculation for the Initial
Premises and is not severable from Yearly Rent due and payable under this
Lease. The Rental Credit shall not apply to the First Expansion Premises,
Second Expansion Premises, Expansion Option Premises or any Potential Available
Space. For partial months, the Rental Credit shall be appropriately prorated.
In the event that this Lease is terminated prior to the end of the fifteen (15)
year period over which the Rental Credit relates for any reason other than as a
result of an Event of Default of Tenant, Landlord shall pay to Tenant, on the
first day of each month that remains in such 15 year period, notwithstanding
such termination of this Lease, the amount of the monthly installment of the
Rental Credit as set forth below, which obligation shall run with the Land.
The foregoing obligation of Landlord shall survive the termination of this
Lease under the aforesaid circumstances and, following any termination of this
Lease, other than as a result of an Event of Default, prior to the fulfillment
by Landlord of its obligations with respect to the Rental Credit, Tenant may
record a notice in the land records of the District of Columbia, giving
constructive notice to third parties of Tenant’s claim to the remaining Rental
Credit under this Section 6.2.

	 	 	 	 	 
	Lease Year	Rental Credit per square foot of Initial Premises Rentable Area
	1
	 	$	4.00	 
	2
	 	$	4.30	 
	3
	 	$	4.62	 
	4
	 	$	4.97	 
	5
	 	$	5.34	 
	6
	 	$	5.74	 
	7
	 	$	6.17	 
	8
	 	$	6.64	 
	9
	 	$	7.13	 
	10
	 	$	7.67	 
	11
	 	$	8.24	 

22

 

	 	 	 	 	 
	Lease Year	Rental Credit per square foot of Initial Premises Rentable Area
	12
	 	$	8.86	 
	13
	 	$	9.53	 
	14
	 	$	10.24	 
	15
	 	$	11.01	 

     6.3 Rentable Area. The Rentable Area of the Building and the Premises and
other rentable areas thereof have been agreed upon in accordance with Exhibit
3.

7. RENTAL ESCALATION.

This Article 7 shall only apply to Yearly Rent for the Initial Premises, First
Expansion Premises, and Second Expansion Premises, and Storage Rent for the
Storage Space, and shall be limited to the initial term of this Lease.
Escalations of Yearly Rent, if any, for the Expansion Option Premises and
Available Space, and escalations of Yearly Rent during the Extension Period
shall be determined as otherwise provided in this Lease.

     7.1 Definitions. As used in this Article 7, the words and terms which follow
shall mean and include the following:

          (a) “CPI” means the Consumer Price Index, All Urban Consumers (CPI-U),
U.S. City Average, All-Items Index (1982 – 84 = 100) as published by the Bureau
of Labor Statistics, United States Department of Labor. If at any time during
the term, the United States Bureau of Labor Statistics discontinues the
issuance of such Index, “CPI” shall mean any other standard nationally
recognized cost-of-living index then published by Prentice-Hall, Inc. or other
nationally recognized publisher of similar statistical information agreed upon
by Landlord and Tenant. If any monthly CPI is not available for use, the CPI
as issued and published for the earliest preceding month shall be used. If the
CPI ceases to be published on a monthly basis, then the shortest stated period
for which it is published shall be used for purposes hereof.

          (b) “Twelve-Month CPI Increase” means the amount, expressed as a
percentage, by which the CPI for the month most recently published as of the
first day of the Lease Year with respect to which the new rate of Yearly Rent
and Storage Rent is being calculated, has increased during the twelve (12)
month period that has just concluded. Should there be a decrease in the CPI
during the twelve (12) month period in question, the “Twelve-Month CPI
Increase” shall be deemed to be 0%.

          (c) “CPI Rental Escalation Formula” means the product of (x) the
Twelve-Month CPI Increase attributable to the immediately preceding Lease Year
pursuant to this Article 7, times (y) one hundred ten percent (110%).

          (d) “Annual Rental Escalation Limit” means an increase in the rate of
Yearly Rent and Storage Rent pursuant to this Article 7, from one Lease Year to
the next succeeding Lease Year, of two and one-half percent (2 1⁄2%).

          (e) “Deferred Rental Escalation” has the meaning set forth in Article 7.2.

     7.2
Adjustment of Yearly Rental Rate. On the first day of the second
(2nd)
Lease Year, and on the first day of each succeeding Lease Year during the term
of this Lease, the CPI Rental Escalation Formula shall be applied to the rate
of Yearly Rent and Storage Rent payable with respect to the prior Lease

23

 

Year,
resulting in either no change in the rate of Yearly Rent and Storage Rent, or
an increase therein. However, if the application of the CPI Rental Escalation
Formula as aforesaid would result in an increase in the rate of Yearly Rent and
Storage Rent in excess of the Annual Rental Escalation Limit, then the increase
in the rate of Yearly Rent and Storage Rent shall be limited to the Annual
Rental Escalation Limit, and any sum or sums of Yearly Rent and Storage Rent
that would otherwise have been payable, had the rate of Yearly Rent and Storage
Rent been permitted to increase by application of the CPI Rental Escalation
Formula without limitation by the Annual Rental Escalation Limit, shall be
deemed “Deferred Rental Escalation,” and shall be permitted to be recaptured by
Landlord in accordance with Article 7.3 below.

     7.3 Recapture of Deferred Rental Escalation. If Deferred Rental Escalation has
accumulated in accordance with Article 7.2, then for each Lease Year with
respect to which there has either been no scheduled increase in Yearly Rent and
Storage Rent by application of the CPI Rental Escalation Formula without giving
effect to this Article 7.3, or if the scheduled increase in Yearly Rent and
Storage Rent for such Lease Year, without giving effect to this Article 7.3,
does not meet or exceed the Annual Rental Escalation Limit, then Yearly Rent
and Storage Rent shall be increased for such Lease Year by any available
Deferred Rental Escalation, provided that the aggregate increase in the rate of
Yearly Rent and Storage Rent for such Lease Year shall not exceed the Annual
Escalation Limit with respect thereto. Any accumulated Deferred Rental
Escalation not able to be so recaptured, due to the application of the Annual
Rental Escalation Limit, may be further deferred to a future Lease Year with
respect to which the application of the CPI Rental Escalation Formula does not
result in an increase in the rate of Yearly Rent and Storage Rent exceeding the
Annual Rental Escalation Limit.

     7.4 Example of Rental Escalation.

          (a) The assumptions for the purpose of this example are:

		
	 	     (i) The first Lease Year is the period from June 1,
2004 to May 30, 2005, the second Lease Year is the period
from June 1, 2005 to May 30, 2006 and the third Lease Year
is the period from June 1, 2006 to May 30, 2007;
	 
	 	     (ii) Yearly Rent for the first Lease Year is $1,000;
	 
	 	     (iii) CPI published in May 2004 is 100;
	 
	 	     (iv) CPI published in May 2005 is 105;
	 
	 	     (v) CPI published in May 2006 is 106.05.

          (b) Using the assumptions set forth in paragraph (a) above, for purposes
of determining the rental escalation under this Article 7 for the second Lease
Year, the Twelve-Month CPI increase is 5% and the resulting CPI Rental
Escalation Formula is 5.5%. However, due to the Annual Rental Escalation
Limit, Yearly Rent increases to only $1,025 (rather than to $1,055). The
remaining balance of $30 constitutes the Deferred Rental Escalation.

          (c) Using the assumptions set forth in paragraphs (a) and (b) above, for
purposes of determining the rental escalation under this Article 7 for the
third Lease Year, the Twelve-Month CPI increase is 1% and the resulting CPI
Rental Escalation Formula is 1.1%, which does not trigger the Annual Rental
Escalation Limit. The application of the CPI Rental Escalation Formula to the
Yearly Rent payable with respect to the prior Lease Year would otherwise have
resulted in a new Yearly Rent of $1,036.275, but in order to recapture a
portion of the Deferred Rental Escalation, the Yearly Rent is increased to
$1,050.625, which is the limit of the increase due to the Annual Rental
Escalation Limit. The remaining Deferred Rental Escalation of $15.65 is
further deferred, to be recaptured in a future year or years.

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     7.5 Second Example of Rental Escalation

          (a) The assumptions for the purpose of this example are:

		
	 	     (i) The first Lease Year is the period from June 1,
2004 to May 30, 2005, the second Lease Year is the period
from June 1, 2005 to May 30, 2006 and the third Lease Year
is the period from June 1, 2006 to May 30, 2007;
	 
	 	     (ii) Yearly Rent for the first Lease Year is $1,000;
	 
	 	     (iii) CPI published in May 2004 is 100;
	 
	 	     (iv) CPI published in May 2005 is 102;
	 
	 	     (v) CPI published in May 2006 is 106.

          (b) Using the assumptions set forth in paragraph (a) above, for purposes
of determining the rental escalation under this Article 7 for the second Lease
Year, the Twelve-Month CPI increase is 2% and the resulting CPI Rental
Escalation Formula is 2.2%. The CPI increase is lower than the Annual Rental
Escalation Limit, so Yearly Rent increases to only $1,022 (rather than to the
$1,025 maximum). There is no Deferred Rental Escalation in the second Lease
Year.

          (c) Using the assumptions set forth in paragraphs (a) and (b) above, for
purposes of determining the rental escalation under this Article 7 for the
third Lease Year, the Twelve-Month CPI increase is 3.9% and the resulting CPI
Rental Escalation Formula is 4.3%, which exceeds the Annual Rental Escalation
Limit. The application of the CPI Rental Escalation Formula to the Yearly Rent
payable with respect to the prior Lease Year results in a Yearly Rent of
$1,047.55; if there were no limit to the CPI escalation, the Yearly Rent could
have increased to $1,065.95. The Deferred Rental Escalation of $18.40 may be
carried to future years where the CPI escalation does not exceed the Annual
Rental Escalation Limit.

8.     SERVICES FURNISHED BY LANDLORD. Landlord will both (a) perform all services
set forth in this Section 8 and (b) manage, operate and maintain the Building,
in a manner consistent with the operation of a first class office building in
the downtown Washington, DC area at all times during the term of this Lease. A
description of the existing base building conditions, to the best of Landlord’s
knowledge, is set forth in Exhibit 7-C.

     8.1 Electric Current.

          (a) Landlord shall contract with an electricity distribution provider for
electricity to the Premises and provide facilities, conduits and riser space to
accommodate Tenant’s electricity needs that enable electricity to the Premises
to be available at all times in an amount not less than 6 watts per rentable
square foot in the Premises, connected load, and not less than 2 watts per
rentable square foot for lighting
(together, the “Building Standard Electric”), and Tenant agrees that its
total connected lighting load will not exceed the maximum from time to time
permitted under applicable governmental regulations. All existing electrical
feeds, transformers, electrical panels and circuit breakers located in each
electrical closet on each floor will remain as currently installed for Tenant’s
use.

          (b) As part of Landlord’s Pre-Occupancy Work for the Premises, Landlord
will install, at Landlord’s cost, check meters on each floor of the Premises to
measure the direct consumption of electricity on such floor. If Tenant shall
expand the Premises to include a partial floor in the Building, whether as part
of the Second Expansion Premises or Potential Available Space (excluding,
however, any

25

 

expansion to include Available Recapture Space), Landlord shall
install a check meter to measure the direct consumption of electricity in the
portion of the Premises on such partial floor. Any costs to be incurred by
Landlord in connection under this Article 8.1(b) with respect to the Expansion
Option Premises and any Available Space, shall be taken into account at the
time the fair market rental value of such space is determined. Tenant shall
reimburse Landlord for Tenant’s actual costs of electricity usage as measured
by the relevant check meters within 30 days after receipt of an invoice from
Landlord, together with reasonable supporting documentation.

          (c) If Tenant shall require electric current for use in the Premises in
excess of the Building Standard Electric limits, and if Landlord’s facilities
are inadequate for such excess requirements, then Landlord shall, upon written
request and at the sole cost and expense of Tenant, furnish and install such
additional wires, conduits, feeders, switchboards, equipment and appurtenances
as reasonably may be required to supply such additional requirements of Tenant,
provided that (i) such excess electric current is available to the Building
(ii) such additional requirements shall be permitted by applicable laws and
insurance regulations, shall not cause damage to the Building or the Premises
or cause or create a dangerous or hazardous condition.

          (d) Tenant agrees that it will not make any material alteration or
material addition to the electrical equipment in the Premises without the prior
written consent of Landlord in each instance first obtained, which consent will
not be unreasonably withheld, conditioned or delayed, and will promptly advise
Landlord of any other alteration or addition to such electrical equipment.

     8.2 Water. Landlord shall furnish hot and cold water for cleaning, toilet,
lavatory, drinking, and food preparation, as well as for ice makers, filtered
water dispensers, coffee makers, soda fountains, pantry sinks, dishwashers, and
other purposes ancillary to Tenant’s permitted use in the Premises. However,
if Tenant requires, uses or consumes water, as aforesaid, in excess of the
amount reasonably used or consumed for similar first class office space,
Landlord may (i) assess a reasonable charge for the additional water so used or
consumed by Tenant or (ii) install a water meter and thereby measure Tenant’s
water consumption for all purposes. In the latter event, Tenant shall pay the
cost of the meter and the cost of Landlord’s installation thereof and shall
keep said meter and installation equipment in good working order and repair.
Tenant agrees to pay for water consumed, as shown on said meter, in excess of
that which is an amount reasonably used or consumed for similar office space,
together with the sewer charge based on said meter charges, as and when bills
are rendered, and on default in making such payment Landlord may pay such
charges and collect the same from Tenant.

     8.3 Elevators; Cleaning. Landlord shall: (i) provide necessary elevator
facilities on Mondays through Fridays, excepting legal holidays, from 8:00
a.m. to 8:00 p.m. and on Saturdays, excepting legal holidays, from 9:00 a.m. to
3:00 p.m. (called “business days”) and have at least three elevators in
operation available for Tenant’s use, non-exclusively, together with others
having business in the Building, at all other times; and (ii) cause the office
areas of the Premises to be cleaned on business days (except on Saturdays)
after 6:00 p.m. Exhibit 4 annexed hereto represents substantially the extent
and scope of the cleaning by Landlord referred to in this Article 8.3.

     8.4 Heat; Air Conditioning. Landlord shall furnish to and distribute in
the Premises and public areas of the Building heat and air conditioning as
normal seasonal changes may require on business
days during the hours as aforesaid in Article 8.3. The aforesaid HVAC
system will be operated to maintain room conditions in the Premises, based on
internal heat load generated by two (2) watts for Tenant lighting and six (6)
watts for Tenant equipment and occupancy of one (1) person per 100 usable
square feet as follows:

          (a) Heating. 72 degrees F. dry bulb when the
coincident outside air temperature is not less than 10 degrees F. dry bulb.
Average Relative Humidity (RH) shall not be lower than 40% RH.

26

 

          (b) Cooling. 74 degrees F. when the coincident outside
air temperature is not higher than 95 degrees F dry bulb / 78° F. wet bulb. RH
shall not be higher than 50%.

          (c) Outside Air Ventilation. Outside air for
ventilation will be provided at the rate of 20 CFM per person and will meet
current ASHRAE guidelines for outside air ventilation.

     8.5 Additional Heat, Cleaning and Air Conditioning Services.

          (a) Landlord shall, if notified by Tenant before 3:00 p.m. for same
business day after-hour requirements, and before 3:00 p.m. on Friday for
weekend and the following Monday requirements, furnish additional heat,
cleaning or air conditioning services to the Premises on days and at times
other than as provided in Article 8.3 above. Tenant’s notice in this Article
8.5 may be by email communication so long as it is sent by a tenant
representative that Tenant shall have identified, in advance, to Landlord as an
agreeable source of such instructions.

          (b) Tenant will pay to Landlord a reasonable charge, not to exceed
Landlord’s actual cost, (i) for any such additional heat, cleaning or air
conditioning service required by Tenant, and (ii) for any extra cleaning of the
Premises beyond those performed for typical first class office tenants or
otherwise as specified in the Cleaning Specifications exhibit. If the cost to
Landlord for cleaning the Premises shall be increased due to Tenant’s extra
cleaning requirements, Tenant shall pay to Landlord an amount equal to such
actual increase in cost, within thirty (30) days after receipt of an invoice
therefor, together with supporting documentation, if any. Landlord’s current
charge for overtime HVAC is $110 per hour for the Building. Notwithstanding
the foregoing, if any extra service provided under this Article 8 is also
requested by another tenant of the Building, Landlord shall reasonably adjust
such costs such that Tenant will pay a portion reasonably allocable to Tenant’s
use, and Landlord shall not recover more than Landlord’s actual costs for the
provision of such extra service.

     8.6 Additional Air Conditioning Equipment. In the event Tenant requires
additional air conditioning for business machines, meeting rooms or other
special purposes, or because of occupancy or excess electrical loads, any
additional air conditioning units, chillers, condensers, compressors, ducts,
piping and other equipment, then Tenant shall, at its sole cost and expense and
subject to the terms and conditions of this Lease, furnish and install
additional air conditioning equipment, provided that such additional equipment
shall be permitted by applicable laws and insurance regulations, shall not
cause damage to the Building or the Premises or cause or create a dangerous or
hazardous condition. If Tenant should desire to install a supplemental HVAC
system in the Premises (including without limitation one or more package
units), Landlord will permit Tenant, at Tenant’s sole cost and expense, to tie
into the base building condenser water loop, and any incremental additional
out-of-pocket costs (which may include reasonable overhead and equipment
depreciation allowance) of condenser water shall be billed as a separate charge
to Tenant. All such additional air conditioning equipment shall be maintained
by Tenant at Tenant’s sole cost and expense, and, if and to the extent that
such additional equipment causes Tenant’s electrical consumption to exceed the
Building Standard Electric limits, Tenant shall reimburse Landlord in such an
amount as will compensate it for the cost incurred by it in operating such
additional air conditioning equipment.

     8.7 Repairs. Except as otherwise provided in Articles 18 and 20, Landlord
shall keep, maintain, repair (including replacement, if reasonably necessary),
the Building’s structure, including the roof, exterior walls, structural floor
slabs, columns, elevators, public stairways and corridors; the lavatories;
Building equipment and all Building systems (including, without limitation,
sanitary/plumbing, electrical, heating, air conditioning, mechanical, fire and
life safety systems or other systems) and other common facilities of the
Building in good working condition and repair. Tenant shall endeavor to give
to Landlord prompt notice of any fire or accident in the Premises or in the
Building and of any damage to, or defective condition in, any part or
appurtenance of the Building including, without limitation, sanitary/plumbing,
electrical, heating, air conditioning, mechanical, fire and life safety systems
or other systems located in, or passing through, the Premises. Notwithstanding
anything to the contrary contained in this Lease, the

27

 

delivery of any portion
of the Premises in its “as is” condition shall not derogate from Landlord’s
obligations set forth in this Lease, including this Article 8.7.

     8.8 Interruption or Curtailment of Services.

          (a) When necessary by reason of accident or emergency, or of difficulty or
inability in securing supplies or labor, or of strikes, or of any other cause
beyond the reasonable control of Landlord, whether such other cause be similar
or dissimilar to those hereinabove specifically mentioned until said cause has
been removed, or when necessary for repairs, alterations, replacements or
improvements which in the reasonable judgment of Landlord are desirable or
necessary to be made, Landlord reserves the right to interrupt, curtail, stop
or suspend (i) the furnishing of heating, elevator, air conditioning, and
cleaning services and (ii) the operation of the plumbing and electric systems,
provided that if such interruption is necessary for repairs, alterations,
replacements or improvements, Landlord shall use reasonable efforts to minimize
any interference with Tenant’s use and occupancy of the Premises. Landlord
shall exercise reasonable diligence to eliminate the cause of any such
interruption, curtailment, stoppage or suspension, but, except as expressly set
forth herein, there shall be no diminution or abatement of Rent or other
compensation due from Landlord to Tenant hereunder, nor shall this Lease be
affected or any of the Tenant’s obligations hereunder reduced, and the Landlord
shall have no responsibility or liability for any such interruption,
curtailment, stoppage, or suspension of services or systems.

          (b) Notwithstanding anything contained in this Lease to the contrary, if
(i) an interruption or curtailment, suspension or stoppage of an Essential
Service (as said term is hereinafter defined) shall occur, except any of the
same due to (A) any act or neglect of Tenant or Tenant’s agents employees,
contractors or invitees or any person claiming by, through or under Tenant, or
(B) a casualty covered under Article 18 below (any such interruption of an
Essential Service being hereinafter referred to as a “Service Interruption”),
and (ii) such Service Interruption either (x) is the consequence of a
circumstance that affects only the Building, and not any other building, or (y)
if it is the consequence of a circumstance that affects the Building and any
other building, but such circumstance is an excluded occurrence, and
consequently not covered under a typical and customary policy of business
interruption insurance reasonably carried by prudent businesses that lease
office space in the downtown Washington D.C. area, and (iii) such Service
Interruption continues for more than five (5) consecutive business days after
the commencement of such interruption, unless such Service Interruption affects
only the Premises, in which case it shall have continued for more than five (5)
consecutive business days after Landlord shall have received notice thereof
from Tenant, and (iv) as a result of such Service Interruption, the conduct of
Tenant’s normal operations in the Premises are materially and adversely
affected, then there shall be an abatement of one day’s Monthly Rent Payment
applicable to the portion of the Premises affected by such Service Interruption
for each day during which such Service Interruption continues after such five
(5) business day period; provided, however, that if Tenant conducts all or any
part of its operations in any portion of the Premises notwithstanding such
Service Interruption, then the amount of each daily abatement of Monthly Rent
Payments shall only be proportionate to the nature and extent of the
interruption of Tenant’s normal operations or ability to use the Premises. If
any Service Interruption (a) affects only the Building and not any other
building in the area in which the Building is located, (b) materially and
adversely affects the conduct of Tenant’s normal operations in the Premises and
(c) continues for more than thirty (30) consecutive days after the commencement
of such interruption, or for more than thirty (30)
consecutive days after notice from Tenant if such interruption affects
only the Premises, then Tenant shall have the right to terminate this Lease by
written notice to Landlord prior to the date such Service Interruption is
remedied, provided that such thirty (30) day period shall be extended in the
event that Landlord is unable to remedy such Service Interruption as a result
of Force Majeure, but in no event shall such period be extended for Force
Majeure for more than an additional one hundred twenty (120) days. Without
limiting the obligations of Landlord as otherwise expressly provided in this
Lease, the rights granted to Tenant under this paragraph (b) shall be Tenant’s
sole and exclusive remedy resulting from such a failure of Landlord to provide
services, and Landlord shall not otherwise be liable for any loss or damage
suffered or sustained by Tenant resulting from any such failure or cessation of
services. For purposes hereof, the term “Essential Services” shall mean the
following services: access to the Premises, HVAC

28

 

service, water and
sewer/septic service and electricity, but only to the extent that Landlord has
an obligation to provide same to Tenant under this Lease.

     8.9 Energy Conservation. Notwithstanding anything to the contrary in this
Article 8 or in this Lease contained, Landlord may institute, and Tenant shall
comply with, such policies, programs and measures of general applicability to
all tenants of the Building as may be necessary or required for the
conservation and/or preservation of energy or energy services, or as may be
necessary or required to comply with applicable governmental codes, rules,
regulations or standards.

     8.10 Rooftop Communications. Tenant shall have the right to use the Antenna
Area, as hereinafter defined, to install use, maintain, and from time to time
replace Tenant’s communication equipment and related equipment required to
connect such communication equipment to the Premises (such equipment is
collectively referred to as an “Antenna”) for a period commencing as of the
Term Commencement Date and terminating as of the expiration or earlier
termination of the term of this Lease. The “Antenna Area” shall be an area on
the roof of the Building depicted on Exhibit 9, which approval shall not be
unreasonably withheld, conditioned or delayed. Tenant shall be permitted to
use the Antenna Area solely for the Antenna installed in accordance with
specifications approved by Landlord in advance, which approval shall not be
unreasonably withheld, conditioned or delayed, utilizing a frequency or
frequencies and transmission power identified in such approved specifications.
The Antenna and Tenant’s use of the Antenna Area shall be upon all of the
conditions of the Lease, except as follows:

          (a) Tenant shall have no obligation to pay Monthly Rent Payments in
respect of the Antenna Area.

          (b) Landlord shall have no obligation to provide any services to the
Antenna Area, provided Tenant shall be entitled at its cost, to connect to the
Building’s electrical current, to the extent necessary, provided that Tenant
shall also pay for any electrical current consumed by it through such
connections.

          (c) Except as otherwise contemplated in this Article 8.10, Tenant shall
have no right to make any changes, alterations, signs, decoration, or other
improvements to the Antenna Area or to the Antenna without Landlord’s prior
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed.

          (d) Landlord shall provide Tenant with 24-hour access to the Antenna Area,
subject to Landlord’s reasonable security procedures and restrictions based on
emergency conditions and to other causes beyond Landlord’s reasonable control.
Tenant shall give Landlord reasonable advance notice of the need for access to
the Antenna Area (which notice may be oral in an emergency), and Landlord must
be present during any entry by Tenant onto the Antenna Area. Each notice for
access shall be in the form of a work order referencing this Lease and
describing, as applicable, the date access is needed, the name of the
contractor or other personnel requiring access, the name of the supervisor
authorizing the access/work, the areas to which access is required, the
Building common elements to be impacted (risers, electrical rooms, etc.), the
description of the work to be performed and evidence of Landlord’s approval
thereof. In the event of an emergency, such notice shall follow within five
(5) days after access to the Antenna Area.

          (e) At the expiration or prior termination of Tenant’s right to use the
Antenna Area, Tenant shall remove the Antenna from the Antenna Area.

          (f) Tenant shall be responsible for the cost of repairing any damage to
the roof of the Building caused by the installation or removal of the Antenna.

          (g) Tenant shall have no right to sublet the Antenna Area, except in
connection with an approved sublease, to the extent required by Article 16, of
all or any part of the Premises.

29

 

          (h) No other person, firm or entity (including, without limitation, other
tenants, licensees or occupants of the Building) shall have the right to use
the services provided by the Antenna.

          (i) In the event that Landlord performs repairs to or replacement of the
roof which reasonably requires the temporary removal or relocation of the
Antenna, upon reasonable prior notice to Tenant, Tenant shall, at Landlord’s
cost, remove the Antenna until such time as Landlord has completed such repairs
or replacements, provided that Landlord shall use reasonable efforts to
complete such work as promptly as possible and to perform such work in a manner
which will minimize or, if reasonably possible, eliminate any interruption in
Tenant’s use of the Antenna (including providing Tenant with an alternative
area to place the Antenna, if available, during the repair period). Landlord
shall reimburse Tenant for the cost to reinstall the Antenna upon completion of
such repairs or replacements.

          (j) Any services required by Tenant in connection with Tenant’s use of the
Antenna Area or the Antenna shall be installed by Tenant, at Tenant’s expense,
subject to Landlord’s prior approval, which approval shall not be unreasonably
withheld, conditioned or delayed.

          (k) Tenant shall take the Antenna Area “as-is” in the condition in which
the Antenna Area is in as of the Term Commencement Date.

          (l) Tenant shall comply with all applicable laws, ordinances and
regulations in Tenant’s use of the Antenna Area and the Antenna.

          (m) Provided that there is no other commercially reasonably alternatives,
Landlord shall have the right, upon thirty (30) days notice to Tenant, to
require Tenant to relocate the Antenna Area to another area (“Relocated Rooftop
Area”) on the roof of the Building suitable for the use of the Antenna. In
such event, Tenant shall, at Landlord’s cost and expense, on or before the
thirtieth (30th) day after Landlord gives such notice, relocate the Antenna
from the Antenna Area to the Relocation Rooftop Area.

          (n) In addition to complying with the applicable construction provisions
of the Lease, Tenant shall not install or operate the Antenna in any portion of
the Antenna Area until (x) Tenant shall have obtained Landlord’s prior written
approval of Tenant’s plans and specifications for the placement and
installation of the Antenna in the Antenna Area, and (y) Tenant shall have
obtained and delivered to Landlord copies of all required governmental and
quasi-governmental permits, approvals, licenses and authorizations necessary
for the lawful installation, operation and maintenance of the Antenna.

          (o) Landlord shall have the right to designate or identify the Antenna
with or by a lease or license number (or other marking) and to place such
number (or marking) on or near the Antenna, provided that such marking or
identification does not interfere with the functionality or serviceability of
the Antenna.

          (p) Landlord shall use commercially reasonable efforts to seek to ensure
that any other rooftop installations and/or antenna placed on the roof of the
Building after Landlord’s approval of the plans for Tenant’s Antenna do not
interfere with the normal use and operation of Tenant’s Antenna or otherwise
result in any signal interference. In the event any such installations or
antennas on the roof cause
interference with the normal use and operation of Tenant’s Antenna,
Landlord shall promptly remove such interference.

     8.11 Exterior Tenant Identification Signage.

          (a) So long as Tenant shall not be in default under this Lease beyond
applicable notice and cure periods, Tenant shall have the right, subject to the
terms and conditions of this Article 8.11, to install an identification sign on
the exterior of the Building, approximately in the location currently used by
the existing tenant of the Premises as of the date of this Lease. The size,
materials and graphics shall be subject to Landlord’s prior review and
approval, which shall not be unreasonably withheld, conditioned or

30

 

delayed.
Tenant’s installation work shall be subject to all of the applicable terms and
conditions of Articles 12 and 13, and Tenant hereby covenants and agrees to
maintain such exterior signage in good condition, consistent with the first
class quality of the Building, so long as such exterior signage is affixed to
the Building, and Tenant shall remove such signage from the exterior of the
Building, and repair any damage caused thereby, upon the earlier to occur of
(i) the expiration of Tenant’s rights under this Article 8.11, or (ii) the
Termination Date.

          (b) Tenant’s rights under this Article 8.11 shall not be assignable or
transferable other than by the assignment of this Lease or a sublease of all or
substantially all of the Premises, and consequently will not be available to
any other sublessee or other occupant, or any other third party, other than an
Affiliate. Tenant’s rights under this Article 8.11 shall no longer be
available to Tenant should Tenant fail to itself occupy at least 80,000 square
feet of Rentable Area in the Building.  Landlord agrees that
no tenant in the Building leasing less square footage than Tenant will (i) have
a larger exterior sign than Tenant or (ii) be listed above Tenant’s listing on
any nonexclusive monument sign, if any.

     8.12 Maintenance of Exterior Common Areas. Landlord shall keep sidewalks,
plazas, and landscaped areas reasonably free of accumulation of snow, ice,
dirt, refuse, rubbish and unlawful obstructions.

     8.13 Maintenance of Interior Common Areas. Landlord shall keep the Building
atrium, lobbies, and common and public areas of the Building reasonably clean
and presentable.

     8.14 Maintenance of Landscaping. Landlord shall care for and maintain
shrubbery, planting and landscaping, if any, on the terraces, the plaza and
other public areas of the Building.

     8.15 Building Access. Subject to Landlord’s Rules and Regulations and security
procedures, Landlord shall provide access to the Premises through the Building
lobby and from the Building garage 24 hours per day, 7 days per week. Landlord
shall install and maintain an electronic card access system for the Building
and the parking garage, which system will allow Tenant such access. Landlord
shall provide Tenant with an initial distribution of access keys/cards for
Tenant’s employees in the amount requested by Tenant prior to the respective
Term Commencement Date of the Initial Premises and the First Expansion
Premises, Second Expansion Premises and Expansion Option Premises. Provided
that Tenant’s request is reasonably timely, Landlord will make such access
keys/cards available at least ten (10) business days before the anticipated
occupancy date specified by Tenant in its request. Tenant shall be solely
responsible for obtaining any additional keys/cards, or any replacements of
such keys/cards, at Tenant’s sole cost and expense, directly through Landlord’s
designated third party vendor, and further subject to the requirements of and
availability from such vendor.

9. OPERATING COSTS AND REAL ESTATE TAXES

     9.1 Definitions. As used in this Article 9, the words and terms which follow
mean and include the following:

          (a) “Operating Year” shall mean a calendar year in which occurs any part
of the term of this Lease.

          (b) “Intentionally Omitted.

          (c) “Tenant’s Proportionate Share” shall be the figure as stated in
Exhibit 1.

          (d) “Taxes” shall mean the real estate taxes and other taxes, levies and
assessments imposed upon the Building and the land on which it stands and upon
any personal property of Landlord used in the operation thereof, or Landlord’s
interest in the Building or such personal property; charges, fees

31

 

and assessments for transit, housing, police, fire or other governmental services
or purported governmental benefits to the Building; service or user payments in
lieu of taxes; and any and all other taxes, levies, betterments, assessments
and charges arising from the ownership, leasing, operating, use or occupancy of
the Building or based upon rentals derived therefrom, which are or shall be
imposed by National, State, Municipal or other authorities. As of the
Execution Date, “Taxes” shall not include any franchise, rental, income or
profit tax, capital levy or excise, provided, however, that any of the same and
any other tax, excise, fee, levy, charge or assessment, however described, that
may in the future be levied or assessed as a substitute for or an addition to,
in whole or in part, any tax, levy or assessment which would otherwise
constitute “Taxes,” whether or not now customary or in the contemplation of the
parties on the Execution Date of this Lease, shall constitute “Taxes,” but only
to the extent calculated as if the Building and the land upon which it stands
is the only real estate owned by Landlord. “Taxes” shall also include
reasonable expenses of tax abatement or other proceedings contesting
assessments or levies.

          (e) Intentionally Omitted.

          (f) “Tax Period” shall be any fiscal/tax period in respect of which Taxes
are due and payable to the appropriate governmental taxing authority, any
portion of which period occurs during the term of this Lease, the first such
Period being the one in which the Rent Commencement Date occurs.

          (g) “Operating Costs”:

		
	 	     (1) Definition of Operating Costs. “Operating Costs” shall
mean all costs incurred and expenditures of whatever nature made
by Landlord in the operation and management, for repair and
replacements (subject to the provisions regarding Permissible
Capital Expenditures as provided below), cleaning and maintenance
of the Building and grounds including, without limitation,
vehicular and pedestrian passageways related to the Building,
related equipment, facilities and appurtenances, elevators,
cooling and heating equipment. In the event that Landlord or
Landlord’s managers or agents perform services for the benefit of
the Building off-site which would otherwise be performed on-site,
the cost of such services shall be reasonably allocated among the
properties benefiting from such service and shall be included in
Operating Costs. Operating Costs shall include, without
limitation, those categories of “Specifically Included Operating
Costs,” as set forth below, but shall not include “Excluded
Costs,” as hereinafter defined. Notwithstanding the foregoing, in
determining the amount of Operating Costs for the Building and
grounds for any Operating Year, or portion thereof falling within
the term of this Lease, Landlord’s costs shall be deemed to be
increased by extrapolation to account for the incremental
additional Operating Costs that would otherwise have been incurred
by Landlord, but for the existence of vacant rentable floor area
in the Building, or attributable to services or other items that
are contemplated under this Lease to be shared by tenants in
accordance with their respective proportionate share thereof, but
not delivered or applicable to portions of the Rentable Area of
the Building, such as for example, but without limitation, when a
particular tenant in the Building provides cleaning to its own
space, in lieu of having it furnished by Landlord. Extrapolation
as aforesaid, in the case of vacancy, shall be calculated based on
an assumed occupancy
level of the greater of (i) 95% or (ii) the average level of
occupancy of the Building during the Operating Year in question.

		
	 	     (2) Definition of Excluded Costs. Notwithstanding anything
contained herein to the contrary, Operating Costs shall not
include Excluded Costs. “Excluded Costs” shall be defined as the
following:

		
	 	     (i) the cost of repairs, alterations, capital
improvements and other items, which, under generally
accepted accounting principles, are properly classified as
capital expenditures;

32

 

		
	 	     (ii) depreciation;

		
	 	     (iii) lease commissions and advertising and
promotional expenses;

		
	 	     (iv) any interest or principal payments on mortgages
of Landlord and other indebtedness of Landlord or any costs
of financing or refinancing;

		
	 	     (v) amounts paid to any person, firm or corporation
related to or otherwise affiliated with Landlord or its
management company or any general partner or member of
Landlord which are in excess of arms-length competitive
prices paid in the Washington, DC metropolitan area for the
services or goods provided;

		
	 	     (vi) any management fees whether paid to a related or
otherwise affiliated party in excess of two and one-half
percent (21⁄2 %) of the gross income from the Building
(for the computation hereof, gross income shall be
extrapolated in the same manner described in Article
9.1(g)(1) hereof);

		
	 	     (vii) ground rent payments to any ground lessor;

		
	 	     (viii) the costs of any items for which Landlord (a)
is reimbursed by insurance or parties other than tenants of
the Building pursuant to operating expense provisions
included in their respective lease, (b) would have been
covered by insurance proceeds had Landlord maintained the
insurance required to be maintained by Landlord under this
Lease or (c) is not fully compensated due to the
coinsurance provisions of its insurance policies on account
of Landlord’s failure to obtain sufficient amount of
coverage against such risk;

		
	 	     (ix) painting or decorating other than in common or
public areas of the Building;

		
	 	     (x) any tenant work performed or alteration of space
leased to Tenant or other tenants or occupants of the
Building, whether such work or alteration is performed for
the initial occupancy by such tenant or occupant or
thereafter;

		
	 	     (xi) any cash or other consideration paid by Landlord
on account of, with respect to or in lieu of the tenant
work or alterations described in clause (x) above;

		
	 	     (xii) costs attributable to the ownership, operation
or maintenance of the Building parking garage;
	 
	 	     (xiii) repairs necessitated by the negligence of
Landlord (but Landlord may include as an Operating Cost the
amount of any insurance deductible permitted in paragraph
(4) below as a Specifically Included Category of Operating
Costs) or required to cure violations of laws in effect on
the Term Commencement Date;

		
	 	     (xiv) compensation paid to general partners, officers
or executives of Landlord;

33

 

		
	 	     (xv) legal, accounting, professional or other
consulting fees either related to disputes with tenants,
based upon Landlord’s negligence or other tortious conduct,
or related to enforcement of leases;

		
	 	     (xvi) the cost of electricity to any tenanted space in
the Building;

		
	 	     (xvii) Landlord’s cost for any services provided by
Landlord to other tenants for which Landlord would be
entitled to be reimbursed as a charge in addition to the
Rent payable under the terms of this Lease;

		
	 	     (xviii) costs and expenses associated with any retail
space in the Building;

		
	 	     (xix) “takeover expenses” (i.e., expenses incurred by
Landlord with respect to space located in another building
of any kind or nature in connection with the leasing of
space in the Building);

		
	 	     (xx) the cost of replacing any lamps and/or ballasts
in tenanted areas in the Building;

		
	 	     (xxi) any asset management fees; or

		
	 	     (xxii) any capital expenses other than Permissible
Capital Expenditures as provided below.

		
	 	     (3) Capital Expenditures.

		
	 	     (i) Included in Operating Costs.
If, during the term of this Lease, Landlord shall incur any
Permissible Capital Expenditure (as defined in clause (ii)
below) there shall be included in such Operating Costs and
in Operating Costs for each succeeding Operating Year the
amount of the Annual Charge-Off (determined as hereinafter
provided) of such Permissible Capital Expenditure.

		
	 	     (ii) Permissible Capital
Expenditures. “Permissible Capital Expenditure”
shall mean and refer to capital expenditures incurred (A)
to reduce Operating Costs or to reduce the increase in
Operating Costs (i.e., the anticipated average annual
savings is greater than the average annual charge), or (B)
to comply with legal requirements first enacted or
promulgated and in effect after the Term Commencement Date.

		
	 	     (iii) Annual Charge-Off. “Annual
Charge-Off” shall be defined as the annual amount of
principal and interest payments which would be required to
repay a loan (“Capital Loan”) in equal monthly installments
over the Useful Life, as hereinafter defined, of the
capital item in question at an annual
interest rate equal to the Capital Interest Rate, as
hereinafter defined, where the initial principal balance is
the cost of the capital item in question.

		
	 	     (iv) Useful Life. “Useful Life”
shall be reasonably determined by Landlord in accordance
with generally accepted accounting principles and practices
in effect at the time of acquisition of the capital item.

		
	 	     (v) Capital Interest Rate.
“Capital Interest Rate” shall be defined as an annual rate
of either one percentage point over the AA Bond rate
(Standard & Poor’s corporate composite or, if unavailable,
its equivalent) as reported in the

34

 

		
	 	financial press at the
time the capital expenditure is made or, if the capital
item is acquired through third-party financing, then the
actual (including fluctuating) rate paid by Landlord in
financing the acquisition of such capital item.

		
	 	     (4) Specifically Included Categories of Operating Costs.
Operating Costs shall include, but not be limited to, the
following:

		
	 	     Taxes (other than real estate taxes): Sales, Federal Social
Security, Unemployment and Old Age Taxes and contributions and
State Unemployment taxes and contributions accruing to and paid by
the Landlord on account of all employees of Landlord and/or
Landlord’s managing agent, who are employed in, about or on
account of the Building, except that taxes levied upon the net
income of the Landlord and taxes withheld from employees, and
“Taxes” as defined in Article 9.1(d) shall not be included herein.
Additionally, should the Building ever fall within the boundary
of a so-called “Business Improvement District,” then Operating
Costs shall include charges, fees and assessments associated
therewith.

		
	 	     Water: All charges and rates connected with water supplied
to the Building and related sewer use charges, except to the
extent reimbursable by tenants or occupants of the Building.

		
	 	     Heat and Air Conditioning: All charges connected with heat
and air conditioning supplied to the Building, except to the
extent reimbursable by or separately charged to tenants or
occupants of the Building.

		
	 	     Wages: Wages and cost of all employee benefits of all
employees of the Landlord and/or Landlord’s managing agent (but
excluding any employee above the grade of building manager) who
are employed in, about or on account of the Building. For any
employee or managing agent that services more than one property,
Landlord shall reasonably allocate the wages and benefits among
the properties served by such employee and managing agent.

		
	 	     Cleaning: The cost of labor and material for cleaning the
Building, surrounding areaways and windows in the Building, except
to the extent charged directly to, or reimbursed by, tenants or
occupants of the Building.

		
	 	     Elevator Maintenance: All expenses for or on account of the
upkeep and maintenance of all elevators in the Building.

		
	 	     Electricity: The cost of all electric current for the
operation of any machine, appliance or device used for the
operation of the Building and the public areas thereof, including
the cost of electric current for the elevators, lights, air
conditioning and heating, but not including electric current which
is paid for directly to the utility by the user/tenant
in the Building. Operating Costs shall exclude any
electricity costs associated with any tenanted space in the
Building.

		
	 	     Insurance, etc.: The premiums and other costs for insurance
to be carried by Landlord pursuant to Article 15.9 of this Lease
with commercially reasonable deductibles amounts.

		
	 	     Management Office: Rental fees associated with Landlord’s
management office in the Building, so long as such management
office does not exceed 1,500 square feet of Rentable Area, such
rental fees are reasonable, arms-length fees, and the fees
associated

35

 

		
	 	with such management office are reasonably allocated
among all other properties serviced by such management office.

     9.2 Tax Payment Obligation. Commencing on the Rent Commencement Date, Tenant
shall pay to Landlord Tenant’s Proportionate Share of Taxes for each Tax
Period, such amount being hereinafter referred to as the “Tax Payment
Obligation”. Tenant shall remit to Landlord pro rata monthly installments on
account of the projected Tax Payment Obligation, reasonably calculated by
Landlord on the basis of the most recent Tax data or budget available. If the
total of such monthly remittances on account of any Tax Period is greater than
the actual Tax Payment Obligation for such Tax Period, Tenant may credit the
difference against the next installment of Monthly Rent Payments or other
charges due to Landlord hereunder, or, if the Lease has terminated, Landlord
shall pay such difference to Tenant within 30 days after receipt of the funds.
If the total of such remittances is less than the actual Tax Payment Obligation
for such Tax Period, Tenant shall pay the difference to Landlord within 30 days
after invoice, together with supporting documentation.

     Upon the written request of Tenant, Landlord will consider in good faith
whether to contest or seek abatement of any Taxes affecting the Premises. In
the event Landlord receives a request from tenants (including Tenant) occupying
at least 50% of the Rentable Area of the Building, Landlord shall contest or
seek abatement of Taxes affecting the Premises. Should Landlord contest or
seek abatement of such Taxes, then it shall do so with reasonable diligence and
shall keep Tenant appropriately informed, in the Landlord’s reasonable
discretion, as to such action. Appropriate credit against Tax Payment
Obligation shall be given for any refund obtained by reason of a reduction in
any Taxes by the Assessors or the administrative, judicial or other
governmental agency responsible therefor. The original computations, as well
as reimbursement or payments of additional charges, if any, or allowances, if
any, under the provisions of this Article 9.2 shall be based on the original
assessed valuations with adjustments to be made at a later date when the tax
refund, if any, shall be paid to Landlord by the taxing authorities.
Reasonable expenditures for legal fees and for other similar or dissimilar
expenses incurred in obtaining the tax refund may be charged against the tax
refund before the adjustments are made for the Tax Period, otherwise such fees
and expenses shall be included as part of Operating Costs.

     9.3 Operating Cost Payment Obligation. Commencing on the Rent Commencement
Date, Tenant shall pay to Landlord Tenant’s Proportionate Share of Operating
Costs for each Operating Year, such amount being hereinafter referred to as the
“Operating Cost Payment Obligation.” Tenant shall remit to Landlord pro rata
monthly installments on account of the projected Operating Cost Payment
Obligation, reasonably calculated by Landlord on the basis of the most recent
Operating Costs data or budget available. If the total of such monthly
remittances on account of any Operating Year is greater than the actual
Operating Cost Payment Obligation for such Operating Year, Tenant may credit
the difference against the next installment of Rent or other charges due to
Landlord hereunder, or, if the Lease has terminated, Landlord shall pay such
difference to Tenant within 30 days after receipt of the funds. If the total
of such remittances is less than actual Operating Cost Payment Obligation for
such Operating Year, Tenant shall pay the difference to Landlord within thirty
(30) days after being billed therefor.

     9.4 Part Years. If the Rent Commencement Date or the Termination Date occurs
in the middle of an Operating Year or Tax Period, Tenant shall be liable for
only that portion of the Operating
Cost Payment Obligation or Tax Payment Obligation, as the case may be, in
respect of such Operating Year or Tax Period represented by a fraction the
numerator of which is the number of days of the herein term which falls within
the Operating Year or Tax Period and the denominator of which is three hundred
sixty-five (365), or the number of days in said Tax Period, as the case may be.

     9.5 Annual Statement; Audit Rights.

          (a) Annual Statement. Landlord will deliver to Tenant,
within a commercially reasonable period of time, not to exceed 120 days after
the end of the Operating Year, a statement of Operating Costs (the “Annual
Statement”), in reasonable detail, broken down into component parts and

36

 

certified by an officer of Landlord or by Landlord’s certified public
accountant that the Annual Statement is true, complete and correct.

          (b) Audit Right. Tenant shall have the right to audit
or inspect Landlord’s books and records establishing Operating Costs for an
Operating Year for a period of one hundred eighty (180) days following the date
that Tenant receives the Annual Statement for such Operating Year from
Landlord. If Tenant notifies Landlord within such 180 day period, Landlord
shall, upon 30 days’ prior written notice from Tenant (the “Review Notice”),
make its books and records for the most recent Operating Year available to
Tenant for Tenant’s review, during normal business hours at Landlord’s
management office in the Building or such other location within the
metropolitan Washington, DC area as Landlord routinely maintains such books and
records. If requested by Tenant in the Review Notice, Landlord shall also make
available its books and records for the two Operating Years immediately prior
to the most recent Operating Year. As a condition to performing any such
examination, Tenant’s examiners shall be required to execute and deliver to
Landlord an agreement, in form reasonably acceptable to Landlord, agreeing (i)
to keep confidential (with customary exceptions) any information which it
discovers about Landlord or the Building in connection therewith and (ii) to
refrain from soliciting other tenants in the Building. Such examination may be
made only by Tenant, its employees and/or by an independent certified public
accounting firm approved by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed. Without limiting Landlord’s approval rights,
Landlord may withhold its approval of any examiner that is being compensated on
a contingent fee basis. All costs of the examination shall be borne by Tenant
except as set forth in this Article 9.5(b). If Tenant elects to review
Landlord’s books and records, within thirty (30) days after such books and
records are made available to Tenant, Tenant shall have the right to give
Landlord written notice stating in reasonable detail any objection to
Landlord’s Annual Statement with respect to the three most recently concluded
Operating Years (a “Notice of Dispute”). If Tenant fails to give Landlord such
Notice of Dispute within such thirty (30) day period or fails to provide
Landlord with a Review Notice within the time period provided above, Tenant
shall be deemed to have approved Landlord’s Annual Statement in all respects
and shall thereafter be barred from raising any claims with respect thereto.
Upon Landlord’s receipt of a timely objection notice from Tenant, Landlord and
Tenant shall work together in good faith to resolve the discrepancy between
Landlord’s Annual Statement and Tenant’s review. If Landlord and Tenant do not
agree on the proper amount for Tenant’s Operating Costs within thirty (30) days
after Tenant’s Notice of Dispute to Landlord, either party may refer the
dispute to arbitration in accordance with the arbitration provision set forth
in Article 29.5 of this Lease. If it is finally determined that the actual
Operating Costs for the Operating Year in question are less than the amount set
forth as the annual Operating Costs on the Annual Statement delivered to Tenant
by at least 2.5% then Landlord shall pay Tenant’s reasonable third-party costs
incurred in connection with its audit or inspection of Landlord’s books and
records. If, after the audit by Tenant of Landlord’s books and records
pursuant to this Article 9.5 with respect to any Operating Year, it is finally
determined that: (a) Tenant has made an overpayment on account of Operating
Costs, then Landlord shall credit such overpayment against the next
installment(s) of Operating Costs thereafter payable by Tenant, except that if
such overpayment is determined after the termination or expiration of
 the term
of this Lease, Landlord shall promptly refund to Tenant the amount of such
overpayment less any amounts then due from Tenant to Landlord, or (b) Tenant
has made an underpayment on account of Operating Costs, Tenant shall, within
thirty (30) days of such determination, pay such underpayment to Landlord, and
the obligation to make such payment for any period within the term shall
survive expiration of the term.

          9.6 Information Meetings and Adjustment of Operating Cost Payment Obligation.
Upon any request by Tenant, Landlord shall meet with Tenant to discuss the
management and operation of the Building, and advise Tenant of any contemplated
material changes with respect thereto, and any material increases in Operating
Costs that are anticipated. If Landlord anticipates that the actual Operating
Costs for a given Operating Year will be substantially greater than Landlord’s
prior estimate, Landlord will endeavor to notify Tenant of such increase and
adjust the Operating Cost Payment Obligation.

37

 

     9.7 Survival. Any obligations under this Article 9 which shall not have been
paid at the expiration or sooner termination of the term of this Lease shall
survive such expiration and shall be paid when and as the amount of same shall
be determined to be due.

10. CHANGES OR ALTERATIONS BY LANDLORD

     Landlord reserves the right, exercisable by itself or its nominee, at any
time and from time to time without the same constituting an actual or
constructive eviction and without incurring any liability to Tenant therefor or
otherwise affecting Tenant’s obligations under this Lease, to make such
changes, alterations, additions, improvements, repairs or replacements in or to
the Building (including the Premises) and the fixtures and equipment thereof,
as well as in or to the street entrances, halls, passages, elevators,
escalators, and stairways thereof, as it may deem necessary or desirable, and
to change the arrangement and/or location of entrances or passageways, doors
and doorways, and corridors, elevators, stairs, toilets, or other public parts
of the Building, provided, however, in all cases, that (i) there is no
unreasonable obstruction of the right of access to, or unreasonable
interference with the use and enjoyment of, the Premises by Tenant, (ii) such
changes, alterations, improvements, repairs or replacements are consistent with
the first class quality and nature of the Building, and (iii) if such work
would affect Tenant’s use or occupancy of the Premises, Landlord shall provide
reasonable prior notice to Tenant (except in cases of emergency). If Landlord
alters the configuration of the Building, thereby increasing or decreasing the
Rentable Area thereof, at any time during the term of this Lease, Tenant may,
at Tenant’s option, require that Landlord remeasure the Building in accordance
with the Measurement Method, in which event, Tenant shall have the right to
verify such calculation. Nothing contained in this Article 10 shall be deemed
to relieve Tenant of any duty, obligation or liability of Tenant with respect
to making any repair, replacement or improvement or complying with any law,
order or requirement of any governmental or other authority. Landlord reserves
the right to adopt and at any time and from time to time to change the name or
address of the Building, except that, so long as Tenant itself occupies at
least 80,000 square feet of Rentable Area in the Building, Landlord shall not
change the name of the Building to a proper name of a person or entity.
Notwithstanding anything in this Lease to the contrary, Landlord shall
diligently prosecute to completion any construction activity on or about the
Building, and Landlord shall perform all construction activities so as to
minimize interference, to the extent commercially reasonable, with Tenant’s
business operations in the Premises or Tenant’s access to the Premises or
parking garage.

     No easement for light or air is incorporated in the Premises. The
obstruction of Tenant’s view, air, or light by any structure created in the
vicinity of the Premises, whether by Landlord or any third party shall in no
way affect this Lease or impose any liability on Landlord (provided that such
obstruction by Landlord does not violate any covenants of Landlord expressly
set forth elsewhere in this Lease).

11. FIXTURES, EQUIPMENT AND IMPROVEMENTS—REMOVAL BY TENANT; WAIVER OF LANDLORD’S LIEN

          (a) All fixtures, equipment, improvements and appurtenances attached to or
built into the Premises prior to or during the term, whether by Landlord at its
expense or at the expense of Tenant (either or both) or by Tenant shall be and
remain part of the Premises and shall not be removed by Tenant during or at the
end of the term unless Landlord otherwise elects to require Tenant to remove
such fixtures, equipment, improvements and appurtenances, in accordance with
Articles 12.3 and/or 22 of the Lease;
provided, however, that Tenant shall have the right to remove any such
fixtures, equipment, improvements and appurtenances installed by Tenant at its
expense. If Tenant elects to or is required to remove same, Tenant will repair
any damage to the Premises caused by such removal.

          (b) Landlord hereby affirmatively and forever waives any contractual or
statutory lien or security interest in and to Tenant’s personal property,
arising solely as a result of this Lease having been entered into by Landlord
and Tenant, but Tenant specifically acknowledges that in no event shall such

38

 

waiver ever be construed as limiting any judgment lien obtained by Landlord
upon a default of Tenant of its obligations under this Lease.

12. ALTERATIONS AND IMPROVEMENTS BY TENANT

     12.1 General Provisions. Except as otherwise provided in this Article 12.1,
Tenant shall make no alterations, installations, additions or improvements in
or to the Premises without Landlord’s prior written consent, which shall not be
unreasonably withheld, conditioned or delayed, and then only those made by
contractors or mechanics approved by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed. No installations or work shall
be undertaken or begun by Tenant until: Landlord has approved written plans
and specifications for such work. Landlord shall respond to Tenant’s request
for approval of its plans within a commercially reasonable period of time, but
in no event more than seven (7) business days after receipt thereof. No
amendments or additions to such plans and specifications shall be made without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed. Landlord’s consent shall not be required for
any solely decorative alterations to the Premises, including, without
limitation, changes to paint, carpet and other finishes in the Premises.
Landlord’s approval is solely given for the benefit of Landlord and neither
Tenant nor any third party shall have the right to rely upon Landlord’s
approval of Tenant’s plans for any purpose whatsoever. Without limiting the
foregoing, Tenant shall be responsible for all elements of the design of
Tenant’s plans (including, without limitation, compliance with law,
functionality of design, the structural integrity of the design, the
configuration of the Premises and the placement of Tenant’s furniture,
appliances and equipment), and Landlord’s approval of Tenant’s plans shall in
no event relieve Tenant of the responsibility for such design. Landlord shall
have no liability or responsibility for any claim, injury or damage alleged to
have been caused by the particular materials, appliances or equipment selected
by Tenant in connection with any work performed by or on behalf of Tenant in
the Premises including, without limitation, furniture, carpeting, copiers,
laser printers, computers and refrigerators. Any such work, alterations,
installations, additions and improvements shall be done at Tenant’s sole
expense and at such times and in such manner as Landlord may as the parties may
reasonably agree upon. Copies of all permits and approvals required for the
Tenant’s improvements or alterations shall be furnished to Landlord promptly
upon receipt thereof. In addition, Landlord may monitor the progress of such
work, including, without limitation, attend any weekly or other periodic job
meetings. Except in connection with Tenant’s Initial Work, First Expansion
Work, and Second Expansion Work, Tenant shall pay Landlord’s actual,
reasonable, third party costs incurred to review Tenant’s plans, within thirty
(30) days after substantial completion of such work. Any review and monitoring
of Tenant’s improvements or alterations by Landlord shall not impose upon
Landlord any responsibility or liability whatsoever to Tenant as a result of
such work . Within forty-five (45) days after completion of any improvements
or alterations, Tenant shall provide to Landlord “as-built” plans of such
improvements or alterations.

     12.2 Alterations Outside of the Premises. Tenant shall not be permitted to
make or perform any alterations, improvements or installations to any portion
of the Building outside of the Premises, including, without limitation, on the
roof of the Building, without Landlord’s prior written consent, which consent
to alterations, improvements or installations required to provide services to
the Premises, including, without limitation, any supplemental heating,
ventilation or air conditioning systems, shall not be unreasonably withheld,
conditioned or delayed, provided that Landlord shall be deemed reasonable for
refusing consent to alterations that adversely affect the structure of the
Building or any Building systems, or adversely affect Landlord’s design or
aesthetic criteria. Such alterations, improvements or installations
shall be subject to all of the terms and conditions of this Article 12 and
Article 13 and Landlord’s reasonable determination of the optimal location for
such installations. Landlord shall provide Tenant with 24-hour access to the
area in which such alterations, improvements or installations are located,
subject to Landlord’s reasonable security procedures and restrictions based on
emergency conditions and to other causes beyond Landlord’s reasonable control.

39

 

     12.3 Tenant’s Obligation to Remove. If Tenant shall make any alterations,
installations, additions or improvements other than Tenant’s Work (as defined
in Article 4.3), then Landlord may elect to require Tenant at the expiration or
sooner termination of the term of this Lease to remove the same (and repair any
damage caused by such removal), provided that Landlord shall have designated in
writing at the time of Landlord’s approval (if such approval was required
pursuant to Article 12.1) which of the foregoing are to be so removed.
Notwithstanding anything contained herein to the contrary, Landlord shall not
be entitled to require the removal of (i) any internal restrooms or
kitchen/pantry, (ii) any existing interconnecting stairs in the Premises, or
any such stairs hereinafter installed by Tenant, (iii) cabling and/or conduit,
or (iv) any other alterations, installations, additions or improvements unless
they are both (a) unusual (i.e. not commonly found in modern first class office
buildings) and (b) costly to remove. Upon request by Landlord, Tenant shall
consult with Landlord, and Tenant will implement any reasonable suggestions
that will allow hereinafter installed interconnecting stairs to be removed
without extraordinary expense, so long as such suggestions do not materially
increase the cost of their construction.

	13. 
	TENANT’S CONTRACTORS—MECHANICS’ AND OTHER LIENS—STANDARD OF TENANT’S PERFORMANCE—COMPLIANCE WITH LAWS

     Whenever Tenant shall make any alterations, installations, additions or
improvements in or to the Premises—whether such work be done prior to or after
the Term Commencement Date—Tenant will strictly observe the following
covenants and agreements:

          (a) Tenant agrees that it will not, either directly or indirectly, use any
contractors and/or materials if their use will create any difficulty, whether
in the nature of a labor dispute or otherwise, with other contractors and/or
labor engaged by Tenant or Landlord or others in the construction, maintenance
and/or operation of the Building or any part thereof.

          (b) In no event shall any material or equipment be incorporated in or
added to the Premises, so as to become a fixture or otherwise a part of the
Building, in connection with any such alteration, installation, addition or
improvement which is subject to any lien, mortgage or other encumbrance of any
kind whatsoever or is subject to any security interest or any form of title
retention agreement. Any mechanic’s lien filed against the Premises or the
Building for work claimed to have been done for, or materials claimed to have
been furnished to, Tenant shall be discharged by Tenant within thirty (30) days
thereafter, at Tenant’s expense by filing the bond required by law or
otherwise. If Tenant fails so to discharge any lien, Landlord may do so at
Tenant’s expense and Tenant shall reimburse Landlord for any expense or cost
incurred by Landlord in so doing within thirty (30) days after rendition of a
bill therefor, including, without limitation, reasonable attorney’s fees.

          (c) All installations or work done by Tenant shall be at its own expense
and shall at all times comply with (i) laws, rules, orders and regulations of
governmental authorities having jurisdiction for the Premises; (ii) orders,
rules and regulations of any Board of Fire Underwriters, or any other body
hereafter constituted exercising similar functions, and governing insurance
rating bureaus; and (iii) Rules and Regulations of Landlord; and shall be
performed substantially in accordance with plans and specifications approved by
Landlord to the extent required pursuant to Article 12.

          (d) Tenant shall procure all necessary permits before undertaking any work
in the Premises that requires a permit; do all of such work in a good and
workmanlike manner, employing materials of good quality and complying with all
governmental requirements. Tenant shall cause
contractors employed by Tenant to carry Worker’s Compensation Insurance in
accordance with statutory requirements, Automobile Liability Insurance and,
naming Landlord as an additional insured, Commercial General Liability
Insurance covering such contractors on or about the Premises in amounts
reasonably acceptable to Landlord and to submit certificates evidencing such
coverage to Landlord prior to the commencement of such work.

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14. REPAIRS BY TENANT—FLOOR LOAD

     14.1 Repairs by Tenant. Tenant shall keep the Premises neat and clean and in
such repair, order and condition as the same are in on the Rent Commencement
Date or may be put in during the term hereof, reasonable use and wearing
thereof and damage by fire or by other casualty or condemnation excepted.
Tenant shall be solely responsible for the proper maintenance of all equipment
and appliances operated by Tenant, including, without limitation, copiers,
laser printers, computers, ovens and refrigerators. Tenant shall make, as and
when needed as a result of misuse by, or neglect or improper conduct of, Tenant
or Tenant’s servants, employees, agents, contractors, invitees, or licensees or
otherwise, all repairs in and about the Premises necessary to preserve them in
such repair, order and condition, which repairs shall be in quality and class
equal to the original work. Landlord may elect, upon ten (10) days’ prior
written notice to Tenant (except in cases of emergency when only notice
reasonable under the circumstances shall be required), at the expense of
Tenant, to make any such repairs or to repair any damage or injury to the
Building or the Premises caused by moving property of Tenant in or out of the
Building, or by installation or removal of furniture or other property, or by
misuse by, or neglect, or improper conduct of, Tenant or Tenant’s servants,
employees, agents, contractors, or licensees. This Article 14.1 is subject to
Landlord’s repair and maintenance obligations in Article 8 and to the waivers
in Article 19.

     14.2 Floor Load—Heavy Machinery. Tenant shall not place a load upon any floor
of the Premises exceeding the floor load per square foot of area which such
floor was designed to carry and which is allowed by law. The structural load
capacity of each floor is 80 pounds per square foot live load, plus 20 pounds
per square foot partition dead load. Landlord reserves the right to reasonably
prescribe the weight and position of all business machines and mechanical
equipment, including safes, which shall be placed so as to distribute the
weight. Business machines and mechanical equipment shall be placed and
maintained by Tenant at Tenant’s expense in settings sufficient in Landlord’s
reasonable judgment to absorb and minimize, to the extent reasonably
satisfactory to Landlord, any vibration, noise and annoyance. Tenant shall
coordinate the moving of any safe, heavy machinery, heavy equipment, freight,
bulky matter, or fixtures into or out of the Building with Landlord. If such
safe, machinery, equipment, freight, bulky matter or fixtures requires special
handling, Tenant agrees to employ only persons qualified to do so, including,
if necessary, using a person holding a Master Rigger’s License to do said work,
and that all work in connection therewith shall comply with applicable laws and
regulations. Any such moving shall be at the sole risk and hazard of Tenant.
Proper placement of all such business machines, etc., in the Premises shall be
Tenant’s responsibility.

15. INSURANCE, INDEMNIFICATION, EXONERATION AND EXCULPATION

     15.1 General Liability Insurance. Tenant shall procure, and keep in force and
pay for Commercial General Liability Insurance, including, without limitation,
host liquor liability coverage (which shall, without limitation, cover Tenant’s
use of the roof deck), insuring Tenant on an occurrence basis against all
claims and demands for personal injury liability (including, without
limitation, bodily injury, sickness, disease, and death) or damage to property
which may be claimed to have occurred from and after the time Tenant and/or its
contractors enter the Premises in accordance with Article 4 of this Lease, of
not less than Five Million ($5,000,000) Dollars in the event of personal injury
to any number of persons or damage to property, arising out of any one
occurrence, and from time to time thereafter shall be not less than such higher
amounts, if procurable, as may be reasonably required by Landlord and are
customarily
carried by responsible similar tenants in the City or Town wherein the Building
is located. Tenant may use an umbrella policy to cover limits in excess of Two
Million and 00/100 Dollars ($2,000,000.00).

     15.2 Tenant’s Property Insurance. Tenant shall keep its personal property in
and about the Premises insured against loss or damage caused by any peril
covered under a “special form” property insurance policy in an amount equal to
one hundred percent (100%) of the replacement cost value. Notwithstanding the
foregoing, Landlord agrees that the original named Tenant, The Advisory Board

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Company, and any Permitted Assignee (as defined in Article 16.5), shall be
permitted to self-insure its personal property in and about the Premises.

     15.3 Insurance Requirements. Such insurance shall be effected with insurers
having Best’s rating of A-:VIII or better, authorized to do business in the
State wherein the Building is situated under valid and enforceable policies.
Tenant shall name Landlord, any Mortgagee, and Landlord’s managing agent as
additional insureds, as their interest may appear, under the liability policy
referenced above. All such insurance shall provide that it shall not be
canceled or modified without at least twenty (20) days’ prior written notice to
each insured named therein. On or before the time Tenant and/or its
contractors enter the Premises in accordance with Articles 4 and 14 of this
Lease and thereafter not less than fifteen (15) days prior to the expiration
date of each expiring policy, original copies of the policies provided for in
Article 15.1 issued by the respective insurers, or certificates of such
policies using ACORD Form 27 (or its equivalent), and issued by such insurers
together with evidence satisfactory to Landlord of the payment of all premiums
for such policies, shall be delivered by Tenant to Landlord. Tenant may
satisfy such insurance requirements by including the Premises in a so-called
“blanket” insurance policy, provided that the amount of coverage allocated to
the Premises pursuant to a “per location” endorsement shall fulfill the
requirements set forth herein. To the extent of Tenant’s indemnity obligations
under Article 15.4 below, Tenant’s insurance shall be primary to, and not
contributory with, any insurance carried by Landlord, whose insurance shall be
considered excess only in such events. Landlord may require that Tenant carry
such additional types and amounts of insurance as may commonly be required by
other owners of similar first class office buildings in the Downtown Washington
D.C. area from time to time.

     15.4 Tenant Indemnity. Tenant will save Landlord, its agents and employees,
harmless and will defend and indemnify Landlord, its agents and employees, from
and against any and all claims, liabilities or penalties asserted by or on
behalf of any person, firm, corporation or public authority on account of or
based upon any injury to person, or loss of or damage to property, arising out
of the use or occupancy of the Premises by Tenant, or by any person claiming
by, through or under Tenant, or on account of or based upon the negligence or
willful misconduct of Tenant, its agents, employees or contractors (except to
the extent the same is caused by Landlord, its agents, contractors or
employees).

     15.5 Landlord Indemnity. Landlord will save Tenant, its agents and employees,
harmless and will defend and indemnify Tenant, its agents and employees, from
and against any and all claims, liabilities or penalties asserted by or on
behalf of any person, firm, corporation or public authority on account of or
based upon any injury to person, or loss of or damage to property, arising out
of or based upon the negligence or willful misconduct of Landlord, its agents,
employees or contractors.

     15.6 Intentionally Omitted.

     15.7 Bursting of Pipes, etc. Landlord shall not be liable for any injury or
damage to persons or property resulting from fire, explosion, falling plaster,
steam, gas, air contaminants or emissions, electricity, electrical or
electronic emanations or disturbance, water, rain or snow or leaks from any
part of the Building or from the pipes, appliances, equipment or plumbing works
or from the roof, street or sub-surface or from any other place or caused by
dampness, vandalism, malicious mischief or by any other cause of whatever
nature, unless caused by or due to the negligence of Landlord, its agents,
servants, contractors or employees.

     15.8 Repairs and Alterations—No Diminution of Rental Value. Except as
otherwise provided in this Lease, there shall be no allowance to Tenant for
diminution of rental value and no liability on the part of Landlord by reason
of inconvenience, annoyance or injury to Tenant arising from any repairs,
alterations, additions, replacements or improvements made by Landlord, or any
related work performed by Tenant or others in or to any portion of the Building
or Premises, or in or to fixtures, appurtenances, or equipment thereof, or for
failure of Landlord or others to make any repairs, alterations, additions or
improvements in or to any portion of the Building, or of the Premises, or in or
to the fixtures, appurtenances or equipment thereof. Notwithstanding anything
in this Lease to the contrary, Landlord shall diligently

42

 

prosecute to
completion any construction activity on or about the Building, and Landlord
shall perform all construction activities so as to minimize interference, to
the extent commercially reasonable, with Tenant’s business operations in the
Premises or Tenant’s access to the Premises or parking garage.

     15.9 Landlord’s Insurance. At all times throughout the term, Landlord shall
carry and maintain the following insurance policies with a reputable insurance
company licensed in the District of Columbia:

          (a) Commercial General Liability Insurance applicable to the Building and
the Land and its appurtenances providing, on an occurrence basis, a minimum
combined single limit of Five Million Dollars ($5,000,000.00), with a
contractual liability endorsement covering Landlord’s indemnity obligations
under Article 15.5 above, and naming Tenant as an additional insured.

          (b) “Special Form” property insurance, written at replacement cost value
of the Building above foundation walls (including work, installations,
improvements and betterments in the Premises), and all of Landlord’s personal
property on the Land and at the Building, provided that in the event any
improvements and alterations performed by or on behalf of Tenant in the
Premises in excess of standard office improvements or materially more expensive
to insure than standard first-class office improvements or alterations, as
reasonably determined by Landlord, Tenant shall pay such portion of the premium
to Landlord within thirty (30) days after receipt of an invoice and reasonable
supporting information.

          (c) Rent Loss Insurance as may be required by Landlord’s Mortgagee, or in
such commercially reasonable amounts as may be determined appropriate by
Landlord recognizing that it is the express intent of the parties that Landlord
shall obtain rent-loss insurance for at least a one (1) year period insuring
the continued payment of rent notwithstanding a fire or other casualty damaging
the Building.

Landlord’s insurance shall be effected with insurers having Best’s rating of
A-:VIII or better, authorized to do business in the District of Columbia under
valid and enforceable policies. All such insurance shall provide that it shall
not be canceled or modified without at least twenty (20) days’ written notice
to each insured named therein. Certificates of such policies using ACORD Form
27 (or its equivalent), issued by such insurers together with evidence
satisfactory to Tenant of the payment of all premiums for such policies, shall
be delivered by Landlord to Tenant. Landlord may satisfy such insurance
requirements by including the Premises in a so-called “blanket” insurance
policy, provided that the amount of coverage allocated to the Premises pursuant
to a “per location” endorsement shall fulfill the requirements set forth
herein. To the extent of Landlord’s indemnity obligations under Article 15.5
above, Landlord’s insurance shall be primary to, and not contributory with, any
insurance carried by Tenant, whose insurance shall be considered excess only in
such events.

16. ASSIGNMENT, MORTGAGING AND SUBLETTING

     16.1 General Prohibition. Tenant covenants and agrees that, except as
expressly otherwise provided in this Article 16, neither this Lease nor the
term and estate hereby granted, nor any interest herein or therein, will be
assigned, mortgaged, pledged, encumbered or otherwise transferred, voluntarily,
by operation of law or otherwise, and that neither the Premises, nor any part
thereof will be encumbered in any manner by reason of any act or omission on
the part of Tenant, or used or occupied, by anyone other than
Tenant, or to be sublet. The listing of any name other than that of Tenant,
whether on the doors of the Premises or on the Building directory, or
otherwise, shall not operate to vest in any such other person, firm or
corporation any right or interest in this Lease or in the Premises or be deemed
to effect or evidence any consent of Landlord. Except as otherwise set forth
in Article 16.2 below, and other than the transfer of any stock on a
nationally-recognized public security exchange, any transfer of 50% or more of
the ownership interests (including, without limitation, partnership interests,
membership interests or stock) in Tenant or of operating control over Tenant
(whether by management agreement, stock sale or other means) shall be deemed to
constitute an assignment of this Lease, and shall be subject to the provisions
of this Article 16 as

43

 

if the subject transaction were an assignment of this Lease to the new
owners of Tenant. Tenant shall not transfer all or substantially all of its
assets to any person or entity unless this Lease is one of the assets so
transferred to such other person or entity, and the transferee assumes in
writing, for Landlord’s benefit, the obligations of Tenant under this Lease.

     16.2 Transfer or Assignment – Merger or Consolidation. Notwithstanding the
foregoing, if Tenant is a corporation, limited liability company, or other
entity, Landlord’s consent shall not be required with respect to the assignment
or transfer of this Lease, and the term and estate hereby granted, to any
entity into which Tenant is merged or with which Tenant is consolidated or to
which all or substantially all of Tenant’s assets shall be sold, provided that
such successor entity shall have a net worth at least equal to that of Tenant
immediately prior to such merger or consolidation, and provided further that
the successor entity and Tenant shall execute, acknowledge and deliver to
Landlord an agreement in form and substance reasonably satisfactory to Landlord
whereby the successor entity shall agree to be bound by and upon all the
covenants, agreements, terms, provisions and conditions set forth in this Lease
on the part of Tenant to be performed, and shall expressly agree that the
provisions of this Article 16 shall, notwithstanding such assignment or
transfer, continue to be binding upon it with respect to all future assignments
and transfers.

     16.3 Landlord’s Consent – Acknowledgment of Conditions Fulfilled. Tenant must
notify Landlord in writing of any proposed assignment or sublease for which
Landlord’s consent is required under this Article 16, at least 15 business days
prior to the effective date thereof. Each notice requesting Landlord’s consent
for an assignment or sublease (a “Consent Request Notice”) must include (1) the
name and address of the proposed assignee or subtenant, (2) the nature and
character of the business of the proposed assignee or subtenant, (3) financial
information (including financial statements) of the proposed assignee or
subtenant, (4) the proposed effective date of the assignment or sublease, which
shall be not less than fifteen (15) business days thereafter, and (5) a copy of
the proposed sublease or assignment agreement. Tenant shall also provide any
additional information Landlord reasonably requests regarding such proposed
assignment or subletting. Within 15 business days after Landlord receives the
Consent Request Notice (with all required information included), Landlord shall
(i) grant its consent to such proposed assignment or subletting, or (ii) deny
its consent to such proposed assignment or subletting (subject to Article 16.4
below) accompanied by reasonably specific reasons for such denial.

          (a) Reasonable Consent Standard. Landlord will not unreasonably withhold,
condition or delay its consent to the assignment or sublease described in the
Consent Request Notice. Without limitation, it shall not be unreasonable for
Landlord to deny its consent to any proposed assignment or sublease if (i) the
proposed assignee or subtenant does not have a financial worth, considering the
responsibility involved, based on evidence provided by Tenant (and others) to
Landlord to be capable, in Landlord’s reasonable judgment, of fulfilling such
responsibility; (ii) in Landlord’s reasonable judgment the proposed assignee or
subtenant is engaged in a business which is not in keeping with the then
standards of the Building; (iii) the proposed use is not limited to the
Permitted Use; (iv) Landlord (or its broker) has submitted a draft expression
of interest, letter of intent or term sheet to the proposed assignee or
sublessee (or its broker) or such proposed assignee or sublessee (or its
broker) has submitted to Landlord (or its broker) a draft expression of
interest, letter of intent or term sheet to lease space in the Building, at any
time within the six month period prior to the date of the Consent Request
Notice, or (v) consenting to the proposed assignment or sublease could cause
Landlord to be in violation under another lease at, or contractual obligation
relating to, the Building.

          (b) Conditional Waiver Regarding Subtenant Credit. Notwithstanding
anything to the contrary provided in paragraph (a) above, so long as there is
no Event of Default in existence at the time
of Tenant’s giving a Consent Request Notice, or as of the execution date
of any sublease with respect to which such Consent Request Notice relates, and
provided that at each such time no more than twenty-five percent (25%) of the
Rentable Area of the Premises are or will be (when taking into account the
proposed sublease) subject to a sublease or subleases, excluding any sublease
to a then Affiliate, Landlord agrees that it shall waive the right to consider
the factor referred to in clause (i) in subparagraph (a) above. However,

44

 

in no
event shall the aforesaid conditional waiver apply to any sublease for which
Tenant is requesting a Special Non-Disturbance Agreement (as hereinafter
defined).

     16.4 Consideration for Assignment or Sublease; Profit Sharing.

          (a) Less than 25% of the Premises Sublet. Unless and until Tenant
subleases twenty-five percent (25%) or more of the Rentable Area of the
Premises (excluding any sublease(s) to an Affiliate and the sublease to Wilmer
Cutler & Pickering of the 6th floor telecom equipment room [the “WCP
Sublease"]), Landlord shall have no right to receive any portion of the profit
generated by any sublease of any portion of the Premises.

          (b) 25% or More, but Less Than 50% of the Premises Sublet. If, as of the
first day of any calendar month during the term of this Lease, more than
twenty-five percent (25%) but less than fifty percent (50%) of the Rentable
Area of the Premises is then sublet (excluding any sublease(s) to an Affiliate
and the WCP Sublease), then Tenant shall pay to Landlord as Additional Rent
under this Lease, as and when received or realized by Tenant, fifty percent
(50%) of the Monthly Sublet Profit (hereafter defined) multiplied by a
fraction, the numerator of which is (i) the total Rentable Area of all space
then sublet by Tenant (excluding any sublease(s) to an Affiliate and the WCP
Sublease) minus twenty-five percent (25%) of the total Rentable Area of the
Premises, and (ii) the denominator of which is the total Rentable Area of all
space then sublet by Tenant (excluding any sublease(s) to an Affiliate and the
WCP Sublease). For purposes hereof, “Monthly Sublet Profit” shall mean the
amount by which the fixed rent, additional rent and any other sums paid by
subtenant(s) to Tenant for such month (excluding any of the foregoing with
respect to the WCP Sublease or under a sublease to an Affiliate) exceeds the
portion of the Yearly Rent plus Tenant’s Proportionate Share of Taxes and
Operating Costs and reasonably allocable Additional Rent with respect to the
sublet Rentable Area(s), after Tenant shall have recovered, in full, all
reasonable and actual out-of-pocket expenses incurred by Tenant in procuring
such sublease(s), including leasehold improvement costs, broker fees and legal
fees (if any) paid by Tenant. Any consideration given in consideration for
such sublease, whether in the form of cash payment or otherwise, that is
realized other than on a monthly basis, shall be deemed realized monthly on the
first day of each month, on a straight line basis over the term of the
sublease. For example, if (1) the Rentable Area of the Premises is 100,000
square feet, (2) the total Rentable Area of the Premises sublet by Tenant
(excluding any sublease(s) to an Affiliate and the WCP Sublease) is 35,000
square feet, (3) the total Rentable Area of the Premises sublet by Tenant to an
Affiliate is 65,000 and (4) the Monthly Sublet Profit for a particular month is
$1,000, then the portion of the Monthly Sublet Profit to be paid to Landlord
shall be $142.85 (50% x $1,000 x [10,000/35,000]).

     For purposes of this Article 16.4, in determining if and to the extent
there is any Monthly Sublet Profit, all subleases then in effect (excluding
subleases to Affiliates and the WCP Sublease) shall be taken into account.

          (c) 50% or More of the Premises Sublet. If, as of the first day of a
calendar month during the term of this Lease, fifty percent (50%) or more of
the Premises is then sublet (excluding subleases to Affiliates and the WCP
Sublease), then Tenant shall pay to Landlord as Additional Rent under this
Lease, as and when received or realized by Tenant, fifty percent (50%) of the
Monthly Sublet Profit.

          (d) Lease Assignment. If Tenant assigns this Lease (other than an
assignment to an Affiliate or a Permitted Assignee [as defined in Article
16.5]), Tenant shall pay to Landlord, as Additional Rent under this Lease, as
and when paid by the assignee, fifty percent (50%) of all sums received or
consideration given in consideration for such assignment of this Lease,
after Tenant shall have recovered in full all reasonable and actual
out-of-pocket expenses incurred by Tenant in procuring such assignment,
including without limitation, leasehold improvement costs, broker fees and
legal fees (if any) paid by Tenant.

          (e) Subsequent De-Affiliation. Notwithstanding anything to the contrary
provided in this Article 16.4, if any subtenant that is initially an Affiliate,
but at a later point in time, it no longer

45

 

qualifies under this Lease as an
Affiliate, then the calculation thereafter of Landlord’s share of any Monthly
Sublet Profit, payable under paragraphs (b) or (c) of this Article 16.4, shall
no longer exclude the Rentable Area demised under the sublease to such former
Affiliate, and the sums payable under such sublease shall be accounted for in
the calculation of Monthly Sublet Profit. However, in no event shall any
sublease originally excluded as a sublease to an Affiliate, but later
considered a non-Affiliate sublease under this paragraph (e), result in
aggregate Monthly Sublet Profit being reduced on account of (i) expenses
incurred in procuring such sublease or (ii) the amounts payable under such
sublease being less than the Yearly Rent and other amounts allocable to such
space payable under this Lease.

          (f) Effect of Event of Default. Notwithstanding anything to the contrary
provided in this Article 16.4, Landlord shall be entitled to one hundred
percent (100%) of any Monthly Sublet Profit attributable to a period during
which an Event of Default exists under this Lease.

     16.5 Permitted Assignments and Subleases Notwithstanding anything to the
contrary in this Lease, provided that (a) there is no uncured Event of Default
under this Lease, and (b) Tenant shall continue to remain fully liable under
the Lease, Tenant, without Landlord’s prior consent, may assign this Lease to
an “Affiliate” (as hereinafter defined, and collectively with any transferee
permitted under Article 16.2 above, hereinafter referred to as “Permitted
Assignee”), or sublease all or any portion of the Premises to an Affiliate,
provided that, in either case, at the time of such assignment or sublease there
are no plans to cause a change in control of such Affiliate, that would cause
such entity to no longer be an Affiliate of Tenant. Subject to the foregoing
prohibition of subterfuge, a later transaction which results in the subtenant
ceasing to be an Affiliate of Tenant shall not be subject to the terms and
conditions of Article 16.2, provided that at such time as an Affiliate later
ceases to be an Affiliate, the Rentable Area subleased to such entity shall
thereafter be included in the Rentable Area of the Premises considered, for all
purposes of this Lease, subleased to third parties, including without
limitation for the purpose of determining whether Tenant has exceeded the
sublease thresholds set forth in Articles 2.8(h), 3.4(a), and above in Article
16.4. For purposes of this Article 16.5, “Affiliate” means and refers to any
person or entity (i) which directly or indirectly controls or is controlled by
Tenant, or (ii) which is under common control with Tenant. Notwithstanding
that Landlord’s consent is not required under the circumstances set forth
above, Tenant shall fulfill the requirements of clauses (1), (2) and (5) of
Section 16.3 in connection with any such transaction. Subject to Article
16.4(e), Landlord shall have no claim to profits of any assignment or
subletting transaction with any Permitted Assignee or Affiliate. Tenant shall
give Landlord at least ten (10) days’ prior written notice of any sublease or
assignment within the scope of this Article 16.5, and shall evidence its
compliance with this Article 16.5, prior to the effective date of the
applicable transaction.

     16.6 Intentionally Omitted.

     16.7 Miscellaneous. If the Premises or any part thereof is sublet or occupied
by anybody other than Tenant, Landlord may, at any time during the continuance
of an Event of Default, collect rent and other charges from the subtenant or
occupant, and apply the net amount collected to the rent and other charges
herein reserved then due and thereafter becoming due, but no such subletting,
occupancy or collection shall be deemed a waiver of this
covenant, or the acceptance of the subtenant or occupant as a tenant, or a
release of Tenant from the further performance by Tenant of covenants on the
part of Tenant herein contained. Each and every subsequent assignment or
sublease will be subject to the provisions of this Article 16. The assignee
under any assignment of this Lease shall be jointly and severally liable with
Tenant for all of the obligations of “Tenant” under this Lease (and in no event
will Tenant be released from any of its obligations under this Lease, whether
accruing before or after the date of such assignment or sublease). Any
sublease or assignment shall require that the sublessee or assignee thereunder
be subject to and bound in all respects by all of the provisions of this Lease
(but in the case of a sublease, to the extent that such Lease provisions relate
to the portion of the Premises subleased or to the sublessee’s operations and
conduct of business, and to the extent of the rent and other financial
obligations set forth in such sublease). Tenant shall reimburse Landlord for
Landlord’s reasonable attorneys fees and out-of-pocket expenses incurred in
connection with Landlord’s review of such sublease or assignment, provided that
no such fees and expenses shall be owing in the case of the WCP Sublease
executed contemporaneously

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herewith. Any sublease to which Landlord gives its
consent shall not be valid unless and until Tenant and the sublessee execute a
consent agreement in form and substance reasonably satisfactory to Landlord and
Tenant and a fully executed counterpart of such sublease has been delivered to
Landlord. Any consent by Landlord to a particular assignment or subletting
shall not in any way diminish the prohibition stated in the first sentence of
this Article 16 or the continuing liability of Tenant.

     16.8 Special Non-Disturbance. (a) Provided there is not an Event of
Default in existence at the time Tenant requests a Special Non-Disturbance
Agreement (as hereinafter defined) or as of the execution date of any such
Special Non-Disturbance Agreement, and provided that the following conditions
are fulfilled (the “Conditions”), Landlord will enter into a non-disturbance
agreement in substantially the form attached hereto as
Exhibit 15 (a “Special
Non-Disturbance Agreement”) with a subtenant under a Qualified Non-Disturbance
Sublease (as hereinafter defined).

          (b) The “Conditions” shall mean satisfaction of the following:

		
	 	     (1) The subtenant under a Qualified Non-Disturbance Sublease
is a Qualified Non-Disturbance Subtenant (as hereinafter defined);
	 
	 	     (2) The sublease is a Qualified Non-Disturbance Sublease;
	 
	 	     (3) The reasonable legal fees and expenses of Landlord’s
counsel in connection with the review of the Qualified
Non-Disturbance Sublease, the subtenant in question, and the
review and negotiation of the Special Non-Disturbance Agreement
have been paid by Tenant;
	 
	 	     (4) Two (2) original, fully executed counterparts of the
Qualified Non-Disturbance Sublease have been delivered to
Landlord, together with any necessary guaranty to be delivered in
connection therewith; and
	 
	 	     (5) The Qualified Non-Disturbance Subtenant executes and
delivers to Landlord four (4) counterparts of the Special
Non-Disturbance Agreement.

     (c)  “Qualified Non-Disturbance Sublease” shall mean a sublease which:

		
	 	     (1) Is a sublease of Qualified Non-Disturbance Sublease Space
(as hereinafter defined);
	 
	 	     (2) Provides that the sublet premises shall be used by the
subtenant solely for the Permitted Use set forth in this Lease;
	 
	 	     (3) Provides for payment by the subtenant of annual fixed
rent, payable without abatement except the appropriate pro rata
portion (as more particularly illustrated in clause (f) below) of
any abatement available to Tenant under the Lease which Tenant
passes through to the Qualified Non-Disturbance Subtenant, in an
amount equal to or greater than the Yearly Rent payable under this
Lease with respect to the portion of the Premises to be sublet (as
more particularly illustrated in clause (f) below, the “Special
Fixed Subrent Floor”), and is otherwise a sublease which, if the
recognition and attornment provisions of the Special
Non-Disturbance Agreement were to become effective and the
subtenant were to become a direct tenant of Landlord thereunder,
will not provide the subtenant with rights which exceed the rights
granted to Tenant under this Lease as to the sublet premises;
	 
	 	     (4) Provides for the payment by the subtenant of subtenant’s
pro rata share (on a per rentable square foot basis) of Tenant’s
Tax Payment Obligation and Operating 

47

 

		
	 	Cost Payment Obligation,
payable without abatement except the appropriate pro rata portion
(as more particularly illustrated in clause (f) below) of any
abatement available to Tenant under the Lease which Tenant passes
through to the Qualified Non-Disturbance Subtenant, together with
the subtenant’s appropriate pro rata portion (as more particularly
illustrated in clause (f) below) of any Additional Rent to be paid
by Tenant to Landlord under this Lease;

		
	 	     (5) Directs the subtenant to pay an amount equal to the
Special Fixed Subrent Floor plus subtenant’s share of Tenant’s Tax
Payment Obligations and Operating Cost Payment Obligation due
under the Sublease, plus any Landlord’s Profit (as defined in the
Special Non-Disturbance Agreement) directly to Landlord;
	 
	 	     (6) Does not contain terms which are inconsistent with, or
contrary to, the provisions of this Lease;
	 
	 	     (7) Provides sublandlord substantially the same rights and
remedies against the subtenant as Landlord has with respect to
Tenant under this Lease;
	 
	 	     (8) Expressly subjects the subtenant to all of Tenant’s
obligations under this Lease as applicable to the sublet premises
demised under the sublease, so that Landlord continues to have the
benefit thereof; and
	 
	 	     (9) Grants to the subtenant no rights in excess of those
granted to Tenant hereunder, but which excludes those set forth in
the following sections of this Lease: Article 2.1(c) [last 4
sentences], Article 2.2(b), Articles 2.4, 2.5, 2.7, 2.8 and 3.4,
Article 4, Articles 8.1(b) and 8.11, Article 9.6, any right to
retain more than 50% of Monthly Sublet Profit, under any
circumstances, under Article 16.4, Article 16.9, Article 30
(except for the first sentence thereof, which will be included),
and Article 31. In no event may the term of a Qualified
Non-Disturbance Sublease (whether initial term or extension term)
extend beyond the term of this Lease (as the same may have been
extended by extension options which have been exercised), so that
Tenant must extend the term of this Lease in order to grant such
rights. Likewise, in no event may the space described under a
Qualified Non-Disturbance Sublease extend beyond the boundaries of
the Premises as theretofore expanded, so that Tenant must expand
the Premises to include such space and to demise any rights to the
same under the Qualified Non-Disturbance Sublease

     (d)  “Qualified Non-Disturbance Sublease Space” shall mean the entire
Premises, or a portion of the Premises which satisfies the following
requirements:

		
	 	     (1) the sublease premises must be comprised of not less than
50,000 square feet of Rentable Area, and any proposed sublease
premises that constitutes a portion of a floor of the Building
shall have an Acceptable Sublease Configuration (as hereinafter
defined); and
	 
	 	     (2) the sublease premises must be comprised of at least one
(1) full floor with any space in excess thereof on a contiguous
floor or floors, and with any partial floor space limited to one
(1) floor of the Building, and any Storage Space allocated thereto
not exceeding the subtenant’s pro rata share of Tenant’s leased
Storage Space; and
	 
	 	     (3) the full floors of such sublease premises must be either
the highest or lowest full floors of the portion of the Building
comprising the aggregate of (i) the Initial Premises, the First
Expansion Premises and the Second Expansion Premises (the “Must
Take Space”) and (ii) any other space in the Building then
comprising a full floor of the 

48

 

		
	 	Premises (for example, if the space
referred to in this clause (iii) then comprises only the
6th, 7th,
8th and 9th floors, then the Qualified Non-Disturbance Space must
be comprised of either the entire 9th floor and a portion of the
8th floor, or the entire 6th floor and a portion of the 7th floor.

An “Acceptable Sublease Configuration” shall mean a contiguous and commercially
reasonable, independently leasable configuration containing a proportionate
ratio of linear feet of exterior window line to the rentable area of the
Premises as a whole (i.e. the same proportion as the entire Premises) and
contains reasonable means of ingress, egress or access to the common facilities
and/or core areas of the Building (such as access to bathrooms, telephone and
electrical closets, etc.).

          (e) “Qualified Non-Disturbance Subtenant” shall mean a subtenant, which
may not be an Affiliate of Tenant, that satisfies all of the requirements and
procedures for obtaining Landlord’s consent to a sublease under this Article 16
including, without limitation, the creditworthiness set forth in Article 16.4.

          (f) The “pro rata” portion of any abatement shall be based on the Rentable
Area of the Premises (or portion thereof) in cases where the abatement is
equally applicable to the entire Premises (or a portion thereof) and for the
full term of the Sublease. For example, rent abatement in the case of fire or
other casualty under Article 18.4 shall be on a rentable square footage basis.
Any abatement on account of the Rent Credit, however, shall only be allocable
to the Initial Premises and for only the fifteen (15) year term thereof, and
may not be allocated to a subtenant other than to the extent the subtenant is
subleasing a portion of the Initial Premises during the aforesaid fifteen (15)
year term of the Rent Credit. The applicable Special Fixed Subrent Floor for a
sublease shall be calculated based on the Yearly Rent payable by Tenant under
this Lease for the space in question, rather than on a per square foot basis.
For purposes of allocating responsibility for Additional Rent, the subtenant
must be allocated responsibility as it may reasonably be allocable to the
premises demised under its sublease. For example, in the event such subtenant
requests overtime HVAC, then in the absence of any other requests therefor that
would result in the sharing of that expense, 100% thereof must be allocated to
the subtenant.

          (g) Notwithstanding that Landlord has executed a Special Non-Disturbance
Agreement with respect to a Qualified Non-Disturbance Sublease, such Qualified
Non-Disturbance Sublease shall nevertheless be subject to all of the terms and
conditions of this Article 16, including, without limitation, Article 16.5.

17. MISCELLANEOUS COVENANTS

     Tenant covenants and agrees as follows:

     17.1 Rules and Regulations. Tenant will faithfully observe and comply with the
Rules and Regulations attached hereto as Exhibit 10 and such other and further
reasonable Rules and Regulations as Landlord hereafter at any time or from time
to time may make and may communicate in writing to Tenant, which in the
reasonable judgment of Landlord shall be necessary for the reputation, safety,
care or appearance of the Building, or the preservation of good order therein,
or the operation or maintenance of the Building, or the equipment thereof, or
the comfort of tenants or others in the Building, provided, however, that (a)
in the case of any conflict between the provisions of this Lease and any such
regulations, the provisions of this Lease shall control, and (b) any
enforcement of such Rules and Regulations shall be implemented in a
non-discriminatory manner, provided that Landlord shall not be liable to Tenant
for violation of the same by any other tenant, its servants, employees, agents,
contractors, visitors, invitees or licensees.

     17.2 Intentionally Omitted.

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     17.3 Intentionally Omitted.

     17.4 Signs, Blinds and Drapes.

          (a) General. Except as permitted by this Lease, and except for signs
placed within the Premises, Tenant shall not attach any signs in any part of
the Building. No signs or blinds may be put on or in any window or elsewhere
if visible from the exterior of the Building, nor may the building standard
blinds be removed by Tenant. Tenant may hang its own drapes, provided that
they shall not in any way interfere with the building standard blinds or be
visible from the exterior of the Building and that such drapes are so hung and
installed that when drawn, the building standard drapery or blinds are
automatically also drawn. Any signs or lettering affixed to the public
corridors or the doors shall conform to Landlord’s building standard design or
as reasonably approved by Landlord. Neither Landlord’s name, nor the name of
the Building, or the name of any other structure erected therein shall be used
without Landlord’s consent (which consent shall not be unreasonably withheld,
conditioned or delayed) in any material advertising or marketing the
availability of the Premises for assignment or sublease. Nothing in this
Article 17.4 is intended to derogate from Tenant’s rights under Article 8.11.
Notwithstanding the provisions of this Article 17.4, Tenant shall be permitted,
subject to the Rules and Regulations, to place tasteful, temporary,
free-standing signs in the Building lobby from time to time to direct members
or other invitees to events in the Premises.

          (b) Lobby, Directory, Floor Signs. Landlord shall install, at Landlord’s
expense, Building standard signage, including one entry on the lobby directory
for every 500 square feet of Rentable Area in the Premises, and a company
listing, all done in a professional size and style of graphics and font type.
Tenant may place additional signage, including Tenant’s logo, on each floor of
the Premises, with Landlord’s prior written approval, which approval shall not
be unreasonably withheld, conditioned or delayed.

     17.5 Estoppel Certificate. Tenant shall at any time and from time to time upon
not less than fifteen (15) days’ prior notice by Landlord to Tenant, execute,
acknowledge and deliver to Landlord a statement in writing certifying that this
Lease is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and
stating the modifications), and the dates to which the Yearly Rent and other
charges have been paid in advance, if any, stating whether or not Landlord is
in default in performance of any covenant, agreement, term, provision or
condition contained in this Lease and, if so, specifying each such default and
such other facts as Landlord may reasonably request, it being intended that any
such statement delivered pursuant hereto may be relied upon by any prospective
purchaser of the Building or of the Building and the Land or of any interest of
Landlord therein, any mortgagee or prospective mortgagee thereof, any lessor or
prospective lessor thereof, any lessee or prospective lessee thereof, or any
prospective assignee of any mortgage thereof. Tenant hereby acknowledges the
importance of such certificates in mortgage financing arrangements, prospective
sale and the like. Landlord shall, upon request of Tenant from time to time,
execute an estoppel certificate similar in substance upon which a prospective
assignee or subtenant will be permitted to rely.

     17.6 Prohibited Materials and Property. Tenant shall not bring or permit to be
brought or kept in or on the Premises or elsewhere in the Building (i) any
inflammable, combustible or explosive fluid, material, chemical or substance
including, without limitation, any hazardous substances as defined under the
Federal Comprehensive Environmental Response Compensation and Liability Act
(CERCLA), 42 USC §9601 et seq., as amended, under Section 3001 of the Federal
Resource Conservation and Recovery Act of 1976, as amended, or under any
regulation of any governmental authority regulating environmental or health
matters (except for standard office supplies and cleaning materials stored in
proper containers), (ii) any materials, appliances or equipment (including,
without limitation, materials, appliances and equipment selected by Tenant for
the construction or other preparation of the Premises and furniture and
carpeting) which pose any danger to life, safety or health or may cause damage,
injury or death. Landlord hereby represents that, to the best of its
knowledge, except as otherwise set forth in that certain Report on ASTM Phase I
Environmental Site Assessment and Drinking Water Survey, File No. 28632-000,
dated March,

50

 

2002, a copy of which has be provided to Tenant, the Premises, the
Building and the Land are free from any hazardous substances, including
petroleum products, and the Building is free from asbestos.

     17.7 Requirements of Law—Fines and Penalties. Tenant at its sole expense
shall comply with all laws, rules, orders and regulations, including, without
limitation, all energy-related requirements, of Federal, State, County and
Municipal Authorities and with any direction of any public officer or officers,
pursuant to law which shall impose any duty upon Landlord or Tenant with
respect to or arising out of Tenant’s particular use or occupancy of the
Premises (as opposed to normal and customary office use). If either party
receives notice of any violation of law, ordinance, order or regulation
applicable to the Premises, such party shall give prompt notice thereof to the
other party.

     17.8 Tenant’s Acts—Effect on Insurance. Tenant shall not do or permit to be
done any act or thing upon the Premises or elsewhere in the Building which will
invalidate or be in conflict with any insurance policies covering the Building
and the fixtures and property therein. Tenant at its own expense shall comply
with all rules, orders, regulations and requirements of the Board of Fire
Underwriters, or any other similar body having jurisdiction, and shall not (i)
do, or permit anything to be done, in or upon the Premises, or bring or keep
anything therein, except as now or hereafter permitted by the Fire Department,
Board of Underwriters, Fire Insurance Rating Organization, or other authority
having jurisdiction, and then only in such quantity and manner of storage as
will not increase the rate for any insurance applicable to the Building, or
(ii) use the Premises in a manner which shall increase such insurance rates on
the Building, or on property located therein, over that applicable when Tenant
first took occupancy of the Premises hereunder. If by reason of the failure of
Tenant to comply with the provisions hereof the insurance rate applicable to
any policy of insurance shall at any time thereafter be higher than it
otherwise would be, the Tenant shall reimburse Landlord for that part of any
insurance premiums thereafter paid by Landlord, which shall have been charged
because of such failure by Tenant.

     17.9 Landlord Access to Premises. Tenant shall, upon reasonable prior written
notice (except that no notice shall be required in emergency situations) and
accompanied by a representative of Tenant, permit Landlord and any Mortgagee
(as defined in Article 23), and their representatives, to have access to and to
enter upon the Premises at all reasonable hours for the purposes of (a)
inspection or of making repairs, replacements or improvements in or to the
Premises or the Building or otherwise to protect the Building or equipment
(including, without limitation, sanitary, electrical, heating, air conditioning
or other systems) or (b) complying with all laws, orders and requirements of
governmental or other authority or (c) exercising any right reserved to
Landlord by this Lease (including the right during the progress of any such
repairs, replacements or improvements or while performing work and furnishing
materials in connection with compliance with any such laws, orders or
requirements to take upon or through the Premises all necessary materials,
tools and equipment); (d) showing the Premises during ordinary business hours
to any existing or prospective Mortgagee, purchaser, or assignee of any
Mortgage, following the date upon which Tenant must have elected to extend the
term of this Lease, to any person contemplating the leasing of the Premises or
any part thereof, or (e) providing access to any receiver, trustee, assignee
for the benefit of creditors, sheriff, marshal or court officer entitled to, or
reasonably purporting to be entitled to, such access for the purpose of taking
possession of, or removing, Tenant’s property or for any other lawful purpose,
or upon demand of any representative of the fire, police, building, sanitation
or other department of the city, state or federal governments. If Tenant shall
not be personally present to open and permit an entry into the Premises at any
time when for any reason an entry therein shall be necessary or permissible,
Landlord or Landlord’s agents may enter the same by a master key, or may
forcibly enter the same, without rendering Landlord or such agents liable
therefor (if during such entry Landlord or Landlord’s agents shall accord
reasonable care to Tenant’s property), and without in any manner affecting the
obligations and covenants of this Lease. Landlord shall exercise its rights of
access to the Premises permitted hereunder in such manner as to minimize to the
extent practicable interference with Tenant’s use and occupation of the
Premises and shall prosecute to completion any construction with diligence.

     18.     DAMAGE BY FIRE, ETC.

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     18.1 Restoration. If any portion of the Premises or Building shall be damaged
by fire or other casualty, and if neither Landlord nor Tenant shall have
terminated this Lease in accordance with this Article 18, Landlord shall
proceed with diligence, subject to the then applicable statutes, building
codes, zoning ordinances, and regulations of any governmental authority, and at
the expense of Landlord to restore the Premises and Building to the condition
they were in just prior to such fire or other casualty.

     18.2 Landlord Right to Terminate. Within 30 days after any fire or other
casualty affecting the Premises, or any portion of the Building that affects
Tenant’s use and occupancy of the Premises, Landlord shall deliver to Tenant a
certificate from Landlord’s architect setting forth the estimated number of
days required to fully repair such damage. Landlord may elect to terminate
this Lease by written notice to Tenant, delivered within thirty (30) days after
Landlord’s receipt of such certificate, if (i) the Premises and/or the Building
are damaged by any fire or other casualty that is not insured under the
policies of insurance carried or required to be carried by Landlord under
Article 15.9(b) and the cost to repair such damage exceeds Five Million Dollars
($5,000,000), and, in such event, Landlord will terminate all other leases in
the Building, or (ii) Landlord’s architect’s certificate estimates that the
Premises is so damaged by fire or other casualty that it cannot be repaired
within 315 days from the date of such fire or other casualty, or (iii)
Landlord’s architect’s certificate estimates that any portion of the Building
outside of the Premises is so damaged by fire or other casualty that it cannot
be repaired within 360 days from the date of such fire or other casualty, and,
in such event, Landlord will terminate all other leases in the Building.

     18.3 Tenant Right to Terminate. In the event of any fire or other casualty
affecting the Premises or any portion of the Building that affects Tenant’s use
and occupancy of the Premises, Tenant may elect to terminate this Lease by
written notice to Landlord, delivered within thirty (30) days after Tenant’s
receipt of the architect’s certificate, if (i) such certificate estimates that
the Premises and/or the Building is so damaged by fire or other casualty that
it cannot be repaired within 315 days from the date of such fire or other
casualty, or (ii) in fact, after the later to occur of (A) 315 days from the
date of such fire or other casualty or (B) such longer period as Landlord’s
architect estimates such repairs will require (as either such period may be
extended for such periods of time as Landlord is prevented from proceeding with
or completing such restoration due to Force Majeure, but in no event for more
than an additional 60 days), the Premises and Building have not been
substantially restored, provided that, with respect to the foregoing clause
(ii) this Lease shall cease and come to an end without further liability or
obligation on the part of either party forty-five (45) days after such giving
of notice by Tenant unless, within such forty-five day period, Landlord
substantially completes such restoration.

     In the event of any termination under Article 18.2 and 18.3 above, this
Lease and the term hereof shall expire as of the date of such fire or other
casualty (or in the case of clause (ii) of Article 18.3 above, as of the date
of termination determined pursuant to such clause) as though that were the
Termination Date as stated in Exhibit 1 and the Monthly Rent Payments shall be
apportioned as of such date.

     18.4 Rent Abatement. If the Premises or any part thereof shall have been
rendered unfit for use and occupancy hereunder by reason of such fire or other
casualty, the Monthly Rent Payments, or a just and proportionate part thereof,
according to the nature and extent to which the Premises shall have been so
rendered unfit, shall be suspended or abated from the date of the fire or other
casualty until the Premises shall have been restored as nearly as practicably
may be to the condition in which they were immediately prior to such fire or
other casualty.

19. WAIVER OF CLAIMS; SUBROGATION

     Notwithstanding anything set forth in this Lease to the contrary, Landlord
and Tenant do hereby waive any and all right of recovery, claim, action or
cause of action against the other, their respective principals, beneficiaries,
partners, officers, directors, agents, and employees, and, with respect to
Landlord, its Mortgagee(s), for any loss or damage that may occur to Landlord
or Tenant or any party claiming by, through or under Landlord or Tenant, as the
case may be, with respect to their respective property,

52

 

interruption of their
respective business, the Land, Building, or the Premises or any additions or
improvements thereto, or any contents therein, by reason of fire, the elements
or any other cause, regardless of cause or origin, including the negligence of
Landlord or Tenant, or their respective principals, beneficiaries, partners,
officers, directors, agents and employees and, with respect to Landlord, its
Mortgagee(s), which loss or damage is (or would have been, had the insurance
required by this Lease been carried) covered by insurance required to be
carried hereunder. Since this mutual waiver will preclude the assignment of
any such claim by subrogation (or otherwise) to an insurance company (or any
other person), Landlord and Tenant each agrees to give each insurance company
which has issued, or in the future may issue, policies of insurance, with
respect to the items covered by this waiver, written notice of the terms of
this mutual waiver, and to have such insurance policies properly endorsed, if
necessary, to prevent the invalidation of any of the coverage provided by such
insurance policies by reason of such mutual waiver. For the purpose of the
foregoing waiver, the amount of any deductible applicable to any loss or damage
shall be deemed covered by, and recoverable by the insured under the insurance
policy to which such deductible relates. In the event that Tenant fails to
carry any insurance required to be carried by Tenant pursuant to this Lease, or
is permitted to self-insure any of the requirements under this Lease, then all
loss or damage to Tenant, its leasehold interest, its business, its property,
the Premises or any additions or
improvements thereto or contents thereof shall be deemed covered by and
recoverable by Tenant under valid and collectible policies of insurance. In
the event that Landlord fails to carry any insurance required to be carried by
Landlord pursuant to this Lease, then all loss or damage to Landlord, its
business, its property, the Land, Building or any additions or improvements
thereto or contents thereof shall be deemed covered by and recoverable by
Landlord under valid and collectible policies of insurance.

20. CONDEMNATION - EMINENT DOMAIN

     In the event that any portion of the Building which would leave the
remainder of the Building unsuitable or uneconomic for use as an office
building comparable to its use on the Term Commencement Date, shall be taken or
appropriated by eminent domain or shall be condemned for any public or
quasi-public use, then (and in any such event) this Lease and the term hereof
may be terminated at the election of Landlord by a notice in writing of its
election so to terminate which shall be given by Landlord to Tenant within
sixty (60) days following the date on which Landlord shall have received notice
of such taking, appropriation or condemnation. In the event that (i) the whole
or any substantial part of the Premises, or (ii) ten percent (10%) or more of
the Premises, which would, in Tenant’s good faith judgment, leave the remainder
of the Premises unsuitable by Tenant for its intended business purposes, shall
be so taken, appropriated or condemned, then (and in any such event) this Lease
and the term hereof may be terminated at the election of Tenant by a notice in
writing of its election so to terminate which shall be given by Tenant to
Landlord within sixty (60) days following the date on which Tenant shall have
received notice of such taking, appropriation or condemnation. Notwithstanding
the foregoing, in the case of a condemnation or taking affecting less than the
entire Building, Landlord may not terminate this Lease unless it terminates the
leases of all other similarly affected office tenants in the Building.

     In the event of any taking of the Premises or any part thereof for
temporary use, (i) this Lease shall be and remain unaffected thereby, and (ii)
Tenant shall be entitled to receive for itself any award made to the extent
allocable to the Premises in respect of such taking on account of such use,
provided, that if any taking is for a period extending beyond the term of this
Lease, such award shall be apportioned between Landlord and Tenant as of the
Termination Date or earlier termination of this Lease.

     Upon the giving of any such notice of termination (either by Landlord or
Tenant) this Lease and the term hereof shall terminate on or retroactively as
of the date of such taking, appropriation or condemnation became legally
effective. In the event of any such termination, this Lease and the term
hereof shall expire as of such effective termination date as though that were
the Termination Date as stated in Exhibit 1, and the Monthly Rent Payments
shall be apportioned as of such date. If neither party (having the right so to
do) elects to terminate, Landlord will, with reasonable diligence and at
Landlord’s expense, restore the remainder of the Premises to a complete
tenantable unit, or the remainder of the means of access

53

 

and the remainder of
the Building, as nearly as may be practicable to the same condition as obtained
prior to such taking, appropriation or condemnation in which event (i) the
Rentable Area of the Premises and the Building shall be adjusted pursuant to
the Measurement Method, (ii) a just proportion of the Rent, according to the
nature and extent of the taking, appropriation or condemnation and the
resulting permanent injury to the Premises and the means of access thereto,
shall be permanently abated, (iii) a just proportion of the remainder of the
Rent, according to the nature and extent of the taking, appropriation or
condemnation and the resultant injury sustained by the Premises and the means
of access thereto, shall be abated until what remains of the Premises and the
means of access thereto shall have been restored as fully as may be for
permanent use and occupation by Tenant hereunder, and (iv) Tenant’s
Proportionate Share shall be adjusted. Except for any award specifically
reimbursing Tenant for moving or relocation expenses, there are expressly
reserved to Landlord all rights to compensation and damages created, accrued or
accruing by reason of any such taking, appropriation or condemnation, in
implementation and in confirmation of which Tenant does hereby acknowledge that
Landlord shall be entitled to receive all such compensation and damages, grant
to Landlord all and whatever rights (if any) Tenant may have to such
compensation and damages, and agree to execute and deliver all and whatever
further instruments of assignment as Landlord may from time to time request.

21. DEFAULT

     21.1 Conditions of Limitation - Re-entry - Termination. The following shall
constitute an “Event of Default” under this Lease: (a) subject to Article 21.7,
Tenant shall neglect or fail to perform or observe any of the Tenant’s
covenants or agreements herein, including (without limitation) the covenants or
agreements with regard to the payment when due of Monthly Rent Payments,
Additional Rent, reimbursement for increase in Landlord’s costs, or any other
charge payable by Tenant to Landlord (all of which shall be considered as part
of Rent for the purposes of invoking Landlord’s statutory or other rights and
remedies in respect of payment defaults); or (b) Tenant shall be determined to
be insolvent or shall admit its inability to pay its debts generally as they
become due, or shall make or offer to make a composition of its debts with its
creditors; or (c) Tenant shall make a general assignment of all or
substantially all of its assets for the benefit of its creditors, or (d) the
leasehold hereby created shall be taken on execution or by other process of law
and shall not be revested in Tenant within thirty (30) days thereafter; or (e)
a receiver, trustee or similar officer shall be appointed by a court of
competent jurisdiction to take charge of all or substantially all of Tenant’s
property and such appointment shall not be vacated within thirty (30) days; or
(f) any proceeding shall be instituted by or against Tenant pursuant to any of
the provisions of any Act of Congress or State law relating to bankruptcy,
reorganizations, arrangements, compositions or other relief from creditors,
and, in the case of any proceeding instituted against it, if Tenant shall fail
to have such proceedings dismissed within ninety (90) days or if Tenant is
adjudged bankrupt or insolvent as a result of any such proceeding. Upon the
occurrence of an Event of Default, Landlord may, by notice to Tenant, elect to
terminate this Lease; and thereupon (and without prejudice to any remedies
which might otherwise be available for arrears of Rent or other charges due
hereunder or preceding breach of covenant or agreement and without prejudice to
Tenant’s liability for damages as hereinafter stated), upon the giving of such
notice, this Lease shall terminate as of the date specified therein as though
that were the Termination Date as stated in Exhibit 1. Without being taken or
deemed to be guilty of any manner of trespass or conversion, and without being
liable to indictment, prosecution or damages therefor, Landlord may, in
accordance with applicable law, enter into and upon the Premises (or any part
thereof in the name of the whole); repossess the same as of its former estate;
and expel Tenant and those claiming under Tenant. The words “re-entry” and
“re-enter” as used in this Lease are not restricted to their technical legal
meanings.

     21.2 Intentionally Omitted.

     21.3 Damages - Termination. Upon the termination of this Lease under the
provisions of this Article 21, Tenant shall pay to Landlord the Rent and other
charges payable by Tenant to Landlord up to

54

 

the time of such termination, shall
continue to be liable for any preceding breach of covenant, and in addition,
shall pay to Landlord as damages, at the election of Landlord

     either:

     (x)  the amount by which, at the time of the termination of this Lease (or
at any time thereafter if Landlord shall have initially elected damages under
subparagraph (y), below), (i) the aggregate of the Rent reasonably projected
over the period commencing with such termination and ending on the Termination
Date as stated in Exhibit 1 exceeds (ii) the aggregate reasonably projected
fair market rental value of the Premises for such period, which sum shall be
discounted to present value using an interest rate equal to the Discount Rate.
The “Discount Rate” is the rate which, when compounded monthly, is equivalent
to the Treasury Rate, when compounded semi-annually. The “Treasury Rate” is
the semi-annual yield on the Treasury Constant Maturity Series with maturity
equal to what would have otherwise been the remaining term of this Lease for
the week prior to the Discount Rate, as reported in Federal Reserve
Statistical Release H.15 – Selected Interest Rates, as determined by
Landlord as of the applicable date. The rate will be determined by linear
interpolation between the yields reported in Release H.15, if necessary (in the
event Release H.15 is no longer published, Landlord shall select a comparable
publication to determine the Treasury Rate);

     or:

     (y)  amounts equal to the Rent and other charges which would have been
payable by Tenant had this Lease not been so terminated, payable upon the due
dates therefor specified herein following such termination and until the
Termination Date as specified in Exhibit 1, provided, however, if Landlord
shall re-let the Premises during such period, that Landlord shall credit Tenant
with the net rents received by Landlord from such re-letting, such net rents to
be determined by first deducting from the gross rents as and when received by
Landlord from such re-letting the reasonable expenses incurred or paid by
Landlord in terminating this Lease, as well as the reasonable expenses of
re-letting, including altering and preparing the Premises for new tenants,
brokers’ commissions, and all other similar and dissimilar expenses properly
chargeable against the Premises and the rental therefrom, it being understood
that any such re-letting may be for a period equal to or shorter or longer than
the remaining term of this Lease; and provided, further, that (i) in no event
shall Tenant be entitled to receive any excess of such net rents over the sums
payable by Tenant to Landlord hereunder and (ii) in no event shall Tenant be
entitled in any suit for the collection of damages pursuant to this
Subparagraph (y) to a credit in respect of any net rents from a re-letting
except to the extent that such net rents are actually received by Landlord
prior to the commencement of such suit. If the Premises or any part thereof
should be re-let in combination with other space, then proper apportionment on
a square foot area basis shall be made of the rent received from such
re-letting and of the expenses of re-letting. Landlord shall use reasonable
efforts to re-let the Premises in the event of a termination of this Lease
under this Section 21.

     In calculating the Rent and other charges under Subparagraph (x), above,
there shall be included, in addition to the Yearly Rent, Tax Payment
Obligations and Operating Cost Payment Obligations and all other considerations
agreed to be paid or performed by Tenant, on the assumption that all such
amounts and considerations would have remained constant (except as herein
otherwise provided) for the balance of the full term hereby granted.

     Suit or suits for the recovery of such damages, or any installments
thereof, may be brought by Landlord from time to time at its election, and
nothing contained herein shall be deemed to require Landlord to postpone suit
until the date when the term of this Lease would have expired if it had not
been terminated hereunder.

     21.4 Fees and Expenses.

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          (a) If Tenant shall default in the performance of any covenant on Tenant’s
part to be performed under this Lease, Landlord may, at any time that such
default remains uncured after five (5) business days’ notice from Landlord,
immediately, or at any time thereafter, perform the same for the account of
Tenant and Tenant shall, within thirty (30) days after request therefor, pay to
Landlord by way of reimbursement costs reasonably incurred by Landlord.
Interest at the rate provided in Article 6.1(c) hereof shall accrue on any sums
not so timely reimbursed.

          (b) Tenant shall pay all costs and expenses (including, without
limitation, reasonable attorneys’ fees and expenses at both the trial and
appellate levels) incurred by or on behalf of Landlord in connection with the
successful enforcement of any rights of Landlord or obligations of Tenant
hereunder, following an Event of Default. Landlord shall pay all costs and
expenses (including, without limitation, reasonable attorneys’ fees and
expenses at both the trial and appellate levels) incurred by or on behalf of
Tenant in connection with the successful enforcement of any rights of
Tenant or obligations of Landlord hereunder, following a default of Landlord
hereunder.

     21.5 Waiver of Redemption. Tenant does hereby waive and surrender all rights
and privileges which it might have under or by reason of any present or future
law to redeem the Premises or to have a continuance of this Lease for the term
hereby demised after being dispossessed or ejected therefrom by process of law
or under the terms of this Lease or after the termination of this Lease as
herein provided.

     21.6 Remedies Not Exclusive. The specified remedies to which Landlord may
resort hereunder are cumulative and are not intended to be exclusive of any
remedies or means of redress to which Landlord may at any time be lawfully
entitled, and Landlord may invoke any remedy (including the remedy of specific
performance) allowed at law or in equity as if specific remedies were not
herein provided for. The remedies set forth in this Lease to which Tenant may
resort are cumulative and are not intended to be exclusive of any remedies or
means of redress to which Tenant may at any time be lawfully entitled, and
Tenant may invoke any remedy (including the remedy of specific performance)
allowed at law or in equity as if specific remedies were not herein provided
for.

     21.7 Grace Period. Notwithstanding anything to the contrary contained in this
Article, an Event of Default shall not be deemed to have occurred hereunder
unless (a) with respect to a default in the payment when due of any sum of
money, Tenant shall fail to cure such default within ten (10) days after
written notice thereof is given by Landlord to Tenant, provided, however, that
no such notice need be given and no such default in the payment of money shall
be curable if on two (2) prior occasions in any twelve-month period there had
been a default in the payment of money which had been cured after notice
thereof had been given by Landlord to Tenant as herein provided or (b) with
respect to a default in the performance of any covenant other than a covenant
to pay a sum of money, Tenant shall fail to cure such default within a period
of thirty (30) days after written notice thereof given by Landlord to Tenant,
or within such additional period as may reasonably be required to cure such
default if (because of governmental restrictions or any other cause beyond the
reasonable control of Tenant) the default is of such a nature that it cannot be
cured within such thirty (30) day period, provided that Tenant commences to
cure within such thirty (30) day period and thereafter continuously prosecutes
such cure to completion with reasonable diligence.

     Notwithstanding anything to the contrary in this Article 21.7 contained,
except to the extent prohibited by applicable law, any statutory notice and
grace periods provided to Tenant by law are hereby expressly waived by Tenant.

22. END OF TERM - ABANDONED PROPERTY

     Upon the expiration or other termination of the term of this Lease, Tenant
shall peaceably quit and surrender to Landlord the Premises and all alterations
and additions thereto, broom clean, in good order, repair and condition (except
as provided herein and in Articles 8.7, 18 and 20) excepting only ordinary wear
and use and damage by fire or other casualty or condemnation for which, under
other provisions of

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this Lease, Tenant has no responsibility of repair or
restoration. Tenant shall remove all of its personal property, all alterations
required to be removed pursuant to Section 12.3, and shall repair any damages
to the Premises or the Building caused by their removal. Tenant’s obligation
to observe or perform this covenant shall survive the expiration or other
termination of the term of this Lease.

     Tenant will remove any personal property from the Building and the
Premises upon or prior to the expiration or termination of this Lease and any
such property which shall remain in the Building or the Premises thereafter
shall be conclusively deemed to have been abandoned, and may either be retained
by Landlord as its property or sold or otherwise disposed of in such manner as
Landlord may see fit. If any part thereof shall be sold, Landlord may receive
and retain the proceeds of such sale and apply the same, at its option, against
the expenses of the sale, the cost of moving and storage, any arrears of Yearly
Rent, additional or other charges payable hereunder by Tenant to Landlord and
any damages to which Landlord may be entitled under Article 21 hereof or
pursuant to law.

     If Tenant or anyone claiming under Tenant shall remain in possession of
the Premises or any part thereof after the expiration or prior termination of
the term of this Lease without any agreement in writing between Landlord and
Tenant with respect thereto, then, prior to the acceptance of any payments for
rent or use and occupancy by Landlord, the person remaining in possession shall
be deemed a tenant-at-sufferance. In the event that Tenant so holds over,
Tenant shall pay to Landlord in addition to all rental and other charges due
and accrued under the Lease prior to the date of termination, holdover rent in
the amount of (a) 125% of the Yearly Rent in effect immediately prior to the
date of termination for the first thirty (30) days, and (b) 150% of the Yearly
Rent in effect immediately prior to the date of termination thereafter, plus,
in any case, the other charges payable under this Lease measured from the day
on which Tenant’s hold-over commenced and terminating on the day on which
Tenant vacates the Premises. Provided Landlord has notified Tenant in writing
that consequential, special and/or direct damages may accrue as a result of
Tenant’s holdover and the nature and potential extent of such damages, if
Tenant holds over for more than sixty (60) days, Tenant shall also pay to
Landlord all of Landlord’s consequential, special and/or direct damages that
accrue after the later of sixty (60) days after the commencement of the
holdover or sixty (60) days after Landlord’s aforesaid notice. No acceptance
of holdover rent or other payments by Landlord under these holdover provisions
shall operate as a waiver of Landlord’s right to regain possession or any other
of Landlord’s remedies.

23. SUBORDINATION

          (a) Landlord represents that there are no Mortgages (as defined herein)
encumbering the Land or Building on the date hereof other than in favor of New
York Life Insurance Company (the “Existing Lender”). Subject to any
mortgagee’s or ground lessor’s election, as provided in paragraph (b) below,
this Lease is and shall be subject and subordinate in all respects to all
ground leases and/or underlying leases, deeds of trust, and all mortgages, any
of which may now or hereafter be placed on or affect such leases and/or all or
any part of the Land, and/or Landlord’s interest or estate therein, and to each
advance made and/or hereafter to be made under any such mortgages or deeds of
trust, and to all renewals, modifications, consolidations, replacements,
refinancings and extensions thereof and all substitutions therefor (any such
mortgage, deed of trust, ground lease or other security lien, as so renewed,
consolidated, recast, replaced or modified being sometimes hereinafter referred
to as a “Mortgage”, and the person or entity having the benefit of same,
including, without limitation, any foreclosure purchaser or mortgage receiver,
being referred to hereinafter as a “Mortgagee”), provided that in the case of
all Mortgages entered into subsequent to the date of this Lease, the Mortgagee
shall join with Landlord and Tenant in a subordination, non-disturbance and
attornment agreement (“SNDA”) in the form attached hereto as Exhibit 11 which,
for all purposes, shall govern the subordination of this Lease to a Mortgage,
and the relative rights and obligations of Tenant and a Mortgagee with respect
to this Lease. Landlord shall endeavor to obtain and deliver to Tenant a SNDA
in the form attached hereto as Exhibit 11 from the Existing Lenders.

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          (b) Any Mortgagee may from time to time subordinate or revoke any such
subordination of the Mortgage held by it to this Lease. Such subordination or
revocation, as the case may be, shall be effected by written notice to Tenant
and by recording an instrument of subordination or of such revocation, as the
case may be, with the appropriate registry of deeds or land records and to be
effective without any further act or deed on the part of Tenant. In
confirmation of such subordination or of such
revocation, as the case may be, Tenant shall execute, acknowledge and
promptly deliver any certificate or instrument that Landlord and Mortgagee may
request.

          (c) Without limitation of any of the provisions of this Lease, if any
Mortgagee shall succeed to the interest of Landlord by reason of the exercise
of its rights under such Mortgage, or the acceptance of voluntary conveyance in
lieu thereof, or the expiration or sooner termination of such Mortgage, however
caused, then Mortgagee shall succeed to the interest of Landlord under this
Lease as provided in Article 28 below, provided, however, that such successor
shall not: (i) be liable for any previous act or omission of Landlord under
this Lease; (ii) be subject to any offset, defense, or counterclaim which shall
theretofore have accrued to Tenant against Landlord; or (iii) have any
obligation with respect to any security deposit unless it shall have been paid
over or physically delivered to such successor. In the event of such
succession to the interest of the Landlord — and notwithstanding that any such
Mortgage may antedate this Lease — the Tenant shall attorn to such successor
and shall ipso facto be and become bound directly to such successor in interest
to Landlord to perform and observe all the Tenant’s obligations under this
Lease without the necessity of the execution of any further instrument.
Nevertheless, Tenant agrees at any time and from time to time during the term
hereof to execute a suitable instrument in confirmation of Tenant’s agreement
to attorn, as aforesaid.

          (d) Notwithstanding anything to the contrary contained in this Article 23,
if all or part of Landlord’s estate and interest in the real property of which
the Premises are a part shall be a leasehold estate held under a ground lease,
then: (i) the foregoing subordination provisions of this Article 23 shall not
apply to any mortgages of the fee interest in said real property to which
Landlord’s leasehold estate is not otherwise subject and subordinate; and (ii)
the provisions of this Article 23 shall in no way waive, abrogate or otherwise
affect any agreement by any ground lessor (x) not to terminate this Lease
incident to any termination of such ground lease prior to its term expiring or
(y) not to name or join Tenant in any action or proceeding by such ground
lessor to recover possession of such real property or for any other relief.

24. QUIET ENJOYMENT

     Landlord covenants that, except to the extent an Event of Default has
occurred under this Lease, that remains uncured, Tenant shall quietly enjoy the
Premises from and against the claims of all persons claiming by, through or
under Landlord subject, nevertheless, to the covenants, agreements, terms,
provisions and conditions of this Lease.

25. ENTIRE AGREEMENT — WAIVER — SURRENDER

     25.1 Entire Agreement. This Lease and the Exhibits made a part hereof and
incorporated herein by this reference contain the entire and only agreement
between the parties and any and all statements and representations, written and
oral, including previous correspondence and agreements between the parties
hereto, are merged herein. Tenant acknowledges that all representations and
statements upon which it relied in executing this Lease are contained herein
and that the Tenant in no way relied upon any other statements or
representations, written or oral. Any executory agreement hereafter made shall
be ineffective to change, modify, discharge or effect an abandonment of this
Lease in whole or in part unless such executory agreement is in writing and
signed by the party against whom enforcement of the change, modification,
discharge or abandonment is sought.

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     25.2 No Waiver. The failure of Landlord to seek redress for violation, or to
insist upon the strict performance, of any covenant or condition of this Lease,
or any of the Rules and Regulations promulgated hereunder, shall not
prevent a subsequent act, which would have originally constituted a violation,
from having all the force and effect of an original violation. The receipt by
Landlord of Rent with knowledge of the breach of any covenant of this Lease
shall not be deemed a waiver of such breach. The failure of Landlord to
enforce any of such Rules and Regulations against Tenant and/or any other
tenant in the Building shall not be deemed a waiver of any such Rules and
Regulations. No provisions of this Lease shall be deemed to have been waived
by Landlord unless such waiver be in writing signed by Landlord. No payment by
Tenant or receipt by Landlord of a lesser amount than the Monthly Rent Payments
herein stipulated shall be deemed to be other than on account of the stipulated
Rent, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Rent be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord’s
right to recover the balance of such Rent or pursue any other remedy in this
Lease provided. The failure of Tenant to seek redress for violation, or to
insist upon the strict performance, of any covenant or condition of this Lease
by Landlord, shall not prevent a subsequent act, which would have originally
constituted a violation, from having all the force and effect of an original
violation. No provisions of this Lease shall be deemed to have been waived by
Tenant unless such waiver be in writing signed by Tenant.

     25.3 Surrender. No act or thing done by Landlord during the term hereby
demised shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept such surrender shall be valid, unless in writing signed by
Landlord. No employee of Landlord or of Landlord’s agents shall have any power
to accept the keys of the Premises prior to the termination of this Lease. The
delivery of keys to any employee of Landlord or of Landlord’s agents shall not
operate as a termination of the Lease or a surrender of the Premises. In the
event that Tenant at any time desires to have Landlord underlet the Premises
for Tenant’s account, Landlord or Landlord’s agents are authorized to receive
the keys for such purposes without releasing Tenant from any of the obligations
under this Lease, and Tenant hereby relieves Landlord of any liability for loss
of or damage to any of Tenant’s effects in connection with such underletting.

26. FORCE MAJEURE - EXCULPATORY CLAUSE

     Except as otherwise expressly provided in this Lease, this Lease and the
obligations of Tenant to pay Rent hereunder and perform all the other
covenants, agreements, terms, provisions and conditions hereunder on the part
of Tenant to be performed shall in no way be affected, impaired or excused
because Landlord is unable to fulfill any of its obligations under this Lease
or is unable to supply or is delayed in supplying any service expressly or
impliedly to be supplied or is unable to make or is delayed in making any
repairs, replacements, additions, alterations, improvements or decorations or
is unable to supply or is delayed in supplying any equipment or fixtures if
Landlord is prevented or delayed from so doing by reason of strikes or labor
troubles or any other similar or dissimilar cause whatsoever beyond Landlord’s
reasonable control, including but not limited to, governmental preemption in
connection with a national emergency or by reason of any rule, order or
regulation of any department or subdivision thereof of any governmental agency
or by reason of the conditions of supply and demand which have been or are
affected by war, hostilities or other similar or dissimilar emergency (each
such event, cause or condition is collectively referred to as “Force Majeure”).
In no event shall Landlord’s failure to pay sums of money ever be considered
Force Majeure. In each such instance of inability of Landlord to perform,
Landlord shall exercise reasonable diligence to eliminate the cause of such
inability to perform.

     Except as otherwise expressly provided in this Lease, this Lease and the
obligations of Landlord to perform all the covenants, agreements, terms,
provisions and conditions hereunder on the part of Landlord to be performed
shall in no way be affected, impaired or excused because Tenant is unable to
fulfill any of its obligations under this Lease (excluding in all cases the
obligation of Tenant to pay any amounts of Rent under this Lease) or is unable
to make or is delayed in making any repairs, if Tenant is prevented or delayed
from so doing by reason of Force Majeure or any other similar or dissimilar
cause whatsoever beyond

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Tenant’s reasonable control. In each such instance of inability of Tenant
to perform, Tenant shall exercise reasonable diligence to eliminate the cause
of such inability to perform.

     Tenant shall neither assert nor seek to enforce any claim against
Landlord, or Landlord’s agents or employees, or the assets of Landlord or of
Landlord’s agents or employees, for breach of this Lease or otherwise, other
than against Landlord’s interest in the Building of which the Premises are a
part and in the uncollected rents, issues and profits thereof, and Tenant
agrees to look solely to such interest for the satisfaction of any liability of
Landlord under this Lease, it being specifically agreed that in no event shall
Landlord or Landlord’s agents or employees (or any of the officers, trustees,
directors, partners, beneficiaries, joint venturers, members, stockholders or
other principals or representatives, and the like, disclosed or undisclosed,
thereof) ever be personally liable for any such liability. This paragraph
shall not limit any right that Tenant might otherwise have to obtain injunctive
relief against Landlord or to take any other action which shall not involve the
personal liability of Landlord to respond in monetary damages from Landlord’s
assets other than the Landlord’s interest in said real estate, as aforesaid.
In no event shall Landlord or Landlord’s agents or employees (or any of the
officers, trustees, directors, partners, beneficiaries, joint venturers,
members, stockholders or other principals or representatives and the like,
disclosed or undisclosed, thereof) ever be liable for lost profits or
consequential or incidental damages of Tenant. Except as otherwise provided in
Article 22, in no event shall Tenant or Tenant’s agents or employees (or any of
the officers, trustees, directors, partners, beneficiaries, joint venturers,
members, stockholders or other principals or representatives and the like,
disclosed or undisclosed, thereof) ever be liable for lost profits or
consequential or incidental damages of Landlord.

27. BILLS AND NOTICES

     Any notice, consent, request, bill, demand or statement hereunder by
either party to the other party shall be in writing and, if received at
Landlord’s or Tenant’s address, shall be deemed to have been duly given if
delivered in person (with receipt therefor), if sent by reputable overnight
delivery or courier service (e.g., Federal Express) providing for receipted
delivery, or if sent by certified or registered mail, return receipt requested,
postage prepaid, addressed to Landlord at its address as stated in Exhibit 1
and to Tenant at the Premises, Attention: David L. Felsenthal, Chief Financial
Officer (or at Tenant’s address as stated in Exhibit 1, if mailed prior to
Tenant’s occupancy of the Premises), in all cases with a copy to: Arent Fox
Kintner Plotkin & Kahn, PLLC, 1050 Connecticut Avenue, NW, Washington, DC
20036, Attn: Barbara Wahl, Esq. , or if any address for notices shall have
been duly changed as hereinafter provided, if mailed as aforesaid to the party
at such changed address. Either party may at any time change the address or
specify an additional address for such notices, consents, requests, bills,
demands or statements by delivering or mailing, as aforesaid, to the other
party a notice stating the change and setting forth the changed or additional
address, provided such changed or additional address is within the United
States.

     All bills and statements for reimbursement or other payments or charges
due from Landlord to Tenant hereunder shall be due and payable in full thirty
(30) days, unless herein otherwise provided, after submission thereof by Tenant
to Landlord. All bills and statements for reimbursement or other payments or
charges due from Tenant to Landlord hereunder shall be due and payable in full
thirty (30) days, unless herein otherwise provided, after submission thereof by
Landlord to Tenant. Tenant’s failure to make timely payment of any amounts
indicated by such bills and statements, whether for work done by Landlord at
Tenant’s request, reimbursement provided for by this Lease or for any other
sums properly owing by Tenant to Landlord, shall be treated as a default in the
payment of Rent, in which event Landlord shall have all rights and remedies
provided in this Lease for the nonpayment of Rent.

28. PARTIES BOUND — SEIZING OF TITLE

     The covenants, agreements, terms, provisions and conditions of this Lease
shall bind and benefit the successors and assigns of the parties hereto with
the same effect as if mentioned in each instance where

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a party hereto is named or referred to, except that no violation of the
provisions of Article 16 hereof shall operate to vest any rights in any
successor or assignee of Tenant and that the provisions of this Article 28
shall not be construed as modifying the conditions of limitation contained in
Article 21 hereof.

     If, in connection with or as a consequence of the sale, transfer or other
disposition of the real estate (land and/or Building, either or both, as the
case may be) of which the Premises are a part, Landlord ceases to be the owner
of the reversionary interest in the Premises, Landlord shall be entirely freed
and relieved from the performance and observance thereafter of all covenants
and obligations hereunder on the part of Landlord to be performed and observed,
it being understood and agreed in such event (and it shall be deemed and
construed as a covenant running with the land) that the person succeeding to
Landlord’s ownership of said reversionary interest shall thereupon and
thereafter assume, and perform and observe, any and all of such covenants and
obligations of Landlord.

29. MISCELLANEOUS

     29.1 Separability. If any provision of this Lease or portion of such provision
or the application thereof to any person or circumstance is for any reason held
invalid or unenforceable, the remainder of the Lease (or the remainder of such
provision) and the application thereof to other persons or circumstances shall
not be affected thereby.

     29.2 Captions, etc. The captions are inserted only as a matter of convenience
and for reference, and in no way define, limit or describe the scope of this
Lease nor the intent of any provisions thereof. References to “State” shall
mean, where appropriate, the District of Columbia and other Federal
territories, possessions, as well as a state of the United States.

     29.3 Broker. Tenant represents and warrants that it has not directly or
indirectly dealt, with respect to the leasing of office space in the Building
with any broker or had its attention called to the Premises or other space to
let in the Building by anyone other than the broker, person or firm, if any,
designated in Exhibit 1. Tenant agrees to defend, exonerate and save harmless
and indemnify Landlord and anyone claiming by, through or under Landlord
against any claims for a commission arising out of the execution and delivery
of this Lease or out of negotiations between Landlord and Tenant with respect
to the leasing of space in the Building, other than any claims by the brokers
designated in Exhibit 1. Landlord represents and warrants that it has not
directly or indirectly dealt, with respect to the leasing of the Premises, with
any broker other than the broker, person or firm, if any, designated in Exhibit
1. Landlord agrees to defend, exonerate and save harmless and indemnify Tenant
and anyone claiming by, through or under Tenant against any claims for a
commission arising out of the execution and delivery of this Lease or out of
negotiations between Landlord and Tenant with respect to the leasing of the
Premises. Landlord shall pay the fees and brokerage commissions to the broker,
person or firm, if any, designated in Exhibit 1 required to be paid by Landlord
pursuant to a separate agreement.

     29.4 Time is of the Essence. Time is of the essence of each provision of this
Lease.

     29.5 Arbitration. Any disputes relating to provisions or obligations in this Lease as to which
a specific provision for a reference to arbitration is made herein shall be
submitted to arbitration in accordance with the provisions of the law of the
District of Columbia, as from time to time amended. In no event shall any
dispute pertaining to fair market rental value be subject to such arbitration,
which disputes shall be determined pursuant to the provisions of Exhibit 5.
Arbitration proceedings, including the selection of an arbitrator, shall be
conducted pursuant to the commercial rules, regulations and procedures from
time to time in effect as promulgated by the American Arbitration Association.
Prior written notice of application by either party for arbitration shall be
given to the other at least ten (10) days before submission of the application
to the said Association’s office in the City wherein the Building is situated
(or the nearest other city having an Association office). The arbitrator shall
hear the parties and their evidence. The decision of the arbitrator shall be
binding and conclusive, and judgment upon the award or decision of the

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arbitrator may be entered in the appropriate court of law; and the parties
consent to the jurisdiction of such court and further agree that any process or
notice of motion or other application to the Court or a Judge thereof may be
served outside the District of Columbia by registered mail or by personal
service, provided a reasonable time for appearance is allowed. The costs and
expenses of each arbitration hereunder and their apportionment between the
parties shall be determined by the arbitrator in his award or decision. No
arbitrable dispute shall be deemed to have arisen under this Lease prior to (i)
the expiration of the period of twenty (20) days after the date of the giving
of written notice by the party asserting the existence of the dispute together
with a description thereof sufficient for an understanding thereof; and (ii)
where a Tenant payment (e.g., Tax Excess or Operating Expense Excess under
Article 9 hereof) is in issue, the amount billed by Landlord having been paid
by Tenant.

     29.6 Governing Law. This Lease is made pursuant to, and shall be governed by,
and construed in accordance with, the laws of the State wherein the Building is
situated and any applicable local municipal rules, regulations, by-laws,
ordinances and the like.

     29.7 Representation of Authority. By his execution hereof each of the
signatories on behalf of the respective parties hereby warrants and represents
to the other that he is duly authorized to execute this Lease on behalf of such
party. If Tenant is a corporation, Tenant hereby appoints the signatory whose
name appears below on behalf of Tenant as Tenant’s attorney-in-fact for the
purpose of executing this Lease for and on behalf of Tenant.

     29.8 Survival. Without limiting any other obligation of the Tenant which may
survive the expiration or prior termination of the term of the Lease, all
obligations on the part of Tenant to indemnify, defend, or hold Landlord
harmless, as set forth in this Lease (including, without limitation, Tenant’s
obligations under Articles 15.4, and 29.3) shall survive the expiration or
prior termination of the term of the Lease. Without limiting any other
obligation of Landlord which may survive the expiration or prior termination of
the term of the Lease, all obligations on the part of Landlord to indemnify,
defend, or hold Tenant harmless, as set forth in this Lease (including, without
limitation, Landlord’s obligations under Articles 15.5 and 29.3) shall survive
the expiration or prior termination of the term of the Lease.

     29.9 Leasing Requirement. Landlord hereby agrees with Tenant that it will not
lease space in the Building to any tenant that engages in any activity that
will attract a volume, frequency or type of visitor or employee to the Building
which is not consistent with the standards of a first class office building in
Washington, D.C.

30.     LANDLORD DEFAULT. Landlord shall in no event be in default under this Lease unless Landlord
shall neglect or fail to perform any of its obligations hereunder and shall
fail to remedy the same within thirty (30) days after notice to Landlord
specifying such neglect or failure, or if such failure is of such a nature that
Landlord cannot reasonably remedy the same within such thirty (30) day period,
Landlord shall fail to commence promptly (and in any event within such thirty
(30) day period) to remedy the same and to prosecute such remedy to completion
with diligence and continuity. If Landlord has failed to make any repair which
materially and adversely affects Tenant’s use or occupancy of the Premises
within the foregoing period of time, then Tenant shall have the right, after
providing an additional ten (10) days’ written notice to Landlord, to perform
such obligation so long as the same may be done solely within the Premises.
Landlord shall reimburse Tenant for all of Tenant’s reasonable costs associated
with effecting such cure within thirty (30) days after receipt of an invoice
from Tenant accompanied by reasonable evidence of such costs and expenses. If
Landlord shall fail to reimburse Tenant for such costs and expenses within such
thirty day period, Tenant shall be entitled to deduct and withhold the amount
of such costs and expenses, from the next ensuing installments and payments of
Yearly Rent becoming due under this Lease (with interest accruing at the rate
of interest described in Article 6.1(c) from the due date for such
reimbursement), provided that (a) if Landlord shall notify Tenant that it
disputes Tenant’s claims of default and/or the amounts owed to Tenant, Tenant
shall continue to pay the amounts of Yearly Rent in dispute until a final,
unappealable decision is obtained in favor of Tenant, whether pursuant to
Article 29.5 or

62

 

otherwise, and (b) in no event shall Tenant be permitted to
withhold more than twenty-five percent (25%) of the monthly installment of
Yearly Rent in any one month.

31. SECURITY DEPOSIT

          (a) Tenant acknowledges that Landlord is unwilling to execute this Lease
unless Tenant provides Landlord with additional security for Tenant’s
obligations hereunder. Therefore, Tenant shall deliver to Landlord, on the
date that Tenant executes and delivers this Lease, an irrevocable standby
letter of credit (“Letter of Credit”) which shall (1) be in the form attached
hereto as Exhibit 6, (2) be issued by a bank reasonably acceptable to Landlord
with minimum assets of Ten Billion Dollars ($10,000,000,000.00), upon which
presentment may be made in Washington D.C., (3) be in an amount equal to Three
Million One Hundred Ninety Eight Thousand One Hundred Fifty Dollars
($3,198,150.00), (4) have an expiration date no earlier than the first
anniversary of the date of issuance thereof and shall be automatically renewed
from year to year unless terminated by the issuer thereof by notice to Landlord
given not less than thirty (30) days prior to the expiration thereof, and (5)
have a final expiration date occurring not earlier than sixty (60) days
following the Termination Date of this Lease. Tenant shall, throughout the
term of this Lease, deliver to Landlord, in the event of the termination of any
such letter of credit by the issuer thereof, replacement letter of credit
(“Substitute Letter of Credit”) in substitute for the Letter of Credit then
being held by Landlord, no later than twenty (20) days prior to the expiration
date of the preceding Letter of Credit. In the event that Tenant fails timely
to deliver to Landlord a Substitute Letter of Credit, then the Landlord shall
have the right, at any time after such event, without giving any further notice
to Tenant or to Landlord, to draw down the Letter of Credit, or any Substitute
Letter of Credit and/or any Additional Letter(s) of Credit ( as defined below)
and to hold the proceeds thereof (“Security Proceeds”) as a cash security
deposit, in an interest-bearing account, for Tenant’s obligations under the
Lease in accordance with the provisions of this Article 30. If, at any time,
Landlord draws on all or a portion of the Letter of Credit, Tenant shall have
the right, after the default that triggered Landlord’s right to draw down the
Letter of Credit has been cured, to post a replacement Letter of Credit, in
which case, Landlord shall promptly return all remaining proceeds and original
Letter of Credit to Tenant. Tenant hereby covenants and agrees not to instruct
the bank to refrain from paying to Landlord the proceeds of the Letter of
Credit for any reason, a breach of which covenant Tenant expressly acknowledges
shall constitute a material default under this Lease. Nothing in the preceding
sentence is intended to constitute a release by Tenant of any liability
Landlord would otherwise have to Tenant for an unjustified drawing down of the
Letter of Credit.

          (b) If an Event of Default shall occur under this Lease, then Landlord
shall have the right, at any time after such event, without giving any further
notice to Tenant, to draw down from said Letter of Credit (i) the amount
necessary to cure such Event of Default or (ii) if such Event of Default cannot
reasonably be cured by the expenditure of money, the amount which, in
Landlord’s opinion, is necessary to be advanced to Landlord so that it may
exercise all rights and remedies Landlord may have due to such default, and
then to satisfy Tenant’s liability on account thereof. In the event of any
such draw by Landlord, Tenant shall, within five (5) business days of written
demand therefor, deliver to Landlord an additional Letter of Credit satisfying
the conditions set forth in paragraph (a) above (an “Additional Letter of
Credit”), except that the amount of such Additional Letter of Credit shall be
in the amount of such draw. In addition, in the event of a termination based
upon an Event of Default under the Lease, or a rejection of the Lease pursuant
to the provisions of the Federal Bankruptcy Code, Landlord shall have the right
to draw upon the Letter of Credit (from time to time, if necessary) to cover
the full amount of damages and other amounts due from Tenant to Landlord under
this Lease. Any amounts so drawn shall, at Landlord’s election, be applied
first to any unpaid Rent and other charges which were due prior to the filing
of the petition for protection under the Federal Bankruptcy Code.

          (c) Upon request of Landlord or any (prospective) purchaser or mortgagee
of the Building, Tenant shall cooperate with Landlord in transferring,
obtaining an amendment to, or replacement of any Letter of Credit which
Landlord is then holding so that the transferred, amended or new Letter of

63

 

Credit reflects the name of the new owner of the Building. Landlord shall be
responsible for any charges payable to the bank as a result of such transfer up
to One Thousand Dollars ($1,000.00), and any excess charge shall be at Tenant’s
expense.

          (d) To the extent that Landlord has not previously drawn upon any Letter
of Credit, Substitute Letter of Credit, Additional Letter of Credit or Security
Proceeds (collectively, the “Security Collateral”) held by the Landlord, and to
the extent that an Event of Default is not continuing as of the Termination
Date of the Lease, Landlord shall return such Security Collateral to Tenant
within thirty (30) days after the Termination Date of this Lease.

          (e) In no event shall the proceeds of any Letter of Credit be deemed to be
a prepayment of Rent nor shall it be considered as a measure of liquidated
damages.

          (f) Provided that no Event of Default has occurred that remains uncured,
as of May 1, 2012, Tenant may reduce the amount of the Letter of Credit then
held by Landlord to One Million Sixty-Six Thousand Fifty Dollars
($1,066,050.00), by providing an amendment to the existing Letter of Credit or
a Substitute Letter of Credit. If Tenant shall submit a Substitute Letter of
Credit, upon Landlord’s receipt thereof, Landlord shall return the Letter of
Credit then held by Landlord to Tenant.

32. PARKING

          (a) From time to time, but no later than December 1, 2004, Tenant will
notify Landlord of the number of parking passes it will require for monthly
parking privileges for passenger automobiles by Tenant’s employees in
unreserved spaces in the garage (the “Garage”) serving the Building, up to and
not exceeding seventy-one (71) such passes, and Landlord shall cause such
passes to be issued to Tenant. Tenant shall have no right to sublet, assign or
otherwise transfer such parking passes, except in connection with an approved
assignment of the Lease or sublease of all of part of the Premises. The number
of such passes shall be increased by one (1) such pass for each 1,500 square
feet of Rentable Area added to the Premises pursuant to Articles 2.4, 2.5, 2.7,
and 2.8 (excluding any Available Recapture Space leased by Tenant) from time to
time pursuant to the terms of this Lease. With respect to Available Recapture
Space, Tenant may contract for up to the number of passes surrendered by the
tenant of such space. Tenant may elect, from time to time, to surrender to
Landlord any or all of the aforesaid parking passes, upon at least thirty (30)
days’ prior written notice to Landlord, provided that Tenant shall not
thereafter have any future rights with respect to such parking passes, except
on an “as available” basis. Said
parking passes shall be paid for by Tenant at the then current prevailing
rate in the Garage, as such rate may vary from time to time, but which shall
not exceed the market rate for similar parking spaces in similar locations in
downtown Washington, D.C. The monthly parking charge at the present time is
$200 per parking pass. Tenant acknowledges that said monthly charges to be
paid under this Article 31 are for the use by the Tenant of the parking
privileges referred to herein, and not for any other service. No deductions or
allowances shall be made for days when Tenant or any of its employees does not
utilize the parking facilities or for Tenant utilizing less than all of the
passes. Said parking passes will be on an unassigned, non-reserved basis, and
shall be subject to the reasonable rules and regulations from time to time in
force. Landlord reserves the right to institute an attendant-managed parking
system in the Garage.

          (b) Landlord hereby reserves the right to enter into a management
agreement or lease with an entity for the Garage (“Garage Operator”). In such
event, Tenant, upon request of Landlord, shall enter into a parking agreement
with the Garage Operator and pay the Garage Operator the monthly charge
established hereunder. Without limiting the liability of the Garage Operator,
Landlord shall have no liability for claims arising through acts or omissions
of the Garage Operator and, unless caused by the negligence or willful
misconduct of Landlord, Landlord shall not be responsible for money, jewelry,
automobiles or other personal property lost in or stolen from the Garage,
regardless of whether such loss or theft occurs when the Garage or other areas
therein are locked or otherwise secured. It is understood and agreed that the
identity of the Garage Operator may change from time to time during the Term.
In

64

 

connection therewith, any parking lease or agreement entered into between
Tenant and a Garage Operator shall be freely assignable by such Garage Operator
or any successors thereto.

          (c) Landlord or the Garage Operator shall have the right from time to time
to promulgate reasonable rules and regulations regarding the Garage, the
parking passes and the use thereof, including, but not limited to, rules and
regulations controlling the flow of traffic to and from various parking areas,
the angle and direction of parking and the like. Tenant shall comply with and
cause its employees to comply with all such rules and regulations as well as
all reasonable additions and amendments thereto. Landlord reserves for itself
the right to alter the Garage as Landlord or the Garage Operator sees fit, and
in such case to change the Garage including the reduction in area of the same.

          (d) The Garage Operator shall have the right to temporarily close the
Garage or certain areas therein, upon reasonable prior written notice to
Tenant, in order to perform necessary repairs, maintenance and improvements to
the Garage. In such event, Landlord shall provide Tenant with alternative
parking in the vicinity of the Building or shall equitably abate the parking
fees for such period of repairs, maintenance or improvements.

          (e) The Garage Operator may elect to provide parking cards or keys to
control access to the Garage or surface parking areas, if any. In such event,
Landlord or the Garage Operator shall provide Tenant with one card or key for
each Space that Tenant is leasing hereunder, provided that the Garage Operator
shall have the right to require Tenant or its employees to place a reasonable
deposit on such access cards or keys and to pay a fee for any lost or damaged
cards or keys.

65

 

IN WITNESS WHEREOF the parties hereto have executed this Indenture of Lease in
multiple copies, each to be considered an original hereof, as a sealed
instrument on the day and year noted in Exhibit 1 as the Execution Date.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:
	 	 	 	 	 	 	 	 	 
	2445 M Street Property LLC	 	 	 	The Advisory Board Company
	 	 	 	 	 	 	 	 	 
	By:	 	
/s/ Philip J. Brannigan, Jr.
	 	 	 	By:
	 	/s/ David L. Felsenthal
	 	 	

	 	 	 	 	 	

	 	 	
Name: Philip J. Brannigan, Jr.
	 	 	 	 	 	Name: David L. Felsenthal
	 	 	
Title: Vice President
	 	 	 	 	 	Title: Chief Financial Officer
	 	 	
Hereunto Duly Authorized
	 	 	 	 	 	Hereunto Duly Authorized

     IF TENANT IS A CORPORATION, A SECRETARY’S OR CLERK’S CERTIFICATE OF THE
AUTHORITY AND THE INCUMBENCY OF THE PERSON SIGNING ON BEHALF OF TENANT SHOULD
BE ATTACHED.

COMMONWEALTH, DISTRICT OR

STATE OF

COUNTY OF City of Washington, District of Columbia

     On the Execution Date stated in Exhibit 1, the person above signing this
Lease for and on behalf of the Tenant, to me personally known, did sign and
execute this Lease and, being by me duly sworn, did depose and say that he is
the officer of the above named Tenant, as noted, and that s/he signed his/her
name hereto on behalf of said Tenant.

	 	/s/ Annette Johnson

Notary Public

My Commission Expires: May 31, 2007

COMMONWEALTH OF MASSACHUSETTS

COUNTY OF SUFFOLK

     On the Execution Date stated in Exhibit 1, the person above signing this
Lease for and on behalf of Landlord to me personally known, did sign and
execute this Lease and, being by me duly sworn, did depose and say that s/he is
the duly authorized representative of Landlord.

	 	/s/ Barbara Jean Smith

Notary Public

My Commission Expires: August 15, 2008

66

 

EXHIBIT 1

LEASE DATA

2445 M Street, N.W.

Washington, D.C.

(the “Building”)

	 	 	 
	Execution Date:	 	
October 20, 2003
	 	 	 
	Tenant:	 	
The Advisory Board Company, a Delaware corporation.
Mailing Address: 600 New Hampshire Avenue, N.W.
Washington, DC 20037, Attn: David Felsenthal.
	 	 	 
	Landlord:	 	
2445 M Street Property LLC, a Delaware limited liability company. Mailing address: c/o
Beacon Capital Partners, LLC, One Federal Street, Boston, Massachusetts 02110.

	 	 	 	 	 
	Art. 2	 	
Initial Premises:
	 	106,605 square feet of Rentable Area, comprising the
entire Rentable Area of the 6th, 7th and 8th floors of
the Building, substantially as shown on Lease Plan,
Exhibit 2, which includes the exclusive use of the 8th
floor terrace shown on Exhibit 2, which terrace area is
not included in the calculation of the Rentable Area of
the 8th floor.
	 	 	 	 	 
	 	 	
Premises:
	 	As of the Term Commencement Date, the Premises shall
consist of the Initial Premises, and the Premises shall
thereafter consist of the area leased by Tenant from
time to time pursuant to the expansion obligations and
rights set forth in this Lease.
	 	 	 	 	 
	 	 	
Building:
	 	The building located at 2445 M Street, N.W. Washington,
D.C.
	 	 	 	 	 
	 	 	
Land:
	 	The real property on which the Building is located, as
described in Exhibit 12.
	 	 	 	 	 
	Art. 2.1	 	
Rentable Area:
	 	The rentable area of the portion of the Building in
question, determined in accordance with the Measurement
Method. The parties have agreed upon the Rentable Area
of each floor of the Building as set forth in the
Rentable Area Schedule, Exhibit 3, and neither the
Rentable Area of the Premises nor the aggregate
Rentable Area of the Building shall be subject to
adjustment, for all purposes of this Lease, except as
otherwise expressly provided in this Lease.
	 	 	 	 	 
	 	 	
Measurement Method:
	 	The standards set forth in the June 1996 American
National Standards Institute (ANSI)/Building Owners and
Managers Association (BOMA) 265.1 guidelines for
calculating rentable square feet of office space in
office buildings.
	 	 	 	 	 
	Art. 2.4	 	
First Expansion Premises:
	 	25,967 square feet of Rentable Area, comprising the
entire Rentable Area of the 9th floor of the Building,
substantially as shown on the Lease Plan, Exhibit 2,
which includes exclusive use of the 9th floor terrace
shown on Exhibit 2,

E1-1

 

	 	 	 	 	 
	 	 	 	 	but which terrace area is not
included in the calculation of the Rentable Area of the
9th floor.
	 	 	 	 	 
	 	 	
First Expansion Premises Commencement Date:
	 	May 1, 2006, as such date may be adjusted in accordance
with Article 2.4.
	 	 	 	 	 
	 	 	
First Expansion Premises Rent Commencement Date:
	 	The date that is four months after the First Expansion
Premises Commencement Date.
	 	 	 	 	 
	Art. 2.5	 	
Second Expansion Premises:
	 	11,102 square feet of Rentable Area on the 1st floor of
the Building, substantially as shown on the Lease Plan,
Exhibit 2.
	 	 	 	 	 
	 	 	
Second Expansion Premises Commencement Date:
	 	May 1, 2007, as such date may be adjusted in accordance
with Article 2.5.
	 	 	 	 	 
	 	 	
Second Expansion Premises Rent Commencement Date:
	 	The date that is four months after the Second Expansion
Premises Commencement Date.
	 	 	 	 	 
	Art. 2.7	 	
Expansion Option Premises:
	 	36,475 square feet of Rentable Area, comprising the
entire Rentable Area of the 5th floor of the Building,
substantially as shown on the Lease Plan, Exhibit 2.
	 	 	 	 	 
	 	 	
Expansion Option Premises Commencement Date:
	 	May 1, 2008, as such date may be adjusted in accordance
with Article 2.7.
	 	 	 	 	 
	 	 	
Expansion Option Premises Rent Commencement Date:
	 	The date that is four months after the Expansion Option
Premises Commencement Date.
	 	 	 	 	 
	Art. 2.8	 	
Potential Available Space:
	 	An area comprising the entire Rentable Area of the 2nd,
3rd and 4th floors, and the remainder of the 1st floor
of the Building (i.e., excluding the Second Expansion
Premises), substantially as shown on the Lease Plan,
Exhibit 2.
	 	 	 	 	 
	Art. 4.1	 	
Term Commencement Date:
	 	December 1, 2003, as such date may be adjusted in
accordance with Article 4.1.
	 	 	 	 	 
	Art. 3.1	 	
Rent Commencement Date:
	 	The date that is six months after the Term Commencement
Date.
	 	 	 	 	 
	Art. 3.2	 	
Termination Date:
	 	The date immediately prior to the fifteenth (15th)
anniversary of the Rent Commencement Date, except that
if the Rent Commencement Date does not occur on the
first day of a calendar month, the Termination Date
shall be the last day of the month in which such
fifteenth anniversary occurs.
	 	 	 	 	 
	Art. 6	 	
Yearly Rent for the Initial Premises:
	 	$32.00 per square foot of the Rentable Area of the
Premises per Lease Year, subject to adjustment in
accordance with Article 7. Yearly Rent during the
Extended Term shall be determined in accordance with
Article 3.4 of this Lease.
	 	 	 	 	 
	Art. 2.4	 	
Yearly Rent for the First Expansion Premises:
	 	The amount set forth in Article 2.4(c).

E1-2

 

	 	 	 	 	 
	Art. 2.5	 	
Yearly Rent for the Second Expansion Premises:
	 	The amount set forth in Article 2.5(c).
	 	 	 	 	 
	Art. 2.7	 	
Yearly Rent for the Expansion Option Premises:
	 	The amount determined pursuant to Article 2.7(f).

	 	 	 	 	 
	Art. 2.8	 	
Yearly Rent for the Potential Available Space:
	 	The amount determined pursuant to the applicable provisions of Article 2.8.
	 	 	 	 	 
	Art. 6.1	 	
Monthly Rent Payments:
	 	See Section 6.1(b).

	 	 	 	 	 
	Art. 6.2	 	
Rental Credit:
	 	The amounts specified in Article 6.2 to be applied
against Yearly Rent for the Initial Premises, as more fully set forth in Article 6.

	 	 	 	 	 
	Art 2.1	 	
Storage Rent for the Storage Space:
	 	$18.00 per usable square foot per Lease Year of the Storage Space as provided in Article 2.1(c) below.
	 	 	 	 	 
	Art. 9	 	
Tenant’s Proportionate Share of Operating Costs
and Taxes:	 	 

	 	 	 	 	 
	Initial Premises:	 	 	
36.87	%
	First Expansion Premises:	 	 	
8.98	%
	Second Expansion Premises:	 	 	
3.84	%
	Expansion Option Premises:	 	 	
12.61	%

	 	 	 
	 	 	
All proportionate share percentages are based upon a fraction, the numerator of which is the Rentable Area of
the particular portion of the Premises and the denominator of which is the aggregate Rentable Area of the
Building.
	 	 	 
	Art. 29.3	 	
Broker:         Collectively, Cassidy & Pinkard and Spaulding & Slye Colliers.

E1-3

 

Execution Counterpart

EXHIBIT 2

SITE PLAN OF THE LAND AND PLAN OF INITIAL PREMISES, STORAGE SPACE,

FIRST EXPANSION PREMISES, SECOND EXPANSION PREMISES

AND EXPANSION OPTION PREMISES

[To be attached]

E2-1

 

Execution Counterpart

EXHIBIT 3

RENTABLE AREA SCHEDULE

[Revised BOMA Chart to be attached]

E3-1

 

Execution Counterpart

EXHIBIT 4

SPECIFICATIONS FOR OFFICE CLEANING

	 	 	 	 	 	 	 	 	 
	I.	 	PREMISES: (Includes office areas, stock rooms and conference rooms.)
	 	 	 	 	 	 	 	 	 
	 	 	A.	 	Office areas, pantries, stock rooms, copy rooms and conference rooms	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Daily	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Empty and collect trash, including recyclables (in
kitchens, private lavatories, or elsewhere). Wipe
clean all wastepaper baskets as needed.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Dust furniture, desks, phones, file cabinets, window
ledges, bookcases, etc. (Paper left on desk will not
be disturbed.)	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	3.
	 	Vacuum carpet and brush out carpet edges and corners
(as needed), Dry sweep resilient tile, stone and wood
floors, mop resilient tile, marble, or granite
floors. Spot clean walls, doors and partitions.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	4.
	 	Vacuum and spot clean as necessary all carpeted
stairways, dust handrails.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	5.
	 	Sanitize and wash clean all common area water
fountains and coolers.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	6.
	 	Clean all glass tables and desktops, remove finger
marks, smudges, etc. from glass entrances, private
entrances to offices.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	7.
	 	Turn off lights and check all doors on completion of
work.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Weekly	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Dust windowsills and baseboards.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Mop and wax ceramic tile and resilient tile floors.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	3.
	 	Spot clean walls, doors and partitions.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	4.
	 	Clean glass sidelights.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	5.
	 	Clean metal partitions, light switches, doorframes
and countertops. Polish suite entry door hardware.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Monthly	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Dust picture frames, charts, graphs, etc.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Dust vertical surfaces, walls, doors, etc., and
vacuum as needed.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	3.
	 	Dust moldings, partition ledges, desk sides, louvers
and vents, light fixtures.	 	 

E4-1 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	4.
	 	Vacuum and dust HVAC diffusers.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	5.
	 	Spot clean carpets.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	6.
	 	Recondition resilient tile floors.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	7.
	 	Vacuum upholstered furniture.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Quarterly	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	High dusting; dust vertical surfaces, walls, etc.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Wax and buff tile flooring.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	3.
	 	Clean partitions.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Windows	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Weekly	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Clean window ledges	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Monthly	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Dust and clean venetian blinds.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Periodic	 	 
	 	 	 	 	1.
	 	Clean all windows inside and out a minimum of two (2)
times per year, including window frames.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Clean partition glass as required (approximately ten
(10) times per year).	 	 
	 	 	 	 	 	 	 	 	 
	II.	 	PUBLIC AREAS
	 	 	 	 	 	 	 	 	 
	 	 	A.	 	Lavatories	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Daily	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Clean and disinfect all toilet bowls and toilet
seats, washbowls, urinals, and tiles surrounding
urinals.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Clean and polish all mirrors, power shelves, etc.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	3.
	 	All floors swept and washed.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	4.
	 	Spot wash and/or disinfect all partitions,
countertops, surfaces, glass, fixtures/light
switches.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Twice Daily	 	 

E4-2 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Resupply all dispensers.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Clean wash basins and countertops.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	3.
	 	Empty and clean trash and other dispensers.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	As Needed (not less than Daily):	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Wash or wipe all surfaces in rest rooms.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Typical Lobby and Corridors:	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Daily	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Collect trash.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Vacuum carpet and brush out carpet edges and corners
(as needed). Dry sweep resilient tile, stone and wood
floors, spot clean, damp mop.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	As Needed	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Spot clean walls and doors.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Spot clean carpet.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	C.	 	Elevators:	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Daily	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Wipe down walls.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Wipe down all metal surfaces and devices with damp
cloth.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	3.
	 	Clean flooring including spot cleaning, as required.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	4.
	 	Clean and polish door sills.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	D.	 	Main Lobby:	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Daily	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Dust wood walls.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Wipe down stone walls, as required.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	3.
	 	Mop and buff stone floors.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	4.
	 	Clean entrance mat.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	5.
	 	Clean storefront glass.	 	 

E4-3 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	6.
	 	Clean and polish sills and door pulls at entrances.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	7.
	 	Wipe down all metal surfaces with a damp cloth.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	E.	 	Exterior:	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Daily	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Police all sidewalks.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Empty trash cans; clean ashtrays, etc.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	3.
	 	Wipe down metal surfaces with a damp cloth.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	4.
	 	Spot clean exterior building surfaces, as required.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	As Needed	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Hose down all sidewalks.	 	 

E4-4 

 

Execution Counterpart

EXHIBIT 5

BROKER DETERMINATION OF FAIR MARKET RENTAL VALUE

Wherever in the Lease to which this Exhibit 5 is attached provision is made for
either party to require a Broker Determination, the following procedures and
requirements shall apply:

     1.     Initiating Party’s Request. The initiating party’s notice to the other
party requesting a Broker Determination of the Fair Market Rental Value (as
defined in paragraph 4 below) of the Subject Space (as defined in paragraph 4
below), to be effective, must include the name of a broker selected by the
initiating party, which broker shall be affiliated with a major Washington D.C.
commercial real estate brokerage firm and have at least ten (10) years
experience dealing in properties of a nature and type generally similar to the
Building located in the downtown Washington, D.C. area.

     2.     Responding Party’s Obligations. Within thirty (30) days after receipt
of the initiating party’s notice requesting the Broker Determination, and
stating the name of the broker selected by such party, the responding party
shall give written notice to the initiating party of the responding party’s
selection of a broker having at least the affiliation and experience referred
to above.

     3.     Selection of Third Broker. Within ten (10) days thereafter, the two
(2) brokers so selected shall select a third such broker, also having at least
the affiliation and experience referred to above.

     4.     Rental Value Determination. Within thirty (30) days after the
selection of the third broker, the three (3) brokers so selected, by majority
opinion, shall make a determination of the annual fair market rental value of
the space in the Building then in question (for purposes of this Exhibit 5, the
“Subject Space”). Notwithstanding the foregoing, for establishing the Fair
Market Rental Value of Available Expiring Space, Available Early Termination
Space, or the Fair Market Rental Value of the Premises for the Extended Term,
Fair Market Rental Value shall equal ninety five percent (95%) of the fair
market rental value that would otherwise have been determined, without giving
effect to this sentence. Such annual fair market rental value determination
shall take into account all relevant factors, including without limitation (a)
the terms and conditions of this Lease such as, for example, but without
limitation, the term the Subject Space is to be occupied by Tenant pursuant to
the Lease, the “net” nature of the operating costs and real estate tax
provisions of the Lease (i.e. absence of a “base year”), the provisions with
respect to Tenant electricity, whether or not the “Rental Escalation” provision
of Article 7 of the Lease will apply thereto and the existence (if any) of any
prescribed “free rent” period applicable thereto, (b) any economic concessions
then being granted by landlords to tenants in connection with comparable lease
transactions (and taking into account, if applicable, whether comparable
transactions are term extensions) and (c) the then as-is condition of the
Subject Space (including, without limitation, whether or not it is then
separately demised). The brokers shall advise Landlord and Tenant in writing
by the expiration of said thirty (30) day period of the annual fair market
rental value for the Subject Space, which as so determined shall be referred to
as the “Fair Market Rental Value”.

     5.     Resolution of Broker Deadlock. If the Brokers are unable to agree at
least by majority on a determination of annual fair market rental value, then
the brokers shall send a notice to Landlord and Tenant by the end of the thirty
(30) day period for making said determination setting forth their individual
determinations of annual fair market rental value, and the highest such
determination and the lowest such determination shall be disregarded and the
remaining determination shall be deemed to be the determination of annual fair
market rental value and shall be referred to as the Fair Market Rental Value of
the Subject Space.

E5-1

 

     6.     Costs. Each party shall pay the costs and expenses of the broker
selected by it and each shall pay one half (1/2) of the costs and expenses of
the third broker.

     7.     Failure to Select Broker or Failure of Broker to Serve. If the
responding party shall not have designated a broker within the time period
provided therefor above, then the initiating party’s broker shall alone make
the determination of the Fair Market Rental Value in writing to Landlord and
Tenant within thirty (30) days after the expiration of the responding party’s
right to designate a broker hereunder. If Tenant and Landlord have both
designated brokers but the two brokers so designated do not, within a period of
fifteen (15) days after the appointment of the second broker, agree upon and
designate the third broker willing so to act, Tenant, Landlord or either broker
previously designated may request the local office of Washington D.C.
Association of Realtors to designate the third broker willing so to act and a
broker so appointed shall, for all purposes, have the same standing and powers
as though he had been seasonably appointed by the brokers first appointed. In
case of the inability or refusal to serve of any person designated as a broker,
or in case any broker for any reason ceases to be such, a broker to fill such
vacancy shall be appointed by Tenant, Landlord, the brokers first appointed or
the said Washington D.C. Association of Realtors, as the case may be, whichever
made the original appointment, or if the person who made the original
appointment fails to fill such vacancy, upon application of any broker who
continues to act, and any broker so appointed to fill such vacancy shall have
the same standing and powers as though originally appointed.

E5-2

 

Execution Counterpart

EXHIBIT 6

FORM OF LETTER OF CREDIT

	 	 	 	 	 
	
BENEFICIARY:
	 	ISSUANCE DATE:	 	 
	
2445 M Street Property LLC	 	 	 	 
	
c/o Beacon Capital Partners, LLC
	 	 	 	, 2003
	
One Federal Street	 	
	 	 
	
Boston, MA 02110	 	 	 	 
	 	 	IRREVOCABLE STANDBY	 	 
	 	 	LETTER OF CREDIT NO.	 	 
	 	 	 	 	 
	
ACCOUNTEE/APPLICANT:
	 	MAXIMUM/AGGREGATE	 	 
	
[TENANT NAME]
	 	CREDIT AMOUNT:_____________	 	 
	 	 	USD_____________	 	 

GENTLEMEN:

     We hereby establish our irrevocable letter of credit in your favor for
account of the applicant up to an aggregate amount not to exceed           
      US Dollars ($____) available by your draft(s) drawn
on ourselves at sight accompanied by:

     Your statement, signed by a purportedly authorized officer/official certifying
that the Beneficiary is entitled to draw upon this Letter of Credit (in the
amount of the draft submitted herewith) pursuant to the Lease (the “Lease”)
dated_______ by and between 2445 M Street Property LLC, as Landlord,
and________, as Tenant.

     Draft(s) must indicate name and issuing bank and credit number and must be
presented at this office.

     You shall have the right to make partial draws against this Letter of
Credit, from time to time.

     Funds will be made available to Beneficiary no later than the second day
following the day that a sight draft and required statement are presented by
Beneficiary.

     The Beneficiary’s rights under this Letter of Credit are transferable in
its entirety (but not in part) and only Merrill Lynch Bank USA is authorized to
act as the transferring bank. We shall not recognize any transfer of this
Letter of Credit until this Original Letter of Credit together with any
amendments, a signed and completed Transfer Form in the form attached hereto as
Attachment A, and payment of our standard transfer fee is received by us.
Under no circumstances shall this Letter of Credit be transferred to any person
or entity with which U.S. persons or entities are prohibited from conducting
business under U.S. Foreign Asset Control regulations and other applicable U.S.
laws and regulations. Transfer fees are for the account of the applicant.

     This Letter of Credit shall expire at our office on________ , 2004
(the “Stated Expiration Date”). It is a condition of this Letter of Credit
that the Stated Expiration Date shall be deemed automatically extended without
amendment for successive one (1) year periods from such Stated Expiration

E6-1

 

Date,
unless at least forty-five (45) days prior to such Stated Expiration Date (or
any anniversary thereof)
we shall notify you and the Accountee/Applicant in writing by registered mail
(return receipt) or overnight courier service that we elect not to consider
this Letter of Credit extended for any such additional one (1) year period. In
addition to the foregoing, we understand and agree that you shall be entitled
to draw upon this Letter of Credit as set forth above in the event that we
elect not to renew this Letter of Credit and, in addition, you provide us with
a dated statement purportedly signed by Beneficiary’s officers stating that the
Applicant has failed to provide you with an acceptable substitute irrevocable
standby letter of credit in accordance with the terms of the above-referenced
Lease.

     Except as otherwise expressly stated herein, this Letter of Credit is
subject to the “Uniform Customs and practice for Documentary Credits,
International Chamber of Commerce, Publication No. 500 (1993 Revision)”.

     We hereby agree with you that drawings made under and in compliance with
the terms and conditions of this Letter of Credit will be duly honored if
presented to use at our office as stated above, in person or by overnight
courier, not later than 4:00 p.m. MST on or before the then current expiration
date.

MERRILL LYNCH BANK USA

	 	 	 	 
	BY:	 	 	 
	 	 	

	 
	TITLE:	 	 	 
	 	 	

	 

E6-2

 

FORM OF TRANSFER

The undersigned, a duly authorized officer of the beneficiary of Letter of
Credit No.______ (the “Letter of Credit”) dated______ irrevocably
instructs Merrill Lynch Bank USA as issuer of the Letter of Credit, as follows:

	1.	 	For value received, the undersigned beneficiary irrevocably transfers to
______ (name of transferee),________ (address
of transferee) all rights of the undersigned beneficiary under the Letter
of Credit. The transferee is the assignee or has succeeded the
undersigned.
	 
	2.	 	By this transfer, all rights of the undersigned beneficiary in the Letter
of Credit are transferred to the transferee, and the transferee shall from
the date of this instruction have sole rights as beneficiary of the Letter
of Credit including sole rights relating to any amendments, whether
increases or extensions or other amendments and whether now existing or
hereafter made. All amendments are to be advised direct to the transferee
without necessity of any consent of, or notice to, the undersigned
beneficiary; provided, however, that no rights shall be deemed to have
been transferred to the transferee until such transfer complies with the
requirements of the Letter of Credit pertaining to transfers.
	 
	3.	 	The Letter of Credit is returned with this instruction, and in accordance
with the Letter of Credit the undersigned asks that this transfer be
effective and that you transfer the same to the transferee or that, if so
requested by the transferee, you issue a new irrevocable Letter of Credit
in favor of the transferee with provisions consistent with the Letter of
Credit.
	 
	4.	 	Your signature below must be guaranteed and witnessed by an authorized
officer of your bank.

	 	 	 	 
	Dated:	 	 	 
	 	 	

	 
	 	 	 	 
	
	 
	(Name of Transferor)	 
	 	 	 	 
	By:	 	 	 
	 	 	

	 
	 	 	 
	Title:	 	 	 
	 	 	

	 
	 	 	 
	Signature Guarantee by Your Bank:
	 	 	 	 
	By:	 	 	 
	 	 	

	 
	 	 	 	 
	Title:	 	 	 
	 	 	

	 

E6-3

 

Execution Counterpart

EXHIBIT 7 -A

DESCRIPTION OF LANDLORD’S RENOVATION WORK

	 	1.	 	Entrance Canopy: The existing main entrance canopy will be
replaced with a new lighted glass and steel canopy.
	 
	 	2.	 	Arcade: The arcade will receive new pendant lighting, and the
storefronts will be repaired, if required, and repainted on the first
floor.
	 
	 	3.	 	Elevator Cabs, Call Buttons, ADA Signage: The elevator cabs will
be renovated to include architectural wood panels on the ceiling and
rear wall with indirect lighting emitting from behind. The side walls
will be glass with white laquer painted on the back. The elevator
call buttons in the cabs will be modified and/or relocated to meet ADA
requirements. Floor call buttons will be modified and/or relocated if
required to comply with ADA requirements.
	 
	 	4.	 	Main Lobby: The lobby upgrades include floating ceilings in the
first and second floor elevator lobbies, new lighting, architectural
wood panels, the existing polished brass will be refinished to satin
finish, a new security desk and building directory and the elevator
call buttons will be modified to meet ADA requirements. The new
security desk will be installed in a new location as indicated on the
floor plan and will be relocated to the opposite side of the lobby, or
back to its present location in the middle of the lobby, prior to the
Rent Commencement Date applicable to the Second Expansion Premises so
as not to interfere with the entry to the Second Expansion Premises.
	 
	 	5.	 	Fitness Center: The fitness center will be expanded and remodeled
to include new exercise equipment, shower and locker rooms. The shower
and locker rooms will both be ADA compliant. All finishes and fixtures
will be consistent with a first class office building located in the
West End of Washington, D.C.

Also attached hereto, comprising a portion of this Exhibit 7-A, is a series of
slides prepared by Gensler, dated August 8, 2003, describing the contemplated
Landlord’s Renovation Work.

E7-A-1

 

Execution Counterpart

EXHIBIT 7-B

DESCRIPTION OF LANDLORD’S PRE-OCCUPANCY WORK

Initial Premises:

	 	1.	 	Fire Alarm Panel, Riser, Core Protection, and Fire Control Room:
The existing fire alarm system will be upgraded to meet BOCA and other
applicable codes. A fire control room will be constructed on the first
floor east of the main entrance. The fire alarm system will include
sufficient capacity to accommodate and monitor new Tenant devices with
sufficient main panel and floor panel capacity to accommodate Tenant’s
reasonable needs.
	 
	 	2.	 	Sprinkler Pump and Riser: A new fire pump and modified sprinkler
risers will be designed and installed to include all sprinkler water
flow and tamper switches, fire pump, and connections to Tenant’s
sprinkler system within the Initial Premises to be stubbed at the
Building core. The new sprinkler system will be designed to
accommodate Tenant’s layout in accordance with applicable codes for
office use, a minimum of one head per every 125 usable square feet.
Landlord will install a complete and operational sprinkler system in
the restrooms, telephone closets, electrical rooms and janitor’s
closets on floors 6, 7, and 8.
	 
	 	3.	 	Emergency Generator: The emergency generator will be replaced with
a larger generator to serve the additional life and safety systems.
	 
	 	4.	 	Core Restrooms: There are presently four existing restrooms per
floor on floors 6, 7 and 8, two women’s and two men’s restrooms. The
Landlord will combine the four restrooms to make two larger restrooms
per floor, one women’s and one men’s. All of the finishes and fixtures
will be typical of a class “A” office building located in the West End
of Washington, DC.
	 
	 	5.	 	Check Meters: New check meters will be installed on the existing
electrical panels serving floors 6, 7, and 8.
	 
	 	6.	 	Elevator Call Buttons: The elevator call buttons located in the
elevator lobbies of floors 1, 6, 7, and 8 will be modified to meet ADA
requirements.
	 
	 	7.	 	ADA Signage: All signage located in the building common areas,
core areas, and all elevator door frames on floors 6, 7, and 8 will
meet current ADA requirements and will be coordinated with Tenant’s
Initial Work schedule.
	 
	 	8.	 	Base Building HVAC Upgrade: Upgrade of base building HVAC system
to achieve the standard for outside air ventilation described in
Article 8.4(c).

First Expansion Premises :

	 	1.	 	Core Restrooms: There are presently four existing restrooms on the
ninth floor, two women’s and two men’s restrooms. The Landlord will
combine the four restrooms to make two larger restrooms, one women’s
and one men’s. All of the finishes and fixtures will be typical of a
class “A” office building located in the West End of Washington, DC.
	 
	 	2.	 	Check Meters: New check meters will be installed on the existing
electrical panels serving the ninth floor.

E7-B-1

 

	 	3.	 	Fire Alarm Panel: The fire alarm system on the ninth floor will
include sufficient capacity to accommodate and monitor new Tenant fire
and life safety components, including speakers, strobes and smoke
detectors, with sufficient main panel and floor panel capacity to
accommodate Tenant’s reasonable needs.
	 
	 	4.	 	Sprinkler System: The sprinkler system will be installed on the
ninth floor to include modified sprinkler risers designed and installed
to include all sprinkler water flow and tamper switches, and
connections to Tenant’s sprinkler system within the First Expansion
Premises to be stubbed at the Building core. The new sprinkler system
will be designed to accommodate Tenant’s layout in accordance with
applicable codes for office use, a minimum of one head per every 125
usable square feet. Landlord will install a complete and operational
sprinkler system in the restrooms, telephone closets, electrical rooms
and janitor’s closets on the ninth floor.
	 
	 	5.	 	Elevator Call Buttons: The elevator call buttons located in the
elevator lobbies of the ninth floor will be modified to meet ADA
requirements.
	 
	 	6.	 	ADA Signage: All signage located in the building common areas,
core areas, and all elevator door frames on the ninth floor will meet
current ADA requirements and will be coordinated with Tenant’s First
Expansion Work schedule.
	 
	 	7.	 	Base Building HVAC Upgrade: Upgrade of base building HVAC system
to achieve the standard for outside air ventilation described in
Article 8.4(c).

Second Expansion Premises :

	 	1.	 	Check Meters: New check meters will be installed on the existing
electrical panels serving the First floor.
	 
	 	2.	 	Fire Alarm Panel: The fire alarm system on the first floor will
include sufficient capacity to accommodate and monitor new Tenant fire
and life safety components, including speakers, strobes and smoke
detectors, with sufficient main panel and floor panel capacity to
accommodate Tenant’s reasonable needs.
	 
	 	3.	 	Sprinkler System: The sprinkler system will be installed on the
first floor to include modified sprinkler risers designed and installed
to include all sprinkler water flow and tamper switches, and
connections to Tenant’s sprinkler system within the Second Expansion
Premises to be stubbed at the Building core. The new sprinkler system
will be designed to accommodate Tenant’s layout in accordance with
applicable codes for office use, a minimum of one head per every 125
usable square feet. Landlord will install a complete and operational
sprinkler system in the telephone closets, electrical rooms and
janitor’s closets on the first floor, as well as in such portions of
the public areas of the first floor as may be required by law.
	 
	 	4.	 	Elevator Call Buttons: The elevator call buttons located in the
elevator lobbies of the first floor will be modified to meet ADA
requirements.
	 
	 	5.	 	ADA Signage: All signage located in the building common areas,
core areas, and all elevator door frames on the first floor will meet
current ADA requirements and will be coordinated with Tenant’s Second
Expansion Work schedule.

E7-B-2

 

	 	6.	 	Main Lobby: The security desk and feature wall will be relocated
to the other side of the main lobby to accommodate the new entrance to
the Second Expansion space.
	 
	 	7.	 	Base Building HVAC Upgrade: Upgrade of base building HVAC system
to achieve the standard for outside air ventilation described in
Article 8.4(c).

Expansion Option Premises :

	 	1.	 	Core Restrooms: There are presently four existing restrooms on the
fifth floor, two women’s and two men’s restrooms. The Landlord will
combine the four restrooms to make two larger restrooms, one women’s
and one men’s. All of the finishes and fixtures will be typical of a
class “A” office building located in the West End of Washington, DC.
	 
	 	2.	 	Check Meters: New check meters will be installed on the existing
electrical panels serving the fifth floor.
	 
	 	3.	 	Fire Alarm Panel: The fire alarm system on the fifth floor will
include sufficient capacity to accommodate and monitor new Tenant fire
and life safety components, including speakers, strobes and smoke
detectors, with sufficient main panel and floor panel capacity to
accommodate Tenant’s reasonable needs.
	 
	 	4.	 	Sprinkler System: The sprinkler system will be installed on the
fifth floor to include modified sprinkler risers designed and installed
to include all sprinkler water flow and tamper switches, and
connections to Tenant’s sprinkler system within the Expansion Option
Premises to be stubbed at the Building core. The new sprinkler system
will be designed to accommodate Tenant’s layout in accordance with
applicable codes for office use, a minimum of one head per every 125
usable square feet. Landlord will install a complete and operational
sprinkler system in the restrooms, telephone closets, electrical rooms
and janitor’s closets on the fifth floor.
	 
	 	5.	 	Elevator Call Buttons: The elevator call buttons located in the
elevator lobbies of the fifth floor will be modified to meet ADA
requirements.
	 
	 	6.	 	ADA Signage: All signage located in the building common areas,
core areas, and all elevator door frames on the fifth floor will meet
current ADA requirements and will be coordinated with Tenant’s
Expansion Option Work schedule.
	 
	 	7.	 	Base Building HVAC Upgrade: Upgrade of base building HVAC system
to achieve the standard for outside air ventilation described in
Article 8.4(c).

E7-B-3

 

Execution Counterpart

EXHIBIT 7-C

DESCRIPTION OF BASE BUILDING CORE AND SHELL

	1.	 	Structure - Reinforced concrete frame structure is designed to support
100 lbs / sq. ft (80 lbs / sq. ft. live load and 20 lbs / sq. ft. dead
load) capacity throughout the Premises. Columns are spaced primarily on a
twenty foot by twenty foot grid.
	 
	2.	 	Exterior –An electrically operated metal overhead door is provided at the
parking garage entrance off of 25th Street with electronic card key
security access.
	 
	3.	 	Slab to Slab Heights – The top of slab to underside of slab height is 9
feet, 8 inches.
	 
	4.	 	HVAC System.

	 	a.	 	The HVAC system features a variable air volume (VAV) single
duct system. Supply air is from two central, built-up air handlers
with chilled water coils located in the mechanical penthouse. AHV-1
includes an 115,000 CFM centrifugal supply fan and 110,000 CFM
centrifugal return fan. AHV-2 includes a 103,000 CFM centrifugal
supply fan and a 99,000 CFM centrifugal return fan.
	 
	 	b.	 	Chilled water to the central air handlers is supplied by two
centrifugal chillers, one 320 ton and one 280 ton, also located in
the mechanical penthouse.
	 
	 	c.	 	Condenser water to the chillers is supplied from two 325-ton
forced draft counter-flow cooling towers at the east end of the
mechanical penthouse.
	 
	 	d.	 	Chilled water is pumped to the air handling units via two 650
GPM chilled water pumps and two 975 GPM condenser water pumps.
	 
	 	e.	 	VAV terminal units control cool air distribution to the
office space. There are approximately 77 perimeter VAV terminal
units (with electric heat) on each floor serving an average area of
approximately 150 square feet per VAV. Each floor also contains
approximately 23 VAV terminal units that serve interior areas.
	 
	 	f.	 	Space heating is provided by electric resistance duct heaters
(re-heaters) at perimeter zones, local baseboard heaters and unit
heaters. Additionally, there are 350 KW outside air pre-heaters at
each air handler.
	 
	 	g.	 	A constant volume, single duct system provides HVAC to the
first floor. A 160 ton cooling tower supplies condenser water to
self-contained water source heat pumps and air conditioning units.
	 
	 	h.	 	Water is pumped from the cooling tower to the units via two
285 GPM pumps in addition to a back-up pump.
	 
	 	i.	 	A separate cooling tower with supplemental condenser water
risers serving each floor is available for use by the Tenant.

E7-C-1

 

	5.	 	Electrical System – The switchgear room is located on the C-1 level of
the parking garage. The incoming system voltage is 277 / 480 VOLT, three
phase, four wire. Two 4,000 AMP
switchboards serve the office building and mechanical equipment.
	 
	 	 	Energy efficiency is provided by on / off control of limited common area
lighting controlled by time clocks and occupancy sensors. Lighting has
been converted to energy efficient electronic ballasts with T-8
fluorescent lamps.
	 
	6.	 	Wet Stacks – A minimum of two wet stacks exist, located on each floor not
adjacent to core containing waste, vent and water lines for Tenant
connection with valved connections for cold water.
	 
	7.	 	Window coverings – Landlord to provide existing one-inch slat venetian
blinds at all exterior windows.
	 
	8.	 	Electronic Security Access System – A centrally monitored electronic
proximity card reader security access system is installed in the Building
to control perimeter access to all doors, elevator cabs, and parking
garage entrance. Landlord will make reasonable attempts to accommodate
Tenant’s needs with respect to Tenant connections of electronic security
access devices to secure the Premises, which would be installed only at
Tenant’s sole cost and expense. System will provide for individual
elevator cab floor lock-off capability.

E7-C-2

 

Execution Counterpart

EXHIBIT 8

Intentionally Omitted

E8-1

 

Execution Counterpart

EXHIBIT 9

ROOFTOP PLAN SHOWING THE ANTENNA AREA

E9-1

 

Execution Counterpart

EXHIBIT 10

RULES AND REGULATIONS

     1.     Neither the whole nor any part of the sidewalks, plaza areas,
entrances, passages, courts, elevators, vestibules, stairways, corridors or
halls of the Building shall be obstructed or encumbered by any tenant or used
for any purpose other than ingress and egress to and from the premises of such
tenant.

     2.     No awning, canopy, sign or other projection shall be attached to the
outside walls or windows of the Building without Landlord’s prior written
consent. No curtain, blind, shade, or screen (other than those furnished by
Landlord as building standard) shall be attached to, hung in or used in
connection with any exterior window or door of the premises of any tenant.

     3.     No tenant shall deface any part of the Building.

     4.     No tenant shall make, or permit to be made, any unseemly or disturbing
noises (whether by the use of any musical instrument, radio, television or
other audio device) or allow any unsavory odors to emanate from its space, nor
shall any tenant annoy, disturb or interfere with other tenants or occupants of
the Building or neighboring buildings.

     5.     No change shall be made to door locks without prior notice to Landlord
and provided that Tenant delivers copies of keys for such locks. Landlord’s
prior written consent. Each tenant must upon the termination of its tenancy
restore to Landlord all keys to offices and toilet rooms either furnished to,
or otherwise procured by, such tenant. In the event of the loss of any keys
during the Term, Tenant shall pay Landlord the reasonable cost of replacement
keys.

     6.     Landlord reserves the right to control and operate the public portions
of the Building and the public facilities, as well as facilities furnished for
the common use of the tenants, in such manner as it deems best for the benefit
of the tenants generally, including, without limitation, the right to exclude
from the Building, except during the hours the Building is open to the public,
all persons who do not present suitable identification satisfactory to
Landlord.

     7.     Each tenant, before closing and leaving its premises at any time, shall
see that all suite entrance doors are locked.

     8.     No premises shall be used, or permitted to be used, for lodging or
sleeping or for any immoral or illegal purpose.

     9.     Canvassing, soliciting and peddling outside of the Premises in the
Building are prohibited.

     10.     There shall not be used in the Building by any tenant or their agents
or contractors, in the delivery or receipt of merchandise, freight or other
matter, any hand trucks or other means of conveyance, except those equipped
with rubber tires, rubber side guards, and such other safeguards as Landlord
may require.

     11.     No animals of any kind (except seeing-eye dogs) shall be brought into
or kept about the Building by any tenant.

E10-1

 

     12.     No vending machines shall be permitted to be placed or installed in
any part of the Building or premises by any tenant without prior notice to
Landlord. Landlord reserves the right to place or install vending machines in
any of the common areas of the Building.

     13.     Bicycles, motorcycles or any other type of vehicle shall not be
brought into the lobby or elevators of the Building or into the Premises of any
tenant. Landlord shall make space available in the garage for parking
bicycles.

     14.     Except in connection with the performance of Tenant’s Work, which is
governed by Article 4 of this Lease, Tenant will refer all contractors,
contractor’s representatives and installation technicians, rendering any
services on or to the premises for tenant, to Landlord before performance of
any service. This provision shall apply to all work performed in the Building,
including installation of telephones, telegraph equipment, electrical devices
and attachments and any installation of any nature affecting floors, walls,
woodwork, trim, windows, ceilings, equipment or any other physical portion of
the Building.

     15.     No trash or other objects shall be placed in the public corridors or
sidewalks of the Building.

     16.     Tenant is not allowed to lock overnight the lockers in the Locker Room
(C1 Level).

     17.     Tenant may be allowed to hold a catered event from time to time on the
Roof Terrace, however, Tenant is required to first provide proof of vendor’s
current Certificate of Insurance to the Management Office. Any and all
expenses related to cleaning and disposal of refuse after an event will be at
the sole cost and expense of the Tenant.

     18.     No Tenant shall be allowed to consume or provide any type of alcoholic
beverage in the Roof Terrace, unless Tenant shall have provided a certificate
evidencing host liquor liability insurance coverage as required in Article
15.1.

     19.     At no time shall Tenant exceed the Maximum Occupancy permitted by Life
Safety Codes.

     20.     Landlord reserves the right, at any time and from time to time, to
rescind, alter, or waive, in whole or in part, or to add to any of these Rules
and Regulations when it is deemed necessary, desirable or proper, in Landlord’s
judgment, for its best interest or for the best interests of all tenants.

     21.     Violations of these Rules and Regulations, or any amendments thereof
or additions thereto, constitute a default of this Lease.

E10-2

 

Execution Counterpart

EXHIBIT 11

FORM OF SNDA

SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT

     THIS AGREEMENT is made and entered into as of the_______ day of________
200_, by and among_______ (“Tenant”) and NEW YORK LIFE
INSURANCE COMPANY, a New York mutual insurance company (“Lender”), whose
principal address is 51 Madison Avenue, New York, New York, 10010 and
_______(“Borrower”).

RECITALS:

     A.     Lender has made a loan (the “Loan”) to Borrower which is secured by a
Deed of Trust, Assignment of Leases and Rents and Security Agreement (the
“Mortgage”) on the real property legally described in Exhibit “A” attached
hereto (the “Premises”);

     B.     Tenant is the present lessee under a lease dated as of
________ made by Landlord, demising a portion of the Premises (said
lease and all amendments now or hereafter executed with respect thereto being
referred to as the “Lease”);

     C.     The Lease is presently subordinate to the lien of the Mortgage; and

     D.     The parties desire to affirm the subordination of the Lease to the
Mortgage and to set forth herein the agreement of Tenant and Lender regarding
the relationship between the Lease and the Mortgage.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

AGREEMENTS:

     1.     Subordination. The Lease, and the rights of Tenant in, to and under
the Lease and the Demised Premises, are and continue to be subject and
subordinate to the lien of the Mortgage and to any modification, reinstatement,
extension, renewal, supplement, consolidation or replacement thereof as well as
any advances or re-advances with interest thereon and to any other mortgages or
deeds of trust on the Premises which may hereafter be held by Lender.

     2.     Tenant Not to Be Disturbed. In the event it should become necessary to
foreclose the Mortgage or Lender should otherwise come into possession of title
to the Premises, Lender will not join Tenant in summary or foreclosure
proceedings unless required by law in order to obtain jurisdiction, but in such
event no judgment foreclosing the Lease will be sought, and Lender will not
disturb the use and occupancy of Tenant under the Lease so long as Tenant is
not in default under any of the terms, covenants or conditions of the Lease
after applicable notice and cure periods.

E11-1

 

     3.     Tenant to Attorn to Lender. Tenant agrees that in the event of a
foreclosure of the Mortgage or upon a transfer of the Premises pursuant to a
deed in lieu of foreclosure, it will attorn to the purchaser (including Lender)
as the landlord under the Lease. The purchaser by virtue of such foreclosure
or deed in lieu of foreclosure shall be deemed to have assumed and agreed to be
bound, as substitute landlord, by the terms and conditions of the Lease until
the resale or other disposition of its interest by such purchaser, except that
such assumption shall not be deemed of itself an acknowledgment by such
purchaser of the validity of any then existing claims of Tenant against any
prior landlord (including Landlord). All rights and obligations under the
Lease shall continue as though such foreclosure proceedings had not been
brought, except as aforesaid. Tenant agrees to execute and deliver to any such
purchaser such further assurance and other documents, including a new lease
upon the same terms and conditions of the Lease, confirming the foregoing as
such purchaser may reasonably request. Tenant waives the provisions (i)
contained in the Lease or any other agreement relating thereto and (ii) of any
statute or rule of law now or hereafter in effect which may give or purport to
give it any right or election to terminate or otherwise adversely affect the
Lease and the obligations of Tenant thereunder by reason of any foreclosure
proceeding.

     4.     Limitations. If Lender or such other purchaser obtains possession,
Lender or purchaser shall be bound to Tenant under all of the terms and
conditions of the Lease and Tenant shall have all of the same remedies that
Tenant might have had under the Lease against Landlord; provided however that
Lender or such purchaser shall not be:

	 	(a)	 	liable for any act or omission of any prior landlord
(including Landlord);
	 
	 	(b)	 	obligated to cure any defaults of any prior landlord
(including Landlord) which occurred prior to the time that Lender
or such other purchaser succeeded to the interest of such prior
landlord under the Lease;
	 
	 	(c)	 	subject to any offsets or defenses which Tenant may be
entitled to assert against any prior landlord (including Landlord);
	 
	 	(d)	 	bound by any payment of rent or additional rent by Tenant
to any prior landlord (including Landlord) for more than one month
in advance;
	 
	 	(e)	 	bound by any amendment or modification of the Lease made
without the written consent of Lender or such other purchaser,
which consent shall not be unreasonably withheld; or
	 
	 	(f)	 	liable or responsible for, or with respect to, the
retention, application and/or return to Tenant of any security
deposit paid to any prior landlord (including Landlord), whether or
not still held by such prior landlord, unless and until Lender or
such other purchaser has actually received for its own account as
landlord the full amount of such security deposit.

     5.     Acknowledgment of Assignment of Lease and Rent. Tenant acknowledges
that it has notice that the Lease and the rent and all other sums due
thereunder have been assigned or are to be assigned to Lender as security for
the Loan secured by the Mortgage. In the event that Lender notifies Tenant of
a default under the Mortgage and demands that Tenant pay its rent and all other
sums due under the Lease to Lender, Tenant agrees that it will honor such
demand and pay its rent and all other sums due under the Lease directly to
Lender or as otherwise required pursuant to such notice. By its execution
hereof, Borrower expressly consents to the foregoing.

     6.     Limited Liability. Tenant acknowledges that in all events, the
liability of Lender and any purchaser shall be limited and restricted to their
interest in the Premises and shall in no event exceed such interest.

E11-2

 

     7.     Lender’s Right to Notice of Default and Option to Cure. Tenant will
give written notice to Lender of any default by Landlord under the Lease by
mailing a copy of the same by certified mail, postage prepaid, addressed as
follows (or to such other address as may be specified from time to time by
Lender to Tenant):

	 	 	 
	To Lender:	 	
New York Life Insurance Company
	 	 	
51 Madison Avenue
	 	 	
New York, New York 10010
	 	 	
Attn.: Real Estate Department
	 	 	
Real Estate Vice President - Loan
	 	 	
Administration
	 	 	
Loan No.:__________

Upon such notice, Lender shall be permitted and shall have the option, in its
sole and absolute discretion, to cure any such default during the period of
time during which the Landlord would be permitted to cure such default, but in
any event Lender shall have a period of thirty (30) days after the receipt of
such notification to cure such default; provided, however, that in the event
Lender is unable to cure the default by exercise of reasonable diligence within
such 30-day period, Lender shall have such additional period of time as may be
reasonably required to remedy such default with reasonable dispatch.

     8.     Successors and Assigns. The provisions of this Agreement are binding
upon and shall inure to the benefit of the heirs, successors and assigns of the
parties hereof.

     9.     Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.

     10.     Governing Law. This Agreement shall be construed and enforced
according to the law of the state in which the Premises are located, other than
such law with respect to conflicts of law.

     IN WITNESS WHEREOF, the parties hereto have executed these presents as of
the day and year first above written.

[SIGNATURE PAGES TO FOLLOW]

E11-3

 

IF TENANT IS A CORPORATION, USE THIS SIGNATURE PAGE

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	TENANT
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	

	[SEAL]	 	 	 	 	 	a(n)                corporation
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	 	 	Title:
	 	 	 	 	 	 	 	 	 
	STATE OF____________	)	 	 	 	 	 	 	 
	 	 	
)
	 	SS:	 	 	 	 
	COUNTY OF___________ 	)	 	 	 	 	 	 	 

This instrument was acknowledged in said jurisdiction before me this________ day
of________, 200_______, by________ as________ of________.

	 	 	 	 	 	 	 
	
	 	 	 	 	[SEAL]                  	 
	Notary Public	 	 	 	 	 	 
	My commission expires:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	LENDER	 
	 	 	 	 	 	 	 
	[SEAL]	 	 	 	 	 	 
	 	 	 	 	NEW YORK LIFE INSURANCE COMPANY,
	 	 	 	 	a New York mutual insurance company
	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 	 	 	 	 	
	 
	 	 	 	 	 	Name:	 
	 	 	 	 	 	Title:	 
	 	 	 	 	 	 	 
	STATE OF NEW YORK	 	
)	 	 	 	 
	 	 	
) SS:	 	 	 	 
	COUNTY OF NEW YORK	 	
)	 	 	 	 

This instrument was acknowledged in said jurisdiction before me this________ day
of_________, 200________, by_________ as __________ of New York Life Insurance Company.

	 	 	 
	
	 	
[SEAL]
	Notary Public	 	 
	My commission expires:	 	 

E11-4

 

IF BORROWER IS A LIMITED LIABILITY COMPANY, USE THIS SIGNATURE PAGE

The terms of the above Agreement are hereby consented, agreed to and
acknowledged.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	BORROWER
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	Printed Name of Borrower
	 	 	 	 	 	 	a
( )    _________________
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	 	 	Title:
	 	 	 	 	 	 	 	 	 
	STATE OF_______________	
)	 	 	 	 	 	 	 
	 	 	 	)	 SS:	 	 	 	 
	COUNTY OF_____________	
)	 	 	 	 	 	 	 

This instrument was acknowledged in said jurisdiction before me this________ day
of________ , 200________ , by__________ as
________ of_________ .

	 	 	 
	
	 	
[SEAL]
	Notary Public	 	 
	My commission expires:	 	 

E11-5

 

Execution Counterpart

EXHIBIT 12

LEGAL DESCRIPTION OF LAND

All of that certain lot or parcel of land, together with the improvements
thereon, situated, lying and being in the District of Columbia, and being more
particularly described as follows:

Part of Lot 108, Square 24, shown on subdivision plat recorded in the District
of Columbia Surveyor’s Office in Book 175, page 19, and more particularly
described as follows:

	 	 	BEGINNING at the intersection of the north line of M Street, N.W.
(90 feet wide) with the east line of 25th Street, N.W. (90 feet
wide); thence along said east line of 25th Street, North 175.50
feet, record (175.35 feet. measured); thence with the center line
of an alley closed per plat recorded in the District of Columbia
Surveyor’s Office in Book 175, page 11, East 204.02 feet, record
(204.00 feet, measured); thence through aforementioned Lot 108,
South 74.65 feet, record (74.31 feet, measured); thence East 80.01
feet, record (80.00 feet, measured); thence South 100.85 feet,
record (100.38 feet, measured); thence West along aforementioned
North line of M Street, West 284.03 feet, record (S 89 degrees 52’
W 284.00 feet, measured) to the place of beginning.

Said property being now known for assessment and taxation purposes as Lot 871
in Square 24.

Together with the benefit of, and subject to the terms of, the following three
easements:

	1.	 	Easement for pedestrian access and walkway, set forth in Deed dated
September 15, 1983 recorded September 16, 1983 as Instrument No. 29864.
	 
	2.	 	Easement for open space set forth in Deed dated September 15, 1983

recorded September 16, 1983 as Instrument No. 29864.
	 
	3.	 	Easements in favor of Associates as set forth in Agreement of Covenants
and Easements dated March 22, 1985, recorded as Instrument No. 16565.

E12-1

 

Execution Counterpart

EXHIBIT 13

TENANT’S DESIGN DEVELOPMENT PLANS

E13-1

 

Execution Counterpart

EXHIBIT 14-A

ROOFTOP TERRACE RESERVATION RULES

Prior to the commencement of each calendar year the Building manager shall
distribute to tenants of the Building a chart such as is contained in Exhibit
14-B. This chart shall set forth the schedule of Thursday and Friday evenings
of that calendar year on which Wilmer Cutler & Pickering and the Advisory Board
Company (each, a “Designated Party”) shall have rights to reserve the Rooftop
Terrace on an exclusive basis. The Designated Party may reserve either
Thursday or Friday (or, alternatively, another day of the same week) of its
Priority Week by providing the Building manager with written notice of its
reservation no less than thirty (30) days prior to the selected evening. If
either Party fails to exercise its reservation rights within the prescribed
period, then another party may reserve that evening by contacting the Building
manager. The parties may agree to exchange their reserved dates by
coordinating such exchange with the Building manager, who shall take
responsibility for communicating to all Building tenants a calendar of those
evenings on which the Terrace is therefore unavailable to other tenants.

E14A-1

 

Execution Counterpart

EXHIBIT 14-B

2004 ALLOCATION OF ROOFTOP TERRACE EXCLUSIVE RIGHTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	# of	 	 	 	 	 	WCP Priority	 	ABC Priority
	Month	 	Thursdays	 	# of Fridays	 	Weeks	 	Weeks
	
	 	
	 	
	 	
	 	

	April	 	 	5	 	 	 	5	 	 	1st, 3rd	 	2nd, 4th
	May	 	 	4	 	 	 	4	 	 	1st, 3rd	 	2nd, 4th
	June	 	 	4	 	 	 	4	 	 	1st, 3rd	 	2nd, 4th
	July	 	 	5	 	 	 	5	 	 	1st, 3rd	 	2nd, 4th
	August	 	 	4	 	 	 	4	 	 	1st, 3rd	 	2nd, 4th
	September	 	 	5	 	 	 	4	 	 	1st, 3rd	 	2nd, 4th
	October	 	 	4	 	 	 	5	 	 	1st, 3rd	 	2nd, 4th

E14B-1

 

Execution Counterpart

EXHIBIT 15

FORM OF SPECIAL NONDISTURBANCE AGREEMENT

SPECIAL NON-DISTURBANCE
AGREEMENT

     AGREEMENT made as of the______ day of______,______, between
_______, a_______ , having an office
at_______ (“Master Landlord”), The Advisory Board Company,
having an office at 2445 M Street, N.W., Washington, D.C. 20037 (the
“Sublandlord”), and_______, a_______, having an
office at________ (“Subtenant”).

W I T N E S S E T H:

     WHEREAS, Master Landlord is the landlord under a certain lease with
Sublandlord as the tenant of certain premises located at 2445 M Street N.W.,
Washington, D.C., (the “Building”) consisting of approximately________ rentable square feet which premises is more fully described in the
Lease (the “Master Premises”); and

     WHEREAS, Master Landlord leased the Master Premises to Sublandlord,
pursuant to a lease, dated October________, 2003, as amended from time to time (the
“Master Lease”); and

     WHEREAS, by sublease, dated _________, between Sublandlord and Subtenant
(the “Sublease”), Sublandlord desires to sublease to Subtenant [all of] [a
portion of] the Master Premises consisting of approximately________ rentable
square feet of floor area as shown on Schedule A annexed hereto (the “Subleased
Premises”); and

     WHEREAS, Subtenant, Sublandlord and Master Landlord desire to confirm
their understanding with respect to the Sublease and the Master Lease;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, Master Landlord, Sublandlord and Subtenant hereby
covenant and agree as follows:

     1.     Master Landlord agrees that provided and so long as the Non-Disturbance
Conditions (as defined in Paragraph 3 hereof) are satisfied and Subtenant shall
attorn to Master Landlord, then:

     (a)  Subtenant shall not be named or joined as a party defendant in any
action, suit or proceeding which may be instituted by Master Landlord to
terminate the Master Lease by reason of a default or event of default by
Sublandlord under the Master Lease, or in the exercise by Master Landlord of
any right of termination provided therein, unless Subtenant or any person
claiming through or under Subtenant is deemed a necessary party to such action,
suit or proceeding, in which event such party may be so named or joined, but
such naming or joinder shall not otherwise be in derogation of the rights of
Subtenant set forth in this Agreement; and

     (b)  Subtenant shall not be evicted from the Subleased Premises, nor shall
the leasehold estate or possession thereof by Subtenant be terminated by reason
of any default or event of default under the Master Lease by Sublandlord, any
termination by Master Landlord of the Master Lease, or by reason of any
surrender of the Master Premises.

E15-1

 

     2.     If, at any time, Master Landlord shall terminate the Master Lease, then
provided and so long as the Non-Disturbance Conditions (as defined in Paragraph
3 hereof) are satisfied: (i) the Sublease shall not terminate, (ii) Subtenant
shall, by executing this Agreement be deemed to have attorned to and recognized
Master Landlord as Subtenant’s landlord upon the then executory terms and
conditions of the Sublease and as hereinafter provided in this Article 2, and
(iii) Master Landlord shall, by executing this Agreement, be deemed to have
accepted such attornment and recognized Subtenant as Master Landlord’s direct
tenant upon the terms and conditions of the Sublease, subject to the terms and
conditions of this Agreement. Notwithstanding the foregoing, upon such
attornment and recognition, in no event shall Master Landlord be:

		
	 	     (a) liable for any act, omission, breach, default,
misrepresentation, or breach of warranty of Sublandlord, its successors
and/or assigns under the Sublease;
	 
	 	     (b) liable for the return of any security deposit which Subtenant
might have paid to Sublandlord, its successors and/or assigns, under the
Sublease, unless such Security Deposit has been received by Master
Landlord;
	 
	 	     (c) bound by any rent or other payments which Subtenant might have
paid to Sublandlord, its successors and/or assigns, under the Sublease,
unless the same has been received by Master Landlord;
	 
	 	     (d) subject to any offsets or defenses which Subtenant may have
against Sublandlord under the Sublease;
	 
	 	     (e) bound by any amendment or modification of the Sublease made
without Master Landlord’s prior written consent;
	 
	 	     (f) bound by any consent by Sublandlord, its successors and/or
assigns, made without also obtaining Master Landlord’s prior written
consent;
	 
	 	     (g) bound by any provisions of the Sublease for performance,
completion, or payment of any improvements with respect to the Subleased
Premises or for Subtenant’s use and occupancy thereof; and Subtenant
shall have absolutely no right to offset rent due to Master Landlord for
any non-payment of all or any part of any construction or improvement
allowance as set forth in the Sublease.

     3.     The effectiveness of this Agreement is expressly conditioned upon the
satisfaction of the following conditions (collectively the “Non-Disturbance
Conditions”):

	 	(a)	 	The Sublease has not been terminated;
	 
	 	(b)	 	Subtenant is not in default of any of the terms and
conditions of the Sublease beyond the time, if any, permitted
therein to cure such default and provided the default or event of
default for which the Master Lease is terminated is not the result
of any action or circumstance for which Subtenant, its agent,
employee, servant or contractor is responsible; and
	 
	 	(c)	 	Subtenant delivering to Master Landlord within five (5)
business days after notice from Master Landlord that the Master
Lease has terminated or will be terminated within ten (10) business
days following the date of such notice, the security deposit
(“Subtenant’s Security Deposit”), if any, required pursuant to the
terms and conditions of the Sublease.

     4.     Anything in the Sublease to the contrary notwithstanding, undertakings
and agreements made on the part of Master Landlord upon Subtenant’s attornment
to Master Landlord as hereinabove set

E15-2

 

forth are made and intended not for the
purpose of binding Master Landlord personally or the assets of
Master Landlord generally, but are made and intended only to bind Master
Landlord’s interest in the Building, as the same may, from time to time be
encumbered, and no personal liability shall at any time be asserted or
enforceable against Master Landlord or its stockholders, officers or partners
or their respective heirs, legal representatives, successors and assigns on
account of the Sublease. Accordingly, and notwithstanding any other provisions
of the Sublease to the contrary, Subtenant shall look solely to Master
Landlord’s interest in the Building, and not to any other or separate business
or non-business assets of Master Landlord or any partner, shareholder, member,
officer or representative of Landlord, for the satisfaction of any claim
brought by Subtenant against Master Landlord.

     5.     Upon notification by Master Landlord that an Event of Default under
the Master Lease has occurred, Subtenant shall pay, upon receipt of notice from
Master Landlord, all rent and other sums due and payable to Sublandlord under
the Sublease directly to Master Landlord. Sublandlord hereby acknowledges that
Sublandlord hereby waives any right to object to any such notification from
Master Landlord and Subtenant shall direct payment as so required by Master
Landlord, and any failure by Subtenant to make such direct payments under this
Section 3(b) shall, for purposes of Section 3 hereof, be a default under the
Sublease

     6.     Subtenant shall maintain the same insurance required to be carried by
Tenant under the Lease, naming Master Landlord as an additional insured under
Subtenant’s policies of insurance, and Subtenant further agrees to waive
subrogation in favor of Master Landlord to the same extent required of Tenant
under the Lease. Subtenant further agrees to provide a certificate of
insurance which complies with these requirements to Landlord no later than the
earlier of (i) fifteen (15) days following the date hereof or (ii) the date on
which Subtenant, or any party acting through Subtenant, occupies the Premises
for any purpose, including, without limitation, the installation of Subtenant’s
furniture, fixtures or other personal property.

     7.     Nothing herein contained shall be construed to modify, waive, impair or
affect any of the covenants, agreements, terms, provisions or conditions in the
Lease, or to waive any breach thereof, or any rights of Landlord against any
person, firm, partnership, association or corporation liable or responsible for
the performance thereof, or to enlarge or increase Landlord’s obligations under
the Lease, and all covenants, agreements, terms, provisions and conditions of
the Lease are hereby mutually declared to be in full force and effect.

     8.     Subtenant shall not do or permit anything to be done in connection with
Subtenant’s occupancy of the Subleased Premises which would violate any of said
covenants, agreements, terms, provisions and conditions.

     9.     Subtenant agrees that if Subtenant shall become a direct tenant of
Landlord pursuant to the provisions of this Agreement, Landlord shall not be
responsible for the payment of any commissions or fees in connection with such
direct lease, and Tenant and Subtenant jointly and severally agree to indemnify
and hold Landlord harmless from and against any claims, liability, losses or
expenses, including reasonable attorneys’ fees, incurred by Landlord in
connection with any claims for a commission by any broker or agent in
connection with any such direct lease.

     10.     Subtenant agrees that if Subtenant shall become a direct tenant of
Landlord pursuant to the provisions of this Agreement, then effective as of the
date Subtenant so becomes a direct tenant of Landlord, the following provision
shall be deemed added to and shall become part of the Sublease for all
purposes:

		
	 	     Upon a request for consent to assign this Sublease or all or any
part of the Subleased Premises, Sublandlord shall have the option (i) to
grant its consent to such proposed assignment, subletting, (ii) to deny
its consent to such proposed assignment or subletting (but only in
accordance with the terms and conditions of the Sublease), or (iii) to
terminate this Sublease for the balance of the term in accordance with
the provisions of this Section with regard to (a) the

E15-3

 

		
	 	entire Subleased
Premises if an assignment or sublease of the entire Subleased Premises
for substantially the remainder of the term of this Sublease has been
proposed (a “Recapture”) or (b)
the portion of the Subleased Premises proposed to be subleased for
substantially the remainder of the term of this Sublease (a “Partial Full
Term Recapture”) if a sublease of less than all of the Subleased Premises
has been proposed or (c) the portion of the Subleased Premises proposed
to be subleased for the period of time contemplated for such sublease (a
“Partial Limited Recapture”). If Sublandlord exercises its Right of
Recapture or Partial Full Term Recapture: (i) this Lease and the term
hereof shall terminate (a) in its entirety (in the event of a Recapture),
or (b) as to the portion of the Subleased Premises which Subtenant is
proposing to sublease (in the event of a Partial Full Term Recapture), as
of the later of (1) the proposed effective date of such assignment or
sublease, as set forth in Subtenant’s request for consent, or (2) 30 days
after the date Sublandlord received Subtenant’s request for consent; (ii)
Subtenant shall be released (a) from all of its obligations under the
Sublease (in the event of a Recapture) or (b) from its obligations
relating to the proposed subleased portion of the Subleased Premises only
(in the event of a Partial Full Term Recapture), in each case with
respect to the period after the effective date of such termination,
except for any obligations of Subtenant which would otherwise survive the
termination or expiration of this Sublease; (iii) all fixed rent and
other applicable charges shall be prorated to the date of such
termination, and appropriately adjusted if there is only a Partial Full
Term Recapture; (iv) upon such termination date, Subtenant shall
surrender the Subleased Premises (or the applicable portion thereof) to
Sublandlord as though such date were the original expiration date of the
term of this Sublease; and (v) in the case of a Partial Full Term
Recapture, Sublandlord may take all steps necessary to physically
separate the portion of the Subleased Premises subject to such Partial
Recapture from the balance of the Subleased Premises. In the case of a
Partial Limited Recapture, the foregoing shall be applicable except that
upon the expiration of the term of the Partial Limited Recapture,
Landlord will return the space in question to Subtenant for occupancy
under this Sublease, in its then “as is” condition, and the release
referred to above shall no longer be in effect.

     11.     If any provision of this Agreement conflicts with any provision of the
Sublease, then the provisions of this Agreement shall prevail and the Sublease
shall be deemed amended accordingly.

     12.     Any notice or demand which under the terms of this Agreement must or
may be given or made by the parties hereto shall be in writing and shall be
delivered personally or sent by United States certified mail, postage prepaid,
return receipt requested, or by Federal Express or other reputable overnight
carrier, addressed to the respective addresses hereinbefore given. Any party
may designate by notice in writing a new or other address to which such notice
or demand shall thereafter be so given, made or mailed. Any notice given
herein by mail, as aforesaid, shall be deemed given upon the earlier of actual
receipt or refusal of delivery, as evidenced by the receipt therefor.

     13.     This Agreement may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought. This Agreement shall be construed in
accordance with the laws of the District of Columbia.

     14.     The provisions of this Agreement shall be self-operative and no
further instrument shall be necessary to effect the aforementioned attornment,
recognition and subordination. Nevertheless, in confirmation thereof,
Subtenant shall execute and deliver any appropriate documents to confirm such
attornment, recognition and subordination upon request of Master Landlord.

     15.     The covenants and agreements herein contained shall be binding upon
the parties hereto and their successors in interest, shall inure to the benefit
of Master Landlord and its successors in interest, and shall inure to the
benefit of Subtenant and its permitted successors in interest as permitted
strictly in accordance under the provisions of the Sublease relating to
subletting and assigning.

E15-4

 

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.

	 	 	 	 	 
	ATTEST:	 	Master Landlord
	 	 	 	 	 
	 	 	

	
	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	ATTEST:	 	Subtenant
	 	 	 	 	 
	 	 	

	
	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	ATTEST:	 	Sublandlord
	 	 	 	 	 
	 	 	

	
	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	ATTEST:	 	Master Landlord’s Lender
	 	 	 	 	 
	 	 	

	
	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:

E15-5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]