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Corporate Advisory Board Company District of Columbia Lease 06-23-1998

AGREEMENT OF LEASE

(OFFICE)

FOR

 

 

 

 

THE CORPORATE ADVISORY BOARD COMPANY

 

 

 

SUITES _____

2000 PENNSYLVANIA AVENUE, N.W.

WASHINGTON, D.C. 20006

 

 

 

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

<PAGE>

 

TABLE OF CONTENTS

 

Page

----

 

 

1. INITIAL DEMISED PREMISES/CONDITION OF INITIAL DEMISED PREMISES....... 1

--------------------------------------------------------------

 

2. TERM................................................................. 1

----

 

3. RENT/BASIC ANNUAL RENT............................................... 2

----------------------

 

5. OPERATING EXPENSE INCREASES AND REAL ESTATE TAX ADJUSTMENTS.......... 5

-----------------------------------------------------------

 

6. SECURITY DEPOSIT..................................................... 12

----------------

 

7. USE.................................................................. 13

---

 

9. UPKEEP OF BUILDING................................................... 14

------------------

 

10. ASSIGNMENT AND SUBLETTING............................................ 15

-------------------------

 

11. ALTERATIONS.......................................................... 19

-----------

 

12. MECHANICS' LIENS AND SIMILAR LIENS................................... 22

----------------------------------

 

13. PERSONAL PROPERTY.................................................... 22

-----------------

 

14. DELIVERIES AND MOVING OF PROPERTY BELONGING TO TENANT................ 23

-----------------------------------------------------

 

15. TENANT'S EQUIPMENT................................................... 24

------------------

 

16. SIGNS AND ADVERTISEMENTS............................................. 26

------------------------

 

17. LANDLORD'S ACCESS.................................................... 26

-----------------

 

18. SERVICES............................................................. 27

--------

 

19. RULES AND REGULATIONS................................................ 28

---------------------

 

20. DAMAGE BY TENANT..................................................... 28

----------------

 

21. LIABILITY............................................................ 29

---------

 

22. INSURANCE............................................................ 30

---------

 

23. REQUIREMENTS FOR TENANT'S INSURANCE POLICIES......................... 31

--------------------------------------------

 

24. DAMAGE BY FIRE OR OTHER CASUALTY..................................... 32

--------------------------------

 

25. EMINENT DOMAIN....................................................... 33

--------------

 

 

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26. SUBORDINATION........................................................ 34

-------------

 

27. ESTOPPEL CERTIFICATES................................................ 36

---------------------

 

28. BANKRUPTCY........................................................... 37

----------

 

29. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT............................ 38

-----------------------------------------

 

30. DEFAULTS AND REMEDIES................................................ 39

---------------------

 

31. REPEATED DEFAULTS.................................................... 41

-----------------

 

32. SUCCESSORS........................................................... 41

----------

 

33. AUTOMOBILE PARKING................................................... 41

------------------

 

34. ALTERNATIVE TELEPHONE OR TELECOMMUNICATIONS PROVIDER................. 42

----------------------------------------------------

 

35. TENANT HOLDOVER...................................................... 43

---------------

 

36. RIGHTS RESERVED BY LANDLORD.......................................... 44

---------------------------

 

37. JURY TRIAL WAIVER.................................................... 45

-----------------

 

38. NOTICES.............................................................. 45

-------

 

39. LIEN FOR RENT........................................................ 45

-------------

 

40. LIMITATION ON LANDLORD'S LIABILITY................................... 46

----------------------------------

 

41. COVENANTS OF LANDLORD................................................ 46

---------------------

 

42. MISCELLANEOUS........................................................ 46

-------------

 

43. TENANT'S RIGHT TO RENEW..............................................

-----------------------

 

44. EXPANSION OPTIONS....................................................

-----------------

 

 

TABLE OF EXHIBITS

-----------------

 

 

Exhibit A Floor Plan(s) of the Demised Premises and Expansion Spaces

 

Exhibit B Declaration as to Date of Delivery of Demised Premises and as

to Lease Commencement Date

 

Exhibit C Rules and Regulations

 

Exhibit D Specifications for Office Space

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

 

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Exhibit E Form of Tenant Estoppel Certificate

 

Exhibit F Cleaning Specifications

 

Exhibit G Guaranty

 

Exhibit H First Amendment to Deed of Trust

 

 

 

TABLE OF DEFINED TERMS

----------------------

<TABLE>

<S> <C>

Term PAGE

---- ----

 

Additional Rent................................................................. 3

 

 

Adjustment Rent................................................................. 10

 

 

affiliate....................................................................... 16

 

 

Alterations..................................................................... 19

 

 

Assignment Date................................................................. 17

 

 

Assignment Notice............................................................... 17

 

 

base building systems........................................................... 14

 

 

Base Operating Expenses......................................................... 10

 

 

Base Real Estate Taxes.......................................................... 10

 

 

Basic Annual Rent............................................................... 2

 

 

Building........................................................................ 1

 

 

Calendar Year................................................................... 5

 

 

control......................................................................... 16

 

 

Fiscal Year..................................................................... 5

 

 

Indemnitees..................................................................... 29

 

 

Land............................................................................ 9

 

 

Landlord........................................................................ 1

 

 

Lease........................................................................... 1

</TABLE>

 

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June 23, 1998 Final

 

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<PAGE>

 

<TABLE>

<CAPTION>

 

<S> <C>

Lease Year...................................................................... 5

 

 

Operating Expense Share......................................................... 9

 

 

Operating Expenses.............................................................. 6

 

 

Provider........................................................................ 42

 

 

Real Estate Tax Share........................................................... 9

 

 

Real Estate Tax Year............................................................ 10

 

 

Real Estate Taxes............................................................... 9

 

 

Recapture Space................................................................. 18

 

 

Security Deposit................................................................ 12

 

 

Sublet Space.................................................................... 18

 

 

Subletting Date................................................................. 18

 

 

Subletting Notice............................................................... 18

 

 

subsidiary...................................................................... 16

 

 

successor partnership, limited liability company or professional corporation.... 16

 

 

Taking Date..................................................................... 34

 

 

Tenant.......................................................................... 1

 

 

Tenant's Property............................................................... 23

</TABLE>

 

The Corporate Advisory Board Company Lease

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<PAGE>

 

AGREEMENT OF LEASE

FOR

THE CORPORATE ADVISORY BOARD COMPANY

 

THIS AGREEMENT OF LEASE (the "Lease") is made as of the ___ day of June,

1998, by and between The George Washington University, a non-profit corporation

chartered by an act of the Congress of the United States (hereinafter called

"Landlord"), and The Corporate Advisory Board Company, a Delaware corporation

(hereinafter called "Tenant").

 

WITNESSETH, that, for and in consideration of the rents, mutual covenants

and agreements hereinafter set forth, the parties hereto do mutually agree as

follows:

 

1. INITIAL DEMISED PREMISES/CONDITION OF INITIAL DEMISED PREMISES

--------------------------------------------------------------

 

(A.) Initial Demised Premises. Landlord has leased, and does hereby lease

--------------------------

and demise unto Tenant, and Tenant has leased and does hereby lease and hire

from Landlord as tenant of Landlord, at the rent and upon the terms, covenants

and conditions herein set forth, approximately 21,000 square feet of rentable

area on the seventh (7th) floor of the building presently known as Suite 7000,

which building is known by street address as 2000 Pennsylvania Avenue, N.W.,

Washington, D.C. 20006 and being herein referred to as the "Building". Suite

7000 is hereinafter referred to as the "Initial Demised Premises". The Initial

Demised Premises is shown on the floor plan attached to this Lease and made a

part hereof as Exhibit A.

----------

 

(B.) Condition of Initial Demised Premises. Tenant agrees to accept the

-------------------------------------

Initial Demised Premises in its "as is" condition existing on the date

possession of the Initial Demised Premises is delivered to Tenant by Landlord,

without Landlord being required to undertake any demolitions, removals,

alterations, improvements, decorations, repairs or modifications of the Initial

Demised Premises. This provision shall not in any way affect any repair and

maintenance obligations of Landlord hereunder with respect to the Demised

Premises, if any.

 

(C.) Tenant Examination. Tenant represents that it has thoroughly

------------------

examined the Initial Demised Premises as of the date of this Lease first stated

and is aware of and accepts the existing condition of each.

 

(D) Swing Space. Landlord has leased, and does hereby lease and demise

------------

unto Tenant, and Tenant has leased and does hereby lease and hire from Landlord

as tenant of Landlord, upon the terms, covenants and conditions herein set

forth, approximately 4,958 square feet of rentable area on the second (2nd)

floor of the Building presently known as Suite 2500 (hereinafter called the

"Swing Space"). The Swing Space is outlined on the floor plan attached to this

Lease and made a part hereof as Exhibit A .

---------

 

 

(E.) Definition of Demised Premises. The Initial Demised Premises and any

-------------------------------

other rentable areas of the Building leased to Tenant from time to time pursuant

to the provisions of this Lease are collectively hereinafter referred to as the

"Demised Premises".

 

 

2. TERM

----

 

(A.) Lease Commencement Date. The term of this Lease shall commence on the

-----------------------

Delivery Date (as hereinafter defined) of the Initial Demised Premises (the

"Lease Commencement Date"). The delivery date of the Initial Demised Premises

shall be the 1st day of July, 1998 ("Delivery Date") and except as provided

under Subparagraph (B.) of this Paragraph below,

 

The Corporate Advisory Board Company Lease

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Landlord will deliver, and Tenant shall accept, possession of the Initial

Demised Premises on the Lease Commencement Date.

 

(B.) Delay in Delivery of Initial Demised Premises and Swing Space. In the

-------------------------------------------------------------

event Landlord is unable to deliver possession of Suite 7000 and/or the Swing

Space to Tenant by July 1, 1998, Landlord, its agents and employees, shall not

be liable or responsible for any claims, damages or liabilities arising in

connection therewith or by reason thereof, nor shall the validity of this Lease

be affected or Tenant be excused or released from this Lease, or its performance

hereunder. The Lease Commencement Date shall be extended, if necessary, to the

date Landlord delivers possession of the Initial Demised Premises and Tenant's

obligations pursuant to this Lease shall commence thereon. For the purposes of

this Lease, the term "Lease Commencement Date" shall also mean any extended date

of commencement of the term of this Lease as may be established pursuant to the

operation of the provisions of this Paragraph of the Lease. If any existing

tenant of the Initial Demised Premises or occupant of the Initial Demised

Premises holds over in violation of its lease, Landlord shall promptly initiate

and pursue appropriate legal action to evict such tenant or occupant from the

Initial Demised Premises.

 

(C.) Confirmation of Lease Commencement Date. When Tenant accepts

---------------------------------------

possession of the Initial Demised Premises on the Lease Commencement Date,

Landlord and Tenant shall execute the "Declaration of Lease Commencement Date,"

attached hereto as Exhibit B, which shall specify and be controlling as to the

---------

Lease Commencement Date and as to the Rent Commencement Date, as hereinafter

defined. Actual entry by Tenant into the Initial Demised Premises shall not be

necessary to establish that the Lease Commencement Date has occurred and

Tenant's obligations hereunder have become effective.

 

(D.) The Lease Expiration Date. The initial term of this Lease shall

-------------------------

expire on June 30, 2009 (the "Lease Expiration Date"), unless the term of this

Lease shall sooner cease and expire as hereinafter provided in this Lease.

 

(E) Rent Commencement. Tenant's first payment of Basic Annual Rent (as

------------------

hereinafter defined) shall be due on the date that is ninety (90) days after the

Lease Commencement Date (the "Rent Commencement Date").

 

(F) Swing Space Term. The term of this Lease for the Swing Space (i.e.,

-----------------

unless and until such Swing Space becomes Expansion Space B as described in

Paragraph 44 hereof) shall commence on the Lease Commencement Date and continue

through June 30, 1999. In no event shall Tenant be entitled to lease or occupy

the Swing Space after June 30, 1999 without exercising the option for Expansion

Space B set forth in Paragraph 44 hereof, and should Tenant continue in

occupancy after June 30, 1999 without having exercised Tenant's option for

Expansion Space B, Tenant shall be considered to be a tenant at will and the

provisions of Paragraph 35 TENANT HOLDOVER shall apply.

---------------

 

 

3. RENT/BASIC ANNUAL RENT

----------------------

 

(A.) Rent. Tenant hereby covenants and agrees to pay to Landlord, as

----

consideration for making this Lease with Tenant, rent of the kind and nature

hereinafter prescribed in this Lease. Rent shall include, but is not limited

to, Basic Annual Rent, as increased pursuant to this Lease (as hereinafter

defined), Adjustment Rent (as hereinafter defined), any modification to Basic

Annual Rent or Adjustment Rent, any increases due to increases or decreases in

the size of the Demised Premises, and any sums, charges, expenses and costs

identified in this Lease as to be

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

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<PAGE>

 

paid by Tenant to Landlord (with all rent, other than Basic Annual Rent [and any

modifications thereto] being collectively defined and hereinafter referred to as

"Additional Rent").

 

(B.) Basic Annual Rent/Basic Monthly Rent. In keeping with Tenant's

------------------------------------

covenant and commitment to pay rent, Tenant agrees to pay a basic annual rent

for the leasing of the Initial Demised Premises (other than the Swing Space) of

Thirty-two and 50/100th Dollars ($32.50) per rentable square foot, subject to

annual increases during the term of this Lease as set forth hereinbelow, (such

rent, as adjusted is hereinafter referred to as "Basic Annual Rent"). Basic

Annual Rent shall be due and payable in equal monthly installments. Each of

said monthly installments of Basic Annual Rent are hereinafter called "Basic

Monthly Rent". Every installment of Basic Monthly Rent shall be due and payable

without demand and shall not be subject to setoff, deduction or counterclaim,

except if and as otherwise provided herein. Installments of Basic Monthly Rent

shall be due and payable in advance on or before the first day of each calendar

month during the term hereof, commencing on the Rent Commencement Date. If the

Rent Commencement Date occurs on a day other than the first day of a calendar

month, then the first installment of Basic Monthly Rent paid by Tenant shall be

prorated based upon the number of days in such partial month and Tenant shall be

credited with any overpayment.

 

It is agreed by Landlord and Tenant that all Basic Monthly Rent and

Additional Rent otherwise due on the Swing Space shall be abated for the period

from July 1, 1998 through June 30, 1999 or, if the Lease Commencement Date with

respect to the Swing Space is not July 1, 1998, then for a period commencing on

the Lease Commencement Date and continuing for a period of twelve (12) months

from such Lease Commencement Date. It is agreed by Landlord and Tenant that all

Basic Monthly Rent otherwise due for Suite 7000 and for the Mandatory Expansion

Space, as hereinafter defined, shall be abated for the months of July and

August, 2000, or if the Lease Commencement Date is not July 1, 1998, then for

the first two (2) months of the third Lease Year.

 

Basic Annual Rent per rentable square foot shall be subject to adjustment

and escalation effective as of the first day of each Lease Year starting with

the second Lease Year, (excluding, however, the sixth Lease Year), by an amount

equal to two percent (2%) of the per-square-foot Basic Annual Rent in effect for

the immediately preceding and expiring Lease Year. In lieu of a 2% escalation

in the sixth Lease Year, the per-square-foot Basic Annual Rent for the sixth

Lease Year shall be equal to the per-square-foot Basic Annual Rent in effect for

the fifth (5th) Lease Year plus an amount equal to Two Dollars ($2.00) per

rentable square foot.

 

Accordingly, as computed, Basic Annual Rent and the resulting Basic Monthly

Rent for the Initial Demised Premises shall be as follows:

 

 

<TABLE>

<CAPTION>

 

Basic Annual Rent Basic Annual Basic Monthly

Lease Year Per Square Foot Rent Rent

------------------------------ ------------------- --------------- ---------------

<S> <C> <C> <C>

 

1 $32.50 $682,500 $56,875

------------------------------ ------------------- --------------- ---------------

 

2 $33.15 $696,150 $58,012.50

------------------------------ ------------------- --------------- ---------------

 

3 $33.81 $710,010 $59,167.50

------------------------------ ------------------- --------------- ---------------

 

4 $34.49 $724,290 $60,357.50

------------------------------ ------------------- --------------- ---------------

 

5 $35.18 $738,780 $61,565

------------------------------ ------------------- --------------- ---------------

 

6 $37.18 $780,780 $65,065

------------------------------ ------------------- --------------- ---------------

</TABLE>

 

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

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<PAGE>

 

<TABLE>

<CAPTION>

 

<S> <C> <C> <C>

 

7 $37.92 $796,320 $66,360

------------------------------ ------------------- --------------- ---------------

 

8 $38.68 $812,280 $67,690

------------------------------ ------------------- --------------- ---------------

 

9 $39.45 $828,450 $69,037.50

------------------------------ ------------------- --------------- ---------------

 

10 $40.24 $845,040 $70,420

------------------------------ ------------------- --------------- ---------------

 

11 $41.04 $861,840 $71,820

------------------------------ ------------------- --------------- ---------------

</TABLE>

 

 

(C.) Payment Instructions. All rent shall be paid by check (subject to

--------------------

collection) made payable to the order of " The George Washington University" and

shall be delivered to "LaSalle Partners Management Services, Inc., P.O. Box

71015, Chicago, IL 60694-1015," or to such other party or address as Landlord

may from time to time designate in writing.

 

(D.) Certified/Cashier's Check. If Tenant is delayed or in default in

-------------------------

making any payment of rent of any kind and nature more than once during any

Lease Year during the term of this Lease, then Landlord at its option may

require that all future payments of rent thereafter be made by certified or

cashier's check, payable to Landlord. This requirement shall be in addition to

and not in limitation of any remedies available to Landlord under this Lease for

Tenant's failure to timely and properly pay rent.

 

 

4. MANDATORY EXPANSION OF INITIAL DEMISED PREMISES.

------------------------------------------------

 

(A.) Obligation.

-----------

 

Subject to the provisions of Subparagraph (B.) of this Paragraph,

Tenant shall be obligated to lease from Landlord, and Landlord shall be

obligated to lease to Tenant, approximately 6,765 square feet of rentable area

on the seventh (7th) floor of the Building presently known as Suite 7400 and

approximately 37,701 square feet of rentable area on the sixth (6th) floor of

the Building presently known as Suite 6000 (collectively, the "Mandatory

Expansion Space"). The Mandatory Expansion Space is outlined on the floor plan

attached to this Lease and made a part hereof as Exhibit A. If any existing

---------

tenant of the Mandatory Expansion Space or occupant of the Mandatory Expansion

Space holds over in violation of its lease, Landlord shall promptly initiate and

pursue appropriate legal action to evict such tenant or occupant from the

Mandatory Expansion Space.

 

(B.) Commencement Date.

------------------

 

(i) The commencement date of this Lease with regard to the Mandatory

Expansion Space shall be March 23, 1999, or such later date as Landlord shall be

able to deliver the Mandatory Expansion Space to Tenant (in either case, the

"Mandatory Expansion Space Lease Commencement Date").

 

(ii) The term of this Lease with regard to the Mandatory Expansion

Space shall commence on the date Landlord delivers possession of the Mandatory

Expansion Space to Tenant ("Mandatory Expansion Space Delivery Date"), but in no

event shall the Mandatory Expansion Space Delivery Date be earlier than March

23, 1999, without Tenant's prior approval.

 

(iii) The lease termination date with respect to the Mandatory

Expansion Space will be the same as the Lease Expiration Date for the Initial

Demised Premises.

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

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<PAGE>

 

(C.) Conditions of the Leasing of the Mandatory Expansion Space by Tenant.

---------------------------------------------------------------------

 

Tenant shall lease the Mandatory Expansion Space from Landlord subject

to and upon the following conditions, and where not in conflict with the

following, on the same terms and conditions as the Initial Demised Premises:

 

(i) Tenant shall accept the Mandatory Expansion Space in "AS IS"

condition, without Landlord being required to undertake any demolition,

removals, alterations, improvements, decorations, repairs or modifications of

the Mandatory Expansion Space. This provision shall not in any way affect any

repair and maintenance obligations of Landlord hereunder with respect to the

Mandatory Expansion Space, if any.

 

(ii) Tenant shall pay to Landlord, as Basic Annual Rent for the

Mandatory Expansion Space ("Mandatory Expansion Space Rent") an amount equal to

the product of the number of square feet of rentable area attributable to the

Mandatory Expansion Space, multiplied by the then-applicable per-square-foot

Basic Annual Rent attributable to the Initial Demised Premises in effect for

each Lease Year of the remainder of the term, beginning with the Lease Year in

which the Mandatory Expansion Space Rent Commencement Date (as hereinafter

defined) occurs and further, to pay that Mandatory Expansion Space Rent in equal

monthly installments to Landlord with the Basic Monthly Rent paid for the

Initial Demised Premises.

 

(iii) Tenant shall commence to pay Mandatory Expansion Space Rent, in

advance, from and after three (3) months after the Mandatory Expansion Space

Lease Commencement Date (the "Mandatory Expansion Space Rent Commencement

Date").

 

(iv) Tenant shall commence to pay Adjustment Rent for the Mandatory

Expansion Space from and after the Mandatory Expansion Space Rent Commencement

Date, and the percentage of the Tenant's Operating Expense Share and the

percentage of the Tenant's Real Estate Tax Share shall be increased to reflect

the addition of the Mandatory Expansion Space to the Initial Demised Premises in

accordance with the calculation of such percentages set forth in Paragraph 5 of

the Lease entitled "OPERATING EXPENSE INCREASES AND REAL ESTATE TAX

-----------------------------------------------

ADJUSTMENTS", such revised percentages to become effective as of the Mandatory

--------------

Expansion Space Rent Commencement Date, with appropriate pro rata adjustments in

Adjustment Rent being made in the Lease Year in which the Mandatory Expansion

Space Rent Commencement Date occurs.

 

5. OPERATING EXPENSE INCREASES AND REAL ESTATE TAX ADJUSTMENTS

-----------------------------------------------------------

 

(A.) Definitions. As used in this Lease, the terms listed below shall have

-----------

the meanings indicated, namely:

 

(i) "Calendar Year" shall mean each consecutive twelve (12) calendar

month period, January 1st through the succeeding December 31st, of any

year in which this Lease is in effect.

 

(ii) "Fiscal Year" shall mean the period July 1st of one Calendar Year

through June 30th of the next Calendar Year, being the fiscal year of

the Building, or such other twelve (12) calendar month period,

including a Calendar Year, as Landlord may determine from time to time

during the term of this Lease.

 

(iii) "Lease Year" shall mean each consecutive twelve (12) calendar

month period commencing on the Lease Commencement Date, or if the

Lease

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

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<PAGE>

 

Commencement Date is not the first day of a calendar month, then

commencing on the first day of the calendar month next following the

Lease Commencement Date.

 

(iv) "Operating Expenses" shall mean any and all expenses reasonably

allocated by Landlord to the office areas of the Building (as

distinguished from the areas of the Building designated from time to

time by Landlord as retail areas of the Building) incurred in a Fiscal

Year in connection with the operation, maintenance, servicing, repair

and improvement of the Building and its appurtenances, but net of any

discounts, credits, rebates or reimbursements to Landlord. Operating

Expenses shall be determined in accordance with generally accepted

accounting principles, ("GAAP") consistently applied and modified as

necessary to reflect customary property management practices and the

specific provisions of this paragraph (iv). By way of example, but

without limitation, Operating Expenses shall include, but are not

limited to, any and all of the following:

 

(a) salaries, wages, medical, surgical and general welfare

benefits (including also group life insurance and pension

payments for employees of Landlord or Landlord's agent or

agents engaged in the operation, maintenance, servicing or

repair of the Building);

 

(b) payroll taxes;

 

(c) premiums and payments related to workmen's compensation

insurance;

 

(d) license and permit fees and charges;

 

(e) electricity charges;

 

(f) costs and expenses for repairs and maintenance;

 

(g) utility taxes;

 

(h) water and sewer charges;

 

(i) natural gas charges (if any);

 

(j) oil and other fuels charges;

 

(k) premiums and other charges for insurance provided and

maintained by Landlord, including casualty and liability

insurance;

 

(l) charges for security services;

 

(m) fees and charges for char and cleaning services;

 

(n) costs of operating supplies for the Building, including

cleaning supplies and equipment;

 

(o) costs of uniforms and dry cleaning and laundering;

 

(p) costs related to window cleaning;

 

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

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<PAGE>

 

(q) costs related to snow removal;

 

(r) costs and expenses of repair and maintenance of common areas

in or about the Building and the Land, including but not

limited to sidewalks, driveways, parking facilities, vaults,

roadways, grounds, and public spaces;

 

(s) management and service provider fees actually incurred by

Landlord (but as to property management fees, not to exceed

market rates for such services for first-class office

buildings in downtown Washington, D.C.) ;

 

(t) costs and expenses of service or management contracts with

independent contractors;

 

(u) fees and expenses of accountants and attorneys, including

but not limited to those incurred to reduce or contest

Operating Expenses or Real Estate Taxes;

 

(v) costs and expenses incurred for telephone, telegraph,

postage, stationery, supplies and other materials required

for or related to the operation of the Building, including

those of any management office supporting the Building;

 

(w) the cost of capital improvements to the Building and

appurtenant improvements made by Landlord (i) for the

purpose of complying with governmental laws, rules,

regulations or order arising subsequent to the date of this

Lease first hereinabove stated, or (ii) which are reasonably

determined by third party consultants hired by Landlord to

be likely to reduce Operating Expenses, provided that the

cost of each such capital improvement, together with

financing charges if the improvement is not financed by

borrowing, shall be amortized in constant annual payments

over the useful life of the improvement, and only the amount

of that annual payment shall be included as Operating

Expenses for any Fiscal year; and,

 

(x) any other expenses or charges of any nature whatsoever,

whether or not herein mentioned, which would be included as

operating expenses of a mixed use, commercial office

building in accordance with generally accepted accounting

and management principles with respect to operation of

first-class office buildings in the Washington, D.C.,

Metropolitan Area.

 

Operating Expenses may, in Landlord's sole discretion, include

payments made to entities related to Landlord, or in which Landlord

may have a direct or indirect interest, to reimburse such entities (as

determined by Landlord using commercially reasonable principles) for

the proportionate use by Landlord within the Building of equipment

owned or personnel employed by such entities which are used both by

such entities and Landlord.

 

Operating Expenses shall not include any of the following: (a)

painting or decorating areas of the Building other than public areas;

(b) interest and amortization

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

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<PAGE>

 

on mortgages; (c) depreciation of the Building (but not any

amortization of capital improvements and interest thereon as provided

for above); (d) ground rent, if any; (e) salaries and other

compensation paid to officers or executives of Landlord or to any

partner, principal or owner of the entity comprising Landlord; (f)

income taxes imposed upon the net income of Landlord from the

operation of the Building; (g) the costs of alterations, capital

improvements and other items which under generally accepted accounting

principles are properly classified as capital expenditures (except to

the extent otherwise provided in Subparagraph 5(A.)(iv)(w)); (h) any

tenant work performed or alteration of space leased to Tenant or other

tenants or occupants of the Building, whether such work or alteration

is performed for the initial occupancy by such tenant or occupant or

thereafter; (i) any cash or other consideration paid by Landlord on

account of, with respect to or in lieu of the tenant work or

alterations described in (h) above; (j) interest and amortization of

indebtedness or any costs of financing or refinancing, depreciation or

ground rent; (j) management fees in excess of the amount permitted

under Subparagraph 5(A.)(iv)(s); (k) leasing commissions and

advertising (other than advertising for building employees) and

promotional expenses related to leasing space in the Building; (l)

"takeover lease expenses" (i.e., expenses incurred by Landlord with

----

respect to leases entered into by tenants of the Building for space

which such tenants vacated in another building in connection with the

leasing of space in the Building); (m) any amounts payable by Landlord

by way of indemnity or for damages or which constitute a fine,

interest or penalty which payments were not triggered or caused,

directly or indirectly, by the actions or inactions of Tenant; (n) any

cost representing an amount paid for services or materials to a

person, firm or entity related to Landlord or any general partner of

Landlord to the extent such amount exceeds the maximum amount that

would be paid in the marketplace for such services or materials to an

unrelated third party for the identical level and nature of services

or materials; (o) costs for which Landlord actually receives

reimbursement from insurance, condemnation awards or any other source

and expenses for repairs and other work caused by fire, windstorm or

other casualty required to be insured under this Lease; (p) any

expenses incurred by Landlord as a result of asbestos in the Building

or on or about the Land or suspected to be in the Building or on or

about the Land; and (q) legal, investigative, and court costs in

connection with the enforcement by Landlord of leases to tenants in

the Building. In addition, to the extent that the costs of performing

additional services (including operation of the Building beyond the

days and hours specified in Paragraph 15 (A.) and start-up time

related thereto) or the costs of installations to or for tenants other

than Tenant are reimbursed to Landlord by such tenants, such costs

shall not be included in Operating Expenses.

 

If during all or part of any Fiscal Year, including the Fiscal

Year ending June 30, 1999, Landlord shall not furnish any particular

item of work or service (which would constitute an item of Operating

Expenses hereunder) to at least ninety-five percent (95%) of the

rentable area of the Building designated by Landlord as office space,

because (a) less than all of the space then designated for office

space of the Building is occupied, or (b) such item of work or service

is not desired or required by any tenant of the office space, or (c)

any tenant of the office space is itself obtaining and providing such

item of work or service, then an adjustment shall be made in computing

the Operating Expenses for such Fiscal Year so that the Operating

Expenses shall be increased for such Fiscal Year to the amount that

would have been reasonably incurred had Landlord provided such item of

work or service to ninety-five percent (95%) of the rentable area of

the Building designated by Landlord as office space for the entire

Fiscal Year.

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

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<PAGE>

 

(v) "Operating Expense Share" shall mean Tenant's proportionate share

of increases in Operating Expenses (as hereinafter defined);

representing the ratio that the rentable area of the Demised Premises

bears to the total rentable area of all office area in the Building

from time to time, which total rentable area of office area of the

Building excludes the area of any storage areas located outside any

Demised Premises leased to tenants in the Building and the area of the

garage within the Building. As of the date of this Lease first

hereinabove stated, Tenant's Operating Expense Share will be seven and

one thousand seven hundred ninety-three ten-thousandths percent

(7.1793%) and Tenant's Operating Expense Share will increase to

twenty-two and three thousand eight hundred eight ten-thousandths

percent (22.3808%) from and after the Mandatory Expansion Space Rent

Commencement Date. Tenant's Operating Expense Share will increase

upon the addition of any of Expansion Space A, Expansion Space B, or

Expansion Space C, all as provided in Paragraph 44 hereof.

 

(vi) "Real Estate Tax Share" shall mean Tenant's proportionate share

of increases in Real Estate Taxes (as hereinafter defined),

representing the ratio that the rentable area of the Demised Premises

bears to the total rentable area of all office and retail areas

contained in the Building from time to time, which total rentable area

of office and retail areas of the Building excludes the area of any

storage areas located outside any Demised Premises leased to tenants

in the Building and the area of the garage within the Building. As of

the date of this Lease first herein above stated, Tenant's Real Estate

Tax Share will be five and seven thousand nine hundred fifty-one ten-

thousandths percent (5.7951%) and shall increase to eighteen and six

hundred fifty-eight ten-thousandths percent (18.0658%) from and after

the Mandatory Expansion Space Rent Commencement Date. Tenant's Real

Estate Tax Share will increase upon the addition of any of Expansion

Space A, Expansion Space B, or Expansion Space C, all as provided in

Paragraph 44 hereof.

 

(vii) "Real Estate Taxes" shall mean all taxes, rates and

assessments, general and special and including also any increases in

tax rate and/or in assessed valuation, which are now or at any time(s)

hereafter levied, assessed or imposed with respect to the Building and

all land related or appurtenant thereto (the "Land"), and/or upon

Landlord's leasehold interest (if any) in the said Land, to the extent

same apply to a Real Estate Tax Year (or part thereof occurring during

the term of this Lease). Real Estate Taxes shall include without

limitation, real estate taxes, personal property taxes applicable to

the personalty in the Building, any and all unincorporated and other

business license and/or franchise taxes (other than such taxes based

upon Landlord's net income), public space rentals, including but not

limited to vault rentals, any taxes, assessments or other levies which

may at any time be imposed and/or collected by any federal, state,

county, municipal, quasi-governmental or corporate entity in respect

of bus, subway or other public transportation facilities operating in

the metropolitan area of the District of Columbia, and including also

any assessment or levy for any business improvement district duly

formed in accordance with applicable law, and any tax assessment or

other charges in the nature of a sales, use or other tax upon

Landlord, the Demised Premises, the Building, the Land and/or the

rents payable hereunder (except income taxes, franchise taxes

calculated upon Landlord's net income, estate or inheritance taxes of

Landlord). If the system of real estate taxation shall be altered or

varied and any new tax or levy shall be levied or imposed on the

Building, and/or Land and/or Landlord, in addition to or in

substitution for real estate taxes

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

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<PAGE>

 

and/or personal property taxes presently levied or imposed on

immovables in the District of Columbia, and including also without

limitation any taxes on rents, then any such new tax or levy shall be

included within the term "Real Estate Taxes". If any Real Estate Tax

is levied or assessed in such a manner that the amount thereof

required to be paid by Tenant hereunder in respect of its Real Estate

Tax Share is not ascertainable because such tax relates to one or more

properties other than the Building or to rents received by Landlord in

addition to those received from the Building, then Tenant's Real

Estate Tax Share of said items to be paid by Tenant forming a part of

the Real Estate Taxes shall be reasonably determined by Landlord. If

any Real Estate Taxes levied against the Land, Building or

improvements covered hereby or the rents reserved therefrom, shall be

evidenced by improvement bonds or other bonds, or in any other form,

which may be paid in annual installments, Landlord shall include the

same in Real Estate Taxes based upon the maximum period permitted by

law for payment of such installments and only the amount payable for a

Real Estate Tax Year elapsing during the term of this Lease shall be

included as Real Estate Taxes for purposes of this definition.

 

(viii) "Real Estate Tax Year" shall mean the fiscal year of the

District of Columbia being October 1st of one Calendar Year through

September 30th of the next succeeding Calendar Year, or such other

twelve (12) calendar month period as Landlord may determine from time

to time during the term of this Lease, including such other period as

may be defined as the fiscal year of the District of Columbia from

time to time during the term of this Lease. The term "Real Estate Tax

Year" shall include any period of adjustment which may result from a

change in designation of the period identified by the District of

Columbia as its fiscal year.

 

 

(B.) Obligations for Adjustment Rent. During the term of this Lease and

-------------------------------

any renewals or extensions thereof, Tenant covenants and agrees to pay to

Landlord, as part of Additional Rent, (i.) Tenant's Operating Expense Share of

any Operating Expenses in excess of the Operating Expenses incurred during the

Fiscal Year elapsing between July 1, 1998 and June 30, 1999 ("Base Operating

Expenses"), and (ii.) Tenant's Real Estate Tax Share of Real Estate Taxes in

excess of the Real Estate Taxes payable for the Real Estate Tax Year 1999 (i.e.,

----

October 1, 1998 through September 30, 1999) ("Base Real Estate Taxes"),

provided, however, that during any renewal or extension of this Lease, the Base

Operating Expenses and Base Real Estate Taxes shall be modified to reflect the

Fiscal Year and Real Estate Tax Year during which such renewal or extension

commences, or such other Fiscal Year and Real Estate Tax Year as Landlord and

Tenant agree should apply. The payments called for above as (i) and (ii) in

this Subparagraph (B.) are hereinafter sometimes collectively referred to as

"Adjustment Rent." Tenant shall make the payments of Adjustment Rent called for

in this Subparagraph (B.) commencing on July 1, 1999 and shall make such

payments within thirty (30) days after each and every request therefor from

Landlord. Copies of the appropriate bills for Real Estate Taxes, together with

the statement of Operating Expenses of the Building for the Fiscal Year in

reasonable detail prepared by Landlord or Landlord's accountants, covering said

Adjustment Rent shall be furnished to Tenant as soon as is reasonably

practicable following Landlord's billing of such Adjustment Rent under this

Subparagraph (B.), and unless timely contested by Tenant pursuant to Paragraph

5(D) below, shall be deemed conclusive and binding on the parties. Tenant's

obligation to pay Adjustment Rent shall survive the expiration or earlier

termination of this Lease with regards to payments thereof covering any portion

of the term of this Lease through the date of expiration or termination of the

Lease.

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

10

<PAGE>

 

(C.) Estimates by Landlord. Landlord may from time to time during the term

---------------------

hereof (and more frequently than once during any Lease Year) deliver to Tenant a

written estimate by Landlord of the amount of annual Adjustment Rent which

Landlord may estimate and determine will be payable by Tenant during any ensuing

Fiscal Year (or portions of a Fiscal Year). Such estimated sum is hereinafter

called the "Estimated Adjustment Rent". Commencing on the first day of the

calendar month immediately following the month in which such statement of

Estimated Adjustment Rent is tendered, and on the first day of each and every

calendar month thereafter until the next such statement, Tenant shall pay to

Landlord (in addition to and with Basic Monthly Rent), as Additional Rent, a sum

as specified by Landlord which is equal to one-twelfth (1/12th) of said

Estimated Adjustment Rent, such payments to continue to be due and payable until

further notice from Landlord. At the end of each Fiscal Year, Landlord shall

furnish to Tenant, within a reasonable time after the end of such Fiscal Year,

an annual statement setting forth in reasonable detail the actual amount of the

annual Adjustment Rent due and payable by Tenant for the immediately preceding

Fiscal Year in which such monthly installments of Estimated Adjustment Rent were

paid by Tenant pursuant to this Subparagraph (C.). Thereafter Landlord and

Tenant shall then make an appropriate adjustment of said Estimated Adjustment

Rent paid by Tenant for the then expired Fiscal Year within thirty (30) days

after delivery of such statement, accomplished as applicable either by Tenant's

payment to Landlord of any deficiency, or, at Landlord's option, by Landlord's

refund or credit toward future installments of Basic Monthly Rent in case of any

overpayment of Adjustment Rent by Tenant.

 

(D.) Within ninety (90) days after delivery of an annual Operating Expense

statement, Tenant shall notify Landlord whether Tenant will examine Landlord's

books and records with respect to such Operating Expense statement. If Tenant

so notifies Landlord then Tenant and its representatives shall have the right,

at Tenant's expense, upon reasonable prior notice to Landlord during normal

business hours, to examine Landlord's books and records relating to the

operation of the Building for the three (3) most recent Fiscal Years to verify

matters in the Operating Expense statement(s) for such three most recent Fiscal

Years, provided however, that Tenant may review the books and records and

request an adjustment in Tenant's Adjustment Rent only once for each Fiscal Year

being reviewed by or on behalf of Tenant and such review shall not occur more

than one time in any Lease Year. If as a result of such examination, Tenant

disputes any such Operating Expense statement, Tenant shall notify Landlord that

it disputes such Operating Expense statement setting forth the reasons therefor

(a "Notice of Dispute"). If Landlord shall have overstated Adjustment Rent for

any Fiscal Year, Landlord shall promptly refund such excess to Tenant. If such

Adjustment Rent shall have been overstated by an amount in excess of five

percent (5%), Landlord shall reimburse Tenant for the reasonable, actual, out-of

pocket cost of such examination. If Landlord shall have understated Adjustment

Rent for any Fiscal Year, Tenant shall promptly pay such understated amount to

Landlord. Tenant agrees to maintain all information it receives from Landlord or

Landlord's agents in connection with Tenant's examination of the books and

records in strictest confidence and shall not reveal the same to any other

persons or entities except to such accounting or real estate brokerage firms or

attorneys which Tenant has employed to assist Tenant in the review of such books

and records, which firms shall, prior to receiving any information from such

books and records, execute an agreement with Tenant and Landlord agreeing to

maintain all such information in confidence. In the event that Tenant employs

any persons or entities to review the books and records in accordance with

Tenant's rights stated herein, such persons or entities shall not be compensated

for their work for Tenant on a contingency basis or in any manner which is based

upon the amount of the discrepancies or errors found in the books and records.

In the event that Adjustment Rent is found not to be overstated, then Tenant

shall immediately pay Landlord an administrative fee of $500 for the costs and

expense incurred by Landlord and Landlord's personnel in making such books and

records available for review and in handling any other requests by Tenant or

Tenant's agents in connection with the review of the books and records.

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

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<PAGE>

 

6. SECURITY DEPOSIT

----------------

 

(A.) Delivery. Simultaneous with the delivery by Tenant of this Lease

--------

fully executed by Tenant, Tenant shall deposit with Landlord the sum of One

Million Three Hundred Thousand Dollars ($1,300,000) as security for Tenant's

performance under this Lease (the "Security Deposit"). The Security Deposit

shall be in the form of an unconditional, irrevocable letter of credit payable

at sight to Landlord in form and substance and from a financial institution

acceptable to Landlord in its reasonable discretion. Such letter of credit

shall be assignable by Landlord, as beneficiary, and any successor to Landlord.

Such letter of credit shall have a term of not less than one year and shall be

automatically renewed without notice from Landlord or Tenant to the issuer at

least forty-five days prior to each one year anniversary of the letter of

credit's issuance. In the event that Tenant has not provided Landlord with a

replacement letter of credit within thirty (30) days prior to the expiration of

the letter of credit then being held by Landlord, Landlord shall draw down the

letter of credit and shall hold the sum thereby received in a non-interest

bearing account, provided, however, that if Tenant delivers a replacement letter

of credit, in form and substance acceptable to Landlord in its sole discretion

and in compliance with the provisions of this Paragraph 6, and Tenant is not

otherwise in default of its obligations under this Lease, then Landlord shall

return to Tenant the cash then on deposit in such non-interest bearing account.

If Tenant is in default of its obligations under this Lease at the time Tenant

delivers a replacement letter of credit as aforesaid, then only after such

default has been cured to Landlord's full satisfaction during the period

provided herein for the curing of such default, shall Landlord return the cash

then on deposit in a non-interest bearing account to Tenant. Provided that

Tenant is not then in default and has not been in default during the term

hereof, the letter of credit may be reduced to One Million Forty Thousand

Dollars ($1,040,000) on the Burnoff Date, as such term is defined in the

Guaranty of even date herewith from The Advisory Board Company to Landlord, a

copy of which is attached hereto and incorporated herein by this reference as

Exhibit G and provided that Tenant is not then in default and has not been in

---------

default during the term hereof, and further provided that the Burnoff Date has

occurred, then the letter of credit may be further reduced to Six Hundred Fifty

Thousand Dollars ($650,000) on the one year anniversary of the Burnoff Date. In

the event that Tenant is in default on the date upon which the letter of credit

would otherwise have been reduced in amount, and the cure period for such

default by Tenant, if any, has not yet expired, then in the event that Tenant

cures such default within any applicable cure period, Tenant may thereafter

reduce the amount of the letter of credit to an amount which it would have been

absent the default by Tenant on the applicable date for reduction thereof. From

and after the one year anniversary of the Burnoff Date, Tenant shall maintain

the letter of credit in the amount of $ 650,000 through the term of this Lease.

The letter of credit shall be security for Tenant's payment and performance of

all Tenant's obligations, covenants, conditions and agreements under this Lease.

 

(B.) Availability to Landlord. In the event Tenant fails to perform its

------------------------

obligations, including but not limited to accepting possession of the applicable

portion of the Demised Premises on the Lease Commencement Date and the

Mandatory Expansion Space Lease Commencement Date as provided for herein,

Landlord shall have the right, but shall not be obligated, to apply all or any

portion of the Security Deposit to cure any default by Tenant. The use of the

Security Deposit by Landlord, as aforesaid, shall not excuse Tenant's liability

for defaults hereunder nor limit Landlord's remedies. If Landlord so applies

any or all of the Security Deposit, Tenant shall be obligated to promptly

restore the Security Deposit to its original amount, within five (5) days after

receiving a request from Landlord to do so. The Security Deposit shall not be

deemed liquidated damages and Landlord may apply all or a portion of the

Security Deposit to reduce Landlord's damages of any kind and nature (including

but not limited to court costs and reasonable

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

12

<PAGE>

 

attorneys' fees). Such application of the Security Deposit shall not preclude

Landlord from recovering from Tenant all additional damages incurred by

Landlord.

 

(C.) Return of Security Deposit. If Tenant fully and faithfully complies

--------------------------

with all terms and conditions of this Lease, the Security Deposit shall be

returned to Tenant within thirty (30) days following the expiration of the term

of this Lease and Tenant's surrender of the Demised Premises in accordance with

the terms of this Lease.

 

(D.) Sale or Transfer. In the event of the sale or transfer of Landlord's

----------------

interest in the Building, Landlord shall transfer the Security Deposit to such

purchaser or transferee, in which event Tenant shall be entitled to look to the

new party identified as Landlord for the return of the Security Deposit, and

Landlord shall thereupon be released from all liability to Tenant for the return

of the Security Deposit. Furthermore no holder of a mortgage or deed of trust

to which this Lease is subordinate shall be responsible for the Security Deposit

unless such mortgagee or holder of such deed of trust shall have actually

received or obtained control over the Security Deposit.

 

 

7. USE

---

 

(A.) Permitted Use. Tenant shall use and occupy the Demised Premises for

-------------

general office use and for no other use or purpose whatsoever without the prior

written consent of Landlord. Tenant may not use the Demised Premises for any

use which will cause Landlord to have to modify the Building common areas to

comply with The Americans With Disabilities Act, as it may be amended (the

"ADA") or other similar laws, rules, ordinances and regulations which may

hereinafter be enacted. Tenant hereby covenants and agrees, on behalf of

itself and its assigns, subtenants, contractors and invitees, not to obstruct or

interfere with the rights of other tenants of the Building, and not to injure or

annoy them or those having business with them. Tenant may not use or permit the

Demised Premises or any part thereof to be used for any disorderly, unlawful or

extra hazardous purpose nor for any other purpose than herein specified. Tenant

shall specifically not manufacture any commodity within the Demised Premises.

Tenant shall not store or use, or permit others to store or use, within the

Demised Premises any hazardous or toxic substances or hazardous or toxic wastes

or materials, as defined under applicable Federal and/or local law in violation

of any such law.

 

(B.) Compliance. Tenant shall comply with all laws, ordinances, rules,

----------

orders and regulations of all government authorities and of the Board of Fire

Underwriters (and any successor thereto) at any time promulgated and in force,

attributable to the use, or manner of use by Tenant of the Demised Premises, or

any part thereof. To the extent after the date of this Lease that Tenant's use

or uses of the Demised Premises, or Tenant's manner of operation creates a need

or requirement under applicable statute, ordinance or regulation of any

governmental authority to modify or alter the Demised Premises, supporting

facilities, or access thereto, Tenant shall be fully responsible for the costs

to undertake such changes, and to obtain Landlord's approval (such approval not

to be unreasonably withheld, delayed or conditioned) to undertake such changes

pursuant to the Paragraph of this Lease entitled "ALTERATIONS".

-----------

 

(C.) Certificate of Occupancy. Tenant specifically shall be required to

------------------------

obtain a Certificate of Occupancy from the District of Columbia for Tenant's use

and occupancy of the Building at or prior to the date Tenant occupies the

Demised Premises for its business purposes.

 

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

13

<PAGE>

 

8. UPKEEP OF DEMISED PREMISES

--------------------------

 

Tenant shall keep the Demised Premises and related appurtenances, including

without limitations, doors and windows, the fixtures and equipment therein

clean, safe and sanitary, in good order and condition, in compliance with all

applicable laws, ordinances and regulations of any governmental authority having

jurisdiction over the Building, shall take good care thereof, and shall suffer

no waste or injury thereto. At the expiration or earlier termination of the

term of this Lease, Tenant shall surrender the Demised Premises broom clean and

in the same order and condition in which they were on the Lease Commencement

Date or the Mandatory Expansion Space Lease Commencement Date, as applicable,

ordinary wear and tear and damage by the elements excepted. To the extent that

Tenant's manner of operation or use of the Demised Premises (which Tenant agrees

shall be general office use) creates a need or requirement under applicable law,

ordinance or regulation of any governmental authority for special cleaning,

maintenance, repair and/or modification of the Demised Premises, its fixtures or

improvements, Tenant shall be fully responsible to undertake such cleaning,

maintenance, repair or modification at its sole cost.

 

 

 

9. UPKEEP OF BUILDING

------------------

 

Subject to the provisions of this Lease entitled "DAMAGE BY TENANT,"

----------------

Landlord agrees that it will deliver and keep the Base Building Systems of the

Building (as hereinafter defined) and all structural elements thereof in good

working order and condition, in accordance with the standards customarily

employed by other landlords of similar and comparable first class office

buildings located within the central business district of Washington, D.C., and

the costs thereof incurred by Landlord shall be deemed to be an element of

Operating Expenses of the Building except as otherwise provided in Paragraph

5(A.). For the purposes of this Paragraph, the term "Base Building Systems"

shall be deemed to include, but not be limited to, the roof, the exterior

windows and window systems, the elevators, the base building mechanical and

plumbing systems including building heating, cooling and ventilation systems

(but not any supplementary systems serving less than the entire Building), major

ventilation distribution ducts to each floor of the Building and the electrical

system from the external power supply source to the electrical panel on each

floor, and life safety systems outside the Demised Premises.

 

Landlord at its cost and expense, shall keep and maintain the Building, and

its fixtures, appurtenances, systems and facilities (including the Building

parking garage), and the sidewalks, plazas and landscaped areas located in or

about the Building in good working order, condition and repair and shall make

all repairs as needed in or about the Building, except those repairs for which

Tenant is responsible pursuant to the provisions of Paragraph 8 hereof or which

do not preclude Tenant's reasonable use and enjoyment of the Demised Premises

and the Building. Landlord shall provide a Building security system comparable

to other first-class office buildings in the downtown Washington, D.C. area and

comparable to what presently exists at the Building as of the date hereof.

 

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

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<PAGE>

 

10. ASSIGNMENT AND SUBLETTING

-------------------------

 

(A.) Restrictions on Tenant.

----------------------

 

(i) Subject to Subparagraphs (B.) or (C.) below of this Paragraph as

applicable, Tenant shall not, without first obtaining in writing the prior

consent of Landlord, which consent shall not be unreasonably withheld,

conditioned or delayed: (a) assign, mortgage, pledge, encumber or otherwise

transfer this Lease, the term and estate hereby granted or any interest

hereunder; (b) permit the Demised Premises or any part hereof to be utilized by

anyone other than Tenant for desk space, mailing privileges, or as a concession;

(c) sublet or offer or advertise for subletting the Demised Premises or any part

thereof; or (d) permit any person to occupy the Demised Premises or any part

thereof, other than employees or affiliates of Tenant or clients of Tenant where

such clients, affiliates or employees occupy the space for a temporary period

not to exceed one hundred eighty (180) days and where such occupancy is without

charge by Tenant to such clients, affiliates or employees.

 

(ii) Within 10 business days after Landlord's receipt of the

Subletting Notice (as hereinafter defined) or the Assignment Notice (as

hereinafter defined), Landlord shall by notice to Tenant grant or deny its

consent to such request.

 

(iii) If Landlord shall fail to notify Tenant within the 10 business-

day period of Landlord's approval or rejection of Tenant's request to sublet or

assign, Tenant shall give Landlord a notice so advising Landlord (the "Reminder

Notice") together with a duplicate of Tenant's sublet or assignment request.

The first page of such Reminder Notice must contain the following in capitalized

and boldface type:

 

LANDLORD'S FAILURE TO APPROVE OR DISAPPROVE THE ATTACHED REQUEST WITHIN TEN

(10) BUSINESS DAYS AFTER RECEIPT OF THIS NOTICE SHALL BE DEEMED TO BE

LANDLORD'S APPROVAL OF SUCH REQUEST.

 

If within ten (10) business days after Landlord's receipt of the Reminder

Notice, Landlord shall again fail to notify Tenant of Landlord's approval or

disapproval of Tenant's sublet or assignment request, Landlord shall be deemed

to have approved such proposed sublet or assignment.

 

(iv) The consent of Landlord to any assignment or other transfer of

this Lease and the term and estate hereby granted or to any subletting or

occupancy may not be unreasonably withheld, conditioned or delayed by Landlord.

Without limiting the other instances in which it may be reasonable for Landlord

to withhold its consent to an assignment (or transfer), or subletting (or

occupancy), Landlord and Tenant acknowledge that it will be reasonable for

Landlord to withhold its consent in any of the following instances: (a) in

Landlord's reasonable judgment, the financial worth of the proposed assignee or

sublessee does not meet the credit standards applied by Landlord for other

tenants under leases in the Building with comparable terms; (b) in Landlord's

reasonable judgment, the character or reputation of the proposed use of the

Demised Premises by the proposed assignee or sublessee is inconsistent with the

quality of other tenants in the Building; (c) Landlord has received from any

prior lessor to the proposed assignee or subtenant a negative report concerning

such prior lessor's experience with the proposed assignee or sublessee; (d)

Landlord has experienced previous defaults by or is in litigation with the

proposed assignee or sublessee; (e) the proposed assignee or subtenant is a

tenant in the Building and Landlord has space in the Building available for

leasing to such proposed assignee or subtenant; (f) the proposed assignee or

sublessee is a person or entity with whom Landlord is negotiating to lease space

in the Building or whom has asked the Landlord for

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

15

<PAGE>

 

a proposal to lease space in the Building; or (g) Tenant is in default of any

obligation(s) of Tenant under this Lease, or Tenant has defaulted under this

Lease on three (3) or more occasions during the previous twelve (12) months

preceding the date that Tenant makes its request for consent.

 

(v) Landlord's consent if given shall not relieve Tenant of the

obligation to obtain such consent to any further or subsequent assignment (or

other transfer), or subletting (or occupancy) not expressly permitted under this

Paragraph. Furthermore, Landlord's consent to any assignment, transfer,

subletting or occupancy shall not be construed as a waiver, discharge, or

release of Tenant, and any immediate or remote successors in interest to Tenant

from liability for the performance or observance of any covenant or obligation

to be performed by Tenant under this Lease even where (a) an agreement has been

undertaken to modify any right or obligation of any party under this Lease, (b)

a stipulation extending the time for performance has been granted by Landlord

from time to time, (c) a waiver of performance has been granted by Landlord from

time to time, or (d) Landlord has failed to enforce any obligation set forth in

this Lease. The collection or acceptance of rent from any assignee, sublessee

or occupant shall not constitute a waiver or release of Tenant, and any

immediate or remote successors in interest to Tenant from any of its liabilities

or obligations under this Lease.

 

(vi) Notwithstanding any other provision of this Paragraph of the

Lease to the contrary, but provided Tenant is not then in default of any

provision of this Lease (regardless of whether any applicable notice has been

given or period to cure expired), Tenant shall have the right to assign this

Lease or sublet the Demised Premises in whole or in part to any Subsidiary or

Affiliate or successor of Tenant, or to any successor partnership, limited

liability company or corporation to Tenant upon giving Landlord not less than

ten (10) business days prior written notice of such assignment or subletting.

Such an assignment or subletting shall not trigger any Landlord right to

terminate the Lease or subsequently require Landlord's consent to any assignee

or sublessee. A "Subsidiary" of Tenant shall mean any corporation or other

entity not less than fifty percent (50%) of whose outstanding voting stock or a

controlling interest in which shall, at the time, be owned, directly or

indirectly, by Tenant. An "Affiliate" of Tenant shall mean any corporation or

other entity which, directly or indirectly, controls or is controlled by or is

under common control with Tenant. For purpose of the definition of "Affiliate,"

the word "control" (including "controlled by" and "under common control with"),

as used with respect to any corporation, partnership, limited liability company

or association, shall mean the possession, directly or indirectly, of the power

to direct or cause the direction of the management and policy of a particular

corporation, partnership, limited liability company or association, whether

through the ownership of voting securities or by contract or otherwise. A

"successor partnership, limited liability company or corporation" shall mean any

partnership, limited liability company or corporation (i) into which Tenant is

merged or with which Tenant is consolidated, (ii) to which all or substantially

all of Tenant's business assets or stock shares are transferred, (iii) which has

financial strength commensurate with the obligations of this Lease, and which

(iv) is duly qualified to do business in the District of Columbia. Tenant shall

promptly furnish to Landlord such information as Landlord may reasonably request

in order to make its determination regarding the financial strength of such

partnership, limited liability company or corporation.

 

(vii) Notwithstanding any other provision of this Paragraph 10 of the

Lease to the contrary, but provided Tenant is not then in default of any

provision of this Lease (regardless of whether any applicable notice has been

given or cure period expired), the following actions shall not constitute an

assignment of this Lease and shall therefore not trigger any right of Landlord

to terminate the Lease pursuant to Paragraph 10 or require Landlord's consent:

 

(A) the transfer or sale of Tenant's stock to employees of Tenant;

 

 

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June 23, 1998 Final

 

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(B) the sale of any or all of the stock of Tenant to any public company;

 

(C) the sale of Tenant's stock in connection with any public offering by

Tenant; or

 

(D) the sale or transfer of stock of Tenant which does not affect control

of the Tenant.

 

Tenant shall give Landlord notice of any proposed public offering of Tenant's

stock or the sale of substantially all of the stock of Tenant to its employees

or the sale of any or all of the stock of Tenant to any public company.

 

(B.) Proposed Assignments.

--------------------

 

Except as noted in Subparagraph (A.)(vi) and (vii) of this paragraph, in

the event Tenant desires to assign or transfer this Lease then the following

additional provisions shall apply.

 

(i) In the event Tenant desires to assign or transfer this Lease, then

at least thirty (30) days, but not more than ninety (90) days prior to the date

that Tenant desires the assignment to become effective (the "Assignment Date"),

Tenant shall give Landlord a written notice (the "Assignment Notice") which

shall set forth the name, address, proposed use, financial information,

including bank references and business of the proposed assignee, the Assignment

Date and the consideration and all other material terms and conditions of the

proposed assignment, all in such detail as Landlord shall reasonably require.

 

(ii) If Landlord requests additional detail, the Assignment Notice

shall not be deemed to have been received until Landlord receives such

additional detail. Landlord shall have the option, exercisable by giving notice

to Tenant at any time within thirty (30) days after Landlord's receipt of the

Assignment Notice, to terminate this Lease as of the date specified in the

Assignment Notice as the Assignment Date. If Landlord exercises such option,

this Lease, and the term and estate hereby granted, shall terminate as of the

Assignment Date. No failure of Landlord to exercise such option to terminate

this Lease shall be deemed to be Landlord's consent to the proposed assignment.

 

(iii) If Tenant is a partnership, a limited liability partnership, or

a limited liability company, any dissolution of Tenant or withdrawal or change,

whether voluntary, involuntary or by operation of law, of any general or limited

partner or partners, or alternatively, member or members, of Tenant shall be

deemed a voluntary assignment of this Lease and thus shall be subject to the

provisions of this Paragraph. If Tenant is a corporation, any dissolution,

merger, consolidation or other reorganization of Tenant, or the sale or transfer

of any stock or any interest in the capital stock of Tenant, voluntarily,

involuntarily or by operation of law, shall be deemed a voluntary assignment of

this Lease and subject to the provisions of this Paragraph. In the event of any

conflict between the provisions of this Paragraph 10 (B.) (iii) and either

Paragraph 10 A.(vi) or Paragraph 10 (A)(vii), the latter shall govern.

 

(iv) In the event that the proposed assignee has a credit rating by

Moody's or Standard and Poor's of AA or better, then provided that Landlord

consents to such assignment, Tenant shall be relieved of any further obligations

hereunder as of the effective date of the assignment, except that Tenant's

Security Deposit shall not be returned and shall be available to Landlord in

accordance with the provisions of this Lease unless the assignee has provided to

Landlord a replacement Security Deposit in form and substance satisfactory to

Landlord.

 

 

 

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(C.) Proposed Sublettings.

--------------------

 

Except as noted in Subparagraph (A.)(vi) of this Paragraph, the following

additional provisions shall apply in the event Tenant desires to sublet the

Demised Premises or permit occupancy thereof by others, in whole or in part.

 

(i) Where Tenant desires to sublet the Demised Premises or any part

thereof, or permit the occupancy thereof, then at least thirty (30) days, but

not more than ninety (90) days, prior to the date when Tenant desires the

subletting to be effective (the "Subletting Date"), Tenant shall give Landlord a

written notice (the "Subletting Notice") which shall set forth the name, address

and business of the proposed sublessee, a detailed description of the space

proposed to be sublet, which must be one or more commercially leasable self-

contained unit(s) which meet all requirements of the local building, fire and

safety codes (the "Sublet Space"), any rights of the proposed subtenant to use

Tenant's improvements and the like; the Subletting Date and the fixed rent and

other consideration and all other material terms and conditions of the proposed

subletting, all in such detail as Landlord shall reasonably require and which

Subletting Notice shall be accompanied by financial information from the

proposed subtenant for the immediately preceding three (3) calendar years. If

Landlord requests additional detail, the Subletting Notice shall not be deemed

to have been received until Landlord receives such additional detail.

 

(ii) Landlord shall have the option, exercisable by giving notice to

Tenant at any time within thirty (30) days after Landlord's receipt of the

Subletting Notice, to sublease from Tenant all or such part of the Sublet Space

as may be specified in the notice exercising the option (the "Recapture Space")

upon the terms and conditions set forth in the Subletting Notice, except that

the rental rate shall be the lower of a rental rate per square foot derived from

the per square foot Basic Annual Rent (a) specified in the Paragraph of this

Lease entitled "RENT/BASIC ANNUAL RENT" as adjusted pursuant to this Lease and

----------------------

that part of the Adjustment Rent described in the Paragraph of this Lease

entitled "OPERATING EXPENSE INCREASES AND REAL ESTATE TAX ADJUSTMENTS" payable

-----------------------------------------------------------

under this Lease for the Recapture Space, or (b) a rental rate derived from the

per square foot Basic Annual Rent and other consideration set forth in the

Subletting Notice which is applicable to the Recapture Space and except that

Landlord shall not have the right to sublet the first 10,000 square feet of the

Demised Premises which Tenant desires to sublease. As to such first 10,000

square feet of the Demised Premises which Tenant desires to sublease, no such

sublease shall be permitted unless and until the proposed subtenant otherwise

meets the requirements of this Paragraph 10.

 

(iii) If Landlord exercises its option to sublet the Recapture Space,

Tenant shall sublet the Recapture Space to Landlord upon the aforesaid terms and

conditions; provided, however, that (a) Landlord shall at all times under such

sublease have the right and option further to sublet the Recapture Space without

obtaining Tenant's consent, (b) the provisions of the Paragraph of this Lease

entitled "USE" and of this Paragraph shall not be applicable thereto as regards

---

Landlord as sublessee, (c) Landlord and its under subtenants shall have the

right to the use in common with Tenant all lavatories, corridors and lobbies (if

any) which are within the Demised Premises and the use of which is reasonably

required for the use and enjoyment of the Recapture Space, and (d) Landlord's

liability under such sublease shall not, unless expressly assumed or taken

subject to, be deemed assumed or taken subject to by any successor to Landlord's

interest under this Lease (including the holder of any underlying mortgage). No

failure of Landlord to exercise such option with respect to all of the Sublet

Space shall be deemed to be Landlord's consent to the subletting of all of the

Sublet Space or such portion thereof which does not constitute Recapture Space.

 

 

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June 23, 1998 Final

 

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<PAGE>

 

(D.) General Conditions.

------------------

 

(i) For any period during which Tenant is in default hereunder, Tenant

hereby assigns to Landlord any monies otherwise due to Tenant from any assignee,

transferee, sublessee or occupant of Tenant and hereby authorizes each such

assignee, transferee, sublessee or occupant to make such payments directly to

Landlord to be applied toward the payment of rent by Tenant under this Lease.

 

(ii) If the rent paid to Tenant on any subletting, assignment or

occupancy exceeds the rent payable by Tenant to Landlord hereunder (and if the

area of the Demised Premises subleased does not constitute the entire Demised

Premises, the existence of such excess shall be determined on a pro rata basis),

fifty percent (50%) of all such excess shall be paid to Landlord as Additional

Rent hereunder (after reimbursement to Tenant of reasonable costs incurred by

Tenant in connection with such subleasing or assignment).

 

(iii) Tenant may not mortgage or encumber this Lease, without the

prior written consent of Landlord, which consent may be withheld for any reason.

 

(iv) Notwithstanding any other provision of this Lease to the

contrary, Tenant shall have no right to transfer, assign, sublet, enter into

license or concession agreements, or mortgage or hypothecate this Lease or

Tenant's interest in the Demised Premises or any part thereof to a foreign

government or to any individual or entity whereby enforcement of the obligations

of the Tenant under this Lease might be limited by sovereign immunity. Any such

attempted transfer, assignment, subletting, license or concession agreement,

mortgage or hypothecation shall be void and confer no rights on such foreign

government or individual or entity.

 

(v) Tenant agrees to pay to Landlord as Additional Rent hereunder the

costs (including reasonable attorneys' fees) incurred by Landlord in connection

with any request by Tenant to obtain Landlord's consent to any assignment,

transfer, mortgage, encumbrance, subletting, or occupancy by Tenant, such

payment by Tenant not to exceed $1,500.00. Any sublease, occupancy agreement,

assignment or other transfer shall, at Landlord's option, be effected on forms

reasonably approved by Landlord.

 

 

11. ALTERATIONS

-----------

 

(A.) No Alterations without Landlord's Consent. Without the prior written

-----------------------------------------

consent of Landlord in each instance, which consent shall not be unreasonably

withheld, conditioned or delayed, Tenant will not make, from and after the Lease

Commencement Date or the Mandatory Lease Expansion Commencement Date, as

applicable, any removals, demolition, alterations, improvements, installations,

changes, replacements, additions, or improvements (structural or otherwise,

including without limitation wall paper and coverings, floor tile, ceiling light

fixtures, window blinds and wall to wall carpeting) in or to the Demised

Premises or any part thereof, including work to be undertaken by Tenant related

to its use and occupancy of the Demised Premises (collectively "Alterations"),

including any Alterations relating to any subletting of any portion of the

Demised Premises. Landlord's consent to any requested Alterations may not be

unreasonably withheld, delayed or conditioned, provided that Tenant has

delivered to Landlord the submissions provided for in Subparagraph (B.) below of

this Paragraph. Notwithstanding the foregoing, Landlord may withhold its

consent for any reason with regard to the requested Alterations where Landlord

determines in good faith that the Alterations will likely (i) adversely affect

the structure or safety of the Building or the mechanical, plumbing, electrical

or HVAC systems of the

 

 

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<PAGE>

 

Building, (ii) are or become visible from the exterior of the Building or any of

the common areas of the Building, (iii) interfere with the operation of the

Building or the provision of services or utilities to other tenants of the

Building, or (iv) could cause Landlord to have to undertake capital improvements

or impose upon Landlord costs which could not be included in Operating Expenses

of the Building. Landlord shall be entitled to at least ten (10) business days

to review Tenant's submissions, but shall timely apprise Tenant of any omissions

or need for additional information as and when discovered by Landlord.

Landlord's consent to a subletting pursuant to the Paragraph of this Lease

entitled "ASSIGNMENT AND SUBLETTING" shall not mean Landlord's consent or

-------------------------

approval to any related Alterations.

 

(B.) Tenant Submissions. At the time that Tenant makes its request to

------------------

Landlord, Tenant, at its sole cost and expense, shall provide Landlord with a

copy of the original or revised full-floor mechanical and electrical plans for

the floor or floors on which the Alterations are to be made, revised by the

Tenant's architect and engineers to show Tenant's proposed Alterations, and a

complete set of any and all architectural and engineering plans for the

Alterations (including, without limitation, structural engineering plans) for

Landlord's review and comment, such review and comment to be completed by

Landlord not later than ten (10) business days after delivery of a complete set

of any and all architectural and engineering plans for the Alterations and such

review and comment to be done using Landlord's reasonable discretion. Tenant

shall also deliver to Landlord a fee not to exceed Five Hundred Dollars

($500.00) for Landlord's out-of-pocket expenses incurred in connection with a

review of the plans for Tenant's proposed Alterations, provided, however, that

if Tenant has used Landlord's mechanical, electrical and plumbing engineer for

the Building (the "MEP Engineer") to design the plans for Alterations, then such

Five Hundred Dollar ($500.00) processing charge shall be waived by Landlord, and

provided further that Tenant shall use Landlord's designated structural engineer

for the Building for Tenant's Alterations provided such designated structural

engineer is available to Tenant at a cost not to exceed market rates for such

structural engineering services. Notwithstanding the foregoing, architectural

and engineering plans will not be required for Alterations which do not require

Landlord's prior written consent.

 

(C.) Landlord's Oversight and Review of Alterations. Landlord shall be

----------------------------------------------

entitled to review the construction, installation and fabrication of Alterations

from time to time as Alterations are being undertaken, but shall not exercise

any direct responsibility over any contractor of Tenant. Landlord agrees to

promptly bring to Tenant's attention any violation or irregularity observed by

Landlord during the construction, installation or fabrication of any elements of

Alterations.

 

(D.) Cost/Approval of Contractors. All Alterations made or to be made by

----------------------------

or on behalf of Tenant shall be undertaken (i) at Tenant's sole expense, (ii) at

such times, in such manner, and pursuant to such rules and regulations as

Landlord may designate, (iii) in a good, workmanlike, first class and prompt

manner, (iv) using new materials only, (v) in accordance with all applicable

legal requirements and the requirements of any insurance company insuring the

Building, as supplied by Landlord, (vi) in accordance with Landlord's

construction rules, if any, as supplied by Landlord, (vii) in satisfaction of

all applicable insurance requirements, at law and under this Lease and (viii)

only in accordance with all applicable governmental codes and regulatory

requirements. Tenant shall be solely responsible for and shall obtain any

necessary permits from appropriate governmental authorities prior to commencing

work, and shall furnish copies of the permits to Landlord prior to commencement

of any Alterations. Tenant shall be solely responsible for and shall obtain all

certificates of occupancy required by applicable regulations of the District of

Columbia in order to permit Tenant to occupy and use the altered Demised

Premises. Tenant shall be solely responsible for all penalties and claims

arising from civil infractions noted by the District of Columbia related to

performance of Alterations or its use and occupancy of the

 

 

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June 23, 1998 Final

 

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<PAGE>

 

Demised Premises. To the extent Landlord incurs costs arising from Tenant's

activities related to construction, installation and/or fabrication of

Alterations arising from damage to the Building or to other areas of the

Building occupied by other tenants, or is required to provide additional

services, such as but not limited to extra security measures, additional

disposal or waste collection services and char and cleaning services, arising

from the ongoing constructions, installations and/or fabrications of

Alterations, Tenant shall reimburse Landlord for such costs (without mark up to

Landlord) within thirty (30) days of receipt by Tenant of a request from

Landlord for reimbursement. Such costs incurred by Landlord shall be deemed

Additional Rent.

 

(E.) Approval of Contractors. Any and all Alterations shall be made

-----------------------

only by such contractors, mechanics or suppliers as are approved in writing in

advance by Landlord. Approval of contractors, suppliers, or mechanics by

Landlord, which approval may not be unreasonably withheld, conditioned or

delayed, shall be based upon the contractors, supplier or mechanics being

properly licensed, their financial posture, experience and past job performance.

Any contractor employed shall be solely the contractor of Tenant and shall have

no privity or relationship with Landlord. Tenant shall indemnify Landlord with

regard to all activities of any contractor, mechanic or supplier employed by

Tenant or through any such party employed by Tenant.

 

(F.) Alterations Without Landlord's Approval. If any Alterations are made

---------------------------------------

without the prior written consent of Landlord, Landlord may correct or remove

the same, and Tenant shall be liable to Landlord for any and all expenses

incurred by Landlord in the performance of this work, including an overhead and

administrative charge equal to fifteen percent (15%) of such expenses incurred

by Landlord, all of which amounts shall be deemed Additional Rent. Landlord's

prior written consent shall not be required for Alterations consisting of

recarpeting or repainting of the Demised Premises or the hanging of pictures on

the walls of the Demised Premises where the same are not visible from the common

areas of the Building.

 

(G.) Ownership of Alterations.

------------------------

 

(i) It is distinctly understood that all Alterations whether made by

or at the expense of Landlord or by Tenant, and including without limitation

wall paper and coverings, floor tile, ceiling light fixtures, window blinds,

wall to wall carpet, and any other fixtures and equipment attached to, or built

into, the Demised Premises as of the Lease Commencement Date or the Mandatory

Expansion Space Lease Commencement Date, as applicable, or during the term of

this Lease (whether made with or without Landlord's consent, and whether or not

made at Landlord's or Tenant's expense) shall be and remain part of the Demised

Premises and be deemed the property of Landlord, to be surrendered with the

Demised Premises at the expiration of this Lease without disturbance,

molestation or injury.

 

(ii) Notwithstanding the foregoing Landlord at its option and

discretion may require that Tenant, at Tenant's expense, to remove at the

expiration or any termination of this Lease any or all Alterations to the

Demised Premises made by Tenant, other than the initial improvements to the

Demised Premises made by Tenant on or prior to the date of initial occupancy of

each portion of the Demised Premises, which are unusual in nature and of which

Tenant has been notified by Landlord or Landlord's agent that removal will be

required at the time of installation of the same. If Tenant is required to

remove any or all Alterations, then Tenant shall repair any damage to the

Demised Premises or Building caused by such removal. Tenant specifically agrees

to promptly comply with such directions to remove and repair.

 

(iii) In addition to all legal, equitable and other rights and

remedies available to Landlord, it is agreed that if Tenant does not comply with

its obligations under this Paragraph and

 

 

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June 23, 1998 Final

 

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<PAGE>

 

such non-compliance continues for a period of ten (10) days after notice to

Tenant (except in the case of an emergency, for which no notice or cure period

shall be required or permitted), Landlord shall have the right (but not the

obligation) to perform or cause to be performed Tenant's obligations, duties and

covenants, in which event Tenant shall reimburse to Landlord within five (5)

days after demand all costs incurred by Landlord to undertake the removal and

repairs, plus a sum equal to fifteen percent (15%) of such costs representing

overhead and administrative expenses of Landlord in such matters, all of which

amounts shall be deemed Additional Rent.

 

 

12. MECHANICS' LIENS AND SIMILAR LIENS

----------------------------------

 

(A.) Liens Prohibited. Tenant shall not do or suffer anything to be done

----------------

whereby the Land and/or Building may be encumbered by any mechanic's or

materialmen's lien. If any mechanic's lien or similar lien is filed against the

Demised Premises, or the Building, for work, labor, services, or materials, done

for or supplied to or claimed to have been done or supplied to Tenant, including

but not limited to Alterations, that lien shall be discharged or bonded off by

Tenant to Landlord's sole satisfaction, at Tenant's sole cost and expense,

within thirty (30) days after the earlier of (i) the date Tenant is delivered

written demand from Landlord to discharge said lien, or (ii) the date Tenant

becomes aware of the filing of such lien (or notice thereof) with the District

of Columbia under applicable law. If Tenant fails to discharge or

satisfactorily bond off any lien, Landlord may, at its option, discharge the

same and treat the cost thereof as Additional Rent, due and payable upon receipt

by Tenant of a written statement of costs from Landlord. It is hereby expressly

covenanted and agreed that such discharge or satisfactorily bonding off of any

lien by Landlord shall not be deemed to waive or release Tenant from its default

under the Lease for failing to discharge the same.

 

(B.) No Assumption of Liability. Notice is hereby given that Landlord

--------------------------

shall not be liable for any labor or materials furnished or to be furnished to

Tenant upon credit, and that no mechanic's or materialmen's or other lien for

any such labor or materials shall attach to or affect the reversionary or other

estate or interest of Landlord in and to the Land and Building. In no event

shall Landlord be deemed to be the agent of Tenant for purposes of Title 38-101

of the District of Columbia Code (1981 Edition, as amended) and no contractor of

Tenant shall by virtue of its contract be entitled to assert any mechanic's lien

against the Building or land appurtenant thereto.

 

(C.) Indemnification. Tenant will indemnify and hold harmless Landlord

---------------

from and against any and all claims, damages and expenses incurred by Landlord,

arising from any liens placed against the Demised Premises or the Building and

the Land as a result of Tenant undertaking Alterations or other work.

 

 

13. PERSONAL PROPERTY

-----------------

 

(A.) No Liability of Landlord. Tenant's personal property, including but

------------------------

not limited to its furniture, fixtures and equipment, and the property of any

officer, employee and invitee, and of any agent, contractor, subtenant or

occupant brought into and located within the Building or within the Demised

Premises shall remain therein as the sole risk of such party. Landlord shall

have no liability for any accident to or damage to such personal property and

obligation to protect, repair or restore the same. Landlord shall not, in any

event, be liable for damages to any property of Tenant or any other party,

resulting from water, steam or other causes. Tenant hereby expressly releases

Landlord from any liability for damages.

 

 

 

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<PAGE>

 

(B.) Removal Upon Expiration or Earlier Termination of Lease.

-------------------------------------------------------

 

(i) Tenant shall remove all of its personal property not affixed or

attached to the Demised Premises from the Building and the Land at the

expiration or earlier termination of the Lease. As provided in Paragraph 11 of

this Lease entitled "ALTERATIONS", any property identified as an Alteration but

-----------

which may be removed without causing material damage to the Demised Premises and

which was installed by and at the sole expense of Tenant ("Tenant's Property")

shall be deemed to be the personal property of Tenant and, unless Tenant is in

default under this Lease, may be removed from the Demised Premises by Tenant

upon notice to Landlord prior to the expiration of the term of this Lease or

before any earlier termination thereof. Tenant shall be obligated however to

repair any damage to and restore the Demised Premises and/or the Building

occasioned by such removal to a condition no less than Building standard

condition specified in Exhibit D attached hereto and made a part thereof, or

---------

shall reimburse Landlord immediately upon demand for the cost of repairing such

damage if Tenant fails to timely repair, which costs incurred by Landlord shall

become Additional Rent under this Lease. Tenant shall schedule its move-out of

the Demised Premises with Landlord in advance and Landlord will make the freight

elevator available to Tenant for Tenant's move-out in the exercise of Landlord's

reasonable discretion.

 

(ii) In the event Tenant fails to remove any of its personal property,

including Tenant's Property, which Tenant was obligated to remove, such property

shall be deemed abandoned by Tenant and Landlord may remove that property from

the Demised Premises at Tenant's expense. Tenant hereby agrees to pay to

Landlord, as Additional Rent, the cost of this removal together with any and all

damages which Landlord may suffer and sustain by reason of the failure of Tenant

to remove the same. This amount of Additional Rent shall be due and payable

upon receipt by Tenant of a written statement of costs and damages from

Landlord.

 

(iii) If Tenant is in default under this Lease, then notwithstanding

the provisions of Subparagraph (B.)(i.) of this Paragraph, it shall not remove

any of its personal property, including Tenant's Property, without Landlord's

prior written consent.

 

 

14. DELIVERIES AND MOVING OF PROPERTY BELONGING TO TENANT.

-----------------------------------------------------

 

(A.) Delivery and Moving to, from or within Building. No furniture,

-----------------------------------------------

equipment or other bulky matter of any description (including but not limited to

materials related to construction, installation and/or fabrication of

Alterations) shall be received into or removed from the Building, moved through

the common area of the Building or carried in the elevators of the Building,

except in the manner and during the times reasonably approved by Landlord and in

accordance with any policies and procedures of Landlord in effect from time to

time. Tenant shall obtain Landlord's prior determination as to the manner and

the time that delivery, and/or movement into, out of or through the Building is

permitted prior to moving said property into, out of or through the Building.

 

(B.) Supervision of Deliveries and Moving. All moving of furniture,

------------------------------------

equipment and such other items noted in Subparagraph (A.) of this Paragraph

within the public areas shall be coordinated with Landlord, who shall, however,

not be responsible for any damage resulting from, to or charges for moving the

same.

 

(C.) Elevator Load Capacities. Landlord shall have the sole right to

------------------------

determine the load capacities of the elevators of the Building and to determine

the furniture, equipment and other such

 

 

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June 23, 1998 Final

 

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<PAGE>

 

items noted in Subparagraphs (A.) of this Paragraph if can be safely transported

in the elevators.

 

(D.) Clearing Property from Public Spaces. Tenant agrees promptly to

------------------------------------

remove from the sidewalks adjacent to the Building any of the property of Tenant

or any other person or entity claiming rights under this Lease by and through

Tenant, including but not limited to furniture, equipment or other materials

delivered or deposited there.

 

(E.) Responsibility for Damage. Subject to the provisions of Paragraph

-------------------------

22(C)(iii), all damage done to the Demised Premises and to the Building by the

taking in or removal of any property of Tenant referred to in this Paragraph

(including but not limited to materials related to construction, installations

or fabrication of Alterations), or due to its being in the Demised Premises,

shall be repaired at the expense of Tenant. Tenant hereby agrees to pay

Landlord, as Additional Rent, the cost of any repairs of such damage not

undertaken by Tenant. The amount of Additional Rent shall be due and payable by

Tenant upon receipt by Tenant of a written statement of costs from Landlord.

 

15. TENANT'S EQUIPMENT

------------------

 

(A.) No Equipment without Consent. Without first obtaining Landlord's

----------------------------

prior written consent, which consent shall not be unreasonably withheld or

delayed, but which may be reasonably conditioned, Tenant shall not install or

operate in the Demised Premises any electrically operated equipment or other

machinery, other than typewriters, word processing machines, desktop personal

computers, adding machines, postage meters, radios, televisions, tape recorders,

dictaphones, telecopiers, bookkeeping machines, copying machines, clocks, and

other business machines and equipment normally employed for general office use

in first-class office buildings and which do not require high electricity

consumption for operation or do not require dedicated circuitry. Furthermore

Tenant shall not install any equipment of any kind or nature whatsoever that

will or may necessitate any changes, replacements or additions to, the water

system, plumbing system, heating system, or air conditioning system of the

Demised Premises or of the Building without the prior written consent of

Landlord, which consent shall not be unreasonably withheld or delayed, but which

may be reasonably conditioned.

 

Landlord may condition its consent to installation and operation of

equipment upon the agreement of Tenant to pay to Landlord, as Additional Rent,

compensation for additional consumption of electricity and/or other utility

services, including but not limited to, water for cooling purposes. Such

consumption charges shall be in addition to Tenant's obligations, pursuant to

the Paragraph of this Lease entitled "OPERATING EXPENSE INCREASES AND REAL

------------------------------------

ESTATE TAX ADJUSTMENTS" to pay its proportionate share of increases in Operating

----------------------

Expenses.

 

If Tenant's equipment causes Tenant's consumption of electricity for lights

and power to exceed an average of five (5) watts per rentable square foot or

causes other utility service consumption above Building standard levels, or if

such equipment is to be consistently operated beyond the normal Building hours

of 8:00 a.m. to 7:00 p.m., Monday through Friday, and 9:00 a.m. to 1:00 p.m. on

Saturday, exclusive of designated holidays, ("Building Standard Hours"),

Landlord may install at its option and as applicable (i) a separate electric

meter for the Demised Premises at Tenant's sole cost and expense, (ii) a

separate electric meter for the specific equipment that is causing Tenant's

excessive consumption of electricity, and/or (iii) other separate monitoring

devices to measure utility consumption, all at Tenant's sole cost and expense.

In the event Landlord installs any separate meter for the Demised Premises,

Tenant shall then pay the cost of consumption as recorded by such meter directly

to the utility company to the extent such

 

 

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June 23, 1998 Final

 

24

<PAGE>

 

consumption exceeds the level specified above in this paragraph. In the event

that separate billing by the utility service provider is not possible, Landlord

will separately monitor consumption and bill Tenant periodically based upon such

excess consumption. Any claims for reimbursement and any billing by Landlord to

Tenant under this Subparagraph of the Lease shall be deemed Additional Rent due

and owing by Tenant.

 

Furthermore, if any or all of Tenant's equipment exceeds the level

specified above and requires electricity consumption in excess of the capacity

of the electrical system installed by Landlord in the Demised Premises and/or

dedicated circuitry, and/or consumption of other utility services in excess of

the capacity of the Building's systems at the Demised Premises, and/or types of

utility services that are not available in the Building, then if approved by

Landlord, any installation of additional transformers, pumps, distribution

panels, wiring, plumbing or other modifications to the Building's systems or

structure related thereto shall be at Tenant's sole expense, and any expense

incurred by Landlord related thereto shall be treated as Additional Rent due and

payable to Tenant. Necessary modifications to the Building's systems, utilities

and structure to address these needs of Tenant's equipment approved by Landlord

shall only be undertaken by Landlord, unless Landlord otherwise permits Tenant

to undertake such work.

 

(B.) Maintenance and Repair of Equipment. Maintenance and repair of

-----------------------------------

Tenant's equipment, including but not limited to telecommunications equipment,

office equipment, kitchen fixtures, separate air conditioning equipment, or any

other type of equipment, whether installed by Tenant or by Landlord on behalf of

Tenant, specially related to Tenant's use and occupancy of the Demised Premises,

shall be the sole responsibility of Tenant, and Landlord shall have no

obligation in connection therewith. Tenant shall maintain such equipment in

good working order and condition, subject to all other applicable provisions of

this Lease.

 

(C.) No Modifications of Building Systems. Tenant shall not install any

------------------------------------

equipment of any kind or nature whatsoever which will or may necessitate any

changes, replacements or additions to, or in the use of, the water system,

heating system, plumbing system, air-conditioning system, or electrical system

of the Demised Premises or the Building without first obtaining the prior

written consent of Landlord, not to be unreasonably withheld or delayed, but

which may be reasonably conditioned.

 

(D.) Noise or Vibration. Business machines and mechanical equipment

------------------

belonging to Tenant which cause noise or vibration that may be transmitted to

the structure of the Building or to any space therein to such a degree as to be

objectionable to Landlord or to any tenant in the Building shall be installed by

Tenant, at Tenant's expense, with vibration eliminators or other devices

sufficient to eliminate such noise and vibration. Tenant shall maintain such

devices at its sole expense. Any expense in this regard incurred by Landlord

shall be deemed Additional Rent.

 

(E.) Location of Heavy Equipment. Landlord shall have the right to

---------------------------

prescribe the weight and position of all heavy equipment and fixtures,

including, but not limited to, data processing equipment, record and file

systems, and safes which Tenant intends to install or locate within the Demised

Premises. Tenant will not install in the Demised Premises any fixtures,

equipment or machinery that will place a load upon any floor exceeding the floor

load per square foot area which such floor was designed to carry. Tenant shall

obtain Landlord's prior review and approval before installing or locating heavy

equipment and fixtures in the Demised Premises. If installation or location of

such equipment or fixtures, in Landlord's opinion, requires alterations to the

Demised Premises or the Building, Tenant agrees to reimburse Landlord, as

Additional Rent, for any and all costs incurred by Landlord to make such

required modifications or reinforcements, and such modifications or

reinforcements to the Building and Tenant shall make such required modifications

or reinforcements to the interior of the Demised Premises, all of which

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

25

<PAGE>

 

modifications or reinforcements shall be completed prior to Tenant installing or

locating such equipment or fixtures in the Demised Premises. Tenant shall

reimburse Landlord within thirty (30) days of receipt of any statement setting

forth those costs.

 

 

16. SIGNS AND ADVERTISEMENTS

------------------------

 

(A.) No Signs without Consent. Tenant may not inscribe, paint or affix

------------------------

sign, advertisement or notice on any part of the outside of the Demised Premises

or Building or any sign, notice or advertisement inside the Demised Premises

which is visible from the common areas of the Building or the exterior of the

Building, except on the directories and doors of offices, and then only in such

size, color and style as Landlord shall reasonably approve. Tenant may display

its name on the main entry door(s) of the Demised Premises in Building standard,

color, size and style of lettering, or as Landlord may otherwise approve, at

Tenant's expense.

 

(B.) No Advertisements Without Consent. Landlord may have the right to

---------------------------------

prohibit any advertisement of Tenant which in Landlord's reasonable opinion

tends to impair the reputation of the Building or its desirability as a Building

for offices or for financial, insurance or other institutions and businesses of

like nature, and upon written notice from Landlord, Tenant shall refrain from

and discontinue such advertisement.

 

(C.) Building Directory. Tenant shall have a proportionate share of

------------------

listings in the Building's directory at the time of Tenant's occupancy of the

Initial Demised Premises (which share shall increase as the Demised Premises

increases) in the size and style of lettering used by Landlord, at Landlord's

expense. Any changes to such display requested by Tenant shall be done at

Tenant's sole expense.

 

17. LANDLORD'S ACCESS

-----------------

 

(A.) Landlord's Right to Access. Upon reasonable prior notice to Tenant,

--------------------------

which may be less than one (1) Business Day, Tenant shall permit Landlord, or

its agents, employees or contractors, as well as Landlord's mortgagees to enter

the Demised Premises at all reasonable times and in a reasonable manner, without

charge to Landlord or diminution of rent, including Basic Monthly Rent and

Adjustment Rent, payable by Tenant, to examine, inspect and protect the

Building, and to make any repairs as in the judgment of Landlord may be deemed

necessary to maintain or protect the Building, or to exhibit the Building to

prospective tenants, purchasers and lenders. In the event of any emergency, no

prior notice from Landlord shall be required before Landlord or its agents

enters the Demised Premises. Landlord shall use reasonable efforts to minimize

interference with Tenant's business when making repairs, but Landlord shall not

be required to perform the repairs at a time other than during normal working

hours. At Tenant's request, a representative of Tenant may accompany Landlord,

provided that such request does not delay Landlord's or Landlord's agents entry

in the event of an emergency.

 

(B.) Emergency Access. In the event of an emergency, Landlord may enter

----------------

the Demised Premises without notice and make whatever repairs are necessary to

protect the Building and the base building systems.

 

(C.) Additional Permitted Access. Upon reasonable prior notice, except in

---------------------------

the case of an emergency, Tenant shall permit Landlord, or its agents, employees

or contractors, upon prior notice to Tenant, to enter the Demised Premises at

reasonable times and in a reasonable manner, without charge to Landlord or

diminution of Basic Monthly Rent and Adjustment Rent payable by Tenant, (i) to

make installations related to the construction of pre-occupancy tenant work

being

 

 

The Corporate Advisory Board Company Lease

June 23, 1998 Final

 

26

<PAGE>

 

performed by Landlord for other tenants of the Building, (ii) to make repairs,

alterations and improvements arising due to repairs, alterations and

improvements to any areas adjoining the Demised Premises, (iii) to erect, use

and maintain pipes and conduits in and through the Demised Premises, (iv) to

make alterations, installations, improvements and repairs to the Building, or

(v) to make installations, improvements, and repairs to the utility services of

the Building. Landlord shall use reasonable efforts to minimize any interference

with Tenant's business operations, but except in unusual circumstances, Landlord

shall not be required to perform such work at a time other than during Building

Standard Hours.

 

18. SERVICES

--------

 

(A.) Building Services to Be Provided. Landlord shall furnish to Tenant

--------------------------------

reasonably adequate electric current (not to exceed five (5) watts per square

foot of the Demised Premises for lighting and power), water, lavatory supplies,

Building standard ballasts and fluorescent tube replacements, automatically

operated elevator service and normal and usual cleaning and char service after 7

p.m. and consistent with the specifications set forth in Exhibit F (Mondays to

---------

Fridays, both inclusive, except on holidays) , all consistent with the standards

of a first-class office building located in downtown Washington, D.C., without

additional cost to Tenant, excepting only Tenant's obligation to pay Basic

Monthly Rent and Additional Rent. Landlord further agrees to furnish heat and

air conditioning (based upon human occupancy of not more than one (1) person per

each 120 square feet of rentable area) during the appropriate seasons of the

year. It is also agreed that if Tenant desires air-conditioning, heat, or other

Building standard services beyond the Building Standard Hours or on recognized

holidays and provided arrangements are made therefor with Landlord's management

agent (with such reasonable advance written notice of such desire as Landlord or

its management agent may require from time to time), Landlord will make

available such air-conditioning, heat, or other Building services outside of the

Building Standard Hours and on recognized holidays and Tenant agrees to pay for

the same, as Additional Rent, with the next monthly installment of Basic Monthly

Rent or at such other time(s) as Landlord may require, in accordance with the

then current schedule of costs and assessments therefor charged by Landlord. As

of the date of this Lease, the cost charged by Landlord for such after-hours

Building services is $26.00 per hour per (approximately) one half floor. This

cost is subject to change from time to time, if and to the extent Landlord's

cost therefor increases as determined by Landlord in Landlord's sole, but

reasonable, discretion. Landlord shall not be liable for failure to furnish,

or for suspension or delays in furnishing, any services required of Landlord

under this Lease, provided however, that in the event there is a failure of

Building services for a period of more than ten (10) consecutive business days,

and (1) such failure of Building services is within Landlord's reasonable

control to remedy, (2) such failure renders all or at least twenty percent (20%)

of the square footage of the Demised Premises untenantable for such ten (10)

consecutive business day period, (3) Tenant in fact does not use that portion of

the Demised Premises rendered untenantable, (4) Tenant is not then in default in

its obligations under the Lease, (5) Tenant's inaction or actions were not the

cause of the failure of Building services, and (6) Tenant has given Landlord

written notice of the failure of Building services and Landlord has not remedied

such failure within the aforesaid ten (10) consecutive business days period or

such longer period as Landlord determines in good faith is reasonably necessary

to remedy such failure of Building services, provided that Landlord is

diligently pursuing such remedy, then that portion of Basic Monthly Rent which

corresponds to the portion of the Demised Premises rendered untenantable shall

be abated until such time as the failure of services is corrected. Landlord

shall use reasonable, good faith efforts to restore such Building services.

 

 

(B.) Conservation Controls. Tenant agrees on behalf of itself and its

---------------------

subtenants to comply with all mandatory and voluntary conservation controls and

requirements applicable to

 

 

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June 23, 1998 Final

 

27

<PAGE>

 

office buildings that are imposed or instituted by the Federal or District of

Columbia governments, including without limitation, controls on the permitted

range of temperature settings in office buildings and requirements necessitating

curtailment of the volume of energy consumption of the hours of operation of the

Building. Any terms or conditions of this Lease that conflict or interfere with

compliance with such controls or requirements shall be suspended for the

duration of such controls or requirements. It is further agreed that compliance

with such controls or requirements shall not be considered an eviction, actual

or constructive, of Tenant from the Demised Premises or a violation of

Landlord's covenants set forth in the Paragraph of this Lease entitled

"COVENANTS OF LANDLORD," and shall not entitle Tenant to terminate this Lease or

---------------------

to an abatement of any rent payable hereunder.

 

(C) Additional Landlord Services. Landlord shall manage and operate the

-----------------------------

Building as a first-class office building in the Washington, D.C. area.

Landlord, at its cost and expense, shall keep and maintain the Building, and its

fixtures, appurtenances, systems and facilities (including the garage) and the

sidewalks, plaza and landscaped areas located thereon in good order, condition

and repair. Landlord, at its cost and expense, shall: (i) keep the sidewalks,

plazas and landscaped areas adjoining the Building free of accumulations of

snow, ice, dirt, refuse, rubbish and unlawful obstructions; (ii) keep the

Building atrium, lobbies and the common areas of the Building clean; (iii) care

for and maintain the shrubbery, planting and landscaping, if any, on the plaza

or plazas adjacent to the Building or other public areas of the Building; (iv)

provide a Building security system as reasonably determined by Landlord to be

comparable to that of other comparable office buildings in the area; (v) provide

Tenant, its employees and invitees prompt access into the Building, the Demised

Premises, and the Building garage twenty-four (24) hours each day, seven (7)

days per week.

 

19. RULES AND REGULATIONS

---------------------

 

Tenant, its agents, employees and guests shall abide by and observe the

rules and regulations attached hereto as Exhibit C and such other reasonable

---------

rules and regulations as may be promulgated from time to time by Landlord which

in Landlord's judgment are needed for the general well being, safety, care,

operation, maintenance and cleanliness of the Demised Premises and the Building,

provided a copy thereof is sent to Tenant. Nothing contained in this Lease

shall be construed to impose upon Landlord any duty or obligation to enforce

such rules and regulations, or the terms, conditions or covenants contained in

any other lease as against any other tenant, and Landlord shall not be liable to

Tenant for violation of the same by any other tenant, any other tenant's

employees, agents, business invitees, licensees, customers, clients, family

members or guests. Landlord shall not discriminate against Tenant in the

enforcement of any rule or regulation however.

 

 

20. DAMAGE BY TENANT

----------------

 

Subject to the provisions of Paragraph 22 (C)(iii) , Tenant shall be

responsible for all damage or injury to the Demised Premises or the Building

caused by Tenant, or its agents, employees, contractors and invitees doing work

in or about the Building or moving property into, in or out of, the said

Building and all breakage done by Tenant or its agents, employees, contractors

and invitees. Landlord may make such repairs or undertake appropriate

corrective action on Tenant's behalf, or at Landlord's sole election direct

Tenant to promptly repair or correct the damage under Landlord's supervision.

Any charge or cost incurred by Landlord shall be the sole responsibility of

Tenant due and payable by Tenant as Additional Rent, as and when billed to

Tenant by Landlord. This provision shall be construed as an additional remedy

granted

 

 

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June 23, 1998 Final

 

28

<PAGE>

 

to Landlord and not in limitation of any other rights and remedies which

Landlord has or may have in said circumstances.

 

 

21. LIABILITY

---------

 

(A.) No Landlord Liability. Landlord assumes no liability or

---------------------

responsibility whatsoever with respect to the conduct and operation of the

business to be conducted in the Demised Premises. Neither Landlord nor its

management agent shall be liable for any accident or injury to any person or

persons or property in or about the Demised Premises which are caused by the

conduct and operation of said business, or by virtue of equipment or property of

Tenant in the Demised Premises and which are not due to Landlord's gross

negligence or willful misconduct or that of Landlord's agents.

 

(B.) Indemnification of Landlord. Tenant shall defend and hereby does

---------------------------

indemnify and save harmless Landlord and Landlord's officers, directors,

partners, agents and employees (collectively, "Landlord's Indemnitees") from and

against all liability (statutory or otherwise), claims, suits, causes of action,

demands, judgments, costs, interest and expenses (including also reasonable

attorneys' fees and disbursements incurred in the defense thereof) to which any

Landlord's Indemnitees may (except insofar as it arises out of the negligence or

the intentional act or failure to act of such Landlord Indemnitees or their

contractors) be subject or suffer, whether by reason of any claim for, any

injury to, or death of, any person or persons or damage to or loss of property

(including also any loss of use thereof) or otherwise, and arising from or in

connection with the use by Tenant of, or from any work or anything whatsoever

done by Tenant (or any of its officers, directors, agents, contractors,

employees, licensees or invitees) in any part of the Demised Premises or the

Building (other than by Landlord or its agents or contractors) during the term

of this Lease. Tenant's agreement to indemnify and save harmless shall also

apply during the period of time, if any, prior to the Lease Commencement Date

and the Mandatory Expansion Space Lease Commencement Date, as applicable, with

respect to such part of the Demised Premises and/or the Building that Tenant may

have been given access to for the purpose of undertaking Alterations, or

preparing to conduct the Alterations or arising from any condition of the

Demised Premises or the Building due to or resulting from any default by Tenant

in the keeping, observance or performance of any covenant or agreement contained

in this Lease or from any fault or neglect of Tenant or any of its officers,

directors, agents, contractors, employees, licenses or invitees.

 

(C.) Indemnification of Tenant. Landlord shall defend, and hereby does

--------------------------

indemnify and save harmless Tenant and Tenant's officers, directors, partners,

and employees (collectively, "Tenant Indemnitees") from and against all

liability (statutory or otherwise), claims, suits, causes of action, demands,

judgments, costs, interest and expenses (including also reasonable attorneys'

fees and disbursements incurred in the defense thereof) to which any Tenant

Indemnitees may (except insofar as it arises out of the fault or neglect of such

Tenant Indemnitees or their contractors) be subject or suffer, whether by reason

of any claim for, any injury to, or death of, any person or persons or damage to

or loss of Tenant's Business Property (which shall mean Tenant's personal

property used in the operations of its business, including, but not limited to,

fixtures, furnishings and equipment) and arising from or in connection with the

negligence or the intentional act or omission of Landlord or its agents,

contractors, and employees in or about any part of the Demised Premises or the

Building during the term of this Lease or any renewal or extension thereof.

 

 

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June 23, 1998 Final

 

29

<PAGE>

 

22. INSURANCE

---------

 

(A.) Insurance Rating

----------------

 

(i) Tenant hereby covenants and agrees that it will not do or permit