ARLINGTON COUNTY, VIRGINIA. County Board Agenda Item Meeting of December 13, 2014

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1 ARLINGTON COUNTY, VIRGINIA County Board Agenda Item Meeting of December 13, 2014 DATE: December 12, 2014 SUBJECT: Amended and Restated Deed of Lease Between the County Board of Arlington County, Virginia, as Landlord, and Signature Theatre, Inc., a Virginia corporation, as Tenant, for Real Property and Improvements Located at 4200 Campbell Avenue, Arlington, Virginia (RPC# ). C. M. RECOMMENDATION: 1. Approve the attached Amended and Restated Deed of Lease (Exhibit 1) between the County Board of Arlington County, Virginia, as Landlord, and Signature Theatre, Inc., a Virginia corporation, as Tenant, for real property and improvements located at 4200 Campbell Avenue, Arlington, Virginia (RPC# ); and 2. Authorize the Real Estate Bureau Chief, or his designee, to execute the Amended and Restated Deed of Lease and any related documents, on behalf of the County Board, subject to approval as to form by the County Attorney. ISSUES: There are no outstanding issues regarding the approval of the lease. SUMMARY: The Amended and Restated Lease, if approved and executed on behalf of the County Board, would permit Signature Theatre to remain in Arlington, as tenant in the leased premises through December, 2033, on terms that Signature can afford. Signature would not be required to pay rent under the terms of the Amended and Restated Lease, but would continue to be required to pay real estate taxes associated with the leasehold and separately metered utilities, and would also be required to maintain the leased premises at its expense. BACKGROUND: Signature Theatre, a Tony Award-winning non-profit live theater company, currently leases 4200 Campbell Avenue from the County as its primary venue, attracting over 80,000 patrons per year. Signature s current and anticipated revenues are insufficient to fund both the rent due under the existing lease and the payments due under a commercial loan that Signature incurred to fund the initial build-out of the premises. The amounts owed by Signature under the lease exceed $400,000. County Manager: ##### County Attorney: ***** 34. B. Staff: Linda Collier and Doug Raiden, DES Real Estate

2 In order to retain Signature as an Arlington-based theatre company, with its primary venue located within the County, and to continue to provide an enriched cultural environment to Arlington County residents, the County must align Signature s lease and debt obligations with its ability to pay. DISCUSSION: The proposed Amended and Restated Lease would eliminate Signature s obligation to pay rent and charges for utility services provided through the County s meter (e.g., water) and release Signature from any obligation to pay to the County any amounts due as accrued and unpaid back rent and utility charges under the original lease, up to the effective date of the Amended and Restated Lease. This would allow Signature to devote its limited financial resources to the repayment of its outstanding loan debt (which would be curtailed and refinanced by a new loan described below) and to the funding of its operating expenses (staff salary, maintenance, production costs, etc.). Concurrently with the execution of the new lease, subject to Board approval, the Industrial Development Authority will lend Signature approximately $5 million to pay off Signature s existing debt. The details of the new loan are provided in a companion Board report recommending that the Board authorize the loan. The amounts due under the IDA loan agreement and Signature s operating expenses are expected to exhaust Signature s income. Signature will retain its obligations to: i) pay real estate taxes associated with its leasehold interest; ii) pay the cost of separately-metered utilities; and iii) maintain the premises at its own expense. The new lease would expire in December, 2033, when the last loan payment to the IDA would be due under the proposed new loan agreement. FISCAL IMPACT: As described in more detail in the companion Board report for the proposed loan agreement, a new tri-party approach toward Signature has been negotiated among the County, Signature s existing lenders, and Signature that includes substantial loan forgiveness by the lenders and a more manageable loan repayment and lease agreement from the County. This new approach will create a long-term sustainable economic model for Signature. Annual payments to the County (reflecting taxes and loan repayments) will total approximately $280,000 to $300,

3 Vicinity Map Signature Theatre 28TH ST S CAMPBELL AVE 0 75 Feet / Pursuant to Section of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Easements and Dedications are approximate. Aerial Photography 2013 Commonwealth of Virginia Map prepared by Arlington County GIS Mapping Center Produced and May 2014

4 Vicinity Map Signature Theatre 28TH ST S CAMPBELL AVE 0 75 Feet / Pursuant to Section of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Easements and Dedications are approximate. Aerial Photography 2013 Commonwealth of Virginia Map prepared by Arlington County GIS Mapping Center Produced and May 2014

5 Vicinity Map Signature Theatre S ARLINGTON MILL DR 28TH ST S S TAYLOR ST CAMPBELL AVE 29TH ST S S RANDOLPH ST S QUINCY ST Feet Pursuant to Section of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Easements and Dedications are approximate. Aerial Photography 2013 Commonwealth of Virginia Map prepared by Arlington County GIS Mapping Center Produced and November ST ST S INTERSTATE 395 / INTERSTATE 395 HOV LANES

6 BETWEEN THE COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA as Landlord AND, INC. as Tenant Dated: December, 2014 For Premises Located At 4200 Campbell Avenue, Arlington, Virginia The Village at Shirlington

7 TABLE OF CONTENTS Page ARTICLE 1 BASIC LEASE PROVISIONS Premises Building Term Commencement Date Expiration Date [Intentionally Omitted] [Intentionally Omitted] [Intentionally Omitted] Security Deposit Parking Space Allocation Permitted Use Tenant s Trade Name Brokers Landlord s Address for Payment of Rent Landlord s Notice Address Tenant s Notice Address... 3 ARTICLE 2 DEFINITIONS [Intentionally Omitted] Agents Alterations [Intentionally Omitted] Common Area Developer Event of Default [Intentionally Omitted] Fiscal Year Gross Ticket Sales Guarantor. None Hazardous Materials Herein, hereafter, hereunder, and hereof Interest Rate Land Legal Requirements [Intentionally Omitted] Mortgage Mortgagee Operating Expenses Parking Facilities [Intentionally Omitted] Plaza... 5 i

8 2.24 Real Estate Taxes Region Regular Performance Rent [Intentionally Omitted] [Intentionally Omitted] Tenant s Property [Intentionally Omitted] AHUs CPI Incompatible Use Live Load Maximum Reimbursement Amount Percentage Minimum Performance Minimum Temporary License Transfer Transferee Transfer Notice... 7 ARTICLE 3 THE PREMISES Lease of Premises Landlord s Reservations [Intentionally Omitted]... 7 ARTICLE 4 TERM Lease Term Extension Negotiations... 8 ARTICLE 5 RENT [Intentionally Omitted] Payment of Rent [Intentionally Omitted] Late Payment [Intentionally Omitted] [Intentionally Omitted] Tenant s Books and Records... 9 ARTICLE 6 [INTENTIONALLY OMITTED] ARTICLE 7 OPERATING EXPENSES Operating Expenses Operating Expenses Defined ARTICLE 8 REAL ESTATE TAXES Tenant s Obligation to Pay Real Estate Taxes ii

9 ARTICLE 9 PARKING Parking Spaces Changes to Parking Facilities [Intentionally Omitted] ARTICLE 10 USE General Tenant s Personal Property Continuous Use Covenant ARTICLE 11 ASSIGNMENT AND SUBLETTING Consent Temporary Licenses Landlord s Options Release Consultants and Attorneys Fees Transfer Profits ARTICLE 12 MAINTENANCE, REPAIR AND REPLACEMENT Landlord s Obligations Tenant s Obligations [Intentionally Omitted] [Intentionally Omitted] ARTICLE 13 ALTERATIONS [Intentionally Omitted] Alterations Removal of Tenant s Alterations Landlord Alterations ARTICLE 14 SIGNS AND NAMING RIGHTS Signage Naming Rights ARTICLE 15 TENANT S EQUIPMENT AND PROPERTY Moving Tenant s Property Installing and Operating Tenant s Equipment Transfer of Tenant s Property... Error! Bookmark not defined. ARTICLE 16 RIGHT OF ENTRY General Emergency Access ARTICLE 17 INSURANCE Insurance Rating Liability Insurance Insurance for Tenant s Property iii

10 17.4 Workers Compensation and Employers Liability Insurance Requirements of Insurance Coverage Waiver of Subrogation [Intentionally Omitted] Landlord s Insurance Coverage ARTICLE 18 SERVICES AND UTILITIES Services to the Premises Utility Charges ARTICLE 19 LIABILITY OF LANDLORD No Liability Tenant Indemnity Landlord Indemnity Limitation on Recourse No Limitation on Legal and Equitable Remedies ARTICLE 20 RULES AND REGULATIONS General ARTICLE 21 DAMAGE AND CONDEMNATION Damage to the Premises or Building Condemnation ARTICLE 22 DEFAULT Events of Default Landlord s Remedies Rights Upon Possession No Waiver Performance at Tenant s Expense Landlord s Lien Landlord Default ARTICLE 23 MORTGAGES Subordination Mortgagee Protection Modification Due to Financing Attornment ARTICLE 24 SURRENDER; HOLDING OVER Surrender of the Premises Holding Over ARTICLE 25 QUIET ENJOYMENT General iv

11 ARTICLE 26 COVENANTS REGARDING HAZARDOUS MATERIALS Definition General Prohibition Notice Survival ARTICLE 27 MISCELLANEOUS Representations No Partnership Brokers Estoppel Certificate Financial Statements Waiver of Jury Trial Notices Invalidity of Particular Provisions Gender and Number Benefit and Burden Entire Agreement Authority [Intentionally Omitted] Governing Law; Proper Forum; Severability Time of the Essence Force Majeure Headings Memorandum of Lease Release Setoff Rights Appropriation of Funds Role of Landlord/Landlord Decisions; No Waiver No Waiver of Sovereign Immunity by Landlord No Rights in Third Parties No Indemnification or Hold Harmless Approval of Lease by Landlord Delegation of Authority to County Manager Effectiveness Exhibits LIST OF EXHIBITS Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G Plans Showing Premises Legal Description of Land [Intentionally Omitted] [Intentionally Omitted] Rules and Regulations [Intentionally Omitted] [Intentionally Omitted] v

12 AMENDED AND RESTATED DEED OF LEASE THIS ( Lease ) is made as of the day of December, 2014 (the Date of Lease ), by THE COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA, a corporate and body politic of the Commonwealth of Virginia ( Landlord ) and, INC., a Virginia nonstock corporation ( Tenant ). RECITALS A. Landlord and Tenant entered into that certain Deed of Lease, dated July 23, 2003, as amended by that certain First Amendment to Lease Agreement, dated December 9, 2006, and by that certain Second Amendment to Deed of Lease, dated October 4, 2009 (collectively, the Original Lease ), pursuant to which Tenant leases from Landlord premises containing approximately 46,981 square feet of rentable area in a building located at 4200 Campbell Avenue, Arlington, Virginia in a development commonly known as the Village at Shirlington (the Premises ). B. Concurrently herewith, the Industrial Development Authority of Arlington County, Virginia, a political subdivision of the Commonwealth of Virginia (the IDA ), is making a loan to Tenant in the original principal amount of Five Million and 00/100 Dollars ($5,000,000.00) (the Loan ) pursuant to that certain Loan Agreement of even date herewith (the Loan Agreement ). C. Landlord and Tenant desire to revise and amend the Original Lease in its entirety. Effective as of the Commencement Date, as defined below, Landlord and Tenant, intending legally to be bound, hereby amend and restate the Original Lease in its entirety to provide as follows. ARTICLE 1 BASIC LEASE PROVISIONS The following terms, when used herein, shall have the meanings set forth below. 1.1 Premises. The Premises are deemed to contain forty-six thousand eight hundred ninety-one (46,891) square feet of rentable area on a portion of the first (1 st ) floor and on all of the second (2 nd ), mezzanine, and third (3 rd ) floors of the Building, as more specifically described on Exhibit A attached hereto and made a part hereof. The Premises include, without limitation, the elevator(s) and related corridors and spaces for Tenant s exclusive use, as shown on Exhibit A, and the loading dock area serving the building (but excluding driveways). 1.2 Building. The Building located at 4200 Campbell Avenue, Arlington, Virginia in a development known as the Village at Shirlington. 1 P age

13 1.3 Term. The time commencing on the Commencement Date and expiring on the Expiration Date. 1.4 Commencement Date. December, Expiration Date. December 1, [Intentionally Omitted] 1.7 [Intentionally Omitted] 1.8 [Intentionally Omitted] 1.9 Security Deposit. None Parking Space Allocation. Twelve (12) reserved parking spaces in the Parking Facilities, subject to the provisions of Article 9 of this Lease Permitted Use. The (i) performance of live arts theatrical performances, film screenings/festivals, and multimedia performances, including all customary and usual staging requirements in connection with any such performances (such as, without limitation, on-stage smoking and the use of animals, subject to applicable laws, ordinances, regulations and insurance requirements), (ii) holding of arts-related receptions, meetings, and similar events sponsored by Tenant or others under the direct supervision of Tenant, (iii) ancillary general office use related thereto, and (iv) holding of corporate and civic receptions, meetings, and similar events under Temporary Licenses as defined in Section 11.2 of this Lease. As a part of and consistent with the Permitted Use, Tenant shall be entitled to serve food and beverages, including alcoholic beverages, to its patrons and other users, so long as Tenant complies with all laws and ordinances applicable thereto Tenant s Trade Name. Signature Theatre Brokers. (a) Landlord: None. (b) Tenant: None Landlord s Address for Payment of Rent. Treasurer, Arlington County ACG-Real Estate Bureau 2100 Clarendon Boulevard, Suite 800 Arlington, Virginia P age

14 1.15 Landlord s Notice Address. The County Board of Arlington County, Virginia 2100 Clarendon Boulevard, Suite 302 Arlington, Virginia Attn: County Manager with a copy to: Office of the County Attorney 2100 Clarendon Boulevard, Suite 403 Arlington, Virginia Attn: County Attorney Department of Environmental Services, Real Estate Bureau 2100 Clarendon Boulevard, Suite 800 Arlington, Virginia Attn: Real Estate Bureau Chief 1.16 Tenant s Notice Address. Signature Theatre 4200 Campbell Avenue Arlington, Virginia Attn: Managing Director with a copy to: Holland & Knight LLP th Street, NW Suite 1100 Washington, D.C Attn: David W. Briggs, Esq. ARTICLE 2 DEFINITIONS The following terms, when used herein, shall have the meanings set forth below. 2.1 [Intentionally Omitted] 2.2 Agents. Officers, partners, directors, elected officials, employees, duly authorized agents, licensees, customers, invitees, affiliates, and sublessees. 3 P age

15 2.3 Alterations. Alterations, decorations, additions, or improvements of any kind or nature to the Premises or the Building, whether structural or non-structural, interior, exterior, or otherwise. 2.4 [Intentionally Omitted] 2.5 Common Area. All areas, improvements, facilities, and equipment, if any, from time to time designated by Landlord for the common use or benefit of Landlord, Tenant, other tenants and occupants of the Building, and their respective Agents, including without limitation the Plaza, roadways, landscaped areas, open areas, exterior lighting, service drives, loading areas, pedestrian walkways, sidewalks, stairs, ramps, maintenance and utility rooms, and closets, exterior utility lines, and common window areas. 2.6 Developer. Federal Realty Investment Trust and its successors, transferees, affiliates, and assigns in regard to the site plan approvals, as modified from time to time, for the Village at Shirlington. 2.7 Event of Default. As defined in Article [Intentionally Omitted] 2.9 Fiscal Year. A period of twelve (12) months commencing on each July 1 st and expiring on each June 30 th during the Term Gross Ticket Sales. All sales of tickets for Regular Performances held at the Premises during the Term, whether such sales shall be credit or cash sales and whether such sales shall be made from the Premises or elsewhere (i.e., by telephone, internet, Ticket Master, or similar off-site sales). With regard to Regular Performances that serve as an announced fundraiser for Tenant and for which the price charged per ticket is higher than the price per ticket for normal renditions of such Regular Performances, Gross Ticket Sales shall only include the normal sales price for such tickets and shall exclude the sales price in excess of such normal sales price. Thus, for example, if the normal sales price per ticket for a series of Regular Performances is $50, but one rendition of such Regular Performance is an announced fundraiser Regular Performance with a sales price per ticket of $150, only the $50 per ticket sales price shall be included in the calculation of Gross Ticket Sales Guarantor. None Hazardous Materials. As defined in Article Herein, hereafter, hereunder, and hereof. Under this Lease, including, without limitation, all exhibits and any riders. 4 P age

16 2.14 Interest Rate. Three (3) percentage points above the then applicable Wall Street Journal Prime Rate (U.S. money center commercial banks) or its successor (or in the absence thereof, such similar rate reasonably designated by Landlord) Land. The piece or parcel of land upon which the Building is located, as more particularly described on Exhibit B attached hereto and made a part hereof, and all rights, easements, and appurtenances thereunto belonging or pertaining Legal Requirements. All laws, statutes, ordinances, orders, site plans, rules, regulations and requirements (including but not limited to any and all energy conservation requirements applicable to the Building and customary industry indoor air quality standards and practices) of all federal, state and municipal governments, and the appropriate agencies, officers, departments, boards and commissions thereof whether now or hereafter in force which relate or are applicable to all or any part of the Land, Premises, Building, Common Area, or Parking Facilities [Intentionally Omitted] 2.18 Mortgage. Any mortgage, deed of trust, security interest, or title retention interest affecting the Building Mortgagee. The holder of any note or obligation secured by a Mortgage Operating Expenses. As defined in Article Parking Facilities. All parking areas now or hereafter made available for use by tenants of the Building, including Tenant. The Parking Facilities currently consist of the Campbell garage located at 4280 Campbell Avenue. The Parking Facilities are not Common Area under the terms of this Lease [Intentionally Omitted] 2.23 Plaza. The pedestrian plaza fronting the Building Real Estate Taxes. As defined in Article Region. The District of Columbia and the geographic area lying within a fifty (50) mile radius of the boundaries of the District of Columbia Regular Performance. Any theatrical, musical or other performance held at the Premises (either in the MAX Theater or the ARK Theater ) for which members of the audience are required to purchase a ticket for admission, excluding: (a) any performance where the proceeds of ticket sales are provided to benefit charitable organizations or causes (other than Tenant itself), (b) any non-performance reception, meeting or similar event sponsored by or under 5 P age

17 the direct supervision of Tenant, (c) any non-performance reception, meeting, or similar event under a Temporary License pursuant to Section 11.2 of this Lease, and (d) any event of Tenant, whether involving a performance or not, where attendance is not available to the general public by purchase of a ticket for admission, but is solicited by invitation issued by Tenant that is captioned as a fundraising event for Tenant s benefit. Tenant shall be required to provide Landlord with prior written notice of a scheduled fundraiser or benefit performance and the name of the charitable organization or cause to be benefited thereby, in order to qualify for the fundraiser or benefit exemption Rent. All sums payable by Tenant to Landlord under this Lease [Intentionally Omitted] 2.29 [Intentionally Omitted] 2.30 Tenant s Property. Any and all personal property, furniture, business trade fixtures, inventory, and equipment located in or about the Premises and owned or leased by Tenant, together with all leasehold and tenant improvements installed or performed by Tenant or its Agents or on behalf of Tenant. Tenant does not own, and Tenant s Property shall not include, work performed or alterations made by Landlord to the Premises or Building [Intentionally Omitted] 2.32 AHUs. Defined in Section CPI. Defined in Section IDA. Defined in Recital C Incompatible Use. Defined in Section Live Load. Defined in Section Loan. Defined in Recital C Loan Agreement. Defined in Recital C Maximum Reimbursement Amount. Defined in Section Original Lease. Defined in Recital A Percentage Minimum. Defined in Section Performance Minimum. Defined in Section P age

18 2.43 Renewal Discussion Notice. Defined in Section Temporary License. Defined in Section Transfer. Defined in Section Transferee. Defined in Section Transfer Notice. As defined in Section ARTICLE 3 THE PREMISES 3.1 Lease of Premises. In consideration of the agreements contained herein, Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Landlord, for the Term upon the terms and conditions provided herein. The Premises are leased subject to, and Tenant agrees not to violate, all present and future covenants, conditions, and restrictions of record which affect the Land or the Building. The Premises do not include an easement for light, air, or view. 3.2 Landlord s Reservations. In addition to the other rights of Landlord under this Lease, Landlord reserves the right (i) to change the street address and/or, subject to Article 14 hereof, the name of the Building, (ii) to install, erect, use, maintain, and repair mains, pipes, conduits, and other such facilities to serve the Building and the Premises, (iii) to grant to anyone the exclusive right to conduct any particular business or undertaking in the Building (other than live theater use), (iv) to establish a condominium regime for the Common Area and to include the Premises therein, (v) to control the use of the roof and exterior walls of the Building for any purpose, (vi) perform such other acts and make such other changes with respect to the Common Area and the Building as Landlord may, in its sole discretion, deem to be appropriate, and (vii) to use all areas of the Building (other than the Premises) as a library or for any other use at its sole discretion, subject to the provisions of Section Landlord may exercise any or all of the foregoing rights without being deemed to be guilty of an eviction, actual or constructive, or a disturbance or interruption of the business of Tenant or Tenant s use or occupancy of the Premises, so long as reasonable access to and use of the Premises shall at all times be maintained. 3.3 [Intentionally Omitted] ARTICLE 4 TERM 4.1 Lease Term. The Term shall commence on the Commencement Date and expire at midnight on the Expiration Date. 7 P age

19 4.2 Extension Negotiations. Provided that (i) this Lease is in full force and effect as of the date of the Renewal Discussion Notice (as such term is hereinafter defined), (ii) Tenant is not then in violation of any term or conditions of this Lease, and (iii) Tenant has not assigned or sublet all or any portion of the Premises, the Tenant named in this Lease may, upon written notice (the Renewal Discussion Notice ) to Landlord given not later than two (2) years nor earlier than three (3) years prior to the Expiration Date of the initial Term, notify Landlord that Tenant desires to engage in a nonbinding discussion with Landlord concerning an extension of the Term of this Lease on terms mutually acceptable to Landlord and Tenant. Provided, however, nothing herein shall require either party to agree to an extension or to accept any particular term(s) with respect thereto, whether concerning the amount of rent or any other provision of this Lease or any extension thereof. No obligation shall arise or bind either party with respect to the discussions unless a formal written agreement concerning the extension is approved by the Arlington County Board and such formal written agreement is mutually signed and delivered. If Tenant fails to provide such Renewal Discussion Notice pursuant to the terms set forth in this Section 4.2, Tenant s rights under this Section 4.2 shall expire and be of no further force or effect. 5.1 [Intentionally Omitted] 5.2 Payment of Rent. ARTICLE 5 RENT (i) (ii) [Intentionally Omitted] [Intentionally Omitted] (iii) Tenant shall provide to Landlord, in a format reasonably acceptable to Landlord, statements of the total sales of tickets for Tenant s Regular Performances occurring during each semi-annual period (January through June and July through December) of the Term. The statement for each semi-annual period shall be due by the last day of the next succeeding February or August, as applicable. The statements shall be broken down by production and certified as correct by Tenant s chief financial officer or treasurer or by another corporate officer, and shall include the total sales of tickets for the Regular Performances of others during the semiannual period, broken down by production, under Temporary Licenses based upon the best information available to Tenant. (iv) Tenant shall pay at Landlord s Address for payment of Rent all amounts due to Landlord under this Lease, or at such other address as Landlord specifies upon written notice. 8 P age

20 (v) Landlord may credit any payment made by Tenant towards any late charges then due and payable and to any other Rent obligations then past due before crediting the payment to any amounts currently due. (vi) All payments due to Landlord under this Lease shall be made payable to Treasurer, Arlington County, or to such other party as Landlord may identify from time to time upon written notice. 5.3 [Intentionally Omitted] 5.4 Late Payment. If Tenant fails to pay any Rent within ten (10) days from and after such Rent becomes due and payable (which ten (10)-day period shall include the day when such Rent is due and payable), Tenant shall pay to Landlord a late charge of five percent (5%) of the amount of such overdue Rent. In addition, any such late Rent payment shall bear interest from the date such Rent became due and payable to the date of payment thereof by Tenant at the Interest Rate. Such late charge and interest shall be due and payable within two (2) days after written demand from Landlord. 5.5 [Intentionally Omitted] 5.6 [Intentionally Omitted] 5.7 Tenant s Books and Records. (i) Tenant shall keep and maintain at the Premises, and update on at least a quarterly basis, true, correct, and complete books of account and records with respect to all Gross Ticket Sales (and all receipts therefrom), whether attributed to Tenant from Regular Performances or to Regular Performances of others under Temporary Licenses; provided that, as to the latter, Tenant shall only be obligated to maintain as part of its records the reports of others supplied to Tenant. Notwithstanding the foregoing, Tenant shall require that all users of the Premises or any part thereof provide statements to Tenant of Gross Ticket Sales from Regular Performances so performed. All documentation regarding Temporary Licenses shall be retained by Tenant and made available to Landlord pursuant to the terms of this section. All such books and records shall be kept in accordance with generally accepted accounting principles consistently applied. All such books and records shall be kept and maintained for at least thirty-six (36) months after the end of the Fiscal Year to which they pertain. (ii) At any time or from time to time after at least ten (10) business days prior written notice to Tenant, Landlord shall have the right to make any examination or audit of the books, records, and other materials of Tenant which Tenant is required to retain. If such audit or inspection shall disclose that Gross Ticket Sales reported to Landlord were less than ninety-five percent (95%) of the amount disclosed during such audit or inspection, then Tenant shall pay the costs of such examination or audit (up to a maximum cost of $2,500.00). 9 P age

21 (iii) [Intentionally Omitted] ARTICLE 6 [Intentionally Omitted] ARTICLE 7 OPERATING EXPENSES 7.1 Operating Expenses. Except as otherwise provided herein, including without limitation Section 18.2 of this Lease, Tenant shall pay directly for all Operating Expenses incurred to operate, manage, maintain, heat, cool, ventilate, repair, replace, and use the Premises in a first-class manner, and any and all other reasonable expenses, utilities, repairs, and maintenance costs that relate to the Premises and which may arise or come due during the Term of this Lease. Notwithstanding any provision of this Lease to the contrary, Tenant shall have no obligation for costs or expenses incurred by Landlord to perform Landlord s responsibilities under Section 12.1 and/or Section 18.1 of this Lease or for Landlord s other costs and expenses incurred in owning, operating, managing, maintaining, insuring, and repairing the Building, the Common Area, and the Land, except to the extent caused by Tenant s negligent actions or negligent failures to act (subject to the waiver of subrogation provisions of Section 17.6). As noted above, it is the intent of the parties that Tenant shall incur and pay for all Operating Expenses directly to the extent possible, and that Landlord will not incur any Operating Expenses otherwise payable by Tenant. In the event Tenant shall be obligated to reimburse Landlord for Operating Expenses that may be paid by Landlord other than pursuant to Section 22.5 hereof, Landlord shall provide Tenant with an invoice for such expenses which shall be due and payable within 30 days of receipt by Tenant of such invoice. 7.2 Operating Expenses Defined. As used herein, the term Operating Expenses shall mean all costs and expenses incurred by Tenant in the operation, maintenance, repair, replacement and use of the Premises, including but not limited to: (a) electricity, water, sewer, power, natural gas, fuel oil, and other utility charges (including surcharges and connection fees); (b) insurance premiums; (c) costs of service, security, and maintenance contracts; (d) maintenance, redecoration, and repair expenses; (e) charges for trash removal services; (f) any business, professional, and occupational license tax payable by Tenant with respect to Tenant s use and occupancy of the Premises; and (g) costs for rodent and pest control, but excluding costs for which Landlord is responsible under Section ARTICLE 8 REAL ESTATE TAXES 8.1 Tenant s Obligation to Pay Real Estate Taxes. Tenant shall pay to the appropriate taxing authority (or, at Landlord s option, to Landlord) throughout the Term all Real Estate Taxes, if any, charged with respect to this Lease or in connection with Tenant s use and 10 P age

22 occupancy of the Premises. Tenant shall pay all such amounts prior to any penalty or interest being assessed. Real Estate Taxes shall mean all taxes and assessments, including but not limited to general or special, ordinary or extraordinary, foreseen or unforeseen, assessed, levied, or imposed by any governmental authority upon Tenant s leasehold interest in the Premises upon the fixtures, machinery, equipment, or systems in, upon, or used in or in connection with the Premises, or upon the Rent paid by Tenant pursuant to this Lease under the current or any future taxation or assessment system or any modification of, supplement to, or substitute for such system. Real Estate Taxes also shall include special assessments which are in the nature of or in substitution for real estate taxes, including without limitation road improvement assessments, special use area assessments and school district assessments. If at any time the method of taxation prevailing at the Commencement Date shall be altered so that in lieu of, as a substitute for, or in addition to the whole or any part of the taxes now levied or assessed, there shall be levied or assessed a tax of whatever nature, then the same shall be included as Real Estate Taxes hereunder. ARTICLE 9 PARKING 9.1 Parking Spaces. During the Term, Tenant shall have the exclusive right to use, free of charge, twelve (12) reserved parking spaces designated by Landlord contained in the Parking Facilities for Tenant s employees or other individuals providing services to Tenant, as same are designated by Tenant. Such spaces shall be marked, without expense to Tenant, as reserved for Tenant s use, but Landlord shall have no obligation to oversee or otherwise monitor the use of Tenant s parking spaces. Landlord does not assume any responsibility for, and shall not be held liable to Tenant for, any damage or loss to any automobiles parked in the Parking Facilities or to any personal property located therein, or for any injury sustained by any person in or about the Parking Facilities and Tenant shall fully indemnify Landlord for any claims, losses, damages and expenses whatsoever arising or related to use of the parking spaces. 9.2 Changes to Parking Facilities. Landlord shall have the right, from time to time, to change, alter, add to, temporarily close, or otherwise affect the Parking Facilities; provided that in connection with any such action Landlord shall endeavor in good faith to minimize, in light of expense and convenience, any material interference with Tenant s use of the Premises caused thereby. Landlord may permanently close any Parking Facilities so long as the applicable Legal Requirements for the Building are satisfied with respect to parking availability and Landlord provides the reserved parking spaces required by Section 9.1 above. 9.3 [Intentionally Omitted] ARTICLE 10 USE 10.1 General. Tenant shall occupy the Premises solely for the Permitted Use in a manner consistent with first-class live theaters. Tenant shall not use the Premises for any other 11 P age

23 purpose without Landlord s prior written consent, which Landlord may withhold in its sole discretion. In its performance of the Permitted Use, Tenant shall comply, at Tenant s expense, with (i) all Legal Requirements and (ii) any reasonable requests of any Mortgagee or any insurance company providing coverage with respect to the Premises. Notwithstanding the foregoing, Tenant shall have no obligation to comply with any Green Building Plan applicable to the Building in connection with the construction or operation of the Premises. Tenant acknowledges that Landlord operates an Arlington County public library (the Library ) in the Building immediately beneath the Premises. Accordingly, Tenant shall use commercially reasonable efforts to ensure that sounds and vibrations from its use of the Premises do not unreasonably interfere with the use of the Library. Tenant shall not modify, alter, or damage the sound and vibration attenuation/mitigation system installed by Landlord for the Building without Landlord s prior written consent, which consent may be withheld by Landlord at Landlord s sole discretion. Landlord acknowledges that it will exert no control or influence over the content of Tenant s theatrical productions so long as Tenant does not use or occupy the Premises in any manner that is unlawful or dangerous or that may constitute waste. Subject to applicable laws and ordinances and the terms of this Lease, Tenant shall be entitled to perform the Permitted Use in the Premises in a manner consistent with a standard commercial tenancy within a commercial building Tenant s Personal Property. Tenant shall pay before delinquency any business, rent, or other tax or fee that is now or hereafter assessed or imposed upon Tenant s use or occupancy of the Premises, the conduct of Tenant s business in the Premises, or Tenant s Property. If any such tax or fee is enacted or altered so that such tax or fee is imposed upon Landlord or so that Landlord is responsible for the collection or payment thereof, then Tenant shall pay the amount of such tax or fee as Rent Continuous Use Covenant. Tenant hereby covenants to Landlord that, so long as Landlord performs its material obligations pursuant to Sections 12.1 and 18.1, then throughout the Term Tenant shall continuously operate the Permitted Use in the Premises. For purposes of this Section 10.3, Tenant shall be deemed to have satisfied its obligation to continuously operate the Permitted Use in the Premises in any Fiscal Year if and only if Tenant holds at least one hundred nineteen (119) Regular Performances of Tenant during the Fiscal Year (the Performance Minimum ). For any partial Fiscal Year at the beginning or end of the Term, the Performance Minimum shall be proportionately reduced. Tenant further covenants to Landlord that, at all times during the Term, the Premises shall constitute Tenant s primary theatrical venue and, except as otherwise approved by Landlord in its reasonable discretion, Tenant shall hold each performance in Tenant s principal subscription series of productions at the Premises. Tenant further covenants to Landlord that at least sixty percent (60%) of the Regular Performances sponsored by Tenant during each Fiscal Year in the Region shall be performed at the Premises (the Percentage Minimum ). (For purposes of the immediately-preceding sentence, the defined term Regular Performances shall be deemed to be amended such that the words held at the Premises (either in the MAX Theater or the ARK Theater ) are deemed to be deleted from Section 2.26). Notwithstanding the foregoing, Tenant shall be exempt from the Percentage Minimum for any Fiscal Year in which the Premises capacity for performances is fully utilized. The Premises 12 P age

24 capacity for performances shall be deemed to be fully utilized during any Fiscal Year if Tenant s schedule of performances, rehearsals, technical strikes and load ins for productions, and annual maintenance of the Premises (such maintenance not to exceed three (3) weeks during any Fiscal Year for purposes of this section) cause the Premises to be utilized for at least 300 days during such Fiscal Year. During any Fiscal Year in which the Premises are determined to be untenantable due to a fire or other casualty or to the exercise of Landlord s rights under Section 3.2 hereof, Tenant s continuous use obligations under this section shall be reduced for such Fiscal Year in direct proportion to the period of untenantability in relation to the entire Fiscal Year. ARTICLE 11 ASSIGNMENT AND SUBLETTING 11.1 Consent. Tenant shall not assign, transfer, mortgage, or otherwise encumber this Lease or sublet or rent (or permit a third party to occupy or use) the Premises, or any part thereof, nor shall any assignment or transfer of this Lease or the right of occupancy hereunder be effected by operation of law or otherwise, without the prior written consent of Landlord, which consent Landlord may withhold in its sole discretion (any such assignment, sublease, or any of the other foregoing transactions shall sometimes be referred to hereinafter as a transfer ). Any assignment, encumbrance, sublease, or license without Landlord s written consent shall be voidable by Landlord and, at Landlord s election, constitute an Event of Default hereunder Temporary Licenses. Notwithstanding any provision of this Article 11 to the contrary, Tenant shall be permitted, without Landlord s consent, to license the temporary use of portions of the Premises on a short-term basis, not to exceed thirty (30) days per license, to outside performing arts groups and to civic and business organizations (a Temporary License ) so long as (i) Tenant provides Landlord with prior written notice of such short-term license (including the proposed license agreement) and (ii) such third party executes and delivers to Landlord a hold harmless agreement in form reasonably satisfactory to Landlord. Any such Temporary License shall not be deemed a transfer for purposes of this Article 11. Landlord and Tenant shall mutually and reasonably agree upon the form of a short-term license agreement and hold harmless agreement to be used by Tenant in connection with Temporary Licenses Landlord s Options. Whenever Tenant desires to effect a transfer, Tenant shall deliver to Landlord written notice (a Transfer Notice ) setting forth the terms and provisions of the proposed transfer and the identity of the proposed assignee, sublessee, or other transferee (sometimes referred to hereinafter as a Transferee ). Tenant shall also deliver to Landlord with the Transfer Notice a current financial statement for the Transferee and such other information as Landlord may request. Landlord shall have the option, exercisable by written notice delivered to Tenant by the thirtieth (30 th ) day after Landlord s receipt of the Transfer Notice, such financial statements, and other information, either to: 13 P age

25 discretion; or (a) approve or disapprove such transfer in its sole and absolute (b) terminate this Lease with respect to the entire Premises (or, in the case of a proposed sublease, only that portion of the Premises which Tenant has requested to sublease), which termination shall be effective thirty (30) days after Tenant s receipt of Landlord s notice and Landlord may, at its option, enter into a lease with the proposed Transferee Release. No transfer or Temporary License shall release Tenant from Tenant s obligations under this Lease or alter the primary liability of Tenant to pay the Rent and to perform all other obligations to be performed by Tenant hereunder. If Landlord consents to any proposed transfer, Landlord may require that, upon an Event of Default hereunder, the Transferee remit directly to Landlord all monies due Tenant by said Transferee. The collection or acceptance of rent by Landlord from any other person shall not be deemed to be a waiver by Landlord of any provision hereof or the approval by Landlord of any Transferee. Consent by Landlord to one transfer shall not be deemed consent to any subsequent transfer. If an Event of Default is caused by any Transferee or licensee of Tenant s or any successor of Tenant s in the performance of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such Transferee, licensee, or successor. Landlord may consent to subsequent assignments of this Lease or sublettings, or agree to amendments or modifications to this Lease with assignees of Tenant, without notifying Tenant or any successor of Tenant s, and without obtaining its or their consent thereto, and any such actions shall not relieve Tenant of liability under this Lease Consultants and Attorneys Fees. If Tenant effects a transfer or requests the consent of Landlord to any transfer, then Tenant shall, upon demand, reimburse Landlord for any consultants, engineers, and/or reasonable attorneys fees incurred by Landlord in connection with such transfer or request for consent, not to exceed the Maximum Reimbursement Amount for any individual transfer or request for consent. Acceptance of reimbursement for Landlord s consultants, engineers or attorneys fees shall in no event obligate Landlord to consent to any proposed transfer. Since a Temporary License is not a transfer hereunder, the provisions of this Section 11.5 shall not be applicable to any Temporary License. The Maximum Reimbursement Amount means one thousand dollars ($1,000.00) multiplied by a fraction whose numerator is the Consumer Price Index - All Urban Consumers, all items, Washington-Baltimore region (November 1996 = 100), as published by the Bureau of Labor Statistics of the U.S. Department of Labor (the CPI ) for the third month before the month in which Landlord receives the transfer request and whose denominator is the CPI for October, Transfer Profits. In the event of any transfer (as defined in Section 11.1 hereof) by Tenant hereunder, one hundred percent (100%) of all profits made by Tenant in connection therewith shall be paid to Landlord, as and when received by Tenant. For purposes of determining profits made by Tenant, Tenant shall be entitled to deduct from its transactional proceeds the reasonable, direct, out-of-pocket costs and expenses paid to unaffiliated third parties 14 P age

26 in connection with any such transfer, including but not limited to legal fees, sales or other taxes, brokerage commissions, and the cost of tenant improvements or tenant improvement allowances, but only if and to the extent such costs and expenses are actually and reasonably incurred by Tenant. Revenue derived under Temporary Licenses shall not be considered profits subject to this Section ARTICLE 12 MAINTENANCE, REPAIR AND REPLACEMENT 12.1 Landlord s Obligations. To the extent necessary for Tenant s use of the Premises, Landlord shall, at its sole cost and expense, keep and maintain in good condition and repair, in good working order, and in compliance with all Legal Requirements at all times during the Term the structural components of the Building and the exterior of the Building (including Building windows and exterior walls, doors (including the rollup garage doors), and lighting fixtures) and roof area, the Land, the Common Area, and base Building mechanical, electrical, sound and vibration attenuation, and plumbing systems, including the HVAC systems and fire/life safety systems serving the Premises (including risers, lines, and sprinkler heads), and agrees during the Term to replace the same when necessary for Tenant s use of the Premises, except for repairs and replacements which Tenant is required to make pursuant to this Lease and repairs and replacements resulting from Tenant s negligent actions (subject to the waiver of subrogation provisions of Section 17.6). Landlord shall, at its sole cost and expense, also be responsible, to the extent necessary for Tenant s use of the Premises, for termite and pest extermination in all areas of the Building, the Common Area, and the Land other than the Premises, for regular removal of trash and debris from all areas of the Building, the Common Area, and the Land other than the Premises, and for cleaning and snow removal from all sidewalks, driveways, and other Building and Land Common Area. Landlord shall have no obligation to provide such services with regard to the loading dock serving Tenant. Notwithstanding the foregoing, with regard to the maintenance and repair of the Plaza, Landlord has no direct responsibility to perform the same but shall use good-faith efforts to enforce Landlord s legal rights against Developer with regard to the maintenance and repair of the Plaza, provided that in no event shall Landlord be obligated to pursue litigation or incur legal fees. Landlord shall also be responsible, at its sole cost and expense, for the maintenance, repair, and replacement of the mechanical components of the elevators (including control panels) when necessary for Tenant s use of the Premises. Landlord shall not be responsible for any repairs, renovations, or maintenance with respect to any part of the Premises, except for the repair of damage caused by Landlord (subject to the waiver of subrogation provisions of Section 17.6) and the Landlord maintenance obligations specifically set forth herein. In the event a defect or need for repair to the HVAC system that has a material and immediate impact on Tenant s ability to use the Premises, Landlord shall take prompt reasonable steps to mitigate the impact of such defect or need for repair. Landlord shall perform its obligations under this Section 12.1 pursuant to applicable Legal Requirements. In further elaboration of Landlord s obligations under this section, it can be generally described that Landlord has master control over the HVAC system up to the point of delivery 15 P age

27 beyond the VAV boxes within the Premises. Landlord shall maintain the chillers, boilers, and all air handlers (individually, AHUs ) for the Library, including the Operations Area. Landlord shall afford Tenant reasonable and timely physical access to the Operations Area, or otherwise provide remote control access, so that Tenant can control the HVAC system to the extent that it serves the Premises. Thus Landlord shall: (i) Maintain, repair, and replace as necessary for Tenant s use of the Premises the following components of the Building s HVAC system: A. AHU 1 (MAX Theater) - All of the constituent components of the HVAC system of the Building and within the Premises, excluding Tenant s duct work in the Premises; B. AHU 2 (ARK Theater) - All of the constituent components of the HVAC system of the Building and within the Premises, excluding Tenant s duct work in the Premises; C. AHU 3 (1/2/3/4 Common Area) - All of the constituent components of the HVAC system of the Building and within the Premises to and including the VAV boxes, with Tenant being responsible for all components from and after the VAV boxes within the Premises; D. AHU 4 (Lobby) - All of the constituent components of the HVAC system of the Building and within the Premises, excluding Tenant s duct work in the Premises; E. AHU 5 (Library/Operations Area) - All of the constituent components of the HVAC system; and F. AHU 6 (Scene Shop) - All of the constituent components of the HVAC system of the Building and within the Premises, excluding Tenant s duct work in the Premises. (ii) Clean the exterior glass/glazing on the perimeter of the Premises on a semiannual basis, with Tenant responsible for the interior surface thereof. Landlord shall endeavor to coordinate such cleaning with Tenant, both as to when the same is to be undertaken and the method of undertaking such task Tenant s Obligations. Tenant shall, at its own expense, maintain all parts of the Premises and Tenant s Property (except the parts of the Premises for which Landlord is expressly responsible pursuant to Section 12.1 of this Lease) in good condition, promptly making all necessary repairs and replacements, including but not limited to all interior areas, windows, glass and plate glass, doors, door hardware, interior walls and ceilings and finish work, walls and floor coverings, lighting and electrical systems, dock boards, truck doors, dock bumpers, non-base Building mechanical systems and equipment, any Premises security system, the interior of the elevators(s) (including carpeting and other finishes) serving or contained within the Premises, termite and pest extermination, regular removal of trash and debris, and the cleaning of and snow removal from Tenant s loading dock area. Tenant shall, at its expense, enter into a contract for janitorial and/or char service with a contractor reasonably acceptable to Landlord, such approval not to be unreasonably withheld, conditioned, or delayed. Tenant, at its expense, shall install and 16 P age

28 maintain any additional fire extinguishers and other fire protection devices as may be required from time to time under any Legal Requirement or by any agency having jurisdiction over, or the underwriters issuing insurance for, the Building. In further elaboration of Tenant s obligations under this section, Tenant shall maintain, repair, and replace the following components the HVAC system of the Building located within the Premises: A. AHU 1 (MAX Theater) - Tenant s duct work, with all of the other constituent components of the HVAC system serving the Building and the Premises being maintained by Landlord; B. AHU 2 (ARK Theater) - Tenant s duct work, with all of the other constituent components of the HVAC system serving the Building and the Premises being maintained by Landlord; C. AHU 3 (1/2/3/4 Common Area) - AII of the constituent components of the HVAC system within the Premises from and after the VAV boxes within the Premises, with Landlord being responsible for all of the constituent components of the HVAC system of the Building and the Premises to and including the VAV boxes; D. AHU 4 (Lobby) - Tenant s duct work, with all of the other constituent components of the HVAC system serving the Building and the Premises being maintained by Landlord; and E. AHU 6 (Scene Shop) - Tenant s duct work, with all of the other constituent components of the HVAC system serving the Building and the Premises being maintained by Landlord. Tenant is to report to Landlord HVAC issues related to the chilled/heated water supply to its air handlers, including domestic hot water, to Landlord s Facility Maintenance Hotline, currently If and to the extent Tenant has operational control over any of the operating equipment of the HVAC system serving the Premises, Tenant, at its sole cost and expense, shall have preventive and regular maintenance contracts for its portion of the HVAC system. If Tenant is required to have a contract due to its having operational control over any operating equipment, Tenant s contract shall include different levels of priority regarding emergency response time with regard to servicing of that equipment. Also in further elaboration on Tenant s obligations under this Section 12.2, Tenant shall clean the interior of glass/glazing on the perimeter of the Premises on a semiannual basis, with Landlord responsible for the exterior surface thereof. Tenant shall endeavor to coordinate all such cleaning with Landlord, both as to when the same is to be undertaken and the method of undertaking such task [Intentionally Omitted] 12.4 [Intentionally Omitted] 17 P age

29 13.1 [Intentionally Omitted] ARTICLE 13 ALTERATIONS 13.2 Alterations. Except with regard to decorative or non-structural Alterations that do not require a building permit, Tenant shall not make or permit any Alterations without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned, or delayed. Landlord may impose any conditions to its consent that it deems appropriate, including, without limitation, (i) delivery to Landlord, upon completion of Tenant s Alterations, of written and unconditional waivers of mechanics and materialman s liens for all work, labor, and services performed and materials furnished, signed by all contractors, subcontractors, materialmen, and laborers participating in Tenant s Alterations, (ii) prior approval of the plans and specifications and Tenant s contractors with respect to Tenant s Alterations, (iii) supervision by Landlord s representative at Tenant s expense of Tenant s Alterations, and (iv) with regard to Tenant s Alterations costing in excess of one million dollars ($1,000,000.00), delivery to Landlord of payment and performance bonds naming Landlord and any Mortgagees as obligees. Landlord shall not be entitled to any construction oversight or monitoring fee with respect to Alterations. Tenant s Alterations shall conform to the requirements of Landlord s and Tenant s insurers and of any Legal Requirements applicable to the Premises, shall be performed in accordance with the terms and provisions of this Lease in a good and workmanlike manner befitting a first-class building, and shall not adversely affect the value, utility, or character of the Premises or the Building or interfere with the use of the Library or with other users or occupants of the Building. If Tenant s Alterations are not performed as herein required, Landlord shall have the right, at Landlord s option, to halt the further conduct of those Alterations, or to require Tenant to perform its Alterations as herein required or to require Tenant, at Tenant s cost, to return the Premises to their condition before such Alterations. Notwithstanding the foregoing, if any mechanic s or materialman s lien is filed against the Premises or the Building for work claimed to have been done for, or materials claimed to have been furnished to or for the benefit of, Tenant, such lien shall be discharged of record by Tenant within thirty (30) days by the payment thereof or the filing of any bond required by law. If Tenant shall fail to discharge any such lien, Landlord may (but shall not be obligated to) discharge or otherwise have removed the same, the cost of which, including any attorneys fees, shall be paid by Tenant within fifteen (15) days of demand by Landlord. Such discharge by Landlord shall not be deemed to waive or release the default of Tenant in not discharging the same. Neither Landlord s consent to Tenant s Alterations nor anything contained in this Lease shall be deemed to be the agreement or consent of Landlord to subject Landlord s interest in the Premises and to any mechanics or materialmen s liens which may be filed in respect of the Alterations. In no event shall Tenant undertake any Alteration that has the effect of altering or damaging the base-building sound attenuation system Removal of Tenant s Alterations. Except as otherwise provided herein, all or any part of Tenant s Alterations made after the Commencement Date, whether made with or without the consent of Landlord, shall, at the reasonable election of Landlord, either be removed 18 P age

30 by Tenant at its expense before the expiration of the Term or shall remain upon the Premises and be surrendered therewith at the Expiration Date or earlier termination of this Lease as the property of Landlord without disturbance, molestation, or injury. In no event, however, shall Landlord require the removal of (i) the Tenant Work performed pursuant to Exhibit C of the Original Lease or any item or element thereof (including without limitation any replacements of such Tenant Work made during the Term of this Lease, such as the replacement of carpet and other floor coverings, wall coverings, and similar decorative finishes), (ii) any temporary improvements within the Premises that are not fixtures (including without limitation theatrical sets), and (iii) any non-structural Alterations, which did not cost in excess of $50, to install or construct. If requested in writing by Tenant at the time it submits any request to undertake Alterations to Landlord for its review and approval, Landlord will notify Tenant in writing if Landlord will require the removal of such Alterations or any item or element thereof upon the Expiration Date, and if Landlord fails to so notify Tenant, Landlord shall not thereafter require the removal thereof. If Landlord advises Tenant that it will require the removal of all or part of the Alterations, and Tenant thereafter undertakes the Alterations, Tenant, at its expense, shall be required to remove such Tenant Alterations and repair any damage to the Premises or the Building caused by such removal. If Tenant fails to remove any Alterations requested to be removed by Landlord, then Landlord may (but shall not be obligated to) remove the same and the cost of such removal and repair of any damage caused by the same, together with any and all damages which Landlord may suffer and sustain by reason of the failure of Tenant to remove the same, shall be charged to Tenant and paid upon demand Landlord Alterations. Subject to Section 12.1 hereof, and without mitigating Landlord s obligations under Article 21, Landlord shall have no obligation to make any Alterations in or to the Premises or the Building. ARTICLE 14 SIGNS AND NAMING RIGHTS 14.1 Signage. Tenant shall be permitted, at its sole cost and expense, to install signage at the exterior of the Premises, the size, type, style, quality, color, form, content, and location of which shall be subject to Landlord s prior written approval, and subject to the approval of the County Board if such approval is a Legal Requirement. Landlord shall cooperate with Tenant, at no cost to Landlord, to develop mutually-agreeable exterior signage for Tenant s Trade Name that meets all Legal Requirements. Except as provided in the previous sentence, no sign, advertisement, or notice shall be inscribed, painted, affixed, placed, or otherwise displayed by Tenant on any part of the Land or the outside of the Building or the Premises without Landlord s prior written approval, which approval may be withheld in Landlord s sole discretion. Tenant shall, however, have the right, without Landlord s consent but subject to all Legal Requirements, to temporarily install posters, postings, hours of operation, and other temporary signage related to the Permitted Use on the interior face of the exterior windows of the Premises (with the front of such posters, postings, hours of operation and such other temporary signage visible from the exterior) other than the windows on the second (2 nd ) and third (3 rd ) floors of the East side of the 19 P age

31 Building (facing 28 th Street). No signs, banners, posters, or similar items, whether temporary or permanent, shall be placed on the windows on the second (2 nd ) and third (3 rd ) floors of the East side of the Building (facing 28 th Street). Tenant shall cause all of its signage to comply with all applicable Legal Requirements. In the event that the total size or amount of exterior signage for the Building as a whole is limited by applicable Legal Requirements, Tenant s share of such signage shall be consistent with the square footage of the Premises in relation to the square footage of the Building. If any prohibited sign, advertisement, or notice is exhibited by Tenant, Landlord shall have the right to remove the same, and Tenant shall pay any and all expenses incurred by Landlord in such removal, together with interest thereon at the Interest Rate, upon demand Naming Rights. Tenant shall, upon reasonable prior written notice to Landlord (but without Landlord s consent), be permitted to sell naming rights to the interior portion of the Premises or any part thereof (as distinct from Tenant s Trade Name or any other name or designation applicable to the exterior of the Premises) and Tenant shall be entitled to retain the full proceeds from the sale of such interior naming rights. Tenant shall provide Landlord with a copy of any agreement regarding such naming rights. In the event of a Tenant default under this Lease giving rise to Landlord s right to terminate this Lease, Landlord shall also be permitted to terminate any naming rights agreement entered into by Tenant without any cost to Landlord. Tenant shall have no right to change Tenant s Trade Name or sell exterior naming rights without Landlord s prior written consent, which Landlord may withhold in Landlord s sole discretion. Neither Landlord nor Tenant shall have the right to install exterior signage that purports to name or designate the entire Building (as distinct from the users/uses of the Building). Landlord shall have the right to name, establish, and install exterior signage for the Library and/or other uses/users of the Building. ARTICLE 15 TENANT S EQUIPMENT AND PROPERTY 15.1 Moving Tenant s Property. Subject to the terms of Section 17.6 hereof, any and all damage or injury to the Building or the Premises caused by the installation, removal, or moving of Tenant s Property into or out of the Premises, or due to the same being on the Premises, shall be promptly repaired by Tenant Installing and Operating Tenant s Equipment. Without first obtaining the written consent of Landlord, which consent may be withheld in Landlord s sole discretion, Tenant shall not install or operate in the Premises (i) any electrically operated equipment or other machinery, other than normal and customary equipment reasonably necessary for Tenant s Permitted Use of the Premises and that does not require wiring, cooling, or other service in excess of existing Building systems, (ii) any equipment of any kind or nature whatsoever which will require any material changes, replacements or additions to, or changes in the use of any water, heating, plumbing, air conditioning, life safety, sound attenuation, or electrical system of the Premises or the Building, or (iii) any equipment which causes the floor load to exceed the load limits set by Landlord for the Building. Machines and equipment which cause noise or vibration 20 P age

32 that may be transmitted to the structure of the Building or to any space therein so as to be objectionable to Landlord shall be installed and maintained by Tenant, at its expense, on vibration eliminators or other devices sufficient to eliminate such noise and vibration. The following load limits ( Live Load ) of the Building are based upon the requirements of the Virginia Uniform Statewide Building Code (BOCA Basic Building Code 1996 edition): Area Load Limit Roof 30 psf (adjusted to account for snow drifting and sliding) General Public Areas 100 psf Administrative 50 psf + 20 psf partitions Mechanical Rooms 150 psf With regard to the Premises, the General Public Areas shall be deemed to mean the main floor of the Premises (being the second floor of the Building, which is the level on which the theaters and theater lobby areas are located), and have been designed at 100 psf Live Load. The floors of the Premises above the main floor of the Premises are designed at an 80 psf Live Load. The ground floor of the Building, including the ground floor lobby of the Premises and the Library, have been designed at a 150 psf Live Load in the public spaces, with the office areas on that floor at the above-referenced administrative Live Load where applicable. ARTICLE 16 RIGHT OF ENTRY 16.1 General. Tenant shall permit Landlord and its elected officials, employees, contractors, and authorized agents, with reasonable prior oral or written notice and during normal business hours (except in the case of an emergency), to enter the Premises (i) to examine, inspect, and protect the Premises, (ii) to make such alterations and repairs or perform such maintenance which in the sole judgment of Landlord may be deemed necessary or desirable, or (iii) to exhibit the same to any present or future Mortgagee, purchaser, or, during the last year of the Term or at any time in which Tenant is in default under this Lease, to a prospective tenant. Tenant s point of contact for the purpose of receiving notice of Landlord s requests for access is Tenant s Facilities Coordinator, who can be reached by telephone at (571) Tenant reserves the right to change its point of contact upon giving Landlord notice pursuant to the provisions of Section 27.7 hereof. In the course of such entries into the Premises, Landlord shall use reasonable efforts, in light of expense and convenience, to minimize interference with Tenant s use of the Premises and, barring emergencies, shall not enter the Premises for such purposes during a theatrical or other performance therein. With regard to the performance of alterations within the Premises in the absence of an emergency, Landlord shall provide Tenant with at least three (3) days prior notice before such entry and shall only perform alterations consistent with Landlord s obligations under this Lease or otherwise as reasonably necessary or advisable in connection with Landlord s 21 P age

33 ownership and operation of the Building and the Land (including, without limitation, in connection with the construction of improvements in other areas of the Building) Emergency Access. For emergency purposes, Tenant shall maintain in place the Knox Box installed by Landlord outside of the front entry door to the Premises. ARTICLE 17 INSURANCE 17.1 Insurance Rating. Tenant shall not conduct or permit any activity, or place any equipment or material, in or about the Premises or the Building which will increase the rate of fire or other insurance on the Building and, if any increase in the rate of insurance is stated by any insurance company or by the applicable insurance rating bureau to be due to any activity, equipment, or material of Tenant s, such statement shall be conclusive evidence that the increase in such rate is due to the same and, as a result thereof, Tenant shall pay such increase to Landlord upon demand. Tenant shall have the right, at Tenant s sole cost and expense, to contest such a rate increase with the insurance company upon Landlord s prior written consent, such consent not to be unreasonably withheld, conditioned, or delayed Liability Insurance. Tenant shall, at its sole cost and expense, procure and maintain throughout the Term a commercial general liability insurance policy covering claims, demands, and actions for bodily injury, death, personal injury, and loss or damage to property arising out of or in connection with (i) the Premises; (ii) the condition of the Premises; (iii) Tenant s operations in, maintenance of, and use of the Premises and the Building; and (iv) Tenant s liability assumed under this Lease. Such policy shall, without limitation, (a) include liquor legal liability and contractual liability coverage, (b) have such combined single limit as reasonably required by Landlord from time to time, but in no event less than five million dollars ($5,000,000.00) per occurrence, and (c) name as additional insureds Landlord, any affiliated or subsidiary board, authority, committee, or independent agency (including those newly constituted), provided that such affiliated or subsidiary board, authority, committee, or independent agency is either a body politic created by Landlord or one in which controlling interest is vested in Arlington County, Landlord s officers, elected and appointed officials, and employees, and any other persons or entities designated by Landlord upon notice to Tenant, with coverage limits for such additional insureds equal to the full amount of the policy, but in no event less than the minimum coverage limits set forth in this section Insurance for Tenant s Property. Tenant shall, at its sole cost and expense, maintain throughout the Term a broad form property insurance policy insuring all of Tenant s Property for not less than the full replacement cost of said property. Tenant shall cause Landlord to be named as a loss payee under the policy. Except as otherwise provided in the Loan Agreement, all proceeds paid under the policy attributable to Tenant s Property shall be used to repair or replace Tenant s Property. 22 P age

34 17.4 Workers Compensation and Employers Liability Insurance. Tenant shall, at all times during the Term, maintain in effect workers compensation insurance as required by applicable Legal Requirements and at least one million dollars ($1,000,000) employer s liability coverage Requirements of Insurance Coverage. All insurance required to be carried by Tenant herein shall be with an insurance company licensed to do business in the Commonwealth of Virginia and rated not lower than A-:XII in Best s Key Rating Guide. All required policies shall contain a provision whereby the same cannot be cancelled, allowed to lapse or adversely modified unless Landlord (and any additional insureds) and, at Landlord s reasonable request, any Mortgagee, are given at least thirty (30) days prior written notice of such cancellation, lapse or modification. The form and substance of Tenant s insurance shall be satisfactory to Landlord. At least thirty (30) days before the expiration date of any required insurance policy, Tenant shall cause an ACORD certificate of insurance and endorsements necessary to evidence the required coverage, together with evidence satisfactory to Landlord of the payment of all premiums for such policy, to be delivered to Landlord. Tenant s insurance policies required by this Lease shall be issued on an occurrence (not claims-made) basis and shall be primary to any insurance maintained by Landlord, with Landlord s insurance noncontributing thereto Waiver of Subrogation. Each party hereby releases the other party hereto from liability for any loss or damage to any building, structure, or tangible personal property on or about the Land notwithstanding that such loss, damage, or liability may arise out of the negligent act or omission of the other party or its Agents, if such loss or damage is covered by broad form property insurance benefitting the party suffering such loss or damage or was required to be covered by broad form property insurance pursuant to this Lease. Each party hereto shall cause a waiver of subrogation clause or endorsement to be included in its property insurance policies [Intentionally Omitted] 17.8 Landlord s Insurance. Landlord shall procure and maintain, at its sole cost and expense, throughout the Term (i) broad form property insurance on the Building in such coverage and amounts as is commercially reasonable for a prudent owner of the Building and as necessary to satisfy the requirements of Landlord s Mortgagee, if any, and (ii) commercial general liability coverage of at least five million dollars ($5,000,000.00). At Landlord s option, such insurance may be carried under any blanket or umbrella policies that Landlord has in force for other buildings and projects. In addition, at Landlord s option (during all times in which the Landlord is the County Board of Arlington County, Virginia or other body politic or governmental agency), Landlord may elect to self-insure all or any part of the required liability insurance coverage. Landlord may, but shall not be obligated to, carry any other form or forms of insurance as Landlord or the Mortgagees or ground lessors of Landlord may reasonably determine is advisable. The proceeds payable under all insurance policies maintained by Landlord on the Building shall belong to and be the property of Landlord, and Tenant shall not have any interest in such proceeds. 23 P age

35 17.9 Coverage. Landlord makes no representation to Tenant that the limits or forms of coverage specified above or approved by Landlord are adequate to insure Tenant s Property or Tenant s obligations or assumption of contractual liability under this Lease, and the limits of any insurance carried by Tenant shall not limit its duties and obligations under this Lease. ARTICLE 18 SERVICES AND UTILITIES 18.1 Services to the Premises. Landlord shall provide for and maintain, consistent with the standards of similar projects in Arlington, Virginia, water from the wet stacks in the Building, landscaping, grounds maintenance, snow-clearing (other than with respect to Tenant s loading dock area), exterior and Common Area maintenance, repair, and cleaning for the Building, and such other maintenance and repair as provided for in Section 12.1 of this Lease. Landlord shall perform its obligations under this Section 18.1 pursuant to applicable Legal Requirements. No interruption or malfunction of, or deficiency in, any utility service, in Building elevators, or in the Premises or Building s HVAC system shall constitute a breach by Landlord of this Lease, nor shall it be deemed to cause an eviction or disturbance of Tenant or release Tenant from any obligation hereunder, and Landlord shall not be liable for damages as a result thereof Utility Charges. Water utility service shall be furnished to the Premises through Landlord s meter. Tenant shall not be required to reimburse Landlord for the cost of such water utility service or for the electricity and gas service powering the HVAC systems that serve the Building outside the Premises or both the Premises and the Building outside the Premises (as opposed to HVAC systems serving only the Premises). Tenant shall arrange and pay for all other utility services to the Premises desired by Tenant. Tenant shall use reasonable diligence to conserve HVAC and utility services supplied to the Premises at Landlord s expense. Tenant hereby agrees to comply with all reasonable (in light of the Permitted Use) energy conservation procedures, controls, and requirements instituted by Landlord pursuant to any Legal Requirements or otherwise, including but not limited to controls on the permitted range of temperatures, the volume of energy consumption or the hours of operation of the Building. Institution by Landlord of such controls and requirements shall not entitle Tenant to terminate this Lease or to an abatement of any Rent payable hereunder. ARTICLE 19 LIABILITY OF LANDLORD 19.1 No Liability. Except as otherwise expressly provided in this Lease, Tenant hereby agrees that Landlord shall not be liable to Tenant or its officers, partners, directors, employees, or independent contractors for, and Tenant, for itself and its officers, partners, directors, employees, and independent contractors, does hereby release Landlord and its Agents from liability for, any damage, compensation, or claim arising from (i) the necessity of repairing 24 P age

36 any portion of the Premises, (ii) any interruption in the use of the Premises or the Common Area for any reason, including without limitation any interruption or suspension of utility service, (iii) fire or other casualty or property injury, damage, or loss resulting from the use or operation (by Landlord, Tenant, or any other person whomsoever) of the Premises, the Building, or the Land, (iv) robbery, assault or theft, or (v) any leakage in the Premises from water, rain, snow, or other cause whatsoever. Except as otherwise expressly provided in this Lease, no such occurrence shall give rise to a constructive eviction. Notwithstanding the foregoing, any goods, automobiles, property, or personal effects stored or placed by Tenant or its Agents in or about the Premises shall be at the sole risk of Tenant and Tenant hereby waives its right to recover against Landlord and its Agents therefor. Tenant hereby waives any claim it might have against Landlord or its Agents for any consequential damages or business losses sustained by Tenant arising out of the loss of or damage to any person or property of Tenant s, or any interruption in the use of the Premises, for any reason. Tenant acknowledges its obligation to insure against such losses and damages Tenant Indemnity. Tenant shall indemnify, defend, protect, and hold harmless Landlord, any corporate entity or governmental or political subdivision or authority affiliated with Landlord, Landlord s master lessor if any, Landlord s property manager if any, any third-party operator or owner of the Building, and any asset manager, contractor, employee, officer, principal, member, partner, agent, or elected or appointed official of any of the foregoing, and the successors and assigns of each of them from and against any and all damages, claims, liabilities, costs, and expenses (including without limitation, attorneys and other professionals fees) of every kind and nature (including without limitation those arising from any injury or damage to any person, property, or business) incurred by or claimed against Landlord or its Agents as a result of, arising from, or in connection with (i) the use and occupancy of the Premises by Tenant or its Agents, licensees, or contractors; (ii) Tenant s breach of this Lease; or (iii) any negligent act or omission of Tenant or its contractors in or about the Premises or the Building or on or about the Land Landlord Indemnity. So long as Landlord is The County Board of Arlington County, Virginia, or another body politic or other governmental agency, there shall be no Landlord indemnity for the benefit of Tenant. At such time as Landlord is no longer The County Board of Arlington County, Virginia or another body politic or governmental agency, then the following Landlord indemnity shall become effective. Landlord shall indemnify, defend, protect, and hold harmless Tenant from and against any and all damages, claims, liabilities, costs, and expenses (including without limitation attorneys and other professionals fees) of every kind and nature (including without limitation those arising from any injury or damage to any person, property, or business) incurred by or claimed against Tenant as a result of, arising from or in connection with (i) Landlord s breach of this Lease; or (ii) any negligent act or omission of Landlord or its contractors in or about the Premises or the Building or on or about the Land Limitation on Recourse. Notwithstanding anything contained in this Lease to the contrary, the obligations of Landlord and Tenant under this Lease (including any actual or alleged breach or default by Landlord or Tenant) do not constitute personal obligations of the 25 P age

37 Agents of Landlord or Tenant, as applicable, and neither Landlord nor Tenant shall seek recourse against the other party s individual Agents, or any of their personal assets for satisfaction of any liability with respect to this Lease. In addition, in consideration of the benefits accruing hereunder to Tenant and notwithstanding anything contained in this Lease to the contrary, Tenant hereby covenants and agrees for itself and all of its successors and assigns that the liability of Landlord for its obligations under this Lease (including any liability as a result of any actual or alleged failure, breach, or default hereunder by Landlord), shall be limited solely to, and Tenant s and its successors and assigns sole and exclusive remedy shall be against, Landlord s interest in the Building and the Land and/or such respective partnership interests or assets and proceeds therefrom, and no other assets of Landlord. In the event that the original Landlord hereunder, or any successor owner of the Building, shall sell or convey the Building, all liabilities and obligations on the part of the original Landlord, or such successor owner, under this Lease occurring thereafter shall terminate as of the day of such sale, and thereupon all such liabilities and obligations shall be binding on the new owner so long as the successor Landlord assumes such liabilities and obligations No Limitation on Legal and Equitable Remedies. Except as otherwise provided by the terms of this Lease, Landlord and Tenant shall each may have all legal and equitable rights provided by law, including without limitation the right to maintain an action for specific performance, injunctive relief, declaratory judgment, constructive eviction, and/or breach of this Lease and damages. ARTICLE 20 RULES AND REGULATIONS 20.1 General. Tenant shall at all times abide by and observe, and cause its Agents and contractors to abide by and observe, the Rules and Regulations and any amendments thereto that may be reasonably promulgated from time to time by Landlord for the operation and maintenance of the Building. The Rules and Regulations shall be deemed to be covenants of this Lease to be performed and/or observed by Tenant. Nothing contained in this Lease shall be construed to impose upon Landlord any duty or obligation to enforce the Rules and Regulations, or the terms or provisions contained in any other lease, against any other tenant of the Building. If there is any inconsistency between this Lease and the Rules and Regulations, this Lease shall govern. Landlord reserves the right to reasonably amend and modify the Rules and Regulations as it deems necessary upon prior written notice to Tenant, so long as such amendment or modification does not materially restrict the Permitted Use or cause Tenant to incur material additional costs. The current Rules and Regulations are attached hereto as Exhibit E and made a part hereof. 26 P age

38 ARTICLE 21 DAMAGE AND CONDEMNATION 21.1 Damage to the Premises or Building. (i) Tenant shall notify Landlord promptly of any casualty damage to the Premises. Landlord may terminate this Lease upon written notice following any such casualty if the damage is not fully covered by insurance maintained by Landlord, if, in Landlord s reasonable estimation, the repair of the damage is not reasonably susceptible to completion within one hundred twenty (120) days after the casualty without accelerated construction or other extraordinary measures, or if the casualty occurs with less than one (1) year remaining in the Term. If this Lease is not terminated following any such damage, Landlord shall, to the extent reasonably practicable and to the extent of Landlord s net insurance proceeds, repair the damage to the Premises and to any portion of the Building necessary for Tenant s use of the Premises, provided that Landlord shall not be obligated to repair or replace Tenant s Property or any Alterations made by Tenant. Promptly following the substantial completion of Landlord s repairs, Tenant shall perform any additional repairs to the Premises necessary to occupy the Premises for the Permitted Use. (ii) If this Lease does not terminate following any casualty, Landlord does not substantially complete the repairs within eighteen (18) months after the damage (plus any delay attributable to force majeure), and Tenant is not reasonably able to use the Premises for the Permitted Use without the repairs, then until the repairs are substantially complete, as Tenant s sole remedy therefor, Tenant may terminate this Lease on sixty (60) days notice, provided that Landlord may nullify the termination by substantially completing the repairs within the foregoing sixty (60)-day notice period. (iii) [Intentionally Omitted] 21.2 Condemnation. (a) If the whole or a substantial part of the Premises or the Building is condemned or acquired in lieu of condemnation by any governmental authority for any public or quasi-public use or purpose, then the term of this Lease shall cease and terminate as of the date when title vests in such governmental authority. Tenant shall have no claim against Landlord or the condemning authority for any portion of the amount of the condemnation award or settlement that Tenant claims as its damages arising from such condemnation or acquisition, or for the value of any unexpired term of the Lease. Tenant may make a separate claim against the condemning authority for a separate award for the value of Tenant s tangible personal property, for moving and relocation expenses, and for such business damages and/or consequential damages as may be allowed by law, provided the same shall not diminish the amount of Landlord s award. For purposes of this Section 21, a substantial part of the Premises shall be considered to have been 27 P age

39 taken if twenty-five percent (25%) or more of the Premises is condemned or acquired in lieu of condemnation, or if less than twenty-five percent (25%) of the Premises is taken but Tenant cannot reasonably conduct its business in the remainder of the Premises. (b) If less than a substantial part of the Premises is condemned or acquired in lieu of condemnation by any governmental authority for any public or quasi-public use or purpose, this Lease shall continue in full force and effect as to the portion of the Premises not taken. (c) If twenty-five percent (25%) or more of the Building is condemned (whether or not the Premises shall have been condemned) and Landlord elects to demolish the remainder of the Building, Landlord may terminate this Lease upon at least thirty (30) days prior written notice to Tenant. ARTICLE 22 DEFAULT 22.1 Events of Default. Each of the following shall constitute an Event of Default : (i) Tenant fails to pay Rent within five (5) business days after written notice from Landlord that the payment is overdue; (ii) Tenant fails to observe or perform any other term, condition, or covenant herein binding upon or obligating Tenant within thirty (30) days after written notice from Landlord; provided, however, that if such failure is not reasonably susceptible to cure within said thirty (30)-day period, Tenant shall have a reasonable period of time, not to exceed an additional sixty (60) days, in which to cure said breach, conditioned upon Tenant s promptly commencing to cure such breach and diligently pursuing the cure to completion, (iii) Tenant abandons the Premises or fails to comply with the continuous use and primary theater covenants contained in Section 10.3 hereof; (iv) Tenant makes or consents to a general assignment for the benefit of creditors or a common law composition of creditors, or a receiver of the Premises or all or substantially all of Tenant s assets is appointed; or (v) a transfer in violation of Article 11 herein Landlord s Remedies. Upon the occurrence of an Event of Default, Landlord, at its option, without further notice or demand to Tenant, may in addition to all other rights and remedies provided in this Lease, at law, or in equity: (i) Terminate this Lease and Tenant s right of possession of the Premises, and recover all damages to which Landlord is entitled under law, specifically including, but without limitation, all of Landlord s reasonable expenses of reletting (including without limitation market rental concessions to new tenants, repairs, Alterations, legal fees, and brokerage commissions). If Landlord elects to terminate this Lease, every obligation of the parties shall cease as of the date of such termination, except that Tenant shall remain liable for the payment of Rent and performance of all other terms and conditions of this Lease through the date of termination. 28 P age

40 (ii) Terminate Tenant s right of possession of the Premises without terminating this Lease, in which event Landlord may, but shall not be obligated to, relet the Premises, or any part thereof, for the account of Tenant, for such rent and term and upon such other conditions as are acceptable to Landlord. For purposes of such reletting, Landlord is authorized to redecorate, repair, alter, and improve the Premises as advisable in Landlord s sole discretion. Until Landlord relets the Premises, Tenant shall remain obligated to pay Rent to Landlord as provided in this Lease. If and when the Premises are relet and if a sufficient sum is not realized from such reletting after payment of all Landlord s reasonable expenses of reletting (including, without limitation, rental concessions to new tenants, repairs, Alterations, legal fees, and brokerage commissions) to satisfy the payment of Rent due under this Lease in any month, Tenant shall pay Landlord any such deficiency upon demand. Tenant agrees that Landlord may file suit to recover any sums due Landlord under this article from time to time and that such suit or recovery of any amount due Landlord shall not be any defense to any subsequent action brought for any amount not previously reduced to judgment in favor of Landlord. (iii) [Intentionally Omitted] (iv) Re-enter and repossess the Premises and remove all persons and effects therefrom, by summary proceeding, ejectment, or other legal action. Landlord shall have no liability by reason of any such re-entry, repossession, or removal so long as such action is compliant with applicable law. (v) Recover from Tenant, to the extent permitted under the laws of the Commonwealth of Virginia, the value and/or cost of all unamortized concessions to Tenant under this Lease, if any Rights Upon Possession. If Landlord takes possession of the Premises pursuant to this article, then upon terminating this Lease, subject to applicable law, Landlord may, at its option, enter into the Premises, remove Tenant s Alterations, signs, and Tenant s Property and store them at Tenant s risk and expense or dispose of them as Landlord may see fit; provided, however, that if Landlord elects to take possession only without terminating this Lease, such entry and possession shall not terminate this Lease or release Tenant or any guarantor, in whole or in part, from the obligation to pay the Rent reserved hereunder for the full Term or from any other obligation under this Lease or any guaranty thereof No Waiver. If either party shall institute proceedings against the other and a compromise or settlement thereof shall be made, the same shall not constitute a waiver of any other covenant, condition, or agreement herein contained, or of any of Landlord s rights hereunder. No waiver by either party of any breach shall operate as a waiver of such covenant, condition, or agreement, or of any subsequent breach thereof. No payment of Rent by Tenant or acceptance of Rent by Landlord shall operate as a waiver of any breach or default by Tenant under this Lease. No payment by Tenant or receipt by Landlord of a lesser amount than the full amount then due shall be deemed to be other than a payment on account of the earliest unpaid Rent, nor shall any 29 P age

41 endorsement or statement on any check or communication accompanying a check for the payment of Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord s right to recover the balance of such Rent or to pursue any other remedy provided in this Lease. No re-entry by Landlord, and no acceptance by Landlord of keys from Tenant, shall be considered an acceptance of a surrender of the Lease Performance at Tenant s Expense. If Tenant fails to perform any obligation under this Lease, including Tenant s obligation to pay Operating Expenses and Taxes, then upon at least ten (10) days prior notice (or reasonable shorter notice in emergencies), whether or not an Event of Default has occurred, Landlord may (but shall not be obligated to) perform or pay on Tenant s behalf any action or amount necessary to cure the failure. Tenant shall reimburse Landlord for the full cost of Landlord s action (including without limitation reasonable attorneys fees incurred) plus an administrative fee equal to ten percent (10%) of such cost. Payment shall be due within five (5) days after Landlord s written demand therefor. Landlord s remedies under this section are in addition to any other remedies available under this Lease or under applicable law Landlord s Lien. As security for the performance of Tenant s obligations, Tenant grants to Landlord a lien upon and a security interest in Tenant s Property, both existing and hereafter acquired, which shall be subject and subordinate to any lien under the Loan Agreement. Such lien shall be in addition to Landlord s rights of distraint, if any. Within twenty (20) days after written request, Tenant shall execute, acknowledge, and deliver to Landlord a financing statement and any other commercially-reasonable documents requested by Landlord evidencing or establishing such lien and security interest Landlord Default. Tenant shall promptly notify Landlord of the need for any repairs or actions that are Landlord s obligation under this Lease. Landlord shall not be deemed to have breached this Lease based on a violation of any provision hereof unless Tenant notifies Landlord of the violation, including a reasonably-detailed statement of the factual basis thereof, and Landlord fails to cure the violation within thirty (30) days after receiving such notice. Notwithstanding the foregoing, if the violation is not reasonably susceptible to cure within thirty (30) days, Landlord shall not be deemed to have breached this Lease so long as Landlord commences curing the violation within thirty (30) days after receiving the notice and thereafter diligently pursues the cure to completion. Tenant s sole remedies for Landlord s breach of this Lease shall be either (i) an action for specific performance, declaratory relief, or injunctive relief fully subject, however, to an appropriation of funds by Landlord for such obligations per Section hereof or (ii) the termination of this Lease upon thirty (30) days notice given no sooner than the expiration of any applicable cure period, provided that the notice shall be nullified and this Lease shall not terminate if the default is cured within the thirty (30)-day termination notice period. 30 P age

42 ARTICLE 23 MORTGAGES 23.1 Subordination. This Lease and Tenant s interest hereunder shall be subject and subordinate to (i) any ground lease or master lease now or hereafter affecting the Building or the Land or Landlord s interest therein and to all renewals, modifications, consolidations, replacements, and extensions thereof and (ii) any Mortgage now or hereafter affecting the Building or the Land and to all renewals, modifications, replacements, consolidations, and extensions thereof and to any and all advances made thereunder and all interest thereon. This section is selfoperative and no further instrument is required. Tenant nevertheless shall execute and deliver, upon ten (10) business days notice from time to time, any documents requested by Landlord to evidence such subordination. If, at any time or from time to time during the Term, any Mortgagee requests that this Lease have priority over the lien of its Mortgage, then this Lease shall have priority over the lien of the Mortgage and all renewals, modifications, replacements, consolidations, and extensions thereof and all advances made thereunder and the interest thereon, and Tenant shall, within ten (10) business days after receipt of a request therefor from Landlord, execute, acknowledge, and deliver any and all reasonable documents and instruments confirming the priority of this Lease. In any event, however, if this Lease shall have priority over the lien of a first Mortgage, this Lease shall not become subject or subordinate to the lien of any subordinate Mortgage, and Tenant shall not execute any subordination documents or instruments for any subordinate Mortgagee without the written consent of the first Mortgagee Mortgagee Protection. Tenant agrees to give any Mortgagee by certified mail, return receipt requested, a copy of any notice of default served upon Landlord, provided that before such notice Tenant has been notified in writing of the address of such Mortgagee Modification Due to Financing. If, in connection with obtaining a Mortgage, the Mortgagee requests reasonable modifications of this Lease as a condition to such financing, Tenant shall promptly execute a modification of this Lease, provided such modifications do not materially increase the financial obligations of Tenant hereunder or materially adversely affect the leasehold interest hereby created or Tenant s reasonable use and enjoyment of the Premises. Tenant and any guarantor shall each, prior to execution and annually throughout the Term upon request, provide such financial information and documentation about itself to Landlord or Mortgagee as may be requested Attornment. In the event of (i) a transfer of Landlord s interest in the Premises, (ii) the termination of any ground or underlying lease of the Building or the Land, or (iii) the purchase of the Building or the Land or Landlord s interest therein in a foreclosure sale or by deed in lieu of foreclosure under any Mortgage or pursuant to a power of sale contained in any Mortgage, then in any of such events, Tenant shall, at the request of Landlord or Landlord s successor in interest, attorn to and recognize the transferee or purchaser of Landlord s interest or the lessor under the terminated ground or underlying lease, as the case may be, as Landlord under this Lease for the balance of the then remaining Term, and thereafter this Lease shall continue as 31 P age

43 a direct lease between such lessor, transferee, or purchaser as Landlord and Tenant as Tenant, except that such lessor, transferee, or purchaser shall not be (a) liable for any act or omission of Landlord s occurring prior to such lease termination or prior to its succession to title, (b) subject to any offset, defense, or counterclaim accruing prior to such lease termination or prior to such succession to title, (c) bound by any payment of Rent made prior to such lease termination or prior to such succession to title for more than one month in advance, (d) bound by any amendment of this Lease made without the consent of the lessor, transferee, or purchaser, as applicable, or its predecessor in interest, or (e) liable for the return of any security deposit unless actually received by the lessor, transferee, or purchaser. Tenant shall, upon request by Landlord or the transferee or purchaser of Landlord s interest or the lessor under the terminated ground or underlying lease, as the case may be, execute and deliver an instrument or instruments confirming the foregoing provisions of this article. Tenant hereby waives the provisions of any present or future law or regulation which gives or purports to give Tenant any right to terminate or otherwise adversely affect this Lease, or the obligations of Tenant hereunder, upon or as a result of the termination of any such ground or underlying lease or the completion of any such foreclosure sale. ARTICLE 24 SURRENDER; HOLDING OVER 24.1 Surrender of the Premises. Tenant shall peaceably surrender the Premises to Landlord on the Expiration Date or earlier termination of this Lease, in broom-clean condition, free of Tenant s personal property, and in as good condition as when Tenant took possession, including, without limitation, the repair of any damage to the Premises caused by the removal of any personal property from the Premises, except for reasonable wear and tear and loss by fire or other casualty. Any Tenant s Property or other personal property left on or in the Premises or the Building after the Expiration Date or earlier termination of this Lease shall be deemed to be abandoned, and, at Landlord s option, title shall pass to Landlord under this Lease Holding Over. Tenant shall indemnify and defend Landlord and hold it harmless from any claims, losses, damages, demands, and expenses made or incurred in connection with any failure by Tenant to vacate the Premises and deliver possession thereof to Landlord, in accordance with Section 24.1 hereof, upon the termination of this Lease. ARTICLE 25 QUIET ENJOYMENT 25.1 General. Landlord covenants that if Tenant shall pay Rent and perform all of the terms and conditions of this Lease to be performed by Tenant, Tenant shall during the Term peaceably and quietly occupy and enjoy possession of the Premises without molestation or hindrance by Landlord or its Agents and contractors, or any party claiming through or under Landlord or its successors, subject to the provisions of this Lease and any easements, conditions, and restrictions of record affecting the Land. Without limiting the foregoing, Landlord agrees that, so long as no Event of Default then exists, Landlord shall not allow any other area of the Building 32 P age

44 to be used for an Incompatible Use (as hereinafter defined). For purposes of this Section 25.1, the term Incompatible Use shall mean a use that by its nature and/or actual operation (i) unreasonably or materially interferes with Tenant s Permitted Use of the Premises, or (ii) creates a noxious or unreasonable physical condition (such as, but not limited to, odors, noise or vibrations) that emanates from the Building and materially interferes with Tenant s performance of the Permitted Use in the Premises. Tenant acknowledges and agrees that, in all events, a public library, by its nature, does not constitute an Incompatible Use. ARTICLE 26 COVENANTS REGARDING HAZARDOUS MATERIALS 26.1 Definition. As used in this article, the term Hazardous Material means any flammable items, explosives, radioactive materials, hazardous or toxic substances, material, or waste, or related materials, including any substances defined as or included in the definition of hazardous substances, hazardous wastes, infectious wastes, hazardous materials, or toxic substances now or subsequently regulated under any federal, state or local laws, regulations, or ordinances, including without limitation oil, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and including any different products and materials which are subsequently found to have adverse effects on the environment or the health and safety of persons General Prohibition. Tenant shall not cause or permit any Hazardous Material to be generated, produced, brought upon, used, stored, treated, discharged, released, spilled, or disposed of on, in, under, or about the Premises or the Building by Tenant or its Agents and contractors. Notwithstanding the foregoing, Tenant shall have the right to use paints, adhesives, and other substances and materials needed for set design and construction, and in theater productions, of types and in amounts consistent with the customary practices of a first-class theater operation, so long as same are used and stored in strict compliance with all applicable Legal Requirements. Tenant shall indemnify, defend, and hold Landlord harmless from and against any and all actions (including, without limitation, remedial or enforcement actions of any kind, administrative or judicial proceedings, and orders or judgments arising out of or resulting therefrom), costs, claims, damages (including, without limitation, punitive damages), expenses (including, without limitation, attorneys, consultants and experts fees, court costs and amounts paid in settlement of any claims or actions), fines, forfeitures or other civil, administrative or criminal penalties, injunctive or other relief (whether or not based upon personal or bodily injury, property damage, or contamination of, or adverse effects upon, the environment, water tables or natural resources), liabilities or losses arising from a breach of this prohibition by Tenant, its Agents, or contractors. Landlord covenants that it will not cause the use of Hazardous Materials on, in, under or about the Premises, Building or Land by Landlord, its Agents or contractors, other than in the normal course of operating a commercial, mixed-use building. Landlord, at its sole cost and expense, shall be responsible for removing any Hazardous Materials upon the Premises, Building, or Land as a result of the breach of the immediately forgoing covenant. 33 P age

45 26.3 Notice. In the event that Hazardous Materials are discovered upon, in, or under the Premises or the Building and any governmental agency or entity having jurisdiction over the Premises or the Building requires the removal of such Hazardous Materials, Tenant shall be responsible for removing those Hazardous Materials that are introduced or caused by Tenant or its Agents and contractors, but not those resulting from the actions or failures to act of the predecessors in interest of the Land or any prior improvements thereon, or of Landlord and its contractors. Notwithstanding the foregoing, Tenant shall not take any remedial action in or about the Premises or the Building without first notifying Landlord of Tenant s intention to do so and affording Landlord the opportunity to protect Landlord s interest with respect thereto. Tenant immediately shall notify Landlord in writing of: (i) any spill, release, discharge or disposal of any Hazardous Material in, on or under the Premises or the Building or any portion thereof that it observes or becomes aware of, (ii) any enforcement, cleanup, removal or other governmental or regulatory action instituted, contemplated, or threatened (if Tenant has notice thereof) pursuant to any Hazardous Materials Laws; (iii) any claim made or threatened by any person against Tenant, the Premises or the Building relating to damage, contribution, cost recovery, compensation, loss or injury resulting from or claimed to result from any Hazardous Materials, that Tenant becomes aware of; and (iv) any reports made to any governmental agency or entity arising out of or in connection with any Hazardous Materials in, on, under or about or removed from the Premises or the Building including any complaints, notices, warnings, reports or asserted violations in connection therewith, that Tenant has notice of. Tenant also shall supply to Landlord as promptly as possible, and in any event within five (5) business days after Tenant first receives or sends the same, copies of all claims, reports, complaints, notices, warnings or asserted violations relating in any way to the Premises or Tenant s use or occupancy thereof Survival. The respective rights and obligations of Landlord and Tenant under this Article 26 shall survive the expiration or earlier termination of this Lease Representations. ARTICLE 27 MISCELLANEOUS (a) No Representations by Landlord. Tenant acknowledges that neither Landlord or its Agents nor any broker has made any representation or promise with respect to the Premises or the Building except as herein expressly set forth, and no rights, privileges, easements, or licenses are acquired by Tenant except as herein expressly set forth. Tenant accepts the Premises and the Building AS IS, and acknowledges that the Premises and the Building are in good and satisfactory condition as of the Commencement Date. (b) Representations by Tenant. Tenant represents, warrants, agrees, and acknowledges that as of the Commencement Date Landlord is in compliance with this Lease and that no event has occurred and no condition exists that, with the giving of notice and the passage of time, would constitute a default by Landlord hereunder. 34 P age

46 27.2 No Partnership. Nothing contained in this Lease shall be deemed or construed to create a partnership or joint venture of or between Landlord and Tenant, or to create any other relationship between Landlord and Tenant other than that of landlord and tenant Brokers. Landlord and Tenant each represents and warrants to the other that it has not employed any broker, agent or finder relating to this Lease. Tenant shall indemnify, defend, and hold Landlord harmless from and against any claim for brokerage or other commission arising from or out of any breach of Tenant s representation and warranty Estoppel Certificate. Tenant shall, without charge, at any time and from time to time, within ten (10) business days after request therefor by Landlord or any Mortgagee, ground lessor, or purchaser or prospective purchaser of the Building or the Premises execute, acknowledge, and deliver to such requesting party a written estoppel certificate certifying to the extent then true and correct, as of the date of such estoppel certificate, the following: (i) that this Lease is unmodified and in full force and effect (or if modified, that the Lease is in full force and effect as modified and setting forth such modifications); (ii) that the Term has commenced (and setting forth the Commencement Date and the Expiration Date); (iii) that Tenant is presently occupying the Premises; (iv) the amounts of Rent currently due and payable by Tenant, if any; (v) that any Alterations required by the Lease to have been made by Landlord have been made to the satisfaction of Tenant; (vi) that, to Tenant s knowledge, there are no existing set-offs, charges, liens, claims, or defenses against the enforcement of any right hereunder; (vii) that no Rent has been paid more than thirty (30) days in advance of its due date; (viii) that Tenant has no knowledge of any then uncured default by Landlord of its obligations under this Lease (or, if Tenant has such knowledge, specifying the same in detail); (ix) that Tenant is not in default; (x) that the address to which notices to Tenant should be sent is as set forth in the Lease (or, if not, specifying the correct address); and (xi) any other certifications reasonably requested by Landlord. Any such estoppel certificate delivered pursuant to this article may be relied upon by any existing or prospective Mortgagee, beneficiary, lessee, or purchaser of any portion of the Land, as well as their assignees. A failure by Tenant to timely execute and deliver such an estoppel certificate shall constitute an Event of Default under this Lease Financial Statements. Within ten (10) business days after request by Landlord, Tenant shall deliver to Landlord (i) Tenant s audited financial statements for its most recently audited Fiscal Year (which may be for a prior Fiscal Year if Tenant has not then completed its audit for any current Fiscal Year), and (ii) Tenant s unaudited interim financial statements for its most recently ended quarter. Any unaudited interim financial statements shall be certified as true, correct, and complete by Tenant s chief financial officer, treasurer, or other corporate officer Waiver of Jury Trial. Landlord and Tenant hereby waive trial by jury in any action, proceeding, or counterclaim brought by either party against the other with respect to any matter whatsoever arising out of or in any way connected with this Lease, the relationship of landlord and tenant hereunder, or Tenant s use or occupancy of the Premises. In the event 35 P age

47 Landlord commences any proceedings for nonpayment of Rent, Tenant shall not interpose any counterclaims other than compulsory counterclaims. This shall not, however, be construed as a waiver of Tenant s right to assert such claims in any separate action brought by Tenant Notices. All notices or other communications hereunder shall be in writing and shall be deemed duly given upon receipt if delivered in person or by a nationally-recognized overnight delivery service, or, if sent by mail, on the third (3 rd ) business day after certified or registered mailing, return receipt requested, postage prepaid. Notices to Landlord must be sent to Landlord s Notice Address specified in Section Notices to Tenant must be sent to Tenant s Notice Address specified in Section Landlord and Tenant may from time to time by written notice to the other designate another address for receipt of future notices Invalidity of Particular Provisions. If any provisions of this Lease or the application thereof to any person or circumstances shall to any extent be invalid or unenforceable, the remainder of this Lease, or the application of such provision to persons or circumstances other than those to which it is invalid or unenforceable, shall not be affected thereby, and each provision of this Lease shall be valid and be enforced to the full extent permitted by law Gender and Number. All terms and words used in this Lease, regardless of the number or gender in which they are used, shall be deemed to include any other number or gender as the context may require Benefit and Burden. Subject to the provisions of Article 11 and except as otherwise expressly provided, the provisions of this Lease shall be binding upon, and shall inure to the benefit of, the parties hereto and each of their respective representatives, heirs, successors and assigns Entire Agreement. This Lease (which shall be deemed to include the exhibits attached hereto, as well as the Agreement) contains and embodies the entire agreement of the parties hereto, and no representations, inducements or agreements, oral or otherwise, between the parties not contained in this Lease shall be of any force or effect. This Lease (other than the Rules and Regulations, which may be changed from time to time as provided herein) may not be modified, changed or terminated in whole or in part in any manner other than by an agreement in writing duly signed by Landlord and Tenant Authority. (i) If Tenant signs as a corporation, Tenant hereby represents and warrants that Tenant is a duly formed and validly existing corporation, in good standing, qualified to do business in the Commonwealth of Virginia, that the corporation has full power and authority 36 P age

48 to enter into this Lease and that the person signing for Tenant is authorized to execute this Lease on behalf of the corporation. (ii) If Tenant signs as a partnership, Tenant hereby represents and warrants that Tenant is a duly formed, validly existing partnership qualified to do business in the Commonwealth of Virginia, that the partnership has full power and authority to enter into this Lease, and that the person signing for Tenant is authorized to execute this Lease on behalf of the partnership [Intentionally Omitted] Governing Law; Proper Forum; Severability. This Lease shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia. The parties hereto agree that all disputes arising hereunder shall be brought in the Circuit Court of Arlington County, Virginia, which shall be the proper forum for any dispute arising hereunder, and in no other courts. The unenforceability, invalidity, or illegality of any provision herein shall not render any other provision herein unenforceable, invalid, or illegal Time of the Essence. Time is of the essence as to both Landlord s and Tenant s obligations contained in this Lease Force Majeure. Except for Tenant s obligations to pay Rent hereunder, neither Landlord nor Tenant shall be required to perform any of its obligations under this Lease, nor shall such party be liable for loss or damage for failure to do so, nor shall the other party thereby be released from any of its obligations under this Lease, where such failure by the nonperforming party arises from or through acts of God, strikes, lockouts, labor difficulties, explosions, sabotage, accidents, riots, civil commotions, acts of war, results of any warfare or warlike conditions in this or any foreign country, fire or casualty, Legal Requirements, energy shortage or other causes beyond the reasonable control of the non-performing party, unless such loss or damage results from the willful misconduct or gross negligence of the non-performing party Headings. Captions and headings are for convenience of reference only Memorandum of Lease. Either party may record a memorandum of this Lease at such party s sole expense for all costs, fees, and taxes, if any, associated with such recordation. (Landlord shall have no obligation to relieve Tenant from, or reimburse or credit Tenant for, any such tax liability associated with such recordation). If requested by the party seeking to record such a memorandum, the other party shall, within ten (10) business days, execute and return to such requesting party a memorandum of this Lease in statutory form submitted by the requesting party seeking to so record. In the event Tenant so records such a memorandum, upon the expiration or earlier termination of this Lease, Tenant shall, at its sole expense, record an 37 P age

49 appropriate termination of lease document in recordable form, as reasonably approved by Landlord, to evidence the termination of this Lease Release. (a) Release of Tenant. Landlord hereby releases Tenant from liability for Base Rent, Excess Rent, and utility charge reimbursements under the Original Lease, including any late charges and interest accrued on any of the foregoing, due before the Commencement Date. As used in this section, Base Rent and Excess Rent have the meanings assigned in the Original Lease. (b) Release of Landlord. Tenant hereby releases Landlord and Landlord s Agents from all liability, obligations, and responsibilities arising at any time from, or relating to, the Lease, the Premises, the Building, or the Land based on events occurring before the Commencement Date Setoff Rights. Whenever Landlord is obligated by this Lease to pay money to Tenant, before making the payment Landlord may set off against such payment any amounts then owed by Tenant to Landlord. In addition, Landlord may set off against claims of any sort made or asserted by Tenant at any time hereafter the amounts from which Tenant is released under Section 27.19(a) hereof plus the collective amount of the Base Rent and Excess Rent that would have been due under the Original Lease had this Lease not been entered into, from the Commencement Date hereof through the Expiration Date hereof. Tenant waives any applicable statute of limitation with respect to the foregoing setoff rights Appropriation of Funds. (i) Notwithstanding any other term or condition of this Lease, while Landlord is The County Board of Arlington County, Virginia or another body politic or other governmental agency, all of Landlord s duties and obligations under this Lease are subject to appropriation of funds by the County Board of Arlington County, Virginia for the specific purpose of satisfying the payment and performance of such obligations (whether or not such obligations are specifically referenced as being subject to appropriation). In the event that funds are not appropriated as aforesaid then this Lease shall become null and void and shall terminate on the last day of the Term for which appropriations were made for such purpose, without any liability whatsoever to Landlord. (ii) Notwithstanding any provision in this Lease to the contrary, this clause shall supersede any and all obligations imposed by any other provision of this Lease. No subsequent amendment of, or addendum to, this Lease shall compromise the full legal implication of this section between the parties hereto or their respective successors or assigns. 38 P age

50 27.22 Role of Landlord/Landlord Decisions; No Waiver. Tenant hereby acknowledges that Landlord has entered into this Lease in its role as landlord under this Lease and not as a governing authority. Accordingly, Landlord s execution of this Lease shall neither constitute nor be deemed to be governmental approval of any actions or interests contemplated herein or for any other governmental approval or consent required to be obtained from Landlord. Whenever in this Lease Landlord is required to join in, consent, give its approval, or otherwise act under this Lease, it is understood that such obligations are meant to apply to Landlord acting in its capacity as a landlord and not in its capacity as a governing authority. Notwithstanding the foregoing, nothing in this Lease shall be construed to waive any of (i) Landlord s powers, rights, or obligations as a governing authority or local governing body, whether or not affecting the Building or the Premises, including but not limited to its police power, right to grant or deny permits, right to collect taxes or other fees, or any other power, right, or obligation whatsoever, or (ii) Tenant s rights as a corporate citizen of Arlington County, Virginia. The provisions of this section shall not be applicable at any time that Landlord is not The County Board of Arlington County, Virginia or another body politic or governmental agency No Waiver of Sovereign Immunity by Landlord. Notwithstanding any other provisions of this Lease to the contrary, nothing in this Lease nor any action taken by Landlord pursuant to this Lease nor any document which arises out of this Lease shall constitute or be construed as a waiver of either the sovereign immunity or governmental immunity of Landlord or of its elected and appointed officials, officers, and employees. The provisions of this section shall not be applicable at any time that Landlord is not The County Board of Arlington County, Virginia or another body politic or governmental agency No Rights in Third Parties. The parties hereto mutually agree that no provision of this Lease shall create in the public, or in any person or entity other than those signing this Lease as parties hereto, rights as a third party beneficiary hereunder, or authorize any person or entity, not a party hereto, to maintain any action for personal injury, property damage, or breach of contract pursuant to the terms of this Lease or otherwise No Indemnification or Hold Harmless. Notwithstanding any other term or provision of this Lease to the contrary, Landlord shall have no obligation to explicitly or implicitly indemnify, defend, or hold harmless Tenant or any third party or parties from any liability whatsoever. The provisions of this section shall not be applicable at any time that Landlord is not The County Board of Arlington County, Virginia or another body politic or governmental agency Approval of Lease by Landlord. This Lease shall not become effective unless and until the County Board approves this Lease and this Lease is signed and delivered on behalf of the County Board Delegation of Authority to County Manager. Except to the extent prohibited by law, the County Manager or his or her designee is hereby authorized to grant or withhold, on behalf of Landlord, any consents and approvals that Tenant is required to obtain from 39 P age

51 Landlord under this Lease. This specific authority shall not be construed to limit the general authority invested by law in the County Manager to manage public property and to perform acts related thereto Effectiveness. The furnishing of the form of this Lease shall not constitute an offer and this Lease shall become effective upon and only upon its execution by and delivery to each party hereto Exhibits. All exhibits attached to this Lease are hereby incorporated in this Lease as though set forth at length herein. IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under seal as of the Date of Lease. WITNESS: LANDLORD: THE COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA, a body politic By: Print name: Name: Title: Date: Approved as to form: County Attorney ATTEST/WITNESS: TENANT:, INC., a Virginia corporation By: Print name: Name: Title: Date: 40 P age

52 EXHIBIT A PLAN SHOWING PREMISES (Excluding Loading Dock Area) First Floor A-1

53 Mezzanine (Premises are shaded) A-2

54 Second Floor (Premises are shaded) A-3

55 Third Floor (Premises are shaded) A-4