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SECTION 1:		BASIC LEASE PROVISIONS		1
	1.1	Date and Parties		1
	1.2	Premises		1
	1.3	Use		1
	1.4	Acceptance “As Is”; Improvements		1
	1.5	Term		1
	1.6	Option to Extend		2
	1.7	Option to Terminate		2
SECTION 2:		RENT AND SECURITY		3
	2.1	Rent		3
	2.2	Additional Rent		3
	2.3	Lease Taxes		10
	2.4	Personal Property Tax		10
	2.5	Security Deposit		10
SECTION 3:		AFFIRMATIVE OBLIGATIONS		11
	3.1	Compliance with Laws		11
	3.2	Services and Utilities		11
	3.3	Repairs and Maintenance		14
SECTION 4:		NEGATIVE OBLIGATIONS		15
	4.1	Alterations		15
	4.2	Assignment and Subleasing		16
SECTION 5:		INSURANCE AND LIABILITY		18
	5.1	Insurance		18
	5.2	Indemnification		20


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	5.3	Limitation of Landlord’s Liability		20
SECTION 6:		LOSS OF PREMISES		21
	6.1	Damages		21
	6.2	Condemnation		22
SECTION 7:		DEFAULT		23
	7.1	Tenant’s Default		23
	7.2	Landlord’s Remedies		24
	7.3	Landlord’s Default		26
	7.4	Survival		26
SECTION 8:		NONDISTURBANCE		26
	8.1	Subordination		26
	8.2	Estoppel Certificate		27
	8.3	Quiet Enjoyment		27
SECTION 9:		LANDLORD’S RIGHTS		28
	9.1	Rules		28
	9.2	Mechanics’ Liens		28
	9.3	Right to Enter		28
	9.4	Holdover		29
	9.5	Signs		29
SECTION 10:		DISPUTES		30
	10.1	Arbitration		30
SECTION 11:		MISCELLANEOUS		31
	11.1	Broker’s Warranty		31
	11.2	Parking Areas		31


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11.3	Attorneys’ Fees		31
11.4	Notices		32
11.5	Partial Invalidity		32
11.6	Waiver		32
11.7	Time of the Essence		32
11.8	Binding on Successors		33
11.9	Governing Law		33
11.10	Insurance Increase		33
11.11	Lease not an Offer		33
11.12	Recording		33
11.13	Survival of Remedies		33
11.14	Authority of Parties		33
11.15	Business Days		33
11.16	Entire Agreement		33
11.17	Waiver of Jury Trial		33
11.18	Definition of Lease		33

iii

SECTION 1:
BASIC LEASE PROVISIONS

1.1 Date and Parties. This Office Lease (this “Lease”) is made the 22nd day of November, 1999 between 1899 L STREET LLC, a Delaware limited liability company (“Landlord”) and BLACKBOARD, Inc., a Delaware corporation (“Tenant”).

1.2 Premises. Landlord hereby leases to Tenant the entire fourth and fifth floors (the “Premises”) in the building (the “Building”) located at 1899 L Street, NW, Washington, DC; the Premises are shown on the floor plans attached to this Lease as Exhibits A and A-1. The parties hereto agree that for the purposes of this Lease the Building contains 131,395 rentable square feet and the Premises contains 23,540 rentable square feet, both measurements in accordance with the Washington, D.C. Board of Realtors Standard Method of Measurement in effect on the date of execution of this Lease.

Tenant and its agents, employees, and invitees shall have the non-exclusive right with others designated by Landlord to the use of the common areas in the Building and of the land (the “Land”) on which the Building and related facilities are located (which Land is legally described in Exhibit B attached to this Lease) for the common areas’ intended and normal purpose. Common areas include elevators, sidewalks, parking facilities (subject to paragraph 11.2), driveways, hallways, stairways, bathrooms (other than those bathrooms, if any, that are within a tenant’s premises and that were not shown on the original plans for the Building), common entrances, lobby, and other similar public areas and access ways. Landlord may change the common areas if the changes do not materially or unreasonably interfere with Tenant’s access to or use of the Premises.

1.3 Use. Tenant shall use the Premises for general office purposes only. Tenant shall not create a nuisance or use the Premises for any immoral or illegal purpose or in a manner not in keeping with the general character of the Building or with the Building’s operation as a first-class office facility.

1.4 Acceptance “As Is”; Improvements. Except as set forth herein and in the following sentence, Tenant agrees to accept the Premises in their current “as is” condition, but shall be permitted to improve the Premises to suit the particular needs of Tenant in accordance with the Work Letter attached hereto as Exhibit C (the “Tenant Improvements”). Landlord shall renovate the men’s and women’s restrooms on the fourth and fifth floors, commencing work by February 29, 2000 in accordance with a mutually agreeable scope of work not to exceed $5,000 per restroom or $20,000 in the aggregate.

1.5 Term. The term of this Lease (the “Term”) begins (the “Commencement Date”) on the date of this Lease and, subject to Paragraphs 1.6 and 1.7 below, ends (the “Expiration Date”) on March 31, 2005, unless terminated earlier under this Lease. Tenant shall have the right to occupy the Premises from and after the Commencement Date, so long as Tenant shall have obtained any and all permits and approvals, such as a certificate of occupancy, necessary to permit Tenant to legally occupy the Premises.

1.6 Option to Extend. Tenant, at its option, may extend the Term of this Lease for one further period (“Extended Term”) of five (5) years, commencing on April 1, 2005 and expiring on March 31, 2010. The option for such extension may be exercised by Tenant by giving written notice thereof to Landlord not earlier than October 1, 2003, nor later than March 31, 2004, provided that at the time of such notice and on the Expiration Date, Tenant shall not be in Default (as defined in Section 7.1) in the performance of any of the terms and provisions of this Lease beyond any applicable grace periods. The Extended Term shall be on like terms, covenants, agreements, provisions, conditions and limitations as are contained herein, except for the provisions hereof that are by their terms applicable exclusively during the original Term (including this extension option) and except further that the rental payable by Tenant during the Extended Term shall be equal to the fair market rental of the Premises as of the date of Tenant’s exercise of the extension option. Landlord and Tenant shall negotiate in good faith to agree upon such fair market rental, but if the parties are not able to agree within 30 days after Tenant’s exercise of the extension option (the “Negotiation Period”), the fair market rental of the Premises shall be conclusively determined as follows: Within ten (10) business days after the end of the Negotiation Period, Landlord and Tenant shall each, by written notice to the other party, (1) designate a licensed real estate broker, having substantial experience during the prior five years in leasing office space in Washington D.C. (a “Qualified Broker”) and (2) set forth such party’s opinion (the “Landlord’s Opinion” or the “Tenant’s Opinion”) as to the fair market rental of the Premises. If either party fails to timely designate a Qualified Broker, the one Qualified Broker who has been designated shall select either the Landlord’s Opinion or the Tenant’s Opinion as the fair market rental of the Premises. If two Qualified Brokers have been timely designated, those two Qualified Brokers shall, within ten (10) days after the designation of the later of the two, designate a third Qualified Broker, and thereafter the three Qualified Brokers shall, by majority vote, select either the Landlord’s Opinion or the Tenant’s Opinion as the fair market rental of the Premises (with no right to make any other determination). The fair market rental of the Premises determined pursuant to this Section 1.6 shall be binding upon both Landlord and Tenant.

1.7 Option to Terminate. Tenant, at its option, may terminate this Lease as of March 31, 2003 (“Termination Date”) by giving written notice of such termination (a “Termination Notice”) to Landlord not earlier than February 1, 2002, nor later than March 31, 2002, which notice must be accompanied by a Termination Fee equal to (a) Four Hundred Forty Thousand Dollars ($440,000.00), plus (b) an amount equivalent to five (5) months of Rent (including Additional Rent), at the rate then payable by Tenant, for all Expansion Space and First Refusal Space that Tenant shall have committed to lease prior to giving such Termination Notice. If Tenant timely provides the Termination Notice, accompanied by the Termination Fee, Tenant shall have no further rights to lease any additional Expansion Space or First Refusal Space, and all of Tenant’s rights under this Lease shall cease and terminate on the Termination Date. If Tenant fails to give a Termination Notice, accompanied by the Termination Fee, on or before March 31, 2002, Tenant shall have no further rights to terminate this Lease pursuant to this Paragraph 1.7.

SECTION 2:
RENT AND SECURITY

2.1 Rent. No Rent shall be payable hereunder for the period from the Commencement Date to March 31, 2000 (the “Rent Commencement Date”). Beginning on April 1, 2000, Tenant shall pay to Landlord Rent as provided in the attached Schedule of Rents. The Rent shall be paid: (i) without advance notice, demand, offset, or deduction; (ii) by the first day of each month during the Term; and (iii) to Landlord c/o Spaulding & Slye/Colliers International, P. O. Box 4904, Boston, MA 02211, or as Landlord may otherwise specify in writing to Tenant.

If Tenant fails to pay part or all of the Rent or Additional Rent (paragraph 2.2(d)) within five (5) days after the date same was due, Tenant shall also pay a late charge equal to five percent (5%) of the unpaid Rent or Additional Rent; provided, however, that no late charge shall be imposed the first time during each calendar year when part or all of the Rent or Additional Rent is not paid within five (5) days after the date same was due if such late Rent or Additional Rent is paid within five (5) days after Tenant receives written notice of such late payment from Landlord.

2.2 Additional Rent.

(a) Definitions.

(i) Base Operating Expenses: means Operating Expenses for the 2000 calendar year (the “Base Year”), as adjusted under paragraph 2.2(b).

(ii) Base Real Estate Taxes: means the amount of Real Estate Taxes incurred with respect to the Property as defined in paragraph 2.2(a)(iv) for the 2000 calendar year.

(iii) Tenant’s pro rata share: means the percentage obtained by dividing the rentable square footage of the Premises, as specified in paragraph 1.2 (numerator), by the rentable square footage of the Building, as specified in paragraph 1.2 (denominator), and expressing the fraction as a percentage, rounded up to the nearest one-hundredth (1/100th) of one percent (0.01%). Subject to any expansion of the Premises or recalculation of rentable square footage pursuant to paragraph 1.2, Tenant’s pro rata share shall be 17.85%.

(iv) Property: means the Building, including for purposes of this definition parking and all other improvements, fixtures and facilities appurtenant thereto, the Building’s equipment and systems, and the Land.

(v) Real Estate Taxes: means (1) real property taxes and currently due installments of assessments, special or otherwise, imposed upon the Property and paid or payable (provided that Tenant shall have no obligation to pay its share of any Real Estate Taxes more than thirty (30) days before the same are payable by Landlord) by Landlord, and (2)

reasonable legal and other fees, costs and disbursements incurred for proceedings to contest, determine or reduce Real Estate Taxes. Notwithstanding the foregoing, Real Estate Taxes exclude: (1) federal, state or local income taxes, (2) franchise, gift, transfer, excise, capital stock, estate, succession or inheritance taxes, and (3) penalties or interest for late payment of Real Estate Taxes.

(vi) Operating Expenses:

(A) means Landlord’s reasonable expenses that are attributable to the operation, maintenance, management, and repair of the Property, including, but not limited to:

(1) salaries, bonuses, and other compensation (including, but not limited to, payroll taxes, vacation, holiday, and other paid absences, welfare, retirement, and other fringe benefits) that is paid to employees, independent contractors, or agents of Landlord or its agents engaged in the operation, repair, management, or maintenance of the Property;

(2) the purchase, cleaning, replacement, and pressing of uniforms of employees described in paragraph 2.2(a)(vi)(A)(1);

(3) repairs and maintenance of the Property and the cost of supplies, tools, materials, and equipment for Property repairs and maintenance that, under generally accepted accounting principles consistently applied, would not be capitalized;

(4) premiums and other charges incurred by Landlord for insurance on or in respect to the Property (including, without limitation, that which is described in paragraph 5.1) and for employees described in paragraph 2.2(a)(vi)(A)(1);

(5) costs incurred for inspection and servicing, including all outside maintenance contracts necessary or proper for the maintenance of the Property, such as janitorial and window cleaning, rubbish removal, snow removal, exterminating, water treatment, elevator, electrical, plumbing and mechanical equipment, and the cost of materials, tools, supplies and equipment used for inspection and servicing;

(6) costs incurred for electricity, water, gas, fuel or other utilities;

(7) payroll taxes, federal taxes, state and local unemployment taxes and social security taxes paid for the employees described in paragraph 2.2(a)(vi)(A)(1);

(8) sales, use and excise taxes on goods and services purchased by Landlord;

(9) personal property taxes imposed upon Landlord with respect to the personal property used in connection with the Property or its operation, excluding the personal property taxes payable by Tenant under paragraph 2.3;

(10) license, permit and inspection fees;

(11) auditor’s fees for public accounting;

(12) legal fees, costs and disbursements but excluding those (a) relating to disputes with tenants, (b)based upon Landlord’s negligence or other tortious conduct, (c) relating to enforcing any leases except for enforcing lease provisions for the benefit of the Building tenants generally, or (d) relating to the defense of Landlord’s title to, or interest in, the Property;

(13) management fees, at a rate not to exceed that charged in other comparable buildings;

(14) the annual amortization over its useful life on a straight-line basis of the costs of any capital improvements made by Landlord that are required by laws, rules, regulations or directives of any governmental authorities;

(15) the annual amortization over its useful life on a straight-line basis of the costs of any equipment or capital improvements made by Landlord as a labor-saving measure or to accomplish other savings in operating, repairing, managing or maintaining the Property; and

(16) other costs reasonably necessary to operate, repair, manage and maintain the Property in a first class manner and condition.

(B) Notwithstanding paragraph 2.2(a)(vi)(A), Operating Expenses exclude:

(1) Real Estate Taxes as defined in paragraph 2.2(a)(v);

(2) leasing commissions, costs and other expenses (including legal fees) incurred for leasing, renovating or improving space for new tenants;

(3) costs (including permit, license and inspection fees) incurred in renovating, improving, decorating, painting or redecorating vacant space or space for new tenants;

(4) Landlord’s cost of electricity or other service sold to tenants for which Landlord is to be reimbursed as a charge over the Rent and Additional Rent payable under the lease with that tenant;

(5) costs incurred by Landlord for capital improvements and alterations and replacements that are considered capital improvements under generally accepted accounting principles consistently applied, except that the annual amortization of these costs shall be included to the extent expressly permitted in paragraphs 2.2(a)(vi)(A)(15) and (16);

(6) depreciation and amortization on the Building except as may be expressly permitted elsewhere in the Lease;

(7) overhead and profit paid to subsidiaries or affiliates of Landlord for management or other services on or to the Property or for supplies or other materials, to the extent that the costs of the services, supplies or materials exceed the competitive costs of the services, supplies or materials had they been provided by someone other than a subsidiary or affiliate;

(8) interest on debt or amortization payments on mortgages or deeds of trust or any other debt for borrowed money;

(9) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment ordinarily considered to be of a capital nature, except equipment not affixed to the Building that is used in providing janitorial services;

(10) items and services for which Tenant reimburses Landlord or pays third parties;

(11) except for a reasonable deductible amount (if any), costs of repairs or other work needed because of fire, windstorm or other casualty or cause insured against by Landlord or to the extent Landlord’s Insurance required under Section 5

would have provided insurance, whichever is the greater coverage;

(12) any fines or penalties incurred because Landlord violated any law;

(13) costs incurred to test, survey, cleanup, contain, abate, remove or otherwise remedy hazardous wastes or asbestos-containing materials from the Property unless the wastes or asbestos-containing materials were in or on the Property because of Tenant’s negligence or intentional acts;

(14) Legal fees incurred as a result of disputes with other tenants in the Building; and

(15) Costs incurred in connection with the sale, financing, refinancing, mortgaging, selling or change of ownership of the Building.

(vii) Adjustment Period: means each calendar year occurring during the Term beginning with calendar year 2001, which shall be the first Adjustment Period.

(b) Adjustments. Operating Expenses as defined in paragraph 2.2(a)(vi) shall be adjusted as follows:

(i) Gross-Up. If average occupancy during the Base Year or any Adjustment Period is less than 95 percent, then Operating Expenses for that Base Year or Adjustment Period shall be “grossed up” to that amount of Operating Expenses that, using reasonable projections, would normally be expected to have been incurred during the Base Year or Adjustment Period if the Building was 95 percent occupied during the Base Year or Adjustment Period, as determined under generally accepted accounting principles consistently applied. Only those component expenses that are affected by variations in occupancy levels shall be grossed up.

(ii) Unused Tenant Services. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would constitute an Operating Expense) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses for that Adjustment Period shall be adjusted to reflect the same assumptions as to level of work and services as were used in determining Base Operating Expenses.

(iii) Credits/Reimbursements. Operating Expenses shall be reduced by reimbursements, credits, discounts, reductions or other allowances received by Landlord for items of cost included in Operating Expenses, except reimbursements to Landlord by tenants under the Additional Rent

(Operating Expenses/Taxes) provisions in their leases and payments for the use of any parking facilities.

(iv) Tax Refund. If Landlord receives a refund of any portion of Real Estate Taxes that were included in the Real Estate Taxes paid by Tenant, then Tenant shall receive a credit against its next Additional Rent(s) due under this Lease equal to its pro rata share of the refunded taxes, less any reasonable expenses that Landlord incurred to obtain the refund.

(v) Substituted Taxes. If any non-Real Estate Taxes are imposed against Landlord or the Building in substitution for any Real Estate Taxes, then the substituted tax shall be considered a Real Estate Tax.

(c) Payment by Landlord. Landlord shall pay the Property’s Operating Expenses and Real Estate Taxes.

(d) Payment by Tenant. If the combined total of Operating Expenses and Real Estate Taxes for any Adjustment Period exceeds the combined total of Base Operating Expenses and Base Real Estate Taxes (“Operating Expense Increase”), then Tenant agrees to pay Landlord, as additional rent for such Adjustment Period (“Additional Rent”), Tenant’s pro rata share of the Operating Expense Increase.

(e) Manner of Payment.

(i) Landlord may give Tenant notice of Landlord’s estimate of amounts payable under paragraph 2.2(d) for each Adjustment Period. If Tenant requests, Landlord shall give Tenant a general breakdown to support Landlord’s estimate.

On or before the first day of each month during the Adjustment Period, Tenant shall pay Landlord one-twelfth (1/12th) of the estimated amount. If, however, the estimate is not given before the Adjustment Period begins, Tenant shall continue to pay on the basis of the prior year’s estimate, if any, until the month after the new estimate is given.

If the actual Operating Expenses or Real Estate Taxes being incurred by Landlord during the Adjustment Period are greater than the estimated amount, Landlord may deliver to Tenant (no more than twice a year) a revised estimated amount and Tenant shall pay Landlord, by the first day of each month which is at least ten (10) days after such notice, one-twelfth (1/12th) of the revised estimated amount rather than the previously estimated amount.

(ii) Within ninety (90) days after each Adjustment Period ends, or as soon thereafter as is reasonably practical, Landlord shall give Tenant an itemized statement (the “Statement”) showing in reasonable detail the:

(A) actual Operating Expenses for the Adjustment Period;

(B) Real Estate Taxes for the Adjustment Period;

(C) Base Operating Expenses and Base Real Estate Taxes;

(D) the Operating Expense Increase for the Adjustment Period;

(E) the amount of Tenant’s pro rata share of the Operating Expense Increase;

(F) the amount, if any, paid by Tenant during the Adjustment Period towards its share of the Operating Expense Increase; and

(G) the amount Tenant owes towards its share of the Operating Expense Increase or the amount Landlord owes Tenant as a refund.

(iii) If the Statement shows that the actual amount Tenant owes for the Adjustment Period is less than the estimated Operating Expenses and Real Estate Taxes paid by Tenant during the Adjustment Period, Tenant shall receive a credit for the difference (“Overpayment Amount”) against Rent and Additional Rent next due under this Lease. If the Statement shows that the actual amount Tenant owes is more than the estimated Operating Expenses and Real Estate Taxes paid by Tenant during the Adjustment Period, Tenant shall pay the difference (“Underpayment Amount”) to Landlord within thirty (30) days after the Statement is delivered to Tenant. The obligation to pay Additional Rent shall survive the expiration or termination of this Lease; likewise, Landlord’s obligation to pay to Tenant any Overpayment Amount shall survive the expiration or termination of this Lease and shall be paid to Tenant, less any amounts then owed by Tenant to Landlord pursuant to the terms of this Lease, within thirty (30) days of its calculation after the expiration or termination of this Lease.

(iv) During any Adjustment Period during which the Lease is not in effect for a complete calendar year (unless this Lease was terminated due to Tenant’s Default) Tenant’s obligation for Additional Rent shall be determined by multiplying the Additional Rent for the Adjustment Period by a fraction expressed as a percentage, the numerator of which is the number of days of the Adjustment Period included in the Term and the denominator of which is 365.

(v) Tenant, and its agents and employees, shall have one hundred twenty (120) days after receiving the Statement to audit Landlord’s books and records concerning the Statement at a mutually convenient time at Landlord’s offices in Washington, D.C. If Tenant disputes the accuracy of Landlord’s Statement, Tenant shall still pay the amount shown owing, except that tenant may, within one hundred fifty (150) days after receiving the Statement, begin arbitration under paragraph 10.1 to recover that part

of the Additional Rent paid because of errors in the Statement, books or records of Landlord. If Tenant does not file for arbitration within the 150-day period, then Tenant accepts as final the amount shown as owing on the Statement.

If Tenant’s audit of the books and records shows that the actual Operating Expense Increase was more than five percent (5%) less than the Operating Expense Increase appearing on the Statement, and either Landlord concedes to a greater than five percent (5%) differential or an arbitration panel or court so rules, then Landlord shall reimburse Tenant for its reasonable outside costs of conducting the audit and any arbitration in connection therewith within thirty (30) days.

2.3 Lease Taxes. Tenant shall pay to Landlord by the first day of each month during the Term from and after the Rent Commencement Date any applicable sales, occupancy, transaction or privilege tax imposed upon this Lease, the leasing of the Premises or sums payable hereunder by any governmental authority.

2.4 Personal Property Tax. Before delinquency Tenant shall pay all taxes assessed during the Term against trade fixtures or personal property placed in the Premises by or for the use of Tenant. If these taxes are assessed against the Building, Tenant shall pay its share of the taxes to Landlord within thirty (30) days after receiving Landlord’s written statement setting forth the amount of taxes applicable to Tenant’s property and the basis for the charge to Tenant. Tenant’s failure to pay within the thirty- (30-)day period shall entitle Landlord to the same remedies it has upon Tenant’s failure to pay Rent.

2.5 Security Deposit. The Tenant has deposited with Landlord cash (or, in accordance with Rider 2, a letter of credit) in the amount of Four Hundred Fifty Thousand Dollars ($450,000.00) (the “Security Deposit”) to secure Tenant’s timely performance of its Lease obligations. If there shall have been no breach or default by Tenant under this Lease prior to April 1, 2001, Landlord shall promptly thereafter refund to Tenant Ninety Thousand Dollars ($90,000.00) of the Security Deposit. If there shall also have been no breach or default by Tenant under this Lease prior to April 1, 2002, Landlord shall promptly thereafter refund to Tenant an additional Ninety Thousand Dollars ($90,000.00) of the Security Deposit. If there shall also have been no breach or default by Tenant under this Lease prior to April 1, 2003, Landlord shall promptly thereafter refund to Tenant an additional Ninety Thousand Dollars ($90,000.00) of the Security Deposit. If there shall also have been no breach or default by Tenant under this Lease prior to April 1, 2004, Landlord shall promptly thereafter refund to Tenant an additional Seventy Thousand Dollars ($70,000.00) of the Security Deposit.

If Tenant defaults under or breaches any provision of this Lease, Landlord may, after giving five (5) days advance notice to Tenant, and without prejudice to Landlord’s other remedies, apply part or all of the Security Deposit to cure Tenant’s breach or default. If Landlord so uses part or all of the Security Deposit, then Tenant shall, within ten (10) days after written demand, pay Landlord the amount necessary to restore the Security Deposit to its amount immediately prior to such application by Landlord. Landlord shall deposit any cash Security Deposit in an interest-earning bank account, and all interest earned thereon shall become a part

of the Security Deposit. Any part of the Security Deposit not used by Landlord as permitted by this paragraph shall be returned to Tenant within thirty (30) days after the Lease expires (or is terminated) and all sums due to Landlord under or in connection with this Lease are paid. If Landlord sells the Building then Landlord shall be relieved of any liability for the Security Deposit if the requirements of paragraph 5.3(a) are met.

SECTION 3:
AFFIRMATIVE OBLIGATIONS

3.1 Compliance with Laws. Tenant shall comply with all applicable laws, ordinances, rules and regulations of governmental authorities (“Applicable Laws”) regarding the physical condition of the Premises or that relate to the lawful use or occupancy of the Premises, including without limitation all applicable fire codes and the handicap access requirements of the Americans With Disabilities Act (“ADA”); provided, however, that Landlord shall remain responsible for compliance with the ADA by the overall Building and the common areas within the Building.

3.2 Services and Utilities.

(a) Services. Landlord shall provide at its expense, subject to reimbursement under paragraph 2.2:

(i) Heating, ventilation, and air-conditioning (“HVAC”) for the Premises consistent with comparable quality office buildings in D.C. during Business Hours to maintain temperatures for comfortable use and occupancy in light of Tenant’s space plan (approved by Landlord), subject to governmental laws, regulations or restrictions pertaining to the functioning or use of HVAC;

(ii) Automatic passenger elevator service (three elevators available, but Landlord warrants that at least two will be operational at all times) to the floors on which the Premises are located;

(iii) Freight elevator service to the floors on which the Premises are located as reasonable scheduling permits;

(iv) Janitorial services (after 6:00 p.m.) to the Premises consistent with comparable quality office buildings in D.C., as specified in Exhibit D, during normal business hours, from Monday through Friday, exclusive of legal holidays;

(v) Hot and cold water (24 hours, 365 days/year) sufficient for drinking, lavatory, toilet and ordinary cleaning purposes to be drawn from approved fixtures in the Premises if shown on Tenant’s approved space plan;

(vi) Electricity to the Premises (24 hours, 365 days/year) that provides electric current in amounts (at least 6 watts per square foot) reasonably necessary for normal office use, lighting and HVAC;

(vii) Building access controls, equipment, personnel, procedures and systems;

(viii) Replacement of Building Standard lighting tubes, lamp ballasts, and bulbs;

(ix) Snow removal, as required;

(x) Extermination and pest control when necessary; and

(xi) Maintenance of common areas consistent with comparable quality office buildings in D.C.; and

(xii) Washing of exterior windows not less than twice per year.

(b) Business Hours. Business Hours means: (i) Monday through Friday, 8:00 a.m. through 8:00 p.m., and (ii) Saturday, 9:00 a.m. through 4:00 p.m., but exclusive of the following holidays or the days on which the following holidays are designated for observance: New Year’s Day, Memorial Day, Independence Day (July Fourth), Labor Day, Thanksgiving Day, Christmas Day, Martin Luther King Jr. Day and Presidents’ Day.

(c) 24 Hour Access. Tenant, its employees, agents and invitees shall have access to the Building and the Premises twenty-four (24) hours a day, seven (7) days a week. During non-Business Hours Landlord may institute reasonable building access restrictions, including but not limited to, issuance of electronic card keys or other entry devices or requiring persons to show a badge or identification card issued by Landlord. Landlord shall not be liable for denying entry to any person unable to comply with such reasonable building access restrictions. Landlord may temporarily close the Building if required because of a life-threatening or Building-threatening situation. Landlord shall use its best efforts to close the Building only during non-Business Hours.

(d) Extra Services. If Tenant is using a material amount of extra services because of either non-Business-Hours use or high electricity consumption installations, Landlord may, after five (5) days notice to Tenant of such use of extra services, directly charge Tenant for the extra services used after the five (5) day notice period.

(i) Non-Business-Hours Use. HVAC and electricity required by Tenant during non-Business Hours shall be supplied upon 24 hours advance written notice (but such notice must be received by noon on Friday if HVAC is desired on Saturday or Sunday). The current charge for use of HVAC and electricity during non-Business Hours is $75 per hour, per floor, but such charge is subject to change in the future.

(ii) Excess Utility Use. Tenant shall not place or operate in the Premises any electrically operated equipment or other machinery, other than typewriters, personal computers, computer servers, adding machines, reproduction machines and other machinery and equipment normally used in offices in

amounts customary for normal office uses, unless Tenant receives Landlord’s advance written consent. Landlord shall not unreasonably withhold or delay its consent, but Landlord may require payment for the extra use of electricity caused by operating this equipment or machinery. Landlord may require that special, high electricity consumption installations of Tenant such as computer or reproduction facilities (except personal computers or normal office photocopy machines) be separately sub-metered for electrical consumption at Tenant’s cost.

(iii) Payment. Tenant’s charges for the utilities provided under (i) and (ii) above shall be the actual out-of-pocket cost to Landlord of providing the services; there shall be no administration fee. Tenant’s failure to pay the above charges within thirty (30) days of receiving an invoice shall entitle Landlord to the same remedies it has upon Tenant’s failure to pay Rent.

(e) Interruption of Services.

(i) Interruptions. Landlord does not warrant that any services Landlord supplies will not be interrupted. Services may be interrupted because of accidents, repairs, alterations, improvements, or any reason beyond the reasonable control of Landlord. Except as noted in (ii) below, any interruption shall not: (A) be considered an eviction or disturbance of Tenant’s use and possession of the Premises; (B) make Landlord liable to Tenant for damages; (C) abate Rent or Additional Rent; unless Landlord shall have insurance for the same; or (D) relieve Tenant from performing Tenant’s obligations under this Lease. In any event, Landlord shall use best efforts to restore any interruption in services.

(ii) Remedy. If any essential services (HVAC, passenger elevators, electricity or water) supplied by Landlord are interrupted, and the interruption is the result of the negligence or willful misconduct of Landlord, its employees or agents, Tenant shall be entitled to an abatement of Rent and Additional Rent if (i) the interruption materially interferes with Tenant’s use and enjoyment of the Premises, and (ii) the interruption or the continuation of the interruption is not attributable to or caused (in whole or in part) by Tenant or its agents, employees, contractors or invitees. The abatement shall begin on the fifth consecutive business day of the interruption and shall apply to only that portion of the Premises which Tenant stops using because of the interruption. The abatement shall end when the services are restored or when the elements required for abatement under this paragraph are no longer met. This Section shall not apply to interruption caused by fire, the elements or other casualty or condemnation which is governed by Section 6 of this Lease.

(f) Storage Space. Landlord shall also lease to Tenant, a Storage Space area to be demised by Landlord at Landlord’s sole cost and expense on the B-1 level of the Building containing approximately 500 rentable square feet (the actual square footage to be computed by

the Landlord’s architect in accordance with the Washington, D.C. Board of Realtors Standard Method of Measurement in effect on the date of execution of this Lease). Such Storage Space area shall not be deemed a part of the Premises. Tenant shall pay rent on the Storage Space area to Landlord in the amount of $1.50 per rentable square foot per month, which rent shall be deemed Additional Rent under this Lease. The rent commencement for the Storage Space shall be as stated in Section 2.1. Tenant shall have the right to terminate its use of the Storage Space area, and the rent payable therefor, at any time upon not less than ninety (90) days written notice to Landlord. If Tenant’s right to occupy the Premises is terminated for any reason, Tenant shall thereupon have no further right to use or occupy the Storage Space area.

3.3 Repairs and Maintenance.

(a) Tenant’s Care of Premises. Tenant shall:

(i) keep the Premises and fixtures in good order;

(ii) make repairs and replacements to the Premises or Building needed because of Tenant’s misuse or negligence, except to the extent that the repairs or replacements are covered by Landlord’s insurance or the insurance Landlord is required to carry under Section 5, whichever is greater;

(iii) repair and replace special equipment above Building Standard installed by or at Tenant’s request and that serve the Premises only, except (A) to the extent the repairs or replacements are needed because of Landlord’s misuse or negligence, and are not covered by Tenant’s insurance or the insurance Tenant is required to carry under Section 5, whichever is greater; or (B) if the Lease is terminated under paragraphs 6.1 (Damages), 6.2 (Condemnation) or 7.3 (Landlord’s Default);

(iv) not place or cause to be placed in the Premises any thing that causes a condition whereby the design load (live load) of the floor on which the Premises is located is exceeded without Landlord’s prior written consent; and

(v) not commit waste.

(b) Landlord’s Repairs. Except for repairs and replacements that Tenant must make under paragraph 3.3(a), Landlord shall make all other repairs and replacements to the Premises, Building components serving the Premises and the Common Areas consistent with comparable quality buildings in Washington D.C. Tenant shall assign to Landlord any warranties to the extent that any such warranties cover repairs to be made by Landlord under this paragraph 3.3(b). On entire floors within the Premises, Landlord shall nevertheless be responsible for the basic plumbing, electrical, heating, air-conditioning and ventilation systems installed or furnished by Landlord and serving the lobbies, restrooms, elevators, life-safety equipment and janitor and phone closets which are included within such entire floors of the Premises, except that Tenant shall be responsible for any separate

HVAC systems installed by Tenant within the Premises and except that Landlord may, at its option, require Tenant to install separate metering of electrical current to any such separate HVAC systems.

(c) Time for Repairs. Repairs or replacements required under paragraphs 3.3(a) or 3.3(b) shall be made within a reasonable time using commercially reasonable efforts (depending on the nature of the repair or replacement needed) after Landlord receives written (or, in the case of an emergency, oral) notice of the need for a repair or replacement. Landlord shall have no liability in connection with or arising out of its failure to make any repair or replacement unless it shall first have received a specific written request for the repair or replacement from Tenant and have failed to make the repair within a reasonable period of time given the nature of the repair.

(d) Surrendering the Premises. Upon the Expiration Date, Tenant shall surrender the Premises to Landlord in the same broom clean condition that the Premises were in on the Commencement Date except for: (i) ordinary wear and tear; (ii) damage by the elements, fire, or other casualty unless Tenant would be required to repair same under paragraph 3.3(a); (iii) condemnation; (iv) damage arising from any cause not required to be repaired or replaced by Tenant; and (v) alterations permitted by this Lease unless Landlord’s consent was conditioned upon their removal. Upon surrender Tenant shall remove from the Premises its personal property, trade fixtures and any alterations required to be removed under paragraph 4.1 and repair any damage to the Premises caused by the removal. Any items not removed by Tenant as required above shall be considered abandoned. Landlord may dispose of abandoned items as Landlord chooses and bill Tenant for the cost of theft disposal without credit for any revenues received by Landlord in connection with their disposal.

SECTION 4:
NEGATIVE OBLIGATIONS

4.1 Alterations.

(a) Definitions. “Alterations” means alterations, additions, substitutions, installations, changes and improvements, but excludes minor decorations, such as the hanging of pictures of a typical weight.

(b) Consent. Tenant shall not make Alterations without Landlord’s advance written consent. Landlord’s consent shall not be unreasonably withheld or unduly delayed for recarpeting, repainting and other interior Alterations to the Premises that do not adversely affect the Building’s appearance, base building systems (plumbing, electrical, HVAC, fire protection and life safety), value or structural integrity. If consent is withheld, Landlord shall provide to Tenant, at Tenant’s request, a written statement explaining why Landlord’s consent was withheld.

(c) Conditions of Consent. Landlord may impose reasonable conditions on its consent in paragraph 4.1(b), which conditions may include a requirement that the Alterations be removed by Tenant upon the expiration or termination of this Lease. The provisions of Section 7 of Exhibit C to this Lease, including without limitation the insurance requirements of Section 7(e), shall be applicable to the construction of the Alterations.

(d) Tenant’s Security System. Tenant shall be permitted, at its sole cost and expense and in compliance with all applicable laws, to install a security system for the Premises, which may be an electronic card key system, provided a reasonable number of card keys shall be provided by Tenant to Landlord to permit emergency entrance by Landlord into the Premises and provided reasonable advance written notice is given to Landlord of such installation.

(e) Payment and Ownership of Alterations. Alterations made under this paragraph 4.1 shall be at Tenant’s expense. The Alterations shall belong to Landlord when this Lease expires or terminates except for those Alterations required to be removed by Tenant, if any, under paragraph 4.1(c). Nevertheless, Tenant may remove its trade fixtures, furniture, equipment and other personal property if Tenant promptly repairs any damage caused by their removal.

4.2 Assignment and Subleasing.

(a) Consent Required. Tenant shall not transfer, mortgage, encumber, assign or sublease all or part of the Premises or allow its use by any third party, without Landlord’s advance written consent. Landlord’s consent to any assignment or sublease shall not be unreasonably withheld, conditioned or delayed.

(b) Recapture. Landlord may, as an alternative to giving the consent required by paragraph 4.2(a), elect to terminate the Lease effective as of the effective date of the proposed sublease or assignment if Tenant is proposing to assign this Lease or to sublease more than 50% of the Premises. If Tenant desires to sublease more than 50%, but less than all, of the Premises, Landlord’s option to recapture shall only apply to that part of the Premises that Tenant desires to sublease. In the event Landlord chooses this alternative, consent shall not be deemed to have been unreasonably withheld. Within fifteen (15) business days of Tenant’s written notice to Landlord of its intent to assign this Lease or to sublease more than 50% of the Premises, Landlord must elect whether it will recapture the Premises or the over 50% portion thereof proposed to be sublet. If Landlord elects this option, Tenant shall have the right to withdraw its request and reinstate the Lease by notice to Landlord given within five (5) days of Landlord’s election to terminate. In the event the Premises or an over 50% portion thereof is recaptured by Landlord pursuant to this paragraph 4.2(b), Tenant shall have no further obligations under this Lease from the date of recapture with respect to the Premises (or the portion thereof recaptured, if less than all is recaptured).

(c) Reasonableness. Landlord’s consent shall not be considered unreasonably withheld, conditioned or delayed if: (i) the proposed subtenant’s or assignee’s financial responsibility does not meet the same criteria Landlord uses to select comparable Building tenants; (ii) the proposed subtenant or assignee is an existing tenant in the Building or has been contacted by or on behalf of Landlord, within the six (6) months prior to Tenant’s request for consent, as a prospective tenant for the Building; (iii) the proposed subtenant’s or assignee’s business is not suitable for the Building considering the business of the other tenants and the Building’s prestige; or (iv) the proposed use is inconsistent with the use permitted by paragraph 1.3.

(d) Procedure.

(i) Tenant must provide Landlord in writing: (A) the name and address of the proposed subtenant or assignee; (B) the nature of the business the proposed subtenant or assignee will operate in the Premises; (C) the terms of the proposed sublease or assignment; and (D) reasonable financial information so that Landlord can evaluate the proposed subtenant or assignee under paragraph 4.2(c)(i).

(ii) Landlord shall, within fifteen (15) business days after receiving the information under paragraph 4.2(d)(i), give notice to Tenant consenting, or denying its consent, to the proposed sublease or assignment. If Landlord denies consent, it must explain the reasons for the denial. If Landlord does not give any notice within the fifteen (15) business-day period, then Tenant may sublease or assign part or all of the Premises upon the terms Tenant gave in the information under paragraph 4.2(d)(i).

(e) Affiliates. Notwithstanding paragraphs 4.2(a), (b), (c) and (d), Tenant may assign or sublease part or all of the Premises without Landlord’s consent to: (i) any corporation or partnership that controls, is controlled by or is under common control with, Tenant; or (ii) any corporation resulting from the merger or consolidation with Tenant, as long as the assignee or sublessee is a bona fide entity and assumes the obligations of Tenant (an “Affiliate”). Tenant shall provide Landlord with notice of any such assignment or subletting within thirty (30) days of such assignment or subletting.

(f) Conditions. Subleases and assignments by Tenant shall be subject to the terms of this Lease and shall also be subject to the following: (i) the term of any sublease shall not extend beyond the Lease Term (or the Extended Term, if Tenant shall have timely exercised its option under Paragraph 1.6 to extend the Term); (ii) the original Tenant named in this Lease and each successor Tenant shall remain liable for all Lease obligations; (iii) consent to one sublease or assignment does not waive the consent requirement for future assignments or subleases; and (iv) fifty percent (50%) of the consideration (the “Excess Consideration”) received by Tenant from an assignment or sublease that exceeds the amount Tenant must pay Landlord, which amount is to be prorated where a part of the Premises is

subleased or assigned, shall also be paid to Landlord. Excess Consideration shall exclude reasonable leasing commissions paid by Tenant, payments attributable to the amortization of the cost of improvements made with Landlord’s approval to the Premises at Tenant’s cost for the assignee or sublessee, any free rent, and other reasonable, out-of-pocket costs paid by Tenant, such as attorney’s fees, directly related to Tenant’s obtaining an assignee or sublessee. Tenant shall pay this Excess Consideration to Landlord within thirty (30) days after receipt. Each payment shall be sent with a detailed statement showing: (A) the total consideration paid by the subtenant or assignee and (B) any exclusions from the consideration permitted by this paragraph. Landlord shall have the right to verify the accuracy of the detailed statement by requesting reasonable evidence thereof which Tenant shall supply to Landlord within thirty (30) days of Landlord’s request.

SECTION 5:
INSURANCE AND LIABILITY

5.1 Insurance.

(a) Landlord’s Building Insurance. Landlord shall keep the Property, excluding leasehold improvements (leasehold improvements includes the Tenant Improvements and all other improvements made by Tenant to the Premises), insured against damage and destruction in the manner customary for operators of comparable quality office buildings in Washington, D.C..

(b) Property Insurance. Each party shall keep its personal property and trade fixtures in the Premises and Building insured with “all risks” insurance in an amount to cover one hundred percent (100%) of the replacement cost of the property and fixtures. Tenant shall also keep all leasehold improvements within the Premises insured to the same degree as Tenant’s personal property.

(c) Liability Insurance. Tenant shall maintain contractual and comprehensive general liability insurance, including public liability and property damage, with a minimum combined single limit of liability of two million dollars ($2,000,000) for personal injuries or deaths of persons occurring in or about the Property and Premises.

(d) Increases in Insurance Amounts. The amount of insurance required pursuant to this Section 5 shall be subject to increase to the extent it is commercially reasonable. If the parties do not agree on the amount of an increase, then the party requesting the increase shall submit the dispute to arbitration under paragraph 10.1.

(e) Waiver of Subrogation. Each party waives claims arising in any manner in its (Injured Party’s) favor and against the other party for loss or damage to Injured Party’s property located within or constituting a part or all of the Building or Premises or the improvements or other property therein. This waiver applies to

the extent the loss or damage is covered by: (i) the Injured Party’s insurance or (ii) the insurance the Injured Party is required to carry under Section 5, whichever is greater. The waiver also applies to each party’s constituent partners, as well as each party’s directors, officers, employees, shareholders and agents. The waiver does not apply to claims caused by a party’s willful misconduct.

(f) Insurance Criteria. The insurance policies required to be carried by Tenant pursuant to this Lease shall:

(i) be issued by insurance companies licensed to do business within the District of Columbia having a general policyholder’s ratings of at least A and a financial rating of at least XI in the most current Best’s Insurance Reports available on the date such policy is written. If the Best’s ratings are changed or discontinued, the parties shall agree to an equivalent method of rating insurance companies. If the parties cannot agree they shall submit the dispute to arbitration under paragraph 10.1;

(ii) name Landlord and its managing agent as additional insureds as their interest may appear;

(iii) provide that the insurance not be canceled or materially changed in the scope or amount of coverage unless thirty (30) days’ advance notice is given to Landlord;

(iv) be primary policies — not as contributing with, or in excess of, the coverage that Landlord may carry;

(v) be permitted to be carried through a “blanket policy” or “umbrella” coverage provided that the policy limits apply in a “per location” basis;

(vi) have deductibles not greater than $10,000 unless otherwise agreed to by Landlord; and

(vii) be maintained during the entire Term.

(g) Evidence of Insurance. By the Commencement Date and upon each renewal of its insurance policies, Tenant shall give certificates of insurance to Landlord. The certificate shall specify amounts, types of coverage, the waiver of subrogation, and the insurance criteria listed in paragraph 5.1(e). The policies shall be renewed or replaced and maintained by the Tenant. If Tenant fails to maintain the insurance required by this Section 5 or fails to give the required certificate within five (5) days after notice or demand for it, Landlord may, but shall not be obligated to, obtain and pay for that insurance and receive from Tenant, upon demand, reimbursement for all sums paid, plus interest thereon at the rate of ten percent (10%) per annum from the date of Landlord’s payment until the date of Tenant’s reimbursement of Landlord.

5.2 Indemnification. Tenant agrees to indemnify, defend, and hold harmless Landlord, its agents (including its managing agent and any mortgagee), employees, members, affiliates, and their respective officers, directors, agents and employees, from and against all claims, demands, liabilities, losses, costs, charges and expenses resulting from damage to property or injury (including death) of persons,

(i) either (x) occurring in, on, or about the Premises, or (y) occurring in, on, or about any facilities, (including, without limitations, common areas, walkways, elevators, stairways, passageways or hallways) the use of which Tenant may have in conjunction with other tenants of the Building, when such injury, death or damage shall be caused in part or in whole by any act, negligence or willful misconduct of, or omissions of any duty with respect to the same, by Tenant, its agents, employees, contractors or licensees;

(ii) arising from any work or act done or benefiting Tenant in, on, or about the Premises; or

(iii) otherwise arising from any negligent act, omission or fault of, or negligent omission of any duty of Tenant, or any of its agents, employees, contractors or licensees.

Additionally, Tenant agrees that Tenant shall contractually require all contractors and sub-contractors doing any work or activity relating to or in connection with the Premises to indemnify and hold harmless the Landlord and the other parties set forth above under the terms of the foregoing indemnity in clause (a) above.

5.3 Limitation of Landlord’s Liability.

(a) Transfer of Premises. If the Building is sold or transferred, voluntarily or involuntarily, Landlord’s Lease obligations and liabilities accruing after the transfer shall be the sole responsibility of the new owner if: (i) the new owner assumes Landlord’s obligations in writing and (ii) the Tenant’s funds that the Landlord is holding, such as the Security Deposit (or a credit in the amount of such Tenant funds), are given to the new owner.

(b) Liability for Money Judgment. If Landlord, its constituent partners or its or their employees, officers or agents are ordered to pay Tenant a money judgment because of Landlord’s default, Tenant’s sole remedy to satisfy the judgment shall be against Landlord’s interest in the Property.

(c) Security. Notwithstanding any Building security that may be provided by Landlord, Tenant is solely responsible for maintaining the security of the Premises and providing any security for its agents, employees or invitees that it deems necessary or advisable. Accordingly, Landlord will have no liability for any injury, damage, theft or other loss to persons or property suffered by Tenant or its agents, employees or invitees as a result of any tortious or criminal act of a third party in or about the Premises or other portion of the Property.

SECTION 6:
LOSS OF PREMISES

6.1 Damages.

(a) Definition. “Relevant Space” means: (i) the Premises as defined in paragraph 1.2, excluding Tenant’s leasehold improvements; (ii) access to the Premises; and (iii) any part of the Building that provides essential services to the Premises.

(b) Repair of Damage. If the Relevant Space is damaged in part or whole from any cause and the Relevant Space can be substantially repaired and restored within 180 days from the date of the damage (as reasonably determined by Landlord’s contractor), Landlord shall at its expense promptly and diligently repair and restore the Relevant Space to substantially the same condition as existed before the damage. This repair and restoration shall be made within 180 days from the date of the damage unless the delay is due to causes beyond Landlord’s reasonable control.

If the Relevant Space cannot be repaired and restored within the 180 day period, then either party may, within ten (10) days after determining (pursuant to paragraph 6.1(c), if applicable) that the repairs and restoration cannot be made within 180 days, and providing written notice to the other party of such determination, cancel this Lease by giving notice to the other party. Nevertheless, if the Relevant Space is not repaired and restored within 180 days from the date of the damage, then Tenant may cancel the Lease at any time (before notice from Landlord that the Relevant Space has been repaired and restored) after the 180th day and before the 200th day following the date of damage. Tenant shall not be permitted to cancel this Lease if its willful misconduct causes the damage, unless Landlord is not promptly and diligently repairing and restoring the Relevant Space.

(c) Determining the Extent of Damage. If Tenant disputes the determination of Landlord’s contractor as to the time required for restoration, then the determination will be submitted to arbitration under paragraph 10.1.

(d) Abatement. Unless the damage is caused by Tenant’s willful misconduct or negligence, the Rent and Additional Rent shall abate in proportion to that part of the Premises that is unfit for use in Tenant’s business. The abatement shall consider the nature and extent of interference to Tenant’s ability to conduct business in the Premises and the need for access and essential services. The abatement shall continue from the date the damage occurred until ten (10) business days after Landlord completes the repairs and restoration to the Relevant Space or the part rendered unusable and notice to Tenant that the repairs and restoration are completed, or until Tenant is actively conducting its business in the Premises or the part rendered unusable, whichever is first.

(e) Tenant’s Property. Notwithstanding anything else in this Section 6, Landlord is not obligated to repair or restore damage to Tenant’s trade fixtures, furniture, equipment or other personal property, or the leasehold improvements, all of which shall be promptly restored or replaced by Tenant.

(f) Damage to Building. If: (i) more than twenty-five percent (25%) of the Building is damaged, (ii) any mortgagee of the Building will not allow insurance proceeds to be used for repair and restoration, (iii) the damage is not covered by Landlord’s insurance, or (iv) the Lease is in the last twelve (12) months of its Term, then either party may cancel this Lease. To cancel, the canceling party must give notice to the other within thirty (30) days after the date of the damage. The notice must specify the cancellation date, which shall be at least ten (10) days, but not more than sixty (60) days, after the date notice is given.

(g) Effect of Cancellation. If either party cancels this Lease as permitted by this paragraph 6.1, then this Lease shall terminate on the day specified in the cancellation notice. The Rent, Additional Rent and other charges shall be payable up to the cancellation date. Landlord shall promptly refund to Tenant any prepaid, unaccrued Rent and Additional Rent, accounting for any abatement, plus Security Deposit, if any, less any sum then owing by Tenant to Landlord.

6.2 Condemnation.

(a) Definitions. The terms “eminent domain,” “condemnation,” “taken” and the like in this paragraph 6.2 include takings for public or quasi-public use and private purchases in place of condemnation by any authority authorized to exercise the power of eminent domain.

(b) Entire Taking. If the entire Premises or the portions of the Building required for reasonable access to, or the reasonable use of, the Premises are taken by eminent domain, this Lease shall automatically terminate on the earlier of: (i) the date title vests or (ii) the date Tenant is dispossessed by the condemning authority.

(c) Partial Taking. If the taking of a part of the Premises materially interferes with Tenant’s ability to continue its business operations in substantially the same manner and space, then Tenant may terminate this Lease on the earlier of: (i) the date when title vests, (ii) the date Tenant is dispossessed by the condemning authority, or (iii) sixty (60) days following notice to Tenant of the date when vesting or dispossession is to occur. If there is a partial taking and this Lease continues, then the Lease shall terminate as to the part taken, the Rent and Additional Rent shall abate in proportion to the part of the Premises taken, and Tenant’s pro rata share shall be equitably reduced.

(d) Rent Adjustment. If the Lease is canceled as provided in paragraphs 6.2(b) or (c), then the Rent, Additional Rent and other charges shall be payable up to the cancellation date. Landlord, considering any abatement, shall promptly refund to

Tenant any prepaid, unaccrued Rent and Additional Rent plus Security Deposit, if any, less any sum then owing by Tenant to Landlord.

(e) Repair. If the Lease is not canceled as provided for in paragraphs 6.2(b) or (c), then Landlord at its expense shall promptly repair and restore the Premises to the condition that existed immediately before the taking, except for the part taken, to render the Premises a complete architectural unit, but only to the extent of the condemnation award available to Landlord for the damage.

(f) Awards and Damages. Landlord reserves all rights to damages paid because of any partial or entire taking of the Property, including, without limitation, the Premises and the leasehold interest created by this Lease. Tenant assigns to Landlord any right Tenant may have to the damages or award. Further, Tenant shall not make claims against Landlord or the condemning authority for damages. Notwithstanding anything else in this paragraph 6.2(f), Tenant may claim and recover from the condemning authority a separate award for Tenant’s moving expenses, business dislocation damages, Tenant’s personal property and fixtures, and the unamortized costs of leasehold improvements paid for by Tenant, excluding the Tenant Improvements described in paragraph 1.4 and Exhibit C, provided that such claim and recovery does not have the effect of reducing the award payable to Landlord. Each party shall seek its own award, as limited by this paragraph 6.2(f), at its own expense, and neither shall have any right to the award made to the other.

(g) Temporary Condemnation. If part or all of the Premises are condemned for a limited period of time (a “Temporary Condemnation”), this Lease shall remain in full force and effect, except that the Rent and Additional Rent and Tenant’s obligations for the part of the Premises taken shall abate during the Temporary Condemnation in proportion to the part of the Premises that Tenant is unable to use in its business operations as a result of the Temporary Condemnation. Landlord shall receive the entire award for any Temporary Condemnation.

SECTION 7:
DEFAULT

7.1 Tenant’s Default.

(a) Defaults. Each of the following shall constitute a default (“Default”):

(i) Tenant’s failure to pay Rent or Additional Rent within five (5) days after Tenant receives written notice from Landlord of Tenant’s failure to pay Rent or Additional Rent;

(ii) Tenant’s failure to pay Rent or Additional Rent by the due date, at any time during a calendar year in which Tenant had previously received on two separate occasions a written notice of its failure to pay Rent or Additional Rent by the due date;

(iii) Tenant’s failure to maintain the insurance required by paragraph 5.1 or any failure by Tenant to perform or observe any other Tenant obligation under this Lease where such failure materially affects other tenants or the general character of the Building, if such failure is not cured within three (3) business days after written notice by Landlord or (except with respect to maintenance of insurance for which no extension shall be permitted) within such additional time, if any, as is reasonably necessary to promptly and diligently cure the failure;

(iv) Tenant’s failure to perform or observe any other Tenant obligation under the Lease which is not cured within fifteen (15) days after it receives written notice from Landlord setting forth the failure, or within such additional time, if any, that is reasonably necessary to promptly and diligently cure the failure;

(v) Tenant’s abandoning the Premises for a period in excess of ten days without paying Rent; or

(vi) Tenant files a petition in bankruptcy or makes an assignment for the benefit of creditors or fails to vacate or stay any of the following within ninety (90) days after they occur: (A) a petition in bankruptcy is filed against Tenant, (B) Tenant is adjudicated as bankrupt or insolvent, or (C) a receiver, trustee or liquidator is appointed for all or a substantial part of Tenant’s property.

7.2 Landlord’s Remedies.

(a) Remedies. Landlord, in addition to the remedies given in this Lease or under the law, may do any one or more of the following if Tenant commits a Default:

(i) terminate this Lease as of the date notice of Landlord’s election to terminate this Lease is sent to Tenant, and Tenant shall then surrender the Premises to Landlord immediately upon receipt of such notice or a copy thereof;

(ii) enter and take possession of the Premises, either with or without process of law, and remove Tenant, with or without having terminated the Lease;

(iii) accelerate and declare the unpaid Rent and Additional Rent for the remainder of the Term to be immediately due and payable, and may, at once, take legal action to recover and collect the same, reduced to its present value using a discount rate of seven and one-half percent (7.5%) per annum; and

(iv) cure the Default (without thereby waiving the Default), and recover from Tenant upon demand all the costs, expenses and disbursements incurred by Landlord to cure the Default.

Provided a Default exists, Tenant waives claims for damages by reason of Landlord’s reentry, repossession or alteration of locks or other entry devices and for damages by reason of any legal process.

(b) No Termination/Waiver. No entry or taking possession of the Premises by Landlord shall be construed as an election by Landlord to terminate this Lease, unless a written notice of such intention is given to Tenant. Pursuit of any remedy provided by this Lease shall not constitute a forfeiture or waiver of any Rent, Additional Rent or other monies due to Landlord hereunder or of any damages accruing to Landlord by reason of any Default. Landlord’s acceptance of Rent or Additional Rent or other monies following any Default shall not be construed as Landlord’s waiver of such Default. No forbearance by Landlord of action upon any violation or breach of any of the terms, provisions and covenants of this Lease shall be deemed or construed to constitute a waiver of any such term, provision or covenant. Forbearance by Landlord to enforce one or more of the remedies provided by this Lease upon a Default shall not be deemed to constituent a waiver of that or any other Default.

(c) Rent. If Landlord terminates this Lease or ends Tenant’s right to possess the Premises because of a Default, Landlord may hold Tenant liable for Rent, Additional Rent and other indebtedness accrued to the date the Lease is terminated or Tenant’s right to possession is ended. If Landlord does not terminate this Lease but only ends Tenant’s right to possess the Premises, Tenant shall, in addition t