Document:

Exhibit 10.3

 

[Net Lease]

 

LEASE AGREEMENT

 

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

 

	
  Tenant:

  	
  Government Technology Services, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenant’s representative, address, and phone no.:

  	
   

  	
  Tom Smudz, Chief Financial Officer

  4100 Lafayette Center Drive, Chantilly, Virginia 22021-0808

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Premises:

  	
   

  	
  Approximately 204,649 square feet, as shown on
  Exhibit A.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Project:

  	
   

  	
  Chantilly Distribution Center

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Building:

  	
   

  	
  Building 1 of Chantilly Distribution Center

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenant’s Proportionate Share of Project:

  	
   

  	
  58.29%

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenant’s Proportionate Share of Building:

  	
   

  	
  58.29%

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lease Term:

  	
   

  	
  Beginning on the Commencement Date and ending on the
  last day of the 120th full calendar month thereafter.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commencement Date:

  	
   

  	
  See Addendum 2

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial Monthly Base Rent:

  	
   

  	
  See Addendum 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial Estimated Monthly Operating Expense
  Payments: (estimates only and subject to adjustment to actual
  costs and expenses according to the provisions of this Lease)

  	
   

  	
  1. Utilities:

  	
  $Paid directly by Tenant

  	
   

  
	
   

  	
   

  	
   

  
	
  2. Common Area Charges:

  	
  $5,627.85

  	
   

  
	
   

  	
   

  	
   

  
	
  3. Taxes:

  	
  $8,527.04

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4. Insurance:

  	
  $852.70

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5. Others (Management Fee):

  	
  $2,046.49

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial
  Estimated Monthly Operating Expense Payments:

  	
   

  	
   

  	
   

  	
  $17,054.08

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial
  Monthly Base Rent and Operating Expense Payments:

  	
   

  	
   

  	
   

  	
  $75,720.13

  

 

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  Security
  Deposit:

  	
   

  	
  $117,332.10 (See Paragraph 5)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Broker:

  	
   

  	
  Barnes, Morris, Pardoc & Foster Inc. Landlord
  shall pay Broker pursuant to a separate agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Addenda:

  	
   

  	
  1-8, Exhibit A, B and C

  

 

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

 

2.              Acceptance of Premises.   Tenant shall accept the Premises, subject to
all applicable laws, ordinances, regulations, covenants and restrictions as
provided in Addendum 2.  Landlord has
made no representation or warranty as to the suitability of the Premises for
the conduct of Tenant’s business, and Tenant waives any implied warranty that
the Premises are suitable for Tenant’s intended purposes.  Except as provided in Paragraph 10, in no
event shall Landlord have any obligation for any defects in the Premises or any
limitation on its use.  The taking of
possession of the Premises shall be conclusive evidence that Tenant accepts the
Premises and that the Premises were in good condition at the time possession
was taken except for items that are Landlord’s responsibility under Paragraph
10 and any punchlist items agreed to in writing by Landlord and Tenant pursuant
to the provisions of Addendum 2.

 

3.              Use.  The Premises shall be used only for the
purpose of receiving, storing, shipping and selling (but limited to non-retail
sales) products, materials and merchandise made and/or distributed by Tenant
and for such other lawful purposes as may be incidental thereto including
general office use, assembly and light manufacturing.  Tenant shall not conduct or give notice of any
auction, liquidation sale open to the general public, or going out of business
sale on the Premises.  Tenant will use
the Premises in a careful, safe and proper manner and will not commit waste
thereon.  Tenant shall not permit any
objectionable or unpleasant odors, smoke, dust, gas, noise, or vibrations to
emanate from the Premises, or take any other action that would constitute a
nuisance or would disturb, unreasonably interfere with, or endanger Landlord or
any tenants of the Project.  Outside
storage, including without limitation, storage of trucks and other vehicles,
except for overnight parking of operational vehicles, is prohibited without
Landlord’s prior written consent. 
Tenant, at its sole expense, shall use and occupy the Premises in compliance
with all laws, including, without limitation, the Americans With Disabilities
Act, orders, judgments, ordinances, regulations, codes, directives, permits,
licenses, covenants and restrictions now or hereafter applicable to the
Premises (collectively, “Legal Requirements”).  The Premises shall not be used as a place of
public accommodation under the Americans With Disabilities Act or similar state
statutes or local ordinances or any regulations promulgated thereunder, all as
may be amended from time to time unless Tenant shall have fully complied with
its obligations under the preceding and succeeding sentences of this Paragraph
3.  Tenant shall, at its expense, make
any alterations or modifications, within or without the Premises, that are
required by Legal Requirements related to Tenant’s use or occupation of the
Premises.  Tenant will not use or permit
the Premises to be used for any purpose or in any manner that would void Tenant’s
or Landlord’s insurance, increase the insurance risk, or cause the disallowance
of any sprinkler credits.  If any
increase in the cost of any insurance on the Premises or the Project is caused
by Tenant’s use or occupation of the Premises, then Tenant shall pay the amount
of such increase to Landlord.

 

4.              Base Rent.  Tenant shall pay Base Rent in the amount set
forth on Addendum I attached hereto.  One-half
of the first month’s Base Rent and one-half of the first monthly installment of
estimated Operating Expenses (as hereafter defined) shall be due and payable on
the date Landlord acquires the Project and one-half shall be payable on the
Commencement Date, and Tenant promises to pay to Landlord in advance, without
demand, deduction or set-off, monthly installments of Base Rent on or before
the first day of each calendar month succeeding

 

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the Commencement Date.  Payments
of Base Rent for any fractional calendar month shall be prorated.  All payments required to be made by Tenant to
Landlord hereunder shall be payable at such address as Landlord may specify
from time to time by written notice delivered in accordance herewith.  The obligation of Tenant to pay Base Rent and
other sums to Landlord and the obligations of Landlord under this Lease are
independent obligations.  Tenant shall
have no right at any time to abate, reduce, or set-off any rent due hereunder
except as may be expressly provided in this Lease.  Tenant waives and releases all statutory liens
and offset rights as to rent.  If Tenant
is delinquent in any monthly installment of Base Rent or of estimated Operating
Expenses for more than 5 business days, Tenant shall pay to Landlord on demand
a late charge equal to 5 percent of such delinquent sum.  The provision for such late charge shall be in
addition to all of Landlord’s other rights and remedies hereunder or at law and
shall not be construed as a penalty.

 

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

 

6.             Operating
Expense Payments.  During each
month of the Lease Term, on the same date that Base Rent is due, Tenant shall
pay Landlord an amount equal to 1/12 of the annual cost, as estimated by
Landlord from time to time, of Tenant’s Proportionate Share (hereinafter
defined) of Operating Expenses for the Project.  Payments thereof for any fractional calendar
month shall be prorated.  The term “Operating
Expenses” means all costs and expenses incurred by Landlord with respect to the
ownership, maintenance, and operation of the Project including, but not limited
to costs of: Taxes (hereinafter defined) and fees payable to tax consultants
and attorneys for consultation and contesting taxes; insurance; utilities;
maintenance, repair and replacement of all portions of the Project, including
without limitation, paving and parking areas, roads, roofs, alleys, and
driveways, mowing, landscaping, exterior painting, utility lines, heating,
ventilation and air conditioning systems, lighting, electrical systems and
other mechanical and building systems; amounts paid to contractors and
subcontractors for work or services performed in connection with any of the
foregoing; charges or assessments of any association to which the Project is
subject and which may be used as an alternative method for Landlord to receive
Operating Expenses; property management fees payable to a property manager,
including any affiliate of Landlord, (which shall not exceed 3 % of total rent
per year) or an administration fee of 15 percent of Operating Expenses payable
to Landlord; security services, if any; trash collection, sweeping and removal;
and additions or alterations made by Landlord to the Project or the Building in
order to comply with Legal Requirements (other than those expressly required
herein to be made by Tenant) or that are appropriate to the continued operation
of the Project or the Building as a bulk warehouse facility in the market area,
provided that the cost of additions or alterations that are required to be

 

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capitalized for federal
income tax purposes shall be amortized on a straight line basis over a period
equal to the lesser of the useful life thereof for federal income tax purposes
or 10 years.  Operating Expenses do not
include costs, or expenses, depreciation or amortization for capital repairs
and capital replacements required to be made by Landlord under Paragraph 10 of
this Lease, debt service under mortgages or ground rent under ground leases,
costs of restoration to the extent of net insurance proceeds received by
Landlord with respect thereto, leasing commissions, or the costs of renovating
space for tenants.

 

If Tenant’s total
payments of Operating Expenses for any year are less than Tenant’s
Proportionate Share of actual Operating Expenses for such year, then Tenant
shall pay the difference to Landlord within 30 days after Landlord provides
Tenant with written evidence thereof, and if more, then Landlord shall retain
such excess, notify Tenant in writing of same and credit it against Tenant’s
next payments.  For purposes of
calculating Tenant’s Proportionate Share of Operating Expenses, a year shall
mean a calendar year except the first year, which shall begin on the
Commencement Date, and the last year, which shall end on the expiration of this
Lease.  With respect to Operating
Expenses which Landlord allocates to the entire Project, Tenant’s “Proportionate
Share” shall be the percentage set forth on the first page of this Lease as
Tenant’s Proportionate Share of the Project as reasonably adjusted by Landlord
in the future for changes in the physical size of the Premises or the Project;
and, with respect to Operating Expenses which Landlord allocates only to the
Building, Tenant’s “Proportionate Share” shall be the percentage set forth on
the first page of this Lease as Tenant’s Proportionate Share of the Building as
reasonably adjusted by Landlord in the future for changes in the physical size
of the Premises or the Building.  Landlord
may equitably increase Tenant’s Proportionate Share for any item of expense or
cost reimbursable by Tenant that relates to a repair, replacement, or service
that benefits only the Premises or only a portion of the Project or Building
that includes the Premises or that varies with occupancy or use.  Upon written request from Tenant, Landlord
shall provide back-up documentation setting forth the calculation of any equitable
increase of Tenant’s Proportionate Share.  The estimated Operating Expenses for the
Premises set forth on the first page of this Lease are only estimates, and
Landlord makes no guaranty or warranty that such estimates will be accurate.

 

7.             Utilities.  Landlord shall be responsible for all water
and sewer tap fees associated with the hookup of basic services to the
Premises.  Tenant shall pay for all
water, gas, electricity, heat, light, power, telephone, sewer, sprinkler
services, refuse and trash collection, and other utilities and services used on
the Premises, all maintenance charges for utilities, and any storm sewer
charges or other similar charges for utilities imposed by any governmental
entity or utility provider, together with any taxes, penalties, surcharges or
the like pertaining to Tenant’s use of the Premises.  To the extent possible, all utilities shall be
separately metered and billed directly to Tenant.  Landlord shall not be liable for any
interruption or failure of utilities or any other service to the Premises and
no such interruption or failure shall result in the abatement of rent
hereunder.  Tenant agrees to limit use of
water and sewer for normal restroom use.

 

8.             Taxes.
 Landlord shall pay all ad valorem
real estate taxes, assessments and governmental charges (collectively referred
to as “Taxes”) that accrue against the Project during the Lease Term, which
shall be included as part of the Operating Expenses charged to Tenant.  Landlord may contest by appropriate legal
proceedings the amount, validity, or application of any Taxes or liens thereof.
 All capital levies or other taxes
assessed or imposed on Landlord upon the rents payable to Landlord under this
Lease and any franchise tax, any excise, transaction, sales or privilege tax,
assessment, levy or charge measured by or based, in whole or in part, upon such
rents from the Premises and/or the Project or any portion thereof shall be paid
by Tenant to Landlord monthly in estimated installments or upon demand, at the
option of Landlord, as additional rent; provided, however, in no event shall Tenant
be liable for any net income taxes imposed on Landlord unless such net income
taxes are directly and identifiably in substitution for any Taxes payable
hereunder.  If any such tax or excise is
levied or assessed directly against Tenant, then Tenant shall be responsible
for and shall pay the same at such times and in such manner as the taxing
authority shall require.  Tenant shall be
liable for all taxes levied or assessed against any personal property or
fixtures placed in the Premises, whether levied or assessed against Landlord or
Tenant.

 

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9.             Insurance.
 Landlord shall maintain all risk
property insurance covering the full replacement cost of the Building.  Landlord may, but is not obligated to,
maintain such other insurance and additional coverages as it may deem
necessary, including, but not limited to, commercial liability insurance and
rent loss insurance.  All such insurance
shall be included as part of the Operating Expenses charged to Tenant.  The Project or Building may be included in a
blanket policy (in which case the cost of such insurance allocable to the
Project or Building will be determined by Landlord based upon the insurer’s
cost calculations).  Tenant shall also
reimburse Landlord for any increased premiums or additional insurance which
Landlord reasonably deems necessary as a result of Tenant’s use of the
Premises, if Tenant’s actual use of the Premises differs from the permitted
uses set forth in Paragraph 3 hereof.

 

Tenant, at its expense,
shall maintain during the Lease Term: all risk property insurance covering the
full replacement cost of all property and improvements installed or placed in
the Premises by Tenant at Tenant’s expense; worker’s compensation insurance
with no less than the minimum limits required by law; employer’s liability
insurance with such limits as required by law; and commercial liability
insurance, with a minimum limit of $1,000,000 per occurrence and a minimum
umbrella limit of $4,000,000, for a total minimum combined general liability
and umbrella limit of $5,000,000 for property damage, personal injuries, or
deaths of persons occurring in or about the Premises.  Landlord may from time to time require
reasonable increases in any such limits.  The commercial liability policies shall name
Landlord as an additional insured, insure on an occurrence and not a
claims-made basis, be issued by insurance companies which are reasonably
acceptable to Landlord, not be cancelable unless 30 days prior written notice
shall have been given to Landlord, contain a hostile fire endorsement and a
contractual liability endorsement and provide primary coverage to Landlord (any
policy issued to Landlord providing duplicate or similar coverage shall be
deemed excess over Tenant’s policies).  Such
policies or certificates thereof shall be delivered to Landlord by Tenant upon
commencement of the Lease Term and upon each renewal of said insurance.

 

The all risk property
insurance obtained by Landlord and Tenant shall include a waiver of subrogation
by the insurers and all rights based upon an assignment from its insured,
against Landlord or Tenant, their officers, directors, employees, managers,
agents, invitees and contractors, in connection with any loss or damage thereby
insured against.  Neither party nor its
officers, directors, employees, managers, agents, invitees or contractors shall
be liable to the other for loss or damage caused by any risk coverable by all
risk property insurance, and each party waives any claims against the other
party, and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage.  The
failure of a party to insure its property shall not void this waiver.  Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims
against such parties for, business interruption and losses occasioned thereby
sustained by Tenant or any person claiming through Tenant resulting from any
accident or occurrence in or upon the Premises or the Project from any cause
whatsoever, including without limitation, damage caused in whole or in part,
directly or indirectly, by the negligence of Landlord or its agents, employees
or contractors; provided, however, such waiver shall only apply to claims in
excess of $1,000, which is the deductible under Tenant’s property insurance
policy.

 

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

 

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

 

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dock bumpers, dock plates or levelers, or office
entries.  Tenant shall promptly give
Landlord written notice of any repair required by Landlord pursuant to this
Paragraph 10, after which Landlord shall promptly repair.

 

11.           Tenant’s Repairs.
 Landlord, at Tenant’s expense as
provided in Paragraph 6, shall maintain in good repair and condition the
parking areas and other common areas of the Building, including, but not
limited to driveways, alleys, landscape and grounds surrounding the Premises.  Subject to Landlord’s obligation in Paragraph 10,
Tenant, at its expense, shall maintain in good repair and condition all
portions of the Premises.  If Tenant
fails to perform any repair for which it is responsible, Landlord may perform
the repair and be reimbursed by Tenant within 10 days after demand therefor.  Subject to Paragraphs 9 and 15, Tenant shall
bear the full cost of any repair to any part of the Building or Project that
results from damage caused by the gross negligence or willful misconduct of
Tenant, its agents, contractors, or invitees and any repair that benefits only
the Premises.  Heating, ventilation and
air conditioning systems and other mechanical and building systems serving the
Premises shall be maintained at Tenant’s expense pursuant to maintenance
service contracts entered into by Tenant.  To the extent that a warranty exists and is in
effect for any such improvements and is unassignable to Tenant, Landlord agrees
to undertake all reasonable efforts to enforce such warranty for Tenant’s
benefit.  The scope of services and
contractors under such maintenance contracts shall be reasonably approved by
Landlord.  At Landlord’s request, Tenant
shall enter into a joint maintenance agreement with any railroad that services
the Premises.

 

12.           Tenant-Made Alterations
and Trade Fixtures.  Any alterations, additions,
or improvements made by or on behalf of Tenant to the Premises (“Tenant-Made
Alterations”) shall be subject to Landlord’s prior written consent, which shall
not be unreasonably withheld, delayed or conditioned for Tenant-Made
Alternations which do not affect the structural components of the Building or
pierce the roof membrane.  Tenant shall
cause, at its expense, all Tenant-Made Alterations to comply with insurance
requirements and with Legal Requirements and shall construct at its expense any
alteration or modification required by Legal Requirements as a result of any
Tenant-Made Alterations.  All Tenant-Made
Alterations shall be constructed in a good and workmanlike manner by
contractors reasonably acceptable to Landlord and only good grades of materials
shall be used.  All plans and specifications
for any Tenant-Made Alterations shall be submitted to Landlord for its
approval, and Landlord may monitor construction of the Tenant-Made Alterations;
and Tenant shall reimburse Landlord for its costs in reviewing plans and
documents and in monitoring construction; provided, however, that such
reimbursements shall not exceed $2,000 per occurrence for actual expenses
incurred by Landlord.  Tenant shall
provide Landlord with the identities and mailing addresses of all persons
performing work or supplying materials, prior to beginning such construction, and
Landlord may post on and about the Premises notices of non-responsibility
pursuant to applicable law.  Landlord’s
right to review plans and specifications and monitor construction shall be
solely for its own benefit, and Landlord shall have no duty to see that such
plans and specifications or construction comply with applicable laws, codes,
rules, or regulations.  At Landlord’s
request, Tenant shall obtain payment and performance bonds for any Tenant-Made
Alterations which bonds shall be delivered to Landlord prior to commencement of
work on the Tenant-Made Alterations and shall be in form and substance
satisfactory to Landlord.  Upon
completion of any Tenant-Made Alterations, Tenant shall deliver to Landlord
sworn statements setting forth the names of all contractors and subcontractors
who did work on the Tenant-Made Alterations and final lien waivers from all
such contractors and subcontractors.

 

Landlord hereby grants
Tenant the right to install, maintain and replace from time to time an antennae
device (hereinafter “Antenna”) on the roof of the Premises, subject to
the following: (a) applicable governmental laws; (b) the right of Landlord to
supervise any roof penetrations; (c) compliance with the conditions of any roof
bond maintained by Landlord on the Premises; and (d) the Antenna not being
visible at street level from the front of the Building.  Tenant shall be responsible for the repair of
any damage to any portion of the Premises caused by Tenant’s installation, use
or removal of the Antenna.  The Antenna
shall remain the exclusive property of Tenant, and Tenant shall have the right
to remove same at any time during the term of the Lease so long as Tenant is
not in default under the Lease.  Tenant
shall protect, defend, indemnify and hold harmless Landlord from and against
any and all claims, damages, liabilities, costs or  expenses of every kind and nature (including without

 

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

 

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

 

13.           Signs.  Tenant shall not make any changes to the
exterior of the Premises, install any exterior lights, decorations, balloons,
flags, pennants, banners, or painting, or erect or install any signs, windows
or door lettering, placards, decorations, or advertising media of any type
which can be viewed from the exterior of the Premises, without Landlord’s prior
written consent which shall not be unreasonably withheld, delayed or conditioned,
provided that all applicable sign ordinances are met and provided further that,
in Landlord’s reasonable opinion, any such signage will materially conform with
the Landlord’s signage criteria for the Project, which will be uniformly
applied among tenants in the Project.  Subject
to the conditions set forth above and subject to approval of location, Tenant
shall have the right to install a monument sign at the Building and display
Tenant’s name and logo on the Building.  Landlord
shall provide Tenant up to $20,000 as a signage allowance, and such allowance
shall be payable to Tenant within 20 days after receipt of a “paid” invoice for
signage costs from Tenant.  Upon vacation
of the Premises, Tenant shall remove all signs and repair, paint, and/or
replace the building facia surface to which its signs are attached.  Tenant shall obtain all applicable
governmental permits and approvals for sign and exterior treatments.  All signs, decorations, advertising media,
blinds, draperies and other window treatment or bars or other security
installations visible from outside the Premises shall be subject to Landlord’s
approval and conform in all respects to Landlord’s requirements.

 

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

 

15.           Restoration.  If at any time during the Lease Term the
Premises are damaged by a fire or other casualty, Landlord shall notify Tenant
within 45 days after such damage as to the amount of time Landlord reasonably
estimates it will take to restore the Premises.  If the restoration time is estimated to exceed
4 months, either Landlord or Tenant may elect to terminate this Lease upon
notice to the other party given no later than 45 days after Landlord’s notice.  If neither party elects to terminate this
Lease or if Landlord estimates that restoration will take 4 months or less,
then, subject to receipt of sufficient insurance proceeds, Landlord shall
promptly restore the Premises excluding the improvements installed by Tenant or
by Landlord and paid by Tenant, subject to delays arising from the collection
of insurance proceeds or from Force Majeure events.  Tenant at Tenant’s expense shall promptly
perform, subject to delays arising from the collection of insurance proceeds,
or from Force Majeure events, all repairs or restoration not required to be
done by Landlord and shall promptly re-enter the Premises and commence doing
business in accordance with this Lease.  Notwithstanding
the foregoing, either party may terminate this Lease if the Premises are
damaged during the last year of the Lease Term and Landlord reasonably
estimates that it will take more than one month to repair such damage.  Tenant shall pay to Landlord with respect to
any damage to the Premises the amount of the commercially reasonably deductible
under Landlord’s insurance policy (up to $10,000) within 10 days after
presentment of Landlord’s invoice.  If
the damage involves the premises of other tenants, Tenant shall pay the portion
of the deductible that the cost of the restoration of the Premises bears to the
total cost of restoration, as determined by Landlord.  Base Rent and Operating Expenses shall be
abated for

 

7

 

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

 

16.           Condemnation.  If any part of the Premises or the Project
should be taken for any public or quasi-public use under governmental law,
ordinance, or regulation, or by right of eminent domain, or by private purchase
in lieu thereof (a “Taking” or “Taken”), and the Taking would prevent or
materially interfere with Tenant’s use of the Premises or in Landlord’s
judgment would materially interfere with or impair its ownership or operation
of the Project, then upon written notice by Tenant to Landlord, or by Landlord
to Tenant, as the case may be this Lease shall terminate and Base Rent shall be
apportioned as of said date.  If part of
the Premises shall be Taken, and this Lease is not terminated as provided
above, the Base Rent payable hereunder during the unexpired Lease Term shall be
reduced to such extent as may be fair and reasonable under the
circumstances.  In the event of any such
Taking, Landlord shall be entitled to receive the entire price or award from
any such Taking without any payment to Tenant, and Tenant hereby assigns to
Landlord Tenant’s interest, if any, in such award.  Tenant shall have the right, to the extent
that same shall not diminish Landlord’s award, to make a separate claim against
the condemning authority (but not Landlord) for such compensation as may be
separately awarded or recoverable by Tenant for moving expenses and damage to
Tenant’s Trade Fixtures, if a separate award for such items is made to Tenant.

 

17.           Assignment
and Subletting.  Without Landlord’s prior written consent
which shall not be unreasonably withheld, delayed or conditioned provided that
the conditions set forth on Addendum 3 are met, Tenant shall not assign this
Lease or sublease the Premises or any part thereof or mortgage, pledge, or
hypothecate its leasehold interest or grant any concession or license within
the Premises and any attempt to do any of the foregoing shall be void and of no
effect.  For purposes of this paragraph,
a transfer of the ownership interests controlling Tenant shall be deemed an
assignment of this Lease unless such ownership interests are publicly traded.  Notwithstanding the above, Tenant may assign
or sublet the Premises, or any part thereof, to any entity controlling Tenant,
controlled by Tenant or under common control with Tenant (a “Tenant Affiliate”),
without the prior written consent of Landlord.  Tenant shall reimburse Landlord for all of
Landlord’s reasonable out-of-pocket expenses in connection with any assignment
or sublease, not to exceed $1,000 per occurrence.  Upon Landlord’s receipt of Tenant’s written
notice of a desire to assign or sublet the Premises, or any part thereof (other
than to a Tenant Affiliate), Landlord may, by giving written notice to Tenant
within 30 days after receipt of Tenant’s notice, terminate this Lease with
respect to the space described in Tenant’s notice, as of the date specified in
Tenant’s notice for the commencement of the proposed assignment or sublease.

 

Notwithstanding any
assignment or subletting, Tenant and any guarantor or surety of Tenant’s
obligations under this Lease shall at all times remain fully responsible and
liable for the payment of the rent and for compliance with all of Tenant’s
other obligations under this Lease (regardless of whether Landlord’s approval
has been obtained for any such assignments or sublettings).  In the event that the rent due and payable by
a sublessee or assignee (or a combination of the rental payable under such
sublease or assignment plus any bonus or other consideration therefor or
incident thereto) exceeds the rental payable under this Lease, then Tenant
shall be bound and obligated to pay Landlord as additional rent hereunder all
such excess rental and other excess consideration (after deducting Tenant’s
brokerage commissions, reasonable attorney’s fees and reasonable costs of
improvements made by Tenant in connection therewith) within 10 days following
receipt thereof by Tenant.

 

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

 

8

 

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

 

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

 

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

 

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

 

21.           Surrender.  Upon termination of the Lease Term or earlier
termination of Tenant’s right of possession, all Tenant-Made Alterations except
for the Initial Tenant Improvements as defined in Addendum 2, shall be removed
by Tenant at Tenant’s expense and Tenant shall repair any damage caused by such
removal.  Notwithstanding the above, at
Tenant’s request, Landlord will inform Tenant at the time of Landlord’s
approval of Tenant-Made Alterations whether Landlord will require removal of
such Tenant-Made Alterations at the end of the Lease Term.  Any Trade Fixtures or Tenant-Made Alterations
not so removed by Tenant as permitted or required herein shall be deemed
abandoned and may be stored, removed, and disposed of by Landlord at Tenant’s
expense, and Tenant waives all claims against Landlord for any damages
resulting from Landlord’s retention and disposition of such property.  All obligations of Tenant hereunder not fully
performed as of the termination of the Lease Term shall survive the termination
of the Lease Term, including without limitation, indemnity obligations, payment
obligations with respect to Operating Expenses and obligations concerning the
condition and repair of the Premises.

 

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

 

9

 

23.           Events
of Default.  Each
of the following events shall be an event of default (“Event of Default”) by
Tenant under this Lease:

 

(i)           Tenant shall fail to pay any
installment of Base Rent or any other payment required herein when due, and
such failure shall continue for a period of 5 business days from the date of
Landlord’s written notice to Tenant of such failure to pay; provided, however,
that Landlord shall not be obligated to provide written notice more than 2
times in any 12-month period or more than 7 times over the Lease Term, and the
failure of Tenant to pay in a timely fashion any additional installment of Base
Rent or other payment when due shall constitute an Event of Default without
requirement of notice or an opportunity to cure.

 

(ii)          Tenant or any guarantor or surety of
Tenant’s obligations hereunder shall (A) make a general assignment for the
benefit of creditors; (B) commence any case, proceeding or other action seeking
to have an order for relief entered on its behalf as a debtor or to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts or seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or of any substantial part of its property (collectively a “proceeding
for relief”); (C) become the subject of any proceeding for relief which is not
dismissed within 60 days of its filing or entry; or (D) die or suffer a legal
disability (if Tenant, guarantor, or surety is an individual) or be dissolved
or otherwise fail to maintain its legal existence (if Tenant, guarantor or
surety is a corporation, partnership or other entity).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

commissions incurred by Landlord, and costs of
removing and storing Tenant’s or any other occupant’s property, repairing,
altering, remodeling, or otherwise putting the Premises into rentable
condition, and all reasonable expenses incurred by Landlord in pursuing its
remedies, including reasonable attorneys’ fees and court costs; and the excess
of the then present value of the Base Rent and other amounts payable by Tenant
under this Lease as would otherwise have been required to be paid by Tenant to
Landlord during the period following the termination of this Lease measured
from the date of such termination to the expiration date stated in this Lease,
over the present value of any net amounts which Tenant establishes Landlord can
reasonably expect to recover by reletting the Premises for such period, taking
into consideration the availability of acceptable tenants and other market
conditions affecting leasing.  Such
present values shall be calculated at a discount rate equal to the 90-day U.S.
Treasury bill rate at the date of such termination.

 

If Landlord terminates
Tenant’s right of possession (but not this Lease), Landlord may, but shall be
under no obligation to, relet the Premises for the account of Tenant for such
rent and upon such terms as shall be satisfactory to Landlord without thereby
releasing Tenant from any liability hereunder and without demand or notice of
any kind to Tenant.  For the purpose of
such reletting Landlord is authorized to make any repairs, changes,
alterations, or additions in or to the Premises as Landlord deems reasonably
necessary or desirable.  If the Premises
are not relet, then Tenant shall pay to Landlord as damages a sum equal to the
amount of the rental reserved in this Lease for such period or periods, plus
the cost of recovering possession of the Premises (including reasonable
attorneys’ fees and costs of suit), the unpaid accrued Base Rent and other
amounts accrued hereunder at the time of repossession, and the costs incurred
in any attempt by Landlord to relet the Premises.  If the Premises are relet and a sufficient sum
shall not be realized from such reletting [after first deducting therefrom, for
retention by Landlord, the unpaid Base Rent and other amounts accrued hereunder
at the time of reletting, the cost of recovering possession (including
reasonable attorneys’ fees and costs of suit), all of the costs and expense of
repairs, changes, alterations, and additions, the expense of such reletting
(including without limitation brokerage fees and leasing commissions) and the
cost of collection of the rent accruing therefrom] to satisfy the rent provided
for in this Lease to be paid, then Tenant shall immediately satisfy and pay any
such deficiency.  Any such payments due
Landlord shall be made upon demand therefor from time to time and Tenant agrees
that Landlord may file suit to recover any sums falling due from time to time.  Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect in writing to terminate
this Lease for such previous breach.

 

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

 

11

 

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

 

26.            Waiver of Jury Trial.  TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL
BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING
OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

 

27.            Subordination.  This Lease and Tenant’s interest and rights
hereunder are and shall be subject and subordinate at all times to the lien of
any first mortgage, now existing or hereafter created on or against the Project
or the Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant.  Tenant agrees, at the election of the holder
of any such mortgage, to attorn to any such holder.  Landlord agrees to use commercially reasonable
efforts to obtain for Tenant a non-disturbance and attornment agreement from
any current or future holder of a mortgage on the Project.  Tenant agrees upon demand to execute,
acknowledge and deliver such instruments, confirming such subordination and
such instruments of attornment as shall be requested by any such holder.  Tenant hereby appoints Landlord attorney in
fact for Tenant irrevocably (such power of attorney being coupled with an
interest) to execute, acknowledge and deliver any such instrument and
instruments for and in the name of the Tenant and to cause any such instrument
to be recorded.  Notwithstanding the
foregoing, any such holder may at any time subordinate its mortgage to this
Lease, without Tenant’s consent, by notice in writing to Tenant, and thereupon
this Lease shall be deemed prior to such mortgage without regard to their respective
dates of execution, delivery or recording and in that event such holder shall
have the same rights with respect to this Lease as though this Lease had been
executed prior to the execution, delivery and recording of such mortgage and
had been assigned to such holder.  The
term “mortgage” whenever used in this Lease shall be deemed to include deeds of
trust, security assignments and any other encumbrances, and any reference to
the “holder” of a mortgage shall be deemed to include the beneficiary under a
deed of trust.

 

28.            Mechanic’s Liens. 
Tenant has no express or implied authority to create
or place any lien or encumbrance of any kind upon, or in any manner to bind the
interest of Landlord or Tenant in, the Premises or to charge the rentals
payable hereunder for any claim in favor of any person dealing with Tenant, including
those who may furnish materials or perform labor for any construction or
repairs.  Tenant covenants and agrees
that it will pay or cause to be paid all sums legally due and payable by it on
account of any labor performed or materials furnished in connection with any
work performed on the Premises and that it will save and hold Landlord harmless
from all loss, cost or expense based on or arising out of asserted claims or
liens against the leasehold estate or against the interest of Landlord in the Premises
or under this Lease.  Tenant shall give
Landlord immediate written notice of the placing of any lien or encumbrance
against the Premises and cause such lien or encumbrance to be discharged within
30 days of the filing or recording thereof; provided, however, Tenant may
contest such liens or

 

12

 

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

 

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

 

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

 

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

 

When available, Landlord
will deliver to Tenant a true and complete copy of the final Phase 1
Environmental Site Assessment prepared on behalf of Landlord (the “Report”),
Tenant agrees to keep the Report confidential and not to disclose the contents
thereof to any other party (except Tenant’s advisors with respect to this
leasing transaction) without the prior written consent of Landlord.  Tenant acknowledges that Landlord has made no
representation or warranty with respect to the accuracy or completeness of any
information or conclusions contained in such environmental Report.  Landlord shall also provide to Tenant copies
of all other final and fully executed environmental reports prepared on behalf
of Landlord during Landlord’s inspection period for the Project, provided that
Tenant agrees to keep such reports confidential, except as provided above.

 

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

 

13

 

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

 

Landlord shall have
access to, and a right to perform inspections and tests of, the Premises to
determine Tenant’s compliance with Environmental Requirements, its obligations
under this Paragraph 30, or the environmental condition of the Premises.  Access shall be granted to Landlord upon
Landlord’s prior notice to Tenant and at such times so as to minimize, so far
as may be reasonable under the circumstances, any disturbance to Tenant’s
operations.  Such inspections and tests
shall be conducted at Landlord’s expense, unless such inspections or tests
reveal that Tenant has not complied with any Environmental Requirement, in
which case Tenant shall reimburse Landlord for the reasonable cost of such
inspection and tests.  Landlord’s receipt
of or satisfaction with any environmental assessment in no way waives any
rights that Landlord holds against Tenant.

 

31.           Rules and Regulations.  Tenant shall, at all times during the Lease
Term and any extension thereof, comply with all reasonable rules and
regulations at any time or from time to time established by Landlord covering
use of the Premises and the Project.  The
current rules and regulations are attached hereto.  In the event of any conflict between said
rules and regulations and other provisions of this Lease, the other terms and
provisions of this Lease shall control. 
Landlord shall not have any liability or obligation for the breach of
any rules or regulations by other tenants in the Project, but shall equitably
enforce the rules and regulations among all tenants in the Project.

 

32.           Security Service.  Tenant acknowledges and agrees that, while
Landlord may patrol the Project, Landlord is not providing any security services
with respect to the Premises and that Landlord shall not be liable to Tenant
for, and Tenant waives any claim against Landlord with respect to, any loss by
theft or any other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any other breach of security with
respect to the Premises.

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

(d)           Except as otherwise expressly
provided in this Lease, Landlord retains the absolute right to withhold any
consent or approval.

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

(k)         Construction and interpretation of this
Lease shall be governed by the laws of the state in which the Project is
located, excluding any principles of conflicts of laws.

 

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

 

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

 

38.           Intentionally
Omitted.

 

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

 

40.           Acquisition of Premises
and Approvals Contingency. 
Tenant acknowledges that Landlord does not currently own the Premises.  Notwithstanding anything in the Lease to the
contrary, Landlord’s obligations under the Lease are conditioned and contingent
upon Landlord or its nominee or assignee acquiring fee simple title to the
Premises no later than November 15, 1995.  Landlord shall promptly notify Tenant of its
acquisition of fee simple title to the Premises.  If Landlord has not acquired fee simple title
to the Premises by November 15, 1995, Tenant shall have the right to terminate
this Lease for the ensuing two business days, by written notice to Landlord, be
relieved of all obligations hereunder and receive a return of the Security
Deposit and all deposited Base Rent and Operating Expenses.  If Tenant fails to terminate the Lease as set
forth above, the Lease shall continue in full force and effect; provided,
however, that Tenant shall have a right to terminate the Lease, subject to the
conditions and time restrictions set forth above, on the 30th day following
November 15, 1995 and every 30th day thereafter, until Landlord obtains fee
simple title to the Property.  Landlord
agrees to keep Tenant generally apprised of its due diligence review, and
agrees to use reasonable efforts to notify Tenant of material issues relating
to Landlord’s acquisition of the Project. 
No expenditure of any sum or incurring of any liability of Tenant for
merchandise, fixtures, equipment, labor, materials or otherwise shall affect
the rights of Landlord hereunder.

 

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

 

16

 

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

 

 

	
  TENANT:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
  GOVERNMENT TECHNOLOGY SERVICES, INC.

  	
   

  	
  SECURITY CAPITAL INDUSTRIAL TRUST

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Thomas L. Smudz

  	
   

  	
  By:

  	
  /s/ Robert Steubens

  
	
  Title:

  	
  EVP & CFO

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
  8-11-95

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
  4100 Lafayette Center Drive

  Chantilly, Virginia 22021

  	
   

  	
  1800 Diagonal Road

  Sixth Floor

  Alexandria, Virginia 22314

  

 

17

 

Rules and Regulations

 

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

 

2.                                     Except
as otherwise provided in the Lease, Tenant shall not place any objects, outdoor
furniture, etc., in the parking areas, landscaped areas or other areas outside
of its Premises, or on the roof of the Project.

 

3.                                     Except
for seeing-eye dogs, no animals shall be allowed in the offices, halls, or
corridors in the Project.

 

4.                                     Tenant
shall not disturb the occupants of the Project or adjoining buildings by the
use of any radio or musical instrument or by the making of loud or improper
noises.

 

5.                                     If
Tenant desires telegraphic, telephonic or other electric connections in the
Premises, Landlord or its agent will direct the electrician as to where and how
the wires may be introduced; and, without such direction, no boring or cutting
of wires will be permitted.  Any such
installation or connection shall be made at Tenant’s expense.

 

6.                                     Tenant
shall not install or operate any steam or gas engine or boiler, or other
mechanical apparatus in the Premises, except as specifically approved in the
Lease.  The use of oil, gas or
inflammable liquids for heating, lighting or any other purpose is expressly
prohibited.  Explosives or other articles
deemed extra hazardous shall not be brought into the Project.

 

7.                                     Parking
any type of recreational vehicles is specifically prohibited on or about the
Project.  Except for the overnight
parking of operative vehicles, no vehicle of any type shall be stored in the
parking areas at any time.  In the event that
a vehicle is disabled, it shall be removed within 48 hours.  There shall be no “For Sale” or other
advertising signs on or about any parked vehicle.  All vehicles shall be parked in the designated
parking areas in conformity with all signs and other markings.  All parking will be open parking, and no
reserved parking, numbering or lettering of individual spaces will be permitted
except as specified by Landlord.

 

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

 

9.                                     Landlord
reserves the right to exclude or expel from the Project any person who, in the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs
or who shall in any manner do any act in violation of the Rules and Regulations
of the Project.

 

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

 

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

 

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

 

13.                               All
moveable trash receptacles provided by the trash disposal firm for the Premises
must be kept in the trash enclosure areas, if any, provided for that purpose.

 

14.                               No
auction, public or private, will be permitted on the Premises or the Project.

 

15.                               No
awnings shall be placed over the windows in the, Premises except with the prior
written consent of Landlord.

 

16.                               The
Premises shall not be used for lodging, sleeping or cooking (other than for
incidental meals) or for any immoral or illegal purposes or for any purpose
other than that specified in the Lease.  No
gaming devices shall be operated in the Premises.

 

18

 

17.                               Tenant
shall ascertain from Landlord the maximum amount of electrical current which
can safely be used in the Premises, taking into account the capacity of the
electrical wiring in the Project and the Premises and the needs of other
tenants, and shall not use more than such safe capacity.  Landlord’s consent to the installation of
electric equipment shall not relieve Tenant from the obligation not to use more
electricity than such safe capacity.

 

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

 

19

 

ADDENDUM 1

 

BASE RENT ADJUSTMENTS

 

ATTACHED TO AND A PART OF
THE LEASE AGREEMENT

DATED AUGUST 11, 1995 BETWEEN

GOVERNMENT TECHNOLOGY SERVICES, INC.

AND

SECURITY CAPITAL INDUSTRIAL TRUST

 

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

 

	
  Period

  	
   

  	
  Per Square Ft Per Year

  	
   

  	
  Monthly Rent */

  	
   

  
	
  Lease Year 1

  	
   

  	
  $

  	
  3.44

  	
   

  	
  $

  	
  58,666.05

  	
   

  
	
  Lease Year 2

  	
   

  	
  $

  	
  3.54

  	
   

  	
  $

  	
  60,371.46

  	
   

  
	
  Lease Year 3

  	
   

  	
  $

  	
  3.65

  	
   

  	
  $

  	
  62,247.40

  	
   

  
	
  Lease Year 4

  	
   

  	
  $

  	
  3.76

  	
   

  	
  $

  	
  64,123.35

  	
   

  
	
  Lease Year 5

  	
   

  	
  $

  	
  3.87

  	
   

  	
  $

  	
  65,999.30

  	
   

  
	
  Lease Year 6

  	
   

  	
  $

  	
  3.90

  	
   

  	
  $

  	
  66,510.93

  	
   

  
	
  Lease Year 7

  	
   

  	
  $

  	
  4.02

  	
   

  	
  $

  	
  68,557.42

  	
   

  
	
  Lease Year 8

  	
   

  	
  $

  	
  4.14

  	
   

  	
  $

  	
  70,603.91

  	
   

  
	
  Lease Year 9

  	
   

  	
  $

  	
  4.26

  	
   

  	
  $

  	
  72,650.40

  	
   

  
	
  Lease Year 10

  	
   

  	
  $

  	
  4.39

  	
   

  	
  $

  	
  74,867.43

  	
   

  

 

*/   Monthly
Base Rent will be adjusted based on a final determination of the square footage
of space contained in the Premises.

 

20

 

ADDENDUM 2

 

CONSTRUCTION -
SHORT FORM

(ALLOWANCE)

 

ATTACHED TO AND A
PART OF THE LEASE AGREEMENT

DATED AUGUST 11,
1995 BETWEEN

GOVERNMENT
TECHNOLOGY SERVICES, INC.

and

SECURITY CAPITAL
INDUSTRIAL TRUST

 

(a)    Within 15 days following execution of this
Lease, Landlord shall use its best efforts to enter into a contract with Morgan
Gick and Associates (“Gick”) at Landlord’s cost and expense (except for any
costs and expenses related to the mezzanine, which shall be the responsibility
of Tenant), which will provide for Gick to prepare all necessary plans and
specifications for construction of the “Base Building” and the “Initial Tenant Improvements”
as such terms are defined below in a timely manner in order to meet the
anticipated Substantial Completion Date set forth in this Addendum 2.  The Building (including the Base Building and
the Initial Tenant Improvements) shall be designed and constructed
substantially in accordance with the Outline Specifications attached hereto at Exhibit
B.

 

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

 

(c)    The plans and specifications for the Initial
Tenant Improvements shall be prepared by Gick at the reasonable direction of
Tenant, subject to periodic review by Landlord and Tenant.  Landlord shall provide Tenant with final
plans (the “Final Plans”) including plans and specifications for the Base
Building and Initial Tenant Improvements which are consistent with the Outline
Specifications and Tenant’s reasonable direction concerning the Initial Tenant
Improvements.  Tenant shall advise
Landlord within 7 business days of its approval or disapproval of the Final
Plans.  Tenant’s right to disapprove the
proposed Final Plans shall be limited to factors which would materially and
adversely affect the basic nature or appearance of the Premises or Tenant’s
ability to use the Premises, and any such disapproval shall be in writing and
shall specify those elements of the Final Plans objected to by Tenant.  To the extent that the Final Plans are
substantially consistent with the Outline Specifications, Tenant shall not be
entitled to object thereto.  If Tenant
shall not object in writing within the time period set forth above, then such
Final Plans or portion thereof not objected to by Tenant shall be deemed
approved.

 

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

 

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

 

21

 

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

 

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

 

(h)     Landlord shall use all reasonable efforts
to ensure that the Premises are Substantially Completed, as defined below, by
June 1, 1996.  Such date, unless an
earlier date is otherwise agreed to in writing between Landlord and Tenant,
shall be the “Commencement Date” provided the Premises are Substantially
Complete on such date unless the completion of such improvements was delayed
due to Tenant’s fault, including as a result of changes made by Tenant or
delays in the construction of the mezzanine as set forth below, in which case
the Commencement Date shall be the date such improvements would have been
completed but for the delays caused by Tenant. “Substantial Completion” shall
be deemed to have occurred when (i) the construction of the Base Building and
Initial Tenant Improvements are completed in accordance with the Final Plans as
reasonably determined by Gick, subject to minor punch list items which do not
interfere with Tenant’s use and enjoyment of the Premises, (ii) all utilities
are available to the Premises, (iii) the Building’s parking areas and loading
areas are available for use by Tenant, and (iv) temporary (if applicable) or
permanent certificates of occupancy (if applicable) shall have been issued for
the Building and the Premises.  If
Substantial Completion or an earlier Commencement Date does not occur by July
15, 1996, or an extended date as set forth below based on Tenant delays, then
the Commencement Date shall be no earlier than October 15, 1996, unless
requested by Tenant.  If Substantial
Completion or an earlier Commencement Date does not occur by February 1, 1997,
subject to Force Majeure delays, Tenant shall have the right in its sole
discretion to cancel this Lease for a 10 day period following such date, and
receive a return of the Security Deposit and all deposited Base Rent, and be
released from all liability hereunder.

 

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

 

(j)      As an additional improvement item, and as
part of the Initial Tenant Improvements, the plans and specifications shall
provide for an approximately 15,000 square foot mezzanine space at the rear of
the Premises.  The mezzanine will be bid
as an “add alternate” and the general contractor for the Base Building will
construct the mezzanine.  Tenant shall be
responsible for all design, architectural, engineering and construction costs
with respect to the mezzanine, including any additional Base Building or
Initial Tenant Improvement costs which result from such construction.  Tenant, upon receipt of an invoice from
Landlord or Gick, will promptly pay for all design, architectural and
engineering costs for the mezzanine which will not be included in the mezzanine
construction escrow.  Prior to
commencement of the construction of the mezzanine, Tenant will deposit with
Landlord an amount equal to 110% of the accepted bid for the mezzanine
construction.  Any costs in excess of the
escrowed amount shall be paid by Tenant within 5 business days of demand
therefor.  Upon receipt of final lien
waivers from all contractors, Landlord will return to Tenant any unused portion
of the 110% escrow.  Each day of delay to
Substantial Completion which results from the construction of the mezzanine,
which shall be determined in writing by Gick, shall serve to extend by one day
the July 15, 1996 date set forth in paragraph (h) above.

 

22

 

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

 

23

 

ADDENDUM 3

 

ASSIGNMENT AND SUBLETTING (CONSENT)

 

ATTACHED TO AND A PART OF THE LEASE AGREEMENT

DATED AUGUST 11, 1995, BETWEEN

GOVERNMENT TECHNOLOGY SERVICES, INC.

and

SECURITY CAPITAL
INDUSTRIAL TRUST

 

Notwithstanding the terms of Paragraph 17 of the Lease:

 

(a)           Excepting Tenant’s
absolute right to assign or sublet the Premises to a Tenant Affiliate, Landlord
shall not unreasonably withhold, delay or condition its consent to Tenant’s
request for permission to assign the Lease or sublease all or part of the
Premises.  It shall be reasonable for the
Landlord to withhold its consent to any assignment or sublease in any of the
following instances:

 

(i)            The assignee or sublessee is not
creditworthy in the sole but reasonable judgment of Landlord;

 

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

 

(iii)          The intended use of the Premises by
the assignee or sublessee would materially increase the pedestrian or vehicular
traffic to the Premises or the Project;

 

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

 

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

 

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

 

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

 

(viii)        The proposed assignee or sublessee is a
government entity.

 

The foregoing
criteria shall not exclude any other reasonable basis for Landlord to refuse
its consent to such assignment or sublease.

 

(b)           Any approved
assignment or sublease shall be expressly subject to the terms and conditions
of this Lease.

 

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

 

24

 

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

 

(e)             Landlord’s agreement to not
unreasonably withhold its consent shall only apply to the first assignment or
sublease under the Lease and to any subsequent proposed assignment or sublet of
at least 50% of the Premises.

 

25

 

ADDENDUM 4

 

TWO RENEWAL
OPTIONS AT MARKET

 

ATTACHED TO AND A
PART OF THE LEASE AGREEMENT

DATED AUGUST 11,
1995, BETWEEN

GOVERNMENT
TECHNOLOGY SERVICES, INC.

and

SECURITY CAPITAL
INDUSTRIAL TRUST

 

(a)             Provided that as of the time of the
giving of the First Extension Notice and the Commencement Date of the First
Extension Term, (x) Tenant is the Tenant originally named herein, (y) Tenant
actually occupies 60% of the Premises initially demised under this Lease and
any space added to the Premises, and (z) no Event of Default exists or would
exist but for the passage of time or the giving of notice, or both; then Tenant
shall have the right to extend the Lease Term for an additional term of 5 years (such additional term is
hereinafter called the “First Extension Term”) commencing on the day
following the expiration of the Lease Term (hereinafter referred to as the “Commencement
Date of the First Extension Term”).  Tenant
shall give Landlord notice (hereinafter called the “First Extension Notice”)
of its election to extend the term of the Lease Term at least 12 months, but
not more than 15 months, prior to the scheduled expiration date of the Lease
Term.

 

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

 

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

 

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

 

(e)             The determination of Base Rent does
not reduce the Tenant’s obligation to pay or reimburse Landlord for operating
expenses and other reimbursable items as set forth in the Lease, and Tenant
shall reimburse any pay Landlord as set forth in the Lease with respect to such
operating expenses and other items with respect to the Premises during the
First Extension Term and Second Extension Term without regard to any cap on
such expenses set forth in the Lease.

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

ADDENDUM 5

 

RIGHT OF FIRST
OFFER

 

ATTACHED TO AND A
PART OF THE LEASE AGREEMENT

DATED AUGUST 11,
1995, BETWEEN

GOVERNMENT
TECHNOLOGY SERVICES, INC.

and

SECURITY CAPITAL
INDUSTRIAL TRUST

 

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

 

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

 

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

 

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

 

(e)             If Tenant at any time declines any
Offered Space offered by Landlord, Tenant shall be deemed to have irrevocably
waived all further rights under this Addendum with respect to the specified
Offered Space, and Landlord shall be free to lease the Offered Space to third
parties including on terms which may be less favorable to Landlord than those
offered to Tenant.

 

28

 

ADDENDUM 6

 

CANCELLATION
OPTION

 

ATTACHED TO AND A
PART OF THE LEASE AGREEMENT

DATED AUGUST 11,
1995, BETWEEN

GOVERNMENT
TECHNOLOGY SERVICES, INC.

and

SECURITY CAPITAL
INDUSTRIAL TRUST

 

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

 

If Tenant elects to terminate this Lease pursuant to the immediately
preceding sentence, the effectiveness of such termination shall be conditioned
upon Tenant paying to Landlord $766,246.00 plus the sum of any unamortized
leasing commissions, calculated on a straight-line basis with no interest, less
an amount equal to 6 months of interest on the Termination Fee, calculated at
10% per annum using simple interest calculations (the “Termination Fee”)
contemporaneously with Tenant’s delivery of the Termination Notice to Landlord.
 Landlord and Tenant shall be relieved of
all obligations accruing under this Lease after the effective date of such
termination but not any obligations accruing under the Lease prior to the
effective date of such termination.

 

29

 

ADDENDUM 7

 

PREMISES
RELOCATION

 

ATTACHED TO AND A
PART OF THE LEASE AGREEMENT

DATED AUGUST 11,
1995, BETWEEN

GOVERNMENT
TECHNOLOGY SERVICES, INC.

and

SECURITY CAPITAL
INDUSTRIAL TRUST

 

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

 

30

 

ADDENDUM 8

 

RIGHT OF FIRST
OFFER TO PURCHASE

 

ATTACHED TO AND A
PART OF THE LEASE AGREEMENT

DATED AUGUST 11,
1995, BETWEEN

GOVERNMENT
TECHNOLOGY SERVICES, INC.

and

SECURITY CAPITAL
INDUSTRIAL TRUST

 

1.             Provided that Landlord is the owner of the approximately
7 acre tract of land located along Lee Jackson Memorial Highway as illustrated
on Exhibit C (the “Option Parcel”), Tenant shall have the right to purchase the
Option Parcel prior to Landlord listing the Option Parcel for sale to the
market.  The Option Parcel shall be
offered to Tenant by Landlord (“Landlord’s Offer”) at the price which Landlord
intends to offer such Option Parcel to the market.

 

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

 

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

 

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

 

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

 

6.             Landlord makes no, and at closing Tenant shall waive in
writing reasonably satisfactory to Landlord any, warranty or representation
with respect to the Premises (other than title to the Premises as provided
above), including without limitation, any representation or warranty as to the
environmental or physical condition of the Premises.  Except for such warranty, Tenant is relying on
its own inspection and review of the Premises.

 

7.             Landlord may conduct the sale as a tax-free exchange
pursuant to Section 1031 of the Internal Revenue Code.  Such exchange shall be conducted through a
qualified intermediary, at no cost to Tenant, and without affecting Landlord’s
obligations to Tenant.  Tenant shall not
be required to take title to any other property in connection with a Section
1031 exchange.

 

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

 

31

 

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

 

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

 

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

 

32

 

FIRST AMENDMENT TO
LEASE

 

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

 

W I T N E S S E T
H:

 

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

 

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

 

1.      Commencement
Date.  The commencement
date shall be hereby amended to be December 10, 1996.

 

2.       Except as modified
herein, the Lease, and all of the terms and conditions thereof, shall remain in
full force and effect and the same are hereby ratified and confirmed.

 

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

 

	
   

  	
  SCI DEVELOPMENT SERVICES INCORPORATED

  
	
   

  	
   

  
	
   

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert J. Watson

  	
   

  
	
   

  	
  Name:

  	
  ROBERT J. WATSON

  	
   

  
	
   

  	
  Title:

  	
  MANAGING DIRECTOR

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GOVERNMENT TECHNOLOGY SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
  LESSEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter E. JAnke

  	
   

  
	
   

  	
  Name:

  	
  Peter E. JAnke

  	
   

  
	
   

  	
  Title:

  	
  EVP & CFO

  	
   

  
						

 

 

FIRST AMENDMENT TO LEASE AGREEMENT

 

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

 

W I T N E S S E T H:

 

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

 

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

 

NOW THEREFORE, for and in
consideration of the sum of Ten and No/100 Dollars ($10.00) each to the other
in hand paid, the mutual covenants and agreements of the Lease and this First
Amendment, and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  GOVERNMENT TECHNOLOGY SERVICES, INC.

  	
  SECURITY CAPITAL INDUSTRIAL TRUST

  
	
   

  	
   

  
	
  By:

  	
  /s/ Thomas L. Smudz

  	
   

  	
  By:

  	
  /s/ Robert A Kritt

  	
   

  
	
  Name:

  	
  Thomas L. Smudz

  	
   

  	
  Name:

  	
  Robert A. Kritt

  	
   

  
	
  Title:

  	
  EVP & CFO

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
  10/17/95

  	
   

  
	
   

  	
  “Tenant”

  	
   

  	
   

  	
  “Landlord”

  	
   

  
										

 

 

SECOND AMENDMENT TO LEASE

 

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

 

W I T N E S S E T H:

 

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

 

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

 

1.              AMENDMENT.  Addendum 8 to the
Lease is hereby deleted and is of no force or effect.

 

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

 

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

 

	
   

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  SCI DEVELOPMENT SERVICES

  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. Marc Jason

  	
   

  
	
   

  	
  Name:

  	
  M. Marc Jason

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  LESSEE:

  
	
   

  	
   

  
	
   

  	
  GOVERNMENT TECHNOLOGY SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ H. Robert Boehm

  	
   

  
	
   

  	
  Name:

  	
  H. Robert Boehm

  	
   

  
	
   

  	
  Title:

  	
  V.P. Human Resources

  	
   

  
						

 

 

THIRD
AMENDMENT TO LEASE AGREEMENT

 

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

 

Recitals

 

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

 

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

 

3.     Landlord recaptured as of June 1, 2004
61,788 square feet of the Premises (the “Recapture Space”)
as permitted by the Lease (the “Recapture”) and
Landlord and Tenant have agreed upon a certain allocation of costs relating to
such Recapture.  The Recapture Space and
the remaining Premises (the “Revised Premises”)
are as set forth in the attached Exhibit A.

 

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

 

NOW
THEREFORE, in consideration of the above recitals which by
this reference are incorporated herein and made a substantive part hereof, the
mutual covenants and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant, intending to be legally bound hereby, agree as follows:

 

1.     Capitalized Terms;
Recitals; Exhibits.  All
capitalized terms not defined in this Third Amendment shall have the same
meaning as in the Lease.  The preceding
recitals and attached Exhibits are deemed to be a material part hereof
and are hereby incorporated herein by this reference.

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

f)        Section 2 of the Lease is deleted and
restated as:

 

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

 

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

 

	
  Period

  	
   

  	
  Per
  Square Ft Per Year

  	
   

  	
  Monthly
  Rent

  	
   

  
	
  Lease Year 8

  	
   

  	
  $

  	
  4.14

  	
   

  	
  $

  	
  49,287.05

  	
   

  
								

 

2

 

	
  Lease Year 9 

  	
   

  	
  $

  	
  4.26 

  	
   

  	
  $

  	
  50,715.66 

  	
   

  
	
  Lease Year 10 

  	
   

  	
  $

  	
  4.39 

  	
   

  	
  $

  	
  52,263.32 

  	
   

  

 

3.     Recapture Space.

 

a)          Subject to the provisions of this
Third Amendment, Tenant releases, quitclaims, and surrenders to Landlord, its
successors and assigns, its leasehold interest with respect to the Recapture
Space and all of the estate and rights of Tenant in and to the such leasehold
interest and the Recapture Space and Tenant forever releases and discharges
Landlord from any and all claims, demands or causes of action whatsoever
against Landlord or its successor and assigns arising out of or in connection
with the Recapture Space or such leasehold interest or any obligations to be
observed or performed by Landlord under the Lease after the Recapture Date with
respect to the Recapture Space.

 

b)         Subject to the provisions of this Third
Amendment, Landlord recaptures the Recapture Space from and after the Recapture
Date, and effective as of the Recapture Date, forever releases and discharges
Tenant from any obligations to be observed and performed by the Tenant under
the Lease with respect to the Recapture Space after the Recapture Date (subject
to Tenant having fulfilled the agreements set forth herein and that Tenant’s
representations and warranties set forth herein are true and correct).  Notwithstanding the foregoing, nothing herein
shall release Tenant from:

 

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

 

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

 

4.     Recapture Costs and Work.

 

a)       Tenant shall surrender the Recapture
Space as of the Recapture Date in the condition required pursuant to the Lease
upon surrender of the Premises, except as otherwise provided in this Third
Amendment.

 

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

 

3

 

hereinafter), Landlord shall undertake the following
work at its sole cost and expense: (i) construct a demising wall between the
Revised Premises and the Recapture Space; (ii) separate the electrical service
between the Revised Premises and the Recapture Space; (iii) provide an
electrical feed for the material handling charging station that will be
relocated at Tenant’s sole expense from the Recapture Space to the Revised
Premises; and (iv) remove the existing Tenant chain link fence and gate in the
Building parking lot and relocate such fence and gate to locations reasonably
determined by Landlord to correspond with the Revised Premises.  Tenant acknowledges and agrees that such
relocation of the fence and gate locations shall cause a proportionate
reduction in the parking lot areas reserved for Tenant’s use to reflect the
difference in size between the Premises and the Revised Premises.

 

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

 

d)      Tenant acknowledges and agrees that Tenant’s
work to the Revised Premises related to or arising from the Recapture shall be
subject to the requirements of the Lease with respect to Tenant-Made
Alterations.

 

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

 

4

 

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

 

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

 

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

 

9.     Counterpart
Execution.  This Third Amendment may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which,
when executed and delivered, together shall constitute one and the same
document.

 

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

 

11.   Entire
Agreement.  This Third Amendment, together with its
exhibits, contains all agreements of the parties to this Third Amendment and
supersedes any previous negotiations.  There
have been no representations made by the Landlord or understandings made between
the parties other than those set forth in the Lease (as hereby amended) and its
exhibits.  The Lease may not be modified
except by a written instrument duly executed by the parties hereto.

 

12.   Payments.  All payments to Landlord pursuant to this
Third Amendment other than Base Rent shall constitute additional rent under the
Lease, and in the event of nonpayment of either Base Rent or additional rent by
Tenant, Landlord shall have all of the rights and remedies as set forth in this
Third Amendment and the Lease.  In the
event of nonpayment by Landlord of any amounts required pursuant to Section
4(c) hereof, Tenant shall provide written notice to Landlord of such
non-payment.  If Landlord fails to make
payment within ten (10) business days following such written notice, Tenant
shall thereafter have all of the rights and remedies provided by the Lease, as
amended hereby, and applicable law.

 

5

 

 

13. Tenant’s
Authority.   Tenant
represents and warrants that (a) Tenant is the rightful owner of all of the
Tenant’s interest in the Lease and that Tenant has full power and authority to
execute and perform this Third Amendment and has taken all action necessary to
authorize the execution and performance of this Third Amendment; (b) Tenant has
not made any disposition, assignment, lease, or conveyance of the Lease or
Tenant’s interest therein or any claim, demand, obligation, liability, action
or cause of action arising from the Lease; (c) no other person or entity has an
interest in the Lease, collateral or otherwise; (d) there are no outstanding
contracts for the supply of labor or material and no work has been done or is
being done in, to or about the Recapture Space which has not been fully paid
for and for which appropriate waivers of mechanic’s liens have not been
obtained; and (e) Tenant is not currently subject to the provisions of the United
Slates Bankruptcy Code or other law of the United States or any state thereof
for the protection of debtors.   If
Tenant signs as a corporation each of the persons executing this Third
Amendment on behalf of Tenant represents and warrants that Tenant has been and
is qualified to do business in the state in which the Building is located, that
the corporation has full right and authority to enter into this Third
Amendment, and that all persons signing on behalf of the corporation were
authorized to do so by appropriate corporate actions.  If Tenant signs as a partnership, trust or
other legal entity, each of the persons executing this Third Amendment on
behalf of Tenant represents and warrants that Tenant has complied with all
applicable laws, rules and governmental regulations relative to its right to do
business in the state and that such entity on behalf of the Tenant was
authorized to do so by any and all appropriate partnership, trust or other
actions.  If requested by Landlord,
Tenant agrees to furnish promptly upon request a corporate resolution
evidencing the due authorization of Tenant to enter into this Third Amendment.

 

14. Miscellaneous.  This Third Amendment(i) shall be binding upon
and inure to the benefit of Landlord and Tenant, and their respective
successors, assigns and related entities (subject to any restrictions set forth
in the Lease) and (ii) shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia and may be executed in multiple
counterparts or by facsimile transmissions, each of which shall be treated as
an original of this Third Amendment for all purposes, and all of which shall
constitute one (1) agreement binding upon all of the parties hereto,
notwithstanding that all the parties are not signatory to the original or the same
counterpart or facsimile transmission. 
Each such counterpart or facsimile transmission shall be admissible into
evidence as an original hereof against the party who executed it.

 

15. Limitation
of Liability.  Redress for
any claim against Landlord under the Lease and this Third Amendment shall be
limited to and enforceable only against and to the extent of Landlord’s
interest in the Building.  The
obligations of Landlord under the Lease and this Third Amendment are not intended
to and shall not be personally binding upon, nor shall any resort be had to
private properties of, any of Landlord’s trustees or board of directors or
officers, as the case may be, its investment manager, the general partners
thereof, or any beneficiaries, stockholders, employees, or agents of Landlord
or of the investment manager.

 

6

 

16. Waivers.
 Landlord and Tenant each agree to and
they hereby do waive trial by jury in any action, proceeding or counterclaim
brought by either of the parties hereto against the other on any matters
whatsoever arising out of or in any way connected with this Third Amendment or
the Lease.

 

[Signatures contained on next
page]

 

7

 

IN
WITNESS WHEREOF, Landlord
and Tenant have caused this Third Amendment to be executed as of the day and
year as first above written.

 

	
  WITNESS:

  	
  LANDLORD

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CHANTILLY DISTRIBUTION, INC.,

  	
   

  
	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  RREEF MANAGEMENT COMPANY,

  	
   

  
	
   

  	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/William B. Murray

  	
   

  	
  By:

  	
  /s/Patrick N. Connell

  	
   

  	
   

  
	
  Name:

  	
  William B. Murray

  	
  Name:

  	
  Patrick N. Connell

  	
   

  
	
  Title:

  	
  Property Manager

  	
  Title:

  	
  Vice President - Regional Manager

  	
   

  
	
   

  	
  Dated:

  	
  10/7/04

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
  TENANT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GTSI CORP.,

  	
   

  
	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/Charles Deleon

  	
   

  	
  By:

  	
  /s/Thomas A. Mutryn

  	
   

  	
   

  
	
  Name:

  	
  CHARLES DELEON

  	
  Name:

  	
  THOMAS A. MUTRYN

  	
   

  	
   

  
	
  Title:

  	
  CORPORATE SECRETARY

  	
  Title:

  	
  SR VP & CFO

  	
   

  	
   

  
	
   

  	
  Dated:

  	
  10/5/04

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Corporate Seal]

  	
   

  	
   

  
	
  Dated:

  	
  10/5/04

  	
   

  
											

 

8Exhibit
10.4

 

DEED OF LEASE

 

by
and between

 

PETULA ASSOCIATES, LTD.

 

(“Landlord”)

 

and

 

GOVERNMENT
TECHNOLOGY SERVICES, INC.

 

(“Tenant”)

 

dated

 

December 10, 1997

 

11/13/97

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  DEMISE

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  TERM

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  RENT

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  PERMITTED USE

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  EXPENSES

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  ADDITIONAL RENT

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  SORTING AND
  SEPARATION OF REFUSE AND TRASH

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  HAZARDOUS SUBSTANCES

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  INSURANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  DAMAGE OR DESTRUCTION

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  ASSIGNMENT AND SUBLETTING

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  CARE OF PREMISES

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  ALTERATION BY TENANT

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  CONDEMNATION

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  SUBORDINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  ACCESS TO PREMISES

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  RULES AND REGULATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  COVENANTS OF RIGHT TO
  LEASE

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  MECHANICS LIENS

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  EXPIRATION
  OF LEASE AND SURRENDER OF POSSESSION

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  DEFAULT-REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  RE-ENTRY BY LANDLORD

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  ADDITIONAL RIGHTS TO
  LANDLORD

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  SUCCESSORS, ASSIGNS
  AND LIABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  MORTGAGEE’S APPROVAL

  	
   

  
	
   

  	
   

  	
   

  
	
  28.

  	
  ESTOPPEL CERTIFICATES

  	
   

  

 

i

 

	
  29.

  	
  DEFAULT RATE OF INTEREST

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
  EXCULPATORY PROVISIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
  MORTGAGEE PROTECTION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
  RECIPROCAL
  COVENANT ON NOTIFICATION OF ADA VIOLATIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
  LAWS THAT GOVERN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  34.

  	
  FINANCIAL STATEMENTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  35.

  	
  PARKING

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  36.

  	
  SIGNAGE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  37.

  	
  RECORDATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  38.

  	
  FORCE MAJEURE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  39.

  	
  LANDLORD’S LIEN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  40.

  	
  BROKERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  41.

  	
  CONFIDENTIALITY

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  42

  	
  LEASE/DEED OP LEASE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  43

  	
  RIGHT OF FIRST OFFER

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  44.

  	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  45.

  	
  ROOF-TOP EQUIPMENT

  	
   

  	
   

  

 

	
  EXHIBIT

  	
  A

  	
  -

  	
  Land

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  B

  	
  -

  	
  Work Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  B-1

  	
  -

  	
  Current Site Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  B-2

  	
  -

  	
  Form of Environmental Certification

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  B-3

  	
  -

  	
  Current Specification

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  C

  	
  -

  	
  Declaration of Lease Commencement

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  D

  	
  -

  	
  Rules and Regulations

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  E

  	
  -

  	
  Avion® Signage Program

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  F

  	
  -

  	
  License Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  F-1

  	
  -

  	
  Location of License Area

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  F-2

  	
  -

  	
  Intentionally Deleted

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  F-3

  	
  -

  	
  Minimum Equipment Requirements

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  F-4

  	
  -

  	
  Contractor Insurance Requirements

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
  G

  	
  -

  	
  Non-Disturbance Agreement

  	
   

  

 

ii

 

DEED OF LEASE

 

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

 

IT IS AGREED AS FOLLOWS:

 

1.             DEMISE.

 

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

 

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

 

2.             TERM.

 

(A)          Initial
Term

 

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

 

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

(B)           Commencement
Certificate.

 

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

 

(C)           Extension
Period.

 

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

 

3

 

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

 

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

 

4

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

3.             RENT.

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

(E)                                 Security
Deposit.

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

of
whether Tenant disputes the content of such declaration; and

 

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

 

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

 

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

 

(9)                                  Right
to Draw Upon security Deposit.

 

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

 

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

 

11

 

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

 

(10)                            Transfer
of Security Deposit.

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

4.             PERMITTED USE.

 

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

 

13

 

5.            EXPENSES.

 

(A)         Taxes

 

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

 

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

 

14

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

6.             ADDITIONAL RENT.

 

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

 

17

 

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

 

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

 

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

 

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

 

18

 

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

 

7.             SORTING AND
SEPARATION OF REFUSE AND TRASH.

 

Tenant shall be
responsible for contracting for all trash removal services.  Tenant covenants and agrees, as its sole cost
and expense, to comply with all present and future laws, orders and regulations
of all state, federal, municipal and local governments, departments,
commissions and boards regarding the collection, sorting, separation and
recycling of waste products, garbage, refuse and trash.  Tenant shall pay all costs, expenses, fines,
penalties or damages that may be imposed on Landlord or Tenant by reason of
Tenant’s failure to comply with the provisions of this Section 7, and, at
Tenant’s sole cost and expense, shall indemnify, defend and hold Landlord
harmless (including legal fees and expenses) from and against any actions,
claims and suits

 

19

 

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

 

8.            HAZARDOUS
SUBSTANCES.

 

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

 

20

 

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

 

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

 

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

 

21

 

9.                                       INSURANCE.

 

(A)          INSURANCE BY LANDLORD.

 

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

 

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

 

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

 

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

 

(B)          INSURANCE BY TENANT.

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

(C)          SUBROGATION.

 

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

 

10.          DAMAGE OR
DESTRUCTION.

 

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

 

24

 

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

 

11.          INDEMNIFICATION.

 

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

 

25

 

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

 

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

 

26

 

 

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

 

12.          ASSIGNMENT
AND SUBLETTING.

 

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

 

27

 

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

 

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

 

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

 

28

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

 

30

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

32

 

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

 

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

 

13.           CARE OF
PREMISES.

 

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

 

14.           ALTERATION
BY TENANT.

 

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

 

33

 

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

 

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

 

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

 

34

 

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

 

15.           CONDEMNATION.

 

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

 

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

 

16.           SUBORDINATION.

 

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

 

	
   

  	
  (B)

  	
  (1)

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

  

 

35

 

	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

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

  

 

36

 

	
   

  	
   

  	
   

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

  

 

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

 

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

 

37

 

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

 

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

 

17.                                 ACCESS TO PREMISES.

 

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

 

38

 

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

 

18.                                 RULES AND REGULATIONS.

 

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

 

19.                                 COVENANTS OF RIGHT TO LEASE.

 

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

 

20.                                 MECHANICS LIENS.

 

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

 

39

 

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

 

21.           EXPIRATION OF LEASE AND SURRENDER OF
POSSESSION.

 

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

 

40

 

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

 

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

 

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

 

22.                                 DEFAULT-REMEDIES.

 

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

 

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

 

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

 

41

 

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

 

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

 

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

 

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

 

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

 

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

 

42

 

 

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

 

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

 

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

 

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

 

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

 

43

 

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

 

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

 

44

 

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

 

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

 

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

 

45

 

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

 

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

 

(E)                                 Landlord
Default.

 

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

 

46

 

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

 

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

 

47

 

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

 

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

 

23.                                 RE-ENTRY BY LANDLORD.

 

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

 

48

 

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

 

24.                                 ADDITIONAL RIGHTS TO LANDLORD.

 

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

 

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

 

(C)                                Intentionally
Deleted.

 

(D)                               Intentionally
Deleted.

 

25.                                 SUCCESSORS, ASSIGNS AND LIABILITY.

 

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

 

26.                                 NOTICES.

 

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

 

49

 

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

 

	
  Landlord

  	
  Tenant

  
	
   

  	
   

  
	
  Petula Associates, Ltd.

  	
  If Prior to the Commencement

  
	
  711 High Street

  	
  Date:

  
	
  Des Moines, Iowa 50392-1370

  	
  Government Technology

  
	
  Attn: CRE Equities/Mid-Atlantic Team

  	
  4100 Lafayette Center Drive

  
	
   

  	
  Chantilly, VA 20151-1200

  
	
   

  	
   

  
	
  With a copy
  to:

  	
  With a copy to:

  
	
   

  	
   

  
	
  Trammell Crow Real Estate

  	
  Government Technology

  
	
  Services, Inc.

  	
  Services, Inc.

  
	
  1115 30th Street, N.W.

  	
  4100 Lafayette Center Drive

  
	
  Washington, D.C. 20007

  	
  Chantilly, Virginia 20151-1200

  
	
  Attn:     Property
  Manager/Avion

  	
  Attn: General Counsel

  
	
   

  	
   

  
	
   

  	
  If after the Commencement

  
	
   

  	
  Date:

  
	
   

  	
   

  
	
   

  	
  Tenant at the Premises

  
	
   

  	
  Attn: Director of Facilities

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Tenant at the Premises

  
	
   

  	
  Attn: General Counsel

  

 

27.           MORTGAGEE’S APPROVAL.

 

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

 

50

 

28.                                 ESTOPPEL CERTIFICATES.

 

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

 

29.                                 DEFAULT RATE OF INTEREST.

 

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

 

30.                                 EXCULPATORY PROVISIONS.

 

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

 

51

 

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

 

31.                                 MORTGAGEE PROTECTION.

 

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

 

32.                                 RECIPROCAL COVENANT ON NOTIFICATION OF
ADA VIOLATIONS.

 

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

 

52

 

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

 

33.                                 LAWS THAT GOVERN.

 

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

 

34.                                 FINANCIAL STATEMENTS.

 

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

 

35.                                 PARKING.

 

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

 

53

 

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

 

36.           SIGNAGE.

 

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

 

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

 

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

 

54

 

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

 

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

 

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

 

37.           RECORDATION.

 

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

 

38.           FORCE MAJEURE.

 

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

 

55

 

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

 

39.           LANDLORD’S LIEN.

 

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

 

56

 

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

 

40.           BROKERS.

 

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

 

41.           CONFIDENTIALITY.

 

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

 

57

 

42.                                 LEASE/DEED OF LEASE.

 

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

 

43.                                 RIGHT OF FIRST OFFER.

 

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

 

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

 

58

 

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

 

44.                                 MISCELLANEOUS.

 

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

 

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

 

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

 

59

 

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

 

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

 

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

 

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

 

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

 

45.                                 ROOF-TOP EQUIPMENT.

 

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

 

60

 

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

 

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

 

	
  WITNESS/ATTEST:

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  PETULA ASSOCIATES, LTD., an Iowa

  corporation

  
	
  /s/ Susie Wieland

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Ripson

  	
  (Seal)

  
	
   

  	
   

  	
  MICHAEL D. RIPSON

  	
   

  
	
   

  	
  Title:

  	
  VICE PRESIDENT

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ H. L. Minear

  	
  (Seal)

  
	
   

  	
   

  	
  H. L. Minear

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WITNESS/ATTEST:

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
  GOVERNMENT TECHNOLOGY SERVICES,

  INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
  By:

  	
  /s/ M. Dendy Young

  	
  (Seal)

  
	
   

  	
  Title: 

  	
  CEO

  	
   

  
							

 

61

 

FIRST AMENDMENT TO LEASE
AGREEMENT

 

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

 

WITNESSETH:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  AG/ARG AVION, L.L.C

  
	
   

  	
   

  
	
  WITNESS:

  	
  By:

  	
  /s/ David Fisher

  	
   

  
	
   

  	
  Name:

  	
  David Fisher

  	
   

  
	
  /s/ Nancy Feene

  	
   

  	
  Title:

  	
  Senior VP

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
  ATTEST:

  	
  GTS1 Corp.

  
	
   

  	
  3901 Stonecroft Boulevard

  Chantilly, VA 20151

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott Decker

  	
   

  
	
   

  	
  Name:

  	
  Scott Decker

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Sr. Director, Operations

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