Document:

Exhibit 10.1

 

FIRST AMENDMENT TO LEASE

 

THIS FIRST AMENDMENT TO
LEASE (this “Amendment”) is made as of February 28,
2007 by and between

 

	
  “Landlord”

  	
   

  	
  NEWTOWER
  TRUST COMPANY MULTI-EMPLOYER PROPERTY TRUST, a trust organized under 12 C F R
  Section 9.18

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
  “Tenant”

  	
   

  	
  METASTORM,
  INC., a Maryland corporation

  

 

PRELIMINARY STATEMENT

 

Pursuant to the Office Lease dated as of February 9,
2006 (the “Original Lease”), between landlord
and Tenant, Tenant has leased from Landlord 9,196 rentable square feet of space
designated as Suite 1250 (the “Original Premises”)
at 500 East Pratt Street, Baltimore, Maryland. 
Tenant has exercised its right of first offer pursuant to Section 2.11
of the Original Lease.  Landlord and
Tenant desire to amend the Original Lease to expand the Premises by 2,219
rentable square feet contiguous to the Original Premises.  Capitalized terms not otherwise defined in
this Amendment are defined in the Original Lease.

 

SECTION 1:  DEFINITIONS

 

The following definitions supersede and replace the
definitions for such terms to the extent defined in the Original Lease:

 

Base Rent:  The rate per
rentable square foot per annum and the portion of the Lease Term during which
such monthly Base Rent is payable shall be determined from the following tables
except to the extent the next sentence applies. 
If the final determination of the rentable square feet for the Expansion
Premises made about the Expansion Premises Commencement Date in accordance with
the definition of the term “Expansion Premises” and the paragraph entitled “Lease
Memorandum” differs from the number of rentable square feet utilized in the
second table, the Base Rent shall be recomputed using the annual rental rates
specified in the second table and the finally determined rentable square feet
for the Premises Base Rent set forth in tabular form in the Lease Memorandum
for the Expansion Premises shall be final and conclusive as, when and to
the extent specified in the paragraph entitled “Lease Memorandum”

 

Prior to Expansion Premises Commencement
Date:

 

	
  Applicable Portion of Lease Term

  	
   

  	
  Rate Per/ 

  Rentable Sq

  Ft / Annum

  	
   

  	
  Annual Base Rent 

  (excluding 

  Supplemental Tenant

  improvement 

  Allowance)

  	
   

  	
  Monthly Base 

  Rent Installment 

  (Annual + 12)

  	
   

  	
  Monthly Base Rent

  Plus Tenant 

  Improvement 

  Allowance

  	
   

  
	
  March 31,
  2006

  	
   

  	
  March 31, 2006

  	
   

  	
  $

  	
  32.00

  	
   

  	
  $

  	
  806.22

  	
   

  	
  $

  	
  806.22

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  April 1,
  2008

  	
   

  	
  August 31, 2006

  	
   

  	
  $

  	
  32.00

  	
  *

  	
  $

  	
  122,613.35

  (5 months)

  	
  *

  	
  $

  	
  24,522.67

  	
  *

  	
  $

  	
  1,164.91

  	
   

  
	
  September 1,
  2006

  	
   

  	
  March 31, 2007

  	
   

  	
  $

  	
  16.00

  	
   

  	
  $

  	
  85,829.31

  (7 months)

  	
   

  	
  $

  	
  12,261.33

  	
   

  	
  $

  	
  13,426.24

  	
   

  
	
  April 1,
  2007

  	
   

  	
  August 31, 2007

  	
   

  	
  $

  	
  16.48

  	
   

  	
  $

  	
  63,145.85

  (5 months)

  	
   

  	
  $

  	
  12,629.17

  	
   

  	
  $

  	
  13,794.08

  	
   

  
	
  September 1,
  2007

  	
   

  	
  March 31, 2008

  	
   

  	
  $

  	
  32.96

  	
   

  	
  $

  	
  176,808.45

  (7 months)

  	
   

  	
  $

  	
  25,258.35

  	
   

  	
  $

  	
  26,423.26

  	
   

  
	
  April 1,
  2008

  	
   

  	
  March 31, 2009

  	
   

  	
  $

  	
  33.95

  	
   

  	
  $

  	
  312,204.24

  	
   

  	
  $

  	
  26,017.02

  	
   

  	
  $

  	
  27,181.93

  	
   

  
	
  April 1,
  2009

  	
   

  	
  March 31, 2010

  	
   

  	
  $

  	
  34.97

  	
   

  	
  $

  	
  321,584.16

  	
   

  	
  $

  	
  26,798.68

  	
   

  	
  $

  	
  27,963.59

  	
   

  
	
  April 1,
  2010

  	
   

  	
  March 31, 2011

  	
   

  	
  $

  	
  36.02

  	
   

  	
  $

  	
  331,239.96

  	
   

  	
  $

  	
  27,603.33

  	
   

  	
  $

  	
  28,768.24

  	
   

  
	
  April 1,
  2011

  	
   

  	
  March 31, 2012

  	
   

  	
  $

  	
  37.10

  	
   

  	
  $

  	
  341,171.64

  	
   

  	
  $

  	
  28,430.97

  	
   

  	
  $

  	
  29,595.88

  	
   

  

 

 

	
  Applicable Portion of Lease Term

  	
   

  	
  Rate Per/ 

  Rentable Sq

  Ft / Annum

  	
   

  	
  Annual Base Rent 

  (excluding 

  Supplemental Tenant

  improvement 

  Allowance)

  	
   

  	
  Monthly Base 

  Rent Installment 

  (Annual + 12)

  	
   

  	
  Monthly Base Rent

  Plus Tenant 

  Improvement 

  Allowance

  	
   

  
	
  April 1,
  2012

  	
   

  	
  March 31, 2013

  	
   

  	
  $

  	
  38.21

  	
   

  	
  $

  	
  351,379.20

  	
   

  	
  $

  	
  29,281.60

  	
   

  	
  $

  	
  30,446.51

  	
   

  
	
  April 1,
  2013

  	
   

  	
  March 31, 2014

  	
   

  	
  $

  	
  39.36

  	
   

  	
  $

  	
  361,954.56

  	
   

  	
  $

  	
  30,162.88

  	
   

  	
  $

  	
  31,327.79

  	
   

  
	
  April 1,
  2014

  	
   

  	
  March 31, 2015

  	
   

  	
  $

  	
  40.54

  	
   

  	
  $

  	
  372,805.80

  	
   

  	
  $

  	
  31,067.15

  	
   

  	
  $

  	
  32,232.06

  	
   

  
	
  April 1,
  2015

  	
   

  	
  March 31, 2016

  	
   

  	
  $

  	
  41.76

  	
   

  	
  $

  	
  384,024.96

  	
   

  	
  $

  	
  32,002.08

  	
   

  	
  $

  	
  33,166.99

  	
   

  

 

From and
After Expansion Premises Commencement Date:

 

	
  Applicable Portion of Lease Term

  	
   

  	
  Rate Per/ 

  Rentable Sq

  Ft / Annum

  	
   

  	
  Annual Base Rent 

  (excluding 

  Supplemental Tenant

  improvement 

  Allowance)

  	
   

  	
  Monthly Base 

  Rent Installment 

  (Annual + 12)

  	
   

  	
  Monthly Base Rent

  Plus Tenant 

  Improvement 

  Allowance

  	
   

  
	
  Expansion Premises Commencement Date

  	
   

  	
  August 31, 2007

  	
   

  	
  $

  	
  16.48

  	
   

  	
  $

  	
  78,383.00

  (5 months)

  	
   

  	
  $

  	
  15,676.60

  	
   

  	
  **

  	
   

  
	
  September 1,
  2007

  	
   

  	
  March 31, 2008

  	
   

  	
  $

  	
  32.96

  	
   

  	
  $

  	
  219,947.40

  (7 months)

  	
   

  	
  $

  	
  31,353.20

  	
   

  	
  **

  	
   

  
	
  April 1,
  2008

  	
   

  	
  March 31, 2009

  	
   

  	
  $

  	
  33.95

  	
   

  	
  $

  	
  387,539.28

  	
   

  	
  $

  	
  32,294.94

  	
   

  	
  **

  	
   

  
	
  April 1,
  2009

  	
   

  	
  March 31, 2010

  	
   

  	
  $

  	
  34.97

  	
   

  	
  $

  	
  399,182.52

  	
   

  	
  $

  	
  33,265.21

  	
   

  	
  **

  	
   

  
	
  April 1,
  2010

  	
   

  	
  March 31, 2011

  	
   

  	
  $

  	
  36.02

  	
   

  	
  $

  	
  411,168.36

  	
   

  	
  $

  	
  34,264.03

  	
   

  	
  **

  	
   

  
	
  April 1,
  2011

  	
   

  	
  March 31, 2012

  	
   

  	
  $

  	
  37.10

  	
   

  	
  $

  	
  423,496.56

  	
   

  	
  $

  	
  35,291.38

  	
   

  	
  **

  	
   

  
	
  April 1,
  2012

  	
   

  	
  March 31, 2013

  	
   

  	
  $

  	
  38.21

  	
   

  	
  $

  	
  436,167.12

  	
   

  	
  $

  	
  36,347.26

  	
   

  	
  **

  	
   

  
	
  April 1,
  2013

  	
   

  	
  March 31, 2014

  	
   

  	
  $

  	
  39.36

  	
   

  	
  $

  	
  449,294.40

  	
   

  	
  $

  	
  37,441.20

  	
   

  	
  **

  	
   

  
	
  April 1,
  2014

  	
   

  	
  March 31, 2015

  	
   

  	
  $

  	
  40.54

  	
   

  	
  $

  	
  462,764.16

  	
   

  	
  $

  	
  38,563.68

  	
   

  	
  **

  	
   

  
	
  April 1,
  2015

  	
   

  	
  March 31, 2016

  	
   

  	
  $

  	
  41.76

  	
   

  	
  $

  	
  476,690.40

  	
   

  	
  $

  	
  39,724.20

  	
   

  	
  **

  	
   

  

 

** To be included in updated Lease Memorandum if
applicable

 

Commencement Date:  The Original
Premises Commencement Date with respect to the Original Premises and the
Expansion Premises Commencement Date with respect to the Expansion Premises.

 

Expansion Premises: 
The portion of the Building depicted on the plan attached to this
Amendment as Exhibit B-1, together with the right in common with
other tenants of the same floor of the Building to use the exterior balcony,
which shall be demised using a metal railing. 
Based on measurements conducted by Landlord’s architect, the Expansion
Premises as of the Expansion Premises Commencement Date shall contain 2,219 rentable square feet of the approximate total 279,716 rentable square feet of office space for the entire
Building.  The method used by the
Landlord in establishing its estimates of rentable square feet for the Premises
and the Building and the determination of rentable square feet at or about the
Commencement Date shall be made, in accordance with BOMA guidelines (ANSI/BOMA
Z65 1 1996).  Based on measurements by
Landlord’s architect, the add-on factor for the twelfth floor is 19.39%.  Any additions to the Premises shall be
measured in accordance with BOMA guidelines (ANSI/BOMA Z65.1 1996).

 

Expansion Premises Commencement Date: 
The earlier to occur of:  (a) the
date of Substantial Completion of the Expansion Premises; or (b) the date
on which Tenant takes possession of all or part of the Expansion Premises.

 

Expansion Premises Commencement Date: 
The earlier to occur of:  (a) the
date of Substantial Completion of the Expansion Premises; or (b) the date
on which Tenant takes possession of all or part of the Expansion Premises.

 

Lease:  The Original
Lease as amended by this Amendment and as the same may be further modified or
amended hereafter.

 

Lease Security Deposit: 
Collectively, the following items: 
(a) the cash sum of Fifty Thousand Dollars ($50,000.00) with
respect to the Original Premises; (b) the Basic Letter of Credit in the
amount of $300,000 for the Original Premises; (c) the Supplemental Letter
of Credit in the amount of $91,960; (d) the cash sum of Twelve Thousand
Dollars ($12,000.00) with respect to the 

 

2

 

Expansion Premises; and (e) the
letter(s) of credit delivered by Tenant to Landlord as described in the paragraph
entitled “Security Provisions” in the Original Lease, as amended, below.

 

Original Premises Commencement Date:  March 31,
2008.

 

Parking Ratio:  2.5 parking stalls per 1,000 rentable
square feet of the Premises.  The number
of parking stalls available pursuant to the Lease shall increase from 23 to 28
effective as of the Expansion Premises Commencement Date.

 

Premises:  Prior to the
Expansion Premises Commencement Date, the Original premises. From and after the
Expansion Premises Commencement Date, collectively, the Original Premises and
the Expansion Premises Prior to the Expansion Premises Commencement Date, the
Premises contains 9,198 rentable
square feet.  From and after the
Expansion Premises Commencement Date, the Premises shall contain 11,415 rentable square feet.

 

Tenant’s Pro Rata Share: 
Prior to the Expansion Premises Commencement Date, Three and
29/100 Percent (3.29%); from and after the Expansion Premises
Commencement Date, Four and 08/100 Percent
(4.08%), which shall be final, conclusive and controlling from and
after the Expansion Premises Commencement Date during to Lease Term for all
purposes unless a change appears in the Lease Memorandum on the measurement of
the Expansion Premises.

 

SECTION 2:  EXPANSION OF PREMISES

 

2.1           Expansion of Premises. 
Landlord
and Tenant hereby agree to expand the Original Premises to include the
Expansion Premises Landlord hereby agrees to lease to Tenant and Tenant hereby
agrees to lease from Landlord the Expansion Premises.

 

2.2           Tenant Improvements. 
Promptly following agreement to the Plans pursuant to the Work Letter,
Landlord shall commence and complete construction of the Tenant Improvements
for the Expansion Premises in accordance with the Work Letter, as amended by
this Amendment.  Tenant acknowledges that
no representations as to the condition of the Expansion Premises have been made
by Landlord, unless such are expressly set forth in this Amendment.  The Tenant Improvements to Expansion Premises
shall be completed in a good and workmanlike manner and in substantial
compliance with applicable laws, rules, and regulations and shall include
delivery by Landlord of a certificate of occupancy or other form of
governmental authorization, as required by law, issued by the appropriate
governmental entity, stating that the Expansion Premises may lawfully be
occupied.

 

2.3           Expansion Premises
Commencement Date.  Landlord shall notify Tenant
in writing of Substantial Completion of the Expansion Premises.  If Tenant believes that Substantial
Completion has not occurred, Tenant shall notify Landlord in writing of its
objections within five (5) Business Days after its receipt of the Landlord’s
notice described in the preceding sentence. Landlord shall have a reasonable
time after its receipt of Tenant’s notice in which to take such action as may
be necessary to achieve Substantial Completion, and shall notify Tenant in
writing when such has been achieved. 
Taking of possession by Tenant shall establish the Expansion Premises Commencement
Date as specified in the definition of that term even if Tenant disputes
whether Substantial Completion has occurred or attempts to condition qualify
the taking of possession.  In the event
of any dispute as to whether Substantial Completion has occurred, the receipt
of a temporary certificate of occupancy as described in Paragraph 2(b) of
the Work Letter shall be conclusive unless a temporary certificate of occupancy
is unavailable or delayed due to causes which are Tenant’s responsibility shall
be conclusive if on the Expansion Premises Commencement Date, Punch List
Work remains to be completed, Landlord, Tenant, and the Architect (as defined
in the Work Letter) shall agree on such Punch List Work prior to occupancy by
Tenant and Landlord will promptly complete it after the Expansion Premises
Commencement Date in accordance with Paragraph 4(g) of the Work
Letter.  In no event shall Tenant’s
refusal or failure to agree on the nature and extent of Punch List Work or the
existence of items of Punch List Work delay or postpone the occurrence of the
Expansion Premises Commencement Date. Tenant shall make no changes to the Plans
or the work reflected in the Plans without the consent of Landlord.

 

3

 

2.4           Amendment to Work Letter. 
The Tenant improvements for the Expansion Premises shall be designed and
completed on all of the same terms as contained in the Work Letter with the
following modifications:

 

2.4.1           All references to the Tenant Improvement Work shall
mean the Tenant Improvement Work for the Expansion Premises.

 

2.4.2           The Schedule of Deliveries for the Expansion Space is
attached to this Amendment as Exhibit C-1.

 

2.4.3           Tenant’s obligation to pay Base Rent only after
Substantial Completion, as provided in paragraph 2(c) of the Work Letter,
refers only to Base Rent due with respect to the Expansion Premises.

 

2.4.4           The fees of the Architect payable by Landlord shall be
capped at $2,025 per rentable square foot of the Expansion Premises.  The fees of the MEP engineer payable by
Landlord shall be capped at $0.765 per rentable square foot of the Expansion
Premises.

 

2.4.5           The Base Tenant Improvement Allowance for the
Expansion Premises shall be $43.20 per rentable square foot of the Expansion
Premises. The Supplemental Tenant improvement Allowance shall be up to $9.00
per rentable square foot of the Expansion Premises.  If Tenant elects Option 2, the actual
Supplemental Tenant Improvement Allowance will be added to the Base Rent
payable under the Lease on the basis of an amortization for the period
beginning on the Expansion Premises Commencement Date and for the remainder of
the initial Lease Term at a rate that is amortized over nine (9) years at
an interest rate equal to nine percent (9%) per annum.  Landlord shall provide Tenant with a supplemental
schedule to Base Rent if Tenant elects to have Landlord expend all or any
portion of the Supplemental Tenant Improvement Allowance.  The prorations for the Tenant Improvement
Allowance for the Expansion Premises are based on an Expansion Premises Commencement
Date of April 1, 2007.  If the
Expansion Premises Commencement Date occurs earlier or later than April, 2007,
the Tenant Improvement Allowance for the Expansion Premises will be
recalculated accordingly.

 

2.4.6           The Moving Allowance described in paragraph 7(e) of
the Work Letter shall not be applicable to the Expansion Premises.

 

2.5           Satisfaction of Right
First Offer.  Tenant’s right of first offer set forth in Section 2
11 of the Original Lease is deemed satisfied and of no further force and effect.

 

SECTION 3:  LEASE SECURITY PROVISIONS

 

3.1           Letters of Credit for
Expansion Premises.

 

3.1.1           As additional security for the full and faithful
payment of all sums due under this Lease and the full and faithful performance
of every covenant and condition of this Lease to be performed by Tenant shall
be required to deliver not later than the Expansion Premises Commencement Date
an additional latter of credit in the amount of Fifty-seven
thousand six hundred and no/100 Dollars ($57,600.00)
(the “Basic Expansion Letter of Credit”) in
favor of Landlord. See Section 3.14 below regarding delivery of a cash
security deposit in lieu the Basic Expansion Letter of Credit.  If (A) no Event of Default shall exist
at the time of any reduction and (B) there has been no material adverse
change in the financial condition of Tenant (as defined below), Landlord shall
permit the Basic Expansion Letter of Credit to be reduced as follows:

 

(a)           On March 31, 2008, the Basic Expansion Letter of
Credit may be reduced to Forty-three thousand two
hundred and no/100 Dollars ($43,200.00);
and

 

(b)           On March 31, 2009, the Basic Expansion Letter of
Credit may be reduced to Twenty-eight thousand
eight hundred and no/100 Dollars ($28,800.00);
and

 

(c)           On March 31, 2010, the Basic Expansion Letter of
Credit may be reduced to Fourteen thousand four
hundred and no/100 Dollars ($14,400.00);
and

 

4

 

(d)           On March 31, 2011 and payment by Tenant to
Landlord of a $62,000 Lease Security Deposit as set forth in Section 3.3.12
of the Original Lease, as modified below, the Basic Expansion Letter of Credit
may be reduced to Zero Dollars ($-0-), at which time Landlord shall have no
further right to draw on the Basic Expansion Letter of Credit and will return
the Basic Expansion Letter of Credit to Tenant upon written demand from Tenant.

 

3.1.2        If Tenant uses the entire Supplemental Tenant
Improvement Allowance, as defined in the Work Letter, then at the time Tenant
sends Landlord written notice electing Option 2, Tenant shall deliver a
supplemental letter of credit in the amount of the Supplemental Tenant
Improvement Allowance (as defined in the Work Letter) (the “Supplemental
Expansion Letter of Credit”). 
If Tenant uses less than the entire Supplemental Tenant Improvement
Allowance, the Supplemental Expansion Letter of Credit may be reduced to the
amount of the Supplemental Tenant Improvement Allowance actually used by
Tenant.  If (A) no Event of Default
shall exist at the time of any reduction and (B) there has been no
material adverse change in the financial condition of Tenant (as defined
below), Landlord shall permit the Supplemental Expansion Letter of Credit to be
reduced by twenty percent (20%) of the original stated amount at the end of
each of the first five (5) Lease Years with the Supplemental Letter of
Credit being reduced to Zero Dollars ($-0-) at the end of the fifth Lease Year,
at which time Landlord shall have no further right to draw on the Supplemental
Expansion Letter of Credit and will return the Supplemental Expansion Letter of
Credit to Tenant upon written demand from Tenant.

 

3.1.3           As used in the Lease, “Letter of
Credit” means, collectively, the Basic Letter of Credit and Basic
Expansion Letter of Credit and; if applicable, the Supplemental Letter of
Credit and Supplemental Expansion Letter of Credit.

 

3.1.4        At Tenant’s election, Tenant may deliver to Landlord a
cash security deposit of $57,600 in lieu of the Basic Expansion Letter of
Credit described in Section 3.1.1 above. 
If Tenant satisfies all the requirements for reduction of the Basic
Letter of Credit, Supplemental Letter of Credit, Basic Expansion Letter of
Credit and Supplemental Expansion Letter of Credit (if applicable) as of March 31,
2008, then upon Landlord’s receipt of one or more new Letters of Credit or
amendments to the existing Letters of Credit in the aggregate amount required
as of April 1, 2008 and in form required pursuant to the Lease, as amended
by this Amendment, Landlord shall promptly return the aforementioned cash security
deposit of $57,600 to Tenant. Tenant shall deliver the foregoing $57,600 cash
security deposit to Landlord not later than
and as a condition, to Landlord’s delivery of the Expansion Premises to Tenant
upon Substantial Completion.

 

3.2           Cash Security Deposit. 
The cash Lease Security Deposit required to be deposited on or before March 31,
2011 pursuant to Section 3.3.12 of the Original Lease is hereby increased
from Fifty thousand and no/100 Dollars ($50,005.00)
to Sixty-two thousand and no/100 Dollars ($62,000.00),
as security for the full and faithful payment of all sums due under the Lease
and the full and faithful performance of every covenant and condition of the
Lease to be performed by Tenant.

 

3.3           Applicability of Section 3.3
of Original Lease.  Except as modified above, all
other terms and conditions of Section 3.3 of the Original Lease shall
apply to the Letters of Credit and cash Lease Security Deposit for the
Expansion Premises.

 

SECTION 4:  TENANT WORK PERFORMANCE

 

4.1           Tenant Work Performance.  Section 4
5 of the Original Lease is deleted in its entirety and the following Section 4
5 is substituted in its place.

 

4.5          Tenant Work Performance. 
Any Tenant Alterations to be performed under this paragraph shall be
performed by contractors approved in advance in writing by Landlord pursuant to
one or more construction contracts in form and content approved in advance in
writing by Landlord. Approval shall be subject to Landlord’s discretion and
shall include a requirement that the prime contractor and the respective
subcontractors of any tier performing the Tenant Alterations:  (a) be parties to, and bound by, a
collective bargaining agreement with a labor organization affiliated with the
Building and

 

5

 

Construction Trades
Council of the AFL-CIO applicable to the geographic area in which the Building
is located and to the trade or trades in which the work under the contact is
to be performed and (b) employ only members of such labor
organizations to perform work within their respective jurisdictions.  With the prior written approval of Landlord
which may be withheld in Landlord’s sole and absolute discretion, in the
preceding sentence a project labor agreement may be substituted in place of a
collective bargaining agreement, and an independent, nationally recognized
labor organization may be substituted in place of a labor organization
affiliated with the Building and Construction Trades Council of the AFL-CIO
Tenant’s contractors, workers and suppliers shall work in harmony with and
not interfere with workers or contractors of Landlord other tenants
of landlord if Tenant’s contractors, workers or suppliers do, in the
opinion of Landlord, cause such disharmony or interference, Landlord’s consent,
to the continuation of such work may be withdrawn upon written notice to
Tenant.  All Tenant Alterations shall be (1) completed
in accordance with the plans and specifications approved by Landlord; (2) completed
in accordance with all Governmental Requirements; (3) carried out promptly
in a good and workmanlike manner; (4) of all new materials; and (5) free
of defect in materials and workmanship Tenant shall pay for all damages to the
Premises, Building and Land caused by Tenant or Tenant’s Agents. Tenant shall indemnify,
defend and hold harmless Landlord and Landlord’s Agents from Claims arising as
a result of the Tenant Alterations or any defect in design, material or
workmanship of any Tenant Alterations.

 

SECTION 5:  MISCELLANEOUS PROVISIONS

 

5.1           Authority. 
If Tenant
is a partnership, company, corporation or other entity, each individual
executing this Amendment on behalf of Tenant represents and warrants to
Landlord that he or she is duty authorized to so execute and deliver this
Amendment and that all partnership, company, corporation or other entity
actions and consents required for execution of this Amendment have been given,
granted or obtained.  If Tenant is a
partnership, company, corporation or other business organization, it shall,
within ten (10) Business Days after demand by Landlord, deliver to
Landlord satisfactory evidence of the due authorization of this Amendment and
the authority of the person executing this Amendment on its behalf.  Landlord represents that the individual
executing this Amendment on behalf of Landlord is duly authorized to so execute
and deliver this Amendment and that all actions and consents required for
execution of this Amendment have given, granted or obtained.

 

5.2           Notice Addresses. 
The
current notice addresses for Landlord are shown on the signature page of
this Amendment.

 

5.3           Waiver of Jury Trial. 
Landlord and Tenant irrevocably waive the respective rights to trial by
jury in any action, proceeding or counterclaim brought by either against the
other (whether in contract or tort) on any matter arising out of or relating in
any way to this Lease, the relationship of Landlord and Tenant or Tenant’s or
occupancy of the Premises.

 

5.4           Ratification. 
Except as expressly or by necessary implication amended or modified
hereby, the terms of the Original Lease are hereby ratified, confirmed and
continued in full force and effect.

 

5.5           Brokers. 
Landlord and Tenant warrant and represent that they have dealt with no
real estate broker in connection with this Amendment other than the Brokers,
and that no other broker is entitled to any commission on account of this
Amendment The party who breaches this warranty shall defend, hold harmless and
indemnify the other from any loss, damage or expense, including reasonable
attorneys’ fees, arising from the breach.

 

Signatures
on Next Page

 

6

 

IN WITNESS WHEREOF, this Lease has been executed the
day and year first above set forth.

 

	
  Designated Address for
  Landlord:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
  c/o Kennedy Associates
  Real Estate Counsel LP 

  Attn: Senior Vice President - Asset Management 

  1215 Fourth Avenue, Suite 2400 

  Seattle, WA 98161 

  	
   

  	
  NEWTOWER TRUST COMPANY 

  MULTI-EMPLOYER PROPERTY TRUST, a trust

  organized under 12 C F R Section 9 18 

  
	
  Facsimile: 206-682-4769

  	
   

  	
  By: Kennedy Associates
  Real Estate Counsel LP 

  
	
   

  	
   

  	
  Authorized Signatory 

  
	
  With copy to:

  	
   

  	
   

  
	
   

  	
   

  	
  By: Kennedy Associates
  Real Estate Counsel GP, 

  
	
  Kennedy Associates Real
  Estate Counsel LP 

  	
   

  	
  LLC, its general
  partner 

  
	
  Attn: Vice President -
  Asset Management 

  	
   

  	
   

  
	
  7315 Wisconsin Avenue 

  	
   

  	
  By:

  	
  /s/ James R. Landau

  
	
  Suite 350 West 

  	
   

  	
  Name: James R. Landau

  
	
  Bethesda, MD 20814 

  	
   

  	
  Its: Vice President

  
	
  Facsimile: 301-656-9339

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and to Landlord’s
  Trustee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NewTower Trust Company 

  Mult-Employer Property Trust 

  c/o NewTower Trust Company 

  Attn: President/MEPT 

  or Patrick O’Mayberry 

  Three Bethesda Metro Center, Suite 1600 

  Bethesda, MD 20814 

  Facsimile: 240-235-9951

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  with a copy to Manager
  at:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Trammell Crow
  Services, Inc. 

  500 East Pratt Street 

  Suite 500 

  Baltimore, Maryland 21202

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Designated Address for
  Tenant:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  METASTORM, INC., a
  Maryland corporation

  
	
   

  	
   

  	
   

  
	
  Metastorm. Inc. 

  	
   

  	
  By:

  	
  /s/ Robert J. Farrell

  
	
  500 East Pratt Street
  Suite 1250 

  	
   

  	
   

  	
   

  
	
  Baltimore; Maryland
  21202 

  	
   

  	
  Name:

  	
  Robert J. Farrell

  
	
   

  	
   

  	
   

  	
   

  
	
  Facsimile: 443-874-1338

  	
   

  	
  Its:

  	
  President/CEO

  
						

 

7

 

LANDLORD ACKNOWLEDGEMENT

 

STATE OF
MARYLAND            )

                                                                      )
ss

COUNTY OF MONTGOMERY  )

 

On this 28th day of February 28, 2007, before me,
personally appeared James R. Landau, to be known to be a VP of Kennedy
Associates Real Estate Counsel, Inc., the authorized signatory of the
NewTower Trust Company Multi-Employer Property Trust, the trust that executed
the within and foregoing instrument, and acknowledged said instrument to be the
free and voluntary act and deed of said Trust, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said instrument.

 

IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year first above written.

 

	
   

  	
   

  	
  /s/ Melissa Mclean

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Melissa Mclean

  
	
   

  	
   

  	
  NOTARY PUBLIC in and
  for the state of
                          

  residing at
                                          

  My appointment expires August 29, 2009

  

 

8

 

TENANT
ACKNOWLEDGEMENT (CORPORATION)

 

SEE ATTACHED LOOSE CERTIFICATE

 

9

 

CALIFORNIA ALL-PURPOSE
ACKNOWLEDGMENT

 

	
  State of California

  	
  }

  	
   

  
	
   

  	
  ss

  
	
  County of San Diego

  	
   

  

 

	
  On Feb. 20, 2007,
  before me, Megan McGarty, Notary Public, personally appeared Robert J.
  Farrell

  

 

 

	
  [SEAL]

  	
  o personally known to me

   

  x proved to me on the basis of
  satisfactory evidence to be the person whose name is subscribed to the within
  instrument and acknowledged to me that he executed the same in his authorized
  capacity, and that by his signature on the instrument the person, or the
  entity upon behalf of which the person acted, executed the instrument

   

  WITNESS my hand and
  official seal

  
	
   

  	
   

  
	
  Place Notary
  Seal Above

  	
  /s/ Megan
  McGarty

  
	
   

  	
  Signature of
  Notary Public

  

 

OPTIONAL

 

Though
the information below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent removal and reattachment
of this form to another document

 

Description of Attached Document

 

Title or Type Document:
Lease Amendment

 

	
  Document Date: February
  20, 2007

  	
  Number of Pages:
  11

  

 

Signer(s) Other Than
Named Above: James R. Landan

 

Capacity Claimed by Signer

 

	
  Signer’s Name: Robert
  J. Farrell

  	
   

  
	
  o Individual

  	
   

  
	
  x Corporate Officer — Title(s):
  President/CEO

  	
   

  
	
  o Partner — o Limited  o General

  	
  RIGHT
  THUMBPRINT 

  	
   

  	
   

  
	
  o Attorney in Fact

  	
  OF SIGNER

  Top of thumb here

   

  	
   

  	
   

  
	
  o Trustee

  	
   

  
	
  o Guardian or Conservator

  	
   

  
	
  o Other:                              

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signer is Representing:

  	
   

  
	
  Metastorm,
  Inc.,

  	
   

  
	
  a
  Maryland Corporation

  	
   

  

 

	
  © 2004 National Notary
  Association  9350 De Soto Avenue,  P.O.  Box 2402 
  Chatsworth,  CA 91313-2402

  	
  Item No. 2007     Reorder:
  Call toll Free 1 800 676 6827

  

 

10

 

 

Exhibit B-1

Location of Expansion Premises

 

11

 

 

12

 

Exhibit C-1

SCHEDULE OF DELIVERIES

 

	
  Action

  	
   

  	
  Scheduled
  Date

  
	
  Landlord submits space
  plan to Tenant for approval

  	
   

  	
  Seven (7) days
  after lease execution (2/19/07)

  
	
  Tenant Approves Space
  Plan

  	
   

  	
  One (1) day after
  submission by LL (2/20/07)

  
	
  Landlord’s Agent
  submits CDs to Tenant for approval

  	
   

  	
  Twenty One (21)-days
  after space plan approval (3/13/07)

  
	
  Tenant Approves CD’s
  for Bidding

  	
   

  	
  Two (2) days after
  submission by LL (3/15/07)

  
	
  Landlord submits
  approved bid packages to General Contractors for sub bids

  	
   

  	
  One (1) day after
  tenant approval (3/16/07)

  
	
  Subcontractor/General
  Contractor Bids due to landlord/Tenant

  	
   

  	
  Nine (9) business
  days after bidding (3/29/07)

  
	
  Landlord submits
  approved plans for building permit

  	
   

  	
  One(1) day after
  tenant approval (3/16/07)

  
	
  Landlord receives and
  reviews bids, selects contractor

  	
   

  	
  One (1) day after
  receiving bids (3/30/07)

  
	
  GC/Landlord/Tenant to
  complete Value Engineering if required

  	
   

  	
  Three (3) days
  after receiving bids (4/4/07)

  
	
  Tenant approves excess
  cost if required

  	
   

  	
  One (1) day
  (4/5/07)

  
	
  Landlord issues NTP to
  GC and Contract sent to GC execution

  	
   

  	
  One (1) day after
  tenant approval of cost (4/6/07)

  
	
  Target construction
  start date

  	
   

  	
  April 9, 2007*

  
	
  Target date for
  Substantial Completion of Tenant Improvement Work

  	
   

  	
  May 11, 2007

  
	
  Target date for
  punchlist completion

  	
   

  	
  June 1, 2007

  

 

Notes:

·                  The work
schedule assumes the absence of material lead-time issues and the execution of
the lease amendment on 2/12/07*. 
Further, the work schedule assumes the following:

 

·                  Intermediate
milestone dates:

 

	
   

  	
   

  	
  March 26, 2007

  	
   

  	
  for building permit
  approval;

  
	
   

  	
   

  	
  April 16, 2007

  	
   

  	
  general contractor
  submits for sprinkler/fire alarm

  
	
   

  	
   

  	
  May 1, 2007

  	
   

  	
  for sprinkler/fire
  alarm permit approval

  
	
   

  	
   

  	
  May 10, 2007

  	
   

  	
  for sprinkler/fire
  alarm inspection approval

  

 

·                  These dates must
be achieved in order to maintain the target dates for substantial completion
and final completion of the Tenant Improvements.  Delays beyond these dates will delay the
substantial and final completion dates, issuance of building permits are not
under landlord control.  Permit issuance
dates are estimated only and are based on recent historical data with Baltimore
City permit office.

 

·                  All permits and
work by Tenant and Tenant’s vendors must be coordinated with Landlord’s
construction schedule  The Tenant’s work
and permits include but are not limited to: 
telephone and data cabling and permits; systems furniture and
permits; telephone service and installation; moving.

 

13

 

LEASE MEMORANDUM

 

NewTower Trust Company Multi-Employer Property Trust, a trust organized
under 12 C.F.R. Section 9.18, as Landlord, and Metastorm, Inc., a
Maryland corporation as Tenant, executed that Lease dated as of February 9,
2006 (the “Lease”).

 

The Lease contemplates that this document shall be delivered and
executed, as set forth in the paragraph entitled “Lease Memorandum”.  This Lease Memorandum shall become part of
the Lease.

 

Landlord and Tenant agree as follows:

 

1              The Commencement
Date of the Lease is March 31, 2006.

 

2              The end of the Lease
Term and the date on which this Lease will expire is March 31, 2016.

 

3              The Lease is in full
force and effect as of the date of this Lease Memorandum. By execution of this Lease Memorandum, Tenant confirms that as of
the date of the Lease Memorandum. Tenant has no claims against Landlord
and Landlord has fulfilled all of its obligations under the Lease required to
be fulfilled by Landlord.

 

4              The Premises consist
of approximately 9,196 rentable square feet.

 

5              Base Rent:  The amount of Base Rent and the portion of
the Lease Term during which such Base Rent is payable shall be determined from
the-following table:

 

	
  Applicable Portion of Lease Term

  	
   

  	
  Rate

  Per/Rentable

  Sq. Ft./Annum

  	
   

  	
  Annual Base

  Rent

  	
   

  	
  Monthly Base

  Rent Installment

  (Annual+ 12)

  	
   

  	
  Monthly Base Rent

  Plus

  Tenant

  Improvement

  Amortization

  	
   

  
	
  Beginning

  	
   

  	
  Ending

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2006

  	
   

  	
  March 31, 2006

  	
   

  	
  $

  	
  32.00

  	
   

  	
  $

  	
  806.22

  	
   

  	
  806.22

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  April 1, 2006

  	
   

  	
  August 31, 2006

  	
   

  	
  $

  	
  32.00

  	
  *

  	
  $

  	
  122,613.35

  (5 months)

  	
  *

  	
  $

  	
  24,522.67

  	
  *

  	
  $

  	
  1,164.91

  	
   

  
	
  September 1, 2006

  	
   

  	
  March 31, 2007

  	
   

  	
  $

  	
  16.00

  	
   

  	
  $

  	
  85,829.31

  (7 months) 

  	
   

  	
  $

  	
  12,261.33

  	
   

  	
  $

  	
  13,426.24

  	
   

  
	
  April 1, 2007

  	
   

  	
  August 31, 2007

  	
   

  	
  $

  	
  16.48

  	
   

  	
  $

  	
  63,145.85

  (5 months) 

  	
   

  	
  $

  	
  12,629.17

  	
   

  	
  $

  	
  13,794.08

  	
   

  
	
  September 1, 2007

  	
   

  	
  March 31, 2008

  	
   

  	
  $

  	
  32.96

  	
   

  	
  $

  	
  176,808.45

  (7 months) 

  	
   

  	
  $

  	
  25,285.35

  	
   

  	
  $

  	
  26,423.26

  	
   

  
	
  April 1, 2008

  	
   

  	
  March 31, 2009

  	
   

  	
  $

  	
  33.95

  	
   

  	
  $

  	
  312,204.24

  	
   

  	
  $

  	
  26,017.02

  	
   

  	
  $

  	
  27,181.93

  	
   

  
	
  April 1, 2009

  	
   

  	
  March 31, 2010

  	
   

  	
  $

  	
  34.97

  	
   

  	
  $

  	
  321,584.16

  	
   

  	
  $

  	
  26,798.68

  	
   

  	
  $

  	
  27,963.59

  	
   

  
	
  April 1, 2010

  	
   

  	
  March 31, 2011

  	
   

  	
  $

  	
  36.02

  	
   

  	
  $

  	
  331,239.96

  	
   

  	
  $

  	
  27,603.33

  	
   

  	
  $

  	
  28,768.24

  	
   

  
	
  April 1, 2011

  	
   

  	
  March 31, 2012

  	
   

  	
  $

  	
  37.10

  	
   

  	
  $

  	
  341,171.64

  	
   

  	
  $

  	
  28,430.97

  	
   

  	
  $

  	
  29,595.88

  	
   

  
	
  April 1, 2012

  	
   

  	
  March 31, 2013

  	
   

  	
  $

  	
  38.21

  	
   

  	
  $

  	
  351,379.20

  	
   

  	
  $

  	
  29,281.60

  	
   

  	
  $

  	
  30,446.51

  	
   

  
	
  April 1, 2013

  	
   

  	
  March 31, 2014

  	
   

  	
  $

  	
  39.36

  	
   

  	
  $

  	
  361,954.56

  	
   

  	
  $

  	
  30,162.88

  	
   

  	
  $

  	
  31,327.79

  	
   

  
	
  April 1, 2014

  	
   

  	
  March 31, 2015

  	
   

  	
  $

  	
  40.54

  	
   

  	
  $

  	
  372,805.80

  	
   

  	
  $

  	
  31,067.15

  	
   

  	
  $

  	
  32,232.06

  	
   

  
	
  April 1, 2015

  	
   

  	
  March 31, 2016

  	
   

  	
  $

  	
  41.76

  	
   

  	
  $

  	
  384,024.96

  	
   

  	
  $

  	
  32,002.08

  	
   

  	
  $

  	
  33,166.99

  	
   

  

 

*Subject to abatement pursuant to paragraph 3.2

 

6                                                              Tenant’s
Pro Rata Share is Three and 29/100 percent (3.29%).

 

	
  Dated:

  	
   

  	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  
	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
  NewTower
  Trust Company Multi-Employer Property

  	
   

  	
  Metastorm, Inc.,

  
	
  Trust,
  a trust organized under 12 C.F.R. Section 9.18

  	
   

  	
  a
  Maryland Corporation

  
	
   

  	
   

  	
   

  
	
  By:
  Kennedy Asociates Real Estate Counsel, LP,

  	
   

  	
  By:

  	
   

  
	
  Authorized
  Signatory

  	
   

  	
  Name:

  	
   

  
	
  *

  	
   

  	
  Its:

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  	
   

  
								

 

	
  *By:

  	
  Kennedy Associates Real
  Estate Counsel GP, LLC its general

  
	
   

  	
  partner

  	
   

  

 

 

OFFICE LEASE

(500 EAST PRATT)

 

THIS LEASE (this “Lease”) is made
as of February 9, 2006 by and between

 

“Landlord”                                                      NEWTOWER TRUST COMPANY MULTI-EMPLOYER
PROPERTY TRUST, a trust organized under 12 C.F.R. Section 9.18

 

and

 

“Tenant”                                                                      METASTORM, INC., a Maryland corporation

 

TABLE OF CONTENTS

 

	
  SECTION 1: DEFINITIONS

  	
  5

  
	
   

  	
  Access Laws

  	
  4

  
	
   

  	
  Additional Rent

  	
  4

  
	
   

  	
  Base Amount Allocable
  to the Premises

  	
  4

  
	
   

  	
  Base Rent

  	
  4

  
	
   

  	
  Brokers

  	
  4

  
	
   

  	
  Building

  	
  4

  
	
   

  	
  Business Day

  	
  4

  
	
   

  	
  Claims

  	
  4

  
	
   

  	
  Commencement Date

  	
  5

  
	
   

  	
  ERMA

  	
  5

  
	
   

  	
  Estimated Operating
  Costs Allocable to the Premises

  	
  5

  
	
   

  	
  Events of Default 

  	
  5

  
	
   

  	
  Governmental Agency

  	
  5

  
	
   

  	
  Governmental
  Requirements

  	
  5

  
	
   

  	
  Hazardous Substance(s)

  	
  5

  
	
   

  	
  Land.

  	
  5

  
	
   

  	
  Landlord

  	
  5

  
	
   

  	
  Landlord’s Amts

  	
  5

  
	
   

  	
  Lease Memorandum

  	
  5

  
	
   

  	
  Lease Seventy Deposit

  	
  5

  
	
   

  	
  Lease Term

  	
  5

  
	
   

  	
  Lease Year

  	
  5

  
	
   

  	
  Lender

  	
  5

  
	
   

  	
  Managers Address

  	
  5

  
	
   

  	
  Operating Costs

  	
  5

  
	
   

  	
  Operating Costs
  Allocable to the Premises

  	
  5

  
	
   

  	
  Parking Ratio

  	
  5

  
	
   

  	
  Permitted Use

  	
  6

  
	
   

  	
  Prepaid Rent

  	
  6

  
	
   

  	
  Premises

  	
  6

  
	
   

  	
  Prime Rate

  	
  6

  
	
   

  	
  Project

  	
  6

  
	
   

  	
  Property Taxes

  	
  6

  
	
   

  	
  Punch List Work

  	
  6

  
	
   

  	
  Restrictions

  	
  6

  
	
   

  	
  Substantial Completion

  	
  6

  

 

 

	
   

  	
  Telecommunication
  Facilities

  	
  7

  
	
   

  	
  Telecommunication
  Services

  	
  7

  
	
   

  	
  Tenant

  	
  7

  
	
   

  	
  Tenant Alterations

  	
  7

  
	
   

  	
  Tenant Improvement
  Allowance

  	
  7

  
	
   

  	
  Tenant Improvements

  	
  7

  
	
   

  	
  Tenant’s Agents 

  	
  7

  
	
   

  	
  Tenants Pro Rata Share

  	
  7

  
	
   

  	
  Work Letter

  	
  7

  
	
   

  	
  Year

  	
  7

  
	
  SECTION 2: PREMISES AND TERM

  	
  7

  
	
   

  	
  2.1

  	
  Lease of Premises

  	
  7

  
	
   

  	
  2.2

  	
  Lease Term

  	
  7

  
	
   

  	
  2.3

  	
  Tenant Improvements

  	
  7

  
	
   

  	
  2.4

  	
  Commencement Date

  	
  7

  
	
   

  	
  2.5

  	
  Tenant’s Contribution to Tenant Improvement Costs

  	
  8

  
	
   

  	
  2.6

  	
  Lease Memorandum

  	
  8

  
	
   

  	
  2.7

  	
  Use and Conduct of Business

  	
  8

  
	
   

  	
  2.8

  	
  Compliance with Governmental Requirements and
  Rules and Regulations

  	
  9

  
	
   

  	
  2.9

  	
  Intentionally Deleted.

  	
  9

  
	
   

  	
  2.10

  	
  Renewal Terms

  	
  9

  
	
   

  	
  2.11

  	
  Right of First Offer Space

  	
  10

  
	
  SECTION 3: BASE RENT, ADDITIONAL
  RENT AND OTHER SUMS PAYABLE UNDER LEASE

  	
  11

  
	
   

  	
  3.1

  	
  Payment of Rental

  	
  11

  
	
   

  	
  3.2

  	
  Base Rent

  	
  11

  
	
   

  	
  3.3

  	
  Lease Security Provisions

  	
  11

  
	
   

  	
  3.4

  	
  Additional Rent

  	
  14

  
	
   

  	
  3.5

  	
  Utilities

  	
  20

  
	
   

  	
  3.6

  	
  Holdover

  	
  21

  
	
   

  	
  3.7

  	
  Late Charge

  	
  21

  
	
   

  	
  3.8

  	
  Default Rate

  	
  21

  
	
  SECTION 4: MANAGEMENT AND
  LEASING PROVISIONS

  	
  21

  
	
   

  	
  4.1

  	
  Maintenance and Repair by Landlord

  	
  21

  
	
   

  	
  4.2

  	
  Maintenance and Repair by Tenant

  	
  22

  
	
   

  	
  4.3

  	
  Common Areas/Security

  	
  22

  
	
   

  	
  4.4

  	
  Tenant Alterations

  	
  23

  
	
   

  	
  4.5

  	
  Tenant’s Work Performance

  	
  23

  
	
   

  	
  4.6

  	
  Surrender of Possession

  	
  24

  
	
   

  	
  4.7

  	
  Removal of Property

  	
  24

  
	
   

  	
  4.8

  	
  Access

  	
  24

  
	
   

  	
  4.9

  	
  Damage or Destruction

  	
  25

  
	
   

  	
  4.10

  	
  Condemnation

  	
  26

  
	
   

  	
  4.11

  	
  Parking

  	
  26

  
	
   

  	
  4.12

  	
  Indemnification

  	
  26

  
	
   

  	
  4.13

  	
  Tenant Insurance

  	
  26

  
	
   

  	
  4.14

  	
  Landlord’s Insurance

  	
  27

  
	
   

  	
  4.15

  	
  Waiver of Subrogation

  	
  27

  
	
   

  	
  4.16

  	
  Assignment and Subletting by Tenant

  	
  28

  
	
   

  	
  4.17

  	
  Assignment by Landlord

  	
  30

  
	
   

  	
  4.18

  	
  Estoppel Certificates and Financial Statements

  	
  30

  
	
   

  	
  4.19

  	
  Modification for Lender

  	
  31

  
	
   

  	
  4.20

  	
  Hazardous Substances

  	
  31

  
	
   

  	
  4.21

  	
  Access Laws

  	
  31

  
	
   

  	
  4.22

  	
  Quiet Enjoyment

  	
  32

  
	
   

  	
  4.23

  	
  Signs

  	
  32

  

 

2

 

	
   

  	
  4.24

  	
  Subordination

  	
  32

  
	
   

  	
  4.25

  	
  Intentionally Deleted.

  	
  33

  
	
   

  	
  4.26

  	
  Brokers

  	
  33

  
	
   

  	
  4.27

  	
  Limitation on Recourse

  	
  33

  
	
   

  	
  4.28

  	
  Mechanic’s Liens, and Tenant’s Personal .Property
  Taxes.

  	
  33

  
	
   

  	
  4.29

  	
  Landlord’s Security Interest

  	
  33

  
	
  SECTION 5: DEFAULT AND REMEDIES

  	
  34

  
	
   

  	
  5.1

  	
  Events of Default.

  	
  34

  
	
   

  	
  5.2

  	
  Remedies

  	
  34

  
	
   

  	
  5.3

  	
  Right to Perform

  	
  36

  
	
   

  	
  5.4

  	
  Landlord’s Default

  	
  36

  
	
  SECTION 6: MISCELLANEOUS
  PROVISIONS

  	
  36

  
	
   

  	
  6.1

  	
  Notices

  	
  36

  
	
   

  	
  6.2

  	
  Attorney’s Fees and Expenses

  	
  36

  
	
   

  	
  6.3

  	
  No Accord and Satisfaction

  	
  37

  
	
   

  	
  6.4

  	
  Successors; Joint and Several Liability

  	
  37

  
	
   

  	
  6.5

  	
  Choice, of Law

  	
  37

  
	
   

  	
  6.6

  	
  No Waiver of Remedies

  	
  37

  
	
   

  	
  6.7

  	
  Offer to Lease

  	
  37

  
	
   

  	
  6.8

  	
  Force Majeure

  	
  37

  
	
   

  	
  6.9

  	
  Landlord’s Consent

  	
  38

  
	
   

  	
  6.10

  	
  Severability; Captions

  	
  38

  
	
   

  	
  6.11

  	
  Interpretation

  	
  38

  
	
   

  	
  6.12

  	
  Incorporation of Prior Agreement; Amendments

  	
  38

  
	
   

  	
  6.13

  	
  Authority

  	
  38

  
	
   

  	
  6.14

  	
  Time of Essence

  	
  38

  
	
   

  	
  6.15

  	
  Survival of Obligations

  	
  38

  
	
   

  	
  6.16

  	
  Consent to Service

  	
  38

  
	
   

  	
  6.17

  	
  Landlord’s Authorized Agents

  	
  38

  
	
   

  	
  6.18

  	
  Waiver of Jury Trial

  	
  39

  

 

LISTING OF EXHIBITS

 

	
  Exhibit A

  	
   

  	
  Legal Descriptions of the Land

  
	
  Exhibit B

  	
   

  	
  Drawing Showing Location and Configuration of the Premises

  
	
  Exhibit C

  	
   

  	
  Work Letter

  
	
  Exhibit D

  	
   

  	
  Form of Lease Memorandum

  
	
  Exhibit E

  	
   

  	
  Rules and Regulations

  
	
  Exhibit F

  	
   

  	
  Description of Permitted Exterior Signs

  
	
  Exhibit G

  	
   

  	
  Schedule of Cleaning Services

  
	
  Exhibit H

  	
   

  	
  Letter of Credit Criteria

  

 

3

 

SECTION 1: DEFINITIONS

 

Access Laws:  The Americans With Disabilities Act of 1990
(including the Americans with Disabilities Act Accessibility Guidelines for
Building and Facilities) and all other Governmental Requirements relating to
the foregoing.

 

Additional Rent:  Defined in paragraph captioned “Additional Rent.”

 

Base Amount Allocable to the Premises.  Defined in paragraph captioned “Additional
Rent.”

 

Base Rent:  The rate per rentable square foot per annum
and the portion of file Lease Term during which such monthly Base Rent is
payable shall be determined from the following table except to the extent the
next sentence applies.  If the final determination
of the rentable square feet for the Premises made about the Commencement Date
in accordance with the definition of the term “Premises” and the paragraph
entitled “Lease Memorandum” differs from the number of rentable square
feet utilized in the following table, the Base Rent should be recomputed using
the annual rental rates specified in the table and the finally determined
rentable square feet for the Premises Base Rent set forth in tabular form in
the Lease Memorandum shall be final and conclusive as, when and to the extent
specified in the paragraph entitled “Lease Memorandum.”

 

	
  Applicable Portion of Lease
  Term

  	
   

  	
  Rate Per/Rentable

  Sq. Ft./Annum

  	
   

  	
  Annual Base Rent

  	
   

  	
  Monthly Base

  Rent Installment

  (Annual + 12)

  	
   

  
	
  Lease Year 1 (first five months)

  	
   

  	
  $

  	
  32.00

  	
  *

  	
  $

  	
  122,613.35

  (5 months)

  	
  *

  	
  $

  	
  24,522.67

  	
  *

  
	
  Lease Year 1 (last seven months)

  	
   

  	
  $

  	
  16.00

  	
   

  	
  $

  	
  85,829.31

  (7 months) 

  	
   

  	
  $

  	
  12,251.33

  	
   

  
	
  Lease Year 2 (first five months)

  	
   

  	
  $

  	
  16.48

  	
   

  	
  $

  	
  63,145.85

  (5 months) 

  	
   

  	
  $

  	
  12,629.17

  	
   

  
	
  Lease Year 2 (last seven months)

  	
   

  	
  $

  	
  32.96

  	
   

  	
  $

  	
  176,808.45

  (7 months) 

  	
   

  	
  $

  	
  25,258.35

  	
   

  
	
  Lease Year 3

  	
   

  	
  $

  	
  33.95

  	
   

  	
  $

  	
  312,204,24

  	
   

  	
  $

  	
  26,017.02

  	
   

  
	
  Lease Year 4

  	
   

  	
  $

  	
  34.97

  	
   

  	
  $

  	
  321,584.16

  	
   

  	
  $

  	
  26,798.68

  	
   

  
	
  Lease Year 5

  	
   

  	
  $

  	
  36.02

  	
   

  	
  $

  	
  331,239.96

  	
   

  	
  $

  	
  27,603.33

  	
   

  
	
  Lease Year 6

  	
   

  	
  $

  	
  37.10

  	
   

  	
  $

  	
  341,171.64

  	
   

  	
  $

  	
  28,430.97

  	
   

  
	
  Lease Year 7

  	
   

  	
  $

  	
  38.21

  	
   

  	
  $

  	
  351,379.20

  	
   

  	
  $

  	
  29,281.60

  	
   

  
	
  Lease Year 8

  	
   

  	
  $

  	
  39.36

  	
   

  	
  $

  	
  361,954.56

  	
   

  	
  $

  	
  30,162.88

  	
   

  
	
  Lease Year 9

  	
   

  	
  $

  	
  40.54

  	
   

  	
  $

  	
  372,805.80

  	
   

  	
  $

  	
  31,067.15

  	
   

  
	
  Lease Year 10

  	
   

  	
  $

  	
  41.76

  	
   

  	
  $

  	
  384,024.96

  	
   

  	
  $

  	
  32,002.08

  	
   

  

 

* Subject to abatement pursuant to Paragraph 3.2.

 

Brokers:  Tenant was represented in this transaction by
Scheer Partners, Inc., a licensed real estate broker.  Landlord was represented in this transaction
by Trammell Crow Services, Inc. , a licensed real estate broker.

 

Building:  The building located on the Land at 500 East Pratt Street, Baltimore, Maryland, 21202, and
containing approximately 279,716 of
rentable square feet of office space.

 

Business Day:  Calendar days, except for Saturdays and
Sundays and holidays when banks are closed in Washington, DC.

 

Claims:  An individual and collective reference to any
and all claims, demands, damages, injuries, losses, liens, liabilities,
penalties, fines, lawsuits, actions, other proceedings and expenses (including
attorneys’ fees and expenses incurred in connection with the proceeding whether
at trial or on appeal).

 

4

 

Commencement Date: The
earlier to occur of: (a) the date of Substantial Completion; or (b) the
date on which Tenant takes possession of all or part of the Premises.

 

ERISA:  The Employee Retirement Income Security Act
of 1974, as now or hereafter amended, and the regulations promulgated under it.

 

Estimated Operating Costs Allocable to the
Premises:  Defined
in paragraph captioned “Additional Rent”.

 

Events of Default:  One or more of those events or states of
facts defined in the paragraph captioned “Events of Default”.

 

Governmental, Agency:  The United States of America, the state in
which the Land is located, any county, city, district, municipality or other
governmental subdivision, court or agency or quasi-governmental agency having
jurisdiction over the Land and any board, agency or authority associated with
any such governmental entity, including, the fire department having
jurisdiction over the Land.

 

Governmental Requirements:  Any and all statutes, ordinances, codes,
laws, rules, regulations, orders and directives of any Governmental Agency as
now or later amended.

 

Hazardous Substance(s):  Asbestos, PCBs, petroleum or petroleum-based
chemicals or substances, urea formaldehyde or any chemical, material element,
compound, solution, mixture, sub-stance or other matter of any kind whatsoever
which is now or later defined, classified, listed, designated or regulated as
hazardous, toxic or radioactive by any Governmental Agency.

 

Land:               The
land upon which the Building is located in Baltimore City, State of Maryland,
as legally described in Exhibit A attached to this Lease.

 

Landlord:  The trust named on the first page of
this Lease, or its successors and assigns as provided in paragraph captioned “Assignment
by Landlord”.

 

Landlord’s Agents: The
trustee of and consultants and advisors to the Landlord and employees of the
foregoing.

 

Lease Memorandum:  Defined in paragraph entitled “Lease
Memorandum”.

 

Lease Security Deposit:  The cash sum of Fifty Thousand Dollars
($50,000.00) and the letter of credit delivered by Tenant to Landlord as
described in the paragraph entitled “Security Provisions”.

 

Lease Term:  Commencing on the Commencement Date and
ending on the last day of that calendar month which “is one hundred twenty
(120) months after the Commencement Date.

 

Lease Year: (i) Each
twelve (12) month period commencing on the Commencement Date, and (ii) each
successive period of twelve (12) calendar months thereafter during the Lease
Term; provided  that
if the Commencement Date occurs on (x) the 1st through the 15th days of
the first calendar month, then the first Lease Year shall be the remainder of
such calendar month and the next successive eleven (11) calendar months, and (y) the
16th through the last day of the calendar month, then the first Lease Year
shall be the remainder of such calendar month and the next successive twelve
(12) calendar months.

 

Lender: Defined in paragraph
entitled “Landlord’s Default”.

 

Manager:  Trammell Crow Services, Inc., or its
replacement as specified by written notice from Landlord to Tenant.

 

Manager’s Address: Trammell
Crow Services, Inc., 500 East Pratt Street, Baltimore, Maryland 21202,
which address may be changed by written notice from Landlord to Tenant.

 

Operating Costs:  Defined in paragraph captioned “Additional
Rent”.

 

Operating Costs Allocable to the Premises:  Defined in paragraph captioned “Additional
Rent”.

 

Parking Ratio:  2.5 parking
stalls per 1,000 rentable square feet of the
Premises.

 

5

 

Permitted Use:  General business office uses, so long as such
use is consistent with Governmental Requirements and with first class buildings
of the same or similar use as the Building located in the metropolitan area in
which the Building is located.

 

Plans:    Those certain plans and specifications
for the Tenant Improvements as prepared by Tenant and approved by Landlord in
accordance with Exhibit C and any modifications to them approved in
writing by Landlord and Tenant pursuant to Exhibit C.

 

Prepaid Rent:  $12,261.33, to be applied toward Base Rent
for the first full calendar month of the Lease Term or to the first month in
which full rent is due.

 

Premises:  The portion of the Building depicted on the
plan attached to this Lease as Exhibit B, together with the right
in common with other tenants of the same floor of the Building to use the
exterior balcony, which shall be demised using a metal railing.  Based on measurements conducted by Landlord’s
architect, the Premises as of the Commencement Date shall contain 9,196
rentable square feet of the approximate total 279,716 rentable square feet of
office space for the entire Building. 
The method used by the Landlord in establishing its estimates of
rentable square feet for the Premises and the Building and the determination of
rentable square feet at or about the Commencement Date shall be made, in
accordance BOMA guidelines (ANSI/BOMA Z65.1 1996).  Based on
measurements by Landlord’s architect, the add-on factor for the twelfth floor
is 19.39%.  Any additions to the Premises
shall be measured in accordance with BOMA guidelines (ANSI/BOMA Z65 1 1996).

 

Prime Rate:  Defined in paragraph captioned ‘‘Default
Rate”.

 

Project:  The Land, together with all improvements,
including the Building.

 

Property Taxes: (a) Any
form of ad valorem real: or personal property tax or assessment imposed by any
Governmental Agency on the Project or any personal property owned by Landlord
located on such Project; (b) any other form of tax or assessment, license
fee, license tax, tax or excise on rent or any other levy, charge expense or
imposition made or required by any Governmental Agency on any Interest of
Landlord in such Project or personal property; (c) any fee for services
charged by any Governmental Agency for any services such as fire protection,
street, sidewalk and road maintenance, refuse collection, school systems or
other services provided or formerly provided to property owners and residents
within the general area of the Project; (d) any governmental impositions
allocable to or measured by the area of any or all of such Project or personal
property or the amount of any base rent, additional rent or other sums payable
under any lease for any or all of such Project or personal property; (e) any
gross receipts or other excise tax allocable to, measured by or a function of
any one or more of the matters referred to in clause (d); or (f) any
amounts payable by Landlord in lieu of real property taxes pursuant to a
Payment in Lieu of Taxes Agreement with the applicable Governmental
Agency.  Property Taxes shall not include
taxes on Landlord’s net income.  Any
special assessments or charges for capital expenditures or infrastructure shall
be included in Property Taxes only to the extent it is levied after the
Commencement Date and then only based upon that installment thereof (including
interest thereon) payable in a particular tax year assuming such special
assessment was spread over the longest term available to Landlord by the
assessing authority and at the interest rate available from the assessing
authority.

 

Punch List Work:  Minor items of repair, correction, adjustment
or completion as such phrase is commonly understood in the construction
industry in the metropolitan area in which the Land is located.

 

Restrictions:  Any covenants, conditions and restrictions
applicable to the Land attached as a supplement to Exhibit E.

 

Substantial Completion:  The date that the Tenant Improvements have
been completed substantially in accordance with the Plans, subject to Punch
List Work, as more fully defined in the Work Letter.

 

6

 

Telecommunication Facilities: 
Equipment, facilities, apparatus and other materials utilized for the
purpose of electronic telecommunication, including cable, switches, wires,
conduit and sleeves.

 

Telecommunication Services: 
Services associated with electronic telecommunications, whether in a
wired or wireless mode.  Basic voice
telephone services are included within this definition.

 

Tenant:  The person or
entry(ies) named on the first page of this Lease.

 

Tenant Alterations: 
Defined in paragraph captioned “Tenant Alterations”.

 

Tenant Improvement Allowance: 
Defined in the Work Letter.

 

Tenant Improvements: 
Those alterations or improvements to the Premises as appear and are
depicted in the Plans.

 

Tenant’s Agents:  Any and all
officers, partners, contractors, subcontractors, consultants, licensees,
agents, concessionaires, subtenants, servants, employee, customers, guests,
invitees or visitors of Tenant.

 

Tenant’s Pro Rate Share: 
Three and 29/100 Percent (3.29%) which shall be final, conclusive and controlling
during the Lease Term for all purposes unless a change appears in the Lease
Memorandum on the measurement of the Premises.

 

Work Letter:  The Work
Letter Agreement attached to this Lease as Exhibit C.

 

Year:  A calendar
year commencing January 1 and ending December 31 or that portion of
the calendar year within the Lease Term.

 

SECTION 2: PREMISES AND TERM

 

2.1           Lease of Premises.  Landlord leases the Premises to Tenant, and
Tenant leases the Premises from Landlord, upon the terms and conditions set
forth in this Lease.

 

2.2           Lease Term.  The Lease Term Shall be for the period stated
in the definition of that term, unless earlier terminated as provided in this
Lease.

 

2.3           Tenant Improvements.  Promptly following agreement to the Plans
pursuant to the Work Letter, Landlord shall commence and complete construction
of the Tenant Improvements in accordance with the Work Letter.  Tenant acknowledges that no representations
as to the condition of the Premises have been made by Landlord unless such are
expressly set forth in this Lease.  The
Tenant Improvements to Premises shall be completed in a good and workmanlike
manner and in substantial compliance with applicable laws, rules, and
regulations and shall include delivery by Landlord of a certificate of occupancy
or other form of governmental authorization, as required by law, issued by the
appropriate governmental entity, stating that the Premises may lawfully be
occupied.

 

2.4           Commencement Date.  Landlord shall notify Tenant in writing of
Substantial Completion.  If Tenant
believes that Substantial Completion has not occurred, Tenant shall notify
Landlord in writing of its objections within five (5) Business Days after
its receipt of the Landlord’s notice described in the preceding sentence.  Landlord shall have a reasonable time after
its receipt of Tenant’s notice in which to take such action as may be necessary
to achieve Substantial Completion, and shall notify Tenant in writing when such
has been achieved.  Taking of possession
by Tenant shall establish the Commencement Date as specified in the definition
of that term even if Tenant disputes whether Substantial Completion has
occurred or attempts to condition or qualify the taking of possession.  In the event of any dispute as to whether
Substantial Completion has occurred, the receipt of a temporary certificate of
occupancy as described in Paragraph 2(b) of the Work Letter shall be
conclusive unless a temporary certificate of occupancy is unavailable or
delayed due to causes which are Tenant’s responsibility shall be
conclusive.  If on the Commencement Date,
Punch List Work remains to be completed, Landlord, Tenant, and the Architect
(as defined in the Work Letter) shall agree on such Punch List Work prior to
occupancy by Tenant and Landlord will promptly complete it after the
Commencement Date in accordance with Paragraph 4(g) of the Work
Letter.  In no event shall Tenant’s
refusal or failure to

 

7

 

agree on the nature and extent of Punch List Work or
the existence of items of Punch List Work delay or postpone the occurrence of
the Commencement Date.  Tenant shall make
no changes to the Plans or the work reflected in the Plans without the consent
of Landlord.

 

2.5           Tenant’s Contribution to
Tenant Improvement Costs.

 

2.5.1           If the cost of the Tenant Improvements exceeds the
Tenant Improvement Allowance, Tenant shall pay to Landlord such excess within
twenty (20) Business Days after demand made from time to time by Landlord.  If Tenant fails to pay to Landlord the cost
of any such excess Tenant Improvements as and when due, Landlord may elect to
suspend work on the Tenant Improvements pending such timely payment, and the
Commencement Date shall be deemed to have occurred on the date that Substantial
Completion would have been achieved absent such suspension of work.

 

2.5.2           All Tenant Improvements, regardless of which party
constructed or paid for them, shall become the property of Landlord and shall
remain upon and be surrendered with the Premises upon the expiration or earlier
termination of this Lease; provided  that, if Landlord elects to require Tenant to remove all or
any portion of the Tenant Improvements (including Telecommunication Facilities
installed by or on behalf of Tenant), Landlord shall make such election in
writing to Tenant at the time Landlord approves Tenant’s final Plans and
Specifications.  If Landlord makes such
election and so notifies Tenant, Tenant shall be required to remove, at Tenant’s
cost, the affected Tenant Improvements (including the affected
Telecommunication Facilities) upon the expiration or earlier termination of
this Lease.

 

2.6           Lease Memorandum.  Contemporaneously with Substantial
Completion, Landlord shall prepare and submit to the Tenant a Lease Memorandum
in the form of Exhibit D, completed in good faith by Landlord, and
executed by Landlord.  The information
inserted on the Lease Memorandum shall be controlling and conclusive and shall
prevail over any inconsistent provision in this Lease on (a) the mutual
execution of the Lease Memorandum by Landlord and Tenant or (b) the lapse
of seven (7) days following delivery of the Lease Memorandum to Tenant
without Tenant delivering to Landlord a written objection to all or part of the
information in the Lease Memorandum.  If
Tenant does object in good faith to any information set forth in the Lease
Memorandum, it shall execute the Lease Memorandum subject to its specifically
stated, written objections.  Tenant must
explain the reasons for its objections in reasonable detail.  That portion of the Lease Memorandum to which
no objection was made shall be conclusive and controlling.  Pending resolution of any dispute by
agreement or a final determination by a court of competent jurisdiction in
accordance with this Lease, Landlord’s information as inserted in the Lease
Memorandum shall be utilized subject to any later adjustment agreed or found to
be appropriate Tenant’s refusal or failure to execute a Lease Memorandum shall
neither prevent nor delay the occurrence of the Commencement
Date.  In no event shall the Lease
Memorandum be recorded.

 

2.7           Use and Conduct of
Business.

 

2.7.1           The Premises are to be used only for the Permitted
Uses, and for no other business or purpose without the prior consent of
Landlord.  Landlord makes no representation
or warranty as to the suitability of the Premises for Tenant’s intended
use.  Tenant shall, at its own cost and
expense, obtain and maintain any and all licenses, permits, and approvals
necessary or appropriate for its use, occupation and operation of the Premises
for the Permitted Uses.  Tenant’s
inability to obtain or maintain any such license, permit or approval necessary
or appropriate for its use, occupation or operation of the Premises shall
relieve it of its obligations under this Lease, including the obligation to pay
Base Rent and Additional Rent.

 

2.7.2           No act shall be done in or about the Premises that is
unlawful or that will increase the existing rate of insurance on any or all of
the Land or Building.  Tenant shall not
commit or allow to be committed or exist; (a) any waste upon the Premises,
(b) any public or private nuisance, or (c) any act or condition which
disturbs the quiet enjoyment of any other tenant in the Building, violates any
of Landlord’s contracts affecting any or all of the Land or Building, creates
or contributes to any work stoppage, strike, picketing, labor disruption or
dispute, interferes in any way with the business of Landlord or any other
tenant in the Building or with the rights or privileges of any contractors, subcontractors,
licensees, agents, concessionaires, subtenants, servants, employees, customers,
guests, invitees or visitors or any other 

 

8

 

persons lawfully in and upon the Land or Building, or
causes any impairment or reduction of the good will or reputation of the Land
or Building.

 

2.7.3           Tenant shall not, without the prior consent of
Landlord, use any apparatus, machinery, device or equipment in or about the
Premises which will cause any substantial noise or vibration or any increase in
the normal consumption level of electric power. 
If any of Tenant’s apparatus, machinery, devices or equipment should
disturb the quiet enjoyment of any other tenant in the Building, then Tenant
shall provide, at its sole cost and expense, adequate insulation or take other
such action, including removing such apparatus, machinery, devices or
equipment, as may be necessary to eliminate the disturbance.  No food or beverage dispensing machines shall
be installed by Tenant in the Premises without the prior written consent of
Landlord, which consent shall not be unreasonably withheld if the food or
beverage machines are for the sole use of Tenant’s employees.

 

2.8           Compliance with Governmental Requirements and Rules and
Regulations.  Tenant shall
comply with all Governmental Requirements and Restrictions relating to its use,
occupancy and operation of the Premises and shall observe such reasonable rules and
regulations as may be adopted and published by Landlord from time to time for the
safety, care and cleanliness of the Premises and the Building, and for the
preservation of good order in the Building and for the administration and
management of the Building.  Current Rules and
Regulations are attached to this Lease as Exhibit E.  Restrictions, if any exist, are attached as a
supplement to Exhibit E.

 

2.9           Intentionally Deleted.

 

2.10         Renewal Terms.  Tenant shall have two (2) options (each,
a “Renewal Option”) to renew the Lease
Term for an additional period of three (3) years each (“Renewal Term” which shall be deemed part of the Lease Term),
under the same terms and conditions of this Lease subject to the following:

 

2.10.1         Tenant shall exercise the option by providing written
notice to Landlord of Tenant’s election to exercise each option no earlier than
fifteen (15) months prior to the expiration of the Lease Term nor later than
twelve (12) months prior to the expiration of the Lease Term, provided, however, that Tenants option to renew shall be
subject to the condition that no Event of Default shall have occurred and be
continuing as of the date of Tenant’s exercise of such option; and provided further, that if this Lease shall be terminated
prior to the commencement of the Renewal Term, Tenant’s option to renew shall
expire upon such termination.  Tenant
shall have no other right to renew this Lease after expiration of the second
Renewal Term.  Except as otherwise
expressly provided in this Lease, all terms, covenants, and conditions of this
Lease shall remain in full force and effect during each Renewal Term, except
that (1) the Base Rent applicable to the first year of the Renewal Term
shall be one hundred percent (100%) of the then prevailing market rate of rent
for comparable space in Class A office properties in the Baltimore, Maryland
central business district office market including concessions (the “Market Rate”) and (2) the Base Rent applicable to the
succeeding years of the Renewal Term shall include a market escalation.  A new base year for Operating Costs and
Property Taxes shall be established as part of the Market Rate
determination.  If Tenant exercises its
option hereunder, then within thirty (30) days after Tenant’s renewal notice,
Landlord shall notify Tenant in writing of Landlord’s determination of the
Market Rate.  If Tenant notifies Landlord
that Tenant disagrees with Landlord’s determination of the Market Rate within
thirty (30) days after receipt of Landlord’s notification and if Landlord and
Tenant fail to reach agreement within thirty (30) days following Tenant’s
notice to Landlord of Tenant’s disagreement (the “Outside
Agreement Date”), then Tenant shall have the right to revoke its
exercise of the Renewal Option by giving Landlord written notice of such
revocation not later than the expiration of such Thirty (30) day period and
thereafter Tenant shall surrender the Premises to Landlord on the expiration of
the then-current term, and Landlord shall be relieved of all liability created
by such Renewal Option.  If Tenant shall
fail to exercise its right to revoke the Renewal Option by the Outside
Agreement Date, then each party shall place in a separate sealed envelope its
final proposal as to Market Rate and such determination shall be submitted to
arbitration in accordance with paragraph (a) through (e) below.  Failure of Tenant to so object in writing to
such rental or provide notice of Tenant’s revocation of its Exercise of the
Renewal Option within thirty (30) days after receipt of Landlord’s
determination of the new Base Rent shall conclusively be deemed Tenant’s
agreement with the Base Rent determined by Landlord.

 

9

 

(a)        Landlord and Tenant shall meet with each other within
five (5) business Days after the Outside Agreement Date and exchange the
sealed envelopes and then open such envelopes in each other’s
presence.  If Landlord and Tenant do not
mutually agree upon the Market Rate within ten (10) Business Days
after the exchange and opening of envelopes, then, within ten (10) Business
Days after the exchange and opening of envelopes Landlord and Tenant shall
agree upon and jointly appoint a single arbitration who shall by profession be
a real estate appraiser, lawyer or broker who shall have been active over
the five (5) year period ending on the date of such appointment in the
leasing of comparable commercial properties in the vicinity of the
Building. Neither Landlord nor Tenant shall consult with such broker or
lawyer as to his or her opinion as Market Rate prior to the appointment.  The determination of the arbitrator shall be
limited solely to the issue of whether Landlord’s or Tenant’s submitted
Market Rate for the Premises is the closer o the actual Market Rate
for the Premises as determined by the arbitrator, taking into account the
requirements of this Paragraph 0. 
Such arbitrator may hold such hearings and require such briefs as the
arbitrator, in his or her sole discretion, determines is necessary.  In addition Landlord or Tenant may submit to
the arbitrator with a copy to the other party within five (5) Business
Days after the appointment of the arbitrator any market data and additional
information that, such party deems relevant to the determination of Market
Rate (“MR Data”) and the other party. may
submit a reply in writing within five (5) Business Days after receipt of
such MR Data.

 

(b)       The arbitrator shall, within thirty (30) days after
his or her appointment, reach a decision as to whether the parties shall use
Landlord’s      Tenant’s submitted Market Rate, and shall
notify Landlord and Tenant of such determination.

 

(c)        The decision and award of the arbitrator shall be
final, conclusive, and binding on the parties, absent settlement by agreement
of tie parties prior to the rendering by the arbitrator of any such decision
and award.  If the Market Rate is not
finally determined prior to the commencement of the extension term in
question, Tenant shall pay Base Rent based upon the higher of Tenant’s
proposed Base Rent or the Base Rent payable under this Lease immediately
prior to the expiration of the prior term of this Lease until the final
determination of the Market Rate as provided above.  If the final determination of such
Market Rate is different from the amount paid by Tenant, Landlord shall credit toward
future Rent payments any overpayment of Base Rent from the commencement of the
Renewal Term in question until such final determination.

 

(d)       If Landlord and Tenant fail to agree upon and appoint
an arbitrator, then the appointment of the arbitrator shall be made by any
judge having jurisdiction over the parties. 
Either Landlord or Tenant may petition such judge for such appointment.

 

(e)        The cost of arbitration shall be paid by Landlord and
Tenants equally

 

Immediately after
the Basic Rent for the Renewal Term is determined pursuant to this Section,
Landlord and tenant shall execute an amendment to the Lease stating the new
Basic Rent in effect.

 

2.10.2         If Tenant fails to give notice exercising the
foregoing option by the date required herein, or if this Lease assigned by
Tenant to an assignee that is not pursuant to a Permitted Transfer subject
to the provisions of subparagraph 4.16.8, or fifty percent (50%) or more
of the Premises in the aggregate is sublet for all or substantially all of the
remaining Term to one or more sublessees that are not part of a Permitted
Transfer, then Tenant’s rights and options to renew shall be automatically
terminated and of no further force or effect.

 

2.11         Right of First Offer Space

 

2.11.1         Tenant shall have a right of first offer to expand
into approximately 2,000 rentable space on the twelfth (12th) floor of the Building (the “ROFO Space”)
that is or becomes available for lease.

 

2.11.2         When Landlord issues an offer to lease any portion of
the ROFO Space (except to a then existing tenant of such space) during the
Lease Term, Landlord shall simultaneously notify Tenant that such space is
available stating the terms upon which Landlord is willing to lease the space
to others (“Landlord’s Notice”).  Tenant shall have five (5) Business Days
to notify Landlord in writing of Tenant’s 

 

10

 

election to lease all of such offered space that is
included in the applicable portion of the ROFO Space upon all of the terms and
conditions of this lease, including the Lease Term except that, rent and
allowance for tenant improvements shall be as stated in Landlord’s Notice
unless Tenant exercises its right to lease the ROFO Space within eight (8) months
after the Commencement Date of this Lease, in which event (x) the rental
terms will be as stated in this Lease except that Tenant will have the benefit
of any remaining Base Rent abatement for the ROFO Space as if the Commencement
Date of the ROFO Space had been the Commencement Dais of the Lease and (y) the
Tenant Improvement Allowance shall be as stated in the Work Letter, but
prorated for the number of months remaining in the Lease Term for example, if
the Commencement Date of the ROFO Space occurs at the beginning of the fifth (5th) month of the Lease Term, Base Rent for the ROFO Space
shall fully abate for the (1st) month of
the Lease Term of the ROFO Space and abate by fifty percent (50%) for the
succeeding twelve (12) months thereafter. 
If Tenant elects to lease such space, then upon such elections.  Landlord and Tenant shall enter into an
amendment to this Agreement whereby Tenant shall lease such space from Landlord
in accordance with the economic terms contained in the Landlord’s Notice, but
otherwise in accordance with the terms and conditions of this Agreement.  If Tenant does not elect in writing within
the five (5) Business Day period to lease such space, Landlord may
thereafter lease the space to others without further notice to the Tenant.  Notwithstanding anything in this Paragraph
2.11.2 to the contrary, Landlord shall have no obligation to honor Tenant’s
rights with respect to ROFO space during the last two (2) years of the
Lease Term unless Tenant has any remaining Renewal Term option and has
exercised or agrees to exercise the applicable Renewal Term when Tenant
exercises its rights with respect to the available ROFO Space.

 

SECTION 3:  BASE RENT, ADDITIONAL RENT AND OTHER SUMS
PAYABLE UNDER LEASE

 

3.1           Payment of Rental.  Tenant agrees to pay
Base Rent, Additional Rent and any other sum due under this Lease to Landlord
without demand, deduction, credit, adjustment or offset of any kind or nature,
in lawful money of the United .States when due under this Lease, at the offices
of Manager at Manager’s Address, or to such other party or at such other place
as Landlord may from time to time designate in writing.

 

3.2           Base Rent.

 

3.2.1           On execution of this Lease, Tenant shall pay to
Landlord the amount specified, if any, in the definition of Prepaid Rent for
the month specified in the definition of that term Tenant agrees to pay the
monthly installments of Base Rent to Landlord, without demand and in advance,
on or before the first day of each calendar, month of the Lease Term from and
after the Commencement Date.  The monthly
Base Rent Installment for any partial month at the beginning or end of the
Lease Term shall be prorated. Base Rent for any partial month at the beginning
of the Lease Term shall be paid by Tenant on the first calendar day of the
month in which Tenant is obligated to commence making Base Rent payments after giving
effect to the following Base Rent abatement period.

 

3.2.2           So long as no Event of Default by Tenant under this
Lease exists at the time the applicable Base Rent payment is due, Base Rent
shall abate during the first five (5) months of the Lease Term (“Free Rent”);

 

3.3           Lease Security Provisions.

 

3.3.1           As security for the full and faithful payment of all
sums due under this Lease and the full and, faithful performance of every
covenant and condition of this Lease to be performed by Tenant shall be required
to deliver a letter of credit in the amount of Three
hundred thousand and no/100 Dollars ($300,000.00) (the “Basic Letter of Credit”) in favor of Landlord.  If (A) no Event of Default shall exist
at the time of any reduction and (B) there has been no material adverse
change in the financial condition of Tenant (as defined below), Landlord shall
permit the Basic Letter of Credit to be reduced as follows:

 

(a)        upon the completion of the twelfth (12th month of the
Lease Term, which date shall be confirmed in the Lease Memorandum, the Basic
Letter of Credit may be reduced to Two hundred sixty-seven
thousand five hundred and no/100 Dollars ($267,500.00); and

 

11

 

(b)       upon the completion of the twenty-fourth (24th) month of the Lease Term, which date shall be
confirmed in the Lease Memorandum, the Basic Letter of Credit may be reduced to
One hundred seventy-nine thousand two hundred
twenty-five and no/100 Dollars ($179,225.00); and

 

(c)        upon the completion of the thirty-sixth (36th) month of the Lease Term, which date shall be
confirmed in the Lease Memorandum, the Basic Letter of Credit may be reduced to
One hundred twenty thousand eighty and no/100
Dollars ($120,080.00); and

 

(d)       upon the completion of the forty-eighth (48th) month of the Lease Term, which date shall be
confirmed in the Lease Memorandum, the Basic Letter of Credit may be reduced to
Eighty thousand five hundred and no/100
Dollars ($80,500.00); and

 

(e)        upon the completion of the sixtieth (60th) month of the Lease Term and payment by Tenant to
Landlord of a $50,000 Lease Security Deposit as set forth in Section 3.3.12
below, the Basic Letter of Credit may be reduced to Zero Dollars ($-0-),
at which time Landlord shall have no further right to draw on the Basic
Letter of Credit and will return the Basic Letter of Credit to Tenant
upon written demand from Tenant.

 

3.3.2           If Tenant uses the entire
Supplemental Tenant Improvement Allowance, as defined in the Work Letter, then at the time
Tenant sends Landlord written notice electing Option 2, Tenant shall deliver a
supplemental letter of credit in the amount of the Supplemental Tenant
Improvement Allowance (as defined in the Work Letter) (the “Supplemental Letter of Credit”) If Tenant uses less than the
entire Supplemental Tenant Improvement Allowance, the Supplemental Letter of
Credit may be reduced to the amount of the Supplemental Tenant Improvement
Allowance actually used by Tenant If (A) no Event of Default shall exist
at the time of any reduction and (B) there has been no material adverse
change in the financial condition of Tenant (as defined below).  Landlord shall permit the Supplemental Letter
of Credit to be reduced by twenty percent (20%) of the original stated amount
at the end of each of the first five (5) Lease Years with the Supplemental
Letter of Credit being reduced to Zero Dollars ($-0-) at the end of the fifth
Lease Year, at which time Landlord shall have no further right to draw on the
Supplemental Letter of Credit and will return the Supplemental Letter if Credit
to Tenant upon written demand from Tenant.

 

3.3.3           As used in this Lease, “Letter of
Credit” means the Basic Letter of Credit and, if applicable, the
Supplemental Letter of Credit.  Landlord
shall have no obligation to permit the reduction or release of the Letter of
Credit during continuation of an Event of Default, nor shall Landlord have any
obligation to permit the reduction or release of the Letter of Credit if a
material adverse change has occurred in the financial condition of Tenant. As
used in this Paragraph 3.3.3, with respect to any scheduled Letter of Credit
reduction a “material adverse change in financial condition” shall be deemed
to have occurred if Tenant’s tangible net worth, determined in accordance
with GAAP, for Tenant’s most recently completed fiscal year prior to the
scheduled Letter of Credit reduction is less than the higher of
Tenant’s tangible net worth for Tenant’s fiscal year 2005 or Tenant’s fiscal
year immediately prior to Tenants most recently completed fiscal year prior to
the scheduled Letter of Credit reduction (if more recent than fiscal-year 2005)
At least thirty (30) days before the proposed reduction in the Letter of
Credit, Tenant’ shall deliver to Landlord copies of Tenant’s applicable
annual financial statements prepared in: accordance with GAAP, consistently
applied, to demonstrate to Landlord’s reasonable satisfaction that no material
adverse change in financial condition has occurred.

 

3.3.4           The Letter of Credit initially delivered pursuant to
this paragraph and all substitutions, replacements and renewals of it, must be
consistent with and shall satisfy all the requirements in the letter of credit
criteria made Exhibit H If the Basic Letter of Credit has not been
delivered to and accepted by Landlord on or before the full execution of this
Lease, Tenant shall deliver the Basic Letter of Credit to Landlord within five (5) business
days from the full execution of this Lease. 
Pending delivery of the Basic Letter of Credit and Supplemental Letter
of Credit Landlord may defer contracting for Tenant improvements.  Timely delivery of the Letter of Credit
shall, at Landlord’s election, (a) be treated as a condition subsequent to
the effectiveness of this Lease such that this Lease shall be voidable by
Landlord by notice to Tenant if timely delivery of the Letter of Credit does
not occur or (b) be treated by Landlord as an Event of Default.  If Landlord elects to treat the failure to
deliver the Letter of Credit in a timely manner 

 

12

 

as an Event of Default, Landlord may pursue all
available rights and remedies, including the right to specific performance.

 

3.3.5           Landlord may draw on the Letter of Credit, in whole or
in part at Landlord’s election, without advance notice to Tenant at any time or
from time to time on or after (a) the occurrence of any Event of Default, (b) if
Tenant, or anyone in possession of the Leased Premises through Tenant, holds
over without Landlord’s prior written consent after the expiration or earlier
termination of this Lease, (c) Landlord is given notice by the issuer of
the Letter of Credit that it is terminating Letter of Credit, (d) a
confirming bank gives notice to Landlord that it will cease to act in that
capacity, (e) the Letter of Credit expires on a specified date by its
terms and is not renewed or replaced at least such (60) days in advance of its
expiration date or (f) to the extent permitted by law, in the event any
bankruptcy, insolvency, reorganization or any other debtor creditor proceeding
is instituted any or against Tenant.

 

3.3.6           Landlord may apply any sum drawn
on the Letter of Credit to amounts owing to Landlord under this Lease in such order and priority
as Landlord elects in its absolute discretion if any of the proceeds drawn on
the Letter of Credit are not applied immediately to sums owing to Landlord
under this Lease, Landlord may retain any such excess proceeds as a cash Lease
Security Deposit for application, at Lender’s election, to future sums owing to
Landlord under this Lease.  In such order
and priority as Landlord elects in its absolute discretion Tenant shall, within
twenty (20) days after Landlord’s demand, restore the amount of the Letter of
Credit drawn so that the Letter of Credit is restored to the original amount of
the Letter of Credit.  If Tenant does not
restore the Letter of Credit to its original amount within the required time
period, such non-restoration shall be considered an Event of Default.

 

3.3.7           Additionally, Landlord’s draw and application of all
or any portion of the proceeds of the Letter of Credit shall not impair any
other rights or remedies provided under this Lease or under applicable law and
shall not be construed as a payment of liquidated damages.  If Tenant shall have fully complied with all
of the covenants and conditions of this Lease, the Letter of Credit shall be
returned to Tenant or, if Landlord has drawn on the Letter of Credit, the
remaining proceeds of the Letter of Credit which are in excess of sums due the
Landlord shall be repaid to Tenant, without interest, within thirty (30) days
after the expiration or termination of the Lease Term and delivery of
possession of the Leased Premises to Landlord in accordance with this Lease.

 

3.3.8           On any request by Landlord made during the Lease Term,
Tenant shall use reasonable efforts to cooperate in accomplishing any
reasonable modification of the Letter of Credit requested by Landlord.  If the Letter of Credit should be lost,
mutilated, stolen or destroyed, Tenant shall cooperate in obtaining the
issuance of a replacement.

 

3.3.9           Tenant shall not assign or grant any security interest
in the Letter of Credit and any attempt to do so shall be void and of no
effect.

 

3.3.10         In the event of a sale or
transfer of Landlord’s estate or interest in the Land and Building, Landlord shall have the right
to transfer the Letter of Credit to the vendee or the transferee, Tenant shall
pay any transfer fees charged by the issuing bank and Landlord shall thereafter
be considered released by Tenant from all liability for the return of the
Letter of Credit.  Tenant shall cooperate
in affecting such transfer.

 

3.3.11         No mortgagee or purchaser of any or all of the
Building at any foreclosure proceeding brought under the provisions of any
mortgage shall (regardless of whether the Lease is at the time in question
subordinated to the lien of any mortgage) be liable to Tenant or any other
person for any or all amounts drawn against the Letter of Credit or any other
or additional Lease Security Deposit or other payment made by Tenant under the
provisions of this Lease), unless Landlord has actually delivered it in cash to
such mortgagee or purchaser, as the case may be.

 

3.3.12         On or before the commencement of the sixth (6th) Lease Year, Tenant shall pay to Landlord the sum of Fifty thousand and no/100 Dollars ($50,000.00), as security
for the full and faithful payment of all sums due under this Lease and the full
and faithful performance of every covenant and condition of this Lease to be
performed by Tenant.  If an Event of
Default by Tenant has occurred with respect to any payment obligation or other
covenant or condition of this Lease, Landlord may apply all or 

 

13

 

any part of the Lease Security Deposit to the payment
of any sum in default or any damage suffered by Landlord as a result of such
breach or default, and in such event, Tenant shall, upon demand by Landlord,
deposit with Landlord the amount so applied so that Landlord shall have the
full Lease Security Deposit on hand at all times during the Lease Term.  In the event Tenant defaults on its
obligations to pay Base Rent, Additional Rent or any other sum as and when due
under this Lease on more than two occasions during any twelve (12) month period
after the sixth (6th) Lease Year, Landed may, at any time
thereafter require an increase in the Lease Security Deposit by an amount equal
to twenty-five percent (25%) of the cash amount specified in the definition of
the term Lease Security Deposit and Tenant shall immediately deposit such
additional amount with Landlord upon Landlord’s demand.  Following such increase, the definition of
the term Lease Security Deposit shall refer to the amount of the Lease Security
Deposit prior to the increase plus the increased amount.  The remedy of increasing the Lease Security
Deposits for Tenant’s multiple defaults shall be in addition to and not a
substitute for any of Landlord’s other rights and remedies under this Lease or
applicable Law.  Additionally, Landlord’s
use or application of all or any portion of the Lease Security Deposit shall
not preclude or impair any other rights or remedies provided for under this
Lease or under applicable law and shall not be construed as a payment of
liquidated damages.

 

3.3.13         If Tenant shall have fully complied with all of the
covenants and conditions of this Lease, the remaining Lease Security Deposit
shall be repaid to Tenant, without interest, within thirty (30) Business Days
after the expiration of this Lease. 
Tenant may not mortgage, assign, transfer or encumber the Lease Security
Deposit and any such act on the part of Tenant shall be without force or
effect.

 

3.3.14         In the event any bankruptcy, insolvency,
reorganization or other creditor-debtor proceedings shall be instituted by or
against Tenant, the Lease Security Deposit shall be deemed to be applied first
to the payment of Base Rent, Additional Rent and all other sums payable under
this Lease to Landlord for all periods prior to the institution of such
proceedings and the balance, if any, may be retained by Landlord and applied
against Landlord’s damages.

 

3.3.15         In the event of a sale or
transfer of Landlord’s estate or interest in the Land and Building, Landlord shall have the right
to transfer the Lease Security Deposit to the vendee or the transferee, and
upon such transfer, Landlord shall be considered released by Tenant from all
liability for the return of the Lease Security Deposit.  Tenant shall look solely to the transferee
for the return of the Lease Security Deposit, and it is agreed that all of the
foregoing shall apply to every transfer or assignment made of the Lease
Security Deposit to a new transferee.  No
mortgagee or purchaser of any or all of the Building at any foreclosure
proceeding brought under the provisions of any mortgage shall (regardless of
whether the Lease is at the time in question subordinated to the lien of any
mortgage) be liable to Tenant or any other person for any or all of such sum
(or any other or additional Lease Security Deposit or other payment made by
Tenant under the provisions of this Lease), unless Landlord has actually
delivered it in cash to such mortgagee or purchaser, as the case may be.

 

3.3.16         In the event of any rightful and permitted assignment
of Tenant’s interest in this Lease, the Lease Security Deposit shall be deemed
to be held by Landlord as a deposit made by the assignee, and Landlord shall
have no further liability to the assignor with respect to the return of the
Lease Security Deposit.

 

3.4           Additional Rent.  Definitions of
certain terms used in this paragraph are set forth in the last subparagraph of
this paragraph entitled “Additional Rent”. 
Tenant agrees to pay to Landlord additional rent as computed in this
paragraph (individually and collectively the “Additional Rent”):

 

3.4.1           Estimated Operating Costs. 
Tenant shall pay to Landlord as Additional Rent one-twelfth (1/12) of
the amount, if any, by which the Estimated Operating Costs Allocable to the
Premises exceeds the Base Amount Allocable to the Premises.  This sum shall be paid in advance on or
before the first day of each calendar month of the Lease Term.  Landlord shall furnish Tenant a written
statement of Estimated Operating Cost Allocable to the Premises in advance of
the commencement of each Year.  If such
written statement is furnished after the commencement of the Year, Tenant shall
also make a retroactive lump-sum payment to Landlord equal to the monthly
payment amount multiplied by the number of months during the Year for which no
payment was paid.  Notwithstanding the
foregoing, 

 

14

 

Landlord reserves the right, but not more than once
during each Year, to revise the Estimated Operating Costs Allocable to the
Premises and upon notice to Tenant of such revision, together with a reasonable
rationale for such revision, Tenant shall adjust its payment to Landlord under
this subparagraph 3.4.1 accordingly.

 

3.4.2           Actual Costs. Within ninety (90) days after the close of each
year, Landlord shall deliver to Tenant a written statement setting forth the
Operating Costs Allocable to the Premises during the preceding Year.  If such Operating Costs Allocable to the
Premises for any Year exceed the Estimated Operating Costs Allocable to the
Premises paid by Tenant to Landlord pursuant to subparagraph 3.4.1 for such
Year, Tenant shell pay the amount of such excess to Landlord within twenty (20)
Business Days after receipt of such statement by Tenant.  If such statement shows the Operating Costs
Allocable to the Premises to be less than the Estimated Operating Costs
Allocable to the Premises paid by Tenant to Landlord pursuant to subparagraph 3
4 1, then the amount of such overpayment shall be paid by Landlord to Tenant
within twenty (20) Business Days following the date of such statement or, at
Landlord’s option, shall be credited towards the installment(s) of
Additional Rent next coming due from Tenant.

 

3.4.3           Determination. The determination of Operating Costs Allocable to
the Premises shall be made by Landlord using commercially acceptable practices
for comparable first class buildings in downtown Baltimore consistently
applied.

 

3.4.4           Operating Cost Audit. Landlord shall
maintain records concerning estimated and actual Operating Costs Allocable to the Premises for no
less than twelve (12) months following the period covered by the statement or
statements furnished Tenant, after which time Landlord may dispose of such
records, unless Tenant has initiated an audit with respect to such period, in
which event Landlord shall maintain such records for such reasonable time as
Tenant may require to complete its audit. 
Provided that no Event of Default has occurred by Tenant of any of its
obligations under this Lease, Tenant may, at Tenant’s sole cost and expense,
cause a Qualified Person (defined below) to inspect Landlord’s records.  Such inspection, if any, shall be conducted
no more than once each Year, during Landlord’s normal business hours within
ninety (90) calendar days after receipt of Landlord’s written statement of
Operating Costs Allocable to the Premises for the previous year, upon first
furnishing Landlord at least twenty (20) calendar days prior written
notice.  Any errors disclosed by the
review shall be promptly corrected by Landlord; provided, however, that if
Landlord disagrees with any such claimed errors, Landlord shall have the right
to cause another review to be made by an auditor of Landlord’s choice.  In the event the results of the review of
records (taking into account, if applicable, the results of any additional
review caused by Landlord) reveal that Tenant has overpaid obligations for a
preceding period, the amount of such overpayment shall be credited against
Tenant’s subsequent installment of Base Rent, Additional Rent or other payments
due to Landlord under the Lease.  In the
event that such results show that Tenant has underpaid its obligations for a
preceding period, the amount of such underpayment shall be paid by Tenant to
Landlord with the next succeeding installment obligation of estimated Operating
Costs Allocable to the Premises.  If the
actual Operating Costs Allocable to the Premises for any given Year were
improperly computed and if the actual Operating Costs Allocable to the Premises
are overstated by more than 5% Landlord shall reimburse Tenant for the cost of
its audit.

 

3.4.5           End of Term If this Lease shall terminate on a day other than the
last day of a Year, (a) Landlord shall estimate the Operating Costs and
Property Taxes Allocable to the Premises for such Year predicated on the most
recent reliable information available to Landlord; (b) the amount
determined under clause (a) of this sentence shall be prorated by
multiplying such amount by a fraction, the numerator of which is the number of
days within the Lease Term in such Year and the denominator of which is 360; (c) the
Operating Costs Base Amount Allocable to the Premises shall be prorated in the
manner described in clause (b); (d) the clause (c) amount (i.e., the
prorated Base Amount Allocable to the Premises) shall be .deducted from the
clause (b) amount (i.e., the prorated Operating Costs Allocable to the
Premises); (e) if the clause (d) amount exceeds the Estimated
Operating Costs Allocable to the Premises paid by Tenant for the last Year in
the Lease Term, then Tenant shall pay the excess to Landlord within ten (10) Business
Days after Landlord’s delivery to Tenant of a statement for such excess; and (f) if
the Estimated Operating Costs Allocable to the Premises paid by Tenant for the
last Year in the Lease Term exceeds the clause (d) amount, then Landlord
shall refund to Tenant the excess within the ten (10) Business Day 

 

15

 

period described in clause (e) if Tenant is not
then in an Event of Default of any of its obligations under this Lease.  Landlord’s and Tenant’s obligations under
this paragraph shall survive the expiration or other termination of this Lease.

 

3.4.6           Definitions. Each underlined
term in this subparagraph shall have the meaning set forth next to that
underlined term:

 

Operating Costs Base Amount
Allocable to the Premises:  The Operating
Costs Allocable to the Premises for the year beginning January 1, 2006 and
ending December 31, 2006 (the “Base Year”).

 

Estimated Operating Costs
Allocable to the Premises:  Landlord
written estimate of Operating Costs Allocable to the Premises for a Year
to be given by Landlord to Tenant pursuant to subparagraph 3.4.1.

 

Operating Costs (net of Property
Taxes):  All expenses, paid or incurred by Landlord
for maintaining, operating and repairing any or all of the Project Premises,
related improvements, and the personal property used in conjunction with such
Project, Premises and related improvements, except for Property
Taxes.  Included are all expenses paid or
incurred by Landlord for:  (a) utilities,
including electricity, water, gas, sewer, fire sprinkler charges, refuse
collection, Telecommunication Services, cable television, steam, heat, cooling
or any other similar service and which are not payable directly by tenants in the
Project; (b) supplies; (c) cleaning, painting and janitorial services
(including window washing), landscaping and landscaping maintenance (including
irrigating, trimming, mowing, fertilizing, seeding and replacing plants), snow
removal and other services; (d) security services, if any; (e) insurance
premiums and applicable insurance deductible payments by Landlord; (f) management
fees, not to exceed the prevailing market rate; (g) compensation
(including employment taxes and fringe benefits) of all persons and business
organizations who perform duties in connection with any service, repair,
maintenance, replacement or improvement or other work included in this
subparagraph; (h) license, permit and inspection fees; (i) assessments
and special assessments due to deed restrictions, declarations or owners
associations or other means of allocating costs of a larger tract of which the
Land is a part; (j) rental of any machinery or equipment; (k) audit
fees and accounting services related to the Project and charges for the
computation of the rents and charges payable by tenants in the Project (but
only to the extent the cost of such fees and services are in addition to the
cost of the management fee); (l) the cost of repairs or replacements; (m) charges
under maintenance and service contracts; (n) .legal fees and other
expenses of legal or other dispute resolution proceedings; (o) maintenance
and repair of the roof and roof membranes; (p) costs incurred by Landlord
for compliance with any and all Governmental Requirements, including Access
Laws, and to Increase the efficiency of any electrical, mechanical or other
system servicing the Project or the Land; (q) elevator service and repair,
if any; (r) business taxes and license fees; (s) any other expense or
charge which in accordance with generally accepted accounting and management
principles would be considered an expense of maintaining, operating, owning or
repairing the Project; and (t) the amortization of costs of capital
improvements in accordance with the next sentence.  Costs associated with capital improvements
installed or constructed by Landlord other than in the initial construction of
the Project, whether such were constructed or installed before or after the
Commencement Date, shall be amortized with interest return at the Prime Rate
plus two (2) percentage points over the estimated useful life of the
capital improvement as determined by Landlord and the annual amortization of
principal and interest attributable to the Lease Term shall be an Operating
Cost.  The capital improvements referred
to in the previous sentence shall include: 
replacement of roof structure and roof membranes; exterior painting; and
upgrading Project common systems and facilities (including HVAC systems, and if
owned by Landlord, Telecommunication Facilities).

 

Exclusions from Operating Costs: 
Notwithstanding the foregoing, the following items shall be excluded
from Operating Expenses:

 

16

 

(i)            debt service on Mortgages and any
costs and expenses relating to a refinancing or debt modification, including
legal fees, title insurance premiums, survey expenses, appraisal, environmental
report, or engineering report;

 

(ii)           leasing commissions, brokerage fees
or legal fees incurred in connection with the negotiation and preparation of
letters, deal memos, letters of intent, leases and related documents with
respect to the leasing, assignment or subletting of space for any occupant of
the Building;

 

(iii)          the cost of tenant installations
incurred in connection with preparing space for a new tenant or refurbishing or
renovating space for an existing tenant;

 

(iv)          salaries and other compensations of
personnel above the grade of building manager;

 

(v)           any expense for which Landlord is
otherwise compensated through the proceeds of insurance or is otherwise
compensated by any tenant (including Tenant) of the Building for services in
excess of the services Landlord is obligated to furnish to Tenant hereunder;

 

(vi)          capital costs, depreciation or
amortization on Base Building structural elements and major Building systems
not considered an operating expense under GAAP shall not be passed through
except for (i) cost savings items and only to the extent of the savings
actually achieved, and/or (ii) items required by law or regulation enacted
after the date of the Lease (i) and (ii) above shall be passed
through only as amortized on a straight line basis over the useful life of the
expense according to GAAP;

 

(vii)         costs incurred by Landlord due to a
violation of any lease in the Building or any superior Lease or Mortgage or
penalties or charges arising due to violation of any Legal Requirement or
insurance Requirement required to be complied with by Landlord;

 

(viii)        costs incurred from Landlord’s
charitable or political contributions or as fees to community or real estate
associations;

 

(ix)           attorneys fees and disbursements and
other expenses, including settlement, incurred in connection with disputes with
the Mortgagee or other tenants or occupants of the Building or associated with
the enforcement of any leases or the defense of Landlord’s title or interest in
the Project or any part thereof;

 

(x)            bad debt losses or reserves;

 

(xi)           accounting fees incurred in preparing
Landlord’s financial reports for Landlord, its partners, affiliates or any
Mortgagee or in preparing Landlord’s tax returns or other accounting fees not
directly related to the preparation of Operating Cost Statements;

 

(xii)          travel and meal expenses of Landlord’s
management and leasing employees;

 

(xiii)         cost of removal of Hazardous Substances
from the Project which were performed or should have been performed pursuant to
environmental studies and recommendations received by Landlord in connection with
the initial construction, renovation, and/or rehabilitation of the Building or
due to any other pre-existing environmental condition;

 

(xiv)        all costs applicable solely to any
additional buildings constructed on the Project;

 

(xv)         costs incurred in performing work or
furnishing services or utilities for any tenant or other occupant, whether at
such tenants or other occupant’s or Landlord’s expense, to the extent that such
work or service or utility is in excess of any work or

 

17

 

service of utilities that Landlord is obligated to
furnish to Tenant at Landlord’s expense and is not available to tenants
generally;

 

(xvi)        professional fees for tax certiorari
proceedings;

 

(xvii)       any expense for which Landlord is
reimbursed by any tenant as an additional charge in excess of Annual Fixed Rent
and Additional Charges;

 

(xviii)      overhead and profit increment paid to
affiliates of Landlord for services to the extent that such costs exceed the
costs of such services were they not rendered by an affiliate (except the
agreed management/administrative fee);

 

(xix)         advertising and promotional expenses
with respect to the Project;

 

(xx)          cost of permanent works of art (as
distinct from decorations, which are includible in Operating Expenses);

 

(xxi)         franchise, gains, estate or income
taxes imposed upon the income of Landlord;

 

(xxii)        costs with respect to a sale of the
Building or the Project;

 

(xxiii)       any costs and compensation paid to
clerks, attendants or other persons in commercial concessions operated by
Landlord or located within the Project;

 

(xxiv)       costs incurred with respect to
installing, operating or maintaining any observatory, broadcasting, cafeteria,
hotel or dining facility, parking garage, or athletic, luncheon or recreational
club in. the Project which is operated by Landlord (i.e., not leased to a third
party);

 

(xxv)        expenses of constructing tenant
improvements for any tenant in the Building;

 

(xxvi)       damages imposed on Landlord by any
judgment, settlement or arbitration award which, in any such case, shall result
from any tort liability of Landlord; provided, however, that any portion of the
judgment, settlement or arbitration award that by its nature is otherwise an
Operating Cost pursuant to this section (e.g., the cost of repairs and
maintenance) shall, notwithstanding the foregoing, be included in Operating
Expenses;

 

(xxvii)      costs incurred with respect to the
construction of any additions to the Building and/or the Project which increase
the physical size and total rentable square feet of the Building;

 

(xxviii)     amounts incurred by Landlord in connection
with the management, repair, maintenance or operation of any portion of the
Building used solely for retail purposes, to the extent such amount exceeds the
amount that would have been incurred if such portion were used solely for
office purposes (however, such expenses may only be-included in Operating
Expenses if the Rentable Floor Area of such space is included in the
calculation of the Total Rentable Floor Area of the Building);

 

(xxix)       amounts received by Landlord through
proceeds of insurance to the extent they are compensation for sums previously
included in Operating Expenses;

 

(xxx)        costs of correcting defects (including
latent defects) in the construction of the Building or in the base building
systems or equipment used therein;

 

(xxxi)       costs of Landlord’s general overhead and
general administrative expenses (except for the agreed upon
administrative/management fees) (individual, partnership or corporate, as the
case may be) and costs for Landlord’s professional fees not directly
attributable to the operation and management of the Building, including,
without limitation, accounting fees associated with Landlord’s ownership of the
Project;

 

18

 

(xxxii)      any increase in insurance premiums to the
extent that such increase is caused by or attributable to the use, occupancy or
act of another tenant; and

 

cost of repairs or replacements incurred by reason of
fire or other casualty or condemnation to the extent covered by casualty
insurance on the Building or condemnation.

 

Gross-Up Provision:    
If less than ninety-five percent (95%) of the net rentable area of the
Project is occupied by tenants at all times during any Year, then Operating
Costs for such Year shall include all additional costs and expenses that
Landlord reasonably determines would have been incurred had ninety-five percent
(95%) of the Project been occupied at all times during such Year by tenants.

 

Operating Costs Allocable to the
Premises:     The product of Tenants Pro Rata Share
times Operating Costs (net of Property Taxes).

 

Qualified Person:    
This means an accountant or other person experienced in accounting for
income and expenses of office projects, who is engaged solely by Tenant on
terms which do not entail any compensation based or measured in any way upon
any savings in Additional Rent or reduction in Operating Costs Allocable to the
Premises achieved through the inspection process described in this
subparagraph.

 

Property Tax Base Amount:    
The Property Taxes-payable for the tax year 2007 (beginning July 1,
2006 and ending June 30, 2007).

 

Property Taxes Allocable to the
Premises:    Tenant’s Pro Rata Share of Property Taxes.

 

3.4.7        Property Tax Escalation  In addition to the payments required by the
previous subparagraphs of this paragraph, Tenant shall pay as Additional Rent
to Landlord of one-twelfth (1/12) of the amount, if any, by which (a) Landlord’s
estimate of the Property Taxes Allocable to the Premises for the current tax
year exceeds the Property Tax Base Amount. 
This sum shall be paid in advance on or before the first day of each
calendar month of the Lease Term.  After
the close of each tax year during the Lease Term, Landlord shall deliver Tenant
a written statement setting forth (1) the actual Property
Taxes Allocable to the Premises for the Preceding Tax Year, (2) the
difference between the amount referred to in clause (1) and the
Property Tax Base Amount and (3) the differential between the amount
referred to in clause (2) and the sum of the tentative monthly
payments toward such amount made by Tenant. 
If the differential referred to in clause (3) of the previous
sentence represents an underpayment by Tenant, such differential shall be paid
to Landlord within twenty (20) Business Days after delivery of Landlord’s
written statement to Tenant; if such differential represents an overpayment by
Tenant, Landlord shall, at its option, either credit such overpayment to the
installment(s) of Additional Rent next coming due from Tenant or refund
such overpayment to Tenant within twenty (20) Business Days after Tenant’s
concurrence in the amount due as a refund. 
If the Lease Term begins or ends on a day other than the beginning or
end of a tax year, the amount due as described in clause (2) of this
subparagraph shall be prorated on a per diem basis with reference to the tax
year.  The provisions of this
subparagraph shall survive the expiration or other termination of this Lease.

 

3.4.8        Tenant’s Costs  Tenant agrees to reimburse or pay Landlord
within Twenty (20) Business Days after invoice from Landlord for (a) any
cleaning expenses incurred by Landlord, including carpet cleaning, garbage and
trash removal expenses, over and above the normal cleaning provided by
Landlord, if any, or due to the presence of a lunchroom or kitchen or food or
beverage dispensing machines within the Premises, (b) any expense incurred
by Landlord for usage in the Premises of heating, ventilating and air
conditioning services, elevator services, electricity, water, janitorial
services, or any other services or utilities over and above the normal usage
for the Premises, (c) any expense incurred by Landlord relating to or
arising out of the usage by Tenant or Tenant’s Agents or the public or common
areas of the Project, or any of the equipment contained therein, which usage is
over and above the normal usage for such public or common areas or equipment,
and (d) any other direct expense incurred by Landlord on Tenant’s
behalf.  The normal cleaning to be
provided by Landlord to the Premises is described in Exhibit G.  If Landlord determines that Tenant’s utility
usage for one or more

 

19

 

utilities exceeds normal usage, Landlord reserves the right, at
Landlord’s sole cost and expense, to install and activate separate metering of
electricity, water or other utilities to the Premises, in which case Tenant
shall be billed for such separately metered utilities on the basis of actual
usage and the Operating Costs Base Amount Allocable to the Premises and
Operating Costs shall be adjusted accordingly.

 

3.4.9        Payments Deemed Additional Rent.  Any sums payable under this Lease pursuant to
this paragraph or otherwise shall be Additional Rent and, in the event of
nonpayment of such sums, Landlord shall have the same rights and remedies with
respect to such nonpayment as it has with respect to nonpayment of the Base
Rent due under this Lease.

 

3.5                                Utilities.

 

3.5.1        Landlord
shall have the right from time to time to select the company or companies
providing electricity, gas, fuel, and any other utility services to the
Building.  Landlord shall contract
directly and pay for all water, gas, heat, light, power, sewer, sprinkler
charges and other utilities used on or from the Premises together with any
taxes, penalties, surcharges or similar charges relating to such
utilities.  If any such service is not
separately metered to the Premises or is not otherwise separately accounted for
and billed to Tenant, the cost therefor shall be an Operating Cost under this
Lease.  Tenant shall contract directly
and pay for its own Telecommunication Services.

 

3.5.2        Tenant
acknowledges that space on the Building rooftop and in Building risers,
equipment rooms and equipment closets is limited.  If Tenant requires Telecommunication Services
for the Premises other than from the provider or providers of Telecommunication
Services selected by Landlord and whose Telecommunication Facilities are installed
in or about the Building or on the rooftop of the Building, provision for
alternate or supplemental Telecommunication Services or Telecommunication
Facilities has been made in a license agreement accompanying and made part of
this Lease.  Unless otherwise required by
law, neither Tenant, nor a provider of Telecommunication Services to Tenant, in
the future shall be entitled to locate or Install Telecommunication Facilities
in, on or about the Building without (a) first obtaining Landlord’s
advance, written consent, such consent not to be unreasonably withheld,
conditioned or delayed and (b) the advance execution by Landlord and
Tenant of a satisfactory agreement granting a license to Tenant for such
purposes and setting forth the scope, the additional rent, if any, royalties
and the other terms and conditions of that license, and (c) Tenant
negotiating and obtaining the right, if any is required, to bring such
Telecommunication Facilities across public or private property to an approved
entry point to the Building.  The
agreement referred to in clause (b) of the previous sentence shall be
incorporated in and become part of this Lease. 
Any future application by Tenant for permission to locate or install
Telecommunication Facilities shall (1) be in such form and shall be
accompanied by such supporting information as the Landlord may require, (2) be
subject to such procedures, regulations and controls as the Landlord may
specify and (3) be accompanied by such payment as the Landlord may
reasonably request to reimburse Landlord for its costs of evaluating and
processing the application and in negotiating and preparing the agreement
described earlier in this subparagraph.

 

3.5.3        Landlord
shall in no case be liable or in any way be responsible for damages or loss to
Tenant arising from the failure of, diminution of or interruption in electrical
power, natural gas, fuel, Telecommunication Services, sewer, water, or garbage
collection services, other utility service or building service of any kind to
the Premises, unless such interruption in, deprivation of or reduction of any
such service was caused by the gross negligence or willful misconduct of
Landlord, its agents or contractors or by a failure in facilities, equipment or
systems in the Landlord’s ownership.  To
the extent that Landlord bears any responsibility for any such interruption,
deprivation or reduction in utility or building services to the Premises,
Landlord’s responsibility and Tenant’s remedy shall be limited to a
proportionate abatement in Base Rent for the period beginning with (a) the
day which is three (3) Business Days after the date on which Tenant
delivers notice to Landlord of such interruption, deprivation or reduction and
that Tenant is being deprived of reasonable use of all or a substantial portion
of the Premises and ending on (b) the date such interruption, deprivation
or reduction which is Landlord’s responsibility is not causing Tenant to be
deprived of reasonable use of all or a substantial portion of the Premises.

 

20

 

3.6           Holdover.  Tenant is not authorized to hold over beyond
the expiration or earlier termination of the Lease Term.  If Landlord consents to a holdover and no
other agreement is reached between Tenant and Landlord concerning the duration
and terms of the Holdover, Tenants holdover shall be a month-to-month
tenancy.  During such tenancy, Tenant
shall pay to Landlord 150% of the rate of Base Rent in effect on the expiration
or termination of the Lease Term plus all Additional Rent and other sums
payable under this Lease, and shall be bound by all of the other covenants and
conditions specified in this Lease, so far as applicable.  If the Landlord does not consent to the
Tenant’s remaining in possession, Landlord shall have all the rights and
remedies provided for by law and this Lease, including he right to recover
consequential damages suffered by Landlord in the event of Tenant’s wrongful
refusal to relinquish possession of the Premises.

 

3.7           Late
Charge. If Tenant fails to make any payment of Base Rent,
Additional Rent or other amount when due under this Lease, a late charge is
immediately due and payable by Tenant equal to five percent (5%) of the amount
of any such payment; provided that
Landlord will waive the late charge for the first two (2) such failures
occurring during any consecutive twelve (12) month period during the Lease Term
so long as such payment is made within three (3) Business Days after-the
date such sums are due and payable with no requirement for Landlord to provide
written notice before such late charge is assessed) Landlord and Tenant agree
that this charge compensates Landlord for the administrative costs caused by
the delinquency.  The parties agree that
Landlord’s damage would be difficult to compute and the amount stated in this
paragraph represents a reasonable estimate of such damage.  Assessment or payment of the late charge
contemplated in this paragraph shall not excuse or cure any Event of Default or
breach by Tenant under this Lease or impair any other right or remedy provided
under this Lease or under law.

 

3.8           Default
Rate.  Any Base Rent,
Additional Rent or other sum payable under this Lease which is not paid when
due shall bear interest at a rate equal to the lesser of:  (a) the published prime or reference
rate of such national banking institution designated by Landlord if such bank
ceases to publish such rate (the “Prime Rate”),
then in effect, plus four (4) percentage points, or (b) the maximum
rate of interest per annum permitted by applicable law (the “Default Rate”), but the payment of such interest shall not
excuse or cure any Event of Default or breach by Tenant under this Lease or
impair any other right or remedy provided under this Lease or law.  Landlord will waive the application of the
Default Rate for the first such failure occurring during any
consecutive twelve (12) month period during the Lease Term so long as such
payment is made within five (5) Business Days after written notice from
Landlord.  No written notice shall be
required more than once in any consecutive twelve (12) month period before
Landlord may apply the Default Rate in accordance with this Paragraph.

 

SECTION 4:  MANAGEMENT AND LEASING PROVISIONS

 

4.1           Maintenance
and Repair by Landlord

 

 4.1.1       Subject
to the Paragraphs captioned “Damage or Destruction” and “Condemnation”,
Landlord shall repair, replace and maintain the Building, including, without
limitation, structural elements, the foundation, the roof of and roof membrane,
exterior windows, and all Building systems, including, without limitation,
electrical, mechanical, plumbing, sewer, fire-life-safety and heating, air
conditioning and ventilating systems (excluding supplemental systems installed
by or on behalf of Tenant), in reasonably good order and condition consistent
with Government Requirements and with first-class buildings of the same or
similar use as the Building located in the metropolitan area in which the
Building is located and subject to reasonable wear and tear.  Landlord shall make such repairs thereto as
become necessary after obtaining actual knowledge of the need for such
repairs.  All repair costs shall be
included in Operating Costs, except as otherwise expressly provided herein and
except for damage occasioned by the act or omission of Tenant or Tenant’s
Agents which shall be paid for entirely by Tenant upon demand by Landlord.  In the event any or all of the Building
becomes in need of maintenance or repair which Landlord is required to make
under this Lease, Tenant shall promptly give written notice to Landlord, and
Landlord shall commence and complete such maintenance or repairs within a
reasonable time after Landlord’s receipt of such notice.

 

21

 

4.1.2        Landlord
agrees to furnish Tenant the following services, the cost of which shall be
included in Operating Costs:  (a) hot
and cold water at those points of supply in the Premises and where provided for
general use of ether tenants in the Building; (b) central heat and air
conditioning at such temperatures and in such amounts as are consistent with
other Class A office buildings in downtown Baltimore or as required by
governmental authority; (c) routine maintenance and electric lighting
service for all Building standard light fixtures in the Premises, and in all
common areas of the Building in the manner and to the extent consistent with
other Class A office buildings in downtown Baltimore (but at a minimum
including light bulb replacement); (d) janitorial service as provided in Exhibit G;
(a) facilities to provide electrical current to Tenant in its use and
occupancy of the Premises; (f) telephone service to the Premises unless
Tenant provides its own telephone service; (g) passenger and freight
elevator service; provided that use of freight elevators shall require
twenty-four (24) hours’ notice; and (h) access to and egress from the
Building, the Premises, and the common areas, twenty four (24) hours per day,
seven (7) days per week.  Landlord
shall only be obligated to provide heating and air-conditioning to the Premises
during Normal Business Hours (hereinafter defined).  As used herein, the term “Normal Business Hours” shall mean Monday through Friday
7:00 am. to 7:00 p.m., and Saturday 9:00 a.m. to 1:00 p.m.,
excluding the following legal holidays: 
New Year’s Day, Memorial Day, 4th of July, Labor Day,
Thanksgiving Day and Christmas Day.  At
times other than Normal Business Hours and days aforesaid, central air
conditioning and heating shall be provided to Tenant upon at least twenty-four
(24) hours’ prior notice from Tenant (except for weekend and Holiday HVAC
service, which requires notice by 6:00 p m. on the second (2nd) Business
Day immediately preceding such weekend day or Holiday).  Tenant shall pay Landlord within twenty (20)
Business Days after demand for such service at the hourly charge established by
Landlord for each hour (or a portion thereof) of after-hours usage, which shall
be the actual cost to Landlord to provide such service.  For informational purposes, Landlord’s charge
for after hours HVAC is $31.78 per hour per floor as of May 1, 2005.  Such amount is subject to change from time to
time.

 

4.2           Maintenance
and Repair by Tenant. 
Except as is expressly set forth as Landlord’s responsibility pursuant
to the paragraph captioned “Maintenance and Repair by Landlord” and as
otherwise expressly set forth in this Lease, Tenant shall at Tenant’s sole cost
and expense keep, clean and maintain the Premises in good condition and repair,
including interior painting, carpets and floor coverings, all interior wall
surfaces and coverings (including tile and paneling), interior doors,
non-standard light bulb replacement, and interior preventative
maintenance.  If Tenant fails to maintain
or repair the Premises in accordance with this paragraph, then Landlord may,
but shall not be required to, enter the Premises upon ten (10) Business
Days’ prior written notice to Tenant (or immediately without any notice in the
case of an emergency) to perform such maintenance or repair at Tenant’s sole
cost and expense.  Tenant shall pay to
Landlord the cost of such maintenance or repair plus a fifteen percent (15%)
administration fee within ten (10) Business Days of written demand from
Landlord.

 

4.3           Common
Areas/Security.

 

 4.3.1       The
common areas of the Building shall be subject to Landlord’s sole management and
control.  Without limiting the generality
of the immediately preceding sentence, Landlord reserves the exclusive right as
it deems necessary or desirable to install, construct, remove, maintain and
operate lighting systems, facilities, improvements, equipment,
Telecommunication Facilities and signs on, in or to all parts of the common
areas; change the number, size, height, layout, or locations of walks,
driveways and truckways or parking areas now or later forming a part of the
Land or Building; make alterations or additions to the Building or common area;
close temporarily all or any portion of the common areas to make repairs,
changes or to avoid public dedication; grant easements to which the Land will
be subject; replat, subdivide, or make other changes to the Land; place or
relocate or cause to be placed or located utility lines and Telecommunication
Facilities through, over or under the land and Building; and use or permit the
use of all or any portion of the roof of the Building.  Notwithstanding anything contained in this
paragraph to the contrary, Landlord shall be permitted to take the actions and
exercise the rights set forth in this paragraph only if such actions are taken
and such rights are exercised in accordance with the Standard and do not
interfere unreasonably with Tenant’s use of the Premises or reasonable access
thereto.

 

22

 

4.3.2        Landlord
shall provide such security services to the Building that are usually and
customary for Class A office buildings located in downtown Baltimore
similarly situated to the Building. 
Subject to Landlord’s prior approval, Tenant may, at its sole cost and
expense, install establish and maintain security services within the Premises; provided that, such security services (including any
apparatus, facilities, equipment or people utilized in connection with the
provision of such security services) comply with the Governmental Requirements
and shall not cause the Building to be out of compliance with the Governmental
Requirements.  Notwithstanding the
foregoing, any such security services installed, established or maintained by
Tenant must not affect or impact any portion of the Building or the Land other
than the Premises and shall not to any way limit or interfere with Landlord’s
ability to exercise its rights as provided in the paragraph captioned “Access”.  Tenant’s rights under this subparagraph are
subject to all the obligations, limitations and requirements as set forth in
the paragraphs captioned “Tenant Alterations” and “Tenant’s Work
Performance.

 

4.3.3        Without
limiting the generality of the preceding paragraph, Tenant shall have
twenty-four (24) hours, seven (7) days per week access to the Building
through a proximity key access system or such other comparable system as may be
installed by Landlord from fane to time. 
Certain garage elevators will have controlled access to the Building.  Visitors will have access during Normal
Business Hours to the second floor/mezzanine area of the Building.

 

4.4           Tenant
Alterations.  Tenant shall
not make any alterations, additions or improvements in or to the Premises, or
make changes to locks on doors, or add, disturb or in any way change any floor
covering, wall covering, fixtures, plumbing, wiring or Telecommunication
Facilities (individually and collectively “Tenant Alterations”),
without first obtaining the consent of Landlord which may be withheld in
Landlord’s absolute discretion, except as provided below.  Tenant shall deliver to Landlord full and
complete plans and specifications for any proposed Tenant Alterations (provided
that the level of Tenant Alterations would reasonably require plans and
specifications) and, if consent by Landlord is given, all such work shall be
performed at Tenant’s expense.  Tenant
shall pay to Landlord all reasonable out-of-pocket costs incurred by Landlord
for any architecture, engineering, supervisory and/or legal services in
connection with any Tenant Alterations, including, without limitation, Landlord’s
review of the Plans.  Without limiting
the generality of the foregoing, Landlord may require Tenant (if Landlord has
elected to require Tenant to perform the Tenant Alterations), at Tenant’s sole
cost and expense, to obtain and provide Landlord with proof of insurance
coverage and a payment and performance bond, in forms, amounts and by companies
acceptable to Landlord; provided that
in lieu of payment and performance bonds, Tenant may provide evidence that
Tenant’s contractors are bondable. 
Should Tenant make any alterations without Landlord’s prior written
consent, or without satisfaction of any conditions established by Landlord,
Landlord shall have the right, in addition to and without limitation of any
right or remedy Landlord may have under this Lease, at law or in equity, to
require Tenant to remove some or all of Tenant Alterations, or at Landlord’s
election, Landlord may remove such Tenant Alterations and restore the Premises
at Tenant’s Expense.  Nothing contained
in this paragraph or the paragraph captioned “Tenant’s Work Performance”
shall be deemed a waiver of the provisions of the paragraph captioned “Mechanic’s
Liens”.  Notwithstanding anything
in this Paragraph 4.4 to the contrary, Landlord shall not unreasonably
withhold its consent to Tenant Alterations that have no impact on Building
structure or systems, and Landlord hereby consents to any Tenant Alterations
under $15,000 for a single project so long as such Tenant Alterations have no
impact on the Building structure or systems.

 

4.5           Tenant’s
Work Performance.  Any
Tenant Alterations to be performed under this paragraph shall be performed by
contractors employed by Tenant under one or more construction contracts, in
form and content approved in advance in writing by Landlord.  Approval shall be subject to Landlord’s
discretion and shall include a requirement that the prime contractor and the
respective subcontractors of any tier performing the Tenant Alterations:  (a) be parties to, and bound by, a
collective bargaining agreement with a labor organization affiliated with the
Building and Construction Trades Council of the AFL-CIO applicable to the
geographic area in which the Building is located and to the trade or trades in
which the work under the contract is to be performed and (b) employ only
members of such labor organizations to perform work within their respective
jurisdictions.  Tenant’s contractors,
workers and suppliers shall work in harmony with and not interfere with workers
or contractors of Landlord or other tenants of Landlord.  If Tenant’s contractors, workers or suppliers
do, in the opinion of Landlord, cause

 

23

 

such disharmony or interference, Landlord’s consent to the continuation
of such work may be withdrawn upon written notice to Tenant.  All Tenant Alterations shall be (1) completed
in accordance with the plans and specifications approved by Landlord; (2) completed
in accordance with all Governmental Requirements; (3) carried out promptly
in a good and workmanlike manner; (4) of all new Materials; and (5) free
of defect in materials and workmanship. 
Tenant shall pay for all damage to the Premises, Building and Land
caused by Tenant or Tenant’s Agents. 
Tenant shall indemnify, defend and hold harmless Landlord and Landlord’s
Agents from any Claims arising as a result of the Tenant Alterations or any
defect in design, material or workmanship of any Tenant Alterations.

 

4.6           Surrender
of Possession.  Subject to
the last subparagraph of the paragraph captioned “Insurance”.  Tenant shall, at the expiration or earlier
termination of this Lease, surrender and deliver the Premises to Landlord in as
good condition as when received by Tenant from Landlord or as later improved,
reasonable use and wear excepted, and free from all tenancies or occupancies by
any person.

 

4.7           Removal
of Property.  Unless
otherwise agreed to in writing by Landlord, Tenant agrees that there are and
shall be no trade fixtures in the Premises owned by Tenant.  Upon expiration or earlier termination of
this Lease, Tenant may remove its personal property, office supplies and office
furniture and equipment if (a) such items are readily moveable and are not
attached to the Premises; (b)  such removal is completed prior to the expiration
or earlier termination of this Lease; (c) Tenant is not in an Event of
Default of any covenant or condition of this Lease at any time of such removal;
and (d) Tenant immediately repairs all damage caused by or resulting from
such removal.  All other property in the
Premises and any Tenant Alterations (including, wall-to-wall carpeting,
paneling, wall covering, lighting fixtures and apparatus or Telecommunication
Facilities or any other article affixed to the floor, walls, ceiling or any
other part of the Premises or Building) shall become the property of Landlord
and shall remain upon and be surrendered with the Premises; provided, however,
at Landlord’s sole election, which election must be made at the time Landlord
approves the effected Tenant Alterations, Tenant shall be obligated, at its
sole cost and expense, to remove all (or such portion as Landlord shall
designate) of the Tenant Alterations (including Telecommunication Facilities),
repair any damages resulting from such removal and return the Premises to the
same condition as existed prior to such Tenant Alterations.  Tenant waives all rights to any payment or
compensation for such Tenant Alterations (including Telecommunication
Facilities).  If Tenant shall fail to
remove any of its property from the Premises, Building or Land at the
expiration or earlier termination of this Lease or when Landlord has the right
of re-entry, Landlord may, at its option, remove and store such property at
Tenant’s expense without liability for loss of or damage to such property, such
storage to be for the account and at the expense of Tenant.  Tenant shall pay all costs incurred by
Landlord within five (5) Business Days after demand for such payment.  If Tenant fails to pay the cost of storing
any such property, Landlord may, at its option, after it has been stored for a
period of twenty (20) Business Days or more, sell or permit to be sold, any or
all such property at public or public sale (and Landlord may become a purchaser
at such sale), in such manner and at such times and places as Landlord in its
sole discretion may deem proper, without notice to Tenant, and Landlord shall
apply the proceeds of such sale:  first, to the cost and expense of
such sale, including reasonable attorney’s fees actually incurred; second, to the payment of the costs
or charges for storing any such property; third, to
the payment of any other sums of money which may then be or later become due
Landlord from Tenant under this Lease; and, fourth, the
balance, if any, to Tenant.

 

4.8           Access.
Tenant shall permit Landlord and Landlord’s Agents to enter into the Premises
at any time on at least one (1) Business Day’s notice (except in case of
emergency in which case no notice shall be required), for the purpose of
inspecting the same or for the purpose of repairing, altering or improving the
Premises or the Building.  Nothing
contained in this paragraph shall be deemed to impose any obligation upon
Landlord not expressly stated elsewhere in this Lease.  When reasonably necessary, Landlord may temporarily
close Building or Land entrances, Building doors or other facilities, without
liability to Tenant by reason of such closure and without such action by
Landlord being construed as an eviction of Tenant or as relieving Tenant from
the duty of observing or performing any of the provisions of this Lease.  If Tenant does not exercise the applicable
Renewal Option, Landlord shall have the right, during the last twelve (12)
months of the Lease Term, to enter the Premises on at least three (3) Business
Days’ notice for the purpose of showing the Premises to prospective tenants and
to erect on the Premises

 

24

 

a suitable sign indicating the Premises are available.  Tenant shall give written notice to Landlord
at least twenty (20) Business Days prior to vacating the Premises and shall
arrange to meet with Landlord for a joint inspection of the Premises prior to
vacating.  In the event of Tenant’s
failure to give such notice or arrange such joint inspection, Landlord’s
inspection at or after Tenant’s vacating the premises shall be conclusively
deemed correct for purposes of determining Tenant’s responsibility for repairs
and restoration.  Landlord shall not be
liable for the consequences of admitting by passkey; or refusing to admit to
the Premises, Tenant or any of Tenant’s Agents, or other persons claiming the
right of admittance.

 

4.9                                Damage or Destruction.

 

4.9.1        If
the Premises are damaged by fire, earthquake or other casualty, Tenant shall
give immediate written notice thereof to Landlord.  If Landlord estimates that the damage can be
repaired in accordance with the then-existing Governmental Requirements within
one hundred-eighty (180) days after Landlord is notified by Tenant of such
damage and if there are sufficient insurance proceeds available to repair such
damage, then Landlord shall so notify Tenant by written notice, which notice
(the “Landlord’s  Casualty
Notice”) shall include Landlord’s estimate of how long it will take
to complete the restoration work; then Landlord shall proceed with reasonable
diligence to restore the Premises to substantially the condition which existed
prior to the damage and this Lease shall not terminate.  If, in Landlord’s estimation, the damage
cannot be repaired within such 180 day period or if there are insufficient
insurance proceeds available to repair such damage, Landlord may elect in its
absolute discretion to either:  (a) terminate
this Lease or (b) restore the Premises to substantially the condition
which existed prior to the damage and this Lease will continue.  If Landlord restores the Premises under this
paragraph, then Landlord shall use commercially reasonable efforts to proceed
toward completion of the restoration and (1) the Lease Term shall be
extended for the time required to complete such restoration, and (2) Landlord
shall not be required to repair or restore Tenant Improvements, Tenant
Alterations (including Telecommunication Facilities), or any or all furniture,
fixtures, equipment, inventory, improvements or other property which was in or
about the Premises at the time of the damage and was not owned by
Landlord.  Base Rent, Additional Rent and
any other sum due under this Lease during any reconstruction period shall not
be abated.  Tenant agrees to look to the
provider of Tenant’s insurance for coverage for the loss of Tenant’s use of the
Premises and any other related losses or damages incurred by Tenant during any
reconstruction period.

 

4.9.2        If
the Building is damaged by fire, earthquake or other casualty and more than
fifty percent (50%) of the Building is rendered untenantable, without regard to
whether the Premises are affected by such damage.  Landlord may in its absolute discretion and
without limiting any other options available to Landlord under this Lease or
otherwise, elect to terminate this Lease by notice in writing to Tenant within
sixty (60) days after the occurrence of such damage if Landlord is also
terminating the leases of other tenants in the Building who are similarly
situated to Tenant.  Such notice shall be
effective thirty (30) days after receipt by Tenant.

 

4.9.3        Notwithstanding
anything contained in this Lease to the contrary, if there is damage to the
Premises or Building and the holder of any indebtedness secured by a mortgage
or deed of trust covering any such property requires that the insurance
proceeds be applied to such indebtedness or if the insurance proceeds are
otherwise inadequate to complete the repair of the damages to the Premises, the
Building of both, then Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within fifteen (15) days
after Landlord is notified of such requirement.

 

4.9.4        Notwithstanding
the foregoing, if the Premises or the Building are wholly or partially damaged
or destroyed within the final six (6) months of the Term, Landlord may, at
its option, elect to terminate this Lease upon written notice to Tenant within
thirty (30) days following such damage or destruction.

 

4.9.5        Notwithstanding
the foregoing, if, Landlord elects to repair the casualty damage despite
Landlord’s estimation that the restoration period will exceed one hundred
eighty (180) days, Landlord will so indicate the anticipated period to restore
in Landlord’s Casualty Notice, and this Lease shall remain in full force and
effect; provided  that
if the damage cannot be repaired within two hundred ten (210) days

 

25

 

after Landlord is notified by Tenant of such damage, regardless of
Landlord’s intent to restore, Tenant may elect to terminate this Lease by
written notice to Landlord given within thirty (30) days after receipt of
Landlord’s Casualty Notice.

 

4.10         Condemnation.  If all of the Premises, or such portions of
the Building as may be required for the Tenant’s reasonable use of the
Premises, are taken by eminent domain or by conveyance in lieu thereof, this
Lease shall automatically terminate as of the date the physical taking occurs,
and all Base Rent, Additional Rent and other sums payable under this Lease
shall be paid to that date.  In case of
taking of a part of the Premises or a portion of the Building not required for
the Tenant’s reasonable use of the Premises, then this Lease shall continue in
full force and effect and the Base Rent shall be equitably reduced based on the
proportion by which the floor area of the Premises is reduced, such reduction
in Base Rent to be effective as of the date the physical taking occurs.  Additional Rent and all other sums payable
under this Lease shall not be abated but Tenant’s Pro Rata Share will be
redetermined as equitable under the circumstances.  Landlord reserves all rights to damages or
awards for any taking by eminent domain relating to the Premises, Building,
Land and the unexpired term of this Lease. 
Tenant assigns to Landlord any right Tenant may have to such damages of
award and Tenant shall make no claim against Landlord for damages for
termination of its leasehold interest or interference with Tenant’s
business.  Tenant shall have the right,
however, to claim and recover from the condemning authority compensation for
any loss to which Tenant may be entitled for Tenant’s moving expenses or other
relocation costs; provided that, such expenses or
costs may be claimed only if they are awarded separately in the eminent domain
proceedings and not as a part of the damages recoverable by Landlord.

 

4.11         Parking.  Tenant shall have the right during the Lease
Term (including the Renewal Term) to lease parking spaces satisfying the Parking
Ratio in the parking garage contiguous to the Building at rates and on terms to
be agreed between Tenant and The Parkway Companies (“Operator”).  Tenants parking privileges shall be subject
to the rules and regulations relating to parking adopted by the Operator
from time to time.  Tenant acknowledges
that Landlord does not control the parking garage and shall have no obligation
whatsoever to monitor, secure or police the use of the parking areas.  As of the date of this Lease, the current
market rate for the parking garage is $140 per month for general parking and
$275 per month for reserve parking. 
Future parking costs are subject to market adjustments.

 

4.12                          Indemnification.

 

4.12.1      Tenant
shall indemnify, defend and hold harmless Landlord and Landlord’s Agents from
and against any and all Claims, arising in whole or In part out of (a) the
possession, use or occupancy of the Premises or the business conducted in the
Premises, (b) any act, omission or negligence of Tenant or Tenant’s
Agents, or (c) any breach or default under this Lease by Tenant.  Tenant’s obligations under the previous
sentence shall not apply if the Claim arose solely from intentional misconduct
by or actionable neglect of Landlord or Landlord’s Affiliates.

 

4.12.2      Landlord
shall indemnify, defend and hold harmless Tenant and Tenant’s Affiliates from
and against any and all Claims to the extent resulting from (a) any
occurrence in the common areas of the Building or in any other portion of the
Project under the exclusive control of Landlord, (b) any negligent or
wrongful act or omission of Landlord or any of Landlord’s Affiliates, or (c) any
breach or default under this Lease by Landlord that remains uncured following
the expiration of all applicable notice and cure periods.  Landlord’s obligations under the previous
sentence shall not apply if the Claim arose solely from intentional misconduct
by or actionable neglect of Tenant or Tenant’s Affiliates.  The obligations of this paragraph shall be
subject to the paragraph captioned ‘Waiver of Subrogation”.

 

4.13         Tenant
Insurance.

 

 4.13.1     Tenant
shall, throughout the Lease Term, at its own expense, keep and maintain in full
force and effect the following policies, each of which shall be endorsed as
needed to provide that the insurance afforded by these policies is primary and
that all insurance carried by Landlord is strictly excess and secondary and
shall not contribute with Tenant’s liability insurance:

 

(a)           A
policy of commercial general liability insurance, including a contractual liability
endorsement covering Tenant’s obligations under the paragraph captioned “Indemnification”,
insuring

 

26

 

against claims of bodily injury and death or property damage or loss
with a combined single limit at the Commencement Date of this Lease of not less
than  Two Million Dollars  ($2,000,000.00),  which limit shall be reasonably increased
during the Lease Term at Landlord’s request to reflect both increases in
liability exposure arising from inflation as well as from changing use of the
Premises or changing legal liability standards, which policy shall be payable
on an “occurrence” rather than a “claims made” basis, and  which 
policy names Landlord and Manager and, at Landlord’s request Landlord’s
mortgage lender(s) or investment advisors, as additional insureds;

 

(b)           A policy of extended
property insurance (which is commonly called “all risk”) covering Tenant
Improvements,  Tenant Alterations
(including Telecommunication Facilities), and any and all furniture, fixtures,
equipment, inventory, improvements, and other property in or about the Premises
which is not owned by Landlord, for one hundred percent (100%) of the then
current replacement cost of such property;

 

(c)           Business interruption
insurance in an amount sufficient to cover costs, damages, lost income,  expenses, 
Base Rent,  Additional  Rent and all other sums payable under this
Lease, should any or all of the Premises not be usable for a period of up to
twelve (12) months;

 

(d)           A policy or worker’s
compensation insurance as required by applicable law and employer’s liability
insurance with limits of no less than One Million Dollars ($1,000,000 00);
and

 

(e)           A policy of
comprehensive automobile liability insurance, including loading and unloading,
and covering owned, non-owned and hired vehicles, with limits of no less than
One Million Dollars ($1,000,000 00) per occurrence.

 

4.13.2         All insurance policies
required under this paragraph shall be with companies reasonably approved by
Landlord and each policy shall provide that it is not subject to cancellation,
lapse or reduction in coverage except after thirty (30) days’ written notice to
Landlord.  Tenant shall deliver to
Landlord and, at Landlord’s request Landlord’s mortgage lenders), prior to the
Commencement Date and from time to time thereafter, certificates evidencing the
existence and amounts of all such policies.

 

4.13.3         If Tenant fails to
acquire or maintain any insurance or provide any certificate required by this
paragraph, Landlord may, but shall not be required to, obtain such insurance or
certificates and the costs associated with obtaining such insurance or
certificates shall be payable by Tenant to Landlord on demand.

 

4.14         Landlord’s Insurance.  Landlord shall, throughout the Lease Term,
keep and maintain in full force and effect:

 

4.14.1         Commercial general
liability insurance, insuring against claims of bodily injury and death or
property damage or loss with a combined single limit at the Commencement Date
of not less than One Million Dollars ($1,000,000) per occurrence and
Two Million Dollars (52,000,000 00) in the aggregate, which policy shall
be payable on an “occurrence” rather than a “claims made” basis;

 

4.14.2         A policy of extended
property insurance (what is commonly called “all risk”) covering the Building
and Landlord’s personal property, if any, located on the Land in the amount of
one hundred percent (100%) of the then current replacement value of such
property; and

 

4.14.3         Landlord may, but shall
not be required to, maintain other types of insurance as Landlord deems
appropriate, including but not limited to, property insurance coverage for
earthquakes and floods in such amounts as Landlord deems appropriate.  Such policies may be ‘‘blanket” policies
which cover other properties owned by Landlord.

 

4.15         Waiver of Subrogation.  Notwithstanding anything in this Lease to the
contrary, Landlord and Tenant hereby each waive and release the other from any
and all Claims or any loss or damage that may occur to the Project, Premises,
or personal property located therein, by reason of fire or other casualty
regardless of cause or origin, including the negligence or misconduct of
Landlord, Tenant, Landlord’s Agents or Tenant’s Agents, but only to the extent
of the Insurance proceeds paid to such releasor under its policies of insurance
or, if it fails to maintain the required policies, the insurance proceeds that
would have been paid to such releasor if it had maintained such policies.  Each party to this Lease shall 

 

27

 

promptly give to its insurance company written notice
of the mutual waivers contained in this subparagraph, and shall cause its
property insurance policies to be properly endorsed, if necessary, to prevent
the invalidation of any insurance coverages by reason of the mutual waivers
contained in this subparagraph.

 

4.16         Assignment and Subletting by Tenant.

 

4.16.1         Tenant shall not have the
right to assign, transfer, mortgage or encumber this Lease in whole or in part,
nor sublet the whole or any part of the Premises, nor allow the occupancy of
all or any part of the Premises by another, without first obtaining Landlord’s
consent, which consent may be granted or denied in accordance with this
Paragraph 4.16; provided that
Landlord’s consent shall not be unreasonably withheld or delayed; provided
further Landlord shall consent to Permitted Transfers in accordance with
subparagraph 4.16.8. 
Notwithstanding any permitted assignment or subletting, Tenant shall at
all times remain directly, primarily and fully responsible and liable for the
payment of all sums payable under this Lease and for compliance with all of its
other obligations as tenant under this Lease. 
Landlord’s acceptance of Base Rent, Additional Rent or any other sum
from any assignee, sublessee, transferee, mortgagee or encumbrance holder shall
not be deemed to be Landlord’s approval of any such conveyance.  Upon the occurrence of an Event of Default,
if the Premises or any part of the Premises are then subject to an assignment
or subletting, Landlord may; at its option, collect directly from such assignee
or subtenant all rents becoming due to Tenant under such assignment or sublease
and apply such rents against any sums due to Landlord from Tenant under this
Lease.  No such collection shall be
construed to constitute a novation or release of Tenant from the further
performance of Tenant’s obligations under this Lease.  Landlord’s right of direct collection shall
be in addition to and not in limitation of any other rights and remedies
provided for in this Lease or at law. 
Tenant makes an absolute assignment to Landlord of such assignments and
subleases and any rent, Lease Security Deposits and other sums payable under
such assignments and subleases as collateral to secure the performance of the
obligations of Tenant under this Lease.

 

4.16.2         In the event Tenant
desires to assign this Lease or to sublet all or any portion of the Premises,
Tenant shall give written notice of such desire to Landlord setting forth the
name of the proposed subtenant or assignee, the proposed term, the nature of
the proposed subtenant’s or assignee’s business to be conducted on the
Premises, the rental rate, and any other particulars of the proposed subletting
or assignment that Landlord may reasonably request.  Without limiting the preceding sentence,
Tenant shall also provide Landlord with: 
(a) such financial information as Landlord may request concerning
the proposed subtenant or assignee, including recent financial statements
certified as accurate and complete by a certified public accountant and by the
president, managing partner or other appropriate officer of the proposed
subtenant or assignee; (b) proof satisfactory to Landlord that the
proposed subtenant or assignee will promptly occupy and thereafter use the
entire Premises (or any sublet portion of the Premises) for the remainder of
the Lease Term (or for the entire term of the sublease, if shorter) in
compliance with the terms of this Lease; and (c) a copy of the proposed
sublease or assignment or letter of intent. 
Tenant shall pay to Landlord, upon Landlord’s demand therefor, Landlord’s
reasonable attorneys’ fees incurred in the review of such documentation and in
documenting Landlord’s consent.  Receipt
of such fees shall not obligate Landlord to approve the proposed assignment or
sublease.

 

4.16.3         In determining whether to
grant or withhold consent to a proposed assignment or sublease, Landlord may
consider, and weigh, any factor it deems relevant, in its reasonable
discretion.  Without limiting what may be
construed as a factor considered by Landlord, Tenant agrees that any one or
more of the following will be proper grounds for Landlord’s disapproval of a
proposed assignment or sublease:

 

(a)           Landlord believes that
the proposed assignment or sublease may constitute or may cause this Lease to
be a prohibited  transaction  under or otherwise violate ERISA or the
Landlord is unable to determine  whether
the  proposed  assignment or this  Lease may be a non-exempt prohibited
transaction under ERISA;

 

28

 

(b)           The proposed assignee
or subtenant does not, in Landlord’s good faith judgment, have financial worth
or creditworthiness equal to insure full and timely performance under this
Lease;

 

(c)           Landlord has received
insufficient evidence of the financial worth or creditworthiness of the
proposed assignee or subtenant to make the determination set forth in clause
(b);

 

(d)           The proposed assignee
or subtenant has a reputation for disputes in contractual relations, for
failure to observe and perform its contractual obligations in a timely and
complete manner or for negative business relations in the business
community as a tenant of property or otherwise;

 

(e)           Intentionally deleted;

 

(f)            Landlord has had prior
negative leasing experience with the proposed assignee or subtenant or an
affiliate;

 

(g)           The use of the Premises
by the proposed assignee or subtenant will not be permitted under the Permitted
Uses;

 

(h)           In Landlord’s judgment,
the proposal assignee or subtenant is engaged in a business, or the Premises or
any part of the Premises will be used in a manner,  that is not in keeping with the then standards
of the Building, or that is not compatible with the businesses of other tenants
in the Building, or that is inappropriate for the Building, or that will
violate any negative covenant as to use contained in any other lease of space
in the Building;

 

(i)            The use of the
Premises by the proposed assignee or subtenant will violate any Governmental
Requirement or create a violation of Access Laws;

 

(j)            Tenant is in an Event
of Default of any obligation of Tenant under this Lease, or Tenant  has defaulted on its monetary obligations
under this Lease on three  (3)  or
more occasions during the twenty-four (24) months preceding the date that
Tenant shall request such consent;

 

(k)           Landlord does not

 

(l)            reasonably approve of
any of the tenant improvements required for the proposed assignor subtenant; or

 

(m)          Landlord has had written
negotiations with the proposed assignee or subtenant, in the six (6) months
preceding Tenant’s request, regarding the leasing of space by such proposed
assignee or subtenant in the Building.

 

4.16.4         With fifteen (15)
Business Days after Landlord’s receipt of all required information to be
supplied by Tenant pursuant to this paragraph, Landlord shall notify Tenant of
Landlord’s approval, disapproval or conditional approval of any proposed
assignment or subletting or of Landlord’s election to recapture as described
below.  Landlord shall have no obligation
to respond unless and until all required information has been submitted.  In the event Landlord approves of any
proposed assignment or subletting, Tenant the proposed assignee or sublessee
shall execute and deliver to Landlord an assignment (or subletting) and
assumption agreement in form and content reasonably satisfactory to Landlord.

 

4.16.5         Any transfer, assignment
or hypothecation of any of the stock or interest in Tenant, or the assets of
Tenant, or any other transaction, merger, reorganization or event, however
constituted which (a) results in fifty percent (50%), or more of such
stock, interest or assets going into different ownership, or (b) is a
subterfuge denying Landlord the benefits of this paragraph, shall be deemed to
be an assignment within the meaning and provisions of this paragraph and shall
be subject to the provisions of this paragraph.

 

4.16.6         If Landlord consents to
any assignment or sublease and Tenant receives rent or any other consideration,
either initially or over the term of the assignment or sublease, In excess of
the Base Rent and Additional Rent (or, in the case of a sublease of a portion
of the Premises, in excess of the Base Rent paid by Tenant on a square footage
basis under this Lease), Tenant shall pay to Landlord fifty 

 

29

 

percent (50%) of such excess, after Tenant first
deducts all reasonable subleasing or assignment costs such as commissions,
legal fees, Landlord fees and alterations.

 

4.16.7         Landlord shall have the
right to recapture the Premises or the applicable portion thereof (a “Recapture”) by giving written notice of such Recapture to
Tenant within fifteen (15) Business Days after receipt of Tenant’s written
request for Landlord’s consent to such proposed assignment or subletting.  Tenant shall have no right to retract its
request for Landlord’s consent to assign or sublease once such request has been
made.  Such Recapture shall terminate
this Lease, as to the applicable space effective on the prospective effective
date of assignment or subletting, which shall be the last day of a calendar
month and shall not be earlier than forty-five (45) Business Days after receipt
of Tenant’s request hereunder.  If less
than the entire Premises are recaptured, this Lease shall remain in full force
and effect with respect to that remaining area not recaptured by Landlord.  Tenant shall surrender that portion of the
Premises recaptured by Landlord in accordance with the terms and conditions of
this Lease.  Notwithstanding the first
sentence of this subparagraph, Landlord shall have no right to Recapture the
Premises or applicable portion thereof if: 
(a) Tenant’s proposed assignment or sublet is to an affiliate or
wholly-owned subsidiary or is to a reorganized entity under which no change in
ownership has occurred, or (b) Tenant’s proposed assignment or sublet
together with any previous assignments and sublets encompass, in the aggregate,
net rentable area equal to or les than twenty percent (20%) of the total net
rentable area of Premises.

 

4.16.8         Notwithstanding any
contrary provision in the previous subparagraphs of this paragraph, Landlord
shall consent to and approve a proposed assignment or subletting of the
Premises where (a) the assignment or subletting is to (i) an
affiliate or wholly-owned Subsidiary of the Tenant (ii) a reorganized
entity under which no change of ownership has occurred, or (iii) an acquirer
of all the outstanding stock or substantially all of the assets of Tenant; (b) the
proposed assignee or subtenant has delivered to Landlord satisfactory evidence
of financial worth (less goodwill) equal to or greater than that of Tenant as
of the execution date of this Lease; (c) the assignee or sublessee intends
to make the same general use of the Premises as Tenant; and (d) no grounds
for disapproval as described in clauses (a), (g), (i) or (k) of
subparagraph 4.16.3 exist.  An
assignment or subletting in accordance with this subparagraph 4.16.8 is
called a “Permitted Transfer”.

 

4.17         Assignment by Landlord.  Landlord shall have the right to transfer and
assign, in whole or in part, its rights and obligations under this Lease and in
any and all of the Land or Building.  If
Landlord sells or transfers any or all of the Building, including the Premises,
Landlord and Landlord’s Agents shall, upon consummation of such sale or
transfer, be released automatically from any liability relating to obligations
or covenants under this Lease to be performed or observed after the date of
such transfer, and in such event, Tenant agrees to look solely to Landlord’s
successor-in-interest with respect to such liability; provided
that, as to the Lease Security Deposit and Prepaid Rent, Landlord
shall not be released from liability therefor unless Landlord has delivered (by
direct transfer or credit against the purchase price) the Lease Security
Deposit or Prepaid Rent to its successor-in-interest.

 

4.18         Estoppel Certificates and Financial Statements.  Tenant shall, from time to time, upon the
written request of Landlord, execute, acknowledge and deliver to Landlord or
its designee a written statement stating: 
(a) the date this Lease was executed and the date it expires; (b) the
date Tenant entered into occupancy of the Premises; (c) the amount of
monthly Base Rent and Additional Rent and the date to which such Base Rent and
Additional Rent have been paid; and (d) certifying that (1) this
Lease is in full force and effect and has not been assigned, modified,
supplemented or amended in any way (or specifying the date of the agreement so
affecting this Lease); (2) to the best of Tenant’s knowledge; Landlord is
not in breach of this Lease (or, if so, a description of each such breach) and
that no event, omission or condition has occurred which would result, with the
giving of notice or the passage of time, in a breach of this Lease by Landlord;
(3) this Lease represents the entire agreement between the parties with
respect to the Premises; (4) all required contributions by Landlord to
Tenant on account of Tenant Improvements have been received; (5) on the
date of execution, there exist no defenses or offsets which the Tenant has
against the enforcement of this Lease by the Landlord; (6) no Base Rent,
Additional Rent or other sums payable under this Lease have been paid in
advance except for Base Rent and Additional Rent for the then currant month; (7) no
security has been deposited with Landlord (or, if so, the 

 

30

 

amount of such security); (8) it is intended that
any Tenant’s statement may be relied upon by a prospective purchaser or
mortgagee of Landlord’s interest or an assignee of any such mortgagee; and (9) such
other information as may be reasonably requested by Landlord.  If Tenant fails to respond within ten (10) Business
Days of its receipt of a written request by Landlord as provided in this
paragraph, such shall be a breach of this Lease and Tenant shall be deemed to
have admitted the accuracy of any information supplied by Landlord to a
prospective purchaser, mortgagee or assignee. 
In addition, Tenant shall, not more than one (1) time in any
calendar year, upon the written request of Landlord, deliver to or cause to be
delivered to Landlord or its designee then current financial statements
(including a statement of operations and balance sheet and statement of cash
flows) certified as accurate by a certified public accountant and prepared in
conformance with generally accepted accounting principles for (i) Tenant, (ii) any
entity which owns a controlling interest in Tenant, (iii) any entity the
controlling interest of which is owned by Tenant, (iv) any successor
entity to Tenant by merger or operation of law, and (v) any guarantor of
this Lease.

 

4.19         Modification for Lender.  If, in connection with obtaining
construction, interim or permanent financing for the Building or Land, Landlord’s
lender, if any, shall request reasonable modifications to this Lease as a
condition to such financing. Tenant will not unreasonably withhold or delay its
consent to such modifications; provided that,
such modifications do not increase the obligations of Tenant under this Lease
or materially adversely affect Tenant’s rights under this Lease.

 

4.20         Hazardous Substances.

 

4.20.1         Neither Tenant, any of
Tenant’s Agents nor any other person shall store, place, generate, manufacture,
refine, handle, or locate on, in, under or around the Land or Building any
Hazardous Substance, except for storage, handling and use of reasonable
quantities and types of cleaning fluids and office supplies in the Premises in
the ordinary course and the prudent conduct of Tenant’s business in the
Premises.  Tenant agrees that (a) the
storage, handling and use of such permitted Hazardous Substances must at all
times conform to all Governmental Requirements and to applicable fire, safety
and insurance requirements; (b) the types and quantities of permitted
Hazardous Substances which are stored in the Premises must be reasonable and
appropriate to the nature and size of Tenant’s operation in the Premises and
reasonable and appropriate for a first-class building of the same or similar
use and in the same market area as the Building; and (c) no Hazardous
Substance shall be spilled or disposed of on, in, under or around the Land or
Building or otherwise discharged from the Premises or any area adjacent to the
Land or Building.  In no event will
Tenant be permitted to store, handle or use on, in, under or around the
Premises any Hazardous Substance which will increase the rate of fire or
extended coverage insurance on the Land or Building, unless; (1) such
Hazardous Substance and the expected rate increase have been specifically
disclosed in writing to Landlord; (2) Tenant has agreed in writing to pay
any rate increase related to each such Hazardous Substance; and (3) Landlord
has approved in writing each such Hazardous Substance, which approval shall be
subject to Landlord’s discretion.

 

4.20.2         Tenant shall indemnify,
defend and hold harmless Landlord and Landlord’s Agents from and against any
and all Claims arising out of any breach of any provision of this paragraph,
which expenses shall also include laboratory testing fees, personal injury
claims, clean-up costs and environmental consultants’ fees.  Tenant agrees that Landlord may be
irreparably harmed by Tenant’s breach of this paragraph and that a specific
performance action may appropriately be brought by Landlord; provided that, Landlord’s election to bring or not bring any
such specific performance action shall in no way limit, waive, impair or hinder
Landlord’s other remedies against Tenant.

 

4.20.3         As
of the execution date of this Lease, Tenant represents and warrants to Landlord
that, except as otherwise disclosed by Tenant to Landlord, Tenant has no intent
to bring any Hazardous Substances on, in or under the Premises except for the
type and quantities authorized in the first paragraph of the paragraph
captioned “Hazardous  Substances”.

 

4.21         Access Laws

 

4.21.1         Tenant agrees to notify
Landlord promptly if Tenant receives notification or otherwise becomes aware
of:  (a) any condition or situation
on, in, under or around the Land or Building which may constitute a violation
of any Access Laws or (b) any threatened or actual lien, action or notice
that the 

 

31

 

Land or Building is not in compliance with any Access
Laws.  If Tenant is responsible for such
condition, situation, lien, action or notice under this paragraph, Tenant’s notice
to Landlord shall include a statement as to the actions Tenant proposes to take
in response to such condition, situation, lien, action or notice.

 

4.21.2         Tenant shall not alter or
permit any assignee or subtenant or any other person to alter the Premises in
any manner which would violate any Access Laws or increase Landlord’s
responsibilities for compliance with Access Laws, without the prior approval of
the Landlord.  In connection with any
such approval, Landlord may require a certificate of compliance with Access
Laws from an architect, engineer or other person acceptable to Landlord.  Tenant agrees to pay the reasonable fees
incurred by such architect, engineer or other third party in connection with
the issuance of such certificate of compliance. 
Landlord’s consent to any proposed Tenant Alteration shall (a) not
relieve Tenant of its obligations or indemnities contained in this paragraph or
this Lease or (b) be construed as a warranty that such proposed alteration
complies with any Access Law.

 

4.21.3         Tenant shall be solely
responsible for all costs and expenses: relating to or incurred in connection
with:  (a) failure of the Premises
to comply with the Access Laws and (b) bringing the Building and the
common areas of the Building into compliance with Access Laws, if and to the
extent such noncompliance arises out of or relates to:  (1) Tenant’s use of the Premises,
including the hiring of employees; or (2) any Tenant Alterations to the
Premises (other than the Tenant Improvements).

 

4.21.4         Landlord shall be
responsible for all costs and expenses relating to or incurred in connection
with bringing the common areas of the Building into compliance with Access
Laws, unless such costs and expenses are Tenants responsibility as provided in
the preceding subparagraph.  Any cost or
expense paid or incurred by Landlord to bring the Premises or common areas of
the Building into compliance with Access Laws which is not Tenant’s
responsibility under the preceding subparagraphs shall be amortized over the
useful economic life of the Improvements (not to exceed ten (10) years)
with Interest at the Prime Rate plus four (4) percentage points-compounded
daily, and shall be an Operating Cost for purposes of this Lease.

 

4.21.5         Tenant agrees to
indemnify, defend and hold harmless Landlord and Landlord’s Agents from and
against any and all Claims arising out of or relating to any failure of Tenant
or Tenants Agents to comply with Tenant’s obligations under this
paragraph.

 

4.21.6         The provisions of this
paragraph shall supersede any other provisions In this Lease regarding Access
Laws, to the extent inconsistent with the provisions of any other paragraphs.

 

4.22         Quiet Enjoyment.  Landlord covenants that Tenant, upon paying
Base Rent, Additional Rent and all other sums payable under this Lease and
performing all covenants and conditions required of Tenant under this Lease
shall and may peacefully have, hold and enjoy the Premises without hindrance or
molestation by Landlord, or by anyone claiming by, through or under Landlord,
subject to the provisions of this Lease.

 

4.23         Signs. At Landlord’s and expense,
Landlord shall install Building standard lobby directory identification and
suite entry, signage.  Tenant shall not
inscribe an inscription, or post, place, or in any manner display any sign,
notice, picture, placard or poster, or any advertising matter whatsoever,
anywhere in or about the Land or Building at places visible (either directly or
indirectly as an outline or shadow on a glass pane) from anywhere outside the
Premises without first obtaining Landlord’s consent unless permitted in Exhibit F.  If at any time during the Lease Term, Tenant
is permitted to install exterior signage, then upon vacation of the Premises on
the expiration or earlier termination of this Lease, Tenant shall be
responsible, at it sole cost, for the removal of such sign and the repair,
painting and/or replacement of the structure to which the sign is attached
including discoloration caused by such installation or removal.  If Tenant fails to perform such work,
Landlord may cause the same to be performed and the cost thereof shall be
Additional Rent immediately due and payable upon rendition of a bill therefore.

 

4.24         Subordination.  Tenant subordinates this Lease and all rights
of Tenant under this Lease to any mortgage, deed of trust, ground lease or
vendor’s lien, or similar instrument which may from time to time be placed upon
the Premises (and all renewals, modifications, replacements and extensions of
such 

 

32

 

encumbrances), and each such mortgage, deed of trust,
ground lease or lien or other instrument shall be superior to and prior to this
Lease.  Notwithstanding anything
contained herein to the contrary, this Lease shall not be subordinate to any
future mortgage, deed of trust or ground lease unless the holder or beneficiary
of such mortgage, deed of trust or ground lease executes and delivers to Tenant
a subordination, non-disturbance and attornment agreement reasonably acceptable
to all parties.  Upon receipt from the
holder or beneficiary of such mortgage, deed of trust or ground lease of such
an executed subordination, non-disturbance and attornment agreement, Tenant
shall, within ten (10) Business Days thereafter, return to such holder or
beneficiary of such mortgage, deed of trust or ground lease an original thereof
duly executed by Tenant.  Tenant further
covenants and agrees that if the lender or ground lessor acquires the Premises
as a purchaser at any foreclosure sale or otherwise and shall recognize Tenant
as tenant pursuant to the terms of this Lease, Tenant shall recognize and
attorn to such party as landlord under this Lease, and shall make all payments
required hereunder to such new landlord without deduction or set-off and, upon
the request of such purchaser or other successor, execute, deliver and
acknowledge documents confirming such attornment.  Tenant waives the provisions of any law or
regulation, now or hereafter in effect, which may give or purport to give
Tenant any right to terminate or otherwise adversely affect this Lease or the
obligations of Tenant hereunder in the event that any such foreclosure or
termination or other proceeding is prosecuted or compiled.

 

4.25         Intentionally Deleted.

 

4.26         Brokers.  Each party to this Lease shall indemnify,
defend and hold harmless the other party from and against any and all Claims
asserted against such other party by any real estate broker, finder or
intermediary relating to any act of the indemnifying party m connection with
this Lease.

 

4.27         Limitation on Recourse.  Landlord has executed this Lease by its
trustee signing solely in a representative capacity.  Notwithstanding anything contained in this
Lease to the contrary, Tenant confirms that the covenants of Landlord are made
and intended, not as personal covenants of the trustee, or for the purpose of
binding the trustee personally, but solely in the exercise of the
representative powers conferred upon the trustee by its principal.  Liability with respect to the entry and
performance of this Lease by or on behalf of Landlord, however it may arise,
shall be asserted and enforced only against Landlord’s estate and equity
interest in the Building.  Neither
Landlord nor any of Landlord’s Agents shall have any personal liability in the
event of any claim against Landlord arising out of or in connection with this
Lease, the relationship of Landlord and Tenant or Tenant’s use of the
Premises.  Further, in no event
whatsoever shall any Landlord’s Agent have any liability or responsibility whatsoever
arising out of or in connection with this Lease, the relationship of Landlord
and Tenant or Tenant’s use of the Premises. 
Any and all personal liability, if any, if any, beyond that which may be
asserted under this paragraph, is expressly waived and released by Tenant and
by all persons claiming by, through or under Tenant.

 

4.28         Mechanic’s Liens, and Tenant’s Personal .Property
Taxes.

 

4.28.1         Tenant shall have no
authority, express or implied, to create or place any lien or encumbrance of
any kind or nature whatsoever upon, or in any manner to bind, the interest of
Landlord or Tenant in the Premises or to charge the rentals payable under this
Lease for any Claims in favor of any person dealing with Tenant, including
those who may furnish materials or perform labor for any construction or
repairs.  Tenant shall timely pay or
cause to be paid all sums legally due and payable by it on account of and labor
performed or materials furnished in connection with any work performed on the
Premises on which any lien is or can be validly and legally asserted against
its leasehold interest in the Premises and Tenant shall indemnify, defend and
hold harmless Landlord from any and all Claims arising out of any such asserted
Claims.  Tenant agrees to give Landlord Immediate
written notice of any such Claim.

 

4.28.2         Tenant shall be liable
for all taxes levied or assessed against personal property, furniture or
fixtures placed by Tenant in the Premises. 
If any such taxes for which Tenant is liable are levied or assessed
against Landlord or Landlord’s property and Landlord elects to pay them or if
the assessed value of Landlord’s property is increased by inclusion of such
personal property, furniture or fixtures and Landlord elects to pay the taxes
based on such increase, Tenant shall reimburse Landlord for the sums so paid by
Landlord, upon demand by Landlord.

 

33

 

4.29         Landlord’s Security Interest.
Intentionally Deleted

 

SECTION 5:  DEFAULT AND REMEDIES

 

5.1           Events of Default.

 

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

 

(a)           vacation or abandonment
of all or any portion of the Premises without continuing to pay Base Rent;

 

(b)           failure by Tenant to
make any payment of Base Rent, Additional Rent or any other sum payable by
Tenant under this Lease within five (5) Business Days after its due date
after receipt of written notice from Landlord; provided
that Landlord shall not be obligated to provide notice more than
once in any consecutive twelve-month period before such failure to pay within
such five (5) Business Day period becomes an Event of Default;

 

(c)           failure by Tenant to
observe or perform any-covenant or condition of this Lease, other than the
making of payments, where such failure shall continue for a period of ten (10) Business
Days after written notice from Landlord; provided, however,
that if the nature of Tenant’s obligation is such that more than ten (10) Business
Days are required for performance, then Tenant shall not be in default if
Tenant or its Agents commences performance with such ten (10) Business Day
period and thereafter diligently prosecutes the same to completion within
thirty (30) Business Days after Landlord’s initial notice of default;

 

(d)           the failure of Tenant
to surrender possession of the Premises at the expiration or earlier
termination of this Lease in the condition required by this Lease;

 

(e)           (1) the making by
Tenant of any general assignment or general arrangement for the benefit of
creditors; (2) the filing by or against Tenant of a petition in
bankruptcy, including reorganization or arrangement, unless, in the case of a
petition filed against Tenant, unless the same is dismissed within twenty
(20) Business Days; (3) the appointment of a trustee or receiver to take
possession of substantially all of Tenant’s assets located in the Premises or
of Tenant’s interest in this Lease; (4) any execution, levy, attachment or
other process of law against any property of Tenant or Tenant’s interest in
this Lease unless the same is dismissed within twenty (20) Business Days; (5) adjudication
that Tenant is bankrupt; (6) the making by Tenant of a transfer in fraud
of creditors; or (7) the failure of Tenant to generally pay its debts
as they become due; or

 

(f)            any information
furnished by or on behalf of Tenant to Landlord in connection with the entry of
this Lease is determined to have been materially false, misleading or
incomplete when made

 

(g)           [insert if a letter of
credit is utilized] a failure of the Tenant to deliver the Letter of Credit
within the time period specified in the paragraph captioned “Lease Security”

 

5.1.2           Tenant shall notify
Landlord promptly of any Event of Default or any facts, conditions or events
which, with the giving of notice or passage of time or both, would constitute
an Event of Default.

 

5.1.3           If a petition in
bankruptcy is filed by or against Tenant, and if this Lease is treated as an “unexpired
lease” under applicable bankruptcy law in such proceeding, then Tenant agrees
that Tenant shall not attempt nor cause any trustee to attempt to extend the
applicable time period within which this Lease must be assumed or rejected.

 

5.2           Remedies.  If any Event of Default occurs, Landlord may
at any time after such occurrence, with or without notice or demand except as
stated in this paragraph, and without limiting Landlord in the exercise of any
right or remedy at law which Landlord may have by reason of such Event of
Default, exercise the rights and remedies, either singularly or in combination,
as are specified or described in the subparagraphs of this paragraph.

 

34

 

5.2.1           Landlord may terminate
this Lease and all rights of Tenant under this lease either immediately or at
some later date by giving Tenant written notice that this Lease is
terminated.  If Landlord so terminates
this Lease, then Landlord may recover from Tenant the sum of:

 

(a)           the unpaid Base Rent,
Additional Rent and all other sums payable under this Lease which have been
earned at the time of termination;

 

(b)           interest at the Default
Rate on the unpaid Base Rent, Additional Rent and all other sums payable under
this Lease which have been earned at the time of termination; plus

 

(c)           the amount by which the
unpaid Base Rent, Additional Rent and all other sums payable under this Lease
which would have been earned after termination until the time of award exceeds
the amount of such rental loss, if any, as Tenant affirmatively proves could
have been reasonably avoided and interest on such excess at the Default Rate;
plus

 

(d)           the amount by which the
aggregate of the unpaid Base Rent, Additional Rent and all other sums payable
under this Lease for the balance of the Lease Term after the time of award
exceeds the amount of such rental loss, if any, as Tenant affirmatively proves
could be reasonably avoided, with such difference being discounted to present
value at the Prime Rate at the time of award; plus

 

(e)           any other amount
necessary to compensate Landlord for the detriment proximately caused by Tenant’s
failure to perform Tenant’s obligations under this Lease or which, in the
ordinary course of things, would be likely to result from such failure,
including, leasing commissions, tenant improvement costs, renovation costs
and advertising costs; plus

 

(f)            all such other amounts
in addition to or in lieu of the foregoing as may be permitted from time to
time by applicable law.

 

5.2.2           Landlord shall also
have the right, with or without terminating this Lease, to re-enter the
Premises and remove all persons and property from the Premises.  Landlord may cause property so removed from
the Premises to be stored in a public warehouse or elsewhere at the expense and
for the account of Tenant.

 

5.2.3           Intentionally Deleted

 

5.2.4           If Tenant vacates,
abandons or surrenders the Premises without Landlord’s consent and fails to
continue timely payment of Base Rent, or if Landlord re-enters the Premises as
provided in subparagraph 5.2.2 or takes possession of the Premises pursuant to
legal proceedings or through any notice procedure provided by law, then, if
Landlord does not elect to terminate this Lease, Landlord may, from time to
time, without terminating this Lease, either (a) recover all Base Rent,
Additional Rent and all other sums payable under this Lease as they become due
or (b) relet the Premises or any part of the Premises on behalf of Tenant
for such term or terms, at such rent or rents and pursuant to such other
provisions as Landlord, in its sole discretion, may deem advisable, all with
the right, at Tenant’s cost, to make alterations and repairs to the Premises
and recover any deficiency from Tenant as set forth in subparagraph 5.2.6.

 

5.2.5           None of the following
remedial actions, singly or in combination, shall be construed as an election
by Landlord to terminate this Lease unless Landlord has in fact given Tenant
written notice that this tease is terminated: 
(a) an act by Landlord to maintain or preserve the Premises; (b) any
efforts by Landlord to relet the Premises; (c) any repairs or alterations
made by Landlord to the Premises; (d) re-entry, repossession or reletting
of the Premises by Landlord pursuant to this paragraph; or (e) the
appointment of a receiver, upon the initiative of Landlord, to protect Landlord’s
interest under this Lease.  If Landlord
takes any of the foregoing remedial action without terminating this Lease,
Landlord may nevertheless at any time after taking any such remedial action
terminate this Lease by written notice to Tenant.

 

5.2.6           If Landlord relets the
Premises, Landlord shall apply the revenue from such reletting as follows:  first, to
the payment of any indebtedness of Tenant to Landlord other than Base Rent,
Additional Rent or any other sums payable by Tenant under this Lease; second, to the payment of any cost
of 

 

35

 

reletting (including finders’ fees and leasing
commissions); third, to the payment of the
cost of any alterations, improvements, maintenance and repairs to the Premises;
and fourth, to the payment of Base Rent,
Additional Rent and other sums due and payable and unpaid under this
Lease.  Landlord shall hold and apply the
residue, if any, to payment of future Base Rent, Additional Rent and other sums
payable under this Lease as the same become due, and shall deliver the eventual
balance, if any, to Tenant.  Should
revenue from letting during any month, after application pursuant to the
foregoing provisions, be less than the sum of the Base Rent, Additional Rent
and other sums payable, under this Lease and Landlord’s expenditures for the
Premises during such month, Tenant shall be obligated to pay such deficiency to
Landlord as and when such deficiency arises.

 

5.2.7           Pursuit of any of the
foregoing remedies shall not preclude pursuit of any of the other remedies
provided in this Lease or by law (all such remedies being cumulative), nor
shall pursuit of any remedy provided in this Lease constitute a forfeiture or
waiver of ay Base Rent, Additional Rent or other sum payable under this Lease
or of any damages accruing to Landlord by reason of the violation of any of the
covenants or conditions contained in this Lease.

 

5.2.8           Tenant hereby waives
its right of redemption pursuant to Section 401(e) of the Real
Property Article of the Annotated Code of Maryland, as amended from time
to time.

 

5.3           Right to Perform.  If Tenant shall fail to pay any sum of money,
other than Base Rent or Additional Rent, required to be paid by it under this
Lease or shall fail to perform any other act on its part to be performed under
this Lease, and such failure shall continue for ten (10) Business Days
after notice of such failure by Landlord, Landlord may, but shall not be
obligated to, and without waiving or releasing Tenant from any obligations of
Tenant, make such payment or perform such other act on Tenant’s part to be made
or performed as provided in this Lease. 
Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of the nonpayment of sums
due under this paragraph as in the case of default by Tenant in the payment of
Base Rent.

 

5.4           Landlord’s Default.  Landlord shall not be in default under this
Lease unless Landlord fails to perform obligations required of Landlord within
twenty (20) Business Days after written notice is delivered by Tenant to
Landlord and to the holder of any mortgages or deeds of trust of which Tenant
has notice (collectively, “Lender”)
covering the Premises whose name and address shall have theretofore been
furnished to Tenant in writing, specifying the obligation which Landlord has
failed to perform; provided, however, that if the nature of Landlord’s
obligation is such that more than twenty (20) Business Days are required for
performance, then Landlord shall not be in default if Landlord or Lender
commences performance within such twenty (20) Business Day period and
thereafter diligently prosecutes the same to completion.  All obligations of Landlord hereunder shall
be construed as covenants, not conditions. 
In the event of any default, breach or violation of Tenant’s rights
under this Lease by Landlord, Tenant’s exclusive remedy shall be either an
action for specific performance or an action for actual damages.

 

SECTION 6:  MISCELLANEOUS PROVISIONS

 

6.1           Notices.  Any notice, request, approval, consent or
written communication required or permitted to be delivered under this Lease
shall be:  (a) in writing; (b) transmitted
by personal delivery, express or courier service, United States Postal Service
in the manner described below, or electronic means of transmitting written
material; and (c) deemed to be delivered on the earlier of the date
received or four (4) Business Days after having been deposited in the
United States Postal Service, postage prepaid. 
Such writings shall be addressed to Landlord or Tenant, as the case may
be, at the respective designated addresses set forth opposite their signatures,
or at such other address(es) as they may, after the execution date of this
Lease, specify by written notice delivered in accordance with this paragraph,
with copies to the persons at the addresses, if any, designated opposite each
party’s signature.  Those notices which
contain a notice of breach or default or a demand for performance may be sent
by any of the methods described in clause (b) above, but if
transmitted by personal delivery or electronic means, shall also be sent
concurrently by certified or registered mail, return receipt requested.

 

6.2           Attorney’s Fees and Expenses.  In the event either party requires the
services of an attorney in connection with enforcing the terms of this Lease,
or in the event suit is brought for the recovery of Base

 

36

 

Rent, Additional Rent or any other sums payable under
this Lease or for the breach of any covenant or condition of this Lease, or for
the restitution of the Premises to Landlord or the eviction of Tenant during
the Lease Term or after the expiration or earlier termination of this Lease,
the non-breaching party shall be entitled to a reasonable sum for attorney’s
and paralegal’s fees, expenses and court costs, including those relating to any
appeal.

 

6.3           No Accord and Satisfaction.  No payment by Tenant or receipt by Landlord
of an amount less than the Base Rent or Additional Rent or any other sum due
and payable under this Lease shall be deemed to be other than a payment on
account of the Base Rent, Additional Rent or other such sum, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment be deemed an accord and satisfaction, nor preclude Landlord’s right to
recover the balance of any amount payable or Landlord’s right to pursue any
other remedy provided in Lease or at law.

 

6.4           Successors; Joint and Several Liability.  Except as provided in the paragraph captioned
“Limitation on Recourse” and subject to the paragraph captioned “Assignment
and Subletting by Landlord”, all of the covenants and conditions contained
in this Lease shall apply to and be binding upon Landlord and Tenant and their
respective heirs, executors, administrators, successors and assigns.  In the event that more than one person,
partnership, company, corporation or other entity is included in the term “Tenant”,
then each such person, partnership, company, corporation or other entity shall
be jointly and severally liable for all obligations of Tenant under this Lease.

 

6.5           Choice of Law.  This Lease shall be construed and governed by
the laws of the state in which the Land is located.  Tenant consents to Landlord’s choice of venue
for any legal proceeding brought by Landlord or Tenant to enforce the terms of
this Lease.

 

6.6           No Waiver of Remedies.  The waiver by Landlord of any covenant or
condition contained in this Lease shall not be deemed to be a waiver of any
subsequent breach of such covenant or condition nor shall any custom or
practice which may develop between the parties in the administration of this
Lease be construed to waive or lessen the rights of Landlord to insist on the
strict performance by Tenant of all of the covenants and conditions of this
Lease.  No act or thing done by Landlord
or Landlord’s Agents during the Lease Term shall be deemed an acceptance or a
surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless made in writing and signed by Landlord.  The mention in this Lease of any particular
remedy shall not preclude Landlord from any other remedy it might have, either
under this Lease or at law, nor shall the waiver of or redress for any
violation of any covenant or condition in this Lease or in any of the rules or
regulations attached to this Lease or later adopted by Landlord, prevent a
subsequent act, which would have originally constituted a violation, from
having all the force and effect of an original violation.  The receipt by Landlord of Base Rent,
Additional Rent or any other sum payable under this Lease with knowledge of a
breach of any covenant or condition in this Lease shall not be deemed a waiver
of such breach.  The failure of Landlord
to enforce any of the rules and regulations attached to this Lease or
later adopted, against Tenant or any other tenant in the Building, shall not be
deemed a waiver.  Any waiver by Landlord
must be in writing and signed by Landlord to be effective.

 

6.7           Offer to Lease.  The submission of this Lease in a draft form
to Tenant or its broker or other agent does not constitute an offer to Tenant
to lease the Premises.  This Lease shall
have no force or effect until (a) it is executed and delivered by Tenant
to Landlord; and (b) it is executed and delivered by Landlord to Tenant.

 

6.8           Force Majeure.  In the event that Landlord shall be delayed,
hindered in or prevented from the performance of any act or obligation required
under this Lease by reason of acts of God, strikes, lockouts, labor troubles or
disputes, inability to procure or shortage of materials or labor, failure of
power or utilities, delay in transportation, fire, vandalism, accident, flood,
severe weather, other casualty, Governmental Requirements (including mandated
changes in the Plans or the Tenant Improvements resulting from changes in
pertinent Governmental Requirements or interpretations thereof), riot,
insurrection, civil commotion, sabotage, explosion, war, natural or local
emergency, acts or omissions of others, including Tenant, or other reasons of a
similar or dissimilar nature not solely the fault of, or under the reasonable
control of, Landlord, then performance of such act or obligation shall be
excused for the period of the 

 

37

 

delay and the period for the performance of any such
act of obligation shall be extended for the period equivalent to the period of
such delay.

 

6.9           Landlord’s Consent.  Unless otherwise provided in this Lease,
whenever Landlord’s consent, approval or other action is required under the
terms of this Lease, such consent, approval or action shall be subject to
Landlord’s judgment or discretion exercised in good faith and shall be
delivered in writing.

 

6.10         Severability; Captions.  If any clause or provision of this Lease is
determined to be illegal, invalid, or unenforceable under present or future
laws, the remainder of this Lease shall not be affected by such determination,
and in lieu of each clause or provision that is determined to be 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.  Headings or captions in this Lease are added
as a matter of convenience only and in no way define, limit or otherwise affect
the construction or interpretation of this Lease.

 

6.11         Interpretation.  Whenever a provision of this Lease uses the
term (a) “include” or “including”, that term shall not be limiting but
shall be construed as illustrative, (b) “covenant”, that term shall
include any covenant, agreement, term or provision, (c) “at law”, that
term shall mean as specified in any applicable statute, ordinance or regulation
having the force of law or as determined at law or in equity, or both, and (d) “day”,
that uncapitalized word shall mean a calendar day.  This Lease shall be given a fair and
reasonable interpretation of the words contained in it without any weight being
given to whether a provision was drafted by one party or its counsel.

 

6.12         Incorporation of Prior Agreement; Amendments.  This Lease contains all of the agreements of
the parties to this Lease with respect to any matter covered or mentioned in
this Lease, and no prior agreement or understanding pertaining to any such
matter shall be effective for any purpose. 
No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties to this Lease or their respective
successors in interest.

 

6.13         Authority.  If Tenant is a partnership, company,
corporation or other entity, each individual executing this Lease on behalf of
Tenant represents and warrants to Landlord that he or she is duly authorized to
so execute and deliver this Lease and that all partnership, company,
corporation or other entity actions and consents required for execution of this
Lease have been given, granted or obtained. 
If Tenant is a partnership, company, corporation or other business
organization, it shall, within ten (10) Business Days after demand by
Landlord, deliver to Landlord satisfactory evidence of the due authorization of
this Lease and the authority of the person executing this Lease on its behalf.

 

6.14         Time of Essence.  Time is of the essence with respect to the
performance of every covenant and condition of this Lease.

 

6.15         Survival of Obligations.  Notwithstanding anything contained in this
Lease to the contrary or the expiration or earlier termination of this Lease,
any and all obligations of either party accruing prior to the expiration or
termination of this Lease shall survive the expiration or earlier termination
of this Lease, and either party shall promptly perform all such obligations
whether or not this Lease has expired or terminated.  Such obligations shall include any and all
indemnity obligations set forth in this Lease.

 

6.16         Consent to Service.  Tenant irrevocably consents to the service of
process of any action or proceeding at the address of the Premises.  Nothing in this paragraph shall affect the
right to serve process in any other manner permitted by law.

 

6.17         Landlord’s Authorized Agents.  Notwithstanding anything contained in the
Lease to the contrary, including without limitation, the definition of Landlord’s
Agents, only officers of Kennedy Associates Real Estate Counsel, Inc., the
authorized signatory of this Lease, and officers of the trustee of Landlord,
are authorized to amend, renew or terminate this Lease, or to compromise any of
Landlord’s claims under this Lease or to bind Landlord in any manner.  Without limiting the effect of the previous
sentence, no property manager or broker shall be considered an authorized agent
of Landlord to amend, renew or terminate this Lease, to compromise any of
Landlord’s claims under this Lease or to bind Landlord in any manner.

 

38

 

6.18         Waiver of Jury Trial.  Landlord and Tenant irrevocably waive the
respective rights to trial by jury in any action, proceeding or counterclaim
brought by either against the other (whether in contract or tort) on any matter
arising out of or relating in any way to this Lease, the relationship of
Landlord and Tenant or Tenant’s use or occupancy of the Premises.

 

Signatures on Next Page

 

39

 

IN WITNESS WHEREOF, this Lease has been executed the
day and year first above set forth.

 

	
  Designated Address for
  Landlord:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
  c/o Kennedy Associates
  Real Estate Counsel, Inc.

  Attn: Senior Vice President – Asset Management

  1215 Fourth Avenue, Suite 2400

  Seattle, WA 98161

  	
   

  	
  NEWTOWER TRUST COMPANY
  MULTI-

  EMPLOYER PROPERTY TRUST, a trust

  organized under 12 C F R Section 9.18

  
	
  Facsimile: 206-682-4769

  	
   

  	
  By:

  	
  Kennedy Associates Real
  Estate Counsel, Inc.

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  
	
  With copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Kennedy Associates Real
  Estate Counsel, Inc.

  	
   

  	
  By:

  	
    /s/ James
  R. Landau

  
	
  Attn: Vice
  President – Asset Management

  	
   

  	
   

  	
   

  
	
  7315 Wisconsin Avenue

  	
   

  	
  Name:

  	
  James R. Landau

  
	
  Suite 350 West

  	
   

  	
  Its:

  	
  Vice President

  
	
  Bethesda, MD 20814

  	
   

  	
   

  
	
  Facsimile: 301-656-9339

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and to Landlord’s
  Trustee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NewTower Trust Company

  Multi-Employer Property Trust

  c/o NewTower Trust Company

  Attn: President/MEPT

  or Patrick O. Mayberry

  Three Bethesda Metro Center, Suite 1600

  Bethesda, MD 20814

  Facsimile: 240-235-9961

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  with a copy to Manager
  at:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Trammell Crow
  Services, Inc.

  500 E. Pratt Street

  Suite 500

  Baltimore, Maryland 21202

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Designated Address for
  Tenant:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  METASTORM, INC., a
  Maryland corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Chris DeSautelle

  
	
   

  	
   

  	
  Name:

  	
  Chris DeSautelle

  
	
  Facsimile:

  	
   

  	
   

  	
  Its:

  	
  CFO

  
												

 

40

 

LANDLORD ACKNOWLEDGEMENT

 

	
  STATE OF MARYLAND

  	
  )

  	
   

  
	
   

  	
  ) ss.

  
	
  COUNTY OF
                                            

  	
  )

  

 

On this
           day of
                      
200 , before me, personally appeared
                                                  ,
to be known to be a
                                              
of Kennedy Associates Real Estate Counsel, Inc., the authorized signatory
of the NewTower Trust Company Multi-Employer Property Trust, the trust that
executed the within and foregoing instrument; and acknowledged said instrument
to be the free and voluntary act and deed of said Trust, for the uses and
purposes therein mentioned, and on oath stated that
           was authorized to
execute said instrument.

 

IN WITNESS
WHEREOF, I have hereunto set my hand and affixed my official seal the day and
year first above written.

 

 

	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
  [NOTARIAL SEAL]

  	
  NOTARY PUBLIC in and
  for the state of
                              
                                 residing
  at
                              .

  My appointment expires:

  

 

41

 

TENANT ACKNOWLEDGEMENT (CORPORATION)

 

	
                                                

  	
  )

  
	
                                                

  	
  ) ss.

  
	
                                                

  	
  )

  

 

On this
           day of
                  ,
200 , before me, a Notary Public in and for the
                              
of                                               ,
personally appeared
                                                  , the
                                    
of Metastorm, Inc., the Maryland corporation that executed the within and
foregoing instrument; and acknowledged said instrument to be the free and
voluntary act and deed of said corporation, for the uses and purposes therein
mentioned, and on oath stated that he/she/they was/were authorized to execute
said instrument.

 

WITNESS my hand
and official seal the day and year first above written.

 

	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
  [NOTARIAL SEAL]

  	
  NOTARY PUBLIC in and
  for the State of
                              
                                 residing
  at
                              .

  My appointment expires:

  

 

42

 

EXHIBIT A TO LEASE

 

LEGAL DESCRIPTION OF LAND

 

Lot 3 as described on the Plat of “Lockwood Place
Subdivision” and recorded in the Land Records of Baltimore City, Maryland in
Plat Folder F M C 3745.

 

CONTAINING 47,538 square feet or 1.0913 acres, more or
less, of land.

 

BEING a part of the land described m the conveyance
from the Board of Trustees of the Community College of Baltimore to the Board
of Trustees of the New Community College of Baltimore by deed dated December 31,
1990 and recorded among the land records of the City of Baltimore, Maryland in
Liber 2942 at folio 364.

 

 

EXHIBIT B TO LEASE

 

DRAWING SHOWING LOCATION OF THE PREMISES

 

 

 

 

EXHIBIT C

WORK LETTER

 

THIS WORK LETTER
AGREEMENT (“Work Letter”) is executed
simultaneously with that certain Lease between METASTORM, INC., a Maryland
corporation, as Tenant, and NEWTOWER TRUST COMPANY MULTI-EMPLOYER PROPERTY
TRUST, a trust organized under C.F.R. Section 9.18, as Landlord, relating
to demised premises (“Premises”) at
the building commonly known as 500 East Pratt Street, Baltimore, Maryland
(“Building”), which Premises are more
fully identified in the Lease. 
Capitalized terms used herein, unless otherwise defined in this Work
Letter, shall have the respective meanings assigned to them in the Lease.

 

For and in
consideration of the agreement to lease the Premises and the mutual covenants
contained herein and in the Lease, Landlord and Tenant hereby agree as follows:

 

1              Base Building Improvements

 

(a)           Landlord
represents that the work to the Building described in the Base Building
Drawings and Specifications provided to Tenant (the “Base
Building Improvements”) has been completed in accordance with the
Access Laws and other Governmental Requirements and is sufficient for the
Landlord to commence and complete the improvements to be installed in the
Premises pursuant to the terms of this Work Letter (the “Tenant
Improvement Work”).  The Base
Building Improvements include the specific improvements described on Exhibit A.

 

2              Substantial Completion

 

(a)           Attached hereto
as Exhibit B is a projected completion schedule for the Tenant
Improvement Work (the “Schedule of Deliveries”).  The dates set forth in the Schedule of
Deliveries are intended to reflect the time frames for various approvals and
submissions and not as required dates for completion of the referenced
items.  Subject to Tenant Delay (as defined
below) and Force Majeure Delay (as defined below), Landlord shall use
commercially reasonable efforts to Substantially Complete the Tenant
Improvement Work in accordance with the Schedule of Deliveries.

 

(b)           For purposes of
this work letter, “Substantial Completion”
or to “Substantially Complete” shall mean (i) the
Tenant Improvement Work has been completed by Landlord in accordance with the
Plans (defined below) except for minor or insubstantial details of
construction, declaration or mechanical adjustment that remain to be done that
do not materially adversely affect occupancy of the Premises and the use of the
Premises by Tenant for its Permitted Use (the “Punch List
Items”) and (ii) a Temporary Certificate of Occupancy, subject
to no conditions that materially adversely affect Tenant’s occupancy of the
Premises for its Permitted Use, has been issued for the Premises.  Landlord shall endeavor to provide one month’s
advance notice of the estimated date for Substantial Completion.  Thereafter, Landlord and Tenant shall conduct
a pre-punchlist walk through at a time and date mutually agreeable to Landlord
and Tenant.

 

(c)           Tenant’s
obligations for the payment of Base Rent under the Lease shall not commence and
the Commencement Date shall not be deemed to have occurred until Landlord has
Substantially Completed all of the Tenant Improvement Work; provided, however, that if Landlord shall be delayed beyond the target date for
Substantial Completion of the Tenant Improvement Work identified in Exhibit B
as a result of, but only to the extent of, any of the following, (each, a “Tenant Delay”):

 

(i)            Tenant’s
failure to provide, or delay in providing within the time frame reasonably
requested by Landlord, which shall not be less than three (3) Business
Days, Landlord with any information reasonably requested by Landlord for the
purpose of completing the Plans or the ordering of materials or the letting of
bids for the Tenant Improvement Work;

 

C-1

 

(ii)           Tenant’s
failure to timely grant approvals and cooperate so as to accommodate completion
of drawings, plans and specifications within the time frames required-by the
Schedule of Deliveries;

 

(iii)          Tenants request
for changes in the final Plans, after they have been approved by Tenant, other
than by reason of making modifications as may be required by the City of
Baltimore;

 

(iv)          a requirement
for “Long Lead Items,” i.e., any
particular item or items of Tenant Improvement Work that, as determined jointly
by Landlord’s and Tenant’s architects, (1) is unique to Tenant’s
operations within the Building and (2) is not readily available in
reasonable quantities in, or for delivery to, the Baltimore metropolitan market
or requires a long term lead time to procure, obtain or install, Landlord and
Tenant’s architect shall notify Tenant or Landlord (who will notify Tenant) of
this fact promptly after ascertaining same for which a comparable replacement
item is readily available as a substitute for the items described above, and
Tenant refuses to accept such substitution; or

 

(v)           any other
action or failure to timely act by Tenant or a Tenant Contractor in accordance
with the terms of the Lease or this Work Letter that shall be the cause of a
delay in completion of the Tenant Improvement Work;

 

then the Commencement Date shall occur on the date
that Landlord would have completed the Tenant Improvements Work but for the
Tenant Delay.  Such date shall be
determined jointly by Landlord’s and Tenant’s architects.  If the parties’ architects are unable to
agree upon such date, the architects shall select an independent architect to
make the determination.

 

3              Preparation of Plans

 

(a)           Landlord shall retain a licensed architect (the “Architect”), whose fees shall be capped at $2.25 times the
number of rentable square feet of the Premises, MEP engineer, whose fees shall
be capped at $0.85 times the number of rentable square feet of the Premises,
and any other specialty engineers necessary for completing designs/plans, to
prepare complete, finished and detailed architectural and engineering
(electrical, mechanical, plumbing and structural, if any) drawings and
specifications for Tenant’s partition layout, reflected ceiling plan, floor
finishes and other installations, for the Tenant Improvement Work to be done by
Landlord to the Premises under this Work Letter.  Landlord’s engineer will be Brady &
Anglin Consulting Engineers.

 

(b)           Landlord shall cause the Architect to furnish to Tenant for
Tenant’s approval space plans sufficient to convey the architectural design of
the Premises, including, without limitation, the location of doors, partitions,
electrical and telephone outlets, plumbing fixtures, heavy floor loads and
other special requirements (collectively, the “Space Plan”).  Such space planning service, to include a
maximum of two test fits with one minor revision each, will be provided to
Tenant at Landlord’s cost.  Any
additional space planning services will be a Tenant Improvement Cost, which
shall be paid from the Tenant Improvement Allowance.  The final Space Plan approved by Landlord and
Tenant is referred to as the “Final Space Plan”.

 

(c)           Based upon and in conformity with the Final Space Plan,
Landlord shall cause the Architect and engineers to prepare and deliver to Tenant,
for Tenant’s approval, detailed specifications and engineered working drawings
for the tenant improvements shown on the Final Space Plan (the “Working Drawings”). 
The Working Drawings shall incorporate modifications to the Final Space
Plan as necessary to comply with the floor load and other structural and system
requirements of the Building.  Within
five (5) business days after Tenant’s receipt of the Working Drawings,
Tenant shall approve or disapprove the same, which approval shall not be
unreasonably withheld; provided, however, that Tenant may
only disapprove the Working Drawings to the extent such Working Drawings are
inconsistent with the Final Space Plan and only if Tenant delivers to Landlord,
within such three (3) business days period, specific changes proposed by
Tenant that are consistent with the Final Space Plan and do not constitute
changes which would result in any of the circumstances described in items (i) through
(iv) below.  If any such revisions
are timely and properly proposed by Tenant, Landlord shall 

 

C-2

 

cause
the Architect and engineers to revise the Working Drawings to incorporate such
revisions and submit the same for Tenant’s approval in accordance with the
foregoing provisions, and the parties shall follow the foregoing procedures for
approving the Working Drawings until the same are finally approved by Landlord
and Tenant.  Upon Landlord’s and Tenant’s
approval of the Working Drawings, the same shall be known as the “Approved Working Drawings”. 
Once the Approved Working Drawings have been approved by Landlord and
Tenant, Tenant shall make no changes, change orders or modifications thereto
without the prior written consent of Landlord, which consent may be withheld in
Landlord’s sole discretion if such change or modification would:  (i) directly or indirectly delay the
Substantial Completion of the Leased Premises; (ii) increase the cost of
designing or constructing the Tenant Improvement Work above the cost of the
tenant improvements depicted in the Final Space Plan; (iii) be of a
quality lower than the quality of the standard improvement package items for
the Building; and/or (iv) require any changes to the base, shell and core
work or structural improvements or systems of the Building.  The Final Space Plan, Working Drawings and
Approved Working Drawings shall be collectively referred to herein as, the “Plans”.

 

4                                         Tenant Improvement Work

 

Landlord shall perform or cause to be performed the
Tenant Improvement Work under the following terms and conditions:

 

(a)           Landlord shall place the Plans out to bid to not less than
three (3) competitive third-party general contractors with Tenant
selecting one (1).  Landlord and Tenant
agree that Trammell Crow Company (the “Construction Manager”) will provide
construction management services at a fee of four percent (4%) (the “Construction Management Fee”), which fee shall be paid from
the Tenant Improvement Allowance.  There
will be no other construction management/oversight fees paid to the general
contractor or any other person.  The
Construction Management Fee will be based only on hard construction costs and
shall not include any architectural/design or engineering fees in partial
consideration of the Construction Management Fee, the Construction Manager
shall manage the completion of the Tenant Improvement Work in a prudent and
diligent manner so as to avoid cost overruns of the Tenant Improvement Costs
beyond the Tenant Improvement Allowance. 
In the event the Construction Manager determines or anticipates that any
such cost overrun is likely to occur, the Construction Manager shall comply
with the terms of Section 7(a) below.

 

(b)           Following Landlord’s receipt of the above-referenced bids,
Landlord shall submit to Tenant copies and an estimate (the “Cost Estimate”) of the Tenant Improvement Cost (as defined
below) for Tenant’s approval within three (3) Business Days after Tenant’s
receipt of the Cost Estimate.  Landlord
shall have no obligation to commence or perform the Tenant Improvement Work
until the Cost Estimate has been approved by Tenant.  Landlord may revise the Cost Estimate from
time to time to reflect any estimated cost increases or decreases for the
Tenant Improvement Work, including such adjustments as may be required with respect
to any revisions to the Plans requested by Tenant and approved by Landlord, or
required by any Governmental Requirements. 
As to revised costs resulting from revisions to the Plans requested by
Tenant, Tenant shall approve in writing such revised costs shown in the
corresponding revised Cost Estimate within five (5) Business Days after
Landlord submits the same to Tenant.  If
such approval is not received by Landlord within such five (5) Business
Day period, Tenant shall be deemed to have failed to approve such Cost Estimate
and to have abandoned its request for the subject revisions to the Plans.  If any revisions to the Plans are required by
a Governmental Requirement, Tenant shall be deemed to have approved any
adjustments to the Cost Estimate resulting therefrom.  If Landlord approves revisions to the Plans
requested by Tenant and Tenant approves the corresponding revised Cost
Estimate, the work to be performed by Landlord shall include the revisions
shown in the revised Plans, and the total cost of such revisions requested by
Tenant shall be included in the Tenant Improvement Cost.  The Tenant Improvement Work shall also
include revisions to the Tenant Improvement Work required by all governmental
authorities having or asserting jurisdiction, and the cost of any such
revisions shall also be added to and included in the Tenant Improvement Cost.

 

C-3

 

(c)           Landlord shall use only new, first-class materials in the
Tenant Improvement Work.  All construction
work shall be done in a good and workmanlike manner and in substantial
compliance with Governmental Requirements and shall be under the supervision of
Landlord’s construction manager.

 

(d)           The cost of the Tenant Improvement Work charged against the
Tenant Improvement Allowance shall be the amount of the construction contract
selected by Landlord, plus the Construction Management Fee, plus the fees of
the Architect and the engineer, plus permitting fees, plus all other hard and
soft costs set forth in the approved construction budget (the “Tenant Improvement Costs”). 
The Tenant Improvement Costs shall also include any extra space planning
services as provided in Paragraph 3(b).

 

(e)           The Tenant Improvement Costs shall not include and Landlord
shall not charge any administrative or other fee for Landlord, utility costs or
charges for any service (including HVAC, hoisting or freight elevator and the
like) to the Premises during the completion of the Tenant Improvement
Work.  If, however, the Plans for the
Tenant Improvement Work require the construction and installation of more fire
hose cabinets and/or telephone/electrical closets than the number regularly
provided by Landlord in the core of the Building as part of the Base Building
Improvements, then Tenant agrees that all reasonable costs and expenses arising
from the construction and installation of such additional fire hose cabinets
and/or telephone/electrical closets shall be treated as Tenant Improvement
Costs.

 

(f)            Landlord shall have the right to
run utility lines, pipes, conduits, duct work and component parts of all
mechanical and electrical systems where necessary or desirable through the
Premises, to repair, alter, replace or remove the same, and to install proper
access panels thereto; provided that
the same shall not unreasonably interfere with the Tenant Improvements or the
maintenance thereof as shown on the Plans. 
Such work shall not be included in the Tenant Improvement Costs.

 

(g)           Upon Substantial Completion of the Tenant Improvement Work,
Landlord, Tenant and the Architect shall agree upon a list of Punch List Items
for the Tenant Improvement Work, and Landlord shall proceed to diligently work
to correct such items and to complete such work within sixty (60) days.

 

(h)           All contractors shall be licensed contractors, possessing
good labor relations, capable of performing quality workmanship and working in
harmony with Landlord’s contractors and subcontractors and with other
contractors and subcontractors in the Building. 
Tenant acknowledges that all contractors, including Tenant’s Contractors
(as defined below), will be bound by a collective bargaining agreement with a labor organization
affiliated with the Building and Construction Trades Council of the AFL-CIO and
employ only members of such labor organizations to perform work within their
jurisdictions.  In addition, the parties
covenant to use good faith efforts to comply with the policies of the City of
Baltimore regarding participation by minority business enterprise (“MBE”) and women’s business enterprises (“WBE”).

 

5              Tenant’s Separate Work

 

(a)           If Tenant intends to perform work outside the scope of
Tenant Improvement Work, i.e.,
telephone, voice and data technology installation and furniture installation,
during Landlord’s performance of the Tenant Improvement Work (“Tenant’s Separate Work”), and Landlord hereby grants to
Tenant the right to enter the Premises and portions of the Building for
completion of Tenant’s Separate Work. 
Tenant may cause the Tenant’s Separate Work to be performed during the
normal construction process prior to the date of Substantial Completion of the
Tenant Improvement Work; provided that
if  Landlord determines in Landlord’s
sole discretion that Tenant’s performance of Tenant’s Separate Work prior to
Substantial Completion may impede Landlord’s ability to achieve Substantial
Completion by the target date indicated in the Schedule of Deliveries, then
Landlord may require Tenant to perform Tenant’s Separate Work after Substantial
Completion.  The foregoing right to enter
prior to the commencement of the Term, however, is conditioned upon Tenant’s
contractors and mechanics (the “Tenant’s Contractors”)
working in harmony and not interfering with the labor employed by Landlord,
Landlord’s 

 

C-4

 

mechanics
or contractors or by any other tenant or their contractors.  If at any times, such entry shall cause
disharmony or interference therewith, this right to enter may be withdrawn by
Landlord upon forty-eight (48) hours’ written notice to Tenant until such time
as Landlord determines that the disharmony or interference will abate.  Such entry shall be deemed to be under all of
the terms, covenants, provisions and conditions of the Lease except as to the
covenant to pay rent.  Furthermore,
Tenant and Tenant’s Contractors shall be responsible for transportation,
safekeeping and storage of .materials and equipment used in the performance of
Tenant’s Work and for the removal of waste and debris resulting from the
performance of Tenant’s Separate Work. 
Such waste and debris shall be deposited by Tenant and Tenant’s
Contractors in its own dumpsters or other containers and shall not be deposited
in those of Landlord or Landlord’s contractors unless by prearrangement and in
exchange for an agreement to pay the costs of additional waste pick ups at the
Building.

 

(b)           In addition to any insurance that may be required under the
Lease, Tenant shall secure, pay for and maintain or cause Tenant’s Contractors
to secure, pay for and maintain during the continuance of construction and
fixturing work within the Building  or
Premises, insurance in the following minimum coverages and limits of liability;
provided that the following minimums may
be reduced to a lower, yet commercially reasonable amount, for Tenant’s
Contractors having contracts with a contract amount of less than $75,000:

 

(i)            workers’
compensation and employers’ liability insurance with limits of not less than
$500,000.00, or such higher amounts as may be required from time to time by any
employee benefit acts or other statutes applicable where the work is to be
performed, and in any event sufficient to protect Tenant’s Contractors from
liability under the aforementioned acts;

 

(ii)           commercial
general liability insurance (including contractors’ protective liability) in an
amount not less than $2,000,000.00 per occurrence, whether involving bodily
injury liability (or death resulting therefrom) or property damage liability or
a combination thereof with a minimum aggregate limit of $2,000,000.00.

 

(iii)          comprehensive
automobile liability insurance, including the ownership, maintenance and
operation of any automotive equipment, owned, hired or non-owned, in an amount
not less than $500,000.00 for each person in one accident and $1,000,000.00 for
injuries sustained by two or more persons in any one accident, and property
damage liability in an amount not less than $1,000,000.00 for each
accident.  Such insurance shall insure
Tenant’s Contractors against any and all claims for bodily injury, including
death resulting therefrom, and damage to the property of others arising from
its operations-under the contracts, whether such operations are performed by
Tenant’s Contractors or by anyone directly or indirectly employed by any of
them;

 

All policies (except the
workers’ compensation policy) shall be endorsed to include as additional
insured parties Landlord and such additional persons as Landlord may
designate.  The waiver of subrogation
provisions contained in the Lease shall apply to all insurance policies (except
the workers’ compensation policy) to be obtained by Tenant pursuant to this
Paragraph.  The insurance policy
endorsements shall also provide that all additional insured parties shall be
given thirty (30) days’ prior written notice of any reduction, cancellation or
non-renewal of coverage (except that ten (10) days’ notice shall be
sufficient in the case of cancellation for nonpayment of premium) and shall
provide that the insurance coverage afforded to the additional insured parties
thereunder shall be primary to any insurance carried independently by said
additional insured parties. 
Additionally, where applicable, each policy shall contain a
cross-liability and severability of interest clause.

 

6              Construction Representatives.  Tenant’s representative for construction
matters is “Christopher S. Desautelle (“Tenant’s
Representative”), whose notice address is 8825 Stanford Blvd., Suite 200,
Columbia, Maryland 21045 (Fax: 
410-290-1172).  Landlord’s
representative for construction matters is Lynne Goldberg (“Landlord’s Representative”), whose notice address is c/o
Trammell Crow Company at 8444 Westpark Drive, Suite 300, McLean,
Virginia 22102 (Fax:  703-288-2604).  Tenant may appoint a new Tenant’s
Representative by written notice of Landlord, and Landlord may appoint a new
Landlord’s Representative by written notice to Tenant.  All notices and deliveries with respect to
construction matters will be made to Tenant’s Representative or Landlord’s
Representative, as 

 

C-5

 

applicable.  Each party shall allow the other party’s
designated representative access to the Premises at all reasonable times during
construction prior to the Commencement Date for the purpose of inspecting and
verifying the performance of the Tenant Improvement Work.

 

7              Tenant Improvement Allowance;
Excess Amounts

 

(a)           Landlord shall be responsible for the payment of all the
Tenant Improvement Costs up to the amount of the Tenant Improvement
Allowance.  If the Tenant Improvement Costs
exceed the Tenant Improvement Allowance, Tenant shall pay to Landlord such
excess within twenty (20) Business Days after receipt of Landlord’s demand made
from time to time and accompanied by reasonably detailed documentation of the
excess cost incurred by Landlord.  If
Tenant fails to pay to Landlord the cost of any such excess Tenant Improvement
Costs as and when due, Landlord may elect to suspend work on the Tenant
Improvement Work pending such timely payment, and the Commencement Date shall
be deemed to have occurred on the date that Substantial Completion would have
been achieved absent such suspension of work. 
If Landlord or the Construction Manager at any time determines or
anticipates that the Tenant Improvement Costs will exceed the Tenant Improvement
Allowance, Landlord or the Construction Manager shall provide Tenant with
prompt notice, together with reasonably detailed documentation indicating the
amount by which the Tenant Improvement Costs will exceed the Tenant Improvement
Allowance.  Following delivery and
receipt of any such notice, Landlord, Tenant and the Construction Manager shall
cooperate in good faith and with all deliberate speed to avoid or otherwise
minimize the extent to which the Tenant Improvement Costs will exceed the
Tenant Improvement Allowance.  In
connection therewith, Tenant may request modifications to the Plans in order to
reduce such excess, subject to Landlord’s approval, not to be unreasonably
withheld or delayed; provided that Tenant acknowledges that such modifications
may create a Tenant Delay.  Landlord will
notify Tenant of the amount of any Tenant Delay associated such requested
modifications.

 

(b)           If the Tenant Improvement Costs are less than the Tenant
Improvement Allowance, Tenant may also use the Tenant Improvement Allowance for
the Other Permitted Purposes (as defined below).

 

(c)           On or before the date that Tenant approved the Cost
Estimate, Tenant shall provide Landlord with written notice of its selection of
one of the following options regarding the amount and structure of the Tenant
Improvement Allowance; provided that if Tenant does not provide Landlord
written notice of Tenant’s election by such date, Tenant shall be deemed to
have elected Option 1:

 

OPTION 1:

 

The “Tenant Improvement
Allowance” will be comprised of a “Base Tenant
Improvement Allowance” in an amount equal to Forty Dollars ($48.00)
times the number of rentable square feet of the Premises.  If Tenant elects Option 1, there shall
be no Additional Tenant Improvement Allowance.

 

OPTION 2:

 

The “Tenant Improvement
Allowance” will be comprised of a “Base Tenant
Improvement Allowance” as described in Option 1, plus a “Supplemental Tenant Improvement Allowance” in an amount up
to Ten-Dollars ($10.00) times the number of rentable square feet of the Premises.  If Tenant elects Option 2, the actual
Supplemental Tenant Improvement Allowance will be added to the Base Rent
payable under this Lease on the basis of an amortization for the period
beginning on the Commencement Date and for the remainder of the initial Lease
Term at a rate that is amortized over ten (10) years at an interest rate
equal to nine percent (9%) per annum. 
Landlord shall provide Tenant with a supplemental schedule to Base Rent
if Tenant elects to have Landlord expend all or any portion of the Supplemental
Tenant Improvement Allowance.

 

Upon Tenant’s selection
of Option 1 or Option 2 above, the remaining Option shall be deemed
to be waived and deleted from this Work Letter.

 

C-6

 

(d)           The Tenant Improvement Allowance shall be applied to the
Tenant Improvement Costs; except, however, at Tenant’s election, Tenant may
also use the Tenant Improvement Allowance for the following additional purposes
(“Other Permitted Purposes”):  (a) Tenant’s Separate Work and cabling,
networking, and other installation of Telecommunications Facilities, if not
part of the Tenant Improvement Work); and (b) Tenant’s purchase of
furniture, fixtures and equipment for the Premises.  Tenant Improvement Costs together with Tenant’s
costs for Other Permitted Purposes are collectively referred to as “Tenant Costs”.  With
each draw request for any Other Permitted Purpose, Tenant shall submit invoices
or paid receipts for the Tenant Costs to be paid from the draw request.  Landlord shall pay Tenant’s draw requests
submitted by the 20th of any calendar month by the last day of the
next calendar month (unless the invoice that is the subject of any such draw
request requires an earlier payment due date, in which event Landlord shall use
reasonable efforts to accommodate such earlier date); provided,
however, that
Landlord shall only be required to pay such draw requests so long as there is
sufficient Tenant Improvement Allowance remaining to cover the cost of the
Tenant Improvement Work in accordance with the approved budget.

 

(e)           Moving Allowance.  In addition to the
Tenant Improvement Allowance, Landlord shall also provide a moving allowance
(the “Moving Allowance”) of Two Dollars
($2.00) times the number of rentable square feet of the Premises.  Tenant may use the Moving Allowance for
moving costs or excess space planning costs. 
Landlord shall pay Tenant’s draw requests from the Moving Allowance
submitted by the 20th of any calendar month by the last day of the
next calendar month.  Tenant’s draw
requests must be accompanied by invoices or paid receipts for the moving costs
or excess space planning costs.

 

8              Miscellaneous

 

(a)           Except as expressly set forth in this Work Letter or in the
Lease, Landlord has no agreement with Tenant and has no obligation to do any
work with respect to the Premises.

 

(b)           Time is of the essence under this Work Letter.

 

(c)           This Work Letter shall not be deemed applicable to any
additional space added to the original Premises at any time or from time to
time, whether by any options under the Lease or otherwise, or to any portion of
the original Premises or any additions thereto in the event of a renewal or
extension of the original term of the Lease, whether by any options under the
Lease or otherwise, unless expressly so provided in the Lease or any amendment
or supplement thereto.

 

(d)           Tenant’s failure to pay any amounts owed by Tenant hereunder
when due or Tenant’s failure to perform its obligations hereunder shall also
constitute a default under the Lease, and Landlord shall have all the rights
and remedies granted to Landlord under the Lease for nonpayment of any amounts
owed thereunder or failure by Tenant to perform its obligations thereunder.

 

(e)           Notices under this Work Letter shall be given in the same
manner as under the Lease.

 

(f)            The liability of Landlord
hereunder or under any amendment hereto or any instrument or document executed
in connection herewith (including, without limitation, the Lease) shall be
limited to and enforceable solely against Landlord’s interest in the Building
and against the Tenant Improvement Allowance.

 

(g)           The headings set forth herein are for convenience only.

 

(h)           This Work Letter sets forth the entire agreement of Tenant
and Landlord regarding the Tenant Improvement Work.

 

C-7

 

(i)            This Work Letter may only be
amended if in writing and duly executed by both Landlord and Tenant.

 

C-8

 

EXHIBIT A 

 

BASE BUILDING IMPROVEMENTS

 

Landlord, at Landlord’s sole cost and responsibility,
will provide Tenant with the following Base Building Improvements.  Such Base Building Improvements will be in
addition to Tenant’s Improvement Allowance as described herein.

 

·      A sprinkler system will be installed in the Premises
per local municipal fire codes.  All
sprinkler heads will be dropped in accordance with Tenant’s space plan.
Sprinkler heads will be concealed or the semi-recessed style.

 

·      The Building exterior glass is low “E” treated for maximum
energy conservation.  Blinds will be
installed on all windows.

 

·      Bathrooms in the Building are finished with porcelain
ceramic tile floors and walls.  The
counter tops are granite and bathroom partitions are ceiling-hung, polished
stainless steel and ADA compliant.

 

·      The Building contains six (6) high-speed
elevators, with lock-off capabilities on a floor-by-floor basis.  An electronic card-key access system will be
installed at the main entrances to the Building.

 

·      HVAC–Trunk lines are installed on each floor with
installed VAV mixing boxes on a minimum ratio of one per 700 s f
leased.  Distribution from the mixing
boxes will be a part of the Tenant Improvement Allowance.

 

·      Landlord will provide a telephone and equipment
(T&E) closet on each floor in the Building. 
Tenant will be responsible for telephone and data distribution from the
T&E main room on the second floor of the Building through the conduits
provided in the T&E closets on the floor where the Premises is located and
throughout the Premises.

 

·      Distribution panels will be provided on each floor for
both 277v and 110v, with up to 7 watts psf of low-voltage power available

 

C-9

 

EXHIBIT
B

SCHEDULE OF DELIVERIES

 

	
  Action

  	
   

  	
  Scheduled Date

  
	
  Landlord
  submits space plan to Tenant.

  	
   

  	
  December 23, 2005

  
	
  Tenant
  submits CDs to Landlord for approval

  	
   

  	
  January 15, 2006

  
	
  Landlord
  submits bid packages to General Contractor for sub bids

  	
   

  	
  January 21, 2006

  
	
  Subcontractor/General
  Contractor Bids due to Landlord/Tenant

  	
   

  	
  January 28, 2006

  
	
  Landlord
  submits for building permit

  	
   

  	
  February 2, 2006

  
	
  GC/Landlord/Tenant
  to complete Value Engineering

  	
   

  	
  February 3, 2006

  
	
  GC
  Contract executed

  	
   

  	
  February 10, 2006

  
	
  Target
  construction start date.

  	
   

  	
  February 13, 2006

  
	
  Target
  date for Substantial Completion of Tenant Improvement Work

  	
   

  	
  April 15, 2006

  
	
  Target
  date for punchlist completion

  	
   

  	
  May 15, 2006

  

 

Notes:

 

·      The work schedule assumes-the absence of
material lead-time issues.  Further, the
work schedule assumes the following

 

·      Intermediate milestone dates:

 

	
  February 7, 2006

  	
   

  	
  for building permit
  approval;

  
	
   

  	
   

  	
   

  
	
  February 9, 2006

  	
   

  	
  general contractor
  submits for sprinkler/fire alarm

  
	
   

  	
   

  	
   

  
	
  February 23, 2005

  	
   

  	
  for sprinkler/fire
  alarm permit approval

  
	
   

  	
   

  	
   

  
	
  March 16, 2006

  	
   

  	
  for sprinkler/fire
  alarm inspection approval

  

 

·      These dates must be achieved in order to
maintain the target dates for substantial completion and final completion of
the Tenant Improvements.  Delays beyond
these dates will delay the substantial and final completion dates.

 

·      All permits and work by Tenant and Tenant’s
vendors must be coordinated with Landlord’s construction schedule.  The Tenant’s work and permits include but are
not limited to:  telephone and data
cabling and permits; systems furniture and permits; telephone service and
installation; moving.

 

C-10

 

EXHIBIT
D TO LEASE

 

FORM OF LEASE MEMORANDUM

 

NewTower Trust Company Multi-Employer Property Trust,
a trust organized under 12 C.F.R. Section 9.18. as Landlord, and
                                                  
as Tenant executed that Lease dated as of
                                
200     (the “Lease”)

 

The Lease contemplates that this document shall be
delivered and: executed as set forth in the paragraph entitled “Lease
Memorandum” This Lease Memorandum shall become part of the Lease.

 

Landlord and Tenant agree as follows:

 

1.             The Commencement Date of the Lease is
                          .

 

2.             The end of the 
Lease Term and the date on which this Lease will expire is
                                    .

 

3.             The Lease is in full force and effect as of the date
of this Lease Memorandum.  By execution of this Lease Memorandum, Tenant confirms that as of the date of the
Lease Memorandum.  Tenant
has no claims against Landlord and Landlord has fulfilled all of its
obligations under the Lease required to be fulfilled by Landlord.

 

4.             The Premises consist of approximately
                    
rentable square feet.

 

5.             Base Rent:  The
amount of Base Rent and the portion of the Lease Term during which such Base
Rent is payable shall be determined from the following table:

 

	
  Applicable Portion of Lease Terms

  	
   

  	
  Rata
  Per/Rentable

  	
   

  	
   

  	
   

  	
  Monthly
  Base

  Rent Installment

  
	
  Beginning

  	
   

  	
  Ending

  	
   

  	
  Sq Ft /
  Annum

  	
   

  	
  Annual
  Base Rent

  	
   

  	
  (Annual+
  12)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

6.             Tenant’s Pro Rata Share is
                    
percent
(                            %)

 

	
  Dated:

  	
   

  	
   

  	
   

  	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LANDLORD

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  NewTower Trust Company
  Multi-Employer 

  Property Trust, a trust organized under 12 C.F.R. 

  Section 9.18

  	
   

  	
  Metastorm, Inc., a
  Maryland corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  By:  Kennedy Associates Real Estate 

  	
   

  	
  Name:

  	
   

  
	
   

  	
  Counsel, Inc.,
  Authorized Signatory

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  	
   

  
														

 

1

 

LANDLORD
ACKNOWLEDGEMENT

 

STATE OF
MARYLAND               )

                                                          )
ss.

COUNTY OF
                                  )

 

On this
           day of
                    ,
200  , before me, personally appeared
                                                  ,
to be known to be a
                                              
of Kennedy Associates Real Estate Counsel, Inc., the authorized signatory
of the NewTower Trust Company Multi-Employer Property Trust, the trust that
executed the within and foregoing instrument; and acknowledged said instrument
to be the free and voluntary act and deed of said Trust, for the uses and
purposes therein mentioned, and on oath stated that
           was authorized to
execute said instrument.

 

IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year first above written.

 

	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
  [NOTARIAL SEAL]

  	
  NOTARY PUBLIC in and
  for the state of 

                              
  residing at
                              .

  My appointment expires:                                    

  

 

2

 

TENANT ACKNOWLEDGEMENT (CORPORATION)

 

                                                                       )

                                                                       )
ss.

                                                                       )

 

On this
         day of
                  ,
200  , before me, a Notary Public in and for the of
                                                                  
personally appeared                                                               
the                                               
of
                                            
                                  
the                                                 
corporation that executed the within and foregoing instrument, and acknowledge
said instrument to be the free and voluntary act and deed of said corporation
for the uses and purposes herein mentioned, and on oath stated that s/he/they
was/were authorized to execute said instrument.

 

WITNESS my hand and official seal hereto affixed the
day and year first as above written.

 

	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
  [NOTARIAL SEAL]

  	
  NOTARY PUBLIC in and
  for the state of 

                              
  residing at
                              .

  My appointment expires:                                    

  

 

3

 

EXHIBIT
E TO LEASE

 

RULES AND REGULATIONS

 

1              No sign,
placard, picture, advertisement, name or notice shall be installed or displayed
on any part of the outside or inside of the Building or Land without the prior
written consent of the Landlord. 
Landlord shall have the right to remove, at Tenant’s expense and without
notice, any sign installed or displayed in violation of this rule.  All approved signs or lettering on doors and
walls shall be printed, painted, affixed or inscribed at the expense of Tenant
by a person approved by Landlord.

 

2              If Landlord
objects in writing to any curtains, blinds, shades, screens or hanging plants
or other similar objects attached to or used in connection with any window or
door of the Premises, Tenant shall immediately discontinue such use.  No awning shall be permitted on any part of
the Premises.  Tenant shall not place
anything against or near glass partitions or doors or windows which may appear
unsightly from outside the Premises.

 

3              Tenant shall
not obstruct any sidewalk, halls, passages, exits, entrances, elevators,
escalators, or stairways of the Building or driveways and loading areas of the
Project.  The halls, passages, exits,
entrances, elevators, escalators and stairways are not open to the general
public.  Landlord shall in all cases
retain the right to control and prevent access to such areas of all persons
whose presence in the judgment of Landlord would be prejudicial to the safety,
character reputation and interest of the Project and the Building’s tenants;
provided that, nothing in this Lease contained shall be construed to prevent
such access to persons with whom any Tenant normally deals in the ordinary
course of its business, unless such persons are engaged in illegal
activities.  Tenant shall not go upon the
roof of the Building except as expressly permitted by the Lease.

 

4              The directory
of the Building will be provided exclusively for the display of the name and
location of tenants only, and Landlord reserves the right to exclude any other
names therefrom.

 

5              All cleaning,
and janitorial services for the Building and the Premises shall be provided
exclusively by contractors approved by Landlord and shall be an Operating Expense
unless otherwise agreed by Landlord and Tenant. 
Except with the written consent of Landlord, no person or persons other
than those approved by Landlord shall be employed by Tenant or permitted to
enter the Building for the purpose of cleaning the same.  Cleaning and janitorial services shall be
provided five (5) days per week. 
Tenant shall not cause any unnecessary labor by carelessness or
indifference to the good order and cleanliness of the Premises.  Landlord shall not in any way be responsible
to any Tenant for any loss of property on the Premises, however occurring, or
for any damage to any Tenant’s property by the janitor, any of Landlord’s
Agents or any other person.

 

6              Landlord will
furnish Tenant, free of charge, two (2) keys to each door lock in the
Premises.  Landlord may make a reasonable
charge for any additional keys.  Tenant
shall not make or have made additional keys, and Tenant shall not alter any
lock or install a new additional lock or bolt on any door of its Premises
except as approved by Landlord as part of the Tenant Improvements or Tenant
Alterations.  Tenant, upon the
termination of its tenancy, shall deliver to Landlord the keys of all doors
which have been furnished to Tenant and the keys to all locks, if any,
installed by Tenant with Landlord’s approval and in the event of loss of any
keys so furnished, shall pay Landlord therefor.

 

7              HVAC service
shall be provided to the Premises Monday through Friday from 7:00 a.m. to
7:00 p.m. and on Saturday from 9:00 a.m. to 1:00 p.m. excluding
Holidays or as otherwise provided in Tenant’s Lease.

 

8              If Tenant
requires Telecommunication Services, computer circuits, burglar alarm or
similar services or other utility services, it shall first obtain Landlord’s
approval of the construction or 

 

1

 

installation of such services.  Application for such services shall be made
in accordance with the procedure prescribed by Landlord in subsection 3.5.2 of
the Lease.

 

9              Tenant shall
not place a load upon any floor of the Premises that exceeds the load per
square foot that such floor was designed to carry and that is allowed by
Governmental Requirements.  Landlord shall have the right to
prescribe the weight size and position of all equipment, materials,
furniture or other property brought into the Building.  Heavy objects shall, if considered necessary
by Landlord, stand on such platforms as determined by Landlord to be
necessary to properly distribute the weight.  Business machines and mechanical equipment
belonging to Tenant that cause noise or vibration that may be
transmitted to the structure of the Building or to any space in the
Building or to any other tenant in the Building shall be placed and maintained
by Tenant, at Tenant’s expense, on vibration eliminators or other devices
sufficient to eliminate noise or vibration. 
The persons employed to move such equipment in or out of the
Building must be acceptable to Landlord. 
Landlord will not be responsible for loss of, or damage to,
any such equipment or other property from any cause, and all damage done
to the Building by maintaining or moving such equipment or other property shall
be repaired at the expense of Tenant.

 

10            Tenant shall
not use or keep in the Premises any kerosene, gasoline or inflammable or combustible
fluid or material other than those limited quantities permitted by the
Lease.  Tenant shall not use or permit to be used in the Premises any
foul or noxious gas or substance, or permit or allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors or vibrations
nor shall Tenant bring into or keep in or about the Premises any birds or
animals.

 

11            Tenant shall
not use my method of heating or air-conditioning other than that
supplied by Landlord and by any supplemental HVAC systems approved by
Landlord as part of the Tenant Improvements or Tenant Alterations pursuant to
the Lease.

 

12            Tenant shall
not waste any utility provided by Landlord and agrees to cooperate
fully with Landlord to assure the most effective operation of the
Building’s heating and air-conditioning and to comply with any
governmental energy-saving rules, laws or regulations of which Tenant has
actual notice.

 

13            Landlord
reserves the right, exercisable without notice and without liability to Tenant,
to change the name and street address of the Building; provided, however, that
if such change is not mandated by government or quasi-government
authority, Landlord shall pay the reasonable costs (not to exceed $10,000)
for printing of new Tenant business cards and stationary to reflect such
change of address.

 

14            Landlord
reserves the right to exclude from the Building between the hours of 6 p.m. and 7:30 a.m.
the following day, or such other hours as may be established from time to time
by Landlord and on Sundays and legal holidays, any person unless that
person is known to the person or employee in charge of the Building
and has a pass or is properly identified. 
Tenant shall be responsible for all persons for whom it requests
passes and shall be liable to Landlord for all acts of such persons.  Landlord shall initially provide Tenant forty
(40) Building access keycards for after hours access.  Thereafter, Tenant shall pay all costs for lost
or replacement cards.  Landlord shall
not be liable for damages for any error with regard to the admission
to or exclusion from the Building of any person.  Landlord reserves the right to prevent access
to the Building in case of invasion, mob, riot, public excitement or
other commotion by closing the doors or by other appropriate action.

 

15            Tenant shall
close and lock the doors of its Premises and entirely shut off all
water faucets or other water apparatus, and electricity, gas or air
outlets before Tenant and its employees leave the Premises.  Tenant shall be responsible for any damage or
injuries sustained by other tenants or occupants of the Building or by
Landlord for noncompliance with this rule.

 

2

 

16            The toilet
rooms, toilets, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed
and no foreign substance of any kind whatsoever shall be deposited in
them.  The expenses of any breakage stoppage or
damage resulting from the violation of this rule shall be bore by
Tenant if it or its employees or invitees shall have caused it.

 

17            Tenant shall
not sell, or permit the sale at retail, of newspapers, magazines,
periodicals, theater tickets or any other goods or merchandise to the
general public in or on the Premises.  Tenant Shall not make any
room-to-room solicitation of business from other tenants in
the Building.  Tenant shall not use
the Premises for any business or activity other than that
specifically provided for in the Lease.

 

18            Tenant shall
not install any radio or television antenna, loudspeaker or other
device on the roof or exterior walls of the Building.  Tenant shall not interfere with radio or
television broadcasting or reception from or in the Building or elsewhere.  Other than the usual and customary cellular
telephones, Tenant shall not install or utilize any wireless Telecommunication
Facilities, including antenna and satellite receiver dishes within the
Premises or on, in, or about the Building without first obtaining Landlord’s
prior written consent and Landlord at its option may require the
entry of a supplemental agreement with respect to such
construction or installation.  Tenant
shall comply with all instructions for installation and shall pay or shall
cause to be paid the entire cost of such installations.  Application for such facilities shall be made
in the same manner and shall be subject to the same requirements as
specified for Telecommunication Services and Telecommunication Facilities
in the paragraph of the Lease entitled “Utilities”.  Supplemental rules and regulations
may be promulgated by Landlord specifying the form of and information to be
included with the application and establishing procedures, regulations and
controls with respect to the installation and use of such wireless
Telecommunication Facilities.  Subject to
the terms of the Lease, Tenant may install a wireless internal
telecommunications network.

 

19            Landlord
reserves the right to direct electricians as to where and how telephone
and telegraph wires are to be introduced to the Premises.  Tenant shall not cut or bore holes for
wires.  Tenant shall not affix any floor covering to the floor of the
Premises in any manner except as approved by Landlord.  Tenant shall repair any damage resulting from
noncompliance with this rule.

 

20            Tenant shall
not install, maintain or operate upon the Premises any vending
machine without the written consent of Landlord, which consent shall not
be unreasonably withheld if the vending machines are for the sole use
of Tenant’s employees.

 

21            Canvassing,
soliciting and distribution of handbills or any other written material,
and peddling in the Building or Land are prohibited, and Tenant shall cooperate to prevent the same.

 

22            Landlord
reserves the right to exclude or expel from the Building and Land any
person who, in Landlord’s judgment, is intoxicated, under the influence of
liquor or drugs or in violation of any of these Rules and
Regulations.

 

23            Tenant shall
store all of its trash and garbage within the Premises.  Tenant shall not place in any trash
box or receptacle any material which cannot be disposed of in the ordinary
and customary manner of trash and garbage disposal.  All garbage and refuse disposal shall be
made in accordance with directions issued from time to time by
Landlord.

 

24            The Premises
shall not be used for lodging or any improper or immoral or
objectionable purpose.  No cooking
shall be done or permitted by Tenant, except that use by Tenant of Underwriters’
Laboratory approved equipment, including a microwave oven, for brewing coffee,
tea, hot chocolate and similar beverages and for microwave cooking by
Tenant’s employees for their 

 

3

 

own consumption, shall be permitted; provided that,
such equipment and its use is in accordance with all Governmental
Requirements.

 

25            Tenant shall
not use in the Premises or in the public halls of the Building any
hand truck except those equipped with rubber tires and side guards or
such other material-handling equipment as Landlord may approve.  Excluding those permitted under the Americans
with Disabilities Act, Tenant shall not bring any other vehicles of any
kind into the Building.

 

26            Without the
prior written consent of Landlord, Tenant shall not use the name “500
East Pratt” in connection with or in promoting or advertising the business
of Tenant except as Tenant’s address.

 

27            Tenant shall
comply with all safety, fire protection and evacuation procedures and regulations
established by Landlord or any governmental agency.

 

28            Tenant assumes
any and all responsibly, for protecting the Premises from theft,
robbery and pilferage, which includes keeping doors locked and other means
of entry to the Premises closed.

 

29            The
requirements of Tenants will be attended to only upon appropriate application
to the Manager of the Building by an authorized individual.  Employees of Landlord are not required
to perform any work or do anything outside of their regular duties unless
under special instructions from Landlord, and no employee of Landlord is
required to admit Tenant to any space other than the Premises without specific
instructions from Landlord.

 

30            Tenant shall
not park its vehicles in any parking areas designated by Landlord as
areas for parking by visitors to the Building or Land.  Tenant shall not leave vehicles in the
parking areas overnight nor park any vehicles in the Building parking
areas other than automobiles, motorcycles, motor driven or nonmotor driven
bicycles or four-wheeled trucks.

 

31            Landlord may
waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor
of any other person, nor prevent Landlord from thereafter revoking such
waiver and enforcing any such Rules and Regulations against any or all of
the tenants of the Building. 
Landlord shall not waive a Rule or Regulation for the benefit of
Tenant or any other tenant if such waiver would unreasonably interfere
with access to any tenant’s (including Tenant’s) premises or with any tenant’s
(including Tenant’s) quiet enjoyment of its premises.

 

32            These Rules and
Regulations are in addition to, and shall not be construed to in
any way modify or amend, in whole or in part, the covenants and
conditions of any lease of premises in the Building.  If any provision of these Rules and
Regulations conflicts with any provisions of the Lease, the terms of
the Lease shall prevail.

 

33            Landlord
reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for
safety and security, the care and cleanliness of the Building and Land,
the preservation of good order in the Building and the maintenance or
enhancement of the value of the Building as a rental property.  Tenant agrees to abide by all the Rules and
Regulations stated in this exhibit and any additional rules and
regulations which are so made by Landlord.

 

34            Tenant shall be
responsible for the observance of all of the foregoing rules by
Tenant and Tenant’s Agents, customers, guests, Invitees and visitors.

 

4

 

EXHIBIT
F TO LEASE

 

DESCRIPTION OF PERMITTED EXTERIOR SIGNS

 

NONE

 

5

 

EXHIBIT
G TO LEASE

 

SCHEDULE OF CLEANING SERVICES

 

Introductory Note: 
All services set forth in this Exhibit shall only be performed if
and to the extent the applicable surface to be vacuumed, buffed, polished,
swept, mopped, dusted, wiped, washed or otherwise cleaned is exposed and
readily accessible.

 

CLEANING SPECIFICATIONS

 

TENANT SUITES AND COMMON AREAS (including
conference and traning rooms in the Premises)

 

A             Nightly Services:

 

·      Secure
all doors and lights as soon as possible each night.  Doors found locked are to be opened only
during actual cleaning and then re-locked.

 

·      Sweep
or dust mop all resilient and composition floors with treated mops.  Damp mop with germicidal cleaner removing all
spills and water stains.

 

·      Clean
and dust all desks, telephones and office furniture (files, fixtures,
windowsills, etc.) with treated cloths.

 

·      Papers
and folders on desks are not to be disturbed; printers and related peripheral
equipment should not be cleaned.  Unless
otherwise stated in Section 5.7.

 

·      Empty
24” central recycling containers into large carts.  Tenants are responsible for emptying all
desktop recycling bins.

 

·      Empty
all waste paper baskets and other trash containers and replace plastic trash
liners as needed and clean and sanitize as required.  Waste not in cans will not be removed unless
marked “trash.”

 

·      Remove
all trash to dumpsters designated by Owner or Manager.

 

·      Remove
finger prints, dirt smudges, graffiti, etc, from all doors, frames, glass
partitions, windows; light switches, walls, elevator door jambs, call buttons
and elevators.

 

·      Thoroughly
vacuum all carpeted hallways, reception areas, high traffic areas, and desk
areas.

 

·      Return
chairs and wastebaskets to proper positions.

 

·      Clean,
sanitize and polish drinking fountains.

 

·      Stairwells
(North and South) - Dust and/or damp wipe railings.  Sweep landings and treads.

 

·      Dust
and remove debris from all metal door and elevator door thresholds.

 

·      Wipe
clean smudged bright work (brass, stainless).

 

·      Spot
clean all carpets, resilient and composition floors as required.  Where difficult spots are encountered, notify
supervisor and Property Management personnel.

 

·      Service
all walk-off mats as required.

 

·      Dust
all low reach areas including, but not limited to, standard and built-in
furniture, ledges, baseboards, windowsills, door louvers, work station
partitions and chairs.

 

1

 

·      Wipe
all kitchen counters and remove dirt and fingerprints from vertical cabinets.

 

B             Weekly Services:

 

·      Dust
all high reach areas including, but not limited to, picture frames, charts,
graphs, wood paneling, tops of file cabinets, shelving, molding and similar
wall hangings not cleaned nightly.

 

·      Dust
inside of all door jams.

 

·      Detail
vacuum all carpet in offices and public areas. 
Vacuum around doorframes and behind doors.

 

·      Dust/clean
all wood and vinyl baseboards.

 

·      Edge
all carpeted areas.

 

·      Clean
and spray buff all resilient and composition flooring.

 

·      Dust
and spot clean all fire extinguishers and fire extinguisher cabinets.

 

·      Clean
and sanitize all telephone receiver.

 

·      Clean
and leave streak-free all window wall glass, glass partitions or detail.

 

C             Monthly Services:

 

·      Dust
all high reach areas, including but not limited to, tops of door frames,
structural and furniture ledges, air condition diffusers and return grilles and
light fixtures.

 

·      Vacuum
all upholstered furniture and fabric wall covering as needed.

 

·      Dust
window blinds.

 

D             Quarterly Service:

 

·      Wash
all .chair mats using approved cleaning material.

 

·      Strip
and wax all kitchens, supply room and file room resilient and composition
flooring.

 

E              Annual Services:

 

·      Damp
wipe blinds; clean exterior windows twice per year.

 

REST ROOMS

 

One multi-stall rest room per gender, per floor.

 

A             Nightly Services

 

·      Restock
all rest rooms including paper towels, toilet tissue, toilet seat covers, hand
soap, sanitary napkins and tampons as required.

 

·      Wash,
polish and sanitize all mirrors, dispensers, faucets, flush valves and bright
work with non-scratch disinfectant cleaners as approved by Owner.

 

·      Wash
and sanitize all toilets, toilet seats, urinals and sinks with non-scratch
disinfectant cleaner.  Wipe dry all
sinks.

 

·      Remove
stains descale toilets, urinals and sinks as required.

 

·      Mop
all rest room floors with disinfectant, germicidal solution.

 

·      Remove
all rest room trash from building to designated area.

 

2

 

·      Wipe
down dirt spots and water stains on wallcovering and stall partitions.

 

·      Clean
and sanitize floor beneath urinals to prevent urine stains.

 

·      Vacuum
A/C diffusers.

 

B             Weekly Services.

 

·      Dust
all low reach and high reach areas including, but not limited to structural
ledges, mirror tops, partition tops and edges, air conditioning diffusers,
return air grills and light fixtures.

 

·      Wipe
down all tile walls, vinyl covered walls and partitions.  Partitions and walls shall be left in an
unstreaked condition after this work.

 

·      Clean
all doors, jambs, louvers and kick plates.

 

C             Quarterly Services

 

·      Scrub
grout floor

 

GROUND FLOOR, MAIN LOBBY, PUBLIC
CORRIDORS

 

A.            Nightly Services:

 

·      Thoroughly
clean all glass entry doors and side lights (both sides).

 

·      Spot
clean all metal work including hardware, kick plates, cove base and wood baseboard,
drinking .fountains, planters, elevator call button plates, bronze and any
visible hardware.

 

·      Clean
elevator doors.

 

·      Polish
entrance frames - both sides.

 

·      Polish
hardware.

 

·      Spot
clean tenant directory panels.

 

·      The
large planters that are sitting on the floors need to be checked for spots and
cleaned as needed.

 

·      The
mats need to be vacuumed or swept nightly.

 

·      Clean
Ash Urns.

 

·      Thoroughly
clean all door and elevator thresholds of dirt and debris using a wire brush.

 

·      Wash
entire lobby floor and elevator floors. 
Be sure to clean dust and dirt from corners.

 

·      Vacuum
all carpets and spot clean as necessary.

 

B.            Weekly Services:

 

·      Thoroughly
clean all interior metal work (if applicable).

 

·      Machine
polish/buff lobby floor and elevator floors.

 

·      Clean
and polish all vents.

 

·      Dust
and spot clean walls to 8’ high.

 

3

 

C.            Monthly Services

 

·      Strip
and polish lobby and elevator floors.

 

SERVICE AREAS

 

A.            Nightly Services:

 

·      Remove
trash from all areas.

 

·      Maintain
an orderly arrangement of janitorial supplies and paper products in janitorial
area and service sink areas.

 

·      Maintain
an orderly arrangement of all equipment stored in service areas such as mops,
buckets, brooms, vacuum cleaners, scrubbers and like materials.

 

·      Clean
and disinfect service sinks and floors in service areas and janitorial closets.

 

PASSENGER ELEVATORS

 

A.            Nightly Services:

 

·      Thoroughly
vacuum, dean and polish all elevator thresholds.  PLEASE KEEP THE TRACKS CLEAN!

 

·      Spot
clean interior surfaces of cab walls and doors. 
The wood panels should not be wiped down with any cleaner or polish, but
only maintained with a damp clean cloth.

 

·      Thoroughly
clean all metal surfaces with approved products.

 

·      Report
all burned out lights or damage to cleaning supervisor who will report to
Owner.

 

4

 

EXHIBIT
H TO LEASE

 

LETTER OF CREDIT CRITERIA

 

1              The letter of
credit shall be clean, irrevocable and unconditional.

 

2              The letter of
credit shall be in the amount specified in the Lease paragraph captioned “Lease
Security Provisions”.

 

3              The letter of
credit must either (a) be issued by a national bank that is a member of
the New York Clearing House and that has a banking office dedicated to the
administration and payment of letters of credit in New York City,
Washington D.C. or Baltimore, Maryland or (b) if issued by any
bank that is not described in clause (a), be confirmed by a bank described in
clause (a).  The issuing bank must have been assigned by Standard &
Poors. Investor Services a Bank Financial Strength Rating of BBB+, or
better if clause (ii) is applicable, the confirming bank must be assigned
by Standard & Poors Investor Services a Bank Financial Strength Rating
of BBB+, or better.  The identity of the issuing bank and of any
confirming bank shall also be reasonably satisfactory to Landlord.

 

4              The letter of
credit shall have an expiration date no earlier than the first anniversary of
the date of its issuance and shall provide for its automatic renewal from year
to year unless terminated by the issuing bank by notice to Landlord
given not less than sixty (60) days prior to its expiration
date by registered or certified mail. 
The final expiration date of the letter of credit and all renewals of
it shall be no earlier than sixty (60) days following the end of the Lease
Term except as expressly provided otherwise in the Lease.

 

5              The letter of
credit shall be issued in favor of Landlord and shall be effective immediately
on its issuance.

 

6              The letter of
credit may be drawn at the New York City, Washington, D.C., or Baltimore,
Maryland banking office of either the issuer of the letter of credit described
in clause (a) of paragraph 3 or, if clause (b) of
paragraph 3 is applicable, the confirming bank described in clause (a) of such
paragraph 3.  It must allow for draws to
be made at sight on a draft drawn under the letter of credit which,
has been approved as to form by Landlord. 
It must allow for one draw in the whole amount or multiple partial
draws.  The Landlord shall not as a
condition to any draw be required to deliver
any certificate, affidavit or other writing to the issuer expressing the basis
for the draw.

 

7              The letter of
credit shall be transferable.

 

8              The letter of
credit shall be governed by the International Standby Practices 1SP98 published
by the International Chamber of Commerce and the United Nations Convention on
Independent Guarantees and Standby Letters of Credit.  Alternatively, if approved by the Landlord
and if .required by either the issuing bank or the confirming bank,
the Uniform Customs and Practices for Documentary Credits published
by the International Chamber of Commerce may be substituted for the ISP98 to
the extent such Customs and Practices are not inconsistent with the
criteria in this Exhibit H.

 

9              The letter of
credit shall otherwise be in such form and shall be subject to such additional
requirements as Landlord may reasonably require.

 

1Exhibit 10.2

 

INDEMNIFICATION AGREEMENT

 

THIS
INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into
this         day of              ,
200  , by and between Metastorm Inc., a Maryland corporation
(the “Company”), and                                 
(“Indemnitee”).

 

WHEREAS, at
the request of the Company, Indemnitee currently serves as a(n) director/officer
of the Company and may, therefore, be subjected to claims, suits or proceedings
arising as a result of his service; and

 

WHEREAS, as an
inducement to Indemnitee to continue to serve as such director/officer, the
Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee
in connection with any such claims, suits or proceedings, to the fullest extent
permitted by law; and

 

WHEREAS, the
parties by this Agreement desire to set forth their agreement regarding
indemnification and advance of expenses;

 

NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1.               Definitions.
 For purposes of this Agreement:

 

(a)           “Change in Control”
means any of the following events or series of events occurring after the
Effective Date: (i) any “person” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the “Act”)) is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing 50% or more
of the combined voting power of the Company’s then outstanding securities; (ii) there
occurs a proxy contest, or the Company is a party to a merger, consolidation,
sale of assets, plan of liquidation or other reorganization, as a consequence
of which members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors
thereafter; or (iii) during any period of two consecutive years, other
than as a result of an event described in clause (a)(ii) of this Section 1,
individuals who at the beginning of such period constituted the Board of
Directors (including for this purpose any new director whose election or
nomination for election by the Company’s stockholders was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of such period) cease for any reason to constitute at least a
majority of the Board of Directors.

 

(b)           “Corporate Status”
means the status of a person who is or was a director, trustee, officer,
employee or agent of the Company or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise which such
person is or was serving at the request of the Company.

 

(c)           “Disinterested
Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification is sought by Indemnitee.

 

 

(d)           “Effective Date”
means the date set forth in the first paragraph of this Agreement.

 

(e)           “Expenses” shall
include all reasonable attorneys’ fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
and all other disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a Proceeding.

 

(f)            “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced
in matters of corporation law and neither presently is, nor in the past five
years has been, retained to represent: (i) the Company or Indemnitee in
any matter material to either such party, or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Counsel” shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement. If a Change of Control has not occurred, Independent Counsel shall
be selected by the Board of Directors, with the approval of Indemnitee, which
approval will not be unreasonably withheld. If a Change of Control has
occurred, Independent Counsel shall be selected by Indemnitee, with the
approval of the Board of Directors, which approval will not be unreasonably
withheld.

 

(g)           “Proceeding”
includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative hearing
or any other proceeding, whether civil, criminal, administrative or
investigative (including on appeal), except one (i) initiated by an
Indemnitee pursuant to Section 11 of this Agreement to enforce his rights
under this Agreement or (ii) pending or completed on or before the
Effective Date, unless otherwise specifically agreed in writing by the Company
and Indemnitee.

 

Section 2.            Services by Indemnitee.  Indemnitee will serve as a(n) director/officer
of the Company. However, this Agreement shall not impose any obligation on
Indemnitee or the Company to continue Indemnitee’s service to the Company
beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.

 

Section 3.            Indemnification - General.  The Company shall indemnify, and advance
Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise
to the fullest extent permitted by Maryland law in effect on the date hereof
and as amended from time to time; provided, however, that no change in Maryland
law shall have the effect of reducing the benefits available to Indemnitee
hereunder based on Maryland law as in effect on the date hereof. The rights of
Indemnitee provided in this Section 3 shall include, without limitation,
the rights set forth in the other sections of this Agreement, including any
additional indemnification permitted by Section 2-418(g) of the
Maryland General Corporation Law (“MGCL”).

 

2

 

Section 4.            Proceedings Other Than Proceedings by or
in the Right of the Company. Indemnitee shall be entitled to the rights of
indemnification provided in this Section 4 if, by reason of his Corporate
Status, he is, or is threatened to be, made a party to or a witness in any
threatened, pending, or completed Proceeding, other than a Proceeding by or in
the right of the Company. Pursuant to this Section 4, Indemnitee shall be
indemnified against all judgments, penalties, fines and amounts paid in
settlement and all Expenses actually and reasonably incurred by him or on his
behalf in connection with a Proceeding by reason of his Corporate Status unless
 it is established that (i) the act
or omission of Indemnitee was material to the matter giving rise to the
Proceeding and (a) was committed in bad faith or (b) was the result
of active and deliberate dishonesty, (ii) Indemnitee actually received an
improper personal benefit in money, property or services, or (iii) in the
case of any criminal Proceeding, Indemnitee had reasonable cause to believe
that his conduct was unlawful.

 

Section 5.            Proceedings by or in the Right of the
Company. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 5 if, by reason of his Corporate Status, he is,
or is threatened to be, made a party to or a witness in any threatened, pending
or completed Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 5, Indemnitee shall be
indemnified against all amounts paid in settlement and all Expenses actually
and reasonably incurred by him or on his behalf in connection with such
Proceeding unless it is established that (i) the act or omission of
Indemnitee was material to the matter giving rise to such a Proceeding and (a) was
committed in bad faith or (b) was the result of active and deliberate
dishonesty or (ii) Indemnitee actually received an improper personal
benefit in money, property or services.

 

Section 6.            Court-Ordered Indemnification.
Notwithstanding any other provision of this Agreement, a court of appropriate
jurisdiction, upon application of Indemnitee and such notice as the court shall
require, may order indemnification in the following circumstances:

 

(a)            if
it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(l) of
the MGCL, the court shall order indemnification, in which case Indemnitee shall
be entitled to recover the expenses of securing such reimbursement; or

 

(b)            if
it determines that Indemnitee is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not
Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of
the MGCL or (ii) has been adjudged liable for receipt of an improper personal
benefit under Section 2-418(c) of the MGCL, the court may order such
indemnification as the court shall deem proper. However, indemnification with
respect to any Proceeding by or in the right of the Company or in which
liability shall have been adjudged in the circumstances described in Section 2-418(c) of
the MGCL shall be limited to Expenses.

 

Section 7.            Indemnification for Expenses of a Party
Who is Wholly or Partly Successful. Notwithstanding any other provision of
this Agreement, and without limiting any such provision, to the extent that
Indemnitee is, by reason of his Corporate Status, made a party to and is
successful, on the merits or otherwise, in the defense of any Proceeding, he
shall be indemnified for all Expenses actually and reasonably incurred by him
or on his behalf in 

 

3

 

connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is successful, on
the merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7
for all Expenses actually and reasonably incurred by him or on his behalf in
connection with each successfully resolved claim, issue or matter. For purposes
of this Section and without limitation, the termination of any claim,
issue or matter in such a Proceeding by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue or matter.

 

Section 8.            Advance of Expenses. The Company
shall advance all reasonable Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding to which Indemnitee is, or is threatened to be,
made a party or a witness, within ten days after the receipt by the Company of
a statement or statements from Indemnitee requesting such advance or advances from
time to time, whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by a written
affirmation by Indemnitee of Indemnitee’s good faith belief that the standard
of conduct necessary for indemnification by the Company as authorized by law
and by this Agreement has been met and a written undertaking by or on behalf of
Indemnitee, in substantially the form attached hereto as Exhibit A or in
such form as may be required under applicable law as in effect at the time of
the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee
relating to claims, issues or matters in the Proceeding as to which it shall
ultimately be established that the standard of conduct has not been met and
which have not been successfully resolved as described in Section 7.  To the extent that Expenses advanced to
Indemnitee do not relate to a specific claim, issue or matter in the
Proceeding, such Expenses shall be allocated on a reasonable and proportionate
basis. The undertaking required by this Section 8 shall be an unlimited
general obligation by or on behalf of Indemnitee and shall be accepted without
reference to Indemnitee’s financial ability to repay such advanced Expenses and
without any requirement to post security therefor.

 

Section 9.            Procedure for Determination of
Entitlement to Indemnification.

 

(a)            To
obtain indemnification under this Agreement, Indemnitee shall submit to the
Company a written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt of
such a request for indemnification, advise the Board of Directors in writing
that Indemnitee has requested indemnification.

 

(b)            Upon
written request by Indemnitee for indemnification pursuant to the first sentence
of Section 9(a) hereof, a determination, if required by applicable
law, with respect to Indemnitee’s entitlement thereto shall promptly be made in
the specific case: (i) if a Change in Control shall have occurred, by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to Indemnitee; or (ii) if a Change of Control
shall not have occurred, (A) by the Board of Directors (or a duly
authorized committee thereof) by a majority vote of a quorum consisting of
Disinterested Directors (as herein defined), or (B) if a quorum of the
Board of Directors consisting of Disinterested Directors is not obtainable or,
even 

 

4

 

if obtainable, such quorum of
Disinterested Directors so directs, by Independent Counsel in a written opinion
to the Board of Directors, a copy of which shall be delivered to Indemnitee, or

 

(c)            if
so directed by a majority of the members of the Board of Directors, by the
stockholders of the Company; and, if it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within ten
days after such determination. Indemnitee shall cooperate with the person,
persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which
is not privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to such determination.
Any costs or Expenses (including  reasonable
attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination shall be borne by
the Company (irrespective of the determination as to Indemnitee’s entitlement
to indemnification) and the Company hereby agrees to indemnify and hold
Indemnitee harmless therefrom.

 

Section 10.          Presumptions and Effect of Certain
Proceedings.

 

(a)          In
making a determination with respect to entitlement to indemnification
hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of
this Agreement, and the Company shall have the burden of proof to overcome that
presumption in connection with the making of any determination contrary to that
presumption.

 

(b)          The
termination of any Proceeding by judgment, order, settlement, conviction, a
plea of nolo contendere or its equivalent, or an entry of an order of probation
prior to judgment, does not create a presumption that Indemnitee did not meet
the requisite standard of conduct described herein for indemnification.

 

Section 11.          Remedies of Indemnitee.

 

(a)          If
(i) a determination is made pursuant to Section 9 of this Agreement
that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance
of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no
determination of entitlement to indemnification shall have been made pursuant
to Section 9(b) of this Agreement within 90 days after receipt by the
Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 7 of this Agreement within
ten days after receipt by the Company of a written request therefor, or (v) payment
of indemnification is not made within ten days after a determination has been
made that Indemnitee is entitled to indemnification, Indemnitee shall be
entitled to an adjudication in an appropriate court of the State of Maryland,
or in any other court of competent jurisdiction, of his entitlement to such
indemnification or advance of Expenses. Alternatively, Indemnitee, at his
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the commercial Arbitration Rules of the American Arbitration
Association. Indemnitee shall commence such proceeding seeking an adjudication
or an award in arbitration within 180 days following the date on which
Indemnitee 

 

5

 

first has the right to commence
such proceeding pursuant to this Section 11 (a); provided, however, that
the foregoing clause shall not apply in respect of a proceeding brought by
Indemnitee to enforce his rights under Section 7 of this Agreement.

 

(b)          In
any judicial proceeding or arbitration commenced pursuant to this Section 11
the Company shall have the burden of proving that Indemnitee is not entitled to
indemnification or advance of Expenses, as the case may be.

 

(c)          If
a determination shall have been made pursuant to Section 9(b) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 11, absent a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification.

 

(d)          In
the event that Indemnitee, pursuant to this Section 11, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee shall be entitled to
recover from the Company, and shall be indemnified by the Company for, any and
all Expenses actually and reasonably incurred by him in such judicial
adjudication or arbitration. If it shall be determined in such judicial adjudication
or arbitration that Indemnitee is entitled to receive part but not all of the
indemnification or advance of Expenses sought, the Expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall
be appropriately prorated.

 

Section 12.          Defense of the Underlying Proceeding.

 

(a)          Indemnitee
shall notify the Company promptly upon being served with or receiving any
summons, citation, subpoena, complaint, indictment, information, notice,
request or other document relating to any Proceeding which may result in the
right to indemnification or the advance of Expenses hereunder; provided,
however, that the failure to give any such notice shall not disqualify
Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee,
to indemnification or the advance of Expenses under this Agreement unless the
Company’s ability to defend in such Proceeding or to obtain proceeds under any
insurance policy is materially and adversely prejudiced thereby, and then only
to the extent the Company is thereby actually so prejudiced.

 

(b)          If,
at the time of the receipt by the Company of a notice of any summons, citation,
subpoena, complaint, indictment, information, notice, request or other document
relating to any Proceeding pursuant to Section 12(a) hereof, the
Company has liability insurance in effect which may cover the Proceeding, the
Company shall give prompt notice of the commencement of the Proceeding to the
insurers in accordance with the procedures set forth in the respective
policies.  The Company shall thereafter
take all necessary or desirable action to cause the insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of the Proceeding in
accordance with the terms of the policies.

 

(c)          Subject
to the provisions of the last sentence of this Section 12(c) and of Section 12(d) below,
the Company shall have the right to defend Indemnitee in any Proceeding 

 

6

 

which may give rise to
indemnification hereunder; provided, however, that the Company shall notify
Indemnitee of any such decision to defend within 15 calendar days following
receipt of notice of any such Proceeding under Section 12(a) above.
The Company shall not, without the prior written consent of Indemnitee, which
shall not be unreasonably withheld or delayed, consent to the entry of any
judgment against Indemnitee or enter into any settlement or compromise which (i) includes
an admission of fault of Indemnitee or (ii) does not include, as an
unconditional term thereof, the full release of Indemnitee from all liability
in respect of such Proceeding, which release shall be in form and substance
reasonably satisfactory to Indemnitee. This Section 12(c) shall not
apply to a Proceeding, brought by Indemnitee under Section 11 above or Section 18
below.

 

(d)          Notwithstanding
the provisions of Section 12(c) above, if in a Proceeding to which
Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee
reasonably concludes, based upon an opinion of counsel approved by the Company,
which approval shall not be unreasonably withheld, that he may have separate
defenses or counterclaims to assert with respect to any issue which may not be
consistent with other defendants in such Proceeding, (ii) Indemnitee
reasonably concludes, based upon an opinion of counsel approved by the Company,
which approval shall not be unreasonably withheld, that an actual or apparent
conflict of interest or potential conflict of interest exists between
Indemnitee and the Company, or (iii) if the Company fails to assume the
defense of such Proceeding in a timely manner, Indemnitee shall be entitled to
be represented by separate legal counsel of Indemnitee’s choice, subject to the
prior approval of the Company, which shall not be unreasonably withheld, at the
expense of the Company. In addition, if the Company fails to comply with any of
its obligations under this Agreement or in the event that the Company or any
other person takes any action to declare this Agreement void or unenforceable,
or institutes any Proceeding to deny or to recover from Indemnitee the benefits
intended to be provided to Indemnitee hereunder, Indemnitee shall have the
right to retain counsel of Indemnitee’s choice, subject to the prior approval
of the Company, which shall not be unreasonably withheld, at the expense of the
Company (subject to Section 1l(d)), to represent Indemnitee in connection
with any such matter.

 

Section 13.          Non-Exclusivity; Survival of Rights;
Insurance; Subrogation.

 

(a)          The
rights of indemnification and advance of Expenses as provided by this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee may at
any time be entitled under applicable law, the Charter or Bylaws of the
Company, any agreement or a resolution of the stockholders entitled to vote
generally in the election of directors or of the Board of Directors, or
otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal.

 

(b)          In
the event of any payment under this Agreement, the Company shall be subrogated
to the extent of such payment to all of the rights of recovery of Indemnitee,
who shall execute all papers required and take all action necessary to secure
such rights, including 

 

7

 

execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.

 

(c)          The
Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.

 

 

Section 14.          Insurance.  The Company will use its reasonable best
efforts to acquire directors and officers liability insurance, on terms and
conditions deemed appropriate by the Board of Directors of the Company, with
the advice of counsel, covering Indemnitee or any claim made against Indemnitee
for service as a director or officer of the Company and covering the Company
for any indemnification or advance of expenses made by the Company to
Indemnitee for any claims made against Indemnitee for service as a director or
officer of the Company. Without in any way limiting any other obligation under
this Agreement, the Company shall indemnify Indemnitee for any payment by
Indemnitee arising out of the amount of any deductible or retention and the
amount of any excess of the aggregate of all judgments, penalties, fines,
settlements and reasonable expenses incurred by Indemnitee in connection with a
Proceeding over the coverage of any insurance referred to in the previous
sentence.

 

Section 15.          Indemnification for Expenses of a Witness.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding,
whether instituted by the Company or any other party, and to which Indemnitee
is not a party, he shall be advanced all reasonable Expenses and indemnified
against all Expenses actually and reasonably incurred by him or on his behalf
in connection therewith.

 

Section 16.          Duration of Agreement; Binding Effect.

 

(a)          This
Agreement shall continue until and terminate ten years after the date that
Indemnitee shall have ceased to serve as a director, trustee, officer,
employee, or agent of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which Indemnitee
served at the request of the Company; provided, that the rights of Indemnitee
hereunder shall continue until the final termination of any Proceeding then
pending in respect of which Indemnitee is granted rights of indemnification or
advance of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 11 of this Agreement relating thereto.

 

(b)          The
indemnification and advance of Expenses provided by, or granted pursuant to,
this Agreement shall be binding upon and be enforceable by the parties hereto
and their respective successors and assigns (including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or substantially
all of the business or assets of the Company), shall continue as to an
Indemnitee who has ceased to be a director, trustee, officer, employee or agent
of the Company or of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person is or was serving
at the request of the Company, and shall inure to the benefit of Indemnitee and
his or her spouse, assigns, heirs, devisees, executors and administrators and
other legal representatives.

 

8

 

(c)          The
Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation or otherwise) to all, substantially all or a
substantial part, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to Indemnitee, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken place.

 

Section 17.          Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of
any section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (b) to the
fullest extent possible, the provisions of this Agreement (including, without
limitation, each portion of any section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested thereby.

 

Section 18.          Exception to Right of Indemnification or
Advance of Expenses. Notwithstanding any other provision of this Agreement,
Indemnitee shall not be entitled to indemnification or advance of Expenses
under this Agreement with respect to any Proceeding brought by Indemnitee,
unless (a) the Proceeding is brought to enforce indemnification under this
Agreement or otherwise or (b) the Company’s Bylaws, as amended, the
Charter, a resolution of the stockholders entitled to vote generally in the
election of directors or of the Board of Directors or an agreement approved by
the Board of Directors to which the Company is a party expressly provide
otherwise.

 

Section 19.          Identical Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement. One such
counterpart signed by the party against whom enforceability is sought shall be
sufficient to evidence the existence of this Agreement.

 

Section 20.          Headings.  The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to constitute
part of this Agreement or to affect the construction thereof.

 

Section 21.          Modification and Waiver.  No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.

 

Section 22.          Notices.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by 

 

9

 

hand and receipted for by the
party to whom said notice or other communication shall have been directed, or (ii) mailed
by certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

 

	
   

  	
   

  	
  (a)

  	
  If to
  Indemnitee, to: The address set forth below.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  If to the
  Company to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Metastorm, Inc.

  
	
   

  	
   

  	
   

  	
  500 East
  Pratt Street

  
	
   

  	
   

  	
   

  	
  Suite 1250

  
	
   

  	
   

  	
   

  	
  Baltimore,
  Maryland 21202

  
	
   

  	
   

  	
   

  	
  Attn:
  General Counsel

  

 

 

or to such other address as may have been furnished to Indemnitee by
the Company or to the Company by Indemnitee, as the case may be.

 

Section 23.             Governing Law.
 The parties agree that this Agreement
shall be governed by, and construed and enforced in accordance with, the laws
of the State of Maryland, without regard to its conflicts of laws rules.

 

Section 24.             Miscellaneous.
 Use of the masculine pronoun shall be
deemed to include usage of the feminine pronoun where appropriate.

 

IN WITNESS WHEREOF, the parties
hereto have executed this Indemnification Agreement as of the date first above
written.

 

	
   

  	
  METASTORM
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
				

 

	
   

  	
  Name: 

  	
  Robert
  Farrell

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AGREED TO
  AND ACCEPTED:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
					

 

10

 

	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

11

 

EXHIBIT A

 

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED

 

The Board of Directors of
Metastorm, Inc.

 

Re: Undertaking to Repay
Expenses Advanced

 

Ladies and Gentlemen:

 

This undertaking
is being provided pursuant to that certain Indemnification Agreement dated the         
day of             ,
200   by and between Metastorm, Inc. (the “Company”)
and the undersigned Indemnitee (the “Indemnification Agreement”),
pursuant to which I am entitled to advance of expenses in connection with
[Description of Proceeding] (the “Proceeding”).

 

Terms used
herein and not otherwise defined shall have the meanings specified in the
Indemnification Agreement.

 

I am subject
to the Proceeding by reason of my Corporate Status or by reason of alleged
actions or omissions by me in such capacity. I hereby affirm that at all times,
insofar as I was involved as a(n) director/officer of the Company, in any
of the facts or events giving rise to the Proceeding, I (1) acted in good
faith and honestly, (2) did not receive any improper personal benefit in
money, property or services and (3) in the case of any criminal
proceeding, had no reasonable cause to believe that any act or omission by me
was unlawful.

 

In
consideration of the advance of expenses by the Company for reasonable attorney’s
fees and related expenses incurred by me in connection with the Proceeding (the
“Advanced Expenses”), I hereby agree that if, in connection with the
Proceeding, it is established that (1) an act or omission by me was
material to the matter giving rise to the Proceeding and (a) was committed
in bad faith or (b) was the result of active and deliberate dishonesty or (2) I
actually received an improper personal benefit in money, property or services
or (3) in the case of any criminal proceeding, I had reasonable cause to
believe that the act or omission was unlawful, then I shall promptly reimburse
the portion of the Advanced Expenses relating to the claims, issues or matters
in the Proceeding as to which the foregoing findings have been established and
which have not been successfully resolved as described in Section 7 of the
Indemnification Agreement. To the extent that Advanced Expenses do not relate
to a specific claim, issue or matter in the Proceeding, I agree that such
Expenses shall be allocated on a reasonable and proportionate basis.

 

IN WITNESS
WHEREOF, I have executed this Affirmation and Undertaking on this       
day of                     ,
200    .

 

 

	
  WITNESS:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (SEAL)

  

 

12

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