8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

July 25, 2003
Date of Report (Date of earliest event reported):

COMMERCIAL NET LEASE REALTY, INC.
(Exact Name of Registrant as specified in its Charter)

Maryland	0-12989	56-1431377
(State or Other Jurisdiction of	(Commission File Number)	(IRS Employer Identification Number)
Incorporation or Organization)

450 South Orange Avenue
Suite 900
Orlando, Florida 32801
(Address of principal executive offices, including zip code)

(407) 650-1000
(Registrant’s telephone number, including area code)

Item 1. Changes in Control of Registrant.

     Not Applicable.

Item 2. Acquisition or Disposition of Assets.

     Not Applicable.

Item 3. Bankruptcy or Receivership.

     Not Applicable.

Item 4. Changes in Registrant’s Certifying Accountant.

     Not Applicable.

Item 5. Other Events

     Concurrently with the filing of this Current Report on Form 8-K, the Registrant filed a Prospectus Supplement to the Registration Statement on Form S-3, File No. 333-105635 (the “Registration Statement”), with respect to the offering by the Registrant of 5,600,000 shares of the Registrant’s Common Stock, par value $.01 per share. The Registration Statement was declared effective by the Securities and Exchange Commission on June 5, 2003.

Item 6. Resignation of Registrant’s Directors.

     Not Applicable.

Item 7. Financial Statements and Exhibits.

     (a)-(b) Not Applicable.

     (c)  Exhibits.

Exhibit No.	Description
1	Form of Underwriting Agreement, which is being filed pursuant to Regulation S-K, Item 601(b)(1) in lieu of filing the otherwise required exhibit to the Registration Statement, under the Securities Act of 1933, as amended (the “Securities Act”), and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement. (Filed herewith).
4.1	First Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-3 (File No. 333-64511)).
5	Opinion of Shaw Pittman LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(5) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).

8	Opinion of Shaw Pittman LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(8) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).
10.1	Real Estate Purchase Contract, dated as of July 23, 2003, by and between MCI Worldcom Network Services, Inc. and the Company, which is being filed pursuant to Regulation S-K, Item 601(b)(10) (Filed herewith).
10.2	U.S. Government Lease for Real Property, dated December 17, 2002, between MCI Worldcom Network Services, Inc. and the United States of America, which is being filed pursuant to Regulation S-K, Item 601(b)(10) (Filed herewith).
23.1	Consents of Shaw Pittman LLP, which are being filed pursuant to Regulation S-K, Item 601(b)(23) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (contained in the opinions filed as Exhibits 5 and 8 hereto).
23.2	Consent of KPMG LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(23) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).

Item 8. Change in Fiscal Year.

     Not Applicable.

Item 9. Regulation FD Disclosure.

     Not Applicable.

Item 10. Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.

     Not Applicable.

Item 11. Temporary Suspension of Trading Under Registrant’s Employee Benefit Plans.

     Not Applicable.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	COMMERCIAL NET LEASE REALTY, INC.
Date: July 25, 2003	By: /s/ Kevin B. Habicht                Kevin B. Habicht         Chief Financial Officer

EXHIBITS

Exhibit No.	Description
1	Form of Underwriting Agreement, which is being filed pursuant to Regulation S-K, Item 601(b)(1) in lieu of filing the otherwise required exhibit to the Registration Statement, under the Securities Act of 1933, as amended (the “Securities Act”), and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement. (Filed herewith).
4.1	First Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-3 (File No. 333-64511)).
5	Opinion of Shaw Pittman LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(5) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).
8	Opinion of Shaw Pittman LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(8) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).
10.1	Real Estate Purchase Contract, dated as of July 23, 2003, by and between MCI Worldcom Network Services, Inc. and the Company, which is being filed pursuant to Regulation S-K, Item 601(b)(10) (Filed herewith).
10.2	U.S. Government Lease for Real Property, dated December 17, 2002, between MCI Worldcom Network Services, Inc. and the United States of America, which is being filed pursuant to Regulation S-K, Item 601(b)(10) (Filed herewith).
23.1	Consents of Shaw Pittman LLP, which are being filed pursuant to Regulation S-K, Item 601(b)(23) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (contained in the opinions filed as Exhibits 5 and 8 hereto).
23.2	Consent of KPMG LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(23) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).

EX-1 3 w88491aexv1.txt EXHIBIT 1 Exhibit 1 5,600,000 SHARES COMMERCIAL NET LEASE REALTY, INC. Common Stock UNDERWRITING AGREEMENT New York, New York July 25, 2003 Citigroup Global Markets Inc. Wachovia Capital Markets, LLC As Representatives of the several Underwriters c/o Citigroup Global Markets Inc. 388 Greenwich Street New York, NY 10013 Ladies and Gentlemen: Commercial Net Lease Realty, Inc., a Maryland corporation (the "Company"), proposes to issue and sell an aggregate of [5,600,000] shares (the "Firm Securities") of its common stock, $0.01 par value per share (the "Common Stock"), to the several Underwriters named in Schedule I hereto (the "Underwriters"). The Company also proposes to sell to the Underwriters, upon the terms and conditions set forth in Section 2 hereof, up to an additional [840,000] shares (the "Additional Securities") of Common Stock. The Firm Securities and the Additional Securities are hereinafter collectively referred to as the "Securities." The Company wishes to confirm as follows its agreement with the several Underwriters in connection with the several purchases of the Securities by the Underwriters. 1. Registration Statement and Prospectus. The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Act"), a registration statement on Form S-3 (file number 333-105635) under the Act ("Registration Statement 333-105635") and a post-effective amendment number 1 to Registration Statement Number 333-53796 ("Registration Statement 333-53796," and together with Registration Statement 333-5105635, the "Registration Statement"), which Registration Statement included a combined prospectus dated June 5, 2003 relating to an aggregate of $600,000,000 of the Company's securities (as described therein, including the Company's Common Stock), and has filed with, or transmitted for filing to, or shall promptly hereafter file with or transmit for filing to, the Commission a supplement to the prospectus included in such Registration Statement (the "Prospectus Supplement") specifically relating to the Securities and the plan of distribution thereof pursuant to Rule 424 under the Act. The Registration Statement was declared effective on June 5, 2003. As of the date hereof an aggregate of no securities have been sold under the Registration Statement. The term "Registration Statement" as used in this Agreement means the registration statement (including all financial schedules and exhibits), as amended to the date of this Agreement. If it is contemplated, at the time this Agreement is executed, that a post-effective amendment to the registration statement will be filed and must be declared effective before the offering of the Securities may commence, the term "Registration Statement" as used in this Agreement means the registration statement as amended by said post-effective amendment. The term "Basic Prospectus" as used in this Agreement means the prospectus in the form included in the Registration Statement. The term "Prospectus" means the Basic Prospectus, as amended or supplemented by the Prospectus Supplement. If applicable, the term "Preliminary Prospectus" as used in this Agreement means a prospectus supplement, subject to completion, that specifically relates to the Securities and which has heretofore been filed with the Commission, together with the Basic Prospectus. If the Company has filed an abbreviated registration statement to register Securities pursuant to Rule 462(b) under the Act (including the exhibits thereto, the "Rule 462(b) Registration Statement"), then any reference herein to the Registration Statement shall also be deemed to include such Rule 462(b) Registration Statement. Any reference in this Agreement to the registration statement, the Registration Statement, the Basic Prospectus, the Preliminary Prospectus, if any, or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, and any reference to any amendment or supplement to the registration statement, the Registration Statement, the Basic Prospectus, the Preliminary Prospectus, if any, or the Prospectus shall be deemed to refer to and include any documents filed by the Company with the Commission after the date of the Basic Prospectus under the Securities Exchange Act of 1934, as amended (the "Exchange Act") which, upon filing, are incorporated by reference therein, as required by paragraph (b) of Item 12 of Form S-3. As used herein, the term "Incorporated Documents" means the documents which are incorporated by reference in the registration statement, the Registration Statement, the Basic Prospectus, the Preliminary Prospectus, if any, the Prospectus, or any amendment or supplement thereto. 2. Agreement to Sell and Purchase. (a) The Company hereby agrees, subject to all of the terms and conditions set forth herein, to issue and sell to each Underwriter and, upon the basis of the representations, warranties and agreements of the Company herein contained and subject to all the terms and conditions set forth herein, each Underwriter agrees, severally and not jointly, to purchase from the Company, at a purchase price of $18.00 per share; the number of Firm Securities set forth opposite the name of such Underwriter in Schedule I hereto (or such number of Firm Securities increased as set forth in Section 10 hereof). (b) The Company also agrees, subject to all the terms and conditions set forth herein, to sell to the Underwriters, and, upon the basis of the representations, warranties and agreements of the Company herein contained and subject to all the terms and conditions set forth herein, the Underwriters shall have the right to purchase from the Company, pursuant to an option (the "over-allotment option") which may be exercised at any time and from time to time prior to 9:00 P.M., New York City time, on the 30th day after the date of this Agreement (or, if such 30th day shall be a Saturday or Sunday or a holiday, on the next business day thereafter when the New York Stock Exchange is open for trading) (the "Option Period"), up to an aggregate of [840,000] Additional Securities. Additional Securities purchased pursuant to the over-allotment option shall be purchased from the Company at the purchase price per share set 2 forth in Section 2(a) above less an amount per share equal to any dividends or distributions per common share payable on the Firm Securities during the Option Period, provided however, to the extent any such dividends or distributions are payable on any Additional Securities, such Additional Securities purchased pursuant to the over-allotment option shall be purchased from the Company at the purchase price per share set forth in Section 2(a). Additional Securities may be purchased only for the purpose of covering over-allotments made in connection with the offering of the Firm Securities. Upon any exercise of the over-allotment option, each Underwriter, severally and not jointly, agrees to purchase from the Company the number of Additional Securities (subject to such adjustments as the Underwriters may determine in order to avoid fractional shares) which bears the same proportion to the number of Additional Securities to be purchased by the Underwriters as the number of Firm Securities set forth opposite the name of such Underwriter in Schedule I hereto (or such number of Firm Securities increased as set forth in Section 10 hereof) bears to the aggregate number of Firm Shares. 3. Offering by Underwriters. The Company has been advised by Citigroup Global Markets Inc. that the Underwriters propose to make a public offering of their respective portions of the Securities as soon after this Agreement has become effective as in their judgment is advisable and initially to offer the Securities upon the terms set forth in the Prospectus. 4. Delivery of the Securities and Payment Therefor. Delivery of and payment for the Firm Securities and the Additional Securities (if the option provided for in Section 2(b) hereof shall have been exercised on or before the third Business Day prior to the Closing Date shall be made at 10:00 AM, New York City time, on July 30, 2003, or at such time on such later date not more than three Business Days after the foregoing date as the Underwriters shall designate, which date and time may be postponed by mutual written agreement of the Underwriters and the Company or as provided in Section 10 hereof (such date and time of delivery and payment for the Securities being herein called the "Closing Date"). Delivery of the Securities shall be made for the respective accounts of the several Underwriters, against payment by the several Underwriters of the purchase price thereof, to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. Delivery of the Firm Securities and the Additional Securities shall be made through the facilities of The Depository Trust Company unless the Underwriters shall otherwise instruct the Company in writing. If the option provided for in Section 2(b) hereof is exercised after the third Business Day prior to the Closing Date, the Company will deliver the Additional Securities (at the expense of the Company) to the Underwriters, at 388 Greenwich Street, New York, New York, on the date specified by the Underwriters (which shall be within three Business Days after exercise of said option) for the respective accounts of the several Underwriters, against payment by the several Underwriters of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. If settlement for the Additional Securities occurs after the Closing Date, the Company will deliver to the Underwriters on the settlement date for the Additional Securities, and the obligation of the Underwriters to purchase the Additional Securities shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 8 hereof. 3 5. Agreements of the Company. The Company agrees with the several Underwriters as follows: (a) If, at the time this Agreement is executed and delivered, it is necessary for a post-effective amendment to the registration statement to be declared effective before the offering of the Securities may commence, the Company will use its best efforts to cause such post-effective amendment to become effective as soon as possible and will advise the Underwriters promptly and, if requested by the Underwriters, will confirm such advice in writing, immediately after such post-effective amendment has become effective. (b) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act, any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder, the Company promptly will: (1) notify the Underwriters of such event; (2) prepare, and file with the Commission, an amendment or supplement which will correct such statement or omission or effect such compliance; and (3) supply any supplemented Prospectus to the Underwriters in such quantities as they may reasonably request. (c) The Company will advise the Underwriters promptly and, if requested by the Underwriters, will confirm such advice in writing: (i) of any review, issuance of comments, or request by the Commission or its staff on or for an amendment of or a supplement to the Registration Statement, the Preliminary Prospectus, if any, or the Prospectus or for additional information regarding the Company, its affiliates or their filings with the Commission, whether or not such filings are incorporated by reference into the Registration Statement, the Preliminary Prospectus, if any, or the Prospectus; (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the suspension of qualification of the Securities for offering or sale in any jurisdiction or the initiation of any proceeding for such purpose; and (iii) within the period of time referred to in the first sentence in subsection (f) below, of any change in the Company's condition (financial or other), business, prospects, properties, net worth or results of operations, or of the happening of any event, which results in any statement of a material fact made in the Registration Statement or the Prospectus (as then amended or supplemented) being untrue or which requires the making of any additions to or changes in the Registration Statement or the Prospectus (as then amended or supplemented) in order to state a material fact required by the Act to be stated therein or necessary in order to make the statements therein not misleading, or of the necessity to amend or supplement the Prospectus (as then amended or supplemented) to comply with the Act or any other law. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, the Company will make every reasonable effort to obtain the withdrawal of such order at the earliest possible time. (d) The Company will furnish to the Underwriters and counsel to the Underwriters, without charge: (i) ten signed copies of the registration statement and any Rule 462(b) Registration Statement as originally filed with the Commission and of each amendment thereto, including financial statements and all exhibits to the registration statement and Rule 4 462(b) Registration Statement; (ii) such number of conformed copies of the registration statement as originally filed and of each amendment thereto, but without exhibits, as the Underwriters may request; (iii) such number of copies of the Incorporated Documents, without exhibits, as the Underwriters may request; and (iv) ten copies of the exhibits to the Incorporated Documents. The Company will pay all of the expenses of printing or other production of all documents relating to the offering. (e) The Company will not file any amendment to the Registration Statement (including any filing under Rule 462(b)) or make any amendment or supplement to the Prospectus or, prior to the end of the period of time referred to in the first sentence in subsection (f) below, file any document which upon filing becomes an Incorporated Document, of which the Underwriters shall not previously have been advised or to which, after the Underwriters shall have received a copy of the document proposed to be filed, the Underwriters shall reasonably object; and no such further document, when it is filed, will contain an untrue statement of a material fact or will omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. (f) As soon after the execution and delivery of this Agreement as possible and thereafter from time to time for such period as in the opinion of counsel for the Underwriters a prospectus is required by the Act to be delivered in connection with sales by any Underwriter or dealer, the Company will expeditiously deliver to each Underwriter and each dealer, without charge, as many copies of the Prospectus (and of any amendment or supplement thereto) as the Underwriters may request. The Company consents to the use of the Prospectus (and of any amendment or supplement thereto) in accordance with the provisions of the Act and with the securities or blue sky laws of the jurisdictions in which the Securities are offered by the several Underwriters and by all dealers to whom Securities may be sold, both in connection with the offering and sale of the Securities and for such period of time thereafter as the Prospectus is required by the Act to be delivered in connection with sales by any Underwriter or dealer. If during such period of time: (i) any event shall occur that in the judgment of the Company, or in the opinion of counsel for the Underwriters, is required to be set forth in the Prospectus (as then amended or supplemented) or should be set forth therein in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading; or (ii) if it is necessary to supplement or amend the Prospectus (or to file under the Exchange Act any document which, upon filing, becomes an Incorporated Document) in order to comply with the Act or any other law, the Company will forthwith prepare and, subject to the provisions of paragraph (e) above, file with the Commission an appropriate supplement or amendment thereto (or to such document), and will expeditiously furnish to the Underwriters and dealers a reasonable number of copies thereof. In the event that the Company and the Underwriters agree that the Prospectus should be amended or supplemented, the Company, if requested by the Underwriters, will promptly issue a press release announcing or disclosing the matters to be covered by the proposed amendment or supplement. (g) The Company will: (i) cooperate with the Underwriters and with counsel for the Underwriters in connection with the registration or qualification of the Securities for offering and sale by the several Underwriters and by dealers under the securities or blue sky laws of such jurisdictions as the Underwriters may designate; (ii) maintain such qualifications in effect so long as required for the distribution of the Securities; (iii) pay any fee of the National 5 Association of Securities Dealers, Inc., in connection with its review of the offering; and (iv) file such consents to service of process or other documents necessary or appropriate in order to effect such registration or qualification; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to service of process in suits, other than those arising out of the offering or sale of the Securities, in any jurisdiction where it is not now so subject. (h) The Company will make generally available to its security holders and to the Underwriters a consolidated earnings statement, which need not be audited, covering a 12-month period commencing after the effective date of this Agreement and ending not later than 15 months thereafter, as soon as practicable after the end of such period, which consolidated earnings statement shall satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. (i) During the period commencing on the date hereof and ending on the date occurring three years hereafter, the Company will furnish to the Underwriters: (i) as soon as available, if requested, a copy of each report of the Company mailed to stockholders or filed with the Commission; and (ii) from time to time such other information concerning the Company as the Underwriters may request. (j) If this Agreement shall terminate or shall be terminated after execution pursuant to any provisions hereof, or if this Agreement shall be terminated by the Underwriters because of any inability, failure or refusal on the part of the Company to comply with the terms or fulfill any of the conditions of this Agreement, the Company shall reimburse the Underwriters severally through Citigroup Global Markets Inc. for all out-of-pocket expenses (including fees and expenses of counsel for the Underwriters) incurred by the Underwriters in connection herewith. (k) The Company will apply the net proceeds from the sale of the Securities substantially in accordance with the description set forth in the Prospectus. (l) If Rule 430A of the Act is employed, the Company will timely file the Prospectus pursuant to Rule 424(b) under the Act and will advise the Underwriters of the time and manner of such filing. (m) Except as provided in this Agreement, the Company will not sell, contract to sell or otherwise dispose of any Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or grant any options or warrants to purchase Common Stock, for a period of 90 days after the date of the Prospectus, without the prior written consent of Citigroup Global Markets Inc., except that the Company may (i) issue shares of its Common Stock upon the exercise of an option or warrant or the conversion of a security outstanding on the date of the Prospectus of which the Underwriters have been advised in writing and to which Citigroup Global Markets Inc. has consented; (ii) the issuance of grant of shares of Common Stock or options or rights to purchase shares of Common Stock pursuant to the Company's benefit and compensation plans existing on the date of the Prospectus and in amounts and on terms historically consistent with such plans; and (iii) the issuance of shares of 6 Common Stock in connection with the Company's Dividend Reinvestment Plan existing on the date of the Prospectus. (n) The Company has furnished to the Underwriters "lock-up" letters signed by the individuals listed on Schedule II and substantially in the form attached as Exhibit A to Schedule II hereto. (o) The Company has not taken, nor will it take, directly or indirectly, any action designed to, or that might reasonably be expected to cause or result in under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. (p) The Company will comply and will use its best efforts to cause the Properties and the tenants to comply in all material respects with all applicable Environmental Laws (as hereinafter defined). (q) The Company will use its best efforts to have the shares of Common Stock which it agrees to sell under this Agreement listed, subject to notice of issuance, on the New York Stock Exchange on or before the Closing Date. (r) The Company will use its best efforts to continue to qualify as a real estate investment trust (a "REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), and to continue to have each of its corporate subsidiaries (other than its taxable REIT subsidiary) comply with all applicable laws and regulations necessary to maintain a status as a "qualified REIT subsidiary" under the Code. (s) The Company will use all reasonable best efforts to do or perform all things required to be done or performed by the Company prior to the Closing Date to satisfy all conditions precedent to the delivery of the Securities pursuant to this Agreement. The Company will use all reasonable best efforts to do or perform all things required, to be done or performed by the Company under the WorldCom Agreements (as defined below). (t) The Company will not, without the prior written consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge, or otherwise dispose of, or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate of the Company or any person in privity with the Company or any affiliate of the Company, directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any debt securities issued or guaranteed by the Company (other than the Securities) or publicly announce an intention to effect any such transaction, until the Closing Date. (u) The Company will comply with all applicable securities and other applicable laws, rules and regulations, including, without limitation, the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), and to use its best efforts to cause the Company's directors 7 and officers, in their capacities as such, to comply with such laws, rules and regulations, including, without limitation, the provisions of the Sarbanes-Oxley Act. 6. Representations and Warranties of the Company. The Company hereby represents and warrants to each Underwriter: (a) The Basic Prospectus and each Preliminary Prospectus, if any, included as part of the registration statement as originally filed or as part of any amendment or supplement thereto, or filed pursuant to Rule 424 under the Act, complied when so filed in all material respects with the provisions of the Act. (b) The Company and the transactions contemplated by this Agreement meet all of the requirements for using Form S-3 under the Act. The Registration Statement has become effective for the registration under the Act of the Securities. No stop order suspending the effectiveness of the Registration Statement is in effect, and, to the best of the Company's knowledge, no proceedings for such purpose are pending before or threatened by the Commission. The Registration Statement meets the requirements set forth in Rule 415(a)(1)(x) under the Act and complies in all other material respects with such Rule. The registration statement, in the form in which it became effective, and also in such form as it may be when any post-effective amendment thereto shall become effective, and the Prospectus and any supplement or amendment thereto, each when filed with the Commission under Rule 424(b) under the Act, complied or will comply in all material respects with the provisions of the Act, and the Exchange Act and did not and will not at any such times contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein not misleading. The representation and warranty contained in this Section 6(b) does not apply to statements in or omissions from the registration statement or the Prospectus made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by or on behalf of any Underwriter expressly for use therein. (c) The Incorporated Documents heretofore filed, when they were filed (or, if any amendment with respect to any such document was filed, when such amendment was filed), conformed in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder. No such document when it was filed (or, if an amendment with respect to any such document was filed, when such amendment was filed), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (d) All the outstanding shares of Common Stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable and are free of any preemptive or similar rights; the Securities have been duly authorized and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued, fully paid and nonassessable and free of any preemptive or similar rights; and the capital stock of the Company conforms to the description thereof in the registration statement and the Prospectus. 8 (e) Each of the Company and each of its subsidiaries is a corporation, partnership or trust, as applicable, duly organized, validly existing and in good standing under the laws of the state of its formation, as set forth on Schedule III hereto, with full corporate, partnership or trust power, as applicable, and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, and each is duly registered and qualified to conduct its business, and is in good standing, in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a material adverse effect on the condition (financial or other), business, properties, net worth or results of operations of the Company and its subsidiaries. Neither the Company nor any of its subsidiaries does any business in Cuba. (f) The Company has no subsidiary or subsidiaries other than as set forth on Schedule III hereto and does not control, directly or indirectly, any corporation, partnership, joint venture, association or other business association (other than the general partner interest of Net Lease Realty III, Inc. in Net Lease Institutional Funding, L.P.). The issued shares of capital stock of each of the Company's subsidiaries have been duly authorized and validly issued, are fully paid and non-assessable and are owned legally and beneficially by the Company free and clear of any security interests, liens, encumbrances, equities or claims. (g) There are no legal or governmental actions, suits or proceedings pending or, to the knowledge of the Company, threatened, against the Company or any of its subsidiaries, or to which the Company or any properties of the Company or any of its subsidiaries is subject, that (A) are required to be described in the Registration Statement or the Prospectus but are not described as required; (B) could reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby; or (C) could reasonably be expected to have a material adverse effect on the condition (financial or other), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Prospectus (exclusive of any supplement thereto). There are no statutes, regulations, capital expenditures, off-balance sheet transactions, contingencies or agreements, contracts, indentures, leases or other instruments or documents of a character that are required to be described in the Registration Statement or the Prospectus or to be filed or incorporated by reference as an exhibit to the Registration Statement or any Incorporated Document that are not described, filed or incorporated as required by the Act or the Exchange Act. The statements in the Prospectus under the heading "Federal Income Tax Considerations" and in the Prospectus Supplement under the heading "Certain Additional Federal Income Tax Considerations" fairly summarize the matters therein described. (h) Neither the Company nor any of its subsidiaries is: (A) in violation of (i) its respective articles of incorporation or by-laws, (ii) any law, ordinance, administrative or governmental rule or regulation applicable to the Company or its subsidiaries, which violation would have a material adverse effect on the Company and its subsidiaries, or (iii) any decree of any court or governmental agency or body having jurisdiction over the Company or its subsidiaries; or (B) in default in any material respect in the performance of any obligation, agreement, condition, or covenant (financial or otherwise) contained in any bond, debenture, note or any other evidence of indebtedness or in any material agreement, indenture, lease or 9 other instrument to which the Company or any of its subsidiaries is a party or by which the Company or its subsidiaries or any of their respective properties may be bound, and no such default is reasonably foreseeable. (i) (A) As of the date of this Agreement, the Company owned 350 Properties (as defined in the Prospectus). To the best of the Company's knowledge, neither the Company nor any of its subsidiaries is in violation of any municipal, state or federal law, rule or regulation concerning any of the Properties, which violation would have a material adverse effect on the Company and/or its subsidiaries; (B) to the best of the Company's knowledge, each of the Properties complies with all applicable zoning laws, ordinances and regulations in all material respects and, if and to the extent there is a failure to comply, such failure does not materially impair the value of any of such properties and will not result in a forfeiture or reversion of title thereof; (C) neither the Company nor any of its subsidiaries has received from any governmental authority any written notice of any condemnation of, or zoning change affecting any of, the Properties, and the Company does not know of any such condemnation or zoning change which is threatened and which if consummated would have a material adverse effect on the Company or any of such properties; (D) the leases under which the Company leases the Properties as lessor (the "Leases") are in full force and effect and have been entered into in the ordinary course of business of the Company; (E) the Company and each of its subsidiaries has complied with its respective obligations under the Leases in all material respects and the Company does not know of any default by any other party to the Leases which, alone or together with other such defaults, would have a material adverse effect on the Company or its subsidiaries or any of the properties subject to a Lease; and (F) all liens, charges, encumbrances, claims or restrictions on or affecting the properties and assets (including the Properties) of the Company and its subsidiaries that are required to be disclosed in the Prospectus are disclosed therein. (j) Neither the issuance and sale of the Securities, the execution, delivery or performance of this Agreement by the Company, nor the consummation by the Company of the transactions contemplated hereby (including the application of the proceeds from the sale of the Securities): (A) requires any consent, approval, authorization or other order of, or registration or filing with, any court, regulatory body, administrative agency or other governmental body, agency or official (except such as may be required for the registration of the Securities under the Act and compliance with the securities or blue sky laws of various jurisdictions), or conflicts or will conflict with or constitutes or will constitute a breach or violation of, or a default under, the articles of incorporation or by-laws of the Company or any of its subsidiaries; or (B) conflicts or will conflict with or constitutes or will constitute a breach of, or a default under, any agreement, indenture, lease or other instrument to which the Company or any of its subsidiaries is a party or by which the Company or any properties of the Company or any of its subsidiaries may be bound, or violates or will violate any statute, law, regulation or filing or judgment, injunction, order or decree applicable to the Company or any of its subsidiaries or any properties of the Company or any of its subsidiaries, or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to the terms of any agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries may be bound, or to which any property or assets of the Company or any of its subsidiaries is subject. 10 (k) To the Company's knowledge, the accountants, KPMG LLP, who have certified or shall certify the financial statements and schedules included or incorporated by reference in the Registration Statement and the Prospectus (or any amendment or supplement thereto), are independent public accountants with respect to the Company as required by the Act and the applicable published rules and regulations thereunder. (l) The financial statements, together with related schedules and notes, included or incorporated by reference in the Registration Statement and the Prospectus (and any amendment or supplement thereto), present fairly in all material respects the financial position, results of operations and changes in financial position of the Company and its subsidiaries on the basis stated in the Registration Statement and the Incorporated Documents at the respective dates or for the respective periods to which they apply. Such statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as disclosed therein. The other financial and statistical information and data included or incorporated by reference in the Registration Statement and the Prospectus (and any amendment or supplement thereto) are accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Company and its subsidiaries. The pro forma financial statements and other pro forma financial information included, or incorporated by reference in, the Registration Statement and the Prospectus include assumptions that provide a reasonable basis for presenting the significant effects directly attributable to the transactions and events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma adjustments reflect the proper application of those adjustments to the historical financial statement amounts in the pro forma financial statements included in the Prospectus and the Registration Statement. The pro forma financial statements included in the Prospectus and the Registration Statement comply as to form in all material respects with the applicable accounting requirements of Regulation S-X under the Act and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements. (m) The execution and delivery of, and the performance by the Company of its obligations under, this Agreement has been duly and validly authorized by the Company, and this Agreement has been duly executed and delivered by the Company and constitutes the valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except only to the extent that rights to indemnity and contribution hereunder may be limited by federal or state securities laws. (n) Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement thereto), subsequent to the respective dates as of which such information is given in the Registration Statement and the Prospectus (or any amendment or supplement thereto), neither the Company nor any of its subsidiaries has incurred any liability or obligation (financial or other), direct or contingent, or entered into any transaction (including any off-balance sheet activities or transactions), not in the ordinary course of business, that is material to the Company and its subsidiaries, and there has not been any change in the capital stock, or material increase in the short-term debt or long-term debt (including any off-balance sheet activities or transactions), of either the Company or its subsidiaries, or any material adverse change, or any development involving or which may reasonably be expected to involve, a 11 prospective material adverse change, in the condition (financial or other), business, prospects, net worth or results of operations of either the Company or its subsidiaries. (o) Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement thereto) the Company and each of its subsidiaries has good and marketable title to all property (real and personal) described in the Prospectus as being owned by each of them (including the Properties), free and clear of all liens, claims, security interests or other encumbrances except such as are described in the Registration Statement and the Prospectus, or in any document filed as an exhibit to the Registration Statement, and each property described in the Prospectus as being held under lease by the Company or any of its subsidiaries is held by it under a valid, subsisting and enforceable lease. (p) The Company has not distributed and, prior to the later to occur of (x) the Closing Date and (y) completion of the distribution of the Securities, will not distribute, any offering material in connection with the offering and sale of the Securities other than the Registration Statement, the Prospectus or other materials, if any, permitted by the Act. The Company has not, directly or indirectly: (i) taken any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities; or (ii) since the filing of the Registration Statement (A) sold, bid for, purchased, or paid anyone any compensation for soliciting purchases of, the Securities or (B) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company. (q) The Company and each of its subsidiaries possess all certificates, permits, licenses, franchises and authorizations of governmental or regulatory authorities ("permits") as are necessary to own their respective properties and to conduct their respective businesses in the manner described in the Prospectus, where such failure to possess could have a material adverse effect on the Company and its subsidiaries, subject to such qualifications as may be set forth in the Prospectus. The Company and each of its subsidiaries has fulfilled and performed all of their respective material obligations with respect to such permits, and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or which would result in any other material impairment of the rights of the holder of any such permit, subject in each case to such qualification as may be set forth in the Prospectus. Except as described in the Prospectus, none of the permits contains any restriction that is materially burdensome to the Company and/or its subsidiaries. Except as described in the Prospectus, exclusive of any supplement thereto, neither the revocation or modification of any permit singly or in the aggregate, nor the announcement of an unfavorable decision, ruling or finding with respect to any permit, would have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole. (r) The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to the financial and 12 corporate books and records and assets is permitted only in accordance with management's general or specific authorization; (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) management is made aware of the nature and significance of all transactions that are not reflected in the Company's financial statements. (s) There is and has been no failure on the part of the Company and any of the Company's directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications. (t) To the Company's knowledge, neither the Company and its subsidiaries nor any employee or agent of the Company and its subsidiaries has made any payment of funds of the Company or its subsidiaries or received or retained any funds in violation of any law, rule or regulation, which payment, receipt or retention of funds is of a character required to be disclosed in the Prospectus. (u) No labor problem or dispute with the employees of the Company and/or any of its subsidiaries or any of the Company's or its subsidiaries' principal suppliers, contractors or customers, exists, is threatened or imminent that could result in a material adverse change in the condition (financial or other), business, net worth or results of operations of the Company and/or its subsidiaries. To the Company's knowledge, no labor problem or dispute with the Company's or its subsidiaries' tenants exists, is threatened or imminent that could result in a material adverse change in the condition (financial or other), business, net worth or results of operations of the Company and/or its subsidiaries. (v) The Company has filed all foreign, federal, state and local tax returns that are required to be filed, which returns are complete and correct, or has requested extensions thereof (except in any case in which the failure so to file would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in the Prospectus (exclusive of any supplement thereto)) and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in the Prospectus (exclusive of any supplement thereto). (w) No holder of any security of the Company has any right to require registration of Common Stock or any other security of the Company because of the filing of the registration statement or consummation of the transactions contemplated by this Agreement, which right has not been waived in connection with the transactions contemplated by this Agreement. 13 (x) The Company and its subsidiaries own or possess all patents, trademarks, trademark registrations, service marks, service mark registrations, trade names, copyrights, licenses, inventions, trade secrets and rights described in the Prospectus as being owned by them or necessary for the conduct of their respective businesses. The Company is not aware of any claim to the contrary or any challenge by any other person to the rights of the Company and its subsidiaries with respect to the foregoing. (y) The Company is not now, and after sale of the Securities to be sold by the Company hereunder and the application of the net proceeds from such sale as described in the Prospectus under the caption "Use of Proceeds," will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (z) (i) To the best of the Company's knowledge, the Company, its subsidiaries, the Properties and the operations conducted thereon comply and heretofore have complied with all applicable Environmental Laws, and no expenditures are required or advisable to maintain or achieve such compliance and except as is disclosed in the Environmental Reports (defined below) and except for circumstances and expenditures that have not and will not likely have a material adverse effect on the relevant Property. (ii) Neither the Company nor any of its subsidiaries has at any time and, to the best of the Company's knowledge, no other party has at any time, handled, buried, stored, retained, refined, transported, processed, manufactured, generated, produced, spilled, allowed to seep, leak, escape or leach, or be pumped, poured, emitted, emptied, discharged, injected, dumped, transferred or otherwise disposed of or dealt with, Hazardous Materials (as defined below) on, to, under or from the Properties, except as disclosed in environmental site assessment reports obtained by the Company on or before the date of the Prospectus in connection with the purchase of any of the Properties and provided to the Underwriters or their counsel (collectively, the "Environmental Reports") and except for those circumstances that have not had and will not have a material adverse effect on the relevant Property. Neither the Company nor any of its subsidiaries intends to use the Properties or any subsequently acquired properties for the purpose of handling, burying, storing, retaining, refining, transporting, processing, manufacturing, generating, producing, spilling, seeping, leaking, escaping, leaching, pumping, pouring, emitting, emptying, discharging, injecting, dumping, transferring or otherwise disposing of or dealing with Hazardous Materials. (iii) To the best of the Company's knowledge, no seepage, leak, escape, leach, discharge, injection, release, emission, spill, pumping, pouring, emptying or dumping of Hazardous Materials into any surface water, groundwater, soil, air or other media on or adjacent to the Properties has occurred, is occurring or is reasonably expected to occur, except as is disclosed in the Environmental Reports and except for those circumstances not likely to have a material adverse effect on the relevant Property. 14 (iv) Neither the Company nor any of its subsidiaries has received notice from any Governmental Authority or other person of, or has knowledge of, any occurrence or circumstance which, with notice, passage of time, or failure to act, would give rise to any material claim under or pursuant to any Environmental Law or under common law pertaining to Hazardous Materials on or originating from the existing Properties or any act or omission of any party with respect to the existing Properties, except as disclosed in the Environmental Reports. (v) To the best of the Company's knowledge, none of the Properties is included or proposed for inclusion on any federal, state, or local lists of sites which require or might require environmental cleanup, including, but not limited to, the National Priorities List or CERCLIS List issued pursuant to CERCLA (as defined below) by the United States Environmental Protection Agency or any analogous state list. As used herein, "Hazardous Material" shall include, without limitation, any flammable explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, or related materials, asbestos, polychlorinated biphenyls ("PCBs"), petroleum products and by-products and substances defined or listed as "hazardous substances," "toxic substances," "hazardous waste," or "hazardous materials" in any Federal, state or local Environmental Law. As used herein, "Environmental Law" shall mean all laws, common law duties, regulations or ordinances (including any orders or agreements) of any Federal, state or local governmental authority having or claiming jurisdiction over any of the Properties (a "Governmental Authority") that are designed or intended to protect the public health and the environment or to regulate the handling of Hazardous Materials, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the Hazardous Material Transportation Act, as amended (49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution Control Act, as amended (33 U.S.C. Section 1251 et seq.), and the Clean Air Act, as amended (42 U.S.C. Section 7401 et seq.), and any and all analogous future federal or present or future state or local laws. (aa) The Company is organized in conformity with the requirements for qualification as a real estate investment trust under Sections 856 through 860 of the Code and the rules and regulations thereunder. As of the close of every taxable year during the Company's existence, the Company has had no earnings and profits accumulated in a non-REIT year within the meaning of Section 857(a)(3)(B) of the Code. The Company's past and proposed method of operation have enabled it, and will enable it, to meet the requirements for taxation as a REIT under the Code. (bb) Each of the Company's corporate subsidiaries, except its taxable REIT subsidiary, is in compliance with all requirements applicable to a "qualified REIT subsidiary" within the meaning of Section 856(i) of the Code and all applicable regulations under the Code, and the Company is not aware of any fact that would negatively impact such qualifications. 15 (cc) The Company and each of its subsidiaries is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged and the value of their properties. All policies of insurance and fidelity or surety bonds insuring the Company or any of its subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect. The Company and its subsidiaries are in compliance with the terms of such policies and instruments in all material respects and there are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause. Neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for, and the Company does not have any reason to believe that the Company and each of its subsidiaries will not be able to renew its respective existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue their respective businesses at a cost that would not materially and adversely affect the condition (financial or otherwise), business, prospects, net worth or results of operations of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in the Prospectus. (dd) The Company and its subsidiaries have title insurance on each of the Properties in an amount at least equal to the greater of: (a) the cost of acquisition of such property; or (b) the replacement cost of the improvements located on such property. (ee) No subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such subsidiary's capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring and of such subsidiary's assets or property to the Company or any other subsidiary of the Company, except as described in the Prospectus. (ff) There are no transfer taxes or other similar fees or charges under Federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance by the Company or sale by the Company of the Securities. (gg) Each of the Company and its subsidiaries has fulfilled its obligations, if any, under the minimum funding standards of Section 302 of the United States Employee Retirement Income Security Act of 1974 ("ERISA") and the regulations and published interpretations thereunder with respect to each "plan" (as defined in Section 3(3) of ERISA and such regulations and published interpretations) in which employees of the Company and its subsidiaries are eligible to participate. Each such plan is in compliance in all material respects with the presently applicable provisions of ERISA and such regulations and published interpretations. Neither the Company nor any of its subsidiaries has incurred any unpaid liability to the Pension Benefit Guaranty Corporation (other than for the payment of premiums in the ordinary course) or to any such plan under Title IV of ERISA. (hh) The execution and delivery of, and the performance by the Company of its obligations under (a) the purchase agreement (the "WorldCom Purchase Agreement") executed in connection with the proposed purchase of the properties located at 601 and 701 16 South 12th Street, Arlington, Virginia 22201-4202 (including any related parking facility) (together, the "WorldCom Properties") and (b) the proposed lease agreement (the "WorldCom Lease Agreement" and together with the WorldCom Purchase Agreement, and the other agreements and documents executed or to be executed in connection therewith, the "WorldCom Agreements") governing the lease of the WorldCom Properties to the government of the United States of America, have been duly and validly authorized by the Company, and the WorldCom Agreements have been duly executed and delivered by the Company and, assuming approval by the bankruptcy court exercising jurisdiction over the sale of the WorldCom Properties, constitute valid and legally binding agreements of the Company, enforceable against the Company in accordance with their terms. Upon closing of the offering of common stock contemplated by this Agreement, the Company has sufficient capital resources to complete its obligations under the WorldCom Agreements. 7. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and each person who controls any Underwriter, within the meaning of either the Act or the Exchange Act, against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Securities as originally filed or in any amendment thereof, or in the Basic Prospectus, the Preliminary Prospectus, if any, or the Prospectus, or in any amendment thereof or supplement thereto; or (ii) arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (iii) arise out of or are based upon a breach of the representations and warranties in this Agreement. The Company agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case arising in connection with this Section 7 to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter in writing specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. The Company acknowledges that the only information furnished in writing by or on behalf of the several Underwriters for inclusion in the Prospectus is set forth in Section 12 of this Agreement. 17 (c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party: (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if: (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise, or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action), unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 7 is unavailable to, or insufficient to hold harmless, an indemnified party for any reason, the Company and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses") to which the Company and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and by the Underwriters, on the other, from the offering of the Securities; provided, however, that in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating to the offering of the Securities) be responsible for any amount in excess of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Underwriters severally shall contribute in such proportion as is appropriate to reflect not only 18 such relative benefits but also the relative fault of the Company, on the one hand, and of the Underwriters, on the other, in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Prospectus. Relative fault shall be determined by reference to, among other things: (i) whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company, on the one hand, or the Underwriters, on the other; (ii) the intent of the parties and their relative knowledge; (iii) access to information; and (iv) the opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d). 8. Conditions of Underwriters' Obligations. The several obligations of the Underwriters to purchase the Firm Securities hereunder are subject to the following conditions: (a) (i) If, at the time this Agreement is executed and delivered, it is necessary for a post-effective amendment to the registration statement to be declared effective before the offering of the Securities may commence, such post-effective amendment shall have become effective not later than 5:30 P.M., New York City time, on the date hereof, or at such later date and time as shall be consented to in writing by the Underwriters; (ii) no stop order suspending the effectiveness of the registration statement shall have been issued and no proceeding for that purpose shall have been instituted or, to the knowledge of the Company or any Underwriter, threatened by the Commission; and (iii) any request of the Commission for additional information (to be included in the registration statement or the Prospectus or otherwise) shall have been complied with to the satisfaction of the Underwriters. (b) Subsequent to the effective date of this Agreement, or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereto) and the Prospectus (exclusive of any amendment thereof), there shall not have occurred: (i) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business, properties, net worth, or results of operations of the Company and its subsidiaries, whether or not arising from transactions in the ordinary course of business, except as set forth in the Prospectus (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement), the effect of which, in the sole judgment of the 19 Underwriters, is so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendments thereto) and the Prospectus (exclusive of any supplement thereto); or (ii) any event or development relating to or involving the Company and its subsidiaries or any officer or director of the Company and its subsidiaries which makes any statement made in the Prospectus untrue or which, in the opinion of the Company and its counsel or the Underwriters and their counsel, requires the making of any addition to or change in the Prospectus in order to state a material fact required by the Act or any other law to be stated therein, or necessary in order to make the statements therein not misleading, if amending or supplementing the Prospectus to reflect such event or development would, in the opinion of the Underwriters, adversely affect the market for the Securities. (c) The Underwriters shall have received on the Closing Date, an opinion of Shaw Pittman, LLP, counsel for the Company, dated the Closing Date and addressed to the Underwriters, to the effect that: (i) The Company and each of its material subsidiaries: (x) is a corporation, partnership or trust duly incorporated and validly existing in good standing under the laws of its state of formation, with full corporate, partnership or trust power, as applicable, and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus (and any amendment or supplement thereto); and, (y) based solely on certificates of public officials and officers of the Company and each of its material subsidiaries, are duly registered and qualified to conduct their business; and (z) are in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a material adverse effect on the condition (financial or other), business, properties, net worth or results of operations of the Company and its subsidiaries; (ii) The Company has no material subsidiaries other than those set forth on Schedule III hereto, and does not control, directly or indirectly, any corporation, partnership, joint venture, association or other business association (other than the general partner interest of Net Lease Realty III, Inc. in Net Lease Institutional Funding, L.P.). The issued shares of capital stock of each of the Company's subsidiaries have been duly authorized and validly issued, are fully paid and non-assessable and are owned legally and beneficially by the Company and, to the knowledge of such counsel, after due inquiry, free and clear of any security interests, liens, encumbrances, equities or claims; (iii) The authorized capital stock and debt securities of the Company conform in all material respects as to legal matters to the description thereof contained in the Prospectus under the captions "Description of Debt Securities," "Description of Preferred Stock," "Description of Depositary Shares," "Description of Common Stock" "Description of Common Stock Warrants" in the Base Prospectus and, except as set forth in the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to 20 convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding; (iv) All the shares of capital stock of the Company outstanding prior to the issuance of the Securities have been duly authorized and validly issued, and are fully paid and nonassessable; (v) The Securities have been duly authorized and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued, fully paid and nonassessable and free of preemptive rights under Maryland General Corporation law; (vi) No holder of securities of the Company is entitled to have such securities registered under the Registration Statement which right has not been waived in connection with the transactions contemplated by this Agreement; (vii) The form of certificates for the Securities conform to the requirements of the Maryland General Corporation Law, if any; (viii) The Registration Statement has become effective under the Act; any required filing of the Basic Prospectus, any Preliminary Prospectus or the Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued, no proceedings for that purpose have been instituted or threatened and the Registration Statement and the Prospectus (other than the financial statements and other financial information contained therein, as to which such counsel need express no opinion) comply as to form in all material respects with the applicable requirements of the Act, the Exchange Act and the Trust Indenture Act and the respective rules thereunder; and such counsel has no reason to believe: (A) that on the effective date of the registration statement, or as of the date hereof, the Registration Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading; or (B) that the Prospectus as of its date and on the Closing Date included or includes any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (in each case, other than the financial statements and other financial information, contained therein, as to which such counsel need express no opinion); (ix) The Company has the corporate power and authority to enter into this Agreement and to issue, sell and deliver the Securities to the Underwriters as provided herein. This Agreement has been duly authorized, executed and delivered by the Company and are valid, legal and binding agreements of the Company, enforceable against the Company in accordance with their respective terms, except as enforcement of rights to indemnity and contribution hereunder 21 may be limited by Federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Company's obligations hereunder and thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors' rights generally, and by general equitable principles when applied by a court of law or equity; (x) Neither the Company nor any of its subsidiaries is: (A) in violation of its respective articles of incorporation or by-laws; or (B) in default in the performance of any material obligation, agreement or condition contained in any bond, debenture, note or other evidence of indebtedness set forth on Schedule A attached to such opinion, except as may be disclosed in the Prospectus; (xi) Neither the issue, offer, sale or delivery of the Securities, the execution, delivery or performance by the Company of this Agreement, compliance by the Company with the provisions hereof nor consummation by the Company of the transactions contemplated hereby (including the application of the proceeds from the sale of the Securities): (A) conflicts or will conflict with or constitutes or will constitute or result in a breach of, or a default under, (1) the articles of incorporation or by-laws of the Company or any of its subsidiaries or (2) any agreement, indenture, lease or other instrument to which the Company or any of its subsidiaries is a party or by which the Company or any properties of the Company or any of its subsidiaries is bound (x) that is an exhibit to the Registration Statement or (y) which is known to such counsel; or (B) results or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or its subsidiaries, pursuant to any agreement, indenture, lease, mortgage, deed of trust or other instrument, agreement, obligation, condition or covenant to which the Company or any of its subsidiaries is bound or a party or to which any properties of the Company or any of its subsidiaries is subject; or (C) violates or will violate any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its subsidiaries or any of its or their properties; (xii) No consent, approval, authorization or other order of, or registration or filing with, any court, regulatory body, administrative agency or other governmental body, agency, or official is required on the part of the Company (except as have been obtained under the Act or such as may be required under state securities or blue sky laws governing the purchase and distribution of the Securities) for the valid issuance and sale of the Securities to the Underwriters as contemplated by this Agreement; (xiii) (A) The Registration Statement and the Prospectus, and any supplements or amendments thereto (except for the financial statements and the notes thereto and the schedules and other financial and statistical data included therein, as to which such counsel need not express any opinion), comply as to 22 form in all material respects with the requirements of the Act; and (B) each of the Incorporated Documents (except for the financial statements and the notes thereto and the schedules and other financial and statistical data included therein, as to which counsel need not express any opinion) complies as to form in all material respects with the Exchange Act and the rules and regulations of the Commission thereunder; (xiv) To the knowledge of such counsel, after due inquiry, there is no action, suit or proceeding pending or threatened by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or any of its or their property of a character required to be described in the Registration Statement or Prospectus (or any amendment or supplement thereto), and there are no agreements, contracts, indentures, leases or other instruments or documents that are required to be described in the Registration Statement or the Prospectus (or any amendment or supplement thereto) or to be filed or incorporated by reference as an exhibit to the Registration Statement or any Incorporated Document that are not described, filed or incorporated as required, as the case may be; (xv) To the knowledge of such counsel, after due inquiry, neither the Company nor any of its subsidiaries is in violation of any law, ordinance, administrative or governmental rule or regulation applicable to the Company or its subsidiaries or of any decree of any court or governmental agency or body having jurisdiction over the Company or its subsidiaries; (xvi) Such counsel is not aware of any certificates, authorizations, licenses or permits required by any federal regulatory authority which are necessary for the Company and/or its subsidiaries to conduct their respective businesses other than any such certificates, authorizations, licenses or permits which have been obtained. To the knowledge of such counsel, neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any certificate, authorization, license or permit issued by any federal, state, municipal or foreign regulatory authority which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a material adverse change in the condition (financial or otherwise), business prospects, net worth or results of operations of the Company or its subsidiaries; (xvii) The Securities have been approved for listing on the New York Stock Exchange, subject to official notice of issuance; (xviii) The Company is not subject to registration as an investment company under the Investment Company Act of 1940, as amended, and the transactions contemplated by this Agreement will not cause the Company to become an investment company subject to registration under the Investment Company Act of 1940, as amended; 23 (xix) Commencing with the Company's initial taxable year, the Company has qualified as a REIT under the Code for all taxable years ending on or before December 31, 2002, and its past and proposed method of operation will enable it to qualify as a REIT under the Code for its taxable year ending on December 31, 2003; and each of the Company's corporate subsidiaries (other than its taxable REIT subsidiary) is a "qualified REIT subsidiary" within the meaning of Section 856(i) of the Code; (xx) To the knowledge of such counsel, after due inquiry, (A) Neither the Company nor any of its subsidiaries is in violation of any federal law or regulation relating to occupational safety and health or to the environment, including, without limitation, the storage, handling, transportation or disposal of hazardous or toxic materials; (B) the Company and its subsidiaries have received all permits, registrations, licenses and other approvals required of them under applicable federal occupational safety and health and environmental laws and regulations to conduct their respective businesses; and (C) the Company and each of its subsidiaries is in compliance with all terms and conditions of any such permit, registration, license or approval, except any such violation of law or regulation, failure to receive required permits, registrations, licenses or other approvals or failure to comply with the terms and conditions of such permits, registrations, licenses or approvals which would not, singly or in the aggregate, result in a material adverse change in the condition (financial or otherwise), business prospects, net worth or results of operations of the Company or its subsidiaries; (xxi) The statements in the Prospectus, insofar as they are descriptions of contracts or agreements or constitute statements of law or legal conclusions, are accurate and present fairly the information required to be shown in all material respects; (xxii) Except as disclosed in the Prospectus, no holders of securities have rights to the registration of such securities under the Registration Statement; (xxiii) The execution and delivery of, and the performance by the Company of its obligations under (a) the purchase agreement (the "WorldCom Purchase Agreement") executed in connection with the proposed purchase of the properties located at 601 and 701 South 12th Street, Arlington, Virginia 22201-4202 (including any related parking facility)(together, the "WorldCom Properties") and (b) the proposed lease agreement (the "WorldCom Lease Agreement" and together with the WorldCom Purchase Agreement, and the other agreements and documents executed or to be executed in connection therewith, the "WorldCom Agreements") governing the lease of the WorldCom Properties to the government of the United States of America, have been duly and validly authorized by the Company, and the WorldCom Agreements have been duly executed and delivered by the Company and, assuming approval by the bankruptcy court exercising jurisdiction over the sale of the WorldCom 24 Properties, constitute valid and legally binding agreements of the Company, enforceable against the Company in accordance with their terms; and (xxiv) Although counsel has not undertaken, except as otherwise indicated in its opinion, to determine independently, and does not assume any responsibility for, the accuracy or completeness of the statements in the Registration Statement, such counsel has participated in the preparation of the Registration Statement and the Prospectus, including review and discussion of the contents thereof (including review and discussion of the contents of all Incorporated Documents), and nothing has come to the attention of such counsel that has caused it to believe that the Registration Statement (including the Incorporated Documents), at the time the Registration Statement became effective, or the Prospectus, as of its date and as of the Closing Date or the Closing Date of the Additional Securities contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that any amendment or supplement to the Prospectus, as of its respective date, and as of the Closing Date or the Closing Date of the Additional Securities, as the case may be contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no opinion with respect to the financial statements and the notes thereto and the schedules and other financial data included in the Registration Statement or the Prospectus or any Incorporated Document). (d) The Underwriters shall have received on the Closing Date an opinion of Hunton & Williams LLP, counsel for the Underwriters, dated the Closing Date and addressed to the Underwriters, with respect to the matters referred to in clauses (x) and (xv)(A) of the foregoing paragraph (c) and such other related matters as the Underwriters may request. (e) The Underwriters shall have received letters addressed to the Underwriters and dated the date hereof and the Closing Date from KPMG LLP, independent certified public accountants, substantially in the forms heretofore approved by the Underwriters. (f) (A) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been taken or, to the knowledge of the Company, shall be contemplated by the Commission at or prior to the Closing Date; (B) there shall not have been any change in the capital stock of the Company nor any material increase in the short-term or long-term debt (including any off-balance sheet activities or transactions) of the Company and its subsidiaries (other than in the ordinary course of business) from that set forth or contemplated in the Registration Statement or the Prospectus (or any amendment or supplement thereto); (C) there shall not have been, since the respective dates as of which information is given in the Registration Statement and the Prospectus (or any amendment or supplement thereto), except as may otherwise be stated in the Registration Statement and Prospectus (or any amendment or supplement thereto), any material adverse change in the condition (financial or other), business, prospects, properties, net worth or results of operations of the Company or its subsidiaries; (D) the Company and its subsidiaries shall not 25 have any liabilities or obligations (financial or otherwise), direct or contingent (whether or not in the ordinary course of business), that are material to the Company or its subsidiaries, other than those reflected in the Registration Statement or the Prospectus (or any amendment or supplement thereto); and (E) all the representations and warranties of the Company contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date, provided, that, for purposes of the representations and warranties to be made as of the Closing Date, the Underwriters shall have received a certificate, dated the Closing Date and signed by the chief executive officer and the chief financial officer of the Company (or such other officers as are acceptable to the Underwriters), to the effect set forth in this Section 8(f) and in Section 8(g) hereof. (g) The Company shall not have failed at or prior to the Closing Date to have performed or complied with any of its agreements herein contained and required to be performed or complied with by it hereunder or under the Indenture, at or prior to the Closing Date. (h) Prior to the Closing Date the Securities shall have been listed subject to notice of issuance, on the New York Stock Exchange. (i) The Company shall have furnished or caused to be furnished to the Underwriters such further certificates and documents as the Underwriters shall have requested. All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they are satisfactory in form and substance to the Underwriters and their counsel. Any certificate or document signed by any officer of the Company and delivered to the Underwriters, or to counsel for the Underwriters, shall be deemed a representation and warranty by the Company to each Underwriter as to the statements made therein. If any of the conditions specified in this Section 8 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Underwriters and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled by the Underwriters at, or at any time prior to, the Closing Date. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing. The documents required to be delivered by this Section 8 shall be delivered at the offices of Hunton & Williams LLP, counsel for the Underwriters, at Riverfront Plaza, East Tower, 951 East Byrd Street, Richmond, Virginia 23219 on the Closing Date. 9. Expenses. The Company agrees to pay the following costs and expenses and all other costs and expenses incident to the performance by the Company of its obligations hereunder: (i) the preparation, printing or reproduction, and filing with the Commission of the registration statement (including financial statements and exhibits thereto), each Preliminary Prospectus, if any, the Prospectus, and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the registration statement, each Preliminary 26 Prospectus, the Prospectus, the Incorporated Documents, and all amendments or supplements to any of them, as may be reasonably requested for use in connection with the offering and sale of the Securities; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp or other taxes in connection with the original issuance and sale of the Securities; (iv) the printing (or reproduction) and delivery of this Agreement, the preliminary and supplemental blue sky memoranda and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Securities; (v) the listing of the Shares on the New York Stock Exchange; (vi) the registration or qualification of the Securities for offer and sale under the securities or blue sky laws of the several states as provided in Section 5(g) hereof (including the reasonable fees, expenses and disbursements of counsel for the Underwriters relating to the preparation, printing or reproduction, and delivery of the preliminary and supplemental blue sky memoranda and such registration and qualification); (vii) the filing fees and the fees and expenses of counsel for the Underwriters in connection with any filings required to be made with the National Association of Securities Dealers, Inc.; (viii) the transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Securities; and (ix) the fees and expenses of the Company's accountants and the fees and expenses of counsel (including local and special counsel) for the Company. 10. Effective Date of Agreement. This Agreement shall become effective: (i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at the time this Agreement is executed and delivered, it is necessary for a post-effective amendment to the registration statement to be declared effective before the offering of the Securities may commence, when notification of the effectiveness of such post-effective amendment has been released by the Commission. Until such time as this Agreement shall have become effective, it may be terminated by the Company, by notifying the Underwriters, or by the Underwriters, by notifying the Company. If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the number of Firm Securities set forth opposite their names in Schedule I hereto bears to the aggregate amount of Firm Securities set forth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate principal amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate principal amount of Securities set forth in Schedule I hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Underwriter or the Company. In the event of a default by any Underwriter as set forth in this Section 10, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the nondefaulting Underwriters shall determine in order that the required changes in the Registration Statement and the Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting 27 Underwriter of its liability, if any, to the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder. Any notice under this Section 10 may be given by telegram, telecopy or telephone but shall be subsequently confirmed by letter. (a) Termination of Agreement. This Agreement shall be subject to termination in the absolute discretion of the Underwriters, without liability on the part of any Underwriter to the Company, by notice to the Company, if, prior to the Closing Date or any Closing Date for the Additional Securities (if different from the Closing Date and then only as to the Additional Securities) as the case may be: (i) trading in securities generally on the New York Stock Exchange, the American Stock Exchange or the Nasdaq National Market shall have been suspended or limited or minimum prices shall have been established on either of such Exchanges or the Nasdaq National Market; (ii) there shall not have been any decrease in the rating of any of the Company's debt securities by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act) or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change; or (iii) a general moratorium on commercial banking activities in New York or Florida shall have been declared by either federal or state authorities; or (iv) the Company or any of its subsidiaries shall have sustained a substantial loss by fire, flood, accident or other calamity which renders it impracticable, in the reasonable judgment of the Underwriter, to consummate the sale of the Securities and the delivery of the Securities by the Underwriter at the initial public offering price; or (v) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representatives, impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Prospectus (exclusive of any supplement thereto) or to enforce contracts for the resale of the Securities by the Underwriters. Notice of such termination may be given to the Company by telegram, telecopy or telephone and shall be subsequently confirmed by letter. 11. Information Furnished by the Underwriters. The statements in the third, eighth and ninth paragraphs under the caption "Underwriting" in the Prospectus Supplement, constitute the only information furnished by or on behalf of the Underwriters as such information is referred to in Sections 6(b) and 7 hereof. 12. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Section 7 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7 and 9 hereof shall survive the termination or cancellation of this Agreement. 13. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Underwriters, will be mailed, delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax no.: (212) 816-7912) and confirmed to the General 28 Counsel, Citigroup Global Markets Inc., at 388 Greenwich Street, New York, New York, 10013, Attention: General Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to the office of the Company at 450 S. Orange Street, Suite 900, Orlando, Florida 32801, (fax no. 407-650-1011) Attention: James M. Seneff, Jr., Chairman and Chief Executive Officer. 14. Successors. This Agreement has been made solely for the benefit of the several Underwriters, the Company, its directors and officers, and the other controlling persons referred to in Section 7 hereof and their respective successors and assigns, to the extent provided herein. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 7 hereof, and no other person shall acquire or have any right under or by virtue of this Agreement. Neither the term "successor" nor the term "successors and assigns" as used in this Agreement shall include a purchaser from any Underwriter of any of the Securities in his status as such purchaser. 15. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York without giving effect to the conflict or choice of laws principles thereof. 16. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original, and all of which together shall constitute one and the same agreement. 17. Headings. The section headings used herein are for convenience only and shall not affect the construction hereof. 18. Definitions. The terms which follow, when used in this Agreement, shall have the meanings indicated. "Business Day" shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City. 29 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters. Very truly yours, COMMERCIAL NET LEASE REALTY, INC. By: /s/ Kevin B. Habicht ------------------------------ Name: Kevin B. Habicht ---------------------------- Title: Chief Financial Officer --------------------------- The foregoing Agreement is hereby confirmed and accepted as of the date on the first page hereof. CITIGROUP GLOBAL MARKETS INC. By: /s/ Douglas W. Sesler ------------------------------ Name: ---------------------------- Title: --------------------------- WACHOVIA CAPITAL MARKETS, LLC By: /s/ J. Brit Stephens ------------------------------ Name: ---------------------------- Title: --------------------------- For themselves and the other several Underwriters named in Schedule I to the foregoing Agreement. 30 SCHEDULE I COMMERCIAL NET LEASE REALTY, INC.

NUMBER OF UNDERWRITTEN UNDERWRITERS SECURITIES TO BE PURCHASED ------------ -------------------------- Citigroup Global Markets Inc. $3,220,000 Wachovia Capital Markets, LLC 980,000 A.G. Edwards & Sons, Inc. 700,000 Legg Mason Wood Walker, Incorporated 700,000 ---------- Total $5,600,000

SCHEDULE II COMMERCIAL NET LEASE REALTY, INC. Persons Subject to Lock-Up: Robert A. Bourne Gary M. Ralston James M. Seneff, Jr. Kevin B. Habicht Julian E. Whitehurst Dennis E. Tracy David W. Cobb EXHIBIT A TO SCHEDULE II FORM OF LOCK-UP AGREEMENT [LETTERHEAD EXECUTING PARTY] Commercial Net Lease Realty, Inc. Public Offering of Common Stock July 25, 2003 Citigroup Global Markets Inc. Wachovia Capital Markets, LLC As Representatives of the several Underwriters, c/o Citigroup Global Markets Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: This letter is being delivered to you in connection with the proposed Underwriting Agreement (the "Underwriting Agreement"), between Commercial Net Lease Realty Inc., a Maryland corporation (the "Company"), and each of you as representatives of a group of Underwriters named therein, relating to an underwritten public offering of Common Stock, $0.01 par value (the "Common Stock"), of the Company. In order to induce you and the other Underwriters to enter into the Underwriting Agreement, the undersigned will not, without the prior written consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Securities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with 2 respect to, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any such transaction, for a period of 90 days after the date of the Underwriting Agreement, other than shares of Common Stock disposed of as bona fide gifts approved by Citigroup Global Markets Inc. If for any reason the Underwriting Agreement shall be terminated prior to the Closing Date (as defined in the Underwriting Agreement), the agreement set forth above shall likewise be terminated. Yours very truly, [SIGNATURE] [NAME AND ADDRESS] 3 SCHEDULE III LIST OF SUBSIDIARIES NAME OF SUBSIDIARY ------------------ Net Lease Realty I, Inc. Net Lease Realty II, Inc. Net Lease Realty III, Inc. Net Lease Realty IV, Inc. CNLR Ster Florida, LLC CNLR Ster Texas L.P. CNLR Ster Richmond Virginia, LLC CNLR Ster Glendale Arizona, LLC CNLR Ster Paradise Valley Arizona, LLC Net Lease Funding, Inc. Hollywood CNLR, LLC Commercial Net Lease Realty Trust CNLR Ster Toledo Ohio, LLC CNLR Texas Opportunity, L.P. CNLR GP Corp. CNLR LP Corp. CNLR Texas GP Corp. Commercial Net Lease Realty Services, Inc. RE-Stores, Inc. CNLRS Funding, Inc. CNLRS Exchange I, Inc. NorthStar Brokerage Services, Inc. LHC-Memphis/Germantown, LLC CNLRS Equity Ventures, Inc. Eck-St. Joseph MO, LLC Net Lease Realty VI, LLC CNLR Plantation BT, LLC CNLRS Mortgage Capital, Inc. CNLRS Acquisitions, Inc. CNLRS Acquisitions I, LLC Gator Columns, LLC 4 EX-5 4 w88491aexv5.txt EXHIBIT 5 Exhibit 5 Opinion of Shaw Pittman LLP [Letterhead of Shaw Pittman LLP] July 25, 2003 Commercial Net Lease Realty, Inc. 450 South Orange Avenue Suite 900 Orlando, Florida 32801 Ladies and Gentlemen: We have acted as counsel to Commercial Net Lease Realty, Inc., a Maryland corporation (the "Company"), in connection with the Registration Statement on Form S-3, Registration No. 333-105635 (the "Registration Statement"), filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended, and declared effective by the Commission on June 5, 2003. Pursuant to the Registration Statement, the Company proposes to issue and sell 5,600,000 shares of the Registrant's Common Stock, par value $.01 per share (the "Common Stock"), to the public, and up to an additional 840,000 shares of Common Stock upon the exercise of the underwriters' over-allotment option, pursuant to the terms set forth in the prospectus supplement dated July 25, 2003 (the "Prospectus Supplement") to the prospectus filed as part of the Registration Statement. Based upon our examination of the originals or copies of such documents, corporate records, certificates of officers of the Company and other instruments as we have deemed necessary and upon the laws as presently in effect, we are of the opinion that the Common Stock has been duly authorized for issuance by the Company, and that upon issuance and delivery in accordance with the Prospectus Supplement, the Common Stock will be validly issued, fully paid and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the Prospectus Supplement. We also consent to the reference to Shaw Pittman LLP under the caption "Legal Matters" in the Prospectus Supplement. Very truly yours, /s/ Shaw Pittman LLP SHAW PITTMAN LLP EX-8 5 w88491aexv8.txt EXHIBIT 8 Exhibit 8 Opinion of Shaw Pittman LLP [LETTERHEAD OF SHAW PITTMAN LLP] July 25, 2003 Commercial Net Lease Realty, Inc. 450 South Orange Avenue Suite 900 Orlando, Florida 32801 Ladies and Gentlemen: Commercial Net Lease Realty, Inc. (the "Company") has filed a registration statement on Form S-3 (File No. 333-105635) (the "Registration Statement"), with the Securities and Exchange Commission, which was declared effective on June 5, 2003. In connection with the filing of a prospectus supplement on July 25, 2003, you have asked us to render an opinion with respect to the qualification of the Company as a real estate investment trust ("REIT") under sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). We have served as special counsel for the Company in connection with the filing of the prospectus and the prospectus supplement and from time to time in the past have represented the Company on specific matters as requested by the Company. Specifically for the purpose of this opinion, we have examined and relied upon the following: copies of the Company's Articles of Incorporation and any amendments thereto; the Registration Statement; the prospectus; the prospectus supplement; copies of executed leases covering real property owned by the Company; the Form 10-K filed on March 28, 2003; and the Company's Form S-11 Registration Statement as filed with the Securities and Exchange Commission on August 15, 1984. We have not served as general counsel to the Company and have not been involved in decisions regarding the day-to-day operation of the Company and its properties. We have, however, discussed the mode of operation of the Company with its officers with a view to learning information relevant to the opinions expressed herein and have received and relied upon a certificate from the Company with respect to certain matters. We have discussed with management of the Company arrangements relating to the management of its properties, the relationships of the Company with tenants of such properties, and certain terms of leases of such properties to tenants, with a view to assuring that (i) at the close of each quarter of the taxable years covered by this opinion, it met the asset composition requirements set forth in section 856(c)(4), (ii) with respect to years covered by this opinion, it satisfied the 95% and 75% gross income tests set forth in sections 856(c)(2) and (3), respectively, and (iii) with respect to tax years prior to 1998, it satisfied the 30% gross income test. We have further reviewed with management of the Company the requirements that the beneficial ownership of a REIT be held by 100 or more persons for at least 335/365ths of each taxable year Commercial Net Lease Realty, Inc. July 25, 2003 Page 2 and that a REIT must satisfy the diversity of ownership requirements of section 856(h) as such requirements existed in the years covered by this opinion, and we have been advised by management that at all times during the years covered by this opinion (and specifically on each record date for the payment of dividends during 1984 through the date hereof) the Company has had more than 1,000 shareholders of record, that the Company maintains the records required by section 1.857-8 of the Treasury Regulations, that no later than January 30 of each year it sent the demand required by section 1.857-8(d) of the Treasury Regulations to each shareholder of record owning one percent or more of the outstanding shares of the Company on the appropriate date required by said regulation, and that the actual ownership of the Company shares was such that, to the best knowledge of its management (based upon responses to the aforesaid demands, any filing of a Schedule 13D under the Securities Exchange Act of 1934, as amended, or any other sources of information), the Company satisfied the applicable requirements of section 856(h). Further, we have examined various property leases and lease supplements relating to the properties that the Company owns, and although leases relating to certain properties that the Company owns have not been made available to us, the Company has represented with respect to such leases that they do conform in all material respects to a form of lease agreement provided to us. On the basis of discussions with management of the Company, we are not aware that the Company's election to be a REIT has been terminated or challenged by the Internal Revenue Service or any other party, or that the Company has revoked its election to be a REIT for any such prior year so as to make the Company ineligible to qualify as a REIT for the years covered by this opinion. In rendering the opinions set forth herein, we are assuming that copies of documents examined by us are true copies of originals thereof and that the information concerning the Company set forth in the Company's federal income tax returns, and in the prospectus supplement, as well as the information provided to us by the Company's management are true and correct. We have no reason to believe that such assumptions are not warranted. Based upon the foregoing, we are of the opinion that the Company was a "real estate investment trust" as defined by section 856(a) for its taxable years ended December 31, 1984 through December 31, 2002, and its current and proposed method of operation will enable it to meet the requirements for qualification and taxation as a REIT for its taxable year ending December 31, 2003 and for all future taxable years. With respect to the 2003 year and all future years, however, we note that the Company's status as a real estate investment trust at any time is dependent among other things upon its meeting the requirements of section 856 throughout the year and for the year as a whole. This opinion is based upon the existing provisions of the Code (or predecessor provisions, as applicable), rules and regulations (including proposed regulations) promulgated thereunder, and reported administrative and judicial interpretations thereof, all of which are subject to change, possibly with retroactive effect. This opinion is limited to the specific matters covered hereby and should not be interpreted to imply that the undersigned has offered its opinion on any other matter. Commercial Net Lease Realty, Inc. July 25, 2003 Page 3 We hereby confirm that the statements set forth in the Registration Statement under the heading "Federal Income Tax Considerations," and in the prospectus supplement under the heading "Certain Additional Income Tax Considerations," to the extent that they constitute matters of law or legal conclusions with respect thereto, are correct in all material respects. We hereby consent to the filing of this opinion as an exhibit to the prospectus supplement. We also consent to the reference to Shaw Pittman LLP under the caption "Legal Matters" in the prospectus supplement. In giving such consent, we do not consider that we are "experts," within the meaning of the term used in the Act or the rules and regulations of the Securities and Exchange Commission promulgated thereunder, with respect to any part of the Registration Statement, including this opinion as an exhibit or otherwise. Very truly yours, SHAW PITTMAN LLP By: /s/ Charles B. Temkin --------------------- Charles B. Temkin, P.C. EX-10.1 6 w88491aexv10w1.txt EXHIBIT 10.1 EXHIBIT 10.1 REAL ESTATE PURCHASE CONTRACT This Real Estate Purchase Contract (the "CONTRACT") is entered into as of the 23rd day of July, 2003 (the "EXECUTION DATE") by and between MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation ("SELLER"), and COMMERCIAL NET LEASE REALTY, INC., a Maryland corporation (or an affiliate or related entity thereof) ("PURCHASER"). RECITALS: A. On July 21, 2002 and November 8, 2002, Seller and certain of its domestic affiliates filed voluntary petitions for relief under Chapter 11 of title 11, United States Code (the "BANKRUPTCY CODE") in the United States Bankruptcy Court for the Southern District of New York (the "BANKRUPTCY COURT"). Seller is continuing to operate its business and manage its properties as a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. B. Seller desires to sell and Purchaser desires to purchase from Seller certain property on the terms and subject to the conditions set forth herein. In consideration of the representations and covenants set forth herein, Purchaser and Seller hereby agree as follows: 1. PURCHASE AND SALE. Seller agrees to sell to Purchaser, and Purchaser agrees to buy from Seller, in accordance with the terms, conditions and stipulations set forth in this Contract, all of Seller's right, title and interest in and to (i) those certain parcels of real property located at 601 and 701 South 12th Street, Arlington, Virginia, as more particularly described in Exhibit A, and any and all improvements thereon and appurtenances thereto (the "REAL PROPERTY"), (ii) the furniture, furnishings, fixtures, equipment, inventory and other tangible personal property located at the Real Property and owned by Seller (but excluding any such items as are located in the Terminal Space (hereinafter defined), which shall remain the property of Seller), subject to the rights of the tenants under the TSA Lease (hereinafter defined) (collectively, the "PERSONAL PROPERTY"), (iii) the construction and other contracts which are set forth on Exhibit B (collectively, the "CONSTRUCTION CONTRACTS"), (iv) the management contracts, utility contracts, service contracts, equipment leases, maintenance contracts, and other agreements pertaining to the Real Property all of which are set forth on Exhibit C (collectively, "SERVICE CONTRACTS"), (v) all plans and specifications; engineering plans and studies; floor plans and landscape plans pertaining to the Real Property in Seller's possession, (vi) all mineral, oil and gas rights, water rights, sewer rights and other utility rights allocated to the Real Property, (vii) all leases of any portion of the Real Property, (viii) all appurtenances, easements, licenses, privileges and other property interests belonging or appurtenant to the Real Property, and (ix) all right, title and interest of Seller in and to any roads, streets and ways, public and private, serving the Real Property (including, without limitation, all rights to develop the land granted by governmental entities having jurisdiction over said land) (all of the foregoing items in (i)-(ix) above, collectively, the "PROPERTY"). 2. PAYMENT OF PURCHASE PRICE. A. The total purchase price to be paid to Seller by Purchaser for the Property shall be $142,800,000 (One Hundred Forty Two Million Eight Hundred Thousand Dollars), subject to the prorations and adjustments that are more particularly set forth in this Contract (the "PURCHASE PRICE"). B. Upon execution of this Contract, Purchaser shall deposit with Chicago Title Insurance Co., 711 Third Avenue, New York, New York 10017, Attention: Robert Simins) (the "ESCROW AGENT") an amount equal to $14,280,000 (Fourteen Million Two Hundred Eighty Thousand Dollars) in immediately available funds. Such deposit shall be held by the Escrow Agent in accordance with the terms of the Escrow Agreement annexed hereto as Exhibit D. Said sum, together with any interest earned thereon or any additions made thereto shall be referred to herein as the "DEPOSIT." The Deposit shall be nonrefundable, except as expressly set forth herein. At the time of closing of this transaction (the "CLOSING"), the Deposit shall be applied toward the Purchase Price. At Closing, Purchaser shall remit the remainder of the Purchase Price by wire transfer of immediately available funds to the Escrow Agent for the account of Seller. 3. TITLE AND SURVEY. On or prior to the date hereof, Seller has delivered to Purchaser a title insurance commitment (the "TITLE BINDER") from the Escrow Agent and a current ALTA Survey of the Property, as each are more particularly described on Exhibit E. Purchaser has approved the state of title to the Property and all matters disclosed in the Title Binder (as anticipated to be impacted by the Sale Order (hereinafter defined)) and Survey. At Closing, Purchaser shall obtain a title insurance policy (the "TITLE POLICY") from Escrow Agent and shall pay all premiums and costs and expenses in connection therewith. 4. CONDITION OF PROPERTY. A. The Property is being sold in "AS IS" condition without any representations and warranties of Seller whatsoever other than as specified in Section 13. Seller shall deliver the Property at Closing in materially the same condition as existed on the Execution Date, ordinary wear and tear excepted, subject to the terms of the Equipment Site Lease (hereinafter defined) and the TSA Lease. B. Purchaser acknowledges that Seller and the Government (hereinafter defined) will, in the ordinary course of business, be entering into "Supplemental Lease Agreements" (each an "SLA" and collectively, the "SLAs") with respect to the TSA Lease (as hereinafter defined), and that with respect to those SLAs, including but not limited to those addressing the acceptance of space each month and de minimis change orders, which do not alter any of the material terms of the TSA Lease ("Standard SLAs"), Purchaser hereby consents to the execution thereof by Seller on an ongoing basis prior to Closing. Seller shall provide copies of all such Standard SLAs to Purchaser prior to their execution. From and after the end of the Execution Date and until this Agreement shall have terminated (or be deemed to have been terminated), Seller shall not enter into any non-standard SLAs without Purchaser's prior consent, which consent shall not be unreasonably withheld, conditioned or delayed. - 2 - C. Purchaser hereby releases Seller from and waives all claims, demands, actions, and causes of action against Seller and its estate for damages, losses, expenses or injuries arising out of the condition of the Property, including, but not limited to claims, demands, actions, and causes of action for damages, losses, expenses or injuries arising out of preexisting environmental conditions. 5. DEFECTS IN TITLE. Seller shall convey title to the Property by special warranty deed in the form annexed hereto as Exhibit H. Title shall be subject to all matters that are disclosed in Purchaser's Title Binder (as modified by the Sale Order), the ATLA Survey, the Equipment Site Lease and the TSA Lease. From and after the Execution Date, Seller shall not further encumber or restrict the title to the Property, permit any liens, mortgages, deeds of trust, easements or other encumbrances to be placed against the Property or any part thereof without Purchaser's prior written consent. 6. CONTRACTS / LEASES. A. At Closing, Purchaser shall assume all obligations of Seller, as Landlord, under the TSA Lease (as further described on Attachment A to Exhibit F hereof, and together with any and all SLAs executed in accordance with this Contract, the "TSA LEASE"), pursuant to an assignment and assumption agreement in the form annexed hereto as Exhibit N, which shall provide, among other things, that Purchaser shall fully indemnify Seller from and against any and all liabilities, obligations, costs, and expenses under the TSA Lease. Upon Closing, Seller will cooperate with the United States of America (the "GOVERNMENT"), and Purchaser to obtain the execution by the Government of a novation agreement by and among the Government, Seller and Purchaser regarding the TSA Lease in the form annexed hereto as Exhibit F (the "NOVATION AGREEMENT"). If, prior to its execution, the Government requires changes to the Novation Agreement to be signed by Purchaser and Seller at Closing, then such changes shall be reasonably accommodated by Purchaser and Seller. B. At Closing, Seller agrees to assign to Purchaser, to the extent assignable, Seller's interest in the Service Contracts. Purchaser shall execute an assumption of Seller's obligations under such Service Contracts that arise from and after Closing in the form annexed hereto as Exhibit J. Purchaser acknowledges that Seller does not represent or warrant that Purchaser will be entitled to the assignment of any of the Service Contracts except to the extent such assignment is approved by the Bankruptcy Court. If Seller is unable to obtain Bankruptcy Court approval of the assignment of any of the Service Contracts to Purchaser, there shall be no cost or penalty to Seller and this Contract shall otherwise remain in full force and effect. C. At Closing, Purchaser shall assume all obligations of Seller under the Construction Contracts pursuant to an assignment and assumption agreement in the form annexed hereto as Exhibit K, which shall provide, among other things, that Purchaser shall fully indemnify Seller from and against any and all liabilities, costs, and expenses under the Construction Contracts. 7. CLOSING. The Closing shall occur within ten (10) days after entry of an order of the Bankruptcy Court pursuant to, among other things, sections 363 and 365 of the Bankruptcy - 3 - Code authorizing Seller to sell the Property to Purchaser free and clear of liens, claims and encumbrances and consummate the transactions contemplated herein, substantially in the form annexed hereto as Exhibit G (the "SALE ORDER"); provided, however, that the Closing shall not occur if a temporary restraining order, preliminary or permanent injunction or other order issued by the Bankruptcy Court or any other court of competent jurisdiction or other enforceable legal restraint or prohibition (collectively, "LEGAL RESTRAINTS"), shall be in effect or pending which materially delays, restrains, enjoins or otherwise prohibits or seeks to restrain, enjoin or otherwise prohibit the consummation of the transactions contemplated by the Sale Order and the transactions contemplated hereby. The Closing shall take place at the offices of Seller's attorney during normal business hours. 8. PRORATIONS AND ADJUSTMENTS AT CLOSING. A. Ad valorem and similar taxes assessed against the Property shall be prorated between Seller and Purchaser at the time of Closing on the basis of a 365 day year, with the Purchaser liable for ad valorem and similar taxes assessed against the Property from and after the day of Closing. Any then due but unpaid special assessments, special improvement district or taxing district levies, shall be prorated in the same manner as ad valorem taxes. Seller and Purchaser shall also prorate at the time of Closing payments under Service Contracts assumed by Purchaser, utility charges, and any other operating expenses or other items pertaining to the Property that are customarily prorated between sellers and purchasers in Northern Virginia commercial real property sales. To the extent that any item, which would otherwise be apportioned between Purchaser and Seller pursuant to the terms of this Contract, is the obligation of tenant under the TSA Lease, such items should not be subject to prorations under this provision. There shall be no charge to Purchaser for supplies on hand, if any, relating to the operation and maintenance of the Property, all of which shall be transferred to Purchaser subject to the rights of Seller under the Equipment Site Lease and the TSA Lease. The foregoing obligations shall survive the Closing. B. In the event that there shall be any rents or other charges under any leases which, although relating to a period prior to Closing, do not become due and payable until after Closing or are paid prior to Closing but are subject to adjustment after Closing, such as rent from the Government (as defined in Section 6(a) herein) which is paid in arrears and year-end common area expense reimbursements (which such rent and other charges, along with any and all past due amounts from the Government are sometimes referred to herein collectively as the "SPECIAL RENT"), then any rents or charges of such type received by Purchaser or its agents or Seller or its agents subsequent to Closing shall, to the extent applicable to a period extending through Closing, be prorated between Seller and Purchaser as of Closing and Seller's portion thereof shall be remitted promptly to Seller by Purchaser. Purchaser acknowledges that any Special Rent that may be received by Purchaser but due to Seller from the Government shall be timely remitted to Seller without setoff or deduction of any kind (it being understood that the obligation of Purchaser to remit, and the right of Seller to receive the same is unconditional). C. Purchaser shall reimburse Seller for actual payments made by Seller under those Construction Contracts set forth in Exhibit B annexed hereto with respect to: (i) the warm lit shell requirements under the TSA Lease, which amount shall not exceed $6,976,730; - 4 - (ii) tenant improvements required under the TSA Lease, which amount shall not exceed $19,664,280; and (iii) the architectural agreement in respect of the warm lit shell requirement under the TSA Lease, which amount shall not exceed $157,850. At Closing, Seller shall pay a commission to Spaulding and Slye under that certain agreement dated October 8, 2002, between Spaulding and Slye, LLC and Seller (the "S&S AGREEMENT"), which provides for the payment of a brokerage commission. At Closing, Purchaser shall remit to Seller in immediately available funds the sum of $2,135,417.91 to reimburse Seller for amounts paid in connection with the S&S Agreement. 9. TRANSACTION COSTS. Seller shall be responsible for the cost of preparing the deed. At Closing, Purchaser shall reimburse Seller for the cost of the Title Binder and the Survey. Purchaser shall pay the cost of conducting its due diligence studies, the Title Policy, the state and local grantee's recording taxes, sales taxes, recording fees, the escrow charges imposed by the Escrow Agent, and transfer taxes required to be paid. Each party shall pay its own attorneys', brokers' and consultants' fees. Pursuant to the Motion (hereinafter defined), Seller shall request that the Sale Order entered by the Bankruptcy Court exempt the sale of the Property under this Contract from state and local grantee's recording taxes and transfer taxes which may be payable by reason of the sale of the Property under this Contract or the transactions contemplated herein (collectively, the "TRANSFER TAXES"). In the event that the Sale Order entered by the Bankruptcy Court does not provide such an exemption and Transfer Taxes are required to be paid in order to record the deed to be delivered to Purchaser in accordance herewith, or in the event any such Transfer Taxes are assessed at any time thereafter, then all such Transfer Taxes associated with the recordation of the special warranty deed, including, without limitation, transfer and recordation taxes and documentary stamps, shall be paid by Purchaser at Closing or, if assessed at any time thereafter, shall be paid promptly following such assessment. Purchaser and Seller agree to provide each other reasonable assistance in the preparation and filing of any and all required transfer tax returns for or with respect to such Transfer Taxes with any and all appropriate taxing authorities. 10. SPECIAL WARRANTY DEED AND OTHER DOCUMENTS REQUIRED FOR CLOSING. A. At the Closing, Seller shall deliver the following: (i) A special warranty deed, conveying fee simple title to the Property, in the form annexed hereto as Exhibit H; (ii) A duly executed bill of sale conveying the Personal Property, in the form annexed hereto as Exhibit I; (iii) Assignment and assumption agreement for the Service Contracts being assigned to Purchaser pursuant to Section 6, in the form annexed hereto as Exhibit J ; (iv) Assignment and assumption agreement for the Construction Contracts being assigned to Purchaser pursuant to Section 6, in the form annexed hereto as Exhibit K; - 5 - (v) Such documents evidencing the legal status, good standing and authority of Seller that may be required by the Escrow Agent for issuance of the Title Policy; (vi) An affidavit duly executed by Seller stating that Seller is not a "foreign person" as defined in the Federal Foreign Investment in Real Property Tax Act of 1980 and 1984 Tax Reform Act, in the form annexed hereto as Exhibit L; (vii) A release and termination agreement in recordable form to terminate the Memorandum of Lease between MCI Realty Corporation and MCI Telecommunications Corporation recorded in the land records of Arlington County, Virginia in Deed Book 2123, page 1026; (viii) a true and correct copy of the Sale Order (hereinafter defined); (ix) An affidavit to Escrow Agent relating to Purchaser's title insurance policy, in the form annexed hereto as Exhibit M; (x) Assignment and assumption agreement for the TSA Lease being assigned to Purchaser, in the form annexed hereto as Exhibit N; (xi) A Statement of Lease with respect to the TSA Lease which Statement of Lease shall be on the Government's then-current standard form or as otherwise required by Section 5 of the Form 3517B of the TSA Lease; (xii) The Novation Agreement pursuant to Section 6(a) above, executed by Seller; and (xiii) A closing statement. B. At the Closing, Purchaser shall deliver the following: (i) The Purchase Price, less any portion of the Deposit that is applied, in cash or immediately available funds; (ii) Such documents evidencing the legal status, good standing and authority of Purchaser that may be required by the Escrow Agent for issuance of the Title Policy; (iii) Assignment and assumption agreement for the Service Contracts being assigned to Purchaser pursuant to Section 6, in the form annexed hereto as Exhibit J; (iv) Assignment and assumption agreement for the Construction Contracts being assigned to Purchaser pursuant to Section 6, in the form annexed hereto as Exhibit K; (v) Assignment and assumption agreement for the TSA Lease being assigned to Purchaser, in the form annexed hereto as Exhibit N; - 6 - (vi) The Novation Agreement pursuant to Section 6(a) above, executed by Purchaser; (vii) A closing statement; and (viii) A duly executed and acknowledged easement in favor of Seller in the form annexed hereto as Exhibit O. 11. EQUIPMENT SITE LEASE. At Closing, Purchaser and Seller shall enter into an equipment site lease (the "EQUIPMENT SITE LEASE") for a portion of the premises at 601 S. 12th Street, as further described therein (the "TERMINAL SPACE"), in accordance with the terms of an Equipment Site Lease, in the form annexed hereto as Exhibit P. 12. POSSESSION. Possession of the Property, free and clear of all tenants or other parties in possession, except in accordance with the Equipment Site Lease and the TSA Lease, shall be delivered to Purchaser on the day of Closing. 13. REPRESENTATIONS AND WARRANTIES. A. Seller represents and warrants the following to Purchaser as of the Closing: (i) Subject to Section 30 herein: (a) Seller has the full right, power and authority to sell and convey the Property to Purchaser as provided in the Contract and to carry out Seller's obligations hereunder; (b) all requisite corporate or other actions necessary to authorize Seller to enter into this Contract and to perform its obligations thereunder have been taken; and (c) the execution, delivery and performance by Seller of this Contract will not conflict with or cause a default under any other agreement. (ii) Seller is duly organized, validly existing and in good standing in the State of Delaware. (iii) Subject to Section 30 herein, the person executing this Contract on behalf of Seller is duly empowered to do so and thus to bind Seller to perform in compliance with the Contract. (iv) Upon obtaining entry of the Sale Order, the execution and delivery of this Contract, the consummation of the transactions contemplated herein and the performance of, fulfillment of and compliance with the terms and conditions hereof by Seller do not and will not: (a) conflict with or result in the breach of the organizational documents of Seller; or (b) to Seller's knowledge, violate any statute, law, rule or regulation or any order, writ, injunction or decree of any court or governmental authority. (v) Seller represents and warrants that no real estate broker has been involved in this transaction on its behalf other than Hilco Real Estate, LLC, whose fees shall be payable solely by Seller. If any broker should make a claim for a commission based upon the actions of Seller, Seller shall indemnify, defend and hold Purchaser harmless from such claim. - 7 - (vi) Seller has received no notice of default under the TSA Lease. Notwithstanding the foregoing or any other provision of this Contract, in the event that Purchaser has actual knowledge of such facts or disclosure of circumstances that are at variance with any of Seller's representations or warranties, and if Purchaser thereafter consummates Closing, Purchaser shall be deemed to have accepted such variant facts and circumstances and Seller's representations and warranties shall be deemed excised or modified to comport with such variant facts and circumstances. B. Purchaser represents and warrants to Seller, as a material condition to Seller's obligations pursuant to the Contract, the following as of the date hereof and as of the date of Closing: (i) Purchaser has the full right, power and authority to purchase the Property as provided in the Contract and to carry out Purchaser's obligations hereunder. All requisite corporate or other actions necessary to authorize Purchaser to enter into this Contract and to perform its obligations thereunder have been taken. The execution, delivery and performance by Purchaser of this Contract will not conflict with or cause a default under any other agreement. (ii) Purchaser is duly organized, validly existing and in good standing in the State of Maryland and is, or will be at Closing, qualified to do business in the Commonwealth of Virginia. (iii) The person executing this Contract on behalf of Purchaser is duly empowered to do so and thus to bind Purchaser to perform in compliance with this Contract. (iv) Purchaser represents and warrants that no real estate broker has been involved in this transaction on its behalf. If any broker should make a claim for a commission based upon the actions of Purchaser, Purchaser shall indemnify, defend and hold Seller harmless from such claim. 14. DEFAULT. If Seller is in default hereunder for failure to comply with any one or more of the material terms or conditions of this Contract and such failure continues for more than seven (7) business days after receipt of written notice, Purchaser at its sole option may: (i) terminate this Contract by written notice delivered to Seller on or before the Closing, in which event Purchaser shall be entitled to full return of the Deposit, or (ii) waive such defaults and proceed to Closing. Purchaser hereby knowingly waives any and all right to institute any action, claim or suit for damages against Seller with respect to any default by Seller hereunder. If Purchaser is in default hereunder for failure to comply with any one or more of the material terms or conditions of this Contract and such failure continues for more than seven (7) business days after receipt of written notice, then Seller at its sole option may: (i) terminate this Contract and receive from Escrow Agent the Deposit as full liquidated damages, or (ii) waive such defaults and proceed to Closing. Seller and Purchaser agree that upon a default by Purchaser the damages that would be sustained by Seller will be uncertain and not readily ascertainable, but agree that the amount of the Deposit is a reasonable estimate of such damage. - 8 - 15. NO REPRESENTATIONS. A. PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES (OTHER THAN AS EXPRESSLY SET FORTH IN THIS CONTRACT AND IN THE SPECIAL WARRANTY OF TITLE AS SET OUT IN THE DEED), PROMISES, COVENANTS, AGREEMENTS, OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE VALUE, NATURE, QUALITY, OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL, AND GEOLOGY, (B) THE INCOME TO BE DERIVED FROM THE PROPERTY, (C) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES THAT PURCHASER OR ANY TENANT MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES; OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (E) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY, (F) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY, (G) THE MANNER, QUALITY, STATE OF REPAIR, OR LACK OF REPAIR OF THE PROPERTY, (H) COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION, OR LAND USE LAWS, RULES, REGULATIONS, ORDERS, OR REQUIREMENTS, INCLUDING THE EXISTENCE IN OR ON THE PROPERTY OF HAZARDOUS MATERIALS, OR (I) ANY OTHER MATTER WITH RESPECT TO THE PROPERTY. ADDITIONALLY, NO PERSON ACTING ON BEHALF OF SELLER IS AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF PURCHASER ACKNOWLEDGES THAT NO PERSON HAS MADE, ANY REPRESENTATION, AGREEMENT, STATEMENT, WARRANTY, GUARANTY, OR PROMISE REGARDING THE PROPERTY OR THE TRANSACTION CONTEMPLATED HEREIN; AND NO SUCH REPRESENTATION, WARRANTY, AGREEMENT, GUARANTY, STATEMENT, OR PROMISE IF ANY, MADE BY ANY PERSON ACTING ON BEHALF OF SELLER SHALL BE VALID OR BINDING UPON SELLER UNLESS EXPRESSLY SET FORTH HEREIN. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY, PURCHASER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER AND AGREES TO ACCEPT THE PROPERTY AT THE CLOSING AND WAIVE ALL OBJECTIONS OR CLAIMS AGAINST SELLER (INCLUDING, BUT NOT LIMITED TO, ANY RIGHT OR CLAIM OF CONTRIBUTION) ARISING FROM OR RELATED TO THE PROPERTY OR TO ANY HAZARDOUS MATERIALS ON THE PROPERTY. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY, TRUTHFULNESS, OR COMPLETENESS OF SUCH INFORMATION. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENT, REPRESENTATION, OR INFORMATION PERTAINING TO THE PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, CONTRACTOR, AGENT, EMPLOYEE, SERVANT, OR OTHER PERSON. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS" AND "WHERE IS" CONDITION AND BASIS WITH ALL FAULTS. B. PURCHASER HEREBY AGREES TO INDEMNIFY, PROTECT, DEFEND, SAVE, AND HOLD HARMLESS SELLER AND ITS AFFILIATES, AND THEIR RESPECTIVE EMPLOYEES, AGENTS, - 9 - REPRESENTATIVES, AND THIRD PARTY CONSULTANTS AND PROFESSIONALS FROM AND AGAINST ANY AND ALL DEBTS, DUTIES, OBLIGATIONS, LIABILITIES, SUITS, CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, LOSSES, FEES, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES, AND EXPENSES AND COURT COSTS) IN ANY WAY RELATING TO, OR IN CONNECTION WITH OR ARISING ON OR AFTER CLOSING OUT OF PURCHASER'S ACQUISITION, OWNERSHIP, LEASING, USE, OPERATION, MAINTENANCE, AND MANAGEMENT OF THE PROPERTY. PURCHASER ALSO HEREBY RELEASES SELLER AND ITS AFFILIATES, AND THEIR RESPECTIVE EMPLOYEES, AGENTS, REPRESENTATIVES, AND THIRD PARTY CONSULTANTS AND PROFESSIONALS FROM ANY AND ALL CLAIMS, LOSSES, DAMAGES, ACTIONS OR CAUSES OF ACTION IN ANY WAY RELATING TO, OR IN CONNECTION WITH THE PROPERTY WHICH HAVE ARISEN PRIOR TO THE DATE HEREOF. C. THE PROVISIONS OF THIS SECTION 15 SHALL SURVIVE CLOSING OR ANY TERMINATION HEREOF. 16. RISK OF LOSS. A. If, prior to the Closing, action is initiated to take any of the Property by eminent domain proceedings or by deed in lieu thereof, Purchaser may either at or prior to Closing (a) terminate this Agreement, or (b) consummate the Closing, in which latter event all of Seller's assignable right, title and interest in and to the award of the condemning authority shall be assigned to Purchaser at the Closing and there shall be no reduction in the Purchase Price. B. Seller assumes all risks and liability for damage to or injury occurring to the Property by fire, storm, accident, or any other casualty or cause until the Closing has been consummated. If the Property, or any part thereof, suffers any damage in excess of $5,000,000 prior to the Closing from fire or other casualty, which Seller, at its sole option, does not elect to repair, or if the TSA then has the right to terminate the TSA Lease as a result of such fire or other casualty, Purchaser may either at or prior to Closing (a) terminate this Agreement, or (b) consummate the Closing, in which latter event all of Seller's right, title, and interest in and to the proceeds of any insurance covering such damage (less an amount equal to any expense and costs incurred by Seller to repair or restore the Property and any portion paid or to be paid on account of the loss of rents or other income from the Property for the period prior to and including the Closing Date, all of which shall be payable to Seller), to the extent the amount of such insurance does not exceed the Purchase Price, shall be assigned to Purchaser at the Closing. If the Property, or any part thereof, suffers any damage less than $5,000,000 prior to the Closing, then, provided the TSA does not then have the right to terminate the TSA Lease as a result thereof, Purchaser agrees that it will consummate the Closing and accept the assignment of the proceeds of any insurance covering such damage plus an amount equal to Seller's deductible under its insurance policy and there shall be no reduction in the Purchase Price. From the Execution Date until Closing, Seller shall continue to maintain its casualty insurance for the Property in substantially the same amounts and subject to substantially the same deductibles as in existence on the Execution Date. 17. ASSIGNMENT. Purchaser shall not have the right to assign its interest in this Contract without the prior written consent of Seller, which consent may be granted or withheld in - 10 - Seller's sole and unfettered discretion, and any such assignment without such consent shall be null and void and of no force and effect. Notwithstanding any assignment of this Contract, Purchaser shall at all times remain primarily obligated, and not be relieved of any liabilities, hereunder. 18. REPORTING OF FOREIGN INVESTMENT. Purchaser agrees to comply with any and all reporting requirements applicable to the transaction which is the subject of this Contract which are set forth in any law, statute, ordinance, rule, regulation, order or determination of any governmental authority, including but not limited to The International Investment Survey Act of 1976, The Agricultural Foreign Investment Disclosure Act of 1978, The Foreign Investment in Real Property Tax Act of 1980 and the Tax Reform Act of 1984 and further agrees upon request of Seller to furnish Seller with evidence of such compliance. 19. NO OFFER. The submission of this Contract to Purchaser for review does not constitute an offer or option to sell the Property. 20. NOTICES. All notices and other communications hereunder shall be in writing and shall be delivered personally against receipt or shall be sent by certified United States Mail service, postage prepaid and return receipt requested, or by nationally utilized overnight delivery service, addressed to the parties as follows: As to Seller: Brian H. Trosper Vice President, Corporate Facilities & Real Estate WorldCom, Inc. 2400 North Glenville Richardson, TX 75082 Fax- (972) 729-6704 With a copy to: WorldCom, Inc. 1133 19th Street, NW Washington, DC 20036 Attn: Senior Counsel, Network & Facilities (47484/003) Fax- (202) 736-6720 And a copy to: Hilco Real Estate, LLC 5 Revere Drive Suite 320 Northbrook, Illinois 60062 Attn: Mitchell P. Kahn Fax- (847) 714-1289 And a copy to: Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Attn: Elliot L. Hurwitz & Scott E. Cohen Fax- (212) 310-8007 - 11 - As to Purchaser: Commercial Net Lease Realty, Inc. CNL Center at City Commons 9th Floor 450 South Orange Avenue Orlando, Florida 32801 Attention: David Cobb Fax- (407) 650-1046 And a copy to: Lowndes, Drosdick, Doster, Kantor & Reed, P.A. 450 South Orange Avenue Orlando, Florida 32801 Attn: Christopher P. Tessitore, Esq. Fax- (407) 843-4444 Any notice in accordance herewith shall be deemed received when personal or courier delivery is received or refused, or when deposited with the United States Postal Service, as the case may be. Additionally, notices may be given by telephone facsimile transmission, provided that an original copy of said transmission shall be delivered to the addressee by nationally utilized overnight delivery services on the day following such transmission. Telephone facsimiles shall be deemed delivered on the date of such transmission. 21. SURVIVAL. The representations and warranties set forth herein shall be continuing, shall survive the Closing, and shall remain in full force and effect thereafter for a period of twelve (12) months. 22. PARTIES BOUND. This Contract shall be binding upon and inure to the benefit of Seller and Purchaser, their respective successors and permitted assigns. 23. GOVERNING LAW. The laws of the state in which the Property is located shall govern the validity, construction, enforcement and interpretation of this Contract, provided, however, that the Bankruptcy Court shall retain jurisdiction over any and all disputes arising under or otherwise relating to the construction and enforcement of the Sale Order and the transactions consummated thereunder. 24. RESERVED. 25. MULTIPLE COUNTERPARTS. This Contract may be executed in a number of identical counterparts. If so executed, each of such counterparts shall, collectively, constitute one agreement, but in making proof of this Contract, it shall not be necessary to produce or account for more than one such counterpart. Neither this Contract nor any memorandum thereof shall be recorded. 26. TIME OF THE ESSENCE. The parties hereto expressly agree that time is of the essence with respect to this Contract. - 12 - 27. ENTIRE CONTRACT. This Contract embodies the entire agreement of the parties with respect to the transaction herein contemplated, superseding all prior agreements and communications whether oral or written. Any amendments hereto shall be in writing and executed by the party against whom enforcement of the modification is sought. 28. NON-BUSINESS DAYS. If the date of Closing or the date for delivery of a notice or performance of some other obligation of a party falls on a Saturday, Sunday or legal holiday in the State in which the Property is located, then the date for Closing or such notice or performance shall be postponed until the next business day. 29. CONFIDENTIALITY. Purchaser shall treat all materials and information provided by Seller as confidential information, and shall distribute same only to Purchaser's affiliates, partners, employees, agents and representatives who have a need to know and to third party consultants and professionals retained by Purchaser. Purchaser shall instruct all of its affiliates, employees, agents, representatives, and third party consultants and professionals as to the confidentiality of all such information as well as the existence or terms of this Contract. The existence or terms of this Contract shall not be disclosed by either Seller or Purchaser to any unrelated third-party, except for and only to the extent reasonably necessary for those parties required by either Seller or Purchaser to facilitate the transaction contemplated herein. 30. BANKRUPTCY COURT APPROVAL. A. Notwithstanding anything to the contrary contained herein, this Contract, including Seller's obligations hereunder and the sale of Property to Purchaser as contemplated hereby, is subject to (a) higher and better offers for all or a portion of the Property, obtained pursuant to an order of the Bankruptcy Court establishing, in form and substance satisfactory to Seller, procedures substantially in the form annexed hereto as Exhibit Q (the "SALE PROCEDURES ORDER") and (b) entry of the Sale Order in form and substance satisfactory to Seller. Purchaser understands that Seller's obligations under this Contract shall not be effective or enforceable against Seller (i) unless and until (x) Purchaser's offer, as represented by this Contract (as hereafter modified or supplemented) is deemed by the Bankruptcy Court to be the highest and best offer for the Property and (y) the Bankruptcy Court has entered the Sale Order, and (ii) if, in the Seller's exercise of its fiduciary duty, the Seller determines, prior to the entry of the Sale Order that consummation of the transactions contemplated hereunder is not in the best interests of its Chapter 11 estate and creditors, Seller may terminate this Contract without penalty, in which event, the Purchaser shall be deemed to have waived all claims, damages, actions and causes of action of whatever kind and nature (including any claims for attorney's fees), whether known or unknown, fixed or contingent, matured or unmatured, liquidated or unliquidated or otherwise, arising from, related to, or concerning the Contract; provided, however, that the Purchaser does not waive its right to recover its Deposit. B. In furtherance of the transactions contemplated herein, the parties agree that the sale of Property to Purchaser shall be approved in accordance with the following terms: (i) Purchaser and Seller shall cooperate with prosecuting and obtaining entry of the Sale Order. - 13 - (ii) In the event (a) the request for entry of the Sale Order is denied, or (b) the Sale Order is not entered on or before the date which is one hundred five (105) days from the Execution Date, or (c) a Legal Restraint of the Sale Order remains in place for thirty (30) days following entry of the Sale Order, either the Purchaser or the Seller may terminate this Contract without penalty, in which event, the Purchaser shall be entitled to return of its Deposit and shall be deemed to have waived all other claims, damages, actions and causes of action of whatever kind and nature (including any claims for attorney's fees), whether known or unknown, fixed or contingent, matured or unmatured, liquidated or unliquidated or otherwise, arising from, related to, or concerning the Contract. 31. MARKETING. Seller shall have the right to continue to market the Property and other offers may be negotiated and/or accepted by Seller such time as the Sale Order has been entered. SIGNATURES ON NEXT PAGE - 14 - IN WITNESS WHEREOF, the parties hereto have, by their duly authorized representatives, executed this Contract as of the date indicated above. "SELLER" MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation By: _________________________________ Name: _______________________________ Title: ______________________________ "PURCHASER" COMMERCIAL NET LEASE REALTY, INC., a Maryland corporation By: ____________________________ Name: __________________________ Title: _________________________ - 15 - EXHIBITS EXHIBIT A - Description of the Property EXHIBIT B - Construction Contracts EXHIBIT C - Service Contracts EXHIBIT D - Escrow Agreement EXHIBIT E - Title Binder & ALTA Survey EXHIBIT F - Form of Novation Agreement EXHIBIT G - Sale Order EXHIBIT H - Form of Special Warranty Deed EXHIBIT I - Form of Bill of Sale EXHIBIT J - Form of Assignment and Assumption Agreement for Service Contracts being Assigned to Purchaser EXHIBIT K - Form of Assignment and Assumption Agreement for Construction Contracts EXHIBIT L - FIRPTA Affidavit EXHIBIT M - Title Affidavit EXHIBIT N - Form of Assignment and Assumption Agreement for the TSA Lease being assigned to Purchaser EXHIBIT O - Form of Easement in Favor of Seller EXHIBIT P - Equipment Site Lease EXHIBIT Q - Sale Procedures Order - 16 - EXHIBIT A DESCRIPTION OF THE PROPERTY All of those certain parcels of land situate and being in Arlington County, Virginia and more particularly described as: Parcel 1-A, containing 105,422 square feet, being a Subdivision of the Property of Pentagon City One Realty Limited Partnership, as the same appears duly dedicated, platted and recorded in Deed Book 2013 at page 725, among the land records of Arlington County, Virginia; TOGETHER WITH subsurface foundation and footing easement recorded in Deed Book 2034 at page 528, among the aforesaid land records. Parcel 1-B containing 2.45783 acres, being a Resubdivision of the Property of Pentagon Tract Development Corporation and River House Corporation, being a part of Parcel "B-2-B" Ambassador Inc. & "H" Street Building Corp., as the same are shown on a plat attached to Deed of Resubdivision recorded in Deed Book 2062 at page 914, among the aforesaid land records. A-1 EXHIBIT B CONSTRUCTION CONTRACTS Contract Number 3866, Warm Lit Shell, dated February 18, 2003, by and between WorldCom Purchasing, LLC and Spaulding and Slye Construction LP. Contract Number 3867, Tenant Improvements, dated February 19, 2003, by and between WorldCom Purchasing, LLC and Spaulding and Slye Construction LP. Contract Number 3924, Architectural/Engineering Services, Warm Lit Shell, dated March 6, 2003, by and between WorldCom Purchasing, LLC and EllStreet Corporation. Contract Number 3925, Architectural/Engineering Services, Tenant Improvements, dated March 6, 2003, by and between WorldCom Purchasing, LLC and EllStreet Corporation. B-1 EXHIBIT C SERVICE CONTRACTS Contract Number NPW, effective as of October 1, 1998, by and between MCI Telecommunications Corporation and Otis Elevator Company (the "Otis Contract"). Property Management Agreement, dated as of December 17, 2002, by and between MCI WORLDCOM NETWORK SERVICES, INC. and Spaulding and Slye LLC. Contract for Generator/Fire Pump Maintenance, dated April 3, 2003, by and between MCI WORLDCOM NETWORK SERVICES, INC. and Kelly Generator and Equipment, Inc. Contract for Fire Panel Monitoring, undated, by and between MCI WORLDCOM NETWORK SERVICES, INC. and ADT Security. Contract for Fire Alarm Testing, dated March 26, 2003, by and between WORLDCOM NETWORK SERVICES, INC. and Ark Systems, Inc. Contract for Energy Management System, dated April 7, 2003, by and between MCI WORLDCOM NETWORK SERVICES, INC. and Capron Company, Inc. Contract for Engineering Services, dated January 1, 2003, by and between MCI WORLDCOM NETWORK SERVICES, INC. and Building Technology. Contract for Guard Service provided by Burns* Contract for Janitorial Services, dated March 1, 2003, by and between MCI WORLDCOM NETWORK SERVICES, INC. and United States Service Industries, Inc. Contract for Pest Control, dated April 14, 2003, by and between MCI WORLDCOM NETWORK SERVICES, INC. and Triple S Termite and Pest Control. Contract for Snow Removal provided by Brickman* Contract for Access Control provided by ADT* Contract for Recycling Removal Services, dated April 30, 2003, by and between MCI WORLDCOM NETWORK SERVICES, INC. and Waste Management. * denotes that such service contracts are out for signature. C-1 EXHIBIT D ESCROW AGREEMENT Escrow No. _________________ Refer to __________________ Title No. __________________ Phone No. ________________ Fax No. ____________________ Date _____________ ESCROW AGREEMENT TO: CHICAGO TITLE INSURANCE COMPANY, ESCROW AGENT. Customer Identification: Name: _________________________________________ Property Address: _____________________________ Project Reference: ____________________________ Proposed Distribution Date: ___________________ DEPOSITS: (Certified) (Uncertified) (Cashier's) check(s) and/or wire(s) in the amount (s) of $__________________representing: ______________________________________________. ______________________________________________. ______________________________________________. DOCUMENT(S) DEPOSITS: Type of Documents: ____________________________. ____________________________. ____________________________. CONDITIONS FOR Chicago Title Insurance Company's service as escrow agent: 1. Escrow Agent is not a party to, and is not bound by, or charged with notice of any agreement out of which this escrow may arise, other than this escrow agreement or the escrow provisions of the Contract of Sale. 2. Escrow Agent is acting solely as a stakeholder and depository, and is not responsible or liable in any manner whatever for the sufficiency, correctness, genuineness, or validity of the subject matter of the escrow, or for the identity or authority of any person executing or depositing it. D-1 3. Buyer and Seller agree to jointly and severally indemnify, defend and hold harmless the Escrow Agent from and against any loss, cost, damage, expense and attorney's fee (collectively called "Expenses") in connection with or in any way arising out of this Escrow Agreement, other than expenses resulting from the Escrow Agent's own negligence or misconduct. 4. The Escrow Agent shall be protected in acting upon any written notice, request, waiver, consent, certificate, receipt, authorization, power of attorney or other document Escrow Agent in good faith believes to be genuine and what it purports to be. The Escrow Agent may, at its own expense, consult with legal counsel in the event of any dispute or questions as to the construction of any provisions hereof or its duties hereunder, and it shall be fully protected in acting in accordance with the opinion or instructions of such counsel. 5. In the event of a dispute between the Buyer and Seller, the Escrow Agent may continue to hold the deposits pursuant to the terms hereof, or may, at the joint and several cost of the Buyer and Seller, deposit the same in the United States Bankruptcy Court for the Southern District of New York. The Escrow Agent may dispose of the deposits in accordance with an order of said court, and shall be fully protected if it acts in accordance with any such court order. 6. Deposits made pursuant to these instructions may be invested on behalf of any party or parties hereto: Provided that any direction to the Escrow Agent for such investment shall be in writing and contain the consent of all other parties to this escrow; and also provided that the writing is on the "INVESTMENT OF ESCROW FUNDS INSTRUCTION" form of Chicago Title Insurance Company, and a completed, signed W-9 Form accompanies it. Chicago Title Insurance Company is not to be held responsible for the loss of principal or interest on any investment made pursuant to the aforesaid instruction or in the redemption thereof. 7. Except as to deposits of funds for which the Escrow Agent has received written instructions as set forth in paragraph 6 above, the funds may be commingled with other escrowed funds in a non-segregated escrow account of Chicago Title Insurance Company. 8. No funds deposited in escrow with Chicago Title Insurance Company may be wired out of the escrow account unless and until a duly completed and executed "AUTHORIZATION FOR OUTGOING WIRE" form is received for each proposed wire. Said form is shown on Exhibit "A" hereto. Execution of this escrow agreement is deemed an agreement by the parties to complete and execute such "AUTHORIZATIONS FOR OUTGOING WIRES" as required by Chicago Title Insurance Company, as Escrow Agent, in its sole discretion. IN WITNESS WHEREOF, the Buyer, Seller and Escrow Agent have executed this Agreement as of the date hereinabove first written. [SELLER] [BUYER] By: __________________________ By: __________________________ Name: Name: Title: Title: D-2 Chicago Title Insurance Company By:__________________________ Name: Title: D-3 CHICAGO TITLE INSURANCE COMPANY AUTHORIZATION FOR OUTGOING WIRES THIS FORM MUST BE COMPLETED FOR ALL OUTGOING WIRE TRANSFERS Due to recent changes in the Uniform Commercial Code, Chicago Title Insurance Company must have signed wire instructions, specifying the destination for all wire transfers. - ---------------------------------------------------------------------------------------------------------------------- REFERENCE (TITLE NO. OR ESCROW NO. - ---------------------------------------------------------------------------------------------------------------------- AMOUNT TO BE WIRED $ - ---------------------------------------------------------------------------------------------------------------------- FOR FED BANKS - ---------------------------------------------------------------------------------------------------------------------- Receiving Bank - ---------------------------------------------------------------------------------------------------------------------- City, State - ---------------------------------------------------------------------------------------------------------------------- ABA NO. - ---------------------------------------------------------------------------------------------------------------------- PARTY TO CREDIT - ---------------------------------------------------------------------------------------------------------------------- ACCOUNT NUMBER - ---------------------------------------------------------------------------------------------------------------------- PHONE ADVICE (NAME/TEL) - ---------------------------------------------------------------------------------------------------------------------- OTHER REFERENCE INFO - ---------------------------------------------------------------------------------------------------------------------- FOR NON-FED BANKS - ---------------------------------------------------------------------------------------------------------------------- Intermediary CORRESPONDENT NOTE: IF THE WIRE IS TO ROUTED THROUGH A DOMESTIC U.S. NOTE: IF THE RECEIVING BANK IS OUTSIDE THE UNITED STATES, INTERMEDIARY BANK FOR CREDIT TO RECEIVING BANK (I.E. THE WIRE MUST BE DIRECTED TO A BANK WITH A CORRESPONDENT RECEIVING BANK IS NOT ON-LINE WITH THE FED), ENTER SUCH RELATIONSHIP IN THE UNITED STATES INTERMEDIARY BANK INFORMATION BELOW - ---------------------------------------------------------------------------------------------------------------------- NAME: NAME: - ---------------------------------------------------------------------------------------------------------------------- ABA NO. ABA NO. - ---------------------------------------------------------------------------------------------------------------------- ACCOUNT NO. ACCOUNT NO. - ---------------------------------------------------------------------------------------------------------------------- Provided that the funds are wire transferred in accordance with these instructions, Chicago Title Insurance Company shall not be liable for any act or omission of any financial institution or any other person, nor shall Chicago Title Insurance Company have any liability for loss of funds or interest thereon. In no event will damages exceed interest at a rate equal to the Fed Funds rate, adjusted daily, for the number of days that such funds are unavailable. The undersigned customer shall indemnify and hold harmless Chicago Title Insurance Company, its successors or assigns, from any loss, liability and cost incurred as a result of any incorrect information supplied. In no event shall Chicago Title Insurance Company be liable for any special, consequential, indirect or incidental damages, regardless of whether any claim is based on contract or tort or whether the likelihood of such damage was known to Chicago Title Insurance Company. ACCEPTED AND AGREED TO BY: ________________________________________ (PRINT CUSTOMER NAME) BY _____________________________________ (SIGNATURE) DATE: _________________________________ D-1 EXHIBIT E TITLE BINDER & ALTA SURVEY Title Binder: Commitment number 2278-01317 issued by Chicago Title Insurance Company, dated October 16, 2002. ALTA Survey: prepared by Dewberry & Davis LLC, dated July 31, 2002. E-1 EXHIBIT F FORM OF NOVATION AGREEMENT MCI WORLDCOM NETWORK SERVICES, INC. ("Transferor"), a corporation, duly organized and existing under the laws of the State of Delaware, with an office at 500 Clinton Center Drive, Clinton, MS 39056, and a debtor in possession in a voluntary case commenced under Chapter 11 of title 11, United Stated Code pending in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"), Chapter 11 Case No. O2-13533 (AJG) (Jointly Administered); Commercial Net Lease Realty, Inc. ("Transferee") a corporation, duly organized and existing under the laws of the State of Maryland, with an office in CNL Center at City Commons, 9th Floor, 450 South Orange Avenue, Orlando, Florida 32801; and the UNITED STATES OF AMERICA ("Government"), acting by and through the Transportation Security Administration, enter into this Agreement effective as of _______________________, 2003, the date of closing. A. THE PARTIES AGREE TO THE FOLLOWING FACTS: (1) The Government, represented by various Contracting Officers of the Transportation Security Administration, has entered into a certain contract (the "Lease") with the Transferor, namely: Lease for real property, TSA No. DTSA20-03-R-00528 dated December 17, 2002, as amended by Supplemental Lease Agreements more particularly described in Attachment "A" which is attached hereto and made a part hereof, with respect to certain premises (the "Premises") which are located in Arlington, Virginia and known as 601 and 701 South 12th Street. The term, "the Lease," as used in this Agreement, means the above lease and all other contracts, including all modifications, made between the Government and the Transferor before the effective date of this Agreement (whether or not performance or payment have been completed and releases executed if the Government or the Transferor has any remaining rights, duties, or obligations under these contracts.) Included in the term, "the Lease," are also all modifications made under the terms and conditions of these contracts and purchase orders between the Government and the Transferee, on or after the effective date of this Agreement. (2) As of the date hereof, the Transferor has transferred to the Transferee all of its rights in and to the Lease by virtue of various instruments, including, but not limited to, an Assignment and Assumption Agreement between the Transferor and the Transferee. F-1 (3) The Transferee has acquired all of the rights of the Transferor under and pursuant to the Lease by virtue of the above transfer. (4) The Transferee has assumed all obligations and liabilities of the Transferor under the Lease by virtue of the above transfer. (5) The Transferee is in a position to perform fully all obligations that may exist under the Lease. (6) It is consistent with the Government's interest to recognize the Transferee as the successor party to the Lease. (7) Evidence of the above transfer has been filed with the Government. B. IN CONSIDERATION OF THESE FACTS, THE PARTIES AGREE THAT BY THIS AGREEMENT: (1) The Transferor confirms the transfer to the Transferee, and waives any claims and rights against the Government that it now has or may have in the future in connection with the Lease (except for any amounts that are or may become due to the Transferor through the date hereof, it being understood, however, that only one or the other of Transferor or Transferee shall have the right to pursue a claim against the Government for such amounts). (2) The Transferee agrees to be bound by and to perform the Lease in accordance with the conditions contained in the Lease. The Transferee also assumes all obligations and liabilities of, and all claims against, the Transferor under the Lease as if the Transferee were the original party to the Lease. (3) The Transferee ratifies all previous actions taken by the Transferor with respect to the Lease, with the same force and effect as if the action had been taken by the Transferee. (4) The Government recognizes the Transferee as the Transferor's successor in interest in and to the Lease. The Transferee, by this Agreement, becomes entitled to all rights, titles, and interests of the Transferor in and to the Lease, and as set forth in the order of the Bankruptcy Court, dated _______, 2003, becomes solely responsible for the payment and performance of all duties and obligations of the Transferor under the Lease, as if the Transferee were the original party to the Lease. Following the effective date of this Agreement, the term "Lessor", as used in the Lease, shall refer to the Transferee. (5) The Government confirms that Transferor has been released of any and all obligations and liabilities under the Lease as set forth in the order of the Bankruptcy Court, dated [_____], 2003. F-2 (6) All payments and reimbursements previously made by the Government to the Transferor, and all other previous actions taken by the Government under the Lease, shall be considered to have discharged those parts of the Government's obligations under the Lease. All payments and reimbursements made by the Government which occur within 60 days after the date of this Agreement in the name of or to the Transferor shall have the same force and effect as if made to the Transferee, and shall constitute a complete discharge of the Government's obligations under the Lease, to the extent of the amounts paid or reimbursed. (7) The Transferor and the Transferee agree that the Government is not obligated to pay or reimburse either of them for, or otherwise give effect to, any costs, taxes, or other expenses, or any related increases, directly or indirectly arising out of or resulting from the transfer or this Agreement, other than those that the Government, in the absence of this transfer or Agreement, would have been obligated to pay or reimburse under the terms of the Lease. (8) The Lease shall remain in full force and effect, except as modified by this Agreement. Each party has executed this Agreement as of the day and year first above written. UNITED STATES OF AMERICA By: ________________________ ________________________ Contracting Officer Transportation Security Administration MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation By: __________________________ Name: ________________________ Title: _________________________ [CORPORATE SEAL] COMMERCIAL NET LEASE REALTY, INC., a Maryland corporation By: __________________________ Name: ________________________ Title: _______________________ F-3 [CORPORATE SEAL] CERTIFICATE I, _______________________, certify that I am Secretary of Transferor; that _______________________ who signed this Agreement for this corporation, was then _______________________ of this corporation; and that this Agreement was duly signed for and on behalf of this corporation by authority of its governing body and within the scope of its corporate powers. Witness my hand and seal of this corporation this _________ day of _______________________, 2003. [CORPORATE SEAL] CERTIFICATE I, _______________________, certify that I am Secretary of Commercial Net Lease Realty, Inc., a Maryland corporation; that _______________________ who signed this Agreement for this corporation, was then _______________________ of this corporation; and that this Agreement was duly signed for and on behalf of this corporation by authority of its governing body and within the scope of its corporate powers. Witness my hand and seal of this corporation this _________ day of _______________________, 20___. [CORPORATE SEAL] F-4 ATTACHMENT A Lease At 601 and 701 South 12th Street, Arlington, Virginia 22202-4202 Lease Agreement between MCI WorldCom Network Services, Inc. and the United States of America, TSA No. DTSA20-03-R-00528, dated December 17, 2002, as amended by: 1. Supplemental Lease Agreement No. 1 to TSA No. DTSA20-03-R-00528, dated March 4, 2003. 2. Supplemental Lease Agreement No. 2 to TSA No. DTSA20-03-R-00528, dated March 4, 2003. 3. Supplemental Lease Agreement No. 3 to TSA No. DTSA20-03-R-00528, dated March 4, 2003. 4. Supplemental Lease Agreement No. 4 to TSA No. DTSA20-03-R-00528, dated March 26, 2003. 5. Supplemental Lease Agreement No. 5 to TSA No. DTSA20-03-R-00528, dated May 6, 2003. 6. Supplemental Lease Agreement No. 6 to TSA No. DTSA20-03-R-00528, dated April 15, 2003. 7. Supplemental Lease Agreement No. 7 to TSA No. DTSA20-03-R-00528, dated April 15, 2003. 8. Supplemental Lease Agreement No. 8 to TSA No. DTSA20-03-R-00528, dated May 6, 2003 9. Supplemental Lease Agreement No. 9 to TSA No. DTSA20-03-R-00528, dated June 20, 2003. 10. Supplemental Lease Agreement No. 10 to TSA No. DTSA20-03-R-00528, dated June 20, 2003. 11. Supplemental Lease Agreement No. 11 to TSA No. DTSA20-03-R-00528, dated June 20, 2003. 12. Supplemental Lease Agreement No. 12 to TSA No. DTSA20-03-R-00528, dated _______________, 2003.* * denotes that such Supplemental Lease Agreement is out for signature. F-5 PROPOSED SALE ORDER EXHIBIT G UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK - --------------------------------X IN RE : : CHAPTER 11 CASE NO. WORLDCOM, INC., ET AL., : 02-13533 (AJG) : : (JOINTLY ADMINISTERED) DEBTORS. : - --------------------------------X ORDER PURSUANT TO SECTIONS 105, 363 AND 365 OF THE BANKRUPTCY CODE AND BANKRUPTCY RULES 6004(g) AND 6006(d)(a) APPROVING THE TERMS AND CONDITIONS OF REAL ESTATE PURCHASE CONTRACT FOR THE SALE OF PENTAGON CITY AND RELATED PROPERTY, (B) AUTHORIZING THE SALE OF PROPERTY FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, AND (C) AUTHORIZING AND APPROVING THE ASSIGNMENT OR ASSUMPTION AND ASSIGNMENT OF CONTRACTS AND LEASES IN CONNECTION THEREWITH A hearing having been held on July 29, 2003 (the "Sale Hearing"), to consider the motion, dated May 30, 2003 (the "Motion"), of WorldCom, Inc. and certain of its direct and indirect subsidiaries, as debtors and debtors in possession (collectively, "WorldCom" or the "Debtors"), for the entry of an order pursuant to sections 105, 363 and 365 of title 11 of the United States Code (the "Bankruptcy Code"), and Rules 6004 and 6006 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), among other things, (a) approving the terms and conditions of that certain Real Estate Purchase Contract, between MCI WORLDCOM Network Services, Inc., as seller, and Commercial Net Lease Realty, Inc.., as purchaser ("Purchaser"), dated as of July 23, 2003 (the "Agreement"), providing for, among other things, the sale by the Debtors of certain real property known as "Pentagon City" and certain related property and the assignment of certain contracts and leases (collectively, the "Assets"), (b) authorizing the sale of such Assets to Purchaser free and clear of all liens, claims and encumbrances (except as otherwise set forth in the Agreement), and (c) authorizing and approving the assignment or assumption and assignment of certain contracts and leases in connection therewith, all as more fully set forth in the Motion; and the Court having entered the Order (A) Establishing Procedures for Debtors' Proposed Auction of Pentagon City and Related Property, (B) Approving "Break-Up Fee" Arrangement with Proposed Purchaser, (C) Establishing Date and Time for Sale Hearing and (D) Approving Form and Manner of Notices, dated June 17, 2003 (the "Auction Procedures Order"); and the Court having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. Sections 157 and 1334 and the Standing Order Of Referral of Cases to Bankruptcy Court Judges of the District Court for the Southern District of New York, dated July 19, 1984 (Ward, Acting C.J.); and consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. Section 157(b); and venue being proper before this Court pursuant to 28 U.S.C. Sections 1408 and 1409; and due and proper notice of the Motion having been provided in accordance with the Auction Procedures Order and the Court's case management order, dated December 23, 2002, and it appearing that no other or further notice need be provided; and the Court having reviewed the Motion and the papers in support thereof and the responses thereto, if any; and upon the Motion, the papers in support thereof and the responses thereto, if any, and the record of the Sale Hearing; and the Debtors having solicited offers for, and conducted an auction of, the Assets in accordance with the Auction Procedures Order; and the Debtors having determined that Purchaser's offer for the Assets, as embodied in the Agreement, is the highest and best offer received by the Debtors therefor; and the Agreement having been negotiated by the Debtors and Purchaser in good faith and at arm's length; and the Court having found and determined that the legal and factual bases set forth in the Motion and at the Sale Hearing establish just cause for the relief granted herein and that the relief requested in the Motion is an exercise of the Debtors' G-2 sound business judgment and is in the best interests of the Debtors and their estates and creditors; and upon all of the proceedings had before the Court; and after due deliberation and sufficient cause appearing therefor, it is ORDERED that Purchaser's offer for the Assets, as embodied in the Agreement is the highest and best offer and is hereby approved, provided, however, the assignment of the TSA Lease (as defined in the Motion) is subject to approval by the United States through the Transportation Security Administration; and it is further ORDERED that the Agreement is hereby approved pursuant to section 363(b) of the Bankruptcy Code and the Debtors are authorized to perform all of their obligations under the Agreement and to execute such other documents and take such other actions as are necessary or appropriate to effectuate the Agreement; and it is further ORDERED that all objections and responses to the Motion that have not been overruled, withdrawn, waived, settled or resolved by this Order, and all reservations of rights included therein, are hereby denied on the merits except as otherwise provided for in the record at the Sale Hearing; and it is further ORDERED that, pursuant to section 363(f) of the Bankruptcy Code, the Assets shall be sold and transferred free and clear of all liens, claims and encumbrances except as otherwise provided in the Agreement (collectively, "Liens"), with any and all such Liens to attach to proceeds of such sale with the same validity, priority, force and effect such Liens had on the Assets immediately prior to the sale and subject to the rights, claims, defenses, and objections, if any, of the Debtors and all interested parties with respect to any such asserted Liens; and it is further G-3 ORDERED that the Debtors are hereby authorized, but not directed, to satisfy any such valid Liens from the proceeds of sale; and it is further ORDERED that, pursuant to sections 105(a), 363(b) and 365 of the Bankruptcy Code, the sale and assignment by the Debtors to the Purchaser of the Assets, and the assumption by the Debtors and sale and assignment to the Purchaser of the Otis Contract (as defined in the Agreement), as the case may be, upon the closing under the Agreement are authorized and approved in all respects; and it is further ORDERED that the conditions, if any, to the assumption and assignment of the Otis Contract to Purchaser set forth in section 365 of the Bankruptcy Code are deemed satisfied in all respects; and it is further ORDERED that the stays of this Order set forth in Bankruptcy Rules 6004(g) and 6006(d) are hereby waived and this Order shall be effective immediately upon its entry; and it is further ORDERED that the terms of this Order shall be binding on the Purchaser and its successors, the Debtors, creditors of the Debtors and all other parties in interest in the Debtors' cases, and any successors of the Debtors, including any trustee or examiner appointed in these cases or any subsequent or converted cases of the Debtors under chapter 7 or chapter 11 of the Bankruptcy Code; and it is further ORDERED that the sale of the Assets to Purchaser in accordance with the Agreement constitutes a good faith transaction entitled to the protections afforded by section 363(m) of the Bankruptcy Code in the event of a reversal or modification on appeal of this Order; and it is further G-4 ORDERED that in accordance with the Order, dated November 26, 2002, authorizing the employment retention of Hilco Real Estate, LLC and its joint venture partners (collectively, the "Consultant") as real estate consultant for the Debtors, the Consultant shall be entitled to a fee equal to $1,741,062; and it is further ORDERED that, with respect to the transactions consummated pursuant to this Order, this Order shall be sole and sufficient evidence of the transfer of title to any particular purchaser, and the sale transactions consummated pursuant to this Order shall be binding upon and shall govern the acts of all persons and entities who may be required by operation of law, the duties of their office, or contract, to accept, file, register or otherwise record or release any documents or instruments, or who may be required to report or insure any title or state of title in or to any of the property sold pursuant to this Order, including without limitation, all filing agents, filing officers, title agents, title companies, recorders of mortgages, recorders of deeds, administrative agencies, governmental departments, secretaries of state, and federal, state, and local officials, and each of such persons and entities is hereby directed to accept this Order as sole and sufficient evidence of such transfer of title and shall rely upon this Order in consummating the transactions contemplated hereby; and it is further ORDERED that this Court retains jurisdiction (a) to enforce and implement the terms and provisions of the Agreement, all amendments thereto, any waivers and consents thereunder and each of the agreements executed in connection therewith, (b) to compel delivery of the Assets to the Purchaser, (c) to enforce the assumption and assignment of the Otis Contract, (d) to enforce the sale and assignment of the Assets, (e) to resolve any disputes arising under or related to the Agreement, and (f) to interpret, implement and enforce the provisions of this Order, provided, however, that enforcement and implementation of the TSA Lease (as defined in the G-5 Motion) and resolution of disputes between the Transportation Security Administration (the "TSA"), as lessee under the TSA Lease, and any non-Debtor party shall be handled in accordance with the TSA's then-current dispute resolution process (which, as of the date of this Order, is the Office of Dispute Resolution for Acquisition, pursuant to 14 C.F.R. Part 17 and the Aviation and Transportation Security Act, Pub. L. No. 107-17, 115 Stat. 597 (Nov. 19, 2001)); and it is further ORDERED that nothing contained in any chapter 11 plan confirmed in these cases or the order of confirmation confirming any chapter 11 plan, nor any order dismissing any case or converting it to chapter 7 liquidation shall conflict with or derogate from the provisions of the Agreement, any documents or instrument executed in connection therewith, or the terms of this Sale Order; and it is further ORDERED that the failure specifically to include any particular provisions of the Agreement or any of the documents, agreements or instruments executed in connection therewith in this Order shall not diminish or impair the efficacy of such provision, document, agreement or instrument, it being the intent of the Court that the Agreement and each document, agreement or instrument be authorized and approved in its entirety; and it is further ORDERED that the Agreement and any related agreements, documents or other instruments may be modified, amended or supplemented by the parties thereto in accordance with the terms thereof without further order of the Court, provided that any such modification, amendment or supplement does not have a material adverse effect on the Debtors' estates; and it is further ORDERED that, in accordance with section 1146(c) of the Bankruptcy Code, the transactions contemplated by the Agreement are exempt from any transfer, stamp or similar tax G-6 arising as a result of or in connection with Debtors' sale and transfer of the Assets to the Purchaser; and it is further ORDERED that the requirement under rule 9013-1(b) of the Local bankruptcy rules for the Southern District of New York for the filing of a memorandum of law is waived. Dated: New York, New York __________, 2003 ___________________________________ United States Bankruptcy Judge G-7 EXHIBIT H SPECIAL WARRANTY DEED PREPARED OUTSIDE OF THE COMMONWEALTH OF VIRGINIA AND AFTER RECORDED RETURN TO: Tax Map No. ________________ ________________________ Parcel No. _________________ ________________________ ________________________ ________________________ SPECIAL WARRANTY DEED This Special Warranty Deed is made as of ____________, 2003 by and between MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation, having an office at ___________________________("GRANTOR"), a debtor and debtor in possession in a case pending under Chapter 11 of title 11, United States Code (No. 02-13533 (AJG)) in the United States Bankruptcy Court for the Southern District of New York (the "BANKRUPTCY COURT"), and _______________, a _____________, having an office at _________________________("GRANTEE"): WITNESSETH: That for and in consideration of the sum of Ten Dollars ($10.00), cash in hand paid, and other good and valuable consideration, receipt whereof is hereby acknowledged, Grantor does hereby GRANT, BARGAIN, SELL AND CONVEY unto Grantee, with Special Warranty of Title and Covenant of Further Assurances, all that certain lot or parcel of land, situate and being in the City of Arlington, Virginia, and being more particularly described in Exhibit A attached hereto and made a part hereof. TOGETHER WITH all improvements located in or on said property; TOGETHER WITH all water, sewer, utility and development rights now or hereafter allocated or allocable to said property; TOGETHER WITH all right, title and interest of Grantor in and to any land lying in the bed or any public and private streets, roads, highways, avenues, alleys, ways, waterways and creeks adjacent to said property; and TOGETHER WITH all the rights, privileges, appurtenances and advantages thereunto belonging or appertaining. H-1 TO HAVE AND TO HOLD the same unto the use and benefit of Grantee, its successors and assigns forever. AND BEING the same property acquired by Grantor by Deed recorded in Deed Book, ________, at Page ________, among the City of Arlington land records. SUBJECT TO all easements, rights of way, covenants, conditions and restrictions of record and all liens and encumbrances set forth on Exhibit B. This Special Warranty Deed (a) is made without any covenant, warranty or representation by, or recourse against, Seller or Seller's affiliates of any kind whatsoever, except as may be set forth specifically herein or in that certain Real Estate Purchase Contract, dated as of ___________, 2003 between Seller and Purchaser, and (b) is made pursuant to an order of the Bankruptcy Court entered on __________, 2003. WITNESS the following signature and seal: Witness: MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation ____________________________________ By: __________________________ [SEAL] Name: Title: STATE OF: * * TO WIT: COUNTY OF: * I HEREBY CERTIFY, that on this _____ day of _____________, 2003, before me, the undersigned Notary Public of said jurisdiction, personally appeared___________________, to me known personally, and who, being by me duly sworn, deposes and says that she is a________________of MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation, and that the seal affixed to the foregoing instrument is the seal of said corporation, and that said instrument was signed and sealed on behalf of said corporation by the authority of said_________________, and said____________________ acknowledged said instrument to be the free act and deed of said corporation. WITNESS my hand and Notarial Seal. ___________________________ Notary Public My Commission Expires: H-2 EXHIBIT A DESCRIPTION OF THE LAND H-3 EXHIBIT B PERMITTED ENCUMBRANCES H-4 EXHIBIT I FORM OF BILL OF SALE KNOW ALL MEN BY THESE PRESENTS, That MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation, having an address at____________________("SELLER"), a debtor and debtor in possession in a case pending under Chapter 11 of title 11, United States Code (No. 02-13533 (AJG)) in the United States Bankruptcy Court for the Southern District of New York (the "BANKRUPTCY COURT"), for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration paid to Seller by _________________, a _____________, having an address at ________________ ("PURCHASER"), the receipt and sufficiency of which are hereby acknowledged, does hereby sell, grant, convey and transfer to Purchaser all of Seller's right, title and interest in and to all the fixtures, machinery, equipment, supplies and other articles of personal property which are attached or appurtenant to, or used in connection with, the real property more particularly described in Schedule 1 annexed hereto and made a part hereof (the "PREMISES"), but excluding any such items as are located in the [Terminal Space], which shall remain the property of Seller, subject to the rights of the tenants under the [TSA Lease]. TO HAVE AND TO HOLD the same unto Purchaser, its successors and assigns, forever, from and after the date hereof. Purchaser hereby unconditionally waives any and all claims, actions, and causes of action of any nature whatsoever it may now or hereafter have against Seller, Seller's estate, or any disclosed or undisclosed officer, director, employee, trustee, shareholder, partner, principal, parent, subsidiary or other person or entity affiliated with Seller (collectively, "SELLER'S AFFILIATES"), and hereby unconditionally and irrevocably fully releases Seller, Seller's estate, and Seller's Affiliates from any and all liability whatsoever which may now or hereafter accrue in favor of Purchaser against Seller, Seller's estate, or Seller's Affiliates, in connection with or arising out of the Personal Property. This Bill of Sale (a) is made without any covenant, warranty or representation by, or recourse against, Seller or Seller's Affiliates of any kind whatsoever, except as may be set forth in that certain Real Estate Purchase Contract, dated as of ___________, 2003 between Seller and Purchaser, and (b) is made pursuant to an order of the Bankruptcy Court entered on _____________, 2003. [SIGNATURE PAGE FOLLOWS] I-1 IN WITNESS WHEREOF, Seller and Purchaser have executed this Bill of Sale on ____________, 2003. SELLER: MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation By:___________________________ Name: Title: PURCHASER: By:___________________________ Name: Title I-2 Schedule 1 Premises I-3 EXHIBIT J FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT FOR SERVICE CONTRACTS BEING ASSIGNED TO PURCHASER ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS, dated _____________________, 2003, between _________________________, a______________ ________________ ("ASSIGNOR"), having an address at ___________________, and __________________, a ___________________ ("ASSIGNEE"), having an address at _________________________. W I T N E S S E T H: WHEREAS, Assignor and certain of its affiliates are debtors and debtors in possession in a jointly administered case pending under Chapter 11 of title 11, United States Code (No. 02-13533 (AJG)) in the United States Bankruptcy Court for the Southern District of New York (the "BANKRUPTCY COURT"); and WHEREAS, pursuant to an order of the Bankruptcy Court entered on ____________, 2003, Assignor on this day is selling and conveying to Assignee the real property more particularly described in Schedule 1 annexed hereto and made a part hereof (the "PREMISES"). NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby assigns, transfers and conveys to Assignee all of Assignor's right, title and interest, to the extent assignable, in and to all service contracts relating to the operation of the Premises set forth on Schedule 2 annexed hereto and made a part hereof (collectively, the "CONTRACTS"). TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns, forever, from and after the date hereof, subject to the terms, covenants, conditions and provisions of the Contracts. ASSIGNEE HEREBY ACCEPTS the foregoing assignment and assumes and agrees to perform all of the obligations of Assignor under the Contracts. ASSIGNEE HEREBY agrees to indemnify and hold harmless Assignor and its estate from and against any and all claims, liabilities, losses, costs, damages and expenses (including reasonable attorneys' fees) arising or accruing under the Contracts. This Assignment and Assumption of Contracts is made without any covenant, warranty or representation by, or recourse against, Assignor or Assignor's affiliates of any kind whatsoever, except as set forth in that certain Real Estate Purchase Contract dated as of _______________, 2003 between Assignor and Assignee. [SIGNATURE PAGE FOLLOWS] J-1 IN WITNESS WHEREOF, this Assignment and Assumption of Service Contracts has been executed on the date and year first above written. ASSIGNOR: _____________________________ _____________________________ By: _________________________ Name: Title: ASSIGNEE: _____________________________ _____________________________ By: _________________________ Name: Title: J-2 Schedule 1 Premises J-3 Schedule 2 Contracts J-4 EXHIBIT K FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT FOR CONSTRUCTION CONTRACTS ASSIGNMENT AND ASSUMPTION OF CONSTRUCTION CONTRACTS, dated _____________________, 2003, between __________________, a ____________________("ASSIGNOR"), having an address at _______________________, and _______________________, a ___________________ ("ASSIGNEE"), having an address at _________________________. W I T N E S S E T H: WHEREAS, Assignor and certain of its affiliates are debtors and debtors in possession in a jointly administered case pending under Chapter 11 of title 11, United States Code (No. 02-13533 (AJG)) in the United States Bankruptcy Court for the Southern District of New York (the "BANKRUPTCY COURT"); and WHEREAS, pursuant to an order of the Bankruptcy Court entered on ____________, 2003, Assignor on this day is selling and conveying to Assignee the real property more particularly described in Schedule 1 annexed hereto and made a part hereof (the "PREMISES"). NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby assigns, transfers and conveys to Assignee all of Assignor's right, title and interest, to the extent assignable, in and to all construction contracts relating to the operation of the Premises set forth on Schedule 2 annexed hereto and made a part hereof (collectively, the "CONTRACTS"). TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns, forever, from and after the date hereof, subject to the terms, covenants, conditions and provisions of the Contracts. ASSIGNEE HEREBY accepts the foregoing assignment and assumes and agrees to perform all of the obligations of Assignor under the Contracts. ASSIGNEE HEREBY agrees to indemnify and hold harmless Assignor and its estate from and against any and all claims, liabilities, losses, costs, damages and expenses (including reasonable attorneys' fees) arising or accruing under the Contracts. This Assignment and Assumption of Contracts is made without any covenant, warranty or representation by, or recourse against, Assignor or Assignor's affiliates of any kind whatsoever, except as set forth in that certain Real Estate Purchase Contract dated as of _______________, 2003 between Assignor and Assignee. [SIGNATURE PAGE FOLLOWS] K-1 IN WITNESS WHEREOF, this Assignment and Assumption of Construction Contracts has been executed on the date and year first above written. ASSIGNOR: ____________________________ ____________________________ By: ________________________ Name: Title: ASSIGNEE: ____________________________ ____________________________ By: ________________________ Name: Title: K-2 Schedule 1 Premises K-3 Schedule 2 Contracts K-4 EXHIBIT L FIRPTA AFFIDAVIT NON-FOREIGN AFFIDAVIT UNDER INTERNAL REVENUE CODE SECTION 1445(b)(2) STATE OF ___________________________) ) ss: COUNTY OF___________________________) ____________________, being first duly sworn deposes and states under penalty of perjury: 1. That he/she is a _______________________of MCI WORLDCOM NETWORK SERVICES, INC. , a Delaware corporation, the transferor of the property located at 601 and 701 South 12th Street, Arlington, Virginia. 2. That the transferor's office address is at _____________________. 3. That the United States taxpayer identification number for the transferor is 13-2745892. 4. That the transferor is not a "FOREIGN PERSON" as that term is defined in Section 1445(f) of the United States Internal Revenue Code of 1986, as amended (the "CODE"). This affidavit is given to __________________, a _______________, the transferee of the property described in paragraph 1 above, for the purpose of establishing and documenting the nonforeign affidavit exemption to the withholding requirement of Section 1445 of the Code. The transferor understands that this affidavit may be disclosed to the Internal Revenue Service by the transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation By: __________________________ Name: Title: Subscribed and sworn to before me this____day of___________________, 2003. Notary Public: L-1 EXHIBIT M TITLE AFFIDAVIT AFFIDAVIT AND INDEMNITY STATE OF ___________________________________) )ss.: COUNTY OF___________________________________) ___________________________, in his capacity as __________________ of MCI WorldCom Network Services, Inc., a Delaware corporation, ("OWNER"), being duly sworn deposes and says: Owner is the owner of the property (the "PROPERTY") described in Chicago Title Insurance Company's ("CHICAGO TITLE") report/commitment no. __________________ (the "REPORT"). I am fully authorized and qualified to give this Affidavit and Indemnity on behalf of Owner. A complete list of all tenants, lessees or parties in possession (collectively "TENANTS") of all or any part of the Property is set forth on Exhibit A attached hereto. There are no other Tenants at the Property. All such Tenants are in occupancy as tenants only, with no rights of first refusal or options to purchase all or any part of the Property. To affiant's knowledge without independent inquiry, Owner has not received any notice of any violation of any covenant, condition or restriction, if any, affecting the Property. This Affidavit and Indemnity is given to induce Chicago Title to issue its policies of title insurance in connection with the Report, knowing full well that Chicago Title will rely upon the accuracy of the same. Owner shall indemnify and hold Chicago Title harmless from any loss, cost or expense occasioned by the existence of any of the matters listed above or any untrue statement made herein and any cost, expense or liability, including reasonable attorney's fees, arising from the enforcement of this Affidavit and Indemnity. MCI WorldCom Network Services, Inc. By: _________________________________ Name: Title: Sworn to before me this ______ day of ___________, 2003 ________________________________ EXHIBIT A

- -------------------------------------------------------------------------------- TENANTS - -------------------------------------------------------------------------------- 1. United States of America acting by and through the Transportation Security Administration - -------------------------------------------------------------------------------- 2. - -------------------------------------------------------------------------------- 3. - -------------------------------------------------------------------------------- 4. - -------------------------------------------------------------------------------- 5. - -------------------------------------------------------------------------------- 6. - -------------------------------------------------------------------------------- 7. - -------------------------------------------------------------------------------- 8. - -------------------------------------------------------------------------------- 9. - -------------------------------------------------------------------------------- 10. - --------------------------------------------------------------------------------

M-1 EXHIBIT N FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT FOR THE TSA LEASE BEING ASSIGNED TO PURCHASER ASSIGNMENT AND ASSUMPTION OF LEASE, dated _______________, 2003, between MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation ("ASSIGNOR"), having an address at ________________________, and ___________________, a ______________("ASSIGNEE"), having an address at _________________________. W I T N E S S E T H: WHEREAS, Assignor and certain of its affiliates are debtors and debtors in possession in a jointly administered case pending under Chapter 11 of title 11, United States Code (No. 02-13533 (AJG)) in the United States Bankruptcy Court for the Southern District of New York (the "BANKRUPTCY COURT"); and WHEREAS, pursuant to an order of the Bankruptcy Court entered on ______________, 2003, Assignor on this day is selling and conveying to Assignee the real property more particularly described in Schedule 1 annexed hereto and made a part hereof (the "PREMISES"). NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby assigns, transfers and conveys to Assignee all of Assignor's right, title and interest as landlord in and to the lease between MCI WorldCom Network Services, Inc. ("LANDLORD") and the United States of America, TSA No. DTSA20-03-R-00528 (the "GOVERNMENT"), dated December 17, 2002, as amended, as more particularly described on Schedule 2 annexed hereto and made a part hereof (collectively, the "LEASE"). TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns, forever, from and after the date hereof, subject to the terms, covenants, conditions and provisions of the Lease. ASSIGNEE HEREBY accepts the foregoing assignment and assumes and agrees to perform all of the obligations of Assignor under the Lease. ASSIGNEE HEREBY agrees to indemnify and hold harmless Assignor and its estate from and against any and all claims, liabilities, losses, costs, damages and expenses (including reasonable attorneys' fees) arising or accruing under the Lease. This Assignment and Assumption of Lease is made without any covenant, warranty or representation by, or recourse against, Assignor or Assignor's affiliates of any kind whatsoever, except as set forth in that certain Real Estate Purchase Contract dated as of ______________, 2003 between Assignor and Assignee. N-1 IN WITNESS WHEREOF, this Assignment and Assumption of Lease has been executed on the date and year first above written. ASSIGNOR: MCI WORLDCOM NETWORK SERVICES, INC.., a Delaware corporation By: __________________________ Name: Title: ASSIGNEE: ______________________________ ______________________________ By: ___________________________ Name: Title: N-2 Schedule 1 Premises N-3 Schedule 2 Lease N-4 EXHIBIT O FORM OF EASEMENT IN FAVOR OF SELLER DECLARATION OF EASEMENT THIS DECLARATION OF EASEMENT (this "DECLARATION") is made as of the ____ day of ______, 2003, by [INSERT NAME OF PURCHASER OF PROPERTY], a [_______________], having an office at [________________________] ("DECLARANT"). [NOTE: IN THE SOLE DISCRETION OF MCI WORLDCOM NETWORK SERVICES, INC., THE GRANTEE NAMED HEREIN, (A) THE EASEMENT RIGHTS DESCRIBED IN THIS INSTRUMENT MAY BE ESTABLISHED BY RESERVATION IN GRANTEE'S DEED CONVEYING TITLE TO THE PROPERTY (HEREINAFTER DEFINED), AND (B) A MORE DETAILED EASEMENT PLAN AND/OR LEGAL DESCRIPTION MAY BE SUBSTITUTED FOR THE EASEMENT PLAN AND/OR LEGAL DESCRIPTION ATTACHED HERETO AS EXHIBITS B AND C, RESPECTIVELY.] RECITALS: A. Declarant is the owner of certain real property known as 601 and 701 South 12th Street, in Arlington, Virginia, more particularly described in EXHIBIT A attached hereto and made a part hereof (the "PROPERTY"). B. Declarant desires to subject and place upon the Property certain easements, reservations, rights-of-way and other charges as more particularly set forth herein, for the benefit of MCI WORLDCOM Network Services, Inc., a Delaware corporation ("GRANTEE"). NOW, THEREFORE, in consideration of the foregoing premises, the provisions hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Declarant does hereby publish and declare that the following terms, covenants, easements, reservations, rights-of-way and other provisions shall run with title to the Property, and shall be binding on all parties having any right, title or interest in the Property and their heirs, personal representatives, successors and assigns. ARTICLE I - INTERPRETATION 1.1 DEFINITIONS. When used in this Declaration, the following capitalized terms shall have the meanings indicated: EASEMENT: means the easements, rights-of-way, licenses and other rights created hereunder. EASEMENT AREA: means the portion of the Property depicted on the Easement Plan, more particularly described in the legal description attached as Exhibit C hereto. EASEMENT PLAN: means that certain plat attached as EXHIBIT B hereto. O-1 EMERGENCY SITUATION: means a situation (i) impairing or imminently likely to impair the operation or use of any Telecommunications System, (ii) causing or likely to cause the loss of service provided by any Telecommunications System, (iii) causing or likely to cause bodily injury to persons or any damage to any Telecommunications System or any property in, on, under, within, upon, around or about the Easement Area, or (iv) causing or imminently likely to cause substantial economic loss to the Grantee. FEE OWNER: means the owner of the fee interest in the Property from time to time. PROPERTY: means the real property described on EXHIBIT A attached hereto. TELECOMMUNICATIONS SYSTEMS: means telecommunications transmission systems, including, without limitation, conduit, manholes, innerducts, cables, wires and other related fixtures, facilities, apparatus, equipment, marker posts and appurtenances deemed necessary or appropriate for the operation, maintenance, upgrade, repair or use of any such system. 1.2 Exhibits. The exhibits referred to in this Declaration hereby are incorporated into this Declaration in full by this reference. 1.3 Captions; Sections. Captions in this Declaration are for convenience of reference only, and shall not affect the scope or intent of this Declaration. 1.4 Severability. In the event one or more of the provisions of this Declaration shall be held to be illegal, invalid or unenforceable, each provision shall be deemed severable and the remaining provisions of this Declaration shall continue in full force and effect. ARTICLE II - DECLARATION OF EASEMENT 2.1 DECLARATION OF EASEMENT. 2.1.1 There is hereby created for the benefit of the Grantee a non-exclusive perpetual easement in, under, upon, over and across the Property within the bounds of the Easement Area. The Easement shall be used for the purpose of the installation, operation, maintenance, inspection, repair, removal, replacement and enlargement of Telecommunications Systems, whether now existing or hereafter installed, in the Easement Area. The Easement granted herein includes, without limitation, the right to install, maintain and operate conduit, innerducts, cable and wiring under the Easement Area, as well as the placement, installation, maintenance and operation of other equipment, fixtures, manholes and other means of access in, under, upon, over and across the Easement Area. The Grantee shall have the right to use the Easement Area, in whole or in part, as may be deemed necessary or advisable by the Grantee to provide telecommunications services to its customers, wherever situated. O-2 2.1.2 The Easement includes, and the Grantee is hereby granted, rights and easements, privileges and appurtenances over and across the Property necessary or convenient for the full enjoyment and use of the rights herein granted, including, but not limited to, the rights of ingress and egress over and across the Property to and from the Easement Area, the right to clear and keep cleared any and all obstructions which might endanger or interfere with the construction, operation, maintenance, safety or efficiency of any Telecommunications System or parts thereof, including, without limitation, the right to clear and keep clear all trees, roots, brush and other obstructions located in and around the Easement Area. 2.1.3 All Telecommunications System equipment installed by Grantee in the Easement Area shall remain the personal property of Grantee, its successors or assigns, and neither the Fee Owner nor any person or entity claiming by, through or under the Fee Owner shall have any rights to use, operate, remove or disturb such personal property of Grantee without Grantee's prior written consent. 2.1.4 All Telecommunications Systems installed pursuant to this Declaration shall be installed underground, except for (i) manholes installed at grade (flush with ground level); and (ii) customary above-ground appurtenant facilities of underground Telecommunications Systems. 2.2 RESERVATION OF RIGHTS. Declarant hereby reserves, for itself and all subsequent Fee Owners of the Property, (i) the right to use the Easement Area for any purpose consistent with the Easement and which will not endanger or interfere with the construction, reconstruction, repair, maintenance, operation or efficiency of any Telecommunications System; provided, however, that no buildings or other permanent structures may be constructed in or on the Easement Area, and (ii) the right to grant rights in the Easement Area to other parties; provided, however, that no such other grant shall interfere with the exercise of the Easement by Grantee. 2.3 NOTICE. Any work to be done by Grantee within the Easement Area shall be done only after twenty-four (24) hours' advance notice to Fee Owner, except in the event of any Emergency Situation, in which event no advance notice shall be required, provided that such Easement Beneficiary shall notify the Fee Owner of such work as soon as reasonably possible (whether before or after the commencement of such emergency work). 2.4 TERMINATION. The Easement herein granted to Grantee may be terminated by Grantee at any time by written notice to the Fee Owner. 2.5 INDEMNIFICATION BY GRANTEE. The Grantee shall indemnify, defend and hold harmless Fee Owner, and its officers, directors, agents and employees (each, an "INDEMNITEE"), from and against all claims, liabilities, suits, obligations, fines, penalties, damages, losses and expenses (including, without limitation, reasonable attorney's fees and disbursements) that may be imposed upon, incurred by or asserted against an Indemnitee by reason of, or arising out of injuries to or death of persons or damage to property resulting from or occurring by reason of (a) the negligent acts or willful misconduct of Grantee and/or any of its agents, employees or contractors, or (b) the exercise by Grantee and/or any of its agents, O-3 employees and contractors of the easement rights granted herein, except to the extent caused by any gross negligence or willful misconduct of such Indemnitee and/or any of its agents, employees and contractors. ARTICLE III - MISCELLANEOUS. 3.1 NO PUBLIC EASEMENT. Nothing in this Declaration shall be deemed or construed to create an easement or license in favor of the public generally. 3.2 EFFECTIVENESS OF DECLARATION. This Declaration shall be effective upon its full execution by Declarant and recordation. 3.3 BINDING EFFECT. The terms and conditions of this Declaration shall (i) be binding upon and shall inure to the benefit of the Grantee and its successors and assigns, and (ii) run with the land, binding upon and inuring to the benefit of all Fee Owners and other parties owning or having any interest in the Property. 3.4 NO MERGER. In the event the Fee Owner and the Grantee are at any time the same person or entity, such unified ownership shall not of itself work a merger or other termination of the Easement, and this Declaration shall continue in full force and effect in accordance with its terms. 3.5 PRIORITY. This Declaration shall be senior and superior to the lien of any mortgage or deed of trust now or hereafter made encumbering all or any part of the fee title to the Property. [Signature on following page] O-4 IN WITNESS WHEREOF, the undersigned has executed this Declaration of Easement as of the date first written above. WITNESS: [INSERT NAME OF PURCHASER OF THE THE PROPERTY] ____________________ By: ____________________________ Name: __________________________ ____________________ Title: _________________________ STATE OF ___________________________________) ) ss: COUNTY OF___________________________________) I, _________________________________________, a Notary Public in and for the jurisdiction aforesaid, do hereby certify that ______________________, who is personally known to me (or satisfactorily proven) to be the _________________________ of [_________________________], named in the foregoing instrument and hereto annexed, personally appeared before me in said jurisdiction and as ________________________ of the aforesaid corporation acknowledged the same to be the act and deed of said corporation. Given under my hand and seal this ____ day of ____________________, 2003. ________________________ Notary Public. My Commission expires: ________________. [Notarial Seal]. O-5 [WorldCom office buildings, 601 and 701 South 12th Street, Pentagon City, Arlington, VA] EXHIBIT A Property All of those certain parcels of land situate and being in Arlington County, Virginia and more particularly described as: Parcel 1-A, containing 105,422 square feet, being a Subdivision of the Property of Pentagon City One Realty Limited Partnership, as the same appears duly dedicated, platted and recorded in Deed Book 2013 at page 725, among the land records of Arlington County, Virginia; TOGETHER WITH subsurface foundation and footing easement recorded in Deed Book 2034 at page 528, among the aforesaid land records. Parcel 1-B containing 2.45783 acres, being a Resubdivision of the Property of Pentagon Tract Development Corporation and River House Corporation, being a part of Parcel "B-2-B" Ambassador Inc. & "H" Street Building Corp., as the same are shown on a plat attached to Deed of Resubdivision recorded in Deed Book 2062 at page 914, among the aforesaid land records. O-6 EXHIBIT B EASEMENT PLAN O-7 EXHIBIT C LEGAL DESCRIPTION OF EASEMENT AREA O-8 EXHIBIT P EQUIPMENT SITE LEASE EQUIPMENT SITE LEASE AGREEMENT between --------------------------------------- ("LANDLORD") and MCI WORLDCOM NETWORK SERVICES, INC. ("TENANT") PENTAGON CITY TWO 601 S. 12TH STREET ARLINGTON, VIRGINIA LEASE NO. ____________________ O-i TABLE OF CONTENTS 1. Demised Premises............................................................. 1 2. Common Areas................................................................. 1 3. Lease Term................................................................... 2 4. Rent......................................................................... 2 5. Permitted Use/Point of Presence/Collocation.................................. 2 6. Landlord's Covenants/Tenant's Right to 24 hour, 7-day per week access........ 3 7. Mechanics' Liens............................................................. 4 8. Landlord's Services.......................................................... 4 9. Maintenance and Repair....................................................... 4 10. Insurance.................................................................... 5 11. Hazard Insurance............................................................. 5 12. Electric..................................................................... 6 13. Signage...................................................................... 6 14. Trade Fixtures, Specialty Equipment.......................................... 6 15. Alterations By Tenant........................................................ 8 16. Mutual Indemnification; Limitation of Liability.............................. 8 17. Waiver of Claims; Waiver of Subrogation...................................... 8 18. Entry By Landlord............................................................ 9 19. Damage By Casualty........................................................... 9 20. Bankruptcy................................................................... 9 21. Holding Over................................................................. 10 22. Waivers...................................................................... 10 23. Notices...................................................................... 10 24. Delays in Performance........................................................ 11 25. Default...................................................................... 11 26. Cumulative Rights............................................................ 12 27. Eminent Domain............................................................... 13 28. Personal Property............................................................ 13 29. Binding Agreement............................................................ 13 O-1 30. Assignment and Sublease...................................................... 13 31. Subordination and Non-Disturbance............................................ 14 32. Attorneys' Fees.............................................................. 14 33. Captions..................................................................... 14 34. Time of Essence.............................................................. 14 35. Governing Law................................................................ 14 36. Entire Agreement............................................................. 14 37. Brokers...................................................................... 14 38. Reasonableness............................................................... 14 39. Amendments................................................................... 14 40. Parking...................................................................... 15 41. Options to Renew............................................................. 15 42. Right of First Refusal, Second Floor......................................... 15 43. Lien Waiver.................................................................. 15 44. Environmental................................................................ 15 45. Deed of Lease................................................................ 17 O-2 EQUIPMENT SITE LEASE AGREEMENT THIS EQUIPMENT SITE LEASE AGREEMENT ("LEASE") is effective this ____ day of ___________ 2003 by and between _______________________________, a ______________________________________ ("LANDLORD"), and MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation ("TENANT"). WHEREAS, Landlord owns the real estate and the building, commonly known as Pentagon City Two at 601 South 12th Street, Arlington, Virginia and legally described on Exhibit A (the "BUILDING"); WHEREAS, Tenant is currently in occupancy of the Premises and Tenant desires to lease said Premises from Landlord; and WHEREAS, Landlord also owns the real estate commonly known as Pentagon City One at 701 South 12th Street, Arlington, Virginia ("BUILDING ONE") and the entire property known as Pentagon City One and Pentagon City Two are sometimes collectively referred to as "PROPERTY;" NOW, THEREFORE, in consideration of the rent provided for herein, Landlord and Tenant are entering into this Lease upon the terms and conditions set forth herein. DEMISED PREMISES. Landlord does hereby demise and lease unto Tenant, and Tenant does hereby lease from Landlord, 5,059 net rentable square feet on the SECOND FLOOR of the Building (the "SECOND FLOOR SPACE") as shown on the Site Plan attached hereto as Exhibit B-1, together with: the enclosed generator area (the "GENERATOR AREA") and the enclosed electrical area (the "ELECTRICAL AREA") on Level P-1 of the Building as shown on the plan attached hereto as Exhibit B-2, and the enclosed fuel tank area (the "FUEL TANK AREA") and the enclosed utility vault area (the "UTILITY VAULT AREA") on Level P-2 of the Building as shown on the plan attached hereto as Exhibit B-4. The Second Floor Space, Generator Area, Electrical Area, Fuel Tank Area, and Utility Vault Area are collectively called the "PREMISES." Landlord and Tenant agree that the Premises shall be deemed to contain 5,059 net rentable square feet for all purposes under this Lease, regardless of whether the Premises might actually contain more or fewer than 5,059 net rentable square feet. COMMON AREAS. Tenant and its officers, employees, agents, customers and invitees shall have a nonexclusive right of access to the Parking Spaces (hereinafter defined), the walkways, driveways and sidewalks at the Building (the "COMMON AREAS"). Landlord agrees to make the Common Areas continuously available to Tenant for nonexclusive use by Tenant and the other aforementioned groups of persons during the Lease Term (as such term is hereafter defined) and any extension thereof, except when portions of the Common Areas temporarily may be unavailable for use by reason of repair work then being underway thereon. The nonexclusive use of the Common Areas by Tenant and its officers, employees, agents, customers and invitees at all times shall be subject to such reasonable rules and regulations as Landlord from time to time may establish and shall be in common with other tenants from time to time of the Building. O-1 Landlord shall have the right from time to time temporarily to close the Common Areas to prevent the acquisition of public rights therein. Landlord shall operate and maintain the Common Areas during the Lease Term and any extensions thereof in good order and repair in accordance with the standards of comparable buildings in the area in which the Premises are located. LEASE TERM. This Lease shall commence on the date of this Lease (the "COMMENCEMENT DATE") and shall terminate at 11:59 p.m. of the last day of the month that is ten (10) years thereafter (the "INITIAL LEASE TERM"), subject to Tenant's Options to Renew, as set forth in Section 0 of this Lease. As used in this Lease, "LEASE TERM" means the Initial Lease Term and any then applicable Renewal Term (as defined in Section 0). As used in this Lease, "LEASE YEAR" means the period from the Commencement Date through the twelfth full month of the Initial Lease Term with respect to the first Lease Year and each successive twelve month period with respect to each Lease Year thereafter during the Lease Term. RENT. Base Rent. Beginning on the Commencement Date, Tenant agrees to pay Landlord, without demand, deduction or set off (except as set forth herein), at Landlord's address set forth in Section 0 of this Lease, or at such other place as Landlord from time to time may designate in writing, annual rent in the amount of Seventy-five thousand eight hundred eighty-five Dollars ($75,885.00) (i.e., Fifteen Dollars ($15.00) per rentable square foot of the Second Floor Space) payable in advance in twelve (12) equal monthly installments on the first day of each month during the Initial Lease Term (the "BASE RENT"). The Generator Area, Electrical Area, Fuel Tank Area, and Utility Vault Area are included in the Premises without the payment of any additional Base Rent. Base Rent shall be inclusive of all real estate taxes and operating expenses throughout the Lease Term, as extended or renewed. Payments Other Than Base Rent. To the extent that this Lease provides for Tenant's payment of any charges or sums to Landlord that is not a regularly-occurring payment due under this Lease, Tenant shall have thirty (30) days to pay such additional charges or other amount due to Landlord following Tenant's receipt of a statement of such charges or other amount and reasonable supporting documentation. Base Rent and any other sums due hereunder are sometimes collectively called "RENT." PERMITTED USE/POINT OF PRESENCE/COLLOCATION. Tenant may restrict access to the Premises through a card key system or other security devices to maintain security in the Premises. Tenant may use, occupy and operate the Premises for any lawful use, including without limitation, the installation, expansion, operation and maintenance of equipment necessary to operate its telecommunications business as well as general and executive offices and any other uses permitted by the applicable zoning code. Without limiting the foregoing, Tenant shall have the right, at no additional charge or rent, to install, operate, replace, expand, add to, repair and maintain its fiber optic cable and related equipment in horizontal and vertical shafts, risers and pathways to the Building and/or Building One for the purpose of (i) providing telecommunications services (installation of a point of presence) to other O-2 occupants in the Building and/or any other building owned by Landlord or its affiliates, and (ii) interconnecting telecommunications equipment of Tenant, its customers or vendors throughout the Building, Building One and surrounding grounds. Tenant shall have the right to market its services to other tenants in the Building and Building One. Tenant agrees at all times during the Lease Term and any extensions thereof to comply with all applicable laws affecting the use of the Premises. Landlord acknowledges that the Building contains cables and conduits and related equipment within the Building and throughout the Property that service the Premises. All such conduits and cables present in the Building and the Property shall remain in place and not be disturbed without Tenant's written consent. Landlord shall provide 24 hour, 7 day per week access to such additional riser space or comparable areas to Tenant for electrical, generator, telecom, antenna, dish or HVAC requirements at no additional rent as needed by Tenant throughout the Lease Term. Additional space provided pursuant to this Section 0 shall be provided at no additional cost to Tenant, although Tenant shall be responsible for the cost of the conduit installation. Landlord acknowledges and agrees that Tenant's contemplated use of the Premises may include the installation, operation, maintenance, repair and replacement of telecommunications equipment and related facilities by Tenant's customers and vendors (the "COLLOCATES"). The Collocates shall be entitled to use the Premises at no additional charge and without requiring the consent of Landlord. The Collocates shall have the right to bring fiber and related facilities into the Premises through the conduits and space utilized by Tenant at no additional charge and without requiring the consent of Landlord. LANDLORD'S COVENANTS/TENANT'S RIGHT TO 24 HOUR, 7-DAY PER WEEK ACCESS. Landlord covenants that: (a) it is the owner of the real estate described in Exhibit A; (b) the Premises at all times during the Lease Term and any extension thereof will have unobstructed ingress and egress to the entrance of the Premises and a public street or highway; (c) Landlord has full power and capacity to make this Lease with Tenant; and (d) throughout the Lease Term, the Building will comply, with all laws, ordinances, orders, rules, regulations and requirements of all federal, state, municipal and local governmental bodies exercising jurisdiction thereover, whatever the nature of such same, including without limitation, environmental rules and regulations and the Americans With Disabilities Act, as amended ("ADA"), and Tenant shall not be liable or responsible to assure that the Building complies with the same nor for any latent defects in the Premises or Building. Landlord covenants and agrees: (i) to use its best efforts to avoid taking any actions that might adversely affect Tenant's use of or business operations within the Premises, including but not limited to, any actions that might adversely affect Tenant's fiber optic cabling or telecommunications equipment; (ii) to provide Tenant with at least forty-eight (48) hours' prior written notice if, notwithstanding Landlord's best efforts, Landlord must take an action that might adversely affect Tenant's use of or business operations within the Premises; (iii) in all events to coordinate and cooperate with Tenant to minimize any cessation or degradation of Tenant's use of, or business operations within, the Premises; (iv) to take such actions as soon as reasonably practicable as may be necessary to correct or cure any acts, events or circumstances that may have adversely affected Tenant's use of or business operations within the Premises; and (v) to allow Tenant access to the Premises, the roof and the Building including the HVAC Systems and Back-up Systems (as hereinafter defined) twenty-four (24) hours a day, O-3 seven (7) days a week. Landlord further covenants that Tenant, upon the complete and timely payment of Rent and performance of Tenant's other obligations under this Lease, shall peacefully and quietly have, hold and enjoy the occupancy of the Premises throughout the Lease Term and any extensions thereof, or until this Lease is sooner terminated in accordance with its provisions, without any disturbance. MECHANICS' LIENS. Tenant shall not permit any mechanics', laborer's, or materialman's lien to stand against the Premises for any labor or material furnished to Tenant or claimed to have been furnished to Tenant in connection with work of any character performed or claimed to have been performed on the Premises by or at the direction of Tenant and shall hold Landlord and the Premises harmless therefrom. Tenant promptly shall pay all contractors and materialmen so as to minimize the possibility of a lien attaching to the Premises. Tenant may contest in good faith the validity of any liens so filed and shall not be obligated to pay or discharge any such lien until the same has been adjudged valid by the final judgment of a court of competent jurisdiction; provided that the interests of Landlord in the Premises shall be fully protected against such lien during the period of any such contest. LANDLORD'S SERVICES. LANDLORD'S GENERAL SERVICES. Landlord shall provide the following services: public water from the regular Building fixtures for drinking, lavatory and toilet purposes and as required for Tenant's HVAC equipment only; passenger elevator service and freight elevator service in common with Landlord, other tenants and visitors to the Building on a 24-hour per day, 7-day per week basis including holidays; and electrical service as specified in Section 0. Additional electrical capacity or usage shall be provided with the consent of Landlord (which shall not be unreasonably withheld, conditioned or delayed) and at Tenant's expense. DELAYS IN FURNISHING SERVICES. If any failure to furnish or delay in furnishing any of the services described in Section 0 prevents and will continue to prevent Tenant from using the Premises as it is then using the Premises or prevents and will continue to prevent Tenant from providing the telecommunications services being provided by Tenant to its customers ( such a condition of the Premises being hereinafter referred to as "UNTENANTABLE" or "UNTENANTABILITY"), then, commencing upon the date when the Premises became Untenantable, all Rent shall abate for the duration of such Untenantability. Tenant agrees that Landlord shall not be liable for damages for failure to furnish or delay in furnishing any service if attributable to any of the causes described in Section 0. MAINTENANCE AND REPAIR. LANDLORD'S MAINTENANCE OBLIGATIONS. Except for the obligations of Tenant set forth below, Landlord shall maintain and make repairs and replacements to the Common Areas, the Building structural systems, the roof of the Building, the exterior of the Building and the Building Systems, at Landlord's cost and expense. The "BUILDING SYSTEMS" means the base building O-4 mechanical, electrical, plumbing, sanitary, sprinkler, heating, ventilation and air conditioning, security, life-safety, and elevator facilities not located in the Premises, but excluding any specialty lighting, non-building standard leasehold improvements or alterations and supplemental HVAC systems. Landlord agrees to keep the Common Areas reasonably free of snow, ice and debris. TENANT'S MAINTENANCE OBLIGATIONS. Tenant, at its cost and expense, shall keep and maintain Tenant's Property, the Specialty Equipment (as defined in Section 0), the interior of the Premises (including all plate glass windows and doors), and the heating, air conditioning, lighting, plumbing, electrical and sewer systems within the Premises in good order, condition and repair; provided that Tenant shall not be obligated to make any repairs necessitated by damage from fire, flood, the elements or any other casualty. Such obligations of Tenant shall include all repairs, replacements or alterations required within the interior of the Premises including, without limitation, all repairs and replacements required under any applicable laws, rules or regulations. Tenant agrees to keep the hallways adjacent to the Premises free of any temporary or moveable obstruction and to keep the Premises free from trash and debris. RETURN OF PREMISES. Upon the termination of this Lease, Tenant shall surrender the Premises to Landlord in good order, condition and repair, except for (a) reasonable wear and tear and (b) damage from fire, flood, the elements or any other casualty. Tenant shall have the right to remove Tenant's generator, fuel storage equipment and HVAC equipment located outside the Premises within one hundred and twenty (120) days after the termination of the Lease, but Tenant shall not be obligated to do so. Tenant shall remove its equipment, furniture and fixtures within six (6) months following the expiration date. Tenant shall cap and safely cut all cabling, but Tenant shall not be obligated to remove any raised flooring or any conduit or cabling. Tenant shall not otherwise be required to (although Tenant may elect to) remove any improvements made by Tenant to the Premises. CLEANING. Tenant shall, at Tenant's expense, hire its own cleaning contractor to clean the Premises. Tenant's cleaning contractor, cleaning personnel and all aspects of Tenant's cleaning of the Premises shall be subject to all Building security and other requirements as Landlord might impose from time to time. INSURANCE. Tenant, at its expense, at all times during the Lease Term and any other period of occupancy of the Premises by Tenant, shall provide and maintain with respect to the Premises Commercial General Liability insurance in form customarily written for the protection of owners, landlords and tenants of real estate, with Landlord as an additional insured, which insurance shall provide coverage of not less than $1,000,000.00 for bodily injury and property damage. Any insurance required to be maintained by Tenant may be provided through a blanket policy covering the Premises and other properties. Landlord, at its written request, shall be furnished with appropriate certificates evidencing that such insurance is in force and that Landlord is named as an additional insured thereunder. The policies for all such insurance shall provide that they not be canceled without at least ten (10) days' prior written notice to Landlord. HAZARD INSURANCE. Landlord at all times during the Lease Term and any other period of occupancy of the Premises by Tenant shall provide and maintain, at Landlord's expense, O-5 comprehensive fire insurance with extended coverage insuring the Building, providing such level of coverage and insuring against such risks as are customarily maintained with respect to comparable buildings in the market in which the Premises is located. ELECTRIC. A 6,000 amp electrical main service current services the Building. Landlord shall have the right to elect at any time, at Landlord's expense, to install a separate meter, a submeter or a check meter to monitor electricity usage at the Premises. Upon installation of such monitoring meter, Tenant shall be billed directly by the provider (if Tenant is directly metered) and Tenant shall pay for its electric service directly to the power provider, or Tenant shall be billed by Landlord (if Tenant's electricity usage is separately monitored, but not directly metered) for the electricity usage at the Premises and/or electricity usage of the Specialty Equipment, as the case may be, at utility company rates without markup by Landlord. Until the Premises is so metered, the cost of Tenant's electricity usage shall be included in the Base Rent. Subject to electric service outages and reductions outside the control of Landlord, Landlord shall allocate 800 amps, 480 volts, three (3) phase, four (4) wire electrical service to the Premises. If Tenant requires additional capacity at any time during the Lease Term, Landlord shall use commercially reasonable efforts to assist Tenant in securing the additional power requirement from the power provider and providing additional space for additional capacity, at Tenant's expense, for such additional space provided. SIGNAGE. If Tenant so requests, Landlord agrees to display Tenant's name on the Building lobby sign in the same fashion as the other tenants' names are displayed, at Landlord's cost and expense. TRADE FIXTURES, SPECIALTY EQUIPMENT. Tenant may, from time to time during the Lease Term, install, maintain, replace, repair, expand, construct and operate at the Premises and remove therefrom such trade fixtures as it may deem necessary or appropriate to its business operations, including but not limited to the Specialty Equipment (as defined below); provided that any damage that may be caused to the Premises by the removal of any of Tenant's trade fixtures or Specialty Equipment shall be repaired by Tenant at its expense forthwith upon the removal of any such trade fixtures or Specialty Equipment. Landlord grants to Tenant the right, at no additional charge or rent, to install, operate, expand, add to, repair and maintain, and Landlord acknowledges that Tenant's use of the Premises will require, some or all of the following (collectively, the "SPECIALTY EQUIPMENT"): fiber optic cabling from two (2) separate means of entry from the adjoining streets, across the Building's surrounding grounds (at locations indicated on the Declaration of Easement of even date for the benefit of Tenant, which is recorded or to be recorded in the Land Records of Arlington County, Virginia), to, and core drilling of, the Building core structural wall and from the Building core structural wall, by two (2) diverse paths, to the Premises; heat, air conditioning and ventilation for the Premises on a 24-hour, 7-day per week basis, including holidays to the extent necessary for the comfortable occupancy of the Premises under normal business operations with customary office equipment and in the absence of the use of any O-6 non-customary machines, equipment or devices which adversely affect the temperature otherwise maintained in the Premises; batteries in the Premises for power backup in case of power failure; an independent, Tenant-controlled fire suppression system which will include access to Tenant for exhaust louvers, shafts or risers necessary for the discharge of exhaust from the Premises from such system as well as Tenant's air conditioning system; connection of the office space areas within the Premises to Landlord's fire alarm system; a raised floor system to accommodate Tenant's telecommunications equipment; a 750 MCM copper insulated ground conductor in one and one-half inch (1.5") conduit from the master ground at the lowest point in the Building to the Premises; and the installation of interior walls or window covering materials to stabilize environmental conditions within the Premises. In addition to the generator and electrical equipment in the Generator Area, Tenant shall have the right to install and maintain up to a 5,000 gallon fuel tank system in the area shown on Exhibit B-4, and UPS in the Building and/or the Property ("BACK-UP SYSTEMS") and shall have the right to maintain such installations in the locations shown on Exhibit B-2 and Exhibit B-4 throughout the Lease Term, as renewed at no additional charge or rent. Tenant maintains certain mechanical cooling systems in the Building in the location shown on Exhibit B-3 (collectively, "HVAC SYSTEMS") and Tenant shall have the right to maintain such systems throughout the Lease Term, as renewed. Tenant shall have 24-hour, 7-day per week access to the Back-up Systems and the HVAC Systems. Landlord shall provide such space, including the right to install necessary connections therefrom to the Premises, at no additional charge or rent to Tenant. Tenant shall have the right to test its generator(s)at any time, which testing shall be conducted in compliance with all applicable laws, codes, and regulations. During the Lease Term and any extension thereof, Tenant shall have the right, at no additional rent, to install GPS and/or other antenna(s) and dish(es) on the roof or the grounds of the Building (including all necessary connections to the Premises, along with the benefit of any easements that might be required in connection therewith) for use by Tenant and/or Tenant's Collocates. Any such antennas or dishes shall be installed in accordance with all applicable laws and building codes and in locations mutually agreeable to Landlord and Tenant. Tenant shall have the option to remove such antennas and dishes at the expiration or earlier termination of this Lease; provided that in the event of removal, Tenant shall repair any damage to the roof or grounds of the Building caused by such removal. Landlord shall provide the space for such antennas, dishes, and necessary connections at no additional charge or rental to Tenant. Tenant, at Tenant's sole cost and expense, shall have the right to construct a dry pipe, preaction system for the Premises, including the right to relocate or encase any water mains or other water pipes running through the Premises to lessen the potential damage to Tenant's equipment. Landlord agrees to provide sufficient flow and pressure in the standpipe to the Premises to O-7 support such a fire suppression system. Landlord agrees that Tenant may remove all of the existing wet sprinklers in the equipment areas of the Premises, although those support areas of the Premises on which no equipment is located and the Common Areas will remain on the Building's wet sprinkler. The preaction system shall only be located in the Premises and will be connected to the Buildings alarm system in accordance with all applicable laws and building codes. Tenant shall also have the right, at Tenant's expense, to install an FM 200 fire suppression system in the Premises. FLOOR LOAD. Tenant, at Tenant's sole cost and expense, shall have the right but not the obligation, with the prior consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed, to reinforce the floors in the Premises so as to allow additional floor load thereon. Landlord will allow Tenant to reinforce floors in the Building outside the Premises, provided Landlord shall have the right to direct Tenant as to the method of such reinforcement. ALTERATIONS BY TENANT. Tenant, at its expense, may, from time to time during the Lease Term, make such nonstructural alterations to the interior of the Premises as Tenant deems appropriate to its business operations without Landlord's consent; provided that all such alterations shall be completed in a good and workmanlike manner and shall not impair the structural soundness of the Premises. Tenant shall make no additions or alteration whatsoever to the exterior of the Premises and no structural changes whatsoever within the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. MUTUAL INDEMNIFICATION; LIMITATION OF LIABILITY. Landlord agrees to indemnify Tenant against and to defend and hold Tenant harmless from any and all claims, demands, damages, penalties, costs, liabilities and losses arising from or based upon any alleged act, omission or negligence of Landlord or Landlord's agents or employees or arising from or based upon any breach of Landlord's covenants under this Lease. Tenant agrees to indemnify Landlord against and to defend and hold Landlord harmless from any and all claims, demands, damages, penalties, costs, liabilities and losses arising from or based upon any alleged act, omission or negligence of Tenant or Tenant's agents or employees or arising from or based upon any breach of Tenant's covenants under this Lease. Neither Landlord nor Tenant, nor any of their respective employees, agents or contractors shall be liable under any theory of liability to the other for indirect, special, incidental, remote, or consequential damages arising under or in connection with this Lease, whether in an action for or arising out of breach of contract, tort, or otherwise. WAIVER OF CLAIMS; WAIVER OF SUBROGATION. Each party hereto hereby waives any and all claims for recovery which such party or anyone claiming through such party may have against the other party hereto (or such other party's officers, agents or employees) for or with respect to any loss of or damage to such waiving party's property that is (i) insured under valid insurance policies, to the extent of any recovery actually collectible under such insurance policies, or (ii) required by this Lease to be insured, to the extent any recovery would be collectible if such insurance policies were obtained and maintained as required by this Lease, whether or not such loss or damage is caused by the negligence of such other party or such other party's agents, O-8 employees, subtenants, concessionaires or licensees or of any other person or persons for whose actions such other party may be responsible or liable. Landlord and Tenant each agree to obtain from the insurance companies providing its insurance applicable hereto permission to allow Landlord and Tenant to waive their respective insurance companies' rights of subrogation. Landlord and Tenant shall each provide to the other written proof of the waiver of said claims by said insurance companies. ENTRY BY LANDLORD. Landlord shall have the right to enter the Premises only upon reasonable prior notice and accompanied by a representative of Tenant, for the purpose of inspecting the Premises or for the purpose of making repairs thereto; provided that such entry shall not materially interfere with the conduct of the Tenant's business as determined by Tenant in its sole discretion and that Landlord shall reimburse Tenant for all costs reasonably incurred by Tenant as a result or in accommodation of Landlord's repairs. Landlord acknowledges that Tenant's use of the Premises will include installation of sensitive equipment; therefore, during the Lease Term or any extension thereof, Landlord shall have no right to install conduits or other piping in or through the Premises or through the Building or the roof of the Building, including, without limitation the walls, ceilings and floors of the Premises or areas above or below the walls, ceilings and floors without Tenant's consent. DAMAGE BY CASUALTY. In case the Premises, or any part thereof, shall at any time be destroyed or damaged by fire or other unavoidable casualty, so that the same shall be unfit for occupation or use by Tenant for its purposes hereunder, then the Rent hereby reserved, or a fair and just proportion thereof, according to the nature and extent of the damage sustained in loss of occupation of the Premises, shall be suspended, cease to be payable and so continue until said Premises shall be rebuilt or made fit for occupation and use, or if such damage to the Premises or to the Building (regardless of whether the Premises are affected) is to the extent of fifty percent (50%) or more, then this Lease may be terminated at the election of Landlord or Tenant, notice of which election, if exercised, shall be given in writing within fifteen (15) days from date of casualty. If this Lease is not so terminated within such time period, then Landlord shall be deemed to have agreed to repair and restore the Premises and the Building. The length of time that Landlord shall have to make such repairs hereunder shall in no event exceed a period of six (6) months from the date of casualty. If Landlord fails to complete such repairs within said six (6) month period, Tenant shall have the option (i) to terminate this Lease as of the date of such casualty by giving written notice to Landlord not later than thirty (30) days after said six (6) month period or (ii) to exercise any and all rights necessary to cause Landlord to complete such repairs, including, without limitation, collection of damages. BANKRUPTCY. Landlord acknowledges that on July 21, 2002, Tenant and certain of its domestic affiliates filed voluntary petitions for relief under Chapter 11 of title 11, United States Code (the "BANKRUPTCY CODE") in the United State Bankruptcy Court for the Southern District of New York. Tenant is continuing to operate its business and manage its properties as a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. This Section 0 shall not apply to such bankruptcy filing nor shall Tenant be deemed to be in default of this Lease as a result of such bankruptcy filing. O-9 Subject to Section 0, the filing by or against Tenant of any petition in bankruptcy, or the adjudication of Tenant as a bankrupt or insolvent, or the appointment of a receiver or trustee to take possession of all or substantially all of the assets of Tenant, or the making of a general assignment by Tenant for the benefit of creditors, or any action taken or suffered by Tenant under any state or federal insolvency or bankruptcy act, or the levy of execution or attachment against Tenant's interest in the Premises, and the continuance of any of the same for a period of ninety (90) days, shall constitute a breach of this Lease forthwith upon written notice to Tenant. The parties understand and agree that neither this Lease nor any interest herein or hereunder, nor any estate created hereby shall pass by operation of law under any state or federal insolvency or bankruptcy act to any trustee, receiver, assignee for the benefit of creditors or any other person whomsoever without the express prior written consent of Landlord. Any purported transfer in violation of the provisions of this Section shall constitute a breach of this Lease; and in such event, Landlord may, at its option, with written notice, declare this Lease terminated forthwith. HOLDING OVER. Provided Tenant is not in default under the terms and conditions of this Lease beyond the applicable notice and cure period, Tenant shall have the one time option to extend the Lease Term (or any Renewal Term) for an additional six (6) month period, otherwise subject to all the terms and conditions of this Lease. Such option may be effectuated only by written notice to Landlord given no later than twelve (12) months prior to expiration of the Lease Term (or the applicable Renewal Term). Additionally, provided Tenant is not in default under the terms and conditions of this Lease beyond the applicable notice and cure period, Tenant shall have the option to continue this Lease on a month-to-month basis (the "HOLDING OVER PERIOD") commencing upon the day after the date on which the Lease Term or the term of any extensions granted under this Lease expire. The Base Rent for the first four (4) months of the Holding Over Period shall be 100% of the Base Rent in effect at the end of the Lease Term, payable on the first day of each month. Thereafter, Base Rent for the Holding Over Period shall be 125% of the Base Rent in effect at the end of the Lease Term, payable on the first day of each month. The Holding Over Period shall otherwise be subject to all the terms and conditions of this Lease. This option shall be effectuated by Tenant either notifying Landlord in writing of Tenant's decision to exercise said option not less than thirty (30) days prior to the end of the Lease Term or by Tenant remaining in possession of the Premises after the expiration or termination of the Lease Term without the execution of a new lease. WAIVERS. One or more waivers by Landlord or Tenant of a breach of any covenant or condition by the other of them shall not be construed as a waiver of the subsequent breach of the same covenant or condition, and the consent or approval by Landlord or Tenant to or of any act by either requiring the other's consent or approval shall not be deemed to waive or render unnecessary either party's consent to or approval of any subsequent similar act by the other party. NOTICES. All notices or other communications which are required or permitted herein shall be in writing and deemed sufficiently given if delivered by (i) certified or registered mail, postage prepaid, return receipt requested, (ii) by recognized overnight delivery service company (examples include Federal Express, Airborne Express, and UPS), or (iii) by telephone facsimile followed by a hard copy sent via certified mail or by overnight delivery as set forth above addressed to: O-10 If to Tenant: Lease Administration - T WorldCom 500 Clinton Center Drive 3rd Building, 3rd Floor Clinton, MS 39056 Facsimile Number: 601-460-8485 With a copy to: Director, Real Estate WorldCom 6929 N. Lakewood Ave. Mail Drop 5.2-313 Tulsa, OK 74117 Facsimile Number: 918-590-5617 If to Landlord: ____________________________________ ____________________________________ ____________________________________ ____________________________________ or at such place or to such agent as the parties may from time to time designate in writing. Any notice given hereunder shall be deemed delivered when, if sent by mail, the return receipt is signed or refusal to accept the notice is noted thereon or, if sent by recognized overnight courier when the notice is actually delivered or refused as reflected in the courier company's delivery records or if sent via facsimile upon receipt of confirmation by the sender that the facsimile has been received (provided a hard copy of the facsimile is delivered to the recipient via certified mail or overnight delivery within three (3) business days thereafter). Landlord will use reasonable efforts to include in all correspondences and notices from Landlord to Tenant under this Lease reference to Tenant's internal lease number assigned to this Lease by Tenant following execution of this Lease (the "LEASE NUMBER," as shall be set forth on the cover page of this Lease. DELAYS IN PERFORMANCE. The performance by Landlord or Tenant of any of their respective obligations or undertakings provided for in this Lease (except the payment of Rent or any other sums of money payable by Tenant under this Lease) shall be excused and no default shall be deemed to exist in the event and so long as the performance of any such obligation or undertaking is prevented, delayed, retarded or hindered by an act of God, fire, earthquake, flood, explosion, action of the elements, war, riot, failure of transportation, strikes, lockout, action of labor unions, condemnation, laws, orders of government or civil or military authorities, inability to procure labor, equipment, facilities, materials or supplies in the open market, or any other cause beyond the reasonable control of Landlord or Tenant, as the case may be. DEFAULT. TENANT DEFAULT. If Tenant defaults in the payment of any Rent or other sums due and payable to Landlord under this Lease and such default continues for a period of thirty (30) days after written O-11 notice of such default has been given by Landlord to Tenant, or if Tenant shall violate or default in the performance of any covenants, agreements, stipulations or other conditions contained herein (other than the payment of rent and other sums) for a period of thirty (30) days after written notice of such violation or default has been given by Landlord to Tenant or, in the case of a default not curable within thirty (30) days, if Tenant shall fail to commence to cure the same within thirty (30) days, and thereafter proceed diligently to complete the cure thereof, then Landlord, at its option, may re-enter and repossess the Premises in accordance with applicable law, and declare this Lease terminated and the Lease Term ended forthwith. Except for the negligence or intentional misconduct of Landlord, its agents or employees, Landlord shall not be liable for damages by reason of such re-entry and repossession. Notwithstanding such re-entry and repossession by Landlord, the liability of Tenant for the payment of the Rent and other sums due hereunder and for the performance of Tenant's other obligations hereunder for the balance of the Lease Term shall not be relinquished or extinguished; and Landlord at any time may commence such one or more actions as it may deem necessary to collect any sums due from Tenant under this Lease. In the event of any such re-entry and repossession, Landlord shall have the right to relet all or any portion of the Premises upon such terms and conditions as may be reasonable; and any such reletting shall not relieve Tenant of any of its obligations to Landlord under this Lease, except to the extent of any net rents actually received by Landlord from such reletting after deduction of all of Landlord's reasonable expenses (including but not limited to legal expenses and brokerage commissions) incurred in accomplishing such reletting. Landlord agrees to attempt to mitigate its damages by making reasonable efforts to relet the Premises on reasonable terms. LANDLORD'S DEFAULT. In the event Landlord fails to observe and perform any covenant or obligation required to be observed or performed by Landlord under this Lease and such failure of performance continues for a period of thirty (30) days after written notice thereof from Tenant to Landlord (unless such failure cannot reasonably be cured within such thirty (30) day period and Landlord shall fail within such period to commence and diligently pursue the curing of such failure), Tenant may undertake all reasonable action to cure Landlord's failure of performance and Landlord agrees to reimburse Tenant on demand for all sums expended or obligations incurred by Tenant in connection therewith (including reasonable attorneys' fees). If Landlord does not reimburse Tenant within thirty (30) days of receipt of an invoice therefor, Tenant shall have the right to set off said amount from the Rent payable by Tenant to Landlord hereunder. In addition thereto and not in limitation thereof, in the event Landlord's failure of observance of its covenants and agreements contained herein renders Tenant's Premises Untenantable, materially disrupts the operation of Tenant's business, or continues beyond the above cure period, Tenant may, without prejudice to its right to recover damages for breach, terminate this Lease by written notice to Landlord, remove its personal property and trade fixtures, vacate the Premises and employ, and have full recourse to, all other rights and remedies available by operation of law or equity. CUMULATIVE RIGHTS. The rights, options, elections and remedies of both parties contained in this Lease shall be cumulative and may be exercised on one or more occasions; and none of them shall be construed as excluding any other or any additional right, priority or remedy allowed or provided by law. O-12 EMINENT DOMAIN. If the whole or any part of the Premises hereby leased shall be taken by any public authority under the power of eminent domain, then the Lease Term shall cease on the part so taken from the day the possession of that part shall be required for any purpose, and the Rent shall be paid up to that day, and if such portion of the Premises is so taken as to destroy (in Tenant's reasonable discretion) the usefulness of the Premises for the purpose for which the Premises were leased, then, the Tenant shall have the right either to terminate this Lease and declare the same null and void or to continue in the possession of the remainder of the same under the terms herein provided, except that the Rent shall be reduced in proportion to the amount of the Premises taken. All damages awarded for such taking shall belong to and be the property of the Landlord, including such damage as shall be awarded as compensation for diminution in value to the leasehold; provided, however, that Tenant shall be entitled to any portion of the award made to the Tenant for its leasehold improvements and relocation expenses and Tenant shall have the right to file separately for any such claim. PERSONAL PROPERTY. All personal property in the Premises shall be at the risk of the Tenant only and the Landlord shall not be or become liable for any damage to said personal property, including any damage to said personal property caused by water leakage, steam, sewer gas or odors, or done or occasioned by or from, any boiler, plumbing, gas, water, steam or other pipes or any fixtures, equipment or appurtenances whatsoever, or occasioned by water, snow or ice, being upon or coming through the roof, sky-light, trap door, or otherwise arising from any defect in the Building or any of the fixtures, equipment or appurtenances therein, or by the act or neglect of any other person or caused in any other manner whatsoever; provided, however, that Landlord shall be liable for any such damage caused by any negligent or intentional act or omission of Landlord or Landlord's agents or employees. BINDING AGREEMENT. All rights and liabilities herein given to or imposed upon the respective parties hereto shall extend to and bind the respective heirs, executors, administrators, legal representatives, successors and assigns of said parties. ASSIGNMENT AND SUBLEASE. So long as Tenant or any Related Entity (as hereafter defined) is the Tenant, Tenant shall have the right, without the consent or approval of Landlord, and without the sharing of any excess rents, recapture, or any other rights or remedies of Landlord set forth herein, to: (a) assign its interest in the Lease (i) to any corporation or other entity that is a successor to Tenant either by merger or consolidation, or (ii) to a purchaser of all or substantially all of Tenant's assets, or (iii) to a purchaser of all or substantially all of Tenant's business line or company division that includes the Premises use, or (iv) to a corporation or other entity that shall directly or indirectly control, be under the control of, or be under common control with, Tenant (any such entity being a "RELATED ENTITY"); (b) sublease all or any portion of Premises to a Related Entity; or (c) allow or facilitate the collocation of telecommunications equipment not owned by Tenant in the Premises. For purposes hereof, "control" shall be deemed to mean the direct or indirect ownership of more than fifty percent (50%) of the outstanding voting stock of a corporation or other majority equity and control interest if not a corporation. Tenant shall not assign its interest in the Lease or sublease all or any portion of the Premises to any party that does not constitute a Related Entity without first obtaining Landlord's written consent, which consent shall not be unreasonably withheld, conditioned or delayed. O-13 SUBORDINATION AND NON-DISTURBANCE. Tenant shall be obligated to subordinate its interest under this Lease to any lien or encumbrance that may hereafter be placed on, against or affecting the Premises only if, and on the condition that, Landlord shall provide Tenant with a non-disturbance agreement in favor of Tenant from the holder of such lien or encumbrance in the form of Exhibit D attached hereto. Landlord shall, contemporaneously herewith, provide Tenant with a non-disturbance agreement in favor of Tenant from the holder of any existing lien or encumbrance now on, against or affecting the Premises in the form of Exhibit D attached hereto. Landlord represents and warrants to Tenant that ___________________, a __________________, is the only holder of any existing lien or encumbrance now on, against, or affecting the Premises. ATTORNEYS' FEES. The prevailing party in any lawsuit between the Landlord and Tenant shall be reimbursed by the non-prevailing party for its attorneys' fees and costs. CAPTIONS. The captions and headings of the paragraphs in this Lease are for convenience only and shall not in any way limit or be deemed to construe or interpret the terms and provisions hereof. TIME OF ESSENCE. Time is of the essence of this Lease and of all provisions hereof. GOVERNING LAW. This Lease shall be construed and enforced in accordance with the laws of the State in which the Premises is located. ENTIRE AGREEMENT. The terms of this Lease are intended by the parties as a final expression of their agreement with respect to such terms as are included in this Lease and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Lease constitutes the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial proceedings, if any, involving this Lease. The Exhibits referred to herein and/or attached hereto are integral parts hereof and are made a part of this Lease by reference. BROKERS. Tenant and Landlord each represent to the other that it has dealt with no broker in connection with this Lease, and each shall hold the other harmless from and against any and all liability, loss, damage, expense, claim, action, demand, suit or obligation arising out of or relating to a breach of such representation. Landlord shall be responsible for the payment of any and all commissions or other fees to any broker concerning this transaction and in no event shall Tenant be responsible for any brokerage fees whatsoever. REASONABLENESS. Whenever the consent of either party is required hereunder, said consent shall not be unreasonably withheld, conditioned or delayed. Landlord and Tenant agree that should any dispute arise between the parties in relation to this Lease, both Landlord and Tenant shall act in a commercially reasonable manner in regard to and in resolution of such dispute. AMENDMENTS. This Lease may not be altered, changed, or amended except by an instrument signed by both parties hereto. O-14 PARKING. Tenant shall have the right on a 24 hour, 7 day per week basis to three (3) reserved, dedicated parking spaces at the Building marked for Tenant's use at no additional rent, to be located within the area shown on the attached Exhibit C (the "PARKING SPACES"). OPTIONS TO RENEW. Subject to the conditions set forth below, Tenant is granted the option to renew this Lease for five (5) successive additional terms of five (5) years each (the "RENEWAL TERMS"), with the first renewal period commencing on the first day following the expiration of the original Lease Term. Each Renewal Term shall be on the same terms, conditions, provisions and covenants as are set forth herein except the Base Rent, which shall increase by $1.00 per square foot at the commencement of each Renewal Term (i.e., $16.00/square foot for first Renewal Term; $17.00/square foot for second Renewal Term; $18.00/square foot for third Renewal Term; $19.00/square foot for fourth Renewal Term; and $20.00/square foot for fifth Renewal Term). Base Rent shall be inclusive of all real estate taxes and operating expenses throughout the Lease Term, as extended or renewed. Tenant shall provide Landlord with at least six (6) months prior written notice if Tenant desires to renew this Lease. RIGHT OF FIRST REFUSAL, SECOND FLOOR. Landlord shall give Tenant written notice of any bona fide offer to lease the contiguous space on the second floor of the Building ("EXPANSION SPACE"), identifying the same and specifying the basic terms and conditions the "OFFER NOTICE"). Tenant shall then have thirty (30) business days after its receipt of the Offer Notice in which Tenant may give Landlord written notice of Tenant's acceptance of up to 2,000 square feet of the Expansion Space on the same terms and conditions of this Lease, including Rent (the "ACCEPTANCE NOTICE"). Prior to giving the Offer Notice to Tenant, and for fifteen (15) business days thereafter, Landlord shall not enter into any lease of the Expansion Space with any other person or entity. If during such thirty (30) business day period, Tenant gives Landlord an Acceptance Notice, Landlord and Tenant shall then promptly enter into an amendment of this Lease increasing the size of the Premises to include the Expansion Space (or the accepted portion thereof) and increasing Tenant's Proportionate Share to reflect the rentable square feet of the Expansion Space (or the accepted portion thereof). After expiration of such thirty (30) business day period, if Tenant has not given Landlord a timely Acceptance Notice, then Landlord shall be free to lease the Expansion Space to such person or entity, unless the space is thereafter vacant again in which case Landlord shall provide Tenant with another Offer Notice. Tenant's leasehold improvements to the Expansion Space shall be governed by Section 0 of this Lease. LIEN WAIVER. Landlord hereby waives any right it may have to assert any lien against the personal property of Tenant whether existing under common law or by statute of the State in which the Premises is located. ENVIRONMENTAL. Hazardous or Toxic Materials. Notwithstanding any provision contained in this Lease to the contrary, neither Tenant nor Landlord shall cause any escape, release or disposal of "Hazardous Materials" (as hereinafter defined) in, at, on or under the Premises, the Building, or the real property of which the Premises and the Building are a part (the "REAL PROPERTY"). Neither Tenant nor Landlord shall store or use Hazardous Materials in, at, on or under the Premises, Building, or Real Property, except as necessary for use in the ordinary course of business, and O-15 then only in accordance with applicable laws, regulations and ordinances. If during the Lease Term or any extension thereof, Tenant, or any third party acting on Tenant's behalf, encounters any Hazardous Materials during the performance of any alterations or other work, TENANT SHALL INFORM LANDLORD OF SUCH FACT. Landlord, at Landlord's sole cost and expense, shall appropriately handle the Hazardous Materials that are disturbed in the Building. Notwithstanding anything to the contrary, Tenant shall not (a) have any responsibility for managing, monitoring, disposing or abating, (b) be the owner of or (c) have any liability for or in connection with, any Hazardous Materials not introduced by Tenant during the Lease Term. Allowable Use Of Certain Hazardous Materials. Tenant may use and store the following materials in the ordinary course of its business: reasonable amounts of standard cleaning fluid and materials customarily used in conjunction with business machines; cleaning supplies in reasonable quantities; materials customarily used in conjunction with Tenant's fuel tanks, generators, and batteries; and any other materials deemed necessary to Tenant's business. Landlord may use, but not store, on the Premises the following materials in the ordinary course of business: cleaning supplies, insecticides, fungicides and rodenticides. Definition Of Hazardous Materials. For purposes of this Lease, "HAZARDOUS MATERIALS" means all hazardous or toxic materials or substances that have been determined to be hazardous to health or the environment under any applicable city, county, state or Federal law, rule or regulation, including, but not limited to, hazardous waste as defined in the Resource Conservation and Recovery Act; hazardous substances as defined in the Comprehensive Emergency Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act; gasoline or any other petroleum product or by-product or other hydrocarbon derivative; toxic substances regulated by the Toxic Substances Control Act; insecticides, fungicides, or rodenticides regulated by the Federal Insecticide, Fungicide, and Rodenticide Act; asbestos, radon and other toxic or hazardous air pollutants regulated by the Clean Air Act, as amended; substances determined to be hazardous or toxic water pollutants regulated by the Clean Water Act, as amended; and toxic or hazardous chemicals regulated by the Occupational Safety and Health Act, as amended. References to any statute, act, regulation or rule shall include amendments as they are made from time to time. Covenants. Tenant and Landlord each covenant that removal, disposal, handling, use and storage of any Hazardous Materials by such party at the Premises, Building, and/or Real Property shall comply with all applicable Federal, state and local laws, rules and regulations. If either Tenant's or Landlord's use, transportation, storage or disposal of Hazardous Materials results in contamination of the Premises, Building or Real Property, Tenant or Landlord (as the case may be) shall notify the other party of its method, time and procedure for any clean-up or removal of the Hazardous Materials. The party notified shall have the right to require reasonable changes in such method, time or procedure, or require that the same be done after normal business hours or when the Building is otherwise closed (i.e., weekends or holidays), except that if Tenant or Landlord is under a duty by Federal, state, or local laws, regulations or ordinances to immediately remove the contamination, or is under an order to proceed in a specified manner, that party shall comply with the law, regulation, ordinance or order. O-16 Environmental Indemnification. Tenant shall defend, indemnify and hold Landlord harmless from any and all claims, damages, penalties, costs, liabilities or losses and any and all costs incurred due to the investigation, clean-up, removal or restoration of the Premises, Building and Real Property if such claims, damages, penalties, costs, liabilities or losses are incurred solely due to Hazardous Materials introduced to the Premises, Building or Real Property through the actions of Tenant, Tenant's agents, employees or contractors during the Lease Term. Tenant shall not indemnify Landlord for releases of Hazardous Materials that exist on, in or under the Premises, Building, or Real Property at the time of the execution of this Lease, or which are introduced to the Premises, Building, or Real Property by some other tenant or by Landlord. Landlord shall defend, indemnify and hold Tenant harmless from any and all claims, damages, penalties, costs, liabilities or losses and any and all costs incurred due to the investigation, clean-up, removal or restoration of the Premises, Building, or Real Property if such claims, damages, penalties, costs, liabilities or losses concern the introduction of Hazardous Materials in, at, on or under the Premises, Building, or Real Property through the actions of Landlord, Landlord's agents, employees or contractors. The provisions contained in this Section 0 shall survive the expiration or sooner termination of this Lease. DEED OF LEASE. For purposes of Section 55-2, Code of Virginia (1950), as amended, this Lease is and shall be deemed to be a deed of lease. For purposes of Section 55-218.1, Code of Virginia (1950), as amended, Landlord's resident agent for service of process is: SIGNATURES ON NEXT PAGE O-17 IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease effective as of the date and year first written above. LANDLORD _______________________________, a ______________________________ By:_____________________________________ Print Name:_____________________________ Print Title:____________________________ Date:___________________________________ TENANT MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation By:_____________________________________ Print Name:_____________________________ Print Title:____________________________ Date:___________________________________ O-18 STATE OF _______________________) ) ss. COUNTY OF ______________________) On this _____ day of _______, 2003, before me, a notary public in and for said county and state, personally came ___________________, a ____________________President of ____________________________________, which is _______________ of ______________________, a ____________________, known to me to be the identical person who signed the foregoing Equipment Site Lease Agreement on behalf of said corporation and limited partnership and acknowledged the execution thereof to be the voluntary act and deed of said corporation and limited partnership. WITNESS my hand and notarial seal the day and year last above written. ________________________________________ Notary Public My Commission Expires: __________________________ [SEAL] STATE OF _______________________) ) ss. COUNTY OF ______________________) On this _____ day of _______, 2003, before me, a notary public in and for said county and state, personally came _____________________, a ______________________President of MCI WorldCom Network Services, Inc., known to me to be the identical person who signed the foregoing Equipment Site Lease Agreement on behalf of said corporation and acknowledged the execution thereof to be the voluntary act and deed of said corporation. WITNESS my hand and notarial seal the day and year last above written. ________________________________________ Notary Public My Commission Expires: __________________________ [SEAL] O-19 EXHIBIT A LEGAL DESCRIPTION OF BUILDING All of that certain parcel of land situate and being in Arlington County, Virginia and more particularly described as: Parcel 1-B, containing 2.45783 acres, being a Resubdivision of the Property of Pentagon Tract Development Corporation and River House Corporation, being a part of Parcel "B-2-B" Ambassador Inc. & "H" Street Building Corp., as the same are shown on a plat attached to Deed of Resubdivision recorded in Deed Book 2062 at page 914, among the aforesaid land records. O-1 EXHIBIT B-1 SECOND FLOOR SITE PLAN O-1 EXHIBIT B-2 GENERATOR AREA AND ELECTRICAL AREA SITE PLAN O-1 EXHIBIT B-3 LOCATION OF DRY COOLERS O-1 EXHIBIT B-4 FUEL TANK AREA AND UTILITY VAULT AREA SITE PLAN O-1 EXHIBIT C TENANT'S DEDICATED PARKING SPACES O-1 EXHIBIT D SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT THIS AGREEMENT dated the ___ day of ____________, 20___, between _______________________________________________________, hereinafter called the "MORTGAGEE", and MCI WORLDCOM NETWORK SERVICES, INC., hereinafter called the "TENANT". W I T N E S S E T H: WHEREAS, the Tenant has entered into a certain Lease, as may be hereafter amended (the "LEASE"), dated ___________ _______, 200__with _____________________________, hereinafter called the "LANDLORD", covering premises in the Pentagon City Two building located at 601 S. 12th Street, Arlington, Virginia (the "BUILDING"). WHEREAS, the Mortgagee has made a mortgage loan (the "MORTGAGE") to the Landlord; and WHEREAS, the Tenant desires to be assured of continued occupancy of such premises under the terms of the Lease. NOW, THEREFORE, in consideration of the premises and of the sum of One Dollar ($1.00) by each party in hand paid to the other, the receipt of which is hereby acknowledged, it is hereby agreed as follows: The Lease is and shall be subject and subordinate to the Mortgage insofar as it affects the real property of which the Premises (as such term is defined by the Lease) form a part, and to all renewals, modifications, consolidations, replacements and extensions thereof, to the full extent of the principal sum secured thereby and interest thereon. So long as Tenant is not in default under any of the terms, covenants, or conditions of the Lease beyond all applicable notice and cure periods, if the interest of the Landlord under the Lease is acquired by Mortgagee, by reason of exercise of the power of sale or the foreclosure of the Mortgage or other proceedings brought to enforce the rights of the holder thereof, whether by deed in lieu of foreclosure or by any other method, Tenant shall peaceably and quietly have, hold, and enjoy the Premises and the appurtenant rights thereto for the full Lease Term, including any renewals or extensions thereof. In the event it should become necessary to foreclose the Mortgage, the Mortgagee thereunder will not join the Tenant under said Lease in summary or foreclosure proceedings, so long as Tenant is not in default beyond any applicable cure periods under any of the terms, covenants, or conditions of said Lease. In the event that the Mortgagee shall, in accordance with the foregoing, succeed to the interest of the Landlord under such Lease, the Mortgagee agrees to be bound to the Tenant under all of the terms, covenants and conditions of the Lease, and the Tenant shall, from and after such event, have the same remedies against the Mortgagee for the breach of an agreement contained in the P-1 Lease that the Tenant might have had under the Lease against the Landlord if the Mortgagee had not succeeded to the interest of the Landlord; provided, however, that the Mortgagee shall not be: (a) liable for any act or omission of any prior landlord (including the Landlord); provided that the foregoing shall not limit Mortgagee's obligation to correct any conditions that existed as of the date of attornment and violate Mortgagee's obligations as landlord under the Lease; or (b) bound by any rent or additional rent which the Tenant might have paid for more than the current month to any prior landlord (including the Landlord). Mortgagee consents to the terms of the Lease and agrees that the exercise by the Tenant of its rights under the Lease shall not constitute a default under the Mortgage. Mortgagee's consent shall not be required for any amendment or modification of the Lease. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement may not be discharged or modified orally or by any course of conduct of the parties hereto other than by agreement in writing specifically referring to this Agreement and signed by the party or parties to be charged thereby. IN WITNESS WHEREOF, the parties hereto have executed these presents the day and year first above written. MORTGAGEE ________________________________________ By:_____________________________________ Its:____________________________________ Date:___________________________________ TENANT ________________________________________ By:_____________________________________ Its:____________________________________ Date:___________________________________ O-2 EXHIBIT Q SALE PROCEDURES ORDER UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK - -------------------------------------X IN RE : : CHAPTER 11 CASE NO. WORLDCOM, INC., ET AL., : 02-13533 (AJG) : : (JOINTLY ADMINISTERED) DEBTORS. : - -------------------------------------X ORDER (A) ESTABLISHING PROCEDURES FOR DEBTORS' PROPOSED AUCTION OF PENTAGON CITY AND RELATED PROPERTY, (B) APPROVING "BREAK-UP FEE" ARRANGEMENT WITH PROPOSED PURCHASER, (C) ESTABLISHING DATE AND TIME FOR SALE HEARING AND (D) APPROVING FORM AND MANNER OF NOTICES A hearing having been held on [___________], 2003 (the "Hearing"), to consider the motion, dated [___________], 2003 (the "Motion"), of WorldCom, Inc. and certain of its direct and indirect subsidiaries, as debtors and debtors in possession (collectively, "WorldCom" or the "Debtors"), for, among other things, the entry of an order pursuant to sections 105 and 363 of title 11 of the United States Code (the "Bankruptcy Code"), and Rule 6004 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), (a) scheduling a hearing to consider the proposed sale (the "Sale Hearing") by the Debtors of certain real property known as "Pentagon City" and certain related personal property, including the assignment or assumption and assignment of certain contracts and leases in connection therewith (collectively, the "Assets"), free and clear of liens, claims, and encumbrances, pursuant to the Real Estate Purchase Contract, dated as of [_________], 2003, between MCI WORLDCOM Network Services, Inc. ("MCI"), as seller, and [_____________________], as purchaser ("Purchaser"), a copy of which is annexed to the Motion as Exhibit "A" (the "Agreement"), subject to higher and Q-1 better offers, (b) establishing procedures for the proposed auction by the Debtors of the Assets, including for the submission of competing offers to acquire the Assets, (c) approving the terms and conditions of the grant of a proposed "break-up fee" to Purchaser, and (d) approving the form and manner of notice of the auction procedures and the Sale Hearing pursuant to Bankruptcy Rule 2002, all as more fully set forth in the Motion; and the Court having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. Sections 157 and 1334 and the Standing Order of Referral of Cases to Bankruptcy Court Judges of the District Court for the Southern District of New York, dated July 19, 1984 (Ward, Acting C.J.); and consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. Section 157(b); and venue being proper before this Court pursuant to 28 U.S.C. Sections 1408 and 1409; and due and proper notice of the Motion having been provided in accordance with the Court's case management order, dated December 23, 2002, and it appearing that no other or further notice need be provided; and the Court having reviewed the Motion and the papers in support thereof and the responses thereto, if any; and upon the Motion, the papers in support thereof and the responses thereto, if any, and the record of the Hearing; and the Court having found and determined that the legal and factual bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein; and that the relief requested in the Motion is an exercise of the Debtors' sound business judgment and is in the best interests of the Debtors and their estates and creditors; and upon all of the proceedings had before the Court and after due deliberation and sufficient cause appearing therefor, it is ORDERED that the following procedures (the "Auction Procedures") relating to the submission and consideration of competing offers for the Assets (each, an "Alternative Q-2 Transaction") are hereby established and approved and the Debtors are authorized to conduct an auction of the Assets (the "Auction") in accordance therewith: 1. The Debtors shall provide (a) notice of the Sale Hearing and Auction Procedures, substantially in the form of Exhibit ___ to the Motion, together with a copy of the Agreement to all parties known to the Debtors as having expressed a bona fide interest in acquiring the Assets and (b) a copy of the Agreement to all other prospective offerors and parties in interest upon written request to the Debtors through their real estate consultant, Hilco Real Estate, LLC, at the address set forth in paragraph 2, below. 2. Any party wishing to conduct due diligence on the Assets shall, upon execution by such prospective offeror of a confidentiality agreement and access agreement, each in form and substance satisfactory to the Debtors, and delivery to the Debtors of such prospective offeror's certified financial statements for the preceding two years (or other evidence establishing to the Debtors' satisfaction such prospective offeror's financial capability to timely consummate an Alternative Transaction) be granted access to Pentagon City, subject to the rights of the government, as lessee, and to all relevant business and financial information necessary to enable such party to evaluate the Assets for the purpose of submitting a competing offer for an Alternative Transaction. The Debtors shall make such access available during normal business hours as soon as reasonably practicable. Parties interested in conducting due diligence should contact Alan Lieberman at Hilco Real Estate, LLC, 5 Revere Drive, Suite 320, Northbrook, Illinois 60062, Telephone (847) 504-2453, Facsimile (847) 714-1289. 3. To be considered, each competing offer for an Alternative Transaction shall (a) be irrevocable through the date of the closing of the sale of the Assets, (b) be made by a party satisfying the conditions described in the preceding paragraph 2 (a "Competing Offeror"), (c) be submitted in writing and delivered to (i) WorldCom, Inc., Corporate Real Estate, 2400 North Glenville, Richardson, Texas 75082, Attn: Brian Trosper, (ii) Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attn: Elliot L. Hurwitz, Esq., Sharon Youdelman, Esq. and Scott E. Cohen, Esq., counsel to the Debtors, (iii) Hilco Real Estate, LLC, 5 Revere Drive, Suite 320, Northbrook, Illinois 60062, Attn: Alan Lieberman and (iv) Kelley Drye & Warren LLP, 101 Park Avenue, New York, New York 10178, Attn: Mark I. Bane, Esq. and Mark R. Somerstein, Esq., counsel to the statutory committee of unsecured creditors (the "Committee"), so as to be received not later than 12:30 p.m. New York City time, on [___________], 2003 and (d) include the following: (i) A statement of the Competing Offeror's intent to bid at the Auction; Q-3 (ii) A written agreement executed by the Competing Offeror, together with a copy of such agreement marked to show the specific changes to the Agreement that the Competing Offeror requires; (iii) A purchase price for the Assets that exceeds the Purchase Price, as defined in the Agreement, by at least $2,800,000; (iv) (A) A good faith deposit in the amount of $7,000,000 in cash or in other form of immediately available U.S. funds (subject to an escrow agreement substantially in the form of the escrow agreement annexed as Exhibit "D" to the Agreement) (the "Initial Deposit") and (B) a written commitment or other evidence acceptable to the Debtors of the Competing Offeror's ability to provide, in the event such offer ultimately is determined by the Debtors to be the Final Auction Offer (as defined below), a further deposit in cash or other form of immediately available U.S. funds (subject to an escrow agreement on the same terms as the escrow agreement executed in connection with the delivery of the Initial Deposit) in the amount sufficient to bring the total amount of such Competing Offeror's deposit up to the amount that is equal to 10% of the purchase price, exclusive of assumed liabilities as calculated by the Debtors, proposed by such Competing Offeror (the "Remaining Deposit," and together with the Initial Deposit, the "Full Deposit") within one business day after the Debtors have notified the Competing Offeror that its offer has been determined by the Debtors to be the Final Auction Offer; (v) Evidence, acceptable to the Debtors, of the Competing Offeror's (A) ability to consummate the transaction within ten (10) days after the entry of an order approving the sale and (B) future performance to counterparties under the contracts and leases proposed to be assigned, including such adequate assurance as may be required by section 365 of the Bankruptcy Code. 4. Competing offers shall be unconditional and not contingent upon any event, including, without limitation, any due diligence investigation, the receipt of financing or the receipt of any further approval, including, without limitation, from any board of directors, shareholders or otherwise. Any person submitting a competing offer hereby shall be deemed to have submitted to the jurisdiction of this Court. 5. The Debtors may, in their discretion, communicate prior to the Sale Hearing with any Competing Offeror, in which event, such Competing Offeror shall provide to the Debtors, within one business day after the Debtors' request therefor, any additional information reasonably required Q-4 by the Debtors in connection with the Debtors' evaluation of such Competing Offeror's offer. 6. Prior to the Auction, the Debtors shall evaluate Purchaser's offer, as embodied in the Agreement, and any competing offers they have received, and after consultation with the Committee, shall select the offer the Debtors determine to be the highest and best offer for the Assets (the "Initial Auction Offer"). In considering Purchaser's Offer and competing offers, the Debtors shall consider, among other things, the value thereof to their estates, the changes to the Agreement required by the Competing Offeror, the Competing Offeror's satisfaction of any governmental or regulatory requirements, and the Competing Offeror's ability to finance, and timely consummate, its proposed Alternative Transaction. 7. The Auction shall be conducted by the Debtors or their representatives on invitation to Purchaser and all qualified Competing Offerors that have submitted competing offers in accordance with these procedures, and shall commence on [_______ __], 2003 at [__:__] _.m. New York City time at the offices of the Debtors' counsel, Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153. 8. At the commencement of the Auction, the Debtors shall announce the Initial Auction Offer. All bids at the Auction shall be increased therefrom, and thereafter made, in increments of no less than Two Hundred Thousand Dollars ($200,000). The Purchaser may submit competing offer(s) ("Purchaser Subsequent Offer") without waiving its right to the Break-Up Fee (as defined below) in the event an Alternative Transaction is consummated with a Successful Offeror (as defined below) other than Purchaser (or an affiliate of Purchaser). The Purchaser may not apply or credit any portion of the Break-Up Fee as a component of Purchaser Subsequent Offers. 9. Following the conclusion of the Auction, and after consultation with the Committee's counsel and financial advisor, the Debtors shall select the offer that they determine to be the highest and best offer for the Assets (the "Final Auction Offer") and shall inform the party having submitted the Final Auction Offer (the "Successful Offeror") and file with the Court a notice of such selection. Within one business day after the Debtors so notify the Successful Offeror that its offer has been determined by the Debtors to be the Final Auction Offer, the Successful Offeror, whether or not such party is Purchaser, shall deliver the Remaining Deposit to the Debtors. At the Sale Hearing, the Court will consider the Final Auction Offer for approval. 10. Each Initial Deposit and Remaining Deposit shall be maintained in an interest-bearing account and be subject to the jurisdiction of this Court. The Full Deposit shall be applied by the Debtors against the purchase price to be paid by the Successful Offeror at the closing of the transaction Q-5 approved by the Court. Promptly following such closing, each Initial Deposit submitted by a party other than a Successful Offeror, together with any interest paid thereon, shall be returned. 11. In the event the Successful Offeror fails to consummate said transaction due to its breach of the terms of its agreement with the Debtors, such Successful Offeror's Full Deposit, together with any interest paid thereon, shall be forfeited to the Debtors and the Debtors may request authority to consummate a transaction with the Competing Offeror having submitted the next highest and best offer at the final price and terms bid by such Competing Offeror at the Auction (or, if such Competing Offeror fails to consummate such transaction, the Debtors may consummate a transaction with the next highest and best Competing Offeror, and so forth, such subsequent offeror(s) shall be deemed the "Successful Offeror" for purposes of this Order), subject to the delivery by any such Successful Offeror of the Remaining Deposit within one business day after notification by the Debtors. 12. No offer shall be deemed accepted unless and until it is approved by this Court; and it is further ORDERED that in the event the Court approves a Final Auction Offer constituting a higher and better offer for the Assets than the Agreement or Purchaser Subsequent Offers and the Debtors consummate such Alternative Transaction with a Successful Offeror other than Purchaser or an affiliate of Purchaser, the Purchaser shall be entitled to a "break-up fee" in the amount of $2,600,000 (the "Break-Up Fee") payable to Purchaser in cash, by wire transfer of immediately available funds to an account designated in writing by Purchaser, on the business day following the date of consummation of the Alternative Transaction; provided however, that Purchaser shall not be entitled to any Break-Up Fee in the event Purchaser is a Successful Offeror and fails to consummate the transaction by reason of its breach of the terms of its agreement with the Debtors. Upon payment of the Break-Up Fee and return of the Purchaser's Initial Deposit, the Debtors shall be fully released and discharged from any liability or obligation arising under or relating to the Agreement, and neither Purchaser nor any of its Q-6 affiliates shall have any other remedy or cause of action under or in relation to the Agreement including, without limitation, the reimbursement of expenses incurred in connection with the Agreement and the transactions contemplated thereby. Immediately upon consummation of an Alternative Transaction with a Successful Offeror other than Purchaser or an affiliate of Purchaser, Purchaser shall be released from any and all obligations under the Agreement; and it is further ORDERED that upon the return of the Initial Deposit submitted by each unsuccessful Competing Offeror following the closing of a transaction with the Successful Offeror, the Debtors shall be fully released and discharged from any liability or obligation arising under or relating to each Competing Offeror's offer, and neither such Competing Offeror nor any of its affiliates shall have any other remedy or cause of action under or in relation to the sale of the Assets or any other relief requested in the Motion including, without limitation, the reimbursement of expenses incurred in connection with each Competing Offeror's offer and the transactions contemplated thereby; and it is further ORDERED that the Sale Hearing to consider the sale of the Assets, the Debtors' selection of the highest and best offer therefor, and the remainder of the relief requested in the Motion shall be held on [______ __], 2003 at 10:00 a.m. (New York City time); and it is further ORDERED that objections, if any, to the sale of the Assets, the Debtors' selection of the highest and best offer therefor, and the remainder of the relief requested in the Motion, including objections from counterparties to the contracts and leases proposed to be assigned, including with respect to amounts entitled to be treated as cure obligations under section 365 of the Bankruptcy Code, shall be set forth in writing and state with particularity the nature and extent of the objector's interests in the Debtors and their estates and the grounds for such Q-7 objections or other statements of position and shall be filed with the Bankruptcy Court and served upon (i) Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attention: Scott E. Cohen, Esq.; (ii) the Office of the United States Trustee for the Southern District of New York, 33 Whitehall Street, 21st floor, New York, New York 10004, Attention: Mary Elizabeth Tom, Esq.; (iii) Kelley Drye & Warren LLP, 101 Park Avenue, New York, New York 10178, Attn: Mark I. Bane, Esq., and Mark R. Somerstein, Esq.; (iv) Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, Washington, DC 20036, Attention: Richard Thornburgh, Esq.; (v) Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, Attn: Douglas Bartner, Esq. and Marc B. Hankin, Esq.; and (vii) Holland & Knight LLP, 2099 Pennsylvania Avenue, NW, Suite 100, Washington, D.C. 20006, Attn: Scott Sterling, Esq. and Richard Lear, Esq., so as to be actually received by 4:00 p.m. (New York City time) on [_______], 2003; and it is further ORDERED that the Debtors may extend the deadlines in the bidding procedures set forth above, adjourn the Auction either prior to the scheduled date and time therefor (in such event notice of such adjournment and rescheduling of the Auction, if any, shall be provided to all parties submitting qualified competing offers) or by announcement at the Auction, and/or adjourn the Sale Hearing by announcement in open Court (in such event the Debtors shall provide notice of the rescheduled Sale Hearing, if any, to all parties submitting qualified competing offers); and it is further ORDERED that, as soon as practicable after entry of this Order, notice substantially in the form annexed as Exhibit __ to the Motion shall be (i) provided to all potential interested parties identified by the Debtors, all parties included in the Service List maintained pursuant to the Case Management Order dated December 23, 2002, all taxing authorities having Q-8 jurisdiction in respect of the Assets, all parties asserting liens against the Assets, all counterparties to service contracts relating to Pentagon City, the lessee of the Pentagon City property and (ii) published in The Washington Post and The Wall Street Journal (National Edition), and such notice shall constitute good and sufficient notice of this Order, the Auction Procedures, and the Sale Hearing, and it is further ORDERED that this Order shall become effective immediately upon its entry; and it is further ORDERED nothing herein shall prejudice any party's right to object to the approval of the proposed sale of the Assets or any other relief sought by the Debtors at the Sale Hearing; and it is further ORDERED that the Court shall retain jurisdiction over any matter or dispute arising from or relating to the implementation of this Order. This retention of jurisdiction shall not be deemed to extend to any dispute that does not involve the interpretation, construction, enforcement and/or effect of this Order or the Agreement. Dated: New York, New York _______ __, 2003 ________________________________________ United States Bankruptcy Judge Q-9 EX-10.2 7 w88491aexv10w2.txt EXHIBIT 10.2 . . . Exhibit 10.2 LEASE SUMMARY - ------------------------------------------------------------------------------- BUILDINGS 601 & 701 South 12th Street - --------- Arlington, Virginia 22202-4202 LANDLORD MCI Worldcom Network Services, Inc. - -------- TENANT United States of America - ------ 540,707 BOMA rentable square feet OFFICE PREMISES 491,607 BOMA usable square feet - --------------- (The United States of America leases space based on the BOMA usable method of measurement. Rider #1 states the final rent shall be based on an actual measurement of the Premises in accordance with GSA Form 3517.) GARAGE PREMISES Entire two level garage containing - --------------- 1,079 parking spaces LEASE TERM Ten (10) years from the date of - ---------- full lease commencement PARTIAL LEASE The lease commences on the date - ------------- Tenant accepts space in Phase I. COMMENCEMENT However, the ten (10) year term - ------------ does not begin until Phase II & Phase III have been accepted by Tenant FULL LEASE The date that is the weighted - ---------- composite of all incremental COMMENCEMENT dates of Phase II and Phase III - ------------ acceptance by the Tenant. ANNUAL BASE RENT Office Premises - $17,083,343.25 - ---------------- annually, paid monthly in arrears Garage premises -$1,230,060.00 annually, paid monthly in arrears RENTAL ABATEMENT Rent shall be abated for 10 - ---------------- business days for Phases I, II & III after acceptance by the Tenant. Additionally, rent for Phase I shall be reduced to $20.00 per BOMA usable square foot prior to the Lease Commencement (Phase I space shall be accepted in increments of 50,000 square feet up to a total of 150,000 square feet GARAGE RENT Rent shall commence on portions of - ----------- the garage on a prorated basis COMMENCEMENT based on the percentage of office - ------------ space accepted by Tenant TENANT IMPROVEMENTS Landlord must provide - ------------------- $19,664,280.00 for Tenant's improvements in the Premises. This total is subject to revision based on the actual square footage measurement in accordance with GSA Form 3517, contained in the General Clauses of SFO # DTSA20-03-R-00528 BASE RENT INCREASES None; see increases in operating - ------------------- expenses and real estate taxes BASE YEAR OPERATING Landlord shall, at its cost, - ------------------- provide all supplies, services and EXPENSES utilities to operate the building - -------- pursuant to the Lease. Landlord and Tenant have agreed on a Base Year Operating Expense Base of $2,670,408.00 BASE YEAR REAL ESTATE Landlord is responsible for the - --------------------- annual payment of agreed upon Base Year Real Estate Taxes in the amount of $722,957.00 INCREASES IN OPERATING Tenant shall pay Landlord, - ---------------------- annually, a CPI increase above the agreed upon Base Year Operating Expense Base INCREASES IN REAL Tenant shall pay Landlord, - ----------------- annually, an increase above the ESTATE TAXES agreed upon Base Year Real Estate - ------------ Taxes CONSTRUCTION Landlord shall limit construction - ------------ fees for initial improvements and MARK-UPS change orders to: - -------- General Conditions 8% Overhead & Profit 4% Landlord's Oversight Fee 3% SECURITY DEPOSITS Tenant - None Required - -----------------

- ------------------------------------------------------------------------------- STANDARD FORM 2 FEBRUARY 1965 EDITION GENERAL SERVICES ADMINISTRATION U.S. GOVERNMENT (FPR 41 CFR) 1D 16.601 LEASE FOR REAL PROPERTY - -------------------------------------------------------------------------------- DATE OF LEASE: 12/17/02 LEASE # DTSA20-03-R-00528 - -------------------------------------------------------------------------------- THIS LEASE, made and entered into this date between MCI Worldcom Network Services, Inc. ("WORLDCOM, INC." or "WORLDCOM") Whose address is: c/o Spaulding & Slye Colliers International 1717 Pennsylvania Avenue, NW, Suite 1000 Washington, D.C. 20006 and whose interest in the property hereinafter described is that of OWNER, hereinafter called the LESSOR, and the UNITED STATES OF AMERICA, hereinafter called the Government. ***** WITNESSETH: The parties hereto for the considerations hereinafter mentioned, covenant and agree as follows: 1. The Lessor hereby leases to the Government the following described premises: A total of 540,707 BOMA rentable square feet (BRSF) equivalent to 491,607 BOMA Office Usable Square Feet (BUSF) of office and related space in 601/701 South 12th Street, Arlington, VA 22202-4202. The leased area is located in the East and West Towers on 12 above grade full-floor stories, (see Attached Floor Plans). to be used for SUCH PURPOSES AS DETERMINED BY THE GOVERNMENT The Government will also lease the parking garage in its entirety which amounts to 1079 structured parking spaces located on two parking levels ***** 2. TO HAVE AND TO HOLD the said premises with their appurtenances for the TEN YEAR FIRM term beginning on SEE RIDER #1 and ending on SEE RIDER #1. ***** 3. The Government shall pay the Lessor annual rent of $SEE RIDER #1 at the rate $SEE RIDER #1 per MONTH In arrears Rent for a lesser period shall be prorated. Operating costs are subject to annual adjustments in accordance with Paragraph 3.4 of the SFO. Rent payment shall be made payable to: ***** 4. [Deleted] 5. [Deleted] 6. The Lessor shall furnish to the Government as part of the rental consideration, the following: A. All services, utilities, alterations, repairs, maintenance and utilities and other rights and privileges as defined by this lease. - --------------------------------------------------------------------------------

----------------------------------------------------------------------------- B. The annual rent set forth in paragraph 3 of this SF2 is inclusive of the Lessor providing the Building Shell requirements, Fire and Life Safety Requirements and handicapped accessibility requirements specified In the SFO. The Lessor shall comply with all findings and recommendations under the Fire and Life Safety report (Attachment 2) within 60 days of lease execution. C. The annual rent for Phase II and Phase Ill includes a tenant improvement (TI) allowance in the amount of $40.00/BUSF. The TI allowance shall be available in full immediately upon execution of this Lease, but shall be held by the Lessor until directed by the Government on how the disbursement of funds shall occur. The Government shall direct the disbursement of funds in any manner associated with any Government-expense connected with this Lease, including but not limited to the funding of tenant improvements; additional Lessor-provided services; services provided by third-party consultants or technical advisors; and/or to offset the Government's rental obligation to the Lessor. D. In accordance with Paragraph 3.2 (Tax Adjustment) of the SFO, the percentage of Government occupancy Is to be established at time of acceptance of space. The percentage of occupancy is subject to revision based on the actual measurement of the Government occupied space in accordance with GSA Form 3517, GENERAL CLAUSES. E. Upon acceptance of space, base year taxes will he established in accordance with SFO 3.2. F. Pursuant to Paragraph 3.5 of the SFO "Operating Costs Base", the Operating Cost Base for the purpose of calculating operating cost adjustments shall be $5.42 per BUSF. G. Pursuant to Paragraph 7.3 of the SFO "Overtime Usage", the rate for overtime HVAC service shall be mutually agreed to by the Lessor and the Government. The agreed to overtime rate will be reflected In a supplemental Lease Agreement. G. In the case of conflict between this Standard Form 2 (SF2) and its Rider and the remainder of the Lease, the terms specified In this SF2 and its Rider shall govern. 7. The following are attached and made a part hereof: TAB 1 - Rider #1 1, 2 Pages, Exhibit A, Security 3 Pages, Exhibit B, Furniture, 2 Pages TAB 2 - Floor plans - 3 Disks TAB 3 - SFO Revision 1, 51 Pages TAB 4 - GSA Form 1217, "Lessor's Annual Cost Statement" - 3 Pages TAB 5 - SA Form 3517, General Clauses, 27 Pages, TSA Provisions 5 Pages TAB 6 - GSA Form 3518, Representations and Certifications, 4 Pages TAB 7 - Rate Structure, 1 Page TAB 8 - Fire Protection and Life Safety Evaluation - 22 Pages 8. The following changes were made in this lease prior to its execution: PARAGRAPH #4 AND #5 OF THIS STANDARD FORM 2 HAVE BEEN DELETED IN THEIR ENTIRETY. IN WITNESS WHEREOF, the parties hereto have hereunto subscribed their names as of the date first above written. - -------------------------------------------------------------------------------- LESSOR: WORLDCOM, INC. BY ------------------------ ------------------------ Title IN PRESENCE OF ------------------------ ------------------------ Name: Address - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA BY ------------------------------ ---------------------------------- CONTRACTING OFFICER TSA, Contracting Officer - -------------------------------------------------------------------------------- ------------------------------------------------------------------------------ STANDARD FORM 2 FEBRUARY 1964 EDITION RIDER #1 TSA LEASE NO. DTSA20-03-R-00528 The Government and the Lessor agree as fellows: 1. The fully serviced lease rate is as follows: PHASE I The fully serviced lease rate for Phase 1 (Temporary space) shall be $20.00 per BOMA Office Area Square Foot. (BOSF) for space occupied by the Government. Rent shall commence ten (10) working days after the Government accepts Phase I space from the Lessor. Phase I space shall be accepted in increments of up to 50,000 square feet for a total of up to 150,000 square feet. The parking garage will be accepted in increments which represent the percentage of office space which has been accepted by the Government. PHASE II & III The fully serviced lease rate for Phase II and III is as follows:

------------------------------------------------------------------------------------------------------- BOSF PER BOSF TOTAL MONTHLY ------------------------------------------------------------------------------------------------------- Phase 2 & 3 491,607 $34.75 $17,083,343.25 $1,423,611.94 ------------------------------------------------------------------------------------------------------- Parking $2.50 1,230,060 $102,505.00 ------------------------------------------------------------------------------------------------------- $37.25 $18,313,403.25 $1,526,116.94 -------------------------------------------------------------------------------------------------------

Phase II and III space shall be accepted in increments. Rent for each increment shall commence ten (10) working days after the Government accepts space from the Lessor. 2. The commencement date for the Lease term shall be the weighted composite of all incremental dates of Phase II and II acceptance. The final rent will be based on the actual measurement of the Government occupied space in accordance with GSA Form 3517. The parking garage will be accepted in increments which represent the percentage of office space which has been accepted by the Government. 3. Pursuant to Section 9.1 (B) (i) of the SFO, the construction fees for initial improvements and change orders shall not exceed: General Conditions 8% Overhead & Profit 4% Landlord's Oversight Fees 3% Lessor________ Gov't_______ Rider #1, Page 1 of 2 4. The Lessor is to provide a bond secured by an irrevocable letter of credit (ILC) in accordance with FAR 28.204-3 within fifteen (15) days in an amount not less than $22 Million to serve as collateral security if Lessor fails to pay any portion of the Tenant Improvement Allowance after applicable notice and cure periods. The ILC shall be irrevocable, require presentation of no document other than a written demand and the ILC (and letter of confirmation, if any), and is not to terminate until after the entire period during which the Tenant Improvement Allowance is completely used and the Contracting Officer provides the financial institution with a written statement waiving the right to payment. 5. Notwithstanding anything to the contrary in the Lease, in the event an assignment of this offer or the lease is made by WorldCom (in connection with a sale of the property or otherwise) while, WorldCom's Chapter 11 case is pending, WorldCom may determine to seek court approval thereof and in such event, the Government shall not unreasonably withhold its consent to such assignment in connection with any right it may have under the Bankruptcy Code. If required, WorldCom shall comply with the novation requirements of FAR 42.12. 6. Any cure of any default by any lender shall be accepted by the Government in lieu of any cure by the Lessor. 7. SFO Section 6.11 (A)(l) stipulates copper buses in electrical distribution circuitry. The building's existing buses are aluminum, not copper, and are accepted as a suitable alternative to the stipulated requirement. 8. Pursuant to SFO Section 6.15 (A), the building is currently equipped with cable trays which the government may utilize. Any additional cable trays that the Government requires to support its data requirements will be paid out of the Tenant Improvement Allowance. 9. SFO Section 4.12 (B) - The Government accepts building's stairs in their current condition. Existing stairs have treads of ten and one-half (10 1/2) inches and risers measuring seven and three-quarter (7 3/4) inches. The Lessor will not be required to alter either the treads or risers to meet the requirements of ANSI A117.1 Section 504. 10. The Lessor will provide the security requirements provided in Exhibit A of this Rider, 11. The furniture listed in Exhibit B is currently located in the building. The TSA shall have the right to use any of the furniture in Exhibit B or request that the furniture be removed from the building. The Lessor shall be responsible for the cost of disassembling and removal of existing and/or excess furniture. Lessor __Gov't____ Rider #1, Page 2 of 2 12 This offer is for a single occupancy requirement of approximately 540,707 square feet in total, with the TSA being the single tenant agency. However, approximately 3,370 square feet of a terminal room (and related equipment) in the building is to be retained by Lessor along with terminal room related riser access and garage space for infrastructure UNITED STATES OF AMERICA SUPPLEMENTAL AGREEMENT DATE SUPPLEMENTAL LEASE AGREEMENT No. 5 5/6/03 TO LEASE NO. DTSA20-03-R-00528 ADDRESS OF PREMISES: 601/701 S. 12th Street Arlington, VA 22202 THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM NETWORK SERVICES, INC. Whose address is: c/o Spaulding & Slye Colliers International 1717 Pennsylvania Avenue, NW, Suite 1000 Washington, DC 20006 Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter called the Government: WHEREAS, the parties hereto desire to amend the above Lease. NOW THEREFORE, these parties for the considerations hereinafter mentioned covenant and agree that the said Lease is amended, as follows: Paragraph 1.10 of SFO #DTSA20-03-R-00528, attached to the lease dated December 17, 2002, is hereby deleted in its entirety and replaced by the following: "1.10 TENANT IMPROVEMENT RENTAL ADJUSTMENT (SEP 2000) (TSA SEP 2002) A. All Tenant Improvements shall be identified after award of the contract. 1. The Government, at its sole discretion, shall make all decisions as to the usage of the Tenant Improvement Allowance. The Government may use all or part of the Tenant Improvement Allowance. The Government may return to the Lessor any unused portion of the Tenant Improvement Allowance in exchange for an equivalent value of rental abatement to be effective as of the last acceptance date of completed space at a 0% amortization rate. For instance, should the Government decide not to use $5.00 per BOMA Office Area square foot of its Tenant Improvement Allowance, then the rent shall be abated by an equivalent per diem dollar value beginning as of the last acceptance date of completed space and ending on such date that the $5.00 per BOMA Office Area square foot in value has been returned to the Government via this rent abatement. 2. The Government reserves the right to make cash payments for any or all work performed by the Lessor. Prior to occupancy, the Government, at its sole discretion, may choose to pay lump sum for any or all of the Tenant Improvements. Any lump sum payment for Tenant Improvements made by the Government in lieu of accepting all or any portion of the Tenant Improvement Allowance may be made in exchange for an equivalent value of rental abatement to be effective as of the last acceptance date of completed space at a 0% amortization rate. 3. If the Government spends more on Tenant Improvements than $40.00 per BOMA Office Area square foot, the Government reserves the right to: 1) reduce the scope of the Tenant Improvement requirements such that the fair and reasonable cost of such requirements is reduced to $40.00 per BOMA Office Area square foot or less; 2) pay lump sum for the overage upon completion and acceptance of the improvements; or 3) opt for an increase in the rent according to the negotiated amortization rate over the firm term of the lease." ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT. IN WITNESS WHEREOF, the parties subscribed their names as of the above date. - -------------------------------------------------------------------------------- LESSOR: MCI WORLDCOM NETWORK SERVICES, INC. BY /s/ Brian H. Trosper Vice President -------------------------------- ------------------------------- (Signature) (Title) IN THE PRESENCE OF (witnessed by:) 2400 North Glenville Dr. /s/ Susan Baker Richardson, Tx. 75082 -------------------------------- ------------------------------- (Signature) (Address) - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA BY /s/ (ILLEGIBLE) CONTRACTING OFFICER, TSA -------------------------------- ------------------------------- (Signature) (Title) GSA DC 68-1176 GSA FORM 276 JUL 67 - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA SUPPLEMENTAL AGREEMENT DATE SUPPLEMENTAL LEASE AGREEMENT No. 1 3/4/03 -------------------------------------------- TO LEASE NO. DTSA20-03-R-00528 - -------------------------------------------------------------------------------- ADDRESS OF PREMISES: 601/701 S. 12th Street Arlington, VA 22202 - -------------------------------------------------------------------------------- THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM NETWORK SERVICES, INC. Whose address is: c/o Spaulding & Slye Colliers International 1717 Pennsylvania Avenue, NW, Suite 1000 Washington, DC 20006 Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter called the Government: WHEREAS, the parties hereto desire to amend the above Lease. NOW THEREFORE, these parties for the considerations hereinafter mentioned covenant and agree that the said Lease is amended, as follows: The Government shall be responsible for paying the following annual rental rates for Phase I space: o $20.00 per BOMA Office Usable Square Feet ("BUSF") for the first 136,376 BUSF (such being 150,000 BOMA Rentable Square Feet ("BRSF")) accepted by the Government. o $25.42 per BUSF for all Phase I space accepted above the first 136,376 BUSF (such being 150,000 BOMA Rentable Square Feet ("BRSF")). Rent shall be paid MONTHLY in arrears. Rent for a lesser period will be pro-rated. ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT. IN WITNESS WHEREOF, the parties subscribed their names as of the above date. - -------------------------------------------------------------------------------- LESSOR: MCI WORLDCOM NETWORK SERVICES, INC. Vice President -- BY: /s/ Brian H. Trosper Corp. Real Estate & Facilities ------------------------------- ------------------------------- (Signature) (Title) IN THE PRESENCE OF (witnessed by:) /s/ Susan Baker 2400 North Glenville Dr. - ---------------------------------- ------------------------------- (Signature) (Address) - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA BY: /s/ (ILLEGIBLE) CONTRACTING OFFICER, TSA ------------------------------- ------------------------------- (Signature) (Title) - -------------------------------------------------------------------------------- GSA DC 68-1176 GSA FORM 276 JUL 67 UNITED STATES OF AMERICA SUPPLEMENTAL AGREEMENT DATE SUPPLEMENTAL LEASE AGREEMENT No. 2 3/4/03 TO LEASE NO. DTSA20-03-R-00528 ADDRESS OF PREMISES: 601/701 S. 12th Street Arlington, VA 22202 THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM NETWORK SERVICES, INC. Whose address is: c/o Spaulding & Slye Colliers International 1717 Pennsylvania Avenue, NW, Suite 1000 Washington, DC 20006 Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter called the Government: WHEREAS, the parties hereto desire to amend the above Lease. NOW THEREFORE, these parties for the considerations hereinafter mentioned covenant and agree that the said Lease is amended, as follows: 1. Acceptance of Space: In January 2003, the Government accepted 229,932 BOMA Rentable Square Feet ("BRSF") (such being 209,048 BOMA Office Usable Square Feet ("BUSF")) of Phase I space in its "as-is" condition per the schedule identified in Exhibit A of this SLA. 2. Office Rental: For this 229,932 BRSF (such being 209,048 BUSF), the Government shall pay an annual rent of $4,574,842.24 ($20.00 per BUSF for 136,376 BUSF; $25.42 per BUSF for 72,672 BUSF) at a rate of $381,236.85 per MONTH in arrears. Total pro-rated rental for this space for January 2003 shall be $226,824.87. 3. Parking Rental: Total annual rental for the garage, based upon the percentage of total square footage accepted by the Government to date in relation to total building square footage, shall be 42.52% of the annual total garage rental rate or $523,021.51 at a rate of $43,585.13 per MONTH in arrears. Total pro-rated garage rental for January 2003 shall be $26,523.21. ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT. IN WITNESS WHEREOF, the parties subscribed their names as of the above date. - -------------------------------------------------------------------------------- LESSOR: MCI WORLDCOM NETWORK SERVICES, INC. Vice President -- Corp. Real BY /s/ Brian H. Trosper Estate & Facilities -------------------------------- ------------------------------- (Signature) (Title) IN THE PRESENCE OF (witnessed by:) /s/ Susan Baker 2400 North Glenville Dr. -------------------------------- ------------------------------- (Signature) (Address) - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA BY /s/ (ILLEGIBLE) CONTRACTING OFFICER, TSA -------------------------------- ------------------------------- (Signature) (Title) GSA DC 68-1176 GSA FORM 276 JUL LEASE #DTSA20-03-R-00528 EXHIBIT A - SLA # JANUARY 2003 ACCEPTANCE OF SPACE JANUARY 4TH ACCEPTANCE OF SPACE

BUILDING FLOOR % OF FLOOR FLOOR RSF RSF OCCUPIED FLOOR CAF USF OCCUPIED - -------- ----- ---------- --------- ------------ --------- ------------ W701 4 100% 20,820 20,820 1.0999 18,929 W701 5 100% 20,820 20,820 1.0999 18,929 W701 6 100% 20,820 20,820 1.0999 18,929 W701 1 50% 13,990 6,995 1.0999 6,360 W701 7 50% 20,820 10,410 1.0999 9,464 --------------------------------------------------------- TOTAL 79,865 72,611

JANUARY 18TH ACCEPTANCE OF SPACE

BUILDING FLOOR % OF FLOOR FLOOR RSF RSF OCCUPIED BUILDING CAF USF OCCUPIED - -------- ----- ---------- --------- ------------ ------------ ------------ E601 9 100% 25,732 25,732 1.0999 23,395 E601 10 100% 25,732 25,732 1.0999 23,395 E601 11 100% 25,732 25,732 1.0999 23,395 W701 7 50% 20,820 10,410 1.0999 9,464 W701 2 100% 20,823 20,823 1.0999 18,932 W701 9 100% 20,820 20,820 1.0999 18,929 W701 10 100% 20,820 20,820 1.0999 18,929 ------------------------------------------------------------ TOTAL 150,068 136,437

RSF OCCUPIED USF OCCUPIED ------------ ------------ JANUARY SPACE ACCEPTANCE TOTALS 229,932 209,048

UNITED STATES OF AMERICA SUPPLEMENTAL AGREEMENT DATE SUPPLEMENTAL LEASE AGREEMENT No. 3 3/4/03 TO LEASE NO. DTSA20-03-R-00528 ADDRESS OF PREMISES: 601/701 S. 12th Street Arlington, VA 22202 THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM NETWORK SERVICES, INC. Whose address is: c/o Spaulding & Slye Colliers International 1717 Pennsylvania Avenue, NW, Suite 1000 Washington, DC 20006 Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter called the Government: WHEREAS, the parties hereto desire to amend the above Lease. NOW THEREFORE, these parties for the considerations hereinafter mentioned covenant and agree that the said Lease is amended, as follows: Parking Garage: Effective May 1, 2003 the Government will be responsible for paying rent on the entire garage at an initial annual parking rental of $1,230,060 per annum, such being $102,505.00 per month in arrears. Rent for lesser periods shall be pro-rated. The parking rental will escalate by three percent (3%) per annum, effective on May 1, 2004 and May 1st of each year thereafter, throughout the term of the lease. Prior to May 1, 2003 the Government will pay rent (per month, in arrears) for garage space which is a percentage of the annual parking rental rate of $1,230,060 ($102,505 monthly), equivalent to the percentage of space accepted by the Government within the building (the building's total square footage being 540.707 BRSF). ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT. IN WITNESS WHEREOF, the parties subscribed their names as of the above date. - -------------------------------------------------------------------------------- LESSOR: MCI WORLDCOM NETWORK SERVICES, INC. Vice President -- BY /s/ Brian H. Trosper Corp Real Estate & Facilities -------------------------------- ------------------------------- (Signature) (Title) IN THE PRESENCE OF (witnessed by:) /s/ Susan Baker 2400 North Glenville Dr. -------------------------------- ------------------------------- (Signature) (Address) - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA BY /s/ (ILLEGIBLE) CONTRACTING OFFICER, TSA -------------------------------- ------------------------------- (Signature) (Title) GSA DC 68-1176 GSA FORM 276 JUL 67 - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA SUPPLEMENTAL AGREEMENT DATE SUPPLEMENTAL LEASE AGREEMENT No. 4 3/26/03 ----------------------------------------- TO LEASE NO. DTSA20-03-R-00528 - -------------------------------------------------------------------------------- ADDRESS OF PREMISES: 601/701 S. 12th Street Arlington, VA 22202 - -------------------------------------------------------------------------------- THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM NETWORK SERVICES, INC. Whose address is: c/o Spaulding & Slye Colliers International 1717 Pennsylvania Avenue, NW, Suite 1000 Washington, DC 20006 Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter called the Government: WHEREAS, the parties hereto desire to amend the above Lease. NOW THEREFORE, these parties for the considerations hereinafter mentioned covenant and agree that the said Lease is amended, as follows: 1. Acceptance of Space: In February 2003, the Government accepted 84,799 BOMA Rentable Square Feet ("BRSF") (such being 77,097 BOMA Office Usable Square Feet ("BUSF")) of Phase I space in its "as-is" condition per the schedule identified in Exhibit A of this SLA. AS OF FEBRUARY 28, 2003, THE GOVERNMENT HAS ACCEPTED A TOTAL OF 314,731 BRSF (SUCH BEING 288,145 BUSF) OF PHASE I SPACE. 2. Office Rental: For this 84,799 BRSF (such being 77,097 BUSF), the Government shall pay an annual rent of $1,959,805.74 ($25.42 per BUSF) at a rate of $163,317.15 per MONTH in arrears. Pro-rated rental for this space for February 2003 shall be $73,753.77. TOTAL ANNUAL RENTAL FOR ALL GOVERNMENT SPACE ACCEPTED TO DATE SHALL BE $6,534,647.98 ($20.00 PER BUSF FOR 136,376 BUSF; $25.42 PER BUSF FOR 149,769 BUSF) AT A RATE OF $544,554.00 PER MONTH IN ARREARS. TOTAL PRO-RATED RENTAL FOR FEBRUARY 2003 SHALL BE $454,991.02. 3. Parking Rental: Per the ratio of space the Government has accepted per this SLA in relation to the total buildings' total square footage, the Government shall pay for an additional 15.7% of the total garage, which equates to an annual parking rental of $193,119.42 at a rate of $16,093.28 per MONTH in arrears. Pro-rated rental for this portion of the garage for February 2003 shall be $12,056.84. TOTAL ANNUAL RENTAL FOR THE GARAGE, BASED UPON THE PERCENTAGE OF TOTAL SQUARE FOOTAGE ACCEPTED BY THE GOVERNMENT TO DATE IN RELATION TO TOTAL BUILDING SQUARE FOOTAGE, SHALL BE 58.21% OF THE ANNUAL TOTAL GARAGE RENTAL RATE OR $718,017.93 AT A RATE OF $59,668.16 PER MONTH IN ARREARS. TOTAL PRO-RATED GARAGE RENTAL FOR FEBRUARY 2003 SHALL BE $55,647.40. (Continued on next page) - -------------------------------------------------------------------------------- GSA DC 68-1176 GSA FORM 276 JUL 67 ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT. IN WITNESS WHEREOF, the parties subscribed their names as of the above date. - -------------------------------------------------------------------------------- LESSOR: MCI WORLDCOM NETWORK SERVICES, INC. BY: /s/ Brian H. Trosper Vice President -------------------------------- ------------------------------- (Signature) (Title) IN THE PRESENCE OF (witnessed by:) BY: /s/ (ILLEGIBLE) -------------------------------- ------------------------------- (Signature) (Address) - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA BY: /s/ (ILLEGIBLE) CONTRACTING OFFICER, TSA -------------------------------- ------------------------------- (Signature) (Title) CSA DC 68-1176 GSA FORM 276 JUL 67 LEASE # DTSA20-03-R-00528 EXHIBIT A - SLA # FEBRUARY 2003 ACCEPTANCE OF SPACE FEBRUARY 9TH ACCEPTANCE OF SPACE

BUILDING FLOOR % OF FLOOR FLOOR RSF RSF OCCUPIED BUILDING CAF USF OCCUPIED - -------- ----- ---------- --------- ------------ ------------ ------------ W701 3 100% 20,820 20,820 1.0999 18,929 W701 8 100% 20,823 20,823 1.0999 18,932 W701 11 50% 20,820 10,410 1.0999 9,464 W701 1 50% 13,990 6,995 1.0999 6,360 E601 12 100% 25,751 25,751 1.0999 23,412 --------------------------------------------------------- TOTAL 84,799 77,097

RSF OCCUPIED USF OCCUPIED ------------ ------------ February Space Acceptance Totals 84,799 77,097

RSF OCCUPIED USF OCCUPIED ------------ ------------ Total Space Accepted as of Feb 28, 2003 314,731 255,145

UNITED STATES OF AMERICA SUPPLEMENTAL AGREEMENT DATE SUPPLEMENTAL LEASE AGREEMENT No.9 6/20/03 TO LEASE NO. DTSA20-03-R-00528 ADDRESS OF PREMISES: 601/701 S. 12th Street Arlington, VA 22202 THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM NETWORK SERVICES, INC. Whose address is: c/o Spaulding & Slye Colliers International 1717 Pennsylvania Avenue, NW, Suite 1000 Washington, DC 20006 Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter called the Government: WHEREAS, the parties hereto desire to amend the above Lease. NOW THEREFORE, these parties for the considerations hereinafter mentioned covenant and agree that the said Lease is amended, as follows: 1. Exhibit 1 attached to this SLA #9 contains Property Management Modifications Log #2. 2. The Government hereby confirms that it will pay the total amount of $418,293.82 identified in Exhibit 1 in accordance with invoicing and payment procedures set forth in GSA Form 3517B (Rev 09/01), as attached to the Lease dated December 17, 2002. All other terms and conditions of the lease shall remain in force and effect. IN WITNESS WHEREOF, the parties subscribed their names as of the above date. LESSOR: MCI WORLDCOM NETWORK SERVICES, INC. BY /s/ Brian H. Trosper Vice President --------------------- ----------------- (Signature) (Title) IN THE PRESENCE OF (witnessed by:) 2400 North Glenville Dr. Richardson, Tx. 75082 /s/ Susan E. Baker ------------------------ - -------------------- (Address) (Signature) UNITED STATES OF AMERICA BY /s/ (ILLEGIBLE) CONTRACTING OFFICER --------------------- ---------------------- (Signature) (Title) SLA #9 - EXHIBIT 1 PROPERTY MANAGEMENT MODIFICATIONS LOG #2 LEASE NO. DTSA20-03-R-00528

- ----------------------------------------------------------------------------------------------------------------------------------- MODIFICATION MOD# OR MOD COST TO OR TSR TSR# DATE DESCRIPTION VENDOR TSA - ----------------------------------------------------------------------------------------------------------------------------------- MOD 2 Overtime from 6PM 12/23 to BTE $4,678.35 7AM 1/5/03 Excl. NY eve and New Years. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 8 Provide 10 dumpsters for TSA ETW $ 992.15 use during move-in - ----------------------------------------------------------------------------------------------------------------------------------- MOD 16 Extended Supervision buildings BTE $ 774.21 601 and 701 7AM 1/20/03 through 6PM 1/24/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 16 Extended Supervision buildings BTE $8,941.05 601 and 701 7AM 1/20/03 through 6PM 1/24/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 16 Extended Supervision buildings Spaulding & Slye $1,210.00 601 and 701 7AM 1/20/03 through 6PM 1/24/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 17 Daytime Clean from 1/01/03 - Liberty $ 784.08 03/31/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 17 Daytime Clean from 1/01/03 - Liberty $ 588.05 03/31/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 17 Daytime Clean from 1/01/03 - Liberty $ 784.08 03/31/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 17 Daytime Clean from 1/01/03 - Liberty $ 628.72 03/31/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 17 Daytime Clean from 1/01/03 - Liberty $ 628.72 03/31/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 17 Daytime Clean from 1/01/03 - Liberty $ 345.19 03/31/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 17 Daytime Clean from 1/01/03 - Liberty $ 742.27 03/31/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 17 Daytime Clean from 1/01/03 - USSI $ 742.27 03/31/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 22 Extended Supervision buildings BTE $ 806.47 601 and 701 6PM 2/7/03 through 6PM 2/10/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 22 Extended Supervision buildings BTE $5,611.10 601 and 701 6PM 2/7/03 through 6PM 2/10/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 22 Extended Supervision buildings Spaulding & Slye $1,210.00 601 and 701 6PM 2/7/03 through 6PM 2/10/03. - ----------------------------------------------------------------------------------------------------------------------------------- MOD 23 Painting on the 12th floor. T.L. Evans $ 493.35 - ----------------------------------------------------------------------------------------------------------------------------------- MOD 23 2nd floor outlet for copier. Truland Services $ 347.88 - ----------------------------------------------------------------------------------------------------------------------------------- MOD 23 12th floor outlets. Truland Services $ 710.33 - ----------------------------------------------------------------------------------------------------------------------------------- MOD 23 2 dedicated outlets on the Truland Services $ 665.50 5th floor - ----------------------------------------------------------------------------------------------------------------------------------- MOD 23 TSA Requested electrical work Truland Services $ 637.56 - ----------------------------------------------------------------------------------------------------------------------------------- MOD 25 6th floor electrical work at 701. Truland $2,656.95 - -----------------------------------------------------------------------------------------------------------------------------------

SLA #9 - EXHIBIT 1 PAGE 1 SLA #9 - EXHIBIT 1 PROPERTY MANAGEMENT MODIFICATIONS LOG #2 LEASE NO. DTSA20-03-R-00528

MODIFICATION MOD# OR MOD COST TO OR TSR TSR# DATE DESCRIPTION VENDOR TSA - ------------ ---------------- ----------------------------------------- -------------------- ----------- MOD 26 6th floor Liebert PM for 6 units at MECCO $ 5,662.80 701. MOD 27 6th floor PDU maintenance at Power Protection $ 9,710.25 701. MOD 29 Daytime cleaning from 4/1/03 - USSI $ 1,484.54 4/30/03. MOD 30 Security from 3/1/03 through Burns International $ 64,588.98 3/30/03 at 601 & 701. MOD 30 Security from 3/1/03 through Burns International $ 60,515.95 3/30/03 at 601 & 701. MOD 30 Security from 3/1/03 through Burns International $ 60,135.63 3/30/03 at 601 & 701. MOD 30 Security from 3/1/03 through Burns International $ 70,822.68 3/30/03 at 601 & 701. MOD 30 Security from 3/1/03 through Burns International $ 77,858.00 3/30/03 at 601 & 701. MOD 31 After hours HVAC for TSA from Spaulding & Slye $ 23,712.00 3/18/03 - 4/4/03. MOD 28 Stairway emergency battery Trulan Services $ 8,463.95 lights MOD 39 Temperature tools for TSA McMaster Carr $ 461.78 facilities. TOTAL 418,293.82

SLA #9 - Exhibit 1 Page 2 UNITED STATES OF AMERICA SUPPLEMENTAL AGREEMENT DATE SUPPLEMENTAL LEASE AGREEMENT No. 6 TO LEASE NO. DTSA20-03-R-00528 ADDRESS OF PREMISES: 601/701 S. 12th Street Arlington, VA 22202 THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM NETWORK SERVICES, INC. Whose address is: c/o Spaulding & Slye Colliers International 1717 Pennsylvania Avenue, NW, Suite 1000 Washington, DC 20006 Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter called the Government: WHEREAS, the parties hereto desire to amend the above Lease. NOW THEREFORE, these parties for the considerations hereinafter mentioned covenant and agree that the said Lease is amended, as follows: Pursuant to the rights reserved by the Government in SFO Section 7.12(D)(3), the Government has the right to install, at the Government's expense, crash barriers around the perimeter of the leased premises. Such crash barriers may be concrete bollards, planters, retractable gates or other architectural features, which shall conform as much as practical to the existing building's features and structures "to avoid an armed camp appearance." As of March 29, 2003, Lessor has agreed to permit the installation of temporary crash barriers (i.e., jersey walls) by the Government around the perimeter of the leased premises, for a period not to exceed 120 days. Upon the expiration of this 120 period (on July 27, 2003), the Government must remove the temporary crash barriers. Installation and removal of the temporary crash barriers will be at the Government's sole cost and expense. If the Government does not remove the temporary crash barriers and begin the installation of a permanent crash barrier solution (subject to the provisions below) on or before July 27, 2003, then for each day after July 27, 2003 that the temporary crash barriers remain around the perimeter of the leased premises, the Government shall pay to Lessor a daily pro-rated penalty of $1.00 per ANSI/BOMA USF, per annum, as additional rent on the 491,707 ANSI/BOMA USF of space leased at the premises ($1,347.14 per day). Once the temporary crash barriers have been removed, no further penalty, will be assessed related to such barriers. During the 120-day period, the Government shall provide Lessor with plans and specifications for a permanent crash barrier solution, as described in SFO Section 7.12 (D)(3), for the Lessor's written approval, which approval shall not be unreasonably withheld, conditioned or delayed. ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT. IN WITNESS WHEREOF, the parties subscribed their names as of the above date. - -------------------------------------------------------------------------------- LESSOR: MCI WORLDCOM NETWORK SERVICES, INC. BY: /s/ Brian H. Trosper Vice President -------------------------------- ------------------------------- (Signature) (Title) IN THE PRESENCE OF (witnessed by:) 2400 N. Glenville Dr. BY: /s/ Susan E. Baker Richardson, Tx. 75082 -------------------------------- ------------------------------- (Signature) (Address) - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA BY: /s/ (ILLEGIBLE) CONTRACTING OFFICER, TSA -------------------------------- ------------------------------- (Signature) (Title) CSA DC 68-1176 GSA FORM 276 JUL 67 UNITED STATES OF AMERICA SUPPLEMENTAL AGREEMENT DATE SUPPLEMENTAL LEASE AGREEMENT No. 7 TO LEASE NO. DTSA20-03-R-00528 ADDRESS OF PREMISES: 601/701 S. 12th Street Arlington, VA 22202 THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM NETWORK SERVICES, INC. Whose address is: c/o Spaulding & Slye Colliers International 1717 Pennsylvania Avenue, NW, Suite 1000 Washington, DC 20006 Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter called the Government: WHEREAS, the parties hereto desire to amend the above Lease. NOW THEREFORE, these parties for the considerations hereinafter mentioned covenant and agree that the said Lease is amended, as follows: 1. Exhibit 1 attached to this SLA #7 contains Property Management Modifications Log #1. 2. The Government hereby confirms that it will pay the total amount of $535,750.12 identified in Exhibit 1 in accordance with invoicing and payment procedures set forth in GSA Form 3517B (Rev 09/01), as attached to the Lease dated December 17, 2002. ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT. IN WITNESS WHEREOF, the parties subscribed their names as of the above date. - -------------------------------------------------------------------------------- LESSOR: MCI WORLDCOM NETWORK SERVICES, INC. BY: /s/ Brian H. Trosper Vice President -------------------------------- ------------------------------- (Signature) (Title) IN THE PRESENCE OF (witnessed by:) 2400 North Glenville Dr. /s/ Susan E. Baker Richardson, Tx. 75082 -------------------------------- ------------------------------- (Signature) (Address) - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA BY /s/ (ILLEGIBLE) CONTRACTING OFFICER, TSA -------------------------------- ------------------------------- (Signature) (Title) GSA DC 68-1176 GSA FORM 276 JUL 67 LEASE NO. DTSA20-03-R-00528 SLA #7 - EXHIBIT 1 PROPERTY MANAGEMENT MODIFICATIONS LOG #1

MODIFICATION MOD# OR MOD COST TO OR TSR TSR# DATE DESCR. VENDOR TSA - ------------ --------------- ----------------------------------- ------------------- ---------- MOD 2 24 coverage for TSA contractor BTE $ 4,578.35 access MOD 3 Installation of electrical services Power Solutions $22,131.83 in various areas at 701 South 12th Street. MOD 4 24hrs engineer coverage over Building Technology $ 2,743.86 New Year's Holiday. Engineers, Inc. MOD 5 Security Coverage for 1/3-1/6/03 Burns Int'l Security $ 9,939.95 Services MOD 6 8hrs for Electricians for electrical Power Solutions $ 3,388.00 work MOD 7 Provide 16 outlets in the 6th floor Power Solutions $16,732.23 CPU room at 701 South 12 the Street. MOD 9 - Invoice #1 24 hr coverage for TSA service Building Technology $ 5,968.20 contractors. And property Engineers, Inc. management coverage for the move on 1/3/03 4hrs MOD 9 - Invoice #2 24 hr coverage for TSA service Spaulding & Slye $ 605.00 contractors. And property management coverage for the move on 1/3/03 4hrs MOD 10 Install two outlet in every LAN Power Solutions $24,232.11 closet 9-12 in 601 south 12th Street. MOD 11 - Invoice #1 Security Coverage for 1/9-1/18/03 Burns Int'l Security $ 4,620.00 Services MOD 11 - Invoice #2 Security Coverage for 1/9-1/18/03 Burns Int'l Security $19,050.63 Services MOD 11 - Invoice #3 Security Coverage for 1/9-1/18/03 Burns Int'l Security $39,854.65 Services MOD 12 - Invoice #1 24 hr coverage for TSA service Building Technology $ 548.10 contractors. And property Engineers, Inc. management coverage for the move on 1/8-1/20/03 4hrs MOD 12 - Invoice #2 24 hr coverage for TSA service Building Technology $ 3,452.81 contractors. And property Engineers, Inc. management coverage for the move on 1/8-1/20/03 4hrs MOD 12 - Invoice #3 24 hr coverage for TSA service Building Technology $ 5,077.23 contractors. And property Engineers, Inc. management coverage for the move on 1/8-1/20/03 4hrs

SLA #7 - Exhibit 1 Page 1 LEASE NO. DTSA20-03-R-00528 SLA #7 - EXHIBIT 1 PROPERTY MANAGEMENT MODIFICATIONS LOG #1

MODIFICATION MOD# OR MOD COST TO OR TSR TSR# DATE DESCR. VENDOR TSA - ------------ --------------- ------------------------------------ -------------------- ---------- MOD 12 - Invoice #4 24 hr coverage for TSA service Building Technology $ 17,712.06 contractors. And property Engineers, Inc. management coverage for the move on 1/3/03 4hrs MOD 12 - Invoice #5 Property Management coverage Spaulding & Slye $ 1,210.00 for move on 1/18/03 MOD 13 Install two outlet in every LAN Power Solution $ 10,890.00 closet 7-8 in 601 south 12th Street. MOD 14 Installation of electrical circuits Power Solution $ 732.76 in VIP room MOD 18 Rekey of various locks in 701 Action Lock & Safe $ 914.19 MOD 20 - Invoice #1 Security Coverage for 1/19- Burns Int'l Security $ 53,283.87 1/31/03 Services MOD 20 - Invoice #2 Security Coverage for 1/19- Burns Int'l Security $ 60,069.08 1/31/03 Services MOD 21 - Invoice #1 Security Coverage for 2/1-2/28/03 Burns Int'l Security $ 53,537.00 Services MOD 21 - Invoice #2 Security Coverage for 2/1-2/28/03 Burns Int'l Security $ 59,770.98 Services MOD 21 - Invoice #3 Security Coverage for 2/1-2/28/03 Burns Int'l Security $ 58,384.70 Services MOD 21 - Invoice #4 Security Coverage for 2/1-2/28/03 Burns Int'l Security $ 57,502.50 Services TSR 1/17/2003 Rekey of various locks in 701 Action Lock & Safe $ 221.99 TSR 1/30/2003 Rekey of various locks in 701 Action Lock & Safe $ 179.20 TSR 1/30/2003 Rekey of various locks in 701 Action Lock & Safe $ 2,346.96 TSR 2/27/03 - Rekey of various locks in 701 Action Lock & Safe $ 407.22 Invoice #1 TSR 2/27/03 - Rekey of various locks in 701 Action Lock & Safe $ 243.01 Invoice #1 TOTAL $535,750.12

SLA #7 - Exhibit 1 Page 2 - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA SUPPLEMENTAL AGREEMENT DATE SUPPLEMENTAL LEASE AGREEMENT No. 8 -------------------------------------------- TO LEASE NO. DTSA20-03-R-00528 - -------------------------------------------------------------------------------- ADDRESS OF PREMISES: 601/701 S. 12th Street Arlington, VA 22202 - -------------------------------------------------------------------------------- THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM NETWORK SERVICES, INC. Whose address is: c/o Spaulding & Slye Colliers International 1717 Pennsylvania Avenue, NW, Suite 1000 Washington, DC 20006 Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter called the Government: WHEREAS, the parties hereto desire to amend the above Lease. NOW THEREFORE, these parties for the considerations hereinafter mentioned covenant and agree that the said Lease is amended, as follows: 1. Acceptance of Space: In March 2003, the Government accepted 31,230 BOMA Rental Square Feet ("BRSF") (such being 28,393 BOMA Office Usable Square Feet ("BUSF")) of Phase I space in its "as-is" condition per the schedule identified in Exhibit A of this SLA. AS OF MARCH 31, 2003, THE GOVERNMENT HAS ACCEPTED A TOTAL OF 345,972 BRSF (SUCH BEING 314,539 BUSF) OF PHASE I SPACE. 2. Office Rental: For this 31,230 BRSF (such being 28,393 BUSF), the Government shall pay an annual rent of $721,750.06 ($25.42 per BUSF) at a rate of $60,145.84 per MONTH in arrears. Pro-rated rental for this space for March 2003 shall be $60,145.84. TOTAL ANNUAL RENTAL FOR ALL GOVERNMENT SPACE ACCEPTED TO DATE SHALL BE $7,256,423.46 ($20.00 PER BUSF FOR 136,376 BUSF; $25.42 PER BUSF FOR 178,163 BUSF) AT A RATE OF $604,701.96 PER MONTH IN ARREARS. TOTAL PRO-RATED RENTAL FOR MARCH 2003 SHALL BE $604,701.96. 3. Parking Rental: Per the ratio of space the Government has accepted per this SLA in relation to the total buildings' total square footage, the Government shall pay for an additional 5.8% of the total garage, which equates to an annual parking rental of $71,343.48 at a rate of $5,945.29 per MONTH in arrears. Pro-rated rental for this portion of the garage for March 2003 shall be $5,945.29. TOTAL ANNUAL RENTAL FOR THE GARAGE, BASED UPON THE PERCENTAGE OF TOTAL SQUARE FOOTAGE ACCEPTED BY THE GOVERNMENT TO DATE IN RELATION TO TOTAL BUILDING SQUARE FOOTAGE, SHALL BE 63.99% OF THE ANNUAL TOTAL GARAGE RENTAL RATE OR $787,115.39 AT A RATE OF $65,592.95 PER MONTH IN ARREARS. TOTAL PRO-RATED GARAGE RENTAL FOR MARCH 2003 SHALL BE $65,592.95. (Continued on next page) GSA DC 68-1176 GSA FORM 276 JUL 67 ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT. IN WITNESS WHEREOF, the parties subscribed their names as of the above date. - -------------------------------------------------------------------------------- LESSOR: MCI WORLDCOM NETWORK SERVICES, INC. BY: /s/ Brian H. Trosper Vice President ------------------------------ ------------------------------ (Signature) (Title) IN THE PRESENCE OF (witnessed by:) 2400 North Glenville Dr. /s/ Susan E. Baker Richardson, Tx. 75082 - ---------------------------------- ------------------------------ (Signature) (Address) - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA BY: ____________________________ _______________________________ (Signature) (Title) - -------------------------------------------------------------------------------- GSA DC 68-1176 GSA FORM 276 JUL 67 LEASE # DTSA20-03-R-00528 EXHIBIT A - SLA #8 MARCH 2003 ACCEPTANCE OF SPACE MARCH 1, 2003 ACCEPTANCE OF SPACE

BUILDING FLOOR % OF FLOOR FLOOR RSF RSF OCCUPIED BUILDING CAF USF OCCUPIED - -------- ----- ---------- --------- ------------ ------------ ------------ W701 11 50% 20,820 10,410 1.0999 9,464 W701 12 100% 20,820 20,820 1.0999 18,929 ------ ------ TOTAL 31,230 28,393 ====== ======

RSF OCCUPIED USF OCCUPIED ------------ ------------ FEBRUARY SPACE ACCEPTANCE TOTALS 31,230 28,393

RSF OCCUPIED USF OCCUPIED ------------ ------------ TOTAL SPACE ACCEPTED AS OF MARCH 1, 2003 345,972 314,539

REPRESENTATIONS AND CERTIFICATIONS Solicitation Number Dated (Acquisition of Leasehold DTSA20-03-R-00528 Interests In Real Property) Complete appropriate boxes, sign the form, and attach to offer. The Offeror makes the following Representations and Certifications. NOTE: The "Offerer," as used on this form, is the owner of the property offered, not an individual or agent representing the owner. 1. 52.219-1 - SMALL BUSINESS PROGRAM REPRESENTATIONS {NOV 1999) (a) (1) The standard industrial classification (SIC) code for this acquisition is 6515. (2) The small business size standard applicable to this acquisition is average annual gross revenues of $15 million or less for the preceding three fiscal years. (3) The small business size standard for a concern which submits an offer in its own name, other than on a construction or service contract, but which proposes to furnish a product which it did not itself manufacture, is 500 employees. (b) Representations. (1) The Offeror represents as part of its offer that it [ ] is, [X] is not a small business concern. (2) (Complete only if offeror represented itself as a small business concern paragraph (b)(1) of this provision.) The Offeror represents, for general statistical purposes that it [ ] is, [X] is not a small disadvantaged business concern as defined in 13 CFR 124.1002. (3) (Complete only if offerer represented itself as a small business concern in paragraph (b)(1) of this section.) The Offeror represents as part of its offer that it [ ] is, [ ] is not a women-owned small business concern. (4) [Complete only if offerer represented itself as a small business concern in paragraph (b)(1) of this provision.] The offeror represents, as part of its offer, that it-- (i) [ ] is, [ ] is not a HUBZone small business concern listed, on the date of this representation, on the List of Qualified HUBZone Small Business Concerns maintained by the Small Business Administration, and no material change in ownership and control, principal office of ownership, or HUBZone employee percentage has occurred since it was certified by the Small Business Administration in accordance with 13 CFR Part 126; and (ii) It [ ] is, [ ] is not a joint venture that complies with the requirements of 13 CFR Part 126, and the representation in paragraph (b)(4){i) of this provision is accurate for the HUBZone small business concern or concerns that are participating in the joint venture. [The offeror shall enter the name or names of the HUBZone small business concern or concerns that, are participating in the joint venture:______________.] Each HUBZone small business concern participating in the joint venture shall submit a separate signed copy of the HUBZone representation. (5) [Complete if offeror represented itself as disadvantaged in paragraph (b)(2) of this provision). The offeror shall check the category In which its ownership falls: ____ Black American. ____ Hispanic American. ____ Native American (American Indians, Eskimos, Aleuts, or Native Hawaiians). ____ Asian-Pacific American (persons with origins from Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Japan, China, Taiwan, Laos, Cambodia (Kampuchea), Vietnam, Korea, The Philippines, U.S. Trust Territory of the Pacific Islands (Republic of Palau), Republic of the Marshall Islands, Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, Guam, Samoa, Macac, Hong Kong, Fiji, Tonga, Kiribati, Tuvalu, or Nauru). ____ Subcontinent Asian (Asian-Indian) American (persons with origins from India, Pakistan, Bangladesh, Srt Lanka, Bhutan, the Maldives Islands, or Nepal). ____ Individual/concern, other than one of the preceding. (c) Definitions. Small business concern, as use in this provision, means a concern, including its affiliates, that is independently owned and operated, not dominant in the field of operation in which it is bidding on Government contracts, and qualified as a small business under the criteria in 13 CFR Part 121 and the size standard in paragraph (a) of this provision. Women-owned small business concern, as use in this provision, means a small business concern-- (1) Which is at least 51 percent owned by one or more women or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and (2) Whose management and daily business operations are controlled by one or more women. (d) Notice. (1) If this solicitation is for supplies and has been set aside, in whole or in part, for small business concerns, then the clause in this solicitation providing notice of the set-aside contains restrictions on the source of the end items to be furnished. (2) Under 15 U.S.C. 645(d), any person who misrepresents a firm's status as a small, small disadvantaged, or women-owned small business concern in order to obtain a contract to be awarded under the preference INITIALS /s/ [ILLEGIBLE] & /s/ [ILLEGIBLE] --------------- --------------- GSA FORM 3518 PAGE 1 (REV 12/99) programs established pursuant to sections 8(a), 8(d), 9, or 15 of the Small Business Act or any other provision of Federal law that specifically references section 8(d) for a definition of program eligibility, shall- (i) Be punished by imposition of fine, imprisonment, or both; (ii) Be subject to administrative remedies, including suspension and debarment; and (iii) Be ineligible for participation in programs conducted under the authority of the Act. 2. 52:204-5 - WOMEN-OWNED BUSINESS (OTHER THAN SMALL BUSINESS) (MAY 1999) (a) Definition. "Women-owned business concern," as used in this provision, means a concern which is at least 51 percent owned by one or more women; or in the case of any publicly owned business, at least 51 percent of its stock is owned by one or more women; and whose management and daily business operations are controlled by one or more women. (b) Representation. [Complete only if the offeror is a women-owned business concern and has not represented itself as a small business concern in paragraph (b)(1) of FAR 52.219-1, Small Business Program Representations, of this solicitation.] The offeror represents that it [ ] is a women-owned business concern. 3. 52.222-22 - PREVIOUS CONTRACTS AND COMPLIANCE REPORTS (FEB 1999) The Offeror represents that- (a) It [X] has, [ ] has not participated in a previous contract or subcontract subject to the Equal Opportunity clause of this solicitation; (b) It [X] has, [ ] has not filed all required compliance reports; and (c) Representations indicating submission of required compliance reports, signed by proposed subcontractors, will be obtained before subcontract awards. (Approved by OMB under Control Number 1215-0072.) 4. 52.222-25 - AFFIRMATIVE ACTION COMPLIANCE (APR 1984) The Offeror represents that- (a) It [X] has developed and has on file, [ ] has not developed and does not have on file, at each establishment affirmative action programs required by the rules and regulations of the Secretary of Labor (41 CFR 60-1 and 60-2), or (b) It [ ] has not previously had contracts subject to the written affirmative action programs requirement of the rules and regulations of the Secretary of Labor. (Approved by OMB under Control Number 1215-0072.) 5. 52.203-02 - CERTIFICATE OF INDEPENDENT PRICE DETERMINATION (APR 1985} (Applies to leases which exceed $100,000 average net annual rental, including option periods.) (a) The Offeror certifies that- (1) The prices in this offer have been arrived at independently, without, for the purpose of restricting competition, any consultation, communication, or agreement with any other Offeror or competitor relating to (i) those prices, (ii) the intention to submit an offer, or (iii) the methods or factors used to calculate the prices offered; (2) The prices in this offer have not been and will not be knowingly disclosed by the Offeror, directly or indirectly, to any other Offeror or competitor before bid opening (in the case of a sealed bid solicitation) or contract award (in the case of a negotiated solicitation) unless otherwise required by law; and (3) No attempt has been made or will be made by the Offeror to induce any other concern to submit or not to submit an offer for the purpose of restricting competition. (b) Each signature on the offer is considered to be a certification by the signatory that the signatory- (1) Is the person in the Offeror's organization responsible for determining the prices being offered in this bid or proposal, and that the signatory has not participated and will not participate In any action contrary to subparagraphs (a)(1) through (a)(3) above; or (2) (i) Has been authorized, in writing, to act as agent for the following principals in certifying that those principals have not participated, and will not participate in any action contrary to subparagraphs (a)(1) through (a)(3) above John Dubel, CFO. [insert full name of person(s) in the Offeror's organization responsible for determining the prices offered in this bid or proposal, and the title of his or her position in the Offeror's organization]; (ii) As an authorized agent, does certify that the principals named in subdivision (b)(2)(i) above have not participated, and will not participate, in any action contrary to subparagraphs (a)(1) through (a)(3) above; and (iii) As an agent, has not personally participated, and will not participate, in action contrary to subparagraphs (a)(1) through (a)(3) above. (c) If the Offeror deletes or modifies subparagraph (a)(2) above, the Offeror must furnish with its offer a signed statement setting forth in detail the circumstances of the disclosure, 6. 52.203-11 - CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS (APR 1991) (DEVIATION) INITIALS: /s/ [ILLEGIBLE] & /s/ [ILLEGIBLE] --------------- --------------- LESSOR GOVERNMENT GSA FORM 3518 PAGE 2 (REV 12/99) (Applies to leases which exceed $100,000.) (a) The definitions and prohibitions contained in the clause, at FAR 52.203-12, Limitation on Payments to Influence Certain Federal Transactions, are hereby incorporated by reference in paragraph (b) of this certification. (b) The offeror, by signing its offer, hereby certifies to the best of his or her knowledge and belief that on or after December 23, 1989,- (1) No Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress on his or her behalf in connection with the awarding of a contract resulting from this solicitation. (2) If any funds other than Federal appropriated funds (including profit or fee received under a covered Federal transaction) have been paid, or will be paid, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress on his or her behalf in connection with this solicitation, the offeror shall complete and submit, with its offer, OMB standard form LLL, Disclosure of Lobbying Activities, to the Contracting Officer; and (3) He or she will include the language of this certification in all subcontract awards at any tier and require that all recipients of subcontract awards in excess of $100,000 shall certify and disclose accordingly. (c) Submission of this certification and disclosure is a prerequisite for making or entering into this contract imposed by section 1352, title 31, United States Code. Any person who makes an expenditure prohibited under this provision or who fails to file or amend the disclosure form to be filed or amended by this provision, shall be subject to a civil penalty of not less than $10,000, and not more than $100,000, for each such failure. 7. 52.209-5 - CERTIFICATION REGARDING DEBARMENT, SUSPENSION, PROPOSED DEBARMENT, AND OTHER RESPONSIBILITY MATTERS {MAR 1996) (Applies to LEASES which EXCEED $100,000 AVERAGE net annual rental, including option periods.) (a) (1) The Offeror certifies, to the best of its knowledge and belief, that- (i) The Offeror and/or any of its Principals- (A) Are [ ] are not [X] presently debarred, suspended, proposed for debarment, or declared ineligible for the award of contracts by any Federal agency; (B) Have [ ] have not [X] within a three-year period preceding this offer, been convicted of or had a civil judgment rendered against them for: commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) contract or subcontract; violation of Federal or State antitrust statutes relating to the submission of offers; or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, or receiving stolen property; and (C) Are [ ] are not [ ] presently indicted for, or otherwise criminally or civilly charged by a governmental entity with, commission of any of the offenses enumerated in subdivision (a)(1)(l)(B) of this provision. (See Note at end of document) (ii) The Offeror has [ ] has not [X], within a three-year period preceding this offer had one or more contracts terminated for default by an Federal agency. (2) "Principals," for the purposes of this certification, means officers; directors; owners; partners; and, persons having primary management or supervisory responsibilities within a business entity (e.g., general manager; plant manager; head of a subsidiary, division, or business segment, and similar positions). THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF AN AGENCY OF THE UNITED STATES AND THE MAKING OF A FALSE, FICTITIOUS, OR FRAUDULENT CERTIFICATION MAY RENDER THE MAKER SUBJECT TO PROSECUTION UNDER SECTION 1001, TITLE 18, UNITED STATES CODE. (b) The Offeror shall provide immediate written notice to the Contracting Officer if, at any time prior to contract award, the Offeror learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. (c) A certification that any of the items in paragraph (a) of this provision exists will not necessarily result in withholding of an award under this solicitation: However, the certification will be considered in connection with a determination of the Offeror's responsibility. Failure of the Offeror to furnish a certification or provide such additional information as requested by the Contracting Officer may render the Offeror nonresponsible. (d) Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render, in good faith, the certification required by paragraph (a) of this provision. The knowledge and information of an Offeror is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. (e) The certification in paragraph (a) of this provision is a material representation of fact upon which reliance was placed when making award. If it is later determined that the Offeror knowingly rendered an erroneous certification, in addition to other remedies available to the Government, the Contracting Officer may terminate the contract resulting from this solicitation for default. 8. 52.204-3 - TAXPAYER IDENTIFICATION (JUN 1997) (a) Definitions. INITIALS: /s/ [ILLEGIBLE] & /s/ [ILLEGIBLE] --------------- --------------- LESSOR GOVERNMENT GSA FORM 3518 PAGE 3 (REV 12/99) "Common parent" as used in this solicitation provision, means that corporate entity that owns or controls an affiliated group of corporations that files its Federal income tax returns on a consolidated basis, and of which the offeror is a member. "Taxpayer Identification Number (TIN)," as used in this solicitation provision, means the number required by the IRS to be used by the offeror in reporting income tax and other returns. The TIN maybe either a Social Security Number or an Employer Identification Number. (b) All offerors must submit the information required in paragraphs (d) through (f) of this provision to comply with debt collection requirements of 31 U.S.C. 7701(c) and 3325(3), reporting requirements of 26 U.S.C. 6041, 6041A, and 6050M, and implementing regulations issued by the IRS. If the resulting contract is subject to the payment reporting requirements described in Federal Acquisition Regulation (FAR) 4.904, the failure or refusal by the offeror to furnish the information may result in a 31 percent reduction of payments otherwise due under the contract. (c) The TIN may be used by the Government to collect and report on any delinquent amounts arising out of the offeror's relationship with the Government (31 U.S.C. 7701(c)(3)). If the resulting contract is subject to the payment reporting requirements described in FAR 4.904, the TIN provided hereunder may be matched with IRS records to verify the accuracy of the offeror's TIN. (d) Taxpayer Identification Number (TIN). - TIN: 13-2745892 - TIN has been applied for. - TIN is not required because: - Offeror is a nonresident alien, foreign corporation, or foreign partnership that does not have income effectively connected with the conduct of a trade or business in the United States and does not have an office or place of business or a fiscal paying agent in the United States; - Offeror is an agency or instrumentality of a foreign government; - Offeror is an agency or instrumentality of the Federal government; (e) Type of organization. - Sole proprietorship; - Partnership; Not a corporate entity: - Corporate entity (not tax-exempt); - Corporate entity (tax-exempt); - Government entity (Federal, State, or local); - Foreign government; - International organization per 26 CFR 1.6049-4; - Other _________________________. (f) Common Parent. - Offeror is not owned or controlled by a common parent as defined in paragraph (a) of this provision. - Name and TIN of common parent: Name________________________________ TIN_________________________________ 9. OFFEROR'S DUNS NUMBER (APR 1996) Enter number, if known:________________________________ OFFEROR OR Name and Address (Including ZIP Code) Telephone Number AUTHORIZED REPRESENTATIVE 500 Clinton Center Drive (601)460-3470 Clinton, MS 39056. /s/ [ILLEGIBLE] 12-11-02 ---------------------------------- ---------------- Note: WorldCom, Inc., the Lessor's indirect parent, is subject to a civil fraud complaint brought prior to the commencement of WorldCom, Inc and its affiliates chapter 11 case by the Securities and Exchange Commission currently pending in the United States District Court for the Southern District of New York (Rakoff, J.). In addition, certain former Principal(s) of Lessor's are presently under indictment by the United States Attorney's Office for the Southern District of New York for conspiring to violate the federal securities laws and substantial related offenses. INITIALS /s/ [ILLEGIBLE] & /s/ [ILLEGIBLE] --------------- --------------- LESSOR GOVERNMENT GSA FORM 3518 PAGE 4 (REV 12/99) GENERAL SERVICES ADMINISTRATION 1. SOLICITATION FOR OFFERS 1. STATEMENT DATE PUBLIC BUILDINGS SERVICE DTSA20-03-R-00528 11/26/02 LESSOR'S ANNUAL COST STATEMENT IMPORTANT - Read attached "Instructions" 3A. RENTABLE 3B. ENTIRE BUILDING 3B. LEASED BY GOV'T AREA (Sq. FT,) (BOMA OFFICE AREA) 540,707 491,607 491,607 BUILDING NAME AND ADDRESS (No., street, city, state, and zip code) 601/701 S, 12th Street Arlington, VA 22202 SECTION I - ESTIMATED ANNUAL COST OF SERVICES AND UTILITIES FURNISHED BY LESSOR AS PART OF RENTAL CONSIDERATION SERVICES AND UTILITIES LESSOR'S ANNUAL COST FOR FOR GOVERNMENT USE ONLY (a) ENTIRE BUILDING (b) GOV'T-LEASED AREA (c) A. CLEANING, JANITOR AND/OR CHAR SERVICE 5. SALARIES $ 511,566 $ 511,566 ---------- ---------- 6. SUPPLIES (Wax, cleansers, cloths, etc.) $ 16,221 $ 16,221 ---------- ---------- 7. CONTRACT SERVICES (Window washing, waste and snow removal) $ 72,478 $ 72,478 ---------- ---------- B. HEATING 8. SALARIES $ 336,733 $ 336,733 ---------- ---------- 9. FUEL ("X" one) OIL GAS COAL X ELECTRIC $1,162,520 $1,162,520 ---------- ---------- 10. SYSTEM MAINTENANCE AND REPAIR: $ 81.035 $ 81,035 ---------- ---------- C. ELECTRICAL 11. CURRENT FOR LIGHT AND POWER (Including elevators) ---------- ---------- 12. REPLACEMENT OF BULBS, TUBES, STARTERS $ 7,500 $ 7,500 ---------- ---------- 13. POWER FOR SPECIAL EQUIPMENT ---------- ---------- 14. SYSTEM MAINTENANCE AND REPAIR (Ballasts, fixtures, etc.) ---------- ---------- D. PLUMBING 15. WATER (for all purposes) (Include sewage charges) $ 81,106 $ 81,106 ---------- ---------- 16. SUPPLIES (Soap, towels, tissues not in 6 above) $ 16,221 $ 16,221 ---------- ---------- 17. SYSTEM MAINTENANCE AND REPAIR ---------- ---------- AIR CONDITIONING 18. UTILITIES (Include electricity, if not in C11) ---------- ---------- 19. SYSTEM MAINTENANCE AND REPAIR ---------- ---------- F. ELEVATORS 20. SALARIES (Operators, starters, etc.) ---------- ---------- 21. SYSTEM MAINTENANCE AND REPAIR $ 59,478 $ 59,478 ---------- ---------- G. MISCELLANEOUS (To the extent not included above) $ 198,450 $ 198.450 22. BUILDING ENGINEER AND/OR MANAGER 23. SECURITY (Watchmen, guards, not janitors) $ 58,000 $ 58,000 ---------- ---------- 24. SOCIAL SECURITY TAX AND WORKMEN'S COMPENSATION INSURANCE ---------- ---------- 25. LAWN AND LANDSCAPING MAINTENANCE $ 9,000 $ 9,000 ---------- ---------- 26. OTHER (Explain on separate sheet) $ 60,100 $ 60,100 ---------- ---------- 27. TOTAL $2,670,408 $2,670,408 ---------- ---------- SECTION II - ESTIMATED ANNUAL COST OF OWNERSHIP EXCLUSIVE OF CAPITAL CHARGES 28. REAL ESTATE TAXES $ 722,957 $ 722,957 ---------- ---------- 29. INSURANCE (Hazard, liability, etc.) $ 135,177 $ 135,177 ---------- ---------- 30. BUILDING MAINTENANCE AND RESERVES FOR REPLACEMENT ---------- ---------- 31. LEASE COMMISSION ---------- ---------- 32. MANAGEMENT $ 331,071 $ 331,071 ---------- ---------- 33. TOTAL $1,189,205 $1,189,205 ---------- ---------- LESSOR'S CERTIFICATION - The amounts entered In Columns (a) 34. SIGNATURE OF and (b) represent my best estimate as to the annual costs OWNER LEGAL AGENT of services, utilities and ownership. TYPED NAME AND TITLE SIGNATURE DATE 34A. John Dubel, Chief Financial 34B. /s/ [ILLEGIBLE] 34C. 12-11-07 Officer 35A. 35B. 35C. SFO NO. DTSA 20-03-R-00528 GSA FORM 1217 Use or disclosure of information on this page is subject to the restrictions set-forth on the cover page. INSTRUCTIONS FOR LESSOR'S ANNUAL COST STATEMENT GSA FORM 1217 acquiring space by lease, it is the established policy of GSA to enter into leases only at rental charges which are consistent with prevailing scales in community for comparable facilities. ITEM NUMBER 1. Enter the Government lease or Solicitation for Offers number, if available. 2. Enter the date that your statement was prepared and signed. 3. A. Enter in this block a computation of the rentable area (multiple tenancy basis) for the entire building. The rentable area shall be computed by measurement to the inside finish of permanent outer building walls to the inside finish of corridor walls (actual or proposed) or to other permanent partitions, or both. Rentable space is the area for which a tenant is charged rent. It is determined by the building owner and may vary by city or by building within the same city. The rentable space may include a share of building support/common areas such as elevator lobbies, building corridors, and floor service areas. Floor service areas typically include restrooms, janitor rooms, telephone closets, electrical closets, and mechanical rooms. The rentable space generally does not include vertical building penetrations and their enclosing walls, such as stairs, elevator shafts, and vertical ducts. B. Enter in this block a computation of the rentable area to be rented to the Government. For this area, follow the procedure as outlined above, except that measurements are to be made only to the center of the partitions which separate the area to be rented by the Government from adjoining rented or rentable areas. 4. Identify the property by name and address. SECTION I ESTIMATED ANNUAL COST OF SERVICES AND UTILITIES 5.-26. The services and utilities listed in this section are required in most of our rented space whether furnished by the Government or the Lessor. Carefully review the Solicitation for Offers and/or the proposed lease to identify those services and utilities to be furnished by you as part of the rental consideration. Then enter your best cost estimate, or the actual cost from the previous year, for each of these services and utilities in column (a) for the entire building and in column (b) for the area to be rented to the Government. If any service or utility furnished for the space rented by the Government is not furnished throughout the building, or the cost of a service or utility furnished to the Government space exceeds the cost of the same service or utility furnished to other rented space, explain on a separate sheet. For convenience, each major category has been divided into separate items such as salaries and supplies so that they may be entered when applicable. However, in the event that your records are not maintained for each item contained in Section I, 5 through 26, the total for a major category (A through F) may be entered under the category heading in columns (a) and (b) in lieu of the specific items. System maintenance and repairs includes the annual cost of such items as oiling, inspecting, cleaning, regulating, and routine replacement costs. SECTION II ESTIMATED ANNUAL COST OF OWNERSHIP EXCLUSIVE OF CAPITAL CHARGES Items 28 through 32 will be useful in the Government's determination of the fair market value of the space to be rented and shaft be completed irrespective of whether Section I is applicable, as follows: 28. Include all applicable real estate taxes imposed upon the property. 29. Enter the annual cost of fire, liability, and other insurance carried on the real estate. 30. Enter the annual cost of wages, materials, and outside services used in repairs and maintenance of the building itself and all similar repairs and maintenance costs not included in Section I above (Heating, Electrical, Plumbing, Air Conditioning, and Elevators). This includes major repairs and changes in the nature of a permanent improvement such as annual cost to replace relatively short-lived items such as boilers, compressors, elevators, and roof coverings. 31. Enter any lease commission which you may be responsible for due to the Government leasing action. 32. Include administrative expenses such as agency fees, legal fees, auditing, and advertising. Do not include financial charges such as income or corporate taxes or organization expense. 34/35. Complete Lessor certification. Attachment to GSA Form 1217 - Line 26 Energy Management $ 6,000 Fire & Life Safety $ 23,600 Tools $ 3,000 Road Maintenance $ 4,000 Door & Floor Maint/Rpr $ 6,500 Pest Control $ 4,000 Gas/Oil $ 1,000 Misc Building Repairs $ 12,000 ------------- TOTAL OTHER $ 60,100 ============= Use or disclosure of information on this page is subject to the restrictions set forth on the cover page. 1 EXHIBIT A SECURITY GENERAL Each tower of the building has a perimeter access security system with card readers and two security guards (one at each entrance) in the lobbies with CCTV monitoring capability. Employee identifications are scanned at the security desk. Security cameras monitor each floor elevator lobby. The main security control room is located in the East Tower and serves both towers. Both towers are equipped with 24-hour intrusion detection systems, supplemented by CCTV monitoring of the building and parking entrances. WEST TOWER West Tower has 6 APC units located in the following telephone closets: 11N, 7N, 4N, 3S, 2N, 1S. FLOORS 2-12 HAVE THE FOLLOWING SECURITY: - Electric magnetic locks secure each lobby double glass door and HDD Proximity readers controlled by Sensormatic Advanced Processing Control units - North and South stairwell doors secured by electric mortise locks - Each double glass door is monitored by a CCTV camera - Video is captured by Panasonic time lapse VCR and 16 camera MUX processor housed in telephone closet on 1st floor, south side. LOBBY & 1ST FLOOR; - Center stairwell access to 1st floor-electric strike and proximity reader - Handicap access door-electric magnetic lock and proximity reader - IN/OUT readers at each desk, front and rear - Rear lobby doors are secured by electric magnetic locks o Front and rear lobbies are covered by 1 camera each - Handicap entrance is covered from the outside via 1 CCTV camera EAST TOWER: East Tower has 9 APC units located in the following telephone closets 11S, 1OS, 9S, 7S, 5N, 3S, 2S, 145N, 1N Computer Room. FLOORS 2, 7, & 12 HAVE THE FOLLOWING SECURITY: Lessor /s/ [ILLEGIBLE] GOV'T /s/ [ILLEGIBLE] --------------- --------------- Exhibit A - Security Page 1 of 3 - Delayed egress electric magnetic locks securing each lobby double glass door and HDD Proximity readers - Center stairwell entrances secured by electric strike locks and proximity readers - North and South stairwell doors secured by electric mortise locks - Each double glass door is monitored by a CCTV camera FLOORS 6N & 5N: - Two entrances secured with electric strikes and proximity readers FLOOR 4N - Main entrance and two entrances to 4N computer room secured with electric strikes and proximity readers FLOOR 4S: - Main entrance, secured with magnetic lock and proximity reader - South stairwell entrance, electric strike and swipe card reader 1ST FLOOR AND LOBBY AREA: - Center stairwell access to 1st floor, electric strike and proximity reader, handicap access door-electric magnetic lock and proximity reader - IN/OUT readers at each desk, front and rear - Rear lobby doors are secured by electric magnetic locks - Front and rear lobbies are covered by 3 cameras, and the handicap entrance is covered from the outside via 1 CCTV camera - 1N computer room, 3 entrances, electric strike locks and proximity readers. Two entrances and main area in room covered by CCTV cameras - 1S computer room, electric strike and proximity reader CONTROL ROOM: - Access control system, Computer using Ccure 800 software integrated with Sensormatic Advanced Processing Control Units. Model 30 on a Dell server - Three time lapse Panasonic VCR's and three 16 camera MUX processing units. PARKING LEVELS: - CCTV cameras in PI & PII elevator lobbies, 3 cameras covering loading dock and shipping/receiving area. - Parking levels covered by 13 cameras. Lessor /s/ [ILLEGIBLE] GOV'T /s/ [ILLEGIBLE] --------------- --------------- Exhibit A - Security Page 2 of 3 GARAGE: - The garage has 2 entrances. Main controls are in the booths at each entrance. They are key controlled Open/Closed and On/Off switches. Entrance gates and arms are tied into security system and can be opened via card reader located at each entrance. - Exit gates open automatically on vehicle approach via sensor pads installed at each exit. - There is a separate garage shuttle elevator serving each tower accessing the lobby. The loading dock and service corridor are equipped with security cameras. Additional security cameras are mounted at the roof parapet. Lessor /s/ [ILLEGIBLE] GOV'T /s/ [ILLEGIBLE] --------------- --------------- Exhibit A - Security Page 3 of 3 EXHIBIT B EAST AND WEST FURNITURE INVENTORY

Cubicles Office/Conf ------------------------------------------------ ------------------------------------------------------ Small Med Large West Tower Floor 1 0 0 0 0 0 0 0 2 0 3 0 0 0 5 Floor 2 0 0 6 52 0 0 58 16 16 16 6 2 1 57 Floor 3 0 0 7 101 0 0 108 18 18 18 5 2 1 62 Floor 4 0 0 7 106 2 0 115 5 5 5 6 2 1 24 Floor 5 0 0 4 95 0 5 104 3 3 3 6 2 1 18 Floor 6 0 0 0 44 7 3 54 9 9 9 1 1 1 30 Floor 7 0 0 0 78 6 5 89 8 8 8 6 2 1 33 Floor 8 0 0 0 54 5 0 59 28 28 28 5 2 1 92 Floor 9 0 0 3 91 1 0 95 6 6 6 5 2 1 26 Floor 10 0 0 7 102 1 0 110 6 6 6 6 2 1 27 Floor 11 0 0 6 102 4 0 112 10 10 10 5 2 1 38 Floor 12 0 0 15 31 1 0 47 14 14 14 4 2 1 49 --- --- ---- --- --- --- --- --- --- --- -- -- -- --- Total West 0 0 55 856 27 13 951 125 123 126 55 21 11 461 ==== === ==== === === === === === === === === == == === East Tower Floor 1 4 0 0 14 1 0 19 3 3 4 1 0 0 11 Floor 2 0 12 96 0 12 2 122 1 1 1 7 0 0 10 Floor 3 0 231 0 0 0 0 231 2 2 2 7 1 0 14 Floor 4 0 106 0 0 0 0 106 0 0 18 3 0 0 4 Floor 5 0 0 40 17 0 0 57 35 35 36 0 0 3 109 Floor 6 0 0 97 0 0 0 97 62 62 63 5 1 2 195 Floor 7 0 0 127 0 16 6 149 1 1 1 16 0 0 19 Floor 8 0 0 6 108 8 5 125 1 1 1 19 0 0 22 Floor 9 0 0 11 94 15 5 125 3 3 3 8 2 1 20 Floor 10 0 0 77 14 17 8 116 2 2 2 2 2 1 11 Floor 11 0 0 157 0 11 1 169 1 1 1 3 2 1 9 Floor 12 0 0 0 54 18 9 81 9 9 9 0 3 1 31 Total East 4 349 611 301 98 34 1,397 120 120 124 71 11 9 455 ==== === ==== === === === === === === === === == == === East West Total 4 349 666 1,157 125 47 2,348 245 243 250 126 32 20 916 ==== === ==== === === === === === === === === == == ===

Seating Other -------------------------------------------------------- ------------------------------------------------- 5-Drawer Lat Computer Coffee/End Cafeteria Cubicle Conference Office Side Reception Sofa Total Files Table Table Tables West Tower Floor 1 0 0 7 0 5 0 12 0 0 2 10 Floor 2 58 24 16 84 1 0 183 12 0 0 0 Floor 3 108 24 S 110 2 0 249 17 0 1 0 Floor 4 115 24 3 116 0 0 258 24 0 0 0 Floor 5 104 24 9 124 0 0 261 46 0 0 0 Floor 6 54 19 1 106 0 0 180 28 0 0 0 Floor 7 89 24 8 116 0 0 237 0 0 0 0 Floor 8 59 24 28 124 0 0 235 13 0 0 0 Floor 9 95 24 6 149 0 0 274 14 0 0 0 Floor 10 110 24 6 126 0 0 266 47 0 0 0 Floor 11 112 24 10 130 0 0 276 27 0 0 0 Floor 12 47 24 14 61 0 0 146 49 0 0 0 --- --- ---- --- --- --- --- -- --- -- --- Total West 951 259 113 1,246 8 0 2,577 277 0 3 10 === ==== === ===== === === === === === === === East Tower Floor 1 19 0 3 6 0 1 29 14 0 2 0 Floor 2 122 26 1 30 0 0 179 0 0 0 0 Floor 3 353 16 2 0 4 0 375 0 0 0 5 Floor 4 109 0 0 0 0 0 109 22 0 0 7 Floor 5 57 36 35 87 2 0 217 37 5 0 0 Floor 6 97 40 62 116 0 0 315 81 5 0 0 Floor 7 149 48 1 46 6 0 250 46 0 3 0 Floor 8 125 54 7 132 0 0 318 36 0 0 0 Floor 9 125 19 3 140 0 0 287 126 0 0 0 Floor 10 116 6 2 66 0 0 190 40 0 0 0 Floor 11 169 9 1 26 0 0 205 63 0 0 0 Floor 12 81 10 9 126 0 0 226 70 0 0 0 Total East 1,522 264 126 775 12 1 2,700 535 10 5 12 ===== ==== === ===== === === ===== === == === === East West Total 2,473 523 239 2,021 20 1 5,277 812 10 8 22 ===== ==== === ===== === === ===== === == === ===

Other ---------------------------------- Cafeteria Conf Rm Chairs Credenza Total West Tower Floor 1 50 0 62 Floor 2 0 1 13 Floor 3 0 1 19 Floor 4 0 1 25 Floor 5 0 1 47 Floor 6 0 1 29 Floor 7 0 1 1 Floor 8 0 1 14 Floor 9 0 1 15 Floor 10 0 1 48 Floor 11 0 1 28 Floor 12 0 1 50 -- -- --- Total West 50 11 351 == == === East Tower Floor 1 0 0 16 Floor 2 0 1 1 Floor 3 38 0 43 Floor 4 22 0 51 Floor 5 0 2 44 Floor 6 0 2 88 Floor 7 0 0 49 Floor 8 0 0 36 Floor 9 2 1 129 Floor 10 2 1 43 Floor 11 2 1 66 Floor 12 3 1 74 Total East 69 9 640 === == === East West Total 119 20 991 === == ===

EXHIBIT B iii) QUANTITY, QUALITY AND SUITABILITY OF FURNITURE, IF ANY. Both the East and West Towers are furnished with a combination of workstations, office and conference room furniture including chairs and files. The West Tower furniture is in good to excellent condition. There is furniture for approximately 951 workstations, 90% of which are 8' x 8', and 10% 6' x 8' and 8' x 10', and 115 private offices. The breakdown is 89% open workstations and 11% private office furniture. The 3rd and 12th floor systems furniture is Knoll Morrison and the office furniture is Knoll Reff wood product. The executive offices on the 12th floor will not be furnished. The remaining floors have Kimball Cetra wood workstations and office furniture. Knoll and Kimball are leading manufacturers in the commercial office industry. The Knoll Morrison and Reff and Kimball Cetra are the top of the line products for each manufacturer. The Knoll Morrison workstations have neutral fabric panels and warm gray metal files and trim pieces and plastic laminate work surfaces. The workstation configuration is typically a u-shape work surface with overhead shelving and a personal storage tower, which includes filing and coat storage. The workstations are ergonomically designed with corner work surfaces and above work surface power and data outlets. The majority of panel heights are 54" H. The Knoll Reff office furniture is modular in design with a medium wood stain finish. The desk configuration is u-shape with a "P-top" front work surface for easy conferencing. There are overhead storage units and tack board above the work surface. The Kimball Cetra workstations are a wood furniture system with neutral fabric panels, plastic laminate file/storage units and work surfaces. The panels are detailed with medium finish wood trim pieces. The workstations are ergonomically designed with corner work surface and above work surface power and data outlets. The majority of panel heights are 54" H. The Kimball office furniture is also modular in design with a light neutral plastic laminate u-shaped work surface and files. All storage cabinets and files are lockable. In the East Tower, the workstation and office furniture on the renovated floors (2nd, 7, 8, 9, 10, 11, 12} is Kimball Cetra. This furniture is in good to excellent condition. On these floors, there is furniture for approximately 887 workstations (53% are 6'x 8'; 30% are 8'x 8'; 17% are 6'x 6'and 8'x 14') and 18 offices. The workstation and office furniture is the Kimball Cetra similar to the West Tower. The remaining floors have a combination of older Herman Miller AO2 and Steelcase. Use or disclosure of information on this page is subject to the restrictions set-forth on the cover page. SFO DTSA20-03-R-00528 ATTACHMENT #1 RATE STRUCTURE Building: 601/701 S. 12th Street Term: 10 years firm ---------------------- ---------------

ANSI/BOMA OFFICE AREA SQUARE FEET OFFERED: ALL OFFERED SPACE 1. Base Rate: $ 25.33 The INITIAL firm term base rate per ANSI/BOMA Officer Area square foot (BOSF) for the Building Shell (excluding the cost of services and utilities in line item #2 below). THE BASE RATE SHALL BE FLAT OVER THE FIRM TERM. 2. The BASE YEAR operating costs per BOSF. This equals the 27b of the GSA Form 1217 divided by the BOSF offered. $ 5.42 ------- 3. Tenant Improvements: (a) The annual cost to amortize the Tenant Improvements allowance, such allowance being $40.00 per BOSF $ 4.00 for evaluation. Such amortization is to be compounded monthly over the term of the lease. (b) The annual percentage interest rate, compounded 0% monthly, to be used by the Lessor to amortize the cost of the Tenant Improvements UP TO $40.00 per BOSF over the term of the lease. (c) The annual percentage interest rate, compounded 11% monthly, to be used by the Lessor to amortize the cost of the Tenant Improvements above $40.00 per BOSF over the term of the lease up to $60.00 per BOSF. 4. The fully serviced lease rate per BOSF for the term $ 34.75* (ASSUMES THE evaluated on a $40.00 per BOSF Tenant Improvement GOVERNMENT LEASES ENTIRE allowance. This equals the sum of lines 1, 2, and 3(a) PARKING GARAGE) above. * SEE ADDENDUM FOR PHASE I RENT. 5. The number of months of free rent being months without any payment of base rent, operating expenses, or a $40.00 0 mos. per BOSF Tenant Improvement Allowance. 6. The lump sum cost per annum for" (a) Each reserved parking contract in the building's garage $ 0 or surface parking lot. $ 0 (b) Each non-reserved parking contract in the buildings garage or surface parking lot. $ 1,230,060** ------------- (c) Annualized cost to lease the entire parking garage for security purposes. * PARKING RATES WILL ESCALATE 3% ANNUALLY.

Page 1 of 1 Use or disclosure of information on this page is subject to the restrictions set forth on the cover page. SFO ATTACHMENT #2 FIRE PROTECTION & LIFE SAFETY EVALUATION The results of this survey shall be based on an actual walk-through of the subject premises and review of available construction documents. All building systems associated with fire protection and/or life safety shall be evaluated for conformance to the following codes, standards and/or criteria. Any deviance from the applicable criteria shall be identified and supported by corrective recommendation(s). FUNDAMENTAL CODE REQUIREMENTS ARE AS FOLLOWS: - - The offered building shall be evaluated for compliance with the most recent edition of The Building Officials & Code Administrators (BOCA) National Building Code; with the exception that chapter 10 of BOCA shall be replaced by the entire contents of the most recent edition of NFPA 101, Life Safety Code. All areas which do not meet the most recent editions of these criteria shall be identified as to the extent which they do comply. AUTOMATIC SPRINKLER REQUIREMENTS ARE AS FOLLOWS: - - Where at least 35,000 square feet, any portion of which is on or above the 6th floor, is offered to the government for lease, the entire building must be provided with automatic sprinkler protection or an equivalent level of safety. - - All floors on which the Government occupies below grade space, regardless of the amount, must be sprinklered (including garage areas offered for lease by the Government). - - All hazardous areas, as defined by NFPA 101, Life Safety Code, shall be protected throughout by automatic sprinklers. - - Where acceptable to the local authority having jurisdiction, chained and locked sprinkler control valves are an acceptable alternative to electronic supervision. - - All buildings utilizing Central Sprinkler Company's Omega line of sprinkler heads shall be identified; including: model, location(s), # of heads, approximate age, etc. EGRESS REQUIREMENTS ARE AS FOLLOWS: - - Scissor stairs are considered to be a single stair by GSA criteria. - - Exits must be remotely located by 1/2 of the maximum diagonal dimension of the building floor, or space; for non-sprinklered buildings. For completely sprinklered buildings in Maryland, the exits are required to be remotely located by 1/3 the maximum diagonal dimension (per NFPA 101). For completely sprinklered buildings in Washington, DC and Virginia, the exits are required to be remotely located by 1/4 the maximum diagonal dimension (per BOCA). ALL OF THE FOLLOWING ITEMS MUST BE PROVIDED WITH THE BUILDING FIRE PROTECTION & LIFE SAFETY EVALUATION BEFORE BEING ACCEPTABLE FOR REVIEW BY THE GSA FIRE PROTECTION ENGINEERING OFFICE: - - Completed SFO Attachment #4 with supplemental building information. - - Findings, recommended corrective action and section-specific code and/or criteria references. Reports for buildings in which no deficiencies are identified shall state such in an explicit statement located in the "findings & recommendations" portion of the report. (Specific GSA criteria, noted above, does not require listing of a section.) - - "Statement of Fire Protection Engineer", with an affixed Professional Engineering stamp or seal, signed and dated by the fire protection engineer who conducted the survey and completed the report. - - "Offeror Statement of Correction" signed and dated by the offerer or designated representative. - - Initial of fire protection engineer and offerer, or designated representative on each page of the completed SFO attachment #4 and its supplemental information. This form (in Microsoft Word 6.0 format) can be obtained by bringing a 3-1/2" pre-formatted (IBM) diskette to: GENERAL SERVICES ADMINISTRATION SAFETY AND ENVIRONMENT BRANCH (WPMOX) NATIONAL CAPITAL REGION, ROOM 2080 7TH & D STREETS, SW WASHINGTON, DC 20407 SFO ATTACHMENT #2 FIRE PROTECTION & LIFE SAFETY EVALUATION The offerer represents and agrees, as part of its offer, that the proposed space/building is as described below and contains the identified features and devices. THIS EVALUATION WILL BE MADE BY BOTH THE OFFEROR AND A REGISTERED FIRE PROTECTION ENGINEER. THE FIRE PROTECTION ENGINEER'S OFFICIAL STAMP (PROFESSIONAL LICENSE) MUST BE PLACED ON THE EVALUATION. Should this form not provide sufficient space to respond adequately to any question, additional pages should be attached. BUILDING NAME: Worldcom PCY 2 BUILDING ADDRESS: 601 South 12th Street, Arlington, VA 22202 HEIGHT and # of STORIES: -157 feet, 12 stories (Model Building Code) PLEASE ANSWER "YES" OR "NO" TO THE FOLLOWING QUESTIONS: YES NO The building electrical system appears to comply with the National Electrical X Code in that there are no obvious deficiencies (e.g. temporary wiring, use of extension cords, deteriorated equipment, missing equipment, etc.). If potential problems are noted, describe on an attached sheet. THE FOLLOWING ITEMS ARE LOCATED IN THE SUBJECT BUILDING: Laboratories X Firing Ranges X Parking Garages (unsprinklered) X Print Shops (unsprinklered) X BUILDING EXITS HAVE THE FOLLOWING FEATURES: There are at least two exits from each floor (scissor stairs count as only one exit). X Exits are remote in accordance with the requirements of NFPA 101. X Travel distance to exits are in accordance with the requirements of NFPA 101. X All exits discharge in accordance with the latest version of NFPA 101 or BOCA, National X Building Code. Exit access is at least 44 inches wide. X Dead ends and common paths of travel are in accordance with the latest version of NFPA 101. X A FIRE ALARM IS REQUIRED FOR THIS OCCUPANCY TYPE BY NFPA 101 OR BOCA. A fire alarm system is provided in accordance with NFPA 72. X Manual evacuation alarm sounds in building. X Alarm is transmitted to a listed central station or local fire department. X Battery back-up power is provided for the fire alarm system in accordance with NFPA 72. X PLEASE ANSWER "YES" OR "NO" TO THE FOLLOWING QUESTIONS: YES NO THE BUILDING HAS THE FOLLOWING FIRE SUPPRESSION FEATURES: The building is fully sprinklered. Note: If the answer to this question is "no" X please identify areas of partial sprinkler protection, if any, on an attached sheet. Note specifically if hazardous areas are sprinklered or not and whether below grade space that is occupied is sprinklered or not. Automatic sprinkler protection is provided throughout the occupied levels for X space offered below grade. Central Sprinkler Company's Omega line of sprinklers are installed in the X building (describe location(s), model(s), no. of sprinklers, date installed, etc. on additional sheet). A standpipe system is required for this occupancy type by the Model Building Code. X A standpipe system is provided in the building in accordance with the Model Building Code. X Portable fire extinguishers are present in adequate size, spacing and location; and have a current inspection certificate and maintenance contract in accordance with NFPA 10. X EXIT HARDWARE AND DOORS HAVE THE FOLLOWING FEATURES: Exit doors swing in the direction of exit travel; where required by code. X All fire doors are self-closing or automatic-closing; and self-latching. X All fire doors are in proper working order. X Exit doors require one action to open (e.g. no locks, locked during unoccupied periods only). X Note: Special locking arrangements may be permitted if allowed under local jurisdiction. EXIT AND EMERGENCY LIGHTING SYSTEMS HAVE THE FOLLOWING FEATURES: Illuminated exit signs are provided in accordance with NFPA 101. X Emergency lighting is provided along exit paths in accordance with NFPA 101. X Emergency power is provided for emergency lights and exit signs. X INTERIOR FINISHES HAVE THE FOLLOWING CHARACTERISTICS: Interior finish for ceilings, walls, and floors, are installed without obvious X deficiencies (e.g. no cork board, no carpet on walls, no cellular plastic finishes, etc.). If potential problems are noted, describe on an attached sheet. ELEVATORS HAVE THE FOLLOWING FEATURES: Elevators have a current certificate of elevator inspection from the local jurisdiction. X Elevators are equipped with telephones or other two-way emergency signaling X systems connected to an emergency communication location manned during normal working hours when the elevators are in service. Elevators are automatically recalled by smoke detectors located in elevator lobbies and machine rooms. X Elevator recalls to an alternate level when activated by primary level smoke detector. Firemen's capture feature is provided. X FOR SPACE OFFERED ON OR ABOVE THE 6TH FLOOR (GREATER THAN 75' ABOVE THE LOWEST LEVEL OF FIRE DEPARTMENT VEHICLE ACCESS): Automatic sprinkler protection is provided for all floors of the building where the government leases 35,000 square feet or more, in the building, in total. See the cover page. X GENERAL BUILDING INFORMATION ON AN ATTACHED SHEET, PLEASE RESPOND TO EACH OF THE FOLLOWING BUILDING FEATURES; AS THEY APPLY TO THE OFFERED BUILDING. IDENTIFY EACH RESPONSE BY A NUMBER CORRESPONDING TO THE ITEMS BELOW. RESPOND "N/A" FOR ITEMS WHICH ARE NOT APPLICABLE. RESPOND "NONE" FOR ITEMS WHICH DO NOT EXIST IN THE BUILDING. 1) # Stories above grade: 2) # Stories below grade: 3) Floors offered to government: 4) Height of highest offered floor above lowest level of fire department vehicle access (in feet): 5) Types of occupancies on each floor. Indicate all of other than business occupancy. 6) Approximate gross area of typical floor (identify atypical floors individually): 7) Describe construction type (fire resistive, unprotected non-combustible, ordinary, wood frame, heavy timber) & NFPA 220 classification for floors, walls, columns, and roof. 8) Describe fire-rated subdivision of building floors (including stairs, tenant separation, mechanical rooms, etc.) 9) Describe any smoke detectors with attention to the following: a) locations. b) appropriate type? c) control equipment location. d) control equipment manufacturer. e) connection to building fire alarm system. 10) Describe any heat detectors with attention to the following: a) locations. b) appropriate type? c) control equipment location. d) control equipment manufacturer. e) connection to building fire alarm. 11) Describe any other fire detectors with attention to the following: a) locations. b) appropriate type? c) control equipment location. d) control equipment manufacturer. e) connection to building fire alarm system. 12) Describe emergency lighting: a) type. b) location. c) secondary source(s) of power. 13) Describe exit signs: a) type. b) location. c) secondary source(s) of power. 14) Describe emergency generator: a) power source(s). b) capacity. c) location. d) connected building systems. 15) Describe the fire suppression system(s) with attention to the following: a) sprinkler-location(s). b) waterflow alarm(s)-type and location. c) control valves-type and typical location. d) valve tamper switches-type and adequacy. e) standpipe-riser size, location and number. f) location(s) and manufacturer/model of fixed CO(2), dry chemical, and/or clean-agent fire suppression systems. g) water supply-type, size, arrangement, etc. h) supply static pressure (psi), i) fire pump data: i. UL listed for fire pump service? ii. separate controller for jockey pump? iii. NFPA 20 compliant? iv. rated capacity (gpm). v. rated net pressure (psi). vi. primary power supply. vii. secondary power supply. viii. manufacturer j) compliance to testing & maintenance required by NFPA 25. 16) Describe the communications system with attention to the following: a) type of fire alarm system: i. hardwired, multiplex, analog, etc. ii. location. iii. manufacturer/model. iv. operating voltage. b) central station (company name). c) emergency telephone system. d) secondary power source. e) control panel information. f) manual station locations. g) type of alarm indicating appliances (visual and/or audible) and locations. h) notification system (entire building, floor above & below, etc.). i) type of devices that sound evacuation alarm (list all types). j) system interfaces with? (elevators, smoke control, electric door locks, HVAC, etc.). k) compliance to testing & maintenance required by NFPA 72. 17) Describe the building's means of egress (NFPA 101): a) number of exits per floor. b) points of discharge for each exit. c) capacity of each exit. d) occupant load per floor. e) remoteness of exits: i. maximum diagonal dimension of typical floor (identify for others if different than that of typical floors). ii. exit door separation. iii. how is distance measured (straight line or along rated exit access corridor). f) exit access-width, fire resistance rating, arrangement. g) exit stair enclosure. h) exit discharge protection. i) exit dimensions - width, tread, riser. j) handrails (presence, stability, height above tread, graspability, etc.). k) dead ends. l) common paths of travel. m) vertical openings (open stairs, atriums, escalators, etc.). n) penetrations of exit enclosures not related to the function of the exit. o) exit stairway pressurization, if any. p) STATEMENT OF FIRE PROTECTION ENGINEER (FPE) I hereby attest that I have performed a full inspection of the subject premises; and that the above information is complete and accurate to the best of my knowledge. I have initialed at the bottom of each page in the space marked "FPE". My official stamp, professional license information, and signature are affixed below. I HAVE INCLUDED FINDINGS, RECOMMENDED CORRECTIVE ACTION, AND MADE SPECIFIC REFERENCES TO THE APPLICABLE CODE SECTIONS AS AN ATTACHMENT TO THIS REPORT. SUCH FINDINGS SPECIFICALLY IDENTIFY INSTANCES WHERE THE BUILDING DOES NOT COMPLY WITH THE SPECIFIED CRITERIA, AND RECOMMENDATIONS HAVE BEEN MADE IN ORDER TO RECTIFY THE SITUATION AND ASSURE SUBSTANTIAL COMPLIANCE OF THE BUILDING TO ALL APPLICABLE CRITERIA. (IF NO DEFICIENCIES WERE IDENTIFIED, DURING THE SURVEY, PLEASE EXPLICITLY STATE SO IN THE FINDINGS AND RECOMMENDATIONS PORTION OF THE REPORT] Signature: /s/ Francis A. Hauf Date: 10/28/02 ------------------------------------------ --------------------- Printed Name: Francis A. Hauf, P.E. -------------------------------------- Name of Firm: Hauf Consulting & Construction Phone #: (410) 686-7950 -------------------------------------- ---------------- Management, LLC -------------------------------------- License Number: #036252 - ------------------------- Stamp Here: [COMMONWEALTH OF VIRGINIA PROFESSIONAL ENGINEER SEAL OF FRANCIS ANDREW HAUF No. 036252] OFFEROR'S STATEMENT OF CORRECTION In the event any of the offered space does not meet the above criteria, the offeror shall attach a sheet describing the exact nature of the deficiency, and the offeror shall attest below that all work required to bring the offered space into full compliance with all applicable criteria will be completed at the offeror's sole cost and expense prior to the Government's acceptance of the offered space under the terms of any prospective lease agreement. NOTE: SURVEYS SUBMITTED WITHOUT THE FPE'S FINDINGS, RECOMMENDED CORRECTIVE ACTIONS AND CODE REFERENCES WILL BE RETURNED WITHOUT REVIEW BY THE GSA FIRE PROTECTION ENGINEERING OFFICE. Signature: /s/ John S. Dubel Date: 12/11/02 ------------------------------------------ --------------------- Printed Name: John S. Dubel --------------------------------------- Title: Chief Financial Officer ---------------------------------------------- Name of Firm: MCI WorldCom Network Services, Inc. --------------------------------------- GENERAL BUILDING INFORMATION 1) # Stories above grade 13 2) # Stories below grade 2 3) Floors offered to the government ALL 4) Height of highest offered floor above lowest level of 80.5 feet fire department vehicle access (in feet): 5) Types of occupancies on each floor. Indicate all of Storage S-2, Parking Levels other than business occupancy. 6) Approximate gross area of typical floor (identify P1 & P2=103,650 ft(2) total, 1 thru 12 = 48,600 ft(2), atypical floors individually): Penthouse 4,960 ft(2), Elevator Machine Room = 952 ft(2) 7) Describe construction type (fire resistive, Type 2A (Modified from Type 1B) unprotected non-combustible, ordinary, wood frame, per BOCA table 403.3.3.1 heavy timber) & NFPA 220 classifications for floors, Construction Type II (222) per NFPA 220 walls, columns and roof. Reinforced concrete floors 8) Describe fire-rated subdivision of building floors Stairs are 2 hour rated walls with 1-1/2 hour rated doors. (including stairs, tenant separation, mechanical room, No tenant separations are provided. Tenant separations are etc.) required by code to be 1 hour rated with 20 min. doors or equal. Mechanical rooms are separated with 1 hour construction. 9) Smoke detectors a) Locations Lobby, Freight Elevator Lobby, Mechanical Rooms, Telephone Rooms, Control Rooms, LAN Communication Rooms, Elevator Machine Room, with plenum smoke detectors in return duct work. b) Type New addressable ion c) Control Equipment Location Main fire alarm control panel d) Control Equipment Manufacturer Edwards (new), Gamewell (existing) e) Connection to building fire alarm system This is the building fire alarm system 10) Heat detectors a) Locations Generator rooms and old electric closets that have not been renovated. b) Type Fixed temperature c) Control Equipment Location Main fire alarm control panel d) Control Equipment Manufacturer Edwards (new), Gamewell (existing) e) Connection to building's fire alarm system This is the building fire alarm system 11) Other fire detectors: None 12) Describe emergency lighting: a) Type Battery backup in stairs and bathrooms. Every 3rd or 4th light on a separate circuit. b) Location Stairwells, Bathrooms, throughout floors c) secondary source(s) of power Generator backup 13) Describe exit signs: a) Type Standard internal back-lit consisting of red lettering, properly sized, LED b) Location Stairwells, elevator lobby, interior corridors of each wing c) Secondary sources of power Emergency backup generator 14) Describe emergency generator: a) Power sources 2 Diesel engines b) Capacity Both 1000 KW c) Location One on P1 level loading dock, second on north end P2 level under loading dock d) Connected building systems P1 level generator covers life safety and a few computer rooms. P2 level generator covers computer rooms. 15) Describe the fire suppression system with attention to the following: a) Sprinkler locations Incoming water supply from Hayes St. (south side) P1 level called P2 pump room. The building is entirely sprinklered. Areas subject to freezing (garage) are protected by separate dry pipe sprinkler systems (4 zones 4" sized). All other portions of the building are protected by a wet pipe sprinkler system. b) Waterflow alarm - type and location Waterflow alarms consist of: pressure type devices on each of the dry pipe risers located in the fire pump room. Paddle type devices on each floor zone fed by the wet system - located in stairs 2 and 3. Stair 1 on the elevator machine room level above 12th c) Control valves - type and typical location Control valves in the fire pump room are O.S.&Y., except for the jockey pump valves. The fire pump valves include: 1 on the city supply and 2 on the fire pump piping. 1 on test header, 2 on the jockey pump piping, 1 on each of the 4 dry pipe risers. Additional control valves are provided for floor zones. All floor zone assemblies are provided in stair 2 and 3, except for the elevator machine room level above the 12th floor, which is served by stair 1. d) Valve tamper switches-type & adequacy Adequate valve tamper switches are provided on all control valves. O.S.& Y. have external tamper switch and butterfly valves have internal switches. e) Standpipe riser size, location and number. Stair 1 has a 4" riser. Stairs 2 & 3 have 4" combined standpipe risers. f) Locations and manufacturers of fixed CO(2) dry None chemical and/or clean-agent fire suppression systems. g) Water supply type, size and arrangement The water is supplied from the local water authorities system. An 8 inch incoming to 6 inch line in pump room. h) Supply static pressure 85 psi i) Fire pump data i. UL Listed Yes ii. Separate controller for jockey pump Yes iii. NFPA 20 compliant Yes iv. Rated Capacity (gpm) 1000 v. Rated net pressure (psi) 100 vi. Primary power supply Diesel vii. Secondary power supply viii. Manufacturer Patterson Pump j) Compliance to testing & maintenance required by Yes NFPA 25 16) Describe the communications system with attention to the following: a) Type of fire alarm system i. hardwired, multiplex, analog, etc Edwards (new) addressable; Gamewell (existing) hardwired ii. location First floor rear lobby iii. manufacturer/model Edwards (new - protects renovated floors) Gamewell (existing - monitors floors that were not renovated, sends to monitoring system.) Both new and existing systems have voice and public address notification. The new system is interconnected to the existing system for alarm, trouble and supervisory conditions. iv. operating voltage 120 volts to system, 24 volts device b) Central Station (company Name) Wells Fargo Alarm (Borg-Warner Security) c) Emergency telephone system Yes, located in elevators, elevator lobbies and stairs d) Secondary power source Battery and generator (new), generator (existing) e) Control panel information Edwards (new), Gamewell (existing) f) Manual station locations Pull stations are located by stair entrances and by exterior exit doors on all floors, including garage levels and loading dock area. g) Type of alarm indicating appliances (visual Strobes are located in renovated areas. Speakers are and/or audible) and locations located throughout the entire building. h) Notification system (entire building, floor above & A high-rise package containing a pre-recorded message below, etc.) sounds on the fire floor, floor above and floor below for the 1st alarm. A 2nd alarm sounds for the entire building. i) Type of devices that sound evacuation alarm Smoke detectors, heat detectors and pull stations. j) System interfaces (elevators, smoke control, Elevator recall, no shunt trip. Stairwell pressurization on electric door locks, HVAC, etc.) general building alarm. Electric door locks main lobby 1st floor. Special locking arrangements on stairwell doors with controlled tenant access locking arrangements (both code compliant). HVAC shuts down on duct detector activation (old floors) and general alarm per floor (new floors). k) Compliance to testing and maintenance No. Needs to be scheduled. required by NFPA 72 17) Describe building's means of egress (NFPA 101) a) Number of exits per floor Three exit stairs are provided per floor (P1 and P2 levels, 1st through 12th floors). Elevator Machine Room on 13th floor has center stair access only. b) Points of discharge for each exit North wing exits on 1st floor through hallway. Center exits to lobby and then to 12th Street side. South wing exits on 1st floor through hallway. c) Capacity of each exit Center Stair: 44" clear stair width/0.2"/person = 220, 35-1/4" door provides 33-1/4" clear width/0.15"/person = 221 [Since the stair's capacity is less than the door's, the exit capacity of the Center Stair is 220] Stair 2: 44" clear stair width/0.2"/person = 220, 35-1/4" door provides 33-1/4" clear width/0.15"/person = 221 [Since the stair's capacity is less than the door's, the exit capacity of Stair 2 is 220] Stair 3: 44" clear stair width/0.2"/person = 220, 35-1/4" door provides 33-1/4" clear width/0.15"/person = 221 [Since the stair's capacity is less than the door's, the exit capacity of Stair 3 is 220] Main lobby to 12th Street has 2 double doors of 70" clear width (2x70=140"/0.15"/person = 933 people). Rear lobby has a set of double doors of 58" clear width/0.15"/person = 387 people d) Occupant load per floor 193 people typical e) Remoteness of exits i. Maximum diagonal dimension of typical 280 feet floor ii. Exit door separation 140 feet iii. How is distance measured? straight line f) Exit access width, fire resistance rating, Stairs 2 and 3 are in open office areas, with 5 feet exit arrangement access width. Stair 1 is served by a corridor. g) Exit stair enclosure Stairs 2 and 3 are 2 hour rated. Center stair exits through lobby. h) Exit discharge protection Stairs 2 and 3 have 2 hour rated exit passageways. Center stair exits through lobby. i) Exit dimensions Center Stair: 44" width, 9" run, 8" rise Stair 2: 44" width, 9-1/4" run, 7-3/4" rise Stair 3: 44" width, 9-1/4" run, 7-3/4" rise j) Handrails Handrails are provided on all stairs, mounted 32" above tread with proper graspability. (~1-3/4" pipe) k) Dead ends None 1) Common paths of travel None m) Vertical openings (open stairs, atriums, No escalators. Atrium 1st floor to 12th floor outside front. escalators, etc.) n) Penetrations of exit enclosure not related to the None function of the exit o) Exit Stairway Pressurization Stairwell pressurization is provided on all stairs. The system activates on any fire alarm signal or the control switches in the Fire Alarm Control Room. FINDINGS WITH RECOMMENDED CORRECTIVE ACTIONS WITH SPECIFIC CODE REFERENCES BUILDING CONSTRUCTION TYPE AND REQUIRED FIRE RESISTANCE RATED CONSTRUCTION 1. None FIRE ALARM SYSTEM NOTED DEFICIENCIES 1. The fire alarm detection system on the unrenovated 3rd, 4th, 5th and 6th floors must be modified under the next tenant fit-out. All existing initiation devices on the old fire alarm panel are to be replaced by new initiation devices on the new system. 2. No current annual inspection or test has been performed. RECOMMENDED CORRECTIVE ACTION: 1. Ensure future renovations match the standard of care established under the phased fire alarm system upgrade. A/E design and renovation of space is best suited for pricing work. (Estimate range of $1,200 - $6,000/ per floor.) 2. Perform annual inspection and test. ~$600 MEANS OF EGRESS, EXIT STAIRS AND DISCHARGE PASSAGEWAYS 1. None EMERGENCY LIGHTS AND EXIT SIGNS NOTED DEFICIENCIES 1. The exit sign inside the south stair, on the ground floor, is malfunctioning. RECOMMENDED CORRECTIVE ACTION: 1. Repair/replace. $50.00 - $250.00 FIRE SUPPRESSION NOTED DEFICIENCIES 1. No current records of fire pump inspection and test forms. Fire extinguishers are not tagged. RECOMMENDED CORRECTIVE ACTION: 1. Perform annual fire suppression systems inspections, tests and service. ~$3,000 to $4,000 SFO ATTACHMENTS #2 FIRE PROTECTION & LIFE SAFETY EVALUATION The results of this survey shall be based on an actual walk-through of the subject premises and review of available construction documents. All building systems, associated with fire protection and/or life safety, shall be evaluated for conformance to the following codes, standards and/or criteria. Any deviance from the applicable criteria shall be identified and supported by corrective recommendation(s). FUNDAMENTAL CODE REQUIREMENTS ARE AS FOLLOWS: - - The offered building shall be evaluated for compliance with the most recent edition of The Building Officials & Code Administrators (BOCA) National Building Code; with the exception that chapter 10 of BOCA shall be replaced by the entire contents of the most recent edition of NFPA 101, Life Safety Code. All areas which do not meet the most recent editions of these criteria shall be identified as to the extent which they do comply. AUTOMATIC SPRINKLER REQUIREMENTS ARE AS FOLLOWS: - - Where at least 35,000 square feet, any portion of which is on or above the 6th floor, is offered to the government for lease, the entire building must be provided with automatic sprinkler protection or an equivalent level of safety. - - All floors on which the Government occupies below grade space, regardless of the amount, must be sprinklered (including garage areas offered for lease by the Government). - - All hazardous areas, as defined by NFPA 101, Life Safety Code, shall be protected throughout by automatic sprinklers. - - Where acceptable to the local authority having jurisdiction, chained and locked sprinkler control valves are an acceptable alternative to electronic supervision. - - All buildings utilizing Central Sprinkler Company's Omega line of sprinkler heads shall be identified; including: model, location(s), # of heads, approximate age, etc. EGRESS REQUIREMENTS ARE AS FOLLOWS: - - Scissor stairs are considered to be a single stair by GSA criteria. - - Exits must be remotely located by 1/2 of the maximum diagonal dimension of the building floor, or space; for non-sprinklered buildings. For completely sprinklered buildings in Maryland, the exits are required to be remotely located by 1/3 the maximum diagonal dimension (per NFPA 101). For completely sprinklered; buildings in Washington, DC and Virginia, the exits are required to be remotely located by 1/4 the maximum diagonal dimension (per BOCA). ALL OF THE FOLLOWING ITEMS MUST BE PROVIDED WITH THE BUILDING FIRE PROTECTION & LIFE SAFETY EVALUATION BEFORE BEING ACCEPTABLE FOR REVIEW BY THE GSA FIRE PROTECTION ENGINEERING OFFICE: - - Completed SFO Attachment #4 with supplemental building information. - - Findings, recommended corrective action and section-specific code and/or criteria references. Reports for buildings in which no deficiencies are identified shall state such in an explicit statement located in the "findings & recommendations portion of the report. (Specific GSA criteria, noted above, does not require listing of a section.) - - "Statement of Fire Protection Engineer", with an affixed Professional Engineering stamp or seal, signed and dated by the fire protection engineer who conducted the survey and completed the report. - - "Offerer Statement of Correction" signed and dated by the offerer or designated representative. - - Initial of fire protection engineer and offeror, or designated representative, on each page of the completed SFO attachment #4 and its supplemental information. This form (in Microsoft Word 6.0 format) can be obtained by bringing a 3-1/2" pre-formatted (IBM) diskette to: GENERAL SERVICES ADMINISTRATION SAFETY AND ENVIRONMENT BRANCH (WPMOX) NATIONAL CAPITAL REGION, ROOM 2080 7TH & D STREETS, SW WASHINGTON, DC 20407 SFO ATTACHMENT #2 FIRE PROTECTION & LIFE SAFETY EVALUATION The offeror represents and agrees, as part of its offer, that the proposed space/building is as described below and contains the identified features and devices. THIS EVALUATION WILL BE MADE BY BOTH THE OFFEROR AND A REGISTERED FIRE PROTECTION ENGINEER. THE FIRE PROTECTION ENGINEER'S OFFICIAL STAMP (PROFESSIONAL LICENSE) MUST BE PLACED ON THE EVALUATION. Should this form not provide sufficient space to respond adequately to any question, additional pages should be attached. BUILDING NAME: WORLDCOM PCY 1 BUILDING ADDRESS: 701 SOUTH 12TH STREET, ARLINGTON, VA 22202 Height and # OF STORIES: - 157 FEET, 12 STORIES (MODEL BUILDING CODE)

PLEASE ANSWER "YES" OR "NO" TO THE FOLLOWING QUESTIONS: YES NO --- --- The building electrical system appears to comply with the National Electrical Code in that there X are no obvious deficiencies (e.g. temporary wiring, use of extension cords, deteriorated equipment, missing equipment, etc.). If potential problems are noted, describe on an attached sheet. THE FOLLOWING ITEMS ARE LOCATED IN THE SUBJECT BUILDING: LABORATORIES X FIRING RANGES X PARKING GARAGES (UNSPRINKLERED) X PRINT SHOPS (UNSPRINKLERED) X BUILDING EXITS HAVE THE FOLLOWING FEATURES: There are at least two exits from each floor (SCISSOR STAIRS COUNT AS ONLY ONE EXIT). X Exits are remote in accordance with the requirements of NFPA 101. X Travel distance to exits are in accordance with the requirements of NFPA 101. X All exits discharge in accordance with the latest version of NFPA 101 OR BOCA, National Building Code. X Exit access is at least 44 inches wide. X Dead ends and common paths of travel are in accordance with the latest version of NFPA 101. X A FIRE ALARM IS REQUIRED FOR THIS OCCUPANCY TYPE BY NFPA 101 OR BOCA. A fire alarm system is provided in accordance with NFPA 72. X Manual evacuation alarm sounds in building. X Alarm is transmitted to a listed central station or local fire department. X Battery back-up power is provided for the fire alarm system in accordance with NFPA 72. X

PLEASE ANSWER "YES" OR "NO" TO THE FOLLOWING QUESTIONS: YES NO --- --- THE BUILDING HAS THE FOLLOWING FIRE SUPPRESSION FEATURES: The building is fully sprinklered. Note: If the answer to this question is "no" please identify areas X of partial sprinkler protection, if any, on an attached sheet. Note specifically if hazardous areas are sprinklered or not and whether below grade space that is occupied is sprinklered or not. Automatic sprinkler protection is provided throughout the occupied levels for space offered below X grade. Central Sprinkler Company's Omega line of sprinklers are installed in the building (describe X location(s), model(s), no. of sprinklers, date installed, etc. on additional sheet). A standpipe system is required for this occupancy type by the Model Building Code. X A standpipe system is provided in the building in accordance with the Model Building Code. X Portable fire extinguishers are present in adequate size, spacing and location; and have a current X inspection certificate and maintenance contract in accordance with NFPA 10. EXIT HARDWARE AND DOORS HAVE THE FOLLOWING FEATURES: Exit doors swing in the direction of exit travel; where required by code. X All fire doors are self-closing or automatic-closing; and self-latching. see comment All fire doors are in proper working order. see comment Exit doors require one action to open (e.g. no locks, locked during unoccupied periods only). X Note: Special locking arrangements may be permitted if allowed under local jurisdiction. EXIT AND EMERGENCY LIGHTING SYSTEMS HAVE THE FOLLOWING FEATURES: Illuminated exit signs are provided in accordance with NFPA 101. X Emergency lighting is provided along exit paths in accordance with NFPA 101. X Emergency power is provided for emergency lights and exit signs. X INTERIOR FINISHES HAVE THE FOLLOWING CHARACTERISTICS: Interior finish for ceilings, walls, and floors, are installed without obvious deficiencies (e.g. no X cork board, no carpet on walls, no cellular plastic finishes, etc.). If potential problems are noted, describe on an attached sheet. ELEVATORS HAVE THE FOLLOWING FEATURES: Elevators have a current certificate of elevator inspection from the local jurisdiction. X Elevators are equipped with telephones or other two-way emergency signaling systems connected to an X emergency communication location manned during normal working hours when the elevators are in service. Elevators are automatically recalled by smoke detectors located in elevator lobbies and machine rooms. X Elevator recalls to an alternate level when activated by primary level smoke detector. X Firemen's capture feature is provided. X FOR SPACE OFFERED ON OR ABOVE THE 6TH FLOOR (GREATER THAN 75' ABOVE THE LOWEST LEVEL OF FIRE DEPARTMENT VEHICLE ACCESS): Automatic sprinkler protection is provided for all floors of the building where the government leases X 35,000 square feet or more, in the building, in total. See the cover page.

GENERAL BUILDING INFORMATION ON AN ATTACHED SHEET, PLEASE RESPOND TO EACH OF THE FOLLOWING BUILDING FEATURES; AS THEY APPLY TO THE OFFERED BUILDING. IDENTIFY EACH RESPONSE BY A NUMBER CORRESPONDING TO THE ITEMS BELOW. RESPOND "N/A" FOR ITEMS WHICH ARE NOT APPLICABLE. RESPOND "NONE" FOR ITEMS WHICH DO NOT EXIST IN THE BUILDING. 1) # Stories above grade: 2) # Stories below grade: 3) Floors offered to government: 4) Height of highest offered floor above lowest level of fire department vehicle access (in feet): 5) Types of occupancies on each floor. Indicate all of other than business occupancy. 6) Approximate gross area of typical floor (identify atypical floors individually): 7) Describe construction type (fire resistive, unprotected non-combustible, ordinary, wood frame, heavy timber) & NFPA 220 classification for floors, walls, columns, and roof. 8) Describe fire-rated subdivision of building floors (including stairs, tenant separation, mechanical rooms, etc.) 9) Describe any smoke detectors with attention to the following: a) locations. b) appropriate type? c) control equipment location d) control equipment manufacturer. e) connection to building fire alarm system. 10) Describe any heat detectors with attention to the following: a) locations b) appropriate type? c) control equipment location d) control equipment manufacturer e) connection to building fire alarm 11) Describe any other fire detectors with attention to the following: a) locations. b) appropriate type? c) control equipment location. d) control equipment manufacturer. e) connection to building fire alarm system 12) Describe emergency lighting: a) type. b) location. c) secondary source(s) of power. 13) Describe exit signs: a) type. b) location. c) secondary source(s) of power. 14) Describe emergency generator: a) power source(s). b) capacity. c) location. d) connected building systems. 15) Describe the fire suppression system(s) with attention to the following: a) sprinkler-location(s). b) waterflow alarm(s)-type and location, c) control valves-type and typical location. d) valve tamper switches-type and adequacy. e) standpipe-riser size, location and number. f) location(s) and manufacturer/model of fixed C02, dry chemical, and/or clean-agent fire suppression systems. g) water supply-type, size, arrangement, etc. h) supply static pressure (psi). i) fire pump data: i. UL listed for fire pump service? ii. separate controller for jockey pump? iii. NFPA 20 compliant? iv. rated capacity (gpm). v. rated net pressure (psi). vi. primary power supply. vii. secondary power supply. viii. manufacturer j) compliance to testing & maintenance required by NFPA 25. 16) Describe the communications system with attention to the following: a) type of fire alarm system: i. hardwired, multiplex, analog, etc. ii. location. iii. manufacturer/model. iv. operating voltage. b) central station (company name). c) emergency telephone system. d) secondary power source. e) control panel information. f) manual station locations. g) type of alarm indicating appliances (visual and/or audible) and locations. h) notification system (entire building, floor above & below, etc.). i) type of devices that sound evacuation alarm (list all types). j) system interfaces with? (elevators, smoke control, electric door locks, HVAC, etc.). k) compliance to testing & maintenance required by NFPA 72. 17) Describe the building's means of egress (NFPA 101): a) number of exits per floor. b) points of discharge for each exit. c) capacity of each exit, d) occupant load per floor. e) remoteness of exits: i. maximum diagonal dimension of typical floor (identify for others if different than that of typical floors). ii. exit door separation. iii. how is distance measured (straight line or along rated exit access corridor). f) exit access-width, fire resistance rating, arrangement. g) exit stair enclosure. h) exit discharge protection, i) exit dimensions - width, tread, riser. j) handrails (presence, stability, height above tread, graspability, etc.). k) dead ends. l) common paths of travel. m) vertical openings (open stairs, atriums, escalators, etc.). n) penetrations of exit enclosures not related to the function of the exit. o) exit stairway pressurization, if any. p) STATEMENT OF FIRE PROTECTION ENGINEER (FPE) I HEREBY ATTEST THAT I HAVE PERFORMED A FULL INSPECTION OF THE SUBJECT PREMISES; AND THAT THE ABOVE INFORMATION IS COMPLETE AND ACCURATE TO THE BEST OF MY KNOWLEDGE. I HAVE INITIALED AT THE BOTTOM OF EACH PAGE IN THE SPACE MARKED "FPE". MY OFFICIAL STAMP, PROFESSIONAL LICENSE INFORMATION, AND SIGNATURE ARE AFFIXED BELOW. I HAVE INCLUDED FINDINGS, RECOMMENDED CORRECTIVE ACTION, AND MADE SPECIFIC REFERENCES TO THE APPLICABLE CODE SECTIONS AS AN ATTACHMENT TO THIS REPORT. SUCH FINDINGS SPECIFICALLY IDENTIFY INSTANCES WHERE THE BUILDING DOES NOT COMPLY WITH THE SPECIFIED CRITERIA, AND RECOMMENDATIONS HAVE BEEN MADE IN ORDER TO RECTIFY THE SITUATION AND ASSURE SUBSTANTIAL COMPLIANCE OF THE BUILDING TO ALL APPLICABLE CRITERIA. (IF NO DEFICIENCIES WERE IDENTIFIED, DURING THE SURVEY, PLEASE EXPLICITLY STATE SO IN THE FINDINGS AND RECOMMENDATIONS PORTION OF THE REPORT} Signature: /s/ Francis A. Hauf Date: 10/28/02 ------------------------------------------ ---------------- Printed Name: Francis A. Hauf, P.E. Name of Firm: Hauf Consulting & Construction Management, LLC Phone #:(410) 688-7950 LICENSE Number: #036252 STAMP HERE: [SEAL] OFFEROR'S STATEMENT OF CORRECTION IN THE EVENT ANY OF THE OFFERED SPACE DOES NOT MEET THE ABOVE CRITERIA, THE OFFEROR SHALL ATTACH A SHEET DESCRIBING THE EXACT NATURE OF THE DEFICIENCY, AND THE OFFEROR SHALL ATTEST BELOW THAT ALL WORK REQUIRED TO BRING THE OFFERED SPACE INTO FULL COMPLIANCE WITH ALL APPLICABLE CRITERIA WILL BE COMPLETED AT THE OFFEROR'S SOLE COST AND EXPENSE PRIOR TO THE GOVERNMENT'S ACCEPTANCE OF THE OFFERED SPACE UNDER THE TERMS OF ANY PROSPECTIVE LEASE AGREEMENT. NOTE: SURVEYS SUBMITTED WITHOUT THE FPE'S FINDINGS, RECOMMENDED CORRECTIVE ACTIONS AND CODE REFERENCES WILL BE RETURNED WITHOUT REVIEW BY THE GSA FIRE PROTECTION ENGINEERING OFFICE. Signature:. /s/ John Dubel Date: 12-11-02 Printed Name:. John S. Dubel Title: Chief Financial Officer Name of Firm: MCI WorldCom Network Services, Inc. GENERAL BUILDING INFORMATION 1) # Stories above grade 13 2) # Stories below grade 2 3) Floors offered to the government ALL 4) Height of highest offered floor above lowest 80.5 feet level of fire department vehicle access (in feet): 5) Types of occupancies on each floor. Indicate all Storage S-2, Assembly 1st floor of other than business occupancy. 6) Approximate gross area of typical floor (identify P1 & P2=103,650 ft(2) total, 1 thru 12 = 48,600 ft(2), atypical floors individually): Penthouse 4,960 ft(2), Elevator Machine Room = 952 ft(2) 7) Describe construction type (fire resistive, Type 2A (Modified from Type 1B) per BOCA table 403.3.3.1 unprotected non-combustible, ordinary, wood frame, Construction Type II (222) per NFPA 220 Reinforced heavy timber) & NFPA 220 classifications for concrete floors floors, walls, columns and roof. 8) Describe fire-rated subdivision of building Stairs are 2 hour rated walls with 1-1/2 hour rated doors. No floors (including stairs, tenant separation, tenant separations are provided. Tenant separations are mechanical room, etc.) required by code to be 1 hour rated with 20 min. doors or equal. Mechanical rooms are separated with 1 hour construction. 9) Smoke detectors a) Locations Lobby, Freight Elevator Lobby, Mechanical Rooms, Telephone Rooms, Control Rooms, LAN Communication Rooms, Elevator Machine Room, with plenum smoke detectors in return duct work. b) Type New addressable ion c) Control Equipment Location Main fire alarm control panel d) Control Equipment Manufacturer Edwards (new), Gamewell (existing) e) Connection to building fire alarm system This is the building fire alarm system 10) Heat detectors a) Locations Generator rooms and old electric closets that have not been renovated. b) Type Fixed temperature c) Control Equipment Location Main fire alarm control panel d) Control Equipment Manufacturer Edwards (new), Gamewell {existing) e) Connection to building's fire alarm system This is the building fire alarm system 11) Other fire detectors: None 12) Describe emergency lighting: a) Type Battery backup in stairs and bathrooms. Every 3rd or 4th light on a separate circuit. b) Location Stairwells, Bathrooms, throughout floors c) secondary source(s) of power Generator backup 13) Describe exit signs: a) Type Standard internal back-lit consisting of red lettering, properly sized, LED b) Location Stairwells, elevator lobby, interior corridors of each wing c) Secondary sources of power Emergency backup generator 14) Describe emergency generator: a) Power sources One Diesel engine b) Capacity 250 KW c) Location P1 level loading dock d) Connected building systems Life safety systems, emergency lights, plus battery charges for 6th floor 15) Describe the fire suppression system with attention to the following: a) Sprinkler locations Incoming water supply from south side P2 level pump room. The building is entirely sprinklered. Areas subject to freezing (garage) are protected by separate dry pipe sprinkler systems (4 zones 4" sized). All other portions of the building are protected by a wet pipe sprinkler system. b) Waterflow alarm - type and location Waterflow alarms consist of: pressure type devices on each of the dry pipe risers located in the fire pump room. Paddle type devices on each floor zone fed by the wet system - located in stairs 2 and 3. Stair 1 on the elevator machine room level above 12th c) Control valves - type and typical location Control valves in the fire pump room are O.S& Y., except for the jockey pump valves. The fire pump valves include: 1 on the city supply and 2 on the fire pump piping. 1 on test header, 2 on the jockey pump piping, 1 on each of the 4 dry pipe risers. Additional control valves are provided for floor zones. All floor zone assemblies are provided in stair 2 and 3, except for the elevator machine room level above the 12th floor, which is served by stair 1. d) Valve tamper switches-type & adequacy Adequate valve tamper switches are provided on all control valves. O.S.& Y. have external tamper switch and butterfly valves have internal switches. e) Standpipe riser size, location and number. Stair 1 has a 4" riser. Stairs 2 & 3 have 4" combined standpipe risers. f) Locations and manufacturers of fixed CO2 One charged Ansul wet chemical system in each of three dry chemical and/or clean-agent fire kitchens suppression systems. g) Water supply type, size and arrangement The water is supplied from the local water authorities system. An 8 inch incoming to 6 inch line in pump room. h) Supply static pressure 90 psi i) Fire pump data i. UL Listed Yes ii Separate controller for jockey pump Yes iii. NFPA 20 compliant Yes iv. Rated Capacity (gpm) 750 v. Rated net pressure (psi) 100 vi. Primary power supply Diesel vii. Secondary power supply viii. Manufacturer Patterson Pump j) Compliance to testing & maintenance Yes required by NFPA 25 16) Describe the communications system with attention to the following: a) Type of fire alarm system i. hardwired, multiplex, analog, etc Edwards (new) addressable; Gamewell (existing) hardwired, tenant panel 6th floor Edwards addressable ii. location First floor rear lobby (tenant panel 6th floor) iii. manufacturer/model Edwards (new - protects renovated floors) Gamewell (existing - monitors floors that were not renovated, sends to monitoring system.) Both new and existing systems have voice and public address notification. The new system is interconnected to the existing system for alarm, trouble and supervisory conditions. Tenant Panel EST2 for computer rm smokes. iv. operating voltage 120 volts to system, 24 volts device b) Central Station (company Name) Wells Fargo Alarm (Borg-Warner Security) c) Emergency telephone system Yes, located in elevators, elevator lobbies and stairs d) Secondary power source Battery and generator (new), generator (existing) e) Control panel information Edwards (new), Gamewell (existing) f) Manual station locations Pull stations are located by stair entrances and by exterior exit doors on all floors, including garage levels and loading dock area. g) Type of alarm indicating appliances Strobes are located in renovated areas. Speakers are (visual and/or audible) and locations located throughout the entire building. h) Notification system (entire building, A high-rise package containing a pre-recorded message sounds floor above & below, etc.) on the fire floor, floor above and floor below for the 1st alarm. A 2nd alarm sounds for the entire building. i) Type of devices that sound evacuation Duct detectors for old floors only. New floors replaced with alarm plenum detectors. Smoke detectors, heat detectors, kitchen hoods and pull stations. j) System interfaces (elevators, smoke Elevator recall, no shunt trip. Stairwell pressurization control, electric door locks, HVAC, etc.) on general building alarm. Electric door locks main lobby 1st floor. Special locking arrangements on stairwell doors with controlled tenant access locking arrangements (both code compliant), HVAC shuts down on duct detector activation (old floors) and general alarm per floor (new floors). k) Compliance to testing and maintenance No. Needs to be scheduled. required by NFPA72 17) Describe building's means of egress (NFPA 101) a) Number of exits per floor Three exit stairs are provided per floor (P1 and P2 levels, 1st through 12th floors). Elevator Machine Room on 13th floor has center stair access only. b) Points of discharge for each exit North wing exits on 1st floor through hallway. Center exits to lobby and then to 12th Street side. South wing exits on 1st floor through hallway. c) Capacity of each exit (# people) Center Stair: 44 1/2" clear stair width/0.2"/person = 222, 35 1/4" door provides 33 1/4" clear width/0.15" person = 221 [Since the door's capacity is less than the stair's, the exit capacity of the center stair is 221] Stair 2: 44" clear stair width/0.2"/person = 220, 35 1/4" door provides 33 1/4" clear width/0.15"/person = 221 [Since the stair's capacity is less than the door's, the exit capacity of stair 2 is 220] Stair 3: 44" clear stair width/0.2"/person = 220, 35 1/4" door provides 33 1/4" clear width/0.15"/person = 221 [Since the stair's capacity is less than the door's, the exit capacity of stair 3 is 220] MAIN LOBBY to 12th Street has 2 double doors of 70" clear width (2x70=140"/0.15"/person - 933 PEOPLE). REAR LOBBY has a set of double doors of 58" clear width/0.15"/person = 387 PEOPLE d) Occupant load per floor 193 people typical e) Remoteness of exits i. Maximum diagonal dimension of typical 280 feet floor ii. Exit door separation 140 feet iii. How is distance measured? straight line f) Exit access width, fire resistance Stairs 2 and 3 are in open office areas, with 5 feet rating, arrangement exit access width. Stair 1 is served by a corridor. g) Exit stair enclosure Stairs 2 and 3 are 2 hour rated. Center stair exits through lobby. h) Exit discharge protection Stairs 2 and 3 have 2 hour rated exit passageways. Center stair exits through lobby. i) Exit dimensions Center Stair: 44 1/2" width, 9" run, 8" rise Stair 2: 44" width, 9 1/4" run, 7 3/4" rise Stair 3: 44" width, 9 1/4" run, 7 3/4" rise j) Handrails Handrails are provided on all stairs, mounted 32" above tread with proper graspability. (~13/4" pipe) k) Deadends None l) Common paths of travel None m) Vertical openings (open stairs, atriums, No escalators. Atrium 1st floor to 12th floor outside front. escalators, etc.) n) Penetrations of exit enclosure not related None to the function of the exit o) Exit Stairway Pressurization Stairwell pressurization is provided on all stairs. The system activates on any fire alarm signal or the control switches in the Fire Alarm Control Room. FINDINGS WITH RECOMMENDED CORRECTIVE ACTIONS WITH SPECIFIC CODE REFERENCES BUILDING CONSTRUCTION TYPE AND REQUIRED FIRE RESISTANCE RATED CONSTRUCTION NOTED DEFICIENCIES 1. The Elevator machine room fire rated door does not self-close and latch. The door seems to rub or stick. 2. The 12th floor Electrical Room 1209S has small unsealed penetrations into corridor. 3. The telephone rooms on all the floors located in the tenant area on both the South and North ends of the building have unsealed wire penetrations through the floor/ceiling slab. 4. The North stair discharge fire rated door does not self-close and latch. The door seems to rub or stick. RECOMMENDED CORRECTIVE ACTION: 1. Adjust the door closer or keeper, oil parts. $50.00. 2. Seal the penetrations with mineral wool or drywall closed. $50.00 3. Seal all floor/ceiling slab penetrations with an approved firestopping method. $600.00 - $1200.00 4. Adjust the door closer or keeper, oil parts. $50,00 FIRE ALARM SYSTEM NOTED DEFICIENCIES 1. The Graphic Annunciator contains an LED for a "Halon system" that no longer exists. 2. The 6N telephone room old system smoke detector is hanging down from the ceiling. The room is also protected by a new smoke detector until the old system is entirely phased out. 3. The fire alarm detection system on the unrenovated 9th floor must be modified under the next tenant fit-out. All existing initiation devices on the old fire alarm panel are to be replaced by new initiation devices on the new system. 4. No current annual inspection or test has been performed. RECOMMENDED CORRECTIVE ACTION: 1. Modify the Annunciator - Blank out the information and keep the LED as a spare. $150.00 2. Remount the device. $50.00 3. Ensure future renovations match the standard of care established under the phased fire alarm system upgrade. A/E design and renovation of space is best suited for pricing work. (Estimate range of $1,200 - $6,000) 4. Perform annual inspection and test ~$600 MEANS OF EGRESS, EXIT STAIRS AND DISCHARGE PASSAGEWAYS See building construction comments above regarding any non-functioning door in any rated egress component. EMERGENCY LIGHTS AND EXIT SIGNS NOTED DEFICIENCIES 1. The exit sign near cubicle 1294S was damaged/knocked off ceiling partially. 2. The exit signs near stair 12S are dim. RECOMMENDED CORRECTIVE ACTION: 1. Repair/replace. $50.00 2. Check circuit to exit lights, repair, as needed. $50.00 to $250.00 FIRE SUPPRESSION NOTED DEFICIENCIES 1. No current records of fire pump inspection and test forms. Fire extinguishers are not tagged. RECOMMENDED CORRECTIVE ACTION: 1. Perform annual fire suppression systems inspections, tests and service. ~$3,000 to $4,000 SFO DTSA20-03-R-00528 - -------------------------------------------------------------------------------- GENERAL CLAUSES (FINAL) (ACQUISITION OF LEASEHOLD INTERESTS IN REAL PROPERTY) - --------------------------------------------------------------------------------

CATEGORY CLAUSE NO. 48 CFR REF. CLAUSE TITLE - ------------------- ---------- -------------- --------------------------------------------------------- DEFINITIONS 1 552.270-4 Definitions GENERAL 2 552.270-5 Subletting and Assignment 3 552.270-11 Successors Bound 4 552.270-23 Subordination, Nondisturbance and Attornment 5 552.270-24 Statement of Lease 6 552.270-25 Substitution of Tenant Agency 7 552.270-26 No Waiver 8 552.270-27 Integrated Agreement 9 552.270-28 Mutuality of Obligation PERFORMANCE 10 552.270-17 Delivery and Condition 11 552.270-18 Default in Delivery - Time Extensions (Variation) 12 552.270-19 Progressive Occupancy 13 552.270-21 Effect of Acceptance and Occupancy 14 552.270-6 Maintenance of Building and Premises-Right of Entry 15 552.270-10 Failure in Performance 16 552.270-22 Default by Lessor During the Term 17 552.270-7 Fire and Casualty Damage 18 552.270-8 Compliance with Applicable Law 19 552.270-12 Alterations 20 552.270-29 Acceptance of Space INSPECTION 21 552.270-9 Inspection-Right of Entry PAYMENT 22 552.232-75 Prompt Payment 23 552.232-76 Electronic Funds Transfer Payment (Variation) 24 552.232-70 Invoice Requirements 25 52.232-23 Assignment of Claims 26 552.270-20 Payment (Variation) STANDARDS OF 27 552.203-5 Covenant Against Contingent Fees CONDUCT 28 52.203-7 Anti-Kickback Procedures 29 52.223-6 Drug-Free Workplace ADJUSTMENTS 30 552.203-70 Price Adjustment for Illegal or Improper Activity 31 52.215-10 Price Reduction for Defective Cost or Pricing Data 32 552.270-13 Proposals for Adjustment 33 552.270-14 Changes (Variation) AUDITS 34 552.215-70 Examination of Records by TSA 35 52.215-2 Audit and Records--Negotiation DISPUTES 36 52.233-1 Disputes

INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 1 (REV 9/01) SFO DTSA20-03-R-00528 LABOR STANDARDS 37 52.222-26 Equal Opportunity 38 52.222-24 Preaward On-Site Equal Opportunity Compliance Evaluation 39 52.222-21 Prohibition of Segregated Facilities 40 52.222-35 Affirmative Action for Disabled Veterans and Veterans of the Vietnam Era 41 52.222-36 Affirmative Action for Workers with Disabilities 42 52.222-37 Employment Reports on Disabled Veterans and Veterans of the Vietnam Era SUBCONTRACTING 43 52.209-6 Protecting the Government's Interest When Subcontracting With Contractors Debarred, Suspended, or Proposed for Debarment 44 52.215-12 Subcontractor Cost or Pricing Data 45 52.219-8 Utilization of Small Business Concerns 46 52.219-9 Small Business Subcontracting Plan 47 52.219-16 Liquidated Damages- Subcontracting Plan INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 2 (REV 9/01) SFO DTSA20-03-R-00528 GENERAL CLAUSES (Acquisition of Leasehold Interests in Real Property) 1. 552.270-4 - DEFINITIONS (SEP 1999) The following terms and phrases (except as otherwise expressly provided or unless the context otherwise requires) for all purposes of this lease shall have the respective meanings hereinafter specified: (a) "Commencement Date" means the first day of the term. (b) "Contract" and "Contractor" means "Lease" and "Lessor," respectively. (c) "Contracting Officer" means a person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings. The term includes certain authorized representatives of the Contracting Officer acting within the limits of their authority as delegated by the Contracting Officer. (d) "Delivery Date" means the date specified in or determined pursuant to the provisions of this lease for delivery of the premises to the Government, improved in accordance with the provisions of this lease and substantially complete, as such date may be modified in accordance with the provisions of this lease. (e) "Delivery Time" means the number of days provided by this lease for delivery of the premises to the Government, as such number may be modified in accordance with the provisions of this lease. (f) "Excusable Delays" mean delays arising without the fault or negligence of Lessor and Lessor's subcontractors and suppliers at any tier, and shall include, without limitation, (1) acts of God or of the public enemy, (2) acts of the United States of America in either its sovereign or contractual capacity, (3) acts of another contractor in the performance of a contract with the Government, (4) fires, (5) floods, (6) epidemics, (7) quarantine restrictions, (8) strikes, (9) freight embargoes, (10) unusually severe weather, or (11) delays of subcontractors or suppliers at any tier arising from unforeseeable causes beyond the control and without the fault or negligence of both the Lessor and any such subcontractor or supplier. (g) "Lessor" means the sub-lessor if this lease is a sublease. (h) "Lessor shall provide" means the Lessor shall furnish and install at Lessor's expense. (i) "Notice" means written notice sent by certified or registered mail, Express Mail or comparable service, or delivered by hand. Notice shall be effective on the date delivery is accepted or refused. (j) "Premises" means the space described on the Standard Form 2, U.S. Government Lease for Real Property, of this lease. (k) "Substantially complete" and "substantial completion" means that the work, the common and other areas of the building, and all other things necessary for the Government's access to the premises and occupancy, possession, use and enjoyment thereof, as provided in this lease, have been completed or obtained, excepting only such minor matters as do not interfere with or materially diminish such access, occupancy, possession, use or enjoyment. (l) "Work" means all alterations, improvements, modifications, and other things required for the preparation or continued occupancy of the premises by the Government as specified in this lease. 2. 552.270-5 - SUBLETTING AND ASSIGNMENT (SEP 1999) The Government may sublet all or a portion of the Premises or assign this Lease without obtaining the consent of the Lessor provided that (a) the Government provides the Lessor with written notice of such subletting or assignment at least 15 working days prior to the effective date of such subletting or assignment, (b) the Government remains liable for all the obligations of the tenant under the lease, (c) the lease authority of the Government serves as a guarantee of the obligations of the tenant under this lease in the event of any such subletting and assignment, and (d) the proposed sublessee's use is an office use consistent with office use and zoning for the site in Washington, D.C. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 3 (REV 9/01) SFO DTSA20-03-R-00528 3. 552.270-11 SUCCESSORS BOUND (SEP 1999) This lease shall bind, and inure to the benefit of, the parties and their respective heirs, executors, administrators, successors, and assigns. 4. 552.270-23 - SUBORDINATION, NONDISTURBANCE AND ATTORNMENT (SEP 1999) (a) Lessor warrants that it holds such title to or other interest in the premises and other property as is necessary to the Government's access to the premises and full use and enjoyment thereof in accordance with the provisions of this lease. Government agrees, in consideration of the warranties and conditions set forth in this clause, that this lease is subject and subordinate to any and all recorded mortgages, deeds of trust and other liens now or hereafter existing or imposed upon the premises, and to any renewal, modification or extension thereof. It is the intention of the parties that this provision shall be self-operative and that no further instrument shall be required to effect the present or subsequent subordination of this lease. Government agrees, however, within twenty (20) business days next following the Contracting Officer's receipt of a written demand, to execute such instruments as Lessor may reasonably request to evidence further the subordination of this lease to any existing or future mortgage, deed of trust or other security interest pertaining to the premises, and to any water, sewer or access easement necessary or desirable to serve the premises or adjoining property owned in whole or in part by Lessor if such easement does not interfere with the full enjoyment of any right granted the Government under this lease. (b) No such subordination, to either existing or future mortgages, deeds of trust or other lien or security instrument shall operate to affect adversely any right of the Government under this lease so long as the Government is not in default under this lease. Lessor will include in any future mortgage, deed of trust or other security instrument to which this lease becomes subordinate, or in a separate nondisturbance agreement, a provision to the foregoing effect. Lessor warrants that the holders of all notes or other obligations secured by existing mortgages, deeds of trust or other security instruments have consented to the provisions of this clause, and agrees to provide true copies of all such consents to the Contracting Officer promptly upon demand. (c) In the event of any sale of the premises or any portion thereof by foreclosure of the lien of any such mortgage, deed of trust or other security instrument, or the giving of a deed in lieu of foreclosure, the Government will be deemed to have attorned to any purchaser, purchasers, transferee or transferees of the premises or any portion thereof and its or their successors and assigns, and any such purchasers and transferees will be deemed to have assumed all obligations of the Lessor under this lease, so as to establish direct privity of estate and contract between Government and such purchasers or transferees, with the same force, effect and relative priority in time and right as if the lease had initially been entered into between such purchasers or transferees and the Government; provided, further, that the Contracting Officer and such purchasers or transferees shall, with reasonable promptness following any such sale or deed delivery in lieu of foreclosure, execute all such revisions to this lease, or other writings, as shall be necessary to document the foregoing relationship. (d) None of the foregoing provisions may be deemed or construed to imply a waiver of the Government's rights as a sovereign. 5. 552.270-24 - STATEMENT OF LEASE (AUG 1999) (a) The Contracting Officer will, within thirty (30) days next following the Contracting Officer's receipt of a joint written request from Lessor and a prospective lender or purchaser of the building, execute and deliver to Lessor a letter stating that the same is issued subject to the conditions stated in this clause and, if such is the case, that (1) the lease is in full force and effect; (2) the date to which the rent and other charges have been paid in advance, if any; and (3) whether any notice of default has been issued. (b) Letters issued pursuant to this clause are subject to the following conditions: (1) That they are based solely upon a reasonably diligent review of the Contracting Officer's lease file as of the date of issuance; (2) That the Government shall not be held liable because of any defect in or condition of the premises or building; (3) That the Contracting Officer does not warrant or represent that the premises or building comply with applicable Federal, State and local law; and (4) That the Lessor, and each prospective lender and purchaser are deemed to have constructive notice of such facts as would be ascertainable by reasonable prepurchase and precommitment inspection of the Premises and Building and by inquiry to appropriate Federal, State and local Government officials. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 4 (REV 9/01) SFO DTSA20-03-R-00528 6. 552.270-25 - SUBSTITUTION OF TENANT AGENCY (SEP 1999) The Government may, at any time and from time to time, substitute any Government agency or agencies for the Government agency or agencies, if any, named in the lease. 7. 552.270-26 - NO WAIVER (SEP 1999) No failure by either party to insist upon the strict performance of any provision of this lease or to exercise any right or remedy consequent upon a breach thereof, and no acceptance of full or partial rent or other performance by either party during the continuance of any such breach shall constitute a waiver of any such breach of such provision. 8. 552.270-27 - INTEGRATED AGREEMENT (SEP 1999) This Lease, upon execution, contains the entire agreement of the parties and no prior written or oral agreement, express or implied, shall be admissible to contradict the provisions of the Lease. 9. 552.270-28 - MUTUALITY OF OBLIGATION (SEP 1999) The obligations and covenants of the Lessor, and the Government's obligation to pay rent and other Government obligations and covenants, arising under or related to this Lease, are interdependent. The Government may, upon issuance of and delivery to Lessor of a final decision asserting a claim against Lessor, set off such claim, in whole or in part, as against any payment or payments then or thereafter due the Lessor under this lease. No setoff pursuant to this clause shall constitute a breach by the Government of this lease. Prior to exercising any right of financial offset, the Government shall use best efforts, circumstances allowing, to provide Lessor with ten (10) days prior written notice. 10. 552.270-17 - DELIVERY AND CONDITION (SEP 1999) (a) Unless the Government elects to have the space occupied in increments, the space must be delivered ready for occupancy as a complete unit. The Government reserves the right to determine when the space is substantially complete. (b) If the premises do not in every respect comply with the provisions of this lease the Contracting Officer may, in accordance with the Failure in Performance clause of this lease, elect to reduce the rent payments. 11. 552.270-18 - DEFAULT IN DELIVERY - TIME EXTENSIONS (SEP 1999) (VARIATION) (a) With respect to Lessor's obligation to deliver the premises substantially complete by the delivery date, time is of the essence. If the Lessor fails to work diligently to ensure its substantial completion by the delivery date or fails to substantially complete the work by such date, the Government may by notice to the Lessor terminate this lease. Such termination is effective when received by Lessor. The Lessor and the Lessor's sureties, if any, are jointly and severally liable for any damages to the Government resulting from such termination, as provided in this clause. The Government shall be entitled to the following damages: (1) The Government's aggregate rent and estimated real estate tax and operating cost adjustments for the firm term and all option terms of its replacement lease or leases, in excess of the aggregate rent and estimated real estate tax and operating cost adjustments for the term. If the Government procures replacement premises for a term (including all option terms) in excess of this term, the Lessor is not liable for excess Government rent or adjustments during such excess lease term. (2) All administrative and other costs the Government incurs in procuring a replacement lease or leases. (3) Other, additional relief provided for in this lease, at law, or in equity. (b) Damages to which the Government is entitled to under this clause are due and payable thirty (30) days following the date Lessor receives notice from the Contracting Officer specifying such damages. (c) Delivery by Lessor of less than the minimum ANSI/BOMA Office Area square footage required by this lease shall in no event be construed as substantial completion, except as the Contracting Officer permits. (d) The Government shall not terminate this lease under this clause nor charge the Lessor with damages under this clause, if (1) the delay in substantially completing the work arises from excusable delays and (2) the Lessor within 10 days from the beginning of any such delay (unless extended in writing by the Contracting Officer) provides notice to the Contracting Officer of the causes of delay. The Contracting Officer shall ascertain the facts and the extent of delay. If the facts warrant, the Contracting Officer shall extend the delivery date, to INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 5 (REV 9/01) SFO DTSA20-03-R-00528 the extent of such delay at no additional costs to the Government. A time extension is the sole remedy of the Lessor. 12. 552.270-19 - PROGRESSIVE OCCUPANCY (SEP 1999) The Government shall have the right to elect to occupy the space in partial increments prior to the substantial completion of the entire leased premises, and the Lessor agrees to schedule its work so as to deliver the space incrementally as elected by the Government. The Government shall pay rent commencing with the first business day following substantial completion of the entire leased premise unless the Government has elected to occupy the leased premises incrementally. In case of incremental occupancy, the Government shall pay rent pro rata upon the first business day following substantial completion of each incremental unit. Rental payments shall become due on the first workday of the month following the month in which an increment of space is substantially complete, except that should an increment of space be substantially completed after the fifteenth day of the month, the payment due date will be the first workday of the second month following the month in which it was substantially complete. The commencement date of the firm lease term will be a composite determined from all rent commencement dates. 13. 552.270-21 - EFFECT OF ACCEPTANCE AND OCCUPANCY (SEP 1999) Neither the Government's acceptance of the premises for occupancy, nor the Government's occupancy thereof, shall be construed as a waiver of any requirement of or right of the Government under this Lease, or as otherwise prejudicing the Government with respect to any such requirement or right. 14. 552.270-6 - MAINTENANCE OF BUILDING AND PREMISES - RIGHT OF ENTRY (SEP 1999) Except in case of damage arising out of the willful act or negligence of a Government employee, Lessor shall maintain the premises, including the building, building systems, and all equipment, fixtures, and appurtenances furnished by the lessor under this lease, in good repair and condition so that they are suitable in appearance and capable of supplying such heat, air conditioning, light, ventilation, safety systems, access and other things to the premises, without reasonably preventable or recurring disruption, as is required for the Government's access to, occupancy, possession, use and enjoyment of the premises as provided in this lease. For the purpose of so maintaining the premises, the Lessor may at reasonable times enter the premises with the approval of the authorized Government representative in charge. 15. 552.270-10 - FAILURE IN PERFORMANCE (SEP 1999) The covenant to pay rent and the covenant to provide any service, utility, maintenance, or repair required under this lease are interdependent. In the event of any failure by the Lessor to provide any service, utility, maintenance, repair or replacement required under this lease the Government may, by contract or otherwise, perform the requirement and deduct from any payment or payments under this lease, then or thereafter due, the resulting cost to the Government, including all administrative costs. If the Government elects to perform any such requirement, the Government and each of its contractors shall be entitled to access to any and all areas of the building, access to which is necessary to perform any such requirement, and the Lessor shall afford and facilitate such access. Alternatively, the Government may deduct from any payments under this lease, then or thereafter due, an amount which reflects the reduced value of the contract requirement not performed. No deduction from rent pursuant to this clause shall constitute a default by the Government under this lease. These remedies are not exclusive and are in addition to any other remedies which may be available under this lease or at law. The Government will use best efforts to notify Lessor and allow reasonable time to cure. 16. 552.270-22 - DEFAULT BY LESSOR DURING THE TERM (SEP 1999) (a) Each of the following shall constitute a default by Lessor under this lease: (1) Failure to maintain, repair, operate or service the premises as and when specified in this lease, or failure to perform any other requirement of this lease as and when required provided any such failure shall remain uncured for a period of thirty (30) days next following Lessor's receipt of notice thereof from the Contracting Officer or an authorized representative, unless Lessor is reasonably pursuing a cure of the failure. (b) If a default occurs, the Government may, by notice to Lessor, terminate this lease for default and if so terminated, the Government shall be entitled to the damages specified in the Default in Delivery-Time Extensions clause. The Government will use its best efforts to notify Lessor or management agent and allow reasonable time to cure. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 6 (REV 9/01) SFO DTSA20-03-R-00528 17. 552.270-7 - FIRE AND CASUALTY DAMAGE (SEP 1999) If the entire premises are destroyed by fire or other casualty, this lease will immediately terminate. In case of partial destruction or damage, so as to render the premises untenantable, as determined by the Government, the Government may terminate the lease by giving written notice to the Lessor within 15 calendar days of the fire or other casualty; if so terminated, no rent will accrue to the Lessor after such partial destruction or damage; and if not so terminated, the rent will be reduced proportionately by supplemental agreement hereto effective from the date of such partial destruction or damage. Nothing in this lease shall be construed as relieving Lessor from liability for damage to or destruction of property of the United States of America caused by the willful or negligent act or omission of Lessor. 18. 552.270-8 - COMPLIANCE WITH APPLICABLE LAW (SEP 1999) Lessor shall comply with all Federal, state and local laws applicable to the Lessor as owner or lessor, or both, of the building or premises, including, without limitation, laws applicable to the construction, ownership, alteration or operation of both or either thereof, and will obtain all necessary permits, licenses and similar items at Lessor's expense. The Government will comply with all Federal state and local laws applicable to and enforceable against it as a tenant under this lease; provided that nothing in this lease shall be construed as a waiver of any sovereign immunity of the Government. This lease shall be governed by Federal law. 19. 552.270-12 - ALTERATIONS (SEP 1999) The Government shall have the right during the existence of this lease to make alterations, attach fixtures, and erect structures or signs in or upon the premises hereby leased, which fixtures, additions or structures so placed in, on, upon, or attached to the said premises shall be and remain the property of the Government and may be removed or otherwise disposed of by the Government. If the lease contemplates that the Government is the sole occupant of the building, for purposes of this clause, the leased premises include the land on which the building is sited and the building itself. Otherwise, the Government shall have the right to tie into or make any physical connection with any structure located on the property as is reasonably necessary for appropriate utilization of the leased space. All mechanical, electrical, and/or structural alterations affecting the building systems shall either be reasonably approved in writing by the Lessor or contracted for, through Lessor. 20. 552.270-29 - ACCEPTANCE OF SPACE (SEP 1999) (a) When the Lessor has completed all alterations, improvements, and repairs necessary to meet the requirements of the lease, the Lessor shall notify the Contracting Officer. The Contracting Officer or designated representative shall promptly inspect the space. (b) The Government will accept the space and the lease term will begin after determining that the space is substantially complete and contains the required ANSI/BOMA Office Area square footage as indicated in the paragraph of this solicitation entitled "Amount and Type of Space." 21. 552.270-9 - INSPECTION - RIGHT OF ENTRY (SEP 1999) (a) At any time and from time to time after receipt of an offer (until the same has been duly withdrawn or rejected), after acceptance thereof and during the term, the agents, employees and contractors of the Government may, upon reasonable prior notice to Offeror or Lessor, enter upon the offered premises or the premises, and all other areas of the building access to which is necessary to accomplish the purposes of entry, to determine the potential or actual compliance by the Offeror or Lessor with the requirements of the solicitation or this lease, which purposes shall include, but not be limited to: (1) inspecting, sampling and analyzing of suspected asbestos-containing materials and air monitoring for asbestos fibers; (2) inspecting the heating, ventilation and air conditioning system, maintenance records, and mechanical rooms for the offered premises or the premises; (3) inspecting for any leaks, spills, or other potentially hazardous conditions which may involve tenant exposure to hazardous or toxic substances; and (4) inspecting for any current or past hazardous waste operations, to ensure that appropriate mitigative actions were taken to alleviate any environmentally unsound activities in accordance with Federal, State and local law. (b) Nothing in this clause shall be construed to create a Government duty to inspect for toxic materials or to impose a higher standard of care on the Government than on other lessees. The purpose of this clause is to promote the ease with which the Government may inspect the building. Nothing in this clause shall act to relieve the Lessor of any duty to inspect or liability which might arise as a result of Lessor's failure to inspect for or correct a hazardous condition. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 7 (REV 9/01) SFO DTSA20-03-R-00528 22. 552.232-75 - PROMPT PAYMENT (SEP 1999) The Government will make payments under the terms and conditions specified in this clause. Payment shall be considered as being made on the day a check is dated or an electronic funds transfer is made. All days referred to in this clause are calendar days, unless otherwise specified. (a) Payment due date. (1) Rental payments. Rent shall be paid monthly in arrears and will be due on the first workday of each month, and only as provided for by the lease. (i) When the date for commencement of rent falls on the 15th day of the month or earlier, the initial monthly rental payment under this contract shall become due on the first workday of the month following the month in which the commencement of the rent is effective. (ii) When the date for commencement of rent falls after the 15th day of the month, the initial monthly rental payment under this contract shall become due on the first workday of the second month following the month in which the commencement of the rent is effective. (2) Other payments. The due date for making payments other than rent shall be the later of the following two events: (i) The 30th day after the designated billing office has received a proper invoice from the Contractor. (ii) The 30th day after Government acceptance of the work or service. However, if the designated billing office fails to annotate the invoice with the actual date of receipt, the invoice payment due date shall be deemed to be the 30th day after the Contractor's invoice is dated, provided a proper invoice is received and there is no disagreement over quantity, quality, or Contractor compliance with contract requirements. (b) Invoice and inspection requirements for payments other than rent. (1) The Contractor shall prepare and submit an invoice to the designated billing office after completion of the work. A proper invoice shall include the following items: (i) Name and address of the Contractor. (ii) Invoice date. (iii) Lease number. (iv) Government's order number or other authorization. (v) Description, price, and quantity of work or services delivered. (vi) Name and address of Contractor official to whom payment is to be sent (must be the same as that in the remittance address in the lease or the order.) (vii) Name (where practicable), title, phone number, and mailing address of person to be notified in the event of a defective invoice. (2) The Government will inspect and determine the acceptability of the work performed or services delivered within 7 days after the receipt of a proper invoice or notification of completion of the work or services unless a different period is specified at the time the order is placed. If actual acceptance occurs later, for the purpose of determining the payment due date and calculation of interest, acceptance will be deemed to occur on the last day of the 7-day inspection period. If the work or service is rejected for failure to conform to the technical requirements of the contract, the 7 days will be counted beginning with receipt of a new invoice or notification. In either case, the Contractor is not entitled to any payment or interest unless actual acceptance by the Government occurs. (c) Interest Penalty. (1) An interest penalty shall be paid automatically by the Government, without request from the Contractor, if payment is not made by the due date. (2) The interest penalty shall be at the rate established by the Secretary of the Treasury under Section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611) that is in effect on the day after the due date. This rate is referred to as the "Renegotiation Board Interest Rate," and it is published in the Federal Register semiannually on or about January 1 and July 1. The interest penalty shall accrue daily on the payment amount approved by the Government and be compounded in 30-day increments inclusive from the first day after the due date through the payment date. (3) Interest penalties will not continue to accrue after the filing of a claim for such penalties under the clause at 52.233-1, Disputes, or for more than 1 year. Interest penalties of less than $1.00 need not be paid. (4) Interest penalties are not required on payment delays due to disagreement between the Government and Contractor over the payment amount or other issues involving contract compliance or on amounts temporarily withheld or retained in accordance with the terms of the contract. Claims involving disputes, and any interest that may be payable, will be resolved in accordance with the clause at 52.233-1, Disputes. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 8 (REV 9/01) SFO DTSA20-03-R-00528 23. 552.232-76 - ELECTRONIC FUNDS TRANSFER PAYMENT (SEP 1999) (Variation) (a) The Government will make payments under this lease by electronic funds transfer (EFT). After award, but no later than 30 days before the first payment, the Lessor shall designate a financial institution for receipt of EFT payments, and shall submit this designation to the Contracting Officer or other Government official, as directed. (b) The Lessor shall provide the following information: (1) The lease number to which this notice applies. (2) The American Bankers Association 9-digit identifying number for wire transfers of the financing institution receiving payment if the institution has access to the Federal Reserve Communications System. (3) Number of account to which funds are to be deposited. (4) Type of depositor account ("C" for checking, "S" for savings). (5) If the Lessor is a new enrollee to the EFT system, a completed "Payment Information Form," SF 3881. (c) In the event the Lessor, during the performance of this contract, elects to designate a different financial institution for the receipt of any payment made using EFT procedures, notification of such change and the required information specified in (b), above must be received by the appropriate Government official no later than 30 days prior to the date such change is to become effective. (d) The documents furnishing the information required in this clause must be dated and contain the signature, title, and telephone number of the Lessor or an authorized representative designated by the Lessor, as well as the Lessor's name and lease number. (e) Lessor failure to properly designate a financial institution or to provide appropriate payee bank account information may delay payments of amounts otherwise properly due. 24. 552.232-70 - INVOICE REQUIREMENTS (VARIATION) (SEP 1999) (This clause applies to payments other than rent.) (a) Invoices shall be submitted in an original only, unless otherwise specified, to the designated billing office specified in this contract or order. (b) Invoices must include the Accounting Control Transaction (ACT) number provided below or on the order. ACT Number (to be supplied on individual orders) (c) If information or documentation in addition to that required by the Prompt Payment clause of this contract is required in connection with an invoice for a particular order, the order will indicate what information or documentation must be submitted. 25. 52.232-23 - ASSIGNMENT OF CLAIMS (JAN 1986) (a) The Contractor, under the Assignment of Claims Act, as amended, 31 USC 3727, 41 USC 15 (hereafter referred to as the "the Act"), may assign its rights to be paid amounts due or to become due as a result of the performance of this contract to a bank, trust company, or other financing institution, including any Federal lending agency. The assignee under such an assignment may thereafter further assign or reassign its right under the original assignment to any type of financing institution described in the preceding sentence. (b) Any assignment or reassignment authorized under the Act and this clause shall cover all unpaid amounts payable under this contract, and shall not be made to more than one party, except that an assignment or reassignment may be made to one party as agent or trustee for two or more parties participating in the financing of this contract. (c) The Contractor shall not furnish or disclose to any assignee under this contract any classified document (including this contract) or information related to work under this contract until the Contracting Officer authorizes such action in writing. 26. 552.270-20 - PAYMENT (SEP 1999) (VARIATION) (a) When space is offered and accepted, the ANSI/BOMA Office Area square footage delivered will be confirmed by: INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 9 (REV 9/01) SFO DTSA20-03-R-00528 (1) the Government's measurement of plans submitted by the successful Offeror as approved by the Government, and an inspection of the space to verify that the delivered space is in conformance with such plans or (2) a mutual on-site measurement of the space, if the Contracting Officer determines that it is necessary. (b) Payment will not be made for space which is in excess of the amount of ANSI/BOMA Office Area square footage stated in the lease. (c) If it is determined that the amount of ANSI/BOMA Office Area square footage actually delivered is less than the amount agreed to in the lease, the lease will be modified to reflect the amount of Usable space delivered and the annual rental will be adjusted as follows: Usable square feet not delivered multiplied by the ANSI/BOMA Office Area square foot (USF) rate equals the reduction in annual rent. The rate per USF is determined by dividing the total annual rental by the Usable square footage set forth in the lease. USF Not Delivered X Rate per USF = Reduction in Annual Rent. 27. 552.203-5 - COVENANT AGAINST CONTINGENT FEES (FEB 1990) (Applies to leases which exceed $100,000.) (a) The Contractor warrants that no person or agency has been employed or retained to solicit or obtain this contract upon an agreement or understanding for a contingent fee, except a bona fide employee or agency. For breach or violation of this warranty, the Government shall have the right to annul this contract without liability or, in its discretion, to deduct from the contract price or consideration, or otherwise recover the full amount of the contingent fee. (b) "Bona fide agency," as used in this clause, means an established commercial or selling agency (including licensed real estate agents or brokers), maintained by a Contractor for the purpose of securing business, that neither exerts nor proposes to exert improper influence to solicit or obtain Government contracts nor holds itself out as being able to obtain any Government contract or contracts through improper influence. "Bona fide employee," as used in this clause, means a person, employed by a Contractor and subject to the Contractor's supervision and control as to time, place, and manner of performance, who neither exerts nor proposes to exert improper influence to solicit or obtain Government contracts nor holds out as being able to obtain any Government contract or contracts through improper influence. "Contingent fee," as used in this clause, means any commission, percentage, brokerage, or other fee that is contingent upon the success that a person or concern has in securing a Government contract. "Improper influence," as used in this clause, means any influence that induces or tends to induce a Government employee or officer to give consideration or to act regarding a Government contract on any basis other than the merits of the matter. 28. 52.203-7 - ANTI-KICKBACK PROCEDURES (JUL 1995) (Applies to leases which exceed $100,000 average net annual rental, including option periods.) (a) Definitions. "Kickback," as used in this clause, means any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind which is provided, directly or indirectly, to any prime Contractor, prime Contractor employee, subcontractor, or subcontractor employee for the purpose of improperly obtaining or rewarding favorable treatment in connection with a prime contract or in connection with a subcontract relating to a prime contract. "Person," as used in this clause, means a corporation, partnership, business association of any kind, trust, joint-stock company, or individual. "Prime contract," as used in this clause, means a contract or contractual action entered into by the United States for the purpose of obtaining supplies, materials, equipment, or services of any kind. "Prime Contractor," as used in this clause, means a person who has entered into a prime contract with the United States. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 10 (REV 9/01) SFO DTSA20-03-R-00528 "Prime Contractor employee," as used in this clause, means any officer, partner, employee, or agent of a prime Contractor. "Subcontract," as used in this clause, means a contract or contractual action entered into by a prime Contractor or subcontractor for the purpose of obtaining supplies, materials, equipment, or services of any kind under a prime contract. "Subcontractor," as used in this clause, (1) means any person, other than the prime Contractor, who offers to furnish or furnishes any supplies, materials, equipment, or services of any kind under a prime contract or a subcontract entered into in connection with such prime contract, and (2) includes any person who offers to furnish or furnishes general supplies to the prime Contractor or a higher tier subcontractor. "Subcontractor employee," as used in this clause, means any officer, partner, employee, or agent of a subcontractor. (b) The Anti-Kickback Act of 1986 (41 U.S.C. 51-58) (the Act), prohibits any person from-- (1) Providing or attempting to provide or offering to provide any kickback; (2) Soliciting, accepting, or attempting to accept any kickback; or (3) Including, directly or indirectly, the amount of any kickback in the contract price charged by a prime Contractor to the United States or in the contract price charged by a subcontractor to a prime Contractor or higher tier subcontractor. (c) (1) The Contractor shall have in place and follow reasonable procedures designed to prevent and detect possible violations described in paragraph (b) of this clause in its own operations and direct business relationships. (2) When the Contractor has reasonable grounds to believe that a violation described in paragraph (b) of this clause may have occurred, the Contractor shall promptly report in writing the possible violation. Such reports shall be made to the inspector general of the contracting agency, the head of the contracting agency if the agency does not have an inspector general, or the Department of Justice. (3) The Contractor shall cooperate fully with any Federal agency investigating a possible violation described in paragraph (b) of this clause. (4) The Contracting Officer may (i) offset the amount of the kickback against any monies owed by the United States under the prime contract and/or (ii) direct that the Prime Contractor withhold from sums owed a subcontractor under the prime contract, the amount of the kickback. The Contracting Officer may order that monies withheld under subdivision (c)(4)(ii) of this clause be paid over to the Government unless the Government has already offset those monies under subdivision (c)(4)(i) of this clause. In the either case, the Prime Contractor shall notify the Contracting Officer when the monies are withheld. (5) The Contractor agrees to incorporate the substance of this clause, including subparagraph (c)(5) but excepting subparagraph (c)(1), in all subcontracts under this contract which exceed $100,000. 29. 52.223-6 DRUG-FREE WORKPLACE (JAN 1997) (a) Definitions. As used in this clause -- "Controlled substance" means a controlled substance in schedules I through V of section 202 of the Controlled Substances Act (21 U.S.C. 812) and as further defined in regulation at 21 CFR 1308.11 - 1308.15. "Conviction" means a finding of guilt (including a plea of nolo contendere) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or State criminal drug statutes. "Criminal drug statute" means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, possession, or use of any controlled substance. "Drug-free workplace" means the site(s) for the performance of work done by the Contractor in connection with a specific contract at which employees of the Contractor are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance. "Employee" means an employee of a Contractor directly engaged in the performance of work under a Government contract. "Directly engaged" is defined to include all direct cost employees and any other Contractor employee who has other than a minimal impact or involvement in contract performance. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 11 (REV 9/01) SFO DTSA20-03-R-00528 "Individual" means an offeror/contractor that has no more than one employee including the offeror/contractor. (b) The Contractor, if other than an individual, shall-- within 30 days after award (unless a longer period is agreed to in writing for contracts of 30 days or more performance duration), or as soon as possible for contracts of less than 30 days performance duration-- (1) Publish a statement notifying its employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the Contractor's workplace and specifying the actions that will be taken against employees for violations of such prohibition; (2) Establish an ongoing drug-free awareness program to inform such employees about-- (i) The dangers of drug abuse in the workplace; (ii) The Contractor's policy of maintaining a drug-free workplace; (iii) Any available drug counseling, rehabilitation, and employee assistance programs; and (iv) The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; (3) Provide all employees engaged in performance of the contract with a copy of the statement required by subparagraph (b)(1) of this clause; (4) Notify such employees in writing in the statement required by subparagraph (b)(1) of this clause that, as a condition of continued employment on this contract, the employee will-- (i) Abide by the terms of the statement; and (ii) Notify the employer in writing of the employee's conviction under a criminal drug statute for a violation occurring in the workplace no later than 5 days after such conviction. (5) Notify the Contracting Officer in writing within 10 days after receiving notice under subdivision (b)(4)(ii) of this clause, from an employee or otherwise receiving actual notice of such conviction. The notice shall include the position title of the employee; (6) Within 30 days after receiving notice under subdivision (b)(4)(ii) of this clause of a conviction, take one of the following actions with respect to any employee who is convicted of a drug abuse violation occurring in the workplace: (i) Taking appropriate personnel action against such employee, up to and including termination; or (ii) Require such employee to satisfactorily participate in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency; and (7) Make a good faith effort to maintain a drug-free workplace through implementation of subparagraphs (b)(1) through (b)(6) of this clause. (c) The Contractor, if an individual, agrees by award of the contract or acceptance of a purchase order, not to engage in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance while performing this contract. (d) In addition to other remedies available to the Government, the Contractor's failure to comply with the requirements of paragraph (b) or (c) of this clause may, pursuant to FAR 23.506, render the Contractor subject to suspension of contract payments, termination of the contract for default, and suspension or debarment. 30. 552.203-70 - PRICE ADJUSTMENT FOR ILLEGAL OR IMPROPER ACTIVITY (SEP 1999) (Applies to leases which exceed $100,000.) (a) If the head of the contracting activity (HCA) or his or her designee determines that there was a violation of subsection 27(a) of the Office of Federal Procurement Policy Act, as amended (41 U.S.C. 423), as implemented in the Federal Acquisition Regulation, the Government, at its election, may-- (1) Reduce the monthly rental under this lease by 5 percent of the amount of the rental for each month of the remaining term of the lease, including any option periods, and recover 5 percent of the rental already paid; (2) Reduce payments for alterations not included in monthly rental payments by 5 percent of the amount of the alterations agreement; or INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 12 (REV 9/01) SFO DTSA20-03-R-00528 (3) Reduce the payments for violations by a Lessor's subcontractor by an amount not to exceed the amount of profit or fee reflected in the subcontract at the time the subcontract was placed. (b) Prior to making a determination as set forth above, the HCA or designee shall provide to the Lessor a written notice of the action being considered and the basis therefor. The Lessor shall have a period determined by the agency head or designee, but not less than 30 calendar days after receipt of such notice, to submit in person, in writing, or through a representative, information and argument in opposition to the proposed reduction. The agency head or designee may, upon good cause shown, determine to deduct less than the above amounts from payments. (c) The rights and remedies of the Government specified herein are not exclusive, and are in addition to any other rights and remedies provided by law or under this lease. 31. 52.215-10 - PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA (OCT 1997) (Applies when cost or pricing data are required for work or service exceeding $500,000.) (a) If any price, including profit or fee, negotiated in connection with this contract, or any cost reimbursable under this contract, was increased by any significant amount because-- (1) The Contractor or a subcontractor furnished cost or pricing data that were not complete, accurate, and current as certified in its Certificate of Current Cost or Pricing Data; (2) A subcontractor or prospective subcontractor furnished the Contractor cost or pricing data that were not complete, accurate, and current as certified in the Contractor's Certificate of Current Cost or Pricing Data; or (3) Any of these parties furnished data of any description that were not accurate, the price or cost shall be reduced accordingly and the contract shall be modified to reflect the reduction. (b) Any reduction in the contract price under paragraph (a) of this clause due to defective data from a prospective subcontractor that was not subsequently awarded the subcontract shall be limited to the amount, plus applicable overhead and profit markup, by which (1) the actual subcontract or (2) the actual cost to the Contractor, if there was no subcontract, was less than the prospective subcontract cost estimate submitted by the Contractor; provided, that the actual subcontract price was not itself affected by defective cost or pricing data. (c) (1) If the Contracting Officer determines under paragraph (a) of this clause that a price or cost reduction should be made, the Contractor agrees not to raise the following matters as a defense: (i) The Contractor or subcontractor was a sole source supplier or otherwise was in a superior bargaining position and thus the price of the contract would not have been modified even if accurate, complete, and current cost or pricing data had been submitted. (ii) The Contracting Officer should have known that the cost or pricing data in issue were defective even though the Contractor or subcontractor took no affirmative action to bring the character of the data to the attention of the Contracting Officer. (iii) The contract was based on an agreement about the total cost of the contract and there was no agreement about the cost of each item procured under the contract. (iv) The Contractor or subcontractor did not submit a Certificate of Current Cost or Pricing Data. (2) (i) Except as prohibited by subdivision (c)(2)(ii) of this clause, an offset in an amount determined appropriate by the Contracting Officer based upon the facts shall be allowed against the amount of a contract price reduction if-- (A) The Contractor certifies to the Contracting Officer that, to the best of the Contractor's knowledge and belief, the Contractor is entitled to the offset in the amount requested; and (B) The Contractor proves that the cost or pricing data were available before the "as of" date specified on its Certificate of Current Cost or Pricing Data, and that the data were not submitted before such date. (ii) An offset shall not be allowed if-- (A) The understated data were known by the Contractor to be understated before the "as of" date specified on its Certificate of Current Cost or Pricing Data; or (B) The Government proves that the facts demonstrate that the contract price would not have increased in the amount to be offset even if the available data had been submitted before the "as of" date specified on its Certificate of Current Cost or Pricing Data. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 13 (REV 9/01) SFO DTSA20-03-R-00528 (d) If any reduction in the contract price under this clause reduces the price of items for which payment was made prior to the date of the modification reflecting the price reduction, the Contractor shall be liable to and shall pay the United States at the time such overpayment is repaid-- (1) Simple interest on the amount of such overpayment to be computed from the date(s) of overpayment to the Contractor to the date the Government is repaid by the Contractor at the applicable underpayment rate effective for each quarter prescribed by the Secretary of the Treasury under 26 U.S.C. 6621(a)(2); and (2) A penalty equal to the amount of the overpayment, if the Contractor or subcontractor knowingly submitted cost or pricing data that were incomplete, inaccurate, or noncurrent. 32. 552.270-13 - PROPOSALS FOR ADJUSTMENT (SEP 1999) (a) The Contracting Officer may, from time to time during the term of this lease, require changes to be made in the work or services to be performed and in the terms or conditions of this lease. Such changes will be required under the Changes clause. (b) If the Contracting Officer makes a change within the general scope of the lease, the Lessor shall submit, in a timely manner, an itemized cost proposal for the work to be accomplished or services to be performed when the cost exceeds $100,000. The proposal, including all subcontractor work, will contain at least the following details-- (1) Material quantities and unit costs; (2) Labor costs (identified with specific item or material to be placed or operation to be performed; (3) Equipment costs; (4) Worker's compensation and public liability insurance; (5) Overhead; (6) Profit; and (7) Employment taxes under FICA and FUTA. (c) The following Federal Acquisition Regulation (FAR) provisions also apply to all proposals exceeding $500,000 in cost -- (1) The Lessor shall provide cost or pricing data including subcontractor cost or pricing data (48 CFR 15.403-4) and (2) The Lessor's representative, all Contractors, and subcontractors whose portion of the work exceeds $500,000 must sign and return the "Certificate of Current Cost or Pricing Data" (48 CFR 15.406-2). (d) Lessors shall also refer to 48 CFR Part 31, Contract Cost Principles, for information on which costs are allowable, reasonable, and allocable in Government work. 33. 552.270-14 - CHANGES (SEP 1999) (VARIATION) (a) The Contracting Officer may at any time, by written order, make changes within the general scope of this lease in any one or more of the following: (1) Specifications (including drawings and designs); (2) Work or services; (3) Facilities or space layout; or (4) Amount of space, provided the Lessor consents to the change. (b) If any such change causes an increase or decrease in Lessor's cost of or the time required for performance under this lease, whether or not changed by the order, the Contracting Officer shall modify this lease to provide for one or more of the following: (1) A modification of the delivery date; provided the Government is responsible for all Governmental caused time delays, (2) An equitable adjustment in the rental rate; (3) A lump sum equitable adjustment; or (4) An equitable adjustment of the annual operating costs per ANSI/BOMA Office Area square foot specified in this lease. 34. 552.215-70 - EXAMINATION OF RECORDS BY TSA (FEB 1996) The Contractor agrees that the Deputy Secretary of the Transportation Security Administration, or any duly authorized representative shall, until the expiration of 3 years after final payment under this INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 14 (REV 9/01) SFO DTSA20-03-R-00528 contract, or of the time periods for the particular records specified in Subpart 4.7 of the Federal Acquisition Regulation (48 CFR 4.7), whichever expires earlier, have access to and the right to examine any books, documents, papers, and records of the Contractor involving transactions related to this contract or compliance with any clauses thereunder. The Contractor further agrees to include in all its subcontracts hereunder a provision to the effect that the subcontractor agrees that the Administrator of General Services, or any duly authorized representatives shall, until the expiration of 3 years after final payment under the subcontract, or of the time periods for the particular records specified in Subpart 4.7 of the Federal Acquisition Regulation (48 CFR 4.7), whichever expires earlier, have access to and the right to examine any books, documents, papers, and records of such subcontractor, involving transactions related to the subcontract or compliance with any clauses thereunder. The term "subcontract" as used in this clause excludes (a) purchase orders not exceeding $100,000 and (b) subcontracts or purchase orders for public utility services at rates established for uniform applicability to the general public. 35. 52.215-2 - AUDIT AND RECORDS--NEGOTIATION (JUN 1999) (a) As used in this clause, "records" includes books, documents, accounting procedures and practices, and other data, regardless of type and regardless of whether such items are in written form, in the form of computer data, or in any other form. (b) Examination of costs. If this is a cost-reimbursement, incentive, time-and-materials, labor-hour, or price redeterminable contract, or any combination of these, the Contractor shall maintain and the Contracting Officer, or an authorized representative of the Contracting Officer, shall have the right to examine and audit all records and other evidence sufficient to reflect properly all costs claimed to have been incurred or anticipated to be incurred directly or indirectly in performance of this contract. This right of examination shall include inspection at all reasonable times of the Contractor's plants, or parts of them, engaged in performing the contract. (c) Cost or pricing data. If the Contractor has been required to submit cost or pricing data in connection with any pricing action relating to this contract, the Contracting Officer, or an authorized representative of the Contracting Officer, in order to evaluate the accuracy, completeness, and currency of the cost or pricing data, shall have the right to examine and audit all of the Contractor's records, including computations and projections, related to-- (1) The proposal for the contract, subcontract, or modification; (2) The discussions conducted on the proposal(s), including those related to negotiating; (3) Pricing of the contract, subcontract, or modification; or (4) Performance of the contract, subcontract or modification. (d) Comptroller General-- (1) The Comptroller General of the United States, or an authorized representative, shall have access to and the right to examine any of the Contractor's directly pertinent records involving transactions related to this contract or a subcontract hereunder. (2) This paragraph may not be construed to require the Contractor or subcontractor to create or maintain any record that the Contractor or subcontractor does not maintain in the ordinary course of business or pursuant to a provision of law. (e) Reports. If the Contractor is required to furnish cost, funding, or performance reports, the Contracting Officer or an authorized representative of the Contracting Officer shall have the right to examine and audit the supporting records and materials, for the purpose of evaluating-- (1) The effectiveness of the Contractor's policies and procedures to produce data compatible with the objectives of these reports; and (2) The data reported. (f) Availability. The Contractor shall make available at its office at all reasonable times the records, materials, and other evidence described in paragraphs (a), (b), (C), (d), and (e) of this clause, for examination, audit, or reproduction, until 3 years after final payment under this contract or for any shorter period specified in Subpart 4.7, Contractor Records Retention, of the Federal Acquisition Regulation (FAR), or for any longer period required by statute or by other clauses of this contract. In addition-- (1) If this contract is completely or partially terminated, the Contractor shall make available the records relating to the work terminated until 3 years after any resulting final termination settlement; and (2) The Contractor shall make available records relating to appeals under the Disputes clause or to litigation or the settlement of claims arising under or relating to this contract until such appeals, litigation, or claims are finally resolved. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 15 (REV 9/01) SFO DTSA20-03-R-00528 (g) The Contractor shall insert a clause containing all the terms of this clause, including this paragraph (g), in all subcontracts under this contract that exceed the simplified acquisition threshold, and-- (1) That are cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable type or any combination of these; (2) For which cost or pricing data are required; or (3) That require the subcontractor to furnish reports as discussed in paragraph (e) of this clause. The clause may be altered only as necessary to identify properly the contracting parties and the Contracting Officer under the Government prime contract. 36. 52.233-1 - DISPUTES (DEC 1998) (a) This contract is subject to the Contract Disputes act of 1978, as amended (41 U.S.C. 601-613) (b) Except as provided in the Act, all disputes arising under or relating to this contract shall be resolved under this clause. (c) "Claim," as used in this clause, means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract. A claim arising under a contract, unlike a claim relating to that contract, is a claim that can be resolved under a contract clause that provides for the relief sought by the claimant. However, a written demand or written assertion by the Contractor seeking the payment of money exceeding $100,000 is not a claim under the Act until certified as required by subparagraph (d)(2) of this clause. A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a claim under the Act. The submission may be converted to a claim under the Act, by complying with the submission and certification requirements of this clause, if it is disputed either as to liability or amount or is not acted upon in a reasonable time. (d) (1) A claim by the Contractor shall be made in writing and, unless otherwise stated in this contract, submitted within 6 years after accrual of the claim to the Contracting Officer for a written decision. A claim by the Government against the Contractor shall be subject to a written decision by the Contracting Officer. (2) (i) The Contractor shall provide the certification specified in paragraph (d)(2)(iii) of this clause when submitting any claim exceeding $100,000. (ii) The certification requirement does not apply to issues in controversy that have not been submitted as all or part of a claim. (iii) The certification shall state as follows: "I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the Contractor believes the Government is liable; and that I am duly authorized to certify the claim on behalf of the Contractor." (3) The certification may be executed by any person duly authorized to bind the Contractor with respect to the claim. (e) For Contractor claims of $100,000 or less, the Contracting Officer must, if requested in writing by the Contractor, render a decision within 60 days of the request. For Contractor-certified claims over $100,000, the Contracting Officer must, within 60 days, decide the claim or notify the Contractor of the date by which the decision will be made. (f) The Contracting Officer's decision shall be final unless the Contractor appeals or files a suit as provided in the Act. (g) If the claim by the Contractor is submitted to the Contracting Officer or a claim by the Government is presented to the Contractor, the parties, by mutual consent, may agree to use alternative disputes resolution (ADR). If the Contractor refuses an offer for ADR, the Contractor shall inform the Contracting Officer, in writing, of the Contractor's specific reasons for rejecting the offer. (h) The Government shall pay interest on the amount found due and unpaid from (1) the date that the Contracting Officer receives the claim (certified if required); or (2) the date that payment otherwise would be due, if that date is later, until the date of payment. With regard to claims having defective certifications, as defined in FAR 33.201, interest shall be paid from the date that the Contracting Officer initially receives the claim. Simple interest on claims shall be paid at the rate, fixed by the Secretary of the Treasury as provided in the Act, which is applicable to the period during which the Contracting Officer receives the claim and then at INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 16 (REV 9/01) SFO DTSA20-03-R-00528 the rate applicable for each 6-month period as fixed by the Treasury Secretary during the pendency of the claim. (i) The Contractor shall proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under the contract, and comply with any decision of the Contracting Officer. 37. 52.222-26 - EQUAL OPPORTUNITY (FEB 1999) (a) If, during any 12-month period (including the 12 months preceding the award of this contract), the Contractor has been or is awarded nonexempt Federal contracts and/or subcontracts that have an aggregate value in excess of $10,000, the Contractor shall comply with subparagraphs (b)(1) through (11) below. Upon request, the Contractor shall provide information necessary to determine the applicability of this clause. (b) During performing this contract, the Contractor agrees as follows: (1) The Contractor shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. However, it shall not be a violation of this clause for the Contractor to extend a publicly announced preference in employment to Indians living on or near an Indian reservation, in connection with employment opportunities on or near an Indian reservation, as permitted by 41 CFR 60-1.5. (2) The Contractor shall take affirmative action to ensure the applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin. This shall include, but not be limited to, (i) employment, (ii) upgrading, (iii) demotion, (iv) transfer, (v) recruitment or recruitment advertising, (vi) layoff or termination, (vii) rates of pay or other forms of compensation, and (viii) selection for training, including apprenticeship. (3) The Contractor shall post in conspicuous places available to employees and applicants for employment the notices to be provided by the Contracting Officer that explain this clause. (4) The Contractor shall, in all solicitations or advertisements for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. (5) The Contractor shall send, to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, the notice to be provided by the Contracting Officer advising the labor union or workers' representative of the Contractor's commitments under this clause, and post copies of the notice in conspicuous places available to employees and applicants for employment. (6) The Contractor shall comply with Executive Order 11246, as amended, and the rules, regulations, and orders of the Secretary of Labor. (7) The Contractor shall furnish to the contracting agency all information required by Executive Order 11246, as amended, and by the rules, regulations, and orders of the Secretary of Labor. Standard Form 100 (EEO-1), or any successor form, as prescribed in 41 CFR part 60-1. Unless the Contractor has filed within the 12 months preceding the date of contract award, the Contractor shall, within 30 days after contract award, apply to either the regional Office of Federal Contract Compliance Programs (OFCCP) or the local office of the Equal Employment Opportunity Commission for the necessary forms (8) The Contractor shall permit access to its premises, during normal business hours, by the contracting agency or the OFCCP for the purpose of conducting on-site compliance evaluations and complaint investigations. The Contractor shall permit the Government to inspect and copy any books, accounts, records (including computerized records), and other material that may be relevant to the matter under investigation and pertinent to compliance with Executive Order 11246, as amended, and rules and regulations that implement the Executive Order. (9) If the OFCCP determines that the Contractor is not in compliance with this clause or any rule, regulation, or order of the Secretary of Labor, this contract may be canceled, terminated, or suspended in whole or in part and the Contractor may be declared ineligible for further Government contracts, under the procedures authorized in Executive Order 11246, as amended. In addition, sanctions may be imposed and remedies invoked against the Contractor as provided in Executive Order 11246, as amended, the rules, regulations, and orders of the Secretary of Labor, or as otherwise provided by law. (10) The Contractor shall include the terms and conditions of subparagraph (b)(1) through (11) of this clause in every subcontract or purchase order that is not exempted by the rules, regulations, or orders of the Secretary of Labor issued under Executive Order 11246, as amended, so that these terms and conditions will be binding upon each subcontractor or vendor. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 17 (REV 9/01) SFO DTSA20-03-R-00528 (11) The Contractor shall take such action with respect to any subcontract or purchase order as the contracting agency may direct as a means of enforcing these terms and conditions, including sanctions for noncompliance; provided, that if the Contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of any direction, the Contractor may request the United States to enter into the litigation to protect the interests of the United States. (c) Notwithstanding any other clause in this contract, disputes relative to this clause will be governed by the procedures in 41 CFR 60-1.1. 38. 52.222-24 - PREAWARD ON-SITE EQUAL OPPORTUNITY COMPLIANCE EVALUATION (FEB 1999) (Applies to leases which exceed $10,000,000.) If a contract in the amount of $10 million or more will result from this solicitation, the prospective Contractor and its known first-tier subcontractors with anticipated subcontracts of $10 million or more shall be subject to a preaward compliance evaluation by the Office of Federal Contract Compliance Programs (OFCCP), unless, within the preceding 24 months, OFCCP has conducted an evaluation and found the prospective Contractor and subcontractors to be in compliance with Executive Order 11246. 39. 52.222-21 - PROHIBITION OF SEGREGATED FACILITIES (FEB 1999) (a) "Segregated facilities," as used in this clause, means any waiting rooms, work areas, rest rooms and wash rooms, restaurants and other eating areas, time clocks, locker rooms and other storage or dressing areas, parking lots, drinking fountains, recreation or entertainment areas, transportation, and housing facilities provided for employees, that are segregated by explicit directive or are in fact segregated on the basis of race, color, religion, sex, or national origin because of written or oral policies or employee custom. The term does not include separate or single-user rest rooms or necessary dressing or sleeping areas provided to assure privacy between the sexes. (b) The Contractor agrees that it does not and will not maintain or provide for its employees any segregated facilities at any of its establishments, and that it does not and will not permit its employees to perform their services at any location under its control where segregated facilities are maintained. The Contractor agrees that a breach of this clause is a violation of the Equal Opportunity clause in this contract. (c) The Contractor shall include this clause in every subcontract and purchase order that is subject to the Equal Opportunity clause of this contract. 40. 52.222-35 - AFFIRMATIVE ACTION FOR DISABLED VETERANS AND VETERANS OF THE VIETNAM ERA (APR 1998) (a) Definitions. All employment openings includes all positions except executive and top management, those positions that will be filled from within the contractor's organization, and positions lasting 3 days or less. This term includes full-time employment, temporary employment of more than 3 days' duration, and part-time employment. Appropriate office of the State employment service system means the local office of the Federal-State national system of public employment offices with assigned responsibility to serve the area where the employment opening is to be filled, including the District of Columbia, Guam, the Commonwealth of Puerto Rico, and the Virgin Islands. Positions that will be filled from within the Contractor's organization means employment openings for which no consideration will be given to persons outside the Contractor's organization (including any affiliates, subsidiaries, and the parent companies) and includes any openings that the Contractor proposes to fill from regularly establish "recall" lists. The exception does not apply to a particular opening once an employer decides to consider applicants outside of its organization. Veteran of the Vietnam era means a person who-- (1) Served on active duty for a period of more than 180 days, any part of which occurred between August 5, 1964, and May 7, 1975, and was discharged or released therefrom with other than a dishonorable discharge; or (2) Was discharged or released from active duty for a service-connected disability if any part of such active duty was performed between August 5, 1964, and May 7, 1975. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 18 (REV 9/01) SFO DTSA20-03-R-00528 (b) General. (1) Regarding any position for which the employee or applicant for employment is qualified, the Contractor shall not discriminate against the individual because the individual is a disabled veteran or veteran of the Vietnam era. The Contractor agrees to take affirmative action to employ, advance in employment, and otherwise treat qualified disabled veterans and veterans of the Vietnam era without discrimination based upon their disability or veterans' status in all employment practices such as-- (i) Employment; (ii) Upgrading; (iii) Demotion or transfer; (iv) Recruitment; (v) Advertising; (vi) Layoff or termination; (vii) Rates of pay or other forms of compensation; and (viii) Selection for training, including apprenticeship. (2) The Contractor agrees to comply with the rules, regulations, and relevant orders of the Secretary of Labor (Secretary) issued under the Vietnam Era Veterans' Readjustment Assistance Act of 1972 (the Act), as amended. (c) Listing openings. (1) The Contractor agrees to list all employment openings existing at contract award or occurring during contract performance, at an appropriate office of the State employment service system in the locality where the opening occurs. These openings include those occurring at any contractor facility, including one not connected with performing this contract. An independent corporate affiliate is exempt from this requirement. (2) State and local government agencies holding Federal contracts of $10,000 or more shall also list all employment openings with the appropriate office of the State employment service. (3) The listing of employment openings with the State employment service system is required at least concurrently with using any other recruitment source or effort and involves the obligations of placing a bona fide job order, including accepting referrals of veterans and nonveterans. This listing does not require hiring any particular job applicant or hiring from any particular group of job applicants and is not intended to relieve the Contractor from any requirements of Executive orders or regulations concerning nondiscrimination in employment. (4) Whenever the Contractor becomes contractually bound to the listing terms of this clause, it shall advise the State employment service system, in each State where it has establishments, of the name and location of each hiring location in the State. As long as the Contractor is contractually bound to these terms and has so advised the State system, it need not advise the State system of subsequent contracts. The Contractor may advise the State system when it is no longer bound by this contract clause. (d) Applicability. This clause does not apply to the listing of employment openings which occur and are filled outside the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, and the Virgin Islands. (e) Postings. (1) The Contractor agrees to post employment notices stating- (i) The Contractor's obligation under the law to take affirmative action to employ and advance in employment qualified disabled veterans and veterans of the Vietnam era, and (ii) The rights of applicants and employees. (2) These notices shall be posted in conspicuous places that are available to employees and applicants for employment. They shall be in a form prescribed by the Deputy Assistant Secretary for Federal Contract Compliance Programs, Department of Labor (Deputy Assistant Secretary), and provided by or through the Contracting Officer. (3) The Contractor shall notify each labor union or representative of workers with which it has a collective bargaining agreement or other contract understanding, that the Contractor is bound by the terms of the Act, and is committed to take affirmative action to employ, and advance in employment, qualified disabled veterans and veterans of the Vietnam era. (f) Noncompliance. If the Contractor does not comply with the requirements of this clause, appropriate actions may be taken under the rules, regulations, and relevant orders of the Secretary issued pursuant to the Act. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 19 (REV 9/01) SFO DTSA20-03-R-00528 (g) Subcontracts. The Contractor shall include the terms of this clause in every subcontract or purchase order of $10,000 or more unless exempted by rules, regulations, or orders of the Secretary. The Contractor shall act as specified by the Deputy Assistant Secretary to enforce the terms, including action for noncompliance. 41. 52.222-36 - AFFIRMATIVE ACTION FOR WORKERS WITH DISABILITIES (JUN 1998) (a) General. (1) Regarding any position for which the employee or applicant for employment is qualified, the Contractor shall not discriminate against any employee or applicant because of physical or mental disability. The Contractor agrees to take affirmative action to employ, advance in employment and otherwise treat qualified individuals with disabilities without discrimination based upon their physical or mental disability in all employment practices such as-- (i) Recruitment, advertising, and job application procedures; (ii) Hiring, upgrading, promotion, award of tenure, demotion, transfer, layoff, termination, right of return from layoff, and rehiring; (iii) Rates of pay or any other form of compensation and changes in compensation; (iv) Job assignments, job classifications, organizational structures, position descriptions, lines of progression, and seniority lists; (v) Leaves of absence, sick leave, or any other leave; (vi) Fringe benefits available by virtue of employment, whether or not administered by the Contractor; (vii) Selection and financial support for training, including apprenticeships, professional meetings, conferences, and other related activities, and selection for leaves of absence to pursue training (viii) Activities sponsored by the Contractor, including social or recreational programs; and (ix) Any other term, condition, or privilege of employment. (2) The Contractor agrees to comply with the rules, regulations, and relevant orders of the Secretary of Labor (Secretary) issued under the Rehabilitation Act of 1973 (29 USC 793) (the Act), as amended. (b) Postings. (1) The Contractor agrees to post employment notices stating (i) the Contractor's obligation under the law to take affirmative action to employ and advance in employment qualified individuals with disabilities and (ii) the rights of applicants and employees. (2) These notices shall be posted in conspicuous places that are available to employees and applicants for employment. The Contractor shall ensure that applicants and employees with disabilities are informed of the contents of the notice (e.g., the Contractor may have the notice read to a visually disabled individual, or may lower the posted notice so that it might be read by a person in a wheelchair). The notices shall be in a form prescribed by the Deputy Assistant Secretary for Federal Contract Compliance of the U.S. Department of Labor (Deputy Assistant Secretary) and shall be provided by or through the Contracting Officer. (3) The Contractor shall notify each labor union or representative of workers with which it has a collective bargaining agreement or other contract understanding, that the Contractor is bound by the terms of Section 503 of the Act and is committed to take affirmative action to employ, and advance in employment, qualified individuals with physical or mental disabilities. (c) Noncompliance. If the Contractor does not comply with the requirements of this clause, appropriate actions may be taken under the rules, regulations, and relevant orders of the Secretary issued pursuant to the Act. (d) Subcontracts. The Contractor shall include the terms of this clause in every subcontract or purchase order in excess of $10,000 unless exempted by rules, regulations, or orders of the Secretary. The Contractor shall act as specified by the Director to enforce the terms, including action for noncompliance. 42. 52.222-37 - EMPLOYMENT REPORTS ON DISABLED VETERANS AND VETERANS OF THE VIETNAM ERA (JAN 1999) (a) Unless the Contractor is a State or local government agency, the Contractor shall report at least annually, as required by the Secretary of Labor, on: (1) The number of disabled veterans and the number of veterans of the Vietnam era in the workforce of the contractor by job category and hiring location; and INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 20 (REV 9/01) SFO DTSA20-03-R-00528 (2) The total number of new employees hired during the period covered by the report, and of that total, the number of special disabled veterans, and the number of veterans of the Vietnam era. (b) The above items shall be reported by completing the form entitled "Federal Contractor Veterans' Employment Report VETS-100." (c) Reports shall be submitted no later than September 30 of each year beginning September 30, 1988. (d) The employment activity report required by paragraph (a)(2) of this clause shall reflect total hires during the most recent 12-month period as of the ending date selected for the employment profile report required by paragraph (a)(1) of this clause. Contractors may select an ending date: (1) As of the end of any pay period during the period January through March 1 of the year the report is due, or (2) as of December 31, if the Contractor has previous written approval from the Equal Employment Opportunity Commission to do so for purposes of submitting the Employer Information Report EEO-1 (Standard Form 100). (e) The count of veterans reported according to paragraph (a) of this clause shall be based on voluntary disclosure. Each Contractor subject to the reporting requirements at 38 U.S.C. 4212 shall invite all special disabled veterans and veterans of the Vietnam era who wish to benefit under the affirmative action program at 38 U.S.C. 4212 to identify themselves to the Contractor. The invitation shall state that the information is voluntarily provided, that the information will be kept confidential, that disclosure or refusal to provide the information will not subject the applicant or employee to any adverse treatment, and that the information will be used only in accordance with the regulations promulgated under 38 U.S.C. 4212. (f) Subcontracts. The Contractor shall include the terms of this clause in every subcontract or purchase order of $10,000 or more unless exempted by rules, regulations, or orders of the Secretary. 43. 52.209-6 - PROTECTING THE GOVERNMENT'S INTEREST WHEN SUBCONTRACTING WITH CONTRACTORS DEBARRED, SUSPENDED, OR PROPOSED FOR DEBARMENT (JUL 1995) (a) The Government suspends or debars Contractors to protect the Government's interests. Contractors shall not enter into any subcontract in excess of the small purchase limitation at FAR 13.000 with a Contractor that has been debarred, suspended, or proposed for debarment unless there is a compelling reason to do so. (b) The Contractor shall require each proposed first-tier subcontractor, whose subcontract will exceed the small purchase limitation at FAR 13.000, to disclose to the Contractor, in writing, whether as of the time of award of the subcontract, the subcontractor, or its principals, is or is not debarred, suspended, or proposed for debarment by the Federal Government. (c) A corporate officer or designee of the Contractor shall notify the Contracting Officer, in writing, before entering into a subcontract with a party that is debarred, suspended or proposed for debarment (See FAR 9.404 for information on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs). The notice must include the following: (1) The name of the subcontractor, (2) The Contractor's knowledge of the reasons for the subcontractor being on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs; (3) The compelling reason(s) for doing business with the subcontractor notwithstanding its inclusion on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs; (4) The systems and procedures the Contractor has established to ensure that it is fully protecting the Government's interests when dealing with such subcontractor in view of the specific basis for the party's debarment, suspension, or proposed debarment. 44. 52.215-12 - SUBCONTRACTOR COST OR PRICING DATA (OCT 1997) (Applies when the clause at FAR 52.215-10 is applicable.) (a) Before awarding any subcontract expected to exceed the threshold for submission of cost or pricing data at FAR 15.403-4, on the date of agreement on price or the date of award, which ever is later; or before pricing any subcontract modification involving a pricing adjustment expected to exceed the threshold for submission of cost or pricing data at FAR 15.403-4, the Contractor shall require the subcontractor to submit cost or pricing data (actually or by specific identification in writing), unless an exception under FAR 15.403-1 applies. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 21 (REV 9/01) SFO DTSA20-03-R-00528 (b) The Contractor shall require the subcontractor to certify in substantially the form prescribed in FAR 15.406-2 that, to the best of its knowledge and belief, the data submitted under paragraph (a) of this clause were accurate, complete, and current as of the date of agreement on the negotiated price of the subcontract or subcontract modification. (c) In each subcontract that exceeds the threshold for submission of cost or pricing data at FAR 15.403-4, when entered into, the Contractor shall insert either-- (1) The substance of this clause, including this paragraph (c), if paragraph (a) of this clause requires submission of cost or pricing data for the subcontract; or (2) The substance of the clause at FAR 52.215-13, Subcontractor Cost or Pricing Data -- Modifications. 45. 52.219-8 - UTILIZATION OF SMALL BUSINESS CONCERNS (OCT 2000) (Applies to leases which exceed $100,000 average net annual rental, including option periods.) (a) It is the policy of the United States that small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns shall have the maximum practicable opportunity to participate in performing contracts let by any Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns. (b) The Contractor hereby agrees to carry out this policy in the awarding of subcontracts to the fullest extent consistent with efficient contract performance. The Contractor further agrees to cooperate in any studies or surveys as may be conducted by the United States Small Business Administration or the awarding agency of the United States as may be necessary to determine the extent of the Contractor's compliance with this clause. (c) Definitions. As used in this contract - HUBZone small business concern means a small business concern that appears on the List of Qualified HUBZone Small Business Concerns maintained by the Small Business Administration. Service-disabled veteran-owned small business concern - (1) Means a small business concern - (i) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and (ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran. (2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined in 38 U.S.C. 101(16). Small business concern means a small business as defined pursuant to Section 3 of the Small Business Act and relevant regulations promulgated pursuant thereto. Small disadvantaged business concern means a small business concern that represents, as part of its offer that - (1) It has received certification as a small disadvantaged business concern consistent with 13 CFR part 124, Subpart B; (2) No material change in disadvantaged ownership and control has occurred since its certification; (3) Where the concern is owned by one or more individuals, the net worth of each individual upon whom the certification is based does not exceed $750,000 after taking into account the applicable exclusions set forth at 13 CFR 124.104(c)(2); and (4) It is identified, on the date of its representation, as a certified small disadvantaged business in the database maintained by the Small Business Administration (PRO-Net). INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 22 (REV 9/01) SFO DTSA20-03-R-00528 "Veteran-owned small business concern" means a small business concern - (1) Not less than 51 percent of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and (2) The management and daily business operations of which are controlled by one or more veterans. "Women-owned small business concern" means a small business concern - (1) That is at least 51 percent owned by one or more women, or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and (2) Whose management and daily business operations are controlled by one or more women. (d) Contractors acting in good faith may rely on written representations by their subcontractors regarding their status as a small business concern, a veteran-owned small business concern, a service-disabled veteran-owned small business concern, a HUBZone small business concern, a small disadvantaged business concern, or a women-owned small business concern. 46. 52.219-9 - SMALL BUSINESS SUBCONTRACTING PLAN (OCT 2000) (Applies to leases which exceed $500,000.) (a) This clause does not apply to small business concerns. (b) Definitions. As used in this clause-- "Commercial item" means a product or service that satisfies the definition of commercial item in section 2.101 of the Federal Acquisition Regulation. "Commercial plan" means a subcontracting plan (including goals) that covers the offeror's fiscal year and that applies to the entire production of commercial items sold by either the entire company or a portion thereof (e.g., division, plant, or product line). "Individual contract plan" means a subcontracting plan that covers the entire contract period (including option periods), applies to a specific contract, and has goals that are based on the offeror's planned subcontracting in support of the specific contract, except that indirect costs incurred for common or joint purposes may be allocated on a prorated basis to the contract. "Master plan" means a subcontracting plan that contains all the required elements of an individual contract plan, except goals, and may be incorporated into individual contract plans, provided the master plan has been approved. "Subcontract," means any agreement means any agreement (other than one involving an employer-employee relationship) entered into by a Federal Government prime Contractor or subcontractor calling for supplies or services required for performance of the contract or subcontract. (c) The offeror, upon request by the Contracting Officer, shall submit and negotiate a subcontracting plan, where applicable, which separately addresses subcontracting with small business, veteran-owned small business, HUBZone small business concerns, small disadvantaged business, and women-owned small business concerns. If the offeror is submitting an individual contract plan, the plan must separately address subcontracting with small business, veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns, with a separate part for the basic contract and separate parts for each option (if any). The plan shall be included in and made a part of the resultant contract. The subcontracting plan shall be negotiated within the time specified by the Contracting Officer. Failure to submit and negotiate the subcontracting plan shall make the offeror ineligible for award of a contract. (d) The offeror's subcontracting plan shall include the following: (1) Goals, expressed in terms of percentages of total planned subcontracting dollars, for the use of small business, veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns as subcontractors. Service-disabled veteran-owned small business concerns meet the definition of veteran-owned small business concerns, and offerors may include them within the subcontracting plan goal for veteran-owned small business concerns. A INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 23 (REV 9/01) SFO DTSA20-03-R-00528 separate goal for service-disabled veteran-owned small business concerns is not required. The offeror shall include all subcontracts that contribute to contract performance, and may include a proportionate share of products and services that are normally allocated as indirect costs. (2) A statement of-- (i) Total dollars planned to be subcontracted for an individual contract plan; or the offeror's total projected sales, expressed in dollars, and the total value of projected subcontracts to support the sales for a commercial plan; (ii) Total dollars planned to be subcontracted to small business concerns; (iii) Total dollars planned to be subcontracted to veteran-owned small business concerns; (iv) Total dollars planned to be subcontracted to HUBZone small business concerns; (v) Total dollars planned to be subcontracted to small disadvantaged business concerns; and (vi) Total dollars planned to be subcontracted to women-owned small business concerns. (3) A description of the principal types of supplies and services to be subcontracted, and an identification of the types planned for subcontracting to - (i) Small business concerns, (ii) Veteran-owned small business concerns; (iii) HUBZone small business concerns; (iv) Small disadvantaged business concerns; and (v) Women-owned small business concerns. (4) A description of the method used to develop the subcontracting goals in paragraph (d)(1) of this clause. (5) A description of the method used to identify potential sources for solicitation purposes (e.g., existing company source lists, the Procurement Marketing and Access Network (PRO-Net) of the Small Business Administration (SBA), veterans service organizations, the National Minority Purchasing Council Vendor Information Service, the Research and Information Division of the Minority Business Development Agency in the Department of Commerce, or small, HUBZone, small disadvantaged, and women-owned small business trade associations). A firm may rely on the information contained in PRO-Net as an accurate representation of a concern's size and ownership characteristics for the purposes of maintaining a small, veteran-owned small, HUBZone small, small disadvantaged, and women-owned small business source list. Use of PRO-Net as its source list does not relieve a firm of its responsibilities (e.g., outreach, assistance, counseling, or publicizing subcontracting opportunities) in this clause. (6) A statement as to whether or not the offeror included indirect costs in establishing subcontracting goals, and a description of the method used to determine the proportionate share of indirect costs to be incurred with - (i) Small business concerns; (ii) Veteran-owned small business concerns; (ii) HUBZone small business concerns; (iii) Small disadvantaged business concerns; and (iv) Women-owned small business concerns. (7) The name of the individual employed by the offeror who will administer the offeror's subcontracting program, and a description of the duties of the individual. (8) A description of the efforts the offeror will make to assure that small business, veteran-owned small business, HUBZone small business, small disadvantaged and women-owned small business concerns have an equitable opportunity to compete for subcontracts. (9) Assurances that the offeror will include the clause in this contract entitled "Utilization of Small Business Concerns" in all subcontracts that offer further subcontracting opportunities, and that the offeror will require all subcontractors (except small business concerns) that receive subcontracts in excess of $500,000 ($1,000,000 for construction of any public facility) to adopt a subcontracting plan that complies with the requirements of this clause. (10) Assurances that the offeror will-- (i) Cooperate in any studies or surveys as may be required; (ii) Submit periodic reports so that the Government can determine the extent of compliance by the offeror with the subcontracting plan; (iii) Submit Standard Form (SF) 294, Subcontracting Report for Individual Contracts, and/or SF 295, Summary Subcontract Report, in accordance with paragraph (j) of this clause. The reports shall provide information on subcontract awards to small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, small disadvantaged business concerns, women-owned small business concerns, and Historically Black Colleges and Universities and Minority Institutions. Reporting shall be in accordance with the instructions on the forms or as provided in agency regulations. (iv) Ensure that its subcontractors agree to submit Standard Forms 294 and 295. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 24 (REV 9/01) SFO DTSA20-03-R-00528 (11) A recitation of the types of records the offeror will maintain concerning procedures that have been adopted to comply with the requirements and goals in the plan, including establishing source lists; and a description of the offeror's efforts to locate small business, veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns and award subcontracts to them. The records shall include at least the following (on a plant-wide or company-wide basis, unless otherwise indicated): (i) Source lists (e.g., PRO-Net), guides, and other data that identify small business, veteran-owned small business, HUBZone small business, small disadvantaged and women-owned small business concerns. (ii) Organizations contacted in an attempt to locate sources that are small business, veteran-owned small business, HUBZone small business, small disadvantaged or women-owned small business concerns. (iii) Records on each subcontract solicitation resulting in an award of more than $100,000, indicating - (A) Whether small business concerns were solicited and if not, why not; (B) Whether veteran-owned small business concerns were solicited and, if not, why not; (C) Whether HUBZone small business concerns were solicited and if not, why not; (D) Whether small disadvantaged business concerns were solicited and if not, why not; (E) Whether women-owned small business concerns were solicited and if not, why not; and (F) If applicable, the reason award was not made to a small business concern. (iv) Records of any outreach efforts to contact - (A) Trade associations; (B) Business development organizations, (C) Conferences and trade fairs to locate small, HUBZone small, small disadvantaged, and women-owned small business sources; (D) Veterans service organizations. (v) Records of internal guidance and encouragement provided to buyers through - (A) Workshops, seminars, training, etc.; and (B) Monitoring performance to evaluate compliance with the program's requirements. (vi) On a contract-by-contract basis, records to support award data submitted by the offeror to the Government, including the name, address, and business size of each subcontractor. Contractors having commercial plans need not comply with this requirement. (e) In order to effectively implement this plan to the extent consistent with efficient contract performance, the Contractor shall perform the following functions: (1) Assist small business, veteran-owned small business, HUBZone small business, small disadvantaged and women-owned small business concerns by arranging solicitations, time for the preparation of bids, quantities, specifications, and delivery schedules so as to facilitate the participation by such concerns. Where the Contractor's lists of potential small, veteran-owned small business, HUBZone small business, small disadvantaged and women-owned small business subcontractors are excessively long, reasonable efforts shall be made to give all such small business concerns an opportunity to compete over a period of time. (2) Provide adequate and timely consideration of the potentialities of small, veteran-owned small business, HUBZone small business, small disadvantaged and women-owned small business concerns in all "make-or-buy" decisions. (3) Counsel and discuss subcontracting opportunities with representatives of small, veteran-owned small business, HUBZone small business, small disadvantaged and women-owned small business firms. (4) Provide notice to subcontractors concerning penalties and remedies for misrepresentations of business status as small, veteran-owned small business, HUBZone small business, small disadvantaged or women-owned small business for the purpose of obtaining a subcontract that is to be included as part or all of a goal contained in the Contractor's subcontracting plan. (f) A master plan on a plant or division-wide basis that contains all the elements required by paragraph (d) of this clause, except goals, may be incorporated by reference as a part of the subcontracting plan required of the offeror by this clause; provided - (1) The master plan has been approved; (2) The offeror ensures that the master plan is updated as necessary and provides copies of the approved master plan, including evidence of its approval, to the Contracting Officer; and INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 25 (REV 9/01) SFO DTSA20-03-R-00528 (3) Goals and any deviations from the master plan deemed necessary by the Contracting Officer to satisfy the requirements of this contract are set forth in the individual subcontracting plan. (g) A commercial plan is the preferred type of subcontracting plan for contractors furnishing commercial items. The commercial plan shall relate to the offeror's planned subcontracting generally, for both commercial and Government business, rather than solely to the Government contract. Commercial plans are also preferred for subcontractors that provide commercial items under a prime contract, whether or not the prime contractor is supplying a commercial item. (h) Prior compliance of the offeror with other such subcontracting plans under previous contracts will be considered by the Contracting Officer in determining the responsibility of the offeror for award of the contract. (i) The failure of the Contractor or subcontractor to comply in good faith with - (1) The clause of this contract entitled "Utilization of Small Business Concerns," or (2) An approved plan required by this clause, shall be a material breach of the contract. (j) The Contractor shall submit the following reports: (1) Standard Form 294, Subcontracting Report for Individual Contracts. This report shall be submitted to the Contracting Officer semiannually and at contract completion. The report covers subcontract award data related to this contract. This report is not required for commercial plans. (2) Standard Form 295, Summary Subcontract Report. This report encompasses all the contracts with the awarding agency. It must be submitted semi-annually for contracts with the Department of Defense and annually for contracts with civilian agencies. If the reporting activity is covered by a commercial plan, the reporting activity must report annually all subcontract awards under that plan. All reports submitted at the close of each fiscal year (both individual and commercial plans) shall include a breakout, in the Contractor's format, of subcontract awards, in whole dollars, to small disadvantaged business concerns by North American Industry Classification System (NAICS) Industry Subsector. For a commercial plan, the Contractor may obtain from each of its subcontractors a predominant NAICS Industry Subsector and report all awards to that subcontractor under its predominant NAICS Industry Subsector. 47. 52.219-16 LIQUIDATED DAMAGES - SUBCONTRACTING PLAN (JAN 1999) (a) Failure to make a good faith effort to comply with the subcontracting plan, as used in this clause, means a willful or intentional failure to perform in accordance with the requirements of the subcontracting plan approved under the clause in this contract entitled "Small Business Subcontracting Plan," or willful or intentional action to frustrate the plan. (b) Performance shall be measured by applying the percentage goals to the total actual subcontracting dollars or, if a commercial plan is involved, to the pro rata share of actual subcontracting dollars attributable to Government contracts covered by the commercial plan. If, at contract completion or, in the case of a commercial plan, at the close of the fiscal year for which the plan is applicable, the Contractor has failed to meet its subcontracting goals and the Contracting Officer decides in accordance with paragraph (c) of this clause that the Contractor failed to make a good faith effort to comply with its subcontracting plan, established in accordance with the clause in this contract entitled "Small Business Subcontracting Plan," the Contractor shall pay the Government liquidated damages in an amount stated. The amount of probable damages attributable to the Contractor's failure to comply shall be an amount equal to the actual dollar amount by which the Contractor failed to achieve each subcontract goal. (c) Before the Contracting Officer makes a final decision that the Contractor has failed to make such good faith effort, the Contracting Officer shall give the Contractor written notice specifying the failure and permitting the Contractor to demonstrate what good faith efforts have been made and to discuss the matter. Failure to respond to the notice may be taken as an admission that no valid explanation exists. If, after consideration of all the pertinent data, the Contracting Officer finds that the Contractor failed to make a good faith effort to comply with the subcontracting plan, the Contracting Officer shall issue a final decision to that effect and require that the Contractor pay the Government liquidated damages as provided in paragraph (b) of this clause. (d) With respect to commercial plans, the Contracting Officer who approved the plan will perform the functions of the Contracting Officer under this clause on behalf of all agencies with contracts covered by the commercial plan. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 26 (REV 9/01) SFO DTSA20-03-R-00528 (e) The Contractor shall have the right of appeal, under the clause in this contract entitled Disputes, from any final decision of the Contracting Officer. (f) Liquidated damages shall be in addition to any other remedies that the Government may have. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) --------------- --------------- LESSOR GOVERNMENT GSA FORM 3517B PAGE 27 (REV 9/01) SFO DTSA20-03-R-00528 SOLICITATION PROVISIONS (Acquisition of Leasehold Interests in Real Property) 1. 552.270-1 - INSTRUCTIONS TO OFFERORS - ACQUISITION OF LEASEHOLD INTERESTS IN REAL PROPERTY (MAR 1998) (a) Definitions. As used in this provision-- "Discussions" are negotiations that occur after establishment of the competitive range that may, at the Contracting Officer's discretion, result in the offeror being allowed to revise its proposal. "In writing" or "written" means any worded or numbered expression which can be read, reproduced, and later communicated, and includes electronically transmitted and stored information. "Proposal modification" is a change made to a proposal before the solicitation's closing date and time, or made in response to an amendment, or made to correct a mistake at any time before award. "Proposal revision" is a change to a proposal made after the solicitation closing date, at the request of or as allowed by a Contracting Officer as the result of negotiations. "Time," if stated as a number of days, is calculated using calendar days, unless otherwise specified, and will include Saturdays, Sundays, and legal holidays. However, if the last day falls on a Saturday, Sunday, or legal holiday, then the period shall include the next working day. (b) Amendments to solicitations. If this solicitation is amended, all terms and conditions that are not amended remain unchanged. Offerors shall acknowledge receipt of any amendment to this solicitation by the date and time specified in the amendment(s). (c) Submission, modification, revision, and withdrawal of proposals. (1) Unless other methods (e.g., electronic commerce or facsimile) are permitted in the solicitation, proposals and modifications to proposals shall be submitted in paper media in sealed envelopes or packages. Offers must be: (i) Submitted on the forms prescribed and furnished by the Government as a part of this solicitation or on copies of those forms, and (ii) Signed. The person signing an offer must initial each erasure or change appearing on any offer form. If the offeror is a partnership, the names of the partners composing the firm must be included with the offer. (2) Late proposals and revisions. (i) The Government will not consider any proposal received at the office designated in the solicitation after the exact time specified for receipt of offers unless it is received before the Government makes award and it meets at least one of the following conditions: (A) It was sent by registered or certified mail not later than the 5th calendar day before the date specified for receipt of offers (e.g., an offer submitted in response to a solicitation requiring receipt of offers by the 20th of the month must have been mailed by the 15th). (B) It was sent by mail (or telegram or facsimile, if authorized) or hand-carried (including delivery by a commercial carrier) if it is determined by the Government that the late receipt was due primarily to Government mishandling after receipt at the Government installation. (C) It was sent by U.S. Postal Service Express Mail Next Day Service-Post Office to Addressee, not later than 5:00 p.m. at the place of mailing two working days prior to the date specified for receipt of proposals. The term "working days" excludes weekends and U.S. Federal holidays. (D) It was transmitted through an electronic commerce method authorized by the solicitation and was received at the initial point of entry to the Government infrastructure not later than 5:00 p.m. one working day prior to the date specified for receipt of proposals. (E) There is acceptable evidence to establish that it was received at the activity designated for receipt of offers and was under the Government's control prior to the time set for receipt of offers, and the Contracting Officer determines that accepting the late offer would not unduly delay the procurement. (F) It is the only proposal received. (ii) Any modification or revision of a proposal or response to request for information, including any final proposal revision, is subject to the same conditions as in subparagraphs (c)(2)(i)(A) through (c)(2)(i)(E) of this provision. (iii) The only acceptable evidence to establish the date of mailing of a late proposal or modification or revision sent either by registered or certified mail is the U.S. or Canadian Postal Service postmark both on the envelope or wrapper and on the original receipt from the U.S. or Canadian Postal Service. Both postmarks must show a legible date or the proposal, response to a request for information, or modification INITIALS: (ILLEGIBLE) & (ILLEGIBLE) -------------- -------------- LESSOR GOVERNMENT TSA FORM 3516A PAGE 1 (REV 9/01) SFO DTSA20-03-R-00528 or revision shall be processed as if mailed late. "Postmark" means a printed, stamped, or otherwise placed impression (exclusive of a postage meter machine impression) that is readily identifiable without further action as having been supplied and affixed by employees of the U.S. or Canadian Postal Service on the date of mailing. Therefore, offerors or respondents should request the postal clerk to place a legible hand cancellation bull's eye postmark on both the receipt and the envelope or wrapper. (iv) Acceptable evidence to establish the time of receipt at the Government installation includes the time/date stamp of that installation on the proposal wrapper, other documentary evidence of receipt maintained by the installation, or oral testimony or statements of Government personnel. (v) The only acceptable evidence to establish the date of mailing of a late offer, modification or revision, or withdrawal sent by Express Mail Next Day Service-Post Office to Addressee is the date entered by the post office receiving clerk on the "Express Mail Next Day Service-Post Office to Addressee" label and the postmark on both the envelope or wrapper and on the original receipt from the U.S. Postal Service. "Postmark" has the same meaning as defined in paragraph (c)(2)(iii) of this provision, excluding postmarks of the Canadian Postal Service. Therefore, offerors or respondents should request the postal clerk to place a legible hand cancellation bull's eye postmark on both the receipt and the envelope or wrapper. (vi) Notwithstanding paragraph (c)(2)(i) of this provision, a late modification or revision of an otherwise successful proposal that makes its terms more favorable to the Government will be considered at any time it is received and may be accepted. (vii) An offeror may withdraw its proposal by written notice or telegram (including mailgram) received at any time before award. If the solicitation authorizes facsimile proposals, an offeror may withdraw its proposal via facsimile received at any time before award, subject to the conditions specified in the provision entitled "Facsimile Proposals." Proposals may be withdrawn in person by an offeror or an authorized representative, if the representative's identity is made known and the representative signs a receipt for the proposal before award. (viii) If an emergency or unanticipated event interrupts normal Government processes so that proposals cannot be received at the office designated for receipt of proposals by the exact time specified in the solicitation, and urgent Government requirements preclude amendment of the solicitation or other notice of an extension of the closing date, the time specified for receipt of proposals will be deemed to be extended to the same time of day specified in the solicitation on the first work day on which normal Government processes resume. If no time is specified in the solicitation, the time for receipt is 4:30 p.m., local time, for the designated Government office. (3) Any information given to a prospective offeror concerning this solicitation will be furnished promptly to all other prospective offerors, if that information is necessary in submitting offers or if the lack of it would be prejudicial to any other prospective offeror. (4) Offerors may submit modifications to their proposals at any time before the solicitation closing date and time, and may submit modifications in response to an amendment, or to correct a mistake at any time before award. (5) Offerors may submit revised proposals only if requested or allowed by the Contracting Officer. (6) The Government will construe an offer to be in full and complete compliance with this solicitation unless the offer describes any deviation in the offer. (7) Offerors may submit proposals that depart from stated requirements. Such a proposal shall clearly identify why the acceptance of the proposal would be advantageous to the Government. The proposal must clearly identify and explicitly define any deviations from the terms and conditions of the solicitation, as well as the comparative advantage to the Government. The Government reserves the right to amend the solicitation to allow all offerors an opportunity to submit revised proposals based on the revised requirements. (d) Restriction on disclosure and use of data. An offeror that includes in its proposal data that it does not want disclosed to the public for any purpose, or used by the Government except for evaluation purposes, must meet both of the following conditions: (1) Mark the title page with the following legend: This proposal includes data that shall not be disclosed outside the Government and shall not be duplicated, used, or disclosed--in whole or in part--for any purpose other than to evaluate this proposal. If, however, a lease is awarded to this offeror as a result of--or in connection with--the submission of this data, the Government shall have the right to duplicate, use, or disclose the data to the extent provided in the resulting contract. This restriction does not limit the Government's right to use information contained in this data if it is obtained from another source without restriction. The data subject to this restriction are contained in sheets [insert numbers or other identification of sheets]. (2) Mark each sheet of data it wishes to restrict with the following legend: Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this proposal. (e) Lease award. (1) The Government intends to award a lease resulting from this solicitation to the responsible offeror whose proposal represents the best value after evaluation in accordance with the factors and subfactors in the solicitation. INITIALS: (ILLEGIBLE) & (ILLEGIBLE) -------------- -------------- LESSOR GOVERNMENT TSA FORM 3516A PAGE 2 (REV 9/01) SFO DTSA20-03-R-00528 (2) The Government may reject any or all proposals if such action is in the Government's interest. (3) The Government may waive informalities and minor irregularities in proposals received. (4) The Government intends to evaluate proposals and award a lease after conducting discussions with offerors whose proposals have been determined to be within the competitive range. If the Contracting Officer determines that the number of proposals that would otherwise be in the competitive range exceeds the number at which an efficient competition can be conducted, the Contracting Officer may limit the number of proposals in the competitive range to the greatest number that will permit an efficient competition among the most highly rated proposals. Therefore, the offeror's initial proposal should contain the offeror's best terms from a price and technical standpoint. (5) Exchanges with offerors after receipt of a proposal do not constitute a rejection or counteroffer by the Government. (6) The Government may determine that a proposal is unacceptable if the prices proposed are materially unbalanced between line items or subline items. Unbalanced pricing exists when, despite an acceptable total evaluated price, the price of one or more contract line items is significantly overstated or understated as indicated by the application of cost or price analysis techniques. A proposal may be rejected if the Contracting Officer determines that the lack of balance poses an unacceptable risk to the Government. (7) The unconditional written acceptance of an offer establishes a valid contract. (8) The Government may disclose the following information in postaward debriefings to other offerors: (i) The overall evaluated cost or price and technical rating of the successful offeror; (ii) The overall ranking of all offerors, when any ranking was developed by the agency during source selection; and (iii) A summary of the rationale for award. 2. 52.222-24 - PREAWARD ON-SITE EQUAL OPPORTUNITY COMPLIANCE EVALUATION (FEB 1999) If a contract in the amount of $10 million or more will result from this solicitation, the prospective Contractor and its known first-tier subcontractors with anticipated subcontracts of $10 million or more shall be subject to a preaward compliance evaluation by the Office of Federal Contract Compliance Programs (OFCCP), unless, within the preceding 24 months, OFCCP has conducted an evaluation and found the prospective Contractor and subcontractors to be in compliance with Executive Order 11246. 3. 552.270-3 - PARTIES TO EXECUTE LEASE (SEP 1999) (a) If the lease is executed by an attorney, agent, or trustee on behalf of the Lessor, an authenticated copy of his power of attorney, or other evidence to act on behalf of the Lessor, must accompany the lease. (b) If the Lessor is a partnership, the lease must be signed with the partnership name, followed by the name of the legally authorized partner signing the same, and, if requested by the Government, a copy of either the partnership agreement or current Certificate of Limited Partnership shall accompany the lease. (c) If the Lessor is a corporation, the lease must be signed with the corporate name, followed by the signature and title of the officer or other person signing the lease on its behalf, duly attested, and, if requested by the Government, evidence of this authority so to act shall be furnished. 4. 52.233-2 - SERVICE OF PROTEST (AUG 1996) (VARIATION) (Applies to leases which exceed $100,000 average net annual rental, including option periods.) (a) Protests, as defined in section 33.101 of the Federal Acquisition Regulation, that are filed directly with an agency, and copies of any protests that are filed with the General Accounting Office (GAO), shall be served on the Contracting Officer by obtaining written and dated acknowledgment of receipt from the Contracting Officer at the address shown elsewhere in this solicitation. (b) The copy of any protest shall be received in the office designated above within one day of filing a protest with the GAO. 5. SERVICE OF PROTEST (TSA OCT 2002) AS A CONDITION OF SUBMITTING AN OFFER OR RESPONSE TO THIS SOLICITATION THE OFFEROR OR POTENTIAL OFFEROR AGREES TO BE BOUND BY THE FOLLOWING PROVISIONS RELATING TO PROTESTS. (A) Protests concerning Transportation Security Administration (TSA) solicitations or awards of contracts shall be resolved through the dispute resolution system adopted by the Federal Aviation Administration (FAA) as part of its Acquisition Management System, and FAA's Office of Dispute Resolution (ODRA), and shall be governed by the procedures set forth in 14 CFR Parts 14 and 17, which are hereby incorporated by reference. Judicial review, where available, will be in accordance with 49 USC 46110 and shall apply only to final agency decisions. A protestor may seek review of a final decision only after its administration remedies have been exhausted. GSA FORM 3516A PAGE 3 (REV 9/01) INITIALS: (ILLEGIBLE) & (ILLEGIBLE) -------------- -------------- LESSOR GOVERNMENT SFO DTSA20-03-R-00528 (B) Offerors initially should attempt to resolve any issues concerning potential protests with the Contracting Officer. The Contracting Officer should make reasonable efforts to answer questions promptly and completely, and, where possible, to resolve concerns or controversies. The protest time limitations, however, will not be extended by attempts to resolve a potential protest with the Contracting Officer. (C) The filing of a protest with the ODRA may be accomplished by mail, by overnight delivery, hand delivery or by facsimile. A protest is considered filed on the date it is received by the ODRA. (D) Only an interested party may file a protest. An interested party is one whose direct economic interest has been or would be affected by the award or failure to award a TSA contract. Proposed subcontractors are not "interested parties" within this definition. (E) A written protest must be filed with the ODRA within the time limits set forth below, or the time set forth for the receipt of initial proposals. (1). Protests based on alleged improprieties in a solicitation that are apparent prior to bid opening or the time set for receipt of initial proposals shall be filed prior to bid opening or the time set for receipt of initial proposals. (2). In procurements where proposals are requested, alleged improprieties that do not exist in the initial solicitation, but which are subsequently incorporated into the solicitation must be protested not later than the next closing time for receipt of proposal following the incorporation. (3). For protests other than those related to alleged solicitation improprieties, the protest must be filed on the later of the following two dates: (i). Not later than (7) business days after the date the protester knew or should have known of the grounds for the protest; or (ii). If the protester has requested a post-award briefing from the TSA Contracting Officer, not later than five (5) business days after the date on which the Contracting Officer holds that debriefing. (F) Protests shall be filed at: (1) Office of Dispute Resolution for Acquisition, AGC-70. Federal Aviation Administration 400 7th Street S.W. Room 8332 Washington, DC 20590 Telephone: 202-366-6400 Facsimile: 202-366-7400 or (2) Other addresses as specified in the solicitation. (G) At the same time as filing the protest with the ODRA, the protester shall serve a copy of the protest on the Contracting Officer and any other official designated in the solicitation for receipt of protests by means reasonably calculated to be received by the Contracting Officer on the same day as it is to be received by the ODRA. The protest shall include a signed statement from the protester, certifying to the ODRA the manner of service, date, and time when a copy of the protest was served on the Contracting Officer and other designated official(s). (H) Additional information and guidance about the ODRA dispute resolution process for protests can be found on the ODRA website at http://www.faa.gov. PROTEST AFTER AWARD (I) Upon receipt of a notice that a protest has been filed with the FAA Office of Dispute Resolution (ODRA), or a determination that a protest is likely, the Transportation Security Administrator or his designee may instruct the Contracting Officer to direct the Contractor to stop performance of the work called for by this contract. The order to the Contractor shall be in writing, and shall be specifically identified as a stop-work order issued under this clause. Upon receipt of the order, the contractor shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage. Upon receipt of the final decision or other resolution of the protest, the Contracting Officer shall either: (1). Cancel the stop work order, or (2). For other than cost-reimbursement contracts, terminate the work covered by the work order as provided in the "Default" or the Termination for Convenience of the Government clause(s) of this contract; or (3). For cost-reimbursement contracts, terminate the work covered by the order as provided in the "Termination" clause of this contract. (J) If a stop-work order issued this clause is cancelled either before or after the final resolution of the protest, the Contractor shall resume work. The Contracting Officer shall make for other than cost-reimbursement contracts, an equitable adjustment in the delivery schedule or contract price, or both; and for cost-reimbursement contracts, an equitable adjustment in the delivery schedule, the estimated cost, the fee, or a combination thereof, and in any other terms of the contract that may be affected; and the contract shall be modified in writing accordingly, if: (1). The stop-work order results in an increase in the time required for, or in the Contractor's cost properly allocable to, the performance of any part of this contract; and (2). The Contractor asserts its right to an adjustment within 30 days after the end of the period of work stoppage; provided, that if the Contracting Officer decides the facts justify the action, the Contracting Officer may receive and act upon a proposal submitted any time before final payment under this contract. (K) If a stop-work order is not cancelled and the work covered by the order is terminated for the convenience of the Government, the Contracting Officer shall allow reasonable costs resulting from the stop-work order in arriving at the termination settlement. (L) If a stop-work order is not cancelled and the work covered by the order is terminated for default, the Contracting Officer shall allow, by equitable adjustment or otherwise, reasonable costs resulting from the stop-work order. (M) The Government's rights to terminate this contract at any time are not affected by the action under this clause. 6. FLOOD PLAINS AND WETLANDS (APR 1984) An award of contract will not be made for a property located within a base flood plain or wetland unless the Government has determined it to be the only practicable alternative. TSA FORM 3516A PAGE 4 (REV 9/01) INITIALS: (ILLEGIBLE) & (ILLEGIBLE) -------------- -------------- LESSOR GOVERNMENT SOLICITATION FOR OFFERS DTSA20-03-R-00528 REVISION 1 TRANSPORTATION SECURITY ADMINISTRATION 450,000 to 550,000 ANSI/BOMA rentable square feet NAME: Lisa Maass TITLE: Contracting Officer The information collection requirements contained in this Solicitation/Contract, that are not required by the regulation have been approved by the Office of Management and Budget pursuant to the Paperwork Reduction Act and assigned the OMB Control No. 3090-0163. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- LESSOR GOV'T TABLE OF CONTENTS 1.0 SUMMARY.............................................................................5 1.1 AMOUNT AND TYPE OF SPACE (SEP 2000)(TSA SEP 2002)...................................5 1.2 AREA OF CONSIDERATION...............................................................5 1.3 LOCATION; INSIDE OR OUTSIDE CITY CENTER (SEP 2000)(TSA SEP 2002)....................6 1.4 LEASE TERM (SEP 2000)(TSA SEP 2002).................................................6 1.5 OFFER DUE DATE......................................................................6 1.6 OCCUPANCY DATE (SEP 2000)(TSA SEP 2002).............................................6 1.7 HOW TO OFFER (SEP 2000)(TSA SEP 2002)...............................................6 1.8 BUILDING SHELL REQUIREMENTS (SEP 2000)(TSA SEP 2002)................................8 1.9 TENANT IMPROVEMENTS (SEP 2000)(TSA SEP 2002)........................................9 1.10 TENANT IMPROVEMENT RENTAL ADJUSTMENT (SEP 2000)(TSA SEP 2002).......................9 1.11 PLANS WITH OFFER (SEP 2000)(TSA SEP 2002)...........................................9 1.12 NEGOTIATIONS (SEP 2000)............................................................10 1.13 PRICE EVALUATION (PRESENT VALUE)...................................................12 1.14 HISTORIC PREFERENCE, GSAR 552.270-2 (VARIATION) (SEP 1999).........................11 1.15 AWARD (JAN 1997)...................................................................11 1.16 LABOR STANDARDS (SEP 2000).........................................................12 2.0 AWARD FACTORS......................................................................13 2.1 AWARD FACTORS (JAN 1997)(TSA SEP 2002).............................................13 3.0 MISCELLANEOUS......................................................................14 3.1 SUBSEQUENT TENANT IMPROVEMENTS $100,000 OR LESS (SEP 2000).........................14 3.2 TAX ADJUSTMENT (SEP 2000)..........................................................14 3.3 PERCENTAGE OF OCCUPANCY............................................................15 3.4 OPERATING COSTS (NCR NOVEMBER 2001)................................................15 3.5 OPERATING COSTS BASE (SEP 2000)....................................................16 3.6 BOMA RENTABLE SPACE (SEP 2000)(TSA SEP 2002).......................................16 3.7 ANSI/BOMA OFFICE AREA SQUARE FEET (NCR VARIATION (AUG 2002))(TSA OCT 2002).........16 3.8 COMMON AREA FACTOR (SEP 2000)......................................................16 3.9 APPURTENANT AREAS..................................................................16 3.10 LIQUIDATED DAMAGES, GSAR 552.270-15(SEP 1999)......................................16 3.11 VENDING FACILITIES (SEP 2000)......................................................16 3.12 ADJUSTMENT FOR VACANT PREMISES, GSAR 552.270-16(VARIATION)(SEP 1999)...............17 3.13 RELOCATION ASSISTANCE ACT (MAR 2002)...............................................17 3.14 EVIDENCE OF CAPABILITY TO PERFORM (SEP 2000)(TSA OCT 2002).........................17 3.15 CONSTRUCTION SCHEDULE (TSA OCT 2002)...............................................16 3.16 CONSTRUCTION SCHEDULE OF TENANT IMPROVEMENTS (SEP 2000)(TSA OCT 2002)..............17 3.17 PROGRESS REPORTS (SEP 2000)(TSA SEP 2002)..........................................20 3.18 CONSTRUCTION INSPECTIONS (TSA SEP 2002)............................................20 3.19 REQUIRED PROOF OF AUTHORITY (NCR VARIATION (AUG 2002)).............................21 3.20 BUSINESS IMPROVEMENT DISTRICTS (B.I.D)(NCR VARIATION (AUG 2002))...................19 4.0 GENERAL ARCHITECTURE...............................................................22 4.1 QUALITY AND APPEARANCE OF BUILDING EXTERIOR (SEP 2000).............................22 4.2 CONSTRUCTION WASTE MANAGEMENT (SEP 2000)...........................................22 4.3 EXISTING FIT-OUT, SALVAGED, OR RE-USED BUILDING MATERIAL (SEP 2000)(TSA SEP 2002)..23 4.4 INDOOR AIR QUALITY DURING CONSTRUCTION (SEP 2000)(TSA SEP 2002)....................23 4.5 WORK PERFORMANCE (SEP 2000)........................................................23 4.6 BUILDING SYSTEMS (JAN 1997)........................................................23 4.7 SPACE EFFICIENCY (SEP 2000)........................................................23 4.8 FLOOR PLANS AFTER OCCUPANCY (TSA SEP 2002).........................................23 4.9 CAD AS-BUILT FLOOR PLANS (SEP 2000) (NCR AAP VARIATION (AUG 2002)).................23 4.10 ANSI/BOMA CALCULATIONS AND PLANS (TSA SEP 2002)....................................24 4.11 FLOORS AND FLOOR LOAD (SEP 2000)(TSA SEP 2002).....................................24 4.12 EXITS AND ACCESS (SEP 1991)........................................................25 4.13 WINDOWS (SEP 2000) (NCR VARIATION (AUG 2002))(TSA SEP 2002)........................25 4.14 ACCESSIBILITY (SEP 2000)...........................................................25 4.15 LANDSCAPING (SEP 2000)(TSA SEP 2002)...............................................25 5.0 ARCHITECTURAL FINISHES.............................................................26 5.1 RECYCLED CONTENT PRODUCTS (COMPREHENSIVE PROCUREMENT GUIDELINES)(SEP 2000).........26 5.2 ENVIRONMENTALLY PREFERABLE BUILDING PRODUCTS AND MATERIALS (SEP 2000)..............26 5.3 LAYOUT, FINISHES, AND COLORBOARDS (SEP 2000)(TSA SEP 2002).........................26 5.4 WOOD PRODUCTS (SEP 2000)...........................................................26 5.5 ADHESIVES AND SEALANTS (SEP 2000)..................................................27 SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 2 LESSOR GOV'T 5.6 INSULATION: THERMAL, ACOUSTIC, AND HVAC (SEP 2000)..........................27 5.7 CEILINGS (SEP 2000)(TSA SEP 2002)...........................................27 5.8 WALL COVERINGS (SEP 2000)(TSA SEP 2002).....................................27 5.9 PAINTING (SEP 2000).........................................................28 5.10 DOORS: EXTERIOR (SEP 2000)..................................................28 5.11 DOORS: SUITE ENTRY (SEP 2000)...............................................28 5.12 DOORS: INTERIOR (SEP 2000)..................................................28 5.13 DOORS: HARDWARE (SEP 2000)..................................................29 5.14 DOORS: IDENTIFICATION (SEP 2000)............................................29 5.15 PARTITIONS: GENERAL (SEP 2000)..............................................29 5.16 PARTITIONS: PERMANENT (SEP 2000)............................................29 5.17 PARTITIONS: SUBDIVIDING (SEP 2000)..........................................29 5.18 FLOOR COVERING AND PERIMETERS (SEP 2000)(TSA SEP 2002)......................29 5.19 CARPET: BROADLOOM (SEP 2000)................................................30 5.20 CARPET: TILE (SEP 2000).....................................................30 5.21 ACOUSTICAL REQUIREMENTS (SEP 2000)..........................................31 5.22 WINDOW COVERINGS (SEP 2000).................................................31 5.23 BUILDING DIRECTORY (SEP 2000)...............................................32 5.24 FLAG POLE (SEP 2000)........................................................32 5.25 EXTERNAL SIGNAGE............................................................32 6.0 MECHANICAL, ELECTRICAL, PLUMBING............................................33 6.1 MECHANICAL, ELECTRICAL, PLUMBING: GENERAL (SEP 2000)........................33 6.2 ENERGY COST SAVINGS (SEP 2000)..............................................33 6.3 DRINKING FOUNTAINS (SEP 2000)...............................................33 6.4 TOILET ROOMS (SEP 2000).....................................................33 6.5 TOILET ROOMS: FIXTURE SCHEDULE (SEP 2000)(TSA SEP 2002).....................33 6.6 JANITOR CLOSETS (SEP 2000)..................................................34 6.7 HEATING AND AIR CONDITIONING (SEP 2000).....................................34 6.8 VENTILATION (SEP 2000)(TSA SEP 2002)........................................34 6.9 VENTILATION: TOILET ROOMS (DEC 1993)........................................35 6.10 ELECTRICAL: GENERAL (SEP 2000)..............................................35 6.11 ELECTRICAL: DISTRIBUTION (SEP 2000).........................................35 6.12 ELECTRICAL: ADDITIONAL DISTRIBUTION SPECIFICATIONS..........................35 6.13 TELECOMMUNICATIONS: DISTRIBUTION AND EQUIPMENT (SEP 2000)(TSA SEP 2002).....36 6.14 TELECOMMUNICATIONS: LOCAL EXCHANGE ACCESS (SEP 2000)........................36 6.15 DATA REQUIREMENTS (SEP 2000)(TSA SEP 2002)..................................36 6.16 ELECTRICAL, TELEPHONE, DATA FOR SYSTEMS FURNITURE (SEP 2000)................39 6.17 ADDITIONAL ELECTRICAL CONTROLS..............................................39 6.18 ELEVATORS (SEP 2000)(TSA SEP 2002)..........................................39 6.19 LIGHTING: INTERIOR AND PARKING (SEP 2000)...................................40 6.20 EMERGENCY POWER (TSA SEP 2002)..............................................41 7.0 SERVICES, UTILITIES, MAINTENANCE............................................42 7.1 SERVICES, UTILITIES, MAINTENANCE: GENERAL (NCR VARIATION (AUG 2002))........42 7.2 NORMAL HOURS................................................................42 7.3 OVERTIME USAGE (SEP 2000)...................................................42 7.4 UTILITIES...................................................................42 7.5 UTILITIES: SEPARATE FROM RENTAL (SEP 2000)(TSA OCT 2002)....................42 7.6 BUILDING OPERATING PLAN.....................................................42 7.7 JANITORIAL SERVICES (SEP 2000)..............................................42 7.8 SCHEDULE OF PERIODIC SERVICES...............................................43 7.9 LANDSCAPE MAINTENANCE.......................................................43 7.10 FLAG DISPLAY................................................................44 7.11 SECURITY (SEP 2000) (NCR VARIATION AUG 2002)(TSA SEP 2002)..................44 7.12 ADDITIONAL SECURITY: ADDITIONAL REQUIREMENTS (TSA SEP 2002).................44 7.13 MAINTENANCE AND TESTING OF SYSTEMS (SEP 2000)...............................45 8.0 SAFETY AND ENVIRONMENTAL MANAGEMENT.........................................46 8.1 OCCUPANCY PERMIT (SEP 2000).................................................46 8.2 FIRE AND LIFE SAFETY (SEP 2000).............................................46 8.3 SPRINKLER SYSTEM (SEP 2000).................................................46 8.4 MANUAL FIRE ALARM SYSTEMS (SEP 2000)........................................46 8.5 OSHA REQUIREMENTS (SEP 2000)................................................46 8.6 ASBESTOS (SEP 2000).........................................................46 8.7 INDOOR AIR QUALITY (SEP 2000)...............................................47 8.8 RADON IN AIR (SEP 2000).....................................................47 8.9 CONTAMINATES IN WATER (SEP 2000)(TSA SEP 2002)..............................48 8.10 HAZARDOUS MATERIALS (OCT 1996)..............................................48 8.11 RECYCLING (SEP 2000)........................................................48 SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 3 LESSOR GOV'T 9.0 TENANT IMPROVEMENTS................................................................49 9.1 TENANT IMPROVEMENTS PRIOR TO THE GOVERNMENT'S INITIAL ACCEPTANCE OF SPACE (SEP 2000).........................................................................49 10.0 SPECIAL REQUIREMENTS...............................................................50 10.1 TRANSPORTATION SECURITY ADMINISTRATION OVERVIEW (TSA OCT 2002).....................50 10.2 TRANSPORTATION SECURITY ADMINISTRATION OBJECTIVES AND STRATEGIC APPROACH (TSA OCT 2002).....................................................................50 10.3 TYPES OF SPACE (TSA OCT 2002)......................................................51 1.1 AMOUNT AND TYPE OF SPACE (SEP 2000)(TSA SEP 2002)...................................5 SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 4 LESSOR GOV'T 1.0 SUMMARY 1.0 BY SIGNING THIS PROPOSAL, OFFERORS UNDERSTAND AND AGREE THAT THE GOVERNMENT RESERVES THE RIGHT TO COUNTER-SIGN THEIR OFFER, WHICH SHALL RESULT IN THE FINAL LEASE AGREEMENT BETWEEN THE PARTIES. 1.1 AMOUNT AND TYPE OF SPACE (SEP 2000)(TSA SEP 2002) A. The Transportation Security Administration ("TSA" or "Government") is interested in leasing approximately 450,000-550,000 ANSI/BOMA (BOMA) rentable square feet of above-grade office space in no more than two office buildings that are within three (3) blocks of each other. Refer to the "ANSI/BOMA rentable square feet" paragraph in Section 3.6. Two (2) buildings can be considered one building if they are physically connected and employees are not required to exit secure space or enter public space in order to move from one building to the other. B. The Offer shall 1) be for space located in a quality office building(s) of sound and substantial construction as described in this SFO, 2) have a potential for efficient layout, 3) be within the square footage range to be considered, and 4) be in compliance with all of the Government's minimum requirements set forth herein. C. To demonstrate potential for efficient layout, as well as Offeror's ability to accommodate to Government's requirements, Offeror will be requested to provide ANSI/BOMA calculations and plans at the Offeror's expense, in accordance with the instructions in Section 4.10. D. Between 25,000 and 50,000 BOMA rentable square feet must be ready for Government occupancy on or about January 2, 2003. An additional 25,000 to 50,000 BOMA rentable square feet must be ready for Government occupancy on February 1, 2003 and an additional 25,000 to 50,000 BOMA square feet must be ready for the Government occupancy on March 1, 2503, so that the Government is occupying between 125,000 and 150,000 BOMA rentable square feet on March 1, 2003. This interim space ("Phase 1") shall be substantially "as is" condition, as further described in Section 10.2. The 450,000-550,000 BOMA rentable square feet which TSA will ultimately occupy at its permanent office space will be delivered through phased construction/occupancy with the first 100,000 square feet of Phase 2 available for occupancy on September 1, 2003, and final occupancy of all Phase 2 and Phase 3 to be completed by March 2004. Earlier delivery is preferred. See Section 10.2 for description of all Phases. E. Unless otherwised noted, all references in this SFO to square feet shall mean ANSI/BOMA (BOMA) office area square feet as defined in Section 3.7. 1.2 AREA OF CONSIDERATION A. All properties that are offered to the Government in conjunction with this requirement must be located within the Central Employment Area (CEA) or with proximity to the Pentagon, Pentagon City or Crystal City, Virginia metro stations. All buildings must be within 2500 linear feet of a metro station. B. The CEA is the core area of the District of Columbia where the greatest concentration of employment in the city and region is encouraged. The Central Employment Area's boundaries are as follows: Beginning at Dupont Circle, southeast along Massachusetts Avenue, NW, to 9th Street, NW, north along 9th Street, NW, to N Street, NW, east along N Street, NW, to 7th Street, NW, south along 7th Street, NW, to New York Avenue, NW, east along New York Avenue, NW to 5th Street NW, south along 5th Street, NW to K Street, NW, east along K Street, NW to 3rd Street, NW, south along 3rd Street, NW to Massachusetts Avenue, east along Massachusetts Avenue, NE, and southeast along Florida Avenue, NE, to 4th Street, NE, on the north; south along 4th Street, NE, to M Street, NE, west along M Street, NE, to 3rd Street, NE, south along 3rd Street, NE, to K Street, NE, west along K Street, NE, to 2nd Street NE, south along 2nd Street, NE, to the northeast corner of lot 855, square 725, west along the northern boundary of lot 855 to the northwest corner of lot 855, south along the westerly boundary of lot 855 to Constitution Avenue, NE, west along Constitution Avenue, NE, to 1st Street, NE, south on 1st Street, NW, to Maryland Avenue, NE, east on Maryland Avenue, NE, to 2nd Street, NE, south on 2nd Street, NE, and 2nd Street, SE, to C Street, SE, west on C Street, SE, to New Jersey Avenue, SE, south on New Jersey Avenue, SE, to D Street, SE, west on D Street, SE, to South Capitol Street, south on South Capitol Street to E Street, SE, east on E Street, SE, to New Jersey Avenue, SE, south on New Jersey Avenue, SE, to the Southeast Freeway, east on the Southeast Freeway to 2nd Street, SE, south along 2nd Street, SE, to M Street, SE and east along M Street, SE, to the 11th Street Freeway on the east; south on the 11th Street Freeway to the northbound 11th Street, SE, bridge, south along this bridge to 13th Street, SE, south along 13th Street, SE, to Good Hope Road, SE, west along the rear property lines of properties fronting on the south side of Good Hope Road, SE to Martin Luther King Jr. Avenue, SE, south along the rear property lines of properties fronting on the north side of Chicago Street, SE to the Baltimore and Ohio Railroad right-of-way, south along the Baltimore and Ohio Railroad right of way to the rear property line fronting on Howard Rd., SE, east along the rear property line of property fronting on Howard Road, SE to the rear property lines of properties fronting on the north side of Shannon Place, SE to Chicago Street, SE, east along Chicago Street, fronting on the north side of Shannon Place, SE to Chicago Street, SE, east along Chicago Street, SE to Martin Luther King Jr. Avenue, SE, south along the rear property lines of properties fronting on the east side of Martin Luther King, Jr. Avenue, SE to Howard Road, SE, west along Howard Road, SE to Firth Sterling Avenue, SE, south along Firth Sterling Avenue, SE to South Capitol Street, north along South Capitol Street and the Fredrick Douglass Memorial Bridge to the west bank of the Anacostia River, southwest along the west bank of the Anacostia River to 2nd Street, SW, SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 5 LESSOR GOV'T north along 2nd Street, SW to Potomac Avenue, SW, northeast along Potomac Avenue, SW to South Capitol Street, north along South Capitol Street to the Southwest Freeway, west along the Southwest Freeway to 9th Street, SW, south along the east side of 9th Street, SW to where it intersects with the eastern property line of Lot 53 in Square 414, continuing south to Maine Avenue SW to the Southwest Freeway, west along the Southwest Freeway to 14th Street, SW, north along 14th Street, SW, and 14th Street, NW, to Constitution Avenue, NW, and west along Constitution Avenue, NW, to Route 50 Expressway on the south; north on the Route 50 Expressway to the E Street Expressway and E Street, NW, east on the E Street Expressway, and E Street, NW, to 19th Street, NW to F Street, NW, west on F Street, NW, to 20th Street, NW to Pennsylvania Avenue, NW, west along Pennsylvania Avenue, NW, 21st Street, NW, north along 21st Street, NW, to M Street, NW, east along M Street, NW, to 20th Street, NW, to New Hampshire, Avenue, NW, and northeast along New Hampshire Avenue, NW, to Dupont Circle on the west. The following adjacent area in Southwest is hereby included in addition to the established CEA as delineated above: Eye Street, SW on the North, 3rd Street, SW on the East, M Street, SW on the South and 6th Street, SW on the West. 13. LOCATION: INSIDE OR OUTSIDE CITY CENTER (SEP 2000) (TSA SEP 2002) A. CITY CENTER NEIGHBORHOOD: 1. Space must be in an office district with attractive, prestigious, professional surroundings with a prevalence of modern design and/or tasteful rehabilitation in modern use. Streets and public sidewalks shall be well maintained. 2. Parking. a. The parking-to-square-foot ratio available on-site shall at least meet current local code requirements, or in the absence of a local code requirement, on-site parking shall be available at a ratio of 1 space for every 1,500 BOMA rentable square feet of Government-demised area. If parking cannot be accommodated on site, the Government will consider parking on an adjacent block. The Government shall have the ability to secure the parking area offered. 3. Location Amenities. a. A variety of inexpensive and moderately priced fast food and/or eat-in restaurants shall be located within three blocks. Other employee services, such as retail shops, cleaners, public transportation, banks, etc., shall also be located within three blocks. 1.4 LEASE TERM (SEP 2000) (TSA SEP 2002) The lease term is for ten (10) years firm. All the terms and conditions contained herein shall prevail throughout the term of the lease. 1.5 OFFER DUE DATE Best and Final Offers are due by 10:00 a.m. Friday, November 29, 2002. 1.6 OCCUPANCY DATE (SEP 2000)(TSA SEP 2002) The ability to occupy the interim space (Phase 1) is required commencing on or about January 2, 2003. All other occupancy milestone dates are subject to the requirements of Section 10.2, Transportation Security Administration Objectives and Strategic Approach. 1.7 HOW TO OFFER (SEP 2000)(TSA SEP 2002) A. One (1) original and nine (9) copies of each offer shall be submitted and delivered to the following: Transportation Security Administration Attn: Lisa Maass, Contracting Officer Room 3636, GSA Building 400 Seventh Street, S.W. Washington, DC 20590 B. For the purpose of responding to this Solicitation for Offers (SFO), ownership entities of multiple buildings that are combined to meet the Government's requirement will be jointly considered as one "Offerer". The Government requires one offer for combined buildings. For multiple buildings, each building may submit separate price proposals (GSA Form 1364) which will be combined and analyzed at the Governments discretion. Henceforth in this solicitation, "Lessor" or "offeror" shall refer to the combined offer. The Government reserves the right to separate offers and to pair individual buildings. C. The following documents, properly executed, shall be submitted on the offer due date given in Section 1.5. 1. SFO #OTSA 20-02-R-00528, each page initialed by Offeror. 2. SFO Attachments: a. Attachment #1 -"Rate Structure" b. Attachment #2 -"Fire Protection and Life Safety Evaluation" (For each building offered). c. Attachment #3 -"Property Description Form" 3. GSA Form 1364, Proposal to Lease Space (Combined for all buildings offered). SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 6 LESSOR GOV'T 4. GSA Form 1217, Lessor's Annual Cost Statement. (Combined for all buildings offered). 5. GSA Form 3517B, General Clauses. 6. GSA Form 3518, Representatives and Certifications. (A separate GSA Form 3518 is required from each building owner). 7. First generation black or blue-line plans of the space offered in each building being offered, scaled at 1/8"=1'-0" (preferred) or larger plus Computer Aided Design ("CAD") disks in AutoCAD format with AIA layering conventions of same. The CAD disks shall be consistent with Section 1.11 "Plans with Offer." a. All architectural features of the space shall be accurately shown. If renovation of the building is planned, alterations and schedule to meet the requirements of this SFO shall be indicated. If requested, more informative plans shall be provided within five days. b. As-built plans shall be provided for Phase 1 offered space, Plans will clearly indicate demised area for the entire 125,000-150,000 BOMA rentable square feet. See Section 10.2 for a full description of the Government's requirements for Phase 1. c. Plans shall reflect corridors in place or the proposed corridor pattern for both a typical full (single-tenant) floor and/or partial (multi-tenant) floor. The corridors in place or proposed corridors shall meet local code requirements for issuance of occupancy permits. d. TSA will review the corridors in place and/or proposed corridor pattern to make sure that these achieve an acceptable level of safety as well as to ensure that these corridors provide public access to all essential building elements. The Offeror will be advised of any adjustments that are required to the corridors for determining the ANSI/BOMA Office Area space. The required corridors may or may not be defined by ceiling-high partitions. Actual corridors in the approved layout for the successful Offeror's space may differ from the corridors used in determining the ANSI/BOMA Office Area square footage for the lease award. 8. An hourly overtime rate for overtime use of heating and cooling. See Section 7.3, "Overtime Usage." If proposed rate is different than recommended by an Independent Government estimate, the Offeror may be required to submit worksheets justifying overtime energy usage and rates. 9. Any other information (such as a fact sheet, 5" wide x 3" high or larger color photograph, site plan, location map, and tax parcel map, digital and hard copy photographs of furniture, in case of multiple tax parcels for an offered building, etc., in order for the Government to perform a complete and adequate analysis of the offered property(ies). Other information may also be requested by the Government, and in such circumstances, shall be submitted by the Offeror within 5 working days of the request. 10. Written acknowledgement from each ownership entity confirming agreement to submit a cooperative offer and permission to represent multiple owners for the SFO from multiple ownership groups. 11. If applicable, the agents' disclosure and authorization from each ownership entity to offer in this SFO and/or represent multiple buildings with different ownerships, which may have conflicting interests. Owners and agents in conflicting interest situations are advised to exercise due diligence with regard to ethics, independent pricing, and Government procurement integrity requirements. In such cases, the Government reserves the right to negotiate with the owner directly. 12. General Contractor's overhead, profit, and general conditions for the initial tenant improvements and change orders and any other overhead and profit or management fees that will be added to the tenant improvements, construction costs, or change orders. All fees will be expressed as a percentage of the tenant improvements cost. Costs associated with the base building and the building shell are not included in these calculations. In no event shall the Government pay more than a total of 16% for all fees that are related to constructions, including but not limited to the General Owners Fee, General Contractors General Conditions Overhead and Profit, Construction Management Fee, and Project Management Fee. The Architects Fee is not included in the 16%. 13. Adjustment for Vacant Premises reduction (See Section 3.12). 14. The Government will perform an evaluation of an Offeror's experience and past performance as a Lessor to the Government or to other commercial or non-commercial entities of buildings of a size and complexity comparable to TSA's requirement. The Offeror shall provide a list of up to three (3) Government agencies or other entities to which it performed as a Lessor of a building(s) of similar size and complexity to TSA's requirement that were awarded or performed within the past five (5) years or are currently in force. For each Government agency or other entity please provide the following information: a. Name of agency or entity. b. Customer name and position, address, phone number, e-mail address (if available), and telephone number. Please ensure that the information is current and accurate c. Lease term and the amount of square feet. 15. Evidence of Capability to Perform (See Section 3.14). 16. List of Key Personnel. Key personnel must include, as a minimum, key employees for architectural services, the name of the General Contractor, and key employees of the Property Management firm. These employees should be identified under Section 3.14, Evidence of Capability to Perform. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 7 LESSOR GOV'T 17. ANSI/BOMA Calculations, Plans and Spreadsheet (See Section 4.10). 18. Building Operating Plan (See Section 7.6). D. See TSA Form 3516A, Solicitation Provisions, for additional instructions. If additional information is needed, the Contracting Officer (or the Contracting Officer's designated representative) should be contacted. E. There will be no public opening of offers, and all offers will be confidential until the lease has been awarded. However, the Government may release proposals outside the Government to Government-support contractors to assist in the evaluation of offers. Such Government contractors shall be required to protect the data from unauthorized disclosure. The Officer who desires to maximize protection of information in the offer may apply the restriction notice to the offer as described in GSA Form 3516, Solicitation Provision, 552.270-1 (d), Restriction on Disclosure and Use of Data. F. CLARIFICATIONS TO OFFER REQUIREMENTS: 1. The rate structure required in Attachment 1 shall include the following: a. A lease rate per ANSI/BOMA Office Area square foot (BOSF) for the building shell rental, fully serviced. It is the intent of the Government to lease a building shell with a Tenant Improvement Allowance. All improvements in the base building, lobbies, common areas, and core areas shall be provided by the Lessor, at the Lessor's expense. This rate shall include, but not limited to, property financing (exclusive of Tenant Improvement), insurance, taxes, management, profit, etc., for the building. The building shell rental rate shall also include all basic building systems and common area build out, including base building lobbies, common areas, and core areas, etc. b. The annual cost per BOSF for the cost of services and utilities. This amount shall be for the combined buildings. This equals line 27b of GSA Form 1217, Lessor's Annual Cost Statement, divided by the BOSF offered. c. An annualized percentage interest rate to be used by the Lessor to amortize the cost of the Tenant Improvement Allowance over the firm term of the lease. d. The annual amortized cost of the Tenant Improvement Allowance. Such amortization shall be expressed as a cost per BOSF. Tenant Improvements shall be all alterations for the Government-demised area above the building shell build out. The Tenant Alteration Allowance shall be $40.00 per BOSF. Such alterations shall be described and identified in the drawings used to construct the Government-demised area. The Tenant Alteration Allowance, which is to be provided by the Lessor to the Government for Tenant Improvements, shall be made available at lease execution. e. A fully-serviced lease rate per BOSF as a summation of the amounts broken out in the subparagraphs a, b, and d. f. The annual percentage interest rate, compounded monthly, to be used by the Lessor to amortize the cost of the Tenant Improvements above $40.00 per BOSF over the term of the lease up to $60.00 per BOSF. g. Offerors shall submit proposals in accordance with this Section 1.7, How to Offer. Offers that do not conform to all requirements contained in this SFO may be rejected without further evaluation, deliberation, or discussion. 1.8 BUILDING SHELL REQUIREMENTS (SEP 2000)(TSA SEP 2002) A. The Lessor's build out obligations in providing a building shell (at the Lessor's expense) shall include the following: 1. Base structure and building enclosure components shall be complete. All common areas accessible by the Government, such as lobbies, fire egress corridors and stairwells, elevators, garages, and services areas, shall be complete. Restrooms shall be complete and operational. All building shell components, including but not limited to, heating, ventilation, and air conditioning (HVAC), electrical, ceilings, sprinklers, etc., shall be furnished, installed, and coordinated with Tenant Improvements. 2. Accessibility Requirements. Accessibility to persons with disabilities shall be required throughout the common areas accessible to Government tenants in accordance with both the ADAAG and the UFAS and shall be installed and coordinated with Tenant Improvements. See Section 4.14, "Accessibility." 3. Ceilings. A complete acoustical ceiling system (which includes grid and lay-in tiles) throughout the Government-demised area and all common areas accessible to Government tenants shall be required in accordance with Section 5.7, "Ceilings." The acoustical ceiling system shall be furnished, installed, and coordinated with Tenant Improvements. 3. Doors. Exterior building doors and doors necessary to the lobbies, common areas, and core areas shall be required. This does not include suite entry or interior doors specific to Tenant Improvements. Related hardware shall be installed in accordance with the "Doors: Hardware" (Section 5.13) and the "Doors: Exterior" (Section 5.10). 5. Partitions. Permanent, perimeter, and demising slab-to-slab partitions (including all columns) finished with paint and base shall be require in accordance with Section 5.15, "Partitions: General" and Section 5.16, "Partitions: Permanent." 6. Flooring. All building common areas shall have finished floors in accordance with Section 5.18, "Floor Covering and Perimeters." SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] [SIG] ------- & ------ LESSOR GOV'T 8 7. Plumbing. The Offeror shall include cost of plumbing in common areas, such as for toilet rooms and janitor closets as part of the building shell cost. Hot and cold water risers and domestic waste and vent risers, installed and ready for connections that are required for Tenant improvements, shall be included in the shell rent. 8. HVAC. Central HVAC systems shall be installed and operational, including, as appropriate, main and branch lines, VAV boxes, dampers, flex ducts, and diffusers, for an open office layout, including all building common areas. Conditioned air through medium pressure ductwork at a rate of .75 cubic feet per minute per ANSBOMA rentable square foot shall be provided. 9. Electrical. Electrical power distribution panels and circuit breakers shall be available in an electrical closet, with capacity at 277/480 volt (V) and 120/206 V, 3-phase, 4-wire system providing 7 watts (W) per ANSBOMA rentable square foot. This 7 watt (W) requirement excludes HVAC. 10. Lighting. Lighting. Parabolic type 2' x 2' or 2' x 4' fluorescent lighting fixtures or other building standard fixtures acceptable to the Contracting Officer shall be installed in the ceiling grid for an open office plan. Lighting as necessary shall be provided in accordance with Section 6.19, "Lighting: Interior and Parking." 11. Safety and Environmental Management. Complete safety and environmental management shall be provided throughout the building in accordance with Federal, state, and local codes and laws including, but not limited to, such items as fire detection and alarms, emergency building power for life safety systems, etc., and shall be in accordance with the ADAAG. Where sprinklers are required in the Government-demised area, sprinkler mains and distribution piping in a "protection" layout (open plan) with heads turned down with an escutcheon or trim plate shall be provided. 12. Telephone Rooms. Building telecommunication rooms on each floor shall be completed, operational, and ready for Tenant improvements. The telephone closets shall include a telephone backboard and success to stand-by power. 13. All of the above improvements are described in more detail hereinafter in this SFO. 1.9. TENANT IMPROVEMENTS (SEP 2000)(TSA SEP 2002) A. The Tenant Improvement Allowance shall be used for building out the Government-demised area in accordance with the Government-approved drawings. All Tenant Improvements required by the Government for occupancy shall be performed by the successful Offeror, and all improvements shall meet the quality standards and requirements of this SFO and GSA Form 3517B, General Clauses. B. The Tenant Improvement Allowance shall include all the Offeror's administrative costs, general contractor fees, subcontractor's profit and overhead costs, as well as Offeror's overhead and profit. See Section 3.15 for Construction Schedule. NO COSTS ASSOCIATED WITH THE BASE BUILDING REQUIREMENTS AND BUILDING SHELL SHALL BE INCLUDED IN THE TENANT IMPROVEMENT PRICING. 1.10 TENANT IMPROVEMENT RENTAL ADJUSTMENT (SEP 2002)(TSA SEP 2002) A. All Tenant Improvements shall be identified after award of the contract. 1. The Government, at its sole discretion, shall make all decisions as to the usage of the Tenant Improvement Allowance. The Government may use all or part of the Tenant Improvement Allowance. The Government may return to the Lessor any unused portion of the Tenant Improvement Allowance in exchange for a decrease in rent according to the amortization rate over the firm term. 2. The Government reserves the right to make cash payments for any or all work performed by the Lessor. Prior to occupancy, the Government, at its sole discretion, may choose to pay lump sum for any or all of the Tenant Improvement Allowance. If, prior to occupancy, the Government elects to make a lump sum payment for any portion of the Tenant Improvement Allowance, the payment of the Tenant Improvement Allowance by the Government will result in a decrease in the rent. At any time after occupancy, the Government, at its discretion, may choose to pay lump sum for any part or all of the remaining unpaid amortized balance of the Tenant Improvement Allowance. If the Government elects to make a lump sum payment for the Tenant Improvement Allowance after occupancy, the payment of the Tenant Improvement Allowance by the Government will result in a decrease in the rent according to the amortization rate over the firm term of the lease. 3. The Government reserves the right to 1) reduce the Tenant Improvement requirements, 2) pay lump sum for the overage upon completion and acceptance of the improvements, or 3) increase the rent according to the negotiated amortization rate over the firm term of the lease. 1.11 PLANS WITH OFFER (SEP 2002)(TSA SEP 2002) All Plans submitted for consideration shall have been generated by a Computer Aided Design (CAD) program which is compatible with the latest release of AutoCAD. The required file extension is: DWG. Clean and purged files shall be submitted on 3-1/2-inch double-sided, high-density diskettes, or, if approved by the Contracting Officer, on CD-ROM. All submissions shall be accompanied with a written matrix indicating the layering standard to ensure that all information is recoverable. Preferred laying standard is A/A laying format long version. Plans shall include a proposed corridor pattern for typical floors and/or partial floors. All architectural features of the space shall be accurately shown. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 9 LESSOR GOV'T 1.12 NEGOTIATIONS (SEP 2000)(TSA OCT 2002) A. Negotiations will be conducted on behalf of the Government by the Contracting Officer, the Government Consultant, or the Contracting Officer's designated representatives. The Contracting Officer is named on the cover of this SFO. The Government will negotiate rental price for the firm term and any other aspect of the offer as deemed necessary. B. The Offeror shall not enter into negotiations concerning the space leased or to be eased with representatives of Federal agencies other than the Contracting Officer or designee. C. The Contracting Officer will conduct oral or written negotiations with all Offerors that meet the requirements of this SFO and are within the competitive range. The competitive range will be established by the Contracting Officer on the basis of cost or price and non-cost or price factors as stated in this SFO and will include all of the most highly rated proposals, unless the range is further reduced for purposes of efficiency. D. All Offerors will be provided a reasonable opportunity to submit any cost or price, technical, or other revisions to their offer that may result from the negotiations. Negotiations will be closed with submission of final proposal revisions ("Best and Final" offers). 1.13 PRICE EVALUATION (PRESENT VALUE) A. If annual CPI adjustments in operating expenses are included, the Offeror shall be required to submit the offer with the total "gross" annual price per BOMA Office Area Square Foot and a breakout of the "Base" price per BOMA Office Area Square Foot for services and utilities (operating expenses) to be provided by the Lessor. The "gross" price shall include the "base" price. B. The Offeror shall be required to submit plans and any other information to demonstrate that the BOMA rentable space yields ANSI/BOMA Office Area space within the required ANSI/BOMA Office Area range. The Government will verify the amount of ANSI/BOMA Office Area square footage and will convert the rentable prices offered to ANSI/BOMA Office Area prices, which will subsequently be used in the price evaluation. C. If the offer includes annual adjustments in operating expenses, the base price per ANSI/BOMA Office Area square foot from which adjustments are made will be the base price for the term of the lease, including any option periods. D. Evaluation of offered prices will be on the basis of the annual price per ANSI/BOMA Office Area square foot, including any option periods. The Government will perform present value price evaluation by reducing the prices per ANSI/BOMA Office Area square foot to a composite annual ANSI/BOMA Office Area square foot price, as follows: 1. Parking and wareyard areas will be excluded from the total square footage but not from the price. For different types of space, the gross annual per square foot price will be determined by dividing the total annual rental by the total square footage minus these areas. For parking, the Government requires two prices for the parking requirement as follows: one price per each parking space offered, and one price for TSA to use the entire garage. For evaluation purposes, the Government will evaluate the price for the minimum Government requirement for parking. 2. If annual adjustments in operating expenses will not be made, the gross annual per square foot price will be discounted annually at 8 percent to yield a gross present value cost (PVC) per square foot. 3. If annual adjustments in operating expenses will be made, the annual per square foot price, minus the base cost of operating expense, will be discounted annually at 5.1 percent to yield a net PVC per square foot. The operating expenses will be both escalated at 2.1 percent compounded annually and discounted annually at 5.1 percent, then added to the net PVC to yield the gross PVC. 4. To the gross PVC will be added: a. The cost of Government-provided services not included in the rental escalated at 4 percent compounded annually and discounted annually at 8 percent. b. The annualized (over the full term) per ANSI/BOMA Office Area square foot cost of any items which are to be reimbursed in a lump sum payment. (The cost of these items is present value; therefore, it will not be discounted.) c. The cost of relocation for furniture, telecommunications, replication costs, and other move-related costs, if applicable. d. Cost of general contractor's overhead and profit (OH&P) and any developers project management fees, as a percentage of total improvements costs based on a $40.00 per square foot Tenant Improvement Allowance. In no event shall the Government pay more than a total of 16% for all fees that are related to construction, including but not limited to the General Owners Fee, General Contractors General Conditions Overhead and Profit, Construction Management Fee, and Project Management Fee. The Architects Fee is not included in the 16%. The Government reserves the right to reject a General Contractor or negotiate the General Contractor's Fee. e. The total rental payment for Phase I. If rental for Phase I space is different from phases 2 and 3, indicate as an addendum to Attachment 1. 5. Free rent shall be discounted and evaluated in the year in which it is offered. 6. The sum of either subparagraphs 2 and 4 or subparagraphs 3 and 4 less 5 will be the per ANSI/BOMA Office Area square foot present value of the offer for price evaluation purposes. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 10 LESSOR GOV'T 7. For purposes of evaluation, the Government, at its sole discretion, retains the right to decide what portion of the estimated tenant improvement allowance is used for price evaluation purposes and lease award. 1.14 HISTORIC PREFERENCE, GSAR 552.270-2 (VARIATION)(SEP 1999) A. Preference will be given to Offerors of space in buildings in, or formally listed as eligible for inclusion in, the National Register of Historic Places, and to historically-significant buildings in historic districts listed in the National Register. Such preference will be extended to historic buildings and will result in award if: 1. The offer for space meets the terms and conditions of this SFO as well as any other offer received (It is within the discretion of the Contracting Officer to accept alternatives to certain architectural characteristics and safety features defined elsewhere in this SFO to maintain the historical integrity of the building, such as high ceilings, wooden floors, etc.) and 2. The rental is no more than 10 percent higher, on a total annual square foot (ANSI/BOMA Office Area) cost to the Government, than the lowest otherwise acceptable offer. B. If more than one offer of an historic building is received and they meet the above criteria, an award will then be made to the lowest priced historic property offered. 1.15 AWARD (JAN 1997) A. After conclusion of negotiations, the Contracting Officer will require the Offeror selected for award to execute the proposed lease prepared by the Government which reflects the proposed agreement of the parties. B. The proposed lease shall consist of: 1. Standard Form 2, U.S. Government Lease for Real Property, 2. required clauses, 3. required certifications and representations, 4. the pertinent provisions of the offer, and 5. the pertinent provisions of the SFO. C. The acceptance of the offer and award of the lease by the Government occurs upon notification of unconditional acceptance of the offer or execution of the lease by the Contracting Officer and mailing or otherwise furnishing written notification or the executed lease to the successful Offeror. D. By initialing below, Offerors understand and agree to make their offers in response to solicitation DTSA20-02-R-00528 good until ninety (90) days after submission of Best and Final Offers (BAFO). SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 11 LESSOR GOV'T 1.16 LABOR STANDARDS (SEP 2000) A. If an Offeror proposes to satisfy the requirements of this SFO through the construction of a new building or the complete rehabilitation or reconstruction of an existing building, and the Government will be the sole or predominant tenant such that any other use of the building will be functionally or quantitatively incidental to the Government's use and occupancy, the following Federal Acquisition Regulation (FAR) clauses shall apply to work performed in preparation for occupancy and use of the building by the Government. Full text versions of these clauses are available upon request from the Contracting Officer. Full text versions are also available at the following web site: http;//www.emet.gov/far/ 52.222-4 Contract Work Hours and Safety Standards Act - Overtime Compensation 52.222-6 Davis-Bacon Act 52.222-7 Withholding of Funds 52.222-8 Payrolls and Basic Records 52.222-9 Apprentices and Trainees 52.222-10 Compliance with Copeland Act Requirements 52.222-11 Subcontracts (Labor Standards) 52.222-12 Contract Termination-Debarment 52.222-13 Compliance with Davis-Bacon and Related Act Regulations 52.222-14 Disputes Concerning Labor Standards 52.222-15 Certification of Eligibility SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 12 LESSOR GOV'T 2.0 AWARD FACTORS 2.1 AWARD FACTORS (JAN 1997)(TSA SEP 2002) A. Best Value Selection: This procurement shall be conducted utilizing Best Value Selection (BVS), which seeks to select an offer based on the best combination of technical merit and price reasonableness -- i.e., "best value." "Best Value" is defined as the procurement process that results in the most advantageous acquisition decision for the Government and is performed through an integrated assessment and trade-off analysis between the non-cost/price factors and the cost/price factor. While the Government evaluation team and the Selection Official will strive for maximum objectivity, the selection process, by its nature, is subjective and, therefore professional judgment is implicit throughout the entire process. The Government reserves the right to award a contract on the basis of the initial offers received without discussion. Proposals should be submitted initially on the most favorable terms from a price and technical standpoint that the Offeror can submit to the Government. Advisors who are not Federal Government employees may assist in the evaluation and provide input regarding the offers. B. Non-Cost/Price Factors 1. Building Characteristics Each offer will be evaluated based on the following building characteristics subfactors. The subfactors below are listed in order of importance and each subfactor will be evaluated on an adjectival basis. The adjectival ratings are: Outstanding, Acceptable, Marginal, and Unacceptable. a. The degree to which the building(s) meet or can be modified to meet TSA's requirements: i) Security features - extent to which Level IV security requirements can be met ii) IT infrastructure iii) Electrical systems iv) Quantity, quality and suitability of furniture, if any v) Slab-to-slab height vi) Finished floor-to-ceiling achievable b. Tenancy - Single occupancy of building(s) is preferable to sharing buildings with another tenant(s). c. Number of Buildings - One building is preferable to two buildings. Buildings side by side are better than buildings one block away, which is better than buildings 2 blocks away, which is better than buildings 3 blocks away. d. Space Efficiency - The degree to which the space offered is conducive to efficient layout and good utilization. e. Condition of Phase 1 Space. f. Parking - On-site parking is better than off-site parking. The ability to control entire parking facility is better than the ability to fence off part of the parking lot. g. Location Amenities - The greater the variety of amenities and the closer the amenities to the building site the better. 2. Experience and Past Performance Factor The Government will evaluate the Offeror's experience and past performance as a Lessor to the Government or to other commercial or non-commercial entities of buildings of a size and complexity comparable to TSA's requirement. The objective of the evaluation is to develop insight into the Offeror's relative capability and history of providing quality services at a reasonable price, adherence to schedules, its history of reasonable and cooperative behavior, and its commitment to customer satisfaction. Offerors are cautioned that in conducting the past performance evaluation, the Government may use data provided by the Offeror in its proposal and data obtained from other sources. While the Government may elect to consider data obtained from other sources, the burden of providing complete information remains with the Offeror. Experience and Past Performance factor will be evaluated on an adjectival basis. The adjectival ratings are: Outstanding, Acceptable, Marginal, and Unacceptable. C. Cost/Price Factor The Offeror's cost/price will be evaluated in accordance with the SFO provision entitled, "Price Evaluation (Present Value)." The cost/price factor will be evaluated separately from the Non Cost/Price Factors. The cost/price factor will not be adjectively rated. The Offeror's total evaluated price will be assessed for reasonableness, and realism. Reasonableness and realism will be established by the existence of adequate price competition and/or by comparing all, or a representative sample of the proposed prices/costs, to industry average rates and/or rates from other contracts for similar work, etc. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 13 LESSOR GOV'T 3.0 MISCELLANEOUS 3.1 SUBSEQUENT TENANT IMPROVEMENTS $100,000 OR LESS (SEP 2000) A. The Lessor may be requested to provide alterations during the term of the lease. Alterations will be ordered by issuance of GSA Form 276, Supplemental Lease Agreement, GSA Form 300, Order for Supplies or Services, or a Tenant Agency-approved form. The two clauses from GSA Form 3517, General Clauses, 552.232-25, Prompt Payment (Deviation FAR 52.232-25), and 552.232-70, Invoice Requirements, apply to orders for alterations. All orders are subject to the terms and conditions of this lease. B. Orders may be placed by the Contracting Officer or Tenant Agency officials when specifically authorized to do so by the Contracting Officer. The Contracting Officer will provide the Lessor with a list of Tenant Agency officials authorized to place orders and will specify any limitations on the authority delegated to Tenant Agency officials. The Tenant Agency officials are not authorized to deal with the Lessor on any other matters. B. Payments for alterations ordered by the Tenant Agency will be made directly by the Tenant Agency placing the order. 3.2 TAX ADJUSTMENT (SEP 2000) A. Real estate taxes, as referred to in this paragraph, are only those taxes which are assessed against the building and/or the land upon which the building is located, without regard to benefit to the property, for the purpose of funding general Government services. Real estate taxes shall not include, without limitation, general and/or special assessments, business improvement district assessments, or any other present or future taxes or governmental charges that are imposed upon the Lessor or assessed against the building and/or the land upon which the building is located. B. Base year taxes as referred to in this paragraph are 1) the real estate taxes for the first 12-month period coincident with full assessment or 2) may be an amount negotiated by the parties that reflects an agreed upon base for a fully assessed value of the property. C. The term "full assessment" as referred to in this paragraph means that the taxing jurisdiction has considered all contemplated improvements to the assessed property in the valuation of the same. Partial assessments for newly constructed projects or for projects under construction, conversion, or renovation will not be used for establishing the Government's base year for taxes. D. The Lessor shall furnish the Contracting Officer with copies of all notices which may affect the valuation of said land and buildings for real estate taxes thereon, as well as all notices of a tax credit, all tax bills, and all paid tax receipts, or where tax receipts are not given, other similar evidence of payment acceptable to the Contracting Officer (hereinafter, evidence of payment), and a proper invoice (as described in GSA Form 3517, General Clauses, 552.232-75, Prompt Payment) of the tax adjustment including the calculation thereof, for each year that real estate taxes are incurred during the lease term or any extension thereof. All such documents are due within 10 calendar days of receipt except that the proper invoice and evidence of payment shall be submitted within 60 calendar days after the date the tax payment is due from the Lessor to the taxing authority. FAILURE TO SUBMIT THE PROPER INVOICE AND EVIDENCE OF PAYMENT WITHIN SUCH TIME FRAME SHALL BE A WAIVER OF THE RIGHT TO RECEIVE PAYMENT RESULTING FROM AN INCREASED TAX ADJUSTMENT UNDER THIS PARAGRAPH. E. The Government shall 1) make a single annual lump-sum payment to the Lessor for its share of any increase in real estate taxes during the lease term over the amount established as the base year taxes or 2) receive a rental credit or lump sum payment for its share of any decreases in real estate taxes during the lease term below the amount established as the base year taxes. The amount of lump sum payment or rental credit shall be based upon evidence of valuation and payment submitted by the Lessor to the Contracting Officer in accordance with subparagraph D. 1. In the event of an increase in taxes over the base year, the Lessor shall submit a proper invoice of the tax adjustment including the calculation thereof together with evidence of payment to the Contracting Officer. THE GOVERNMENT SHALL BE RESPONSIBLE FOR PAYMENT OF ANY TAX INCREASE OVER THE BASE YEAR TAXES ONLY IF THE PROPER INVOICE AND EVIDENCE OF PAYMENT IS SUBMITTED BY THE LESSOR WITHIN 60 CALENDAR DAYS AFTER THE DATE THE TAX PAYMENT IS DUE FROM THE LESSOR TO THE TAXING AUTHORITY. The due date for making payment shall be the 30th calendar day after receipt of evidence of payment by the Contracting Officer or the 30th calendar day after the anniversary date of the lease, whichever is later. If the lease terminates before the end of a tax year, payment for the tax increase due as a result of this section for the tax year will be prorated based on the number of days that the Government occupied the space. No increase will be paid, due, or owing unless all evidence of valuation and payment has been previously submitted to the Contracting Officer. The Government's payment for its share of real estate taxes shall not include any late charges, interest, or penalties imposed by the taxing authority as a result of the Lessor's delinquency in paying such taxes or charges. 2. In the event of a decrease in taxes from the base year, or in the event of any refund or tax deduction, the Lessor shall notify the Contracting Officer in accordance with subparagraph D. The Government shall be entitled to, and shall receive a credit for, the prorata reduction in taxes applicable to the premises encumbered by this lease, regardless of whether the Government has made a tax payment for that year. The Government's share of the credit will be determined in accordance with subparagraph F and shall be taken as a deduction from the rent. Any credit due the Government after the expiration or earlier termination of the lease (including, but not limited to, credits resulting from a decrease in taxes pursuant to a tax credit due the Lessor; a reduction in the tax assessment; or a tax appeal proceeding for a year of the lease, or portion thereof) shall be made by a lump sum payment to the Government or as a rental credit to any succeeding lease as determined by the Contracting Officer. The Lessor shall remit any lump sum payment to the Government within 15 calendar days of payment by the taxing authority to the Lessor or the Lessor's designee. If the credit due to the Government is not paid by the due date, interest shall accrue on the late payment at the rate established by the Secretary of the Treasury SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 14 LESSOR GOV'T under Section 12 of the Contract Disputes Act of 1976 (United States Code 41 USC 611) that is in effect on the day after the due date. The interest penalty shall accrue daily on the amount of the credit and shall be compounded in 30-day increments inclusive from the first day after the due date through the payment date. The Government shall have the right to pursue the outstanding balance of any tax credit using all such collection methods as are available to the United States to collect debts. Such collection rights shall survive the expiration of this lease. F. The Government shall pay its share of tax increases or shall receive its share of any tax decrease based on the ratio of the BOMA rentable square feet occupied by the Government to the total rentable square feet in the building or complex (percentage of occupancy). For the purpose of this lease, the Government's percentage of occupancy as of the date hereof is ____TBD*____ percent based upon an occupancy of ____TBD*____ BOMA rentable square feet in a building of ____TBD*____ BOMA rentable square feet. This percentage shall be subject to adjustment to take into account additions or reductions of the amount of space as may be contemplated in this lease or amendments hereto. The block and lot/parcel or other identification numbers for other property, building(s), and parking areas(s) occupied under this lease are ____TBD*____. G. The Government may direct the Lessor upon reasonable notice to initiate a tax appeal, or the Government may decide to contest the tax assessment on behalf of the Government and the Lessor or for the Government alone. The Lessor shall furnish to the Government information necessary for appeal of the tax assessment in accordance with the filing requirements of the taxing authority. If the Government decides to contest the tax assessment on its own behalf or on behalf of the Government and the Lessor, the Lessor shall cooperate and use all reasonable efforts including, but not limited to, affirming the accuracy of the documents, executing documents required for any legal proceeding, and taking such other actions as may be required. If the Lessor initiates an appeal on behalf of the Government, the Government and the Lessor will enter into an agreement to establish a method for sharing expenses and tax savings. (*TBD = To Be Determined) 3.3 PERCENTAGE OF OCCUPANCY The percent of the building occupied by the Government, for purposes of tax adjustments, will be established during negotiations. 3.4 OPERATING COSTS (NCR NOVEMBER 2001) A. Beginning with the second year of the lease and each year thereafter, the Government shall pay adjusted rent for changes in costs for cleaning services, supplies, materials, maintenance, trash removal, landscaping, water and sewer charges, heating, electricity, and certain administrative expenses attributable to occupancy. Applicable costs listed on GSA Form 1217, Lessor's Annual Cost Statement, when negotiated and agreed upon, will be used to determine the base operating cost adjustments. The agreed-upon initial operating costs shall be stated on the SF-2 or other lease document. B. The amount of adjustment will be determined by multiplying the base operating costs by the percent change in the revised Consumer Price Index (CPI) for wage earners and clerical workers, U.S. City average, all items figure, (1982-1984 = 100) published by the Bureau of Labor Statistics, U.S. Department of Labor. C. The first percent change will be computed by comparing the index figure published for the month prior to the lease commencement date with the index figure published for the month before the anniversary date of the lease. For example, a lease commencing in June of 2001 would use the index published for May of 2001 and that figure would be compared with the index published for May of 2002 to determine the percent change. D. Each successive adjustment shall use the percent difference between the prior year index figure and the current year index figure for the month before the next anniversary date of the lease. In the example used, the second adjustment would compare the CPI for May of 2002 with that of May of 2003 to determine the percent change. The percent change shall be applied to the escalated operating costs from the previous year. For example, if the initial operating costs were $10,000 and the initial adjustment calculated under paragraph (C) above were $250, then the operating costs to be used for the second adjustment calculation would be $10,250. E. Payment will be by permanently adding 1/12 of the adjustment to the monthly installment of fixed rent. Rental adjustments will be effective on the anniversary date of the lease. Payment of the adjusted rental rate will become due (for purposes of any interest due) on the first workday of the second month following the publication of the CPI for the month prior to the anniversary date (adjustment effective date). F. If the Government exercises an option to renew the lease term, annual adjustments will continue in the manner described above. G. Change in base operating costs. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 15 LESSOR GOV'T 1. If a change in the operating costs occurs for such things as commencement of daytime cleaning or expansion of space (where the expansion space is rented at the same rate as the original space), annual adjustments shall be calculated separately on the increase/decrease in operating costs. However, such adjustment shall be effective only after the increased costs have been in effect for at least one year. Therefore, for expansions not ocurring on the anniversary date of the lease, the adjustment shall be due and payable on the anniversary date of the lease following the first anniversary date of the expansion. The first rent adjustment for the increase in base operating costs shall be calculated by comparing the CPI for the month before the effective date of the change in base operating costs (such as the expansion effective date) with the CPI for the month before the lease anniversary date. For subsequent adjustments, the increase in the base operating costs shall be added to the other escalated base operating costs and only one calculation shall be made. 2. In cases where an expansion of leased space occurs and the expansion space is rented at a different rate than the original space, the base operating costs shall be reestablished in the Supplemental Lease Agreement to take the additional space. The new base operating costs shall be a prorated blend of the escalated original base operating costs and the base operating costs for the new space from the GSA Form 1217 for the new space. The CPI's shall continue to be determined as specified in paragraph (D) above, and operating cost rental adjustments shall continue to be made on the anniversary date of the lease. H. In the event of a decrease in the CPI during the occupancy under the lease, the rental amount will be reduced accordingly. The amount of such reduction will be determined in the same manner as increases in the rent provided under this clause. I. The offer shall clearly state whether the rental is firm throughout the term of the lease or if it is subject to annual adjustment of operating costs as indicated above. If operating costs will be subject to adjustment, those costs shall be specified on GSA Form 1364, Proposal to Lease Space, contained elsewhere in this SFO. Beginning with the second year of the lease and each year thereafter, the Government shall pay adjusted rent for changes in costs for cleaning services, supplies, materials, maintenance, trash removal, landscaping, water, sewer charges, heating, electricity, and certain administrative expenses attributable to occupancy. Applicable costs listed on GSA Form 1217, Lessor's Annual Cost Statement, when negotiated and agreed upon, will be used to determine the base rate for operating costs adjustment. 3.5 OPERATING COSTS BASE (SEP 2002) The base for the operating costs adjustment will be established during negotiations based upon ANSI/BOMA Office Area square feet. 3.6 ANSI/BOMA RENTABLE SQUARE FEET (SEP 2000) (TSA SEP 2002) For the purposes of this SFO, the Government recognizes the American National Standards Institute/Building Owners and Managers Association (ANSI/BOMA) international standard (Z65.1-1996) definition for rentable space. 3.7 ANSI/BOMA OFFICE AREA SQUARE FEET (NCR VARIATION (AUG 2002)) (TSA OCT 2002) A. For the purposes of this SFO, the Government recognizes the American National Standards Institute/Building Owners and Managers Association (ANSI/BOMA) international standard (Z65.1-1996) definition for office area, which means "the area where a tenant normally houses personnel and/or furniture, for which a measurement is to be computed." B. ANSI/BOMA office area square feet shall be computed by measuring the area enclosed by the finished surface of the room side of corridors (corridors in place as well as those required by local codes and ordinances to provide an acceptable level of safety and/or to provide access to essential building elements) and other permanent walls, the dominant portion (refer to Z65.1) of building exterior walls, and the center of tenant-separating partitions. Where alcoves, recessed entrances, or similar deviations from the corridor are present, ANSI/BOMA office area square feet shall be computed as if the deviation were not present. For purposes of this solicitation, floor common area, including rest rooms, janitors closets, telephone and electrical closets, mechanical rooms, elevator lobbies, and public or fire safety egress corridors are not included as BOMA office area square feet. 3.8 COMMON AREA FACTOR (SEP 2000) If applicable, the Offeror shall provide the Common Area Factor (a conversion factor(s) determined by the building owner and applied by the owner to the ANSI/BOMA office area square feet to determine the rentable square feet for the offered space). 3.9 APPURTENANT AREAS The right to use appurtenant areas and facilities is included. The Government reserves the right to post Government rules and regulations where the Government leases space. 3.10 LIQUIDATED DAMAGES, GSAR 552.270-15 (SEP 1999) See paragraph 3.16.J. 3.11 VENDING FACILITIES (SEP 2000) A. Approximately 500 square feet of the ANSI/BOMA rentable space in Section 1.1 "Amount and Type of Space" will be used for the operation of a vending facility(ies) by the blind under the provisions of the Randolph-Sheppard Act (United States Code 20 USC 107 et. seq.). The Government will control the number, kind, and locations of vending facilities and will control and receive income from all automatic vending machines. The Lessor is required to provide necessary utilities and to make related SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] [SIG] ------- & ------- 16 LESSOR GOVT. alterations. The cost of the improvements will be negotiated, and payment will be made by the Government either on a lump-sum basis or a rental increase. B. The Government will assure that the facility(ies) does not compete with other facilities having exclusive rights in the building. The Offer shall advise the Government if such rights exist. 3.12 ADJUSTMENT FOR VACANT PREMISES, GSA 552.270-16 (VARIATION)(SEP 1999) A. If the Government fails to occupy any portion of the leased premises or vacates the premises in whole or in part prior to expiration of the term of the lease, the rental rate will be reduced. B. The rate will be reduced by that portion of the costs per ANSI/BOMA Office Area square foot of operating expenses not required to maintain the space. Said reduction shall occur after the Government gives 30 calendar days prior notice to the Lessor and shall continue in effect until the Government occupies the premises or the lease expires or is terminated. 3.13 RELOCATION ASSISTANCE ACT (MAR 2002) A. If an improved site is offered and new construction will result in the displacement of individuals or businesses, the successful Offeror shall be responsible for payment of relocation costs for displaced persons in accordance with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and 49 CFR Part 24. B. Offerors shall incorporate the cost of such assistance into their shell rental rate. C. The successful Offeror shall give TSA the name of the person and agency to be providing the relocation assistance to site tenants. In addition, the successful Offeror must provide background information about the relocation agency and references for which the relocation agent has performed relocation assistance in the past. Depending upon the complexity of the relocation project, Offerors may be required to provide a relocation plan with final proposal revisions. 3.14 EVIDENCE OF CAPABILITY TO PERFORM (SEP 2000)(TSA OCT 2002) A. AT THE TIME OF SUBMISSION OF OFFERS, THE OFFEROR SHALL SUBMIT TO THE CONTRACTING OFFICER FOR EACH BUILDING BEING OFFERED: 1. Satisfactory evidence of at least a conditional commitment of funds in an amount necessary to prepare the space. Such commitments shall be signed by an authorized bank officer and at a minimum shall state: amount of loan; term in years; annual percentage rate; and length of loan commitment. 2. The name of the proposed construction contractor, as well as evidence of the contractor's experience, competency, and performance capabilities with construction similar in scope to that which is required herein. 3. Compliance with local zoning laws or evidence of variances, if any, approved by the proper local authority. 4. Evidence of ownership or control of site(s). 5. Satisfactory evidence that Offeror will be able to deliver the appropriate amount of space in the required timeframes, as defined in this SFO. B. AFTER AWARD: Within fourteen days after award, the successful Offeror shall provide to the Contracting Officer evidence of: 1. A firm commitment of funds in an amount sufficient to perform the work. 2. Provision of occupancy permit for initial occupancy of Phase 1 space. (See Section 10.2). 3. The license or certification to practice in the state where the facility is located from the individual(s) and/or firm(s) providing architectural and engineering design services. C. KEY PERSONNEL: 1. The personnel listed below are considered essential to the work being performed under this SFO. Before removing, replacing, or diverting any of the listed or specified personnel, the Lessor shall (1) notify the Contracting Officer reasonably in advance and (2) submit justification, including proposed substitution, in sufficient detail to permit evaluation of the impact on the work to be performed. 2. The Lessor shall make no diversion without the Contracting Officer's written consent; provided, that the Contracting Officer may ratify in writing the change, and that ratification shall constitute Contracting Officer's consent required by this section. 3. The list of key personnel as specified below may, with the consent of the contracting parties, be amended from time to time during the course of the lease to add or delete personnel. 4. List of Key Personnel: Firm Name Title SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 17 LESSOR GOV'T TO BE PROPOSED BY OFFERORS 3.15 CONSTRUCTION SCHEDULE (TSA OCT 2002) A. Within ten days after award of the lease contract, the successful Offeror shall submit to the Contracting Officer a tentative construction schedule giving the dates on which the various phases of construction will be completed to coincide with the Government's project approach as outlined in Section 10.2. The finalized schedule shall be submitted no later than twenty days after award. The Lessor shall work with the Government to establish the most expedient project delivery for all phases. B. The Schedule shall include timing for completion of design and construction milestones including, but not limited to: 1) submittal of preliminary plans and specifications; 2) submittal of other working drawings; 3) issuance of a building permit; 4) completed construction documents; 5) start of construction; 6) completion of principal categories of work; 7) phased completion and availability for occupancy of each portion of the Government-demised area (by floor, block, or other appropriate category); and 8) final construction completion. C. Final agreed-upon design and construction schedule will be incorporated into the lease through a Supplemental Lease Agreement. 3.16 CONSTRUCTION SCHEDULE OF TENANT IMPROVEMENTS (SEP 2000)(TSA OCT 2002) A. The construction schedule for Phase 2 and Phase 3 (see 10.2 for description of phases) shall commence upon lease award. The schedule shall be divided into eight tasks for each phase. These are: 1) the generation of the space plans; 2) the generation of the design intent drawings; 3) the Government's approval of the design intent drawings; 4) the Lessor's generation of the Government's working/construction drawings; 5) the Government's review of the working/construction drawings; 6) the Lessor's bidding of the construction documents; 7) the Lessor's construction of the subject leased area; 8) the Government's acceptance of the Lessor's construction. Each of these tasks is detailed below. References to working days shall be based upon a 5-day work week (Monday through Friday, exclusive of Federal holidays). References to "approval" shall mean such approval granted by the Contracting Officer. During the construction schedule, the Government requests regularly scheduled progress meetings and requests that the Lessor keep meeting minutes of discussion topics and attendance. During design and construction, the Lessor may discover instances where the Government's directives conflict. In such cases, the Lessor shall immediately notify the Contracting Officer so that the Government may issue a determination as to how to proceed beyond the building shell. B. SPACE PLAN LAYOUTS AND PROGRAM OF REQUIREMENTS The Government shall prepare, at the Government's expense, Space Plan Layouts. The Space Plan Layouts will consist of final computer generated drawings to scale showing layouts of furnishings and equipment with any special construction notations. Space Plan Layouts and the Program of Requirements shall be due from the Government within twenty (20) working days after lease award for the Phase 2 first 100,000 square feet delivery of space. C. DESIGN INTENT DRAWINGS: 1. The Lessor shall prepare, out of the Tenant Improvement Allowance and provide to the Government, for the Government's approval, design intent drawings detailing the Tenant Improvements to be made by the Lessor within the Government-demised area. The Government shall use best efforts to coordinate the provision of such information and details as required by the Lessor's architect to complete such drawings in a timely manner. Design intent drawings, for the purposes of this lease, are defined as fully-dimensioned drawings of the leased space which include enough information to prepare construction drawings and shall consist of: 1) furniture locations, telephone and data outlet types and locations; 2) specifications necessary for calculation of electrical and HVAC loads; and 3) all finish/color/signage selections. Design intent drawings shall be due from the Lessor within twenty (20) working days after receipt of the space plan layouts and program of requirements from the Government. 2. Review. The Government retains the right to review, approve, and request modifications (if necessary) to the Lessor's design intent drawings prior to the Lessor's commencement of working/construction drawings. The Government's review and approval of the drawings is limited as to the drawings' conformance to the specific requirements of the SFO and the agency's needs as they apply to the specific leased space. The Government shall perform all reviews of design intent drawings within fifteen (15) working days of receipt of such from Lessor. If the Government requires modifications to the design intent drawings, the Government shall notify the Lessor in writing and the Lessor shall incorporate comments into the construction documents. Upon approval of the design intent drawings, a notice to proceed shall be transmitted to the Lessor, and the Lessor shall commence working/construction drawings for the space. At the sole discretion of the Government, the Lessor may be required to submit a budget proposal, based on the Tenant Improvements and associated work as shown on the design intent drawings. This budget proposal shall be completed within ten (10) working days of the Government's request. Delay of receipt of such proposal shall result in a Lessor delay. D. WORKING/CONSTRUCTION DRAWINGS: The Lessor shall prepare, out of the Tenant Improvement Allowance, final working/construction drawings for the improvements illustrated on the Government-approved design intent drawings. The working/construction drawings shall include all mechanical, electrical, plumbing, fire safety, lighting, structural, and architectural improvements scheduled for inclusion into the Government-demised area. Working/construction drawings shall also be annotated with all applicable specifications. The resulting product shall reflect requirements which are substantially the same as that specified by the Government-approved design intent drawings and shall incorporate neither extraneous additions nor deletions of requirements. The Lessor's working/construction drawings shall be due to the Government within twenty (20) working days of the Government's approval of the design intent drawings. Working/construction drawings shall clearly identify 1) Tenant Improvements already in place and 2) the work to be done by the Lessor or others. The Government may also require at the time of submission of working/construction drawings that the Lessor submit a written price proposal along with adequate cost and pricing data for any SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 18 LESSOR GOV'T costs or credits to the Government which are beyond the scope of the original SFO and its attachments. Any work shown on the working/construction drawings which is building shell shall be clearly identified as such. E. REVIEW OF WORKING/CONSTRUCTION DRAWINGS: The Government retains the right to review, and request modifications (if necessary) to, the Lessor's working/construction drawings prior to the Lessor's commencement of interior construction. The Government's review of the working/construction drawings is limited to the working/construction drawings' conformance to the specific requirements of the SFO and to the approved design intent drawings. The Government shall perform all reviews of working/construction drawings within fifteen (15) working days of receipt from the Lessor. If the Government requires modifications to the working/construction drawings, the Government shall notify the Lessor in writing. The Lessor shall have five (5) working days to cure all noted defects before returning the working/construction drawings to the Government for a subsequent five (5) working day review. Upon complete Government review for conformance of the working/construction drawings to the design intent drawings, A NOTICE TO PROCEED SHALL BE TRANSMITTED TO THE LESSOR, and the Lessor shall obtain the necessary permits and shall commence construction of the space. Notwithstanding the Government's review of the working/construction drawings, the Lessor is solely responsible and liable for the technical accuracy of the working/construction drawings in meeting all requirements and provisions of the lease and the Government-approved design intent drawings. F. BIDDING PROCESS At the Government's sole discretion, the Lessor shall: 1. Provide cost and pricing data in conjunction with the tenant alterations as specified by the Government in Form 3517 per the terms and conditions noted therein or, 2. Provide a price based upon the results of a competitive bid proposal process as follows: a. The scope of work includes the lease (including the SFO and all SFO attachments), the construction drawings/documents, and written specifications. In cases of discrepancies, the lease shall govern over any other documents. All differences will be resolved by the Contracting Officer in accordance with the terms and conditions of the lease. b. No building shell items shall be included in the competitive proposal. c. A minimum of three qualified sub-contractors must be invited to participate in the competitive proposal process. Each participant must compete independently in the process. d. Each submitted proposal must be reviewed by the Government. The Government reserves the right to determine if bids meet the scope of work, that the price is reasonable, and that the Offeror is qualified to perform the work. e. The Government may elect to be represented at all negotiation sessions between the Lessor and potential contractors. f. The Lessor must certify to the Government that best efforts have been made to obtain the most competitive prices possible, that the Lessor shall accept responsibility for all prices through direct contracts with all contractors, and that all performance specifications of the lease shall be met. A certification form, provided by the Government, shall accompany the final bid package. g. The Lessor shall complete the competition and the cost proposal process in 15 working days or less from the date of issuance of completed construction documents. The Lessor shall accompany the bids with a recommendation for selection and with a summary in spreadsheet format comparing the bidders' proposals and indicating the exceptions or variations proposed by the bidders. h. Once the Government determines that there is adequate competition, and upon the Government's acceptance of the Lessor's cost proposal based upon that competition (provided the Lessor selects the competition's lowest priced bid of a contractor qualified to perform the subject work), the Contracting Officer shall issue to the Lessor a Notice To Proceed within 10 working days for the subject work, provided the cost is within the Government's budget for subject work. The NTP may be a partial or a complete NTP, and/or in the event the Lessor's cost proposals for the tenant alternation work exceeds the Government's budget, the Government may elect to have the working drawings be value engineered by the Lessor's construction and design team to meet the Government's budget. The cost of these modifications shall be paid by the Government. i. The Lessor shall manage and complete the work within the timeframe/cost requirements of the SFO and final contract. G. CONSTRUCTION OF TENANT IMPROVEMENTS: The Lessor shall construct all Tenant Improvements in accordance with 1) the Government reviewed and approved working/construction drawings and 2) all terms and conditions of the SFO. The Lessor shall complete all Tenant Improvements according to the Government approved project schedule and as described in Section 10.2 and after receiving the notice to proceed from the Government. The Lessor shall furnish a detailed construction schedule (such as Critical Path Method) to the Government within five (5) days of issuance of the notice to proceed. Such schedule shall also indicate the dates available for the Government contractors to install telephone/data lines or equipment. The Government reserves the right to access any space within the building during the conduct of interior construction for the purposes of performing inspections or for installing Government-furnished equipment. The Government shall coordinate with the Lessor the activity of Government contractors in order to minimize conflicts with, and disruption to, other contractors on site. Access shall not be denied to authorized Government officials including, but not limited to, Government contractors, subcontractors, or consultants acting on behalf of the Government with regard to this project. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 19 LESSOR GOV'T H. DELAYS: Delays by the city or county in issuance of a building permit after Lessor has applied for a permit with all due diligence and delays by city or county inspections in completing inspections necessary to issue the Certificate of Occupancy for the building will be considered excusable delays. Owner agrees to provide the Government a copy of the application for the permit. Should either the Government or the Lessor fail to discharge their responsibilities as defined herein within the time allocated under this construction schedule, such shall constitute "delay." Delay caused by either party may be offset by the early completion of that party's other responsibilities within the schedule. The absolute value of the number of days of one party's delay minus the number of days of the remaining party's delay shall equal the total number of days of delay for a given stage of the schedule. Delay shall be attributable to the party having caused the greatest number of days of critical path delay and shall be termed either "Government Delay" or "Lessor Delay" as appropriate. If Government delay occurs, then the rent commencement date shall be the same number of days earlier than the acceptance date as the number of days of delay. Any rental paid by the Government prior to actual occupancy shall be less the cost for services and utilities (Base Cost of Services) of the vacant premises. In any event, the Government will not be required to accept space and commence rent prior to the original date as indicated in the "Occupancy Date" paragraph of the SFO, unless otherwise agreed to by the Government. Each day of Lessor Delay will be subject to the Liquidated Damages clause of this SFO and the "Default in Delivery" paragraph of the GSA Form 3517. In all cases of delay, the Lessor is required to promptly notify the Government of the delay and to provide an assessment of the impact of each delay on the overall project schedule/budget. Along with that notification, the Lessor is required to provide the Government with a recovery plan outlining options for minimizing the impact of the delay. I. ACCEPTANCE OF SPACE: Thirty (30) days prior to the completion of interior construction, the Lessor shall issue written notice to the Government to inspect the space. The Government shall have five (5) working days to inspect and to either accept or reject the subject space. Substantial completion is defined as space which is fully functional with stable power (including standby) and HVAC, suitable for the Government to begin installation, testing and start up of critical voice/data network and security systems. 1. Space deemed Substantially Complete by the Government will be accepted by the Government subject to the completion of minor punch list items. Space which is not deemed substantially complete by the Government will not be accepted by the Government. The phrase "Substantially Complete" shall mean that the tenant improvements, the common and other areas of the building, and all other things necessary for the Government's access to the premises and occupancy, possession, use and enjoyment thereof, as provided in this lease shall have been completed or obtained, including all local Government reviews and approvals, excepting only such minor matters as do not interfere with or materially diminish such access, occupancy, possession, use, or enjoyment. Should the Government reject the Lessor's space as not substantially complete as defined herein, the Lessor shall immediately undertake remedial action, and when ready shall issue a subsequent notice to inspect to the Government. 2. Before the Government will accept space, the Lessor must provide to the Contracting Officer evidence of the issuance of a building permit incorporating the construction of required improvements. J. RENT COMMENCEMENT: The rent start date for Phase I shall be ten (10) working days after the Government accepts the space from the Lessor. The space must be in a condition that a Certificate of Occupancy can be issued subject to the installation of furniture. No rent will be paid for Phase I space after the Government has vacated the space to move into renovated space. The rent commencement date for Phase II and III shall be ten (10) working days after the date of space acceptance by the Government. However, if Government delay occurs, then the rent commencement date shall be the same number of days earlier than the acceptance date as the number of days of delay. Any rental paid by the Government prior to actual occupancy shall be less than the cost for services and utilities of the vacant premises. Each day of Lessor Delay will increase the amount of free rent after occupancy by the Government on a day for day basis as liquidated damages per the "Default in Delivery" paragraph of the Form 3517. K. ESTABLISHMENT OF LEASE TERM: The Government shall issue GSA Form 276, Supplemental Lease Agreement, to establish the lease term after the acceptance of all space. The lease commencement date shall not be prior to the rent commencement date. The commencement date for the lease term shall be the weighted average composite of all incremental dates of phased acceptance of Phases II and III by the Government. 3.17 PROGRESS REPORTS (SEP 2000)(TSA SEP 2002) After start of construction, the successful Offeror shall submit to the Contracting Officer, written weekly progress reports. Each report shall include information as to 1) percentage of the work completed by phase and trade; 2) a statement as to expected completion and occupancy date; 3) changes introduced into the work; 4) analysis of changes to identify impact on cost/schedule and provision of a recovery plan and 5) general remarks on such items as material shortages, strikes, weather, etc. Such meetings shall be held at a location to be designated by the Government. 3.18 CONSTRUCTION INSPECTIONS (TSA SEP 2002) A. Construction inspections will be made periodically by the Contracting Officer and/or designated technical representatives to review compliance with the SFO requirements and the final working drawings. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 20 LESSOR GOV'T B. Periodic reviews, tests, and inspections by the Government are not to be interpreted as resulting in any approval of the Lessor's apparent progress toward meeting the Government's objectives but are intended to discover any information which the Contracting Officer may be able to call to the Lessor's attention to prevent costly misdirection of effort. The Lessor shall remain completely responsible for constructing, operating, and maintaining the building in full accordance with the requirements of this SFO. 3.19 REQUIRED PROOF OF AUTHORITY (NCR VARIATION (AUG 2002)) As a condition of lease award, the Government will require one of the following forms of proof of signing authority before the Government executes the lease: A. General Partnership -- Copy of Partnership Agreement B. Limited Partnership -- Copy of Partnership Agreement or copy of current Certificate of Limited Partnership C. Corporation -- Corporate Resolution certified by the Secretary of the Corporation or an Informal Action signed by the Board of Directors. The Resolution or Informal Action must approve the lease and indicate who has authority to sign for the corporation. D. Joint Venture -- Copy of Joint Venture Agreement E. Company -- Copy of formation document indicating who can bind the company 3.20 BUSINESS IMPROVEMENT DISTRICTS (B.I.D.) (NCR VARIATION (AUG 2002)) (IF APPLICABLE) A. For purposes of this solicitation: 1. "BID" means a Business Improvement District, Special Improvement District, or other specifically defined geographical area within a taxing jurisdiction, organized and registered pursuant to enabling legislation promulgated by a State or local government, within which properties are assessed, charged or taxed solely by virtue of their location within the given area and in support of services or projects located solely within the area. 2. "Building" means the building(s) within which space is provided to the Government under the Lease, together with the land upon which the building is located. 3. "Lessor's BID Assessment" means charges, assessments or taxes levied against Lessor and/or a Building, expressed as a fixed sum per Building, solely by virtue of the Building being located within a BID. B. The Government agrees, when applicable, to make a single annual lump sum payment to the Lessor for its share of increases in Lessor's BID Assessment over the base year. For purposes of this clause, the base year amount of Lessor's BID Assessment will be determined as the amount in the calendar year in which lease commences. C. The Government's share of increases in Lessor's BID Assessment shall be based upon the ratio of the ANSI/BOMA Office Area square feet occupied by the Government to the total ANSI/BOMA Office Area square feet of office and retail space in the Building (percentage of occupancy). Square footage related to parking will not be included in determining the Government's percentage of occupancy. At the Contracting Officer's sole discretion, the Government may pay its share of increases in Lessor's BID Assessment based upon the ratio of the assessed value of the space leased by the Government to the total assessed value of the Building. For purposes of this clause, the Government's percentage of occupancy is stated in the clause of this lease entitled "Tax Adjustment". D. The Lessor shall furnish the Government with copies of all bills reflecting Lessor's BID Assessment and evidence of payment of such Lessor's BID Assessment by the Lessor. Evidence of payment must be submitted to the Government within 60 calendar days of the date that payment is due. Failure by Lessor to submit evidence of payment as provided in this paragraph shall act as a waiver of Lessor's right to receive payment under this clause. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 21 LESSOR GOV'T 4.0 GENERAL ARCHITECTURE 4.1 QUALITY AND APPEARANCE OF BUILDING EXTERIOR (SEP 2000) The space offered shall be located in a modern office building with a facade of stone, marble, brick, stainless steel, aluminum, or other permanent materials in good condition acceptable to the Contracting Officer. If not in a new office building, the space offered shall be in a building that has undergone, or will be complete by Phase 2 and Phase 3 occupancy, first class restoration or adaptive reuse for office space with modern conveniences. If the restoration work is underway or proposed, then architectural plans acceptable to the Contracting Officer shall be submitted as part of the offer. The building shall be compatible with its surroundings. Overall, the building shall project a professional and aesthetically-pleasing appearance including an attractive front and entranceway. The building shall have energy-efficient windows or glass areas consistent with the structural integrity of the building, unless not appropriate for intended use. The facade, downspouts, roof trim, and window casing shall be clean and in good condition. A. Day lighting Requirements 1. The building will have appropriate fenestration and lighting controls to modulate daylight admittance and to reduce electric lighting, while meeting the occupants' lighting quality and quantity requirements. 4.2 CONSTRUCTION WASTE MANAGEMENT (SEP 2000) A. Recycling construction waste means providing all services necessary to furnish construction materials or wastes to organizations which will employ these materials or wastes in the production of new materials. Recycling includes required labor and equipment necessary to separate individual materials from the assemblies of which they form a part. B. The Offeror shall submit to the Government a proposal to dispose of or recycle construction waste. Where the small quantity of material, the extraordinarily complex nature of the waste disposal method, or prohibitive expense for recycling would represent a genuine hardship, the Government may permit alternative means of disposal. This requirement shall also apply to subsequent alterations under the lease. C. The Lessor shall recycle the following items during both the demolition and construction phases of the project, subject to economic evaluation and feasibility: 1. ceiling grid and tile; 2. light fixtures, including proper disposal of any transformers, ballasts, and fluorescent light bulbs; 3. duct work and HVAC equipment; 4. wiring and electrical equipment; 5. aluminum and/or steel doors and frames; 6. hardware; 7. drywall; 8. steel studs; 9. carpet, carpet backing, and carpet padding; 10. wood; 11. insulation; 12. cardboard packaging; 13. pallets; 14. windows and glazing materials; 15. all miscellaneous metals (as in steel support frames for filing equipment); and 16. all other finish and construction materials. D. If any waste materials encountered during the demolition or construction phase are found to contain lead, asbestos, polychlorinated biphenyls (PCB's) (such as fluorescent lamp ballasts), or other harmful substances, they shall be handled and removed in accordance with Federal and state laws and requirements concerning hazardous waste. E. In addition to providing "one-time" removal and recycling of large-scale demolition items such as carpeting or drywall, the Lessor shall provide continuous facilities for the recycling of incidental construction waste during the initial construction. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 22 LESSOR GOV'T F. Construction materials recycling records shall be maintained and shall be accessible to the Contracting Officer. Records shall include materials recycled or landfilled, quantity, date and identification of hazardous wastes. 4.3 EXISTING FIT-OUT, SALVAGED, OR RE-USED BUILDING MATERIAL (SEP 2000) (TSA SEP 2002) A. Items and materials existing in the offered space, or to be removed from the offered space during the demolition phase, are eligible for reuse in the construction phase of the project. The reuse of items and materials is preferable to recycling them; however, items considered for reuse shall be in refurbishable condition and shall meet the quality standards set forth by the Government in this SFO. In the absence of definitive quality standards, the Lessor shall ensure that the quality of the item(s) in question shall meet or exceed accepted industry or trade standards for first quality commercial grade applications. B. The Lessor shall submit a reuse plan to the Contracting Officer. The Government will not pay for existing fixtures and other Tenant Improvements accepted in place. 4.4 INDOOR AIR QUALITY DURING CONSTRUCTION (SEP 2000)(TSA SEP 2002) A. The Lessor shall provide to the Government material safety data sheets (MSDS) upon request for the following products prior to their installation or use; adhesives, caulking, sealants, insulating materials, fireproofing or fire stopping materials, paints, carpets, floor and wall patching or levelling materials, lubricants, clear finish for wood surfaces, and janitorial cleaning products. B. The Contracting Officer may eliminate from consideration products with significant quantities of toxic, flammable, corrosive, or carcinogenic material and products with potential for harmful chemical emissions. Materials used often or in large quantities will receive the greatest amount of review. C. All MSDS shall comply with Occupational Safety and Health Administration (OSHA) requirements. The Lessor and its agents shall comply with all recommended measures in the MSDS to protect the health and safety of personnel. D. To the greatest extent possible, the Lessor shall sequence the installation of finish materials so that materials that are high emitters of volatile organic compounds (VOC) are installed and allowed to cure before installing interior finish materials, especially soft materials that are woven, fibrous, or porous in nature, that may absorb contaminants and release them over time. E. Where demolition or construction work occurs adjacent to occupied space, the Lessor shall erect appropriate barriers (noise, dust, odor, etc.) and take necessary steps to minimize interference with the occupants. This includes maintaining acceptable temperature, humidity, and ventilation in the occupied areas during window removal, window replacement, or similar types of work. If the Lessor uses any base building or tenant improvement HVAC during construction, those systems shall be cleaned and restored to like-new condition prior to occupancy. F. A final flush-out period of 48 hours to 72 hours shall be provided before occupancy. The Lessor shall ventilate with 100 percent outside air at the recommended air change rate during installation of materials and finishes. Refer to the latest edition of American Society of Heating, Refrigerating, and Air Conditioning Engineers, Inc. ANSI/(ASHRAE) Standard 62, Ventilation for Acceptable Indoor Air Quality. If outside air would cause unacceptable inside temperature levels, humidity levels, and/or air quality, an alternate ventilation plan may be submitted to the Contracting Officer for approval. 4.5 WORK PERFORMANCE (SEP 2000) All work in performance of this lease shall be done by skilled workers or mechanics and shall be acceptable to the Contracting Officer. The Contracting Officer retains the right to reject the Lessor's workers 1) if such are either unlicensed, unskilled, or otherwise incompetent or 2) if such have demonstrated a history of either untimely or otherwise unacceptable performance in connection with work carried out in conjunction with either this contract or other Government or private contracts. 4.6 BUILDING SYSTEMS (JAN 1997) Whenever requested, the Lessor shall furnish at no cost to the Government a report by a registered professional engineer(s) showing that the building and its systems as designed and constructed will satisfy the requirements of this lease. 4.7 SPACE EFFICIENCY (SEP 2000) The design of the space offered shall be conducive to efficient layout and good utilization as determined by the Government at its sole discretion. 4.8 FLOOR PLANS AFTER OCCUPANCY (TSA SEP 2002) Within twenty (20) days after occupancy, as-built mylar reproducible full floor plans, architectural, mechanical, electrical, plumbing and structural scaled at 1/8" = 1'-0", showing the space under lease, as well as corridors, stairways, and core areas, and AutoCAD files with compliance to Section 4.9 shall be provided to the Contracting Officer. 4.9 CAD AS-BUILT FLOOR PLANS (SEP 2000) (NCR AAP VARIATION (AUG 2002)) A. Computer-Aided Design (CAD) files of as-built floor plans showing the space under lease, as well as corridors, stairways, and core areas, shall be provided to the Contracting Officer at Lessor's cost and the Government shall be entitled to a thirty (30) day inspection period within which to evaluate the quality of the plans. In the event it is determined within the thirty (30) day inspection period that the plans are defective, the Lessor shall provide another set of plans to replace the defective set. Any additional plans will be at the cost of the Government. The plans shall have been generated by a CAD program which is SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 23 LESSOR GOV'T compatible with the latest release of AutoCAD. The required file extension is .DWG. Clean and purged files shall be submitted on 3-1/2-inch double-sided, high-density diskettes on CD-ROM. They shall be labeled with building name, address, list of drawing(s), date of the drawings(s), and Lessor's architect and phone number and conform to "PBS Standards for CAD Deliverables." (OCT 2001) which are available by request or on the web at http://www.gsa.gov/attachments/GSA POLICIES/extpol/CADdeliverables 6.pdf. The Lessor's operator shall demonstrate the submission on GSA equipment, if requested by the Contracting Officer. B. The Lessor shall be responsible to maintain CAD as-built floor plans at the tenant's expense with each improvement project, which occurs in the Government's space during occupancy. At the time of each update, the Lessor will be responsible to validate all measurements and construction features of the space. In the event that the tenant has made build out improvements to the space without the Lessor's knowledge or consent, the Government will be responsible for the fair and reasonable design fees to update the as-built drawings. No CAD drawings, specifications or other documentation shall be released to third parties without the written permission of TSA. All as-builts are security sensitive documents and will be secured and destroyed in an approved manner. Detailed security diagrams will be counted for by individual copy, stored in a locked container, and turned over to the TSA security office when no longer required. 4.10 ANSI/BOMA CALCULATIONS AND PLANS (TSA SEP 2002) Offeror shall submit ANSI/BOMA Office Building Assignment Drawings that conform to "ANSI/BOMA Standard Method of Floor Measurement for Office Buildings" outlining Offeror's proposed TSA delineated area of office area, storage area and building common occupancy in offered buildings: A. ANSI/BOMA Office Building Assignment Drawings shall be single poly-line, color-coded or graphical delineated per each ANSI/BOMA's Defined Summary of Areas that outlines the area of space as defined per "ANSI/BOMA Standard Method of Floor Measurement for Office Buildings" per floor. The Definition of Areas that need to be graphically defined are Major Vertical Penetrations, Useable Areas (Office Area, Store Area, and Building Common Area) and Floor Common Areas. Any floor useable areas, building common or floor common that will not be allowed or considered for TSA's use shall also be identified and delineated. This refers to space that will be occupied by another tenant or the Lessor's Building Management. These spaces shall be identified by name of tenant; duration of occupancy in the space, and remaining proposed occupancy of the space. B. Each ANSI/BOMA's Defined Summary of Area that is outlined with a single poly-line shall be color-coded or graphical delineated per each Building Definitions of Areas, label all Building Definitions of Areas by name, and actual square footage per Building Definitions of space. Lettering shall be not smaller than 12 inches in height for a 1/8" plan (1/8" text height after plotting to scale). C. Each floor shall have a color-coded or graphical delineated legend of all Building Definition of Areas per floor. The legend shall list the ANSI/BOMA's Defined Summary of Areas indicating the square footage by each delineated and defined area, and the percentage of the total defined area per the buildings total offer. D. Offeror shall submit three (3) color or black-line sets of 1/8"=1'-0" proposed ANSI/BOMA Office Building Assignment Drawings to TSA and three (3) sets on an 11" x 17" color or black-line format. The size of the ANSI/BOMA Office Building Assignment Drawings sheet size should not exceed 30" x 42". If the building floor plate does not fit the sheet format, then one sheet shall be submitted with the 1/8"=1'-0" scale plans and one plan showing the entire floor plate set at a designated scale. E. Title blocks per each plan shall indicate building name, building address, floor, scale of drawing, a bar scale, date issued, name of owner, address of owner, name and address of company generating ANSI/BOMA Assignment Drawings, and sheet numbers. F. An Executive Summary spreadsheet on 11" x 17' format showing the ANSI/BOMA Standard Method of Floor Measurement for Office Buildings Assignment Drawings used on each floor. The Global Summary of Areas shall include the following columns: Floor, Gross Building Area, Gross Measured Area, Major Vertical Penetrations, Floor BOMA rentable Area, Space ID, Useable Areas Floor Useable Area, Floor Common Area, Floor R/U Area, Floor R/U Ratio, Basic BOMA rentable Areas, Building BOMA rentable Area, Building R/U Ratio, BOMA rentable Area Total BOMA rentable Area. Refer to ANSI/BOMA Z65.1-1996 ANSI/BOMA Standard Method of Floor Measurement for Office Buildings Global Summary of Areas for example of format and information required. G. All formatting shall comply with other SFO requirements for AutoCAD generated plans. H. Based on the Offeror's submitted ANSI/BOMA Office Building Assignment Drawings; If the Government during the process of evaluation of an offer, lease negotiations, or occupancy discovers a site measurement or calculation with a difference greater than 2% of what the Offeror submitted, the Offeror shall pay for an independent, unbiased professional third party to resolve the issue at no cost to the Government and adjust any offer or lease to reflect the agreed upon results measured and calculated results. 4.11 FLOORS AND FLOOR LOAD (SEP 2000)(TSA SEP 2002) All adjoining floor areas shall be 1) of a common level not varying more than 1/4 inch over a 10-foot, 0-inch horizontal run, in accordance with the American Concrete Institute standards, 2) non-slip, and 3) acceptable to the Contracting Officer. Underfloor surfaces shall be smooth and level. A. Acceptable Structural Systems 1. Open web steel joists are not acceptable as floor framing. B. Structural Bay Sizes 1. Structural bay range of 18' x 18' to 40' x 40' module. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- LESSOR GOV'T 24 C. Structural Design Criteria 1. Live loading to meet the more stringent of the following design criteria, applicable building codes or ANSI/ASCE 7-95: a. Roof: 30 psf (minimum) Roof must have capability to support the following: i. Satellite dish. ii. Antennas. (Provide clear and unobstructed radio signal pathways) iii. Generator iv. Roof slab: must accommodate potential roof-mounted equipment and window washing equipment-mounting points. b. Penthouse: 150 psf c. Office floor slab: 80 psf + 20 psf partition load with a minimum concentrated load of 2,000 lbs. d. Mechanical floor slab: 125 psf; loading dock floor slab: 400 psf. e. High density file areas: 150 psf. (To be paid out of tenant improvement allowance). f. Assume high-density file areas will comprise 4% of floor area. g. Written certification by registered professional engineer may be required. Calculations and structural drawings may also be required. 2. Floor framing systems. A. IN ACCORDANCE WITH ACI 117-90, FLOOR FINISH TOLERANCES (AS MEASURED WITH ASTM E 1155-87, STANDARD TEST METHOD FOR DETERMINING FLOOR FLATNESS AND LEVELNESS USING THE F NUMBER SYSTEM SHALL ACHIEVE A TEST AREA TOLERANCE OF FF=20 AND FL=15 WITH A "MINIMUM LOCAL F NUMBER" OF FF-15 AND FL=12. OFFERORS WHO ARE UNABLE TO MEET THE FLOOR FINISH TOLERANCES DESCRIBED IN ACI 117-90 AND ASTM E 1155-87 SHALL PROVIDE INFORMATION WITH REGARD TO HOW WELL THEIR FLOOR FINISH TOLERANCES MEET THESE STANDARDS. OFFICE SPACE MUST HAVE FLOOR TOLERANCES ACCEPTABLE TO THE CONTRACTING OFFICER. 4.12 EXITS AND ACCESS (SEP 1991) A. Vestibules shall be provided at public entrances and exits wherever weather conditions and heat loss are important factors for consideration. In the event of negative air pressure conditions, provisions shall be made for equalizing air pressure. B. Accessibility Requirements for Buildings and Facilities 1. A power-operated door shall be provided at each entrance to public and common use toilet rooms. 2. Stairs: all internal stairs used for existing and connecting/communicating shall meet the requirements of ANSI A 117.1 Section 504. 3. Areas of rescue assistance: all buildings shall contain areas of rescue assistance that shall comply with the technical and scope requirements of ADA. 4. Maximum travel distance to closest toilet room from occupied space shall not exceed 300 walkable feet. 4.13 WINDOWS (SEP 2000) (NCR VARIATION (AUG 2002)) (TSA SEP 2002) A. Office space must have windows acceptable to the Contracting Officer in each exterior bay. All windows shall be weather-tight. Windows shall have a fixed sash. B. Operable windows that open shall be equipped with locks. Off-street, ground level windows and those accessible from fire escapes, adjacent roofs, and other structures that can be opened shall be fitted with a sturdy locking device. 4.14 ACCESSIBILITY (SEP 2000) The building, leased space, and areas serving the leased space shall be accessible to persons with disabilities in accordance with both the ADAAG (36 CFR Part 1191, App. A) and the UFAS (41 CFR Part 101-19.6, App. A). Where standards conflict, the more stringent shall apply. 4.15 LANDSCAPING (SEP 2000) (TSA SEP 2002) A. Where conditions permit, the site shall be landscaped for low maintenance and water conservation with plants that are either native or well-adapted to local growing conditions. B. Landscape management practices shall prevent pollution by: 1. employing practices which avoid or minimize the need for fertilizers and pesticides; 2. prohibiting the use of the 2, 4-Dichlorophenoxyacelic Acid (2,4-D) herbicide and organophosphates; and 3. composting/recycling all yard waste. C. The Lessor shall use landscaping products with recycled content as required by Environmental Protection Agency's (EPA's) Comprehensive Procurement Guidelines (CPG) for landscaping products. Refer to EPA's CPG web site, www.epa.gov/cpg. D. The Contracting Officer shall approve the landscaping to be provided. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 25 LESSOR GOV'T 5.0 ARCHITECTURAL FINISHES 5.1 RECYCLED CONTENT PRODUCTS (COMPREHENSIVE PROCUREMENT GUIDELINES)(SEP 2000) A. The Lessor shall comply to the extent feasible with the Resource Conservation and Recovery Act (RCRA), Section 6002, 1976. The Lessor shall use recycled content products as indicated in this SFO and as designated by the U.S. Environmental Protection Agency (EPA) in the Comprehensive Procurement Guidelines (CPG), 40 CFR Part 247, and its accompanying Recovered Materials Advisory Notice (RMAN). The CPG lists the designated recycled content products. EPA also provides recommended levels of recycled content for these products. The list of designated products, EPA's recommendations, and lists of manufacturers and supplier of the products can be found at the www.epa.gov/cpg/products.htm web site. B. The Offeror, if unable to comply with both the CPG and RMAN lists, shall submit a request for waiver for each material to the Contracting Officer with Initial offers. The request for waiver shall be based on the following criteria. 1. the cost of the recommended product is unreasonable; 2. inadequate competition exists; 3. items are not available within a reasonable period of time; and 4. items do not meet the SFO's performance standard. 5.2 ENVIRONMENTALLY PREFERABLE BUILDING PRODUCTS AND MATERIAL (SEP 2000) A. The Lessor shall use environmentally preferable products and materials where economically feasible. Environmentally preferable products have a lesser or reduced effect on human health and the environment when compared to other products and services that serve the same purpose. B. Refer to EPA's environmentally preferable products web site, www.epa.gov/opptntr/epp. In general, environmentally preferable products and materials do one or more of the following: 1. contain recycled material, are biobased, or have other positive environmental attributes; 2. minimize the consumption of resources, energy, or water; 3. prevent the creation of solid waste, air pollution, or water pollution; and 4. promote the use of non-toxic substances and avoid toxic materials or processes. 5.3 LAYOUT, FINISHES, AND COLORBOARDS (SEP 2000)(TSA SEP 2002) A. All building finishes shall be for first class, modern space. B. The Lessor shall consult with the Contracting Officer prior to developing a minimum of three color boards to include coordinated samples of finishes for all interior elements such as paint, wall coverings, base covering, carpet, window treatments, laminates, and vinyl flooring. All samples provided shall be in compliance with specifications set forth elsewhere in this SFO. Required color boards shall be provided within fifteen working days of the request for such by the Contracting Officer. The color boards shall be approved by the Contracting Officer prior to installation. Upon Government review a selection of ONE color board shall be made within ten working days, and unless otherwise specified prior to lease award, the Offeror may assume that ONE color board will be accepted for all finishes in the entire space under lease. No substitutes may be made by the Lessor after the color board is selected. C. The Lessor will provide the Government with existing or proposed base building finishes and specification so the Government can coordinate tenant space design. Offeror shall provide an architectural rendering or digital photographs of the proposed or existing spaces as follows: 1. Building Exterior. 2. Building Main Lobby. 3. Typical Elevator Lobby. 4. Typical Restroom. 5. Public Corridors. 5.4 WOOD PRODUCTS (SEP 2000) A. For all new installations of wood products, the Lessor is encouraged to use independently certified forest products. For information on certification and certified wood products, refer to the Forest Stewardship Council United States web site (www.fscus.org/) or the Certified Forest Products Council web site (www.certifiedwood.org/). B. New installations of wood products used under this contract shall not contain wood from endangered wood species, as listed by the Convention on International Trade in Endangered Species. The list of species can be found at the following web site: www.certifiedwood.org/Resources/CITES/CITESContent.html. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 26 LESSOR GOV'T C. Particle board, strawboard, and plywood materials shall comply with Department of Housing and Urban Development (HUD) standards for formaldehyde emission controls. Plywood materials shall not emit formaldehyde in excess of 0.2 parts per million (ppm), and particleboard materials shall not emit formaldehyde in excess of 0.3 ppm. 5.5 ADHESIVES AND SEALANTS (SEP 2000) All adhesives employed on this project (including, but not limited to, adhesives for carpet, carpet tile, plastic laminate, wall coverings, adhesives for wood, or sealants) shall be those with the lowest possible VOC content below 20 grams per liter and which meet the requirements of the manufacturer of the products adhered or involved. The Lessor shall use adhesives and sealants with no formaldehyde or heavy metals. 5.6 INSULATION: THERMAL, ACOUSTIC, AND HVAC (SEP 2000) A. All insulation products shall contain recovered materials as required by EPA's CPG and related recycled content recommendations. B. No insulation installed with this project shall be material manufactured using chlorofluorocarbons (CFC's), nor shall CFC's be used in the installation of the product. C. All insulation containing fibrous materials exposed to air flow shall be rated for that exposure or shall be encapsulated. D. Insulating properties for all materials shall meet or exceed applicable industry standards. Polystyrene products shall meet American Society for Testing and Materials (ASTM) C578-91. 5.7 CEILINGS (SEP 2000)(TSA SEP 2002) A. Floor to Floor Heights 1. General office areas, 8' (in existing construction), bulkheads that reduce ceiling height below 8' are not acceptable; desired use of indirect light fixture. 2. Ceiling plenum clear space shall be sufficient for routing of duct work, sprinkler lines, lights, conduit, etc. 3. Main building entrance floor ceiling height minimum of 9'6". B. Prior to closing the ceiling, the Lessor shall coordinate with the Government for the installation of any items above the ceiling. C. Should the ceiling be installed in the Government-demised area prior to the Tenant Improvements, then the Lessor shall be responsible for all costs in regard to the disassembly, storage during alterations, and subsequent re-assembly of any of the ceiling components which may be required to complete the Tenant Improvements. The Lessor shall also bear the risk for any damage to the ceiling or any components thereof during the alterations. D. Ceilings shall be a flat plane in each room and shall be suspended with ample light fixtures and finished as follows unless an alternate equivalent is pre-approved by the Contracting Officer: 1. Restrooms. Plaster or pointed and taped gypsum board. 2. Offices and Conference Rooms. Mineral and acoustical tile or lay in panels with textured or patterned surface and regular edges or an equivalent pre-approved by the Contracting Officer. Tiles or panels shall contain recycled content. 3. Corridors and Eating/Galley Areas. Plaster or pointed and taped gypsum board or mineral acoustical tile. E. All newly installed building tiles must contain recycled materials. 5.8 WALL COVERINGS (SEP 2000)(TSA SEP 2002) A. BUILDING SHELL: 1. Physical Requirements. a. Prior to occupancy, all restrooms within the building common areas of the Government-occupied floors shall have 1) ceramic tile in splash areas and 2) vinyl wall covering not less than 13 ounces per square yard as specified in Federal Specification (FS) CCC-W-408C on remaining wall areas or an equivalent pre-approved by the Contracting Officer. b. Prior to occupancy, all elevator areas which access the Government-demised area and hallways accessing the Government-demised area shall be covered with vinyl wall coverings not less than 22 ounces per square yard as specified in FS CCC-W-408C or an equivalent pre-approved by the Contracting Officer. 2. Replacement. All wall covering shall be maintained in "like new" condition for the life of the lease. Wall covering shall be replaced or repaired at the Lessor's expense any time during the Government's occupancy if it is torn, peeling or permanently stained; the ceramic tile in the restrooms shall be replaced or repaired if it is loose, chipped, broken, or permanently discolored. All repair and replacement work shall be done after working hours. B. TENANT IMPROVEMENT INFORMATION: 1. In the event the Government chooses to install wall covering as part of the Tenant Improvement Allowance, the minimum standard is established as vinyl or polyolefin commercial wall covering weighting not less than 13 ounces per square yard as specified in FS CCC-W-408C or equivalent. The finish shall be pre-approved by the Contracting Officer. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 27 LESSOR GOV'T 2. All wall covering in the Government-demised area shall be maintained in "like new" condition for the life of the lease. Repair or replacement of wall covering shall be at the Lessor's expense and shall include the moving and returning of furnishings, (except where wall covering has been damaged due to the negligence of the Government), any time during the occupancy by the Government if it is lorn, peeling, or permanently stained. All repair and replacement work shall be done after working hours. C. SAMPLES: 1. The Lessor shall provide at least three samples of each type of wall covering to be installed for selection by the Contracting Officer. 5.9 PAINTING (SEP 2000) A. BUILDING SHELL: 1. The Lessor shall bear the expense for all painting associated with the building shell. These areas shall include all common areas. Exterior perimeter walls and interior core walls within the Government-demised area shall be spackled and prime painted with low VOC primer. If any building shell areas are already painted prior to Tenant Improvements, then the Lessor shall repaint, at the Lessor's expense, as necessary during Tenant Improvements. 2. Public areas shall be painted at least every 3 years. B. TENANT IMPROVEMENT INFORMATION: 1. Prior to occupancy, all surfaces within the Government-demised area which are designated by the Government for painting shall be newly finished in colors acceptable to the Government. 2. Where feasible, reprocessed or consolidated latex paint with zero or low VOC shall be used in accordance with EPA's CPG on all painted surfaces. The type of paint shall be acceptable to the Contracting Officer. The Lessor shall follow the manufacturer's recommendations for the application and maintenance of all paint products. 3. Painted surfaces shall be repainted at the Lessor's expense, including the moving and returning of furnishings, any time during the occupancy by the Government if it is peeling or permanently stained, except where damaged due to the negligence of the Government. All work shall be done after normal working hours as defined elsewhere in this SFO. 4. If the Government desires cyclical repainting during the term of the lease, the cost will be borne by the Tenant Agency. 5.10 DOORS: EXTERIOR (SEP 2000) A. BUILDING SHELL: 1. Exterior doors shall be provided at the Lessor's expense unless explicitly requested by the Government in addition to those provided by the Lessor. Exterior doors shall be weather-tight and shall open outward. Hinges, pivots, and pins shall be installed in a manner which prevents removal when the door is closed and locked. 2. These doors shall have a minimum clear opening of 32" wide x 80" high (per leaf). Doors shall be heavy-duty, flush, 1) hollow steel construction, 2) solid-core wood, or 3) insulated tempered glass. As a minimum requirement, hollow steel doors shall be fully insulated, flush, #16-gauge hollow steel. Solid-core wood doors and hollow steel doors shall be at least 1-3/4 inches thick. Door assemblies shall be of durable finish and shall have an aesthetically-pleasing appearance acceptable to the Contracting Officer. The opening dimensions and operations shall conform to the governing building, fire safety, accessibility for the disabled, and energy codes and/or requirements. B. Building Entrance and Exterior Doors 1. Weather tight vestibule or revolving door, equalized air pressure. 2. Commercial grade door and hardware, glazing clear safety glass that meets security requirements. If building entrance doors are integral to the design of the wall system, they shall be of equivalent performance, materials and aesthetics. 3. Weathertight, equipped with automatic door closures, minimum 3' wide by 7' high, meet accessibility requirements. 4. Hinges, pivots and pins installed to prevent removal when doors are closed and locked. 5. Service doors steel, weathertight, equipped with automatic door closures, minimum 3' wide by 7' high, wide peripheral peephole, meet accessibility requirements. 5.11 DOORS: SUITE ENTRY (SEP 2000) A. TENANT IMPROVEMENT INFORMATION: Suite entry doors shall be provided as part of the Tenant Improvements at the Government's expense and shall have a minimum clear opening of 32" wide by 84" high (per leaf). Doors shall meet the requirements of being a flush, solid-core, 1-3/4-inch thick, wood door with a natural wood veneer face or an equivalent pre-approved by the Contracting Officer. Hollow core wood doors are not acceptable. They shall be operable by a single effort and shall be in accordance with National Building Code requirements. Doors shall be installed in a metal frame assembly, finished with a semi-gloss oil based paint finish. 5.12 DOORS: INTERIOR (SEP 2000) A. TENANT IMPROVEMENT INFORMATION: Doors within the Government-demised area shall be provided as part of the Tenant Improvements at the Government's expense and shall have a minimum clear opening of 32" wide by 84" high. Doors shall meet the requirements of being a flush, solid-core, wood door with a natural wood veneer face or an equivalent pre-approved by the Contracting Officer. Hollow core wood doors are SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 28 LESSOR GOV'T not acceptable. They shall be operable with a single effort and shall be in accordance with National Building Code requirements. Doors shall be installed in a metal frame assembly, primed and finished with a low VOC semi-gloss oil based paint with no formaldehyde. 5.13 DOORS: HARDWARE (SEP 2000) A. BUILDING SHELL: Doors shalt have door handles or door pulls with heavy-weight hinges. All doors shall have corresponding door stops (wall- or floor-mounted) and silencers. All public use doors and toilet room doors shall be equipped with kick plates. Exterior doors and all common area doors shall have automatic door closers. All building exterior doors shall have locking devices installed to reasonably deter unauthorized entry. Properly rated and labeled fire door assemblies shall be installed on all fire egress doors. B. TENANT IMPROVEMENT INFORMATION: Doors shall have door handles or door pulls with heavy-weight hinges. All doors shall have corresponding door stops (wall- or floor-mounted) and silencers. All door entrances leading into the Government-demised area from public corridors and exterior doors shall have automatic door closers. Doors designated by the Government shall be equipped with 6pin tumbler cylinder locks, and strike plates. All locks shall be master keyed. The Government shall be furnished with at least two master keys for each lock. 5.14 DOORS: IDENTIFICATION (SEP 2000) A. BUILDING SHELL: All signage required in common area unrelated to tenant identification shall be provided and installed at the Lessor's expense. B. TENANT IMPROVEMENT INFORMATION: Door identification shall be installed in approved locations adjacent to office entrances as part of the Tenant Improvement Allowance. The form of door identification shall be approved by the Contracting Officer. C. All signage shall meet ADAAG and UFAS requirements. 5.15 PARTITIONS: GENERAL (SEP 2000) A. BUILDING SHELL: Partitions in public areas shall be marble, granite, hardwood, sheetrock covered with durable vinyl wall covering, or an equivalent pre-approved by the Contracting Officer. 5.16 PARTITIONS: PERMANENT (SEP 2000) A. BUILDING SHELL: Permanent partitions shall extend from the structural floor slab to the structural ceiling slab. They shall be provided by the Lessor at the Lessor's expense as necessary to surround the Government-demised area, stairs, corridors, elevator shafts, toilet rooms, all columns, and janitor closets. They shall have a flame spread rating of 25 or less and a smoke development rating of 50 or less (ASTM E-84). Stairs, elevators, and other floor openings shall be enclosed by partitions and shall have the fire resistance required by National Fire Protection Association (NFPA) Standard 101, Life Safety Code. 5.17 PARTITIONS: SUBDIVIDING (SEP 2000) A. BUILDING SHELL: Any demolition of existing improvements which is necessary to satisfy the government's layout shall be done at the Lessor's expense. B. TENANT IMPROVEMENT INFORMATION: 1. Office subdividing partitions shall comply with applicable building codes and local requirements and shall be provided at the expense of the Government. Partitioning shall extend from the finished floor to the finished ceiling and shall be designed to provide a sound transmission class (STC) of 37. Partitioning shall be installed by the Lessor at locations to be determined by the Government drawings. They shall have a flame spread rating of 25 or less and a smoke development rating of 50 or less (ASTM E-84). 2. HVAC shall be rebalanced. Sprinkler heads, building speaker system, fire alarms and lighting shall be repositioned, as appropriate, after installation of partitions to comply with national, state and local codes. 3. Partitioning requirements may be met with existing partitions if they meet the Government's standards and layout requirements. 5.18 FLOOR COVERING AND PERIMETERS (SEP 2000) (TSA SEP 2002) A. BUILDING SHELL: 1. Exposed interior floors in primary entrances and lobbies shall be marble, granite, terrazzo, or an equivalent pre-approved by the Contracting Officer. Exposed interior floors in secondary entrances, elevator lobbies, and primary interior corridors shall be high-grade carpet, marble, granite, terrazzo, durable vinyl composite tile, or an equivalent pre-approved by the Contracting Officer. Resilient flooring, or an equivalent pre-approved by the Contracting Officer, shall be used in telecommunications rooms. Floor perimeters at partitions shall have wood, rubber, vinyl, marble, carpet base, or an equivalent pre-approved by the Contracting Officer. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 29 LESSOR GOV'T 2. Terrazzo, unglazed ceramic tile, recycled glass tile, and/or quarry tile shall be used in all toilet and service areas unless another covering is pre-approved by the Contracting Officer. B. CARPET - REPAIR OR REPLACEMENT: 1. Except when damaged by the Government, the Lessor shall repair or replace carpet at the Lessor's expense at any time during the lease term when: a. backing or underlayment is exposed; b. there are noticeable variations in surface color or texture; or c. tears and tripping hazards are present. 2. Repair or replacement shall include the moving and returning of furnishings. Work shall be performed after normal working hours as defined elsewhere in this SFO. C. RESILIENT FLOORING - REPAIR OR REPLACEMENT: 1. Except when damaged by the Government, the Lessor shall repair or replace resilient flooring at the Lessor expense at any time during the lease term when: a. It has curls, upturned edges, or other noticeable variations in texture. 2. Repair or replacement shall include the moving and returning of furnishings. Work shall be performed after normal working hours as defined elsewhere in this SFO. D. TENANT IMPROVEMENT INFORMATION: 1. Floor covering shall be either carpet or resilient flooring, as specified in the Government's drawings. Floor perimeters at partitions shall have wood, rubber, vinyl, carpet base, or an equivalent pre-approved by the Contracting Officer. 2. The use of existing carpet may be approved by the Contracting Officer; however, existing carpet shall be repaired, stretched, and cleaned before occupancy and shall meet the static buildup requirement for new carpet. 3. If the Government requires restrooms and/or shower rooms in the Government-demised area, floor covering shall be terrazzo, unglazed ceramic tile, and/or quarry tile. E. INSTALLATION: Floor covering shall be installed in accordance with manufacturing instructions to lay smoothly and evenly. F. SAMPLES: Finishes will be part of the construction documents. When floor covering is to be newly installed or changed, the Government will provide the Lessor with carpet sample selected. No substitutes may be made by the Lessor after sample selection. 5.19 CARPET: BROADLOOM (SEP 2000) A. Any carpet to be newly installed shall meet the following specifications: 1. Pile Yarn Content. Pile yarn content shall be staple filament or continuous filament branded by a fiber producer (e.g., Allied, DuPont, Monsanto, BASF, Talisman Mills, woolblend), soil-hiding nylon, or wool nylon blends or polyethylene terephthalate (PET) resin. 2. Environmental Requirements. The Lessor shall use carpet that meets the "Green Label" requirements of the Carpet and Rug Institute unless an exception is granted by the Contracting Officer. 3. Carpet Pile Construction. Carpet pile construction shall be level loop, textured loop, level cut pile, or level cut/uncut pile. 4. Pile Weight. Pile weight shall be a minimum of 26 ounces per square yard for level-loop or textured-loop construction. Pile weight shall be a minimum weight of 32 ounces per square yard for level-cut/uncut construction. 5. Secondary Back. The secondary back shall be jute or synthetic fiber for glue-down installation. 6. Density. The density shall be 100 percent nylon (loop and cut pile) with a minimum of 4,000; other fibers, including blends and combinations with a minimum of 4,500. 7. Pile Height. The maximum pile height shall be 1/2 inch (13mm). Exposed edges of carpet shall be fastened to floor surfaces and shall have trim along the entire length of the exposed edge. 5.20 CARPET TILE (SEP 2000) A. Any carpet to be newly installed shall meet the following specifications: 1. Pile Yarn Content. Pile yarn content shall be staple filament or continuous filament branded by a fiber producer (e.g., Allied, DuPont, Monsanto, BASF, soil-hiding nylon or polyethylene terephthalate (PET) resin. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 30 LESSOR GOV'T 2. Environmental Requirements. The Lessor shall use carpet that meets the "Green Label" requirements of the Carpet and Rug Institute unless an exception is granted by the Contracting Officer. 3. Carpet Pile Construction Carpet pile construction shall be tufted level loop, level cut pile, or level cut/uncut pile. 4. Pile Weight. Pile weight shall be a minimum of 26 ounces per square yard for level loop and cut pile. Pile weight shall be a minimum of 32 ounces per square yard for plush and twist. 5. Secondary Back. The secondary back shall be polyvinyl chloride, ethylene vinyl acetate, polyurethane, polyethylene, bitumen, or olefinic hardback reinforced with fiberglass. 6. Total Weight. Total weight shall be a minimum of 130 ounces per square yard. 7. Density. The density shall be 100 percent nylon (loop and cut pile) with a minimum of 4,000; other fibers, including blends and combinations with a minimum of 4,500. 8. Pile Height. The minimum pile height shall be 1/8 inch. The combined thickness of the pile, cushion, and backing height shall not exceed 1/2 inch (13 mm). 9. Static Buildup. Static buildup shall be a maximum of 3.5 kilovolt, when tested in accordance with AATCC-134. 10. Carpet Construction. Carpet construction shall be a minimum of 64 tufts per square inch. 5.21 ACOUSTICAL REQUIREMENTS (SEP 2000) A. BUILDING SHELL: 1. Reverberation Control. Ceilings in carpeted space shall have a noise reduction coefficient (NRC) of not less than 0.55 in accordance with ASTM C-423. Ceilings in offices, conference rooms, and corridors having resilient flooring shall have an NRC of not less than 0.65. 2. Ambient Noise Control. Ambient noise from mechanical equipment shall not exceed noise criteria curve (NC) 35 in accordance with the ASHRAE Handbook of Fundamentals in offices and conference rooms; NC 40 in corridors, cafeterias, lobbies, and toilets; NC 50 in other spaces. 3. Noise Isolation. Rooms separated from adjacent spaces by ceiling-high partitions (not including doors) shall not be less than the following noise isolation class (NIC) standards when tested in accordance with ASTM E-336: a. Conference rooms NIC 40 b. Offices NIC 35 4. Testing. a. The Contracting Officer may require, at no cost to the Government, test reports by a qualified acoustical consultant showing that accoustical requirements have been met. b. The requirements of this paragraph shall take precedence over any additional specifications in this SFO if there is a conflict. 5.22 WINDOW COVERINGS (SEP 2000) A. BUILDING SHELL: 1. Window Blinds. All exterior windows shall be equipped with window blinds in new or like new condition, which shall be provided as part of the Tenant improvement Allowance. The blinds may be aluminum or plastic vertical blinds or horizontal blinds with aluminum slats of 1-inch width or less or an equivalent pre-approved by the Contracting Officer. The window blinds shall have non-corroding mechanisms and synthetic tapes. Color selection will be made by the Contracting Officer. B. TENANT IMPROVEMENT INFORMATION: 1. Draperies. If draperies are required, the following minimum specifications shall apply: a. Fabrics shall be lined with either white or off-white plain lining fabric suited to the drapery fabric weight. Draperies shall be either floor-, apron-, or sill-length, as specified by the Government, and shall be wide enough to cover window and trim. Draperies shall be hung with drapery hooks on well-anchored heavy duty traverse rods. Traverse rods shall draw from either the center, right, or left side. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 31 LESSOR GOV'T b. Construction. Any draperies to be newly installed, shall be made as follows: i. fullness of 100 percent, including overlap, side hems, and necessary returns; ii. double headings of 4 inches turned over a 4-inch permanently finished stiffener; iii. doubled side hems of 1-1/2 inches; 4-inch doubled and blind stitched bottom hems; iv. three-fold pinch pleats; v. safety stitched intermediate seams; vi. matched patterns; vii. tacked corners; and viii. no raw edges or exposed seams. c. Use of existing draperies must be approved by the Contracting Officer. 2. Samples. A minimum of three patterns and colors shall be made available to the Government for selection; shading of sample fabric shall not vary markedly from that of the final product. 5.23 BUILDING DIRECTORY (SEP 2000) A. BUILDING SHELL: 1. A tamper-proof directory with lock shall be provided in the building lobby listing the Government agency(ies). It must be acceptable to the Contracting Officer. 5.24 FLAG POLE (SEP 2000) A. BUILDING SHELL: 1. If the Government is the sole occupant of the building, a flag pole shall be provided at a location to be approved by the contracting officer. The flag will be provided by the Government. This requirement may be waived if determined inappropriate by the Government. 5.25 EXTERNAL SIGNAGE The Government shall have the right to place exterior signage on the building facade on any one of the upper four corners of the building or other approved location, subject to existing signage and local regulation. Any signage will be the Government's sole cost. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 32 LESSOR GOV'T 6.0 MECHANICAL, ELECTRICAL, PLUMBING 6.1 MECHANICAL, ELECTRICAL, PLUMBING: GENERAL (SEP 2000) A. BUILDING SHELL: The Lessor shall provide and operate all building equipment and systems in accordance with applicable technical publications, manuals, and standard procedures. Mains, lines, and meters for utilities shall be provided by the Lessor. Exposed ducts, piping, and conduits are not permitted in office space. 6.2 ENERGY COST SAVINGS (SEP 2000) A. The Offeror is encouraged to use 1) Energy Savings Performance Contracts (ESPC) or 2) utility agreements to achieve, maintain, and/or exceed the ENERGY STAR Benchmark Score of 75. The Offeror is encouraged to include shared savings in the offer as a result of energy upgrades where applicable. The ENERGY STAR Online Benchmark Tool can be found at the www.epa.gov/energystar web site. B. All new construction shall achieve an ENERGY STAR Building Label within 1 year after reaching 95 percent occupancy and will continue to retain the ENERGY STAR Building Label if the level of performance is maintained. C. The Offeror may obtain a list of energy service companies qualified under the Energy Policy Act to perform ESPC, as well as additional information on cost-effective energy efficiency, renewables, and water conservation. For the ESPC qualified list, refer to the www.eren.doe.gov/femp web site, or call the FEMP Help Desk at 1-800-566-2877. 6.3 DRINKING FOUNTAINS (SEP 2000) A. BUILDING SHELL: The Lessor shall provide, on each floor of office space, a minimum of one chilled drinking fountain within every 150 feet, 0 inches of travel distance. 6.4 TOILET ROOMS (SEP 2000) A. BUILDING SHELL: 1. Separate toilet facilities for men and women shall be provided on each floor occupied by the Government in the building. The facilities shall be located so that employees will not be required to travel more than 200 feet, 0 inches on one floor to reach the toilets. Each toilet room shall have sufficient water closets enclosed with modern stall partitions and doors, urinals (in men's room), and hot (set in accordance with applicable building codes) and cold water. Water closets and urinals shall not be visible when the exterior door is open. 2. Each main toilet room shall contain the following equipment: a. a mirror above the lavatory; b. a toilet paper dispenser in each water closet stall, that will hold at least two rolls and allow easy, unrestricted dispensing; c. a coat hook on the inside face of the door to each water closet stall and on several wall locations by the lavatories; d. at least one modern paper towel dispenser, soap dispenser, and waste receptacle for every two lavatories; e. a coin-operated sanitary napkin dispenser in women's toilet rooms with a waste receptacle for each water closet stall; f. ceramic tile, recycled glass tile, or comparable wainscot from the floor to a minimum height of 4 feet, 6 inches; g. a disposable toilet seat cover dispenser; and h. a counter area of at least 2 feet, 0 inches in length, exclusive of the lavatories (however, it may be attached to the lavatories) with a mirror above and a ground fault interrupt-type convenience outlet located adjacent to the counter area. B. If newly installed, toilet partitions shall be made from recovered materials as listed in EPA's CPG. 6.5 TOILET ROOMS: FIXTURE SCHEDULE (SEP 2000)(TSA SEP 2002) A. BUILDING SHELL: 1. The toilet fixtures shall be provided in conformance to the International Plumbing Code. 2. For new installations: a. Water closets shall not use more than 1.6 gallons per flush. b. Urinals shall not use more than 1.0 gallons per flush. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 33 LESSOR GOV'T c. Faucets shall not use more than 2.5 gallons per minute at a flowing water pressure of 80 pounds per square inch. 3. All work under this SFO shall be in compliance with the International Plumbing Code. 6.6 JANITOR CLOSETS (SEP 2000) A. BUILDING SHELL: Janitor closets with service sink, hot and cold water, and ample storage for cleaning equipment, materials, and supplies shall be provided on all floors. Each janitor closet door shall be fitted with an automatic deadlocking latch bolt with a minimum throw of 1/2 inch. 6.7 HEATING AND AIR CONDITIONING (SEP 2000) A. BUILDING SHELL: 1. Temperatures shall conform to local commercial equivalent temperature levels and operating practices in order to maximize tenant satisfaction. These temperatures shall be maintained throughout the leased premises and service areas, regardless of outside temperatures, during the hours of operation specified in the lease. 2. During non-working hours, heating temperatures shall be set no higher than 55' Fahrenheit, and air conditioning shall not be provided except as necessary to return space temperatures to a suitable level for the beginning of working hours. Thermostats shall be secured from manual operation by key or locked cage. A key shall be provided to the Government Field Office Manager. 3. Areas having excessive heat gain or heat loss, or affected by solar radiation at different times of the day, shall be independently controlled. 4. Equipment Performance. Temperature control for office spaces shall be assured by concealed central heating and air conditioning equipment. The equipment shall maintain space temperature control over a range of internal load fluctuations of plus 0.5 W/sq.ft. to minus 1.5 W/sq.ft. from initial design requirements of the tenant. 5. HVAC Use During Construction. The permanent HVAC system may be used to move both supply and return air during the construction process only if the following conditions are met: a. a complete air filtration system with 60 percent efficiency filters is installed and properly maintained; b. no permanent diffusers are used; c. no plenum-type return air system is employed; d. the HVAC duct system is adequately sealed to prevent the spread of airborne particulate and other contaminants; and e. following the building "flush-out," all duct systems are vacuumed with portable high-efficiency particulate arrestance (HEPA) vacuums and documented clean in accordance with National Air Duct Cleaners Association (NADCA) specifications. 6. Ductwork Re-use and Cleaning. Any ductwork to be reused and/or to remain in place shall be cleaned, tested, and demonstrated to be clean in accordance with the standards set forth by NADCA. The cleaning, testing, and demonstration shall occur immediately prior to Government occupancy to avoid contamination from construction dust and other airborne particulates. 7. Insulation. All insulation shall contain recovered materials as required by EPA's CPG and related recycled content recommendations. 8. The Lessor shall conduct HVAC system balancing after any HVAC system alterations during the term of the lease and shall make a reasonable attempt to schedule major construction outside of office hours. Lessor shall provide balancing reports to the government for approval by the Government's mechanical engineer/technical representatives. B. TENANT IMPROVEMENT INFORMATION: 1. Zone Control. Individual thermostat control shall be provided for office space with control areas not to exceed 800 ANSI/BOMA Office Area square feet. Areas which routinely have extended hours of operation shall be environmentally controlled through dedicated heating and air conditioning equipment. Special purpose areas (such as photocopy centers, large conference rooms, computer rooms, etc.) with an internal cooling load in excess of 5 tons shall be independently controlled. Concealed package air conditioning equipment shall be provided to meet localized spot cooling of tenant special equipment. Portable space heaters are prohibited from use. 6.8 VENTILATION (SEP 2000)(TSA SEP 2002) A. BUILDING SHELL: During working hours in periods of heating and cooling, ventilation shall be provided in accordance with the latest edition of ANSI/ASHRAE Standard 62, Ventilation for Acceptable Indoor Air Quality to minimize risk. B. BUILDING SHELL: Air filtration shall be provided and maintained with filters having a minimum efficiency rating as determined by ANSI/ASHRAE Standard 52.2, "Method of Testing General Ventilation Air Cleaning Devices for Removal Efficiency by Particle SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 34 LESSOR GOV'T Size. Pre-filters shall be 30 percent efficient. Final filters shall be 80 percent to 85 percent efficient for particles at 3 microns. C. BUILDING SHELL: Where the Lessor proposes that the Government shall pay utilities, the following shall apply: 1. An automatic air or water economizer cycle shall be provided to all air handling equipment, and 2. The building shall have a fully functional building automation system capable of control, regulation, and monitoring of all environmental conditioning equipment. The building automation system shall be fully supported by a service and maintenance contract. 4. TENANT IMPROVEMENT INFORMATION: Conference rooms of 300 ANSI/BOMA rentable square feet or greater shall be provided with dedicated source of ventilation or be fitted with air handling equipment with smoke/odor removing filters. 6.9 VENTILATION: TOILET ROOMS (DEC 1993) BUILDING SHELL: Toilet rooms shall be properly exhausted, with a minimum of 10 air changes per hour. 6.10 ELECTRICAL: GENERAL (SEP 2000) BUILDING SHELL: The Lessor shall be responsible for meeting the applicable requirements of local codes and ordinances. When codes conflict, the more stringent standard shall apply. Main service facilities shall be enclosed. The enclosure may not be used for storage or other purposes and shall have door(s) fitted with an automatic deadlocking latch bolt with a minimum throw of 1/2 inch. Distribution panels shall be circuit breaker type with 10 percent spare power load and circuits. 6.11 ELECTRICAL: DISTRIBUTION (SEP 2000) A. BUILDING SHELL: 1. Main power distribution switchboards and distribution and lighting panel boards shall be circuit breaker type with copper buses that are properly rated to provide the calculated fault circuits. All power distribution panel boards shall be supplied with separate equipment ground buses. All power distribution equipment shall be required to handle the actual specified and projected loads plus 10 percent spare load capacity. Distribution panels are required to accommodate circuit breakers for the actual calculated needs plus 10 percent spare circuits that will be equivalent to the majority of other circuit breakers in the panel system. All floors shall have 120/208 V, 3-phase, 4-wire with bond, 60-hertz electric service available. 2. Main distribution for standard office occupancy shall be provided at the Lessor's expense. In no event shall such power distribution (not including lighting and HVAC) for the Government-demised area fall below seven(7) W per ANSI/BOMA rentable square foot. 3. Convenience outlets shall be installed in accordance with NFPA Standard 70, National Electrical Code, or local code, whichever is more stringent. B. Provide and install 1. All lighting normal and emergency supply systems in all lobbies, electrical rooms and other base building spaces. 2. Wire distributions system (i.e. access floor, ladder-type cable raceways, cellular floor duct etc.) capable of supporting the telecommunication, data, video, security, life safety, and building automation system requirements. 3. Power distribution from utility sources to all distributed electrical rooms; electrical distribution shall be 480/277 V. 4. 480/277 V and 120/208 V normal power, emergency power and standby power systems with capacity to support the Fit-Out power and lighting loads in all occupiable spaces, terminated in branch panelboards. 5. All electrical equipment shall have minimum of 22-year life expectancy. C. Provisions 1. Space within building for housing batteries and UPS and additional standby generator power, equipment to be obtained through Tenant Improvement Allowance. 2. Empty conduits from UPS location to computer room. D. TENANT IMPROVEMENT INFORMATION 1. All electrical outlets shall be installed by the Lessor in accordance with the construction drawings. All electrical outlets shall be installed in accordance with NFPA Standard 70, or local code, whichever is more stringent. 2. All tenant outlets shall be marked and coded for ease of wire tracing; outlets shall be circuited separately from lighting. All floor outlets shall be flush with the plane of the finished floor. 3. The Lessor shall ensure that outlets and associated wiring (for electricity) to the workstation(s) shall be safely concealed in partitions, ceiling plenums, in recessed floor ducts, under raised flooring, or by use of a method acceptable to the Contracting Officer. In any case, cable on the floor surface shall be minimized. 6.12 ELECTRICAL: ADDITIONAL DISTRIBUTION SPECIFICATIONS If the Offeror proposes that building maintenance will be the responsibility of the Government, the Lessor shall provide duplex utility outlets in toilets, corridors, and dispensing areas for maintenance purposes at no cost to the Government. Fuses and circuit breakers shall be plainly marked or labeled to identify circuits or equipment supplied through them. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 35 LESSOR GOV'T 6.13 TELECOMMUNICATIONS: DISTRIBUTION AND EQUIPMENT (SEP 2000)(TSA SEP 2002) A. BUILDING SHELL: 1. Sufficient space shall be provided on the floor(s) where the Government occupies space for the purposes of terminating telecommunications service into the building. The building's telecommunications closets located on all floors shall be vertically-stacked. Telecommunications switchrooms, wire closets, and related spaces shall be enclosed. The enclosure shall not be used for storage or other purposes and shall have door(s) fitted with an automatic door-closer and deadlocking latch bolt with a minimum throw of 1/2 inch. 2. Telecommunications switchrooms, wire closets, and related spaces shall meet applicable Telecommunications Industry Association (TIA) and Electronic Industries Alliance (EIA) standards. These standards include the following: a. TIA/EIA-568, Commercial Building Telecommunications Cabling Standard, b. TIA/EIA-569, Commercial Building Standard for Telecommunications Pathways and Spaces, c. TIA/EIA-570, Residential and Light Commercial Telecommunications Wiring Standard, and d. TIA/EIA-571, Commercial Building Grounding and Bonding Requirements for Telecommunications Standard. 3. Telecommunications switchrooms, wire closets, and related spaces shall meet applicable NFPA standards. Bonding and grounding shall be in accordance with NFPA Standard 70, National Electrical Code, and other applicable NFPA standards and/or local code requirements. B. TENANT IMPROVEMENT INFORMATION: Telecommunications floor or wall outlets shall be provided as required. The Lessor shall ensure that all outlets and associated wiring, copper, coaxial cable, optical fiber, or other transmission medium used to transmit telecommunications (voice, data, video, Internet, or other emerging technologies) service to the workstation shall be safely concealed under raised floors, in floor ducts, walls, columns, or molding. All outlets/junction boxes shall be provided with rings and pull strings to facilitate the installation of cable. Some transmission medium may require special conduit, inner duct, or shielding as specified by the Government. 6.14 TELECOMMUNICATIONS: LOCAL EXCHANGE ACCESS (SEP 2000) A. BUILDING SHELL: 1. The Government reserves the right to contract its own telecommunications (voice, data, video, Internet or other emerging technologies) service in the space to be leased. The Government may contract with one or more parties to have inside wiring (or other transmission medium) and telecommunications equipment installed. 2. The Lessor shall allow the Government's designated telecommunications providers access to utilize existing building wiring to connect its services to the Government's space. If the existing building wiring is insufficient to handle the transmission requirements of the Government's designated telecommunications providers, the Lessor shall provide access from the point of entry into the building to the Government's floor space, subject to any inherent limitations in the pathway involved. 3. The Lessor shall allow the Government's designated telecommunications providers to affix telecommunications antennae (high frequency, mobile, microwave, satellite, or other emerging technologies), subject to weight and wind load conditions, to roof, parapet, or building envelope as required. Access from the antenna(e) to the leased space shall be provided. 4. The Lessor shall allow Government's designated telecommunications providers to affix antennae and transmission devices throughout its leased space and in appropriate common areas frequented by the Government's employees so as to allow the use of wireless telephones and communications devices necessary to conduct business. B. TENANT IMPROVEMENT INFORMATION: Should the Government's security requirements require sealed conduit to house the telecommunications transmission medium, the Lessor shall provide such conduit at the expense of the Government. 6.15 DATA REQUIREMENTS (SEP 2000)(TSA SEP 2002) A. TENANT IMPROVEMENT INFORMATION: The Government shall at its expense be responsible for purchasing and installing data cable. However, the Government reserves the right to include the purchasing and installing of data cable in Lessor's construction package. The Lessor shall ensure that data outlets and associated wiring used to transmit data to workstations shall be safely concealed in floor ducts, walls, columns, or below access flooring. The Lessor shall provide outlets, which shall include rings and pull strings to facilitate the installation of the data cable. When cable consists of multiple runs, the Lessor shall provide ladder-type cable trays to insure that Government-provided cable does not come into contact with suspended ceilings. Cable trays shall form a loop around the perimeter of the Government-demised area such that they are within a 30-foot, 0-inch horizontal distance of any single drop. B. TSA utilizes permanent and temporary installations of network technology throughout its information technology infrastructure. The installation of a sound cable plant is essential for the successful operation and interoperability of these networks. C. Cable Installation 1. Unless otherwise noted, cabling installed shall conform to the following: a. TIA/EIA-568B building wiring standard for the RJ-45 work station interfaces and data cabling. b. International Standards Organization (ISO) Standard 11801 for Category 5E cables. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 36 LESSOR GOV'T c. All Category 5E cabling installed for this contract must achieve 10 dB ACR at 200 MHz. d. All Category 5E cabling installed under this contract shall conform to EIA/TIA TSB67 cable testing criteria. e. Category 5E (CAT5E) cable - The contractor shall use 24 AWG, 4 pair Category 5E cable with color jacks as specified by the agency. f. Duplex jacks shall have pull strings installed at each location noted on the floor plan, color coded with white or ivory faceplates. D. Labeling: 1. Each cable installed will have a unique label. 2. The contractor will use the room number as the unique label for each cable. In the event that a room has more than one cable terminating in it, the contractor shall label all cables according to building and closet room #, followed by numerical jack # and a notation of voice or data jack (e.g. JDOE-12234-01V would mean John Doe building, closet 234 on floor 12, voice jack #0). 3. The contractor will only use machine-generated labels. The Government will NOT accept handwritten labels on any portion of this contract. E. Patch Panels: 1. The front of each patch panel will be machine labeled indicating each cable installed on the patch panel. F. Wall Plates: 1. Each wall plate will be labeled indicating all cables terminated at that location. 2. The labels used for wall plates shall consist of black lettering with a white or clear background. G. Cable Installation qualities (These are preliminary estimates.): 1. Install 300 pairs of telephone tie cable between the nearest outside wire closet and main CER through conduit. 2. Install 25 pair telephone tie cable between the CER and the conference room. 3. Install 200 pair telephone tie cable between the outside wire closet and the computer room through conduit. 4. Install 50 pair telephone tie cable between the outside wire closet and each CER through. H. Cables: 1. All cables will be fitted with machine-generated labels at each end of the event that a cable is pulled away from a patch panel or wall plate. 2. The label installed at the patch panel end shall be within one inch of termination and should reflect the unique cable identifier. 3. The label installed on the cable at the remote end will be within 4 inches of termination. I. Conduit: 1. One (1) each, 4-inch EMT conduit between the main CER and the nearest outside wire closet with caps on both ends. 2. Two (2) each, 3 inch EMT conduits between the outside wire closet and the computer room. 3. Two (2) each, 3 inch EMT conduits within TSA controlled space (locations to be determined) stubbed out 6 inches above the ceiling to outside wire closet. 4. Conduits from the 1/2 "EMT voice/data outlets to 6" stub up above the ceiling. J. Communications Closet (CER) 1. Provide CER for vertical and horizontal wire distribution system capable of supporting telecomm., data, and video network. provide one CER for every 25,000 sf of space, wiring runs do not exceed 295" from the farthest connection, no more than 500' of separation between CERs, each CER shall be at least 10'x15', free of building columns. 2. Equipment such as piping ductwork, custodial services and distribution of building power must not be located in or pass through the CER. 3. Vertically stacked CERs shall have eight 4" non-corrosive steel sleeves for vertical risers, multiple CERs located on the same floor shall be Interconnected with a minimum of one 3" conduit, all conduits shall have pull boxes installed every 100'. 4. Provide two dedicated 120V/20 amp designated ground circuit service quadraplex receptacle on emergency generator, and one telecommunications grounding busbar. 5. Provide a minimum of 50 fc lighting measured at 3' AFF. 6. Provide dedicated 24 hour/7 days a week cooling for CER. K. Patch panels: 1. All patch panels shall have 48 ports. 2. Homaco MJPC5-35TB or equivalent. 3. The use of any patch panels other than the one listed must be approved in advance by the COTR or designated program manager of TSA. L. Wire Management Panels: 1. Wire management panels shall separate all patch panels associated with this installation. 2. HFM-19-2 or equivalent for separating patch panels. 3. The top wire management panel in each relay rack shall be Homaco HFM-19-1SRC or equivalent. 4. The use of any wire management panels other than the ones listed must be approved in advance by the COTR or designated program manager of TSA. M. Horizontal pathway systems. 1. Provisions must be made to accommodate future tenant build-out of horizontal pathway distribution system, installed above the finished ceiling in tenant areas and corridors, Lessor to provide sufficient space to accommodate the installation of cable trays above suspended ceilings without impacted duct placements or ceiling heights. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 37 LESSOR GOV'T N. Cable Jacks: 1. All cables shall be terminated on "keystone style" RJ45 jacks, and be mounted in faceplates. 2. All jacks associated with this installation shall be wired to the T568B wiring standard. O. Faceplates: 1. All cables shall be mounted in faceplates, and all faceplates shall be attached to the wall in a secure manner. 2. All faceplates shall be almond or white in color, and clearly labeled. P. Racks: 1. Aluminum relay racks must be installed to the following specifications. a. Homaco 19-84-T2SD*B or equivalent. b. The use of any relay racks other than the one listed must be approved in advance by the COTR or designated program manager. c. Each rack will be secured to the floor and to the ceiling to ensure stability. d. The floor mounting of the racks shall utilize a minimum of 1/2 all thread. e. If cables are run into the rack from the ceiling, the contractor shall install two 4" conduits above the main rack. f. All cables terminated on this rack shall run through the 4" "stub outs." g. The contractor shall be responsible for grounding each rack to a building ground. h. If multiple racks are installed, all racks will be secured to each other. i. The contractor will install all racks with a minimum of three-foot clearance for the front and back of each relay rack. Q. Ladder Rack: 1. The contractor shall install ladder rack to interconnect the relay rack(s), and to connect the relay rack to the wall for easy extension of cables and circuits. R. Installation Schedule: 1. The contractor shall complete the work within the time frame per each phase from contract award to complete the physical installation and testing of the cable plant. S. Cable: 1. Category 5E -- The contractor shall furnish and install all materials needed. Quantity of Category 5E rated cables to be determined. 2. All cables installed shall originate in the communications closet. T. Multi-Mode Fiber: 1. The contractor shall install a two (2) 12-strand SC-SC multi-mode fiber pull from CER to the Data Center running on diverse paths. 2. For distances over 500' use single mode fiber (not multimode). U. Test Results: 1. The contractor will test all cables and certify that all cables installed will pass data as outlined in the EIA/TIA TSB67 cable testing criteria. 2. Immediately after contract award, the contractor will submit a draft test plan that outlines how all cable test results will be presented to TSA. 3. The COTR or designated program manager must approve the test plan. 4. The final test results report shall be presented to TSA no later than 30 days after the installation of all cables. V. Documentation: 1. The contractor shall prepare as-built documentation of this cable plant. 2. The contractor shall submit a draft Cable Documentation Plan to the COTR or designated program manager before starting work. 3. The final test results from this installation shall be presented to TSA in an electronic spreadsheet using current version or Microsoft Office Excel. 4. This spreadsheet shall define the cable number, room number, length of each run, and test results for each cable. 5. The contractor will generate and supply four copies of CADD drawings of the floor plans (24" x 36 for this office and supply three copies of elevation drawings of each CER installed by the contractor. 6. The CADD drawings shall include the placement of all walls, doorways, and include the location and unique identifier of each cable. a. The contractor shall mount one laminated 24"x 36" copy of the CADD drawings in the CER. b. The CADD drawings will also be supplied to TSA in electronic and hardcopy format and must be compatible with Auto Desk AutoCAD. Provide two (2) electronic and two (2) hard copies. W. Confidentiality of Information: 1. The information to be developed in this delivery order is of sensitive nature. 2. The contractor shall limit knowledge of and participation in this delivery order tasking and its work product, to those personnel directly involved in its performance, and only then subject to the approval of the COTR. a. Contractor personnel may not disseminate or publish information related to the installation covered under this contract or any information contained in Government furnished documents without prior written approval of the Contracting Officer. b. In addition, the contractor will not issue, or permit others to issue, publicity concerning the project in any form or at any time, unless the Contracting Officer approves such publicity in writing. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 38 LESSOR GOV'T c. During the performance of this contract and thereafter, the contractor will not reveal any of the operating methods or systems; the contents of files; or the names of persons, films, or places related to the contract or studies under it, unless the Contracting Officer approves the disclosure in writing. d. As a precondition for employment related to this contract, each contractor and subcontractor employee must execute a nondisclosure agreement with the contractor stating in part that the employee will: i. Not reveal, divulge or publicize any matters dealt with under this contract; ii. Not disseminate any oral or written information obtained as a result of the execution of this contract or performance of the work hereunder; iii. Not remove any document from the place of performance except as approved by the Contracting Officer; iv. Abide by the rules and regulations outlined in Part 45, Title 28, Code of Federal Regulation. v. The contractor then will provide the Contracting Officer with the original copy of this form signed by the employee at least five (5) working days before the beginning of that employee's participation of the project. 3. The contractor agrees that on termination of the delivery order, whether with or without cause, the contractor has no property or possessor right to any of the correspondence, equipment, files, or materials of whatever kind or description, or any copies or duplicates of such, whether developed or prepared by the contractor or furnished to the contractor by the Government in connection with the performance of this contract; and that on demand, the contractor will surrender immediately to the Contracting Officer or the Contracting Officer's Technical Representative such items, matters, materials, and copies. X. Loudspeaker Paging: 1. Install on the spot volume control ceiling mounted loudspeakers, with 50-ohm potentiometer, 10 oz (HV series) magnet dual voltage 25/70 transformer, at locations to be determined. Wire speakers back to the communications closet and terminated on 66 type blocks in a location to be determined by TSA personnel. 2. Speakers shall be placed in corridors at 25 feet on center and various other locations to be determined later in space design. 6.16 ELECTRICAL, TELEPHONE, DATA FOR SYSTEMS FURNITURE (SEP 2000) A. TENANT IMPROVEMENT INFORMATION: 1. The Lessor shall provide as part of the Tenant Improvement Allowance separate data, telephone, and electric junction boxes for the base feed connections to Government-provided modular or systems furniture, when such feeds are supplied via wall outlets or floor penetrations. When overhead feeds are used, junction boxes shall be installed for electrical connections. Raceways shall be provided throughout the furniture panels to distribute the electrical, telephone, and data cable. The Lessor shall provide all electrical service wiring and connections to the furniture at designated junction points. Each electrical junction shall contain an 8-wire feed consisting of 3 general-purpose 120-V circuits with 1 neutral and 1 ground wire, and a 120-V isolated-ground circuit with 1 neutral and 1 isolated-ground wire. A 20-ampere circuit shall have no more than eight (8) general-purpose receptacles or four (4) designated-ground "computer" receptacles. The isolated and surge protected ground "computer" circuits shall be installed in accordance with the September 21, 1983 edition of Federal information Pressure Standards, published 1994. 2. The Government shall at its expense be responsible for purchasing data and telecommunications cable. Said cable shall be installed and connected to systems furniture by the Lessor/contractor with the assistance and/or advice of the Government or computer vendor. The Lessor shall provide wall-mounted data and telephone junction boxes, which shall include rings and pull strings to facilitate the installation of the data and telecommunications cable. When cable consists of multiple runs, the Lessor shall provide ladder-type cable trays to insure that Government-provided cable does not come into contact with suspended ceilings. Cable trays shall form a loop around the perimeter of the Government-demised area such that they are within a 30-foot, 0-inch horizontal distance of any single drop. Said cable trays shall provide access to both telecommunications data closets and telephone closets. 3. The Lessor shall furnish and install suitably sized junction boxes in the vicinity of the "feeding points" of the furniture panels. All "feeding points" shall be shown on the Government-approved design intent drawings. The Lessor shall temporarily cap off the wiring in the junction boxes until the furniture is installed. The Lessor shall make all connections in the power panel and shall keep the circuit breakers off. The Lessor shall identify each circuit with the breaker number and shall identify the computer hardware to be connected to it. The Lessor shall identify each breaker at the panel and identify the devices that it serves. 4. The Lessor's electrical contractor connecting power poles or base feeds in the junction boxes to the furniture electrical system and testing all pre-wired receptacles in the systems furniture. It also involves other Government contractors who will be installing the data cable in the furniture panels for the terminal and printer locations, installing the connectors on the terminal/printer ends of the cable, and continuity testing each cable. All work shall be coordinated and performed in conjunction with the furniture, telephone, and data cable installers. Much of this work may occur over a weekend on a schedule that requires flexibility and on-call visits. 6.17 ADDITIONAL ELECTRICAL CONTROLS If the Offeror proposes that the Government pay separately for electricity, no more than 500 square feet of office may be controlled by one switch or automatic light control for all space on the Government meter, either through a building automation system, time clock, occupant sensor, or other comparable system acceptable to the Contracting Officer. 6.18 ELEVATORS (SEP 2000)(TSA SEP 2002) A. BUILDING SHELL: 1. The Lessor shall provide suitable passenger and freight elevator service to any Government-demised area not having ground level access. Service shall be available during the hours specified in the Section 7.2, "Normal Hours" paragraph in the SERVICES, UTILITIES, MAINTENANCE section of this SFO. However, one passenger and one freight elevator shall be available SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 39 LESSOR GOV'T at all times for the Government use. The freight elevator shall be accessible to the loading areas. When possible, the Government shall be given 24-hour advance notice if the service is to be interrupted for more than 1-1/2 hours. Normal service interruption shall be scheduled outside of the Government's normal working hours. The Lessor shall also use best efforts to minimize the frequency and duration of unscheduled interruptions. 2. CODE: Elevators shall conform to the current edition of the American Society of Mechanical Engineers ANSI/(ASME) A17.1, Safety Code for Elevators and Escalators, except that elevator cabs are not required to have a visual or audible signal to notify passengers during automatic recall. Elevator lobby smoke detectors shall not activate the building fire alarm system but shall signal the fire department or central station services and capture the elevators. The elevator shall be inspected and maintained in accordance with the current edition of the ANSI/ASME A17.2, Inspector's Manual for Elevators. All elevators shall meet both the ADAAG and the UFAS requirements. 3. SAFETY SYSTEMS: Elevators shall be equipped with telephones or other two-way emergency signaling systems. The system used shall be marked and shall reach an emergency communication location staffed during normal operating hours when the elevators are in service. When Government occupancy is three (3) or more floors above grade, automatic elevator emergency recall is required. 4. INTERIOR FINISHES: Elevator cab walls shall be hardwood, marble, granite, or an equivalent pre-approved by the Contracting Officer. Elevator cab floors shall be marble, granite, terrazzo, or an equivalent pre-approved by the Contracting Officer. 4. GENERAL REQUIREMENTS - VERTICAL TRANSPORTATION a. Passenger and freight elevator service to all premises not having ground level access, 24 hours per day, 365 days per year. Elevators must have solid-state controls and be programmable to control access to any floor at all hours of available service. Each cab must have a TSA approved access control device installed and integrated with the controls. b. Passenger elevators to meet all ADAAG/UFAS requirements. c. Passenger and service elevators equipped with telephone or other two-way voice emergency signalling system, provide both a visual and audible means of communication. d. Conform to the current editions of ANSI A17.1. e. Use of wheelchair platform lifts is not allowed except where necessary to provide access to rooftop spaces. 6.19 LIGHTING: INTERIOR AND PARKING (SEP 2000) A. BUILDING SHELL: 1. The Lessor shall provide interior lighting, as part of the building shell cost, in accordance with the following: a. The Lessor shall provide deep-cell parabolic louver 2' x 2' or 2' x 4' (or building standard that meets or exceeds this standard) fluorescent lighting fixtures with energy-efficient lamps (18 or better) and electronic ballasts for standard interior lighting. Such fixtures shall produce 50 average maintained foot-candles at working surface height throughout workspaces, 20 foot-candles in corridors, and 10 foot-candles in other non-working areas. b. Exterior parking areas, vehicle driveways, pedestrian walkways, and building perimeter shall have a minimum of 1 foot-candle of illumination and shall be designed based on Illuminating Engineering Society of North America (IESNA) standards. Exterior lighting and indoor parking shall be sufficient to accommodate security monitoring (i.e., closed circuit television camera). Parking shall have a minimum of 10 foot-candles and shall be designed based on IESNA standards. c. The Lessor shall provide occupancy sensors and/or scheduling controls through the building automation system to reduce the hours that the lights are on when the space is unoccupied. Daylight dimming controls shall be used in atriums or other space where daylight can contribute to energy savings. d. Lighting shall be controlled by occupancy sensors arranged to control open areas, individual offices, conference rooms, toilet rooms within the Government-demised area, and all other programmed spaces or rooms within the leased space. The control system shall provide an optimal mix of infrared and ultrasonic sensors suitable for the configuration and type of space. Occupancy sensors shall be located so that they have a clear view of the room or area they are monitoring. No more than 1,000 ANSI/BOMA Office Area square feet of open space shall be controlled by occupancy sensor. All occupancy sensors shall have manual switches to override the light control. Such switches shall be located by door openings in accordance with both the ADAAG and the UFAS. If light switches are to be used instead of occupancy sensors or in combination with occupancy sensors, the Offeror shall notify the Government during the negotiation process. INITIALS: [SIG] [SIG] --------- & --------- LESSOR GOV'T 40 6.20 EMERGENCY POWER (TSA SEP 2002) A. BUILDING SHELL: 1. Provide a space for a diesel electric generator with fuel capacity capable of providing power for a duration of 72 hours or a gas fired electrical generator connected to a main gas line, and providing full rated output from cold start in a maximum time of 20 seconds, 2 automatic transfer switches (ATS) for each generator, ATS units to include by-pass isolation switches. B. TENANT IMPROVEMENT INFORMATION: 1. Provide an uninterruptible power source (UPS) and standby power distribution system to service tenant standby power requirements. It is estimated that tenant will require about a 25% requirement for building lighting, tenant electrical, and HVAC. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 41 LESSOR GOV'T 7.0 SERVICES, UTILITIES, MAINTENANCE 7.1 SERVICES, UTILITIES, MAINTENANCE: GENERAL (NCR VARIATION (AUG 2002)) A. The Lessor as part of the rental consideration shall provide services, utilities, and maintenance. The Lessor must have a building superintendent or a locally designated representative available to promptly correct deficiencies during normal hours. B. At the Government's expense, the Lessor shall be responsible for preventive maintenance and repair of all special, Government specified, new or existing Government owned mechanical, electrical, and plumbing equipment (excluding computers, telephone systems, and other communication equipment) installed by the Lessor and as identified by the Government. The cost of the maintenance will be negotiated as an increase in base rent by adjusting the base operating expense and service and utility rate per square foot, either before or after award of the lease, once the scope of work has been identified. An adjustment to the option term base operating expenses and service and utility rate per square foot shall also be negotiated. C. The Lessor must have a building manager and staff onsite or within three (3) blocks. 7.2 NORMAL HOURS Services, utilities, and maintenance shall be provided daily, extending 6:00 a.m. to 7:00 p.m. except Saturdays, Sundays, and Federal holidays. 7.3 OVERTIME USAGE (SEP 2000) A. The Government shall have access to the leased space at all times without additional payment, including the use, during other than normal hours, of necessary services and utilities such as elevators, toilets, lights, and electrical power. B. If heating or cooling is required on an overtime basis, such services will be ordered orally or in writing by the Contracting Officer or the Government Buildings Manager. When ordered, services shall be provided at direct cost to the Lessor. C. When the cost of service is $2,000 or less, the service may be ordered orally. An invoice shall be submitted to the official placing the order for certification and payment. Orders for services costing more than $2,000 shall be placed using GSA Form 300, Order for Supplies or Services. The two clauses from GSA Form 3517, General Clauses, 552.232-75, Prompt Payment, and 552.232-70, Invoice Requirements (Variation), apply to all orders for overtime services. D. All orders are subject to the terms and conditions of this lease. In the event of a conflict between an order and this lease, the lease shall control. 7.4 UTILITIES The Lessor shall ensure that utilities necessary for operation are provided and that all associated costs are included as a part of the established rental rate. 7.5 UTILITIES: SEPARATE FROM RENTAL (SEP 2000)(TSA OCT 2002) A. The Offeror shall specify which utilities, if any, are excluded from the rental consideration. If any such utilities are excluded, the Offeror shall obtain a statement from a registered professional engineer stating that all HVAC, plumbing, and other energy-intensive building systems can operate under the control conditions stated in this SFO. The statement shall also identify all building systems which do not conform to the system performance values, including the "recommended" or "suggested" values of ANSI/ASHRAE Standard 90.1, Energy Efficient Design of New Buildings Except Low-Rise Residential Buildings, or more restrictive state/local codes. B. The Lessor shall provide separate meters for utilities to be paid for by the Government. The Lessor shall furnish in writing to the Contracting Officer, prior to occupancy by the Government, a record of the meter numbers and verification that the meters measure Government usage only. Proration is not permissible. In addition, an automatic control system shall be provided to assure compliance with heating and air conditioning requirements. Refer to the MECHANICAL, ELECTRICAL, PLUMBING section of this SFO. C. The Government shall have the option to request a rental rate net of electric. 7.6 BUILDING OPERATING PLAN The Offeror shall submit a building operating plan with the offer. Such plan shall include a schedule of startup and shutdown times for operation of each building system, such as lighting, HVAC, and plumbing which is necessary for the operation of the building. Such plan shall be in operation on the effective date of the lease. 7.7 JANITORIAL SERVICES (SEP 2000) A. Cleaning shall be performed after tenant working hours unless daytime cleaning is specified as a special requirement elsewhere in this SFO. It is estimated that 25% of the premises will require daytime cleaning. The rental rate shall include daytime cleaning of 25% of the premises. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] [SIG] --------- & --------- LESSOR GOV'T 42 B. SELECTION OF CLEANING PRODUCTS: The Lessor shall make careful selection of janitorial cleaning products and equipment to: 1. use products that are packaged ecologically; 2. use products and equipment considered environmentally beneficial and/or recycled products that are phosphate-free, non-corrosive, non-flammable, and fully biodegradable; and 3. minimize the use of harsh chemicals and the release of irritating fumes. 4. Examples of acceptable products may be found at http://pub.fss.gsa.gov/environ/clean-prod-catalog.html. C. SELECTION OF PAPER PRODUCTS: The Lessor shall select paper and paper products (i.e., bathroom tissue and paper towels) with recycled content conforming to EPA's CPG. D. The Lessor shall maintain the leased premises, including outside areas, in a clean condition and shall provide supplies and equipment. The following schedule describes the level of services intended. Performance will be based on the Contracting Officer's evaluation of results, not the frequency or method of performance. 1. Daily. Empty trash receptacles, and clean ashtrays. Sweep entrances, lobbies, and corridors. Spot sweep floors, and spot vacuum carpets. Clean drinking fountains. Sweep and damp mop or scrub toilet rooms. Clean all toilet fixtures, and replenish toilet supplies. Dispose of all trash and garbage generated in or about the building. Wash inside and out or steam clean cans used for collection of food remnants from snack bars and vending machines. Dust horizontal surfaces that are readily available and visibly require dusting. Spray buff resilient floors in main corridors, entrances, and lobbies. Clean elevators and escalators. Remove carpet stains. Police sidewalks, parking areas, and driveways. Sweep loading dock areas and platforms. Clean glass entry doors to the Government-demised area. 2. Three Times a Week. Sweep or vacuum stairs. 3. Weekly. Damp mop and spray buff all resilient floors in toilets and health units. Sweep sidewalks, parking areas, and driveways (weather permitting). 4. Every Two Weeks. Spray buff resilient floors in secondary corridors, entrance, and lobbies. Damp mop and spray buff hard and resilient floors in office space. 5. Monthly. Thoroughly dust furniture. Completely sweep and/or vacuum carpets. Sweep storage space. Spot clean all wall surfaces within 70 inches of the floor. 6. Every Two Months. Damp wipe toilet wastepaper receptacles, stall partitions, doors, window sills, and frames. Shampoo entrance and elevator carpets. 7. Three Times a Year. Dust wall surfaces within 70 inches of the floor, vertical surfaces and under surfaces. Clean metal and marble surfaces in lobbies. Wet mop or scrub garages. 8. Twice a Year. Wash all interior and exterior windows and other glass surfaces. Strip and apply four coats of finish to resilient floors in toilets. Strip and refinish main corridors and other heavy traffic areas. 9. Annually. Wash all venetian blinds, and dust 6 months from washing. Vacuum or dust all surfaces in the building of 70 inches from the floor, including light fixtures. Vacuum all draperies in place. Strip and refinish floors in offices and secondary lobbies and corridors. Shampoo carpets in corridors and lobbies. Clean balconies, ledges, courts, areaways, and flat roofs. 10. Every Two Years. Shampoo carpets in all offices and other non-public areas. 11. Every Five Years. Dry-clean or wash (as appropriate) all draperies. 12. As Required. Properly maintain plants and lawns. Remove snow and ice from entrances, exterior walks, and parking lots of the building. Provide initial supply, installation, and replacement of light bulbs, tubes, ballasts, and starters. Replace worn floor coverings (this includes the moving and returning of furnishings). Control pests as appropriate, using integrated Pest Management techniques. 7.8 SCHEDULE OF PERIODIC SERVICES Within 60 days after occupancy by the Government, the Lessor shall provide the Contracting Officer with a detailed written schedule of all periodic services and maintenance to be performed other than daily, weekly, or monthly. 7.9 LANDSCAPE MAINTENANCE Performance will be based on the Contracting Officer's evaluation of results and not the frequency or the method of performance. Landscape maintenance shall be performed during the growing season on a weekly cycle and shall consist of watering, mowing, and SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] [SIG] --------- & --------- LESSOR GOV'T 43 policing the area to keep it free of debris. Pruning and fertilization shall be done on an as needed basis. In addition, dead or dying plants shall be replaced. 7.10 FLAG DISPLAY The Lessor shall be responsible for flag display on all workdays and Federal holidays. The Government will provide instructions when flags shall be flown at half-staff. 7.11 SECURITY (SEP 2000) (NCR VARIATION AUG 2002)(TSA SEP 2002) A. During non-duty hours, the Lessor shall provide an electronic key card perimeter security system which covers all building entrances which shall be independently monitored 24 hours a day by a TSA-approved, class A commercial monitoring station, and provide a level of security which reasonably deters unauthorized entry to the leased space. B. The Lessor shall, upon request of the Contracting Officer, deter loitering or disruptive acts in and around the space leased during duty hours. C. The Lessor must provide a detailed outline of the building standard security system. D. In cases of a building emergency, or where building security has been compromised or breached, the TSA Buildings Manager and on-site security must be notified immediately by the Lessor and/or the Lessor's agent. E. At the Government's expense, the Government retains the right to implement security requirements in accordance with the June 28, 1995, Vulnerability Assessment of Federal Facilities report of the U.S. Department of Justice. 7.12 ADDITIONAL SECURITY; ADDITIONAL REQUIREMENTS (TSA SEP 2002) A. The Government reserves the right to require the Lessor to submit completed fingerprint charts and personal history statements for each employee of the Lessor as well as employees of the Lessor's contractors or subcontractors who will provide building operating services of a continuing nature for the property in which the leased space is located. The Government may also require this information for employees of the Lessor, the Lessor's contractors, or subcontractors who will be engaged to perform alterations or emergency repairs for the property. B. If required, the Contracting Officer will furnish the Lessor with form FD-258, "Fingerprint Chart" and Form 176, "Statement of Personal History" to be completed for each employee and returned by the Lessor to the Contracting Officer or his designated representative within 10 working days from the date of the written request to do so. Based on the information furnished, the Government will conduct security checks of the employees. The Contracting Officer will advise the Lessor in writing if an employee is found to be unsuitable or unfit for his assigned duties. Effective immediately, such an employee cannot work or be assigned to work on the property in which the leased space is located. The Lessor will be required to provide the same data within 10 working days from the addition of new employee(s) to the work force. In the event the Lessor's contractor/ subcontractor is subsequently replaced, the new contractor/ subcontractor is not required to submit another set of these forms for employees who were cleared through this process while employed by the former contractor/subcontractor. The Contracting Officer may require the Lessor to submit Form FD-258 and Form 176 for every employee covered by this clause on a 3-year basis. C. Minimum security standards shall be as follows: 1. The Contracting Officer shall reserve the right to reject a building that may pose a security risk to the Government occupants. Visitor parking shall not be immediately adjacent to the building perimeter. The Government reserves the right to establish facility parking controls to limit access to Government parking. 2. The Government has a right to declare a state of emergency during a security alert to establish access and security screening measures in adjacent space not leased by the Government, which could create a security risk for the Federal offices. These areas would include parking garages, outdoor parking areas, lobbies and loading-dock areas. 3. The Lessor will support and assist the building security committee and Occupant Emergency Team in developing and exercising safety and security measures for the facility to include the use of the building public address system to alert employees of building emergencies (bomb-threats, fire, utility emergencies, etc.). D. Tenant Improvement Information: 1. Alarm, access control, and video system. The Government reserves the right to install a security system covering both inside and outside the building. This will involve the installation of camera on exterior surfaces, poles or other structures as required. Interior cameras will include all entry and exits as well as other areas under Government control. Access control, including electric strikes and card readers, will be installed as required by the Government and may include exterior doors, garage gates, building core areas and Government spaces. 2. Window film. The Government may install an anti-fragmentation window security film on the interior of all windows that are subject to damage by blast or natural disasters including those in common areas. 3. Bollards. The building(s) will be protected by the installation of crash barriers around the perimeter. These may be concrete bollards, planters, retractable gates, or other architectural features. They shall conform as much as practical to the existing building features and structures to avoid an armed camp appearance. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 44 LESSOR GOV'T 4. Lighting. If required to provide safety and security, building indoor and outdoor lighting may be upgraded or supplemented with visible or infrared lights as required. 5. Generator. A large generator and storage tank for 72 hours will be required on-site to serve TSA's extensive backup power needs. 6. Locks. A Government-designed high security locking system will be installed on spaces that require access control. These locks shall contain a removable core and will replace the building standard locksets. 7.13 MAINTENANCE AND TESTING OF SYSTEMS (SEP 2000) A. The Lessor is responsible for the total maintenance and repair of the leased premises. Such maintenance and repairs include site and private access roads. All equipment and systems shall be maintained to provide reliable, energy-efficient service without unusual interruption, disturbing noises, exposure to fire or safety hazards, uncomfortable drafts, excessive air velocities, or unusual emissions of dirt. The Lessor's maintenance responsibility includes initial supply and replacement of all supplies, materials, and equipment necessary for such maintenance. Maintenance, testing, and inspection of appropriate equipment and systems shall be done in accordance with applicable codes, and inspection certificates shall be displayed as appropriate. Copies of all records in this regard shall be forwarded to the TSA Field Office Manager or a designated representative. B. Without any additional charge, the Government reserves the right to require documentation of proper operations or testing prior to occupancy of such systems as fire alarm, sprinkler, emergency generator, etc. to ensure proper operation. These tests shall be witnessed by a designated representative of the Contracting Officer. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 45 LESSOR GOV'T 8.0 SAFETY AND ENVIRONMENTAL MANAGEMENT 8.1 OCCUPANCY PERMIT (SEP 2000) The Lessor shall provide a valid occupancy permit for the intended use of the Government and shall maintain and operate the building in conformance with current local codes and ordinances. If the local jurisdiction does not issue occupancy permits, the Offeror shall consult the Contracting Officer to determine if other documentation may be needed. 8.2 FIRE AND LIFE SAFETY (SEP 2000) A. Below-grade space to be occupied by the Government and all areas in a building referred to as "hazardous areas" in NFPA Standard 101, Life Safety Code, or any successor standard thereto, shall be protected by an automatic sprinkler system or an equivalent level of safety. B. If offered space is three (3) stories or more above grade, the Offeror shall provide written documentation that the building meets egress and fire alarm requirements as established by NFPA Standard 101 or equivalent. However, if 1) offered space is 5 stories or less above grade, 2) the total Government-demised area in the building (all leases combined) will be less than 35,000 square feet, and 3) the building is sprinklered, this documentation is not required. C. If offered space is six (6) stories or more above grade, additional fire and life safety requirements may apply. Therefore, the Offeror shall advise the Government in its offer whether or not the offered space, or any part thereof, is on or above the sixth floor of the offered building. D. All exits, stairs, corridors, aisles, and passageways that may be used by the Government shall comply with NFPA Standard 101, or local code, whichever is more stringent. 8.3 SPRINKLER SYSTEM (SEP 2000) A. If any portion of the offered space is on or above the sixth floor, and lease of the offered space will result, either individually or in combination with other Government leases in the offered building, in the Government leasing more than 35,000 ANSI/BOMA Office Area square feet of space in the offered building, then the entire building shall be protected by an automatic sprinkler system or an equivalent level of safety. B. If an Offeror proposes to satisfy any requirement of this paragraph by providing an equivalent level of safety, the Offeror shall submit, for Government review and approval, a fire protection engineering analysis, performed by a qualified fire protection engineer, demonstrating that an equivalent level of safety for the offered building exists. The Offeror shall contact the Contracting Officer for further information regarding Government review and approval of the "equivalent level of safety" analyses. Refer to 41 CFR Part 101-6.6 for guidance on conducting an equivalent level of safety analysis. C. Definition: "Equivalent level of safety" means an alternative design or system (which may include automatic sprinkler systems), based upon fire protection engineering analysis, which achieves a level of safety equal to or greater than that provided by automatic sprinkler systems. 8.4 MANUAL FIRE ALARM SYSTEMS (SEP 2000) Manual fire alarm systems shall be provided in accordance with NFPA Standard 101 (current as of the date of this SFO). Systems shall be maintained and tested by the Lessor in accordance with NFPA Standard 72, National Fire Alarm Code. The fire alarm system wiring and equipment shall be electrically supervised and shall automatically notify the local fire department (NFPA Standard 72) or approved central station. Emergency power shall be provided in accordance with NFPA Standard 70, National Electrical Code, and NFPA Standard 72. 8.5 OSHA REQUIREMENTS (SEP 2000) The Lessor shall maintain buildings and space in a safe and healthful condition according to OSHA standards. 8.6 ASBESTOS (SEP 2000) A. Offers are requested for space with no asbestos-containing materials (ACM), or with ACM in a stable, solid matrix (e.g., asbestos flooring or asbestos cement panels) which is not damaged or subject to damage by routine operations. For purposes of this paragraph, "space" includes the 1) space offered for lease; 2) common building areas; 3) ventilation systems and zones serving the space offered; and 4) the area above suspended ceilings and engineering space in the same ventilation zone as the space offered. If no offers are received for such space, the Government may consider space with thermal system insulation ACM (e.g., wrapped pipe or boiler lagging) which is not damaged or subject to damage by routine operations. B. Definition. ACM is defined as any materials with a concentration of greater than 1 percent by dry weight of asbestos. C. Space with ACM of any type or condition may be upgraded by the Offeror to meet the conditions described in subparagraph A by abatement (removal, enclosure, encapsulation, or repair) of ACM not meeting those conditions. If an offer involving abatement of ACM is accepted by the Government, the Lessor shall, prior to occupancy, successfully complete the abatement in accordance with OSHA, EPA, Department of Transportation (DOT), state, and local regulations and guidance. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 46 LESSOR GOV'T D. Management Plan. If space is offered which contains ACM, the Offeror shall submit an asbestos-related management plan for acceptance by the Government prior to lease award. This plan shall conform to EPA guidance, be implemented prior to occupancy, and be revised promptly when conditions affecting the plan change. If asbestos abatement work is to be performed in the space after occupancy, the Lessor shall submit to the Contracting Officer the occupant safety plan and a description of the methods of abatement and re-occupancy clearance, in accordance with OSHA, EPA, DOT, state and local regulations and guidance, at least 4 weeks prior to the abatement work. 8.7 INDOOR AIR QUALITY (SEP 2000) A. The Lessor shall control contaminants at the source and/or operate the space in such a manner that the GSA indicator levels for carbon monoxide (CO), carbon dioxide (CO(2)), and formaldehyde (HCHO) are not exceeded. The indicator levels for office areas shall be: CO - 9 ppm time-weighted average (TWA - 8-hour sample); CO(2) - 1,000 ppm (TWA); HCHO-0.1 ppm (TWA). B. The Lessor shall make a reasonable attempt to apply insecticides, paints, glues, adhesives, and HVAC system cleaning compounds with highly volatile or irritating organic compounds, outside of working hours. The Lessor shall provide at least 72 hours advance notice to the Government before applying noxious chemicals in occupied spaces and shall adequately ventilate those spaces during and after application. C. The Lessor shall promptly investigate indoor air quality (IAQ) complaints and shall implement the necessary controls to address the complaint. D. The Government reserves the right to conduct independent IAQ assessments and detailed studies in space that it occupies, as well as in space serving the Government-demised area (e.g., common use areas, mechanical room, HVAC systems etc.). The Lessor shall assist the Government in its assessments and detailed studies by 1) making available information on building operations and Lessor activities; 2) providing access to space for assessment and testing, if required; and 3) implementing corrective measures required by the Contracting Officer. E. The Lessor shall provide to the Government material safety data sheets (MSDS) upon request for the following products prior to their use during the term of the lease: adhesives, caulking, sealants, insulating materials, fireproofing or firestopping materials, paints, carpets, floor and wall patching or leveling materials, lubricants, clear finish for wood surfaces, janitorial cleaning products, pesticides, rodenticides, and herbicides. The Government reserves the right to review such products used by the Lessor within 1) the Government-demised area; 2) common building areas; 3) ventilation systems and zones serving the leased space; and 4) the area above suspended ceilings and engineering space in the same ventilation zone as the leased space. 8.8 RADON IN AIR (SEP 2000) A. The radon concentration in the air of space leased to the Government shall be less than EPA's action concentration for homes of four (4) picoCuries per liter (pCi/L), herein called "EPA's action concentration." B. INITIAL TESTING: 1. The Lessor shall 1) test for radon that portion of space planned for occupancy by the Government in ground contact or closest to the ground up to and including the second floor above grade (space on the third or higher floor above grade need not be measured); 2) report the results to the Contracting Officer upon award; and 3) promptly carry out a corrective action program for any radon concentration which equals or exceeds the EPA action level. 2. Testing sequence. The Lessor shall measure radon by the standard test in subparagraph D.1. completing the test not later than 150 days after award, unless the Contracting Officer decides that there is not enough time to complete the test before Government occupancy, in which case the Lessor shall perform the short test in subparagraph D.2. 3. If the space offered for lease to the Government is in a building under construction or proposed for construction, the Lessor shall, if possible, perform the standard test during build out before Government occupancy of the space. If the Contracting Officer decides that it is not possible to complete the standard test before occupancy, the Lessor shall complete the short test before occupancy and the standard test not later than 150 days after occupancy. C. CORRECTIVE ACTION PROGRAM: 1. Program Initiation and Procedures. a. If either the Government or the Lessor detects radon at or above the EPA action level at any time before Government occupancy, the Lessor shall carry out a corrective action program which reduces the concentration to below the EPA action level. b. If either the Government or the Lessor detects a radon concentration at or above the EPA action level at any time after Government occupancy, the Lessor shall promptly carry out a corrective action program which reduces the concentration to below the EPA action level. c. If either the Government or the Lessor detect a radon concentration at or above the EPA residential occupancy concentration of 200 pCi/L at any time after Government occupancy, the Lessor shall promptly restrict the use of the affected area and shall provide comparable temporary space for the tenants, as agreed to by the Government, until the Lessor carries out a prompt corrective action program which reduces the concentration to below the EPA action level and certifies the space of reoccupancy. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 47 LESSOR GOV'T d. The Lessor shall provide the Government with prior written notice of any proposed corrective action or tenant relocation. The Lessor shall promptly revise the corrective action program upon any change in building condition or operation which would affect the program or increase the radon concentration to or above the EPA action level. 2. The Lessor shall perform the standard test in subparagraph D.1 to assess the effectiveness of a corrective action program. The Lessor may also perform the short test in subparagraph D.2 to determine whether the space may be occupied but shall begin the standard test concurrently with the short test. 3. All measures to accommodate delay of occupancy, corrective action, tenant relocation, tenant reoccupancy, or follow-up measurement, shall be provided by the Lessor at no additional cost to the Government. 4. If the Lessor fails to exercise due diligence, or is otherwise unable to reduce the radon concentration promptly to below the EPA action level, the Government may implement a corrective action program and deduct its costs from the rent. D. TESTING PROCEDURES: 1. Standard Test. Place alpha track detectors or electret ion chambers throughout the required area for 91 or more days so that each covers no more than 2,000 ANSI/BOMA Office Area square feet. Use only devices listed in the EPA Radon Measurement Proficiency Program (RMP) application device checklists. Use a laboratory rated proficient in the EPA RMP to analyze the devices. Submit the results and supporting data (sample location, device type, duration, radon measurements, laboratory proficiency certification number, and the signature of a responsible laboratory official) within 30 days after the measurement. 2. Short Test. Place alpha track detectors for at least 14 days, or electret ion chambers or charcoal canisters for 2 days to 3 days, throughout the required area so that each covers no more than 2,000 ANSI/BOMA Office Area square feet, starting not later than 7 days after award. Use only devices listed in the EPA RMP application device checklists. Use a laboratory rated proficient in the EPA RMP to analyze the devices. Submit the results and supporting data within 30 days after the measurement. In addition, complete the standard test not later than 150 days after Government occupancy. 8.9 CONTAMINATES IN WATER (SEP 2000)(TSA SEP 2002) A. The Lessor shall demonstrate that water provided in the leased space is in compliance with EPA requirements and shall submit certification to the Contracting Officer prior to the Government occupying the space. B. If the EPA action level is reached or exceeded, the Lessor shall institute appropriate abatement methods which reduce the radon, lead or other contaminates levels to below this action level. 8.10 HAZARDOUS MATERIALS (OCT 1996) The leased space shall be free of hazardous materials according to applicable Federal state, and local environmental regulations. 8.11 RECYCLING (SEP 2000) Where state and/or local law, code, or ordinance require recycling programs for the space to be provided pursuant to this SFO, the successful Offeror shall comply with such state and/or local law, code, or ordinance in accordance with GSA Form 3517, General Clauses, 552.270-8, Compliance with Applicable Law. In all other cases, the successful Offeror shall establish a recycling program in the leased space where local markets for recovered materials exist. The Lessor agrees, upon request, to provide the Government with additional information concerning recycling programs maintained in the building and in the leased space. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- LESSOR GOV'T 48 9.0 TENANT IMPROVEMENTS 9.1 TENANT IMPROVEMENTS PRIOR TO THE GOVERNMENT'S INITIAL ACCEPTANCE OF SPACE (SEP 2000) A. The Lessor is required to provide cost or pricing data in conjunction with the Tenant Improvements as specified by the Government in GSA Form 3517, General Clauses. B. In lieu of submitting detailed cost or pricing data and entering into negotiations to determine a final cost for the subject work, the Government (in accordance with FAR 15.403) is willing to accept a price based upon the results of a competitive proposal process if the following conditions are met: 1. The Lessor shall submit to the Government a proposal for overhead, profit, permits, and regulatory fees for all Tenant Improvements. a. This will be negotiated and agreed upon prior to the award for the subject improvements (separate from lease award). 2. The scope of work includes the lease, the SFO, all SFO attachments, the construction drawings/documents, and written specifications. In cases of discrepancies, the Lessor shall immediately notify the Contracting Officer to request clarification. All differences will be resolved by the Contracting Officer in accordance with the terms and conditions of the lease. 3. No building shell items shall be included in the competitive proposal. 4. A minimum of three qualified sub-contractors shall be invited to participate in the competitive proposal process. Each participate shall compete independently in the process. 5. Each proposal shall be 1) submitted in Construction Specifications Institute (CSI) format by the proposed contractors and 2) reviewed by the Government. The Government reserves the right to determine if bids meet with the scope of work, that the price is reasonable, and that the Offeror is qualified to perform the work. The Government reserves the right to reject any/all bids, at its sole discretion. 6. The Government shall be represented at all negotiation sessions between the Lessor and potential contractors. 7. The Lessor shall demonstrate to the Government that best efforts have been made to obtain the most competitive prices possible, and the Lessor shall accept responsibility for all prices through direct contracts with all contractors. 8. Once the Government determines that there is adequate competition, and upon the Government's acceptance of the Lessor's cost proposal based upon that competition (provided the Lessor selects the competition's lowest priced bid of a contractor qualified to perform the subject work), the Contracting Officer shall issue to the Lessor a notice to proceed for the subject work. SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 49 LESSOR GOV'T 10.0 SPECIAL REQUIREMENTS 10.1 TRANSPORTATION SECURITY ADMINISTRATION OVERVIEW (TSA OCT 2002) A. On November 19, 2001, the President signed into law the Aviation and Transportation Security Act (ATSA), which among other things, established a new Transportation Security Administration (TSA). TSA's goal is to occupy a model headquarters facility that looks smart and integrates technology and daily activities to meet its needs in the year 2003 and beyond. 1. Innovative -- A workplace that supports TSA's values of integrity, innovation, courtesy and respect, competence, customer focus, dedication, diversity, and teamwork. 2. High-Performance -- A workplace that serves as a catalyst for best practices supporting new business challenges and opportunities and an environment that attracts and retains talented professionals. 3. Best Value -- A workplace that balances cost and benefit. Work environments that support people and processes, and are built to change as mission directives evolve. 10.2 TRANSPORTATION SECURE ADMINISTRATION OBJECTIVES AND STRATEGIC APPROACH (TSA OCT 2002) A. TSA groups are housed in various locations throughout the metropolitan Washington, DC area. It is imperative that TSA collocate to a headquarters facility as quickly as possible to effectively meet their mission directives. In addition, as this newly formed agency is rapidly growing to full capacity, present occupied space does not meet TSA's space requirements. TSA's target date for commencement of occupancy is on or about January 2, 2003. B. TSA has developed a Strategic Project Plan which is a macro level project approach to achieve TSA's short and long-term goals. For the short term, TSA needs to occupy space as quickly as possible to support its current growth. For the long term, TSA requires a fully functional headquarters space that will support its mission. The strategic Project Plan is a three phased approach proposed to meet TSA's goals. 1. PHASE 1: The strategy for Phase 1 is "as is space" which is ready for immediate occupancy as demonstrated by the capability to immediately obtain a certificate for occupancy. The critical element in this phase is the available of 25,000-50,000 ANSI/BOMA rentable square footage of space at lease execution with the ability for TSA to begin occupancy of the space on or about January 2, 2003. TSA must have the ability to access the space at the time of lease execution to begin installation of furniture and other equipment. Subsequently, TSA will require additional space of 25,000-50,000 ANSI/BOMA rentable square foot increments to be available February 1, 2003 and March 1, 2003. Phase 1 requirements are for a total of up to 150,000 ANSI/BOMA rentable square feet available for phased occupancy. It is TSA's intention to occupy the space with no tenant improvement beyond telecommunication infrastructure and power connections to installed workstations. TSA will require space to house a temporary mailroom and provide for building entrance security and other necessary equipment to supply the minimum requirements for TSA's personnel to operate within a secure office environment. 2. PHASE 2: Phase 2 consists of new construction of the remaining 300,000-400,000 ANSI/BOMA rentable square footage with a phased construction/delivery. The definition of new construction is building shell specifications as defined per the SFO, and the tenant improvements required for final occupancy of built space. All offered space and building systems shall be upgraded and built out to comply with all Federal, national, state and local codes as required per the SFO. The Phase 2 new construction will be a phased construction/delivery that will consist of approximately 225,000-325,000 ANSI/BOMA rentable square feet that will entail enclosed offices, workstations, office support and unique/special space build-out. The remaining 75,000 ANSI/BOMA rentable square feet will entail the TSA joint-use spaces. The first portion of Phase 2 will be the delivery of 100,000 BOMA rentable square feet. Planning and construction documents development will commence at lease execution. The Government provided Program of Requirements and Space Plans for the first 100,000 square feet will be delivered to the Lessor 20 days after lease execution. The 100,000 square feet shall be available for occupancy on September 1, 2003. Refer to Section 3.16 and 3.17 for more detailed construction schedule information. With the phased construction completion of each sub-phase of Phase 2 space, a portion of the Phase 1 occupants will be relocated to Phase 2 completed space. 3. PHASE 3: Phase 3 consists of new construction/renovation of the up to 150,000 ANSI/BOMA rentable square footage of Phase 1 "as is space" with phased construction delivery. The "as is space" construction cannot begin until enough Phase 2 space is complete for occupancy and TSA employees have relocated from the "as is space" to the completed Phase 2 spaces. The definition of new construction/renovation is building shell specifications as defined per the SFO, and the tenant improvements required for final occupancy of built space by March 2004. The Phase 3 space will entail enclosed offices, workstations, office support and unique/special space build-out. TSA will work with the Lessor to develop the most expedient construction project schedule to achieve occupancy of the Phase 3 full SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 50 LESSOR GOV'T tenant build-out space. With the phased construction completion for each sub-phase of Phase 3 space, the remaining occupants of Phase 1 space will be relocated to Phase 3 completed space. 10.3 TYPES OF SPACE (TSA OCT 2002) A. As a newly formed agency, TSA is still defining its space requirements. These requirements evolve as groups identify their mission and functions. A Master Space Study is being developed to aid in identifying types, quantity and build out of space. B. Proposed tenant build out space composition includes 68% general office space consisting of a combination of open space, work stations, and office space, 15% unique/special spaces housing particular functions in support of individual TSA groups, and 17% building/joint use spaces necessary to support TSA's operations and available for common use by the entire agency. -End of Solicitation for Offers- SFO NO. DTSA20-03-R-00528 INITIALS: [SIG] & [SIG] --------- --------- 51 LESSOR GOV'T UNITED STATES OF AMERICA SUPPLEMENTAL AGREEMENT DATE SUPPLEMENTAL LEASE AGREEMENT No. 12 TO LEASE NO. DTSA20-03-R-00528 ADDRESS OF PREMISES: 601/701 S. 12th Street Arlington, VA 22202 THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM NETWORK SERVICES, INC. Whose address is: c/o Spaulding & Style Colliers International 1717 Pennsylvania Avenue, NW, Suite 1000 Washington, DC 20006 Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter called the Government: WHEREAS, the parties hereto desire to amend the above Lease. NOW THEREFORE, these parties for the considerations hereinafter mentioned covenant and agree that the said Lease is amended, as follows: ITEM 1: THE LESSOR DESIRES TO RETAIN ADDITIONAL SQUARE FOOTAGE IN THE BUILDING FOR A TERMINAL ROOM (AND RELATED EQUIPMENT) LOCATED ON THE 2ND FLOOR OF THE EAST TOWER. THEREFORE, PARAGRAPH 12 OF RIDER #1 TO LEASE #DTSA20-03-R-00528 IS HEREBY DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING: "12. This offer is for a single-occupancy requirement of approximately 543,945 BOMA rentable square feet in total, with the TSA being the single tenant Agency. However, approximately 5,073 BOMA rentable square feet of a terminal room (and related equipment) in the Building is to be retained by the Lessor along with terminal room related riser access and garage space for infrastructure backup (generator). Attached to this supplemental lease agreement are Exhibits B-1, B-2, B-3, B-4, B-5, B-6, and B-7, illustrating the Lessor's terminal room on the 2nd floor of the East Tower, with related riser access and garage space for infrastructure backup (generator)." ITEM 2: THE GOVERNMENT DESIRES TO INCREASE THE SQUARE FOOTAGE LEASED IN THE BUILDING THROUGH THE ADDITION OF CERTAIN BELOW-GRADE SPACE. THEREFORE, PARAGRAPH 1 OF STANDARD FORM 2 TO LEASE # DTSA20-03-R-00528 IS HEREBY DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING: "1. The Lessor hereby leases to the Government the following described premises: A total of 543,945 BOMA rentable square feet (BRSF) equivalent to 494,541 BOMA Office Usable Square Feet (BUSF) of office and related space in 601/701 South 12th Street, Arlington, VA 22202-4202. The leased area is comprised of the following: 540,189 BRSF equivalent to 491,126 BUSF of office and related space in the East and West Towers on 12 above grade full-floor stories and 3,756 BRSF equivalent to 3,415 BUSF of mailroom and storage related space in the East and West Towers on the P1 below-grade level, (see Attached Floor Plans) to be used for SUCH PURPOSES AS DETERMINED BY THE GOVERNMENT. The Government will also lease the parking garage in its entirety." There SHALL BE NO TENANT IMPROVEMENT ALLOWANCE FOR THE BELOW-GRADE LEASED SPACE. ATTACHED TO THIS SUPPLEMENTAL LEASE AGREEMENT ARE EXHIBITS C-1 AND C-2 ILLUSTRATING THE GOVERNMENT'S BELOW-GRADE LEASED SPACE. ADDITIONALLY, THE TABLE IDENTIFIED IN PARAGRAPH 1 OF RIDER #1 TO LEASE #DTSA20-03-R-00528 IS HEREBY DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING: (Continued on Next Page) GSA DC 68-1176 GSA FORM 276 JUL 67

" BOSF PER BOSF TOTAL MONTHLY PHASE 2 & 3 491,126 $34.75 $17,066,625.50 $1,422,219.04 PHASE 1,2, & 3 3,415 $28.42 $97,054.30 $8,087.86 PARKING $1,230,060.00 $102,505.00 $18,382,060.50 $1,531,838.62"

ITEM 3: THE LESSOR AND THE GOVERNMENT HAVE AGREED TO THE FOLLOWING ADDITIONAL CHANGES: 1. During the term of the Lease, the Government shall be granted a license to use the following: A. The 2nd floor LAN room located in the East Tower adjacent to the "MCI Terminal Room" (see attached, Exhibit B-1), on a non-exclusive basis. B. The Building's 24/7 cooling system (Manufacturer:BAC; Model# BAL-VXT-315C; Serial# 83-3042) and associated pumps. C. The UPS (Uninterrupted Power Supply) currently located on the 6th floor of the West Tower. D. The 1,000 KW generator located on the P2 level of the East Tower (see #3 below for greater detail). 2. During the term of the Lease, the Lessor will maintain ownership of the cooling tower and of the UPS described above, however, the Government will be responsible for all operating expenses, repair, maintenance and/or replacement costs related to these items. 3. During the term of the Lease, the Lessor will maintain ownership of the 1,000 KW generator described above, however, the Government will be responsible for all operating expenses, repair, maintenance and/or replacement costs related to this generator. In addition, the Government will be required to purchase a new generator of suitable size for the Building life safety systems and 24/7 cooling systems. The Government will be responsible for the cost of designing and transferring the life safety systems and 24/7 cooling systems from the P1 and P2 1,000 KW generators (which currently provide power for the same) to the new generator, all with Lessor's prior approval. Once the life safety systems and 24/7 cooling systems have been connected to the new generator, the Lessor will be responsible for all operating expenses, repair, maintenance and/or replacement costs related to the new generator. 4. The Lessor agrees to pay for any re-design charges incurred by the Government in the re-planning of space affected by the Lessor's expansion of the Terminal Room on the 2nd floor of the East Tower, however, the Lessor shall only be responsible for actual third-party amounts not to exceed $8,000.00. ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT. IN WITNESS WHEREOF, the parties subscribed their names as of the above date. - -------------------------------------------------------------------------------- THIS AGREEMENT, made and entered into this date by and between: - -------------------------------------------------------------------------------- LESSOR: MCI WORLDCOM NETWORK SERVICES, INC. BY -------------------------------- --------------------------------- (Signature) (Title) IN THE PRESENCE OF (witnessed by:) -------------------------------- --------------------------------- (Signature) (Address) - -------------------------------------------------------------------------------- UNITED STATES OF AMERICA BY -------------------------------- --------------------------------- (Signature) (Title) GSA DC 68-1176 GSA FORM 276 JUL 67 EX-23.2 8 w88491aexv23w2.txt EXHIBIT 23.2 Exhibit 23.2 Consent of Independent Accountants [CONSENT OF INDEPENDENT ACCOUNTANTS] To the Board of Directors Commercial Net Lease Realty, Inc.: We consent to the incorporation by reference herein of our reports dated January 10, 2003, except as to the fifth paragraph of Note 20 to the consolidated financial statements, which is as of February 13, 2003, relating to the consolidated balance sheets of Commercial Net Lease Realty, Inc. and subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of earnings, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2002, and the related financial statement schedules, which reports appear in the December 31, 2002 annual report on Form 10-K of Commercial Net Lease Realty, Inc. and to the reference to our firm under the heading "Experts" in the prospectus. /s/ KPMG LLP Orlando, Florida July 25, 2003 -----END PRIVACY-ENHANCED MESSAGE-----

EX-1

                                                                       Exhibit 1

                                5,600,000 SHARES

                        COMMERCIAL NET LEASE REALTY, INC.

                                  Common Stock

                             UNDERWRITING AGREEMENT

                                                              New York, New York
                                                                   July 25, 2003

Citigroup Global Markets Inc.
Wachovia Capital Markets, LLC
As Representatives of the several Underwriters

c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, NY  10013

Ladies and Gentlemen:

         Commercial Net Lease Realty, Inc., a Maryland corporation (the
"Company"), proposes to issue and sell an aggregate of [5,600,000] shares (the
"Firm Securities") of its common stock, $0.01 par value per share (the "Common
Stock"), to the several Underwriters named in Schedule I hereto (the
"Underwriters"). The Company also proposes to sell to the Underwriters, upon the
terms and conditions set forth in Section 2 hereof, up to an additional
[840,000] shares (the "Additional Securities") of Common Stock. The Firm
Securities and the Additional Securities are hereinafter collectively referred
to as the "Securities."

         The Company wishes to confirm as follows its agreement with the several
Underwriters in connection with the several purchases of the Securities by the
Underwriters.

         1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 (file number 333-105635) under the
Act ("Registration Statement 333-105635") and a post-effective amendment number
1 to Registration Statement Number 333-53796 ("Registration Statement
333-53796," and together with Registration Statement 333-5105635, the
"Registration Statement"), which Registration Statement included a combined
prospectus dated June 5, 2003 relating to an aggregate of $600,000,000 of the
Company's securities (as described therein, including the Company's Common
Stock), and has filed with, or transmitted for filing to, or shall promptly
hereafter file with or transmit for filing to, the Commission a supplement to
the prospectus included in such Registration Statement (the "Prospectus
Supplement") specifically relating to the Securities and the plan of
distribution thereof pursuant to Rule 424 under the Act. The Registration
Statement was declared effective on June 5, 2003. As of the date hereof an








aggregate of no securities have been sold under the Registration Statement. The
term "Registration Statement" as used in this Agreement means the registration
statement (including all financial schedules and exhibits), as amended to the
date of this Agreement. If it is contemplated, at the time this Agreement is
executed, that a post-effective amendment to the registration statement will be
filed and must be declared effective before the offering of the Securities may
commence, the term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. The term
"Basic Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement. The term "Prospectus" means the Basic
Prospectus, as amended or supplemented by the Prospectus Supplement. If
applicable, the term "Preliminary Prospectus" as used in this Agreement means a
prospectus supplement, subject to completion, that specifically relates to the
Securities and which has heretofore been filed with the Commission, together
with the Basic Prospectus. If the Company has filed an abbreviated registration
statement to register Securities pursuant to Rule 462(b) under the Act
(including the exhibits thereto, the "Rule 462(b) Registration Statement"), then
any reference herein to the Registration Statement shall also be deemed to
include such Rule 462(b) Registration Statement. Any reference in this Agreement
to the registration statement, the Registration Statement, the Basic Prospectus,
the Preliminary Prospectus, if any, or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Act, and any reference to any amendment or supplement
to the registration statement, the Registration Statement, the Basic Prospectus,
the Preliminary Prospectus, if any, or the Prospectus shall be deemed to refer
to and include any documents filed by the Company with the Commission after the
date of the Basic Prospectus under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") which, upon filing, are incorporated by reference
therein, as required by paragraph (b) of Item 12 of Form S-3. As used herein,
the term "Incorporated Documents" means the documents which are incorporated by
reference in the registration statement, the Registration Statement, the Basic
Prospectus, the Preliminary Prospectus, if any, the Prospectus, or any amendment
or supplement thereto.

         2. Agreement to Sell and Purchase. (a) The Company hereby agrees,
subject to all of the terms and conditions set forth herein, to issue and sell
to each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of $18.00 per share; the
number of Firm Securities set forth opposite the name of such Underwriter in
Schedule I hereto (or such number of Firm Securities increased as set forth in
Section 10 hereof).

            (b) The Company also agrees, subject to all the terms and conditions
set forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Underwriters shall
have the right to purchase from the Company, pursuant to an option (the
"over-allotment option") which may be exercised at any time and from time to
time prior to 9:00 P.M., New York City time, on the 30th day after the date of
this Agreement (or, if such 30th day shall be a Saturday or Sunday or a holiday,
on the next business day thereafter when the New York Stock Exchange is open for
trading) (the "Option Period"), up to an aggregate of [840,000] Additional
Securities. Additional Securities purchased pursuant to the over-allotment
option shall be purchased from the Company at the purchase price per share set




                                       2




forth in Section 2(a) above less an amount per share equal to any dividends or
distributions per common share payable on the Firm Securities during the Option
Period, provided however, to the extent any such dividends or distributions are
payable on any Additional Securities, such Additional Securities purchased
pursuant to the over-allotment option shall be purchased from the Company at the
purchase price per share set forth in Section 2(a). Additional Securities may be
purchased only for the purpose of covering over-allotments made in connection
with the offering of the Firm Securities. Upon any exercise of the
over-allotment option, each Underwriter, severally and not jointly, agrees to
purchase from the Company the number of Additional Securities (subject to such
adjustments as the Underwriters may determine in order to avoid fractional
shares) which bears the same proportion to the number of Additional Securities
to be purchased by the Underwriters as the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule I hereto (or such number of
Firm Securities increased as set forth in Section 10 hereof) bears to the
aggregate number of Firm Shares.

         3. Offering by Underwriters. The Company has been advised by Citigroup
Global Markets Inc. that the Underwriters propose to make a public offering of
their respective portions of the Securities as soon after this Agreement has
become effective as in their judgment is advisable and initially to offer the
Securities upon the terms set forth in the Prospectus.

         4. Delivery of the Securities and Payment Therefor. Delivery of and
payment for the Firm Securities and the Additional Securities (if the option
provided for in Section 2(b) hereof shall have been exercised on or before the
third Business Day prior to the Closing Date shall be made at 10:00 AM, New York
City time, on July 30, 2003, or at such time on such later date not more than
three Business Days after the foregoing date as the Underwriters shall
designate, which date and time may be postponed by mutual written agreement of
the Underwriters and the Company or as provided in Section 10 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made for the respective
accounts of the several Underwriters, against payment by the several
Underwriters of the purchase price thereof, to or upon the order of the Company
by wire transfer payable in same-day funds to an account specified by the
Company. Delivery of the Firm Securities and the Additional Securities shall be
made through the facilities of The Depository Trust Company unless the
Underwriters shall otherwise instruct the Company in writing.

            If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Additional Securities (at the expense of the Company) to the Underwriters, at
388 Greenwich Street, New York, New York, on the date specified by the
Underwriters (which shall be within three Business Days after exercise of said
option) for the respective accounts of the several Underwriters, against payment
by the several Underwriters of the purchase price thereof to or upon the order
of the Company by wire transfer payable in same-day funds to an account
specified by the Company. If settlement for the Additional Securities occurs
after the Closing Date, the Company will deliver to the Underwriters on the
settlement date for the Additional Securities, and the obligation of the
Underwriters to purchase the Additional Securities shall be conditioned upon
receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 8 hereof.




                                       3






         5. Agreements of the Company. The Company agrees with the several
Underwriters as follows:


            (a) If, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the registration statement to be
declared effective before the offering of the Securities may commence, the
Company will use its best efforts to cause such post-effective amendment to
become effective as soon as possible and will advise the Underwriters promptly
and, if requested by the Underwriters, will confirm such advice in writing,
immediately after such post-effective amendment has become effective.

            (b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the Registration Statement
or supplement the Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will: (1) notify the
Underwriters of such event; (2) prepare, and file with the Commission, an
amendment or supplement which will correct such statement or omission or effect
such compliance; and (3) supply any supplemented Prospectus to the Underwriters
in such quantities as they may reasonably request.

            (c) The Company will advise the Underwriters promptly and, if
requested by the Underwriters, will confirm such advice in writing: (i) of any
review, issuance of comments, or request by the Commission or its staff on or
for an amendment of or a supplement to the Registration Statement, the
Preliminary Prospectus, if any, or the Prospectus or for additional information
regarding the Company, its affiliates or their filings with the Commission,
whether or not such filings are incorporated by reference into the Registration
Statement, the Preliminary Prospectus, if any, or the Prospectus; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Securities
for offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in the first
sentence in subsection (f) below, of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations, or of the happening of any event, which results in any statement of
a material fact made in the Registration Statement or the Prospectus (as then
amended or supplemented) being untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus (as then
amended or supplemented) in order to state a material fact required by the Act
to be stated therein or necessary in order to make the statements therein not
misleading, or of the necessity to amend or supplement the Prospectus (as then
amended or supplemented) to comply with the Act or any other law. If at any time
the Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.

            (d) The Company will furnish to the Underwriters and counsel to the
Underwriters, without charge: (i) ten signed copies of the registration
statement and any Rule 462(b) Registration Statement as originally filed with
the Commission and of each amendment thereto, including financial statements and
all exhibits to the registration statement and Rule




                                       4




462(b) Registration Statement; (ii) such number of conformed copies of the
registration statement as originally filed and of each amendment thereto, but
without exhibits, as the Underwriters may request; (iii) such number of copies
of the Incorporated Documents, without exhibits, as the Underwriters may
request; and (iv) ten copies of the exhibits to the Incorporated Documents. The
Company will pay all of the expenses of printing or other production of all
documents relating to the offering.

            (e) The Company will not file any amendment to the Registration
Statement (including any filing under Rule 462(b)) or make any amendment or
supplement to the Prospectus or, prior to the end of the period of time referred
to in the first sentence in subsection (f) below, file any document which upon
filing becomes an Incorporated Document, of which the Underwriters shall not
previously have been advised or to which, after the Underwriters shall have
received a copy of the document proposed to be filed, the Underwriters shall
reasonably object; and no such further document, when it is filed, will contain
an untrue statement of a material fact or will omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading.

            (f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the Act to be delivered
in connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
the Underwriters may request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the Act and with the securities or blue sky laws of the jurisdictions in
which the Securities are offered by the several Underwriters and by all dealers
to whom Securities may be sold, both in connection with the offering and sale of
the Securities and for such period of time thereafter as the Prospectus is
required by the Act to be delivered in connection with sales by any Underwriter
or dealer. If during such period of time: (i) any event shall occur that in the
judgment of the Company, or in the opinion of counsel for the Underwriters, is
required to be set forth in the Prospectus (as then amended or supplemented) or
should be set forth therein in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser, not
misleading; or (ii) if it is necessary to supplement or amend the Prospectus (or
to file under the Exchange Act any document which, upon filing, becomes an
Incorporated Document) in order to comply with the Act or any other law, the
Company will forthwith prepare and, subject to the provisions of paragraph (e)
above, file with the Commission an appropriate supplement or amendment thereto
(or to such document), and will expeditiously furnish to the Underwriters and
dealers a reasonable number of copies thereof. In the event that the Company and
the Underwriters agree that the Prospectus should be amended or supplemented,
the Company, if requested by the Underwriters, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.

            (g) The Company will: (i) cooperate with the Underwriters and with
counsel for the Underwriters in connection with the registration or
qualification of the Securities for offering and sale by the several
Underwriters and by dealers under the securities or blue sky laws of such
jurisdictions as the Underwriters may designate; (ii) maintain such
qualifications in effect so long as required for the distribution of the
Securities; (iii) pay any fee of the National




                                       5




Association of Securities Dealers, Inc., in connection with its review of the
offering; and (iv) file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any jurisdiction where
it is not now so subject.

            (h) The Company will make generally available to its security
holders and to the Underwriters a consolidated earnings statement, which need
not be audited, covering a 12-month period commencing after the effective date
of this Agreement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings statement
shall satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.

            (i) During the period commencing on the date hereof and ending on
the date occurring three years hereafter, the Company will furnish to the
Underwriters: (i) as soon as available, if requested, a copy of each report of
the Company mailed to stockholders or filed with the Commission; and (ii) from
time to time such other information concerning the Company as the Underwriters
may request.

            (j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof, or if this Agreement shall be
terminated by the Underwriters because of any inability, failure or refusal on
the part of the Company to comply with the terms or fulfill any of the
conditions of this Agreement, the Company shall reimburse the Underwriters
severally through Citigroup Global Markets Inc. for all out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred by the
Underwriters in connection herewith.

            (k) The Company will apply the net proceeds from the sale of the
Securities substantially in accordance with the description set forth in the
Prospectus.

            (l) If Rule 430A of the Act is employed, the Company will timely
file the Prospectus pursuant to Rule 424(b) under the Act and will advise the
Underwriters of the time and manner of such filing.

            (m) Except as provided in this Agreement, the Company will not sell,
contract to sell or otherwise dispose of any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or grant any
options or warrants to purchase Common Stock, for a period of 90 days after the
date of the Prospectus, without the prior written consent of Citigroup Global
Markets Inc., except that the Company may (i) issue shares of its Common Stock
upon the exercise of an option or warrant or the conversion of a security
outstanding on the date of the Prospectus of which the Underwriters have been
advised in writing and to which Citigroup Global Markets Inc. has consented;
(ii) the issuance of grant of shares of Common Stock or options or rights to
purchase shares of Common Stock pursuant to the Company's benefit and
compensation plans existing on the date of the Prospectus and in amounts and on
terms historically consistent with such plans; and (iii) the issuance of shares
of




                                       6




Common Stock in connection with the Company's Dividend Reinvestment Plan
existing on the date of the Prospectus.

            (n) The Company has furnished to the Underwriters "lock-up" letters
signed by the individuals listed on Schedule II and substantially in the form
attached as Exhibit A to Schedule II hereto.

            (o) The Company has not taken, nor will it take, directly or
indirectly, any action designed to, or that might reasonably be expected to
cause or result in under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.

            (p) The Company will comply and will use its best efforts to cause
the Properties and the tenants to comply in all material respects with all
applicable Environmental Laws (as hereinafter defined).

            (q) The Company will use its best efforts to have the shares of
Common Stock which it agrees to sell under this Agreement listed, subject to
notice of issuance, on the New York Stock Exchange on or before the Closing
Date.

            (r) The Company will use its best efforts to continue to qualify as
a real estate investment trust (a "REIT") under the Internal Revenue Code of
1986, as amended (the "Code"), and to continue to have each of its corporate
subsidiaries (other than its taxable REIT subsidiary) comply with all applicable
laws and regulations necessary to maintain a status as a "qualified REIT
subsidiary" under the Code.

            (s) The Company will use all reasonable best efforts to do or
perform all things required to be done or performed by the Company prior to the
Closing Date to satisfy all conditions precedent to the delivery of the
Securities pursuant to this Agreement. The Company will use all reasonable best
efforts to do or perform all things required, to be done or performed by the
Company under the WorldCom Agreements (as defined below).

            (t) The Company will not, without the prior written consent of
Citigroup Global Markets Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company, directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act, any debt
securities issued or guaranteed by the Company (other than the Securities) or
publicly announce an intention to effect any such transaction, until the Closing
Date.

            (u) The Company will comply with all applicable securities and other
applicable laws, rules and regulations, including, without limitation, the
Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), and to use its best
efforts to cause the Company's directors




                                       7




and officers, in their capacities as such, to comply with such laws, rules and
regulations, including, without limitation, the provisions of the Sarbanes-Oxley
Act.

         6. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Underwriter:

            (a) The Basic Prospectus and each Preliminary Prospectus, if any,
included as part of the registration statement as originally filed or as part of
any amendment or supplement thereto, or filed pursuant to Rule 424 under the
Act, complied when so filed in all material respects with the provisions of the
Act.

            (b) The Company and the transactions contemplated by this Agreement
meet all of the requirements for using Form S-3 under the Act. The Registration
Statement has become effective for the registration under the Act of the
Securities. No stop order suspending the effectiveness of the Registration
Statement is in effect, and, to the best of the Company's knowledge, no
proceedings for such purpose are pending before or threatened by the Commission.
The Registration Statement meets the requirements set forth in Rule 415(a)(1)(x)
under the Act and complies in all other material respects with such Rule. The
registration statement, in the form in which it became effective, and also in
such form as it may be when any post-effective amendment thereto shall become
effective, and the Prospectus and any supplement or amendment thereto, each when
filed with the Commission under Rule 424(b) under the Act, complied or will
comply in all material respects with the provisions of the Act, and the Exchange
Act and did not and will not at any such times contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading. The representation
and warranty contained in this Section 6(b) does not apply to statements in or
omissions from the registration statement or the Prospectus made in reliance
upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by or on behalf of any Underwriter expressly for use
therein.

            (c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder. No such document when it was filed (or, if an amendment with respect
to any such document was filed, when such amendment was filed), contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.

            (d) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the Securities have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights; and the capital
stock of the Company conforms to the description thereof in the registration
statement and the Prospectus.




                                       8






            (e) Each of the Company and each of its subsidiaries is a
corporation, partnership or trust, as applicable, duly organized, validly
existing and in good standing under the laws of the state of its formation, as
set forth on Schedule III hereto, with full corporate, partnership or trust
power, as applicable, and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus, and each is duly registered and qualified to conduct its business,
and is in good standing, in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and its
subsidiaries. Neither the Company nor any of its subsidiaries does any business
in Cuba.

            (f) The Company has no subsidiary or subsidiaries other than as set
forth on Schedule III hereto and does not control, directly or indirectly, any
corporation, partnership, joint venture, association or other business
association (other than the general partner interest of Net Lease Realty III,
Inc. in Net Lease Institutional Funding, L.P.). The issued shares of capital
stock of each of the Company's subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and are owned legally and
beneficially by the Company free and clear of any security interests, liens,
encumbrances, equities or claims.

            (g) There are no legal or governmental actions, suits or proceedings
pending or, to the knowledge of the Company, threatened, against the Company or
any of its subsidiaries, or to which the Company or any properties of the
Company or any of its subsidiaries is subject, that (A) are required to be
described in the Registration Statement or the Prospectus but are not described
as required; (B) could reasonably be expected to have a material adverse effect
on the performance of this Agreement or the consummation of any of the
transactions contemplated hereby; or (C) could reasonably be expected to have a
material adverse effect on the condition (financial or other), prospects,
earnings, business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto). There are no statutes, regulations, capital
expenditures, off-balance sheet transactions, contingencies or agreements,
contracts, indentures, leases or other instruments or documents of a character
that are required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as an exhibit to the
Registration Statement or any Incorporated Document that are not described,
filed or incorporated as required by the Act or the Exchange Act. The statements
in the Prospectus under the heading "Federal Income Tax Considerations" and in
the Prospectus Supplement under the heading "Certain Additional Federal Income
Tax Considerations" fairly summarize the matters therein described.

            (h) Neither the Company nor any of its subsidiaries is: (A) in
violation of (i) its respective articles of incorporation or by-laws, (ii) any
law, ordinance, administrative or governmental rule or regulation applicable to
the Company or its subsidiaries, which violation would have a material adverse
effect on the Company and its subsidiaries, or (iii) any decree of any court or
governmental agency or body having jurisdiction over the Company or its
subsidiaries; or (B) in default in any material respect in the performance of
any obligation, agreement, condition, or covenant (financial or otherwise)
contained in any bond, debenture, note or any other evidence of indebtedness or
in any material agreement, indenture, lease or



                                       9


other instrument to which the Company or any of its subsidiaries is a party or
by which the Company or its subsidiaries or any of their respective properties
may be bound, and no such default is reasonably foreseeable.

            (i) (A) As of the date of this Agreement, the Company owned 350
Properties (as defined in the Prospectus). To the best of the Company's
knowledge, neither the Company nor any of its subsidiaries is in violation of
any municipal, state or federal law, rule or regulation concerning any of the
Properties, which violation would have a material adverse effect on the Company
and/or its subsidiaries; (B) to the best of the Company's knowledge, each of the
Properties complies with all applicable zoning laws, ordinances and regulations
in all material respects and, if and to the extent there is a failure to comply,
such failure does not materially impair the value of any of such properties and
will not result in a forfeiture or reversion of title thereof; (C) neither the
Company nor any of its subsidiaries has received from any governmental authority
any written notice of any condemnation of, or zoning change affecting any of,
the Properties, and the Company does not know of any such condemnation or zoning
change which is threatened and which if consummated would have a material
adverse effect on the Company or any of such properties; (D) the leases under
which the Company leases the Properties as lessor (the "Leases") are in full
force and effect and have been entered into in the ordinary course of business
of the Company; (E) the Company and each of its subsidiaries has complied with
its respective obligations under the Leases in all material respects and the
Company does not know of any default by any other party to the Leases which,
alone or together with other such defaults, would have a material adverse effect
on the Company or its subsidiaries or any of the properties subject to a Lease;
and (F) all liens, charges, encumbrances, claims or restrictions on or affecting
the properties and assets (including the Properties) of the Company and its
subsidiaries that are required to be disclosed in the Prospectus are disclosed
therein.

            (j) Neither the issuance and sale of the Securities, the execution,
delivery or performance of this Agreement by the Company, nor the consummation
by the Company of the transactions contemplated hereby (including the
application of the proceeds from the sale of the Securities): (A) requires any
consent, approval, authorization or other order of, or registration or filing
with, any court, regulatory body, administrative agency or other governmental
body, agency or official (except such as may be required for the registration of
the Securities under the Act and compliance with the securities or blue sky laws
of various jurisdictions), or conflicts or will conflict with or constitutes or
will constitute a breach or violation of, or a default under, the articles of
incorporation or by-laws of the Company or any of its subsidiaries; or (B)
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under, any agreement, indenture, lease or other instrument to which
the Company or any of its subsidiaries is a party or by which the Company or any
properties of the Company or any of its subsidiaries may be bound, or violates
or will violate any statute, law, regulation or filing or judgment, injunction,
order or decree applicable to the Company or any of its subsidiaries or any
properties of the Company or any of its subsidiaries, or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to the terms of any
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries may be bound, or to
which any property or assets of the Company or any of its subsidiaries is
subject.




                                       10






            (k) To the Company's knowledge, the accountants, KPMG LLP, who have
certified or shall certify the financial statements and schedules included or
incorporated by reference in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), are independent public accountants with
respect to the Company as required by the Act and the applicable published rules
and regulations thereunder.

            (l) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement and
the Prospectus (and any amendment or supplement thereto), present fairly in all
material respects the financial position, results of operations and changes in
financial position of the Company and its subsidiaries on the basis stated in
the Registration Statement and the Incorporated Documents at the respective
dates or for the respective periods to which they apply. Such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein. The other financial and statistical
information and data included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) are
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company and its subsidiaries. The
pro forma financial statements and other pro forma financial information
included, or incorporated by reference in, the Registration Statement and the
Prospectus include assumptions that provide a reasonable basis for presenting
the significant effects directly attributable to the transactions and events
described therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma adjustments reflect the proper application
of those adjustments to the historical financial statement amounts in the pro
forma financial statements included in the Prospectus and the Registration
Statement. The pro forma financial statements included in the Prospectus and the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X under the Act and the pro
forma adjustments have been properly applied to the historical amounts in the
compilation of those statements.

            (m) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement has been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except only to the extent that rights to indemnity and contribution hereunder
may be limited by federal or state securities laws.

            (n) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), neither
the Company nor any of its subsidiaries has incurred any liability or obligation
(financial or other), direct or contingent, or entered into any transaction
(including any off-balance sheet activities or transactions), not in the
ordinary course of business, that is material to the Company and its
subsidiaries, and there has not been any change in the capital stock, or
material increase in the short-term debt or long-term debt (including any
off-balance sheet activities or transactions), of either the Company or its
subsidiaries, or any material adverse change, or any development involving or
which may reasonably be expected to involve, a




                                       11




prospective material adverse change, in the condition (financial or other),
business, prospects, net worth or results of operations of either the Company or
its subsidiaries.

            (o) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) the Company and each of its
subsidiaries has good and marketable title to all property (real and personal)
described in the Prospectus as being owned by each of them (including the
Properties), free and clear of all liens, claims, security interests or other
encumbrances except such as are described in the Registration Statement and the
Prospectus, or in any document filed as an exhibit to the Registration
Statement, and each property described in the Prospectus as being held under
lease by the Company or any of its subsidiaries is held by it under a valid,
subsisting and enforceable lease.

            (p) The Company has not distributed and, prior to the later to occur
of (x) the Closing Date and (y) completion of the distribution of the
Securities, will not distribute, any offering material in connection with the
offering and sale of the Securities other than the Registration Statement, the
Prospectus or other materials, if any, permitted by the Act. The Company has
not, directly or indirectly: (i) taken any action designed to cause or to result
in, or that has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities; or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid or agreed
to pay to any person any compensation for soliciting another to purchase any
other securities of the Company.

            (q) The Company and each of its subsidiaries possess all
certificates, permits, licenses, franchises and authorizations of governmental
or regulatory authorities ("permits") as are necessary to own their respective
properties and to conduct their respective businesses in the manner described in
the Prospectus, where such failure to possess could have a material adverse
effect on the Company and its subsidiaries, subject to such qualifications as
may be set forth in the Prospectus. The Company and each of its subsidiaries has
fulfilled and performed all of their respective material obligations with
respect to such permits, and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or which would
result in any other material impairment of the rights of the holder of any such
permit, subject in each case to such qualification as may be set forth in the
Prospectus. Except as described in the Prospectus, none of the permits contains
any restriction that is materially burdensome to the Company and/or its
subsidiaries. Except as described in the Prospectus, exclusive of any supplement
thereto, neither the revocation or modification of any permit singly or in the
aggregate, nor the announcement of an unfavorable decision, ruling or finding
with respect to any permit, would have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries, taken as a whole.

            (r) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
the financial and




                                       12




corporate books and records and assets is permitted only in accordance with
management's general or specific authorization; (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences; and (v) management
is made aware of the nature and significance of all transactions that are not
reflected in the Company's financial statements.

            (s) There is and has been no failure on the part of the Company and
any of the Company's directors or officers, in their capacities as such, to
comply with any provision of the Sarbanes-Oxley Act and the rules and
regulations promulgated in connection therewith, including Section 402 related
to loans and Sections 302 and 906 related to certifications.

            (t) To the Company's knowledge, neither the Company and its
subsidiaries nor any employee or agent of the Company and its subsidiaries has
made any payment of funds of the Company or its subsidiaries or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Prospectus.

            (u) No labor problem or dispute with the employees of the Company
and/or any of its subsidiaries or any of the Company's or its subsidiaries'
principal suppliers, contractors or customers, exists, is threatened or imminent
that could result in a material adverse change in the condition (financial or
other), business, net worth or results of operations of the Company and/or its
subsidiaries. To the Company's knowledge, no labor problem or dispute with the
Company's or its subsidiaries' tenants exists, is threatened or imminent that
could result in a material adverse change in the condition (financial or other),
business, net worth or results of operations of the Company and/or its
subsidiaries.

            (v) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed, which returns are complete and correct,
or has requested extensions thereof (except in any case in which the failure so
to file would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in the Prospectus (exclusive of
any supplement thereto)) and has paid all taxes required to be paid by it and
any other assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as would not have a
material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in the Prospectus (exclusive of any supplement
thereto).

            (w) No holder of any security of the Company has any right to
require registration of Common Stock or any other security of the Company
because of the filing of the registration statement or consummation of the
transactions contemplated by this Agreement, which right has not been waived in
connection with the transactions contemplated by this Agreement.




                                       13






            (x) The Company and its subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service mark registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by them or necessary for the conduct
of their respective businesses. The Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the Company and
its subsidiaries with respect to the foregoing.

            (y) The Company is not now, and after sale of the Securities to be
sold by the Company hereunder and the application of the net proceeds from such
sale as described in the Prospectus under the caption "Use of Proceeds," will
not be, an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.

            (z)   (i) To the best of the Company's knowledge, the Company, its
            subsidiaries, the Properties and the operations conducted thereon
            comply and heretofore have complied with all applicable
            Environmental Laws, and no expenditures are required or advisable to
            maintain or achieve such compliance and except as is disclosed in
            the Environmental Reports (defined below) and except for
            circumstances and expenditures that have not and will not likely
            have a material adverse effect on the relevant Property.

                  (ii) Neither the Company nor any of its subsidiaries has at
            any time and, to the best of the Company's knowledge, no other party
            has at any time, handled, buried, stored, retained, refined,
            transported, processed, manufactured, generated, produced, spilled,
            allowed to seep, leak, escape or leach, or be pumped, poured,
            emitted, emptied, discharged, injected, dumped, transferred or
            otherwise disposed of or dealt with, Hazardous Materials (as defined
            below) on, to, under or from the Properties, except as disclosed in
            environmental site assessment reports obtained by the Company on or
            before the date of the Prospectus in connection with the purchase of
            any of the Properties and provided to the Underwriters or their
            counsel (collectively, the "Environmental Reports") and except for
            those circumstances that have not had and will not have a material
            adverse effect on the relevant Property. Neither the Company nor any
            of its subsidiaries intends to use the Properties or any
            subsequently acquired properties for the purpose of handling,
            burying, storing, retaining, refining, transporting, processing,
            manufacturing, generating, producing, spilling, seeping, leaking,
            escaping, leaching, pumping, pouring, emitting, emptying,
            discharging, injecting, dumping, transferring or otherwise disposing
            of or dealing with Hazardous Materials.

                  (iii) To the best of the Company's knowledge, no seepage,
            leak, escape, leach, discharge, injection, release, emission, spill,
            pumping, pouring, emptying or dumping of Hazardous Materials into
            any surface water, groundwater, soil, air or other media on or
            adjacent to the Properties has occurred, is occurring or is
            reasonably expected to occur, except as is disclosed in the
            Environmental Reports and except for those circumstances not likely
            to have a material adverse effect on the relevant Property.




                                       14






                  (iv) Neither the Company nor any of its subsidiaries has
            received notice from any Governmental Authority or other person of,
            or has knowledge of, any occurrence or circumstance which, with
            notice, passage of time, or failure to act, would give rise to any
            material claim under or pursuant to any Environmental Law or under
            common law pertaining to Hazardous Materials on or originating from
            the existing Properties or any act or omission of any party with
            respect to the existing Properties, except as disclosed in the
            Environmental Reports.

                  (v) To the best of the Company's knowledge, none of the
            Properties is included or proposed for inclusion on any federal,
            state, or local lists of sites which require or might require
            environmental cleanup, including, but not limited to, the National
            Priorities List or CERCLIS List issued pursuant to CERCLA (as
            defined below) by the United States Environmental Protection Agency
            or any analogous state list.

            As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related
materials, asbestos, polychlorinated biphenyls ("PCBs"), petroleum products and
by-products and substances defined or listed as "hazardous substances," "toxic
substances," "hazardous waste," or "hazardous materials" in any Federal, state
or local Environmental Law.

            As used herein, "Environmental Law" shall mean all laws, common law
duties, regulations or ordinances (including any orders or agreements) of any
Federal, state or local governmental authority having or claiming jurisdiction
over any of the Properties (a "Governmental Authority") that are designed or
intended to protect the public health and the environment or to regulate the
handling of Hazardous Materials, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the Hazardous Material
Transportation Act, as amended (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act, as amended (33 U.S.C. Section 1251 et
seq.), and the Clean Air Act, as amended (42 U.S.C. Section 7401 et seq.), and
any and all analogous future federal or present or future state or local laws.

            (aa) The Company is organized in conformity with the requirements
for qualification as a real estate investment trust under Sections 856 through
860 of the Code and the rules and regulations thereunder. As of the close of
every taxable year during the Company's existence, the Company has had no
earnings and profits accumulated in a non-REIT year within the meaning of
Section 857(a)(3)(B) of the Code. The Company's past and proposed method of
operation have enabled it, and will enable it, to meet the requirements for
taxation as a REIT under the Code.

            (bb) Each of the Company's corporate subsidiaries, except its
taxable REIT subsidiary, is in compliance with all requirements applicable to a
"qualified REIT subsidiary" within the meaning of Section 856(i) of the Code and
all applicable regulations under the Code, and the Company is not aware of any
fact that would negatively impact such qualifications.




                                       15






            (cc) The Company and each of its subsidiaries is insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are engaged
and the value of their properties. All policies of insurance and fidelity or
surety bonds insuring the Company or any of its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force and
effect. The Company and its subsidiaries are in compliance with the terms of
such policies and instruments in all material respects and there are no claims
by the Company or any of its subsidiaries under any such policy or instrument as
to which any insurance company is denying liability or defending under a
reservation of rights clause. Neither the Company nor any of its subsidiaries
has been refused any insurance coverage sought or applied for, and the Company
does not have any reason to believe that the Company and each of its
subsidiaries will not be able to renew its respective existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue their respective businesses at
a cost that would not materially and adversely affect the condition (financial
or otherwise), business, prospects, net worth or results of operations of the
Company and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in the
Prospectus.

            (dd) The Company and its subsidiaries have title insurance on each
of the Properties in an amount at least equal to the greater of: (a) the cost of
acquisition of such property; or (b) the replacement cost of the improvements
located on such property.

            (ee) No subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
and of such subsidiary's assets or property to the Company or any other
subsidiary of the Company, except as described in the Prospectus.

            (ff) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery of
this Agreement or the issuance by the Company or sale by the Company of the
Securities.

            (gg) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Section 302 of the
United States Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to each "plan"
(as defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company and its subsidiaries are
eligible to participate. Each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such regulations
and published interpretations. Neither the Company nor any of its subsidiaries
has incurred any unpaid liability to the Pension Benefit Guaranty Corporation
(other than for the payment of premiums in the ordinary course) or to any such
plan under Title IV of ERISA.

            (hh) The execution and delivery of, and the performance by the
Company of its obligations under (a) the purchase agreement (the "WorldCom
Purchase Agreement") executed in connection with the proposed purchase of the
properties located at 601 and 701




                                       16




South 12th Street, Arlington, Virginia 22201-4202 (including any related parking
facility) (together, the "WorldCom Properties") and (b) the proposed lease
agreement (the "WorldCom Lease Agreement" and together with the WorldCom
Purchase Agreement, and the other agreements and documents executed or to be
executed in connection therewith, the "WorldCom Agreements") governing the lease
of the WorldCom Properties to the government of the United States of America,
have been duly and validly authorized by the Company, and the WorldCom
Agreements have been duly executed and delivered by the Company and, assuming
approval by the bankruptcy court exercising jurisdiction over the sale of the
WorldCom Properties, constitute valid and legally binding agreements of the
Company, enforceable against the Company in accordance with their terms. Upon
closing of the offering of common stock contemplated by this Agreement, the
Company has sufficient capital resources to complete its obligations under the
WorldCom Agreements.

            7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter,
within the meaning of either the Act or the Exchange Act, against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) (i) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, the Preliminary Prospectus, if any, or the Prospectus, or in any
amendment thereof or supplement thereto; or (ii) arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(iii) arise out of or are based upon a breach of the representations and
warranties in this Agreement. The Company agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case arising in connection with this Section 7 to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.

               (b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
with reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter in writing specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company acknowledges that the only information furnished
in writing by or on behalf of the several Underwriters for inclusion in the
Prospectus is set forth in Section 12 of this Agreement.




                                       17






               (c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party: (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses;
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if: (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise, or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action), unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.

               (d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 7 is unavailable to, or insufficient to hold harmless, an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and by the Underwriters, on the other, from the offering of the
Securities; provided, however, that in no case shall any Underwriter (except as
may be provided in any agreement among underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Underwriters
severally shall contribute in such proportion as is appropriate to reflect not
only




                                       18




such relative benefits but also the relative fault of the Company, on the one
hand, and of the Underwriters, on the other, in connection with the statements
or omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Prospectus. Relative fault shall be determined by
reference to, among other things: (i) whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company, on the one hand,
or the Underwriters, on the other; (ii) the intent of the parties and their
relative knowledge; (iii) access to information; and (iv) the opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).

         8. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Securities hereunder are subject to the
following conditions:

            (a) (i) If, at the time this Agreement is executed and delivered, it
is necessary for a post-effective amendment to the registration statement to be
declared effective before the offering of the Securities may commence, such
post-effective amendment shall have become effective not later than 5:30 P.M.,
New York City time, on the date hereof, or at such later date and time as shall
be consented to in writing by the Underwriters; (ii) no stop order suspending
the effectiveness of the registration statement shall have been issued and no
proceeding for that purpose shall have been instituted or, to the knowledge of
the Company or any Underwriter, threatened by the Commission; and (iii) any
request of the Commission for additional information (to be included in the
registration statement or the Prospectus or otherwise) shall have been complied
with to the satisfaction of the Underwriters.

            (b) Subsequent to the effective date of this Agreement, or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereto) and the Prospectus (exclusive of
any amendment thereof), there shall not have occurred: (i) any change, or any
development involving a prospective change, in or affecting the condition
(financial or otherwise), earnings, business, properties, net worth, or results
of operations of the Company and its subsidiaries, whether or not arising from
transactions in the ordinary course of business, except as set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), the effect of which, in the sole judgment of the




                                       19




Underwriters, is so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendments thereto)
and the Prospectus (exclusive of any supplement thereto); or (ii) any event or
development relating to or involving the Company and its subsidiaries or any
officer or director of the Company and its subsidiaries which makes any
statement made in the Prospectus untrue or which, in the opinion of the Company
and its counsel or the Underwriters and their counsel, requires the making of
any addition to or change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein, or necessary in order
to make the statements therein not misleading, if amending or supplementing the
Prospectus to reflect such event or development would, in the opinion of the
Underwriters, adversely affect the market for the Securities.

            (c) The Underwriters shall have received on the Closing Date, an
opinion of Shaw Pittman, LLP, counsel for the Company, dated the Closing Date
and addressed to the Underwriters, to the effect that:

                (i) The Company and each of its material subsidiaries: (x) is a
            corporation, partnership or trust duly incorporated and validly
            existing in good standing under the laws of its state of formation,
            with full corporate, partnership or trust power, as applicable, and
            authority to own, lease and operate its properties and to conduct
            its business as described in the Registration Statement and the
            Prospectus (and any amendment or supplement thereto); and, (y) based
            solely on certificates of public officials and officers of the
            Company and each of its material subsidiaries, are duly registered
            and qualified to conduct their business; and (z) are in good
            standing in each jurisdiction or place where the nature of its
            properties or the conduct of its business requires such registration
            or qualification, except where the failure so to register or qualify
            does not have a material adverse effect on the condition (financial
            or other), business, properties, net worth or results of operations
            of the Company and its subsidiaries;

                (ii) The Company has no material subsidiaries other than those
            set forth on Schedule III hereto, and does not control, directly or
            indirectly, any corporation, partnership, joint venture, association
            or other business association (other than the general partner
            interest of Net Lease Realty III, Inc. in Net Lease Institutional
            Funding, L.P.). The issued shares of capital stock of each of the
            Company's subsidiaries have been duly authorized and validly issued,
            are fully paid and non-assessable and are owned legally and
            beneficially by the Company and, to the knowledge of such counsel,
            after due inquiry, free and clear of any security interests, liens,
            encumbrances, equities or claims;

                (iii) The authorized capital stock and debt securities of the
            Company conform in all material respects as to legal matters to the
            description thereof contained in the Prospectus under the captions
            "Description of Debt Securities," "Description of Preferred Stock,"
            "Description of Depositary Shares," "Description of Common Stock"
            "Description of Common Stock Warrants" in the Base Prospectus and,
            except as set forth in the Prospectus, no options, warrants or other
            rights to purchase, agreements or other obligations to issue, or
            rights to




                                       20




            convert any obligations into or exchange any securities for, shares
            of capital stock of or ownership interests in the Company are
            outstanding;

                (iv) All the shares of capital stock of the Company outstanding
            prior to the issuance of the Securities have been duly authorized
            and validly issued, and are fully paid and nonassessable;

                (v) The Securities have been duly authorized and, when issued
            and delivered to the Underwriters against payment therefor in
            accordance with the terms hereof, will be validly issued, fully paid
            and nonassessable and free of preemptive rights under Maryland
            General Corporation law;

                (vi) No holder of securities of the Company is entitled to have
            such securities registered under the Registration Statement which
            right has not been waived in connection with the transactions
            contemplated by this Agreement;

                (vii) The form of certificates for the Securities conform to the
            requirements of the Maryland General Corporation Law, if any;

                (viii) The Registration Statement has become effective under the
            Act; any required filing of the Basic Prospectus, any Preliminary
            Prospectus or the Prospectus, and any supplements thereto, pursuant
            to Rule 424(b) has been made in the manner and within the time
            period required by Rule 424(b); to the knowledge of such counsel, no
            stop order suspending the effectiveness of the Registration
            Statement has been issued, no proceedings for that purpose have been
            instituted or threatened and the Registration Statement and the
            Prospectus (other than the financial statements and other financial
            information contained therein, as to which such counsel need express
            no opinion) comply as to form in all material respects with the
            applicable requirements of the Act, the Exchange Act and the Trust
            Indenture Act and the respective rules thereunder; and such counsel
            has no reason to believe: (A) that on the effective date of the
            registration statement, or as of the date hereof, the Registration
            Statement contained any untrue statement of a material fact or
            omitted to state any material fact required to be stated therein or
            necessary to make the statements therein not misleading; or (B) that
            the Prospectus as of its date and on the Closing Date included or
            includes any untrue statement of a material fact or omitted or omits
            to state a material fact necessary to make the statements therein,
            in the light of the circumstances under which they were made, not
            misleading (in each case, other than the financial statements and
            other financial information, contained therein, as to which such
            counsel need express no opinion);

                (ix) The Company has the corporate power and authority to enter
            into this Agreement and to issue, sell and deliver the Securities to
            the Underwriters as provided herein. This Agreement has been duly
            authorized, executed and delivered by the Company and are valid,
            legal and binding agreements of the Company, enforceable against the
            Company in accordance with their respective terms, except as
            enforcement of rights to indemnity and contribution hereunder




                                       21




            may be limited by Federal or state securities laws or principles of
            public policy and subject to the qualification that the
            enforceability of the Company's obligations hereunder and thereunder
            may be limited by bankruptcy, fraudulent conveyance, insolvency,
            reorganization, moratorium, and other laws relating to or affecting
            creditors' rights generally, and by general equitable principles
            when applied by a court of law or equity;

                (x) Neither the Company nor any of its subsidiaries is: (A) in
            violation of its respective articles of incorporation or by-laws; or
            (B) in default in the performance of any material obligation,
            agreement or condition contained in any bond, debenture, note or
            other evidence of indebtedness set forth on Schedule A attached to
            such opinion, except as may be disclosed in the Prospectus;

                (xi) Neither the issue, offer, sale or delivery of the
            Securities, the execution, delivery or performance by the Company of
            this Agreement, compliance by the Company with the provisions hereof
            nor consummation by the Company of the transactions contemplated
            hereby (including the application of the proceeds from the sale of
            the Securities): (A) conflicts or will conflict with or constitutes
            or will constitute or result in a breach of, or a default under, (1)
            the articles of incorporation or by-laws of the Company or any of
            its subsidiaries or (2) any agreement, indenture, lease or other
            instrument to which the Company or any of its subsidiaries is a
            party or by which the Company or any properties of the Company or
            any of its subsidiaries is bound (x) that is an exhibit to the
            Registration Statement or (y) which is known to such counsel; or (B)
            results or will result in the creation or imposition of any lien,
            charge or encumbrance upon any property or assets of the Company or
            its subsidiaries, pursuant to any agreement, indenture, lease,
            mortgage, deed of trust or other instrument, agreement, obligation,
            condition or covenant to which the Company or any of its
            subsidiaries is bound or a party or to which any properties of the
            Company or any of its subsidiaries is subject; or (C) violates or
            will violate any statute, law, rule, regulation, judgment, order or
            decree applicable to the Company or any of its subsidiaries of any
            court, regulatory body, administrative agency, governmental body,
            arbitrator or other authority having jurisdiction over the Company
            or any of its subsidiaries or any of its or their properties;

                (xii) No consent, approval, authorization or other order of, or
            registration or filing with, any court, regulatory body,
            administrative agency or other governmental body, agency, or
            official is required on the part of the Company (except as have been
            obtained under the Act or such as may be required under state
            securities or blue sky laws governing the purchase and distribution
            of the Securities) for the valid issuance and sale of the Securities
            to the Underwriters as contemplated by this Agreement;

                (xiii) (A) The Registration Statement and the Prospectus, and
            any supplements or amendments thereto (except for the financial
            statements and the notes thereto and the schedules and other
            financial and statistical data included therein, as to which such
            counsel need not express any opinion), comply as to




                                       22




            form in all material respects with the requirements of the Act; and
            (B) each of the Incorporated Documents (except for the financial
            statements and the notes thereto and the schedules and other
            financial and statistical data included therein, as to which counsel
            need not express any opinion) complies as to form in all material
            respects with the Exchange Act and the rules and regulations of the
            Commission thereunder;

                (xiv) To the knowledge of such counsel, after due inquiry, there
            is no action, suit or proceeding pending or threatened by or before
            any court or governmental agency, authority or body or any
            arbitrator involving the Company or any of its subsidiaries or any
            of its or their property of a character required to be described in
            the Registration Statement or Prospectus (or any amendment or
            supplement thereto), and there are no agreements, contracts,
            indentures, leases or other instruments or documents that are
            required to be described in the Registration Statement or the
            Prospectus (or any amendment or supplement thereto) or to be filed
            or incorporated by reference as an exhibit to the Registration
            Statement or any Incorporated Document that are not described, filed
            or incorporated as required, as the case may be;

                (xv) To the knowledge of such counsel, after due inquiry,
            neither the Company nor any of its subsidiaries is in violation of
            any law, ordinance, administrative or governmental rule or
            regulation applicable to the Company or its subsidiaries or of any
            decree of any court or governmental agency or body having
            jurisdiction over the Company or its subsidiaries;

                (xvi) Such counsel is not aware of any certificates,
            authorizations, licenses or permits required by any federal
            regulatory authority which are necessary for the Company and/or its
            subsidiaries to conduct their respective businesses other than any
            such certificates, authorizations, licenses or permits which have
            been obtained. To the knowledge of such counsel, neither the Company
            nor any of its subsidiaries has received any notice of proceedings
            relating to the revocation or modification of any certificate,
            authorization, license or permit issued by any federal, state,
            municipal or foreign regulatory authority which, singly or in the
            aggregate, if the subject of an unfavorable decision, ruling or
            finding, would result in a material adverse change in the condition
            (financial or otherwise), business prospects, net worth or results
            of operations of the Company or its subsidiaries;

                (xvii) The Securities have been approved for listing on the New
            York Stock Exchange, subject to official notice of issuance;

                (xviii) The Company is not subject to registration as an
            investment company under the Investment Company Act of 1940, as
            amended, and the transactions contemplated by this Agreement will
            not cause the Company to become an investment company subject to
            registration under the Investment Company Act of 1940, as amended;




                                       23






                (xix) Commencing with the Company's initial taxable year, the
            Company has qualified as a REIT under the Code for all taxable years
            ending on or before December 31, 2002, and its past and proposed
            method of operation will enable it to qualify as a REIT under the
            Code for its taxable year ending on December 31, 2003; and each of
            the Company's corporate subsidiaries (other than its taxable REIT
            subsidiary) is a "qualified REIT subsidiary" within the meaning of
            Section 856(i) of the Code;

                (xx) To the knowledge of such counsel, after due inquiry, (A)
            Neither the Company nor any of its subsidiaries is in violation of
            any federal law or regulation relating to occupational safety and
            health or to the environment, including, without limitation, the
            storage, handling, transportation or disposal of hazardous or toxic
            materials; (B) the Company and its subsidiaries have received all
            permits, registrations, licenses and other approvals required of
            them under applicable federal occupational safety and health and
            environmental laws and regulations to conduct their respective
            businesses; and (C) the Company and each of its subsidiaries is in
            compliance with all terms and conditions of any such permit,
            registration, license or approval, except any such violation of law
            or regulation, failure to receive required permits, registrations,
            licenses or other approvals or failure to comply with the terms and
            conditions of such permits, registrations, licenses or approvals
            which would not, singly or in the aggregate, result in a material
            adverse change in the condition (financial or otherwise), business
            prospects, net worth or results of operations of the Company or its
            subsidiaries;

                (xxi) The statements in the Prospectus, insofar as they are
            descriptions of contracts or agreements or constitute statements of
            law or legal conclusions, are accurate and present fairly the
            information required to be shown in all material respects;

                (xxii) Except as disclosed in the Prospectus, no holders of
            securities have rights to the registration of such securities under
            the Registration Statement;

                (xxiii) The execution and delivery of, and the performance by
            the Company of its obligations under (a) the purchase agreement (the
            "WorldCom Purchase Agreement") executed in connection with the
            proposed purchase of the properties located at 601 and 701 South
            12th Street, Arlington, Virginia 22201-4202 (including any related
            parking facility)(together, the "WorldCom Properties") and (b) the
            proposed lease agreement (the "WorldCom Lease Agreement" and
            together with the WorldCom Purchase Agreement, and the other
            agreements and documents executed or to be executed in connection
            therewith, the "WorldCom Agreements") governing the lease of the
            WorldCom Properties to the government of the United States of
            America, have been duly and validly authorized by the Company, and
            the WorldCom Agreements have been duly executed and delivered by the
            Company and, assuming approval by the bankruptcy court exercising
            jurisdiction over the sale of the WorldCom




                                       24




            Properties, constitute valid and legally binding agreements of the
            Company, enforceable against the Company in accordance with their
            terms; and

                (xxiv) Although counsel has not undertaken, except as otherwise
            indicated in its opinion, to determine independently, and does not
            assume any responsibility for, the accuracy or completeness of the
            statements in the Registration Statement, such counsel has
            participated in the preparation of the Registration Statement and
            the Prospectus, including review and discussion of the contents
            thereof (including review and discussion of the contents of all
            Incorporated Documents), and nothing has come to the attention of
            such counsel that has caused it to believe that the Registration
            Statement (including the Incorporated Documents), at the time the
            Registration Statement became effective, or the Prospectus, as of
            its date and as of the Closing Date or the Closing Date of the
            Additional Securities contained an untrue statement of a material
            fact or omitted to state a material fact required to be stated
            therein or necessary to make the statements therein not misleading
            or that any amendment or supplement to the Prospectus, as of its
            respective date, and as of the Closing Date or the Closing Date of
            the Additional Securities, as the case may be contained any untrue
            statement of a material fact or omitted to state a material fact
            necessary in order to make the statements therein, in the light of
            the circumstances under which they were made, not misleading (it
            being understood that such counsel need express no opinion with
            respect to the financial statements and the notes thereto and the
            schedules and other financial data included in the Registration
            Statement or the Prospectus or any Incorporated Document).

            (d) The Underwriters shall have received on the Closing Date an
opinion of Hunton & Williams LLP, counsel for the Underwriters, dated the
Closing Date and addressed to the Underwriters, with respect to the matters
referred to in clauses (x) and (xv)(A) of the foregoing paragraph (c) and such
other related matters as the Underwriters may request.

            (e) The Underwriters shall have received letters addressed to the
Underwriters and dated the date hereof and the Closing Date from KPMG LLP,
independent certified public accountants, substantially in the forms heretofore
approved by the Underwriters.

            (f) (A) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (B) there shall
not have been any change in the capital stock of the Company nor any material
increase in the short-term or long-term debt (including any off-balance sheet
activities or transactions) of the Company and its subsidiaries (other than in
the ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); (C) there shall not have been, since the respective dates as of which
information is given in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement thereto),
any material adverse change in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company or its
subsidiaries; (D) the Company and its subsidiaries shall not




                                       25




have any liabilities or obligations (financial or otherwise), direct or
contingent (whether or not in the ordinary course of business), that are
material to the Company or its subsidiaries, other than those reflected in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); and (E) all the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, provided, that, for purposes of the representations and warranties to be
made as of the Closing Date, the Underwriters shall have received a certificate,
dated the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable to
the Underwriters), to the effect set forth in this Section 8(f) and in Section
8(g) hereof.

            (g) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein contained
and required to be performed or complied with by it hereunder or under the
Indenture, at or prior to the Closing Date.

            (h) Prior to the Closing Date the Securities shall have been listed
subject to notice of issuance, on the New York Stock Exchange.

            (i) The Company shall have furnished or caused to be furnished to
the Underwriters such further certificates and documents as the Underwriters
shall have requested.

            All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to the Underwriters and their counsel.

            Any certificate or document signed by any officer of the Company and
delivered to the Underwriters, or to counsel for the Underwriters, shall be
deemed a representation and warranty by the Company to each Underwriter as to
the statements made therein.

            If any of the conditions specified in this Section 8 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriters and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled by
the Underwriters at, or at any time prior to, the Closing Date. Notice of such
cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.

            The documents required to be delivered by this Section 8 shall be
delivered at the offices of Hunton & Williams LLP, counsel for the Underwriters,
at Riverfront Plaza, East Tower, 951 East Byrd Street, Richmond, Virginia 23219
on the Closing Date.

         9. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by the Company of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Preliminary Prospectus, if any, the
Prospectus, and each amendment or supplement to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the registration
statement, each Preliminary




                                       26




Prospectus, the Prospectus, the Incorporated Documents, and all amendments or
supplements to any of them, as may be reasonably requested for use in connection
with the offering and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities,
including any stamp or other taxes in connection with the original issuance and
sale of the Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, the preliminary and supplemental blue sky memoranda and all other
agreements or documents printed (or reproduced) and delivered in connection with
the offering of the Securities; (v) the listing of the Shares on the New York
Stock Exchange; (vi) the registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of the several states as
provided in Section 5(g) hereof (including the reasonable fees, expenses and
disbursements of counsel for the Underwriters relating to the preparation,
printing or reproduction, and delivery of the preliminary and supplemental blue
sky memoranda and such registration and qualification); (vii) the filing fees
and the fees and expenses of counsel for the Underwriters in connection with any
filings required to be made with the National Association of Securities Dealers,
Inc.; (viii) the transportation and other expenses incurred by or on behalf of
Company representatives in connection with presentations to prospective
purchasers of the Securities; and (ix) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Company.

         10. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the registration statement to be declared effective
before the offering of the Securities may commence, when notification of the
effectiveness of such post-effective amendment has been released by the
Commission. Until such time as this Agreement shall have become effective, it
may be terminated by the Company, by notifying the Underwriters, or by the
Underwriters, by notifying the Company.


             If any one or more Underwriters shall fail to purchase and pay for
any of the Securities agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the
performance of its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay for (in the
respective proportions which the number of Firm Securities set forth opposite
their names in Schedule I hereto bears to the aggregate amount of Firm
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate principal
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate principal amount of
Securities set forth in Schedule I hereto, the remaining Underwriters shall have
the right to purchase all, but shall not be under any obligation to purchase
any, of the Securities, and if such nondefaulting Underwriters do not purchase
all the Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 10, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the nondefaulting
Underwriters shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting




                                       27




Underwriter of its liability, if any, to the Company and any nondefaulting
Underwriter for damages occasioned by its default hereunder.

             Any notice under this Section 10 may be given by telegram, telecopy
or telephone but shall be subsequently confirmed by letter.

             (a) Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Underwriters, without liability on
the part of any Underwriter to the Company, by notice to the Company, if, prior
to the Closing Date or any Closing Date for the Additional Securities (if
different from the Closing Date and then only as to the Additional Securities)
as the case may be: (i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market shall have
been suspended or limited or minimum prices shall have been established on
either of such Exchanges or the Nasdaq National Market; (ii) there shall not
have been any decrease in the rating of any of the Company's debt securities by
any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change; or (iii) a general
moratorium on commercial banking activities in New York or Florida shall have
been declared by either federal or state authorities; or (iv) the Company or any
of its subsidiaries shall have sustained a substantial loss by fire, flood,
accident or other calamity which renders it impracticable, in the reasonable
judgment of the Underwriter, to consummate the sale of the Securities and the
delivery of the Securities by the Underwriter at the initial public offering
price; or (v) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto) or to enforce contracts for
the resale of the Securities by the Underwriters. Notice of such termination may
be given to the Company by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.

         11. Information Furnished by the Underwriters. The statements in the
third, eighth and ninth paragraphs under the caption "Underwriting" in the
Prospectus Supplement, constitute the only information furnished by or on behalf
of the Underwriters as such information is referred to in Sections 6(b) and 7
hereof.

         12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 7 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 9 hereof shall survive the termination or
cancellation of this Agreement.

         13. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (212) 816-7912) and confirmed to the General




                                       28




Counsel, Citigroup Global Markets Inc., at 388 Greenwich Street, New York, New
York, 10013, Attention: General Counsel; or, if sent to the Company, will be
mailed, delivered or telefaxed to the office of the Company at 450 S. Orange
Street, Suite 900, Orlando, Florida 32801, (fax no. 407-650-1011) Attention:
James M. Seneff, Jr., Chairman and Chief Executive Officer.

         14. Successors. This Agreement has been made solely for the benefit of
the several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein. This Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons referred to in
Section 7 hereof, and no other person shall acquire or have any right under or
by virtue of this Agreement. Neither the term "successor" nor the term
"successors and assigns" as used in this Agreement shall include a purchaser
from any Underwriter of any of the Securities in his status as such purchaser.

         15. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York without giving effect to the
conflict or choice of laws principles thereof.

         16. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same agreement.

         17. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.

         18. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.

         "Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.




                                       29




         If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.

                                               Very truly yours,

                                               COMMERCIAL NET LEASE REALTY, INC.


                                               By: /s/ Kevin B. Habicht
                                                  ------------------------------
                                               Name:   Kevin B. Habicht
                                                    ----------------------------
                                               Title:  Chief Financial Officer
                                                     ---------------------------



         The foregoing Agreement is hereby confirmed and accepted as of the date
on the first page hereof.

                                               CITIGROUP GLOBAL MARKETS INC.


                                               By: /s/ Douglas W. Sesler
                                                  ------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------


                                               WACHOVIA CAPITAL MARKETS, LLC


                                               By: /s/ J. Brit Stephens
                                                  ------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------


         For themselves and the other several Underwriters named in Schedule I
to the foregoing Agreement.




                                       30






                                   SCHEDULE I

                        COMMERCIAL NET LEASE REALTY, INC.




                                                                                NUMBER OF UNDERWRITTEN
                   UNDERWRITERS                                               SECURITIES TO BE PURCHASED
                   ------------                                               --------------------------
                                                                           
Citigroup Global Markets Inc.                                                       $3,220,000
Wachovia Capital Markets, LLC                                                          980,000
A.G. Edwards & Sons, Inc.                                                              700,000
Legg Mason Wood Walker, Incorporated                                                   700,000
                                                                                    ----------
         Total                                                                      $5,600,000












                                   SCHEDULE II

                        COMMERCIAL NET LEASE REALTY, INC.

Persons Subject to Lock-Up:

Robert A. Bourne
Gary M. Ralston
James M. Seneff, Jr.
Kevin B. Habicht
Julian E. Whitehurst
Dennis E. Tracy
David W. Cobb






                                    EXHIBIT A

                                       TO

                                   SCHEDULE II

                            FORM OF LOCK-UP AGREEMENT

                          [LETTERHEAD EXECUTING PARTY]


                        Commercial Net Lease Realty, Inc.
                         Public Offering of Common Stock


                                                                   July 25, 2003

Citigroup Global Markets Inc.
Wachovia Capital Markets, LLC
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

         This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Commercial Net
Lease Realty Inc., a Maryland corporation (the "Company"), and each of you as
representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Stock, $0.01 par value (the "Common
Stock"), of the Company.

         In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge
or otherwise dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with




                                       2




respect to, any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction, for a period of
90 days after the date of the Underwriting Agreement, other than shares of
Common Stock disposed of as bona fide gifts approved by Citigroup Global Markets
Inc.

         If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.

                                                            Yours very truly,

                                                            [SIGNATURE]
                                                            [NAME AND ADDRESS]




                                       3




                                  SCHEDULE III

                              LIST OF SUBSIDIARIES


                   NAME OF SUBSIDIARY
                   ------------------

Net Lease Realty I, Inc.
Net Lease Realty II, Inc.
Net Lease Realty III, Inc.
Net Lease Realty IV, Inc.
CNLR Ster Florida, LLC
CNLR Ster Texas L.P.
CNLR Ster Richmond Virginia, LLC
CNLR Ster Glendale Arizona, LLC
CNLR Ster Paradise Valley Arizona, LLC
Net Lease Funding, Inc.
Hollywood CNLR, LLC
Commercial Net Lease Realty Trust
CNLR Ster Toledo Ohio, LLC
CNLR Texas Opportunity, L.P.
CNLR GP Corp.
CNLR LP Corp.
CNLR Texas GP Corp.
Commercial Net Lease Realty Services, Inc.
RE-Stores, Inc.
CNLRS Funding, Inc.
CNLRS Exchange I, Inc.
NorthStar Brokerage Services, Inc.
LHC-Memphis/Germantown, LLC
CNLRS Equity Ventures, Inc.
Eck-St. Joseph MO, LLC
Net Lease Realty VI, LLC
CNLR Plantation BT, LLC
CNLRS Mortgage Capital, Inc.
CNLRS Acquisitions, Inc.
CNLRS Acquisitions I, LLC
Gator Columns, LLC






                                       4

EX-5

Exhibit 5 Opinion of Shaw Pittman LLP

                        [Letterhead of Shaw Pittman LLP]


                                  July 25, 2003

Commercial Net Lease Realty, Inc.
450 South Orange Avenue
Suite 900
Orlando, Florida  32801

Ladies and Gentlemen:

        We have acted as counsel to Commercial Net Lease Realty, Inc., a
Maryland corporation (the "Company"), in connection with the Registration
Statement on Form S-3, Registration No. 333-105635 (the "Registration
Statement"), filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, and declared
effective by the Commission on June 5, 2003. Pursuant to the Registration
Statement, the Company proposes to issue and sell 5,600,000 shares of the
Registrant's Common Stock, par value $.01 per share (the "Common Stock"), to the
public, and up to an additional 840,000 shares of Common Stock upon the exercise
of the underwriters' over-allotment option, pursuant to the terms set forth in
the prospectus supplement dated July 25, 2003 (the "Prospectus Supplement") to
the prospectus filed as part of the Registration Statement.

        Based upon our examination of the originals or copies of such documents,
corporate records, certificates of officers of the Company and other instruments
as we have deemed necessary and upon the laws as presently in effect, we are of
the opinion that the Common Stock has been duly authorized for issuance by the
Company, and that upon issuance and delivery in accordance with the Prospectus
Supplement, the Common Stock will be validly issued, fully paid and
nonassessable.

        We hereby consent to the filing of this opinion as an exhibit to the
Prospectus Supplement. We also consent to the reference to Shaw Pittman LLP
under the caption "Legal Matters" in the Prospectus Supplement.





                                             Very truly yours,


                                             /s/  Shaw Pittman LLP


                                             SHAW PITTMAN LLP

EX-8

Exhibit 8 Opinion of Shaw Pittman LLP


                        [LETTERHEAD OF SHAW PITTMAN LLP]


                                  July 25, 2003


Commercial Net Lease Realty, Inc.
450 South Orange Avenue
Suite 900
Orlando, Florida 32801

Ladies and Gentlemen:

        Commercial Net Lease Realty, Inc. (the "Company") has filed a
registration statement on Form S-3 (File No. 333-105635) (the "Registration
Statement"), with the Securities and Exchange Commission, which was declared
effective on June 5, 2003. In connection with the filing of a prospectus
supplement on July 25, 2003, you have asked us to render an opinion with respect
to the qualification of the Company as a real estate investment trust ("REIT")
under sections 856 through 860 of the Internal Revenue Code of 1986, as amended
(the "Code").

        We have served as special counsel for the Company in connection with the
filing of the prospectus and the prospectus supplement and from time to time in
the past have represented the Company on specific matters as requested by the
Company. Specifically for the purpose of this opinion, we have examined and
relied upon the following: copies of the Company's Articles of Incorporation and
any amendments thereto; the Registration Statement; the prospectus; the
prospectus supplement; copies of executed leases covering real property owned by
the Company; the Form 10-K filed on March 28, 2003; and the Company's Form S-11
Registration Statement as filed with the Securities and Exchange Commission on
August 15, 1984.

        We have not served as general counsel to the Company and have not been
involved in decisions regarding the day-to-day operation of the Company and its
properties. We have, however, discussed the mode of operation of the Company
with its officers with a view to learning information relevant to the opinions
expressed herein and have received and relied upon a certificate from the
Company with respect to certain matters.

        We have discussed with management of the Company arrangements relating
to the management of its properties, the relationships of the Company with
tenants of such properties, and certain terms of leases of such properties to
tenants, with a view to assuring that (i) at the close of each quarter of the
taxable years covered by this opinion, it met the asset composition requirements
set forth in section 856(c)(4), (ii) with respect to years covered by this
opinion, it satisfied the 95% and 75% gross income tests set forth in sections
856(c)(2) and (3), respectively, and (iii) with respect to tax years prior to
1998, it satisfied the 30% gross income test. We have further reviewed with
management of the Company the requirements that the beneficial ownership of a
REIT be held by 100 or more persons for at least 335/365ths of each taxable year



Commercial Net Lease Realty, Inc.
July 25, 2003
Page 2


and that a REIT must satisfy the diversity of ownership requirements of section
856(h) as such requirements existed in the years covered by this opinion, and we
have been advised by management that at all times during the years covered by
this opinion (and specifically on each record date for the payment of dividends
during 1984 through the date hereof) the Company has had more than 1,000
shareholders of record, that the Company maintains the records required by
section 1.857-8 of the Treasury Regulations, that no later than January 30 of
each year it sent the demand required by section 1.857-8(d) of the Treasury
Regulations to each shareholder of record owning one percent or more of the
outstanding shares of the Company on the appropriate date required by said
regulation, and that the actual ownership of the Company shares was such that,
to the best knowledge of its management (based upon responses to the aforesaid
demands, any filing of a Schedule 13D under the Securities Exchange Act of 1934,
as amended, or any other sources of information), the Company satisfied the
applicable requirements of section 856(h). Further, we have examined various
property leases and lease supplements relating to the properties that the
Company owns, and although leases relating to certain properties that the
Company owns have not been made available to us, the Company has represented
with respect to such leases that they do conform in all material respects to a
form of lease agreement provided to us. On the basis of discussions with
management of the Company, we are not aware that the Company's election to be a
REIT has been terminated or challenged by the Internal Revenue Service or any
other party, or that the Company has revoked its election to be a REIT for any
such prior year so as to make the Company ineligible to qualify as a REIT for
the years covered by this opinion.

        In rendering the opinions set forth herein, we are assuming that copies
of documents examined by us are true copies of originals thereof and that the
information concerning the Company set forth in the Company's federal income tax
returns, and in the prospectus supplement, as well as the information provided
to us by the Company's management are true and correct. We have no reason to
believe that such assumptions are not warranted.

        Based upon the foregoing, we are of the opinion that the Company was a
"real estate investment trust" as defined by section 856(a) for its taxable
years ended December 31, 1984 through December 31, 2002, and its current and
proposed method of operation will enable it to meet the requirements for
qualification and taxation as a REIT for its taxable year ending December 31,
2003 and for all future taxable years. With respect to the 2003 year and all
future years, however, we note that the Company's status as a real estate
investment trust at any time is dependent among other things upon its meeting
the requirements of section 856 throughout the year and for the year as a whole.

        This opinion is based upon the existing provisions of the Code (or
predecessor provisions, as applicable), rules and regulations (including
proposed regulations) promulgated thereunder, and reported administrative and
judicial interpretations thereof, all of which are subject to change, possibly
with retroactive effect. This opinion is limited to the specific matters covered
hereby and should not be interpreted to imply that the undersigned has offered
its opinion on any other matter.


Commercial Net Lease Realty, Inc.
July 25, 2003
Page 3


        We hereby confirm that the statements set forth in the Registration
Statement under the heading "Federal Income Tax Considerations," and in the
prospectus supplement under the heading "Certain Additional Income Tax
Considerations," to the extent that they constitute matters of law or legal
conclusions with respect thereto, are correct in all material respects.

        We hereby consent to the filing of this opinion as an exhibit to the
prospectus supplement. We also consent to the reference to Shaw Pittman LLP
under the caption "Legal Matters" in the prospectus supplement. In giving such
consent, we do not consider that we are "experts," within the meaning of the
term used in the Act or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder, with respect to any part of the Registration
Statement, including this opinion as an exhibit or otherwise.


                                                  Very truly yours,


                                                  SHAW PITTMAN LLP


                                                  By: /s/ Charles B. Temkin
                                                      ---------------------

                                                      Charles B. Temkin, P.C.

EX-10.1

                                                                    EXHIBIT 10.1

                          REAL ESTATE PURCHASE CONTRACT

         This Real Estate Purchase Contract (the "CONTRACT") is entered into as
of the 23rd day of July, 2003 (the "EXECUTION DATE") by and between MCI WORLDCOM
NETWORK SERVICES, INC., a Delaware corporation ("SELLER"), and COMMERCIAL NET
LEASE REALTY, INC., a Maryland corporation (or an affiliate or related entity
thereof) ("PURCHASER").

                                    RECITALS:

         A.       On July 21, 2002 and November 8, 2002, Seller and certain of
its domestic affiliates filed voluntary petitions for relief under Chapter 11 of
title 11, United States Code (the "BANKRUPTCY CODE") in the United States
Bankruptcy Court for the Southern District of New York (the "BANKRUPTCY COURT").
Seller is continuing to operate its business and manage its properties as a
debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy
Code.

         B.       Seller desires to sell and Purchaser desires to purchase from
Seller certain property on the terms and subject to the conditions set forth
herein.

         In consideration of the representations and covenants set forth herein,
Purchaser and Seller hereby agree as follows:

         1.       PURCHASE AND SALE. Seller agrees to sell to Purchaser, and
Purchaser agrees to buy from Seller, in accordance with the terms, conditions
and stipulations set forth in this Contract, all of Seller's right, title and
interest in and to (i) those certain parcels of real property located at 601 and
701 South 12th Street, Arlington, Virginia, as more particularly described in
Exhibit A, and any and all improvements thereon and appurtenances thereto (the
"REAL PROPERTY"), (ii) the furniture, furnishings, fixtures, equipment,
inventory and other tangible personal property located at the Real Property and
owned by Seller (but excluding any such items as are located in the Terminal
Space (hereinafter defined), which shall remain the property of Seller), subject
to the rights of the tenants under the TSA Lease (hereinafter defined)
(collectively, the "PERSONAL PROPERTY"), (iii) the construction and other
contracts which are set forth on Exhibit B (collectively, the "CONSTRUCTION
CONTRACTS"), (iv) the management contracts, utility contracts, service
contracts, equipment leases, maintenance contracts, and other agreements
pertaining to the Real Property all of which are set forth on Exhibit C
(collectively, "SERVICE CONTRACTS"), (v) all plans and specifications;
engineering plans and studies; floor plans and landscape plans pertaining to the
Real Property in Seller's possession, (vi) all mineral, oil and gas rights,
water rights, sewer rights and other utility rights allocated to the Real
Property, (vii) all leases of any portion of the Real Property, (viii) all
appurtenances, easements, licenses, privileges and other property interests
belonging or appurtenant to the Real Property, and (ix) all right, title and
interest of Seller in and to any roads, streets and ways, public and private,
serving the Real Property (including, without limitation, all rights to develop
the land granted by governmental entities having jurisdiction over said land)
(all of the foregoing items in (i)-(ix) above, collectively, the "PROPERTY").



         2.       PAYMENT OF PURCHASE PRICE.

                  A.       The total purchase price to be paid to Seller by
Purchaser for the Property shall be $142,800,000 (One Hundred Forty Two Million
Eight Hundred Thousand Dollars), subject to the prorations and adjustments that
are more particularly set forth in this Contract (the "PURCHASE PRICE").

                  B.       Upon execution of this Contract, Purchaser shall
deposit with Chicago Title Insurance Co., 711 Third Avenue, New York, New York
10017, Attention: Robert Simins) (the "ESCROW AGENT") an amount equal to
$14,280,000 (Fourteen Million Two Hundred Eighty Thousand Dollars) in
immediately available funds. Such deposit shall be held by the Escrow Agent in
accordance with the terms of the Escrow Agreement annexed hereto as Exhibit D.
Said sum, together with any interest earned thereon or any additions made
thereto shall be referred to herein as the "DEPOSIT." The Deposit shall be
nonrefundable, except as expressly set forth herein. At the time of closing of
this transaction (the "CLOSING"), the Deposit shall be applied toward the
Purchase Price. At Closing, Purchaser shall remit the remainder of the Purchase
Price by wire transfer of immediately available funds to the Escrow Agent for
the account of Seller.

         3.       TITLE AND SURVEY. On or prior to the date hereof, Seller has
delivered to Purchaser a title insurance commitment (the "TITLE BINDER") from
the Escrow Agent and a current ALTA Survey of the Property, as each are more
particularly described on Exhibit E. Purchaser has approved the state of title
to the Property and all matters disclosed in the Title Binder (as anticipated to
be impacted by the Sale Order (hereinafter defined)) and Survey. At Closing,
Purchaser shall obtain a title insurance policy (the "TITLE POLICY") from Escrow
Agent and shall pay all premiums and costs and expenses in connection therewith.

         4.       CONDITION OF PROPERTY.

                  A.       The Property is being sold in "AS IS" condition
without any representations and warranties of Seller whatsoever other than as
specified in Section 13. Seller shall deliver the Property at Closing in
materially the same condition as existed on the Execution Date, ordinary wear
and tear excepted, subject to the terms of the Equipment Site Lease (hereinafter
defined) and the TSA Lease.

                  B.       Purchaser acknowledges that Seller and the Government
(hereinafter defined) will, in the ordinary course of business, be entering into
"Supplemental Lease Agreements" (each an "SLA" and collectively, the "SLAs")
with respect to the TSA Lease (as hereinafter defined), and that with respect to
those SLAs, including but not limited to those addressing the acceptance of
space each month and de minimis change orders, which do not alter any of the
material terms of the TSA Lease ("Standard SLAs"), Purchaser hereby consents to
the execution thereof by Seller on an ongoing basis prior to Closing. Seller
shall provide copies of all such Standard SLAs to Purchaser prior to their
execution. From and after the end of the Execution Date and until this Agreement
shall have terminated (or be deemed to have been terminated), Seller shall not
enter into any non-standard SLAs without Purchaser's prior consent, which
consent shall not be unreasonably withheld, conditioned or delayed.

                                     - 2 -



                  C.       Purchaser hereby releases Seller from and waives all
claims, demands, actions, and causes of action against Seller and its estate for
damages, losses, expenses or injuries arising out of the condition of the
Property, including, but not limited to claims, demands, actions, and causes of
action for damages, losses, expenses or injuries arising out of preexisting
environmental conditions.

         5.       DEFECTS IN TITLE. Seller shall convey title to the Property by
special warranty deed in the form annexed hereto as Exhibit H. Title shall be
subject to all matters that are disclosed in Purchaser's Title Binder (as
modified by the Sale Order), the ATLA Survey, the Equipment Site Lease and the
TSA Lease. From and after the Execution Date, Seller shall not further encumber
or restrict the title to the Property, permit any liens, mortgages, deeds of
trust, easements or other encumbrances to be placed against the Property or any
part thereof without Purchaser's prior written consent.

         6.       CONTRACTS / LEASES.

                  A.       At Closing, Purchaser shall assume all obligations of
Seller, as Landlord, under the TSA Lease (as further described on Attachment A
to Exhibit F hereof, and together with any and all SLAs executed in accordance
with this Contract, the "TSA LEASE"), pursuant to an assignment and assumption
agreement in the form annexed hereto as Exhibit N, which shall provide, among
other things, that Purchaser shall fully indemnify Seller from and against any
and all liabilities, obligations, costs, and expenses under the TSA Lease. Upon
Closing, Seller will cooperate with the United States of America (the
"GOVERNMENT"), and Purchaser to obtain the execution by the Government of a
novation agreement by and among the Government, Seller and Purchaser regarding
the TSA Lease in the form annexed hereto as Exhibit F (the "NOVATION
AGREEMENT"). If, prior to its execution, the Government requires changes to the
Novation Agreement to be signed by Purchaser and Seller at Closing, then such
changes shall be reasonably accommodated by Purchaser and Seller.

                  B.       At Closing, Seller agrees to assign to Purchaser, to
the extent assignable, Seller's interest in the Service Contracts. Purchaser
shall execute an assumption of Seller's obligations under such Service Contracts
that arise from and after Closing in the form annexed hereto as Exhibit J.
Purchaser acknowledges that Seller does not represent or warrant that Purchaser
will be entitled to the assignment of any of the Service Contracts except to the
extent such assignment is approved by the Bankruptcy Court. If Seller is unable
to obtain Bankruptcy Court approval of the assignment of any of the Service
Contracts to Purchaser, there shall be no cost or penalty to Seller and this
Contract shall otherwise remain in full force and effect.

                  C.       At Closing, Purchaser shall assume all obligations of
Seller under the Construction Contracts pursuant to an assignment and assumption
agreement in the form annexed hereto as Exhibit K, which shall provide, among
other things, that Purchaser shall fully indemnify Seller from and against any
and all liabilities, costs, and expenses under the Construction Contracts.

         7.       CLOSING. The Closing shall occur within ten (10) days after
entry of an order of the Bankruptcy Court pursuant to, among other things,
sections 363 and 365 of the Bankruptcy

                                     - 3 -



Code authorizing Seller to sell the Property to Purchaser free and clear of
liens, claims and encumbrances and consummate the transactions contemplated
herein, substantially in the form annexed hereto as Exhibit G (the "SALE
ORDER"); provided, however, that the Closing shall not occur if a temporary
restraining order, preliminary or permanent injunction or other order issued by
the Bankruptcy Court or any other court of competent jurisdiction or other
enforceable legal restraint or prohibition (collectively, "LEGAL RESTRAINTS"),
shall be in effect or pending which materially delays, restrains, enjoins or
otherwise prohibits or seeks to restrain, enjoin or otherwise prohibit the
consummation of the transactions contemplated by the Sale Order and the
transactions contemplated hereby. The Closing shall take place at the offices of
Seller's attorney during normal business hours.

         8.       PRORATIONS AND ADJUSTMENTS AT CLOSING.

                  A.       Ad valorem and similar taxes assessed against the
Property shall be prorated between Seller and Purchaser at the time of Closing
on the basis of a 365 day year, with the Purchaser liable for ad valorem and
similar taxes assessed against the Property from and after the day of Closing.
Any then due but unpaid special assessments, special improvement district or
taxing district levies, shall be prorated in the same manner as ad valorem
taxes. Seller and Purchaser shall also prorate at the time of Closing payments
under Service Contracts assumed by Purchaser, utility charges, and any other
operating expenses or other items pertaining to the Property that are
customarily prorated between sellers and purchasers in Northern Virginia
commercial real property sales. To the extent that any item, which would
otherwise be apportioned between Purchaser and Seller pursuant to the terms of
this Contract, is the obligation of tenant under the TSA Lease, such items
should not be subject to prorations under this provision. There shall be no
charge to Purchaser for supplies on hand, if any, relating to the operation and
maintenance of the Property, all of which shall be transferred to Purchaser
subject to the rights of Seller under the Equipment Site Lease and the TSA
Lease. The foregoing obligations shall survive the Closing.

                  B.       In the event that there shall be any rents or other
charges under any leases which, although relating to a period prior to Closing,
do not become due and payable until after Closing or are paid prior to Closing
but are subject to adjustment after Closing, such as rent from the Government
(as defined in Section 6(a) herein) which is paid in arrears and year-end common
area expense reimbursements (which such rent and other charges, along with any
and all past due amounts from the Government are sometimes referred to herein
collectively as the "SPECIAL RENT"), then any rents or charges of such type
received by Purchaser or its agents or Seller or its agents subsequent to
Closing shall, to the extent applicable to a period extending through Closing,
be prorated between Seller and Purchaser as of Closing and Seller's portion
thereof shall be remitted promptly to Seller by Purchaser. Purchaser
acknowledges that any Special Rent that may be received by Purchaser but due to
Seller from the Government shall be timely remitted to Seller without setoff or
deduction of any kind (it being understood that the obligation of Purchaser to
remit, and the right of Seller to receive the same is unconditional).

                  C.       Purchaser shall reimburse Seller for actual payments
made by Seller under those Construction Contracts set forth in Exhibit B annexed
hereto with respect to: (i) the warm lit shell requirements under the TSA Lease,
which amount shall not exceed $6,976,730;

                                     - 4 -



(ii) tenant improvements required under the TSA Lease, which amount shall not
exceed $19,664,280; and (iii) the architectural agreement in respect of the warm
lit shell requirement under the TSA Lease, which amount shall not exceed
$157,850. At Closing, Seller shall pay a commission to Spaulding and Slye under
that certain agreement dated October 8, 2002, between Spaulding and Slye, LLC
and Seller (the "S&S AGREEMENT"), which provides for the payment of a brokerage
commission. At Closing, Purchaser shall remit to Seller in immediately available
funds the sum of $2,135,417.91 to reimburse Seller for amounts paid in
connection with the S&S Agreement.

         9.       TRANSACTION COSTS. Seller shall be responsible for the cost of
preparing the deed. At Closing, Purchaser shall reimburse Seller for the cost of
the Title Binder and the Survey. Purchaser shall pay the cost of conducting its
due diligence studies, the Title Policy, the state and local grantee's recording
taxes, sales taxes, recording fees, the escrow charges imposed by the Escrow
Agent, and transfer taxes required to be paid. Each party shall pay its own
attorneys', brokers' and consultants' fees. Pursuant to the Motion (hereinafter
defined), Seller shall request that the Sale Order entered by the Bankruptcy
Court exempt the sale of the Property under this Contract from state and local
grantee's recording taxes and transfer taxes which may be payable by reason of
the sale of the Property under this Contract or the transactions contemplated
herein (collectively, the "TRANSFER TAXES"). In the event that the Sale Order
entered by the Bankruptcy Court does not provide such an exemption and Transfer
Taxes are required to be paid in order to record the deed to be delivered to
Purchaser in accordance herewith, or in the event any such Transfer Taxes are
assessed at any time thereafter, then all such Transfer Taxes associated with
the recordation of the special warranty deed, including, without limitation,
transfer and recordation taxes and documentary stamps, shall be paid by
Purchaser at Closing or, if assessed at any time thereafter, shall be paid
promptly following such assessment. Purchaser and Seller agree to provide each
other reasonable assistance in the preparation and filing of any and all
required transfer tax returns for or with respect to such Transfer Taxes with
any and all appropriate taxing authorities.

         10.      SPECIAL WARRANTY DEED AND OTHER DOCUMENTS REQUIRED FOR
CLOSING.

                  A.       At the Closing, Seller shall deliver the following:

                           (i)      A special warranty deed, conveying fee
simple title to the Property, in the form annexed hereto as Exhibit H;

                           (ii)     A duly executed bill of sale conveying the
Personal Property, in the form annexed hereto as Exhibit I;

                           (iii)    Assignment and assumption agreement for the
Service Contracts being assigned to Purchaser pursuant to Section 6, in the form
annexed hereto as Exhibit J ;

                           (iv)     Assignment and assumption agreement for the
Construction Contracts being assigned to Purchaser pursuant to Section 6, in the
form annexed hereto as Exhibit K;

                                     - 5 -



                           (v)      Such documents evidencing the legal status,
good standing and authority of Seller that may be required by the Escrow Agent
for issuance of the Title Policy;

                           (vi)     An affidavit duly executed by Seller stating
that Seller is not a "foreign person" as defined in the Federal Foreign
Investment in Real Property Tax Act of 1980 and 1984 Tax Reform Act, in the form
annexed hereto as Exhibit L;

                           (vii)    A release and termination agreement in
recordable form to terminate the Memorandum of Lease between MCI Realty
Corporation and MCI Telecommunications Corporation recorded in the land records
of Arlington County, Virginia in Deed Book 2123, page 1026;

                           (viii)   a true and correct copy of the Sale Order
(hereinafter defined);

                           (ix)     An affidavit to Escrow Agent relating to
Purchaser's title insurance policy, in the form annexed hereto as Exhibit M;

                           (x)      Assignment and assumption agreement for the
TSA Lease being assigned to Purchaser, in the form annexed hereto as Exhibit N;

                           (xi)     A Statement of Lease with respect to the TSA
Lease which Statement of Lease shall be on the Government's then-current
standard form or as otherwise required by Section 5 of the Form 3517B of the TSA
Lease;

                           (xii)    The Novation Agreement pursuant to Section
6(a) above, executed by Seller; and

                           (xiii)   A closing statement.

                  B.       At the Closing, Purchaser shall deliver the
following:

                           (i)      The Purchase Price, less any portion of the
Deposit that is applied, in cash or immediately available funds;

                           (ii)     Such documents evidencing the legal status,
good standing and authority of Purchaser that may be required by the Escrow
Agent for issuance of the Title Policy;

                           (iii)    Assignment and assumption agreement for the
Service Contracts being assigned to Purchaser pursuant to Section 6, in the form
annexed hereto as Exhibit J;

                           (iv)     Assignment and assumption agreement for the
Construction Contracts being assigned to Purchaser pursuant to Section 6, in the
form annexed hereto as Exhibit K;

                           (v)      Assignment and assumption agreement for the
TSA Lease being assigned to Purchaser, in the form annexed hereto as Exhibit N;

                                     - 6 -



                           (vi)     The Novation Agreement pursuant to Section
6(a) above, executed by Purchaser;

                           (vii)    A closing statement; and

                           (viii)   A duly executed and acknowledged easement in
favor of Seller in the form annexed hereto as Exhibit O.

         11.      EQUIPMENT SITE LEASE. At Closing, Purchaser and Seller shall
enter into an equipment site lease (the "EQUIPMENT SITE LEASE") for a portion of
the premises at 601 S. 12th Street, as further described therein (the "TERMINAL
SPACE"), in accordance with the terms of an Equipment Site Lease, in the form
annexed hereto as Exhibit P.

         12.      POSSESSION. Possession of the Property, free and clear of all
tenants or other parties in possession, except in accordance with the Equipment
Site Lease and the TSA Lease, shall be delivered to Purchaser on the day of
Closing.

         13.      REPRESENTATIONS AND WARRANTIES.

                  A.       Seller represents and warrants the following to
Purchaser as of the Closing:

                           (i)      Subject to Section 30 herein: (a) Seller has
the full right, power and authority to sell and convey the Property to Purchaser
as provided in the Contract and to carry out Seller's obligations hereunder; (b)
all requisite corporate or other actions necessary to authorize Seller to enter
into this Contract and to perform its obligations thereunder have been taken;
and (c) the execution, delivery and performance by Seller of this Contract will
not conflict with or cause a default under any other agreement.

                           (ii)     Seller is duly organized, validly existing
and in good standing in the State of Delaware.

                           (iii)    Subject to Section 30 herein, the person
executing this Contract on behalf of Seller is duly empowered to do so and thus
to bind Seller to perform in compliance with the Contract.

                           (iv)     Upon obtaining entry of the Sale Order, the
execution and delivery of this Contract, the consummation of the transactions
contemplated herein and the performance of, fulfillment of and compliance with
the terms and conditions hereof by Seller do not and will not: (a) conflict with
or result in the breach of the organizational documents of Seller; or (b) to
Seller's knowledge, violate any statute, law, rule or regulation or any order,
writ, injunction or decree of any court or governmental authority.

                           (v)      Seller represents and warrants that no real
estate broker has been involved in this transaction on its behalf other than
Hilco Real Estate, LLC, whose fees shall be payable solely by Seller. If any
broker should make a claim for a commission based upon the actions of Seller,
Seller shall indemnify, defend and hold Purchaser harmless from such claim.

                                     - 7 -



                           (vi)     Seller has received no notice of default
under the TSA Lease.

                  Notwithstanding the foregoing or any other provision of this
Contract, in the event that Purchaser has actual knowledge of such facts or
disclosure of circumstances that are at variance with any of Seller's
representations or warranties, and if Purchaser thereafter consummates Closing,
Purchaser shall be deemed to have accepted such variant facts and circumstances
and Seller's representations and warranties shall be deemed excised or modified
to comport with such variant facts and circumstances.

                  B.       Purchaser represents and warrants to Seller, as a
material condition to Seller's obligations pursuant to the Contract, the
following as of the date hereof and as of the date of Closing:

                           (i)      Purchaser has the full right, power and
authority to purchase the Property as provided in the Contract and to carry out
Purchaser's obligations hereunder. All requisite corporate or other actions
necessary to authorize Purchaser to enter into this Contract and to perform its
obligations thereunder have been taken. The execution, delivery and performance
by Purchaser of this Contract will not conflict with or cause a default under
any other agreement.

                           (ii)     Purchaser is duly organized, validly
existing and in good standing in the State of Maryland and is, or will be at
Closing, qualified to do business in the Commonwealth of Virginia.

                           (iii)    The person executing this Contract on behalf
of Purchaser is duly empowered to do so and thus to bind Purchaser to perform in
compliance with this Contract.

                           (iv)     Purchaser represents and warrants that no
real estate broker has been involved in this transaction on its behalf. If any
broker should make a claim for a commission based upon the actions of Purchaser,
Purchaser shall indemnify, defend and hold Seller harmless from such claim.

         14.      DEFAULT. If Seller is in default hereunder for failure to
comply with any one or more of the material terms or conditions of this Contract
and such failure continues for more than seven (7) business days after receipt
of written notice, Purchaser at its sole option may: (i) terminate this Contract
by written notice delivered to Seller on or before the Closing, in which event
Purchaser shall be entitled to full return of the Deposit, or (ii) waive such
defaults and proceed to Closing. Purchaser hereby knowingly waives any and all
right to institute any action, claim or suit for damages against Seller with
respect to any default by Seller hereunder. If Purchaser is in default hereunder
for failure to comply with any one or more of the material terms or conditions
of this Contract and such failure continues for more than seven (7) business
days after receipt of written notice, then Seller at its sole option may: (i)
terminate this Contract and receive from Escrow Agent the Deposit as full
liquidated damages, or (ii) waive such defaults and proceed to Closing. Seller
and Purchaser agree that upon a default by Purchaser the damages that would be
sustained by Seller will be uncertain and not readily ascertainable, but agree
that the amount of the Deposit is a reasonable estimate of such damage.

                                     - 8 -



         15.      NO REPRESENTATIONS.

                  A.       PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT
MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS,
WARRANTIES (OTHER THAN AS EXPRESSLY SET FORTH IN THIS CONTRACT AND IN THE
SPECIAL WARRANTY OF TITLE AS SET OUT IN THE DEED), PROMISES, COVENANTS,
AGREEMENTS, OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS
OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, OR FUTURE, OF, AS TO, CONCERNING OR
WITH RESPECT TO (A) THE VALUE, NATURE, QUALITY, OR CONDITION OF THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL, AND GEOLOGY, (B) THE INCOME TO
BE DERIVED FROM THE PROPERTY, (C) THE SUITABILITY OF THE PROPERTY FOR ANY AND
ALL ACTIVITIES AND USES THAT PURCHASER OR ANY TENANT MAY CONDUCT THEREON, (D)
THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES,
ORDINANCES; OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (E)
THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY, OR FITNESS FOR
A PARTICULAR PURPOSE OF THE PROPERTY, (F) THE MANNER OR QUALITY OF THE
CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY, (G) THE
MANNER, QUALITY, STATE OF REPAIR, OR LACK OF REPAIR OF THE PROPERTY, (H)
COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION, OR LAND USE LAWS,
RULES, REGULATIONS, ORDERS, OR REQUIREMENTS, INCLUDING THE EXISTENCE IN OR ON
THE PROPERTY OF HAZARDOUS MATERIALS, OR (I) ANY OTHER MATTER WITH RESPECT TO THE
PROPERTY. ADDITIONALLY, NO PERSON ACTING ON BEHALF OF SELLER IS AUTHORIZED TO
MAKE, AND BY EXECUTION HEREOF PURCHASER ACKNOWLEDGES THAT NO PERSON HAS MADE,
ANY REPRESENTATION, AGREEMENT, STATEMENT, WARRANTY, GUARANTY, OR PROMISE
REGARDING THE PROPERTY OR THE TRANSACTION CONTEMPLATED HEREIN; AND NO SUCH
REPRESENTATION, WARRANTY, AGREEMENT, GUARANTY, STATEMENT, OR PROMISE IF ANY,
MADE BY ANY PERSON ACTING ON BEHALF OF SELLER SHALL BE VALID OR BINDING UPON
SELLER UNLESS EXPRESSLY SET FORTH HEREIN. PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY, PURCHASER
IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND NOT ON ANY
INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER AND AGREES TO ACCEPT THE
PROPERTY AT THE CLOSING AND WAIVE ALL OBJECTIONS OR CLAIMS AGAINST SELLER
(INCLUDING, BUT NOT LIMITED TO, ANY RIGHT OR CLAIM OF CONTRIBUTION) ARISING FROM
OR RELATED TO THE PROPERTY OR TO ANY HAZARDOUS MATERIALS ON THE PROPERTY.
PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED OR TO BE
PROVIDED WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND
THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH
INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY, TRUTHFULNESS, OR
COMPLETENESS OF SUCH INFORMATION. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY
ANY ORAL OR WRITTEN STATEMENT, REPRESENTATION, OR INFORMATION PERTAINING TO THE
PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY ANY REAL ESTATE BROKER,
CONTRACTOR, AGENT, EMPLOYEE, SERVANT, OR OTHER PERSON. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF
THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS" AND "WHERE IS"
CONDITION AND BASIS WITH ALL FAULTS.

                  B.       PURCHASER HEREBY AGREES TO INDEMNIFY, PROTECT,
DEFEND, SAVE, AND HOLD HARMLESS SELLER AND ITS AFFILIATES, AND THEIR RESPECTIVE
EMPLOYEES, AGENTS,

                                     - 9 -



REPRESENTATIVES, AND THIRD PARTY CONSULTANTS AND PROFESSIONALS FROM AND AGAINST
ANY AND ALL DEBTS, DUTIES, OBLIGATIONS, LIABILITIES, SUITS, CLAIMS, DEMANDS,
ACTIONS, CAUSES OF ACTION, DAMAGES, LOSSES, FEES, AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES, AND EXPENSES AND COURT COSTS) IN
ANY WAY RELATING TO, OR IN CONNECTION WITH OR ARISING ON OR AFTER CLOSING OUT OF
PURCHASER'S ACQUISITION, OWNERSHIP, LEASING, USE, OPERATION, MAINTENANCE, AND
MANAGEMENT OF THE PROPERTY. PURCHASER ALSO HEREBY RELEASES SELLER AND ITS
AFFILIATES, AND THEIR RESPECTIVE EMPLOYEES, AGENTS, REPRESENTATIVES, AND THIRD
PARTY CONSULTANTS AND PROFESSIONALS FROM ANY AND ALL CLAIMS, LOSSES, DAMAGES,
ACTIONS OR CAUSES OF ACTION IN ANY WAY RELATING TO, OR IN CONNECTION WITH THE
PROPERTY WHICH HAVE ARISEN PRIOR TO THE DATE HEREOF.

                  C.       THE PROVISIONS OF THIS SECTION 15 SHALL SURVIVE
CLOSING OR ANY TERMINATION HEREOF.

         16.      RISK OF LOSS.

                  A.       If, prior to the Closing, action is initiated to take
any of the Property by eminent domain proceedings or by deed in lieu thereof,
Purchaser may either at or prior to Closing (a) terminate this Agreement, or (b)
consummate the Closing, in which latter event all of Seller's assignable right,
title and interest in and to the award of the condemning authority shall be
assigned to Purchaser at the Closing and there shall be no reduction in the
Purchase Price.

                  B.       Seller assumes all risks and liability for damage to
or injury occurring to the Property by fire, storm, accident, or any other
casualty or cause until the Closing has been consummated. If the Property, or
any part thereof, suffers any damage in excess of $5,000,000 prior to the
Closing from fire or other casualty, which Seller, at its sole option, does not
elect to repair, or if the TSA then has the right to terminate the TSA Lease as
a result of such fire or other casualty, Purchaser may either at or prior to
Closing (a) terminate this Agreement, or (b) consummate the Closing, in which
latter event all of Seller's right, title, and interest in and to the proceeds
of any insurance covering such damage (less an amount equal to any expense and
costs incurred by Seller to repair or restore the Property and any portion paid
or to be paid on account of the loss of rents or other income from the Property
for the period prior to and including the Closing Date, all of which shall be
payable to Seller), to the extent the amount of such insurance does not exceed
the Purchase Price, shall be assigned to Purchaser at the Closing. If the
Property, or any part thereof, suffers any damage less than $5,000,000 prior to
the Closing, then, provided the TSA does not then have the right to terminate
the TSA Lease as a result thereof, Purchaser agrees that it will consummate the
Closing and accept the assignment of the proceeds of any insurance covering such
damage plus an amount equal to Seller's deductible under its insurance policy
and there shall be no reduction in the Purchase Price. From the Execution Date
until Closing, Seller shall continue to maintain its casualty insurance for the
Property in substantially the same amounts and subject to substantially the same
deductibles as in existence on the Execution Date.

         17.      ASSIGNMENT. Purchaser shall not have the right to assign its
interest in this Contract without the prior written consent of Seller, which
consent may be granted or withheld in

                                     - 10 -



Seller's sole and unfettered discretion, and any such assignment without such
consent shall be null and void and of no force and effect. Notwithstanding any
assignment of this Contract, Purchaser shall at all times remain primarily
obligated, and not be relieved of any liabilities, hereunder.

         18.      REPORTING OF FOREIGN INVESTMENT. Purchaser agrees to comply
with any and all reporting requirements applicable to the transaction which is
the subject of this Contract which are set forth in any law, statute, ordinance,
rule, regulation, order or determination of any governmental authority,
including but not limited to The International Investment Survey Act of 1976,
The Agricultural Foreign Investment Disclosure Act of 1978, The Foreign
Investment in Real Property Tax Act of 1980 and the Tax Reform Act of 1984 and
further agrees upon request of Seller to furnish Seller with evidence of such
compliance.

         19.      NO OFFER. The submission of this Contract to Purchaser for
review does not constitute an offer or option to sell the Property.

         20.      NOTICES. All notices and other communications hereunder shall
be in writing and shall be delivered personally against receipt or shall be sent
by certified United States Mail service, postage prepaid and return receipt
requested, or by nationally utilized overnight delivery service, addressed to
the parties as follows:

         As to Seller:    Brian H. Trosper
                          Vice President, Corporate Facilities & Real Estate
                          WorldCom, Inc.
                          2400 North Glenville
                          Richardson, TX 75082
                          Fax- (972) 729-6704

         With a copy to:  WorldCom, Inc.
                          1133 19th Street, NW
                          Washington, DC 20036
                          Attn: Senior Counsel, Network & Facilities (47484/003)
                          Fax- (202) 736-6720

         And a copy to:   Hilco Real Estate, LLC
                          5 Revere Drive
                          Suite 320
                          Northbrook, Illinois 60062
                          Attn: Mitchell P. Kahn
                          Fax- (847) 714-1289

         And a copy to:   Weil, Gotshal & Manges LLP
                          767 Fifth Avenue
                          New York, New York 10153
                          Attn: Elliot L. Hurwitz & Scott E. Cohen
                          Fax- (212) 310-8007

                                     - 11 -



         As to Purchaser: Commercial Net Lease Realty, Inc.
                          CNL Center at City Commons
                          9th Floor
                          450 South Orange Avenue
                          Orlando, Florida 32801
                          Attention: David Cobb
                          Fax- (407) 650-1046

         And a copy to:   Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
                          450 South Orange Avenue
                          Orlando, Florida 32801
                          Attn: Christopher P. Tessitore, Esq.
                          Fax- (407) 843-4444

         Any notice in accordance herewith shall be deemed received when
personal or courier delivery is received or refused, or when deposited with the
United States Postal Service, as the case may be. Additionally, notices may be
given by telephone facsimile transmission, provided that an original copy of
said transmission shall be delivered to the addressee by nationally utilized
overnight delivery services on the day following such transmission. Telephone
facsimiles shall be deemed delivered on the date of such transmission.

         21.      SURVIVAL. The representations and warranties set forth herein
shall be continuing, shall survive the Closing, and shall remain in full force
and effect thereafter for a period of twelve (12) months.

         22.      PARTIES BOUND. This Contract shall be binding upon and inure
to the benefit of Seller and Purchaser, their respective successors and
permitted assigns.

         23.      GOVERNING LAW. The laws of the state in which the Property is
located shall govern the validity, construction, enforcement and interpretation
of this Contract, provided, however, that the Bankruptcy Court shall retain
jurisdiction over any and all disputes arising under or otherwise relating to
the construction and enforcement of the Sale Order and the transactions
consummated thereunder.

         24.      RESERVED.

         25.      MULTIPLE COUNTERPARTS. This Contract may be executed in a
number of identical counterparts. If so executed, each of such counterparts
shall, collectively, constitute one agreement, but in making proof of this
Contract, it shall not be necessary to produce or account for more than one such
counterpart. Neither this Contract nor any memorandum thereof shall be recorded.

         26.      TIME OF THE ESSENCE. The parties hereto expressly agree that
time is of the essence with respect to this Contract.

                                     - 12 -



         27.      ENTIRE CONTRACT. This Contract embodies the entire agreement
of the parties with respect to the transaction herein contemplated, superseding
all prior agreements and communications whether oral or written. Any amendments
hereto shall be in writing and executed by the party against whom enforcement of
the modification is sought.

         28.      NON-BUSINESS DAYS. If the date of Closing or the date for
delivery of a notice or performance of some other obligation of a party falls on
a Saturday, Sunday or legal holiday in the State in which the Property is
located, then the date for Closing or such notice or performance shall be
postponed until the next business day.

         29.      CONFIDENTIALITY. Purchaser shall treat all materials and
information provided by Seller as confidential information, and shall distribute
same only to Purchaser's affiliates, partners, employees, agents and
representatives who have a need to know and to third party consultants and
professionals retained by Purchaser. Purchaser shall instruct all of its
affiliates, employees, agents, representatives, and third party consultants and
professionals as to the confidentiality of all such information as well as the
existence or terms of this Contract. The existence or terms of this Contract
shall not be disclosed by either Seller or Purchaser to any unrelated
third-party, except for and only to the extent reasonably necessary for those
parties required by either Seller or Purchaser to facilitate the transaction
contemplated herein.

         30.      BANKRUPTCY COURT APPROVAL.

                  A.       Notwithstanding anything to the contrary contained
herein, this Contract, including Seller's obligations hereunder and the sale of
Property to Purchaser as contemplated hereby, is subject to (a) higher and
better offers for all or a portion of the Property, obtained pursuant to an
order of the Bankruptcy Court establishing, in form and substance satisfactory
to Seller, procedures substantially in the form annexed hereto as Exhibit Q (the
"SALE PROCEDURES ORDER") and (b) entry of the Sale Order in form and substance
satisfactory to Seller. Purchaser understands that Seller's obligations under
this Contract shall not be effective or enforceable against Seller (i) unless
and until (x) Purchaser's offer, as represented by this Contract (as hereafter
modified or supplemented) is deemed by the Bankruptcy Court to be the highest
and best offer for the Property and (y) the Bankruptcy Court has entered the
Sale Order, and (ii) if, in the Seller's exercise of its fiduciary duty, the
Seller determines, prior to the entry of the Sale Order that consummation of the
transactions contemplated hereunder is not in the best interests of its Chapter
11 estate and creditors, Seller may terminate this Contract without penalty, in
which event, the Purchaser shall be deemed to have waived all claims, damages,
actions and causes of action of whatever kind and nature (including any claims
for attorney's fees), whether known or unknown, fixed or contingent, matured or
unmatured, liquidated or unliquidated or otherwise, arising from, related to, or
concerning the Contract; provided, however, that the Purchaser does not waive
its right to recover its Deposit.

                  B.       In furtherance of the transactions contemplated
herein, the parties agree that the sale of Property to Purchaser shall be
approved in accordance with the following terms:

                           (i)      Purchaser and Seller shall cooperate with
prosecuting and obtaining entry of the Sale Order.

                                     - 13 -



                           (ii)     In the event (a) the request for entry of
the Sale Order is denied, or (b) the Sale Order is not entered on or before the
date which is one hundred five (105) days from the Execution Date, or (c) a
Legal Restraint of the Sale Order remains in place for thirty (30) days
following entry of the Sale Order, either the Purchaser or the Seller may
terminate this Contract without penalty, in which event, the Purchaser shall be
entitled to return of its Deposit and shall be deemed to have waived all other
claims, damages, actions and causes of action of whatever kind and nature
(including any claims for attorney's fees), whether known or unknown, fixed or
contingent, matured or unmatured, liquidated or unliquidated or otherwise,
arising from, related to, or concerning the Contract.

         31.      MARKETING. Seller shall have the right to continue to market
the Property and other offers may be negotiated and/or accepted by Seller such
time as the Sale Order has been entered.

                             SIGNATURES ON NEXT PAGE

                                     - 14 -



         IN WITNESS WHEREOF, the parties hereto have, by their duly authorized
representatives, executed this Contract as of the date indicated above.

                                       "SELLER"

                                       MCI WORLDCOM NETWORK SERVICES,
                                       INC., a Delaware corporation

                                       By: _________________________________
                                       Name: _______________________________
                                       Title: ______________________________

                                       "PURCHASER"

                                       COMMERCIAL NET LEASE REALTY, INC.,
                                       a Maryland corporation

                                               By: ____________________________
                                               Name: __________________________
                                               Title: _________________________

                                     - 15 -



EXHIBITS

               
EXHIBIT A    -    Description of the Property
EXHIBIT B    -    Construction Contracts
EXHIBIT C    -    Service Contracts
EXHIBIT D    -    Escrow Agreement
EXHIBIT E    -    Title Binder & ALTA Survey
EXHIBIT F    -    Form of Novation Agreement
EXHIBIT G    -    Sale Order
EXHIBIT H    -    Form of Special Warranty Deed
EXHIBIT I    -    Form of Bill of Sale
EXHIBIT J    -    Form of Assignment and Assumption Agreement for Service Contracts
                  being Assigned to Purchaser
EXHIBIT K    -    Form of Assignment and Assumption Agreement for Construction
                  Contracts
EXHIBIT L    -    FIRPTA Affidavit
EXHIBIT M    -    Title Affidavit
EXHIBIT N    -    Form of Assignment and Assumption Agreement for the TSA Lease being
                  assigned to Purchaser
EXHIBIT O    -    Form of Easement in Favor of Seller
EXHIBIT P    -    Equipment Site Lease
EXHIBIT Q    -    Sale Procedures Order



                                     - 16 -



                                    EXHIBIT A

                           DESCRIPTION OF THE PROPERTY

All of those certain parcels of land situate and being in Arlington County,
Virginia and more particularly described as:

Parcel 1-A, containing 105,422 square feet, being a Subdivision of the Property
of Pentagon City One Realty Limited Partnership, as the same appears duly
dedicated, platted and recorded in Deed Book 2013 at page 725, among the land
records of Arlington County, Virginia;

TOGETHER WITH subsurface foundation and footing easement recorded in Deed Book
2034 at page 528, among the aforesaid land records.

Parcel 1-B containing 2.45783 acres, being a Resubdivision of the Property of
Pentagon Tract Development Corporation and River House Corporation, being a part
of Parcel "B-2-B" Ambassador Inc. & "H" Street Building Corp., as the same are
shown on a plat attached to Deed of Resubdivision recorded in Deed Book 2062 at
page 914, among the aforesaid land records.

                                      A-1



                                    EXHIBIT B

                             CONSTRUCTION CONTRACTS

Contract Number 3866, Warm Lit Shell, dated February 18, 2003, by and between
WorldCom Purchasing, LLC and Spaulding and Slye Construction LP.

Contract Number 3867, Tenant Improvements, dated February 19, 2003, by and
between WorldCom Purchasing, LLC and Spaulding and Slye Construction LP.

Contract Number 3924, Architectural/Engineering Services, Warm Lit Shell, dated
March 6, 2003, by and between WorldCom Purchasing, LLC and EllStreet
Corporation.

Contract Number 3925, Architectural/Engineering Services, Tenant Improvements,
dated March 6, 2003, by and between WorldCom Purchasing, LLC and EllStreet
Corporation.

                                      B-1



                                    EXHIBIT C

                                SERVICE CONTRACTS

Contract Number NPW, effective as of October 1, 1998, by and between MCI
Telecommunications Corporation and Otis Elevator Company (the "Otis Contract").

Property Management Agreement, dated as of December 17, 2002, by and between MCI
WORLDCOM NETWORK SERVICES, INC. and Spaulding and Slye LLC.

Contract for Generator/Fire Pump Maintenance, dated April 3, 2003, by and
between MCI WORLDCOM NETWORK SERVICES, INC. and Kelly Generator and Equipment,
Inc.

Contract for Fire Panel Monitoring, undated, by and between MCI WORLDCOM NETWORK
SERVICES, INC. and ADT Security.

Contract for Fire Alarm Testing, dated March 26, 2003, by and between WORLDCOM
NETWORK SERVICES, INC. and Ark Systems, Inc.

Contract for Energy Management System, dated April 7, 2003, by and between MCI
WORLDCOM NETWORK SERVICES, INC. and Capron Company, Inc.

Contract for Engineering Services, dated January 1, 2003, by and between MCI
WORLDCOM NETWORK SERVICES, INC. and Building Technology.

Contract for Guard Service provided by Burns*

Contract for Janitorial Services, dated March 1, 2003, by and between MCI
WORLDCOM NETWORK SERVICES, INC. and United States Service Industries, Inc.

Contract for Pest Control, dated April 14, 2003, by and between MCI WORLDCOM
NETWORK SERVICES, INC. and Triple S Termite and Pest Control.

Contract for Snow Removal provided by Brickman*

Contract for Access Control provided by ADT*

Contract for Recycling Removal Services, dated April 30, 2003, by and between
MCI WORLDCOM NETWORK SERVICES, INC. and Waste Management.

* denotes that such service contracts are out for signature.

                                      C-1



                                    EXHIBIT D

                                ESCROW AGREEMENT

Escrow No. _________________                 Refer to __________________
Title No. __________________                 Phone No. ________________
Fax No. ____________________                 Date _____________

                                ESCROW AGREEMENT

TO:               CHICAGO TITLE INSURANCE COMPANY, ESCROW AGENT.

Customer Identification:
Name: _________________________________________
Property Address: _____________________________
Project Reference: ____________________________
Proposed Distribution Date: ___________________

DEPOSITS:
(Certified) (Uncertified) (Cashier's) check(s) and/or wire(s) in the amount (s)
of $__________________representing:

______________________________________________.
______________________________________________.
______________________________________________.

DOCUMENT(S) DEPOSITS:
Type of Documents:

____________________________.
____________________________.
____________________________.

CONDITIONS FOR Chicago Title Insurance Company's service as escrow agent:

1.   Escrow Agent is not a party to, and is not bound by, or charged with notice
     of any agreement out of which this escrow may arise, other than this escrow
     agreement or the escrow provisions of the Contract of Sale.

2.   Escrow Agent is acting solely as a stakeholder and depository, and is not
     responsible or liable in any manner whatever for the sufficiency,
     correctness, genuineness, or validity of the subject matter of the escrow,
     or for the identity or authority of any person executing or depositing it.

                                      D-1



3.   Buyer and Seller agree to jointly and severally indemnify, defend and hold
     harmless the Escrow Agent from and against any loss, cost, damage, expense
     and attorney's fee (collectively called "Expenses") in connection with or
     in any way arising out of this Escrow Agreement, other than expenses
     resulting from the Escrow Agent's own negligence or misconduct.

4.   The Escrow Agent shall be protected in acting upon any written notice,
     request, waiver, consent, certificate, receipt, authorization, power of
     attorney or other document Escrow Agent in good faith believes to be
     genuine and what it purports to be. The Escrow Agent may, at its own
     expense, consult with legal counsel in the event of any dispute or
     questions as to the construction of any provisions hereof or its duties
     hereunder, and it shall be fully protected in acting in accordance with the
     opinion or instructions of such counsel.

5.   In the event of a dispute between the Buyer and Seller, the Escrow Agent
     may continue to hold the deposits pursuant to the terms hereof, or may, at
     the joint and several cost of the Buyer and Seller, deposit the same in the
     United States Bankruptcy Court for the Southern District of New York. The
     Escrow Agent may dispose of the deposits in accordance with an order of
     said court, and shall be fully protected if it acts in accordance with any
     such court order.

6.   Deposits made pursuant to these instructions may be invested on behalf of
     any party or parties hereto: Provided that any direction to the Escrow
     Agent for such investment shall be in writing and contain the consent of
     all other parties to this escrow; and also provided that the writing is on
     the "INVESTMENT OF ESCROW FUNDS INSTRUCTION" form of Chicago Title
     Insurance Company, and a completed, signed W-9 Form accompanies it. Chicago
     Title Insurance Company is not to be held responsible for the loss of
     principal or interest on any investment made pursuant to the aforesaid
     instruction or in the redemption thereof.

7.   Except as to deposits of funds for which the Escrow Agent has received
     written instructions as set forth in paragraph 6 above, the funds may be
     commingled with other escrowed funds in a non-segregated escrow account of
     Chicago Title Insurance Company.

8.   No funds deposited in escrow with Chicago Title Insurance Company may be
     wired out of the escrow account unless and until a duly completed and
     executed "AUTHORIZATION FOR OUTGOING WIRE" form is received for each
     proposed wire. Said form is shown on Exhibit "A" hereto. Execution of this
     escrow agreement is deemed an agreement by the parties to complete and
     execute such "AUTHORIZATIONS FOR OUTGOING WIRES" as required by Chicago
     Title Insurance Company, as Escrow Agent, in its sole discretion.

     IN WITNESS WHEREOF, the Buyer, Seller and Escrow Agent have executed this
     Agreement as of the date hereinabove first written.

     [SELLER]                               [BUYER]
     By: __________________________         By: __________________________
         Name:                                  Name:
         Title:                                 Title:

                                      D-2



                                            Chicago Title Insurance Company
                                            By:__________________________
                                               Name:
                                               Title:

                                      D-3



                         CHICAGO TITLE INSURANCE COMPANY
                        AUTHORIZATION FOR OUTGOING WIRES
           THIS FORM MUST BE COMPLETED FOR ALL OUTGOING WIRE TRANSFERS

         Due to recent changes in the Uniform Commercial Code, Chicago Title
Insurance Company must have signed wire instructions, specifying the destination
for all wire transfers.

                                                           
- ----------------------------------------------------------------------------------------------------------------------
REFERENCE (TITLE NO. OR ESCROW
NO.
- ----------------------------------------------------------------------------------------------------------------------
AMOUNT TO BE WIRED              $
- ----------------------------------------------------------------------------------------------------------------------
                                                  FOR FED BANKS
- ----------------------------------------------------------------------------------------------------------------------

Receiving Bank
- ----------------------------------------------------------------------------------------------------------------------

City, State
- ----------------------------------------------------------------------------------------------------------------------
ABA NO.
- ----------------------------------------------------------------------------------------------------------------------
PARTY TO CREDIT
- ----------------------------------------------------------------------------------------------------------------------
ACCOUNT NUMBER
- ----------------------------------------------------------------------------------------------------------------------
PHONE ADVICE
(NAME/TEL)
- ----------------------------------------------------------------------------------------------------------------------
OTHER REFERENCE INFO
- ----------------------------------------------------------------------------------------------------------------------
                                                 FOR NON-FED BANKS
- ----------------------------------------------------------------------------------------------------------------------
                     Intermediary                                                   CORRESPONDENT
NOTE: IF THE WIRE IS TO ROUTED THROUGH A DOMESTIC U.S.        NOTE: IF THE RECEIVING BANK IS OUTSIDE THE UNITED STATES,
 INTERMEDIARY BANK FOR CREDIT TO RECEIVING BANK (I.E.         THE WIRE MUST BE DIRECTED TO A BANK WITH A CORRESPONDENT
RECEIVING BANK IS NOT ON-LINE WITH THE FED), ENTER SUCH                   RELATIONSHIP IN THE UNITED STATES
          INTERMEDIARY BANK INFORMATION BELOW
- ----------------------------------------------------------------------------------------------------------------------
NAME:                                                         NAME:
- ----------------------------------------------------------------------------------------------------------------------
ABA NO.                                                       ABA NO.
- ----------------------------------------------------------------------------------------------------------------------
ACCOUNT NO.                                                   ACCOUNT NO.
- ----------------------------------------------------------------------------------------------------------------------



                  Provided that the funds are wire transferred in accordance
with these instructions, Chicago Title Insurance Company shall not be liable for
any act or omission of any financial institution or any other person, nor shall
Chicago Title Insurance Company have any liability for loss of funds or interest
thereon. In no event will damages exceed interest at a rate equal to the Fed
Funds rate, adjusted daily, for the number of days that such funds are
unavailable. The undersigned customer shall indemnify and hold harmless Chicago
Title Insurance Company, its successors or assigns, from any loss, liability and
cost incurred as a result of any incorrect information supplied. In no event
shall Chicago Title Insurance Company be liable for any special, consequential,
indirect or incidental damages, regardless of whether any claim is based on
contract or tort or whether the likelihood of such damage was known to Chicago
Title Insurance Company.

ACCEPTED AND AGREED TO BY:          ________________________________________
                                           (PRINT CUSTOMER NAME)

                                    BY _____________________________________
                                           (SIGNATURE)

                                    DATE: _________________________________

                                      D-1



                                    EXHIBIT E

                           TITLE BINDER & ALTA SURVEY

Title Binder: Commitment number 2278-01317 issued by Chicago Title Insurance
Company, dated October 16, 2002.

ALTA Survey: prepared by Dewberry & Davis LLC, dated July 31, 2002.

                                      E-1



                                    EXHIBIT F

                           FORM OF NOVATION AGREEMENT

MCI WORLDCOM NETWORK SERVICES, INC. ("Transferor"), a corporation, duly
organized and existing under the laws of the State of Delaware, with an office
at 500 Clinton Center Drive, Clinton, MS 39056, and a debtor in possession in a
voluntary case commenced under Chapter 11 of title 11, United Stated Code
pending in the United States Bankruptcy Court for the Southern District of New
York (the "Bankruptcy Court"), Chapter 11 Case No. O2-13533 (AJG) (Jointly
Administered); Commercial Net Lease Realty, Inc. ("Transferee") a corporation,
duly organized and existing under the laws of the State of Maryland, with an
office in CNL Center at City Commons, 9th Floor, 450 South Orange Avenue,
Orlando, Florida 32801; and the UNITED STATES OF AMERICA ("Government"), acting
by and through the Transportation Security Administration, enter into this
Agreement effective as of _______________________, 2003, the date of closing.

A.       THE PARTIES AGREE TO THE FOLLOWING FACTS:

         (1)      The Government, represented by various Contracting Officers of
                  the Transportation Security Administration, has entered into a
                  certain contract (the "Lease") with the Transferor, namely:

                           Lease for real property, TSA No. DTSA20-03-R-00528
                           dated December 17, 2002, as amended by Supplemental
                           Lease Agreements more particularly described in
                           Attachment "A" which is attached hereto and made a
                           part hereof, with respect to certain premises (the
                           "Premises") which are located in Arlington, Virginia
                           and known as 601 and 701 South 12th Street.

                  The term, "the Lease," as used in this Agreement, means the
                  above lease and all other contracts, including all
                  modifications, made between the Government and the Transferor
                  before the effective date of this Agreement (whether or not
                  performance or payment have been completed and releases
                  executed if the Government or the Transferor has any remaining
                  rights, duties, or obligations under these contracts.)
                  Included in the term, "the Lease," are also all modifications
                  made under the terms and conditions of these contracts and
                  purchase orders between the Government and the Transferee, on
                  or after the effective date of this Agreement.

         (2)      As of the date hereof, the Transferor has transferred to the
                  Transferee all of its rights in and to the Lease by virtue of
                  various instruments, including, but not limited to, an
                  Assignment and Assumption Agreement between the Transferor and
                  the Transferee.

                                      F-1



         (3)      The Transferee has acquired all of the rights of the
                  Transferor under and pursuant to the Lease by virtue of the
                  above transfer.

         (4)      The Transferee has assumed all obligations and liabilities of
                  the Transferor under the Lease by virtue of the above
                  transfer.

         (5)      The Transferee is in a position to perform fully all
                  obligations that may exist under the Lease.

         (6)      It is consistent with the Government's interest to recognize
                  the Transferee as the successor party to the Lease.

         (7)      Evidence of the above transfer has been filed with the
                  Government.

B.       IN CONSIDERATION OF THESE FACTS, THE PARTIES AGREE THAT BY THIS
         AGREEMENT:

         (1)      The Transferor confirms the transfer to the Transferee, and
                  waives any claims and rights against the Government that it
                  now has or may have in the future in connection with the Lease
                  (except for any amounts that are or may become due to the
                  Transferor through the date hereof, it being understood,
                  however, that only one or the other of Transferor or
                  Transferee shall have the right to pursue a claim against the
                  Government for such amounts).

         (2)      The Transferee agrees to be bound by and to perform the Lease
                  in accordance with the conditions contained in the Lease. The
                  Transferee also assumes all obligations and liabilities of,
                  and all claims against, the Transferor under the Lease as if
                  the Transferee were the original party to the Lease.

         (3)      The Transferee ratifies all previous actions taken by the
                  Transferor with respect to the Lease, with the same force and
                  effect as if the action had been taken by the Transferee.

         (4)      The Government recognizes the Transferee as the Transferor's
                  successor in interest in and to the Lease. The Transferee, by
                  this Agreement, becomes entitled to all rights, titles, and
                  interests of the Transferor in and to the Lease, and as set
                  forth in the order of the Bankruptcy Court, dated _______,
                  2003, becomes solely responsible for the payment and
                  performance of all duties and obligations of the Transferor
                  under the Lease, as if the Transferee were the original party
                  to the Lease. Following the effective date of this Agreement,
                  the term "Lessor", as used in the Lease, shall refer to the
                  Transferee.

         (5)      The Government confirms that Transferor has been released of
                  any and all obligations and liabilities under the Lease as set
                  forth in the order of the Bankruptcy Court, dated [_____],
                  2003.

                                      F-2



         (6)      All payments and reimbursements previously made by the
                  Government to the Transferor, and all other previous actions
                  taken by the Government under the Lease, shall be considered
                  to have discharged those parts of the Government's obligations
                  under the Lease. All payments and reimbursements made by the
                  Government which occur within 60 days after the date of this
                  Agreement in the name of or to the Transferor shall have the
                  same force and effect as if made to the Transferee, and shall
                  constitute a complete discharge of the Government's
                  obligations under the Lease, to the extent of the amounts paid
                  or reimbursed.

         (7)      The Transferor and the Transferee agree that the Government is
                  not obligated to pay or reimburse either of them for, or
                  otherwise give effect to, any costs, taxes, or other expenses,
                  or any related increases, directly or indirectly arising out
                  of or resulting from the transfer or this Agreement, other
                  than those that the Government, in the absence of this
                  transfer or Agreement, would have been obligated to pay or
                  reimburse under the terms of the Lease.

         (8)      The Lease shall remain in full force and effect, except as
                  modified by this Agreement. Each party has executed this
                  Agreement as of the day and year first above written.

UNITED STATES OF AMERICA

By: ________________________

________________________
Contracting Officer
Transportation Security Administration

MCI WORLDCOM NETWORK SERVICES, INC.,
a Delaware corporation

By: __________________________
Name: ________________________
Title: _________________________
[CORPORATE SEAL]

COMMERCIAL NET LEASE REALTY, INC.,
a Maryland corporation

By: __________________________
Name: ________________________
Title: _______________________

                                      F-3



[CORPORATE SEAL]

                                   CERTIFICATE

         I, _______________________, certify that I am Secretary of Transferor;
that _______________________ who signed this Agreement for this corporation, was
then _______________________ of this corporation; and that this Agreement was
duly signed for and on behalf of this corporation by authority of its governing
body and within the scope of its corporate powers. Witness my hand and seal of
this corporation this _________ day of _______________________, 2003.

[CORPORATE SEAL]

                                   CERTIFICATE

         I, _______________________, certify that I am Secretary of Commercial
Net Lease Realty, Inc., a Maryland corporation; that _______________________ who
signed this Agreement for this corporation, was then _______________________ of
this corporation; and that this Agreement was duly signed for and on behalf of
this corporation by authority of its governing body and within the scope of its
corporate powers. Witness my hand and seal of this corporation this _________
day of _______________________, 20___.

[CORPORATE SEAL]

                                      F-4



                                  ATTACHMENT A

     Lease At 601 and 701 South 12th Street, Arlington, Virginia 22202-4202

         Lease Agreement between MCI WorldCom Network Services, Inc. and the
United States of America, TSA No. DTSA20-03-R-00528, dated December 17, 2002, as
amended by:

                  1.       Supplemental Lease Agreement No. 1 to TSA No.
                           DTSA20-03-R-00528, dated March 4, 2003.

                  2.       Supplemental Lease Agreement No. 2 to TSA No.
                           DTSA20-03-R-00528, dated March 4, 2003.

                  3.       Supplemental Lease Agreement No. 3 to TSA No.
                           DTSA20-03-R-00528, dated March 4, 2003.

                  4.       Supplemental Lease Agreement No. 4 to TSA No.
                           DTSA20-03-R-00528, dated March 26, 2003.

                  5.       Supplemental Lease Agreement No. 5 to TSA No.
                           DTSA20-03-R-00528, dated May 6, 2003.

                  6.       Supplemental Lease Agreement No. 6 to TSA No.
                           DTSA20-03-R-00528, dated April 15, 2003.

                  7.       Supplemental Lease Agreement No. 7 to TSA No.
                           DTSA20-03-R-00528, dated April 15, 2003.

                  8.       Supplemental Lease Agreement No. 8 to TSA No.
                           DTSA20-03-R-00528, dated May 6, 2003

                  9.       Supplemental Lease Agreement No. 9 to TSA No.
                           DTSA20-03-R-00528, dated June 20, 2003.

                  10.      Supplemental Lease Agreement No. 10 to TSA No.
                           DTSA20-03-R-00528, dated June 20, 2003.

                  11.      Supplemental Lease Agreement No. 11 to TSA No.
                           DTSA20-03-R-00528, dated June 20, 2003.

                  12.      Supplemental Lease Agreement No. 12 to TSA No.
                           DTSA20-03-R-00528, dated _______________, 2003.*

                  * denotes that such Supplemental Lease Agreement is out for
                  signature.

                                      F-5



                                                             PROPOSED SALE ORDER

                                    EXHIBIT G

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- --------------------------------X
IN RE                                        :
                                             :        CHAPTER 11 CASE NO.
WORLDCOM, INC., ET AL.,                      :        02-13533  (AJG)
                                             :
                                             :        (JOINTLY ADMINISTERED)
              DEBTORS.                       :

- --------------------------------X

     ORDER PURSUANT TO SECTIONS 105, 363 AND 365 OF THE BANKRUPTCY CODE AND
  BANKRUPTCY RULES 6004(g) AND 6006(d)(a) APPROVING THE TERMS AND CONDITIONS OF
     REAL ESTATE PURCHASE CONTRACT FOR THE SALE OF PENTAGON CITY AND RELATED
 PROPERTY, (B) AUTHORIZING THE SALE OF PROPERTY FREE AND CLEAR OF LIENS, CLAIMS
AND ENCUMBRANCES, AND (C) AUTHORIZING AND APPROVING THE ASSIGNMENT OR ASSUMPTION
         AND ASSIGNMENT OF CONTRACTS AND LEASES IN CONNECTION THEREWITH

                  A hearing having been held on July 29, 2003 (the "Sale
Hearing"), to consider the motion, dated May 30, 2003 (the "Motion"), of
WorldCom, Inc. and certain of its direct and indirect subsidiaries, as debtors
and debtors in possession (collectively, "WorldCom" or the "Debtors"), for the
entry of an order pursuant to sections 105, 363 and 365 of title 11 of the
United States Code (the "Bankruptcy Code"), and Rules 6004 and 6006 of the
Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), among other
things, (a) approving the terms and conditions of that certain Real Estate
Purchase Contract, between MCI WORLDCOM Network Services, Inc., as seller, and
Commercial Net Lease Realty, Inc.., as purchaser ("Purchaser"), dated as of July
23, 2003 (the "Agreement"), providing for, among other things, the sale by the
Debtors of certain real property known as "Pentagon City" and certain related
property and the assignment of certain contracts and leases (collectively, the
"Assets"), (b) authorizing the sale of such Assets to Purchaser free and clear
of all liens, claims and encumbrances (except as otherwise set forth in the
Agreement), and (c) authorizing and


 approving the assignment or assumption and assignment of certain contracts and
leases in connection therewith, all as more fully set forth in the Motion; and
the Court having entered the Order (A) Establishing Procedures for Debtors'
Proposed Auction of Pentagon City and Related Property, (B) Approving "Break-Up
Fee" Arrangement with Proposed Purchaser, (C) Establishing Date and Time for
Sale Hearing and (D) Approving Form and Manner of Notices, dated June 17, 2003
(the "Auction Procedures Order"); and the Court having jurisdiction to consider
the Motion and the relief requested therein pursuant to 28 U.S.C. Sections 157
and 1334 and the Standing Order Of Referral of Cases to Bankruptcy Court Judges
of the District Court for the Southern District of New York, dated July 19, 1984
(Ward, Acting C.J.); and consideration of the Motion and the relief requested
therein being a core proceeding pursuant to 28 U.S.C. Section 157(b); and venue
being proper before this Court pursuant to 28 U.S.C. Sections 1408 and 1409; and
due and proper notice of the Motion having been provided in accordance with the
Auction Procedures Order and the Court's case management order, dated December
23, 2002, and it appearing that no other or further notice need be provided; and
the Court having reviewed the Motion and the papers in support thereof and the
responses thereto, if any; and upon the Motion, the papers in support thereof
and the responses thereto, if any, and the record of the Sale Hearing; and the
Debtors having solicited offers for, and conducted an auction of, the Assets in
accordance with the Auction Procedures Order; and the Debtors having determined
that Purchaser's offer for the Assets, as embodied in the Agreement, is the
highest and best offer received by the Debtors therefor; and the Agreement
having been negotiated by the Debtors and Purchaser in good faith and at arm's
length; and the Court having found and determined that the legal and factual
bases set forth in the Motion and at the Sale Hearing establish just cause for
the relief granted herein and that the relief requested in the Motion is an
exercise of the Debtors'

                                      G-2



sound business judgment and is in the best interests of the Debtors and their
estates and creditors; and upon all of the proceedings had before the Court; and
after due deliberation and sufficient cause appearing therefor, it is

                  ORDERED that Purchaser's offer for the Assets, as embodied in
the Agreement is the highest and best offer and is hereby approved, provided,
however, the assignment of the TSA Lease (as defined in the Motion) is subject
to approval by the United States through the Transportation Security
Administration; and it is further

                  ORDERED that the Agreement is hereby approved pursuant to
section 363(b) of the Bankruptcy Code and the Debtors are authorized to perform
all of their obligations under the Agreement and to execute such other documents
and take such other actions as are necessary or appropriate to effectuate the
Agreement; and it is further

                  ORDERED that all objections and responses to the Motion that
have not been overruled, withdrawn, waived, settled or resolved by this Order,
and all reservations of rights included therein, are hereby denied on the merits
except as otherwise provided for in the record at the Sale Hearing; and it is
further

                  ORDERED that, pursuant to section 363(f) of the Bankruptcy
Code, the Assets shall be sold and transferred free and clear of all liens,
claims and encumbrances except as otherwise provided in the Agreement
(collectively, "Liens"), with any and all such Liens to attach to proceeds of
such sale with the same validity, priority, force and effect such Liens had on
the Assets immediately prior to the sale and subject to the rights, claims,
defenses, and objections, if any, of the Debtors and all interested parties with
respect to any such asserted Liens; and it is further

                                      G-3



                  ORDERED that the Debtors are hereby authorized, but not
directed, to satisfy any such valid Liens from the proceeds of sale; and it is
further

                  ORDERED that, pursuant to sections 105(a), 363(b) and 365 of
the Bankruptcy Code, the sale and assignment by the Debtors to the Purchaser of
the Assets, and the assumption by the Debtors and sale and assignment to the
Purchaser of the Otis Contract (as defined in the Agreement), as the case may
be, upon the closing under the Agreement are authorized and approved in all
respects; and it is further

                  ORDERED that the conditions, if any, to the assumption and
assignment of the Otis Contract to Purchaser set forth in section 365 of the
Bankruptcy Code are deemed satisfied in all respects; and it is further

                  ORDERED that the stays of this Order set forth in Bankruptcy
Rules 6004(g) and 6006(d) are hereby waived and this Order shall be effective
immediately upon its entry; and it is further

                  ORDERED that the terms of this Order shall be binding on the
Purchaser and its successors, the Debtors, creditors of the Debtors and all
other parties in interest in the Debtors' cases, and any successors of the
Debtors, including any trustee or examiner appointed in these cases or any
subsequent or converted cases of the Debtors under chapter 7 or chapter 11 of
the Bankruptcy Code; and it is further

                  ORDERED that the sale of the Assets to Purchaser in accordance
with the Agreement constitutes a good faith transaction entitled to the
protections afforded by section 363(m) of the Bankruptcy Code in the event of a
reversal or modification on appeal of this Order; and it is further

                                      G-4



                  ORDERED that in accordance with the Order, dated November 26,
2002, authorizing the employment retention of Hilco Real Estate, LLC and its
joint venture partners (collectively, the "Consultant") as real estate
consultant for the Debtors, the Consultant shall be entitled to a fee equal to
$1,741,062; and it is further

                  ORDERED that, with respect to the transactions consummated
pursuant to this Order, this Order shall be sole and sufficient evidence of the
transfer of title to any particular purchaser, and the sale transactions
consummated pursuant to this Order shall be binding upon and shall govern the
acts of all persons and entities who may be required by operation of law, the
duties of their office, or contract, to accept, file, register or otherwise
record or release any documents or instruments, or who may be required to report
or insure any title or state of title in or to any of the property sold pursuant
to this Order, including without limitation, all filing agents, filing officers,
title agents, title companies, recorders of mortgages, recorders of deeds,
administrative agencies, governmental departments, secretaries of state, and
federal, state, and local officials, and each of such persons and entities is
hereby directed to accept this Order as sole and sufficient evidence of such
transfer of title and shall rely upon this Order in consummating the
transactions contemplated hereby; and it is further

                  ORDERED that this Court retains jurisdiction (a) to enforce
and implement the terms and provisions of the Agreement, all amendments thereto,
any waivers and consents thereunder and each of the agreements executed in
connection therewith, (b) to compel delivery of the Assets to the Purchaser, (c)
to enforce the assumption and assignment of the Otis Contract, (d) to enforce
the sale and assignment of the Assets, (e) to resolve any disputes arising under
or related to the Agreement, and (f) to interpret, implement and enforce the
provisions of this Order, provided, however, that enforcement and implementation
of the TSA Lease (as defined in the

                                      G-5



Motion) and resolution of disputes between the Transportation Security
Administration (the "TSA"), as lessee under the TSA Lease, and any non-Debtor
party shall be handled in accordance with the TSA's then-current dispute
resolution process (which, as of the date of this Order, is the Office of
Dispute Resolution for Acquisition, pursuant to 14 C.F.R. Part 17 and the
Aviation and Transportation Security Act, Pub. L. No. 107-17, 115 Stat. 597
(Nov. 19, 2001)); and it is further

                  ORDERED that nothing contained in any chapter 11 plan
confirmed in these cases or the order of confirmation confirming any chapter 11
plan, nor any order dismissing any case or converting it to chapter 7
liquidation shall conflict with or derogate from the provisions of the
Agreement, any documents or instrument executed in connection therewith, or the
terms of this Sale Order; and it is further

                  ORDERED that the failure specifically to include any
particular provisions of the Agreement or any of the documents, agreements or
instruments executed in connection therewith in this Order shall not diminish or
impair the efficacy of such provision, document, agreement or instrument, it
being the intent of the Court that the Agreement and each document, agreement or
instrument be authorized and approved in its entirety; and it is further

                  ORDERED that the Agreement and any related agreements,
documents or other instruments may be modified, amended or supplemented by the
parties thereto in accordance with the terms thereof without further order of
the Court, provided that any such modification, amendment or supplement does not
have a material adverse effect on the Debtors' estates; and it is further

                  ORDERED that, in accordance with section 1146(c) of the
Bankruptcy Code, the transactions contemplated by the Agreement are exempt from
any transfer, stamp or similar tax

                                      G-6



arising as a result of or in connection with Debtors' sale and transfer of the
Assets to the Purchaser; and it is further

                  ORDERED that the requirement under rule 9013-1(b) of the Local
bankruptcy rules for the Southern District of New York for the filing of a
memorandum of law is waived.

Dated: New York, New York
       __________, 2003

                                     ___________________________________
                                       United States Bankruptcy Judge

                                      G-7


                                    EXHIBIT H

                              SPECIAL WARRANTY DEED

PREPARED OUTSIDE OF THE
COMMONWEALTH OF VIRGINIA AND
AFTER RECORDED RETURN TO:                   Tax Map No. ________________

________________________                    Parcel No. _________________
________________________
________________________
________________________

                              SPECIAL WARRANTY DEED

                  This Special Warranty Deed is made as of ____________, 2003 by
and between MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation, having
an office at ___________________________("GRANTOR"), a debtor and debtor in
possession in a case pending under Chapter 11 of title 11, United States Code
(No. 02-13533 (AJG)) in the United States Bankruptcy Court for the Southern
District of New York (the "BANKRUPTCY COURT"), and _______________, a
_____________, having an office at _________________________("GRANTEE"):

                                   WITNESSETH:

         That for and in consideration of the sum of Ten Dollars ($10.00), cash
in hand paid, and other good and valuable consideration, receipt whereof is
hereby acknowledged, Grantor does hereby GRANT, BARGAIN, SELL AND CONVEY unto
Grantee, with Special Warranty of Title and Covenant of Further Assurances, all
that certain lot or parcel of land, situate and being in the City of Arlington,
Virginia, and being more particularly described in Exhibit A attached hereto and
made a part hereof.

         TOGETHER WITH all improvements located in or on said property;

         TOGETHER WITH all water, sewer, utility and development rights now or
hereafter allocated or allocable to said property;

         TOGETHER WITH all right, title and interest of Grantor in and to any
land lying in the bed or any public and private streets, roads, highways,
avenues, alleys, ways, waterways and creeks adjacent to said property; and

         TOGETHER WITH all the rights, privileges, appurtenances and advantages
thereunto belonging or appertaining.

                                      H-1



         TO HAVE AND TO HOLD the same unto the use and benefit of Grantee, its
successors and assigns forever.

          AND BEING the same property acquired by Grantor by Deed recorded in
Deed Book, ________, at Page ________, among the City of Arlington land records.

         SUBJECT TO all easements, rights of way, covenants, conditions and
restrictions of record and all liens and encumbrances set forth on Exhibit B.

         This Special Warranty Deed (a) is made without any covenant, warranty
or representation by, or recourse against, Seller or Seller's affiliates of any
kind whatsoever, except as may be set forth specifically herein or in that
certain Real Estate Purchase Contract, dated as of ___________, 2003 between
Seller and Purchaser, and (b) is made pursuant to an order of the Bankruptcy
Court entered on __________, 2003.

         WITNESS the following signature and seal:

Witness:                                          MCI WORLDCOM NETWORK SERVICES,
                                                  INC., a Delaware corporation

____________________________________              By: __________________________
[SEAL]                                            Name:
                                                  Title:

STATE OF:                           *
                                    *         TO WIT:
COUNTY OF:                          *

         I HEREBY CERTIFY, that on this _____ day of _____________, 2003, before
me, the undersigned Notary Public of said jurisdiction, personally
appeared___________________, to me known personally, and who, being by me duly
sworn, deposes and says that she is a________________of MCI WORLDCOM NETWORK
SERVICES, INC., a Delaware corporation, and that the seal affixed to the
foregoing instrument is the seal of said corporation, and that said instrument
was signed and sealed on behalf of said corporation by the authority of
said_________________, and said____________________ acknowledged said instrument
to be the free act and deed of said corporation.

         WITNESS my hand and Notarial Seal.

                                                     ___________________________
                                                     Notary Public

My Commission Expires:

                                      H-2



                                    EXHIBIT A

                             DESCRIPTION OF THE LAND

                                      H-3



                                    EXHIBIT B

                             PERMITTED ENCUMBRANCES

                                      H-4



                                    EXHIBIT I

                              FORM OF BILL OF SALE

                  KNOW ALL MEN BY THESE PRESENTS,

                  That MCI WORLDCOM NETWORK SERVICES, INC., a Delaware
corporation, having an address at____________________("SELLER"), a debtor and
debtor in possession in a case pending under Chapter 11 of title 11, United
States Code (No. 02-13533 (AJG)) in the United States Bankruptcy Court for the
Southern District of New York (the "BANKRUPTCY COURT"), for and in consideration
of the sum of Ten Dollars ($10.00) and other good and valuable consideration
paid to Seller by _________________, a _____________, having an address at
________________ ("PURCHASER"), the receipt and sufficiency of which are hereby
acknowledged, does hereby sell, grant, convey and transfer to Purchaser all of
Seller's right, title and interest in and to all the fixtures, machinery,
equipment, supplies and other articles of personal property which are attached
or appurtenant to, or used in connection with, the real property more
particularly described in Schedule 1 annexed hereto and made a part hereof (the
"PREMISES"), but excluding any such items as are located in the [Terminal
Space], which shall remain the property of Seller, subject to the rights of the
tenants under the [TSA Lease].

         TO HAVE AND TO HOLD the same unto Purchaser, its successors and
assigns, forever, from and after the date hereof.

         Purchaser hereby unconditionally waives any and all claims, actions,
and causes of action of any nature whatsoever it may now or hereafter have
against Seller, Seller's estate, or any disclosed or undisclosed officer,
director, employee, trustee, shareholder, partner, principal, parent, subsidiary
or other person or entity affiliated with Seller (collectively, "SELLER'S
AFFILIATES"), and hereby unconditionally and irrevocably fully releases Seller,
Seller's estate, and Seller's Affiliates from any and all liability whatsoever
which may now or hereafter accrue in favor of Purchaser against Seller, Seller's
estate, or Seller's Affiliates, in connection with or arising out of the
Personal Property.

         This Bill of Sale (a) is made without any covenant, warranty or
representation by, or recourse against, Seller or Seller's Affiliates of any
kind whatsoever, except as may be set forth in that certain Real Estate Purchase
Contract, dated as of ___________, 2003 between Seller and Purchaser, and (b) is
made pursuant to an order of the Bankruptcy Court entered on _____________,
2003.

                            [SIGNATURE PAGE FOLLOWS]

                                      I-1



         IN WITNESS WHEREOF, Seller and Purchaser have executed this Bill of
Sale on ____________, 2003.

                                            SELLER:

                                            MCI WORLDCOM NETWORK SERVICES,
                                            INC., a Delaware corporation

                                            By:___________________________
                                            Name:
                                            Title:

                                            PURCHASER:

                                            By:___________________________
                                            Name:
                                            Title

                                      I-2



                                   Schedule 1

                                    Premises

                                      I-3



                                    EXHIBIT J

             FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT FOR SERVICE
                      CONTRACTS BEING ASSIGNED TO PURCHASER

         ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS, dated
_____________________, 2003, between _________________________, a______________
________________ ("ASSIGNOR"), having an address at ___________________, and
__________________, a ___________________ ("ASSIGNEE"), having an address at
_________________________.

                              W I T N E S S E T H:

         WHEREAS, Assignor and certain of its affiliates are debtors and debtors
in possession in a jointly administered case pending under Chapter 11 of title
11, United States Code (No. 02-13533 (AJG)) in the United States Bankruptcy
Court for the Southern District of New York (the "BANKRUPTCY COURT"); and

         WHEREAS, pursuant to an order of the Bankruptcy Court entered on
____________, 2003, Assignor on this day is selling and conveying to Assignee
the real property more particularly described in Schedule 1 annexed hereto and
made a part hereof (the "PREMISES").

         NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration paid by Assignee to Assignor, the receipt
and sufficiency of which are hereby acknowledged, Assignor hereby assigns,
transfers and conveys to Assignee all of Assignor's right, title and interest,
to the extent assignable, in and to all service contracts relating to the
operation of the Premises set forth on Schedule 2 annexed hereto and made a part
hereof (collectively, the "CONTRACTS").

         TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
forever, from and after the date hereof, subject to the terms, covenants,
conditions and provisions of the Contracts.

         ASSIGNEE HEREBY ACCEPTS the foregoing assignment and assumes and agrees
to perform all of the obligations of Assignor under the Contracts.

         ASSIGNEE HEREBY agrees to indemnify and hold harmless Assignor and its
estate from and against any and all claims, liabilities, losses, costs, damages
and expenses (including reasonable attorneys' fees) arising or accruing under
the Contracts.

         This Assignment and Assumption of Contracts is made without any
covenant, warranty or representation by, or recourse against, Assignor or
Assignor's affiliates of any kind whatsoever, except as set forth in that
certain Real Estate Purchase Contract dated as of _______________, 2003 between
Assignor and Assignee.

                            [SIGNATURE PAGE FOLLOWS]

                                      J-1



         IN WITNESS WHEREOF, this Assignment and Assumption of Service Contracts
has been executed on the date and year first above written.

                                            ASSIGNOR:

                                            _____________________________
                                            _____________________________

                                            By: _________________________
                                            Name:
                                            Title:

                                            ASSIGNEE:

                                            _____________________________
                                            _____________________________

                                            By: _________________________
                                            Name:
                                            Title:

                                      J-2



                                   Schedule 1

                                    Premises

                                      J-3



                                   Schedule 2

                                    Contracts

                                      J-4



                                    EXHIBIT K

          FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT FOR CONSTRUCTION
                                    CONTRACTS

         ASSIGNMENT AND ASSUMPTION OF CONSTRUCTION CONTRACTS, dated
_____________________, 2003, between __________________, a
____________________("ASSIGNOR"), having an address at _______________________,
and _______________________, a ___________________ ("ASSIGNEE"), having an
address at _________________________.

                              W I T N E S S E T H:

         WHEREAS, Assignor and certain of its affiliates are debtors and debtors
in possession in a jointly administered case pending under Chapter 11 of title
11, United States Code (No. 02-13533 (AJG)) in the United States Bankruptcy
Court for the Southern District of New York (the "BANKRUPTCY COURT"); and

         WHEREAS, pursuant to an order of the Bankruptcy Court entered on
____________, 2003, Assignor on this day is selling and conveying to Assignee
the real property more particularly described in Schedule 1 annexed hereto and
made a part hereof (the "PREMISES").

         NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration paid by Assignee to Assignor, the receipt
and sufficiency of which are hereby acknowledged, Assignor hereby assigns,
transfers and conveys to Assignee all of Assignor's right, title and interest,
to the extent assignable, in and to all construction contracts relating to the
operation of the Premises set forth on Schedule 2 annexed hereto and made a part
hereof (collectively, the "CONTRACTS").

         TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
forever, from and after the date hereof, subject to the terms, covenants,
conditions and provisions of the Contracts.

         ASSIGNEE HEREBY accepts the foregoing assignment and assumes and agrees
to perform all of the obligations of Assignor under the Contracts.

         ASSIGNEE HEREBY agrees to indemnify and hold harmless Assignor and its
estate from and against any and all claims, liabilities, losses, costs, damages
and expenses (including reasonable attorneys' fees) arising or accruing under
the Contracts.

         This Assignment and Assumption of Contracts is made without any
covenant, warranty or representation by, or recourse against, Assignor or
Assignor's affiliates of any kind whatsoever, except as set forth in that
certain Real Estate Purchase Contract dated as of _______________, 2003 between
Assignor and Assignee.

                            [SIGNATURE PAGE FOLLOWS]

                                      K-1



         IN WITNESS WHEREOF, this Assignment and Assumption of Construction
Contracts has been executed on the date and year first above written.

                                            ASSIGNOR:

                                            ____________________________
                                            ____________________________

                                            By: ________________________
                                            Name:
                                            Title:

                                            ASSIGNEE:

                                            ____________________________
                                            ____________________________

                                            By: ________________________
                                            Name:
                                            Title:

                                      K-2



                                   Schedule 1

                                    Premises

                                      K-3



                                   Schedule 2

                                    Contracts

                                      K-4



                                    EXHIBIT L

                                FIRPTA AFFIDAVIT

                           NON-FOREIGN AFFIDAVIT UNDER
                              INTERNAL REVENUE CODE
                               SECTION 1445(b)(2)

STATE OF ___________________________)
                                    ) ss:
COUNTY OF___________________________)

                  ____________________, being first duly sworn deposes and
states under penalty of perjury:

                  1.       That he/she is a _______________________of MCI
                           WORLDCOM NETWORK SERVICES, INC. , a Delaware
                           corporation, the transferor of the property located
                           at 601 and 701 South 12th Street, Arlington,
                           Virginia.

                  2.       That the transferor's office address is at
                           _____________________.

                  3.       That the United States taxpayer identification number
                           for the transferor is 13-2745892.

                  4.       That the transferor is not a "FOREIGN PERSON" as that
                           term is defined in Section 1445(f) of the United
                           States Internal Revenue Code of 1986, as amended (the
                           "CODE").

         This affidavit is given to __________________, a _______________, the
transferee of the property described in paragraph 1 above, for the purpose of
establishing and documenting the nonforeign affidavit exemption to the
withholding requirement of Section 1445 of the Code. The transferor understands
that this affidavit may be disclosed to the Internal Revenue Service by the
transferee and that any false statement contained herein could be punished by
fine, imprisonment, or both.

                                                  MCI WORLDCOM NETWORK SERVICES,
                                                  INC., a Delaware corporation

                                                  By: __________________________
                                                  Name:
                                                  Title:

Subscribed and sworn to
before me this____day
of___________________, 2003.

Notary Public:

                                      L-1



                                    EXHIBIT M

                                 TITLE AFFIDAVIT

                             AFFIDAVIT AND INDEMNITY

STATE OF ___________________________________)
                                            )ss.:
COUNTY OF___________________________________)

___________________________, in his capacity as __________________ of MCI
WorldCom Network Services, Inc., a Delaware corporation, ("OWNER"), being duly
sworn deposes and says:

Owner is the owner of the property (the "PROPERTY") described in Chicago Title
Insurance Company's ("CHICAGO TITLE") report/commitment no. __________________
(the "REPORT").

I am fully authorized and qualified to give this Affidavit and Indemnity on
behalf of Owner.

A complete list of all tenants, lessees or parties in possession (collectively
"TENANTS") of all or any part of the Property is set forth on Exhibit A attached
hereto. There are no other Tenants at the Property. All such Tenants are in
occupancy as tenants only, with no rights of first refusal or options to
purchase all or any part of the Property.

To affiant's knowledge without independent inquiry, Owner has not received any
notice of any violation of any covenant, condition or restriction, if any,
affecting the Property.

This Affidavit and Indemnity is given to induce Chicago Title to issue its
policies of title insurance in connection with the Report, knowing full well
that Chicago Title will rely upon the accuracy of the same. Owner shall
indemnify and hold Chicago Title harmless from any loss, cost or expense
occasioned by the existence of any of the matters listed above or any untrue
statement made herein and any cost, expense or liability, including reasonable
attorney's fees, arising from the enforcement of this Affidavit and Indemnity.

                                        MCI WorldCom Network Services, Inc.

                                        By: _________________________________
                                            Name:
                                            Title:

Sworn to before me this
 ______ day of ___________, 2003

________________________________



                                    EXHIBIT A



- --------------------------------------------------------------------------------
         TENANTS
- --------------------------------------------------------------------------------
      
1.       United States of America acting by and through the Transportation
         Security Administration
- --------------------------------------------------------------------------------
2.
- --------------------------------------------------------------------------------
3.
- --------------------------------------------------------------------------------
4.
- --------------------------------------------------------------------------------
5.
- --------------------------------------------------------------------------------
6.
- --------------------------------------------------------------------------------
7.
- --------------------------------------------------------------------------------
8.
- --------------------------------------------------------------------------------
9.
- --------------------------------------------------------------------------------
10.
- --------------------------------------------------------------------------------


                                      M-1



                                    EXHIBIT N

          FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT FOR THE TSA LEASE
                           BEING ASSIGNED TO PURCHASER

         ASSIGNMENT AND ASSUMPTION OF LEASE, dated _______________, 2003,
between MCI WORLDCOM NETWORK SERVICES, INC., a Delaware corporation
("ASSIGNOR"), having an address at ________________________, and
___________________, a ______________("ASSIGNEE"), having an address at
_________________________.

                              W I T N E S S E T H:

         WHEREAS, Assignor and certain of its affiliates are debtors and debtors
in possession in a jointly administered case pending under Chapter 11 of title
11, United States Code (No. 02-13533 (AJG)) in the United States Bankruptcy
Court for the Southern District of New York (the "BANKRUPTCY COURT"); and

         WHEREAS, pursuant to an order of the Bankruptcy Court entered on
______________, 2003, Assignor on this day is selling and conveying to Assignee
the real property more particularly described in Schedule 1 annexed hereto and
made a part hereof (the "PREMISES").

         NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration paid by Assignee to Assignor, the receipt
and sufficiency of which are hereby acknowledged, Assignor hereby assigns,
transfers and conveys to Assignee all of Assignor's right, title and interest as
landlord in and to the lease between MCI WorldCom Network Services, Inc.
("LANDLORD") and the United States of America, TSA No. DTSA20-03-R-00528 (the
"GOVERNMENT"), dated December 17, 2002, as amended, as more particularly
described on Schedule 2 annexed hereto and made a part hereof (collectively, the
"LEASE").

         TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
forever, from and after the date hereof, subject to the terms, covenants,
conditions and provisions of the Lease.

                  ASSIGNEE HEREBY accepts the foregoing assignment and assumes
and agrees to perform all of the obligations of Assignor under the Lease.

                  ASSIGNEE HEREBY agrees to indemnify and hold harmless Assignor
and its estate from and against any and all claims, liabilities, losses, costs,
damages and expenses (including reasonable attorneys' fees) arising or accruing
under the Lease.

         This Assignment and Assumption of Lease is made without any covenant,
warranty or representation by, or recourse against, Assignor or Assignor's
affiliates of any kind whatsoever, except as set forth in that certain Real
Estate Purchase Contract dated as of ______________, 2003 between Assignor and
Assignee.

                                      N-1



         IN WITNESS WHEREOF, this Assignment and Assumption of Lease has been
executed on the date and year first above written.

                                         ASSIGNOR:

                                         MCI WORLDCOM NETWORK SERVICES, INC.., a
                                         Delaware corporation

                                         By: __________________________
                                         Name:
                                         Title:

                                         ASSIGNEE:

                                         ______________________________
                                         ______________________________

                                         By: ___________________________
                                         Name:
                                         Title:

                                      N-2



                                   Schedule 1

                                    Premises

                                      N-3



                                   Schedule 2

                                     Lease

                                      N-4



                                    EXHIBIT O

                       FORM OF EASEMENT IN FAVOR OF SELLER

                             DECLARATION OF EASEMENT

         THIS DECLARATION OF EASEMENT (this "DECLARATION") is made as of the
____ day of ______, 2003, by [INSERT NAME OF PURCHASER OF PROPERTY], a
[_______________], having an office at [________________________] ("DECLARANT").
[NOTE: IN THE SOLE DISCRETION OF MCI WORLDCOM NETWORK SERVICES, INC., THE
GRANTEE NAMED HEREIN, (A) THE EASEMENT RIGHTS DESCRIBED IN THIS INSTRUMENT MAY
BE ESTABLISHED BY RESERVATION IN GRANTEE'S DEED CONVEYING TITLE TO THE PROPERTY
(HEREINAFTER DEFINED), AND (B) A MORE DETAILED EASEMENT PLAN AND/OR LEGAL
DESCRIPTION MAY BE SUBSTITUTED FOR THE EASEMENT PLAN AND/OR LEGAL DESCRIPTION
ATTACHED HERETO AS EXHIBITS B AND C, RESPECTIVELY.]

                                    RECITALS:

         A.       Declarant is the owner of certain real property known as 601
and 701 South 12th Street, in Arlington, Virginia, more particularly described
in EXHIBIT A attached hereto and made a part hereof (the "PROPERTY").

         B.       Declarant desires to subject and place upon the Property
certain easements, reservations, rights-of-way and other charges as more
particularly set forth herein, for the benefit of MCI WORLDCOM Network Services,
Inc., a Delaware corporation ("GRANTEE").

         NOW, THEREFORE, in consideration of the foregoing premises, the
provisions hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Declarant does hereby
publish and declare that the following terms, covenants, easements,
reservations, rights-of-way and other provisions shall run with title to the
Property, and shall be binding on all parties having any right, title or
interest in the Property and their heirs, personal representatives, successors
and assigns.

                           ARTICLE I - INTERPRETATION

         1.1      DEFINITIONS. When used in this Declaration, the following
capitalized terms shall have the meanings indicated:

                  EASEMENT: means the easements, rights-of-way, licenses and
other rights created hereunder.

                  EASEMENT AREA: means the portion of the Property depicted on
the Easement Plan, more particularly described in the legal description attached
as Exhibit C hereto.

                  EASEMENT PLAN: means that certain plat attached as EXHIBIT B
hereto.

                                      O-1



                  EMERGENCY SITUATION: means a situation (i) impairing or
imminently likely to impair the operation or use of any Telecommunications
System, (ii) causing or likely to cause the loss of service provided by any
Telecommunications System, (iii) causing or likely to cause bodily injury to
persons or any damage to any Telecommunications System or any property in, on,
under, within, upon, around or about the Easement Area, or (iv) causing or
imminently likely to cause substantial economic loss to the Grantee.

                  FEE OWNER: means the owner of the fee interest in the Property
from time to time.

                  PROPERTY: means the real property described on EXHIBIT A
attached hereto.

                  TELECOMMUNICATIONS SYSTEMS: means telecommunications
transmission systems, including, without limitation, conduit, manholes,
innerducts, cables, wires and other related fixtures, facilities, apparatus,
equipment, marker posts and appurtenances deemed necessary or appropriate for
the operation, maintenance, upgrade, repair or use of any such system.

         1.2      Exhibits. The exhibits referred to in this Declaration hereby
are incorporated into this Declaration in full by this reference.

         1.3      Captions; Sections. Captions in this Declaration are for
convenience of reference only, and shall not affect the scope or intent of this
Declaration.

         1.4      Severability. In the event one or more of the provisions of
this Declaration shall be held to be illegal, invalid or unenforceable, each
provision shall be deemed severable and the remaining provisions of this
Declaration shall continue in full force and effect.

                      ARTICLE II - DECLARATION OF EASEMENT

         2.1      DECLARATION OF EASEMENT.

                  2.1.1    There is hereby created for the benefit of the
Grantee a non-exclusive perpetual easement in, under, upon, over and across the
Property within the bounds of the Easement Area. The Easement shall be used for
the purpose of the installation, operation, maintenance, inspection, repair,
removal, replacement and enlargement of Telecommunications Systems, whether now
existing or hereafter installed, in the Easement Area. The Easement granted
herein includes, without limitation, the right to install, maintain and operate
conduit, innerducts, cable and wiring under the Easement Area, as well as the
placement, installation, maintenance and operation of other equipment, fixtures,
manholes and other means of access in, under, upon, over and across the Easement
Area. The Grantee shall have the right to use the Easement Area, in whole or in
part, as may be deemed necessary or advisable by the Grantee to provide
telecommunications services to its customers, wherever situated.

                                      O-2



                  2.1.2    The Easement includes, and the Grantee is hereby
granted, rights and easements, privileges and appurtenances over and across the
Property necessary or convenient for the full enjoyment and use of the rights
herein granted, including, but not limited to, the rights of ingress and egress
over and across the Property to and from the Easement Area, the right to clear
and keep cleared any and all obstructions which might endanger or interfere with
the construction, operation, maintenance, safety or efficiency of any
Telecommunications System or parts thereof, including, without limitation, the
right to clear and keep clear all trees, roots, brush and other obstructions
located in and around the Easement Area.

                  2.1.3    All Telecommunications System equipment installed by
Grantee in the Easement Area shall remain the personal property of Grantee, its
successors or assigns, and neither the Fee Owner nor any person or entity
claiming by, through or under the Fee Owner shall have any rights to use,
operate, remove or disturb such personal property of Grantee without Grantee's
prior written consent.

                  2.1.4    All Telecommunications Systems installed pursuant to
this Declaration shall be installed underground, except for (i) manholes
installed at grade (flush with ground level); and (ii) customary above-ground
appurtenant facilities of underground Telecommunications Systems.

         2.2      RESERVATION OF RIGHTS. Declarant hereby reserves, for itself
and all subsequent Fee Owners of the Property, (i) the right to use the Easement
Area for any purpose consistent with the Easement and which will not endanger or
interfere with the construction, reconstruction, repair, maintenance, operation
or efficiency of any Telecommunications System; provided, however, that no
buildings or other permanent structures may be constructed in or on the Easement
Area, and (ii) the right to grant rights in the Easement Area to other parties;
provided, however, that no such other grant shall interfere with the exercise of
the Easement by Grantee.

         2.3      NOTICE. Any work to be done by Grantee within the Easement
Area shall be done only after twenty-four (24) hours' advance notice to Fee
Owner, except in the event of any Emergency Situation, in which event no advance
notice shall be required, provided that such Easement Beneficiary shall notify
the Fee Owner of such work as soon as reasonably possible (whether before or
after the commencement of such emergency work).

         2.4      TERMINATION. The Easement herein granted to Grantee may be
terminated by Grantee at any time by written notice to the Fee Owner.

         2.5      INDEMNIFICATION BY GRANTEE. The Grantee shall indemnify,
defend and hold harmless Fee Owner, and its officers, directors, agents and
employees (each, an "INDEMNITEE"), from and against all claims, liabilities,
suits, obligations, fines, penalties, damages, losses and expenses (including,
without limitation, reasonable attorney's fees and disbursements) that may be
imposed upon, incurred by or asserted against an Indemnitee by reason of, or
arising out of injuries to or death of persons or damage to property resulting
from or occurring by reason of (a) the negligent acts or willful misconduct of
Grantee and/or any of its agents, employees or contractors, or (b) the exercise
by Grantee and/or any of its agents,

                                      O-3



employees and contractors of the easement rights granted herein, except to the
extent caused by any gross negligence or willful misconduct of such Indemnitee
and/or any of its agents, employees and contractors.

                          ARTICLE III - MISCELLANEOUS.

         3.1      NO PUBLIC EASEMENT. Nothing in this Declaration shall be
deemed or construed to create an easement or license in favor of the public
generally.

         3.2      EFFECTIVENESS OF DECLARATION. This Declaration shall be
effective upon its full execution by Declarant and recordation.

         3.3      BINDING EFFECT. The terms and conditions of this Declaration
shall (i) be binding upon and shall inure to the benefit of the Grantee and its
successors and assigns, and (ii) run with the land, binding upon and inuring to
the benefit of all Fee Owners and other parties owning or having any interest in
the Property.

         3.4      NO MERGER. In the event the Fee Owner and the Grantee are at
any time the same person or entity, such unified ownership shall not of itself
work a merger or other termination of the Easement, and this Declaration shall
continue in full force and effect in accordance with its terms.

         3.5      PRIORITY. This Declaration shall be senior and superior to the
lien of any mortgage or deed of trust now or hereafter made encumbering all or
any part of the fee title to the Property.

                          [Signature on following page]

                                      O-4



         IN WITNESS WHEREOF, the undersigned has executed this Declaration of
Easement as of the date first written above.

WITNESS:                                        [INSERT NAME OF PURCHASER OF THE
                                                THE PROPERTY]

____________________                            By: ____________________________
                                                Name: __________________________
____________________                            Title: _________________________

STATE OF ___________________________________)
                                            )  ss:
COUNTY OF___________________________________)

         I, _________________________________________, a Notary Public in and
for the jurisdiction aforesaid, do hereby certify that ______________________,
who is personally known to me (or satisfactorily proven) to be the
_________________________ of [_________________________], named in the foregoing
instrument and hereto annexed, personally appeared before me in said
jurisdiction and as ________________________ of the aforesaid corporation
acknowledged the same to be the act and deed of said corporation.

                  Given under my hand and seal this ____ day of
____________________, 2003.

                                                    ________________________
                                                    Notary Public.

My Commission expires: ________________.

[Notarial Seal].

                                      O-5



                                                  [WorldCom office buildings,
                                                  601 and 701 South 12th Street,
                                                  Pentagon City, Arlington, VA]

                                    EXHIBIT A

                                    Property

         All of those certain parcels of land situate and being in Arlington
County, Virginia and more particularly described as:

         Parcel 1-A, containing 105,422 square feet, being a Subdivision of the
Property of Pentagon City One Realty Limited Partnership, as the same appears
duly dedicated, platted and recorded in Deed Book 2013 at page 725, among the
land records of Arlington County, Virginia;

         TOGETHER WITH subsurface foundation and footing easement recorded in
Deed Book 2034 at page 528, among the aforesaid land records.

Parcel 1-B containing 2.45783 acres, being a Resubdivision of the Property of
Pentagon Tract Development Corporation and River House Corporation, being a part
of Parcel "B-2-B" Ambassador Inc. & "H" Street Building Corp., as the same are
shown on a plat attached to Deed of Resubdivision recorded in Deed Book 2062 at
page 914, among the aforesaid land records.

                                      O-6


                                    EXHIBIT B

                                  EASEMENT PLAN

                                       O-7



                                    EXHIBIT C

                       LEGAL DESCRIPTION OF EASEMENT AREA

                                      O-8



                                    EXHIBIT P

                              EQUIPMENT SITE LEASE

                         EQUIPMENT SITE LEASE AGREEMENT

                                     between

                    ---------------------------------------
                                  ("LANDLORD")

                                       and

                       MCI WORLDCOM NETWORK SERVICES, INC.
                                   ("TENANT")

                                PENTAGON CITY TWO
                               601 S. 12TH STREET
                               ARLINGTON, VIRGINIA

                         LEASE NO. ____________________

                                       O-i



                                TABLE OF CONTENTS

                                                                                   
1.       Demised Premises.............................................................    1

2.       Common Areas.................................................................    1

3.       Lease Term...................................................................    2

4.       Rent.........................................................................    2

5.       Permitted Use/Point of Presence/Collocation..................................    2

6.       Landlord's Covenants/Tenant's Right to 24 hour, 7-day per week access........    3

7.       Mechanics' Liens.............................................................    4

8.       Landlord's Services..........................................................    4

9.       Maintenance and Repair.......................................................    4

10.      Insurance....................................................................    5

11.      Hazard Insurance.............................................................    5

12.      Electric.....................................................................    6

13.      Signage......................................................................    6

14.      Trade Fixtures, Specialty Equipment..........................................    6

15.      Alterations By Tenant........................................................    8

16.      Mutual Indemnification; Limitation of Liability..............................    8

17.      Waiver of Claims; Waiver of Subrogation......................................    8

18.      Entry By Landlord............................................................    9

19.      Damage By Casualty...........................................................    9

20.      Bankruptcy...................................................................    9

21.      Holding Over.................................................................   10

22.      Waivers......................................................................   10

23.      Notices......................................................................   10

24.      Delays in Performance........................................................   11

25.      Default......................................................................   11

26.      Cumulative Rights............................................................   12

27.      Eminent Domain...............................................................   13

28.      Personal Property............................................................   13

29.      Binding Agreement............................................................   13



                                       O-1



                                                                                   
30.      Assignment and Sublease......................................................   13

31.      Subordination and Non-Disturbance............................................   14

32.      Attorneys' Fees..............................................................   14

33.      Captions.....................................................................   14

34.      Time of Essence..............................................................   14

35.      Governing Law................................................................   14

36.      Entire Agreement.............................................................   14

37.      Brokers......................................................................   14

38.      Reasonableness...............................................................   14

39.      Amendments...................................................................   14

40.      Parking......................................................................   15

41.      Options to Renew.............................................................   15

42.      Right of First Refusal, Second Floor.........................................   15

43.      Lien Waiver..................................................................   15

44.      Environmental................................................................   15

45.      Deed of Lease................................................................   17



                                      O-2



                         EQUIPMENT SITE LEASE AGREEMENT

         THIS EQUIPMENT SITE LEASE AGREEMENT ("LEASE") is effective this ____
day of ___________ 2003 by and between _______________________________, a
______________________________________ ("LANDLORD"), and MCI WORLDCOM NETWORK
SERVICES, INC., a Delaware corporation ("TENANT").

         WHEREAS, Landlord owns the real estate and the building, commonly known
as Pentagon City Two at 601 South 12th Street, Arlington, Virginia and legally
described on Exhibit A (the "BUILDING");

         WHEREAS, Tenant is currently in occupancy of the Premises and Tenant
desires to lease said Premises from Landlord; and

         WHEREAS, Landlord also owns the real estate commonly known as Pentagon
City One at 701 South 12th Street, Arlington, Virginia ("BUILDING ONE") and the
entire property known as Pentagon City One and Pentagon City Two are sometimes
collectively referred to as "PROPERTY;"

         NOW, THEREFORE, in consideration of the rent provided for herein,
Landlord and Tenant are entering into this Lease upon the terms and conditions
set forth herein.

DEMISED PREMISES. Landlord does hereby demise and lease unto Tenant, and Tenant
does hereby lease from Landlord, 5,059 net rentable square feet on the SECOND
FLOOR of the Building (the "SECOND FLOOR SPACE") as shown on the Site Plan
attached hereto as Exhibit B-1, together with: the enclosed generator area (the
"GENERATOR AREA") and the enclosed electrical area (the "ELECTRICAL AREA") on
Level P-1 of the Building as shown on the plan attached hereto as Exhibit B-2,
and the enclosed fuel tank area (the "FUEL TANK AREA") and the enclosed utility
vault area (the "UTILITY VAULT AREA") on Level P-2 of the Building as shown on
the plan attached hereto as Exhibit B-4. The Second Floor Space, Generator Area,
Electrical Area, Fuel Tank Area, and Utility Vault Area are collectively called
the "PREMISES." Landlord and Tenant agree that the Premises shall be deemed to
contain 5,059 net rentable square feet for all purposes under this Lease,
regardless of whether the Premises might actually contain more or fewer than
5,059 net rentable square feet.

COMMON AREAS. Tenant and its officers, employees, agents, customers and invitees
shall have a nonexclusive right of access to the Parking Spaces (hereinafter
defined), the walkways, driveways and sidewalks at the Building (the "COMMON
AREAS"). Landlord agrees to make the Common Areas continuously available to
Tenant for nonexclusive use by Tenant and the other aforementioned groups of
persons during the Lease Term (as such term is hereafter defined) and any
extension thereof, except when portions of the Common Areas temporarily may be
unavailable for use by reason of repair work then being underway thereon. The
nonexclusive use of the Common Areas by Tenant and its officers, employees,
agents, customers and invitees at all times shall be subject to such reasonable
rules and regulations as Landlord from time to time may establish and shall be
in common with other tenants from time to time of the Building.

                                      O-1



Landlord shall have the right from time to time temporarily to close the Common
Areas to prevent the acquisition of public rights therein. Landlord shall
operate and maintain the Common Areas during the Lease Term and any extensions
thereof in good order and repair in accordance with the standards of comparable
buildings in the area in which the Premises are located.

LEASE TERM. This Lease shall commence on the date of this Lease (the
"COMMENCEMENT DATE") and shall terminate at 11:59 p.m. of the last day of the
month that is ten (10) years thereafter (the "INITIAL LEASE TERM"), subject to
Tenant's Options to Renew, as set forth in Section 0 of this Lease. As used in
this Lease, "LEASE TERM" means the Initial Lease Term and any then applicable
Renewal Term (as defined in Section 0). As used in this Lease, "LEASE YEAR"
means the period from the Commencement Date through the twelfth full month of
the Initial Lease Term with respect to the first Lease Year and each successive
twelve month period with respect to each Lease Year thereafter during the Lease
Term.

RENT.

Base Rent. Beginning on the Commencement Date, Tenant agrees to pay Landlord,
without demand, deduction or set off (except as set forth herein), at Landlord's
address set forth in Section 0 of this Lease, or at such other place as Landlord
from time to time may designate in writing, annual rent in the amount of
Seventy-five thousand eight hundred eighty-five Dollars ($75,885.00) (i.e.,
Fifteen Dollars ($15.00) per rentable square foot of the Second Floor Space)
payable in advance in twelve (12) equal monthly installments on the first day of
each month during the Initial Lease Term (the "BASE RENT"). The Generator Area,
Electrical Area, Fuel Tank Area, and Utility Vault Area are included in the
Premises without the payment of any additional Base Rent. Base Rent shall be
inclusive of all real estate taxes and operating expenses throughout the Lease
Term, as extended or renewed.

Payments Other Than Base Rent. To the extent that this Lease provides for
Tenant's payment of any charges or sums to Landlord that is not a
regularly-occurring payment due under this Lease, Tenant shall have thirty (30)
days to pay such additional charges or other amount due to Landlord following
Tenant's receipt of a statement of such charges or other amount and reasonable
supporting documentation. Base Rent and any other sums due hereunder are
sometimes collectively called "RENT."

PERMITTED USE/POINT OF PRESENCE/COLLOCATION.

Tenant may restrict access to the Premises through a card key system or other
security devices to maintain security in the Premises. Tenant may use, occupy
and operate the Premises for any lawful use, including without limitation, the
installation, expansion, operation and maintenance of equipment necessary to
operate its telecommunications business as well as general and executive offices
and any other uses permitted by the applicable zoning code. Without limiting the
foregoing, Tenant shall have the right, at no additional charge or rent, to
install, operate, replace, expand, add to, repair and maintain its fiber optic
cable and related equipment in horizontal and vertical shafts, risers and
pathways to the Building and/or Building One for the purpose of (i) providing
telecommunications services (installation of a point of presence) to other

                                      O-2



occupants in the Building and/or any other building owned by Landlord or its
affiliates, and (ii) interconnecting telecommunications equipment of Tenant, its
customers or vendors throughout the Building, Building One and surrounding
grounds. Tenant shall have the right to market its services to other tenants in
the Building and Building One. Tenant agrees at all times during the Lease Term
and any extensions thereof to comply with all applicable laws affecting the use
of the Premises.

Landlord acknowledges that the Building contains cables and conduits and related
equipment within the Building and throughout the Property that service the
Premises. All such conduits and cables present in the Building and the Property
shall remain in place and not be disturbed without Tenant's written consent.
Landlord shall provide 24 hour, 7 day per week access to such additional riser
space or comparable areas to Tenant for electrical, generator, telecom, antenna,
dish or HVAC requirements at no additional rent as needed by Tenant throughout
the Lease Term. Additional space provided pursuant to this Section 0 shall be
provided at no additional cost to Tenant, although Tenant shall be responsible
for the cost of the conduit installation.

Landlord acknowledges and agrees that Tenant's contemplated use of the Premises
may include the installation, operation, maintenance, repair and replacement of
telecommunications equipment and related facilities by Tenant's customers and
vendors (the "COLLOCATES"). The Collocates shall be entitled to use the Premises
at no additional charge and without requiring the consent of Landlord. The
Collocates shall have the right to bring fiber and related facilities into the
Premises through the conduits and space utilized by Tenant at no additional
charge and without requiring the consent of Landlord.

LANDLORD'S COVENANTS/TENANT'S RIGHT TO 24 HOUR, 7-DAY PER WEEK ACCESS. Landlord
covenants that: (a) it is the owner of the real estate described in Exhibit A;
(b) the Premises at all times during the Lease Term and any extension thereof
will have unobstructed ingress and egress to the entrance of the Premises and a
public street or highway; (c) Landlord has full power and capacity to make this
Lease with Tenant; and (d) throughout the Lease Term, the Building will comply,
with all laws, ordinances, orders, rules, regulations and requirements of all
federal, state, municipal and local governmental bodies exercising jurisdiction
thereover, whatever the nature of such same, including without limitation,
environmental rules and regulations and the Americans With Disabilities Act, as
amended ("ADA"), and Tenant shall not be liable or responsible to assure that
the Building complies with the same nor for any latent defects in the Premises
or Building. Landlord covenants and agrees: (i) to use its best efforts to avoid
taking any actions that might adversely affect Tenant's use of or business
operations within the Premises, including but not limited to, any actions that
might adversely affect Tenant's fiber optic cabling or telecommunications
equipment; (ii) to provide Tenant with at least forty-eight (48) hours' prior
written notice if, notwithstanding Landlord's best efforts, Landlord must take
an action that might adversely affect Tenant's use of or business operations
within the Premises; (iii) in all events to coordinate and cooperate with Tenant
to minimize any cessation or degradation of Tenant's use of, or business
operations within, the Premises; (iv) to take such actions as soon as reasonably
practicable as may be necessary to correct or cure any acts, events or
circumstances that may have adversely affected Tenant's use of or business
operations within the Premises; and (v) to allow Tenant access to the Premises,
the roof and the Building including the HVAC Systems and Back-up Systems (as
hereinafter defined) twenty-four (24) hours a day,

                                      O-3



seven (7) days a week. Landlord further covenants that Tenant, upon the complete
and timely payment of Rent and performance of Tenant's other obligations under
this Lease, shall peacefully and quietly have, hold and enjoy the occupancy of
the Premises throughout the Lease Term and any extensions thereof, or until this
Lease is sooner terminated in accordance with its provisions, without any
disturbance.

MECHANICS' LIENS. Tenant shall not permit any mechanics', laborer's, or
materialman's lien to stand against the Premises for any labor or material
furnished to Tenant or claimed to have been furnished to Tenant in connection
with work of any character performed or claimed to have been performed on the
Premises by or at the direction of Tenant and shall hold Landlord and the
Premises harmless therefrom. Tenant promptly shall pay all contractors and
materialmen so as to minimize the possibility of a lien attaching to the
Premises. Tenant may contest in good faith the validity of any liens so filed
and shall not be obligated to pay or discharge any such lien until the same has
been adjudged valid by the final judgment of a court of competent jurisdiction;
provided that the interests of Landlord in the Premises shall be fully protected
against such lien during the period of any such contest.

LANDLORD'S SERVICES.

LANDLORD'S GENERAL SERVICES.  Landlord shall provide the following services:

public water from the regular Building fixtures for drinking, lavatory and
toilet purposes and as required for Tenant's HVAC equipment only;

passenger elevator service and freight elevator service in common with Landlord,
other tenants and visitors to the Building on a 24-hour per day, 7-day per week
basis including holidays; and

electrical service as specified in Section 0. Additional electrical capacity or
usage shall be provided with the consent of Landlord (which shall not be
unreasonably withheld, conditioned or delayed) and at Tenant's expense.

DELAYS IN FURNISHING SERVICES. If any failure to furnish or delay in furnishing
any of the services described in Section 0 prevents and will continue to prevent
Tenant from using the Premises as it is then using the Premises or prevents and
will continue to prevent Tenant from providing the telecommunications services
being provided by Tenant to its customers ( such a condition of the Premises
being hereinafter referred to as "UNTENANTABLE" or "UNTENANTABILITY"), then,
commencing upon the date when the Premises became Untenantable, all Rent shall
abate for the duration of such Untenantability. Tenant agrees that Landlord
shall not be liable for damages for failure to furnish or delay in furnishing
any service if attributable to any of the causes described in Section 0.

MAINTENANCE AND REPAIR.

LANDLORD'S MAINTENANCE OBLIGATIONS. Except for the obligations of Tenant set
forth below, Landlord shall maintain and make repairs and replacements to the
Common Areas, the Building structural systems, the roof of the Building, the
exterior of the Building and the Building Systems, at Landlord's cost and
expense. The "BUILDING SYSTEMS" means the base building

                                      O-4



mechanical, electrical, plumbing, sanitary, sprinkler, heating, ventilation and
air conditioning, security, life-safety, and elevator facilities not located in
the Premises, but excluding any specialty lighting, non-building standard
leasehold improvements or alterations and supplemental HVAC systems. Landlord
agrees to keep the Common Areas reasonably free of snow, ice and debris.

TENANT'S MAINTENANCE OBLIGATIONS. Tenant, at its cost and expense, shall keep
and maintain Tenant's Property, the Specialty Equipment (as defined in Section
0), the interior of the Premises (including all plate glass windows and doors),
and the heating, air conditioning, lighting, plumbing, electrical and sewer
systems within the Premises in good order, condition and repair; provided that
Tenant shall not be obligated to make any repairs necessitated by damage from
fire, flood, the elements or any other casualty. Such obligations of Tenant
shall include all repairs, replacements or alterations required within the
interior of the Premises including, without limitation, all repairs and
replacements required under any applicable laws, rules or regulations. Tenant
agrees to keep the hallways adjacent to the Premises free of any temporary or
moveable obstruction and to keep the Premises free from trash and debris.

RETURN OF PREMISES. Upon the termination of this Lease, Tenant shall surrender
the Premises to Landlord in good order, condition and repair, except for (a)
reasonable wear and tear and (b) damage from fire, flood, the elements or any
other casualty. Tenant shall have the right to remove Tenant's generator, fuel
storage equipment and HVAC equipment located outside the Premises within one
hundred and twenty (120) days after the termination of the Lease, but Tenant
shall not be obligated to do so. Tenant shall remove its equipment, furniture
and fixtures within six (6) months following the expiration date. Tenant shall
cap and safely cut all cabling, but Tenant shall not be obligated to remove any
raised flooring or any conduit or cabling. Tenant shall not otherwise be
required to (although Tenant may elect to) remove any improvements made by
Tenant to the Premises.

CLEANING. Tenant shall, at Tenant's expense, hire its own cleaning contractor to
clean the Premises. Tenant's cleaning contractor, cleaning personnel and all
aspects of Tenant's cleaning of the Premises shall be subject to all Building
security and other requirements as Landlord might impose from time to time.

INSURANCE. Tenant, at its expense, at all times during the Lease Term and any
other period of occupancy of the Premises by Tenant, shall provide and maintain
with respect to the Premises Commercial General Liability insurance in form
customarily written for the protection of owners, landlords and tenants of real
estate, with Landlord as an additional insured, which insurance shall provide
coverage of not less than $1,000,000.00 for bodily injury and property damage.
Any insurance required to be maintained by Tenant may be provided through a
blanket policy covering the Premises and other properties. Landlord, at its
written request, shall be furnished with appropriate certificates evidencing
that such insurance is in force and that Landlord is named as an additional
insured thereunder. The policies for all such insurance shall provide that they
not be canceled without at least ten (10) days' prior written notice to
Landlord.

HAZARD INSURANCE. Landlord at all times during the Lease Term and any other
period of occupancy of the Premises by Tenant shall provide and maintain, at
Landlord's expense,

                                      O-5


comprehensive fire insurance with extended coverage insuring the Building,
providing such level of coverage and insuring against such risks as are
customarily maintained with respect to comparable buildings in the market in
which the Premises is located.

ELECTRIC. A 6,000 amp electrical main service current services the Building.
Landlord shall have the right to elect at any time, at Landlord's expense, to
install a separate meter, a submeter or a check meter to monitor electricity
usage at the Premises. Upon installation of such monitoring meter, Tenant shall
be billed directly by the provider (if Tenant is directly metered) and Tenant
shall pay for its electric service directly to the power provider, or Tenant
shall be billed by Landlord (if Tenant's electricity usage is separately
monitored, but not directly metered) for the electricity usage at the Premises
and/or electricity usage of the Specialty Equipment, as the case may be, at
utility company rates without markup by Landlord. Until the Premises is so
metered, the cost of Tenant's electricity usage shall be included in the Base
Rent. Subject to electric service outages and reductions outside the control of
Landlord, Landlord shall allocate 800 amps, 480 volts, three (3) phase, four (4)
wire electrical service to the Premises. If Tenant requires additional capacity
at any time during the Lease Term, Landlord shall use commercially reasonable
efforts to assist Tenant in securing the additional power requirement from the
power provider and providing additional space for additional capacity, at
Tenant's expense, for such additional space provided.

SIGNAGE. If Tenant so requests, Landlord agrees to display Tenant's name on the
Building lobby sign in the same fashion as the other tenants' names are
displayed, at Landlord's cost and expense.

TRADE FIXTURES, SPECIALTY EQUIPMENT.

Tenant may, from time to time during the Lease Term, install, maintain, replace,
repair, expand, construct and operate at the Premises and remove therefrom such
trade fixtures as it may deem necessary or appropriate to its business
operations, including but not limited to the Specialty Equipment (as defined
below); provided that any damage that may be caused to the Premises by the
removal of any of Tenant's trade fixtures or Specialty Equipment shall be
repaired by Tenant at its expense forthwith upon the removal of any such trade
fixtures or Specialty Equipment.

Landlord grants to Tenant the right, at no additional charge or rent, to
install, operate, expand, add to, repair and maintain, and Landlord acknowledges
that Tenant's use of the Premises will require, some or all of the following
(collectively, the "SPECIALTY EQUIPMENT"):

fiber optic cabling from two (2) separate means of entry from the adjoining
streets, across the Building's surrounding grounds (at locations indicated on
the Declaration of Easement of even date for the benefit of Tenant, which is
recorded or to be recorded in the Land Records of Arlington County, Virginia),
to, and core drilling of, the Building core structural wall and from the
Building core structural wall, by two (2) diverse paths, to the Premises;

heat, air conditioning and ventilation for the Premises on a 24-hour, 7-day per
week basis, including holidays to the extent necessary for the comfortable
occupancy of the Premises under normal business operations with customary office
equipment and in the absence of the use of any

                                      O-6


non-customary machines, equipment or devices which adversely affect the
temperature otherwise maintained in the Premises;

batteries in the Premises for power backup in case of power failure;

an independent, Tenant-controlled fire suppression system which will include
access to Tenant for exhaust louvers, shafts or risers necessary for the
discharge of exhaust from the Premises from such system as well as Tenant's air
conditioning system;

connection of the office space areas within the Premises to Landlord's fire
alarm system;

a raised floor system to accommodate Tenant's telecommunications equipment;

a 750 MCM copper insulated ground conductor in one and one-half inch (1.5")
conduit from the master ground at the lowest point in the Building to the
Premises; and

the installation of interior walls or window covering materials to stabilize
environmental conditions within the Premises.

In addition to the generator and electrical equipment in the Generator Area,
Tenant shall have the right to install and maintain up to a 5,000 gallon fuel
tank system in the area shown on Exhibit B-4, and UPS in the Building and/or the
Property ("BACK-UP SYSTEMS") and shall have the right to maintain such
installations in the locations shown on Exhibit B-2 and Exhibit B-4 throughout
the Lease Term, as renewed at no additional charge or rent. Tenant maintains
certain mechanical cooling systems in the Building in the location shown on
Exhibit B-3 (collectively, "HVAC SYSTEMS") and Tenant shall have the right to
maintain such systems throughout the Lease Term, as renewed. Tenant shall have
24-hour, 7-day per week access to the Back-up Systems and the HVAC Systems.
Landlord shall provide such space, including the right to install necessary
connections therefrom to the Premises, at no additional charge or rent to
Tenant. Tenant shall have the right to test its generator(s)at any time, which
testing shall be conducted in compliance with all applicable laws, codes, and
regulations.

During the Lease Term and any extension thereof, Tenant shall have the right, at
no additional rent, to install GPS and/or other antenna(s) and dish(es) on the
roof or the grounds of the Building (including all necessary connections to the
Premises, along with the benefit of any easements that might be required in
connection therewith) for use by Tenant and/or Tenant's Collocates. Any such
antennas or dishes shall be installed in accordance with all applicable laws and
building codes and in locations mutually agreeable to Landlord and Tenant.
Tenant shall have the option to remove such antennas and dishes at the
expiration or earlier termination of this Lease; provided that in the event of
removal, Tenant shall repair any damage to the roof or grounds of the Building
caused by such removal. Landlord shall provide the space for such antennas,
dishes, and necessary connections at no additional charge or rental to Tenant.

Tenant, at Tenant's sole cost and expense, shall have the right to construct a
dry pipe, preaction system for the Premises, including the right to relocate or
encase any water mains or other water pipes running through the Premises to
lessen the potential damage to Tenant's equipment. Landlord agrees to provide
sufficient flow and pressure in the standpipe to the Premises to

                                      O-7


support such a fire suppression system. Landlord agrees that Tenant may remove
all of the existing wet sprinklers in the equipment areas of the Premises,
although those support areas of the Premises on which no equipment is located
and the Common Areas will remain on the Building's wet sprinkler. The preaction
system shall only be located in the Premises and will be connected to the
Buildings alarm system in accordance with all applicable laws and building
codes. Tenant shall also have the right, at Tenant's expense, to install an FM
200 fire suppression system in the Premises.

FLOOR LOAD. Tenant, at Tenant's sole cost and expense, shall have the right but
not the obligation, with the prior consent of Landlord, which consent shall not
be unreasonably withheld, conditioned or delayed, to reinforce the floors in the
Premises so as to allow additional floor load thereon. Landlord will allow
Tenant to reinforce floors in the Building outside the Premises, provided
Landlord shall have the right to direct Tenant as to the method of such
reinforcement.

ALTERATIONS BY TENANT. Tenant, at its expense, may, from time to time during the
Lease Term, make such nonstructural alterations to the interior of the Premises
as Tenant deems appropriate to its business operations without Landlord's
consent; provided that all such alterations shall be completed in a good and
workmanlike manner and shall not impair the structural soundness of the
Premises. Tenant shall make no additions or alteration whatsoever to the
exterior of the Premises and no structural changes whatsoever within the
Premises without the prior written consent of Landlord, which consent shall not
be unreasonably withheld, conditioned or delayed.

MUTUAL INDEMNIFICATION; LIMITATION OF LIABILITY.

Landlord agrees to indemnify Tenant against and to defend and hold Tenant
harmless from any and all claims, demands, damages, penalties, costs,
liabilities and losses arising from or based upon any alleged act, omission or
negligence of Landlord or Landlord's agents or employees or arising from or
based upon any breach of Landlord's covenants under this Lease. Tenant agrees to
indemnify Landlord against and to defend and hold Landlord harmless from any and
all claims, demands, damages, penalties, costs, liabilities and losses arising
from or based upon any alleged act, omission or negligence of Tenant or Tenant's
agents or employees or arising from or based upon any breach of Tenant's
covenants under this Lease.

Neither Landlord nor Tenant, nor any of their respective employees, agents or
contractors shall be liable under any theory of liability to the other for
indirect, special, incidental, remote, or consequential damages arising under or
in connection with this Lease, whether in an action for or arising out of breach
of contract, tort, or otherwise.

WAIVER OF CLAIMS; WAIVER OF SUBROGATION. Each party hereto hereby waives any and
all claims for recovery which such party or anyone claiming through such party
may have against the other party hereto (or such other party's officers, agents
or employees) for or with respect to any loss of or damage to such waiving
party's property that is (i) insured under valid insurance policies, to the
extent of any recovery actually collectible under such insurance policies, or
(ii) required by this Lease to be insured, to the extent any recovery would be
collectible if such insurance policies were obtained and maintained as required
by this Lease, whether or not such loss or damage is caused by the negligence of
such other party or such other party's agents,

                                      O-8



employees, subtenants, concessionaires or licensees or of any other person or
persons for whose actions such other party may be responsible or liable.
Landlord and Tenant each agree to obtain from the insurance companies providing
its insurance applicable hereto permission to allow Landlord and Tenant to waive
their respective insurance companies' rights of subrogation. Landlord and Tenant
shall each provide to the other written proof of the waiver of said claims by
said insurance companies.

ENTRY BY LANDLORD. Landlord shall have the right to enter the Premises only upon
reasonable prior notice and accompanied by a representative of Tenant, for the
purpose of inspecting the Premises or for the purpose of making repairs thereto;
provided that such entry shall not materially interfere with the conduct of the
Tenant's business as determined by Tenant in its sole discretion and that
Landlord shall reimburse Tenant for all costs reasonably incurred by Tenant as a
result or in accommodation of Landlord's repairs. Landlord acknowledges that
Tenant's use of the Premises will include installation of sensitive equipment;
therefore, during the Lease Term or any extension thereof, Landlord shall have
no right to install conduits or other piping in or through the Premises or
through the Building or the roof of the Building, including, without limitation
the walls, ceilings and floors of the Premises or areas above or below the
walls, ceilings and floors without Tenant's consent.

DAMAGE BY CASUALTY. In case the Premises, or any part thereof, shall at any time
be destroyed or damaged by fire or other unavoidable casualty, so that the same
shall be unfit for occupation or use by Tenant for its purposes hereunder, then
the Rent hereby reserved, or a fair and just proportion thereof, according to
the nature and extent of the damage sustained in loss of occupation of the
Premises, shall be suspended, cease to be payable and so continue until said
Premises shall be rebuilt or made fit for occupation and use, or if such damage
to the Premises or to the Building (regardless of whether the Premises are
affected) is to the extent of fifty percent (50%) or more, then this Lease may
be terminated at the election of Landlord or Tenant, notice of which election,
if exercised, shall be given in writing within fifteen (15) days from date of
casualty. If this Lease is not so terminated within such time period, then
Landlord shall be deemed to have agreed to repair and restore the Premises and
the Building. The length of time that Landlord shall have to make such repairs
hereunder shall in no event exceed a period of six (6) months from the date of
casualty. If Landlord fails to complete such repairs within said six (6) month
period, Tenant shall have the option (i) to terminate this Lease as of the date
of such casualty by giving written notice to Landlord not later than thirty (30)
days after said six (6) month period or (ii) to exercise any and all rights
necessary to cause Landlord to complete such repairs, including, without
limitation, collection of damages.

BANKRUPTCY.

Landlord acknowledges that on July 21, 2002, Tenant and certain of its domestic
affiliates filed voluntary petitions for relief under Chapter 11 of title 11,
United States Code (the "BANKRUPTCY CODE") in the United State Bankruptcy Court
for the Southern District of New York. Tenant is continuing to operate its
business and manage its properties as a debtor in possession pursuant to
sections 1107(a) and 1108 of the Bankruptcy Code. This Section 0 shall not apply
to such bankruptcy filing nor shall Tenant be deemed to be in default of this
Lease as a result of such bankruptcy filing.

                                      O-9


Subject to Section 0, the filing by or against Tenant of any petition in
bankruptcy, or the adjudication of Tenant as a bankrupt or insolvent, or the
appointment of a receiver or trustee to take possession of all or substantially
all of the assets of Tenant, or the making of a general assignment by Tenant for
the benefit of creditors, or any action taken or suffered by Tenant under any
state or federal insolvency or bankruptcy act, or the levy of execution or
attachment against Tenant's interest in the Premises, and the continuance of any
of the same for a period of ninety (90) days, shall constitute a breach of this
Lease forthwith upon written notice to Tenant. The parties understand and agree
that neither this Lease nor any interest herein or hereunder, nor any estate
created hereby shall pass by operation of law under any state or federal
insolvency or bankruptcy act to any trustee, receiver, assignee for the benefit
of creditors or any other person whomsoever without the express prior written
consent of Landlord. Any purported transfer in violation of the provisions of
this Section shall constitute a breach of this Lease; and in such event,
Landlord may, at its option, with written notice, declare this Lease terminated
forthwith.

HOLDING OVER. Provided Tenant is not in default under the terms and conditions
of this Lease beyond the applicable notice and cure period, Tenant shall have
the one time option to extend the Lease Term (or any Renewal Term) for an
additional six (6) month period, otherwise subject to all the terms and
conditions of this Lease. Such option may be effectuated only by written notice
to Landlord given no later than twelve (12) months prior to expiration of the
Lease Term (or the applicable Renewal Term). Additionally, provided Tenant is
not in default under the terms and conditions of this Lease beyond the
applicable notice and cure period, Tenant shall have the option to continue this
Lease on a month-to-month basis (the "HOLDING OVER PERIOD") commencing upon the
day after the date on which the Lease Term or the term of any extensions granted
under this Lease expire. The Base Rent for the first four (4) months of the
Holding Over Period shall be 100% of the Base Rent in effect at the end of the
Lease Term, payable on the first day of each month. Thereafter, Base Rent for
the Holding Over Period shall be 125% of the Base Rent in effect at the end of
the Lease Term, payable on the first day of each month. The Holding Over Period
shall otherwise be subject to all the terms and conditions of this Lease. This
option shall be effectuated by Tenant either notifying Landlord in writing of
Tenant's decision to exercise said option not less than thirty (30) days prior
to the end of the Lease Term or by Tenant remaining in possession of the
Premises after the expiration or termination of the Lease Term without the
execution of a new lease.

WAIVERS. One or more waivers by Landlord or Tenant of a breach of any covenant
or condition by the other of them shall not be construed as a waiver of the
subsequent breach of the same covenant or condition, and the consent or approval
by Landlord or Tenant to or of any act by either requiring the other's consent
or approval shall not be deemed to waive or render unnecessary either party's
consent to or approval of any subsequent similar act by the other party.

NOTICES. All notices or other communications which are required or permitted
herein shall be in writing and deemed sufficiently given if delivered by (i)
certified or registered mail, postage prepaid, return receipt requested, (ii) by
recognized overnight delivery service company (examples include Federal Express,
Airborne Express, and UPS), or (iii) by telephone facsimile followed by a hard
copy sent via certified mail or by overnight delivery as set forth above
addressed to:

                                      O-10


         If to Tenant:              Lease Administration - T
                                    WorldCom
                                    500 Clinton Center Drive
                                    3rd Building, 3rd Floor
                                    Clinton, MS 39056
                                    Facsimile Number: 601-460-8485

         With a copy to:            Director, Real Estate
                                    WorldCom
                                    6929 N. Lakewood Ave.
                                    Mail Drop 5.2-313
                                    Tulsa, OK 74117
                                    Facsimile Number: 918-590-5617

         If to Landlord:            ____________________________________
                                    ____________________________________
                                    ____________________________________
                                    ____________________________________

or at such place or to such agent as the parties may from time to time designate
in writing.

                  Any notice given hereunder shall be deemed delivered when, if
sent by mail, the return receipt is signed or refusal to accept the notice is
noted thereon or, if sent by recognized overnight courier when the notice is
actually delivered or refused as reflected in the courier company's delivery
records or if sent via facsimile upon receipt of confirmation by the sender that
the facsimile has been received (provided a hard copy of the facsimile is
delivered to the recipient via certified mail or overnight delivery within three
(3) business days thereafter). Landlord will use reasonable efforts to include
in all correspondences and notices from Landlord to Tenant under this Lease
reference to Tenant's internal lease number assigned to this Lease by Tenant
following execution of this Lease (the "LEASE NUMBER," as shall be set forth on
the cover page of this Lease.

DELAYS IN PERFORMANCE. The performance by Landlord or Tenant of any of their
respective obligations or undertakings provided for in this Lease (except the
payment of Rent or any other sums of money payable by Tenant under this Lease)
shall be excused and no default shall be deemed to exist in the event and so
long as the performance of any such obligation or undertaking is prevented,
delayed, retarded or hindered by an act of God, fire, earthquake, flood,
explosion, action of the elements, war, riot, failure of transportation,
strikes, lockout, action of labor unions, condemnation, laws, orders of
government or civil or military authorities, inability to procure labor,
equipment, facilities, materials or supplies in the open market, or any other
cause beyond the reasonable control of Landlord or Tenant, as the case may be.

DEFAULT.

TENANT DEFAULT. If Tenant defaults in the payment of any Rent or other sums due
and payable to Landlord under this Lease and such default continues for a period
of thirty (30) days after written

                                      O-11


notice of such default has been given by Landlord to Tenant, or if Tenant shall
violate or default in the performance of any covenants, agreements, stipulations
or other conditions contained herein (other than the payment of rent and other
sums) for a period of thirty (30) days after written notice of such violation or
default has been given by Landlord to Tenant or, in the case of a default not
curable within thirty (30) days, if Tenant shall fail to commence to cure the
same within thirty (30) days, and thereafter proceed diligently to complete the
cure thereof, then Landlord, at its option, may re-enter and repossess the
Premises in accordance with applicable law, and declare this Lease terminated
and the Lease Term ended forthwith. Except for the negligence or intentional
misconduct of Landlord, its agents or employees, Landlord shall not be liable
for damages by reason of such re-entry and repossession. Notwithstanding such
re-entry and repossession by Landlord, the liability of Tenant for the payment
of the Rent and other sums due hereunder and for the performance of Tenant's
other obligations hereunder for the balance of the Lease Term shall not be
relinquished or extinguished; and Landlord at any time may commence such one or
more actions as it may deem necessary to collect any sums due from Tenant under
this Lease. In the event of any such re-entry and repossession, Landlord shall
have the right to relet all or any portion of the Premises upon such terms and
conditions as may be reasonable; and any such reletting shall not relieve Tenant
of any of its obligations to Landlord under this Lease, except to the extent of
any net rents actually received by Landlord from such reletting after deduction
of all of Landlord's reasonable expenses (including but not limited to legal
expenses and brokerage commissions) incurred in accomplishing such reletting.
Landlord agrees to attempt to mitigate its damages by making reasonable efforts
to relet the Premises on reasonable terms.

LANDLORD'S DEFAULT. In the event Landlord fails to observe and perform any
covenant or obligation required to be observed or performed by Landlord under
this Lease and such failure of performance continues for a period of thirty (30)
days after written notice thereof from Tenant to Landlord (unless such failure
cannot reasonably be cured within such thirty (30) day period and Landlord shall
fail within such period to commence and diligently pursue the curing of such
failure), Tenant may undertake all reasonable action to cure Landlord's failure
of performance and Landlord agrees to reimburse Tenant on demand for all sums
expended or obligations incurred by Tenant in connection therewith (including
reasonable attorneys' fees). If Landlord does not reimburse Tenant within thirty
(30) days of receipt of an invoice therefor, Tenant shall have the right to set
off said amount from the Rent payable by Tenant to Landlord hereunder. In
addition thereto and not in limitation thereof, in the event Landlord's failure
of observance of its covenants and agreements contained herein renders Tenant's
Premises Untenantable, materially disrupts the operation of Tenant's business,
or continues beyond the above cure period, Tenant may, without prejudice to its
right to recover damages for breach, terminate this Lease by written notice to
Landlord, remove its personal property and trade fixtures, vacate the Premises
and employ, and have full recourse to, all other rights and remedies available
by operation of law or equity.

CUMULATIVE RIGHTS. The rights, options, elections and remedies of both parties
contained in this Lease shall be cumulative and may be exercised on one or more
occasions; and none of them shall be construed as excluding any other or any
additional right, priority or remedy allowed or provided by law.

                                      O-12


EMINENT DOMAIN. If the whole or any part of the Premises hereby leased shall be
taken by any public authority under the power of eminent domain, then the Lease
Term shall cease on the part so taken from the day the possession of that part
shall be required for any purpose, and the Rent shall be paid up to that day,
and if such portion of the Premises is so taken as to destroy (in Tenant's
reasonable discretion) the usefulness of the Premises for the purpose for which
the Premises were leased, then, the Tenant shall have the right either to
terminate this Lease and declare the same null and void or to continue in the
possession of the remainder of the same under the terms herein provided, except
that the Rent shall be reduced in proportion to the amount of the Premises
taken. All damages awarded for such taking shall belong to and be the property
of the Landlord, including such damage as shall be awarded as compensation for
diminution in value to the leasehold; provided, however, that Tenant shall be
entitled to any portion of the award made to the Tenant for its leasehold
improvements and relocation expenses and Tenant shall have the right to file
separately for any such claim.

PERSONAL PROPERTY. All personal property in the Premises shall be at the risk of
the Tenant only and the Landlord shall not be or become liable for any damage to
said personal property, including any damage to said personal property caused by
water leakage, steam, sewer gas or odors, or done or occasioned by or from, any
boiler, plumbing, gas, water, steam or other pipes or any fixtures, equipment or
appurtenances whatsoever, or occasioned by water, snow or ice, being upon or
coming through the roof, sky-light, trap door, or otherwise arising from any
defect in the Building or any of the fixtures, equipment or appurtenances
therein, or by the act or neglect of any other person or caused in any other
manner whatsoever; provided, however, that Landlord shall be liable for any such
damage caused by any negligent or intentional act or omission of Landlord or
Landlord's agents or employees.

BINDING AGREEMENT. All rights and liabilities herein given to or imposed upon
the respective parties hereto shall extend to and bind the respective heirs,
executors, administrators, legal representatives, successors and assigns of said
parties.

ASSIGNMENT AND SUBLEASE. So long as Tenant or any Related Entity (as hereafter
defined) is the Tenant, Tenant shall have the right, without the consent or
approval of Landlord, and without the sharing of any excess rents, recapture, or
any other rights or remedies of Landlord set forth herein, to: (a) assign its
interest in the Lease (i) to any corporation or other entity that is a successor
to Tenant either by merger or consolidation, or (ii) to a purchaser of all or
substantially all of Tenant's assets, or (iii) to a purchaser of all or
substantially all of Tenant's business line or company division that includes
the Premises use, or (iv) to a corporation or other entity that shall directly
or indirectly control, be under the control of, or be under common control with,
Tenant (any such entity being a "RELATED ENTITY"); (b) sublease all or any
portion of Premises to a Related Entity; or (c) allow or facilitate the
collocation of telecommunications equipment not owned by Tenant in the Premises.
For purposes hereof, "control" shall be deemed to mean the direct or indirect
ownership of more than fifty percent (50%) of the outstanding voting stock of a
corporation or other majority equity and control interest if not a corporation.
Tenant shall not assign its interest in the Lease or sublease all or any portion
of the Premises to any party that does not constitute a Related Entity without
first obtaining Landlord's written consent, which consent shall not be
unreasonably withheld, conditioned or delayed.

                                      O-13


SUBORDINATION AND NON-DISTURBANCE. Tenant shall be obligated to subordinate its
interest under this Lease to any lien or encumbrance that may hereafter be
placed on, against or affecting the Premises only if, and on the condition that,
Landlord shall provide Tenant with a non-disturbance agreement in favor of
Tenant from the holder of such lien or encumbrance in the form of Exhibit D
attached hereto. Landlord shall, contemporaneously herewith, provide Tenant with
a non-disturbance agreement in favor of Tenant from the holder of any existing
lien or encumbrance now on, against or affecting the Premises in the form of
Exhibit D attached hereto. Landlord represents and warrants to Tenant that
___________________, a __________________, is the only holder of any existing
lien or encumbrance now on, against, or affecting the Premises.

ATTORNEYS' FEES. The prevailing party in any lawsuit between the Landlord and
Tenant shall be reimbursed by the non-prevailing party for its attorneys' fees
and costs.

CAPTIONS. The captions and headings of the paragraphs in this Lease are for
convenience only and shall not in any way limit or be deemed to construe or
interpret the terms and provisions hereof.

TIME OF ESSENCE. Time is of the essence of this Lease and of all provisions
hereof.

GOVERNING LAW. This Lease shall be construed and enforced in accordance with the
laws of the State in which the Premises is located.

ENTIRE AGREEMENT. The terms of this Lease are intended by the parties as a final
expression of their agreement with respect to such terms as are included in this
Lease and may not be contradicted by evidence of any prior or contemporaneous
agreement. The parties further intend that this Lease constitutes the complete
and exclusive statement of its terms and that no extrinsic evidence whatsoever
may be introduced in any judicial proceedings, if any, involving this Lease. The
Exhibits referred to herein and/or attached hereto are integral parts hereof and
are made a part of this Lease by reference.

BROKERS. Tenant and Landlord each represent to the other that it has dealt with
no broker in connection with this Lease, and each shall hold the other harmless
from and against any and all liability, loss, damage, expense, claim, action,
demand, suit or obligation arising out of or relating to a breach of such
representation. Landlord shall be responsible for the payment of any and all
commissions or other fees to any broker concerning this transaction and in no
event shall Tenant be responsible for any brokerage fees whatsoever.

REASONABLENESS. Whenever the consent of either party is required hereunder, said
consent shall not be unreasonably withheld, conditioned or delayed. Landlord and
Tenant agree that should any dispute arise between the parties in relation to
this Lease, both Landlord and Tenant shall act in a commercially reasonable
manner in regard to and in resolution of such dispute.

AMENDMENTS. This Lease may not be altered, changed, or amended except by an
instrument signed by both parties hereto.

                                      O-14


PARKING. Tenant shall have the right on a 24 hour, 7 day per week basis to three
(3) reserved, dedicated parking spaces at the Building marked for Tenant's use
at no additional rent, to be located within the area shown on the attached
Exhibit C (the "PARKING SPACES").

OPTIONS TO RENEW. Subject to the conditions set forth below, Tenant is granted
the option to renew this Lease for five (5) successive additional terms of five
(5) years each (the "RENEWAL TERMS"), with the first renewal period commencing
on the first day following the expiration of the original Lease Term. Each
Renewal Term shall be on the same terms, conditions, provisions and covenants as
are set forth herein except the Base Rent, which shall increase by $1.00 per
square foot at the commencement of each Renewal Term (i.e., $16.00/square foot
for first Renewal Term; $17.00/square foot for second Renewal Term;
$18.00/square foot for third Renewal Term; $19.00/square foot for fourth Renewal
Term; and $20.00/square foot for fifth Renewal Term). Base Rent shall be
inclusive of all real estate taxes and operating expenses throughout the Lease
Term, as extended or renewed. Tenant shall provide Landlord with at least six
(6) months prior written notice if Tenant desires to renew this Lease.

RIGHT OF FIRST REFUSAL, SECOND FLOOR. Landlord shall give Tenant written notice
of any bona fide offer to lease the contiguous space on the second floor of the
Building ("EXPANSION SPACE"), identifying the same and specifying the basic
terms and conditions the "OFFER NOTICE"). Tenant shall then have thirty (30)
business days after its receipt of the Offer Notice in which Tenant may give
Landlord written notice of Tenant's acceptance of up to 2,000 square feet of the
Expansion Space on the same terms and conditions of this Lease, including Rent
(the "ACCEPTANCE NOTICE"). Prior to giving the Offer Notice to Tenant, and for
fifteen (15) business days thereafter, Landlord shall not enter into any lease
of the Expansion Space with any other person or entity. If during such thirty
(30) business day period, Tenant gives Landlord an Acceptance Notice, Landlord
and Tenant shall then promptly enter into an amendment of this Lease increasing
the size of the Premises to include the Expansion Space (or the accepted portion
thereof) and increasing Tenant's Proportionate Share to reflect the rentable
square feet of the Expansion Space (or the accepted portion thereof). After
expiration of such thirty (30) business day period, if Tenant has not given
Landlord a timely Acceptance Notice, then Landlord shall be free to lease the
Expansion Space to such person or entity, unless the space is thereafter vacant
again in which case Landlord shall provide Tenant with another Offer Notice.
Tenant's leasehold improvements to the Expansion Space shall be governed by
Section 0 of this Lease.

LIEN WAIVER. Landlord hereby waives any right it may have to assert any lien
against the personal property of Tenant whether existing under common law or by
statute of the State in which the Premises is located.

ENVIRONMENTAL.

Hazardous or Toxic Materials. Notwithstanding any provision contained in this
Lease to the contrary, neither Tenant nor Landlord shall cause any escape,
release or disposal of "Hazardous Materials" (as hereinafter defined) in, at, on
or under the Premises, the Building, or the real property of which the Premises
and the Building are a part (the "REAL PROPERTY"). Neither Tenant nor Landlord
shall store or use Hazardous Materials in, at, on or under the Premises,
Building, or Real Property, except as necessary for use in the ordinary course
of business, and

                                      O-15


then only in accordance with applicable laws, regulations and ordinances. If
during the Lease Term or any extension thereof, Tenant, or any third party
acting on Tenant's behalf, encounters any Hazardous Materials during the
performance of any alterations or other work, TENANT SHALL INFORM LANDLORD OF
SUCH FACT. Landlord, at Landlord's sole cost and expense, shall appropriately
handle the Hazardous Materials that are disturbed in the Building.
Notwithstanding anything to the contrary, Tenant shall not (a) have any
responsibility for managing, monitoring, disposing or abating, (b) be the owner
of or (c) have any liability for or in connection with, any Hazardous Materials
not introduced by Tenant during the Lease Term.

Allowable Use Of Certain Hazardous Materials. Tenant may use and store the
following materials in the ordinary course of its business: reasonable amounts
of standard cleaning fluid and materials customarily used in conjunction with
business machines; cleaning supplies in reasonable quantities; materials
customarily used in conjunction with Tenant's fuel tanks, generators, and
batteries; and any other materials deemed necessary to Tenant's business.
Landlord may use, but not store, on the Premises the following materials in the
ordinary course of business: cleaning supplies, insecticides, fungicides and
rodenticides.

Definition Of Hazardous Materials. For purposes of this Lease, "HAZARDOUS
MATERIALS" means all hazardous or toxic materials or substances that have been
determined to be hazardous to health or the environment under any applicable
city, county, state or Federal law, rule or regulation, including, but not
limited to, hazardous waste as defined in the Resource Conservation and Recovery
Act; hazardous substances as defined in the Comprehensive Emergency Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act; gasoline or any other petroleum product or by-product or
other hydrocarbon derivative; toxic substances regulated by the Toxic Substances
Control Act; insecticides, fungicides, or rodenticides regulated by the Federal
Insecticide, Fungicide, and Rodenticide Act; asbestos, radon and other toxic or
hazardous air pollutants regulated by the Clean Air Act, as amended; substances
determined to be hazardous or toxic water pollutants regulated by the Clean
Water Act, as amended; and toxic or hazardous chemicals regulated by the
Occupational Safety and Health Act, as amended. References to any statute, act,
regulation or rule shall include amendments as they are made from time to time.

Covenants. Tenant and Landlord each covenant that removal, disposal, handling,
use and storage of any Hazardous Materials by such party at the Premises,
Building, and/or Real Property shall comply with all applicable Federal, state
and local laws, rules and regulations. If either Tenant's or Landlord's use,
transportation, storage or disposal of Hazardous Materials results in
contamination of the Premises, Building or Real Property, Tenant or Landlord (as
the case may be) shall notify the other party of its method, time and procedure
for any clean-up or removal of the Hazardous Materials. The party notified shall
have the right to require reasonable changes in such method, time or procedure,
or require that the same be done after normal business hours or when the
Building is otherwise closed (i.e., weekends or holidays), except that if Tenant
or Landlord is under a duty by Federal, state, or local laws, regulations or
ordinances to immediately remove the contamination, or is under an order to
proceed in a specified manner, that party shall comply with the law, regulation,
ordinance or order.

                                      O-16


Environmental Indemnification.

Tenant shall defend, indemnify and hold Landlord harmless from any and all
claims, damages, penalties, costs, liabilities or losses and any and all costs
incurred due to the investigation, clean-up, removal or restoration of the
Premises, Building and Real Property if such claims, damages, penalties, costs,
liabilities or losses are incurred solely due to Hazardous Materials introduced
to the Premises, Building or Real Property through the actions of Tenant,
Tenant's agents, employees or contractors during the Lease Term. Tenant shall
not indemnify Landlord for releases of Hazardous Materials that exist on, in or
under the Premises, Building, or Real Property at the time of the execution of
this Lease, or which are introduced to the Premises, Building, or Real Property
by some other tenant or by Landlord.

Landlord shall defend, indemnify and hold Tenant harmless from any and all
claims, damages, penalties, costs, liabilities or losses and any and all costs
incurred due to the investigation, clean-up, removal or restoration of the
Premises, Building, or Real Property if such claims, damages, penalties, costs,
liabilities or losses concern the introduction of Hazardous Materials in, at, on
or under the Premises, Building, or Real Property through the actions of
Landlord, Landlord's agents, employees or contractors.

The provisions contained in this Section 0 shall survive the expiration or
sooner termination of this Lease.

DEED OF LEASE. For purposes of Section 55-2, Code of Virginia (1950), as
amended, this Lease is and shall be deemed to be a deed of lease. For purposes
of Section 55-218.1, Code of Virginia (1950), as amended, Landlord's resident
agent for service of process is:

                             SIGNATURES ON NEXT PAGE

                                      O-17



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

                                        LANDLORD

                                        _______________________________,
                                        a ______________________________

                                        By:_____________________________________
                                        Print Name:_____________________________
                                        Print Title:____________________________
                                        Date:___________________________________

                                        TENANT

                                        MCI WORLDCOM NETWORK SERVICES,
                                        INC., a Delaware corporation

                                        By:_____________________________________
                                        Print Name:_____________________________
                                        Print Title:____________________________
                                        Date:___________________________________

                                      O-18



STATE OF _______________________)
                                ) ss.
COUNTY OF ______________________)

         On this _____ day of _______, 2003, before me, a notary public in and
for said county and state, personally came ___________________, a
____________________President of ____________________________________, which is
_______________ of ______________________, a ____________________, known to me
to be the identical person who signed the foregoing Equipment Site Lease
Agreement on behalf of said corporation and limited partnership and acknowledged
the execution thereof to be the voluntary act and deed of said corporation and
limited partnership.

         WITNESS my hand and notarial seal the day and year last above written.

                                        ________________________________________
                                        Notary Public

My Commission Expires:

__________________________
          [SEAL]

STATE OF _______________________)
                                ) ss.
COUNTY OF ______________________)

         On this _____ day of _______, 2003, before me, a notary public in and
for said county and state, personally came _____________________, a
______________________President of MCI WorldCom Network Services, Inc., known to
me to be the identical person who signed the foregoing Equipment Site Lease
Agreement on behalf of said corporation and acknowledged the execution thereof
to be the voluntary act and deed of said corporation.

         WITNESS my hand and notarial seal the day and year last above written.

                                        ________________________________________
                                        Notary Public

My Commission Expires:

__________________________
          [SEAL]

                                      O-19



                                    EXHIBIT A

                          LEGAL DESCRIPTION OF BUILDING

All of that certain parcel of land situate and being in Arlington County,
Virginia and more particularly described as:

Parcel 1-B, containing 2.45783 acres, being a Resubdivision of the Property of
Pentagon Tract Development Corporation and River House Corporation, being a part
of Parcel "B-2-B" Ambassador Inc. & "H" Street Building Corp., as the same are
shown on a plat attached to Deed of Resubdivision recorded in Deed Book 2062 at
page 914, among the aforesaid land records.

                                       O-1



                                   EXHIBIT B-1

                             SECOND FLOOR SITE PLAN

                                       O-1



                                   EXHIBIT B-2

                  GENERATOR AREA AND ELECTRICAL AREA SITE PLAN

                                       O-1



                                   EXHIBIT B-3

                             LOCATION OF DRY COOLERS

                                       O-1



                                   EXHIBIT B-4

                 FUEL TANK AREA AND UTILITY VAULT AREA SITE PLAN

                                       O-1



                                    EXHIBIT C

                        TENANT'S DEDICATED PARKING SPACES

                                       O-1



                                    EXHIBIT D

                         SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

         THIS AGREEMENT dated the ___ day of ____________, 20___, between
_______________________________________________________, hereinafter called the
"MORTGAGEE", and MCI WORLDCOM NETWORK SERVICES, INC., hereinafter called the
"TENANT".

                              W I T N E S S E T H:

         WHEREAS, the Tenant has entered into a certain Lease, as may be
hereafter amended (the "LEASE"), dated ___________ _______, 200__with
_____________________________, hereinafter called the "LANDLORD", covering
premises in the Pentagon City Two building located at 601 S. 12th Street,
Arlington, Virginia (the "BUILDING").

         WHEREAS, the Mortgagee has made a mortgage loan (the "MORTGAGE") to the
Landlord; and

         WHEREAS, the Tenant desires to be assured of continued occupancy of
such premises under the terms of the Lease.

         NOW, THEREFORE, in consideration of the premises and of the sum of One
Dollar ($1.00) by each party in hand paid to the other, the receipt of which is
hereby acknowledged, it is hereby agreed as follows:

The Lease is and shall be subject and subordinate to the Mortgage insofar as it
affects the real property of which the Premises (as such term is defined by the
Lease) form a part, and to all renewals, modifications, consolidations,
replacements and extensions thereof, to the full extent of the principal sum
secured thereby and interest thereon.

So long as Tenant is not in default under any of the terms, covenants, or
conditions of the Lease beyond all applicable notice and cure periods, if the
interest of the Landlord under the Lease is acquired by Mortgagee, by reason of
exercise of the power of sale or the foreclosure of the Mortgage or other
proceedings brought to enforce the rights of the holder thereof, whether by deed
in lieu of foreclosure or by any other method, Tenant shall peaceably and
quietly have, hold, and enjoy the Premises and the appurtenant rights thereto
for the full Lease Term, including any renewals or extensions thereof. In the
event it should become necessary to foreclose the Mortgage, the Mortgagee
thereunder will not join the Tenant under said Lease in summary or foreclosure
proceedings, so long as Tenant is not in default beyond any applicable cure
periods under any of the terms, covenants, or conditions of said Lease.

In the event that the Mortgagee shall, in accordance with the foregoing, succeed
to the interest of the Landlord under such Lease, the Mortgagee agrees to be
bound to the Tenant under all of the terms, covenants and conditions of the
Lease, and the Tenant shall, from and after such event, have the same remedies
against the Mortgagee for the breach of an agreement contained in the

                                       P-1



Lease that the Tenant might have had under the Lease against the Landlord if the
Mortgagee had not succeeded to the interest of the Landlord; provided, however,
that the Mortgagee shall not be:

                           (a)      liable for any act or omission of any prior
                  landlord (including the Landlord); provided that the foregoing
                  shall not limit Mortgagee's obligation to correct any
                  conditions that existed as of the date of attornment and
                  violate Mortgagee's obligations as landlord under the Lease;
                  or

                           (b)      bound by any rent or additional rent which
                  the Tenant might have paid for more than the current month to
                  any prior landlord (including the Landlord).

Mortgagee consents to the terms of the Lease and agrees that the exercise by the
Tenant of its rights under the Lease shall not constitute a default under the
Mortgage.

Mortgagee's consent shall not be required for any amendment or modification of
the Lease.

The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.

This Agreement may not be discharged or modified orally or by any course of
conduct of the parties hereto other than by agreement in writing specifically
referring to this Agreement and signed by the party or parties to be charged
thereby.

         IN WITNESS WHEREOF, the parties hereto have executed these presents the
day and year first above written.

                                        MORTGAGEE

                                        ________________________________________

                                        By:_____________________________________
                                        Its:____________________________________
                                        Date:___________________________________

                                        TENANT

                                        ________________________________________

                                        By:_____________________________________
                                        Its:____________________________________
                                        Date:___________________________________

                                      O-2



                                    EXHIBIT Q

                              SALE PROCEDURES ORDER

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- -------------------------------------X
IN RE                                  :
                                       :        CHAPTER 11 CASE NO.
WORLDCOM, INC., ET AL.,                :        02-13533 (AJG)
                                       :
                                       :        (JOINTLY ADMINISTERED)
               DEBTORS.                :
- -------------------------------------X

             ORDER (A) ESTABLISHING PROCEDURES FOR DEBTORS' PROPOSED
          AUCTION OF PENTAGON CITY AND RELATED PROPERTY, (B) APPROVING
               "BREAK-UP FEE" ARRANGEMENT WITH PROPOSED PURCHASER,
                 (C) ESTABLISHING DATE AND TIME FOR SALE HEARING
                  AND (D) APPROVING FORM AND MANNER OF NOTICES

                  A hearing having been held on [___________], 2003 (the
"Hearing"), to consider the motion, dated [___________], 2003 (the "Motion"), of
WorldCom, Inc. and certain of its direct and indirect subsidiaries, as debtors
and debtors in possession (collectively, "WorldCom" or the "Debtors"), for,
among other things, the entry of an order pursuant to sections 105 and 363 of
title 11 of the United States Code (the "Bankruptcy Code"), and Rule 6004 of the
Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), (a) scheduling a
hearing to consider the proposed sale (the "Sale Hearing") by the Debtors of
certain real property known as "Pentagon City" and certain related personal
property, including the assignment or assumption and assignment of certain
contracts and leases in connection therewith (collectively, the "Assets"), free
and clear of liens, claims, and encumbrances, pursuant to the Real Estate
Purchase Contract, dated as of [_________], 2003, between MCI WORLDCOM Network
Services, Inc. ("MCI"), as seller, and [_____________________], as purchaser
("Purchaser"), a copy of which is annexed to the Motion as Exhibit "A" (the
"Agreement"), subject to higher and

                                      Q-1



better offers, (b) establishing procedures for the proposed auction by the
Debtors of the Assets, including for the submission of competing offers to
acquire the Assets, (c) approving the terms and conditions of the grant of a
proposed "break-up fee" to Purchaser, and (d) approving the form and manner of
notice of the auction procedures and the Sale Hearing pursuant to Bankruptcy
Rule 2002, all as more fully set forth in the Motion; and the Court having
jurisdiction to consider the Motion and the relief requested therein pursuant to
28 U.S.C. Sections 157 and 1334 and the Standing Order of Referral of Cases to
Bankruptcy Court Judges of the District Court for the Southern District of New
York, dated July 19, 1984 (Ward, Acting C.J.); and consideration of the Motion
and the relief requested therein being a core proceeding pursuant to 28 U.S.C.
Section 157(b); and venue being proper before this Court pursuant to 28 U.S.C.
Sections 1408 and 1409; and due and proper notice of the Motion having been
provided in accordance with the Court's case management order, dated December
23, 2002, and it appearing that no other or further notice need be provided; and
the Court having reviewed the Motion and the papers in support thereof and the
responses thereto, if any; and upon the Motion, the papers in support thereof
and the responses thereto, if any, and the record of the Hearing; and the Court
having found and determined that the legal and factual bases set forth in the
Motion and at the Hearing establish just cause for the relief granted herein;
and that the relief requested in the Motion is an exercise of the Debtors' sound
business judgment and is in the best interests of the Debtors and their estates
and creditors; and upon all of the proceedings had before the Court and after
due deliberation and sufficient cause appearing therefor, it is

                  ORDERED that the following procedures (the "Auction
Procedures") relating to the submission and consideration of competing offers
for the Assets (each, an "Alternative

                                       Q-2



Transaction") are hereby established and approved and the Debtors are authorized
to conduct an auction of the Assets (the "Auction") in accordance therewith:

                  1.       The Debtors shall provide (a) notice of the Sale
                           Hearing and Auction Procedures, substantially in the
                           form of Exhibit ___ to the Motion, together with a
                           copy of the Agreement to all parties known to the
                           Debtors as having expressed a bona fide interest in
                           acquiring the Assets and (b) a copy of the Agreement
                           to all other prospective offerors and parties in
                           interest upon written request to the Debtors through
                           their real estate consultant, Hilco Real Estate, LLC,
                           at the address set forth in paragraph 2, below.

                  2.       Any party wishing to conduct due diligence on the
                           Assets shall, upon execution by such prospective
                           offeror of a confidentiality agreement and access
                           agreement, each in form and substance satisfactory to
                           the Debtors, and delivery to the Debtors of such
                           prospective offeror's certified financial statements
                           for the preceding two years (or other evidence
                           establishing to the Debtors' satisfaction such
                           prospective offeror's financial capability to timely
                           consummate an Alternative Transaction) be granted
                           access to Pentagon City, subject to the rights of the
                           government, as lessee, and to all relevant business
                           and financial information necessary to enable such
                           party to evaluate the Assets for the purpose of
                           submitting a competing offer for an Alternative
                           Transaction. The Debtors shall make such access
                           available during normal business hours as soon as
                           reasonably practicable. Parties interested in
                           conducting due diligence should contact Alan
                           Lieberman at Hilco Real Estate, LLC, 5 Revere Drive,
                           Suite 320, Northbrook, Illinois 60062, Telephone
                           (847) 504-2453, Facsimile (847) 714-1289.

                  3.       To be considered, each competing offer for an
                           Alternative Transaction shall (a) be irrevocable
                           through the date of the closing of the sale of the
                           Assets, (b) be made by a party satisfying the
                           conditions described in the preceding paragraph 2 (a
                           "Competing Offeror"), (c) be submitted in writing and
                           delivered to (i) WorldCom, Inc., Corporate Real
                           Estate, 2400 North Glenville, Richardson, Texas
                           75082, Attn: Brian Trosper, (ii) Weil, Gotshal &
                           Manges LLP, 767 Fifth Avenue, New York, New York
                           10153, Attn: Elliot L. Hurwitz, Esq., Sharon
                           Youdelman, Esq. and Scott E. Cohen, Esq., counsel to
                           the Debtors, (iii) Hilco Real Estate, LLC, 5 Revere
                           Drive, Suite 320, Northbrook, Illinois 60062, Attn:
                           Alan Lieberman and (iv) Kelley Drye & Warren LLP, 101
                           Park Avenue, New York, New York 10178, Attn: Mark I.
                           Bane, Esq. and Mark R. Somerstein, Esq., counsel to
                           the statutory committee of unsecured creditors (the
                           "Committee"), so as to be received not later than
                           12:30 p.m. New York City time, on [___________], 2003
                           and (d) include the following:

                           (i)      A statement of the Competing Offeror's
                                    intent to bid at the Auction;

                                       Q-3



                           (ii)     A written agreement executed by the
                                    Competing Offeror, together with a copy of
                                    such agreement marked to show the specific
                                    changes to the Agreement that the Competing
                                    Offeror requires;

                           (iii)    A purchase price for the Assets that exceeds
                                    the Purchase Price, as defined in the
                                    Agreement, by at least $2,800,000;

                           (iv)     (A) A good faith deposit in the amount of
                                    $7,000,000 in cash or in other form of
                                    immediately available U.S. funds (subject to
                                    an escrow agreement substantially in the
                                    form of the escrow agreement annexed as
                                    Exhibit "D" to the Agreement) (the "Initial
                                    Deposit") and (B) a written commitment or
                                    other evidence acceptable to the Debtors of
                                    the Competing Offeror's ability to provide,
                                    in the event such offer ultimately is
                                    determined by the Debtors to be the Final
                                    Auction Offer (as defined below), a further
                                    deposit in cash or other form of immediately
                                    available U.S. funds (subject to an escrow
                                    agreement on the same terms as the escrow
                                    agreement executed in connection with the
                                    delivery of the Initial Deposit) in the
                                    amount sufficient to bring the total amount
                                    of such Competing Offeror's deposit up to
                                    the amount that is equal to 10% of the
                                    purchase price, exclusive of assumed
                                    liabilities as calculated by the Debtors,
                                    proposed by such Competing Offeror (the
                                    "Remaining Deposit," and together with the
                                    Initial Deposit, the "Full Deposit") within
                                    one business day after the Debtors have
                                    notified the Competing Offeror that its
                                    offer has been determined by the Debtors to
                                    be the Final Auction Offer;

                           (v)      Evidence, acceptable to the Debtors, of the
                                    Competing Offeror's (A) ability to
                                    consummate the transaction within ten (10)
                                    days after the entry of an order approving
                                    the sale and (B) future performance to
                                    counterparties under the contracts and
                                    leases proposed to be assigned, including
                                    such adequate assurance as may be required
                                    by section 365 of the Bankruptcy Code.

                  4.       Competing offers shall be unconditional and not
                           contingent upon any event, including, without
                           limitation, any due diligence investigation, the
                           receipt of financing or the receipt of any further
                           approval, including, without limitation, from any
                           board of directors, shareholders or otherwise. Any
                           person submitting a competing offer hereby shall be
                           deemed to have submitted to the jurisdiction of this
                           Court.

                  5.       The Debtors may, in their discretion, communicate
                           prior to the Sale Hearing with any Competing Offeror,
                           in which event, such Competing Offeror shall provide
                           to the Debtors, within one business day after the
                           Debtors' request therefor, any additional information
                           reasonably required

                                       Q-4



                           by the Debtors in connection with the Debtors'
                           evaluation of such Competing Offeror's offer.

                  6.       Prior to the Auction, the Debtors shall evaluate
                           Purchaser's offer, as embodied in the Agreement, and
                           any competing offers they have received, and after
                           consultation with the Committee, shall select the
                           offer the Debtors determine to be the highest and
                           best offer for the Assets (the "Initial Auction
                           Offer"). In considering Purchaser's Offer and
                           competing offers, the Debtors shall consider, among
                           other things, the value thereof to their estates, the
                           changes to the Agreement required by the Competing
                           Offeror, the Competing Offeror's satisfaction of any
                           governmental or regulatory requirements, and the
                           Competing Offeror's ability to finance, and timely
                           consummate, its proposed Alternative Transaction.

                  7.       The Auction shall be conducted by the Debtors or
                           their representatives on invitation to Purchaser and
                           all qualified Competing Offerors that have submitted
                           competing offers in accordance with these procedures,
                           and shall commence on [_______ __], 2003 at [__:__]
                           _.m. New York City time at the offices of the
                           Debtors' counsel, Weil, Gotshal & Manges LLP, 767
                           Fifth Avenue, New York, New York 10153.

                  8.       At the commencement of the Auction, the Debtors shall
                           announce the Initial Auction Offer. All bids at the
                           Auction shall be increased therefrom, and thereafter
                           made, in increments of no less than Two Hundred
                           Thousand Dollars ($200,000). The Purchaser may submit
                           competing offer(s) ("Purchaser Subsequent Offer")
                           without waiving its right to the Break-Up Fee (as
                           defined below) in the event an Alternative
                           Transaction is consummated with a Successful Offeror
                           (as defined below) other than Purchaser (or an
                           affiliate of Purchaser). The Purchaser may not apply
                           or credit any portion of the Break-Up Fee as a
                           component of Purchaser Subsequent Offers.

                  9.       Following the conclusion of the Auction, and after
                           consultation with the Committee's counsel and
                           financial advisor, the Debtors shall select the offer
                           that they determine to be the highest and best offer
                           for the Assets (the "Final Auction Offer") and shall
                           inform the party having submitted the Final Auction
                           Offer (the "Successful Offeror") and file with the
                           Court a notice of such selection. Within one business
                           day after the Debtors so notify the Successful
                           Offeror that its offer has been determined by the
                           Debtors to be the Final Auction Offer, the Successful
                           Offeror, whether or not such party is Purchaser,
                           shall deliver the Remaining Deposit to the Debtors.
                           At the Sale Hearing, the Court will consider the
                           Final Auction Offer for approval.

                  10.      Each Initial Deposit and Remaining Deposit shall be
                           maintained in an interest-bearing account and be
                           subject to the jurisdiction of this Court. The Full
                           Deposit shall be applied by the Debtors against the
                           purchase price to be paid by the Successful Offeror
                           at the closing of the transaction

                                      Q-5



                           approved by the Court. Promptly following such
                           closing, each Initial Deposit submitted by a party
                           other than a Successful Offeror, together with any
                           interest paid thereon, shall be returned.

                  11.      In the event the Successful Offeror fails to
                           consummate said transaction due to its breach of the
                           terms of its agreement with the Debtors, such
                           Successful Offeror's Full Deposit, together with any
                           interest paid thereon, shall be forfeited to the
                           Debtors and the Debtors may request authority to
                           consummate a transaction with the Competing Offeror
                           having submitted the next highest and best offer at
                           the final price and terms bid by such Competing
                           Offeror at the Auction (or, if such Competing Offeror
                           fails to consummate such transaction, the Debtors may
                           consummate a transaction with the next highest and
                           best Competing Offeror, and so forth, such subsequent
                           offeror(s) shall be deemed the "Successful Offeror"
                           for purposes of this Order), subject to the delivery
                           by any such Successful Offeror of the Remaining
                           Deposit within one business day after notification by
                           the Debtors.

                  12.      No offer shall be deemed accepted unless and until it
                           is approved by this Court;

and it is further

                  ORDERED that in the event the Court approves a Final Auction
Offer constituting a higher and better offer for the Assets than the Agreement
or Purchaser Subsequent Offers and the Debtors consummate such Alternative
Transaction with a Successful Offeror other than Purchaser or an affiliate of
Purchaser, the Purchaser shall be entitled to a "break-up fee" in the amount of
$2,600,000 (the "Break-Up Fee") payable to Purchaser in cash, by wire transfer
of immediately available funds to an account designated in writing by Purchaser,
on the business day following the date of consummation of the Alternative
Transaction; provided however, that Purchaser shall not be entitled to any
Break-Up Fee in the event Purchaser is a Successful Offeror and fails to
consummate the transaction by reason of its breach of the terms of its agreement
with the Debtors. Upon payment of the Break-Up Fee and return of the Purchaser's
Initial Deposit, the Debtors shall be fully released and discharged from any
liability or obligation arising under or relating to the Agreement, and neither
Purchaser nor any of its

                                       Q-6



affiliates shall have any other remedy or cause of action under or in relation
to the Agreement including, without limitation, the reimbursement of expenses
incurred in connection with the Agreement and the transactions contemplated
thereby. Immediately upon consummation of an Alternative Transaction with a
Successful Offeror other than Purchaser or an affiliate of Purchaser, Purchaser
shall be released from any and all obligations under the Agreement; and it is
further

                  ORDERED that upon the return of the Initial Deposit submitted
by each unsuccessful Competing Offeror following the closing of a transaction
with the Successful Offeror, the Debtors shall be fully released and discharged
from any liability or obligation arising under or relating to each Competing
Offeror's offer, and neither such Competing Offeror nor any of its affiliates
shall have any other remedy or cause of action under or in relation to the sale
of the Assets or any other relief requested in the Motion including, without
limitation, the reimbursement of expenses incurred in connection with each
Competing Offeror's offer and the transactions contemplated thereby; and it is
further

                  ORDERED that the Sale Hearing to consider the sale of the
Assets, the Debtors' selection of the highest and best offer therefor, and the
remainder of the relief requested in the Motion shall be held on [______ __],
2003 at 10:00 a.m. (New York City time); and it is further

                  ORDERED that objections, if any, to the sale of the Assets,
the Debtors' selection of the highest and best offer therefor, and the remainder
of the relief requested in the Motion, including objections from counterparties
to the contracts and leases proposed to be assigned, including with respect to
amounts entitled to be treated as cure obligations under section 365 of the
Bankruptcy Code, shall be set forth in writing and state with particularity the
nature and extent of the objector's interests in the Debtors and their estates
and the grounds for such

                                      Q-7



objections or other statements of position and shall be filed with the
Bankruptcy Court and served upon (i) Weil, Gotshal & Manges LLP, 767 Fifth
Avenue, New York, New York 10153, Attention: Scott E. Cohen, Esq.; (ii) the
Office of the United States Trustee for the Southern District of New York, 33
Whitehall Street, 21st floor, New York, New York 10004, Attention: Mary
Elizabeth Tom, Esq.; (iii) Kelley Drye & Warren LLP, 101 Park Avenue, New York,
New York 10178, Attn: Mark I. Bane, Esq., and Mark R. Somerstein, Esq.; (iv)
Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, Washington, DC 20036,
Attention: Richard Thornburgh, Esq.; (v) Shearman & Sterling, 599 Lexington
Avenue, New York, New York 10022, Attn: Douglas Bartner, Esq. and Marc B.
Hankin, Esq.; and (vii) Holland & Knight LLP, 2099 Pennsylvania Avenue, NW,
Suite 100, Washington, D.C. 20006, Attn: Scott Sterling, Esq. and Richard Lear,
Esq., so as to be actually received by 4:00 p.m. (New York City time) on
[_______], 2003; and it is further

                  ORDERED that the Debtors may extend the deadlines in the
bidding procedures set forth above, adjourn the Auction either prior to the
scheduled date and time therefor (in such event notice of such adjournment and
rescheduling of the Auction, if any, shall be provided to all parties submitting
qualified competing offers) or by announcement at the Auction, and/or adjourn
the Sale Hearing by announcement in open Court (in such event the Debtors shall
provide notice of the rescheduled Sale Hearing, if any, to all parties
submitting qualified competing offers); and it is further

                  ORDERED that, as soon as practicable after entry of this
Order, notice substantially in the form annexed as Exhibit __ to the Motion
shall be (i) provided to all potential interested parties identified by the
Debtors, all parties included in the Service List maintained pursuant to the
Case Management Order dated December 23, 2002, all taxing authorities having

                                      Q-8



jurisdiction in respect of the Assets, all parties asserting liens against the
Assets, all counterparties to service contracts relating to Pentagon City, the
lessee of the Pentagon City property and (ii) published in The Washington Post
and The Wall Street Journal (National Edition), and such notice shall constitute
good and sufficient notice of this Order, the Auction Procedures, and the Sale
Hearing, and it is further

                  ORDERED that this Order shall become effective immediately
upon its entry; and it is further

                  ORDERED nothing herein shall prejudice any party's right to
object to the approval of the proposed sale of the Assets or any other relief
sought by the Debtors at the Sale Hearing; and it is further

                  ORDERED that the Court shall retain jurisdiction over any
matter or dispute arising from or relating to the implementation of this Order.
This retention of jurisdiction shall not be deemed to extend to any dispute that
does not involve the interpretation, construction, enforcement and/or effect of
this Order or the Agreement.

Dated: New York, New York
    _______ __, 2003

                                        ________________________________________
                                             United States Bankruptcy Judge

                                      Q-9

EX-10.2

                                                                               .
                                                                               .
                                                                               .
                                                                    Exhibit 10.2

                                  LEASE SUMMARY
- -------------------------------------------------------------------------------


                                          
BUILDINGS                                    601 & 701 South 12th Street
- ---------                                    Arlington, Virginia 22202-4202

LANDLORD                                     MCI Worldcom Network Services, Inc.
- --------

TENANT                                       United States of America
- ------                                       540,707 BOMA rentable square feet
OFFICE PREMISES                              491,607 BOMA usable square feet
- ---------------                              (The United States of America
                                             leases space based on the BOMA
                                             usable method of measurement. Rider
                                             #1 states the final rent shall be
                                             based on an actual measurement of
                                             the Premises in accordance with GSA
                                             Form 3517.)

GARAGE PREMISES                              Entire two level garage containing
- ---------------                              1,079 parking spaces

LEASE TERM                                   Ten (10) years from the date of
- ----------                                   full lease commencement

PARTIAL LEASE                                The lease commences on the date
- -------------                                Tenant accepts space in Phase I.
COMMENCEMENT                                 However, the ten (10) year term
- ------------                                 does not begin until Phase II &
                                             Phase III have been accepted by
                                             Tenant

FULL LEASE                                   The date that is the weighted
- ----------                                   composite of all incremental
COMMENCEMENT                                 dates of Phase II and Phase III
- ------------                                 acceptance by the Tenant.

ANNUAL BASE RENT                             Office Premises - $17,083,343.25
- ----------------                             annually, paid monthly in arrears
                                             Garage premises -$1,230,060.00
                                             annually, paid monthly in arrears

RENTAL ABATEMENT                             Rent shall be abated for 10
- ----------------                             business days for Phases I, II &
                                             III after acceptance by the Tenant.
                                             Additionally, rent for Phase I
                                             shall be reduced to $20.00 per BOMA
                                             usable square foot prior to the
                                             Lease Commencement (Phase I space
                                             shall be accepted in increments of
                                             50,000 square feet up to a total of
                                             150,000 square feet

GARAGE RENT                                  Rent shall commence on portions of
- -----------                                  the garage on a prorated basis
COMMENCEMENT                                 based on the percentage of office
- ------------                                 space accepted by Tenant







                                         
TENANT IMPROVEMENTS                          Landlord must provide
- -------------------                          $19,664,280.00 for Tenant's
                                             improvements in the Premises. This
                                             total is subject to revision based
                                             on the actual square footage
                                             measurement in accordance with
                                             GSA Form 3517, contained in the
                                             General Clauses of
                                             SFO # DTSA20-03-R-00528


BASE RENT INCREASES                          None; see increases in operating
- -------------------                          expenses and real estate taxes

BASE YEAR OPERATING                          Landlord shall, at its cost,
- -------------------                          provide all supplies, services and
EXPENSES                                     utilities to operate the building
- --------                                     pursuant to the Lease.
                                             Landlord and Tenant have agreed on
                                             a Base Year Operating Expense Base
                                             of $2,670,408.00

BASE YEAR REAL ESTATE                        Landlord is responsible for the
- ---------------------                        annual payment of agreed upon Base
                                             Year Real Estate Taxes in the
                                             amount of $722,957.00

INCREASES IN OPERATING                       Tenant shall pay Landlord,
- ----------------------                       annually, a CPI increase
                                             above the agreed upon Base Year
                                             Operating Expense Base

INCREASES IN REAL                            Tenant shall pay Landlord,
- -----------------                            annually, an increase above the
ESTATE TAXES                                 agreed upon Base Year Real Estate
- ------------                                 Taxes

CONSTRUCTION                                 Landlord shall limit construction
- ------------                                 fees for initial improvements and
MARK-UPS                                     change orders to:
- --------                                     General Conditions         8%
                                             Overhead & Profit          4%
                                             Landlord's Oversight Fee   3%

SECURITY DEPOSITS                            Tenant - None Required
- -----------------










- -------------------------------------------------------------------------------
STANDARD FORM 2
FEBRUARY 1965 EDITION
GENERAL SERVICES ADMINISTRATION                         U.S. GOVERNMENT
(FPR 41 CFR) 1D 16.601                               LEASE FOR REAL PROPERTY
- --------------------------------------------------------------------------------
DATE OF LEASE:  12/17/02               LEASE # DTSA20-03-R-00528
- --------------------------------------------------------------------------------
                                                                       
  THIS LEASE, made and entered into this date between
           MCI Worldcom Network Services, Inc. ("WORLDCOM, INC." or "WORLDCOM")
  Whose address is:       c/o Spaulding & Slye Colliers International
                    1717 Pennsylvania Avenue, NW, Suite 1000
                    Washington, D.C. 20006

  and whose interest in the property hereinafter described is that of OWNER,
  hereinafter called the LESSOR, and the UNITED STATES OF AMERICA, hereinafter
  called the Government.

                                      *****

WITNESSETH: The parties hereto for the considerations hereinafter mentioned,
covenant and agree as follows:

1.      The Lessor hereby leases to the Government the following described
premises:

        A total of 540,707 BOMA rentable square feet (BRSF) equivalent to
491,607 BOMA Office Usable Square Feet (BUSF) of office and related space in
601/701 South 12th Street, Arlington, VA 22202-4202. The leased area is located
in the East and West Towers on 12 above grade full-floor stories, (see Attached
Floor Plans).

        to be used for SUCH PURPOSES AS DETERMINED BY THE GOVERNMENT The
Government will also lease the parking garage in its entirety which amounts to
1079 structured parking spaces located on two parking levels

                                      *****

2.      TO HAVE AND TO HOLD the said premises with their appurtenances for the
TEN YEAR FIRM term beginning on SEE RIDER #1 and ending on SEE RIDER #1.

                                      *****

3.      The Government shall pay the Lessor annual rent of $SEE RIDER #1 at the
rate $SEE RIDER #1 per MONTH In arrears Rent for a lesser period shall be
prorated. Operating costs are subject to annual adjustments in accordance with
Paragraph 3.4 of the SFO. Rent payment shall be made payable to:
*****

4.      [Deleted]

5.      [Deleted]


6.      The Lessor shall furnish to the Government as part of the rental
consideration, the following:

        A.      All services, utilities, alterations, repairs, maintenance and
        utilities and other rights and privileges as defined by this lease.
- --------------------------------------------------------------------------------







                                                     
  -----------------------------------------------------------------------------
        B.      The annual rent set forth in paragraph 3 of this SF2 is
        inclusive of the Lessor providing the Building Shell requirements, Fire
        and Life Safety Requirements and handicapped accessibility requirements
        specified In the SFO. The Lessor shall comply with all findings and
        recommendations under the Fire and Life Safety report (Attachment 2)
        within 60 days of lease execution.

        C.      The annual rent for Phase II and Phase Ill includes a tenant
        improvement (TI) allowance in the amount of $40.00/BUSF. The TI
        allowance shall be available in full immediately upon execution of this
        Lease, but shall be held by the Lessor until directed by the Government
        on how the disbursement of funds shall occur. The Government shall
        direct the disbursement of funds in any manner associated with any
        Government-expense connected with this Lease, including but not limited
        to the funding of tenant improvements; additional Lessor-provided
        services; services provided by third-party consultants or technical
        advisors; and/or to offset the Government's rental obligation to the
        Lessor.

        D.      In accordance with Paragraph 3.2 (Tax Adjustment) of the SFO,
        the percentage of Government occupancy Is to be established at time of
        acceptance of space. The percentage of occupancy is subject to revision
        based on the actual measurement of the Government occupied space in
        accordance with GSA Form 3517, GENERAL CLAUSES.

        E.      Upon acceptance of space, base year taxes will he established in
        accordance with SFO 3.2.

        F.      Pursuant to Paragraph 3.5 of the SFO "Operating Costs Base", the
        Operating Cost Base for the purpose of calculating operating cost
        adjustments shall be $5.42 per BUSF.

        G.      Pursuant to Paragraph 7.3 of the SFO "Overtime Usage", the rate
        for overtime HVAC service shall be mutually agreed to by the Lessor and
        the Government. The agreed to overtime rate will be reflected In a
        supplemental Lease Agreement.

        G.      In the case of conflict between this Standard Form 2 (SF2) and
        its Rider and the remainder of the Lease, the terms specified In this
        SF2 and its Rider shall govern.

7.      The following are attached and made a part hereof:
                TAB 1 - Rider #1 1, 2 Pages, Exhibit A, Security 3 Pages,
                Exhibit B, Furniture, 2 Pages
                TAB 2 - Floor plans - 3 Disks
                TAB 3 - SFO Revision 1, 51 Pages
                TAB 4 - GSA Form 1217, "Lessor's Annual Cost Statement" - 3
                Pages
                TAB 5 - SA Form 3517, General Clauses, 27 Pages, TSA Provisions
                5 Pages
                TAB 6 - GSA Form 3518, Representations and Certifications, 4
                Pages
                TAB 7 - Rate Structure, 1 Page TAB 8 - Fire Protection and Life
                Safety Evaluation - 22 Pages

8.      The following changes were made in this lease prior to its execution:

PARAGRAPH #4 AND #5 OF THIS STANDARD FORM 2 HAVE BEEN DELETED IN THEIR ENTIRETY.

IN WITNESS WHEREOF, the parties hereto have hereunto subscribed their names as
of the date first above written.

- --------------------------------------------------------------------------------
LESSOR:             WORLDCOM, INC.

                                          BY
                    ------------------------            ------------------------
                                                 Title
IN PRESENCE OF

                    ------------------------            ------------------------
             Name:                               Address
- --------------------------------------------------------------------------------
UNITED STATES OF AMERICA

BY
  ------------------------------              ----------------------------------
CONTRACTING OFFICER                           TSA, Contracting Officer

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


  ------------------------------------------------------------------------------
  STANDARD FORM 2
  FEBRUARY 1964 EDITION



                                    RIDER #1

                         TSA LEASE NO. DTSA20-03-R-00528

         The Government and the Lessor agree as fellows:

1.       The fully serviced lease rate is as follows:

         PHASE I

         The fully serviced lease rate for Phase 1 (Temporary space) shall be
         $20.00 per BOMA Office Area Square Foot. (BOSF) for space occupied by
         the Government. Rent shall commence ten (10) working days after the
         Government accepts Phase I space from the Lessor. Phase I space shall
         be accepted in increments of up to 50,000 square feet for a total of up
         to 150,000 square feet. The parking garage will be accepted in
         increments which represent the percentage of office space which has
         been accepted by the Government.

         PHASE II & III

         The fully serviced lease rate for Phase II and III is as follows:


 
 
               -------------------------------------------------------------------------------------------------------
                                         BOSF             PER BOSF      TOTAL                     MONTHLY
               -------------------------------------------------------------------------------------------------------
                                                                                 
               Phase 2 & 3             491,607              $34.75      $17,083,343.25           $1,423,611.94
               -------------------------------------------------------------------------------------------------------
               Parking                                       $2.50           1,230,060             $102,505.00
               -------------------------------------------------------------------------------------------------------
                                                            $37.25      $18,313,403.25           $1,526,116.94
               -------------------------------------------------------------------------------------------------------


         Phase II and III space shall be accepted in increments. Rent for each
         increment shall commence ten (10) working days after the Government
         accepts space from the Lessor.

2.       The commencement date for the Lease term shall be the weighted
         composite of all incremental dates of Phase II and II acceptance. The
         final rent will be based on the actual measurement of the Government
         occupied space in accordance with GSA Form 3517. The parking garage
         will be accepted in increments which represent the percentage of office
         space which has been accepted by the Government.

3.      Pursuant to Section 9.1 (B) (i) of the SFO, the construction fees for
        initial improvements and change orders shall not exceed:

                                    General Conditions         8%
                                    Overhead & Profit          4%
                                    Landlord's Oversight Fees  3%



         Lessor________ Gov't_______                     Rider #1, Page 1 of 2




4.       The Lessor is to provide a bond secured by an irrevocable letter of
         credit (ILC) in accordance with FAR 28.204-3 within fifteen (15) days
         in an amount not less than $22 Million to serve as collateral security
         if Lessor fails to pay any portion of the Tenant Improvement Allowance
         after applicable notice and cure periods.

         The ILC shall be irrevocable, require presentation of no document other
         than a written demand and the ILC (and letter of confirmation, if any),
         and is not to terminate until after the entire period during which the
         Tenant Improvement Allowance is completely used and the Contracting
         Officer provides the financial institution with a written statement
         waiving the right to payment.

5.       Notwithstanding anything to the contrary in the Lease, in the event an
         assignment of this offer or the lease is made by WorldCom (in
         connection with a sale of the property or otherwise) while, WorldCom's
         Chapter 11 case is pending, WorldCom may determine to seek court
         approval thereof and in such event, the Government shall not
         unreasonably withhold its consent to such assignment in connection with
         any right it may have under the Bankruptcy Code. If required, WorldCom
         shall comply with the novation requirements of FAR 42.12.

6.       Any cure of any default by any lender shall be accepted by the
         Government in lieu of any cure by the Lessor.

7.       SFO Section 6.11 (A)(l) stipulates copper buses in electrical
         distribution circuitry. The building's existing buses are aluminum, not
         copper, and are accepted as a suitable alternative to the stipulated
         requirement.

8.       Pursuant to SFO Section 6.15 (A), the building is currently equipped
         with cable trays which the government may utilize. Any additional cable
         trays that the Government requires to support its data requirements
         will be paid out of the Tenant Improvement Allowance.

9.       SFO Section 4.12 (B) - The Government accepts building's stairs in
         their current condition. Existing stairs have treads of ten and
         one-half (10 1/2) inches and risers measuring seven and three-quarter
         (7 3/4) inches. The Lessor will not be required to alter either the
         treads or risers to meet the requirements of ANSI A117.1 Section 504.

10.     The Lessor will provide the security requirements provided in Exhibit A
        of this Rider,

11.      The furniture listed in Exhibit B is currently located in the building.
         The TSA shall have the right to use any of the furniture in Exhibit B
         or request that the furniture be removed from the building. The Lessor
         shall be responsible for the cost of disassembling and removal of
         existing and/or excess furniture.



         Lessor __Gov't____                               Rider #1, Page 2 of 2



         12 This offer is for a single occupancy requirement of approximately
         540,707 square feet in total, with the TSA being the single tenant
         agency. However, approximately 3,370 square feet of a terminal room
         (and related equipment) in the building is to be retained by Lessor
         along with terminal room related riser access and garage space for
         infrastructure






  UNITED STATES OF AMERICA               SUPPLEMENTAL AGREEMENT           DATE
SUPPLEMENTAL LEASE AGREEMENT             No. 5                            5/6/03

                                         TO LEASE NO. DTSA20-03-R-00528


ADDRESS OF PREMISES:   601/701 S. 12th Street
                       Arlington, VA 22202


THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM
NETWORK SERVICES, INC.
Whose address is:

                  c/o Spaulding & Slye Colliers International
                  1717 Pennsylvania Avenue, NW, Suite 1000
                  Washington, DC 20006

Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter
called the Government:

WHEREAS, the parties hereto desire to amend the above Lease.

NOW THEREFORE, these parties for the considerations hereinafter mentioned
covenant and agree that the said Lease is amended, as follows:

Paragraph 1.10 of SFO #DTSA20-03-R-00528, attached to the lease dated December
17, 2002, is hereby deleted in its entirety and replaced by the following:

"1.10 TENANT IMPROVEMENT RENTAL ADJUSTMENT (SEP 2000) (TSA SEP 2002)

A. All Tenant Improvements shall be identified after award of the contract.

     1.  The Government, at its sole discretion, shall make all decisions as to
         the usage of the Tenant Improvement Allowance. The Government may use
         all or part of the Tenant Improvement Allowance. The Government may
         return to the Lessor any unused portion of the Tenant Improvement
         Allowance in exchange for an equivalent value of rental abatement to be
         effective as of the last acceptance date of completed space at a 0%
         amortization rate. For instance, should the Government decide not to
         use $5.00 per BOMA Office Area square foot of its Tenant Improvement
         Allowance, then the rent shall be abated by an equivalent per diem
         dollar value beginning as of the last acceptance date of completed
         space and ending on such date that the $5.00 per BOMA Office Area
         square foot in value has been returned to the Government via this rent
         abatement.

     2.  The Government reserves the right to make cash payments for any or all
         work performed by the Lessor. Prior to occupancy, the Government, at
         its sole discretion, may choose to pay lump sum for any or all of the
         Tenant Improvements. Any lump sum payment for Tenant Improvements made
         by the Government in lieu of accepting all or any portion of the Tenant
         Improvement Allowance may be made in exchange for an equivalent value
         of rental abatement to be effective as of the last acceptance date of
         completed space at a 0% amortization rate.

     3.  If the Government spends more on Tenant Improvements than $40.00 per
         BOMA Office Area square foot, the Government reserves the right to: 1)
         reduce the scope of the Tenant Improvement requirements such that the
         fair and reasonable cost of such requirements is reduced to $40.00 per
         BOMA Office Area square foot or less; 2) pay lump sum for the overage
         upon completion and acceptance of the improvements; or 3) opt for an
         increase in the rent according to the negotiated amortization rate over
         the firm term of the lease."


ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT.

IN WITNESS WHEREOF, the parties subscribed their names as of the above date.

- --------------------------------------------------------------------------------
LESSOR: MCI WORLDCOM NETWORK SERVICES, INC.



BY  /s/ Brian H. Trosper                         Vice President
    --------------------------------             -------------------------------
    (Signature)                                  (Title)



IN THE PRESENCE OF (witnessed by:)

                                                 2400 North Glenville Dr.
    /s/ Susan Baker                              Richardson, Tx. 75082
    --------------------------------             -------------------------------
    (Signature)                                  (Address)


- --------------------------------------------------------------------------------
UNITED STATES OF AMERICA



BY  /s/ (ILLEGIBLE)                              CONTRACTING OFFICER, TSA
    --------------------------------             -------------------------------
    (Signature)                                  (Title)


GSA DC 68-1176                                               GSA FORM 276 JUL 67


- --------------------------------------------------------------------------------
   UNITED STATES OF AMERICA         SUPPLEMENTAL AGREEMENT    DATE
 SUPPLEMENTAL LEASE AGREEMENT       No. 1                     3/4/03

                                    --------------------------------------------
                                    TO LEASE NO. DTSA20-03-R-00528
- --------------------------------------------------------------------------------
ADDRESS OF PREMISES: 601/701 S. 12th Street
                     Arlington, VA 22202
- --------------------------------------------------------------------------------
THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM
NETWORK SERVICES, INC.
Whose address is:
                 c/o Spaulding & Slye Colliers International
                 1717 Pennsylvania Avenue, NW, Suite 1000
                 Washington, DC 20006

Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter
called the Government:

WHEREAS, the parties hereto desire to amend the above Lease.

NOW THEREFORE, these parties for the considerations hereinafter mentioned
covenant and agree that the said Lease is amended, as follows:


   The Government shall be responsible for paying the following annual rental
   rates for Phase I space:

     o  $20.00 per BOMA Office Usable Square Feet ("BUSF") for the first
        136,376 BUSF (such being 150,000 BOMA Rentable Square Feet ("BRSF"))
        accepted by the Government.

     o  $25.42 per BUSF for all Phase I space accepted above the first 136,376
        BUSF (such being 150,000 BOMA Rentable Square Feet ("BRSF")).

   Rent shall be paid MONTHLY in arrears. Rent for a lesser period will be
   pro-rated.


ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT.







IN WITNESS WHEREOF, the parties subscribed their names as of the above date.

- --------------------------------------------------------------------------------
LESSOR: MCI WORLDCOM NETWORK SERVICES, INC.


                                                 Vice President --
BY: /s/ Brian H. Trosper                         Corp. Real Estate & Facilities
   -------------------------------               -------------------------------
   (Signature)                                   (Title)


IN THE PRESENCE OF (witnessed by:)



/s/ Susan Baker                                  2400 North Glenville Dr.
- ----------------------------------               -------------------------------
(Signature)                                      (Address)

- --------------------------------------------------------------------------------
UNITED STATES OF AMERICA



BY: /s/ (ILLEGIBLE)                              CONTRACTING OFFICER, TSA
   -------------------------------               -------------------------------
   (Signature)                                   (Title)

- --------------------------------------------------------------------------------
GSA DC 68-1176                                                  GSA FORM 276 JUL
67

  UNITED STATES OF AMERICA               SUPPLEMENTAL AGREEMENT         DATE
SUPPLEMENTAL LEASE AGREEMENT             No. 2                          3/4/03

                                         TO LEASE NO. DTSA20-03-R-00528


ADDRESS OF PREMISES:   601/701 S. 12th Street
                       Arlington, VA 22202


THIS AGREEMENT, made and entered into this date by and between:
MCI WORLDCOM NETWORK SERVICES, INC.
Whose address is:

                  c/o Spaulding & Slye Colliers International
                  1717 Pennsylvania Avenue, NW, Suite 1000
                  Washington, DC 20006

Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter
called the Government:

WHEREAS, the parties hereto desire to amend the above Lease.

NOW THEREFORE, these parties for the considerations hereinafter mentioned
covenant and agree that the said Lease is amended, as follows:

     1. Acceptance of Space: In January 2003, the Government accepted 229,932
        BOMA Rentable Square Feet ("BRSF") (such being 209,048 BOMA Office
        Usable Square Feet ("BUSF")) of Phase I space in its "as-is" condition
        per the schedule identified in Exhibit A of this SLA.

     2. Office Rental: For this 229,932 BRSF (such being 209,048 BUSF), the
        Government shall pay an annual rent of $4,574,842.24 ($20.00 per BUSF
        for 136,376 BUSF; $25.42 per BUSF for 72,672 BUSF) at a rate of
        $381,236.85 per MONTH in arrears. Total pro-rated rental for this space
        for January 2003 shall be $226,824.87.

     3. Parking Rental: Total annual rental for the garage, based upon the
        percentage of total square footage accepted by the Government to date in
        relation to total building square footage, shall be 42.52% of the annual
        total garage rental rate or $523,021.51 at a rate of $43,585.13 per
        MONTH in arrears. Total pro-rated garage rental for January 2003 shall
        be $26,523.21.


ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT.





IN WITNESS WHEREOF, the parties subscribed their names as of the above date.

- --------------------------------------------------------------------------------
LESSOR: MCI WORLDCOM NETWORK SERVICES, INC.


                                                 Vice President -- Corp. Real
BY  /s/ Brian H. Trosper                         Estate & Facilities
    --------------------------------             -------------------------------
    (Signature)                                  (Title)



IN THE PRESENCE OF (witnessed by:)


    /s/ Susan Baker                              2400 North Glenville Dr.
    --------------------------------             -------------------------------
    (Signature)                                  (Address)


- --------------------------------------------------------------------------------
UNITED STATES OF AMERICA



BY  /s/ (ILLEGIBLE)                              CONTRACTING OFFICER, TSA
    --------------------------------             -------------------------------
    (Signature)                                  (Title)


GSA DC 68-1176                                               GSA FORM 276 JUL

LEASE #DTSA20-03-R-00528
EXHIBIT A - SLA #
JANUARY 2003 ACCEPTANCE OF SPACE


JANUARY 4TH ACCEPTANCE OF SPACE


BUILDING  FLOOR     % OF FLOOR     FLOOR RSF      RSF OCCUPIED   FLOOR CAF      USF OCCUPIED
- --------  -----     ----------     ---------      ------------   ---------      ------------
                                                              
W701      4         100%           20,820         20,820         1.0999         18,929
W701      5         100%           20,820         20,820         1.0999         18,929
W701      6         100%           20,820         20,820         1.0999         18,929
W701      1         50%            13,990         6,995          1.0999         6,360
W701      7         50%            20,820         10,410         1.0999         9,464
                                   ---------------------------------------------------------
                                   TOTAL          79,865                        72,611


JANUARY 18TH ACCEPTANCE OF SPACE


BUILDING  FLOOR     % OF FLOOR     FLOOR RSF      RSF OCCUPIED   BUILDING CAF      USF OCCUPIED
- --------  -----     ----------     ---------      ------------   ------------      ------------
                                                                 
E601      9         100%           25,732         25,732         1.0999            23,395
E601      10        100%           25,732         25,732         1.0999            23,395
E601      11        100%           25,732         25,732         1.0999            23,395
W701      7         50%            20,820         10,410         1.0999            9,464
W701      2         100%           20,823         20,823         1.0999            18,932
W701      9         100%           20,820         20,820         1.0999            18,929
W701      10        100%           20,820         20,820         1.0999            18,929
                                   ------------------------------------------------------------
                                   TOTAL          150,068                          136,437




                                        RSF OCCUPIED        USF OCCUPIED
                                        ------------        ------------
                                                      
JANUARY SPACE ACCEPTANCE TOTALS         229,932             209,048


  UNITED STATES OF AMERICA               SUPPLEMENTAL AGREEMENT           DATE
SUPPLEMENTAL LEASE AGREEMENT             No. 3                            3/4/03

                                         TO LEASE NO. DTSA20-03-R-00528


ADDRESS OF PREMISES:   601/701 S. 12th Street
                       Arlington, VA 22202


THIS AGREEMENT, made and entered into this date by and between:
MCI WORLDCOM NETWORK SERVICES, INC.

Whose address is:

                  c/o Spaulding & Slye Colliers International
                  1717 Pennsylvania Avenue, NW, Suite 1000
                  Washington, DC 20006

Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter
called the Government:

WHEREAS, the parties hereto desire to amend the above Lease.

NOW THEREFORE, these parties for the considerations hereinafter mentioned
covenant and agree that the said Lease is amended, as follows:

     Parking Garage: Effective May 1, 2003 the Government will be responsible
     for paying rent on the entire garage at an initial annual parking rental of
     $1,230,060 per annum, such being $102,505.00 per month in arrears. Rent for
     lesser periods shall be pro-rated. The parking rental will escalate by
     three percent (3%) per annum, effective on May 1, 2004 and May 1st of each
     year thereafter, throughout the term of the lease.

     Prior to May 1, 2003 the Government will pay rent (per month, in arrears)
     for garage space which is a percentage of the annual parking rental rate of
     $1,230,060 ($102,505 monthly), equivalent to the percentage of space
     accepted by the Government within the building (the building's total square
     footage being 540.707 BRSF).













ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT.

IN WITNESS WHEREOF, the parties subscribed their names as of the above date.

- --------------------------------------------------------------------------------
LESSOR: MCI WORLDCOM NETWORK SERVICES, INC.


                                                 Vice President --
BY  /s/ Brian H. Trosper                         Corp Real Estate & Facilities
    --------------------------------             -------------------------------
    (Signature)                                  (Title)



IN THE PRESENCE OF (witnessed by:)


    /s/ Susan Baker                              2400 North Glenville Dr.
    --------------------------------             -------------------------------
    (Signature)                                  (Address)


- --------------------------------------------------------------------------------
UNITED STATES OF AMERICA



BY  /s/ (ILLEGIBLE)                              CONTRACTING OFFICER, TSA
    --------------------------------             -------------------------------
    (Signature)                                  (Title)


GSA DC 68-1176                                               GSA FORM 276 JUL 67


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

   UNITED STATES OF AMERICA            SUPPLEMENTAL AGREEMENT     DATE
 SUPPLEMENTAL LEASE AGREEMENT          No. 4                      3/26/03

                                       -----------------------------------------
                                       TO LEASE NO. DTSA20-03-R-00528
- --------------------------------------------------------------------------------
 ADDRESS OF PREMISES:   601/701 S. 12th Street
                        Arlington, VA 22202
- --------------------------------------------------------------------------------
 THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM
                                                                 NETWORK
                                                                 SERVICES, INC.
 Whose address is:
                   c/o Spaulding & Slye Colliers International
                   1717 Pennsylvania Avenue, NW, Suite 1000
                   Washington, DC 20006

 Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter
 called the Government:

 WHEREAS, the parties hereto desire to amend the above Lease.

 NOW THEREFORE, these parties for the considerations hereinafter mentioned
 covenant and agree that the said Lease is amended, as follows:

   1.  Acceptance of Space: In February 2003, the Government accepted 84,799
       BOMA Rentable Square Feet ("BRSF") (such being 77,097 BOMA Office Usable
       Square Feet ("BUSF")) of Phase I space in its "as-is" condition per the
       schedule identified in Exhibit A of this SLA.


       AS OF FEBRUARY 28, 2003, THE GOVERNMENT HAS ACCEPTED A TOTAL OF 314,731
       BRSF (SUCH BEING 288,145 BUSF) OF PHASE I SPACE.


   2.  Office Rental: For this 84,799 BRSF (such being 77,097 BUSF), the
       Government shall pay an annual rent of $1,959,805.74 ($25.42 per BUSF) at
       a rate of $163,317.15 per MONTH in arrears. Pro-rated rental for this
       space for February 2003 shall be $73,753.77.


       TOTAL ANNUAL RENTAL FOR ALL GOVERNMENT SPACE ACCEPTED TO DATE SHALL BE
       $6,534,647.98 ($20.00 PER BUSF FOR 136,376 BUSF; $25.42 PER BUSF FOR
       149,769 BUSF) AT A RATE OF $544,554.00 PER MONTH IN ARREARS. TOTAL
       PRO-RATED RENTAL FOR FEBRUARY 2003 SHALL BE $454,991.02.


   3.  Parking Rental: Per the ratio of space the Government has accepted per
       this SLA in relation to the total buildings' total square footage, the
       Government shall pay for an additional 15.7% of the total garage, which
       equates to an annual parking rental of $193,119.42 at a rate of
       $16,093.28 per MONTH in arrears. Pro-rated rental for this portion of the
       garage for February 2003 shall be $12,056.84.


       TOTAL ANNUAL RENTAL FOR THE GARAGE, BASED UPON THE PERCENTAGE OF TOTAL
       SQUARE FOOTAGE ACCEPTED BY THE GOVERNMENT TO DATE IN RELATION TO TOTAL
       BUILDING SQUARE FOOTAGE, SHALL BE 58.21% OF THE ANNUAL TOTAL GARAGE
       RENTAL RATE OR $718,017.93 AT A RATE OF $59,668.16 PER MONTH IN ARREARS.
       TOTAL PRO-RATED GARAGE RENTAL FOR FEBRUARY 2003 SHALL BE $55,647.40.






 (Continued on next page)






- --------------------------------------------------------------------------------
GSA DC 68-1176                                               GSA FORM 276 JUL 67


ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT.



IN WITNESS WHEREOF, the parties subscribed their names as of the above date.

- --------------------------------------------------------------------------------
LESSOR: MCI WORLDCOM NETWORK SERVICES, INC.



BY: /s/ Brian H. Trosper                         Vice President
    --------------------------------             -------------------------------
    (Signature)                                  (Title)



IN THE PRESENCE OF (witnessed by:)


BY: /s/ (ILLEGIBLE)
    --------------------------------             -------------------------------
    (Signature)                                  (Address)


- --------------------------------------------------------------------------------
UNITED STATES OF AMERICA



BY: /s/ (ILLEGIBLE)                              CONTRACTING OFFICER, TSA
    --------------------------------             -------------------------------
    (Signature)                                  (Title)


CSA DC 68-1176                                               GSA FORM 276 JUL 67


LEASE # DTSA20-03-R-00528
EXHIBIT A - SLA #
FEBRUARY 2003 ACCEPTANCE OF SPACE


FEBRUARY 9TH ACCEPTANCE OF SPACE



BUILDING       FLOOR     % OF FLOOR     FLOOR RSF      RSF OCCUPIED   BUILDING CAF   USF OCCUPIED
- --------       -----     ----------     ---------      ------------   ------------   ------------
                                                                   
W701           3         100%           20,820         20,820         1.0999         18,929
W701           8         100%           20,823         20,823         1.0999         18,932
W701           11        50%            20,820         10,410         1.0999         9,464
W701           1         50%            13,990         6,995          1.0999         6,360
E601           12        100%           25,751         25,751         1.0999         23,412
                                        ---------------------------------------------------------
                                        TOTAL          84,799                        77,097




                                             RSF OCCUPIED        USF OCCUPIED
                                             ------------        ------------
                                                           
February Space Acceptance Totals             84,799              77,097





                                             RSF OCCUPIED        USF OCCUPIED
                                             ------------        ------------
                                                           
Total Space Accepted as of Feb 28, 2003      314,731             255,145



      UNITED STATES OF AMERICA       SUPPLEMENTAL AGREEMENT       DATE
    SUPPLEMENTAL LEASE AGREEMENT     No.9                         6/20/03

                                     TO LEASE NO. DTSA20-03-R-00528

ADDRESS OF PREMISES:      601/701 S. 12th Street
                          Arlington, VA 22202

THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM
NETWORK SERVICES, INC.
Whose address is:
                  c/o Spaulding & Slye Colliers International
                  1717 Pennsylvania Avenue, NW, Suite 1000
                  Washington, DC 20006


Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter
called the Government:

WHEREAS, the parties hereto desire to amend the above Lease.

NOW THEREFORE, these parties for the considerations hereinafter mentioned
covenant and agree that the said Lease is amended, as follows:

     1.  Exhibit 1 attached to this SLA #9 contains Property Management
         Modifications Log #2.

     2.  The Government hereby confirms that it will pay the total amount of
         $418,293.82 identified in Exhibit 1 in accordance with invoicing and
         payment procedures set forth in GSA Form 3517B (Rev 09/01), as attached
         to the Lease dated December 17, 2002.

All other terms and conditions of the lease shall remain in force and effect.


IN WITNESS WHEREOF, the parties subscribed their names as of the above date.











LESSOR: MCI WORLDCOM NETWORK SERVICES, INC.

BY /s/ Brian H. Trosper                 Vice President
   ---------------------                -----------------
   (Signature)                            (Title)

IN THE PRESENCE OF (witnessed by:)      2400 North Glenville Dr.
                                        Richardson, Tx. 75082
/s/ Susan E. Baker                      ------------------------
- --------------------                      (Address)
   (Signature)

UNITED STATES OF AMERICA

BY /s/ (ILLEGIBLE)                      CONTRACTING OFFICER
   ---------------------                ----------------------
   (Signature)                            (Title)



SLA #9 - EXHIBIT 1
PROPERTY MANAGEMENT MODIFICATIONS LOG #2
LEASE NO. DTSA20-03-R-00528




- -----------------------------------------------------------------------------------------------------------------------------------
 MODIFICATION        MOD# OR                            MOD                                                              COST TO
 OR TSR              TSR# DATE                      DESCRIPTION                                VENDOR                      TSA
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
 MOD                 2                  Overtime from 6PM 12/23 to                             BTE                      $4,678.35
                                        7AM 1/5/03 Excl. NY eve and
                                        New Years.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 8                  Provide 10 dumpsters for TSA                           ETW                      $  992.15
                                        use during move-in
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 16                 Extended Supervision buildings                         BTE                      $  774.21
                                        601 and 701 7AM 1/20/03
                                        through 6PM 1/24/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 16                 Extended Supervision buildings                         BTE                      $8,941.05
                                        601 and 701 7AM 1/20/03
                                        through 6PM 1/24/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 16                 Extended Supervision buildings                         Spaulding & Slye         $1,210.00
                                        601 and 701 7AM 1/20/03
                                        through 6PM 1/24/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 17                 Daytime Clean from 1/01/03 -                           Liberty                  $  784.08
                                        03/31/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 17                 Daytime Clean from 1/01/03 -                           Liberty                  $  588.05
                                        03/31/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 17                 Daytime Clean from 1/01/03 -                           Liberty                  $  784.08
                                        03/31/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 17                 Daytime Clean from 1/01/03 -                           Liberty                  $  628.72
                                        03/31/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 17                 Daytime Clean from 1/01/03 -                           Liberty                  $  628.72
                                        03/31/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 17                 Daytime Clean from 1/01/03 -                           Liberty                  $  345.19
                                        03/31/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 17                 Daytime Clean from 1/01/03 -                           Liberty                  $  742.27
                                        03/31/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 17                 Daytime Clean from 1/01/03 -                           USSI                     $  742.27
                                        03/31/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 22                 Extended Supervision buildings                         BTE                      $  806.47
                                        601 and 701 6PM 2/7/03 through
                                        6PM 2/10/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 22                 Extended Supervision buildings                         BTE                      $5,611.10
                                        601 and 701 6PM 2/7/03 through
                                        6PM 2/10/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 22                 Extended Supervision buildings                         Spaulding & Slye         $1,210.00
                                        601 and 701 6PM 2/7/03 through
                                        6PM 2/10/03.
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 23                 Painting on the 12th floor.                            T.L. Evans               $  493.35
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 23                 2nd floor outlet for copier.                           Truland Services         $  347.88
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 23                 12th floor outlets.                                    Truland Services         $  710.33
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 23                 2 dedicated outlets on the                             Truland Services         $  665.50
                                        5th floor
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 23                 TSA Requested electrical work                          Truland Services         $  637.56
- -----------------------------------------------------------------------------------------------------------------------------------
 MOD                 25                 6th floor electrical work at 701.                      Truland                  $2,656.95
- -----------------------------------------------------------------------------------------------------------------------------------



                               SLA #9 - EXHIBIT 1
                                     PAGE 1


SLA #9 - EXHIBIT 1
PROPERTY MANAGEMENT MODIFICATIONS LOG #2
LEASE NO. DTSA20-03-R-00528




MODIFICATION       MOD# OR                       MOD                                                      COST TO
  OR TSR          TSR# DATE                  DESCRIPTION                               VENDOR                TSA
- ------------   ----------------   -----------------------------------------    --------------------     -----------
                                                                                            
MOD            26                 6th floor Liebert PM for 6 units at          MECCO                    $  5,662.80
                                  701.
MOD            27                 6th floor PDU maintenance at                 Power Protection         $  9,710.25
                                  701.
MOD            29                 Daytime cleaning from 4/1/03 -               USSI                     $  1,484.54
                                  4/30/03.
MOD            30                 Security from 3/1/03 through                 Burns International      $ 64,588.98
                                  3/30/03 at 601 & 701.
MOD            30                 Security from 3/1/03 through                 Burns International      $ 60,515.95
                                  3/30/03 at 601 & 701.
MOD            30                 Security from 3/1/03 through                 Burns International      $ 60,135.63
                                  3/30/03 at 601 & 701.
MOD            30                 Security from 3/1/03 through                 Burns International      $ 70,822.68
                                  3/30/03 at 601 & 701.
MOD            30                 Security from 3/1/03 through                 Burns International      $ 77,858.00
                                  3/30/03 at 601 & 701.
MOD            31                 After hours HVAC for TSA from                Spaulding & Slye         $ 23,712.00
                                  3/18/03 - 4/4/03.
MOD            28                 Stairway emergency battery                   Trulan Services          $  8,463.95
                                  lights
MOD            39                 Temperature tools for TSA                    McMaster Carr            $    461.78
                                  facilities.
                                                                               TOTAL                     418,293.82




                               SLA #9 - Exhibit 1
                                     Page 2

  UNITED STATES OF AMERICA               SUPPLEMENTAL AGREEMENT             DATE
SUPPLEMENTAL LEASE AGREEMENT             No. 6

                                         TO LEASE NO. DTSA20-03-R-00528


ADDRESS OF PREMISES:   601/701 S. 12th Street
                       Arlington, VA 22202


THIS AGREEMENT, made and entered into this date by and between:
MCI WORLDCOM NETWORK SERVICES, INC.
Whose address is:

                  c/o Spaulding & Slye Colliers International
                  1717 Pennsylvania Avenue, NW, Suite 1000
                  Washington, DC 20006

Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter
called the Government:

WHEREAS, the parties hereto desire to amend the above Lease.

NOW THEREFORE, these parties for the considerations hereinafter mentioned
covenant and agree that the said Lease is amended, as follows:

Pursuant to the rights reserved by the Government in SFO Section 7.12(D)(3), the
Government has the right to install, at the Government's expense, crash barriers
around the perimeter of the leased premises. Such crash barriers may be concrete
bollards, planters, retractable gates or other architectural features, which
shall conform as much as practical to the existing building's features and
structures "to avoid an armed camp appearance."

As of March 29, 2003, Lessor has agreed to permit the installation of temporary
crash barriers (i.e., jersey walls) by the Government around the perimeter of
the leased premises, for a period not to exceed 120 days. Upon the expiration of
this 120 period (on July 27, 2003), the Government must remove the temporary
crash barriers. Installation and removal of the temporary crash barriers will be
at the Government's sole cost and expense. If the Government does not remove the
temporary crash barriers and begin the installation of a permanent crash barrier
solution (subject to the provisions below) on or before July 27, 2003, then for
each day after July 27, 2003 that the temporary crash barriers remain around the
perimeter of the leased premises, the Government shall pay to Lessor a daily
pro-rated penalty of $1.00 per ANSI/BOMA USF, per annum, as additional rent on
the 491,707 ANSI/BOMA USF of space leased at the premises ($1,347.14 per day).
Once the temporary crash barriers have been removed, no further penalty, will be
assessed related to such barriers.

During the 120-day period, the Government shall provide Lessor with plans and
specifications for a permanent crash barrier solution, as described in SFO
Section 7.12 (D)(3), for the Lessor's written approval, which approval shall not
be unreasonably withheld, conditioned or delayed.

ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT.

IN WITNESS WHEREOF, the parties subscribed their names as of the above date.

- --------------------------------------------------------------------------------
LESSOR: MCI WORLDCOM NETWORK SERVICES, INC.



BY: /s/ Brian H. Trosper                         Vice President
    --------------------------------             -------------------------------
    (Signature)                                  (Title)



IN THE PRESENCE OF (witnessed by:)

                                                 2400 N. Glenville Dr.
BY: /s/ Susan E. Baker                           Richardson, Tx. 75082
    --------------------------------             -------------------------------
    (Signature)                                  (Address)


- --------------------------------------------------------------------------------
UNITED STATES OF AMERICA



BY: /s/ (ILLEGIBLE)                              CONTRACTING OFFICER, TSA
    --------------------------------             -------------------------------
    (Signature)                                  (Title)


CSA DC 68-1176                                               GSA FORM 276 JUL 67

  UNITED STATES OF AMERICA               SUPPLEMENTAL AGREEMENT             DATE
SUPPLEMENTAL LEASE AGREEMENT             No. 7

                                         TO LEASE NO. DTSA20-03-R-00528


ADDRESS OF PREMISES:   601/701 S. 12th Street
                       Arlington, VA 22202


THIS AGREEMENT, made and entered into this date by and between:
MCI WORLDCOM NETWORK SERVICES, INC.
Whose address is:

                  c/o Spaulding & Slye Colliers International
                  1717 Pennsylvania Avenue, NW, Suite 1000
                  Washington, DC 20006

Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter
called the Government:

WHEREAS, the parties hereto desire to amend the above Lease.

NOW THEREFORE, these parties for the considerations hereinafter mentioned
covenant and agree that the said Lease is amended, as follows:

     1. Exhibit 1 attached to this SLA #7 contains Property Management
        Modifications Log #1.

     2. The Government hereby confirms that it will pay the total amount of
        $535,750.12 identified in Exhibit 1 in accordance with invoicing and
        payment procedures set forth in GSA Form 3517B (Rev 09/01), as attached
        to the Lease dated December 17, 2002.



ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT.

IN WITNESS WHEREOF, the parties subscribed their names as of the above date.

- --------------------------------------------------------------------------------
LESSOR: MCI WORLDCOM NETWORK SERVICES, INC.



BY: /s/ Brian H. Trosper                         Vice President
    --------------------------------             -------------------------------
    (Signature)                                  (Title)



IN THE PRESENCE OF (witnessed by:)

                                                 2400 North Glenville Dr.
    /s/ Susan E. Baker                           Richardson, Tx. 75082
    --------------------------------             -------------------------------
    (Signature)                                  (Address)


- --------------------------------------------------------------------------------
UNITED STATES OF AMERICA



BY  /s/ (ILLEGIBLE)                              CONTRACTING OFFICER, TSA
    --------------------------------             -------------------------------
    (Signature)                                  (Title)


GSA DC 68-1176                                               GSA FORM 276 JUL 67


LEASE NO. DTSA20-03-R-00528
SLA #7 - EXHIBIT 1
PROPERTY MANAGEMENT MODIFICATIONS LOG #1




MODIFICATION            MOD# OR                         MOD                                               COST TO
  OR TSR               TSR# DATE                       DESCR.                          VENDOR               TSA
- ------------        ---------------     -----------------------------------     -------------------      ----------
                                                                                             
MOD                 2                   24 coverage for TSA contractor          BTE                      $ 4,578.35
                                        access

MOD                 3                   Installation of electrical services     Power Solutions          $22,131.83
                                        in various areas at
                                        701 South 12th Street.

MOD                 4                   24hrs engineer coverage over            Building Technology      $ 2,743.86
                                        New Year's Holiday.                     Engineers, Inc.


MOD                 5                   Security Coverage for 1/3-1/6/03        Burns Int'l Security     $ 9,939.95
                                                                                Services

MOD                 6                   8hrs for Electricians for electrical    Power Solutions          $ 3,388.00
                                        work

MOD                 7                   Provide 16 outlets in the 6th floor     Power Solutions          $16,732.23
                                        CPU room at 701 South 12 the Street.

MOD                 9 - Invoice #1      24 hr coverage for TSA service          Building Technology      $ 5,968.20
                                        contractors. And property               Engineers, Inc.
                                        management coverage for the
                                        move on 1/3/03 4hrs

MOD                 9 - Invoice #2      24 hr coverage for TSA service          Spaulding & Slye         $   605.00
                                        contractors. And property
                                        management coverage for the
                                        move on 1/3/03 4hrs

MOD                 10                  Install two outlet in every LAN         Power Solutions          $24,232.11
                                        closet 9-12 in 601 south 12th
                                        Street.

MOD                 11 - Invoice #1     Security Coverage for 1/9-1/18/03       Burns Int'l Security     $ 4,620.00
                                                                                Services

MOD                 11 - Invoice #2     Security Coverage for 1/9-1/18/03       Burns Int'l Security     $19,050.63
                                                                                Services

MOD                 11 - Invoice #3     Security Coverage for 1/9-1/18/03       Burns Int'l Security     $39,854.65
                                                                                Services

MOD                 12 - Invoice #1     24 hr coverage for TSA service          Building Technology      $   548.10
                                        contractors. And property               Engineers, Inc.
                                        management coverage for the
                                        move on 1/8-1/20/03 4hrs

MOD                 12 - Invoice #2     24 hr coverage for TSA service          Building Technology      $ 3,452.81
                                        contractors. And property               Engineers, Inc.
                                        management coverage for the
                                        move on 1/8-1/20/03 4hrs

MOD                 12 - Invoice #3     24 hr coverage for TSA service          Building Technology      $ 5,077.23
                                        contractors. And property               Engineers, Inc.
                                        management coverage for the
                                        move on 1/8-1/20/03 4hrs



                               SLA #7 - Exhibit 1
                                     Page 1

LEASE NO. DTSA20-03-R-00528
SLA #7 - EXHIBIT 1
PROPERTY MANAGEMENT MODIFICATIONS LOG #1



MODIFICATION      MOD# OR                     MOD                                            COST TO
  OR TSR         TSR# DATE                   DESCR.                         VENDOR             TSA
- ------------  ---------------  ------------------------------------  --------------------   ----------
                                                                                

    MOD       12 - Invoice #4    24 hr coverage for TSA service       Building Technology   $ 17,712.06
                                    contractors. And property           Engineers, Inc.
                                   management coverage for the
                                       move on 1/3/03 4hrs

    MOD       12 - Invoice #5     Property Management coverage         Spaulding & Slye     $  1,210.00
                                       for move on 1/18/03

    MOD             13           Install two outlet in every LAN        Power Solution      $ 10,890.00
                               closet 7-8 in 601 south 12th Street.

    MOD             14         Installation of electrical circuits      Power Solution      $    732.76
                                           in VIP room

    MOD             18             Rekey of various locks in 701       Action Lock & Safe   $    914.19

    MOD       20 - Invoice #1       Security Coverage for 1/19-       Burns Int'l Security  $ 53,283.87
                                             1/31/03                       Services

    MOD       20 - Invoice #2       Security Coverage for 1/19-       Burns Int'l Security  $ 60,069.08
                                             1/31/03                       Services

    MOD       21 - Invoice #1    Security Coverage for 2/1-2/28/03    Burns Int'l Security  $ 53,537.00
                                                                           Services

    MOD       21 - Invoice #2    Security Coverage for 2/1-2/28/03    Burns Int'l Security  $ 59,770.98
                                                                           Services

    MOD       21 - Invoice #3    Security Coverage for 2/1-2/28/03    Burns Int'l Security  $ 58,384.70
                                                                           Services

    MOD       21 - Invoice #4    Security Coverage for 2/1-2/28/03    Burns Int'l Security  $ 57,502.50
                                                                           Services

    TSR          1/17/2003         Rekey of various locks in 701       Action Lock & Safe   $    221.99

    TSR          1/30/2003         Rekey of various locks in 701       Action Lock & Safe   $    179.20

    TSR          1/30/2003         Rekey of various locks in 701       Action Lock & Safe   $  2,346.96

    TSR          2/27/03 -         Rekey of various locks in 701       Action Lock & Safe   $    407.22
                Invoice #1

    TSR          2/27/03 -         Rekey of various locks in 701       Action Lock & Safe   $    243.01
                Invoice #1

                                                                             TOTAL          $535,750.12



                               SLA #7 - Exhibit 1
                                     Page 2


- --------------------------------------------------------------------------------
   UNITED STATES OF AMERICA         SUPPLEMENTAL AGREEMENT    DATE
 SUPPLEMENTAL LEASE AGREEMENT       No. 8

                                    --------------------------------------------
                                    TO LEASE NO. DTSA20-03-R-00528
- --------------------------------------------------------------------------------
ADDRESS OF PREMISES: 601/701 S. 12th Street
                     Arlington, VA 22202
- --------------------------------------------------------------------------------
THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM
NETWORK SERVICES, INC.
Whose address is:
                 c/o Spaulding & Slye Colliers International
                 1717 Pennsylvania Avenue, NW, Suite 1000
                 Washington, DC 20006

Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter
called the Government:

WHEREAS, the parties hereto desire to amend the above Lease.

NOW THEREFORE, these parties for the considerations hereinafter mentioned
covenant and agree that the said Lease is amended, as follows:

1. Acceptance of Space: In March 2003, the Government accepted 31,230 BOMA
   Rental Square Feet ("BRSF") (such being 28,393 BOMA Office Usable Square Feet
   ("BUSF")) of Phase I space in its "as-is" condition per the schedule
   identified in Exhibit A of this SLA.

   AS OF MARCH 31, 2003, THE GOVERNMENT HAS ACCEPTED A TOTAL OF 345,972 BRSF
   (SUCH BEING 314,539 BUSF) OF PHASE I SPACE.

2. Office Rental: For this 31,230 BRSF (such being 28,393 BUSF), the Government
   shall pay an annual rent of $721,750.06 ($25.42 per BUSF) at a rate of
   $60,145.84 per MONTH in arrears. Pro-rated rental for this space for March
   2003 shall be $60,145.84.

   TOTAL ANNUAL RENTAL FOR ALL GOVERNMENT SPACE ACCEPTED TO DATE SHALL BE
   $7,256,423.46 ($20.00 PER BUSF FOR 136,376 BUSF; $25.42 PER BUSF FOR 178,163
   BUSF) AT A RATE OF $604,701.96 PER MONTH IN ARREARS. TOTAL PRO-RATED RENTAL
   FOR MARCH 2003 SHALL BE $604,701.96.

3. Parking Rental: Per the ratio of space the Government has accepted per this
   SLA in relation to the total buildings' total square footage, the Government
   shall pay for an additional 5.8% of the total garage, which equates to an
   annual parking rental of $71,343.48 at a rate of $5,945.29 per MONTH in
   arrears. Pro-rated rental for this portion of the garage for March 2003 shall
   be $5,945.29.

   TOTAL ANNUAL RENTAL FOR THE GARAGE, BASED UPON THE PERCENTAGE OF TOTAL SQUARE
   FOOTAGE ACCEPTED BY THE GOVERNMENT TO DATE IN RELATION TO TOTAL BUILDING
   SQUARE FOOTAGE, SHALL BE 63.99% OF THE ANNUAL TOTAL GARAGE RENTAL RATE OR
   $787,115.39 AT A RATE OF $65,592.95 PER MONTH IN ARREARS. TOTAL PRO-RATED
   GARAGE RENTAL FOR MARCH 2003 SHALL BE $65,592.95.




(Continued on next page)







GSA DC 68-1176                                                  GSA FORM 276 JUL
67



ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT.




IN WITNESS WHEREOF, the parties subscribed their names as of the above date.

- --------------------------------------------------------------------------------
LESSOR: MCI WORLDCOM NETWORK SERVICES, INC.



BY: /s/ Brian H. Trosper                         Vice President
   ------------------------------                ------------------------------
    (Signature)                                   (Title)



IN THE PRESENCE OF (witnessed by:)



                                                  2400 North Glenville Dr.
/s/ Susan E. Baker                                Richardson, Tx. 75082
- ----------------------------------                ------------------------------
(Signature)                                       (Address)

- --------------------------------------------------------------------------------
UNITED STATES OF AMERICA



BY: ____________________________                 _______________________________
    (Signature)                                  (Title)

- --------------------------------------------------------------------------------
GSA DC 68-1176                                                  GSA FORM 276 JUL
67


LEASE # DTSA20-03-R-00528
EXHIBIT A - SLA #8
MARCH 2003 ACCEPTANCE OF SPACE

MARCH 1, 2003 ACCEPTANCE OF SPACE


BUILDING        FLOOR     % OF FLOOR     FLOOR RSF      RSF OCCUPIED        BUILDING CAF        USF OCCUPIED
- --------        -----     ----------     ---------      ------------        ------------        ------------
                                                                              
W701             11           50%          20,820          10,410              1.0999                9,464
W701             12          100%          20,820          20,820              1.0999               18,929
                                                           ------                                   ------
                                           TOTAL           31,230                                   28,393
                                                           ======                                   ======




                                                 RSF OCCUPIED                       USF OCCUPIED
                                                 ------------                       ------------
                                                                              
FEBRUARY SPACE ACCEPTANCE TOTALS                    31,230                             28,393




                                                 RSF OCCUPIED                       USF OCCUPIED
                                                 ------------                       ------------
                                                                              
TOTAL SPACE ACCEPTED AS OF MARCH 1, 2003           345,972                            314,539


REPRESENTATIONS AND CERTIFICATIONS   Solicitation Number         Dated
(Acquisition of Leasehold                 DTSA20-03-R-00528
Interests In Real Property)

Complete appropriate boxes, sign the form, and attach to offer.

The Offeror makes the following Representations and Certifications. NOTE: The
"Offerer," as used on this form, is the owner of the property offered, not an
individual or agent representing the owner.

   1.    52.219-1 - SMALL BUSINESS PROGRAM REPRESENTATIONS {NOV 1999)

         (a)    (1)      The standard industrial classification (SIC) code for
                         this acquisition is 6515.

                (2)      The small business size standard applicable to this
                         acquisition is average annual gross revenues of $15
                         million or less for the preceding three fiscal years.

                (3)      The small business size standard for a concern which
                         submits an offer in its own name, other than on a
                         construction or service contract, but which proposes to
                         furnish a product which it did not itself manufacture,
                         is 500 employees.

         (b)    Representations.

                (1)      The Offeror represents as part of its offer that it [ ]
                         is, [X] is not a small business concern.

                (2)      (Complete only if offeror represented itself as a small
                         business concern paragraph (b)(1) of this provision.)
                         The Offeror represents, for general statistical
                         purposes that it [  ] is, [X] is not a small
                         disadvantaged business concern as defined in 13 CFR
                         124.1002.

                (3)      (Complete only if offerer represented itself as a small
                         business concern in paragraph (b)(1) of this section.)
                         The Offeror represents as part of its offer that it [ ]
                         is, [ ] is not a women-owned small business concern.

                (4)      [Complete only if offerer represented itself as a small
                         business concern in paragraph (b)(1) of this
                         provision.] The offeror represents, as part of its
                         offer, that it--

                         (i) [ ] is, [ ] is not a HUBZone small business concern
                         listed, on the date of this representation, on the List
                         of Qualified HUBZone Small Business Concerns maintained
                         by the Small Business Administration, and no material
                         change in ownership and control, principal office of
                         ownership, or HUBZone employee percentage has occurred
                         since it was certified by the Small Business
                         Administration in accordance with 13 CFR Part 126; and

                         (ii) It [ ] is, [ ] is not a joint venture that
                         complies with the requirements of 13 CFR Part 126, and
                         the representation in paragraph (b)(4){i) of this
                         provision is accurate for the HUBZone small business
                         concern or concerns that are participating in the joint
                         venture. [The offeror shall enter the name or names of
                         the HUBZone small business concern or concerns that,
                         are participating in the joint venture:______________.]
                         Each HUBZone small business concern participating in
                         the joint venture shall submit a separate signed copy
                         of the HUBZone representation.

                (5)      [Complete if offeror represented itself as
                         disadvantaged in paragraph (b)(2) of this provision).
                         The offeror shall check the category In which its
                         ownership falls:

                         ____   Black American.

                         ____   Hispanic American.

                         ____   Native American (American Indians, Eskimos,
                                Aleuts, or Native Hawaiians).

                         ____   Asian-Pacific American (persons with origins
                                from Burma, Thailand, Malaysia, Indonesia,
                                Singapore, Brunei, Japan, China, Taiwan, Laos,
                                Cambodia (Kampuchea), Vietnam, Korea,
                                The Philippines, U.S. Trust Territory of the
                                Pacific Islands (Republic of Palau), Republic of
                                the Marshall Islands, Federated States of
                                Micronesia, the Commonwealth of the Northern
                                Mariana Islands, Guam, Samoa, Macac, Hong Kong,
                                Fiji, Tonga, Kiribati, Tuvalu, or Nauru).

                         ____   Subcontinent Asian (Asian-Indian) American
                                (persons with origins from India, Pakistan,
                                Bangladesh, Srt Lanka, Bhutan, the Maldives
                                Islands, or Nepal).

                         ____   Individual/concern, other than one of the
                                preceding.

        (c)    Definitions. Small business concern, as use in this provision,
               means a concern, including its affiliates, that is independently
               owned and operated, not dominant in the field of operation in
               which it is bidding on Government contracts, and qualified as a
               small business under the criteria in 13 CFR Part 121 and the size
               standard in paragraph (a) of this provision.

               Women-owned small business concern, as use in this provision,
               means a small business concern--

               (1)      Which is at least 51 percent owned by one or more women
                        or, in the case of any publicly owned business, at
                        least 51 percent of the stock of which is owned by one
                        or more women; and

               (2)      Whose management and daily business operations are
                        controlled by one or more women.

        (d)    Notice.

               (1)      If this solicitation is for supplies and has been set
                        aside, in whole or in part, for small business concerns,
                        then the clause in this solicitation providing notice of
                        the set-aside contains restrictions on the source of the
                        end items to be furnished.

               (2)      Under 15 U.S.C. 645(d), any person who misrepresents a
                        firm's status as a small, small disadvantaged, or
                        women-owned small business concern in order to obtain a
                        contract to be awarded under the preference


INITIALS /s/ [ILLEGIBLE] & /s/ [ILLEGIBLE]
         ---------------   ---------------

                                                GSA FORM 3518 PAGE 1 (REV 12/99)



                        programs established pursuant to sections 8(a), 8(d), 9,
                        or 15 of the Small Business Act or any other provision
                        of Federal law that specifically references section 8(d)
                        for a definition of program eligibility, shall-

                         (i)    Be punished by imposition of fine, imprisonment,
                                or both;

                        (ii)    Be subject to administrative remedies, including
                                suspension and debarment; and

                       (iii)    Be ineligible for participation in programs
                                conducted under the authority of the Act.

   2.    52:204-5 - WOMEN-OWNED BUSINESS (OTHER THAN SMALL BUSINESS) (MAY 1999)

         (a)    Definition. "Women-owned business concern," as used in this
                provision, means a concern which is at least 51 percent owned by
                one or more women; or in the case of any publicly owned
                business, at least 51 percent of its stock is owned by one or
                more women; and whose management and daily business operations
                are controlled by one or more women.

         (b)    Representation. [Complete only if the offeror is a women-owned
                business concern and has not represented itself as a small
                business concern in paragraph (b)(1) of FAR 52.219-1, Small
                Business Program Representations, of this solicitation.] The
                offeror represents that it [ ] is a women-owned business
                concern.

   3.    52.222-22 - PREVIOUS CONTRACTS AND COMPLIANCE REPORTS (FEB 1999)

         The Offeror represents that-

         (a)    It [X] has, [ ] has not participated in a previous contract or
                subcontract subject to the Equal Opportunity clause of this
                solicitation;

         (b)    It [X] has, [ ] has not filed all required compliance reports;
                and

         (c)    Representations indicating submission of required compliance
                reports, signed by proposed subcontractors, will be obtained
                before subcontract awards. (Approved by OMB under Control Number
                1215-0072.)

   4.    52.222-25 - AFFIRMATIVE ACTION COMPLIANCE (APR 1984)

         The Offeror represents that-

         (a)   It [X] has developed and has on file, [ ] has not developed and
               does not have on file, at each establishment affirmative action
               programs required by the rules and regulations of the Secretary
               of Labor (41 CFR 60-1 and 60-2), or

         (b)   It [ ] has not previously had contracts subject to the written
               affirmative action programs requirement of the rules and
               regulations of the Secretary of Labor. (Approved by OMB under
               Control Number 1215-0072.)

   5.    52.203-02 - CERTIFICATE OF INDEPENDENT PRICE DETERMINATION (APR 1985}

         (Applies to leases which exceed $100,000 average net annual rental,
         including option periods.)

         (a)   The Offeror certifies that-

               (1)    The prices in this offer have been arrived at
                      independently, without, for the purpose of restricting
                      competition, any consultation, communication, or agreement
                      with any other Offeror or competitor relating to (i) those
                      prices, (ii) the intention to submit an offer, or (iii)
                      the methods or factors used to calculate the prices
                      offered;

               (2)    The prices in this offer have not been and will not be
                      knowingly disclosed by the Offeror, directly or
                      indirectly, to any other Offeror or competitor before bid
                      opening (in the case of a sealed bid solicitation) or
                      contract award (in the case of a negotiated solicitation)
                      unless otherwise required by law; and

               (3)    No attempt has been made or will be made by the Offeror to
                      induce any other concern to submit or not to submit an
                      offer for the purpose of restricting competition.

         (b)   Each signature on the offer is considered to be a certification
               by the signatory that the signatory-

               (1)    Is the person in the Offeror's organization responsible
                      for determining the prices being offered in this bid or
                      proposal, and that the signatory has not participated and
                      will not participate In any action contrary to
                      subparagraphs (a)(1) through (a)(3) above; or

               (2)     (i)      Has been authorized, in writing, to act as agent
                                for the following principals in certifying that
                                those principals have not participated, and will
                                not participate in any action contrary to
                                subparagraphs (a)(1) through (a)(3) above John
                                Dubel, CFO. [insert full name of person(s) in
                                the Offeror's organization responsible for
                                determining the prices offered in this bid or
                                proposal, and the title of his or her position
                                in the Offeror's organization];

                      (ii)      As an authorized agent, does certify that the
                                principals named in subdivision (b)(2)(i) above
                                have not participated, and will not participate,
                                in any action contrary to subparagraphs (a)(1)
                                through (a)(3) above; and

                     (iii)      As an agent, has not personally participated,
                                and will not participate, in action contrary to
                                subparagraphs (a)(1) through (a)(3) above.


         (c)   If the Offeror deletes or modifies subparagraph (a)(2) above, the
               Offeror must furnish with its offer a signed statement setting
               forth in detail the circumstances of the disclosure,

   6.    52.203-11 - CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS TO
         INFLUENCE CERTAIN FEDERAL TRANSACTIONS (APR 1991) (DEVIATION)


INITIALS: /s/ [ILLEGIBLE] & /s/ [ILLEGIBLE]
          ---------------   ---------------
          LESSOR            GOVERNMENT

                                                GSA FORM 3518 PAGE 2 (REV 12/99)



         (Applies to leases which exceed $100,000.)

         (a)   The definitions and prohibitions contained in the clause, at FAR
               52.203-12, Limitation on Payments to Influence Certain Federal
               Transactions, are hereby incorporated by reference in paragraph
               (b) of this certification.

         (b)   The offeror, by signing its offer, hereby certifies to the best
               of his or her knowledge and belief that on or after December 23,
               1989,-

               (1)      No Federal appropriated funds have been paid or will be
                        paid to any person for influencing or attempting to
                        influence an officer or employee of any agency, a Member
                        of Congress, an officer or employee of Congress, or
                        an employee of a Member of Congress on his or her behalf
                        in connection with the awarding of a contract resulting
                        from this solicitation.

               (2)      If any funds other than Federal appropriated funds
                        (including profit or fee received under a covered
                        Federal transaction) have been paid, or will be paid, to
                        any person for influencing or attempting to influence an
                        officer or employee of any agency, a Member of Congress,
                        an officer or employee of Congress, or an employee of a
                        Member of Congress on his or her behalf in connection
                        with this solicitation, the offeror shall complete and
                        submit, with its offer, OMB standard form LLL,
                        Disclosure of Lobbying Activities, to the Contracting
                        Officer; and

               (3)      He or she will include the language of this
                        certification in all subcontract awards at any tier and
                        require that all recipients of subcontract awards in
                        excess of $100,000 shall certify and disclose
                        accordingly.

         (c)   Submission of this certification and disclosure is a prerequisite
               for making or entering into this contract imposed by section
               1352, title 31, United States Code. Any person who makes an
               expenditure prohibited under this provision or who fails to file
               or amend the disclosure form to be filed or amended by this
               provision, shall be subject to a civil penalty of not less than
               $10,000, and not more than $100,000, for each such failure.

 7.    52.209-5 -   CERTIFICATION REGARDING DEBARMENT, SUSPENSION, PROPOSED
       DEBARMENT, AND OTHER RESPONSIBILITY MATTERS {MAR 1996)

       (Applies to LEASES which EXCEED $100,000 AVERAGE net annual rental,
       including option periods.)

       (a)     (1)      The Offeror certifies, to the best of its knowledge and
                        belief, that-

                        (i)     The Offeror and/or any of its Principals-

                                   (A)  Are [ ] are not [X] presently debarred,
                                        suspended, proposed for debarment, or
                                        declared ineligible for the award of
                                        contracts by any Federal agency;

                                   (B)  Have [ ] have not [X] within a
                                        three-year period preceding this offer,
                                        been convicted of or had a civil
                                        judgment rendered against them for:
                                        commission of fraud or a criminal
                                        offense in connection with obtaining,
                                        attempting to obtain, or performing a
                                        public (Federal, State, or local)
                                        contract or subcontract; violation of
                                        Federal or State antitrust statutes
                                        relating to the submission of offers; or
                                        commission of embezzlement, theft,
                                        forgery, bribery, falsification or
                                        destruction of records, making false
                                        statements, tax evasion, or receiving
                                        stolen property; and

                                   (C)  Are [ ] are not [ ] presently indicted
                                        for, or otherwise criminally or civilly
                                        charged by a governmental entity with,
                                        commission of any of the offenses
                                        enumerated in subdivision (a)(1)(l)(B)
                                        of this provision. (See Note at end of
                                        document)

                        (ii)    The Offeror has [ ] has not [X], within a
                                three-year period preceding this offer had one
                                or more contracts terminated for default by an
                                Federal agency.


               (2)      "Principals," for the purposes of this certification,
                        means officers; directors; owners; partners; and,
                        persons having primary management or supervisory
                        responsibilities within a business entity (e.g., general
                        manager; plant manager; head of a subsidiary, division,
                        or business segment, and similar positions).

       THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF AN AGENCY
       OF THE UNITED STATES AND THE MAKING OF A FALSE, FICTITIOUS, OR FRAUDULENT
       CERTIFICATION MAY RENDER THE MAKER SUBJECT TO PROSECUTION UNDER SECTION
       1001, TITLE 18, UNITED STATES CODE.

       (b)     The Offeror shall provide immediate written notice to the
               Contracting Officer if, at any time prior to contract award, the
               Offeror learns that its certification was erroneous when
               submitted or has become erroneous by reason of changed
               circumstances.

       (c)     A certification that any of the items in paragraph (a) of this
               provision exists will not necessarily result in withholding of an
               award under this solicitation: However, the certification will be
               considered in connection with a determination of the Offeror's
               responsibility. Failure of the Offeror to furnish a certification
               or provide such additional information as requested by the
               Contracting Officer may render the Offeror nonresponsible.

       (d)     Nothing contained in the foregoing shall be construed to require
               establishment of a system of records in order to render, in good
               faith, the certification required by paragraph (a) of this
               provision. The knowledge and information of an Offeror is not
               required to exceed that which is normally possessed by a prudent
               person in the ordinary course of business dealings.

       (e)     The certification in paragraph (a) of this provision is a
               material representation of fact upon which reliance was placed
               when making award. If it is later determined that the Offeror
               knowingly rendered an erroneous certification, in addition to
               other remedies available to the Government, the Contracting
               Officer may terminate the contract resulting from this
               solicitation for default.

 8.    52.204-3 - TAXPAYER IDENTIFICATION (JUN 1997)

       (a)     Definitions.


INITIALS: /s/ [ILLEGIBLE] & /s/ [ILLEGIBLE]
          ---------------   ---------------
          LESSOR            GOVERNMENT

                                                GSA FORM 3518 PAGE 3 (REV 12/99)


               "Common parent" as used in this solicitation provision, means
               that corporate entity that owns or controls an affiliated group
               of corporations that files its Federal income tax returns on a
               consolidated basis, and of which the offeror is a member.

               "Taxpayer Identification Number (TIN)," as used in this
               solicitation provision, means the number required by the IRS to
               be used by the offeror in reporting income tax and other returns.
               The TIN maybe either a Social Security Number or an Employer
               Identification Number.

       (b)     All offerors must submit the information required in paragraphs
               (d) through (f) of this provision to comply with debt collection
               requirements of 31 U.S.C. 7701(c) and 3325(3), reporting
               requirements of 26 U.S.C. 6041, 6041A, and 6050M, and
               implementing regulations issued by the IRS. If the resulting
               contract is subject to the payment reporting requirements
               described in Federal Acquisition Regulation (FAR) 4.904, the
               failure or refusal by the offeror to furnish the information may
               result in a 31 percent reduction of payments otherwise due under
               the contract.

       (c)     The TIN may be used by the Government to collect and report on
               any delinquent amounts arising out of the offeror's relationship
               with the Government (31 U.S.C. 7701(c)(3)). If the resulting
               contract is subject to the payment reporting requirements
               described in FAR 4.904, the TIN provided hereunder may be matched
               with IRS records to verify the accuracy of the offeror's TIN.

       (d)     Taxpayer Identification Number (TIN).

               -     TIN: 13-2745892

               -     TIN has been applied for.

               -     TIN is not required because:

               -     Offeror is a nonresident alien, foreign corporation, or
                     foreign partnership that does not have income effectively
                     connected with the conduct of a trade or business in the
                     United States and does not have an office or place of
                     business or a fiscal paying agent in the United States;

               -     Offeror is an agency or instrumentality of a foreign
                     government;

               -     Offeror is an agency or instrumentality of the Federal
                     government;

       (e)     Type of organization.

               -     Sole proprietorship;

               -     Partnership; Not a corporate entity:

               -     Corporate entity (not tax-exempt);

               -     Corporate entity (tax-exempt);

               -     Government entity (Federal, State, or local);

               -     Foreign government;

               -     International organization per 26 CFR 1.6049-4;

               -     Other   _________________________.

       (f)     Common Parent.

               -     Offeror is not owned or controlled by a common parent as
                     defined in paragraph (a) of this provision.

               -     Name and TIN of common parent:

                     Name________________________________
                     TIN_________________________________

 9.      OFFEROR'S DUNS NUMBER (APR 1996)

         Enter number, if known:________________________________


OFFEROR OR           Name and Address (Including ZIP Code)     Telephone Number
AUTHORIZED
REPRESENTATIVE             500 Clinton Center Drive             (601)460-3470
                               Clinton, MS 39056.


                        /s/ [ILLEGIBLE]                              12-11-02
                        ----------------------------------      ----------------




               Note: WorldCom, Inc., the Lessor's indirect parent, is subject to
               a civil fraud complaint brought prior to the commencement of
               WorldCom, Inc and its affiliates chapter 11 case by the
               Securities and Exchange Commission currently pending in the
               United States District Court for the Southern District of New
               York (Rakoff, J.). In addition, certain former Principal(s) of
               Lessor's are presently under indictment by the United States
               Attorney's Office for the Southern District of New York for
               conspiring to violate the federal securities laws and substantial
               related offenses.



INITIALS /s/ [ILLEGIBLE] & /s/ [ILLEGIBLE]
         ---------------   ---------------
             LESSOR          GOVERNMENT

                                                GSA FORM 3518 PAGE 4 (REV 12/99)



                                                                                      
GENERAL SERVICES ADMINISTRATION                 1.   SOLICITATION FOR OFFERS                1.  STATEMENT DATE
PUBLIC BUILDINGS SERVICE                             DTSA20-03-R-00528                          11/26/02

LESSOR'S ANNUAL COST STATEMENT
IMPORTANT - Read attached "Instructions"        3A. RENTABLE         3B. ENTIRE BUILDING    3B. LEASED BY GOV'T
                                                    AREA (Sq. FT,)       (BOMA OFFICE AREA)
                                                    540,707              491,607                491,607


BUILDING NAME AND ADDRESS (No., street, city, state, and zip code) 601/701 S, 12th Street
                                                                  Arlington, VA 22202

           SECTION I - ESTIMATED ANNUAL COST OF SERVICES AND UTILITIES
               FURNISHED BY LESSOR AS PART OF RENTAL CONSIDERATION

        SERVICES AND UTILITIES                                           LESSOR'S ANNUAL COST FOR                 FOR GOVERNMENT
                                                                                                                     USE ONLY
                                                              (a) ENTIRE BUILDING         (b) GOV'T-LEASED AREA         (c)


A.   CLEANING, JANITOR AND/OR CHAR SERVICE

     5.   SALARIES                                                       $  511,566               $ 511,566
                                                                         ----------               ----------
     6.   SUPPLIES (Wax, cleansers, cloths, etc.)                        $   16,221               $  16,221
                                                                         ----------               ----------
     7.   CONTRACT SERVICES (Window washing, waste and snow removal)     $   72,478               $  72,478
                                                                         ----------               ----------

B.   HEATING

     8.   SALARIES                                                       $  336,733               $  336,733
                                                                         ----------               ----------
     9.   FUEL
          ("X" one)      OIL      GAS       COAL      X  ELECTRIC        $1,162,520               $1,162,520
                                                                         ----------               ----------
    10.   SYSTEM MAINTENANCE AND REPAIR:                                 $   81.035               $   81,035
                                                                         ----------               ----------
C.  ELECTRICAL

    11.   CURRENT FOR LIGHT AND POWER (Including elevators)
                                                                         ----------               ----------
    12.    REPLACEMENT OF BULBS, TUBES, STARTERS                         $    7,500               $    7,500
                                                                         ----------               ----------
    13.    POWER FOR SPECIAL EQUIPMENT
                                                                         ----------               ----------
    14.    SYSTEM MAINTENANCE AND REPAIR (Ballasts, fixtures, etc.)
                                                                         ----------               ----------
D.  PLUMBING
    15.    WATER (for all purposes) (Include sewage charges)             $   81,106               $   81,106
                                                                         ----------               ----------
    16.    SUPPLIES (Soap, towels, tissues not in 6 above)               $   16,221               $   16,221
                                                                         ----------               ----------
    17.    SYSTEM MAINTENANCE AND REPAIR
                                                                         ----------               ----------
    AIR CONDITIONING

    18.    UTILITIES (Include electricity, if not in C11)
                                                                         ----------               ----------
    19.    SYSTEM MAINTENANCE AND REPAIR
                                                                         ----------               ----------
F.  ELEVATORS

    20.    SALARIES (Operators, starters, etc.)
                                                                         ----------               ----------
    21.    SYSTEM MAINTENANCE AND REPAIR                                 $   59,478               $   59,478
                                                                         ----------               ----------
G.  MISCELLANEOUS (To the extent not included above)                     $  198,450               $  198.450
    22.    BUILDING ENGINEER AND/OR MANAGER

    23.    SECURITY (Watchmen, guards, not janitors)                     $   58,000               $   58,000
                                                                         ----------               ----------
    24.    SOCIAL SECURITY TAX AND WORKMEN'S COMPENSATION INSURANCE
                                                                         ----------               ----------
    25.    LAWN AND LANDSCAPING MAINTENANCE                              $    9,000               $    9,000
                                                                         ----------               ----------
    26.    OTHER (Explain on separate sheet)                             $   60,100               $   60,100
                                                                         ----------               ----------
    27.    TOTAL                                                         $2,670,408               $2,670,408
                                                                         ----------               ----------


                            SECTION II - ESTIMATED ANNUAL COST OF OWNERSHIP EXCLUSIVE OF CAPITAL CHARGES

    28.    REAL ESTATE TAXES                                             $  722,957               $  722,957
                                                                         ----------               ----------
    29.    INSURANCE (Hazard, liability, etc.)                           $  135,177               $  135,177
                                                                         ----------               ----------
    30.    BUILDING MAINTENANCE AND RESERVES FOR REPLACEMENT
                                                                         ----------               ----------
    31.    LEASE COMMISSION
                                                                         ----------               ----------
    32.    MANAGEMENT                                                    $  331,071               $  331,071
                                                                         ----------               ----------
    33.    TOTAL                                                         $1,189,205               $1,189,205
                                                                         ----------               ----------

 LESSOR'S CERTIFICATION - The amounts entered In Columns (a)             34.   SIGNATURE OF
 and (b) represent my best estimate as to the annual costs                        OWNER           LEGAL AGENT
 of services, utilities and ownership.

                           TYPED NAME AND TITLE                          SIGNATURE                            DATE

    34A.   John Dubel, Chief Financial                                  34B. /s/ [ILLEGIBLE]           34C.   12-11-07
                        Officer
    35A.                                                                35B.                           35C.

 SFO NO. DTSA 20-03-R-00528                                                                              GSA FORM 1217
 Use or disclosure of information on this page is subject to the restrictions set-forth on the cover page.





                                  INSTRUCTIONS
                                       FOR
                         LESSOR'S ANNUAL COST STATEMENT
                                  GSA FORM 1217


acquiring space by lease, it is the established policy of GSA to enter into
leases only at rental charges which are consistent with prevailing scales in
community for comparable facilities.

                                   ITEM NUMBER

1.       Enter the Government lease or Solicitation for Offers number, if
         available.

2.       Enter the date that your statement was prepared and signed.

3.   A.  Enter in this block a computation of the rentable area (multiple
         tenancy basis) for the entire building. The rentable area shall be
         computed by measurement to the inside finish of permanent outer
         building walls to the inside finish of corridor walls (actual or
         proposed) or to other permanent partitions, or both. Rentable space is
         the area for which a tenant is charged rent. It is determined by the
         building owner and may vary by city or by building within the same
         city. The rentable space may include a share of building support/common
         areas such as elevator lobbies, building corridors, and floor service
         areas. Floor service areas typically include restrooms, janitor rooms,
         telephone closets, electrical closets, and mechanical rooms. The
         rentable space generally does not include vertical building
         penetrations and their enclosing walls, such as stairs, elevator
         shafts, and vertical ducts.

     B.  Enter in this block a computation of the rentable area to be rented to
         the Government. For this area, follow the procedure as outlined above,
         except that measurements are to be made only to the center of the
         partitions which separate the area to be rented by the Government from
         adjoining rented or rentable areas.

4.       Identify the property by name and address.



                                    SECTION I
                              ESTIMATED ANNUAL COST
                           OF SERVICES AND UTILITIES

5.-26.   The services and utilities listed in this section are required in most
         of our rented space whether furnished by the Government or the Lessor.

         Carefully review the Solicitation for Offers and/or the proposed lease
         to identify those services and utilities to be furnished by you as part
         of the rental consideration. Then enter your best cost estimate, or the
         actual cost from the previous year, for each of these services and
         utilities in column (a) for the entire building and in column (b) for
         the area to be rented to the Government. If any service or utility
         furnished for the space rented by the Government is not furnished
         throughout the building, or the cost of a service or utility furnished
         to the Government space exceeds the cost of the same service or utility
         furnished to other rented space, explain on a separate sheet. For
         convenience, each major category has been divided into separate items
         such as salaries and supplies so that they may be entered when
         applicable. However, in the event that your records are not maintained
         for each item contained in Section I, 5 through 26, the total for a
         major category (A through F) may be entered under the category heading
         in columns (a) and (b) in lieu of the specific items. System
         maintenance and repairs includes the annual cost of such items as
         oiling, inspecting, cleaning, regulating, and routine replacement
         costs.

                                   SECTION II
                       ESTIMATED ANNUAL COST OF OWNERSHIP
                          EXCLUSIVE OF CAPITAL CHARGES

Items 28 through 32 will be useful in the Government's determination of the fair
market value of the space to be rented and shaft be completed irrespective of
whether Section I is applicable, as follows:

28.      Include all applicable real estate taxes imposed upon the property.

29.      Enter the annual cost of fire, liability, and other insurance carried
         on the real estate.

30.      Enter the annual cost of wages, materials, and outside services used in
         repairs and maintenance of the building itself and all similar repairs
         and maintenance costs not included in Section I above (Heating,
         Electrical, Plumbing, Air Conditioning, and Elevators). This includes
         major repairs and changes in the nature of a permanent improvement such
         as annual cost to replace relatively short-lived items such as boilers,
         compressors, elevators, and roof coverings.

31.      Enter any lease commission which you may be responsible for due to the
         Government leasing action.

32.      Include administrative expenses such as agency fees, legal fees,
         auditing, and advertising. Do not include financial charges such as
         income or corporate taxes or organization expense.

34/35.   Complete Lessor certification.






            Attachment to GSA Form 1217 - Line 26


                             
Energy Management               $       6,000
Fire & Life Safety              $      23,600
Tools                           $       3,000
Road Maintenance                $       4,000
Door & Floor Maint/Rpr          $       6,500
Pest Control                    $       4,000
Gas/Oil                         $       1,000
Misc Building Repairs           $      12,000
                                -------------
TOTAL OTHER                     $      60,100
                                =============





Use or disclosure of information on this page is subject to the restrictions
set forth on the cover page.


                                       1

                                   EXHIBIT A
                                    SECURITY

GENERAL

Each tower of the building has a perimeter access security system with card
readers and two security guards (one at each entrance) in the lobbies with CCTV
monitoring capability. Employee identifications are scanned at the security
desk. Security cameras monitor each floor elevator lobby.

The main security control room is located in the East Tower and serves both
towers. Both towers are equipped with 24-hour intrusion detection systems,
supplemented by CCTV monitoring of the building and parking entrances.

WEST TOWER   West Tower has 6 APC units located in the following telephone
closets: 11N, 7N, 4N, 3S, 2N, 1S.

         FLOORS 2-12 HAVE THE FOLLOWING SECURITY:

         -        Electric magnetic locks secure each lobby double glass door
                  and HDD Proximity readers controlled by Sensormatic Advanced
                  Processing Control units

         -        North and South stairwell doors secured by electric mortise
                  locks

         -        Each double glass door is monitored by a CCTV camera

         -        Video is captured by Panasonic time lapse VCR and 16 camera
                  MUX processor housed in telephone closet on 1st floor, south
                  side.

         LOBBY & 1ST FLOOR;


         -        Center stairwell access to 1st floor-electric strike and
                  proximity reader

         -        Handicap access door-electric magnetic lock and proximity
                  reader

         -        IN/OUT readers at each desk, front and rear

         -        Rear lobby doors are secured by electric magnetic locks o
                  Front and rear lobbies are covered by 1 camera each

         -        Handicap entrance is covered from the outside via 1 CCTV
                  camera

EAST TOWER:  East Tower has 9 APC units located in the following telephone
             closets 11S, 1OS, 9S, 7S, 5N, 3S, 2S, 145N, 1N Computer Room.

         FLOORS 2, 7, & 12 HAVE THE FOLLOWING SECURITY:


Lessor /s/ [ILLEGIBLE]  GOV'T /s/ [ILLEGIBLE]
       ---------------        ---------------

                              Exhibit A - Security
                                   Page 1 of 3



         -        Delayed egress electric magnetic locks securing each lobby
                  double glass door and HDD Proximity readers

         -        Center stairwell entrances secured by electric strike locks
                  and proximity readers

         -        North and South stairwell doors secured by electric mortise
                  locks

         -        Each double glass door is monitored by a CCTV camera

         FLOORS 6N & 5N:

         -        Two entrances secured with electric strikes and proximity
                  readers

         FLOOR 4N

         -        Main entrance and two entrances to 4N computer room secured
                  with electric strikes and proximity readers

          FLOOR 4S:

         -        Main entrance, secured with magnetic lock and proximity reader

         -        South stairwell entrance, electric strike and swipe card
                  reader

         1ST FLOOR AND LOBBY AREA:

         -        Center stairwell access to 1st floor, electric strike and
                  proximity reader, handicap access door-electric magnetic lock
                  and proximity reader

         -        IN/OUT readers at each desk, front and rear

         -        Rear lobby doors are secured by electric magnetic locks

         -        Front and rear lobbies are covered by 3 cameras, and the
                  handicap entrance is covered from the outside via 1 CCTV
                  camera

         -        1N computer room, 3 entrances, electric strike locks and
                  proximity readers. Two entrances and main area in room covered
                  by CCTV cameras

         -        1S computer room, electric strike and proximity reader

         CONTROL ROOM:

         -        Access control system, Computer using Ccure 800 software
                  integrated with Sensormatic Advanced Processing Control Units.
                  Model 30 on a Dell server

         -        Three time lapse Panasonic VCR's and three 16 camera MUX
                  processing units.

PARKING LEVELS:

         -        CCTV cameras in PI & PII elevator lobbies, 3 cameras covering
                  loading dock and shipping/receiving area.

         -        Parking levels covered by 13 cameras.


Lessor /s/ [ILLEGIBLE]  GOV'T /s/ [ILLEGIBLE]
       ---------------        ---------------

                              Exhibit A - Security
                                   Page 2 of 3






GARAGE:

         -        The garage has 2 entrances. Main controls are in the booths at
                  each entrance. They are key controlled Open/Closed and On/Off
                  switches. Entrance gates and arms are tied into security
                  system and can be opened via card reader located at each
                  entrance.

         -        Exit gates open automatically on vehicle approach via sensor
                  pads installed at each exit.

         -        There is a separate garage shuttle elevator serving each tower
                  accessing the lobby. The loading dock and service corridor are
                  equipped with security cameras. Additional security cameras
                  are mounted at the roof parapet.


Lessor /s/ [ILLEGIBLE]  GOV'T /s/ [ILLEGIBLE]
       ---------------        ---------------

                              Exhibit A - Security
                                   Page 3 of 3



                                   EXHIBIT B

EAST AND WEST FURNITURE INVENTORY




                                   Cubicles                                              Office/Conf
                 ------------------------------------------------   ------------------------------------------------------
                                                                                              Small   Med    Large
                                                                                            
West Tower
Floor 1            0      0      0      0       0       0      0        2         0      3       0     0        0        5
Floor 2            0      0      6     52       0       0     58       16        16     16       6     2        1       57
Floor 3            0      0      7    101       0       0    108       18        18     18       5     2        1       62
Floor 4            0      0      7    106       2       0    115        5         5      5       6     2        1       24
Floor 5            0      0      4     95       0       5    104        3         3      3       6     2        1       18
Floor 6            0      0      0     44       7       3     54        9         9      9       1     1        1       30
Floor 7            0      0      0     78       6       5     89        8         8      8       6     2        1       33
Floor 8            0      0      0     54       5       0     59       28        28     28       5     2        1       92
Floor 9            0      0      3     91       1       0     95        6         6      6       5     2        1       26
Floor 10           0      0      7    102       1       0    110        6         6      6       6     2        1       27
Floor 11           0      0      6    102       4       0    112       10        10     10       5     2        1       38
Floor 12           0      0     15     31       1       0     47       14        14     14       4     2        1       49
                  ---    ---   ----   ---      ---     ---   ---      ---       ---    ---      --    --       --      ---
Total West         0      0     55    856      27      13    951      125       123    126      55    21       11      461
                  ====   ===   ====   ===      ===     ===   ===      ===       ===    ===      ===   ==       ==      ===
East Tower
Floor 1            4      0      0     14       1       0     19        3         3      4       1     0        0       11
Floor 2            0     12     96      0      12       2    122        1         1      1       7     0        0       10
Floor 3            0    231      0      0       0       0    231        2         2      2       7     1        0       14
Floor 4            0    106      0      0       0       0    106        0         0     18       3     0        0        4
Floor 5            0      0     40     17       0       0     57       35        35     36       0     0        3      109
Floor 6            0      0     97      0       0       0     97       62        62     63       5     1        2      195
Floor 7            0      0    127      0      16       6    149        1         1      1      16     0        0       19
Floor 8            0      0      6    108       8       5    125        1         1      1      19     0        0       22
Floor 9            0      0     11     94      15       5    125        3         3      3       8     2        1       20
Floor 10           0      0     77     14      17       8    116        2         2      2       2     2        1       11
Floor 11           0      0    157      0      11       1    169        1         1      1       3     2        1        9
Floor 12           0      0      0     54      18       9     81        9         9      9       0     3        1       31
Total East         4    349    611    301      98      34  1,397      120       120    124      71    11        9      455
                  ====   ===   ====   ===      ===     ===   ===      ===       ===    ===      ===   ==       ==      ===
East West Total    4    349    666  1,157     125      47  2,348      245       243    250     126    32       20      916
                  ====   ===   ====   ===      ===     ===   ===      ===       ===    ===      ===   ==       ==      ===



                                    Seating                                                    Other
                --------------------------------------------------------  -------------------------------------------------
                                                                          5-Drawer
                                                                           Lat       Computer    Coffee/End     Cafeteria
                Cubicle  Conference  Office   Side Reception Sofa  Total   Files       Table        Table         Tables
West Tower
Floor 1              0         0        7        0     5      0      12         0          0           2           10
Floor 2             58        24       16       84     1      0     183        12          0           0            0
Floor 3            108        24        S      110     2      0     249        17          0           1            0
Floor 4            115        24        3      116     0      0     258        24          0           0            0
Floor 5            104        24        9      124     0      0     261        46          0           0            0
Floor 6             54        19        1      106     0      0     180        28          0           0            0
Floor 7             89        24        8      116     0      0     237         0          0           0            0
Floor 8             59        24       28      124     0      0     235        13          0           0            0
Floor 9             95        24        6      149     0      0     274        14          0           0            0
Floor 10           110        24        6      126     0      0     266        47          0           0            0
Floor 11           112        24       10      130     0      0     276        27          0           0            0
Floor 12            47        24       14       61     0      0     146        49          0           0            0
                   ---      ---       ----     ---    ---    ---    ---        --         ---         --          ---
Total West         951       259      113    1,246     8      0   2,577       277          0           3           10
                   ===      ====      ===    =====    ===   ===     ===       ===         ===         ===         ===
East Tower
Floor 1             19         0        3        6     0      1      29        14          0           2            0
Floor 2            122        26        1       30     0      0     179         0          0           0            0
Floor 3            353        16        2        0     4      0     375         0          0           0            5
Floor 4            109         0        0        0     0      0     109        22          0           0            7
Floor 5             57        36       35       87     2      0     217        37          5           0            0
Floor 6             97        40       62      116     0      0     315        81          5           0            0
Floor 7            149        48        1       46     6      0     250        46          0           3            0
Floor 8            125        54        7      132     0      0     318        36          0           0            0
Floor 9            125        19      3        140     0      0     287       126          0           0            0
Floor 10           116         6      2         66     0      0     190        40          0           0            0
Floor 11           169         9      1         26     0      0     205        63          0           0            0
Floor 12            81        10      9        126     0      0     226        70          0           0            0
Total East       1,522         264  126        775    12      1   2,700       535         10           5           12
                 =====        ====  ===      =====   ===     ===  =====       ===         ==         ===          ===
East West Total  2,473         523  239      2,021    20      1   5,277       812         10           8           22
                 =====        ====  ===      =====   ===     ===  =====       ===         ==         ===          ===



                                Other
                   ----------------------------------
                    Cafeteria Conf Rm
                      Chairs  Credenza    Total
                                 
West Tower
Floor 1                50         0        62
Floor 2                 0         1        13
Floor 3                 0         1        19
Floor 4                 0         1        25
Floor 5                 0         1        47
Floor 6                 0         1        29
Floor 7                 0         1         1
Floor 8                 0         1        14
Floor 9                 0         1        15
Floor 10                0         1        48
Floor 11                0         1        28
Floor 12                0         1        50
                       --        --       ---
Total West             50        11       351
                       ==        ==       ===
East Tower
Floor 1                 0         0        16
Floor 2                 0         1         1
Floor 3                38         0        43
Floor 4                22         0        51
Floor 5                 0         2        44
Floor 6                 0         2        88
Floor 7                 0         0        49
Floor 8                 0         0        36
Floor 9                 2         1       129
Floor 10                2         1        43
Floor 11                2         1        66
Floor 12                3         1        74
Total East             69         9       640
                      ===        ==       ===
East West Total       119        20       991
                      ===        ==       ===




                                    EXHIBIT B



            iii) QUANTITY, QUALITY AND SUITABILITY OF FURNITURE, IF ANY.

                  Both the East and West Towers are furnished with a combination
                  of workstations, office and conference room furniture
                  including chairs and files.

                  The West Tower furniture is in good to excellent condition.
                  There is furniture for approximately 951 workstations, 90% of
                  which are 8' x 8', and 10% 6' x 8' and 8' x 10', and 115
                  private offices. The breakdown is 89% open workstations and
                  11% private office furniture. The 3rd and 12th floor systems
                  furniture is Knoll Morrison and the office furniture is Knoll
                  Reff wood product. The executive offices on the 12th floor
                  will not be furnished. The remaining floors have Kimball Cetra
                  wood workstations and office furniture. Knoll and Kimball are
                  leading manufacturers in the commercial office industry. The
                  Knoll Morrison and Reff and Kimball Cetra are the top of the
                  line products for each manufacturer.

                  The Knoll Morrison workstations have neutral fabric panels and
                  warm gray metal files and trim pieces and plastic laminate
                  work surfaces. The workstation configuration is typically a
                  u-shape work surface with overhead shelving and a personal
                  storage tower, which includes filing and coat storage. The
                  workstations are ergonomically designed with corner work
                  surfaces and above work surface power and data outlets. The
                  majority of panel heights are 54" H.

                  The Knoll Reff office furniture is modular in design with a
                  medium wood stain finish. The desk configuration is u-shape
                  with a "P-top" front work surface for easy conferencing. There
                  are overhead storage units and tack board above the work
                  surface.

                  The Kimball Cetra workstations are a wood furniture system
                  with neutral fabric panels, plastic laminate file/storage
                  units and work surfaces. The panels are detailed with medium
                  finish wood trim pieces. The workstations are ergonomically
                  designed with corner work surface and above work surface power
                  and data outlets. The majority of panel heights are 54" H.

                  The Kimball office furniture is also modular in design with a
                  light neutral plastic laminate u-shaped work surface and
                  files. All storage cabinets and files are lockable.

                  In the East Tower, the workstation and office furniture on the
                  renovated floors (2nd, 7, 8, 9, 10, 11, 12} is Kimball Cetra.
                  This furniture is in good to excellent condition. On these
                  floors, there is furniture for approximately 887 workstations
                  (53% are 6'x 8'; 30% are 8'x 8'; 17% are 6'x 6'and 8'x 14')
                  and 18 offices.

                  The workstation and office furniture is the Kimball Cetra
                  similar to the West Tower. The remaining floors have a
                  combination of older Herman Miller AO2 and Steelcase.


Use or disclosure of information on this page is subject to the restrictions
set-forth on the cover page.








SFO DTSA20-03-R-00528                                              ATTACHMENT #1

                                 RATE STRUCTURE

Building: 601/701 S. 12th Street                            Term: 10 years firm
          ----------------------                                 ---------------






           ANSI/BOMA OFFICE AREA SQUARE FEET OFFERED:                              ALL OFFERED SPACE


                                                                             
1.   Base Rate:
                                                                                        $ 25.33
     The INITIAL firm term base rate per ANSI/BOMA Officer Area square foot
     (BOSF) for the Building Shell (excluding the cost of services and utilities
     in line item #2 below).

     THE BASE RATE SHALL BE FLAT OVER THE FIRM TERM.

2.   The BASE YEAR operating costs per BOSF.  This equals
     the 27b of the GSA Form 1217 divided by the BOSF offered.                          $  5.42
                                                                                        -------

3.   Tenant Improvements:

     (a)      The annual cost to amortize the Tenant Improvements
              allowance, such allowance being $40.00 per BOSF                           $  4.00
              for evaluation.  Such amortization is to be
              compounded monthly over the term of the lease.

     (b)      The annual percentage interest rate, compounded                                 0%
              monthly, to be used by the Lessor to amortize the
              cost of the Tenant Improvements UP TO $40.00 per
              BOSF over the term of the lease.

     (c)      The annual percentage interest rate, compounded                                11%
              monthly, to be used by the Lessor to amortize the
              cost of the Tenant Improvements above $40.00 per
              BOSF over the term of the lease up to $60.00 per
              BOSF.

4.   The fully serviced lease rate per BOSF for the term                                $ 34.75* (ASSUMES THE
     evaluated on a $40.00 per BOSF Tenant Improvement                                  GOVERNMENT LEASES ENTIRE
     allowance. This equals the sum of lines 1, 2, and 3(a)                             PARKING GARAGE)
     above.
                                                                                        * SEE ADDENDUM FOR PHASE I RENT.

5.   The number of months of free rent being months without
     any payment of base rent, operating expenses, or a $40.00                          0    mos.
     per BOSF Tenant Improvement Allowance.

6.   The lump sum cost per annum for"

     (a)      Each reserved parking contract in the building's garage                   $ 0
              or surface parking lot.
                                                                                        $ 0
     (b)      Each non-reserved parking contract in the buildings
              garage or surface parking lot.                                            $ 1,230,060**
                                                                                        -------------

     (c)      Annualized cost to lease the entire parking garage for
              security purposes.
                                                                                        * PARKING RATES WILL ESCALATE 3% ANNUALLY.




                                  Page 1 of 1

Use or disclosure of information on this page is subject to the restrictions set
forth on the cover page.




                                SFO ATTACHMENT #2
                    FIRE PROTECTION & LIFE SAFETY EVALUATION

The results of this survey shall be based on an actual walk-through of the
subject premises and review of available construction documents. All building
systems associated with fire protection and/or life safety shall be evaluated
for conformance to the following codes, standards and/or criteria. Any deviance
from the applicable criteria shall be identified and supported by corrective
recommendation(s).

FUNDAMENTAL CODE REQUIREMENTS ARE AS FOLLOWS:

- -        The offered building shall be evaluated for compliance with the most
         recent edition of The Building Officials & Code Administrators (BOCA)
         National Building Code; with the exception that chapter 10 of BOCA
         shall be replaced by the entire contents of the most recent edition of
         NFPA 101, Life Safety Code. All areas which do not meet the most recent
         editions of these criteria shall be identified as to the extent which
         they do comply.

AUTOMATIC SPRINKLER REQUIREMENTS ARE AS FOLLOWS:

- -        Where at least 35,000 square feet, any portion of which is on or above
         the 6th floor, is offered to the government for lease, the entire
         building must be provided with automatic sprinkler protection or an
         equivalent level of safety.

- -        All floors on which the Government occupies below grade space,
         regardless of the amount, must be sprinklered (including garage areas
         offered for lease by the Government).

- -        All hazardous areas, as defined by NFPA 101, Life Safety Code, shall be
         protected throughout by automatic sprinklers.

- -        Where acceptable to the local authority having jurisdiction, chained
         and locked sprinkler control valves are an acceptable alternative to
         electronic supervision.

- -        All buildings utilizing Central Sprinkler Company's Omega line of
         sprinkler heads shall be identified; including: model, location(s), #
         of heads, approximate age, etc.

EGRESS REQUIREMENTS ARE AS FOLLOWS:

- -        Scissor stairs are considered to be a single stair by GSA criteria.

- -        Exits must be remotely located by 1/2 of the maximum diagonal dimension
         of the building floor, or space; for non-sprinklered buildings. For
         completely sprinklered buildings in Maryland, the exits are required to
         be remotely located by 1/3 the maximum diagonal dimension (per NFPA
         101). For completely sprinklered buildings in Washington, DC and
         Virginia, the exits are required to be remotely located by 1/4 the
         maximum diagonal dimension (per BOCA).

ALL OF THE FOLLOWING ITEMS MUST BE PROVIDED WITH THE BUILDING FIRE PROTECTION &
LIFE SAFETY EVALUATION BEFORE BEING ACCEPTABLE FOR REVIEW BY THE GSA FIRE
PROTECTION ENGINEERING OFFICE:

- -        Completed SFO Attachment #4 with supplemental building information.

- -        Findings, recommended corrective action and section-specific code
         and/or criteria references. Reports for buildings in which no
         deficiencies are identified shall state such in an explicit statement
         located in the "findings & recommendations" portion of the report.
         (Specific GSA criteria, noted above, does not require listing of a
         section.)

- -        "Statement of Fire Protection Engineer", with an affixed Professional
         Engineering stamp or seal, signed and dated by the fire protection
         engineer who conducted the survey and completed the report.

- -        "Offeror Statement of Correction" signed and dated by the offerer or
         designated representative.

- -        Initial of fire protection engineer and offerer, or designated
         representative on each page of the completed SFO attachment #4 and its
         supplemental information.

This form (in Microsoft Word 6.0 format) can be obtained by bringing a 3-1/2"
pre-formatted (IBM) diskette to:


GENERAL SERVICES ADMINISTRATION
SAFETY AND ENVIRONMENT BRANCH (WPMOX)
NATIONAL CAPITAL REGION, ROOM 2080
7TH & D STREETS, SW
WASHINGTON, DC 20407





                                SFO ATTACHMENT #2
                    FIRE PROTECTION & LIFE SAFETY EVALUATION

The offerer represents and agrees, as part of its offer, that the proposed
space/building is as described below and contains the identified features and
devices. THIS EVALUATION WILL BE MADE BY BOTH THE OFFEROR AND A REGISTERED FIRE
PROTECTION ENGINEER. THE FIRE PROTECTION ENGINEER'S OFFICIAL STAMP (PROFESSIONAL
LICENSE) MUST BE PLACED ON THE EVALUATION. Should this form not provide
sufficient space to respond adequately to any question, additional pages should
be attached.



 BUILDING NAME:               Worldcom PCY 2

 BUILDING ADDRESS:            601 South 12th Street, Arlington, VA 22202

 HEIGHT and # of STORIES:     -157 feet, 12 stories

 (Model Building Code)

                                                                                                                      
PLEASE ANSWER "YES" OR "NO" TO THE FOLLOWING QUESTIONS:                                                    YES               NO

The building electrical system appears to comply with the National Electrical                               X
Code in that there are no obvious deficiencies (e.g. temporary wiring, use of
extension cords, deteriorated equipment, missing equipment, etc.). If potential
problems are noted, describe on an attached sheet.

THE FOLLOWING ITEMS ARE LOCATED IN THE SUBJECT BUILDING:

Laboratories                                                                                                                 X
Firing Ranges                                                                                                                X
Parking Garages (unsprinklered)                                                                                              X
Print Shops (unsprinklered)                                                                                                  X

BUILDING EXITS HAVE THE FOLLOWING FEATURES:

There are at least two exits from each floor (scissor stairs count as only
one exit).                                                                                                  X

Exits are remote in accordance with the requirements of NFPA 101.                                           X

Travel distance to exits are in accordance with the requirements of NFPA 101.                               X

All exits discharge in accordance with the latest version of NFPA 101 or BOCA, National                     X
Building Code.

Exit access is at least 44 inches wide.                                                                     X

Dead ends and common paths of travel are in accordance with the latest version
of NFPA 101.                                                                                                X

A FIRE ALARM IS REQUIRED FOR THIS OCCUPANCY TYPE BY NFPA 101 OR BOCA.

A fire alarm system is provided in accordance with NFPA 72.                                                 X

Manual evacuation alarm sounds in building.                                                                 X

Alarm is transmitted to a listed central station or local fire department.                                  X

Battery back-up power is provided for the fire alarm system in accordance
with NFPA 72.                                                                                               X






                                                                                                                      
PLEASE ANSWER "YES" OR "NO" TO THE FOLLOWING QUESTIONS:                                                    YES               NO

THE BUILDING HAS THE FOLLOWING FIRE SUPPRESSION FEATURES:

The building is fully sprinklered. Note: If the answer to this question is "no"                             X
please identify areas of partial sprinkler protection, if any, on an attached
sheet. Note specifically if hazardous areas are sprinklered or not and whether
below grade space that is occupied is sprinklered or not.

Automatic sprinkler protection is provided throughout the occupied levels for                               X
space offered below grade.

Central Sprinkler Company's Omega line of sprinklers are installed in the                                   X
building (describe location(s), model(s), no. of sprinklers, date installed,
etc. on additional sheet).

A standpipe system is required for this occupancy type by the Model
Building Code.                                                                                              X

A standpipe system is provided in the building in accordance with the Model
Building Code.                                                                                              X

Portable fire extinguishers are present in adequate size, spacing and location;
and have a current inspection certificate and maintenance contract in
accordance with NFPA 10.                                                                                                     X

EXIT HARDWARE AND DOORS HAVE THE FOLLOWING FEATURES:

Exit doors swing in the direction of exit travel; where required by code.                                   X

All fire doors are self-closing or automatic-closing; and self-latching.                                    X

All fire doors are in proper working order.                                                                 X

Exit doors require one action to open (e.g. no locks, locked during unoccupied
periods only).                                                                                              X
Note: Special locking arrangements may be permitted if allowed under local
jurisdiction.

EXIT AND EMERGENCY LIGHTING SYSTEMS HAVE THE FOLLOWING FEATURES:

Illuminated exit signs are provided in accordance with NFPA 101.                                            X

Emergency lighting is provided along exit paths in accordance with NFPA 101.                                X

Emergency power is provided for emergency lights and exit signs.                                            X

INTERIOR FINISHES HAVE THE FOLLOWING CHARACTERISTICS:

Interior finish for ceilings, walls, and floors, are installed without obvious                              X
deficiencies (e.g. no cork board, no carpet on walls, no cellular plastic
finishes, etc.). If potential problems are noted, describe on an attached
sheet.

ELEVATORS HAVE THE FOLLOWING FEATURES:

Elevators have a current certificate of elevator inspection from the local
jurisdiction.                                                                                               X

Elevators are equipped with telephones or other two-way emergency signaling                                 X
systems connected to an emergency communication location manned during normal
working hours when the elevators are in service.

Elevators are automatically recalled by smoke detectors located in elevator
lobbies and machine rooms.                                                                                  X

Elevator recalls to an alternate level when activated by primary level smoke
detector.

Firemen's capture feature is provided.                                                                      X

FOR SPACE OFFERED ON OR ABOVE THE 6TH FLOOR (GREATER THAN 75' ABOVE THE LOWEST LEVEL OF FIRE DEPARTMENT VEHICLE ACCESS):

Automatic sprinkler protection is provided for all floors of the building where
the government leases 35,000 square feet or more, in the building, in total.
See the cover page.                                                                                         X





                          GENERAL BUILDING INFORMATION

ON AN ATTACHED SHEET, PLEASE RESPOND TO EACH OF THE FOLLOWING BUILDING FEATURES;
AS THEY APPLY TO THE OFFERED BUILDING. IDENTIFY EACH RESPONSE BY A NUMBER
CORRESPONDING TO THE ITEMS BELOW. RESPOND "N/A" FOR ITEMS WHICH ARE NOT
APPLICABLE. RESPOND "NONE" FOR ITEMS WHICH DO NOT EXIST IN THE BUILDING.


1)   # Stories above grade:

2)   # Stories below grade:

3)   Floors offered to government:

4)   Height of highest offered floor above lowest level of fire department
     vehicle access (in feet):

5)   Types of occupancies on each floor. Indicate all of other than business
     occupancy.

6)   Approximate gross area of typical floor (identify atypical floors
     individually):

7)   Describe construction type (fire resistive, unprotected non-combustible,
     ordinary, wood frame, heavy timber) & NFPA 220 classification for floors,
     walls, columns, and roof.

8)   Describe fire-rated subdivision of building floors (including stairs,
     tenant separation, mechanical rooms, etc.)

9)   Describe any smoke detectors with attention to the following:

     a)   locations.

     b)   appropriate type?

     c)   control equipment location.

     d)   control equipment manufacturer.

     e)   connection to building fire alarm system.

10)  Describe any heat detectors with attention to the following:

     a)   locations.

     b)   appropriate type?

     c)   control equipment location.

     d)   control equipment manufacturer.

     e)   connection to building fire alarm.

11)  Describe any other fire detectors with attention to the following:

     a)   locations.

     b)   appropriate type?

     c)   control equipment location.

     d)   control equipment manufacturer.

     e)   connection to building fire alarm system.

12)  Describe emergency lighting:

     a)   type.

     b)   location.

     c)   secondary source(s) of power.

13)  Describe exit signs:

     a)   type.

     b)   location.

     c)   secondary source(s) of power.

14)  Describe emergency generator:

     a)   power source(s).

     b)   capacity.

     c)   location.

     d)   connected building systems.

15)  Describe the fire suppression system(s) with attention to the following:

     a)   sprinkler-location(s).

     b)   waterflow alarm(s)-type and location.

     c)   control valves-type and typical location.

     d)   valve tamper switches-type and adequacy.

     e)   standpipe-riser size, location and number.

     f)   location(s) and manufacturer/model of fixed CO(2), dry chemical,
          and/or clean-agent fire suppression systems.

     g)   water supply-type, size, arrangement, etc.

     h)   supply static pressure (psi),

     i)   fire pump data:

          i.     UL listed for fire pump service?

          ii.    separate controller for jockey pump?

          iii.   NFPA 20 compliant?

          iv.    rated capacity (gpm).

          v.     rated net pressure (psi).

          vi.    primary power supply.

          vii.   secondary power supply.

          viii.  manufacturer

     j)   compliance to testing & maintenance required by NFPA 25.

16)  Describe the communications system with attention to the following:

     a)   type of fire alarm system:

          i.   hardwired, multiplex, analog, etc.

          ii.  location.

          iii. manufacturer/model.

          iv.  operating voltage.

     b)   central station (company name).

     c)   emergency telephone system.

     d)   secondary power source.

     e)   control panel information.

     f)   manual station locations.

     g)   type of alarm indicating appliances (visual and/or audible) and
          locations.

     h)   notification system (entire building, floor above & below, etc.).

     i)   type of devices that sound evacuation alarm (list all types).

     j)   system interfaces with? (elevators, smoke control, electric door
          locks, HVAC, etc.).

     k)   compliance to testing & maintenance required by NFPA 72.





17)  Describe the building's means of egress (NFPA 101):

     a)   number of exits per floor.

     b)   points of discharge for each exit.

     c)   capacity of each exit.

     d)   occupant load per floor.

     e)   remoteness of exits:

          i.   maximum diagonal dimension of typical floor (identify for others
               if different than that of typical floors).

          ii.  exit door separation.

          iii. how is distance measured (straight line or along rated exit
               access corridor).

     f)   exit access-width, fire resistance rating, arrangement.

     g)   exit stair enclosure.

     h)   exit discharge protection.

     i)   exit dimensions - width, tread, riser.

     j)   handrails (presence, stability, height above tread, graspability,
          etc.).

     k)   dead ends.

     l)   common paths of travel.

     m)   vertical openings (open stairs, atriums, escalators, etc.).

     n)   penetrations of exit enclosures not related to the function of the
          exit.

     o)   exit stairway pressurization, if any.

     p)




                   STATEMENT OF FIRE PROTECTION ENGINEER (FPE)

I hereby attest that I have performed a full inspection of the subject premises;
and that the above information is complete and accurate to the best of my
knowledge. I have initialed at the bottom of each page in the space marked
"FPE". My official stamp, professional license information, and signature are
affixed below.

I HAVE INCLUDED FINDINGS, RECOMMENDED CORRECTIVE ACTION, AND MADE SPECIFIC
REFERENCES TO THE APPLICABLE CODE SECTIONS AS AN ATTACHMENT TO THIS REPORT. SUCH
FINDINGS SPECIFICALLY IDENTIFY INSTANCES WHERE THE BUILDING DOES NOT COMPLY WITH
THE SPECIFIED CRITERIA, AND RECOMMENDATIONS HAVE BEEN MADE IN ORDER TO RECTIFY
THE SITUATION AND ASSURE SUBSTANTIAL COMPLIANCE OF THE BUILDING TO ALL
APPLICABLE CRITERIA.

(IF NO DEFICIENCIES WERE IDENTIFIED, DURING THE SURVEY, PLEASE EXPLICITLY STATE
SO IN THE FINDINGS AND RECOMMENDATIONS PORTION OF THE REPORT]

Signature:  /s/ Francis A. Hauf                      Date: 10/28/02
          ------------------------------------------      ---------------------

Printed Name: Francis A. Hauf, P.E.
              --------------------------------------

Name of Firm: Hauf Consulting & Construction         Phone #: (410) 686-7950
              --------------------------------------          ----------------
                Management, LLC
              --------------------------------------

License Number:   #036252
- -------------------------

Stamp Here:             [COMMONWEALTH OF VIRGINIA PROFESSIONAL ENGINEER
                         SEAL OF FRANCIS ANDREW HAUF No. 036252]


                       OFFEROR'S STATEMENT OF CORRECTION

In the event any of the offered space does not meet the above criteria, the
offeror shall attach a sheet describing the exact nature of the deficiency, and
the offeror shall attest below that all work required to bring the offered space
into full compliance with all applicable criteria will be completed at the
offeror's sole cost and expense prior to the Government's acceptance of the
offered space under the terms of any prospective lease agreement.

NOTE: SURVEYS SUBMITTED WITHOUT THE FPE'S FINDINGS, RECOMMENDED CORRECTIVE
ACTIONS AND CODE REFERENCES WILL BE RETURNED WITHOUT REVIEW BY THE GSA FIRE
PROTECTION ENGINEERING OFFICE.

Signature: /s/ John S. Dubel                         Date: 12/11/02
          ------------------------------------------      ---------------------

Printed Name: John S. Dubel
             ---------------------------------------
Title:  Chief Financial Officer
      ----------------------------------------------

Name of Firm:  MCI WorldCom Network Services, Inc.
             ---------------------------------------





                          GENERAL BUILDING INFORMATION


                                                           
 1) # Stories above grade                                      13

 2) # Stories below grade                                      2

 3) Floors offered to the government                           ALL

 4) Height of highest offered floor above lowest level of      80.5 feet
    fire department vehicle access (in feet):

 5) Types of occupancies on each floor. Indicate all of        Storage S-2, Parking Levels
    other than business occupancy.

 6) Approximate gross area of typical floor (identify          P1 & P2=103,650 ft(2) total, 1 thru 12 = 48,600 ft(2),
    atypical floors individually):                             Penthouse 4,960 ft(2), Elevator Machine Room = 952 ft(2)

 7) Describe construction type (fire resistive,                Type 2A (Modified from Type 1B)
    unprotected non-combustible, ordinary, wood frame,         per BOCA table 403.3.3.1
    heavy timber) & NFPA 220 classifications for floors,       Construction Type II (222) per NFPA 220
    walls, columns and roof.                                   Reinforced concrete floors

 8) Describe fire-rated subdivision of building floors         Stairs are 2 hour rated walls with 1-1/2 hour rated doors.
    (including stairs, tenant separation, mechanical room,     No tenant separations are provided. Tenant separations are
    etc.)                                                      required by code to be 1 hour rated with 20 min. doors or
                                                               equal. Mechanical rooms are separated with 1 hour
                                                               construction.
 9) Smoke detectors

    a)   Locations                                             Lobby, Freight Elevator Lobby, Mechanical Rooms,
                                                               Telephone Rooms, Control Rooms, LAN Communication
                                                               Rooms, Elevator Machine Room, with plenum smoke
                                                               detectors in return duct work.

    b)   Type                                                  New addressable ion

    c)   Control Equipment Location                            Main fire alarm control panel

    d)   Control Equipment Manufacturer                        Edwards (new), Gamewell (existing)

    e)   Connection to building fire alarm system              This is the building fire alarm system

10) Heat detectors

    a)   Locations                                             Generator rooms and old electric closets that have not
                                                               been renovated.

    b)   Type                                                  Fixed temperature

    c)   Control Equipment Location                            Main fire alarm control panel

    d)   Control Equipment Manufacturer                        Edwards (new), Gamewell (existing)

    e)   Connection to building's fire alarm system            This is the building fire alarm system

11) Other fire detectors:                                      None

12) Describe emergency lighting:

    a)   Type                                                  Battery backup in stairs and bathrooms. Every 3rd or 4th
                                                               light on a separate circuit.

    b)   Location                                              Stairwells, Bathrooms, throughout floors

    c)   secondary source(s) of power                          Generator backup

13) Describe exit signs:

    a)   Type                                                  Standard internal back-lit consisting of red lettering,
                                                               properly sized, LED





                                                           
    b)   Location                                              Stairwells, elevator lobby, interior corridors of each wing

    c)   Secondary sources of power                            Emergency backup generator

14) Describe emergency generator:

    a)   Power sources                                         2 Diesel engines

    b)   Capacity                                              Both 1000 KW

    c)   Location                                              One on P1 level loading dock, second on north end P2 level
                                                               under loading dock

    d)   Connected building systems                            P1 level generator covers life safety and a few computer
                                                               rooms. P2 level generator covers computer rooms.

15) Describe the fire suppression system with attention to the following:

    a)   Sprinkler locations                                   Incoming water supply from Hayes St. (south side) P1
                                                               level called P2 pump room. The building is entirely sprinklered.
                                                               Areas subject to freezing (garage) are protected by
                                                               separate dry pipe sprinkler systems (4 zones 4" sized).

                                                               All other portions of the building are protected by a wet
                                                               pipe sprinkler system.

    b)   Waterflow alarm - type and location                   Waterflow alarms consist of:
                                                               pressure type devices on each of the dry pipe risers located
                                                               in the fire pump room.

                                                               Paddle type devices on each floor zone fed by the wet system -
                                                               located in stairs 2 and 3.

                                                               Stair 1 on the elevator machine room level above 12th

    c)   Control valves - type and typical location            Control valves in the fire pump room are O.S.&Y., except
                                                               for the jockey pump valves. The fire pump valves include: 1 on the
                                                               city supply and 2 on the fire pump piping. 1 on test header, 2 on
                                                               the jockey pump piping, 1 on each of the 4 dry pipe risers.
                                                               Additional control valves are provided for floor zones. All floor
                                                               zone assemblies are provided in stair 2 and 3, except for the
                                                               elevator machine room level above the 12th floor, which is served
                                                               by stair 1.

    d)   Valve tamper switches-type & adequacy                 Adequate valve tamper switches are provided on all control valves.
                                                               O.S.& Y. have external tamper switch and butterfly valves have
                                                               internal switches.


    e)   Standpipe riser size, location and number.            Stair 1 has a 4" riser. Stairs 2 & 3 have 4" combined standpipe
                                                               risers.

    f)   Locations and manufacturers of fixed CO(2) dry        None
         chemical and/or clean-agent fire suppression
         systems.

    g)   Water supply type, size and arrangement               The water is supplied from the local water authorities system. An 8
                                                               inch incoming to 6 inch line in pump room.

    h)   Supply static pressure                                85 psi


    i)   Fire pump data

         i.     UL Listed                                      Yes

         ii.    Separate controller for jockey pump            Yes

         iii.   NFPA 20 compliant                              Yes

         iv.    Rated Capacity (gpm)                           1000

         v.     Rated net pressure (psi)                       100

         vi.    Primary power supply                           Diesel

         vii.   Secondary power supply

         viii.  Manufacturer                                   Patterson Pump

    j)   Compliance to testing & maintenance required by       Yes
         NFPA 25






                                                            
16) Describe the communications system with attention to the following:

    a)   Type of fire alarm system

         i.   hardwired, multiplex, analog, etc                Edwards (new) addressable; Gamewell (existing)
                                                               hardwired

         ii.  location                                         First floor rear lobby

         iii. manufacturer/model                               Edwards (new - protects renovated floors) Gamewell (existing -
                                                               monitors floors that were not renovated, sends to monitoring
                                                               system.) Both new and existing systems have voice and public
                                                               address notification. The new system is interconnected to the
                                                               existing system for alarm, trouble and supervisory conditions.

         iv.  operating voltage                                120 volts to system, 24 volts device

    b)   Central Station (company Name)                        Wells Fargo Alarm (Borg-Warner Security)

    c)   Emergency telephone system                            Yes, located in elevators, elevator lobbies and stairs

    d)   Secondary power source                                Battery and generator (new), generator (existing)

    e)   Control panel information                             Edwards (new), Gamewell (existing)

    f)   Manual station locations                              Pull stations are located by stair entrances and by exterior exit
                                                               doors on all floors, including garage levels and loading dock area.

    g)   Type of alarm indicating appliances (visual           Strobes are located in renovated areas. Speakers are
         and/or audible) and locations                         located throughout the entire building.

    h)   Notification system (entire building, floor above &   A high-rise package containing a pre-recorded message
         below, etc.)                                          sounds on the fire floor, floor above and floor below for
                                                               the 1st alarm. A 2nd alarm sounds for the entire building.

    i)   Type of devices that sound evacuation alarm           Smoke detectors, heat detectors and pull stations.

    j)   System interfaces (elevators, smoke control,          Elevator recall, no shunt trip. Stairwell pressurization on
         electric door locks, HVAC, etc.)                      general building alarm. Electric door locks main lobby 1st
                                                               floor. Special locking arrangements on stairwell doors with
                                                               controlled tenant access locking arrangements (both code
                                                               compliant). HVAC shuts down on duct detector activation (old
                                                               floors) and general alarm per floor (new floors).

    k)   Compliance to testing and maintenance                 No. Needs to be scheduled.
         required by NFPA 72

17) Describe building's means of egress (NFPA 101)

    a)   Number of exits per floor                             Three exit stairs are provided per floor (P1 and P2 levels, 1st
                                                               through 12th floors). Elevator Machine Room on 13th floor has
                                                               center stair access only.

    b)   Points of discharge for each exit                     North wing exits on 1st floor through hallway. Center exits to
                                                               lobby and then to 12th Street side. South wing exits on 1st floor
                                                               through hallway.


    c)   Capacity of each exit                                 Center Stair: 44" clear stair width/0.2"/person = 220, 35-1/4" door
                                                               provides 33-1/4" clear width/0.15"/person = 221 [Since the stair's
                                                               capacity is less than the door's, the exit capacity of the Center
                                                               Stair is 220]

                                                               Stair 2: 44" clear stair width/0.2"/person = 220, 35-1/4" door
                                                               provides 33-1/4" clear width/0.15"/person = 221 [Since the stair's
                                                               capacity is less than the door's, the exit capacity of Stair 2 is
                                                               220]

                                                               Stair 3: 44" clear stair width/0.2"/person = 220, 35-1/4" door
                                                               provides 33-1/4" clear width/0.15"/person = 221 [Since the stair's
                                                               capacity is less than the door's, the exit capacity of Stair 3 is
                                                               220]

                                                               Main lobby to 12th Street has 2 double doors of 70" clear width
                                                               (2x70=140"/0.15"/person = 933 people). Rear lobby has a set of double
                                                               doors of 58" clear width/0.15"/person = 387 people






                                                            

    d)   Occupant load per floor                               193 people typical

    e)   Remoteness of exits

         i.   Maximum diagonal dimension of typical            280 feet
              floor

         ii.  Exit door separation                             140 feet

         iii. How is distance measured?                        straight line

    f)   Exit access width, fire resistance rating,            Stairs 2 and 3 are in open office areas, with 5 feet exit
         arrangement                                           access width. Stair 1 is served by a corridor.

    g)   Exit stair enclosure                                  Stairs 2 and 3 are 2 hour rated. Center stair exits
                                                               through lobby.

    h)   Exit discharge protection                             Stairs 2 and 3 have 2 hour rated exit passageways. Center stair
                                                               exits through lobby.

    i)   Exit dimensions                                       Center Stair: 44" width, 9" run, 8" rise
                                                               Stair 2: 44" width, 9-1/4" run, 7-3/4" rise
                                                               Stair 3: 44" width, 9-1/4" run, 7-3/4" rise

    j)   Handrails                                             Handrails are provided on all stairs, mounted 32" above
                                                               tread with proper graspability. (~1-3/4" pipe)

    k)   Dead ends                                             None


    1)   Common paths of travel                                None

    m)   Vertical openings (open stairs, atriums,              No escalators. Atrium 1st floor to 12th floor outside front.
         escalators, etc.)

    n)   Penetrations of exit enclosure not related to the     None
         function of the exit

    o)   Exit Stairway Pressurization                          Stairwell pressurization is provided on all stairs. The system
                                                               activates on any fire alarm signal or the control switches in the
                                                               Fire Alarm Control Room.




     FINDINGS WITH RECOMMENDED CORRECTIVE ACTIONS WITH SPECIFIC CODE REFERENCES

     BUILDING CONSTRUCTION TYPE AND REQUIRED FIRE RESISTANCE RATED CONSTRUCTION

          1.   None

                                FIRE ALARM SYSTEM

NOTED DEFICIENCIES

          1.   The fire alarm detection system on the unrenovated 3rd, 4th, 5th
               and 6th floors must be modified under the next tenant fit-out.
               All existing initiation devices on the old fire alarm panel are
               to be replaced by new initiation devices on the new system.

          2.   No current annual inspection or test has been performed.

RECOMMENDED CORRECTIVE ACTION:

          1.   Ensure future renovations match the standard of care established
               under the phased fire alarm system upgrade. A/E design and
               renovation of space is best suited for pricing work. (Estimate
               range of $1,200 - $6,000/ per floor.)

          2.   Perform annual inspection and test. ~$600

             MEANS OF EGRESS, EXIT STAIRS AND DISCHARGE PASSAGEWAYS

          1.   None





                         EMERGENCY LIGHTS AND EXIT SIGNS

 NOTED DEFICIENCIES

     1.   The exit sign inside the south stair, on the ground floor, is
          malfunctioning.

 RECOMMENDED CORRECTIVE ACTION:

     1.   Repair/replace. $50.00 - $250.00

                                FIRE SUPPRESSION

 NOTED DEFICIENCIES

     1.   No current records of fire pump inspection and test forms. Fire
          extinguishers are not tagged.

 RECOMMENDED CORRECTIVE ACTION:

     1.   Perform annual fire suppression systems inspections, tests and
          service. ~$3,000 to $4,000



                               SFO ATTACHMENTS #2
                    FIRE PROTECTION & LIFE SAFETY EVALUATION

The results of this survey shall be based on an actual walk-through of the
subject premises and review of available construction documents. All building
systems, associated with fire protection and/or life safety, shall be evaluated
for conformance to the following codes, standards and/or criteria. Any deviance
from the applicable criteria shall be identified and supported by corrective
recommendation(s).

FUNDAMENTAL CODE REQUIREMENTS ARE AS FOLLOWS:

- -        The offered building shall be evaluated for compliance with the most
         recent edition of The Building Officials & Code Administrators (BOCA)
         National Building Code; with the exception that chapter 10 of BOCA
         shall be replaced by the entire contents of the most recent edition of
         NFPA 101, Life Safety Code. All areas which do not meet the most recent
         editions of these criteria shall be identified as to the extent which
         they do comply.

AUTOMATIC SPRINKLER REQUIREMENTS ARE AS FOLLOWS:

- -        Where at least 35,000 square feet, any portion of which is on or above
         the 6th floor, is offered to the government for lease, the entire
         building must be provided with automatic sprinkler protection or an
         equivalent level of safety.

- -        All floors on which the Government occupies below grade space,
         regardless of the amount, must be sprinklered (including garage areas
         offered for lease by the Government).

- -        All hazardous areas, as defined by NFPA 101, Life Safety Code, shall be
         protected throughout by automatic sprinklers.

- -        Where acceptable to the local authority having jurisdiction, chained
         and locked sprinkler control valves are an acceptable alternative to
         electronic supervision.

- -        All buildings utilizing Central Sprinkler Company's Omega line of
         sprinkler heads shall be identified; including: model, location(s),
         # of heads, approximate age, etc.

EGRESS REQUIREMENTS ARE AS FOLLOWS:

- -        Scissor stairs are considered to be a single stair by GSA criteria.

- -        Exits must be remotely located by 1/2 of the maximum diagonal dimension
         of the building floor, or space; for non-sprinklered buildings. For
         completely sprinklered buildings in Maryland, the exits are required to
         be remotely located by 1/3 the maximum diagonal dimension (per NFPA
         101). For completely sprinklered; buildings in Washington, DC and
         Virginia, the exits are required to be remotely located by 1/4 the
         maximum diagonal dimension (per BOCA).

ALL OF THE FOLLOWING ITEMS MUST BE PROVIDED WITH THE BUILDING FIRE PROTECTION &
LIFE SAFETY EVALUATION BEFORE BEING ACCEPTABLE FOR REVIEW BY THE GSA FIRE
PROTECTION ENGINEERING OFFICE:

- -        Completed SFO Attachment #4 with supplemental building information.

- -        Findings, recommended corrective action and section-specific code
         and/or criteria references. Reports for buildings in which no
         deficiencies are identified shall state such in an explicit statement
         located in the "findings & recommendations portion of the report.
         (Specific GSA criteria, noted above, does not require listing of a
         section.)

- -        "Statement of Fire Protection Engineer", with an affixed Professional
         Engineering stamp or seal, signed and dated by the fire protection
         engineer who conducted the survey and completed the report.

- -        "Offerer Statement of Correction" signed and dated by the offerer or
         designated representative.

- -        Initial of fire protection engineer and offeror, or designated
         representative, on each page of the completed SFO attachment #4 and its
         supplemental information.

This form (in Microsoft Word 6.0 format) can be obtained by bringing a 3-1/2"
pre-formatted (IBM) diskette to:

GENERAL SERVICES ADMINISTRATION
SAFETY AND ENVIRONMENT BRANCH (WPMOX)
NATIONAL CAPITAL REGION, ROOM 2080
7TH & D STREETS, SW
WASHINGTON, DC 20407




                                SFO ATTACHMENT #2

                    FIRE PROTECTION & LIFE SAFETY EVALUATION

The offeror represents and agrees, as part of its offer, that the proposed
space/building is as described below and contains the identified features and
devices. THIS EVALUATION WILL BE MADE BY BOTH THE OFFEROR AND A REGISTERED FIRE
PROTECTION ENGINEER. THE FIRE PROTECTION ENGINEER'S OFFICIAL STAMP (PROFESSIONAL
LICENSE) MUST BE PLACED ON THE EVALUATION. Should this form not provide
sufficient space to respond adequately to any question, additional pages should
be attached.

BUILDING NAME:                    WORLDCOM PCY 1

BUILDING ADDRESS:                 701 SOUTH 12TH STREET, ARLINGTON, VA 22202

Height and # OF STORIES:          - 157 FEET, 12 STORIES

(MODEL BUILDING CODE)




PLEASE ANSWER "YES" OR "NO" TO THE FOLLOWING QUESTIONS:                                                          YES            NO
                                                                                                                 ---            ---
                                                                                                                          
The building electrical system appears to comply with the National Electrical Code in that there                  X
are no obvious deficiencies (e.g. temporary wiring, use of extension cords, deteriorated equipment,
missing equipment, etc.). If potential problems are noted, describe on an attached sheet.

THE FOLLOWING ITEMS ARE LOCATED IN THE SUBJECT BUILDING:

LABORATORIES                                                                                                                     X

FIRING RANGES                                                                                                                    X

PARKING GARAGES (UNSPRINKLERED)                                                                                                  X

PRINT SHOPS (UNSPRINKLERED)                                                                                                      X


BUILDING EXITS HAVE THE FOLLOWING FEATURES:

There are at least two exits from each floor (SCISSOR STAIRS COUNT AS ONLY ONE EXIT).                             X

Exits are remote in accordance with the requirements of NFPA 101.                                                 X

Travel distance to exits are in accordance with the requirements of NFPA 101.                                     X

All exits discharge in accordance with the latest version of NFPA 101 OR BOCA, National Building Code.            X

Exit access is at least 44 inches wide.                                                                           X

Dead ends and common paths of travel are in accordance with the latest version of NFPA 101.                       X


A FIRE ALARM IS REQUIRED FOR THIS OCCUPANCY TYPE BY NFPA 101 OR BOCA.


A fire alarm system is provided in accordance with NFPA 72.                                                       X

Manual evacuation alarm sounds in building.                                                                       X

Alarm is transmitted to a listed central station or local fire department.                                        X

Battery back-up power is provided for the fire alarm system in accordance with NFPA 72.                           X






PLEASE ANSWER "YES" OR "NO" TO THE FOLLOWING QUESTIONS:                                                          YES            NO
                                                                                                                 ---            ---
                                                                                                                          
THE BUILDING HAS THE FOLLOWING FIRE SUPPRESSION FEATURES:

The building is fully sprinklered. Note: If the answer to this question is "no" please identify areas             X
of partial sprinkler protection, if any, on an attached sheet. Note specifically if hazardous areas are
sprinklered or not and whether below grade space that is occupied is sprinklered or not.

Automatic sprinkler protection is provided throughout the occupied levels for space offered below                 X
grade.

Central Sprinkler Company's Omega line of sprinklers are installed in the building (describe                      X
location(s), model(s), no. of sprinklers, date installed, etc. on additional sheet).

A standpipe system is required for this occupancy type by the Model Building Code.                                X

A standpipe system is provided in the building in accordance with the Model Building Code.                        X

Portable fire extinguishers are present in adequate size, spacing and location; and have a current                                X
inspection certificate and maintenance contract in accordance with NFPA 10.


EXIT HARDWARE AND DOORS HAVE THE FOLLOWING FEATURES:

Exit doors swing in the direction of exit travel; where required by code.                                         X

All fire doors are self-closing or automatic-closing; and self-latching.                                      see comment

All fire doors are in proper working order.                                                                   see comment

Exit doors require one action to open (e.g. no locks, locked during unoccupied periods only).                     X
Note: Special locking arrangements may be permitted if allowed under local jurisdiction.


EXIT AND EMERGENCY LIGHTING SYSTEMS HAVE THE FOLLOWING FEATURES:

Illuminated exit signs are provided in accordance with NFPA 101.                                                  X

Emergency lighting is provided along exit paths in accordance with NFPA 101.                                      X

Emergency power is provided for emergency lights and exit signs.                                                  X


INTERIOR FINISHES HAVE THE FOLLOWING CHARACTERISTICS:

Interior finish for ceilings, walls, and floors, are installed without obvious deficiencies (e.g. no              X
cork board, no carpet on walls, no cellular plastic finishes, etc.). If potential problems are noted,
describe on an attached sheet.


ELEVATORS HAVE THE FOLLOWING FEATURES:

Elevators have a current certificate of elevator inspection from the local jurisdiction.                          X

Elevators are equipped with telephones or other two-way emergency signaling systems connected to an               X
emergency communication location manned during normal working hours when the elevators are in service.

Elevators are automatically recalled by smoke detectors located in elevator lobbies and machine rooms.            X

Elevator recalls to an alternate level when activated by primary level smoke detector.                            X

Firemen's capture feature is provided.                                                                            X


FOR SPACE OFFERED ON OR ABOVE THE 6TH FLOOR (GREATER THAN 75' ABOVE THE LOWEST LEVEL OF FIRE DEPARTMENT VEHICLE ACCESS):


Automatic sprinkler protection is provided for all floors of the building where the government leases             X
35,000 square feet or more, in the building, in total. See the cover page.



                          GENERAL BUILDING INFORMATION

ON AN ATTACHED SHEET, PLEASE RESPOND TO EACH OF THE FOLLOWING BUILDING FEATURES;
AS THEY APPLY TO THE OFFERED BUILDING. IDENTIFY EACH RESPONSE BY A NUMBER
CORRESPONDING TO THE ITEMS BELOW. RESPOND "N/A" FOR ITEMS WHICH ARE NOT
APPLICABLE. RESPOND "NONE" FOR ITEMS WHICH DO NOT EXIST IN THE BUILDING.



1) # Stories above grade:

2) # Stories below grade:

3) Floors offered to government:

4) Height of highest offered floor above lowest level of fire department vehicle
   access (in feet):

5) Types of occupancies on each floor. Indicate all of other than business
   occupancy.

6) Approximate gross area of typical floor (identify atypical floors
   individually):

7) Describe construction type (fire resistive, unprotected non-combustible,
   ordinary, wood frame, heavy timber) & NFPA 220 classification for floors,
   walls, columns, and roof.

8) Describe fire-rated subdivision of building floors (including stairs, tenant
   separation, mechanical rooms, etc.)

9) Describe any smoke detectors with attention to the following:
         a)  locations.
         b)  appropriate type?
         c)  control equipment location
         d)  control equipment manufacturer.
         e)  connection to building fire alarm system.

10) Describe any heat detectors with attention to the following:
              a)  locations
              b)  appropriate type?
              c)  control equipment location
              d)  control equipment manufacturer
              e)  connection to building fire alarm

11) Describe any other fire detectors with attention to the
    following:
         a)  locations.
         b)  appropriate type?
         c)  control equipment location.
         d)  control equipment manufacturer.
         e)  connection to building fire alarm system

12) Describe emergency lighting:
         a)  type.
         b)  location.
         c)  secondary source(s) of power.

13) Describe exit signs:
         a)  type.
         b)  location.
         c)  secondary source(s) of power.

14) Describe emergency generator:
         a)  power source(s).
         b)  capacity.
         c)  location.
         d)  connected building systems.

15) Describe the fire suppression system(s) with attention to
    the following:
         a)  sprinkler-location(s).
         b)  waterflow alarm(s)-type and location,
         c)  control valves-type and typical location.
         d)  valve tamper switches-type and adequacy.
         e)  standpipe-riser size, location and number.
         f)  location(s) and manufacturer/model of fixed C02,
             dry chemical, and/or clean-agent fire suppression
             systems.
         g)  water supply-type, size, arrangement, etc.
         h)  supply static pressure (psi).
         i)  fire pump data:
                  i.    UL listed for fire pump service?
                  ii.   separate controller for jockey pump?
                  iii.  NFPA 20 compliant?
                  iv.   rated capacity (gpm).
                  v.    rated net pressure (psi).
                  vi.   primary power supply.
                  vii.  secondary power supply.
                  viii. manufacturer
         j)  compliance to testing & maintenance required by
             NFPA 25.

16) Describe the communications system with attention to the following:
         a)  type of fire alarm system:
                  i.   hardwired, multiplex, analog, etc.
                  ii.  location.
                  iii. manufacturer/model.
                  iv.  operating voltage.
         b)  central station (company name).
         c)  emergency telephone system.
         d)  secondary power source.
         e)  control panel information.
         f)  manual station locations.
         g)  type of alarm indicating appliances (visual and/or audible)
             and locations.
         h)  notification system (entire building, floor above & below, etc.).
         i)  type of devices that sound evacuation alarm (list all types).
         j)  system interfaces with? (elevators, smoke control, electric
             door locks, HVAC, etc.).
         k)  compliance to testing & maintenance required by NFPA 72.





17) Describe the building's means of egress (NFPA 101):
         a)  number of exits per floor.
         b)  points of discharge for each exit.
         c)  capacity of each exit,
         d)  occupant load per floor.
         e)  remoteness of exits:
             i.   maximum diagonal dimension of typical floor (identify for
                  others if different than that of typical floors).
             ii.  exit door separation.
             iii. how is distance measured (straight line or along rated exit
                  access corridor).
         f)  exit access-width, fire resistance rating, arrangement.
         g)  exit stair enclosure.
         h)  exit discharge protection,
         i)  exit dimensions - width, tread, riser.
         j)  handrails (presence, stability, height above tread,
             graspability, etc.).
         k)  dead ends.
         l)  common paths of travel.
         m)  vertical openings (open stairs, atriums, escalators, etc.).
         n)  penetrations of exit enclosures not related to the function of
             the exit.
         o)  exit stairway pressurization, if any.
         p)



                   STATEMENT OF FIRE PROTECTION ENGINEER (FPE)

I HEREBY ATTEST THAT I HAVE PERFORMED A FULL INSPECTION OF THE SUBJECT PREMISES;
AND THAT THE ABOVE INFORMATION IS COMPLETE AND ACCURATE TO THE BEST OF MY
KNOWLEDGE. I HAVE INITIALED AT THE BOTTOM OF EACH PAGE IN THE SPACE MARKED
"FPE". MY OFFICIAL STAMP, PROFESSIONAL LICENSE INFORMATION, AND SIGNATURE ARE
AFFIXED BELOW.

I HAVE INCLUDED FINDINGS, RECOMMENDED CORRECTIVE ACTION, AND MADE SPECIFIC
REFERENCES TO THE APPLICABLE CODE SECTIONS AS AN ATTACHMENT TO THIS REPORT. SUCH
FINDINGS SPECIFICALLY IDENTIFY INSTANCES WHERE THE BUILDING DOES NOT COMPLY WITH
THE SPECIFIED CRITERIA, AND RECOMMENDATIONS HAVE BEEN MADE IN ORDER TO RECTIFY
THE SITUATION AND ASSURE SUBSTANTIAL COMPLIANCE OF THE BUILDING TO ALL
APPLICABLE CRITERIA.

(IF NO DEFICIENCIES WERE IDENTIFIED, DURING THE SURVEY, PLEASE EXPLICITLY STATE
SO IN THE FINDINGS AND RECOMMENDATIONS PORTION OF THE REPORT}



Signature:  /s/ Francis A. Hauf                       Date:   10/28/02
          ------------------------------------------        ----------------

Printed Name: Francis A. Hauf, P.E.

Name of Firm: Hauf Consulting & Construction
              Management, LLC                            Phone #:(410) 688-7950

LICENSE Number:   #036252


STAMP HERE:                          [SEAL]


                       OFFEROR'S STATEMENT OF CORRECTION

IN THE EVENT ANY OF THE OFFERED SPACE DOES NOT MEET THE ABOVE CRITERIA, THE
OFFEROR SHALL ATTACH A SHEET DESCRIBING THE EXACT NATURE OF THE DEFICIENCY, AND
THE OFFEROR SHALL ATTEST BELOW THAT ALL WORK REQUIRED TO BRING THE OFFERED SPACE
INTO FULL COMPLIANCE WITH ALL APPLICABLE CRITERIA WILL BE COMPLETED AT THE
OFFEROR'S SOLE COST AND EXPENSE PRIOR TO THE GOVERNMENT'S ACCEPTANCE OF THE
OFFERED SPACE UNDER THE TERMS OF ANY PROSPECTIVE LEASE AGREEMENT.

NOTE: SURVEYS SUBMITTED WITHOUT THE FPE'S FINDINGS, RECOMMENDED CORRECTIVE
ACTIONS AND CODE REFERENCES WILL BE RETURNED WITHOUT REVIEW BY THE GSA FIRE
PROTECTION ENGINEERING OFFICE.


Signature:. /s/ John Dubel                            Date:  12-11-02

Printed Name:. John S. Dubel

Title:  Chief Financial Officer

Name of Firm:  MCI WorldCom Network Services, Inc.



                          GENERAL BUILDING INFORMATION


                                                   
1) # Stories above grade                              13


2) # Stories below grade                              2

3) Floors offered to the government                   ALL

4) Height of highest offered floor above lowest       80.5 feet
   level of fire department vehicle access (in feet):

5) Types of occupancies on each floor. Indicate all   Storage S-2, Assembly 1st floor
   of other than business occupancy.

6) Approximate gross area of typical floor (identify  P1 & P2=103,650 ft(2) total, 1 thru 12 = 48,600 ft(2),
   atypical floors individually):                     Penthouse 4,960 ft(2), Elevator Machine Room = 952 ft(2)

7) Describe construction type (fire resistive,        Type 2A (Modified from Type 1B) per BOCA table 403.3.3.1
   unprotected non-combustible, ordinary, wood frame, Construction Type II (222) per NFPA 220 Reinforced
   heavy timber) & NFPA 220 classifications for       concrete floors
   floors, walls, columns and roof.

8) Describe fire-rated subdivision of building        Stairs are 2 hour rated walls with 1-1/2 hour rated doors. No
   floors (including stairs, tenant separation,       tenant separations are provided. Tenant separations are
   mechanical room, etc.)                             required by code to be 1 hour rated with 20 min. doors or
                                                      equal. Mechanical rooms are separated with 1 hour construction.

9) Smoke detectors

     a)  Locations                                    Lobby, Freight Elevator Lobby, Mechanical Rooms, Telephone
                                                      Rooms, Control Rooms, LAN Communication Rooms, Elevator
                                                      Machine Room, with plenum smoke detectors in return duct work.
     b)  Type                                         New addressable ion
     c)  Control Equipment Location                   Main fire alarm control panel
     d)  Control Equipment Manufacturer               Edwards (new), Gamewell (existing)
     e)  Connection to building fire alarm system     This is the building fire alarm system

10)  Heat detectors

     a)  Locations                                    Generator rooms and old electric closets that have not been
                                                      renovated.
     b)  Type                                         Fixed temperature
     c)  Control Equipment Location                   Main fire alarm control panel
     d)  Control Equipment Manufacturer               Edwards (new), Gamewell {existing)
     e)  Connection to building's fire alarm system   This is the building fire alarm system

11)  Other fire detectors:                            None

12)  Describe emergency lighting:

     a)  Type                                         Battery backup in stairs and bathrooms. Every 3rd or 4th
                                                      light on a separate circuit.
     b)  Location                                     Stairwells, Bathrooms, throughout floors
     c)  secondary source(s) of power                 Generator backup







                                                   
13)  Describe exit signs:

     a)  Type                                         Standard internal back-lit consisting of red lettering,
                                                      properly sized, LED
     b)  Location                                     Stairwells, elevator lobby, interior corridors of each wing
     c)  Secondary sources of power                   Emergency backup generator


14)  Describe emergency generator:

     a)  Power sources                                One Diesel engine
     b)  Capacity                                     250 KW
     c)  Location                                     P1 level loading dock
     d)  Connected building systems                   Life safety systems, emergency lights, plus battery
                                                      charges for 6th floor

15)  Describe the fire suppression system with attention to the following:

     a)  Sprinkler locations                          Incoming water supply from south side P2 level pump
                                                      room. The building is entirely sprinklered. Areas
                                                      subject to freezing (garage) are protected by
                                                      separate dry pipe sprinkler systems (4 zones 4" sized).
                                                      All other portions of the building are protected by a
                                                      wet pipe sprinkler system.

     b)  Waterflow alarm - type and location          Waterflow alarms consist of:
                                                      pressure type devices on each of the dry pipe risers
                                                      located in the fire pump room.
                                                      Paddle type devices on each floor zone fed by the wet
                                                      system - located in stairs 2 and 3.
                                                      Stair 1 on the elevator machine room level above 12th

     c)  Control valves - type and typical location   Control valves in the fire pump room are O.S& Y., except
                                                      for the jockey pump valves. The fire pump valves include:
                                                      1 on the city supply and 2 on the fire pump piping.
                                                      1 on test header, 2 on the jockey pump piping, 1 on
                                                      each of the 4 dry pipe risers.
                                                      Additional control valves are provided for floor zones.
                                                      All floor zone assemblies are provided in stair 2 and 3,
                                                      except for the elevator machine room level above the
                                                      12th floor, which is served by stair 1.

     d)  Valve tamper switches-type & adequacy        Adequate valve tamper switches are provided on all
                                                      control valves. O.S.& Y. have external tamper switch and
                                                      butterfly valves have internal switches.

     e)  Standpipe riser size, location and number.   Stair 1 has a 4" riser. Stairs 2 & 3 have 4" combined
                                                      standpipe risers.

     f)  Locations and manufacturers of fixed CO2     One charged Ansul wet chemical system in each of three
         dry chemical and/or clean-agent fire         kitchens
         suppression systems.

     g)  Water supply type, size and arrangement      The water is supplied from the local water
                                                      authorities system. An 8 inch incoming to 6 inch line
                                                      in pump room.

     h)  Supply static pressure                       90 psi

     i)  Fire pump data
         i.    UL Listed                              Yes
         ii    Separate controller for jockey pump    Yes
         iii.  NFPA 20 compliant                      Yes
         iv.   Rated Capacity (gpm)                   750
         v.    Rated net pressure (psi)               100
         vi.   Primary power supply                   Diesel
         vii.  Secondary power supply
         viii. Manufacturer                           Patterson Pump

     j)  Compliance to testing & maintenance          Yes
         required by NFPA 25








                                                   
16)  Describe the communications system with attention to the following:

     a)  Type of fire alarm system

         i.   hardwired, multiplex, analog, etc       Edwards (new) addressable; Gamewell (existing) hardwired,
                                                      tenant panel 6th floor Edwards addressable

         ii.  location                                First floor rear lobby (tenant panel 6th floor)

         iii. manufacturer/model                      Edwards (new - protects renovated floors) Gamewell (existing
                                                      - monitors floors that were not renovated, sends to
                                                      monitoring system.) Both new and existing systems have voice
                                                      and public address notification. The new system is
                                                      interconnected to the existing system for alarm, trouble and
                                                      supervisory conditions. Tenant Panel EST2 for computer rm
                                                      smokes.

         iv.  operating voltage                       120 volts to system, 24 volts device

     b)  Central Station (company Name)               Wells Fargo Alarm (Borg-Warner Security)

     c)  Emergency telephone system                   Yes, located in elevators, elevator lobbies and stairs

     d)  Secondary power source                       Battery and generator (new), generator (existing)

     e)  Control panel information                    Edwards (new), Gamewell (existing)

     f)  Manual station locations                     Pull stations are located by stair entrances and by
                                                      exterior exit doors on all floors, including garage
                                                      levels and loading dock area.


     g)  Type of alarm indicating appliances          Strobes are located in renovated areas. Speakers are
         (visual and/or audible) and locations        located throughout the entire building.

     h)  Notification system (entire building,        A high-rise package containing a pre-recorded message sounds
         floor above & below, etc.)                   on the fire floor, floor above and floor below for the 1st
                                                      alarm. A 2nd alarm sounds for the entire building.

     i)  Type of devices that sound evacuation        Duct detectors for old floors only. New floors replaced with
         alarm                                        plenum detectors. Smoke detectors, heat detectors, kitchen
                                                      hoods and pull stations.

     j)  System interfaces (elevators, smoke          Elevator recall, no shunt trip. Stairwell pressurization
         control, electric door locks, HVAC, etc.)    on general building alarm. Electric door locks main
                                                      lobby 1st floor. Special locking arrangements on
                                                      stairwell doors with controlled tenant access locking
                                                      arrangements (both code compliant), HVAC shuts down
                                                      on duct detector activation (old floors) and general
                                                      alarm per floor (new floors).


     k)  Compliance to testing and maintenance        No. Needs to be scheduled.
         required by NFPA72


17)  Describe building's means of egress (NFPA 101)

     a)  Number of exits per floor                    Three exit stairs are provided per floor (P1 and P2
                                                      levels, 1st through 12th floors). Elevator Machine
                                                      Room on 13th floor has center stair access only.

     b)  Points of discharge for each exit            North wing exits on 1st floor through hallway. Center
                                                      exits to lobby and then to 12th Street side. South wing
                                                      exits on 1st floor through hallway.

     c)  Capacity of each exit (# people)             Center Stair: 44 1/2" clear stair width/0.2"/person = 222,
                                                      35 1/4" door provides 33 1/4" clear width/0.15" person = 221
                                                      [Since the door's capacity is less than the stair's, the exit
                                                      capacity of the center stair is 221]
                                                      Stair 2: 44" clear stair width/0.2"/person = 220,
                                                      35 1/4" door provides 33 1/4" clear width/0.15"/person = 221
                                                      [Since the stair's capacity is less than the door's, the exit
                                                      capacity of stair 2 is 220]
                                                      Stair 3: 44" clear stair width/0.2"/person = 220,
                                                      35 1/4" door provides 33 1/4" clear width/0.15"/person = 221
                                                      [Since the stair's capacity is less than the door's, the exit







                                              
                                                      capacity of stair 3 is 220]

                                                      MAIN LOBBY to 12th Street has 2 double doors of 70"
                                                      clear width (2x70=140"/0.15"/person - 933 PEOPLE).
                                                      REAR LOBBY has a set of double doors of 58" clear
                                                      width/0.15"/person = 387 PEOPLE

     d)  Occupant load per floor                      193 people typical

     e)  Remoteness of exits

         i.   Maximum diagonal dimension of typical   280 feet
              floor

         ii.  Exit door separation                    140 feet

         iii. How is distance measured?               straight line

     f)  Exit access width, fire resistance           Stairs 2 and 3 are in open office areas, with 5 feet
         rating, arrangement                          exit access width. Stair 1 is served by a corridor.

     g)  Exit stair enclosure                         Stairs 2 and 3 are 2 hour rated. Center stair exits
                                                      through lobby.

     h)  Exit discharge protection                    Stairs 2 and 3 have 2 hour rated exit passageways.
                                                      Center stair exits through lobby.

     i)  Exit dimensions                              Center Stair: 44 1/2" width, 9" run, 8" rise
                                                      Stair 2: 44" width, 9 1/4" run, 7 3/4" rise
                                                      Stair 3: 44" width, 9 1/4" run, 7 3/4" rise

     j)  Handrails                                    Handrails are provided on all stairs, mounted 32" above
                                                      tread with proper graspability. (~13/4" pipe)

     k)  Deadends                                     None

     l)  Common paths of travel                       None

     m)  Vertical openings (open stairs, atriums,     No escalators. Atrium 1st floor to 12th floor outside front.
         escalators, etc.)

     n)  Penetrations of exit enclosure not related   None
         to the function of the exit

     o)  Exit Stairway Pressurization                 Stairwell pressurization is provided on all stairs.
                                                      The system activates on any fire alarm signal or the
                                                      control switches in the Fire Alarm Control Room.


     



   FINDINGS WITH RECOMMENDED CORRECTIVE ACTIONS WITH SPECIFIC CODE REFERENCES

   BUILDING CONSTRUCTION TYPE AND REQUIRED FIRE RESISTANCE RATED CONSTRUCTION

NOTED DEFICIENCIES

         1.       The Elevator machine room fire rated door does not self-close
                  and latch. The door seems to rub or stick.

         2.       The 12th floor Electrical Room 1209S has small unsealed
                  penetrations into corridor.

         3.       The telephone rooms on all the floors located in the tenant
                  area on both the South and North ends of the building have
                  unsealed wire penetrations through the floor/ceiling slab.

         4.       The North stair discharge fire rated door does not self-close
                  and latch. The door seems to rub or stick.

RECOMMENDED CORRECTIVE ACTION:

         1.       Adjust the door closer or keeper, oil parts. $50.00.

         2.       Seal the penetrations with mineral wool or drywall closed.
                  $50.00

         3.       Seal all floor/ceiling slab penetrations with an approved
                  firestopping method. $600.00 - $1200.00

         4.       Adjust the door closer or keeper, oil parts. $50,00




                                FIRE ALARM SYSTEM

NOTED DEFICIENCIES

         1.       The Graphic Annunciator contains an LED for a "Halon system"
                  that no longer exists.

         2.       The 6N telephone room old system smoke detector is hanging
                  down from the ceiling. The room is also protected by a new
                  smoke detector until the old system is entirely phased out.

         3.       The fire alarm detection system on the unrenovated 9th floor
                  must be modified under the next tenant fit-out. All existing
                  initiation devices on the old fire alarm panel are to be
                  replaced by new initiation devices on the new system.

         4.       No current annual inspection or test has been performed.

RECOMMENDED CORRECTIVE ACTION:

         1.       Modify the Annunciator - Blank out the information and keep
                  the LED as a spare. $150.00

         2.       Remount the device. $50.00

         3.       Ensure future renovations match the standard of care
                  established under the phased fire alarm system upgrade. A/E
                  design and renovation of space is best suited for pricing
                  work. (Estimate range of $1,200 - $6,000)

         4.       Perform annual inspection and test ~$600



             MEANS OF EGRESS, EXIT STAIRS AND DISCHARGE PASSAGEWAYS

See building construction comments above regarding any non-functioning door in
any rated egress component.

                         EMERGENCY LIGHTS AND EXIT SIGNS

NOTED DEFICIENCIES

         1.       The exit sign near cubicle 1294S was damaged/knocked off
                  ceiling partially.

         2.       The exit signs near stair 12S are dim.

RECOMMENDED CORRECTIVE ACTION:

         1.       Repair/replace. $50.00

         2.       Check circuit to exit lights, repair, as needed. $50.00 to
                  $250.00


                                FIRE SUPPRESSION

NOTED DEFICIENCIES

         1.       No current records of fire pump inspection and test forms.
                  Fire extinguishers are not tagged.

 RECOMMENDED CORRECTIVE ACTION:

         1.       Perform annual fire suppression systems inspections, tests and
                  service. ~$3,000 to $4,000


                             SFO DTSA20-03-R-00528

- --------------------------------------------------------------------------------
                             GENERAL CLAUSES (FINAL)
              (ACQUISITION OF LEASEHOLD INTERESTS IN REAL PROPERTY)
- --------------------------------------------------------------------------------



CATEGORY                         CLAUSE NO.          48 CFR REF.        CLAUSE TITLE
- -------------------              ----------          --------------     ---------------------------------------------------------
                                                               
DEFINITIONS                            1             552.270-4          Definitions
GENERAL                                2             552.270-5          Subletting and Assignment
                                       3             552.270-11         Successors Bound
                                       4             552.270-23         Subordination, Nondisturbance and Attornment
                                       5             552.270-24         Statement of Lease
                                       6             552.270-25         Substitution of Tenant Agency
                                       7             552.270-26         No Waiver
                                       8             552.270-27         Integrated Agreement
                                       9             552.270-28         Mutuality of Obligation

PERFORMANCE                           10             552.270-17         Delivery and Condition
                                      11             552.270-18         Default in Delivery - Time Extensions
                                                                        (Variation)
                                      12             552.270-19         Progressive Occupancy
                                      13             552.270-21         Effect of Acceptance and Occupancy
                                      14             552.270-6          Maintenance of Building and Premises-Right of Entry
                                      15             552.270-10         Failure in Performance
                                      16             552.270-22         Default by Lessor During the Term
                                      17             552.270-7          Fire and Casualty Damage
                                      18             552.270-8          Compliance with Applicable Law
                                      19             552.270-12         Alterations
                                      20             552.270-29         Acceptance of Space

INSPECTION                            21             552.270-9          Inspection-Right of Entry

PAYMENT                               22             552.232-75         Prompt Payment
                                      23             552.232-76         Electronic Funds Transfer Payment
                                                                        (Variation)
                                      24             552.232-70         Invoice Requirements
                                      25             52.232-23          Assignment of Claims
                                      26             552.270-20         Payment (Variation)

STANDARDS OF                          27             552.203-5          Covenant Against Contingent Fees
CONDUCT                               28             52.203-7           Anti-Kickback Procedures
                                      29             52.223-6           Drug-Free Workplace

ADJUSTMENTS                           30             552.203-70         Price Adjustment for Illegal or Improper
                                                                        Activity
                                      31             52.215-10          Price Reduction for Defective Cost or Pricing Data
                                      32             552.270-13         Proposals for Adjustment
                                      33             552.270-14         Changes (Variation)
AUDITS                                34             552.215-70         Examination of Records by TSA
                                      35             52.215-2           Audit and Records--Negotiation

DISPUTES                              36             52.233-1           Disputes



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                             SFO DTSA20-03-R-00528

                                                               
LABOR STANDARDS                       37             52.222-26          Equal Opportunity
                                      38             52.222-24          Preaward On-Site Equal Opportunity
                                                                        Compliance Evaluation
                                      39             52.222-21          Prohibition of Segregated Facilities
                                      40             52.222-35          Affirmative Action for Disabled Veterans and
                                                                        Veterans of the Vietnam Era
                                      41             52.222-36          Affirmative Action for Workers with
                                                                        Disabilities
                                      42             52.222-37          Employment Reports on Disabled Veterans and
                                                                        Veterans of the Vietnam Era

SUBCONTRACTING                        43             52.209-6           Protecting the Government's Interest When
                                                                        Subcontracting With Contractors Debarred,
                                                                        Suspended, or Proposed for Debarment
                                      44             52.215-12          Subcontractor Cost or Pricing Data
                                      45             52.219-8           Utilization of Small Business Concerns
                                      46             52.219-9           Small Business Subcontracting Plan
                                      47             52.219-16          Liquidated Damages- Subcontracting Plan




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                                                GSA FORM 3517B PAGE 2 (REV 9/01)


                             SFO DTSA20-03-R-00528

                                 GENERAL CLAUSES
              (Acquisition of Leasehold Interests in Real Property)

   1.   552.270-4 - DEFINITIONS (SEP 1999)

        The following terms and phrases (except as otherwise expressly provided
        or unless the context otherwise requires) for all purposes of this lease
        shall have the respective meanings hereinafter specified:

        (a)     "Commencement Date" means the first day of the term.

        (b)     "Contract" and "Contractor" means "Lease" and "Lessor,"
                respectively.

        (c)     "Contracting Officer" means a person with the authority to enter
                into, administer, and/or terminate contracts and make related
                determinations and findings. The term includes certain
                authorized representatives of the Contracting Officer acting
                within the limits of their authority as delegated by the
                Contracting Officer.

        (d)     "Delivery Date" means the date specified in or determined
                pursuant to the provisions of this lease for delivery of the
                premises to the Government, improved in accordance with the
                provisions of this lease and substantially complete, as such
                date may be modified in accordance with the provisions of this
                lease.

        (e)     "Delivery Time" means the number of days provided by this lease
                for delivery of the premises to the Government, as such number
                may be modified in accordance with the provisions of this lease.

        (f)     "Excusable Delays" mean delays arising without the fault or
                negligence of Lessor and Lessor's subcontractors and suppliers
                at any tier, and shall include, without limitation, (1) acts of
                God or of the public enemy, (2) acts of the United States of
                America in either its sovereign or contractual capacity, (3)
                acts of another contractor in the performance of a contract with
                the Government, (4) fires, (5) floods, (6) epidemics, (7)
                quarantine restrictions, (8) strikes, (9) freight embargoes,
                (10) unusually severe weather, or (11) delays of subcontractors
                or suppliers at any tier arising from unforeseeable causes
                beyond the control and without the fault or negligence of both
                the Lessor and any such subcontractor or supplier.

        (g)     "Lessor" means the sub-lessor if this lease is a sublease.

        (h)     "Lessor shall provide" means the Lessor shall furnish and
                install at Lessor's expense.

        (i)     "Notice" means written notice sent by certified or registered
                mail, Express Mail or comparable service, or delivered by hand.
                Notice shall be effective on the date delivery is accepted or
                refused.

        (j)     "Premises" means the space described on the Standard Form 2,
                U.S. Government Lease for Real Property, of this lease.

        (k)     "Substantially complete" and "substantial completion" means that
                the work, the common and other areas of the building, and all
                other things necessary for the Government's access to the
                premises and occupancy, possession, use and enjoyment thereof,
                as provided in this lease, have been completed or obtained,
                excepting only such minor matters as do not interfere with or
                materially diminish such access, occupancy, possession, use or
                enjoyment.

        (l)     "Work" means all alterations, improvements, modifications, and
                other things required for the preparation or continued occupancy
                of the premises by the Government as specified in this lease.

   2.   552.270-5 - SUBLETTING AND ASSIGNMENT (SEP 1999)

        The Government may sublet all or a portion of the Premises or assign
        this Lease without obtaining the consent of the Lessor provided that (a)
        the Government provides the Lessor with written notice of such
        subletting or assignment at least 15 working days prior to the effective
        date of such subletting or assignment, (b) the Government remains liable
        for all the obligations of the tenant under the lease, (c) the lease
        authority of the Government serves as a guarantee of the obligations of
        the tenant under this lease in the event of any such subletting and
        assignment, and (d) the proposed sublessee's use is an office use
        consistent with office use and zoning for the site in Washington, D.C.


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                             SFO DTSA20-03-R-00528


   3.   552.270-11 SUCCESSORS BOUND (SEP 1999)

        This lease shall bind, and inure to the benefit of, the parties and
        their respective heirs, executors, administrators, successors, and
        assigns.

   4.   552.270-23 - SUBORDINATION, NONDISTURBANCE AND ATTORNMENT (SEP 1999)

        (a)     Lessor warrants that it holds such title to or other interest in
                the premises and other property as is necessary to the
                Government's access to the premises and full use and enjoyment
                thereof in accordance with the provisions of this lease.
                Government agrees, in consideration of the warranties and
                conditions set forth in this clause, that this lease is subject
                and subordinate to any and all recorded mortgages, deeds of
                trust and other liens now or hereafter existing or imposed upon
                the premises, and to any renewal, modification or extension
                thereof. It is the intention of the parties that this provision
                shall be self-operative and that no further instrument shall be
                required to effect the present or subsequent subordination of
                this lease. Government agrees, however, within twenty (20)
                business days next following the Contracting Officer's receipt
                of a written demand, to execute such instruments as Lessor may
                reasonably request to evidence further the subordination of this
                lease to any existing or future mortgage, deed of trust or other
                security interest pertaining to the premises, and to any water,
                sewer or access easement necessary or desirable to serve the
                premises or adjoining property owned in whole or in part by
                Lessor if such easement does not interfere with the full
                enjoyment of any right granted the Government under this lease.

        (b)     No such subordination, to either existing or future mortgages,
                deeds of trust or other lien or security instrument shall
                operate to affect adversely any right of the Government under
                this lease so long as the Government is not in default under
                this lease. Lessor will include in any future mortgage, deed of
                trust or other security instrument to which this lease becomes
                subordinate, or in a separate nondisturbance agreement, a
                provision to the foregoing effect. Lessor warrants that the
                holders of all notes or other obligations secured by existing
                mortgages, deeds of trust or other security instruments have
                consented to the provisions of this clause, and agrees to
                provide true copies of all such consents to the Contracting
                Officer promptly upon demand.

        (c)     In the event of any sale of the premises or any portion thereof
                by foreclosure of the lien of any such mortgage, deed of trust
                or other security instrument, or the giving of a deed in lieu of
                foreclosure, the Government will be deemed to have attorned to
                any purchaser, purchasers, transferee or transferees of the
                premises or any portion thereof and its or their successors and
                assigns, and any such purchasers and transferees will be deemed
                to have assumed all obligations of the Lessor under this lease,
                so as to establish direct privity of estate and contract between
                Government and such purchasers or transferees, with the same
                force, effect and relative priority in time and right as if the
                lease had initially been entered into between such purchasers or
                transferees and the Government; provided, further, that the
                Contracting Officer and such purchasers or transferees shall,
                with reasonable promptness following any such sale or deed
                delivery in lieu of foreclosure, execute all such revisions to
                this lease, or other writings, as shall be necessary to document
                the foregoing relationship.

        (d)     None of the foregoing provisions may be deemed or construed to
                imply a waiver of the Government's rights as a sovereign.

   5.   552.270-24 - STATEMENT OF LEASE (AUG 1999)

        (a)    The Contracting Officer will, within thirty (30) days next
               following the Contracting Officer's receipt of a joint written
               request from Lessor and a prospective lender or purchaser of the
               building, execute and deliver to Lessor a letter stating that the
               same is issued subject to the conditions stated in this clause
               and, if such is the case, that (1) the lease is in full force and
               effect; (2) the date to which the rent and other charges have
               been paid in advance, if any; and (3) whether any notice of
               default has been issued.

        (b)     Letters issued pursuant to this clause are subject to the
                following conditions:

               (1)    That they are based solely upon a reasonably diligent
                      review of the Contracting Officer's lease file as of the
                      date of issuance;

               (2)    That the Government shall not be held liable because of
                      any defect in or condition of the premises or building;

               (3)    That the Contracting Officer does not warrant or represent
                      that the premises or building comply with applicable
                      Federal, State and local law; and

               (4)    That the Lessor, and each prospective lender and purchaser
                      are deemed to have constructive notice of such facts as
                      would be ascertainable by reasonable prepurchase and
                      precommitment inspection of the Premises and Building and
                      by inquiry to appropriate Federal, State and local
                      Government officials.


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                             SFO DTSA20-03-R-00528

   6.   552.270-25 - SUBSTITUTION OF TENANT AGENCY (SEP 1999)

        The Government may, at any time and from time to time, substitute any
        Government agency or agencies for the Government agency or agencies, if
        any, named in the lease.

   7.   552.270-26 - NO WAIVER (SEP 1999)

        No failure by either party to insist upon the strict performance of any
        provision of this lease or to exercise any right or remedy consequent
        upon a breach thereof, and no acceptance of full or partial rent or
        other performance by either party during the continuance of any such
        breach shall constitute a waiver of any such breach of such provision.

   8.   552.270-27 - INTEGRATED AGREEMENT (SEP 1999)

        This Lease, upon execution, contains the entire agreement of the parties
        and no prior written or oral agreement, express or implied, shall be
        admissible to contradict the provisions of the Lease.

   9.   552.270-28 - MUTUALITY OF OBLIGATION (SEP 1999)

        The obligations and covenants of the Lessor, and the Government's
        obligation to pay rent and other Government obligations and covenants,
        arising under or related to this Lease, are interdependent. The
        Government may, upon issuance of and delivery to Lessor of a final
        decision asserting a claim against Lessor, set off such claim, in whole
        or in part, as against any payment or payments then or thereafter due
        the Lessor under this lease. No setoff pursuant to this clause shall
        constitute a breach by the Government of this lease. Prior to exercising
        any right of financial offset, the Government shall use best efforts,
        circumstances allowing, to provide Lessor with ten (10) days prior
        written notice.

  10.   552.270-17 - DELIVERY AND CONDITION (SEP 1999)

        (a)    Unless the Government elects to have the space occupied in
               increments, the space must be delivered ready for occupancy as a
               complete unit. The Government reserves the right to determine
               when the space is substantially complete.

        (b)    If the premises do not in every respect comply with the
               provisions of this lease the Contracting Officer may, in
               accordance with the Failure in Performance clause of this lease,
               elect to reduce the rent payments.

  11.   552.270-18 - DEFAULT IN DELIVERY - TIME EXTENSIONS (SEP 1999)
        (VARIATION)

        (a)    With respect to Lessor's obligation to deliver the premises
               substantially complete by the delivery date, time is of the
               essence. If the Lessor fails to work diligently to ensure its
               substantial completion by the delivery date or fails to
               substantially complete the work by such date, the Government may
               by notice to the Lessor terminate this lease. Such termination is
               effective when received by Lessor. The Lessor and the Lessor's
               sureties, if any, are jointly and severally liable for any
               damages to the Government resulting from such termination, as
               provided in this clause. The Government shall be entitled to the
               following damages:

               (1)    The Government's aggregate rent and estimated real estate
                      tax and operating cost adjustments for the firm term and
                      all option terms of its replacement lease or leases, in
                      excess of the aggregate rent and estimated real estate tax
                      and operating cost adjustments for the term. If the
                      Government procures replacement premises for a term
                      (including all option terms) in excess of this term, the
                      Lessor is not liable for excess Government rent or
                      adjustments during such excess lease term.

               (2)    All administrative and other costs the Government incurs
                      in procuring a replacement lease or leases.

               (3)    Other, additional relief provided for in this lease, at
                      law, or in equity.

        (b)    Damages to which the Government is entitled to under this clause
               are due and payable thirty (30) days following the date Lessor
               receives notice from the Contracting Officer specifying such
               damages.

        (c)    Delivery by Lessor of less than the minimum ANSI/BOMA Office Area
               square footage required by this lease shall in no event be
               construed as substantial completion, except as the Contracting
               Officer permits.

        (d)    The Government shall not terminate this lease under this clause
               nor charge the Lessor with damages under this clause, if (1) the
               delay in substantially completing the work arises from excusable
               delays and (2) the Lessor within 10 days from the beginning of
               any such delay (unless extended in writing by the Contracting
               Officer) provides notice to the Contracting Officer of the causes
               of delay. The Contracting Officer shall ascertain the facts and
               the extent of delay. If the facts warrant, the Contracting
               Officer shall extend the delivery date, to

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                             SFO DTSA20-03-R-00528

                the extent of such delay at no additional costs to the
                Government. A time extension is the sole remedy of the Lessor.

  12.   552.270-19 - PROGRESSIVE OCCUPANCY (SEP 1999)

        The Government shall have the right to elect to occupy the space in
        partial increments prior to the substantial completion of the entire
        leased premises, and the Lessor agrees to schedule its work so as to
        deliver the space incrementally as elected by the Government. The
        Government shall pay rent commencing with the first business day
        following substantial completion of the entire leased premise unless the
        Government has elected to occupy the leased premises incrementally. In
        case of incremental occupancy, the Government shall pay rent pro rata
        upon the first business day following substantial completion of each
        incremental unit. Rental payments shall become due on the first workday
        of the month following the month in which an increment of space is
        substantially complete, except that should an increment of space be
        substantially completed after the fifteenth day of the month, the
        payment due date will be the first workday of the second month following
        the month in which it was substantially complete. The commencement date
        of the firm lease term will be a composite determined from all rent
        commencement dates.

  13.   552.270-21 - EFFECT OF ACCEPTANCE AND OCCUPANCY (SEP 1999)

        Neither the Government's acceptance of the premises for occupancy, nor
        the Government's occupancy thereof, shall be construed as a waiver of
        any requirement of or right of the Government under this Lease, or as
        otherwise prejudicing the Government with respect to any such
        requirement or right.

  14.   552.270-6 - MAINTENANCE OF BUILDING AND PREMISES - RIGHT OF ENTRY
        (SEP 1999)

        Except in case of damage arising out of the willful act or negligence of
        a Government employee, Lessor shall maintain the premises, including the
        building, building systems, and all equipment, fixtures, and
        appurtenances furnished by the lessor under this lease, in good repair
        and condition so that they are suitable in appearance and capable of
        supplying such heat, air conditioning, light, ventilation, safety
        systems, access and other things to the premises, without reasonably
        preventable or recurring disruption, as is required for the Government's
        access to, occupancy, possession, use and enjoyment of the premises as
        provided in this lease. For the purpose of so maintaining the premises,
        the Lessor may at reasonable times enter the premises with the approval
        of the authorized Government representative in charge.

  15.   552.270-10 - FAILURE IN PERFORMANCE (SEP 1999)

        The covenant to pay rent and the covenant to provide any service,
        utility, maintenance, or repair required under this lease are
        interdependent. In the event of any failure by the Lessor to provide any
        service, utility, maintenance, repair or replacement required under this
        lease the Government may, by contract or otherwise, perform the
        requirement and deduct from any payment or payments under this lease,
        then or thereafter due, the resulting cost to the Government, including
        all administrative costs. If the Government elects to perform any such
        requirement, the Government and each of its contractors shall be
        entitled to access to any and all areas of the building, access to which
        is necessary to perform any such requirement, and the Lessor shall
        afford and facilitate such access. Alternatively, the Government may
        deduct from any payments under this lease, then or thereafter due, an
        amount which reflects the reduced value of the contract requirement not
        performed. No deduction from rent pursuant to this clause shall
        constitute a default by the Government under this lease. These remedies
        are not exclusive and are in addition to any other remedies which may be
        available under this lease or at law. The Government will use best
        efforts to notify Lessor and allow reasonable time to cure.

  16.   552.270-22 - DEFAULT BY LESSOR DURING THE TERM (SEP 1999)

        (a)    Each of the following shall constitute a default by Lessor under
               this lease:

               (1)    Failure to maintain, repair, operate or service the
                      premises as and when specified in this lease, or failure
                      to perform any other requirement of this lease as and when
                      required provided any such failure shall remain uncured
                      for a period of thirty (30) days next following Lessor's
                      receipt of notice thereof from the Contracting Officer or
                      an authorized representative, unless Lessor is reasonably
                      pursuing a cure of the failure.

        (b)    If a default occurs, the Government may, by notice to Lessor,
               terminate this lease for default and if so terminated, the
               Government shall be entitled to the damages specified in the
               Default in Delivery-Time Extensions clause. The Government will
               use its best efforts to notify Lessor or management agent and
               allow reasonable time to cure.


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  17.   552.270-7 - FIRE AND CASUALTY DAMAGE (SEP 1999)

        If the entire premises are destroyed by fire or other casualty, this
        lease will immediately terminate. In case of partial destruction or
        damage, so as to render the premises untenantable, as determined by the
        Government, the Government may terminate the lease by giving written
        notice to the Lessor within 15 calendar days of the fire or other
        casualty; if so terminated, no rent will accrue to the Lessor after such
        partial destruction or damage; and if not so terminated, the rent will
        be reduced proportionately by supplemental agreement hereto effective
        from the date of such partial destruction or damage. Nothing in this
        lease shall be construed as relieving Lessor from liability for damage
        to or destruction of property of the United States of America caused by
        the willful or negligent act or omission of Lessor.

  18.   552.270-8 - COMPLIANCE WITH APPLICABLE LAW (SEP 1999)

        Lessor shall comply with all Federal, state and local laws applicable to
        the Lessor as owner or lessor, or both, of the building or premises,
        including, without limitation, laws applicable to the construction,
        ownership, alteration or operation of both or either thereof, and will
        obtain all necessary permits, licenses and similar items at Lessor's
        expense. The Government will comply with all Federal state and local
        laws applicable to and enforceable against it as a tenant under this
        lease; provided that nothing in this lease shall be construed as a
        waiver of any sovereign immunity of the Government. This lease shall be
        governed by Federal law.

  19.   552.270-12 - ALTERATIONS (SEP 1999)

        The Government shall have the right during the existence of this lease
        to make alterations, attach fixtures, and erect structures or signs in
        or upon the premises hereby leased, which fixtures, additions or
        structures so placed in, on, upon, or attached to the said premises
        shall be and remain the property of the Government and may be removed or
        otherwise disposed of by the Government. If the lease contemplates that
        the Government is the sole occupant of the building, for purposes of
        this clause, the leased premises include the land on which the building
        is sited and the building itself. Otherwise, the Government shall have
        the right to tie into or make any physical connection with any structure
        located on the property as is reasonably necessary for appropriate
        utilization of the leased space. All mechanical, electrical, and/or
        structural alterations affecting the building systems shall either be
        reasonably approved in writing by the Lessor or contracted for, through
        Lessor.

  20.   552.270-29 - ACCEPTANCE OF SPACE (SEP 1999)

        (a)    When the Lessor has completed all alterations, improvements, and
               repairs necessary to meet the requirements of the lease, the
               Lessor shall notify the Contracting Officer. The Contracting
               Officer or designated representative shall promptly inspect the
               space.

        (b)    The Government will accept the space and the lease term will
               begin after determining that the space is substantially complete
               and contains the required ANSI/BOMA Office Area square footage as
               indicated in the paragraph of this solicitation entitled "Amount
               and Type of Space."

  21.   552.270-9 - INSPECTION - RIGHT OF ENTRY (SEP 1999)

        (a)    At any time and from time to time after receipt of an offer
               (until the same has been duly withdrawn or rejected), after
               acceptance thereof and during the term, the agents, employees
               and contractors of the Government may, upon reasonable prior
               notice to Offeror or Lessor, enter upon the offered premises or
               the premises, and all other areas of the building access to
               which is necessary to accomplish the purposes of entry, to
               determine the potential or actual compliance by the Offeror or
               Lessor with the requirements of the solicitation or this lease,
               which purposes shall include, but not be limited to: (1)
               inspecting, sampling and analyzing of suspected
               asbestos-containing materials and air monitoring for asbestos
               fibers; (2) inspecting the heating, ventilation and air
               conditioning system, maintenance records, and mechanical rooms
               for the offered premises or the premises; (3) inspecting for any
               leaks, spills, or other potentially hazardous conditions which
               may involve tenant exposure to hazardous or toxic substances;
               and (4) inspecting for any current or past hazardous waste
               operations, to ensure that appropriate mitigative actions were
               taken to alleviate any environmentally unsound activities in
               accordance with Federal, State and local law.

        (b)    Nothing in this clause shall be construed to create a Government
               duty to inspect for toxic materials or to impose a higher
               standard of care on the Government than on other lessees. The
               purpose of this clause is to promote the ease with which the
               Government may inspect the building. Nothing in this clause shall
               act to relieve the Lessor of any duty to inspect or liability
               which might arise as a result of Lessor's failure to inspect for
               or correct a hazardous condition.


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  22.   552.232-75 - PROMPT PAYMENT (SEP 1999)

        The Government will make payments under the terms and conditions
        specified in this clause. Payment shall be considered as being made on
        the day a check is dated or an electronic funds transfer is made. All
        days referred to in this clause are calendar days, unless otherwise
        specified.

        (a)    Payment due date.

               (1)    Rental payments. Rent shall be paid monthly in arrears and
                      will be due on the first workday of each month, and only
                      as provided for by the lease.

                      (i)    When the date for commencement of rent falls on
                             the 15th day of the month or earlier, the
                             initial monthly rental payment under this
                             contract shall become due on the first workday of
                             the month following the month in which the
                             commencement of the rent is effective.

                      (ii)   When the date for commencement of rent falls after
                             the 15th day of the month, the initial monthly
                             rental payment under this contract shall become due
                             on the first workday of the second month following
                             the month in which the commencement of the rent is
                             effective.

               (2)    Other payments. The due date for making payments other
                      than rent shall be the later of the following two events:

                      (i)    The 30th day after the designated billing office
                             has received a proper invoice from the Contractor.

                      (ii)   The 30th day after Government acceptance of the
                             work or service. However, if the designated billing
                             office fails to annotate the invoice with the
                             actual date of receipt, the invoice payment due
                             date shall be deemed to be the 30th day after the
                             Contractor's invoice is dated, provided a proper
                             invoice is received and there is no disagreement
                             over quantity, quality, or Contractor compliance
                             with contract requirements.

        (b)    Invoice and inspection requirements for payments other than rent.

               (1)    The Contractor shall prepare and submit an invoice to the
                      designated billing office after completion of the work. A
                      proper invoice shall include the following items:

                      (i)    Name and address of the Contractor.

                      (ii)   Invoice date.

                      (iii)  Lease number.

                      (iv)   Government's order number or other authorization.

                      (v)    Description, price, and quantity of work or
                             services delivered.

                      (vi)   Name and address of Contractor official to whom
                             payment is to be sent (must be the same as that in
                             the remittance address in the lease or the order.)

                      (vii)  Name (where practicable), title, phone number, and
                             mailing address of person to be notified in the
                             event of a defective invoice.

               (2)    The Government will inspect and determine the
                      acceptability of the work performed or services delivered
                      within 7 days after the receipt of a proper invoice or
                      notification of completion of the work or services unless
                      a different period is specified at the time the order is
                      placed. If actual acceptance occurs later, for the purpose
                      of determining the payment due date and calculation of
                      interest, acceptance will be deemed to occur on the last
                      day of the 7-day inspection period. If the work or service
                      is rejected for failure to conform to the technical
                      requirements of the contract, the 7 days will be counted
                      beginning with receipt of a new invoice or notification.
                      In either case, the Contractor is not entitled to any
                      payment or interest unless actual acceptance by the
                      Government occurs.

        (c)    Interest Penalty.

               (1)    An interest penalty shall be paid automatically by the
                      Government, without request from the Contractor, if
                      payment is not made by the due date.

               (2)    The interest penalty shall be at the rate established by
                      the Secretary of the Treasury under Section 12 of the
                      Contract Disputes Act of 1978 (41 U.S.C. 611) that is in
                      effect on the day after the due date. This rate is
                      referred to as the "Renegotiation Board Interest Rate,"
                      and it is published in the Federal Register semiannually
                      on or about January 1 and July 1. The interest penalty
                      shall accrue daily on the payment amount approved by the
                      Government and be compounded in 30-day increments
                      inclusive from the first day after the due date through
                      the payment date.

               (3)    Interest penalties will not continue to accrue after the
                      filing of a claim for such penalties under the clause at
                      52.233-1, Disputes, or for more than 1 year. Interest
                      penalties of less than $1.00 need not be paid.

               (4)    Interest penalties are not required on payment delays due
                      to disagreement between the Government and Contractor over
                      the payment amount or other issues involving contract
                      compliance or on amounts temporarily withheld or retained
                      in accordance with the terms of the contract. Claims
                      involving disputes, and any interest that may be payable,
                      will be resolved in accordance with the clause at
                      52.233-1, Disputes.


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  23.   552.232-76 - ELECTRONIC FUNDS TRANSFER PAYMENT (SEP 1999) (Variation)

        (a)    The Government will make payments under this lease by electronic
               funds transfer (EFT). After award, but no later than 30 days
               before the first payment, the Lessor shall designate a financial
               institution for receipt of EFT payments, and shall submit this
               designation to the Contracting Officer or other Government
               official, as directed.

        (b)    The Lessor shall provide the following information:

               (1)    The lease number to which this notice applies.

               (2)    The American Bankers Association 9-digit identifying
                      number for wire transfers of the financing institution
                      receiving payment if the institution has access to the
                      Federal Reserve Communications System.

               (3)    Number of account to which funds are to be deposited.

               (4)    Type of depositor account ("C" for checking, "S" for
                      savings).

               (5)    If the Lessor is a new enrollee to the EFT system, a
                      completed "Payment Information Form," SF 3881.

        (c)    In the event the Lessor, during the performance of this contract,
               elects to designate a different financial institution for the
               receipt of any payment made using EFT procedures, notification of
               such change and the required information specified in (b), above
               must be received by the appropriate Government official no later
               than 30 days prior to the date such change is to become
               effective.

        (d)    The documents furnishing the information required in this clause
               must be dated and contain the signature, title, and telephone
               number of the Lessor or an authorized representative designated
               by the Lessor, as well as the Lessor's name and lease number.

        (e)    Lessor failure to properly designate a financial institution or
               to provide appropriate payee bank account information may delay
               payments of amounts otherwise properly due.

  24.   552.232-70 - INVOICE REQUIREMENTS (VARIATION) (SEP 1999)

        (This clause applies to payments other than rent.)

        (a)    Invoices shall be submitted in an original only, unless otherwise
               specified, to the designated billing office specified in this
               contract or order.

        (b)    Invoices must include the Accounting Control Transaction (ACT)
               number provided below or on the order.

                        ACT Number (to be supplied on individual orders)

        (c)    If information or documentation in addition to that required by
               the Prompt Payment clause of this contract is required in
               connection with an invoice for a particular order, the order will
               indicate what information or documentation must be submitted.

  25.   52.232-23 - ASSIGNMENT OF CLAIMS (JAN 1986)

        (a)    The Contractor, under the Assignment of Claims Act, as amended,
               31 USC 3727, 41 USC 15 (hereafter referred to as the "the Act"),
               may assign its rights to be paid amounts due or to become due as
               a result of the performance of this contract to a bank, trust
               company, or other financing institution, including any Federal
               lending agency. The assignee under such an assignment may
               thereafter further assign or reassign its right under the
               original assignment to any type of financing institution
               described in the preceding sentence.

        (b)    Any assignment or reassignment authorized under the Act and this
               clause shall cover all unpaid amounts payable under this
               contract, and shall not be made to more than one party, except
               that an assignment or reassignment may be made to one party as
               agent or trustee for two or more parties participating in the
               financing of this contract.

        (c)    The Contractor shall not furnish or disclose to any assignee
               under this contract any classified document (including this
               contract) or information related to work under this contract
               until the Contracting Officer authorizes such action in writing.

  26.   552.270-20 - PAYMENT (SEP 1999) (VARIATION)

        (a)    When space is offered and accepted, the ANSI/BOMA Office Area
               square footage delivered will be confirmed by:

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               (1)    the Government's measurement of plans submitted by the
                      successful Offeror as approved by the Government, and an
                      inspection of the space to verify that the delivered space
                      is in conformance with such plans or

               (2)    a mutual on-site measurement of the space, if the
                      Contracting Officer determines that it is necessary.

        (b)    Payment will not be made for space which is in excess of the
               amount of ANSI/BOMA Office Area square footage stated in the
               lease.

        (c)    If it is determined that the amount of ANSI/BOMA Office Area
               square footage actually delivered is less than the amount agreed
               to in the lease, the lease will be modified to reflect the amount
               of Usable space delivered and the annual rental will be adjusted
               as follows:

               Usable square feet not delivered multiplied by the ANSI/BOMA
               Office Area square foot (USF) rate equals the reduction in annual
               rent. The rate per USF is determined by dividing the total annual
               rental by the Usable square footage set forth in the lease.

               USF Not Delivered X Rate per USF = Reduction in Annual Rent.

  27.   552.203-5 - COVENANT AGAINST CONTINGENT FEES (FEB 1990)

        (Applies to leases which exceed $100,000.)

        (a)    The Contractor warrants that no person or agency has been
               employed or retained to solicit or obtain this contract upon an
               agreement or understanding for a contingent fee, except a bona
               fide employee or agency. For breach or violation of this
               warranty, the Government shall have the right to annul this
               contract without liability or, in its discretion, to deduct from
               the contract price or consideration, or otherwise recover the
               full amount of the contingent fee.

        (b)    "Bona fide agency," as used in this clause, means an established
               commercial or selling agency (including licensed real estate
               agents or brokers), maintained by a Contractor for the purpose of
               securing business, that neither exerts nor proposes to exert
               improper influence to solicit or obtain Government contracts nor
               holds itself out as being able to obtain any Government contract
               or contracts through improper influence.

               "Bona fide employee," as used in this clause, means a person,
               employed by a Contractor and subject to the Contractor's
               supervision and control as to time, place, and manner of
               performance, who neither exerts nor proposes to exert improper
               influence to solicit or obtain Government contracts nor holds out
               as being able to obtain any Government contract or contracts
               through improper influence.

               "Contingent fee," as used in this clause, means any commission,
               percentage, brokerage, or other fee that is contingent upon the
               success that a person or concern has in securing a Government
               contract.

               "Improper influence," as used in this clause, means any influence
               that induces or tends to induce a Government employee or officer
               to give consideration or to act regarding a Government contract
               on any basis other than the merits of the matter.

  28.   52.203-7 - ANTI-KICKBACK PROCEDURES (JUL 1995)

        (Applies to leases which exceed $100,000 average net annual rental,
        including option periods.)

        (a)    Definitions.

               "Kickback," as used in this clause, means any money, fee,
               commission, credit, gift, gratuity, thing of value, or
               compensation of any kind which is provided, directly or
               indirectly, to any prime Contractor, prime Contractor employee,
               subcontractor, or subcontractor employee for the purpose of
               improperly obtaining or rewarding favorable treatment in
               connection with a prime contract or in connection with a
               subcontract relating to a prime contract.

               "Person," as used in this clause, means a corporation,
               partnership, business association of any kind, trust, joint-stock
               company, or individual.

               "Prime contract," as used in this clause, means a contract or
               contractual action entered into by the United States for the
               purpose of obtaining supplies, materials, equipment, or services
               of any kind.

               "Prime Contractor," as used in this clause, means a person who
               has entered into a prime contract with the United States.

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               "Prime Contractor employee," as used in this clause, means any
               officer, partner, employee, or agent of a prime Contractor.

               "Subcontract," as used in this clause, means a contract or
               contractual action entered into by a prime Contractor or
               subcontractor for the purpose of obtaining supplies, materials,
               equipment, or services of any kind under a prime contract.

               "Subcontractor," as used in this clause, (1) means any person,
               other than the prime Contractor, who offers to furnish or
               furnishes any supplies, materials, equipment, or services of any
               kind under a prime contract or a subcontract entered into in
               connection with such prime contract, and (2) includes any person
               who offers to furnish or furnishes general supplies to the prime
               Contractor or a higher tier subcontractor.

               "Subcontractor employee," as used in this clause, means any
               officer, partner, employee, or agent of a subcontractor.

        (b)    The Anti-Kickback Act of 1986 (41 U.S.C. 51-58) (the Act),
               prohibits any person from--

               (1)    Providing or attempting to provide or offering to provide
                      any kickback;

               (2)    Soliciting, accepting, or attempting to accept any
                      kickback; or

               (3)    Including, directly or indirectly, the amount of any
                      kickback in the contract price charged by a prime
                      Contractor to the United States or in the contract price
                      charged by a subcontractor to a prime Contractor or higher
                      tier subcontractor.

        (c)    (1)    The Contractor shall have in place and follow
                      reasonable procedures designed to prevent and detect
                      possible violations described in paragraph (b) of this
                      clause in its own operations and direct business
                      relationships.

               (2)    When the Contractor has reasonable grounds to believe that
                      a violation described in paragraph (b) of this clause may
                      have occurred, the Contractor shall promptly report in
                      writing the possible violation. Such reports shall be made
                      to the inspector general of the contracting agency, the
                      head of the contracting agency if the agency does not have
                      an inspector general, or the Department of Justice.

               (3)    The Contractor shall cooperate fully with any Federal
                      agency investigating a possible violation described in
                      paragraph (b) of this clause.

               (4)    The Contracting Officer may (i) offset the amount of the
                      kickback against any monies owed by the United States
                      under the prime contract and/or (ii) direct that the Prime
                      Contractor withhold from sums owed a subcontractor under
                      the prime contract, the amount of the kickback. The
                      Contracting Officer may order that monies withheld under
                      subdivision (c)(4)(ii) of this clause be paid over to the
                      Government unless the Government has already offset those
                      monies under subdivision (c)(4)(i) of this clause. In the
                      either case, the Prime Contractor shall notify the
                      Contracting Officer when the monies are withheld.

               (5)    The Contractor agrees to incorporate the substance of this
                      clause, including subparagraph (c)(5) but excepting
                      subparagraph (c)(1), in all subcontracts under this
                      contract which exceed $100,000.

29.     52.223-6      DRUG-FREE WORKPLACE (JAN 1997)

        (a)    Definitions. As used in this clause --

               "Controlled substance" means a controlled substance in schedules
               I through V of section 202 of the Controlled Substances Act (21
               U.S.C. 812) and as further defined in regulation at 21 CFR
               1308.11 - 1308.15.

               "Conviction" means a finding of guilt (including a plea of nolo
               contendere) or imposition of sentence, or both, by any judicial
               body charged with the responsibility to determine violations of
               the Federal or State criminal drug statutes.

               "Criminal drug statute" means a Federal or non-Federal criminal
               statute involving the manufacture, distribution, dispensing,
               possession, or use of any controlled substance.

               "Drug-free workplace" means the site(s) for the performance of
               work done by the Contractor in connection with a specific
               contract at which employees of the Contractor are prohibited from
               engaging in the unlawful manufacture, distribution, dispensing,
               possession, or use of a controlled substance.

               "Employee" means an employee of a Contractor directly engaged in
               the performance of work under a Government contract. "Directly
               engaged" is defined to include all direct cost employees and any
               other Contractor employee who has other than a minimal impact or
               involvement in contract performance.


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               "Individual" means an offeror/contractor that has no more than
               one employee including the offeror/contractor.

        (b)    The Contractor, if other than an individual, shall-- within 30
               days after award (unless a longer period is agreed to in writing
               for contracts of 30 days or more performance duration), or as
               soon as possible for contracts of less than 30 days performance
               duration--

               (1)    Publish a statement notifying its employees that the
                      unlawful manufacture, distribution, dispensing,
                      possession, or use of a controlled substance is prohibited
                      in the Contractor's workplace and specifying the actions
                      that will be taken against employees for violations of
                      such prohibition;

               (2)    Establish an ongoing drug-free awareness program to inform
                      such employees about--

                      (i)    The dangers of drug abuse in the workplace;

                      (ii)   The Contractor's policy of maintaining a drug-free
                             workplace;

                      (iii)  Any available drug counseling, rehabilitation, and
                             employee assistance programs; and

                      (iv)   The penalties that may be imposed upon employees
                             for drug abuse violations occurring in the
                             workplace;

               (3)    Provide all employees engaged in performance of the
                      contract with a copy of the statement required by
                      subparagraph (b)(1) of this clause;

               (4)    Notify such employees in writing in the statement required
                      by subparagraph (b)(1) of this clause that, as a condition
                      of continued employment on this contract, the employee
                      will--

                      (i)    Abide by the terms of the statement; and

                      (ii)   Notify the employer in writing of the employee's
                             conviction under a criminal drug statute for a
                             violation occurring in the workplace no later than
                             5 days after such conviction.

               (5)    Notify the Contracting Officer in writing within 10 days
                      after receiving notice under subdivision (b)(4)(ii) of
                      this clause, from an employee or otherwise receiving
                      actual notice of such conviction. The notice shall include
                      the position title of the employee;

               (6)    Within 30 days after receiving notice under subdivision
                      (b)(4)(ii) of this clause of a conviction, take one of the
                      following actions with respect to any employee who is
                      convicted of a drug abuse violation occurring in the
                      workplace:

                      (i)    Taking appropriate personnel action against such
                             employee, up to and including termination; or

                      (ii)   Require such employee to satisfactorily participate
                             in a drug abuse assistance or rehabilitation
                             program approved for such purposes by a Federal,
                             State, or local health, law enforcement, or other
                             appropriate agency; and

               (7)    Make a good faith effort to maintain a drug-free workplace
                      through implementation of subparagraphs (b)(1) through
                      (b)(6) of this clause.

        (c)    The Contractor, if an individual, agrees by award of the contract
               or acceptance of a purchase order, not to engage in the unlawful
               manufacture, distribution, dispensing, possession, or use of a
               controlled substance while performing this contract.

        (d)    In addition to other remedies available to the Government, the
               Contractor's failure to comply with the requirements of paragraph
               (b) or (c) of this clause may, pursuant to FAR 23.506, render the
               Contractor subject to suspension of contract payments,
               termination of the contract for default, and suspension or
               debarment.

  30.   552.203-70 - PRICE ADJUSTMENT FOR ILLEGAL OR IMPROPER ACTIVITY
        (SEP 1999)

        (Applies to leases which exceed $100,000.)

        (a)    If the head of the contracting activity (HCA) or his or her
               designee determines that there was a violation of subsection
               27(a) of the Office of Federal Procurement Policy Act, as amended
               (41 U.S.C. 423), as implemented in the Federal Acquisition
               Regulation, the Government, at its election, may--

               (1)    Reduce the monthly rental under this lease by 5 percent of
                      the amount of the rental for each month of the remaining
                      term of the lease, including any option periods, and
                      recover 5 percent of the rental already paid;

               (2)    Reduce payments for alterations not included in monthly
                      rental payments by 5 percent of the amount of the
                      alterations agreement; or

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               (3)    Reduce the payments for violations by a Lessor's
                      subcontractor by an amount not to exceed the amount of
                      profit or fee reflected in the subcontract at the time the
                      subcontract was placed.

        (b)    Prior to making a determination as set forth above, the HCA or
               designee shall provide to the Lessor a written notice of the
               action being considered and the basis therefor. The Lessor shall
               have a period determined by the agency head or designee, but not
               less than 30 calendar days after receipt of such notice, to
               submit in person, in writing, or through a representative,
               information and argument in opposition to the proposed reduction.
               The agency head or designee may, upon good cause shown, determine
               to deduct less than the above amounts from payments.

        (c)    The rights and remedies of the Government specified herein are
               not exclusive, and are in addition to any other rights and
               remedies provided by law or under this lease.

  31.   52.215-10 - PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA (OCT
        1997)

        (Applies when cost or pricing data are required for work or service
        exceeding $500,000.)

        (a)    If any price, including profit or fee, negotiated in connection
               with this contract, or any cost reimbursable under this contract,
               was increased by any significant amount because--

               (1)    The Contractor or a subcontractor furnished cost or
                      pricing data that were not complete, accurate, and current
                      as certified in its Certificate of Current Cost or Pricing
                      Data;

               (2)    A subcontractor or prospective subcontractor furnished the
                      Contractor cost or pricing data that were not complete,
                      accurate, and current as certified in the Contractor's
                      Certificate of Current Cost or Pricing Data; or

               (3)    Any of these parties furnished data of any description
                      that were not accurate, the price or cost shall be reduced
                      accordingly and the contract shall be modified to reflect
                      the reduction.

        (b)    Any reduction in the contract price under paragraph (a) of this
               clause due to defective data from a prospective subcontractor
               that was not subsequently awarded the subcontract shall be
               limited to the amount, plus applicable overhead and profit
               markup, by which (1) the actual subcontract or (2) the actual
               cost to the Contractor, if there was no subcontract, was less
               than the prospective subcontract cost estimate submitted by the
               Contractor; provided, that the actual subcontract price was not
               itself affected by defective cost or pricing data.

        (c)    (1)    If the Contracting Officer determines under paragraph
                      (a) of this clause that a price or cost reduction should
                      be made, the Contractor agrees not to raise the following
                      matters as a defense:

                      (i)    The Contractor or subcontractor was a sole source
                             supplier or otherwise was in a superior bargaining
                             position and thus the price of the contract would
                             not have been modified even if accurate, complete,
                             and current cost or pricing data had been
                             submitted.

                      (ii)   The Contracting Officer should have known that the
                             cost or pricing data in issue were defective even
                             though the Contractor or subcontractor took no
                             affirmative action to bring the character of the
                             data to the attention of the Contracting Officer.

                      (iii)  The contract was based on an agreement about the
                             total cost of the contract and there was no
                             agreement about the cost of each item procured
                             under the contract.

                      (iv)   The Contractor or subcontractor did not submit a
                             Certificate of Current Cost or Pricing Data.

               (2)    (i)    Except as prohibited by subdivision (c)(2)(ii)
                             of this clause, an offset in an amount determined
                             appropriate by the Contracting Officer based upon
                             the facts shall be allowed against the amount of a
                             contract price reduction if--

                             (A)    The Contractor certifies to the Contracting
                                    Officer that, to the best of the
                                    Contractor's knowledge and belief, the
                                    Contractor is entitled to the offset in the
                                    amount requested; and

                             (B)    The Contractor proves that the cost or
                                    pricing data were available before the "as
                                    of" date specified on its Certificate of
                                    Current Cost or Pricing Data, and that the
                                    data were not submitted before such date.

                      (ii)   An offset shall not be allowed if--

                             (A)    The understated data were known by the
                                    Contractor to be understated before the "as
                                    of" date specified on its Certificate of
                                    Current Cost or Pricing Data; or

                             (B)    The Government proves that the facts
                                    demonstrate that the contract price would
                                    not have increased in the amount to be
                                    offset even if the available data had been
                                    submitted before the "as of" date specified
                                    on its Certificate of Current Cost or
                                    Pricing Data.


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        (d)    If any reduction in the contract price under this clause reduces
               the price of items for which payment was made prior to the date
               of the modification reflecting the price reduction, the
               Contractor shall be liable to and shall pay the United States at
               the time such overpayment is repaid--

               (1)    Simple interest on the amount of such overpayment to be
                      computed from the date(s) of overpayment to the Contractor
                      to the date the Government is repaid by the Contractor at
                      the applicable underpayment rate effective for each
                      quarter prescribed by the Secretary of the Treasury under
                      26 U.S.C. 6621(a)(2); and

               (2)    A penalty equal to the amount of the overpayment, if the
                      Contractor or subcontractor knowingly submitted cost or
                      pricing data that were incomplete, inaccurate, or
                      noncurrent.

  32.   552.270-13 - PROPOSALS FOR ADJUSTMENT (SEP 1999)

        (a)    The Contracting Officer may, from time to time during the term of
               this lease, require changes to be made in the work or services to
               be performed and in the terms or conditions of this lease. Such
               changes will be required under the Changes clause.

        (b)    If the Contracting Officer makes a change within the general
               scope of the lease, the Lessor shall submit, in a timely manner,
               an itemized cost proposal for the work to be accomplished or
               services to be performed when the cost exceeds $100,000. The
               proposal, including all subcontractor work, will contain at least
               the following details--

               (1)    Material quantities and unit costs;

               (2)    Labor costs (identified with specific item or material to
                      be placed or operation to be performed;

               (3)    Equipment costs;

               (4)    Worker's compensation and public liability insurance;

               (5)    Overhead;

               (6)    Profit; and

               (7)    Employment taxes under FICA and FUTA.

        (c)    The following Federal Acquisition Regulation (FAR) provisions
               also apply to all proposals exceeding $500,000 in cost --

               (1)    The Lessor shall provide cost or pricing data including
                      subcontractor cost or pricing data (48 CFR 15.403-4) and

               (2)    The Lessor's representative, all Contractors, and
                      subcontractors whose portion of the work exceeds $500,000
                      must sign and return the "Certificate of Current Cost or
                      Pricing Data" (48 CFR 15.406-2).

        (d)    Lessors shall also refer to 48 CFR Part 31, Contract Cost
               Principles, for information on which costs are allowable,
               reasonable, and allocable in Government work.

  33.   552.270-14 - CHANGES (SEP 1999) (VARIATION)

        (a)    The Contracting Officer may at any time, by written order, make
               changes within the general scope of this lease in any one or more
               of the following:

               (1)    Specifications (including drawings and designs);

               (2)    Work or services;

               (3)    Facilities or space layout; or

               (4)    Amount of space, provided the Lessor consents to the
                      change.

        (b)    If any such change causes an increase or decrease in Lessor's
               cost of or the time required for performance under this lease,
               whether or not changed by the order, the Contracting Officer
               shall modify this lease to provide for one or more of the
               following:

               (1)    A modification of the delivery date; provided the
                      Government is responsible for all Governmental caused time
                      delays,

               (2)    An equitable adjustment in the rental rate;

               (3)    A lump sum equitable adjustment; or

               (4)    An equitable adjustment of the annual operating costs per
                      ANSI/BOMA Office Area square foot specified in this lease.

  34.   552.215-70 - EXAMINATION OF RECORDS BY TSA (FEB 1996)

        The Contractor agrees that the Deputy Secretary of the Transportation
        Security Administration, or any duly authorized representative shall,
        until the expiration of 3 years after final payment under this


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        contract, or of the time periods for the particular records specified in
        Subpart 4.7 of the Federal Acquisition Regulation (48 CFR 4.7),
        whichever expires earlier, have access to and the right to examine any
        books, documents, papers, and records of the Contractor involving
        transactions related to this contract or compliance with any clauses
        thereunder. The Contractor further agrees to include in all its
        subcontracts hereunder a provision to the effect that the subcontractor
        agrees that the Administrator of General Services, or any duly
        authorized representatives shall, until the expiration of 3 years after
        final payment under the subcontract, or of the time periods for the
        particular records specified in Subpart 4.7 of the Federal Acquisition
        Regulation (48 CFR 4.7), whichever expires earlier, have access to and
        the right to examine any books, documents, papers, and records of such
        subcontractor, involving transactions related to the subcontract or
        compliance with any clauses thereunder. The term "subcontract" as used
        in this clause excludes (a) purchase orders not exceeding $100,000 and
        (b) subcontracts or purchase orders for public utility services at rates
        established for uniform applicability to the general public.

  35.   52.215-2 - AUDIT AND RECORDS--NEGOTIATION (JUN 1999)

        (a)    As used in this clause, "records" includes books, documents,
               accounting procedures and practices, and other data, regardless
               of type and regardless of whether such items are in written form,
               in the form of computer data, or in any other form.

        (b)    Examination of costs. If this is a cost-reimbursement, incentive,
               time-and-materials, labor-hour, or price redeterminable contract,
               or any combination of these, the Contractor shall maintain and
               the Contracting Officer, or an authorized representative of the
               Contracting Officer, shall have the right to examine and audit
               all records and other evidence sufficient to reflect properly all
               costs claimed to have been incurred or anticipated to be incurred
               directly or indirectly in performance of this contract. This
               right of examination shall include inspection at all reasonable
               times of the Contractor's plants, or parts of them, engaged in
               performing the contract.

        (c)    Cost or pricing data. If the Contractor has been required to
               submit cost or pricing data in connection with any pricing action
               relating to this contract, the Contracting Officer, or an
               authorized representative of the Contracting Officer, in order to
               evaluate the accuracy, completeness, and currency of the cost or
               pricing data, shall have the right to examine and audit all of
               the Contractor's records, including computations and projections,
               related to--

               (1)    The proposal for the contract, subcontract, or
                      modification;

               (2)    The discussions conducted on the proposal(s), including
                      those related to negotiating;

               (3)    Pricing of the contract, subcontract, or modification; or

               (4)    Performance of the contract, subcontract or modification.

        (d)    Comptroller General--

               (1)    The Comptroller General of the United States, or an
                      authorized representative, shall have access to and the
                      right to examine any of the Contractor's directly
                      pertinent records involving transactions related to this
                      contract or a subcontract hereunder.

               (2)    This paragraph may not be construed to require the
                      Contractor or subcontractor to create or maintain any
                      record that the Contractor or subcontractor does not
                      maintain in the ordinary course of business or pursuant to
                      a provision of law.

        (e)    Reports. If the Contractor is required to furnish cost, funding,
               or performance reports, the Contracting Officer or an authorized
               representative of the Contracting Officer shall have the right to
               examine and audit the supporting records and materials, for the
               purpose of evaluating--

               (1)    The effectiveness of the Contractor's policies and
                      procedures to produce data compatible with the objectives
                      of these reports; and

               (2)    The data reported.

        (f)    Availability. The Contractor shall make available at its office
               at all reasonable times the records, materials, and other
               evidence described in paragraphs (a), (b), (C), (d), and (e) of
               this clause, for examination, audit, or reproduction, until 3
               years after final payment under this contract or for any shorter
               period specified in Subpart 4.7, Contractor Records Retention, of
               the Federal Acquisition Regulation (FAR), or for any longer
               period required by statute or by other clauses of this contract.
               In addition--

               (1)    If this contract is completely or partially terminated,
                      the Contractor shall make available the records relating
                      to the work terminated until 3 years after any resulting
                      final termination settlement; and

               (2)    The Contractor shall make available records relating to
                      appeals under the Disputes clause or to litigation or the
                      settlement of claims arising under or relating to this
                      contract until such appeals, litigation, or claims are
                      finally resolved.


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        (g)    The Contractor shall insert a clause containing all the terms of
               this clause, including this paragraph (g), in all subcontracts
               under this contract that exceed the simplified acquisition
               threshold, and--

               (1)    That are cost-reimbursement, incentive,
                      time-and-materials, labor-hour, or price-redeterminable
                      type or any combination of these;

               (2)    For which cost or pricing data are required; or

               (3)    That require the subcontractor to furnish reports as
                      discussed in paragraph (e) of this clause.

               The clause may be altered only as necessary to identify properly
               the contracting parties and the Contracting Officer under the
               Government prime contract.

  36.   52.233-1 - DISPUTES (DEC 1998)

        (a)    This contract is subject to the Contract Disputes act of 1978, as
               amended (41 U.S.C. 601-613)

        (b)    Except as provided in the Act, all disputes arising under or
               relating to this contract shall be resolved under this clause.

        (c)    "Claim," as used in this clause, means a written demand or
               written assertion by one of the contracting parties seeking, as
               a matter of right, the payment of money in a sum certain, the
               adjustment or interpretation of contract terms, or other relief
               arising under or relating to this contract. A claim arising
               under a contract, unlike a claim relating to that contract, is a
               claim that can be resolved under a contract clause that provides
               for the relief sought by the claimant. However, a written demand
               or written assertion by the Contractor seeking the payment of
               money exceeding $100,000 is not a claim under the Act until
               certified as required by subparagraph (d)(2) of this clause. A
               voucher, invoice, or other routine request for payment that is
               not in dispute when submitted is not a claim under the Act. The
               submission may be converted to a claim under the Act, by
               complying with the submission and certification requirements of
               this clause, if it is disputed either as to liability or amount
               or is not acted upon in a reasonable time.

        (d)    (1)    A claim by the Contractor shall be made in writing
                      and, unless otherwise stated in this contract, submitted
                      within 6 years after accrual of the claim to the
                      Contracting Officer for a written decision. A claim by the
                      Government against the Contractor shall be subject to a
                      written decision by the Contracting Officer.

               (2)    (i)    The Contractor shall provide the certification
                             specified in paragraph (d)(2)(iii) of this clause
                             when submitting any claim exceeding $100,000.

                      (ii)   The certification requirement does not apply to
                             issues in controversy that have not been submitted
                             as all or part of a claim.

                      (iii)  The certification shall state as follows: "I
                             certify that the claim is made in good faith; that
                             the supporting data are accurate and complete to
                             the best of my knowledge and belief; that the
                             amount requested accurately reflects the contract
                             adjustment for which the Contractor believes the
                             Government is liable; and that I am duly authorized
                             to certify the claim on behalf of the Contractor."

               (3)    The certification may be executed by any person duly
                      authorized to bind the Contractor with respect to the
                      claim.

        (e)    For Contractor claims of $100,000 or less, the Contracting
               Officer must, if requested in writing by the Contractor, render a
               decision within 60 days of the request. For Contractor-certified
               claims over $100,000, the Contracting Officer must, within 60
               days, decide the claim or notify the Contractor of the date by
               which the decision will be made.

        (f)    The Contracting Officer's decision shall be final unless the
               Contractor appeals or files a suit as provided in the Act.

        (g)    If the claim by the Contractor is submitted to the Contracting
               Officer or a claim by the Government is presented to the
               Contractor, the parties, by mutual consent, may agree to use
               alternative disputes resolution (ADR). If the Contractor refuses
               an offer for ADR, the Contractor shall inform the Contracting
               Officer, in writing, of the Contractor's specific reasons for
               rejecting the offer.

        (h)    The Government shall pay interest on the amount found due and
               unpaid from (1) the date that the Contracting Officer receives
               the claim (certified if required); or (2) the date that payment
               otherwise would be due, if that date is later, until the date of
               payment. With regard to claims having defective certifications,
               as defined in FAR 33.201, interest shall be paid from the date
               that the Contracting Officer initially receives the claim.
               Simple interest on claims shall be paid at the rate, fixed by
               the Secretary of the Treasury as provided in the Act, which is
               applicable to the period during which the Contracting Officer
               receives the claim and then at


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               the rate applicable for each 6-month period as fixed by the
               Treasury Secretary during the pendency of the claim.

        (i)    The Contractor shall proceed diligently with performance of this
               contract, pending final resolution of any request for relief,
               claim, appeal, or action arising under the contract, and comply
               with any decision of the Contracting Officer.

  37.   52.222-26 - EQUAL OPPORTUNITY (FEB 1999)

        (a)    If, during any 12-month period (including the 12 months preceding
               the award of this contract), the Contractor has been or is
               awarded nonexempt Federal contracts and/or subcontracts that have
               an aggregate value in excess of $10,000, the Contractor shall
               comply with subparagraphs (b)(1) through (11) below. Upon
               request, the Contractor shall provide information necessary to
               determine the applicability of this clause.

        (b)    During performing this contract, the Contractor agrees as
               follows:

               (1)    The Contractor shall not discriminate against any employee
                      or applicant for employment because of race, color,
                      religion, sex, or national origin. However, it shall not
                      be a violation of this clause for the Contractor to extend
                      a publicly announced preference in employment to Indians
                      living on or near an Indian reservation, in connection
                      with employment opportunities on or near an Indian
                      reservation, as permitted by 41 CFR 60-1.5.

               (2)    The Contractor shall take affirmative action to ensure the
                      applicants are employed, and that employees are treated
                      during employment, without regard to their race, color,
                      religion, sex, or national origin. This shall include, but
                      not be limited to, (i) employment, (ii) upgrading, (iii)
                      demotion, (iv) transfer, (v) recruitment or recruitment
                      advertising, (vi) layoff or termination, (vii) rates of
                      pay or other forms of compensation, and (viii) selection
                      for training, including apprenticeship.

               (3)    The Contractor shall post in conspicuous places available
                      to employees and applicants for employment the notices to
                      be provided by the Contracting Officer that explain this
                      clause.

               (4)    The Contractor shall, in all solicitations or
                      advertisements for employees placed by or on behalf of the
                      Contractor, state that all qualified applicants will
                      receive consideration for employment without regard to
                      race, color, religion, sex, or national origin.

               (5)    The Contractor shall send, to each labor union or
                      representative of workers with which it has a collective
                      bargaining agreement or other contract or understanding,
                      the notice to be provided by the Contracting Officer
                      advising the labor union or workers' representative of the
                      Contractor's commitments under this clause, and post
                      copies of the notice in conspicuous places available to
                      employees and applicants for employment.

               (6)    The Contractor shall comply with Executive Order 11246, as
                      amended, and the rules, regulations, and orders of the
                      Secretary of Labor.

               (7)    The Contractor shall furnish to the contracting agency all
                      information required by Executive Order 11246, as amended,
                      and by the rules, regulations, and orders of the Secretary
                      of Labor. Standard Form 100 (EEO-1), or any successor
                      form, as prescribed in 41 CFR part 60-1. Unless the
                      Contractor has filed within the 12 months preceding the
                      date of contract award, the Contractor shall, within 30
                      days after contract award, apply to either the regional
                      Office of Federal Contract Compliance Programs (OFCCP) or
                      the local office of the Equal Employment Opportunity
                      Commission for the necessary forms

               (8)    The Contractor shall permit access to its premises, during
                      normal business hours, by the contracting agency or the
                      OFCCP for the purpose of conducting on-site compliance
                      evaluations and complaint investigations. The Contractor
                      shall permit the Government to inspect and copy any books,
                      accounts, records (including computerized records), and
                      other material that may be relevant to the matter under
                      investigation and pertinent to compliance with Executive
                      Order 11246, as amended, and rules and regulations that
                      implement the Executive Order.

               (9)    If the OFCCP determines that the Contractor is not in
                      compliance with this clause or any rule, regulation, or
                      order of the Secretary of Labor, this contract may be
                      canceled, terminated, or suspended in whole or in part and
                      the Contractor may be declared ineligible for further
                      Government contracts, under the procedures authorized in
                      Executive Order 11246, as amended. In addition, sanctions
                      may be imposed and remedies invoked against the Contractor
                      as provided in Executive Order 11246, as amended, the
                      rules, regulations, and orders of the Secretary of Labor,
                      or as otherwise provided by law.

               (10)   The Contractor shall include the terms and conditions of
                      subparagraph (b)(1) through (11) of this clause in every
                      subcontract or purchase order that is not exempted by the
                      rules, regulations, or orders of the Secretary of Labor
                      issued under Executive Order 11246, as amended, so that
                      these terms and conditions will be binding upon each
                      subcontractor or vendor.


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               (11)   The Contractor shall take such action with respect to any
                      subcontract or purchase order as the contracting agency
                      may direct as a means of enforcing these terms and
                      conditions, including sanctions for noncompliance;
                      provided, that if the Contractor becomes involved in, or
                      is threatened with, litigation with a subcontractor or
                      vendor as a result of any direction, the Contractor may
                      request the United States to enter into the litigation to
                      protect the interests of the United States.

        (c)    Notwithstanding any other clause in this contract, disputes
               relative to this clause will be governed by the procedures in 41
               CFR 60-1.1.

  38.   52.222-24 - PREAWARD ON-SITE EQUAL OPPORTUNITY COMPLIANCE EVALUATION
        (FEB 1999)

        (Applies to leases which exceed $10,000,000.)

        If a contract in the amount of $10 million or more will result from this
        solicitation, the prospective Contractor and its known first-tier
        subcontractors with anticipated subcontracts of $10 million or more
        shall be subject to a preaward compliance evaluation by the Office of
        Federal Contract Compliance Programs (OFCCP), unless, within the
        preceding 24 months, OFCCP has conducted an evaluation and found the
        prospective Contractor and subcontractors to be in compliance with
        Executive Order 11246.

  39.   52.222-21 - PROHIBITION OF SEGREGATED FACILITIES (FEB 1999)

        (a)    "Segregated facilities," as used in this clause, means any
               waiting rooms, work areas, rest rooms and wash rooms, restaurants
               and other eating areas, time clocks, locker rooms and other
               storage or dressing areas, parking lots, drinking fountains,
               recreation or entertainment areas, transportation, and housing
               facilities provided for employees, that are segregated by
               explicit directive or are in fact segregated on the basis of
               race, color, religion, sex, or national origin because of written
               or oral policies or employee custom. The term does not include
               separate or single-user rest rooms or necessary dressing or
               sleeping areas provided to assure privacy between the sexes.

        (b)    The Contractor agrees that it does not and will not maintain or
               provide for its employees any segregated facilities at any of its
               establishments, and that it does not and will not permit its
               employees to perform their services at any location under its
               control where segregated facilities are maintained. The
               Contractor agrees that a breach of this clause is a violation of
               the Equal Opportunity clause in this contract.

        (c)    The Contractor shall include this clause in every subcontract and
               purchase order that is subject to the Equal Opportunity clause of
               this contract.

  40.   52.222-35 - AFFIRMATIVE ACTION FOR DISABLED VETERANS AND VETERANS OF THE
        VIETNAM ERA (APR 1998)

        (a)    Definitions.

        All employment openings includes all positions except executive and top
        management, those positions that will be filled from within the
        contractor's organization, and positions lasting 3 days or less. This
        term includes full-time employment, temporary employment of more than 3
        days' duration, and part-time employment.

        Appropriate office of the State employment service system means the
        local office of the Federal-State national system of public employment
        offices with assigned responsibility to serve the area where the
        employment opening is to be filled, including the District of Columbia,
        Guam, the Commonwealth of Puerto Rico, and the Virgin Islands.

        Positions that will be filled from within the Contractor's organization
        means employment openings for which no consideration will be given to
        persons outside the Contractor's organization (including any affiliates,
        subsidiaries, and the parent companies) and includes any openings that
        the Contractor proposes to fill from regularly establish "recall" lists.
        The exception does not apply to a particular opening once an employer
        decides to consider applicants outside of its organization.

        Veteran of the Vietnam era means a person who--

        (1)    Served on active duty for a period of more than 180 days, any
               part of which occurred between August 5, 1964, and May 7, 1975,
               and was discharged or released therefrom with other than a
               dishonorable discharge; or

        (2)    Was discharged or released from active duty for a
               service-connected disability if any part of such active duty was
               performed between August 5, 1964, and May 7, 1975.


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                             SFO DTSA20-03-R-00528

        (b)    General.

               (1)    Regarding any position for which the employee or applicant
                      for employment is qualified, the Contractor shall not
                      discriminate against the individual because the individual
                      is a disabled veteran or veteran of the Vietnam era. The
                      Contractor agrees to take affirmative action to employ,
                      advance in employment, and otherwise treat qualified
                      disabled veterans and veterans of the Vietnam era without
                      discrimination based upon their disability or veterans'
                      status in all employment practices such as--

                      (i)    Employment;

                      (ii)   Upgrading;

                      (iii)  Demotion or transfer;

                      (iv)   Recruitment;

                      (v)    Advertising;

                      (vi)   Layoff or termination;

                      (vii)  Rates of pay or other forms of compensation; and

                      (viii) Selection for training, including apprenticeship.

               (2)    The Contractor agrees to comply with the rules,
                      regulations, and relevant orders of the Secretary of Labor
                      (Secretary) issued under the Vietnam Era Veterans'
                      Readjustment Assistance Act of 1972 (the Act), as amended.

        (c)    Listing openings.

               (1)    The Contractor agrees to list all employment openings
                      existing at contract award or occurring during contract
                      performance, at an appropriate office of the State
                      employment service system in the locality where the
                      opening occurs. These openings include those occurring at
                      any contractor facility, including one not connected with
                      performing this contract. An independent corporate
                      affiliate is exempt from this requirement.

               (2)    State and local government agencies holding Federal
                      contracts of $10,000 or more shall also list all
                      employment openings with the appropriate office of the
                      State employment service.

               (3)    The listing of employment openings with the State
                      employment service system is required at least
                      concurrently with using any other recruitment source or
                      effort and involves the obligations of placing a bona fide
                      job order, including accepting referrals of veterans and
                      nonveterans. This listing does not require hiring any
                      particular job applicant or hiring from any particular
                      group of job applicants and is not intended to relieve the
                      Contractor from any requirements of Executive orders or
                      regulations concerning nondiscrimination in employment.

               (4)    Whenever the Contractor becomes contractually bound to the
                      listing terms of this clause, it shall advise the State
                      employment service system, in each State where it has
                      establishments, of the name and location of each hiring
                      location in the State. As long as the Contractor is
                      contractually bound to these terms and has so advised the
                      State system, it need not advise the State system of
                      subsequent contracts. The Contractor may advise the State
                      system when it is no longer bound by this contract clause.

        (d)    Applicability. This clause does not apply to the listing of
               employment openings which occur and are filled outside the 50
               states, the District of Columbia, the Commonwealth of Puerto
               Rico, Guam, and the Virgin Islands.

        (e)    Postings.

               (1)    The Contractor agrees to post employment notices stating-

                      (i)    The Contractor's obligation under the law to take
                             affirmative action to employ and advance in
                             employment qualified disabled veterans and veterans
                             of the Vietnam era, and

                      (ii)   The rights of applicants and employees.

               (2)    These notices shall be posted in conspicuous places that
                      are available to employees and applicants for employment.
                      They shall be in a form prescribed by the Deputy Assistant
                      Secretary for Federal Contract Compliance Programs,
                      Department of Labor (Deputy Assistant Secretary), and
                      provided by or through the Contracting Officer.

               (3)    The Contractor shall notify each labor union or
                      representative of workers with which it has a collective
                      bargaining agreement or other contract understanding, that
                      the Contractor is bound by the terms of the Act, and is
                      committed to take affirmative action to employ, and
                      advance in employment, qualified disabled veterans and
                      veterans of the Vietnam era.

        (f)    Noncompliance. If the Contractor does not comply with the
               requirements of this clause, appropriate actions may be taken
               under the rules, regulations, and relevant orders of the
               Secretary issued pursuant to the Act.


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        (g)    Subcontracts. The Contractor shall include the terms of this
               clause in every subcontract or purchase order of $10,000 or more
               unless exempted by rules, regulations, or orders of the
               Secretary. The Contractor shall act as specified by the Deputy
               Assistant Secretary to enforce the terms, including action for
               noncompliance.

  41.   52.222-36 - AFFIRMATIVE ACTION FOR WORKERS WITH DISABILITIES (JUN 1998)

        (a)    General.

               (1)    Regarding any position for which the employee or applicant
                      for employment is qualified, the Contractor shall not
                      discriminate against any employee or applicant because of
                      physical or mental disability. The Contractor agrees to
                      take affirmative action to employ, advance in employment
                      and otherwise treat qualified individuals with
                      disabilities without discrimination based upon their
                      physical or mental disability in all employment practices
                      such as--

                      (i)    Recruitment, advertising, and job application
                             procedures;

                      (ii)   Hiring, upgrading, promotion, award of tenure,
                             demotion, transfer, layoff, termination, right of
                             return from layoff, and rehiring;

                      (iii)  Rates of pay or any other form of compensation and
                             changes in compensation;

                      (iv)   Job assignments, job classifications,
                             organizational structures, position descriptions,
                             lines of progression, and seniority lists;

                      (v)    Leaves of absence, sick leave, or any other leave;

                      (vi)   Fringe benefits available by virtue of employment,
                             whether or not administered by the Contractor;

                      (vii)  Selection and financial support for training,
                             including apprenticeships, professional meetings,
                             conferences, and other related activities, and
                             selection for leaves of absence to pursue training

                      (viii) Activities sponsored by the Contractor, including
                             social or recreational programs; and

                      (ix)   Any other term, condition, or privilege of
                             employment.

               (2)    The Contractor agrees to comply with the rules,
                      regulations, and relevant orders of the Secretary of Labor
                      (Secretary) issued under the Rehabilitation Act of 1973
                      (29 USC 793) (the Act), as amended.

        (b)    Postings.

               (1)    The Contractor agrees to post employment notices stating
                      (i) the Contractor's obligation under the law to take
                      affirmative action to employ and advance in employment
                      qualified individuals with disabilities and (ii) the
                      rights of applicants and employees.

               (2)    These notices shall be posted in conspicuous places that
                      are available to employees and applicants for employment.
                      The Contractor shall ensure that applicants and employees
                      with disabilities are informed of the contents of the
                      notice (e.g., the Contractor may have the notice read to a
                      visually disabled individual, or may lower the posted
                      notice so that it might be read by a person in a
                      wheelchair). The notices shall be in a form prescribed by
                      the Deputy Assistant Secretary for Federal Contract
                      Compliance of the U.S. Department of Labor (Deputy
                      Assistant Secretary) and shall be provided by or through
                      the Contracting Officer.

               (3)    The Contractor shall notify each labor union or
                      representative of workers with which it has a collective
                      bargaining agreement or other contract understanding, that
                      the Contractor is bound by the terms of Section 503 of the
                      Act and is committed to take affirmative action to employ,
                      and advance in employment, qualified individuals with
                      physical or mental disabilities.

        (c)    Noncompliance. If the Contractor does not comply with the
               requirements of this clause, appropriate actions may be taken
               under the rules, regulations, and relevant orders of the
               Secretary issued pursuant to the Act.

        (d)    Subcontracts. The Contractor shall include the terms of this
               clause in every subcontract or purchase order in excess of
               $10,000 unless exempted by rules, regulations, or orders of the
               Secretary. The Contractor shall act as specified by the Director
               to enforce the terms, including action for noncompliance.

  42.   52.222-37 - EMPLOYMENT REPORTS ON DISABLED VETERANS AND VETERANS OF THE
        VIETNAM ERA (JAN 1999)

        (a)    Unless the Contractor is a State or local government agency, the
               Contractor shall report at least annually, as required by the
               Secretary of Labor, on:

               (1)    The number of disabled veterans and the number of veterans
                      of the Vietnam era in the workforce of the contractor by
                      job category and hiring location; and


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               (2)    The total number of new employees hired during the period
                      covered by the report, and of that total, the number of
                      special disabled veterans, and the number of veterans of
                      the Vietnam era.

        (b)    The above items shall be reported by completing the form entitled
               "Federal Contractor Veterans' Employment Report VETS-100."

        (c)    Reports shall be submitted no later than September 30 of each
               year beginning September 30, 1988.

        (d)    The employment activity report required by paragraph (a)(2) of
               this clause shall reflect total hires during the most recent
               12-month period as of the ending date selected for the employment
               profile report required by paragraph (a)(1) of this clause.
               Contractors may select an ending date: (1) As of the end of any
               pay period during the period January through March 1 of the year
               the report is due, or (2) as of December 31, if the Contractor
               has previous written approval from the Equal Employment
               Opportunity Commission to do so for purposes of submitting the
               Employer Information Report EEO-1 (Standard Form 100).

        (e)    The count of veterans reported according to paragraph (a) of
               this clause shall be based on voluntary disclosure. Each
               Contractor subject to the reporting requirements at 38 U.S.C.
               4212 shall invite all special disabled veterans and veterans of
               the Vietnam era who wish to benefit under the affirmative action
               program at 38 U.S.C. 4212 to identify themselves to the
               Contractor. The invitation shall state that the information is
               voluntarily provided, that the information will be kept
               confidential, that disclosure or refusal to provide the
               information will not subject the applicant or employee to any
               adverse treatment, and that the information will be used only in
               accordance with the regulations promulgated under 38 U.S.C.
               4212.

        (f)    Subcontracts. The Contractor shall include the terms of this
               clause in every subcontract or purchase order of $10,000 or more
               unless exempted by rules, regulations, or orders of the
               Secretary.

43.     52.209-6 - PROTECTING THE GOVERNMENT'S INTEREST WHEN SUBCONTRACTING WITH
        CONTRACTORS DEBARRED, SUSPENDED, OR PROPOSED FOR DEBARMENT (JUL 1995)

        (a)    The Government suspends or debars Contractors to protect the
               Government's interests. Contractors shall not enter into any
               subcontract in excess of the small purchase limitation at FAR
               13.000 with a Contractor that has been debarred, suspended, or
               proposed for debarment unless there is a compelling reason to do
               so.

        (b)    The Contractor shall require each proposed first-tier
               subcontractor, whose subcontract will exceed the small purchase
               limitation at FAR 13.000, to disclose to the Contractor, in
               writing, whether as of the time of award of the subcontract, the
               subcontractor, or its principals, is or is not debarred,
               suspended, or proposed for debarment by the Federal Government.

        (c)    A corporate officer or designee of the Contractor shall notify
               the Contracting Officer, in writing, before entering into a
               subcontract with a party that is debarred, suspended or proposed
               for debarment (See FAR 9.404 for information on the List of
               Parties Excluded from Federal Procurement and Nonprocurement
               Programs). The notice must include the following:

               (1)    The name of the subcontractor,

               (2)    The Contractor's knowledge of the reasons for the
                      subcontractor being on the List of Parties Excluded from
                      Federal Procurement and Nonprocurement Programs;

               (3)    The compelling reason(s) for doing business with the
                      subcontractor notwithstanding its inclusion on the List of
                      Parties Excluded from Federal Procurement and
                      Nonprocurement Programs;

               (4)    The systems and procedures the Contractor has established
                      to ensure that it is fully protecting the Government's
                      interests when dealing with such subcontractor in view of
                      the specific basis for the party's debarment, suspension,
                      or proposed debarment.

  44.   52.215-12 - SUBCONTRACTOR COST OR PRICING DATA (OCT 1997)

        (Applies when the clause at FAR 52.215-10 is applicable.)

        (a)    Before awarding any subcontract expected to exceed the threshold
               for submission of cost or pricing data at FAR 15.403-4, on the
               date of agreement on price or the date of award, which ever is
               later; or before pricing any subcontract modification involving a
               pricing adjustment expected to exceed the threshold for
               submission of cost or pricing data at FAR 15.403-4, the
               Contractor shall require the subcontractor to submit cost or
               pricing data (actually or by specific identification in writing),
               unless an exception under FAR 15.403-1 applies.


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        (b)    The Contractor shall require the subcontractor to certify in
               substantially the form prescribed in FAR 15.406-2 that, to the
               best of its knowledge and belief, the data submitted under
               paragraph (a) of this clause were accurate, complete, and current
               as of the date of agreement on the negotiated price of the
               subcontract or subcontract modification.

        (c)    In each subcontract that exceeds the threshold for submission of
               cost or pricing data at FAR 15.403-4, when entered into, the
               Contractor shall insert either--

               (1)    The substance of this clause, including this paragraph
                      (c), if paragraph (a) of this clause requires submission
                      of cost or pricing data for the subcontract; or

               (2)    The substance of the clause at FAR 52.215-13,
                      Subcontractor Cost or Pricing Data -- Modifications.

  45.   52.219-8 - UTILIZATION OF SMALL BUSINESS CONCERNS (OCT 2000)

        (Applies to leases which exceed $100,000 average net annual rental,
        including option periods.)

        (a)    It is the policy of the United States that small business
               concerns, veteran-owned small business concerns,
               service-disabled veteran-owned small business concerns, HUBZone
               small business concerns, small disadvantaged business concerns,
               and women-owned small business concerns shall have the maximum
               practicable opportunity to participate in performing contracts
               let by any Federal agency, including contracts and subcontracts
               for subsystems, assemblies, components, and related services for
               major systems. It is further the policy of the United States
               that its prime contractors establish procedures to ensure the
               timely payment of amounts due pursuant to the terms of their
               subcontracts with small business concerns, veteran-owned small
               business concerns, service-disabled veteran-owned small business
               concerns, HUBZone small business concerns, small disadvantaged
               business concerns, and women-owned small business concerns.

        (b)    The Contractor hereby agrees to carry out this policy in the
               awarding of subcontracts to the fullest extent consistent with
               efficient contract performance. The Contractor further agrees to
               cooperate in any studies or surveys as may be conducted by the
               United States Small Business Administration or the awarding
               agency of the United States as may be necessary to determine the
               extent of the Contractor's compliance with this clause.

        (c)    Definitions. As used in this contract -

               HUBZone small business concern means a small business concern
               that appears on the List of Qualified HUBZone Small Business
               Concerns maintained by the Small Business Administration.

               Service-disabled veteran-owned small business concern -

               (1)    Means a small business concern -

                      (i)    Not less than 51 percent of which is owned by one
                             or more service-disabled veterans or, in the case
                             of any publicly owned business, not less than 51
                             percent of the stock of which is owned by one or
                             more service-disabled veterans; and

                      (ii)   The management and daily business operations of
                             which are controlled by one or more
                             service-disabled veterans or, in the case of a
                             veteran with permanent and severe disability, the
                             spouse or permanent caregiver of such veteran.

               (2)    Service-disabled veteran means a veteran, as defined in
                      38 U.S.C. 101(2), with a disability that is
                      service-connected, as defined in 38 U.S.C. 101(16).

               Small business concern means a small business as defined pursuant
               to Section 3 of the Small Business Act and relevant regulations
               promulgated pursuant thereto.

               Small disadvantaged business concern means a small business
               concern that represents, as part of its offer that -

               (1)    It has received certification as a small disadvantaged
                      business concern consistent with 13 CFR part 124,
                      Subpart B;

               (2)    No material change in disadvantaged ownership and control
                      has occurred since its certification;

               (3)    Where the concern is owned by one or more individuals, the
                      net worth of each individual upon whom the certification
                      is based does not exceed $750,000 after taking into
                      account the applicable exclusions set forth at 13
                      CFR 124.104(c)(2); and

               (4)    It is identified, on the date of its representation, as a
                      certified small disadvantaged business in the database
                      maintained by the Small Business Administration (PRO-Net).


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               "Veteran-owned small business concern" means a small business
               concern -

               (1)    Not less than 51 percent of which is owned by one or more
                      veterans (as defined at 38 U.S.C. 101(2)) or, in the case
                      of any publicly owned business, not less than 51 percent
                      of the stock of which is owned by one or more veterans;
                      and

               (2)    The management and daily business operations of which are
                      controlled by one or more veterans.

               "Women-owned small business concern" means a small business
               concern -

               (1)    That is at least 51 percent owned by one or more women,
                      or, in the case of any publicly owned business, at least
                      51 percent of the stock of which is owned by one or more
                      women; and

               (2)    Whose management and daily business operations are
                      controlled by one or more women.

        (d)    Contractors acting in good faith may rely on written
               representations by their subcontractors regarding their status as
               a small business concern, a veteran-owned small business concern,
               a service-disabled veteran-owned small business concern, a
               HUBZone small business concern, a small disadvantaged business
               concern, or a women-owned small business concern.

  46.   52.219-9 - SMALL BUSINESS SUBCONTRACTING PLAN (OCT 2000)

               (Applies to leases which exceed $500,000.)

        (a)    This clause does not apply to small business concerns.

        (b)    Definitions. As used in this clause--

               "Commercial item" means a product or service that satisfies the
               definition of commercial item in section 2.101 of the Federal
               Acquisition Regulation.

               "Commercial plan" means a subcontracting plan (including goals)
               that covers the offeror's fiscal year and that applies to the
               entire production of commercial items sold by either the entire
               company or a portion thereof (e.g., division, plant, or product
               line).

               "Individual contract plan" means a subcontracting plan that
               covers the entire contract period (including option periods),
               applies to a specific contract, and has goals that are based on
               the offeror's planned subcontracting in support of the specific
               contract, except that indirect costs incurred for common or joint
               purposes may be allocated on a prorated basis to the contract.

               "Master plan" means a subcontracting plan that contains all the
               required elements of an individual contract plan, except goals,
               and may be incorporated into individual contract plans, provided
               the master plan has been approved.

               "Subcontract," means any agreement means any agreement (other
               than one involving an employer-employee relationship) entered
               into by a Federal Government prime Contractor or subcontractor
               calling for supplies or services required for performance of the
               contract or subcontract.

        (c)    The offeror, upon request by the Contracting Officer, shall
               submit and negotiate a subcontracting plan, where applicable,
               which separately addresses subcontracting with small business,
               veteran-owned small business, HUBZone small business concerns,
               small disadvantaged business, and women-owned small business
               concerns. If the offeror is submitting an individual contract
               plan, the plan must separately address subcontracting with small
               business, veteran-owned small business, HUBZone small business,
               small disadvantaged business, and women-owned small business
               concerns, with a separate part for the basic contract and
               separate parts for each option (if any). The plan shall be
               included in and made a part of the resultant contract. The
               subcontracting plan shall be negotiated within the time
               specified by the Contracting Officer. Failure to submit and
               negotiate the subcontracting plan shall make the offeror
               ineligible for award of a contract.

        (d)    The offeror's subcontracting plan shall include the following:

               (1)    Goals, expressed in terms of percentages of total planned
                      subcontracting dollars, for the use of small business,
                      veteran-owned small business, HUBZone small business,
                      small disadvantaged business, and women-owned small
                      business concerns as subcontractors. Service-disabled
                      veteran-owned small business concerns meet the definition
                      of veteran-owned small business concerns, and offerors may
                      include them within the subcontracting plan goal for
                      veteran-owned small business concerns. A


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                      separate goal for service-disabled veteran-owned small
                      business concerns is not required. The offeror shall
                      include all subcontracts that contribute to contract
                      performance, and may include a proportionate share of
                      products and services that are normally allocated as
                      indirect costs.

               (2)    A statement of--

                      (i)    Total dollars planned to be subcontracted for an
                             individual contract plan; or the offeror's total
                             projected sales, expressed in dollars, and the
                             total value of projected subcontracts to support
                             the sales for a commercial plan;

                      (ii)   Total dollars planned to be subcontracted to small
                             business concerns;

                      (iii)  Total dollars planned to be subcontracted to
                             veteran-owned small business concerns;

                      (iv)   Total dollars planned to be subcontracted to
                             HUBZone small business concerns;

                      (v)    Total dollars planned to be subcontracted to small
                             disadvantaged business concerns; and

                      (vi)   Total dollars planned to be subcontracted to
                             women-owned small business concerns.

               (3)    A description of the principal types of supplies and
                      services to be subcontracted, and an identification of the
                      types planned for subcontracting to -

                      (i)    Small business concerns,

                      (ii)   Veteran-owned small business concerns;

                      (iii)  HUBZone small business concerns;

                      (iv)   Small disadvantaged business concerns; and

                      (v)    Women-owned small business concerns.

               (4)    A description of the method used to develop the
                      subcontracting goals in paragraph (d)(1) of this clause.

               (5)    A description of the method used to identify potential
                      sources for solicitation purposes (e.g., existing company
                      source lists, the Procurement Marketing and Access Network
                      (PRO-Net) of the Small Business Administration (SBA),
                      veterans service organizations, the National Minority
                      Purchasing Council Vendor Information Service, the
                      Research and Information Division of the Minority Business
                      Development Agency in the Department of Commerce, or
                      small, HUBZone, small disadvantaged, and women-owned small
                      business trade associations). A firm may rely on the
                      information contained in PRO-Net as an accurate
                      representation of a concern's size and ownership
                      characteristics for the purposes of maintaining a small,
                      veteran-owned small, HUBZone small, small disadvantaged,
                      and women-owned small business source list. Use of PRO-Net
                      as its source list does not relieve a firm of its
                      responsibilities (e.g., outreach, assistance, counseling,
                      or publicizing subcontracting opportunities) in this
                      clause.

                (6)   A statement as to whether or not the offeror included
                      indirect costs in establishing subcontracting goals, and
                      a description of the method used to determine the
                      proportionate share of indirect costs to be incurred
                      with -

                      (i)    Small business concerns;

                      (ii)   Veteran-owned small business concerns;

                      (ii)   HUBZone small business concerns;

                      (iii)  Small disadvantaged business concerns; and

                      (iv)   Women-owned small business concerns.

               (7)    The name of the individual employed by the offeror who
                      will administer the offeror's subcontracting program, and
                      a description of the duties of the individual.

               (8)    A description of the efforts the offeror will make to
                      assure that small business, veteran-owned small business,
                      HUBZone small business, small disadvantaged and
                      women-owned small business concerns have an equitable
                      opportunity to compete for subcontracts.

               (9)    Assurances that the offeror will include the clause in
                      this contract entitled "Utilization of Small Business
                      Concerns" in all subcontracts that offer further
                      subcontracting opportunities, and that the offeror will
                      require all subcontractors (except small business
                      concerns) that receive subcontracts in excess of $500,000
                      ($1,000,000 for construction of any public facility) to
                      adopt a subcontracting plan that complies with the
                      requirements of this clause.

               (10)   Assurances that the offeror will--

                      (i)    Cooperate in any studies or surveys as may be
                             required;

                      (ii)   Submit periodic reports so that the Government can
                             determine the extent of compliance by the offeror
                             with the subcontracting plan;

                      (iii)  Submit Standard Form (SF) 294, Subcontracting
                             Report for Individual Contracts, and/or SF 295,
                             Summary Subcontract Report, in accordance with
                             paragraph (j) of this clause. The reports shall
                             provide information on subcontract awards to small
                             business concerns, veteran-owned small business
                             concerns, service-disabled veteran-owned small
                             business concerns, small disadvantaged business
                             concerns, women-owned small business concerns, and
                             Historically Black Colleges and Universities and
                             Minority Institutions. Reporting shall be in
                             accordance with the instructions on the forms or as
                             provided in agency regulations.

                      (iv)   Ensure that its subcontractors agree to submit
                             Standard Forms 294 and 295.


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                (11)  A recitation of the types of records the offeror will
                      maintain concerning procedures that have been adopted to
                      comply with the requirements and goals in the plan,
                      including establishing source lists; and a description
                      of the offeror's efforts to locate small business,
                      veteran-owned small business, HUBZone small business,
                      small disadvantaged business, and women-owned small
                      business concerns and award subcontracts to them. The
                      records shall include at least the following (on a
                      plant-wide or company-wide basis, unless otherwise
                      indicated):

                      (i)    Source lists (e.g., PRO-Net), guides, and other
                             data that identify small business, veteran-owned
                             small business, HUBZone small business, small
                             disadvantaged and women-owned small business
                             concerns.

                      (ii)   Organizations contacted in an attempt to locate
                             sources that are small business, veteran-owned
                             small business, HUBZone small business, small
                             disadvantaged or women-owned small business
                             concerns.

                      (iii)  Records on each subcontract solicitation resulting
                             in an award of more than $100,000, indicating -

                             (A)    Whether small business concerns were
                                    solicited and if not, why not;

                             (B)    Whether veteran-owned small business
                                    concerns were solicited and, if not, why
                                    not;

                             (C)    Whether HUBZone small business concerns
                                    were solicited and if not, why not;

                             (D)    Whether small disadvantaged business
                                    concerns were solicited and if not, why not;

                             (E)    Whether women-owned small business concerns
                                    were solicited and if not, why not; and

                             (F)    If applicable, the reason award was not made
                                    to a small business concern.

                      (iv)   Records of any outreach efforts to contact -

                             (A)    Trade associations;

                             (B)    Business development organizations,

                             (C)    Conferences and trade fairs to locate small,
                                    HUBZone small, small disadvantaged, and
                                    women-owned small business sources;

                             (D)    Veterans service organizations.

                      (v)    Records of internal guidance and encouragement
                             provided to buyers through -

                            (A)     Workshops, seminars, training, etc.; and

                            (B)     Monitoring performance to evaluate
                                    compliance with the program's requirements.

                      (vi)   On a contract-by-contract basis, records to support
                             award data submitted by the offeror to the
                             Government, including the name, address, and
                             business size of each subcontractor. Contractors
                             having commercial plans need not comply with this
                             requirement.

        (e)    In order to effectively implement this plan to the extent
               consistent with efficient contract performance, the Contractor
               shall perform the following functions:

               (1)    Assist small business, veteran-owned small business,
                      HUBZone small business, small disadvantaged and
                      women-owned small business concerns by arranging
                      solicitations, time for the preparation of bids,
                      quantities, specifications, and delivery schedules so as
                      to facilitate the participation by such concerns. Where
                      the Contractor's lists of potential small, veteran-owned
                      small business, HUBZone small business, small
                      disadvantaged and women-owned small business
                      subcontractors are excessively long, reasonable efforts
                      shall be made to give all such small business concerns an
                      opportunity to compete over a period of time.

               (2)    Provide adequate and timely consideration of the
                      potentialities of small, veteran-owned small business,
                      HUBZone small business, small disadvantaged and
                      women-owned small business concerns in all "make-or-buy"
                      decisions.

               (3)    Counsel and discuss subcontracting opportunities with
                      representatives of small, veteran-owned small business,
                      HUBZone small business, small disadvantaged and
                      women-owned small business firms.

               (4)    Provide notice to subcontractors concerning penalties and
                      remedies for misrepresentations of business status as
                      small, veteran-owned small business, HUBZone small
                      business, small disadvantaged or women-owned small
                      business for the purpose of obtaining a subcontract that
                      is to be included as part or all of a goal contained in
                      the Contractor's subcontracting plan.

        (f)    A master plan on a plant or division-wide basis that contains all
               the elements required by paragraph (d) of this clause, except
               goals, may be incorporated by reference as a part of the
               subcontracting plan required of the offeror by this clause;
               provided -

               (1)    The master plan has been approved;

               (2)    The offeror ensures that the master plan is updated as
                      necessary and provides copies of the approved master plan,
                      including evidence of its approval, to the Contracting
                      Officer; and


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               (3)    Goals and any deviations from the master plan deemed
                      necessary by the Contracting Officer to satisfy the
                      requirements of this contract are set forth in the
                      individual subcontracting plan.

        (g)    A commercial plan is the preferred type of subcontracting plan
               for contractors furnishing commercial items. The commercial plan
               shall relate to the offeror's planned subcontracting generally,
               for both commercial and Government business, rather than solely
               to the Government contract. Commercial plans are also preferred
               for subcontractors that provide commercial items under a prime
               contract, whether or not the prime contractor is supplying a
               commercial item.

        (h)    Prior compliance of the offeror with other such subcontracting
               plans under previous contracts will be considered by the
               Contracting Officer in determining the responsibility of the
               offeror for award of the contract.

        (i)    The failure of the Contractor or subcontractor to comply in good
               faith with -

               (1)    The clause of this contract entitled "Utilization of Small
                      Business Concerns," or

               (2)    An approved plan required by this clause, shall be a
                      material breach of the contract.

        (j)    The Contractor shall submit the following reports:

               (1)    Standard Form 294, Subcontracting Report for Individual
                      Contracts. This report shall be submitted to the
                      Contracting Officer semiannually and at contract
                      completion. The report covers subcontract award data
                      related to this contract. This report is not required for
                      commercial plans.

               (2)    Standard Form 295, Summary Subcontract Report. This report
                      encompasses all the contracts with the awarding agency. It
                      must be submitted semi-annually for contracts with the
                      Department of Defense and annually for contracts with
                      civilian agencies. If the reporting activity is covered by
                      a commercial plan, the reporting activity must report
                      annually all subcontract awards under that plan. All
                      reports submitted at the close of each fiscal year (both
                      individual and commercial plans) shall include a breakout,
                      in the Contractor's format, of subcontract awards, in
                      whole dollars, to small disadvantaged business concerns by
                      North American Industry Classification System (NAICS)
                      Industry Subsector. For a commercial plan, the Contractor
                      may obtain from each of its subcontractors a predominant
                      NAICS Industry Subsector and report all awards to that
                      subcontractor under its predominant NAICS Industry
                      Subsector.

  47.   52.219-16 LIQUIDATED DAMAGES - SUBCONTRACTING PLAN (JAN 1999)

        (a)    Failure to make a good faith effort to comply with the
               subcontracting plan, as used in this clause, means a willful or
               intentional failure to perform in accordance with the
               requirements of the subcontracting plan approved under the clause
               in this contract entitled "Small Business Subcontracting Plan,"
               or willful or intentional action to frustrate the plan.

        (b)    Performance shall be measured by applying the percentage goals
               to the total actual subcontracting dollars or, if a commercial
               plan is involved, to the pro rata share of actual subcontracting
               dollars attributable to Government contracts covered by the
               commercial plan. If, at contract completion or, in the case of a
               commercial plan, at the close of the fiscal year for which the
               plan is applicable, the Contractor has failed to meet its
               subcontracting goals and the Contracting Officer decides in
               accordance with paragraph (c) of this clause that the Contractor
               failed to make a good faith effort to comply with its
               subcontracting plan, established in accordance with the clause
               in this contract entitled "Small Business Subcontracting Plan,"
               the Contractor shall pay the Government liquidated damages in an
               amount stated. The amount of probable damages attributable to
               the Contractor's failure to comply shall be an amount equal to
               the actual dollar amount by which the Contractor failed to
               achieve each subcontract goal.

        (c)    Before the Contracting Officer makes a final decision that the
               Contractor has failed to make such good faith effort, the
               Contracting Officer shall give the Contractor written notice
               specifying the failure and permitting the Contractor to
               demonstrate what good faith efforts have been made and to
               discuss the matter. Failure to respond to the notice may be
               taken as an admission that no valid explanation exists. If,
               after consideration of all the pertinent data, the Contracting
               Officer finds that the Contractor failed to make a good faith
               effort to comply with the subcontracting plan, the Contracting
               Officer shall issue a final decision to that effect and require
               that the Contractor pay the Government liquidated damages as
               provided in paragraph (b) of this clause.

        (d)    With respect to commercial plans, the Contracting Officer who
               approved the plan will perform the functions of the Contracting
               Officer under this clause on behalf of all agencies with
               contracts covered by the commercial plan.


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        (e)    The Contractor shall have the right of appeal, under the clause
               in this contract entitled Disputes, from any final decision of
               the Contracting Officer.

        (f)    Liquidated damages shall be in addition to any other remedies
               that the Government may have.



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                              SFO DTSA20-03-R-00528
                             SOLICITATION PROVISIONS
              (Acquisition of Leasehold Interests in Real Property)

1.   552.270-1 - INSTRUCTIONS TO OFFERORS - ACQUISITION OF LEASEHOLD INTERESTS
     IN REAL PROPERTY (MAR 1998)

     (a) Definitions. As used in this provision--

     "Discussions" are negotiations that occur after establishment of the
     competitive range that may, at the Contracting Officer's discretion, result
     in the offeror being allowed to revise its proposal.

     "In writing" or "written" means any worded or numbered expression which can
     be read, reproduced, and later communicated, and includes electronically
     transmitted and stored information.

     "Proposal modification" is a change made to a proposal before the
     solicitation's closing date and time, or made in response to an amendment,
     or made to correct a mistake at any time before award.

     "Proposal revision" is a change to a proposal made after the solicitation
     closing date, at the request of or as allowed by a Contracting Officer as
     the result of negotiations.

     "Time," if stated as a number of days, is calculated using calendar days,
     unless otherwise specified, and will include Saturdays, Sundays, and legal
     holidays. However, if the last day falls on a Saturday, Sunday, or legal
     holiday, then the period shall include the next working day.

     (b)  Amendments to solicitations. If this solicitation is amended, all
          terms and conditions that are not amended remain unchanged. Offerors
          shall acknowledge receipt of any amendment to this solicitation by the
          date and time specified in the amendment(s).

     (c)  Submission, modification, revision, and withdrawal of proposals.

          (1)  Unless other methods (e.g., electronic commerce or facsimile) are
               permitted in the solicitation, proposals and modifications to
               proposals shall be submitted in paper media in sealed envelopes
               or packages. Offers must be:

               (i)  Submitted on the forms prescribed and furnished by the
                    Government as a part of this solicitation or on copies of
                    those forms, and

               (ii) Signed. The person signing an offer must initial each
                    erasure or change appearing on any offer form. If the
                    offeror is a partnership, the names of the partners
                    composing the firm must be included with the offer.

          (2)  Late proposals and revisions.

               (i)  The Government will not consider any proposal received at
                    the office designated in the solicitation after the exact
                    time specified for receipt of offers unless it is received
                    before the Government makes award and it meets at least one
                    of the following conditions:

                    (A)  It was sent by registered or certified mail not later
                         than the 5th calendar day before the date specified for
                         receipt of offers (e.g., an offer submitted in response
                         to a solicitation requiring receipt of offers by the
                         20th of the month must have been mailed by the 15th).

                    (B)  It was sent by mail (or telegram or facsimile, if
                         authorized) or hand-carried (including delivery by a
                         commercial carrier) if it is determined by the
                         Government that the late receipt was due primarily to
                         Government mishandling after receipt at the Government
                         installation.

                    (C)  It was sent by U.S. Postal Service Express Mail Next
                         Day Service-Post Office to Addressee, not later than
                         5:00 p.m. at the place of mailing two working days
                         prior to the date specified for receipt of proposals.
                         The term "working days" excludes weekends and U.S.
                         Federal holidays.

                    (D)  It was transmitted through an electronic commerce
                         method authorized by the solicitation and was received
                         at the initial point of entry to the Government
                         infrastructure not later than 5:00 p.m. one working day
                         prior to the date specified for receipt of proposals.

                    (E)  There is acceptable evidence to establish that it was
                         received at the activity designated for receipt of
                         offers and was under the Government's control prior to
                         the time set for receipt of offers, and the Contracting
                         Officer determines that accepting the late offer would
                         not unduly delay the procurement.

                    (F)  It is the only proposal received.

               (ii) Any modification or revision of a proposal or response to
                    request for information, including any final proposal
                    revision, is subject to the same conditions as in
                    subparagraphs (c)(2)(i)(A) through (c)(2)(i)(E) of this
                    provision.

              (iii) The only acceptable evidence to establish the date of
                    mailing of a late proposal or modification or revision sent
                    either by registered or certified mail is the U.S. or
                    Canadian Postal Service postmark both on the envelope or
                    wrapper and on the original receipt from the U.S. or
                    Canadian Postal Service. Both postmarks must show a legible
                    date or the proposal, response to a request for information,
                    or modification


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                    or revision shall be processed as if mailed late. "Postmark"
                    means a printed, stamped, or otherwise placed impression
                    (exclusive of a postage meter machine impression) that is
                    readily identifiable without further action as having been
                    supplied and affixed by employees of the U.S. or Canadian
                    Postal Service on the date of mailing. Therefore, offerors
                    or respondents should request the postal clerk to place a
                    legible hand cancellation bull's eye postmark on both the
                    receipt and the envelope or wrapper.

               (iv) Acceptable evidence to establish the time of receipt at the
                    Government installation includes the time/date stamp of that
                    installation on the proposal wrapper, other documentary
                    evidence of receipt maintained by the installation, or oral
                    testimony or statements of Government personnel.

               (v)  The only acceptable evidence to establish the date of
                    mailing of a late offer, modification or revision, or
                    withdrawal sent by Express Mail Next Day Service-Post Office
                    to Addressee is the date entered by the post office
                    receiving clerk on the "Express Mail Next Day Service-Post
                    Office to Addressee" label and the postmark on both the
                    envelope or wrapper and on the original receipt from the
                    U.S. Postal Service. "Postmark" has the same meaning as
                    defined in paragraph (c)(2)(iii) of this provision,
                    excluding postmarks of the Canadian Postal Service.
                    Therefore, offerors or respondents should request the postal
                    clerk to place a legible hand cancellation bull's eye
                    postmark on both the receipt and the envelope or wrapper.

               (vi) Notwithstanding paragraph (c)(2)(i) of this provision, a
                    late modification or revision of an otherwise successful
                    proposal that makes its terms more favorable to the
                    Government will be considered at any time it is received and
                    may be accepted.

              (vii) An offeror may withdraw its proposal by written notice or
                    telegram (including mailgram) received at any time before
                    award. If the solicitation authorizes facsimile proposals,
                    an offeror may withdraw its proposal via facsimile received
                    at any time before award, subject to the conditions
                    specified in the provision entitled "Facsimile Proposals."
                    Proposals may be withdrawn in person by an offeror or an
                    authorized representative, if the representative's identity
                    is made known and the representative signs a receipt for the
                    proposal before award.

             (viii) If an emergency or unanticipated event interrupts normal
                    Government processes so that proposals cannot be received at
                    the office designated for receipt of proposals by the exact
                    time specified in the solicitation, and urgent Government
                    requirements preclude amendment of the solicitation or other
                    notice of an extension of the closing date, the time
                    specified for receipt of proposals will be deemed to be
                    extended to the same time of day specified in the
                    solicitation on the first work day on which normal
                    Government processes resume. If no time is specified in the
                    solicitation, the time for receipt is 4:30 p.m., local time,
                    for the designated Government office.

     (3)  Any information given to a prospective offeror concerning this
          solicitation will be furnished promptly to all other prospective
          offerors, if that information is necessary in submitting offers or if
          the lack of it would be prejudicial to any other prospective offeror.

     (4)  Offerors may submit modifications to their proposals at any time
          before the solicitation closing date and time, and may submit
          modifications in response to an amendment, or to correct a mistake at
          any time before award.

     (5)  Offerors may submit revised proposals only if requested or allowed by
          the Contracting Officer.

     (6)  The Government will construe an offer to be in full and complete
          compliance with this solicitation unless the offer describes any
          deviation in the offer.

     (7)  Offerors may submit proposals that depart from stated requirements.
          Such a proposal shall clearly identify why the acceptance of the
          proposal would be advantageous to the Government. The proposal must
          clearly identify and explicitly define any deviations from the terms
          and conditions of the solicitation, as well as the comparative
          advantage to the Government. The Government reserves the right to
          amend the solicitation to allow all offerors an opportunity to submit
          revised proposals based on the revised requirements.

(d)  Restriction on disclosure and use of data. An offeror that includes in its
     proposal data that it does not want disclosed to the public for any
     purpose, or used by the Government except for evaluation purposes, must
     meet both of the following conditions:

     (1)  Mark the title page with the following legend:

     This proposal includes data that shall not be disclosed outside the
     Government and shall not be duplicated, used, or disclosed--in whole or in
     part--for any purpose other than to evaluate this proposal. If, however, a
     lease is awarded to this offeror as a result of--or in connection with--the
     submission of this data, the Government shall have the right to duplicate,
     use, or disclose the data to the extent provided in the resulting contract.
     This restriction does not limit the Government's right to use information
     contained in this data if it is obtained from another source without
     restriction. The data subject to this restriction are contained in sheets
     [insert numbers or other identification of sheets].

     (2)  Mark each sheet of data it wishes to restrict with the following
          legend:

     Use or disclosure of data contained on this sheet is subject to the
     restriction on the title page of this proposal.

(e)  Lease award.

     (1)  The Government intends to award a lease resulting from this
          solicitation to the responsible offeror whose proposal represents the
          best value after evaluation in accordance with the factors and
          subfactors in the solicitation.


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     (2)  The Government may reject any or all proposals if such action is in
          the Government's interest.

     (3)  The Government may waive informalities and minor irregularities in
          proposals received.

     (4)  The Government intends to evaluate proposals and award a lease after
          conducting discussions with offerors whose proposals have been
          determined to be within the competitive range. If the Contracting
          Officer determines that the number of proposals that would otherwise
          be in the competitive range exceeds the number at which an efficient
          competition can be conducted, the Contracting Officer may limit the
          number of proposals in the competitive range to the greatest number
          that will permit an efficient competition among the most highly rated
          proposals. Therefore, the offeror's initial proposal should contain
          the offeror's best terms from a price and technical standpoint.

     (5)  Exchanges with offerors after receipt of a proposal do not constitute
          a rejection or counteroffer by the Government.

     (6)  The Government may determine that a proposal is unacceptable if the
          prices proposed are materially unbalanced between line items or
          subline items. Unbalanced pricing exists when, despite an acceptable
          total evaluated price, the price of one or more contract line items is
          significantly overstated or understated as indicated by the
          application of cost or price analysis techniques. A proposal may be
          rejected if the Contracting Officer determines that the lack of
          balance poses an unacceptable risk to the Government.

     (7)  The unconditional written acceptance of an offer establishes a valid
          contract.

     (8)  The Government may disclose the following information in postaward
          debriefings to other offerors:

          (i)  The overall evaluated cost or price and technical rating of the
               successful offeror;

          (ii) The overall ranking of all offerors, when any ranking was
               developed by the agency during source selection; and

          (iii) A summary of the rationale for award.

2.   52.222-24 - PREAWARD ON-SITE EQUAL OPPORTUNITY COMPLIANCE EVALUATION (FEB
     1999)

     If a contract in the amount of $10 million or more will result from this
     solicitation, the prospective Contractor and its known first-tier
     subcontractors with anticipated subcontracts of $10 million or more shall
     be subject to a preaward compliance evaluation by the Office of Federal
     Contract Compliance Programs (OFCCP), unless, within the preceding 24
     months, OFCCP has conducted an evaluation and found the prospective
     Contractor and subcontractors to be in compliance with Executive Order
     11246.

3.   552.270-3 - PARTIES TO EXECUTE LEASE (SEP 1999)

     (a)  If the lease is executed by an attorney, agent, or trustee on behalf
          of the Lessor, an authenticated copy of his power of attorney, or
          other evidence to act on behalf of the Lessor, must accompany the
          lease.

     (b)  If the Lessor is a partnership, the lease must be signed with the
          partnership name, followed by the name of the legally authorized
          partner signing the same, and, if requested by the Government, a copy
          of either the partnership agreement or current Certificate of Limited
          Partnership shall accompany the lease.

     (c)  If the Lessor is a corporation, the lease must be signed with the
          corporate name, followed by the signature and title of the officer or
          other person signing the lease on its behalf, duly attested, and, if
          requested by the Government, evidence of this authority so to act
          shall be furnished.

4.   52.233-2 - SERVICE OF PROTEST (AUG 1996) (VARIATION)

     (Applies to leases which exceed $100,000 average net annual rental,
     including option periods.)

     (a)  Protests, as defined in section 33.101 of the Federal Acquisition
          Regulation, that are filed directly with an agency, and copies of any
          protests that are filed with the General Accounting Office (GAO),
          shall be served on the Contracting Officer by obtaining written and
          dated acknowledgment of receipt from the Contracting Officer at the
          address shown elsewhere in this solicitation.

     (b)  The copy of any protest shall be received in the office designated
          above within one day of filing a protest with the GAO.

5.   SERVICE OF PROTEST (TSA OCT 2002)

AS A CONDITION OF SUBMITTING AN OFFER OR RESPONSE TO THIS SOLICITATION THE
OFFEROR OR POTENTIAL OFFEROR AGREES TO BE BOUND BY THE FOLLOWING PROVISIONS
RELATING TO PROTESTS.

     (A)  Protests concerning Transportation Security Administration (TSA)
          solicitations or awards of contracts shall be resolved through the
          dispute resolution system adopted by the Federal Aviation
          Administration (FAA) as part of its Acquisition Management System, and
          FAA's Office of Dispute Resolution (ODRA), and shall be governed by
          the procedures set forth in 14 CFR Parts 14 and 17, which are hereby
          incorporated by reference. Judicial review, where available, will be
          in accordance with 49 USC 46110 and shall apply only to final agency
          decisions. A protestor may seek review of a final decision only after
          its administration remedies have been exhausted.



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     (B)  Offerors initially should attempt to resolve any issues concerning
          potential protests with the Contracting Officer. The Contracting
          Officer should make reasonable efforts to answer questions promptly
          and completely, and, where possible, to resolve concerns or
          controversies. The protest time limitations, however, will not be
          extended by attempts to resolve a potential protest with the
          Contracting Officer.

     (C)  The filing of a protest with the ODRA may be accomplished by mail, by
          overnight delivery, hand delivery or by facsimile. A protest is
          considered filed on the date it is received by the ODRA.

     (D)  Only an interested party may file a protest. An interested party is
          one whose direct economic interest has been or would be affected by
          the award or failure to award a TSA contract. Proposed subcontractors
          are not "interested parties" within this definition.

     (E)  A written protest must be filed with the ODRA within the time limits
          set forth below, or the time set forth for the receipt of initial
          proposals.

          (1). Protests based on alleged improprieties in a solicitation that
          are apparent prior to bid opening or the time set for receipt of
          initial proposals shall be filed prior to bid opening or the time set
          for receipt of initial proposals.

          (2). In procurements where proposals are requested, alleged
          improprieties that do not exist in the initial solicitation, but which
          are subsequently incorporated into the solicitation must be protested
          not later than the next closing time for receipt of proposal following
          the incorporation.

          (3). For protests other than those related to alleged solicitation
          improprieties, the protest must be filed on the later of the following
          two dates:

          (i). Not later than (7) business days after the date the protester
          knew or should have known of the grounds for the protest; or

          (ii). If the protester has requested a post-award briefing from the
          TSA Contracting Officer, not later than five (5) business days after
          the date on which the Contracting Officer holds that debriefing.

     (F)  Protests shall be filed at:

          (1) Office of Dispute Resolution for Acquisition, AGC-70.
          Federal Aviation Administration
          400 7th Street S.W.
          Room 8332
          Washington, DC 20590

          Telephone: 202-366-6400
          Facsimile: 202-366-7400 or

          (2) Other addresses as specified in the solicitation.

     (G)  At the same time as filing the protest with the ODRA, the protester
          shall serve a copy of the protest on the Contracting Officer and any
          other official designated in the solicitation for receipt of protests
          by means reasonably calculated to be received by the Contracting
          Officer on the same day as it is to be received by the ODRA. The
          protest shall include a signed statement from the protester,
          certifying to the ODRA the manner of service, date, and time when a
          copy of the protest was served on the Contracting Officer and other
          designated official(s).

     (H)  Additional information and guidance about the ODRA dispute resolution
          process for protests can be found on the ODRA website at
          http://www.faa.gov.

     PROTEST AFTER AWARD

     (I)  Upon receipt of a notice that a protest has been filed with the FAA
          Office of Dispute Resolution (ODRA), or a determination that a protest
          is likely, the Transportation Security Administrator or his designee
          may instruct the Contracting Officer to direct the Contractor to stop
          performance of the work called for by this contract. The order to the
          Contractor shall be in writing, and shall be specifically identified
          as a stop-work order issued under this clause. Upon receipt of the
          order, the contractor shall immediately comply with its terms and take
          all reasonable steps to minimize the incurrence of costs allocable to
          the work covered by the order during the period of work stoppage. Upon
          receipt of the final decision or other resolution of the protest, the
          Contracting Officer shall either:

          (1). Cancel the stop work order, or

          (2). For other than cost-reimbursement contracts, terminate the work
          covered by the work order as provided in the "Default" or the
          Termination for Convenience of the Government clause(s) of this
          contract; or

          (3). For cost-reimbursement contracts, terminate the work covered by
          the order as provided in the "Termination" clause of this contract.

     (J)  If a stop-work order issued this clause is cancelled either before or
          after the final resolution of the protest, the Contractor shall resume
          work. The Contracting Officer shall make for other than
          cost-reimbursement contracts, an equitable adjustment in the delivery
          schedule or contract price, or both; and for cost-reimbursement
          contracts, an equitable adjustment in the delivery schedule, the
          estimated cost, the fee, or a combination thereof, and in any other
          terms of the contract that may be affected; and the contract shall be
          modified in writing accordingly, if:

          (1). The stop-work order results in an increase in the time required
          for, or in the Contractor's cost properly allocable to, the
          performance of any part of this contract; and

          (2). The Contractor asserts its right to an adjustment within 30 days
          after the end of the period of work stoppage; provided, that if the
          Contracting Officer decides the facts justify the action, the
          Contracting Officer may receive and act upon a proposal submitted any
          time before final payment under this contract.

     (K)  If a stop-work order is not cancelled and the work covered by the
          order is terminated for the convenience of the Government, the
          Contracting Officer shall allow reasonable costs resulting from the
          stop-work order in arriving at the termination settlement.

     (L)  If a stop-work order is not cancelled and the work covered by the
          order is terminated for default, the Contracting Officer shall allow,
          by equitable adjustment or otherwise, reasonable costs resulting from
          the stop-work order.

     (M)  The Government's rights to terminate this contract at any time are not
          affected by the action under this clause.

6.   FLOOD PLAINS AND WETLANDS (APR 1984)

     An award of contract will not be made for a property located within a base
     flood plain or wetland unless the Government has determined it to be the
     only practicable alternative.


                                                TSA FORM 3516A PAGE 4 (REV 9/01)

                                      INITIALS: (ILLEGIBLE)     & (ILLEGIBLE)
                                                --------------    --------------
                                                LESSOR            GOVERNMENT















                            SOLICITATION FOR OFFERS

                               DTSA20-03-R-00528

                                   REVISION 1











                     TRANSPORTATION SECURITY ADMINISTRATION

               450,000 to 550,000 ANSI/BOMA rentable square feet












NAME:  Lisa Maass

TITLE: Contracting Officer


The information collection requirements contained in this Solicitation/Contract,
that are not required by the regulation have been approved by the Office of
Management and Budget pursuant to the Paperwork Reduction Act and assigned the
OMB Control No. 3090-0163.




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                                                         ---------     ---------
                                                          LESSOR         GOV'T







                               TABLE OF CONTENTS

                                                                                  
1.0  SUMMARY.............................................................................5
1.1  AMOUNT AND TYPE OF SPACE (SEP 2000)(TSA SEP 2002)...................................5
1.2  AREA OF CONSIDERATION...............................................................5
1.3  LOCATION; INSIDE OR OUTSIDE CITY CENTER (SEP 2000)(TSA SEP 2002)....................6
1.4  LEASE TERM (SEP 2000)(TSA SEP 2002).................................................6
1.5  OFFER DUE DATE......................................................................6
1.6  OCCUPANCY DATE (SEP 2000)(TSA SEP 2002).............................................6
1.7  HOW TO OFFER (SEP 2000)(TSA SEP 2002)...............................................6
1.8  BUILDING SHELL REQUIREMENTS (SEP 2000)(TSA SEP 2002)................................8
1.9  TENANT IMPROVEMENTS (SEP 2000)(TSA SEP 2002)........................................9
1.10 TENANT IMPROVEMENT RENTAL ADJUSTMENT (SEP 2000)(TSA SEP 2002).......................9
1.11 PLANS WITH OFFER (SEP 2000)(TSA SEP 2002)...........................................9
1.12 NEGOTIATIONS (SEP 2000)............................................................10
1.13 PRICE EVALUATION (PRESENT VALUE)...................................................12
1.14 HISTORIC PREFERENCE, GSAR 552.270-2 (VARIATION) (SEP 1999).........................11
1.15 AWARD (JAN 1997)...................................................................11
1.16 LABOR STANDARDS (SEP 2000).........................................................12

2.0  AWARD FACTORS......................................................................13
2.1  AWARD FACTORS (JAN 1997)(TSA SEP 2002).............................................13

3.0  MISCELLANEOUS......................................................................14
3.1  SUBSEQUENT TENANT IMPROVEMENTS $100,000 OR LESS (SEP 2000).........................14
3.2  TAX ADJUSTMENT (SEP 2000)..........................................................14
3.3  PERCENTAGE OF OCCUPANCY............................................................15
3.4  OPERATING COSTS (NCR NOVEMBER 2001)................................................15
3.5  OPERATING COSTS BASE (SEP 2000)....................................................16
3.6  BOMA RENTABLE SPACE (SEP 2000)(TSA SEP 2002).......................................16
3.7  ANSI/BOMA OFFICE AREA SQUARE FEET (NCR VARIATION (AUG 2002))(TSA OCT 2002).........16
3.8  COMMON AREA FACTOR (SEP 2000)......................................................16
3.9  APPURTENANT AREAS..................................................................16
3.10 LIQUIDATED DAMAGES, GSAR 552.270-15(SEP 1999)......................................16
3.11 VENDING FACILITIES (SEP 2000)......................................................16
3.12 ADJUSTMENT FOR VACANT PREMISES, GSAR 552.270-16(VARIATION)(SEP 1999)...............17
3.13 RELOCATION ASSISTANCE ACT (MAR 2002)...............................................17
3.14 EVIDENCE OF CAPABILITY TO PERFORM (SEP 2000)(TSA OCT 2002).........................17
3.15 CONSTRUCTION SCHEDULE (TSA OCT 2002)...............................................16
3.16 CONSTRUCTION SCHEDULE OF TENANT IMPROVEMENTS (SEP 2000)(TSA OCT 2002)..............17
3.17 PROGRESS REPORTS (SEP 2000)(TSA SEP 2002)..........................................20
3.18 CONSTRUCTION INSPECTIONS (TSA SEP 2002)............................................20
3.19 REQUIRED PROOF OF AUTHORITY (NCR VARIATION (AUG 2002)).............................21
3.20 BUSINESS IMPROVEMENT DISTRICTS (B.I.D)(NCR VARIATION (AUG 2002))...................19

4.0  GENERAL ARCHITECTURE...............................................................22
4.1  QUALITY AND APPEARANCE OF BUILDING EXTERIOR (SEP 2000).............................22
4.2  CONSTRUCTION WASTE MANAGEMENT (SEP 2000)...........................................22
4.3  EXISTING FIT-OUT, SALVAGED, OR RE-USED BUILDING MATERIAL (SEP 2000)(TSA SEP 2002)..23
4.4  INDOOR AIR QUALITY DURING CONSTRUCTION (SEP 2000)(TSA SEP 2002)....................23
4.5  WORK PERFORMANCE (SEP 2000)........................................................23
4.6  BUILDING SYSTEMS (JAN 1997)........................................................23
4.7  SPACE EFFICIENCY (SEP 2000)........................................................23
4.8  FLOOR PLANS AFTER OCCUPANCY (TSA SEP 2002).........................................23
4.9  CAD AS-BUILT FLOOR PLANS (SEP 2000) (NCR AAP VARIATION (AUG 2002)).................23
4.10 ANSI/BOMA CALCULATIONS AND PLANS (TSA SEP 2002)....................................24
4.11 FLOORS AND FLOOR LOAD (SEP 2000)(TSA SEP 2002).....................................24
4.12 EXITS AND ACCESS (SEP 1991)........................................................25
4.13 WINDOWS (SEP 2000) (NCR VARIATION (AUG 2002))(TSA SEP 2002)........................25
4.14 ACCESSIBILITY (SEP 2000)...........................................................25
4.15 LANDSCAPING (SEP 2000)(TSA SEP 2002)...............................................25

5.0  ARCHITECTURAL FINISHES.............................................................26
5.1  RECYCLED CONTENT PRODUCTS (COMPREHENSIVE PROCUREMENT GUIDELINES)(SEP 2000).........26
5.2  ENVIRONMENTALLY PREFERABLE BUILDING PRODUCTS AND MATERIALS (SEP 2000)..............26
5.3  LAYOUT, FINISHES, AND COLORBOARDS (SEP 2000)(TSA SEP 2002).........................26
5.4  WOOD PRODUCTS (SEP 2000)...........................................................26
5.5  ADHESIVES AND SEALANTS (SEP 2000)..................................................27





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5.6  INSULATION: THERMAL, ACOUSTIC, AND HVAC (SEP 2000)..........................27
5.7  CEILINGS (SEP 2000)(TSA SEP 2002)...........................................27
5.8  WALL COVERINGS (SEP 2000)(TSA SEP 2002).....................................27
5.9  PAINTING (SEP 2000).........................................................28
5.10 DOORS: EXTERIOR (SEP 2000)..................................................28
5.11 DOORS: SUITE ENTRY (SEP 2000)...............................................28
5.12 DOORS: INTERIOR (SEP 2000)..................................................28
5.13 DOORS: HARDWARE (SEP 2000)..................................................29
5.14 DOORS: IDENTIFICATION (SEP 2000)............................................29
5.15 PARTITIONS: GENERAL (SEP 2000)..............................................29
5.16 PARTITIONS: PERMANENT (SEP 2000)............................................29
5.17 PARTITIONS: SUBDIVIDING (SEP 2000)..........................................29
5.18 FLOOR COVERING AND PERIMETERS (SEP 2000)(TSA SEP 2002)......................29
5.19 CARPET: BROADLOOM (SEP 2000)................................................30
5.20 CARPET: TILE (SEP 2000).....................................................30
5.21 ACOUSTICAL REQUIREMENTS (SEP 2000)..........................................31
5.22 WINDOW COVERINGS (SEP 2000).................................................31
5.23 BUILDING DIRECTORY (SEP 2000)...............................................32
5.24 FLAG POLE (SEP 2000)........................................................32
5.25 EXTERNAL SIGNAGE............................................................32

6.0  MECHANICAL, ELECTRICAL, PLUMBING............................................33
6.1  MECHANICAL, ELECTRICAL, PLUMBING: GENERAL (SEP 2000)........................33
6.2  ENERGY COST SAVINGS (SEP 2000)..............................................33
6.3  DRINKING FOUNTAINS (SEP 2000)...............................................33
6.4  TOILET ROOMS (SEP 2000).....................................................33
6.5  TOILET ROOMS: FIXTURE SCHEDULE (SEP 2000)(TSA SEP 2002).....................33
6.6  JANITOR CLOSETS (SEP 2000)..................................................34
6.7  HEATING AND AIR CONDITIONING (SEP 2000).....................................34
6.8  VENTILATION (SEP 2000)(TSA SEP 2002)........................................34
6.9  VENTILATION: TOILET ROOMS (DEC 1993)........................................35
6.10 ELECTRICAL: GENERAL (SEP 2000)..............................................35
6.11 ELECTRICAL: DISTRIBUTION (SEP 2000).........................................35
6.12 ELECTRICAL: ADDITIONAL DISTRIBUTION SPECIFICATIONS..........................35
6.13 TELECOMMUNICATIONS: DISTRIBUTION AND EQUIPMENT (SEP 2000)(TSA SEP 2002).....36
6.14 TELECOMMUNICATIONS: LOCAL EXCHANGE ACCESS (SEP 2000)........................36
6.15 DATA REQUIREMENTS (SEP 2000)(TSA SEP 2002)..................................36
6.16 ELECTRICAL, TELEPHONE, DATA FOR SYSTEMS FURNITURE (SEP 2000)................39
6.17 ADDITIONAL ELECTRICAL CONTROLS..............................................39
6.18 ELEVATORS (SEP 2000)(TSA SEP 2002)..........................................39
6.19 LIGHTING: INTERIOR AND PARKING (SEP 2000)...................................40
6.20 EMERGENCY POWER (TSA SEP 2002)..............................................41

7.0  SERVICES, UTILITIES, MAINTENANCE............................................42
7.1  SERVICES, UTILITIES, MAINTENANCE: GENERAL (NCR VARIATION (AUG 2002))........42
7.2  NORMAL HOURS................................................................42
7.3  OVERTIME USAGE (SEP 2000)...................................................42
7.4  UTILITIES...................................................................42
7.5  UTILITIES: SEPARATE FROM RENTAL (SEP 2000)(TSA OCT 2002)....................42
7.6  BUILDING OPERATING PLAN.....................................................42
7.7  JANITORIAL SERVICES (SEP 2000)..............................................42
7.8  SCHEDULE OF PERIODIC SERVICES...............................................43
7.9  LANDSCAPE MAINTENANCE.......................................................43
7.10 FLAG DISPLAY................................................................44
7.11 SECURITY (SEP 2000) (NCR VARIATION AUG 2002)(TSA SEP 2002)..................44
7.12 ADDITIONAL SECURITY: ADDITIONAL REQUIREMENTS (TSA SEP 2002).................44
7.13 MAINTENANCE AND TESTING OF SYSTEMS (SEP 2000)...............................45

8.0  SAFETY AND ENVIRONMENTAL MANAGEMENT.........................................46
8.1  OCCUPANCY PERMIT (SEP 2000).................................................46
8.2  FIRE AND LIFE SAFETY (SEP 2000).............................................46
8.3  SPRINKLER SYSTEM (SEP 2000).................................................46
8.4  MANUAL FIRE ALARM SYSTEMS (SEP 2000)........................................46
8.5  OSHA REQUIREMENTS (SEP 2000)................................................46
8.6  ASBESTOS (SEP 2000).........................................................46
8.7  INDOOR AIR QUALITY (SEP 2000)...............................................47
8.8  RADON IN AIR (SEP 2000).....................................................47
8.9  CONTAMINATES IN WATER (SEP 2000)(TSA SEP 2002)..............................48
8.10 HAZARDOUS MATERIALS (OCT 1996)..............................................48
8.11 RECYCLING (SEP 2000)........................................................48





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9.0  TENANT IMPROVEMENTS................................................................49
9.1  TENANT IMPROVEMENTS PRIOR TO THE GOVERNMENT'S INITIAL ACCEPTANCE OF SPACE
     (SEP 2000).........................................................................49
10.0 SPECIAL REQUIREMENTS...............................................................50
10.1 TRANSPORTATION SECURITY ADMINISTRATION OVERVIEW (TSA OCT 2002).....................50
10.2 TRANSPORTATION SECURITY ADMINISTRATION OBJECTIVES AND STRATEGIC APPROACH
     (TSA OCT 2002).....................................................................50
10.3 TYPES OF SPACE (TSA OCT 2002)......................................................51
1.1  AMOUNT AND TYPE OF SPACE (SEP 2000)(TSA SEP 2002)...................................5









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                                                         ---------     ---------
                                       4                  LESSOR         GOV'T


1.0      SUMMARY



1.0      BY SIGNING THIS PROPOSAL, OFFERORS UNDERSTAND AND AGREE THAT THE
         GOVERNMENT RESERVES THE RIGHT TO COUNTER-SIGN THEIR OFFER, WHICH SHALL
         RESULT IN THE FINAL LEASE AGREEMENT BETWEEN THE PARTIES.

1.1      AMOUNT AND TYPE OF SPACE (SEP 2000)(TSA SEP 2002)

         A.       The Transportation Security Administration ("TSA" or
                  "Government") is interested in leasing approximately
                  450,000-550,000 ANSI/BOMA (BOMA) rentable square feet of
                  above-grade office space in no more than two office buildings
                  that are within three (3) blocks of each other. Refer to the
                  "ANSI/BOMA rentable square feet" paragraph in Section 3.6. Two
                  (2) buildings can be considered one building if they are
                  physically connected and employees are not required to exit
                  secure space or enter public space in order to move from one
                  building to the other.

         B.       The Offer shall 1) be for space located in a quality office
                  building(s) of sound and substantial construction as described
                  in this SFO, 2) have a potential for efficient layout, 3) be
                  within the square footage range to be considered, and 4) be in
                  compliance with all of the Government's minimum requirements
                  set forth herein.

         C.       To demonstrate potential for efficient layout, as well as
                  Offeror's ability to accommodate to Government's requirements,
                  Offeror will be requested to provide ANSI/BOMA calculations
                  and plans at the Offeror's expense, in accordance with the
                  instructions in Section 4.10.

        D.        Between 25,000 and 50,000 BOMA rentable square feet must be
                  ready for Government occupancy on or about January 2, 2003. An
                  additional 25,000 to 50,000 BOMA rentable square feet must be
                  ready for Government occupancy on February 1, 2003 and an
                  additional 25,000 to 50,000 BOMA square feet must be ready for
                  the Government occupancy on March 1, 2503, so that the
                  Government is occupying between 125,000 and 150,000 BOMA
                  rentable square feet on March 1, 2003. This interim space
                  ("Phase 1") shall be substantially "as is" condition, as
                  further described in Section 10.2. The 450,000-550,000 BOMA
                  rentable square feet which TSA will ultimately occupy at its
                  permanent office space will be delivered through phased
                  construction/occupancy with the first 100,000 square feet of
                  Phase 2 available for  occupancy on September 1, 2003, and
                  final occupancy of all Phase 2 and Phase 3 to be completed by
                  March 2004. Earlier delivery is preferred. See Section 10.2
                  for description of all Phases.

         E.       Unless otherwised noted, all references in this SFO to square
                  feet shall mean ANSI/BOMA (BOMA) office area square feet as
                  defined in Section 3.7.

1.2     AREA OF CONSIDERATION

        A.        All properties that are offered to the Government in
                  conjunction with this requirement must be located within the
                  Central Employment Area (CEA) or with proximity to the
                  Pentagon, Pentagon City or Crystal City, Virginia metro
                  stations. All buildings must be within 2500 linear feet of a
                  metro station.

        B.        The CEA is the core area of the District of Columbia where the
                  greatest concentration of employment in the city and region is
                  encouraged.

                  The Central Employment Area's boundaries are as follows:
                  Beginning at Dupont Circle, southeast along Massachusetts
                  Avenue, NW, to 9th Street, NW, north along 9th Street, NW, to
                  N Street, NW, east along N Street, NW, to 7th Street, NW,
                  south along 7th Street, NW, to New York Avenue, NW, east along
                  New York Avenue, NW to 5th Street NW, south along 5th Street,
                  NW to K Street, NW, east along K Street, NW to 3rd Street, NW,
                  south along 3rd Street, NW to Massachusetts Avenue, east along
                  Massachusetts Avenue, NE, and southeast along Florida Avenue,
                  NE, to 4th Street, NE, on the north; south along 4th Street,
                  NE, to M Street, NE, west along M Street, NE, to 3rd Street,
                  NE, south along 3rd Street, NE, to K Street, NE, west along K
                  Street, NE, to 2nd Street NE, south along 2nd Street, NE, to
                  the northeast corner of lot 855, square 725, west along the
                  northern boundary of lot 855 to the northwest corner of lot
                  855, south along the westerly boundary of lot 855 to
                  Constitution Avenue, NE, west along Constitution Avenue, NE,
                  to 1st Street, NE, south on 1st Street, NW, to Maryland
                  Avenue, NE, east on Maryland Avenue, NE, to 2nd Street, NE,
                  south on 2nd Street, NE, and 2nd Street, SE, to C Street, SE,
                  west on C Street, SE, to New Jersey Avenue, SE, south on New
                  Jersey Avenue, SE, to D Street, SE, west on D Street, SE, to
                  South Capitol Street, south on South Capitol Street to E
                  Street, SE, east on E Street, SE, to New Jersey Avenue, SE,
                  south on New Jersey Avenue, SE, to the Southeast Freeway, east
                  on the Southeast Freeway to 2nd Street, SE, south along 2nd
                  Street, SE, to M Street, SE and east along M Street, SE, to
                  the 11th Street Freeway on the east; south on the 11th Street
                  Freeway to the northbound 11th Street, SE, bridge, south along
                  this bridge to 13th Street, SE, south along 13th Street, SE,
                  to Good Hope Road, SE, west along the rear property lines of
                  properties fronting on the south side of Good Hope Road, SE to
                  Martin Luther King Jr. Avenue, SE, south along the rear
                  property lines of properties fronting on the north side of
                  Chicago Street, SE to the Baltimore and Ohio Railroad
                  right-of-way, south along the Baltimore and Ohio Railroad
                  right of way to the rear property line fronting on Howard Rd.,
                  SE, east along the rear property line of property fronting on
                  Howard Road, SE to the rear property lines of properties
                  fronting on the north side of Shannon Place, SE to Chicago
                  Street, SE, east along Chicago Street, fronting on the north
                  side of Shannon Place, SE to Chicago Street, SE, east along
                  Chicago Street, SE to Martin Luther King Jr. Avenue, SE, south
                  along the rear property lines of properties fronting on the
                  east side of Martin Luther King, Jr. Avenue, SE to Howard
                  Road, SE, west along Howard Road, SE to Firth Sterling Avenue,
                  SE, south along Firth Sterling Avenue, SE to South Capitol
                  Street, north along South Capitol Street and the Fredrick
                  Douglass Memorial Bridge to the west bank of the Anacostia
                  River, southwest along the west bank of the Anacostia River to
                  2nd Street, SW,





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                                       5                  LESSOR         GOV'T

                  north along 2nd Street, SW to Potomac Avenue, SW, northeast
                  along Potomac Avenue, SW to South Capitol Street, north along
                  South Capitol Street to the Southwest Freeway, west along the
                  Southwest Freeway to 9th Street, SW, south along the east side
                  of 9th Street, SW to where it intersects with the eastern
                  property line of Lot 53 in Square 414, continuing south to
                  Maine Avenue SW to the Southwest Freeway, west along the
                  Southwest Freeway to 14th Street, SW, north along 14th Street,
                  SW, and 14th Street, NW, to Constitution Avenue, NW, and west
                  along Constitution Avenue, NW, to Route 50 Expressway on the
                  south; north on the Route 50 Expressway to the E Street
                  Expressway and E Street, NW, east on the E Street Expressway,
                  and E Street, NW, to 19th Street, NW to F Street, NW, west on
                  F Street, NW, to 20th Street, NW to Pennsylvania Avenue, NW,
                  west along Pennsylvania Avenue, NW, 21st Street, NW, north
                  along 21st Street, NW, to M Street, NW, east along M Street,
                  NW, to 20th Street, NW, to New Hampshire, Avenue, NW, and
                  northeast along New Hampshire Avenue, NW, to Dupont Circle on
                  the west. The following adjacent area in Southwest is hereby
                  included in addition to the established CEA as delineated
                  above: Eye Street, SW on the North, 3rd Street, SW on the
                  East, M Street, SW on the South and 6th Street, SW on the
                  West.

         13.      LOCATION: INSIDE OR OUTSIDE CITY CENTER (SEP 2000) (TSA SEP
                  2002)
                  A.      CITY CENTER NEIGHBORHOOD:
                          1.       Space must be in an office district with
                                   attractive, prestigious, professional
                                   surroundings with a prevalence of modern
                                   design and/or tasteful rehabilitation in
                                   modern use. Streets and public sidewalks
                                   shall be well maintained.

                          2.       Parking.
                                   a.       The parking-to-square-foot ratio
                                            available on-site shall at least
                                            meet current local code
                                            requirements, or in the absence of a
                                            local code requirement, on-site
                                            parking shall be available at a
                                            ratio of 1 space for every 1,500
                                            BOMA rentable square feet of
                                            Government-demised area. If parking
                                            cannot be accommodated on site, the
                                            Government will consider parking on
                                            an adjacent block. The Government
                                            shall have the ability to secure the
                                            parking area offered.

                          3.                Location Amenities.
                                    a.      A variety of inexpensive and
                                            moderately priced fast
                                            food and/or eat-in restaurants
                                            shall be located within three
                                            blocks. Other employee services,
                                            such as retail shops, cleaners,
                                            public transportation, banks, etc.,
                                            shall also be located within three
                                            blocks.

        1.4      LEASE TERM (SEP 2000) (TSA SEP 2002)
                 The lease term is for ten (10) years firm. All the terms and
                 conditions contained herein shall prevail throughout the term
                 of the lease.

        1.5      OFFER DUE DATE
                 Best and Final Offers are due by 10:00 a.m. Friday, November
                 29, 2002.

        1.6      OCCUPANCY DATE (SEP 2000)(TSA SEP 2002)
                 The ability to occupy the interim space (Phase 1) is required
                 commencing on or about January 2, 2003. All other occupancy
                 milestone dates are subject to the requirements of Section
                 10.2, Transportation Security Administration Objectives and
                 Strategic Approach.

        1.7      HOW TO OFFER (SEP 2000)(TSA SEP 2002)
                 A.       One (1) original and nine (9) copies of each offer
                          shall be submitted and delivered to the following:
                          Transportation Security Administration
                          Attn: Lisa Maass, Contracting Officer
                          Room 3636, GSA Building
                          400 Seventh Street, S.W.
                          Washington, DC 20590

                  B.       For the purpose of responding to this
                           Solicitation for Offers (SFO), ownership entities of
                           multiple buildings that are combined to meet the
                           Government's requirement will be jointly considered
                           as one "Offerer". The Government requires one offer
                           for combined buildings. For multiple buildings, each
                           building may submit separate price proposals (GSA
                           Form 1364) which will be combined and analyzed at the
                           Governments discretion. Henceforth in this
                           solicitation, "Lessor" or "offeror" shall refer to
                           the combined offer. The Government reserves the right
                           to separate offers and to pair individual buildings.

                 C.        The following documents, properly executed, shall be
                           submitted on the offer due date given in Section 1.5.

                           1.      SFO #OTSA 20-02-R-00528, each page initialed
                                   by Offeror.

                           2.      SFO Attachments:

                                   a.      Attachment #1 -"Rate Structure"

                                   b.      Attachment #2 -"Fire Protection and
                                           Life Safety Evaluation" (For each
                                           building offered).

                                   c.      Attachment #3 -"Property Description
                                           Form"

                          3.       GSA Form 1364, Proposal to Lease Space
                                   (Combined for all buildings offered).




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                                       6                  LESSOR         GOV'T




       4.        GSA Form 1217, Lessor's Annual Cost Statement. (Combined for
                 all buildings offered).

       5.        GSA Form 3517B, General Clauses.

       6.        GSA Form 3518, Representatives and Certifications. (A separate
                 GSA Form 3518 is required from each building owner).

       7.        First generation black or blue-line plans of the space offered
                 in each building being offered, scaled at 1/8"=1'-0"
                 (preferred) or larger plus Computer Aided Design ("CAD") disks
                 in AutoCAD format with AIA layering conventions of same. The
                 CAD disks shall be consistent with Section 1.11 "Plans with
                 Offer."

                 a.       All architectural features of the space shall be
                          accurately shown. If renovation of the building is
                          planned, alterations and schedule to meet the
                          requirements of this SFO shall be indicated. If
                          requested, more informative plans shall be provided
                          within five days.

                 b.       As-built plans shall be provided for Phase 1 offered
                          space, Plans will clearly indicate demised area for
                          the entire 125,000-150,000 BOMA rentable square feet.
                          See Section 10.2 for a full description of the
                          Government's requirements for Phase 1.

                 c.       Plans shall reflect corridors in place or the proposed
                          corridor pattern for both a typical full
                          (single-tenant) floor and/or partial (multi-tenant)
                          floor. The corridors in place or proposed corridors
                          shall meet local code requirements for issuance of
                          occupancy permits.

                 d.       TSA will review the corridors in place and/or
                          proposed corridor pattern to make sure that these
                          achieve an acceptable level of safety as well as to
                          ensure that these corridors provide public access to
                          all essential building elements. The Offeror will be
                          advised of any adjustments that are required to the
                          corridors for determining the ANSI/BOMA Office Area
                          space. The required corridors may or may not be
                          defined by ceiling-high partitions. Actual corridors
                          in the approved layout for the successful Offeror's
                          space may differ from the corridors used in
                          determining the ANSI/BOMA Office Area square footage
                          for the lease award.

       8.        An hourly overtime rate for overtime use of heating and
                 cooling. See Section 7.3, "Overtime Usage." If proposed rate
                 is different than recommended by an Independent Government
                 estimate, the Offeror may be required to submit worksheets
                 justifying overtime energy usage and rates.

       9.        Any other information (such as a fact sheet, 5" wide x 3" high
                 or larger color photograph, site plan, location map, and tax
                 parcel map, digital and hard copy photographs of furniture, in
                 case of multiple tax parcels for an offered building, etc., in
                 order for the Government to perform a complete and adequate
                 analysis of the offered property(ies). Other information may
                 also be requested by the Government, and in such circumstances,
                 shall be submitted by the Offeror within 5 working days of the
                 request.

       10.       Written acknowledgement from each ownership entity confirming
                 agreement to submit a cooperative offer and permission to
                 represent multiple owners for the SFO from multiple ownership
                 groups.

       11.       If applicable, the agents' disclosure and authorization from
                 each ownership entity to offer in this SFO and/or represent
                 multiple buildings with different ownerships, which may have
                 conflicting interests. Owners and agents in conflicting
                 interest situations are advised to exercise due diligence with
                 regard to ethics, independent pricing, and Government
                 procurement integrity requirements. In such cases, the
                 Government reserves the right to negotiate with the owner
                 directly.

       12.       General Contractor's overhead, profit, and general conditions
                 for the initial tenant improvements and change orders and any
                 other overhead and profit or management fees that will be added
                 to the tenant improvements, construction costs, or change
                 orders. All fees will be expressed as a percentage of the
                 tenant improvements cost. Costs associated with the base
                 building and the building shell are not included in these
                 calculations. In no event shall the Government pay more than a
                 total of 16% for all fees that are related to constructions,
                 including but not limited to the General Owners Fee, General
                 Contractors General Conditions Overhead and Profit,
                 Construction Management Fee, and Project Management Fee. The
                 Architects Fee is not included in the 16%.

       13.       Adjustment for Vacant Premises reduction (See Section 3.12).

       14.       The Government will perform an evaluation of an Offeror's
                 experience and past performance as a Lessor to the Government
                 or to other commercial or non-commercial entities of buildings
                 of a size and complexity comparable to TSA's requirement. The
                 Offeror shall provide a list of up to three (3) Government
                 agencies or other entities to which it performed as a Lessor of
                 a building(s) of similar size and complexity to TSA's
                 requirement that were awarded or performed within the past five
                 (5) years or are currently in force. For each Government agency
                 or other entity please provide the following information:

                 a.       Name of agency or entity.
                 b.       Customer name and position, address, phone number,
                          e-mail address (if available), and telephone number.
                          Please ensure that the information is current and
                          accurate
                 c.       Lease term and the amount of square feet.

       15.       Evidence of Capability to Perform (See Section 3.14).

       16.       List of Key Personnel. Key personnel must include, as a
                 minimum, key employees for architectural services, the name of
                 the General Contractor, and key employees of the Property
                 Management firm. These employees should be identified under
                 Section 3.14, Evidence of Capability to Perform.



SFO NO. DTSA20-03-R-00528                      INITIALS:   [SIG]    &    [SIG]
                                                         ---------     ---------
                                       7                  LESSOR         GOV'T



                  17.      ANSI/BOMA Calculations, Plans and Spreadsheet (See
                           Section 4.10).

                  18.      Building Operating Plan (See Section 7.6).

         D.       See TSA Form 3516A, Solicitation Provisions, for additional
                  instructions. If additional information is needed, the
                  Contracting Officer (or the Contracting Officer's designated
                  representative) should be contacted.

         E.       There will be no public opening of offers, and all offers will
                  be confidential until the lease has been awarded. However, the
                  Government may release proposals outside the Government to
                  Government-support contractors to assist in the evaluation of
                  offers. Such Government contractors shall be required to
                  protect the data from unauthorized disclosure. The Officer who
                  desires to maximize protection of information in the offer may
                  apply the restriction notice to the offer as described in GSA
                  Form 3516, Solicitation Provision, 552.270-1 (d), Restriction
                  on Disclosure and Use of Data.

         F.       CLARIFICATIONS TO OFFER REQUIREMENTS:

                  1.       The rate structure required in Attachment 1 shall
                           include the following:

                           a.       A lease rate per ANSI/BOMA Office Area
                                    square foot (BOSF) for the building shell
                                    rental, fully serviced. It is the intent of
                                    the Government to lease a building shell
                                    with a Tenant Improvement Allowance. All
                                    improvements in the base building, lobbies,
                                    common areas, and core areas shall be
                                    provided by the Lessor, at the Lessor's
                                    expense. This rate shall include, but not
                                    limited to, property financing (exclusive of
                                    Tenant Improvement), insurance, taxes,
                                    management, profit, etc., for the building.
                                    The building shell rental rate shall also
                                    include all basic building systems and
                                    common area build out, including base
                                    building lobbies, common areas, and core
                                    areas, etc.

                           b.       The annual cost per BOSF for the cost of
                                    services and utilities. This amount shall be
                                    for the combined buildings. This equals
                                    line 27b of GSA Form 1217, Lessor's Annual
                                    Cost Statement, divided by the BOSF
                                    offered.

                           c.       An annualized percentage interest rate to be
                                    used by the Lessor to amortize the cost of
                                    the Tenant Improvement Allowance over the
                                    firm term of the lease.

                           d.       The annual amortized cost of the Tenant
                                    Improvement Allowance. Such amortization
                                    shall be expressed as a cost per BOSF.
                                    Tenant Improvements shall be all alterations
                                    for the Government-demised area above the
                                    building shell build out. The Tenant
                                    Alteration Allowance shall be $40.00 per
                                    BOSF. Such alterations shall be described
                                    and identified in the drawings used to
                                    construct the Government-demised area. The
                                    Tenant Alteration Allowance, which is to be
                                    provided by the Lessor to the Government for
                                    Tenant Improvements, shall be made available
                                    at lease execution.

                           e.       A fully-serviced lease rate per BOSF as a
                                    summation of the amounts broken out in the
                                    subparagraphs a, b, and d.

                           f.       The annual percentage interest rate,
                                    compounded monthly, to be used by the Lessor
                                    to amortize the cost of the Tenant
                                    Improvements above $40.00 per BOSF over the
                                    term of the lease up to $60.00 per BOSF.

                           g.       Offerors shall submit proposals in
                                    accordance with this Section 1.7, How to
                                    Offer. Offers that do not conform to all
                                    requirements contained in this SFO may be
                                    rejected without further evaluation,
                                    deliberation, or discussion.

1.8      BUILDING SHELL REQUIREMENTS (SEP 2000)(TSA SEP 2002)

         A.       The Lessor's build out obligations in providing a building
                  shell (at the Lessor's expense) shall include the following:

                  1.       Base structure and building enclosure components
                           shall be complete. All common areas accessible by the
                           Government, such as lobbies, fire egress corridors
                           and stairwells, elevators, garages, and services
                           areas, shall be complete. Restrooms shall be complete
                           and operational. All building shell components,
                           including but not limited to, heating, ventilation,
                           and air conditioning (HVAC), electrical, ceilings,
                           sprinklers, etc., shall be furnished, installed, and
                           coordinated with Tenant Improvements.

                  2.       Accessibility Requirements. Accessibility to persons
                           with disabilities shall be required throughout the
                           common areas accessible to Government tenants in
                           accordance with both the ADAAG and the UFAS and shall
                           be installed and coordinated with Tenant
                           Improvements. See Section 4.14, "Accessibility."

                  3.       Ceilings. A complete acoustical ceiling system
                           (which includes grid and lay-in tiles) throughout the
                           Government-demised area and all common areas
                           accessible to Government tenants shall be required in
                           accordance with Section 5.7, "Ceilings." The
                           acoustical ceiling system shall be furnished,
                           installed, and coordinated with Tenant Improvements.

                  3.       Doors. Exterior building doors and doors necessary to
                           the lobbies, common areas, and core areas shall be
                           required. This does not include suite entry or
                           interior doors specific to Tenant Improvements.
                           Related hardware shall be installed in accordance
                           with the "Doors: Hardware" (Section 5.13) and the
                           "Doors: Exterior" (Section 5.10).

                  5.       Partitions. Permanent, perimeter, and demising
                           slab-to-slab partitions (including all columns)
                           finished with paint and base shall be require in
                           accordance with Section 5.15, "Partitions: General"
                           and Section 5.16, "Partitions: Permanent."

                  6.       Flooring. All building common areas shall have
                           finished floors in accordance with Section 5.18,
                           "Floor Covering and Perimeters."





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                                                              LESSOR     GOV'T




                                       8


                  7.       Plumbing.  The Offeror shall include cost of
                           plumbing in common areas, such as for toilet rooms
                           and janitor closets as part of the building shell
                           cost. Hot and cold water risers and domestic waste
                           and vent risers, installed and ready for connections
                           that are required for Tenant improvements, shall be
                           included in the shell rent.

                  8.       HVAC. Central HVAC systems shall be installed and
                           operational, including, as appropriate, main and
                           branch lines, VAV boxes, dampers, flex ducts, and
                           diffusers, for an open office layout, including all
                           building common areas. Conditioned air through medium
                           pressure ductwork at a rate of .75 cubic feet per
                           minute per ANSBOMA rentable square foot shall be
                           provided.

                  9.       Electrical. Electrical power distribution panels and
                           circuit breakers shall be available in an electrical
                           closet, with capacity at 277/480 volt (V) and 120/206
                           V, 3-phase, 4-wire system providing 7 watts (W) per
                           ANSBOMA rentable square foot. This 7 watt (W)
                           requirement excludes HVAC.

                  10.      Lighting. Lighting. Parabolic type 2' x 2' or 2' x 4'
                           fluorescent lighting fixtures or other building
                           standard fixtures acceptable to the Contracting
                           Officer shall be installed in the ceiling grid for an
                           open office plan. Lighting as necessary shall be
                           provided in accordance with Section 6.19, "Lighting:
                           Interior and Parking."

                  11.      Safety and Environmental Management. Complete safety
                           and environmental management shall be provided
                           throughout the building in accordance with Federal,
                           state, and local codes and laws including, but not
                           limited to, such items as fire detection and alarms,
                           emergency building power for life safety systems,
                           etc., and shall be in accordance with the ADAAG.
                           Where sprinklers are required in the
                           Government-demised area, sprinkler mains and
                           distribution piping in a "protection" layout (open
                           plan) with heads turned down with an escutcheon or
                           trim plate shall be provided.

                  12.      Telephone Rooms. Building telecommunication rooms on
                           each floor shall be completed, operational, and ready
                           for Tenant improvements.  The telephone closets shall
                           include a telephone backboard and success to stand-by
                           power.

                  13.      All of the above improvements are described in more
                           detail hereinafter in this SFO.

1.9.     TENANT IMPROVEMENTS (SEP 2000)(TSA SEP 2002)
         A.       The Tenant Improvement Allowance shall be used for building
                  out the Government-demised area in accordance with the
                  Government-approved drawings. All Tenant Improvements required
                  by the Government for occupancy shall be performed by the
                  successful Offeror, and all improvements shall meet the
                  quality standards and requirements of this SFO and GSA Form
                  3517B, General Clauses.

         B.       The Tenant Improvement Allowance shall include all the
                  Offeror's administrative costs, general contractor fees,
                  subcontractor's profit and overhead costs, as well as
                  Offeror's overhead and profit. See Section 3.15 for
                  Construction Schedule. NO COSTS ASSOCIATED WITH THE BASE
                  BUILDING REQUIREMENTS AND BUILDING SHELL SHALL BE INCLUDED
                  IN THE TENANT IMPROVEMENT PRICING.

1.10      TENANT IMPROVEMENT RENTAL ADJUSTMENT (SEP 2002)(TSA SEP 2002)
          A.      All Tenant Improvements shall be identified after award of the
                  contract.

                  1.       The Government, at its sole discretion, shall make
                           all decisions as to the usage of the Tenant
                           Improvement Allowance. The Government may use all or
                           part of the Tenant Improvement Allowance. The
                           Government may return to the Lessor any unused
                           portion of the Tenant Improvement Allowance in
                           exchange for a decrease in rent according to the
                           amortization rate over the firm term.

                  2.       The Government reserves the right to make cash
                           payments for any or all work performed by the Lessor.
                           Prior to occupancy, the Government, at its sole
                           discretion, may choose to pay lump sum for any or all
                           of the Tenant Improvement Allowance. If, prior to
                           occupancy, the Government elects to make a lump sum
                           payment for any portion of the Tenant Improvement
                           Allowance, the payment of the Tenant Improvement
                           Allowance by the Government will result in a decrease
                           in the rent. At any time after occupancy, the
                           Government, at its discretion, may choose to pay lump
                           sum for any part or all of the remaining unpaid
                           amortized balance of the Tenant Improvement
                           Allowance. If the Government elects to make a lump
                           sum payment for the Tenant Improvement Allowance
                           after occupancy, the payment of the Tenant
                           Improvement Allowance by the Government  will result
                           in a decrease in the rent according to the
                           amortization rate over the firm term of the lease.

                  3.       The Government reserves the right to 1) reduce the
                           Tenant Improvement requirements, 2) pay lump sum for
                           the overage upon completion and acceptance of the
                           improvements, or 3) increase the rent according to
                           the negotiated amortization rate over the firm term
                           of the lease.

1.11     PLANS WITH OFFER (SEP 2002)(TSA SEP 2002)
         All Plans submitted for consideration shall have been generated by a
         Computer Aided Design (CAD) program which is compatible with the latest
         release of AutoCAD. The required file extension is: DWG. Clean and
         purged files shall be submitted on 3-1/2-inch double-sided,
         high-density diskettes, or, if approved by the Contracting Officer, on
         CD-ROM. All submissions shall be accompanied with a written matrix
         indicating the layering standard to ensure that all information is
         recoverable. Preferred laying standard is A/A laying format long
         version. Plans shall include a proposed corridor pattern for typical
         floors and/or partial floors. All architectural features of the space
         shall be accurately shown.


SFO NO. DTSA20-03-R-00528                      INITIALS:   [SIG]    &    [SIG]
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                                       9                  LESSOR         GOV'T

1.12     NEGOTIATIONS (SEP 2000)(TSA OCT 2002)
         A.       Negotiations will be conducted on behalf of the Government by
                  the Contracting Officer, the Government Consultant, or the
                  Contracting Officer's designated representatives. The
                  Contracting Officer is named on the cover of this SFO. The
                  Government will negotiate rental price for the firm term and
                  any other aspect of the offer as deemed necessary.

         B.       The Offeror shall not enter into negotiations concerning the
                  space leased or to be eased with representatives of Federal
                  agencies other than the Contracting Officer or designee.

         C.       The Contracting Officer will conduct oral or written
                  negotiations with all Offerors that meet the requirements of
                  this SFO and are within the competitive range. The
                  competitive range will be established by the Contracting
                  Officer on the basis of cost or price and non-cost or price
                  factors as stated in this SFO and will include all of the most
                  highly rated proposals, unless the range is further reduced
                  for purposes of efficiency.

         D.       All Offerors will be provided a reasonable opportunity to
                  submit any cost or price, technical, or other revisions to
                  their offer that may result from the negotiations.
                  Negotiations will be closed with submission of final proposal
                  revisions ("Best and Final" offers).

1.13     PRICE EVALUATION (PRESENT VALUE)
         A.       If annual CPI adjustments in operating expenses are included,
                  the Offeror shall be required to submit the offer with the
                  total "gross" annual price per BOMA Office Area Square Foot
                  and a breakout of the "Base" price per BOMA Office Area Square
                  Foot for services and utilities (operating expenses) to be
                  provided by the Lessor. The "gross" price shall include the
                  "base" price.

         B.       The Offeror shall be required to submit plans and any other
                  information to demonstrate that the BOMA rentable space yields
                  ANSI/BOMA Office Area space within the required ANSI/BOMA
                  Office Area range. The Government will verify the amount of
                  ANSI/BOMA Office Area square footage and will convert the
                  rentable prices offered to ANSI/BOMA Office Area prices, which
                  will subsequently be used in the price evaluation.

         C.       If the offer includes annual adjustments in operating
                  expenses, the base price per ANSI/BOMA Office Area square foot
                  from which adjustments are made will be the base price for the
                  term of the lease, including any option periods.

         D.       Evaluation of offered prices will be on the basis of the
                  annual price per ANSI/BOMA Office Area square foot, including
                  any option periods. The Government will perform present value
                  price evaluation by reducing the prices per ANSI/BOMA Office
                  Area square foot to a composite annual ANSI/BOMA Office Area
                  square foot price, as follows:

                  1.       Parking and wareyard areas will be excluded from the
                           total square footage but not from the price. For
                           different types of space, the gross annual per square
                           foot price will be determined by dividing the total
                           annual rental by the total square footage minus these
                           areas. For parking, the Government requires two
                           prices for the parking requirement as follows: one
                           price per each parking space offered, and one price
                           for TSA to use the entire garage. For evaluation
                           purposes, the Government will evaluate the price for
                           the minimum Government requirement for parking.

                  2.       If annual adjustments in operating expenses will not
                           be made, the gross annual per square foot price will
                           be discounted annually at 8 percent to yield a gross
                           present value cost (PVC) per square foot.

                  3.       If annual adjustments in operating expenses will be
                           made, the annual per square foot price, minus the
                           base cost of operating expense, will be discounted
                           annually at 5.1 percent to yield a net PVC per square
                           foot. The operating expenses will be both escalated
                           at 2.1 percent compounded annually and discounted
                           annually at 5.1 percent, then added to the net PVC to
                           yield the gross PVC.

                  4.       To the gross PVC will be added:

                           a.       The cost of Government-provided services not
                                    included in the rental escalated at 4
                                    percent compounded annually and discounted
                                    annually at 8 percent.

                           b.       The annualized (over the full term) per
                                    ANSI/BOMA Office Area square foot cost of
                                    any items which are to be reimbursed in a
                                    lump sum payment. (The cost of these items
                                    is present value; therefore, it will not be
                                    discounted.)

                           c.       The cost of relocation for furniture,
                                    telecommunications, replication costs, and
                                    other move-related costs, if applicable.

                           d.       Cost of general contractor's overhead and
                                    profit (OH&P) and any developers project
                                    management fees, as a percentage of total
                                    improvements costs based on a $40.00 per
                                    square foot Tenant Improvement Allowance. In
                                    no event shall the Government pay more than
                                    a total of 16% for all fees that are related
                                    to construction, including but not limited
                                    to the General Owners Fee, General
                                    Contractors General Conditions Overhead and
                                    Profit, Construction Management Fee, and
                                    Project Management Fee. The Architects Fee
                                    is not included in the 16%. The Government
                                    reserves the right to reject a General
                                    Contractor or negotiate the General
                                    Contractor's Fee.

                           e.       The total rental payment for Phase I. If
                                    rental for Phase I space is different from
                                    phases 2 and 3, indicate as an addendum to
                                    Attachment 1.

                  5.       Free rent shall be discounted and evaluated in
                           the year in which it is offered.

                  6.       The sum of either subparagraphs 2 and 4 or
                           subparagraphs 3 and 4 less 5 will be the per
                           ANSI/BOMA Office Area square foot present value of
                           the offer for price evaluation purposes.


SFO NO. DTSA20-03-R-00528                      INITIALS:   [SIG]    &    [SIG]
                                                         ---------     ---------
                                       10                 LESSOR         GOV'T

                  7.       For purposes of evaluation, the Government, at its
                           sole discretion, retains the right to decide what
                           portion of the estimated tenant improvement allowance
                           is used for price evaluation purposes and lease
                           award.

1.14     HISTORIC PREFERENCE, GSAR 552.270-2 (VARIATION)(SEP 1999)
         A.       Preference will be given to Offerors of space in buildings in,
                  or formally listed as eligible for inclusion in, the National
                  Register of Historic Places, and to historically-significant
                  buildings in historic districts listed in the National
                  Register. Such preference will be extended to historic
                  buildings and will result in award if:

                  1.       The offer for space meets the terms and conditions of
                           this SFO as well as any other offer received (It is
                           within the discretion of the Contracting Officer to
                           accept alternatives to certain architectural
                           characteristics and safety features defined elsewhere
                           in this SFO to maintain the historical integrity of
                           the building, such as high ceilings, wooden floors,
                           etc.) and

                  2.       The rental is no more than 10 percent higher, on a
                           total annual square foot (ANSI/BOMA Office Area) cost
                           to the Government, than the lowest otherwise
                           acceptable offer.

         B.       If more than one offer of an historic building is received and
                  they meet the above criteria, an award will then be made to
                  the lowest priced historic property offered.

1.15     AWARD (JAN 1997)
         A.       After conclusion of negotiations, the Contracting Officer will
                  require the Offeror selected for award to execute the proposed
                  lease prepared by the Government which reflects the proposed
                  agreement of the parties.

         B.       The proposed lease shall consist of:

                  1.       Standard Form 2, U.S. Government Lease for Real
                           Property,

                  2.       required clauses,

                  3.       required certifications and representations,

                  4.       the pertinent provisions of the offer, and

                  5.       the pertinent provisions of the SFO.

         C.       The acceptance of the offer and award of the lease by the
                  Government occurs upon notification of unconditional
                  acceptance of the offer or execution of the lease by the
                  Contracting Officer and mailing or otherwise furnishing
                  written notification or the executed lease to the successful
                  Offeror.

         D.       By initialing below, Offerors understand and agree to make
                  their offers in response to solicitation DTSA20-02-R-00528
                  good until ninety (90) days after submission of Best and Final
                  Offers (BAFO).



SFO NO. DTSA20-03-R-00528                      INITIALS:   [SIG]    &    [SIG]
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                                       11                 LESSOR         GOV'T

1.16     LABOR STANDARDS (SEP 2000)
         A.       If an Offeror proposes to satisfy the requirements of this SFO
                  through the construction of a new building or the complete
                  rehabilitation or reconstruction of an existing building, and
                  the Government will be the sole or predominant tenant such
                  that any other use of the building will be functionally or
                  quantitatively incidental to the Government's use and
                  occupancy, the following Federal Acquisition Regulation (FAR)
                  clauses shall apply to work performed in preparation for
                  occupancy and use of the building by the Government. Full text
                  versions of these clauses are available upon request from the
                  Contracting Officer. Full text versions are also available at
                  the following web site: http;//www.emet.gov/far/

                  52.222-4  Contract Work Hours and Safety Standards Act -
                            Overtime Compensation

                  52.222-6  Davis-Bacon Act

                  52.222-7  Withholding of Funds

                  52.222-8  Payrolls and Basic Records

                  52.222-9  Apprentices and Trainees

                  52.222-10 Compliance with Copeland Act Requirements

                  52.222-11 Subcontracts (Labor Standards)

                  52.222-12 Contract Termination-Debarment

                  52.222-13 Compliance with Davis-Bacon and Related Act
                            Regulations

                  52.222-14 Disputes Concerning Labor Standards

                  52.222-15 Certification of Eligibility



SFO NO. DTSA20-03-R-00528                      INITIALS:   [SIG]    &    [SIG]
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                                       12                 LESSOR         GOV'T

2.0      AWARD FACTORS

2.1      AWARD FACTORS (JAN 1997)(TSA SEP 2002)

         A.       Best Value Selection:
                  This procurement shall be conducted utilizing Best Value
                  Selection (BVS), which seeks to select an offer based on the
                  best combination of technical merit and price reasonableness
                  -- i.e., "best value." "Best Value" is defined as the
                  procurement process that results in the most advantageous
                  acquisition decision for the Government and is performed
                  through an integrated assessment and trade-off analysis
                  between the non-cost/price factors and the cost/price factor.
                  While the Government evaluation team and the Selection
                  Official will strive for maximum objectivity, the selection
                  process, by its nature, is subjective and, therefore
                  professional judgment is implicit throughout the entire
                  process.

                  The Government reserves the right to award a contract on the
                  basis of the initial offers received without discussion.
                  Proposals should be submitted initially on the most favorable
                  terms from a price and technical standpoint that the Offeror
                  can submit to the Government.

                  Advisors who are not Federal Government employees may assist
                  in the evaluation and provide input regarding the offers.

         B.       Non-Cost/Price Factors

                  1.       Building Characteristics
                           Each offer will be evaluated based on the following
                           building characteristics subfactors. The subfactors
                           below are listed in order of importance and each
                           subfactor will be evaluated on an adjectival basis.
                           The adjectival ratings are: Outstanding, Acceptable,
                           Marginal, and Unacceptable.

                           a.       The degree to which the building(s) meet or
                                    can be modified to meet TSA's requirements:

                                    i)       Security features - extent to which
                                             Level IV security requirements can
                                             be met
                                    ii)      IT infrastructure
                                    iii)     Electrical systems
                                    iv)      Quantity, quality and suitability
                                             of furniture, if any
                                    v)       Slab-to-slab height
                                    vi)      Finished floor-to-ceiling
                                             achievable

                           b.       Tenancy - Single occupancy of building(s) is
                                    preferable to sharing buildings with another
                                    tenant(s).

                           c.       Number of Buildings - One building is
                                    preferable to two buildings. Buildings side
                                    by side are better than buildings one block
                                    away, which is better than buildings 2
                                    blocks away, which is better than buildings
                                    3 blocks away.

                           d.       Space Efficiency - The degree to which the
                                    space offered is conducive to efficient
                                    layout and good utilization.

                           e.       Condition of Phase 1 Space.

                           f.       Parking - On-site parking is better than
                                    off-site parking. The ability to control
                                    entire parking facility is better than the
                                    ability to fence off part of the parking
                                    lot.

                           g.       Location Amenities - The greater the variety
                                    of amenities and the closer the amenities
                                    to the building site the better.

                  2.       Experience and Past Performance Factor
                           The Government will evaluate the Offeror's
                           experience and past performance as a Lessor to the
                           Government or to other commercial or non-commercial
                           entities of buildings of a size and complexity
                           comparable to TSA's requirement. The objective of
                           the evaluation is to develop insight into the
                           Offeror's relative capability and history of
                           providing quality services at a reasonable price,
                           adherence to schedules, its history of reasonable
                           and cooperative behavior, and its commitment to
                           customer satisfaction. Offerors are cautioned that
                           in conducting the past performance evaluation, the
                           Government may use data provided by the Offeror in
                           its proposal and data obtained from other sources.
                           While the Government may elect to consider data
                           obtained from other sources, the burden of providing
                           complete information remains with the Offeror.
                           Experience and Past Performance factor will be
                           evaluated on an adjectival basis. The adjectival
                           ratings are: Outstanding, Acceptable, Marginal, and
                           Unacceptable.

         C.       Cost/Price Factor

                           The Offeror's cost/price will be evaluated in
                           accordance with the SFO provision entitled, "Price
                           Evaluation (Present Value)." The cost/price factor
                           will be evaluated separately from the Non Cost/Price
                           Factors. The cost/price factor will not be
                           adjectively rated. The Offeror's total evaluated
                           price will be assessed for reasonableness, and
                           realism. Reasonableness and realism will be
                           established by the existence of adequate price
                           competition and/or by comparing all, or a
                           representative sample of the proposed prices/costs,
                           to industry average rates and/or rates from other
                           contracts for similar work, etc.


SFO NO. DTSA20-03-R-00528                      INITIALS:   [SIG]    &    [SIG]
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                                       13                 LESSOR         GOV'T

3.0      MISCELLANEOUS

3.1      SUBSEQUENT TENANT IMPROVEMENTS $100,000 OR LESS (SEP 2000)
         A.       The Lessor may be requested to provide alterations during the
                  term of the lease. Alterations will be ordered by issuance of
                  GSA Form 276, Supplemental Lease Agreement, GSA Form 300,
                  Order for Supplies or Services, or a Tenant Agency-approved
                  form. The two clauses from GSA Form 3517, General Clauses,
                  552.232-25, Prompt Payment (Deviation FAR 52.232-25), and
                  552.232-70, Invoice Requirements, apply to orders for
                  alterations. All orders are subject to the terms and
                  conditions of this lease.

         B.       Orders may be placed by the Contracting Officer or Tenant
                  Agency officials when specifically authorized to do so by the
                  Contracting Officer. The Contracting Officer will provide the
                  Lessor with a list of Tenant Agency officials authorized to
                  place orders and will specify any limitations on the authority
                  delegated to Tenant Agency officials. The Tenant Agency
                  officials are not authorized to deal with the Lessor on any
                  other matters.

         B.       Payments for alterations ordered by the Tenant Agency will
                  be made directly by the Tenant Agency placing the order.

3.2      TAX ADJUSTMENT (SEP 2000)

         A.       Real estate taxes, as referred to in this paragraph, are only
                  those taxes which are assessed against the building and/or the
                  land upon which the building is located, without regard to
                  benefit to the property, for the purpose of funding general
                  Government services. Real estate taxes shall not include,
                  without limitation, general and/or special assessments,
                  business improvement district assessments, or any other
                  present or future taxes or governmental charges that are
                  imposed upon the Lessor or assessed against the building
                  and/or the land upon which the building is located.

         B.       Base year taxes as referred to in this paragraph are 1) the
                  real estate taxes for the first 12-month period coincident
                  with full assessment or 2) may be an amount negotiated by the
                  parties that reflects an agreed upon base for a fully assessed
                  value of the property.

         C.       The term "full assessment" as referred to in this paragraph
                  means that the taxing jurisdiction has considered all
                  contemplated improvements to the assessed property in the
                  valuation of the same. Partial assessments for newly
                  constructed projects or for projects under construction,
                  conversion, or renovation will not be used for establishing
                  the Government's base year for taxes.

         D.       The Lessor shall furnish the Contracting Officer with copies
                  of all notices which may affect the valuation of said land and
                  buildings for real estate taxes thereon, as well as all
                  notices of a tax credit, all tax bills, and all paid tax
                  receipts, or where tax receipts are not given, other similar
                  evidence of payment acceptable to the Contracting Officer
                  (hereinafter, evidence of payment), and a proper invoice (as
                  described in GSA Form 3517, General Clauses, 552.232-75,
                  Prompt Payment) of the tax adjustment including the
                  calculation thereof, for each year that real estate taxes are
                  incurred during the lease term or any extension thereof. All
                  such documents are due within 10 calendar days of receipt
                  except that the proper invoice and evidence of payment shall
                  be submitted within 60 calendar days after the date the tax
                  payment is due from the Lessor to the taxing authority.
                  FAILURE TO SUBMIT THE PROPER INVOICE AND EVIDENCE OF PAYMENT
                  WITHIN SUCH TIME FRAME SHALL BE A WAIVER OF THE RIGHT TO
                  RECEIVE PAYMENT RESULTING FROM AN INCREASED TAX ADJUSTMENT
                  UNDER THIS PARAGRAPH.

         E.       The Government shall 1) make a single annual lump-sum payment
                  to the Lessor for its share of any increase in real estate
                  taxes during the lease term over the amount established as the
                  base year taxes or 2) receive a rental credit or lump sum
                  payment for its share of any decreases in real estate taxes
                  during the lease term below the amount established as the base
                  year taxes. The amount of lump sum payment or rental credit
                  shall be based upon evidence of valuation and payment
                  submitted by the Lessor to the Contracting Officer in
                  accordance with subparagraph D.

                  1.       In the event of an increase in taxes over the base
                           year, the Lessor shall submit a proper invoice of the
                           tax adjustment including the calculation thereof
                           together with evidence of payment to the Contracting
                           Officer. THE GOVERNMENT SHALL BE RESPONSIBLE FOR
                           PAYMENT OF ANY TAX INCREASE OVER THE BASE YEAR TAXES
                           ONLY IF THE PROPER INVOICE AND EVIDENCE OF PAYMENT IS
                           SUBMITTED BY THE LESSOR WITHIN 60 CALENDAR DAYS AFTER
                           THE DATE THE TAX PAYMENT IS DUE FROM THE LESSOR TO
                           THE TAXING AUTHORITY. The due date for making payment
                           shall be the 30th calendar day after receipt of
                           evidence of payment by the Contracting Officer or the
                           30th calendar day after the anniversary date of the
                           lease, whichever is later. If the lease terminates
                           before the end of a tax year, payment for the tax
                           increase due as a result of this section for the tax
                           year will be prorated based on the number of days
                           that the Government occupied the space. No increase
                           will be paid, due, or owing unless all evidence of
                           valuation and payment has been previously submitted
                           to the Contracting Officer. The Government's payment
                           for its share of real estate taxes shall not include
                           any late charges, interest, or penalties imposed by
                           the taxing authority as a result of the Lessor's
                           delinquency in paying such taxes or charges.

                  2.       In the event of a decrease in taxes from the base
                           year, or in the event of any refund or tax deduction,
                           the Lessor shall notify the Contracting Officer in
                           accordance with subparagraph D. The Government shall
                           be entitled to, and shall receive a credit for, the
                           prorata reduction in taxes applicable to the premises
                           encumbered by this lease, regardless of whether the
                           Government has made a tax payment for that year. The
                           Government's share of the credit will be determined
                           in accordance with subparagraph F and shall be taken
                           as a deduction from the rent. Any credit due the
                           Government after the expiration or earlier
                           termination of the lease (including, but not limited
                           to, credits resulting from a decrease in taxes
                           pursuant to a tax credit due the Lessor; a reduction
                           in the tax assessment; or a tax appeal proceeding for
                           a year of the lease, or portion thereof) shall be
                           made by a lump sum payment to the Government or as a
                           rental credit to any succeeding lease as determined
                           by the Contracting Officer. The Lessor shall remit
                           any lump sum payment to the Government within 15
                           calendar days of payment by the taxing authority to
                           the Lessor or the Lessor's designee. If the credit
                           due to the Government is not paid by the due date,
                           interest shall accrue on the late payment at the rate
                           established by the Secretary of the Treasury


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                                       14                 LESSOR         GOV'T

                           under Section 12 of the Contract Disputes Act of 1976
                           (United States Code 41 USC 611) that is in effect on
                           the day after the due date. The interest penalty
                           shall accrue daily on the amount of the credit and
                           shall be compounded in 30-day increments inclusive
                           from the first day after the due date through the
                           payment date. The Government shall have the right to
                           pursue the outstanding balance of any tax credit
                           using all such collection methods as are available to
                           the United States to collect debts. Such collection
                           rights shall survive the expiration of this lease.

         F.       The Government shall pay its share of tax increases or shall
                  receive its share of any tax decrease based on the ratio of
                  the BOMA rentable square feet occupied by the Government to
                  the total rentable square feet in the building or complex
                  (percentage of occupancy). For the purpose of this lease, the
                  Government's percentage of occupancy as of the date hereof is
                  ____TBD*____ percent based upon an occupancy of ____TBD*____
                  BOMA rentable square feet in a building of ____TBD*____ BOMA
                  rentable square feet. This percentage shall be subject to
                  adjustment to take into account additions or reductions of the
                  amount of space as may be contemplated in this lease or
                  amendments hereto. The block and lot/parcel or other
                  identification numbers for other property, building(s), and
                  parking areas(s) occupied under this lease are ____TBD*____.

         G.       The Government may direct the Lessor upon reasonable notice to
                  initiate a tax appeal, or the Government may decide to contest
                  the tax assessment on behalf of the Government and the Lessor
                  or for the Government alone. The Lessor shall furnish to the
                  Government information necessary for appeal of the tax
                  assessment in accordance with the filing requirements of the
                  taxing authority. If the Government decides to contest the tax
                  assessment on its own behalf or on behalf of the Government
                  and the Lessor, the Lessor shall cooperate and use all
                  reasonable efforts including, but not limited to, affirming
                  the accuracy of the documents, executing documents required
                  for any legal proceeding, and taking such other actions as may
                  be required. If the Lessor initiates an appeal on behalf of
                  the Government, the Government and the Lessor will enter into
                  an agreement to establish a method for sharing expenses and
                  tax savings.

                  (*TBD = To Be Determined)

3.3      PERCENTAGE OF OCCUPANCY
         The percent of the building occupied by the Government, for purposes
         of tax adjustments, will be established during negotiations.

3.4      OPERATING COSTS (NCR NOVEMBER 2001)

         A.       Beginning with the second year of the lease and each year
                  thereafter, the Government shall pay adjusted rent for changes
                  in costs for cleaning services, supplies, materials,
                  maintenance, trash removal, landscaping, water and sewer
                  charges, heating, electricity, and certain administrative
                  expenses attributable to occupancy. Applicable costs listed on
                  GSA Form 1217, Lessor's Annual Cost Statement, when negotiated
                  and agreed upon, will be used to determine the base operating
                  cost adjustments. The agreed-upon initial operating costs
                  shall be stated on the SF-2 or other lease document.

         B.       The amount of adjustment will be determined by multiplying the
                  base operating costs by the percent change in the revised
                  Consumer Price Index (CPI) for wage earners and clerical
                  workers, U.S. City average, all items figure, (1982-1984 =
                  100) published by the Bureau of Labor Statistics, U.S.
                  Department of Labor.

         C.       The first percent change will be computed by comparing the
                  index figure published for the month prior to the lease
                  commencement date with the index figure published for the
                  month before the anniversary date of the lease. For example, a
                  lease commencing in June of 2001 would use the index published
                  for May of 2001 and that figure would be compared with the
                  index published for May of 2002 to determine the percent
                  change.

         D.       Each successive adjustment shall use the percent difference
                  between the prior year index figure and the current year index
                  figure for the month before the next anniversary date of the
                  lease. In the example used, the second adjustment would
                  compare the CPI for May of 2002 with that of May of 2003 to
                  determine the percent change. The percent change shall be
                  applied to the escalated operating costs from the previous
                  year. For example, if the initial operating costs were $10,000
                  and the initial adjustment calculated under paragraph (C)
                  above were $250, then the operating costs to be used for the
                  second adjustment calculation would be $10,250.

         E.       Payment will be by permanently adding 1/12 of the adjustment
                  to the monthly installment of fixed rent. Rental adjustments
                  will be effective on the anniversary date of the lease.
                  Payment of the adjusted rental rate will become due (for
                  purposes of any interest due) on the first workday of the
                  second month following the publication of the CPI for the
                  month prior to the anniversary date (adjustment effective
                  date).

         F.       If the Government exercises an option to renew the lease term,
                  annual adjustments will continue in the manner described
                  above.

         G.       Change in base operating costs.






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                  1.       If a change in the operating costs occurs for such
                           things as commencement of daytime cleaning or
                           expansion of space (where the expansion space is
                           rented at the same rate as the original space),
                           annual adjustments shall be calculated separately on
                           the increase/decrease in operating costs. However,
                           such adjustment shall be effective only after the
                           increased costs have been in effect for at least one
                           year. Therefore, for expansions not ocurring on the
                           anniversary date of the lease, the adjustment shall
                           be due and payable on the anniversary date of the
                           lease following the first anniversary date of the
                           expansion. The first rent adjustment for the increase
                           in base operating costs shall be calculated by
                           comparing the CPI for the month before the effective
                           date of the change in base operating costs (such as
                           the expansion effective date) with the CPI for the
                           month before the lease anniversary date. For
                           subsequent adjustments, the increase in the base
                           operating costs shall be added to the other escalated
                           base operating costs and only one calculation shall
                           be made.

                  2.       In cases where an expansion of leased space occurs
                           and the expansion space is rented at a different rate
                           than the original space, the base operating costs
                           shall be reestablished in the Supplemental Lease
                           Agreement to take the additional space. The new base
                           operating costs shall be a prorated blend of the
                           escalated original base operating costs and the base
                           operating costs for the new space from the GSA Form
                           1217 for the new space. The CPI's shall continue to
                           be determined as specified in paragraph (D) above,
                           and operating cost rental adjustments shall continue
                           to be made on the anniversary date of the lease.

         H.       In the event of a decrease in the CPI during the occupancy
                  under the lease, the rental amount will be reduced
                  accordingly. The amount of such reduction will be determined
                  in the same manner as increases in the rent provided under
                  this clause.

         I.       The offer shall clearly state whether the rental is firm
                  throughout the term of the lease or if it is subject to annual
                  adjustment of operating costs as indicated above. If operating
                  costs will be subject to adjustment, those costs shall be
                  specified on GSA Form 1364, Proposal to Lease Space, contained
                  elsewhere in this SFO. Beginning with the second year of the
                  lease and each year thereafter, the Government shall pay
                  adjusted rent for changes in costs for cleaning services,
                  supplies, materials, maintenance, trash removal, landscaping,
                  water, sewer charges, heating, electricity, and certain
                  administrative expenses attributable to occupancy. Applicable
                  costs listed on GSA Form 1217, Lessor's Annual Cost Statement,
                  when negotiated and agreed upon, will be used to determine the
                  base rate for operating costs adjustment.

3.5      OPERATING COSTS BASE (SEP 2002)
         The base for the operating costs adjustment will be established during
         negotiations based upon ANSI/BOMA Office Area square feet.

3.6      ANSI/BOMA RENTABLE SQUARE FEET (SEP 2000) (TSA SEP 2002)
         For the purposes of this SFO, the Government recognizes the American
         National Standards Institute/Building Owners and Managers Association
         (ANSI/BOMA) international standard (Z65.1-1996) definition for rentable
         space.

3.7      ANSI/BOMA OFFICE AREA SQUARE FEET (NCR VARIATION (AUG 2002)) (TSA OCT
         2002)
         A. For the purposes of this SFO, the Government recognizes the American
            National Standards Institute/Building Owners and Managers
            Association (ANSI/BOMA) international standard (Z65.1-1996)
            definition for office area, which means "the area where a tenant
            normally houses personnel and/or furniture, for which a measurement
            is to be computed."

         B. ANSI/BOMA office area square feet shall be computed by measuring the
            area enclosed by the finished surface of the room side of corridors
            (corridors in place as well as those required by local codes and
            ordinances to provide an acceptable level of safety and/or to
            provide access to essential building elements) and other permanent
            walls, the dominant portion (refer to Z65.1) of building exterior
            walls, and the center of tenant-separating partitions. Where
            alcoves, recessed entrances, or similar deviations from the corridor
            are present, ANSI/BOMA office area square feet shall be computed as
            if the deviation were not present. For purposes of this
            solicitation, floor common area, including rest rooms, janitors
            closets, telephone and electrical closets, mechanical rooms,
            elevator lobbies, and public or fire safety egress corridors are not
            included as BOMA office area square feet.

3.8      COMMON AREA FACTOR (SEP 2000)
         If applicable, the Offeror shall provide the Common Area Factor (a
         conversion factor(s) determined by the building owner and applied by
         the owner to the ANSI/BOMA office area square feet to determine the
         rentable square feet for the offered space).

3.9      APPURTENANT AREAS
         The right to use appurtenant areas and facilities is included. The
         Government reserves the right to post Government rules and regulations
         where the Government leases space.

3.10     LIQUIDATED DAMAGES, GSAR 552.270-15 (SEP 1999)

         See paragraph 3.16.J.

3.11     VENDING FACILITIES (SEP 2000)
         A. Approximately 500 square feet of the ANSI/BOMA rentable space in
            Section 1.1 "Amount and Type of Space" will be used for the
            operation of a vending facility(ies) by the blind under the
            provisions of the Randolph-Sheppard Act (United States Code 20 USC
            107 et. seq.). The Government will control the number, kind, and
            locations of vending facilities and will control and receive income
            from all automatic vending machines. The Lessor is required to
            provide necessary utilities and to make related


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                                       16                 LESSOR      GOVT.

                  alterations. The cost of the improvements will be negotiated,
                  and payment will be made by the Government either on a
                  lump-sum basis or a rental increase.

         B.       The Government will assure that the facility(ies) does not
                  compete with other facilities having exclusive rights in the
                  building. The Offer shall advise the Government if such
                  rights exist.

3.12     ADJUSTMENT FOR VACANT PREMISES, GSA 552.270-16 (VARIATION)(SEP 1999)
         A.       If the Government fails to occupy any portion of the leased
                  premises or vacates the premises in whole or in part prior to
                  expiration of the term of the lease, the rental rate will be
                  reduced.

         B.       The rate will be reduced by that portion of the costs per
                  ANSI/BOMA Office Area square foot of operating expenses not
                  required to maintain the space. Said reduction shall occur
                  after the Government gives 30 calendar days prior notice to
                  the Lessor and shall continue in effect until the Government
                  occupies the premises or the lease expires or is terminated.

3.13     RELOCATION ASSISTANCE ACT (MAR 2002)
         A.       If an improved site is offered and new construction will
                  result in the displacement of individuals or businesses, the
                  successful Offeror shall be responsible for payment of
                  relocation costs for displaced persons in accordance with the
                  Uniform Relocation Assistance and Real Property Acquisition
                  Policies Act of 1970, as amended, and 49 CFR Part 24.

         B.       Offerors shall incorporate the cost of such assistance into
                  their shell rental rate.

         C.       The successful Offeror shall give TSA the name of the person
                  and agency to be providing the relocation assistance to site
                  tenants. In addition, the successful Offeror must provide
                  background information about the relocation agency and
                  references for which the relocation agent has performed
                  relocation assistance in the past. Depending upon the
                  complexity of the relocation project, Offerors may be required
                  to provide a relocation plan with final proposal revisions.

3.14     EVIDENCE OF CAPABILITY TO PERFORM (SEP 2000)(TSA OCT 2002)
         A.       AT THE TIME OF SUBMISSION OF OFFERS, THE OFFEROR SHALL SUBMIT
                  TO THE CONTRACTING OFFICER FOR EACH BUILDING BEING OFFERED:

                  1.       Satisfactory evidence of at least a conditional
                           commitment of funds in an amount necessary to prepare
                           the space. Such commitments shall be signed by an
                           authorized bank officer and at a minimum shall state:
                           amount of loan; term in years; annual percentage
                           rate; and length of loan commitment.

                  2.       The name of the proposed construction contractor, as
                           well as evidence of the contractor's experience,
                           competency, and performance capabilities with
                           construction similar in scope to that which is
                           required herein.

                  3.       Compliance with local zoning laws or evidence of
                           variances, if any, approved by the proper local
                           authority.

                  4.       Evidence of ownership or control of site(s).

                  5.       Satisfactory evidence that Offeror will be able to
                           deliver the appropriate amount of space in the
                           required timeframes, as defined in this SFO.

         B.       AFTER AWARD:
                  Within fourteen days after award, the successful Offeror shall
                  provide to the Contracting Officer evidence of:

                  1.       A firm commitment of funds in an amount sufficient
                           to perform the work.

                  2.       Provision of occupancy permit for initial occupancy
                           of Phase 1 space. (See Section 10.2).

                  3.       The license or certification to practice in the state
                           where the facility is located from the individual(s)
                           and/or firm(s) providing architectural and
                           engineering design services.

         C.       KEY PERSONNEL:

                  1.       The personnel listed below are considered essential
                           to the work being performed under this SFO. Before
                           removing, replacing, or diverting any of the listed
                           or specified personnel, the Lessor shall (1) notify
                           the Contracting Officer reasonably in advance and (2)
                           submit justification, including proposed
                           substitution, in sufficient detail to permit
                           evaluation of the impact on the work to be performed.

                  2.       The Lessor shall make no diversion without the
                           Contracting Officer's written consent; provided, that
                           the Contracting Officer may ratify in writing the
                           change, and that ratification shall constitute
                           Contracting Officer's consent required by this
                           section.

                  3.       The list of key personnel as specified below may,
                           with the consent of the contracting parties, be
                           amended from time to time during the course of the
                           lease to add or delete personnel.

                  4.       List of Key Personnel:

                                   Firm           Name           Title



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                           TO BE PROPOSED BY OFFERORS


3.15     CONSTRUCTION SCHEDULE (TSA OCT 2002)
         A.       Within ten days after award of the lease contract, the
                  successful Offeror shall submit to the Contracting Officer a
                  tentative construction schedule giving the dates on which the
                  various phases of construction will be completed to coincide
                  with the Government's project approach as outlined in Section
                  10.2. The finalized schedule shall be submitted no later than
                  twenty days after award. The Lessor shall work with the
                  Government to establish the most expedient project delivery
                  for all phases.

         B.       The Schedule shall include timing for completion of design and
                  construction milestones including, but not limited to: 1)
                  submittal of preliminary plans and specifications; 2)
                  submittal of other working drawings; 3) issuance of a building
                  permit; 4) completed construction documents; 5) start of
                  construction; 6) completion of principal categories of work;
                  7) phased completion and availability for occupancy of each
                  portion of the Government-demised area (by floor, block, or
                  other appropriate category); and 8) final construction
                  completion.

         C.       Final agreed-upon design and construction schedule will be
                  incorporated into the lease through a Supplemental Lease
                  Agreement.

3.16     CONSTRUCTION SCHEDULE OF TENANT IMPROVEMENTS (SEP 2000)(TSA OCT 2002)

         A.       The construction schedule for Phase 2 and Phase 3 (see 10.2
                  for description of phases) shall commence upon lease award.
                  The schedule shall be divided into eight tasks for each phase.
                  These are: 1) the generation of the space plans; 2) the
                  generation of the design intent drawings; 3) the Government's
                  approval of the design intent drawings; 4) the Lessor's
                  generation of the Government's working/construction drawings;
                  5) the Government's review of the working/construction
                  drawings; 6) the Lessor's bidding of the construction
                  documents; 7) the Lessor's construction of the subject leased
                  area; 8) the Government's acceptance of the Lessor's
                  construction. Each of these tasks is detailed below.
                  References to working days shall be based upon a 5-day work
                  week (Monday through Friday, exclusive of Federal holidays).
                  References to "approval" shall mean such approval granted by
                  the Contracting Officer. During the construction schedule, the
                  Government requests regularly scheduled progress meetings and
                  requests that the Lessor keep meeting minutes of discussion
                  topics and attendance. During design and construction, the
                  Lessor may discover instances where the Government's
                  directives conflict. In such cases, the Lessor shall
                  immediately notify the Contracting Officer so that the
                  Government may issue a determination as to how to proceed
                  beyond the building shell.

         B.       SPACE PLAN LAYOUTS AND PROGRAM OF REQUIREMENTS
                  The Government shall prepare, at the Government's expense,
                  Space Plan Layouts. The Space Plan Layouts will consist of
                  final computer generated drawings to scale showing layouts of
                  furnishings and equipment with any special construction
                  notations. Space Plan Layouts and the Program of Requirements
                  shall be due from the Government within twenty (20) working
                  days after lease award for the Phase 2 first 100,000 square
                  feet delivery of space.

         C.       DESIGN INTENT DRAWINGS:

                  1.       The Lessor shall prepare, out of the Tenant
                           Improvement Allowance and provide to the Government,
                           for the Government's approval, design intent drawings
                           detailing the Tenant Improvements to be made by the
                           Lessor within the Government-demised area. The
                           Government shall use best efforts to coordinate the
                           provision of such information and details as required
                           by the Lessor's architect to complete such drawings
                           in a timely manner. Design intent drawings, for the
                           purposes of this lease, are defined as
                           fully-dimensioned drawings of the leased space which
                           include enough information to prepare construction
                           drawings and shall consist of: 1) furniture
                           locations, telephone and data outlet types and
                           locations; 2) specifications necessary for
                           calculation of electrical and HVAC loads; and 3) all
                           finish/color/signage selections. Design intent
                           drawings shall be due from the Lessor within twenty
                           (20) working days after receipt of the space plan
                           layouts and program of requirements from the
                           Government.

                  2.       Review. The Government retains the right to review,
                           approve, and request modifications (if necessary) to
                           the Lessor's design intent drawings prior to the
                           Lessor's commencement of working/construction
                           drawings. The Government's review and approval of the
                           drawings is limited as to the drawings' conformance
                           to the specific requirements of the SFO and the
                           agency's needs as they apply to the specific leased
                           space. The Government shall perform all reviews of
                           design intent drawings within fifteen (15) working
                           days of receipt of such from Lessor. If the
                           Government requires modifications to the design
                           intent drawings, the Government shall notify the
                           Lessor in writing and the Lessor shall incorporate
                           comments into the construction documents. Upon
                           approval of the design intent drawings, a notice to
                           proceed shall be transmitted to the Lessor, and the
                           Lessor shall commence working/construction drawings
                           for the space. At the sole discretion of the
                           Government, the Lessor may be required to submit a
                           budget proposal, based on the Tenant Improvements and
                           associated work as shown on the design intent
                           drawings. This budget proposal shall be completed
                           within ten (10) working days of the Government's
                           request. Delay of receipt of such proposal shall
                           result in a Lessor delay.

         D.       WORKING/CONSTRUCTION DRAWINGS:
                  The Lessor shall prepare, out of the Tenant Improvement
                  Allowance, final working/construction drawings for the
                  improvements illustrated on the Government-approved design
                  intent drawings. The working/construction drawings shall
                  include all mechanical, electrical, plumbing, fire safety,
                  lighting, structural, and architectural improvements scheduled
                  for inclusion into the Government-demised area.
                  Working/construction drawings shall also be annotated with all
                  applicable specifications. The resulting product shall reflect
                  requirements which are substantially the same as that
                  specified by the Government-approved design intent drawings
                  and shall incorporate neither extraneous additions nor
                  deletions of requirements. The Lessor's working/construction
                  drawings shall be due to the Government within twenty (20)
                  working days of the Government's approval of the design intent
                  drawings. Working/construction drawings shall clearly identify
                  1) Tenant Improvements already in place and 2) the work to be
                  done by the Lessor or others. The Government may also require
                  at the time of submission of working/construction drawings
                  that the Lessor submit a written price proposal along with
                  adequate cost and pricing data for any



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                                       18                 LESSOR         GOV'T

                  costs or credits to the Government which are beyond the scope
                  of the original SFO and its attachments. Any work shown on the
                  working/construction drawings which is building shell shall be
                  clearly identified as such.

         E.       REVIEW OF WORKING/CONSTRUCTION DRAWINGS:
                  The Government retains the right to review, and request
                  modifications (if necessary) to, the Lessor's
                  working/construction drawings prior to the Lessor's
                  commencement of interior construction. The Government's
                  review of the working/construction drawings is limited to the
                  working/construction drawings' conformance to the specific
                  requirements of the SFO and to the approved design intent
                  drawings. The Government shall perform all reviews of
                  working/construction drawings within fifteen (15) working days
                  of receipt from the Lessor. If the Government requires
                  modifications to the working/construction drawings, the
                  Government shall notify the Lessor in writing. The Lessor
                  shall have five (5) working days to cure all noted defects
                  before returning the working/construction drawings to the
                  Government for a subsequent five (5) working day review. Upon
                  complete Government review for conformance of the
                  working/construction drawings to the design intent drawings, A
                  NOTICE TO PROCEED SHALL BE TRANSMITTED TO THE LESSOR, and the
                  Lessor shall obtain the necessary permits and shall commence
                  construction of the space. Notwithstanding the Government's
                  review of the working/construction drawings, the Lessor is
                  solely responsible and liable for the technical accuracy of
                  the working/construction drawings in meeting all requirements
                  and provisions of the lease and the Government-approved design
                  intent drawings.

         F.       BIDDING PROCESS
                  At the Government's sole discretion, the Lessor shall:

                  1.       Provide cost and pricing data in conjunction with the
                           tenant alterations as specified by the Government in
                           Form 3517 per the terms and conditions noted therein
                           or,

                  2.       Provide a price based upon the results of a
                           competitive bid proposal process as follows:

                           a.       The scope of work includes the lease
                                    (including the SFO and all SFO attachments),
                                    the construction drawings/documents, and
                                    written specifications. In cases of
                                    discrepancies, the lease shall govern over
                                    any other documents. All differences will be
                                    resolved by the Contracting Officer in
                                    accordance with the terms and conditions of
                                    the lease.

                           b.       No building shell items shall be included in
                                    the competitive proposal.

                           c.       A minimum of three qualified sub-contractors
                                    must be invited to participate in the
                                    competitive proposal process. Each
                                    participant must compete independently in
                                    the process.

                           d.       Each submitted proposal must be reviewed by
                                    the Government. The Government reserves the
                                    right to determine if bids meet the scope of
                                    work, that the price is reasonable, and that
                                    the Offeror is qualified to perform the
                                    work.

                           e.       The Government may elect to be represented
                                    at all negotiation sessions between the
                                    Lessor and potential contractors.

                           f.       The Lessor must certify to the Government
                                    that best efforts have been made to obtain
                                    the most competitive prices possible, that
                                    the Lessor shall accept responsibility for
                                    all prices through direct contracts with all
                                    contractors, and that all performance
                                    specifications of the lease shall be met. A
                                    certification form, provided by the
                                    Government, shall accompany the final bid
                                    package.

                           g.       The Lessor shall complete the competition
                                    and the cost proposal process in 15 working
                                    days or less from the date of issuance of
                                    completed construction documents. The Lessor
                                    shall accompany the bids with a
                                    recommendation for selection and with a
                                    summary in spreadsheet format comparing the
                                    bidders' proposals and indicating the
                                    exceptions or variations proposed by the
                                    bidders.

                           h.       Once the Government determines that there is
                                    adequate competition, and upon the
                                    Government's acceptance of the Lessor's cost
                                    proposal based upon that competition
                                    (provided the Lessor selects the
                                    competition's lowest priced bid of a
                                    contractor qualified to perform the subject
                                    work), the Contracting Officer shall issue
                                    to the Lessor a Notice To Proceed within 10
                                    working days for the subject work, provided
                                    the cost is within the Government's budget
                                    for subject work. The NTP may be a partial
                                    or a complete NTP, and/or in the event the
                                    Lessor's cost proposals for the tenant
                                    alternation work exceeds the Government's
                                    budget, the Government may elect to have the
                                    working drawings be value engineered by the
                                    Lessor's construction and design team to
                                    meet the Government's budget. The cost of
                                    these modifications shall be paid by the
                                    Government.

                           i.       The Lessor shall manage and complete the
                                    work within the timeframe/cost requirements
                                    of the SFO and final contract.

         G.       CONSTRUCTION OF TENANT IMPROVEMENTS:
                  The Lessor shall construct all Tenant Improvements in
                  accordance with 1) the Government reviewed and approved
                  working/construction drawings and 2) all terms and conditions
                  of the SFO. The Lessor shall complete all Tenant Improvements
                  according to the Government approved project schedule and as
                  described in Section 10.2 and after receiving the notice to
                  proceed from the Government. The Lessor shall furnish a
                  detailed construction schedule (such as Critical Path Method)
                  to the Government within five (5) days of issuance of the
                  notice to proceed. Such schedule shall also indicate the dates
                  available for the Government contractors to install
                  telephone/data lines or equipment. The Government reserves the
                  right to access any space within the building during the
                  conduct of interior construction for the purposes of
                  performing inspections or for installing Government-furnished
                  equipment. The Government shall coordinate with the Lessor the
                  activity of Government contractors in order to minimize
                  conflicts with, and disruption to, other contractors on site.
                  Access shall not be denied to authorized Government officials
                  including, but not limited to, Government contractors,
                  subcontractors, or consultants acting on behalf of the
                  Government with regard to this project.





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                                       19                 LESSOR         GOV'T

         H.       DELAYS:
                  Delays by the city or county in issuance of a building permit
                  after Lessor has applied for a permit with all due diligence
                  and delays by city or county inspections in completing
                  inspections necessary to issue the Certificate of Occupancy
                  for the building will be considered excusable delays. Owner
                  agrees to provide the Government a copy of the application for
                  the permit.

                  Should either the Government or the Lessor fail to discharge
                  their responsibilities as defined herein within the time
                  allocated under this construction schedule, such shall
                  constitute "delay." Delay caused by either party may be offset
                  by the early completion of that party's other responsibilities
                  within the schedule. The absolute value of the number of days
                  of one party's delay minus the number of days of the remaining
                  party's delay shall equal the total number of days of delay
                  for a given stage of the schedule. Delay shall be attributable
                  to the party having caused the greatest number of days of
                  critical path delay and shall be termed either "Government
                  Delay" or "Lessor Delay" as appropriate.

                  If Government delay occurs, then the rent commencement date
                  shall be the same number of days earlier than the acceptance
                  date as the number of days of delay. Any rental paid by the
                  Government prior to actual occupancy shall be less the cost
                  for services and utilities (Base Cost of Services) of the
                  vacant premises. In any event, the Government will not be
                  required to accept space and commence rent prior to the
                  original date as indicated in the "Occupancy Date" paragraph
                  of the SFO, unless otherwise agreed to by the Government. Each
                  day of Lessor Delay will be subject to the Liquidated Damages
                  clause of this SFO and the "Default in Delivery" paragraph of
                  the GSA Form 3517. In all cases of delay, the Lessor is
                  required to promptly notify the Government of the delay and to
                  provide an assessment of the impact of each delay on the
                  overall project schedule/budget. Along with that notification,
                  the Lessor is required to provide the Government with a
                  recovery plan outlining options for minimizing the impact of
                  the delay.

         I.       ACCEPTANCE OF SPACE:
                  Thirty (30) days prior to the completion of interior
                  construction, the Lessor shall issue written notice to the
                  Government to inspect the space. The Government shall have
                  five (5) working days to inspect and to either accept or
                  reject the subject space. Substantial completion is defined as
                  space which is fully functional with stable power (including
                  standby) and HVAC, suitable for the Government to begin
                  installation, testing and start up of critical voice/data
                  network and security systems.

                           1. Space deemed Substantially Complete by the
                  Government will be accepted by the Government subject to the
                  completion of minor punch list items. Space which is not
                  deemed substantially complete by the Government will not be
                  accepted by the Government.

                  The phrase "Substantially Complete" shall mean that the tenant
                  improvements, the common and other areas of the building, and
                  all other things necessary for the Government's access to the
                  premises and occupancy, possession, use and enjoyment thereof,
                  as provided in this lease shall have been completed or
                  obtained, including all local Government reviews and
                  approvals, excepting only such minor matters as do not
                  interfere with or materially diminish such access, occupancy,
                  possession, use, or enjoyment.

                  Should the Government reject the Lessor's space as not
                  substantially complete as defined herein, the Lessor shall
                  immediately undertake remedial action, and when ready shall
                  issue a subsequent notice to inspect to the Government.

                           2. Before the Government will accept space, the
                  Lessor must provide to the Contracting Officer evidence of the
                  issuance of a building permit incorporating the construction
                  of required improvements.

         J.       RENT COMMENCEMENT:
                  The rent start date for Phase I shall be ten (10) working days
                  after the Government accepts the space from the Lessor. The
                  space must be in a condition that a Certificate of Occupancy
                  can be issued subject to the installation of furniture. No
                  rent will be paid for Phase I space after the Government has
                  vacated the space to move into renovated space. The rent
                  commencement date for Phase II and III shall be ten (10)
                  working days after the date of space acceptance by the
                  Government. However, if Government delay occurs, then the rent
                  commencement date shall be the same number of days earlier
                  than the acceptance date as the number of days of delay. Any
                  rental paid by the Government prior to actual occupancy shall
                  be less than the cost for services and utilities of the vacant
                  premises. Each day of Lessor Delay will increase the amount of
                  free rent after occupancy by the Government on a day for day
                  basis as liquidated damages per the "Default in Delivery"
                  paragraph of the Form 3517.

         K.       ESTABLISHMENT OF LEASE TERM:
                  The Government shall issue GSA Form 276, Supplemental Lease
                  Agreement, to establish the lease term after the acceptance of
                  all space. The lease commencement date shall not be prior to
                  the rent commencement date. The commencement date for the
                  lease term shall be the weighted average composite of all
                  incremental dates of phased acceptance of Phases II and III by
                  the Government.

3.17     PROGRESS REPORTS (SEP 2000)(TSA SEP 2002)
         After start of construction, the successful Offeror shall submit to the
         Contracting Officer, written weekly progress reports. Each report shall
         include information as to 1) percentage of the work completed by phase
         and trade; 2) a statement as to expected completion and occupancy date;
         3) changes introduced into the work; 4) analysis of changes to identify
         impact on cost/schedule and provision of a recovery plan and 5) general
         remarks on such items as material shortages, strikes, weather, etc.
         Such meetings shall be held at a location to be designated by the
         Government.

3.18     CONSTRUCTION INSPECTIONS (TSA SEP 2002)
         A.       Construction inspections will be made periodically by the
                  Contracting Officer and/or designated technical
                  representatives to review compliance with the SFO requirements
                  and the final working drawings.






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                                       20                 LESSOR         GOV'T

         B.  Periodic reviews, tests, and inspections by the Government are not
             to be interpreted as resulting in any approval of the Lessor's
             apparent progress toward meeting the Government's objectives but
             are intended to discover any information which the Contracting
             Officer may be able to call to the Lessor's attention to prevent
             costly misdirection of effort. The Lessor shall remain completely
             responsible for constructing, operating, and maintaining the
             building in full accordance with the requirements of this SFO.

3.19     REQUIRED PROOF OF AUTHORITY (NCR VARIATION (AUG 2002))

         As a condition of lease award, the Government will require one of
         the following forms of proof of signing authority before the
         Government executes the lease:

         A.  General Partnership -- Copy of Partnership Agreement

         B.  Limited Partnership -- Copy of Partnership Agreement or copy of
             current Certificate of Limited Partnership

         C.  Corporation -- Corporate Resolution certified by the Secretary of
             the Corporation or an Informal Action signed by the Board of
             Directors. The Resolution or Informal Action must approve the lease
             and indicate who has authority to sign for the corporation.

         D.  Joint Venture -- Copy of Joint Venture Agreement

         E.  Company -- Copy of formation document indicating who can bind the
             company

3.20     BUSINESS IMPROVEMENT DISTRICTS (B.I.D.) (NCR VARIATION (AUG 2002)) (IF
         APPLICABLE)

         A.  For purposes of this solicitation:

             1.  "BID" means a Business Improvement District, Special
                 Improvement District, or other specifically defined
                 geographical area within a taxing jurisdiction, organized and
                 registered pursuant to enabling legislation promulgated by a
                 State or local government, within which properties are
                 assessed, charged or taxed solely by virtue of their location
                 within the given area and in support of services or projects
                 located solely within the area.

             2.  "Building" means the building(s) within which space is provided
                 to the Government under the Lease, together with the land upon
                 which the building is located.

             3.  "Lessor's BID Assessment" means charges, assessments or taxes
                 levied against Lessor and/or a Building, expressed as a fixed
                 sum per Building, solely by virtue of the Building being
                 located within a BID.

         B.  The Government agrees, when applicable, to make a single annual
             lump sum payment to the Lessor for its share of increases in
             Lessor's BID Assessment over the base year. For purposes of this
             clause, the base year amount of Lessor's BID Assessment will be
             determined as the amount in the calendar year in which lease
             commences.

         C.  The Government's share of increases in Lessor's BID Assessment
             shall be based upon the ratio of the ANSI/BOMA Office Area square
             feet occupied by the Government to the total ANSI/BOMA Office Area
             square feet of office and retail space in the Building (percentage
             of occupancy). Square footage related to parking will not be
             included in determining the Government's percentage of occupancy.
             At the Contracting Officer's sole discretion, the Government may
             pay its share of increases in Lessor's BID Assessment based upon
             the ratio of the assessed value of the space leased by the
             Government to the total assessed value of the Building. For
             purposes of this clause, the Government's percentage of occupancy
             is stated in the clause of this lease entitled "Tax Adjustment".

         D.  The Lessor shall furnish the Government with copies of all bills
             reflecting Lessor's BID Assessment and evidence of payment of such
             Lessor's BID Assessment by the Lessor. Evidence of payment must be
             submitted to the Government within 60 calendar days of the date
             that payment is due. Failure by Lessor to submit evidence of
             payment as provided in this paragraph shall act as a waiver of
             Lessor's right to receive payment under this clause.



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                                       21                 LESSOR         GOV'T

4.0      GENERAL ARCHITECTURE

4.1      QUALITY AND APPEARANCE OF BUILDING EXTERIOR (SEP 2000)

         The space offered shall be located in a modern office building with a
         facade of stone, marble, brick, stainless steel, aluminum, or other
         permanent materials in good condition acceptable to the Contracting
         Officer. If not in a new office building, the space offered shall be in
         a building that has undergone, or will be complete by Phase 2 and Phase
         3 occupancy, first class restoration or adaptive reuse for office space
         with modern conveniences. If the restoration work is underway or
         proposed, then architectural plans acceptable to the Contracting
         Officer shall be submitted as part of the offer. The building shall be
         compatible with its surroundings. Overall, the building shall project
         a professional and aesthetically-pleasing appearance including an
         attractive front and entranceway. The building shall have
         energy-efficient windows or glass areas consistent with the structural
         integrity of the building, unless not appropriate for intended use. The
         facade, downspouts, roof trim, and window casing shall be clean and in
         good condition.

         A.       Day lighting Requirements
                  1.    The building will have appropriate fenestration and
                  lighting controls to modulate daylight admittance and to
                  reduce electric lighting, while meeting the occupants'
                  lighting quality and quantity requirements.

4.2     CONSTRUCTION WASTE MANAGEMENT (SEP 2000)

        A.        Recycling construction waste means providing all services
                  necessary to furnish construction materials or wastes to
                  organizations which will employ these materials or wastes in
                  the production of new materials. Recycling includes required
                  labor and equipment necessary to separate individual
                  materials from the assemblies of which they form a part.

        B.        The Offeror shall submit to the Government a proposal to
                  dispose of or recycle construction waste. Where the small
                  quantity of material, the extraordinarily complex nature of
                  the waste disposal method, or prohibitive expense for
                  recycling would represent a genuine hardship, the Government
                  may permit alternative means of disposal. This requirement
                  shall also apply to subsequent alterations under the lease.

        C.        The Lessor shall recycle the following items during both the
                  demolition and construction phases of the project, subject to
                  economic evaluation and feasibility:

                  1.    ceiling grid and tile;

                  2.    light fixtures, including proper disposal of any
                        transformers, ballasts, and fluorescent light bulbs;

                  3.    duct work and HVAC equipment;

                  4.    wiring and electrical equipment;

                  5.    aluminum and/or steel doors and frames;

                  6.    hardware;

                  7.    drywall;

                  8.    steel studs;

                  9.    carpet, carpet backing, and carpet padding;

                  10.   wood;

                  11.   insulation;

                  12.   cardboard packaging;

                  13.   pallets;

                  14.   windows and glazing materials;

                  15.   all miscellaneous metals (as in steel support frames for
                        filing equipment); and

                  16.   all other finish and construction materials.

        D.        If any waste materials encountered during the demolition or
                  construction phase are found to contain lead, asbestos,
                  polychlorinated biphenyls (PCB's) (such as fluorescent lamp
                  ballasts), or other harmful substances, they shall be handled
                  and removed in accordance with Federal and state laws and
                  requirements concerning hazardous waste.

        E.        In addition to providing "one-time" removal and recycling of
                  large-scale demolition items such as carpeting or drywall, the
                  Lessor shall provide continuous facilities for the recycling
                  of incidental construction waste during the initial
                  construction.

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                                       22                 LESSOR         GOV'T

         F.       Construction materials recycling records shall be maintained
                  and shall be accessible to the Contracting Officer. Records
                  shall include materials recycled or landfilled, quantity, date
                  and identification of hazardous wastes.



4.3      EXISTING FIT-OUT, SALVAGED, OR RE-USED BUILDING MATERIAL (SEP 2000)
         (TSA SEP 2002)

         A.       Items and materials existing in the offered space, or to be
                  removed from the offered space during the demolition phase,
                  are eligible for reuse in the construction phase of the
                  project. The reuse of items and materials is preferable to
                  recycling them; however, items considered for reuse shall be
                  in refurbishable condition and shall meet the quality
                  standards set forth by the Government in this SFO. In the
                  absence of definitive quality standards, the Lessor shall
                  ensure that the quality of the item(s) in question shall meet
                  or exceed accepted industry or trade standards for first
                  quality commercial grade applications.

         B.       The Lessor shall submit a reuse plan to the Contracting
                  Officer. The Government will not pay for existing fixtures and
                  other Tenant Improvements accepted in place.


4.4      INDOOR AIR QUALITY DURING CONSTRUCTION (SEP 2000)(TSA SEP 2002)

         A.       The Lessor shall provide to the Government material safety
                  data sheets (MSDS) upon request for the following products
                  prior to their installation or use; adhesives, caulking,
                  sealants, insulating materials, fireproofing or fire stopping
                  materials, paints, carpets, floor and wall patching or
                  levelling materials, lubricants, clear finish for wood
                  surfaces, and janitorial cleaning products.

         B.       The Contracting Officer may eliminate from consideration
                  products with significant quantities of toxic, flammable,
                  corrosive, or carcinogenic material and products with
                  potential for harmful chemical emissions. Materials used often
                  or in large quantities will receive the greatest amount of
                  review.

         C.       All MSDS shall comply with Occupational Safety and Health
                  Administration (OSHA) requirements. The Lessor and its agents
                  shall comply with all recommended measures in the MSDS to
                  protect the health and safety of personnel.

         D.       To the greatest extent possible, the Lessor shall sequence the
                  installation of finish materials so that materials that are
                  high emitters of volatile organic compounds (VOC) are
                  installed and allowed to cure before installing interior
                  finish materials, especially soft materials that are woven,
                  fibrous, or porous in nature, that may absorb contaminants and
                  release them over time.

         E.       Where demolition or construction work occurs adjacent to
                  occupied space, the Lessor shall erect appropriate barriers
                  (noise, dust, odor, etc.) and take necessary steps to minimize
                  interference with the occupants. This includes maintaining
                  acceptable temperature, humidity, and ventilation in the
                  occupied areas during window removal, window replacement, or
                  similar types of work. If the Lessor uses any base building or
                  tenant improvement HVAC during construction, those systems
                  shall be cleaned and restored to like-new condition prior to
                  occupancy.

         F.       A final flush-out period of 48 hours to 72 hours shall be
                  provided before occupancy. The Lessor shall ventilate with 100
                  percent outside air at the recommended air change rate during
                  installation of materials and finishes. Refer to the latest
                  edition of American Society of Heating, Refrigerating, and Air
                  Conditioning Engineers, Inc. ANSI/(ASHRAE) Standard 62,
                  Ventilation for Acceptable Indoor Air Quality. If outside air
                  would cause unacceptable inside temperature levels, humidity
                  levels, and/or air quality, an alternate ventilation plan may
                  be submitted to the Contracting Officer for approval.


4.5      WORK PERFORMANCE (SEP 2000)

         All work in performance of this lease shall be done by skilled workers
         or mechanics and shall be acceptable to the Contracting Officer. The
         Contracting Officer retains the right to reject the Lessor's workers 1)
         if such are either unlicensed, unskilled, or otherwise incompetent or
         2) if such have demonstrated a history of either untimely or otherwise
         unacceptable performance in connection with work carried out in
         conjunction with either this contract or other Government or private
         contracts.

4.6      BUILDING SYSTEMS (JAN 1997)

         Whenever requested, the Lessor shall furnish at no cost to the
         Government a report by a registered professional engineer(s) showing
         that the building and its systems as designed and constructed will
         satisfy the requirements of this lease.


4.7      SPACE EFFICIENCY (SEP 2000)

         The design of the space offered shall be conducive to efficient layout
         and good utilization as determined by the Government at its sole
         discretion.


4.8      FLOOR PLANS AFTER OCCUPANCY (TSA SEP 2002)

         Within twenty (20) days after occupancy, as-built mylar reproducible
         full floor plans, architectural, mechanical, electrical, plumbing and
         structural scaled at 1/8" = 1'-0", showing the space under lease, as
         well as corridors, stairways, and core areas, and AutoCAD files with
         compliance to Section 4.9 shall be provided to the Contracting Officer.


4.9      CAD AS-BUILT FLOOR PLANS (SEP 2000) (NCR AAP VARIATION (AUG 2002))

         A.       Computer-Aided Design (CAD) files of as-built floor plans
                  showing the space under lease, as well as corridors,
                  stairways, and core areas, shall be provided to the
                  Contracting Officer at Lessor's cost and the Government shall
                  be entitled to a thirty (30) day inspection period within
                  which to evaluate the quality of the plans. In the event it is
                  determined within the thirty (30) day inspection period that
                  the plans are defective, the Lessor shall provide another set
                  of plans to replace the defective set. Any additional plans
                  will be at the cost of the Government. The plans shall have
                  been generated by a CAD program which is


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                                                         ---------     ---------
                                       23                 LESSOR         GOV'T

                  compatible with the latest release of AutoCAD. The required
                  file extension is .DWG. Clean and purged files shall be
                  submitted on 3-1/2-inch double-sided, high-density diskettes
                  on CD-ROM. They shall be labeled with building name, address,
                  list of drawing(s), date of the drawings(s), and Lessor's
                  architect and phone number and conform to "PBS Standards for
                  CAD Deliverables." (OCT 2001) which are available by request
                  or on the web at http://www.gsa.gov/attachments/GSA
                  POLICIES/extpol/CADdeliverables 6.pdf. The Lessor's operator
                  shall demonstrate the submission on GSA equipment, if
                  requested by the Contracting Officer.

         B.       The Lessor shall be responsible to maintain CAD as-built floor
                  plans at the tenant's expense with each improvement project,
                  which occurs in the Government's space during occupancy. At
                  the time of each update, the Lessor will be responsible to
                  validate all measurements and construction features of the
                  space. In the event that the tenant has made build out
                  improvements to the space without the Lessor's knowledge or
                  consent, the Government will be responsible for the fair and
                  reasonable design fees to update the as-built drawings. No CAD
                  drawings, specifications or other documentation shall be
                  released to third parties without the written permission of
                  TSA. All as-builts are security sensitive documents and will
                  be secured and destroyed in an approved manner. Detailed
                  security diagrams will be counted for by individual copy,
                  stored in a locked container, and turned over to the TSA
                  security office when no longer required.


4.10     ANSI/BOMA CALCULATIONS AND PLANS (TSA SEP 2002)
         Offeror shall submit ANSI/BOMA Office Building Assignment Drawings that
         conform to "ANSI/BOMA Standard Method of Floor Measurement for Office
         Buildings" outlining Offeror's proposed TSA delineated area of office
         area, storage area and building common occupancy in offered buildings:

         A.       ANSI/BOMA Office Building Assignment Drawings shall be single
                  poly-line, color-coded or graphical delineated per each
                  ANSI/BOMA's Defined Summary of Areas that outlines the area of
                  space as defined per "ANSI/BOMA Standard Method of Floor
                  Measurement for Office Buildings" per floor. The Definition of
                  Areas that need to be graphically defined are Major Vertical
                  Penetrations, Useable Areas (Office Area, Store Area, and
                  Building Common Area) and Floor Common Areas.  Any floor
                  useable areas, building common or floor common that will not
                  be allowed or considered for TSA's use shall also be
                  identified and delineated.  This refers to space that will be
                  occupied by another tenant or the Lessor's Building
                  Management. These spaces shall be identified by name of
                  tenant; duration of occupancy in the space, and remaining
                  proposed occupancy of the space.

         B.       Each ANSI/BOMA's Defined Summary of Area that is outlined with
                  a single poly-line shall be color-coded or graphical
                  delineated per each Building Definitions of Areas, label all
                  Building Definitions of Areas by name, and actual square
                  footage per Building Definitions of space. Lettering shall be
                  not smaller than 12 inches in height for a 1/8" plan (1/8"
                  text height after plotting to scale).

         C.       Each floor shall have a color-coded or graphical delineated
                  legend of all Building Definition of Areas per floor. The
                  legend shall list the ANSI/BOMA's Defined Summary of Areas
                  indicating the square footage by each delineated and defined
                  area, and the percentage of the total defined area per the
                  buildings total offer.

         D.       Offeror shall submit three (3) color or black-line sets of
                  1/8"=1'-0" proposed ANSI/BOMA Office Building Assignment
                  Drawings to TSA and three (3) sets on an 11" x 17" color or
                  black-line format. The size of the ANSI/BOMA Office Building
                  Assignment Drawings sheet size should not exceed 30" x 42". If
                  the building floor plate does not fit the sheet format, then
                  one sheet shall be submitted with the 1/8"=1'-0" scale plans
                  and one plan showing the entire floor plate set at a
                  designated scale.

         E.       Title blocks per each plan shall indicate building name,
                  building address, floor, scale of drawing, a bar scale, date
                  issued, name of owner, address of owner, name and address of
                  company generating ANSI/BOMA Assignment Drawings, and sheet
                  numbers.

         F.       An Executive Summary spreadsheet on 11" x 17' format showing
                  the ANSI/BOMA Standard Method of Floor Measurement for Office
                  Buildings Assignment Drawings used on each floor.  The Global
                  Summary of Areas shall include the following columns: Floor,
                  Gross Building Area, Gross Measured Area, Major Vertical
                  Penetrations, Floor BOMA rentable Area, Space ID, Useable
                  Areas Floor Useable Area, Floor Common Area, Floor R/U Area,
                  Floor R/U Ratio, Basic BOMA rentable Areas, Building BOMA
                  rentable Area, Building R/U Ratio, BOMA rentable Area Total
                  BOMA rentable Area. Refer to ANSI/BOMA Z65.1-1996 ANSI/BOMA
                  Standard Method of Floor Measurement for Office Buildings
                  Global Summary of Areas for example of format and information
                  required.

         G.       All formatting shall comply with other SFO requirements for
                  AutoCAD generated plans.

         H.       Based on the Offeror's submitted ANSI/BOMA Office Building
                  Assignment Drawings; If the Government during the process of
                  evaluation of an offer, lease negotiations, or occupancy
                  discovers a site measurement or calculation with a difference
                  greater than 2% of what the Offeror submitted, the Offeror
                  shall pay for an independent, unbiased professional third
                  party to resolve the issue at no cost to the Government and
                  adjust any offer or lease to reflect the agreed upon results
                  measured and calculated results.

4.11     FLOORS AND FLOOR LOAD (SEP 2000)(TSA SEP 2002)
         All adjoining floor areas shall be 1) of a common level not varying
         more than 1/4 inch over a 10-foot, 0-inch horizontal run, in accordance
         with the American Concrete Institute standards, 2) non-slip, and 3)
         acceptable to the Contracting Officer. Underfloor surfaces shall be
         smooth and level.

         A.       Acceptable Structural Systems
                  1.       Open web steel joists are not acceptable as floor
                           framing.

         B.       Structural Bay Sizes
                  1.       Structural bay range of 18' x 18' to 40' x 40'
                           module.




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                                                          LESSOR         GOV'T

                                       24

         C. Structural Design Criteria

            1.  Live loading to meet the more stringent of the following design
                criteria, applicable building codes or ANSI/ASCE 7-95:

                a.  Roof: 30 psf (minimum) Roof must have capability to support
                    the following:

                    i.    Satellite dish.

                    ii.   Antennas. (Provide clear and unobstructed radio signal
                          pathways)

                    iii.  Generator

                    iv.   Roof slab: must accommodate potential roof-mounted
                          equipment and window washing equipment-mounting
                          points.

                b.  Penthouse: 150 psf

                c.  Office floor slab: 80 psf +  20 psf partition load with a
                    minimum concentrated load of 2,000 lbs.

                d.  Mechanical floor slab: 125 psf; loading dock floor slab: 400
                    psf.

                e.  High density file areas: 150 psf. (To be paid out of tenant
                    improvement allowance).

                f.  Assume high-density file areas will comprise 4% of floor
                    area.

                g.  Written certification by registered professional engineer
                    may be required. Calculations and structural drawings may
                    also be required.


         2.  Floor framing systems.

             A. IN ACCORDANCE WITH ACI 117-90, FLOOR FINISH TOLERANCES (AS
                MEASURED WITH ASTM E 1155-87, STANDARD TEST METHOD FOR
                DETERMINING FLOOR FLATNESS AND LEVELNESS USING THE F NUMBER
                SYSTEM SHALL ACHIEVE A TEST AREA TOLERANCE OF FF=20 AND FL=15
                WITH A "MINIMUM LOCAL F NUMBER" OF FF-15 AND FL=12. OFFERORS WHO
                ARE UNABLE TO MEET THE FLOOR FINISH TOLERANCES DESCRIBED IN ACI
                117-90 AND ASTM E 1155-87 SHALL PROVIDE INFORMATION WITH REGARD
                TO HOW WELL THEIR FLOOR FINISH TOLERANCES MEET THESE STANDARDS.
                OFFICE SPACE MUST HAVE FLOOR TOLERANCES ACCEPTABLE TO THE
                CONTRACTING OFFICER.


4.12     EXITS AND ACCESS (SEP 1991)

         A. Vestibules shall be provided at public entrances and exits wherever
            weather conditions and heat loss are important factors for
            consideration. In the event of negative air pressure conditions,
            provisions shall be made for equalizing air pressure.

         B. Accessibility Requirements for Buildings and Facilities

            1.  A power-operated door shall be provided at each entrance to
                public and common use toilet rooms.

            2.  Stairs: all internal stairs used for existing and
                connecting/communicating shall meet the requirements of ANSI A
                117.1 Section 504.

            3.  Areas of rescue assistance: all buildings shall contain areas of
                rescue assistance that shall comply with the technical and scope
                requirements of ADA.

            4.  Maximum travel distance to closest toilet room from occupied
                space shall not exceed 300 walkable feet.


4.13 WINDOWS (SEP 2000) (NCR VARIATION (AUG 2002)) (TSA SEP 2002)

         A. Office space must have windows acceptable to the Contracting Officer
            in each exterior bay. All windows shall be weather-tight. Windows
            shall have a fixed sash.

         B. Operable windows that open shall be equipped with locks. Off-street,
            ground level windows and those accessible from fire escapes,
            adjacent roofs, and other structures that can be opened shall be
            fitted with a sturdy locking device.

4.14     ACCESSIBILITY (SEP 2000)

         The building, leased space, and areas serving the leased space shall
         be accessible to persons with disabilities in accordance with both the
         ADAAG (36 CFR Part 1191, App. A) and the UFAS (41 CFR Part 101-19.6,
         App. A). Where standards conflict, the more stringent shall apply.

4.15 LANDSCAPING (SEP 2000) (TSA SEP 2002)

         A. Where conditions permit, the site shall be landscaped for low
            maintenance and water conservation with plants that are either
            native or well-adapted to local growing conditions.

         B. Landscape management practices shall prevent pollution by:

            1.  employing practices which avoid or minimize the need for
                fertilizers and pesticides;

            2.  prohibiting the use of the 2, 4-Dichlorophenoxyacelic Acid
                (2,4-D) herbicide and organophosphates; and

            3.  composting/recycling all yard waste.

         C. The Lessor shall use landscaping products with recycled content as
            required by Environmental Protection Agency's (EPA's) Comprehensive
            Procurement Guidelines (CPG) for landscaping products. Refer to
            EPA's CPG web site, www.epa.gov/cpg.

         D. The Contracting Officer shall approve the landscaping to be
            provided.






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                                       25                 LESSOR         GOV'T



5.0      ARCHITECTURAL FINISHES

5.1      RECYCLED CONTENT PRODUCTS (COMPREHENSIVE PROCUREMENT GUIDELINES)(SEP
         2000)
         A.       The Lessor shall comply to the extent feasible with the
                  Resource Conservation and Recovery Act (RCRA), Section 6002,
                  1976. The Lessor shall use recycled content products as
                  indicated in this SFO and as designated by the U.S.
                  Environmental Protection Agency (EPA) in the Comprehensive
                  Procurement Guidelines (CPG), 40 CFR Part 247, and its
                  accompanying Recovered Materials Advisory Notice (RMAN). The
                  CPG lists the designated recycled content products. EPA also
                  provides recommended levels of recycled content for these
                  products. The list of designated products, EPA's
                  recommendations, and lists of manufacturers and supplier of
                  the products can be found at the www.epa.gov/cpg/products.htm
                  web site.
         B.       The Offeror, if unable to comply with both the CPG and RMAN
                  lists, shall submit a request for waiver for each material to
                  the Contracting Officer with Initial offers. The request for
                  waiver shall be based on the following criteria.

                  1.       the cost of the recommended product is unreasonable;

                  2.       inadequate competition exists;

                  3.       items are not available within a reasonable period of
                           time; and

                  4.       items do not meet the SFO's performance standard.

5.2      ENVIRONMENTALLY PREFERABLE BUILDING PRODUCTS AND MATERIAL (SEP 2000)
         A.       The Lessor shall use environmentally preferable products and
                  materials where economically feasible. Environmentally
                  preferable products have a lesser or reduced effect on human
                  health and the environment when compared to other products and
                  services that serve the same purpose.

         B.       Refer to EPA's environmentally preferable products web site,
                  www.epa.gov/opptntr/epp. In general, environmentally
                  preferable products and materials do one or more of the
                  following:

                  1.       contain recycled material, are biobased, or have
                           other positive environmental attributes;

                  2.       minimize the consumption of resources, energy, or
                           water;

                  3.       prevent the creation of solid waste, air pollution,
                           or water pollution; and

                  4.       promote the use of non-toxic substances and avoid
                           toxic materials or processes.

5.3      LAYOUT, FINISHES, AND COLORBOARDS (SEP 2000)(TSA SEP 2002)
         A.       All building finishes shall be for first class, modern space.

         B.       The Lessor shall consult with the Contracting Officer prior to
                  developing a minimum of three color boards to include
                  coordinated samples of finishes for all interior elements such
                  as paint, wall coverings, base covering, carpet, window
                  treatments, laminates, and vinyl flooring. All samples
                  provided shall be in compliance with specifications set forth
                  elsewhere in this SFO. Required color boards shall be provided
                  within fifteen working days of the request for such by the
                  Contracting Officer. The color boards shall be approved by the
                  Contracting Officer prior to installation. Upon Government
                  review a selection of ONE color board shall be made within ten
                  working days, and unless otherwise specified prior to lease
                  award, the Offeror may assume that ONE color board will be
                  accepted for all finishes in the entire space under lease. No
                  substitutes may be made by the Lessor after the color board is
                  selected.

         C.       The Lessor will provide the Government with existing or
                  proposed base building finishes and specification so the
                  Government can coordinate tenant space design. Offeror shall
                  provide an architectural rendering or digital photographs of
                  the proposed or existing spaces as follows:

                         1.       Building Exterior.
                         2.       Building Main Lobby.
                         3.       Typical Elevator Lobby.
                         4.       Typical Restroom.
                         5.       Public Corridors.

5.4      WOOD PRODUCTS (SEP 2000)
         A.       For all new installations of wood products, the Lessor is
                  encouraged to use independently certified forest products. For
                  information on certification and certified wood products,
                  refer to the Forest Stewardship Council United States web site
                  (www.fscus.org/) or the Certified Forest Products Council web
                  site (www.certifiedwood.org/).

         B.       New installations of wood products used under this contract
                  shall not contain wood from endangered wood species, as listed
                  by the Convention on International Trade in Endangered
                  Species. The list of species can be found at the following web
                  site: www.certifiedwood.org/Resources/CITES/CITESContent.html.



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                                       26                 LESSOR         GOV'T


         C.  Particle board, strawboard, and plywood materials shall comply with
             Department of Housing and Urban Development (HUD) standards for
             formaldehyde emission controls. Plywood materials shall not
             emit formaldehyde in excess of 0.2 parts per million (ppm), and
             particleboard materials shall not emit formaldehyde in excess of
             0.3 ppm.

5.5      ADHESIVES AND SEALANTS (SEP 2000)
         All adhesives employed on this project (including, but not limited to,
         adhesives for carpet, carpet tile, plastic laminate, wall coverings,
         adhesives for wood, or sealants) shall be those with the lowest
         possible VOC content below 20 grams per liter and which meet the
         requirements of the manufacturer of the products adhered or involved.
         The Lessor shall use adhesives and sealants with no formaldehyde or
         heavy metals.

5.6      INSULATION: THERMAL, ACOUSTIC, AND HVAC (SEP 2000)
         A. All insulation products shall contain recovered materials as
            required by EPA's CPG and related recycled content recommendations.

         B. No insulation installed with this project shall be material
            manufactured using chlorofluorocarbons (CFC's), nor shall CFC's be
            used in the installation of the product.

         C. All insulation containing fibrous materials exposed to air flow
            shall be rated for that exposure or shall be encapsulated.

         D. Insulating properties for all materials shall meet or exceed
            applicable industry standards. Polystyrene products shall meet
            American Society for Testing and Materials (ASTM) C578-91.

5.7      CEILINGS (SEP 2000)(TSA SEP 2002)
         A. Floor to Floor Heights
            1.  General office areas, 8' (in existing construction), bulkheads
                that reduce ceiling height below 8' are not acceptable; desired
                use of indirect light fixture.

            2.  Ceiling plenum clear space shall be sufficient for routing of
                duct work, sprinkler lines, lights, conduit, etc.

            3.  Main building entrance floor ceiling height minimum of 9'6".

         B. Prior to closing the ceiling, the Lessor shall coordinate with the
            Government for the installation of any items above the ceiling.

         C. Should the ceiling be installed in the Government-demised area prior
            to the Tenant Improvements, then the Lessor shall be responsible for
            all costs in regard to the disassembly, storage during alterations,
            and subsequent re-assembly of any of the ceiling components which
            may be required to complete the Tenant Improvements. The Lessor
            shall also bear the risk for any damage to the ceiling or any
            components thereof during the alterations.

         D. Ceilings shall be a flat plane in each room and shall be suspended
            with ample light fixtures and finished as follows unless an
            alternate equivalent is pre-approved by the Contracting Officer:


            1.  Restrooms. Plaster or pointed and taped gypsum board.

            2.  Offices and Conference Rooms. Mineral and acoustical tile or lay
                in panels with textured or patterned surface and regular edges
                or an equivalent pre-approved by the Contracting Officer. Tiles
                or panels shall contain recycled content.

            3.  Corridors and Eating/Galley Areas. Plaster or pointed and taped
                gypsum board or mineral acoustical tile.

         E. All newly installed building tiles must contain recycled
            materials.

5.8      WALL COVERINGS (SEP 2000)(TSA SEP 2002)
         A. BUILDING SHELL:
            1.  Physical Requirements.
                a.  Prior to occupancy, all restrooms within the building
                    common areas of the Government-occupied floors shall have 1)
                    ceramic tile in splash areas and 2) vinyl wall covering not
                    less than 13 ounces per square yard as specified in Federal
                    Specification (FS) CCC-W-408C on remaining wall areas or an
                    equivalent pre-approved by the Contracting Officer.

                b.  Prior to occupancy, all elevator areas which access the
                    Government-demised area and hallways accessing the
                    Government-demised area shall be covered with vinyl wall
                    coverings not less than 22 ounces per square yard as
                    specified in FS CCC-W-408C or an equivalent pre-approved by
                    the Contracting Officer.

            2.  Replacement. All wall covering shall be maintained in "like
                new" condition for the life of the lease. Wall covering shall be
                replaced or repaired at the Lessor's expense any time during the
                Government's occupancy if it is torn, peeling or permanently
                stained; the ceramic tile in the restrooms shall be replaced or
                repaired if it is loose, chipped, broken, or permanently
                discolored. All repair and replacement work shall be done after
                working hours.

         B. TENANT IMPROVEMENT INFORMATION:

            1.  In the event the Government chooses to install wall covering as
                part of the Tenant Improvement Allowance, the minimum standard
                is established as vinyl or polyolefin commercial wall covering
                weighting not less than 13 ounces per square yard as specified
                in FS CCC-W-408C or equivalent. The finish shall be pre-approved
                by the Contracting Officer.



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                                       27                 LESSOR         GOV'T

            2.  All wall covering in the Government-demised area shall be
                maintained in "like new" condition for the life of the lease.
                Repair or replacement of wall covering shall be at the Lessor's
                expense and shall include the moving and returning of
                furnishings, (except where wall covering has been damaged due to
                the negligence of the Government), any time during the occupancy
                by the Government if it is lorn, peeling, or permanently
                stained. All repair and replacement work shall be done after
                working hours.

         C. SAMPLES:
            1.  The Lessor shall provide at least three samples of each type of
                wall covering to be installed for selection by the Contracting
                Officer.


5.9      PAINTING (SEP 2000)
         A. BUILDING SHELL:
            1.  The Lessor shall bear the expense for all painting associated
                with the building shell. These areas shall include all common
                areas. Exterior perimeter walls and interior core walls within
                the Government-demised area shall be spackled and prime painted
                with low VOC primer. If any building shell areas are already
                painted prior to Tenant Improvements, then the Lessor shall
                repaint, at the Lessor's expense, as necessary during Tenant
                Improvements.

            2.  Public areas shall be painted at least every 3 years.


         B. TENANT IMPROVEMENT INFORMATION:
            1.  Prior to occupancy, all surfaces within the Government-demised
                area which are designated by the Government for painting shall
                be newly finished in colors acceptable to the Government.

            2.  Where feasible, reprocessed or consolidated latex paint with
                zero or low VOC shall be used in accordance with EPA's CPG on
                all painted surfaces. The type of paint shall be acceptable to
                the Contracting Officer. The Lessor shall follow the
                manufacturer's recommendations for the application and
                maintenance of all paint products.

            3.  Painted surfaces shall be repainted at the Lessor's expense,
                including the moving and returning of furnishings, any time
                during the occupancy by the Government if it is peeling or
                permanently stained, except where damaged due to the negligence
                of the Government. All work shall be done after normal working
                hours as defined elsewhere in this SFO.

            4.  If the Government desires cyclical repainting during the term of
                the lease, the cost will be borne by the Tenant Agency.

5.10     DOORS: EXTERIOR (SEP 2000)
         A. BUILDING SHELL:
            1.  Exterior doors shall be provided at the Lessor's expense unless
                explicitly requested by the Government in addition to those
                provided by the Lessor. Exterior doors shall be weather-tight
                and shall open outward. Hinges, pivots, and pins shall be
                installed in a manner which prevents removal when the door is
                closed and locked.

            2.  These doors shall have a minimum clear opening of 32" wide x 80"
                high (per leaf). Doors shall be heavy-duty, flush, 1) hollow
                steel construction, 2) solid-core wood, or 3) insulated tempered
                glass. As a minimum requirement, hollow steel doors shall be
                fully insulated, flush, #16-gauge hollow steel. Solid-core wood
                doors and hollow steel doors shall be at least 1-3/4 inches
                thick. Door assemblies shall be of durable finish and shall have
                an aesthetically-pleasing appearance acceptable to the
                Contracting Officer. The opening dimensions and operations shall
                conform to the governing building, fire safety, accessibility
                for the disabled, and energy codes and/or requirements.

            B.  Building Entrance and Exterior Doors

            1.  Weather tight vestibule or revolving door, equalized air
                pressure.

            2.  Commercial grade door and hardware, glazing clear safety glass
                that meets security requirements. If building entrance doors are
                integral to the design of the wall system, they shall be of
                equivalent performance, materials and aesthetics.

            3.  Weathertight, equipped with automatic door closures, minimum 3'
                wide by 7' high, meet accessibility requirements.

            4.  Hinges, pivots and pins installed to prevent removal when doors
                are closed and locked.

            5.  Service doors steel, weathertight, equipped with automatic door
                closures, minimum 3' wide by 7' high, wide peripheral peephole,
                meet accessibility requirements.

5.11     DOORS: SUITE ENTRY (SEP 2000)
         A. TENANT IMPROVEMENT INFORMATION:
            Suite entry doors shall be provided as part of the Tenant
            Improvements at the Government's expense and shall have a minimum
            clear opening of 32" wide by 84" high (per leaf). Doors shall meet
            the requirements of being a flush, solid-core, 1-3/4-inch thick,
            wood door with a natural wood veneer face or an equivalent
            pre-approved by the Contracting Officer. Hollow core wood doors are
            not acceptable. They shall be operable by a single effort and shall
            be in accordance with National Building Code requirements. Doors
            shall be installed in a metal frame assembly, finished with a
            semi-gloss oil based paint finish.

5.12     DOORS: INTERIOR (SEP 2000)
         A. TENANT IMPROVEMENT INFORMATION:
            Doors within the Government-demised area shall be provided as part
            of the Tenant Improvements at the Government's expense and shall
            have a minimum clear opening of 32" wide by 84" high. Doors shall
            meet the requirements of being a flush, solid-core, wood door with a
            natural wood veneer face or an equivalent pre-approved by the
            Contracting Officer. Hollow core wood doors are


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                                       28                 LESSOR         GOV'T





          not acceptable. They shall be operable with a single effort and shall
          be in accordance with National Building Code requirements. Doors shall
          be installed in a metal frame assembly, primed and finished with a low
          VOC semi-gloss oil based paint with no formaldehyde.

5.13  DOORS: HARDWARE (SEP 2000)
      A.  BUILDING SHELL:
          Doors shalt have door handles or door pulls with heavy-weight hinges.
          All doors shall have corresponding door stops (wall- or floor-mounted)
          and silencers. All public use doors and toilet room doors shall be
          equipped with kick plates. Exterior doors and all common area doors
          shall have automatic door closers. All building exterior doors shall
          have locking devices installed to reasonably deter unauthorized entry.
          Properly rated and labeled fire door assemblies shall be installed on
          all fire egress doors.

      B.  TENANT IMPROVEMENT INFORMATION:
          Doors shall have door handles or door pulls with heavy-weight hinges.
          All doors shall have corresponding door stops (wall- or floor-mounted)
          and silencers. All door entrances leading into the Government-demised
          area from public corridors and exterior doors shall have automatic
          door closers. Doors designated by the Government shall be equipped
          with 6pin tumbler cylinder locks, and strike plates. All locks shall
          be master keyed. The Government shall be furnished with at least two
          master keys for each lock.

5.14  DOORS: IDENTIFICATION (SEP 2000)
      A.  BUILDING SHELL:
          All signage required in common area unrelated to tenant identification
          shall be provided and installed at the Lessor's expense.

      B.  TENANT IMPROVEMENT INFORMATION:
          Door identification shall be installed in approved locations adjacent
          to office entrances as part of the Tenant Improvement Allowance. The
          form of door identification shall be approved by the Contracting
          Officer.

      C.  All signage shall meet ADAAG and UFAS requirements.


5.15  PARTITIONS: GENERAL (SEP 2000)
      A.  BUILDING SHELL:
          Partitions in public areas shall be marble, granite, hardwood,
          sheetrock covered with durable vinyl wall covering, or an equivalent
          pre-approved by the Contracting Officer.

5.16  PARTITIONS: PERMANENT (SEP 2000)
      A.  BUILDING SHELL:
          Permanent partitions shall extend from the structural floor slab to
          the structural ceiling slab. They shall be provided by the Lessor at
          the Lessor's expense as necessary to surround the Government-demised
          area, stairs, corridors, elevator shafts, toilet rooms, all columns,
          and janitor closets. They shall have a flame spread rating of 25 or
          less and a smoke development rating of 50 or less (ASTM E-84).
          Stairs, elevators, and other floor openings shall be enclosed by
          partitions and shall have the fire resistance required by National
          Fire Protection Association (NFPA) Standard 101, Life Safety Code.


5.17  PARTITIONS: SUBDIVIDING (SEP 2000)
      A.  BUILDING SHELL:
          Any demolition of existing improvements which is necessary to satisfy
          the government's layout shall be done at the Lessor's expense.

      B.  TENANT IMPROVEMENT INFORMATION:
          1.   Office subdividing partitions shall comply with applicable
               building codes and local requirements and shall be provided at
               the expense of the Government. Partitioning shall extend from the
               finished floor to the finished ceiling and shall be designed to
               provide a sound transmission class (STC) of 37. Partitioning
               shall be installed by the Lessor at locations to be determined by
               the Government drawings. They shall have a flame spread rating of
               25 or less and a smoke development rating of 50 or less (ASTM
               E-84).

          2.   HVAC shall be rebalanced. Sprinkler heads, building speaker
               system, fire alarms and lighting shall be repositioned, as
               appropriate, after installation of partitions to comply with
               national, state and local codes.

          3.   Partitioning requirements may be met with existing partitions if
               they meet the Government's standards and layout requirements.

5.18  FLOOR COVERING AND PERIMETERS (SEP 2000) (TSA SEP 2002)
      A.  BUILDING SHELL:
          1.   Exposed interior floors in primary entrances and lobbies shall be
               marble, granite, terrazzo, or an equivalent pre-approved by the
               Contracting Officer. Exposed interior floors in
               secondary entrances, elevator lobbies, and primary interior
               corridors shall be high-grade carpet, marble, granite, terrazzo,
               durable vinyl composite tile, or an equivalent pre-approved by
               the Contracting Officer. Resilient flooring, or an equivalent
               pre-approved by the Contracting Officer, shall be used in
               telecommunications rooms. Floor perimeters at partitions shall
               have wood, rubber, vinyl, marble, carpet base, or an equivalent
               pre-approved by the Contracting Officer.



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                                       29                  LESSOR        GOV'T


          2.   Terrazzo, unglazed ceramic tile, recycled glass tile, and/or
               quarry tile shall be used in all toilet and service areas unless
               another covering is pre-approved by the Contracting Officer.

      B.  CARPET - REPAIR OR REPLACEMENT:
          1.   Except when damaged by the Government, the Lessor shall repair or
               replace carpet at the Lessor's expense at any time during the
               lease term when:

               a.   backing or underlayment is exposed;

               b.   there are noticeable variations in surface color or texture;
                    or

               c.   tears and tripping hazards are present.

          2.   Repair or replacement shall include the moving and returning of
               furnishings. Work shall be performed after normal working hours
               as defined elsewhere in this SFO.

      C.  RESILIENT FLOORING - REPAIR OR REPLACEMENT:
          1.   Except when damaged by the Government, the Lessor shall repair or
               replace resilient flooring at the Lessor expense at any time
               during the lease term when:

               a.   It has curls, upturned edges, or other noticeable variations
                    in texture.

          2.   Repair or replacement shall include the moving and returning of
               furnishings. Work shall be performed after normal working hours
               as defined elsewhere in this SFO.

      D.  TENANT IMPROVEMENT INFORMATION:
          1.   Floor covering shall be either carpet or resilient flooring, as
               specified in the Government's drawings. Floor perimeters at
               partitions shall have wood, rubber, vinyl, carpet base, or an
               equivalent pre-approved by the Contracting Officer.

          2.   The use of existing carpet may be approved by the Contracting
               Officer; however, existing carpet shall be repaired, stretched,
               and cleaned before occupancy and shall meet the static buildup
               requirement for new carpet.

          3.   If the Government requires restrooms and/or shower rooms in the
               Government-demised area, floor covering shall be terrazzo,
               unglazed ceramic tile, and/or quarry tile.

      E.  INSTALLATION:
          Floor covering shall be installed in accordance with manufacturing
          instructions to lay smoothly and evenly.

      F.  SAMPLES:
          Finishes will be part of the construction documents. When floor
          covering is to be newly installed or changed, the Government will
          provide the Lessor with carpet sample selected. No substitutes may be
          made by the Lessor after sample selection.


5.19  CARPET: BROADLOOM (SEP 2000)
      A.  Any carpet to be newly installed shall meet the following
          specifications:

          1.   Pile Yarn Content. Pile yarn content shall be staple filament or
               continuous filament branded by a fiber producer (e.g., Allied,
               DuPont, Monsanto, BASF, Talisman Mills, woolblend), soil-hiding
               nylon, or wool nylon blends or polyethylene terephthalate (PET)
               resin.

          2.   Environmental Requirements. The Lessor shall use carpet that
               meets the "Green Label" requirements of the Carpet and Rug
               Institute unless an exception is granted by the Contracting
               Officer.

          3.   Carpet Pile Construction. Carpet pile construction shall be level
               loop, textured loop, level cut pile, or level cut/uncut pile.

          4.   Pile Weight. Pile weight shall be a minimum of 26 ounces per
               square yard for level-loop or textured-loop construction. Pile
               weight shall be a minimum weight of 32 ounces per square yard
               for level-cut/uncut construction.

          5.   Secondary Back. The secondary back shall be jute or synthetic
               fiber for glue-down installation.

          6.   Density. The density shall be 100 percent nylon (loop and cut
               pile) with a minimum of 4,000; other fibers, including blends and
               combinations with a minimum of 4,500.

          7.   Pile Height. The maximum pile height shall be 1/2 inch (13mm).
               Exposed edges of carpet shall be fastened to floor surfaces and
               shall have trim along the entire length of the exposed edge.

5.20  CARPET TILE (SEP 2000)
      A.  Any carpet to be newly installed shall meet the following
          specifications:

          1.   Pile Yarn Content. Pile yarn content shall be staple filament or
               continuous filament branded by a fiber producer (e.g., Allied,
               DuPont, Monsanto, BASF, soil-hiding nylon or polyethylene
               terephthalate (PET) resin.






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                                       30                  LESSOR        GOV'T


          2.   Environmental Requirements. The Lessor shall use carpet that
               meets the "Green Label" requirements of the Carpet and Rug
               Institute unless an exception is granted by the Contracting
               Officer.

          3.   Carpet Pile Construction Carpet pile construction shall be tufted
               level loop, level cut pile, or level cut/uncut pile.

          4.   Pile Weight. Pile weight shall be a minimum of 26 ounces per
               square yard for level loop and cut pile. Pile weight shall be a
               minimum of 32 ounces per square yard for plush and twist.

          5.   Secondary Back. The secondary back shall be polyvinyl chloride,
               ethylene vinyl acetate, polyurethane, polyethylene, bitumen, or
               olefinic hardback reinforced with fiberglass.

          6.   Total Weight. Total weight shall be a minimum of 130 ounces per
               square yard.

          7.   Density. The density shall be 100 percent nylon (loop and cut
               pile) with a minimum of 4,000; other fibers, including blends and
               combinations with a minimum of 4,500.

          8.   Pile Height. The minimum pile height shall be 1/8 inch. The
               combined thickness of the pile, cushion, and backing height shall
               not exceed 1/2 inch (13 mm).

          9.   Static Buildup. Static buildup shall be a maximum of 3.5
               kilovolt, when tested in accordance with AATCC-134.

          10.  Carpet Construction. Carpet construction shall be a minimum of 64
               tufts per square inch.

5.21  ACOUSTICAL REQUIREMENTS (SEP 2000)
      A.  BUILDING SHELL:
          1.   Reverberation Control. Ceilings in carpeted space shall have a
               noise reduction coefficient (NRC) of not less than 0.55 in
               accordance with ASTM C-423. Ceilings in offices, conference
               rooms, and corridors having resilient flooring shall have an NRC
               of not less than 0.65.

          2.   Ambient Noise Control. Ambient noise from mechanical equipment
               shall not exceed noise criteria curve (NC) 35 in accordance with
               the ASHRAE Handbook of Fundamentals in offices and conference
               rooms; NC 40 in corridors, cafeterias, lobbies, and toilets; NC
               50 in other spaces.

          3.   Noise Isolation. Rooms separated from adjacent spaces by
               ceiling-high partitions (not including doors) shall not be less
               than the following noise isolation class (NIC) standards when
               tested in accordance with ASTM E-336:

               a.   Conference rooms   NIC 40
               b.   Offices            NIC 35

          4.   Testing.
               a.   The Contracting Officer may require, at no cost to the
                    Government, test reports by a qualified acoustical
                    consultant showing that accoustical requirements have been
                    met.

               b.   The requirements of this paragraph shall take precedence
                    over any additional specifications in this SFO if there is a
                    conflict.

5.22  WINDOW COVERINGS (SEP 2000)
      A.  BUILDING SHELL:
          1.   Window Blinds. All exterior windows shall be equipped with window
               blinds in new or like new condition, which shall be provided as
               part of the Tenant improvement Allowance. The blinds may be
               aluminum or plastic vertical blinds or horizontal blinds with
               aluminum slats of 1-inch width or less or an equivalent
               pre-approved by the Contracting Officer. The window blinds shall
               have non-corroding mechanisms and synthetic tapes. Color
               selection will be made by the Contracting Officer.


      B.  TENANT IMPROVEMENT INFORMATION:
          1.   Draperies. If draperies are required, the following minimum
               specifications shall apply:

               a.   Fabrics shall be lined with either white or off-white plain
                    lining fabric suited to the drapery fabric weight. Draperies
                    shall be either floor-, apron-, or sill-length, as specified
                    by the Government, and shall be wide enough to cover window
                    and trim. Draperies shall be hung with drapery hooks on
                    well-anchored heavy duty traverse rods. Traverse rods shall
                    draw from either the center, right, or left side.


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               b.   Construction. Any draperies to be newly installed, shall be
                    made as follows:

                       i. fullness of 100 percent, including overlap, side hems,
                          and necessary returns;
                      ii. double headings of 4 inches turned over a 4-inch
                          permanently finished stiffener;
                     iii. doubled side hems of 1-1/2 inches; 4-inch doubled and
                          blind stitched bottom hems;
                      iv. three-fold pinch pleats;
                       v. safety stitched intermediate seams;
                      vi. matched patterns;
                     vii. tacked corners; and
                    viii. no raw edges or exposed seams.

               c.   Use of existing draperies must be approved by the
                    Contracting Officer.

          2.   Samples. A minimum of three patterns and colors shall be made
               available to the Government for selection; shading of sample
               fabric shall not vary markedly from that of the final product.


5.23  BUILDING DIRECTORY (SEP 2000)
      A.  BUILDING SHELL:
          1.   A tamper-proof directory with lock shall be provided in the
               building lobby listing the Government agency(ies). It must be
               acceptable to the Contracting Officer.


5.24  FLAG POLE (SEP 2000)
      A.  BUILDING SHELL:
          1.   If the Government is the sole occupant of the building, a flag
               pole shall be provided at a location to be approved by the
               contracting officer. The flag will be provided by the
               Government. This requirement may be waived if determined
               inappropriate by the Government.



5.25  EXTERNAL SIGNAGE
      The Government shall have the right to place exterior signage on the
      building facade on any one of the upper four corners of the building or
      other approved location, subject to existing signage and local regulation.
      Any signage will be the Government's sole cost.




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                                       32                  LESSOR        GOV'T

6.0      MECHANICAL, ELECTRICAL, PLUMBING

6.1      MECHANICAL, ELECTRICAL, PLUMBING: GENERAL (SEP 2000)
         A.       BUILDING SHELL:
                  The Lessor shall provide and operate all building equipment
                  and systems in accordance with applicable technical
                  publications, manuals, and standard procedures. Mains, lines,
                  and meters for utilities shall be provided by the Lessor.
                  Exposed ducts, piping, and conduits are not permitted in
                  office space.

6.2      ENERGY COST SAVINGS (SEP 2000)
         A.       The Offeror is encouraged to use 1) Energy Savings Performance
                  Contracts (ESPC) or 2) utility agreements to achieve,
                  maintain, and/or exceed the ENERGY STAR Benchmark Score of 75.
                  The Offeror is encouraged to include shared savings in the
                  offer as a result of energy upgrades where applicable. The
                  ENERGY STAR Online Benchmark Tool can be found at the
                  www.epa.gov/energystar web site.

         B.       All new construction shall achieve an ENERGY STAR Building
                  Label within 1 year after reaching 95 percent occupancy and
                  will continue to retain the ENERGY STAR Building Label if the
                  level of performance is maintained.

         C.       The Offeror may obtain a list of energy service companies
                  qualified under the Energy Policy Act to perform ESPC, as well
                  as additional information on cost-effective energy efficiency,
                  renewables, and water conservation. For the ESPC qualified
                  list, refer to the www.eren.doe.gov/femp web site, or call the
                  FEMP Help Desk at 1-800-566-2877.

6.3       DRINKING FOUNTAINS (SEP 2000)
          A.      BUILDING SHELL:
                  The Lessor shall provide, on each floor of office space, a
                  minimum of one chilled drinking fountain within every 150
                  feet, 0 inches of travel distance.

6.4       TOILET ROOMS (SEP 2000)
          A.      BUILDING SHELL:
                  1.       Separate toilet facilities for men and women shall be
                           provided on each floor occupied by the Government in
                           the building. The facilities shall be located so that
                           employees will not be required to travel more than
                           200 feet, 0 inches on one floor to reach the toilets.
                           Each toilet room shall have sufficient water closets
                           enclosed with modern stall partitions and doors,
                           urinals (in men's room), and hot (set in accordance
                           with applicable building codes) and cold water. Water
                           closets and urinals shall not be visible when the
                           exterior door is open.

                  2.       Each main toilet room shall contain the following
                           equipment:

                           a.       a mirror above the lavatory;

                           b.       a toilet paper dispenser in each water
                                    closet stall, that will hold at least two
                                    rolls and allow easy, unrestricted
                                    dispensing;

                           c.       a coat hook on the inside face of the door
                                    to each water closet stall and on several
                                    wall locations by the lavatories;

                           d.       at least one modern paper towel dispenser,
                                    soap dispenser, and waste receptacle for
                                    every two lavatories;

                           e.       a coin-operated sanitary napkin dispenser
                                    in women's toilet rooms with a waste
                                    receptacle for each water closet stall;

                           f.       ceramic tile, recycled glass tile, or
                                    comparable wainscot from the floor to a
                                    minimum height of 4 feet, 6 inches;

                           g.       a disposable toilet seat cover dispenser;
                                    and

                           h.       a counter area of at least 2 feet, 0 inches
                                    in length, exclusive of the lavatories
                                    (however, it may be attached to the
                                    lavatories) with a mirror above and a ground
                                    fault interrupt-type convenience outlet
                                    located adjacent to the counter area.

         B.       If newly installed, toilet partitions shall be made from
                  recovered materials as listed in EPA's CPG.

6.5      TOILET ROOMS: FIXTURE SCHEDULE (SEP 2000)(TSA SEP 2002)
         A.       BUILDING SHELL:

                  1.       The toilet fixtures shall be provided in conformance
                           to the International Plumbing Code.

                  2.       For new installations:

                           a.       Water closets shall not use more than 1.6
                                    gallons per flush.

                           b.       Urinals shall not use more than 1.0 gallons
                                    per flush.


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                           c.       Faucets shall not use more than 2.5 gallons
                                    per minute at a flowing water pressure of 80
                                    pounds per square inch.

                  3.       All work under this SFO shall be in compliance with
                           the International Plumbing Code.

6.6      JANITOR CLOSETS (SEP 2000)
         A.       BUILDING SHELL:
                  Janitor closets with service sink, hot and cold water, and
                  ample storage for cleaning equipment, materials, and supplies
                  shall be provided on all floors.  Each janitor closet door
                  shall be fitted with an automatic deadlocking latch bolt with
                  a minimum throw of 1/2 inch.

6.7      HEATING AND AIR CONDITIONING (SEP 2000)
         A.       BUILDING SHELL:
                  1.       Temperatures shall conform to local commercial
                           equivalent temperature levels and operating
                           practices in order to maximize tenant satisfaction.
                           These temperatures shall be maintained throughout the
                           leased premises and service areas, regardless of
                           outside temperatures, during the hours of operation
                           specified in the lease.

                  2.       During non-working hours, heating temperatures shall
                           be set no higher than 55' Fahrenheit, and air
                           conditioning shall not be provided except as
                           necessary to return space temperatures to a suitable
                           level for the beginning of working hours. Thermostats
                           shall be secured from manual operation by key or
                           locked cage. A key shall be provided to the
                           Government Field Office Manager.

                  3.       Areas having excessive heat gain or heat loss, or
                           affected by solar radiation at different times of the
                           day, shall be independently controlled.

                  4.       Equipment Performance. Temperature control for office
                           spaces shall be assured by concealed central heating
                           and air conditioning equipment. The equipment shall
                           maintain space temperature control over a range of
                           internal load fluctuations of plus 0.5 W/sq.ft. to
                           minus 1.5 W/sq.ft. from initial design requirements
                           of the tenant.

                  5.       HVAC Use During Construction. The permanent HVAC
                           system may be used to move both supply and return
                           air during the construction process only if the
                           following conditions are met:

                           a.       a complete air filtration system with 60
                                    percent efficiency filters is installed and
                                    properly maintained;

                           b.       no permanent diffusers are used;

                           c.       no plenum-type return air system is
                                    employed;

                           d.       the HVAC duct system is adequately sealed
                                    to prevent the spread of airborne
                                    particulate and other contaminants; and

                           e.       following the building "flush-out," all duct
                                    systems are vacuumed with portable
                                    high-efficiency particulate arrestance
                                    (HEPA) vacuums and documented clean in
                                    accordance with National Air Duct Cleaners
                                    Association (NADCA) specifications.

                  6.       Ductwork Re-use and Cleaning. Any ductwork to be
                           reused and/or to remain in place shall be cleaned,
                           tested, and demonstrated to be clean in accordance
                           with the standards set forth by NADCA. The cleaning,
                           testing, and demonstration shall occur immediately
                           prior to Government occupancy to avoid contamination
                           from construction dust and other airborne
                           particulates.

                  7.       Insulation. All insulation shall contain recovered
                           materials as required by EPA's CPG and related
                           recycled content recommendations.

                  8.       The Lessor shall conduct HVAC system balancing after
                           any HVAC system alterations during the term of the
                           lease and shall make a reasonable attempt to schedule
                           major construction outside of office hours. Lessor
                           shall provide balancing reports to the government for
                           approval by the Government's mechanical
                           engineer/technical representatives.

         B.       TENANT IMPROVEMENT INFORMATION:

                  1.       Zone Control. Individual thermostat control shall be
                           provided for office space with control areas not to
                           exceed 800 ANSI/BOMA Office Area square feet. Areas
                           which routinely have extended hours of operation
                           shall be environmentally controlled through dedicated
                           heating and air conditioning equipment. Special
                           purpose areas (such as photocopy centers, large
                           conference rooms, computer rooms, etc.) with an
                           internal cooling load in excess of 5 tons shall be
                           independently controlled. Concealed package air
                           conditioning equipment shall be provided to meet
                           localized spot cooling of tenant special equipment.
                           Portable space heaters are prohibited from use.

6.8      VENTILATION (SEP 2000)(TSA SEP 2002)

         A.       BUILDING SHELL: During working hours in periods of heating
                  and cooling, ventilation shall be provided in accordance with
                  the latest edition of ANSI/ASHRAE Standard 62, Ventilation for
                  Acceptable Indoor Air Quality to minimize risk.

         B.       BUILDING SHELL: Air filtration shall be provided and
                  maintained with filters having a minimum efficiency rating as
                  determined by ANSI/ASHRAE Standard 52.2, "Method of Testing
                  General Ventilation Air Cleaning Devices for Removal
                  Efficiency by Particle



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                  Size. Pre-filters shall be 30 percent efficient. Final filters
                  shall be 80 percent to 85 percent efficient for particles at 3
                  microns.

         C.       BUILDING SHELL: Where the Lessor proposes that the Government
                  shall pay utilities, the following shall apply:

                  1.       An automatic air or water economizer cycle shall be
                           provided to all air handling equipment, and

                  2.       The building shall have a fully functional building
                           automation system capable of control, regulation, and
                           monitoring of all environmental conditioning
                           equipment. The building automation system shall be
                           fully supported by a service and maintenance
                           contract.

                  4.       TENANT IMPROVEMENT INFORMATION: Conference rooms of
                           300 ANSI/BOMA rentable square feet or greater shall
                           be provided with dedicated source of ventilation or
                           be fitted with air handling equipment with smoke/odor
                           removing filters.

6.9      VENTILATION: TOILET ROOMS (DEC 1993)
         BUILDING SHELL: Toilet rooms shall be properly exhausted, with a
         minimum of 10 air changes per hour.

6.10     ELECTRICAL: GENERAL (SEP 2000)
         BUILDING SHELL: The Lessor shall be responsible for meeting the
         applicable requirements of local codes and ordinances. When codes
         conflict, the more stringent standard shall apply. Main service
         facilities shall be enclosed. The enclosure may not be used for storage
         or other purposes and shall have door(s) fitted with an automatic
         deadlocking latch bolt with a minimum throw of 1/2 inch. Distribution
         panels shall be circuit breaker type with 10 percent spare power load
         and circuits.

6.11     ELECTRICAL: DISTRIBUTION (SEP 2000)
         A.       BUILDING SHELL:
                  1.       Main power distribution switchboards and
                           distribution and lighting panel boards shall be
                           circuit breaker type with copper buses that are
                           properly rated to provide the calculated fault
                           circuits. All power distribution panel boards shall
                           be supplied with separate equipment ground buses. All
                           power distribution equipment shall be required to
                           handle the actual specified and projected loads plus
                           10 percent spare load capacity. Distribution panels
                           are required to accommodate circuit breakers for the
                           actual calculated needs plus 10 percent spare
                           circuits that will be equivalent to the majority of
                           other circuit breakers in the panel system. All
                           floors shall have 120/208 V, 3-phase, 4-wire with
                           bond, 60-hertz electric service available.

                  2.       Main distribution for standard office occupancy
                           shall be provided at the Lessor's expense. In no
                           event shall such power distribution (not including
                           lighting and HVAC) for the Government-demised area
                           fall below seven(7) W per ANSI/BOMA rentable square
                           foot.

                  3.       Convenience outlets shall be installed in accordance
                           with NFPA Standard 70, National Electrical Code, or
                           local code, whichever is more stringent.

         B.       Provide and install
                  1.       All lighting normal and emergency supply systems in
                           all lobbies, electrical rooms and other base building
                           spaces.
                  2.       Wire distributions system (i.e. access floor,
                           ladder-type cable raceways, cellular floor duct etc.)
                           capable of supporting the telecommunication, data,
                           video, security, life safety, and building automation
                           system requirements.
                  3.       Power distribution from utility sources to all
                           distributed electrical rooms; electrical distribution
                           shall be 480/277 V.
                  4.       480/277 V and 120/208 V normal power, emergency power
                           and standby power systems with capacity to support
                           the Fit-Out power and lighting loads in all
                           occupiable spaces, terminated in branch panelboards.
                  5.       All electrical equipment shall have minimum of
                           22-year life expectancy.

         C.       Provisions
                  1.       Space within building for housing batteries and UPS
                           and additional standby generator power, equipment to
                           be obtained through Tenant Improvement Allowance.
                  2.       Empty conduits from UPS location to computer room.

         D.       TENANT IMPROVEMENT INFORMATION
                  1.       All electrical outlets shall be installed by the
                           Lessor in accordance with the construction drawings.
                           All electrical outlets shall be installed in
                           accordance with NFPA Standard 70, or local code,
                           whichever is more stringent.

                  2.       All tenant outlets shall be marked and coded for ease
                           of wire tracing; outlets shall be circuited
                           separately from lighting. All floor outlets shall be
                           flush with the plane of the finished floor.

                  3.       The Lessor shall ensure that outlets and associated
                           wiring (for electricity) to the workstation(s) shall
                           be safely concealed in partitions, ceiling plenums,
                           in recessed floor ducts, under raised flooring, or by
                           use of a method acceptable to the Contracting
                           Officer. In any case, cable on the floor surface
                           shall be minimized.

6.12     ELECTRICAL: ADDITIONAL DISTRIBUTION SPECIFICATIONS If the Offeror
         proposes that building maintenance will be the responsibility of the
         Government, the Lessor shall provide duplex utility outlets in toilets,
         corridors, and dispensing areas for maintenance purposes at no cost to
         the Government. Fuses and circuit breakers shall be plainly marked or
         labeled to identify circuits or equipment supplied through them.



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                                       35                 LESSOR         GOV'T



6.13  TELECOMMUNICATIONS: DISTRIBUTION AND EQUIPMENT (SEP 2000)(TSA SEP 2002)
      A.  BUILDING SHELL:
          1.   Sufficient space shall be provided on the floor(s) where the
               Government occupies space for the purposes of terminating
               telecommunications service into the building.  The building's
               telecommunications closets located on all floors shall be
               vertically-stacked.  Telecommunications switchrooms, wire
               closets, and related spaces shall be enclosed.  The enclosure
               shall not be used for storage or other purposes and shall have
               door(s) fitted with an automatic door-closer and deadlocking
               latch bolt with a minimum throw of 1/2 inch.

          2.   Telecommunications switchrooms, wire closets, and related spaces
               shall meet applicable Telecommunications Industry Association
               (TIA) and Electronic Industries Alliance (EIA) standards.  These
               standards include the following:

               a.   TIA/EIA-568, Commercial Building Telecommunications Cabling
                    Standard,

               b.   TIA/EIA-569, Commercial Building Standard for
                    Telecommunications Pathways and Spaces,

               c.   TIA/EIA-570, Residential and Light Commercial
                    Telecommunications Wiring Standard, and

               d.   TIA/EIA-571, Commercial Building Grounding and Bonding
                    Requirements for Telecommunications Standard.

          3.   Telecommunications switchrooms, wire closets, and related spaces
               shall meet applicable NFPA standards.  Bonding and grounding
               shall be in accordance with NFPA Standard 70, National Electrical
               Code, and other applicable NFPA standards and/or local code
               requirements.

     B.   TENANT IMPROVEMENT INFORMATION:
          Telecommunications floor or wall outlets shall be provided as
          required. The Lessor shall ensure that all outlets and associated
          wiring, copper, coaxial cable, optical fiber, or other transmission
          medium used to transmit telecommunications (voice, data, video,
          Internet, or other emerging technologies) service to the workstation
          shall be safely concealed under raised floors, in floor ducts, walls,
          columns, or molding.  All outlets/junction boxes shall be provided
          with rings and pull strings to facilitate the installation of cable.
          Some transmission medium may require special conduit, inner duct, or
          shielding as specified by the Government.

6.14  TELECOMMUNICATIONS: LOCAL EXCHANGE ACCESS (SEP 2000)
      A.  BUILDING SHELL:
          1.   The Government reserves the right to contract its own
               telecommunications (voice, data, video, Internet or other
               emerging technologies) service in the space to be leased.  The
               Government may contract with one or more parties to have inside
               wiring (or other transmission medium) and telecommunications
               equipment installed.

          2.   The Lessor shall allow the Government's designated
               telecommunications providers access to utilize existing building
               wiring to connect its services to the Government's space.  If the
               existing building wiring is insufficient to handle the
               transmission requirements of the Government's designated
               telecommunications providers, the Lessor shall provide access
               from the point of entry into the building to the Government's
               floor space, subject to any inherent limitations in the pathway
               involved.

          3.   The Lessor shall allow the Government's designated
               telecommunications providers to affix telecommunications antennae
               (high frequency, mobile, microwave, satellite, or other emerging
               technologies), subject to weight and wind load conditions, to
               roof, parapet, or building envelope as required. Access from the
               antenna(e) to the leased space shall be provided.

          4.   The Lessor shall allow Government's designated telecommunications
               providers to affix antennae and transmission devices throughout
               its leased space and in appropriate common areas frequented by
               the Government's employees so as to allow the use of wireless
               telephones and communications devices necessary to conduct
               business.

      B.  TENANT IMPROVEMENT INFORMATION:
          Should the Government's security requirements require sealed conduit
          to house the telecommunications transmission medium, the Lessor shall
          provide such conduit at the expense of the Government.



6.15  DATA REQUIREMENTS (SEP 2000)(TSA SEP 2002)
      A.  TENANT IMPROVEMENT INFORMATION:
          The Government shall at its expense be responsible for purchasing and
          installing data cable.  However, the Government reserves the right to
          include the purchasing and installing of data cable in Lessor's
          construction package. The Lessor shall ensure that data outlets and
          associated wiring used to transmit data to workstations shall be
          safely concealed in floor ducts, walls, columns, or below access
          flooring.  The Lessor shall provide outlets, which shall include rings
          and pull strings to facilitate the installation of the data cable.
          When cable consists of multiple runs, the Lessor shall provide
          ladder-type cable trays to insure that Government-provided cable does
          not come into contact with suspended ceilings.  Cable trays shall form
          a loop around the perimeter of the Government-demised area such that
          they are within a 30-foot, 0-inch horizontal distance of any single
          drop.

     B.   TSA utilizes permanent and temporary installations of network
          technology throughout its information technology infrastructure. The
          installation of a sound cable plant is essential for the successful
          operation and interoperability of these networks.

     C.   Cable Installation
          1.   Unless otherwise noted, cabling installed shall conform to the
               following:
               a.   TIA/EIA-568B building wiring standard for the RJ-45 work
                    station interfaces and data cabling.
               b.   International Standards Organization (ISO) Standard 11801
                    for Category 5E cables.


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                                       36                 LESSOR         GOV'T

                 c.       All Category 5E cabling installed for this contract
                          must achieve 10 dB ACR at 200 MHz.
                 d.       All Category 5E cabling installed under this contract
                          shall conform to EIA/TIA TSB67 cable testing criteria.
                 e.       Category 5E (CAT5E) cable - The contractor shall use
                          24 AWG, 4 pair Category 5E cable with color jacks as
                          specified by the agency.
                 f.       Duplex jacks shall have pull strings installed at
                          each location noted on the floor plan, color coded
                          with white or ivory faceplates.

       D.        Labeling:
                 1.       Each cable installed will have a unique label.
                 2.       The contractor will use the room number as the unique
                          label for each cable. In the event that a room has
                          more than one cable terminating in it, the contractor
                          shall label all cables according to building and
                          closet room #, followed by numerical jack # and a
                          notation of voice or data jack (e.g. JDOE-12234-01V
                          would mean John Doe building, closet 234 on floor 12,
                          voice jack #0).
                 3.       The contractor will only use machine-generated labels.
                          The Government will NOT accept handwritten labels on
                          any portion of this contract.

       E.        Patch Panels:
                 1.       The front of each patch panel will be machine labeled
                          indicating each cable installed on the patch panel.

       F.        Wall Plates:
                 1.       Each wall plate will be labeled indicating all cables
                          terminated at that location.
                 2.       The labels used for wall plates shall consist of
                          black lettering with a white or clear background.

       G.        Cable Installation qualities (These are preliminary
                 estimates.):
                 1.       Install 300 pairs of telephone tie cable between the
                          nearest outside wire closet and main CER through
                          conduit.
                 2.       Install 25 pair telephone tie cable between the CER
                          and the conference room.
                 3.       Install 200 pair telephone tie cable between the
                          outside wire closet and the computer room through
                          conduit.
                 4.       Install 50 pair telephone tie cable between the
                          outside wire closet and each CER through.

       H.        Cables:
                 1.       All cables will be fitted with machine-generated
                          labels at each end of the event that a cable is pulled
                          away from a patch panel or wall plate.
                 2.       The label installed at the patch panel end shall be
                          within one inch of termination and should reflect the
                          unique cable identifier.
                 3.       The label installed on the cable at the remote end
                          will be within 4 inches of termination.

        I.       Conduit:
                 1.       One (1) each, 4-inch EMT conduit between the main CER
                          and the nearest outside wire closet with caps on both
                          ends.
                 2.       Two (2) each, 3 inch EMT conduits between the outside
                          wire closet and the computer room.
                 3.       Two (2) each, 3 inch EMT conduits within TSA
                          controlled space (locations to be determined) stubbed
                          out 6 inches above the ceiling to outside wire closet.
                 4.       Conduits from the 1/2 "EMT voice/data outlets to 6"
                          stub up above the ceiling.

       J.        Communications Closet (CER)
                 1.       Provide CER for vertical and horizontal wire
                          distribution system capable of supporting telecomm.,
                          data, and video network. provide one CER for every
                          25,000 sf of space, wiring runs do not exceed 295"
                          from the farthest connection, no more than 500' of
                          separation between CERs, each CER shall be at least
                          10'x15', free of building columns.
                 2.       Equipment such as piping ductwork, custodial services
                          and distribution of building power must not be located
                          in or pass through the CER.
                 3.       Vertically stacked CERs shall have eight 4"
                          non-corrosive steel sleeves for vertical risers,
                          multiple CERs located on the same floor shall be
                          Interconnected with a minimum of one 3" conduit, all
                          conduits shall have pull boxes installed every 100'.
                 4.       Provide two dedicated 120V/20 amp designated ground
                          circuit service quadraplex receptacle on emergency
                          generator, and one telecommunications grounding
                          busbar.
                 5.       Provide a minimum of 50 fc lighting measured at 3'
                          AFF.
                 6.       Provide dedicated 24 hour/7 days a week cooling for
                          CER.


        K.       Patch panels:
                 1.       All patch panels shall have 48 ports.
                 2.       Homaco MJPC5-35TB or equivalent.
                 3.       The use of any patch panels other than the one listed
                          must be approved in advance by the COTR or designated
                          program manager of TSA.

        L.       Wire Management Panels:
                 1.       Wire management panels shall separate all patch panels
                          associated with this installation.
                 2.       HFM-19-2 or equivalent for separating patch panels.
                 3.       The top wire management panel in each relay rack
                          shall be Homaco HFM-19-1SRC or equivalent.
                 4.       The use of any wire management panels other than the
                          ones listed must be approved in advance by the COTR or
                          designated program manager of TSA.

        M.       Horizontal pathway systems.
                 1.       Provisions must be made to accommodate future tenant
                          build-out of horizontal pathway distribution system,
                          installed above the finished ceiling in tenant areas
                          and corridors, Lessor to provide sufficient space to
                          accommodate the installation of cable trays above
                          suspended ceilings without impacted duct placements or
                          ceiling heights.


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      N.  Cable Jacks:
          1.   All cables shall be terminated on "keystone style" RJ45 jacks,
               and be mounted in faceplates.
          2.   All jacks associated with this installation shall be wired to the
               T568B wiring standard.

      O.  Faceplates:
          1.   All cables shall be mounted in faceplates, and all faceplates
               shall be attached to the wall in a secure manner.
          2.   All faceplates shall be almond or white in color, and clearly
               labeled.

      P.  Racks:
          1.   Aluminum relay racks must be installed to the following
               specifications.
               a.   Homaco 19-84-T2SD*B or equivalent.
               b.   The use of any relay racks other than the one listed must be
                    approved in advance by the COTR or designated program
                    manager.
               c.   Each rack will be secured to the floor and to the ceiling to
                    ensure stability.
               d.   The floor mounting of the racks shall utilize a minimum of
                    1/2 all thread.
               e.   If cables are run into the rack from the ceiling, the
                    contractor shall install two 4" conduits above the main
                    rack.
               f.   All cables terminated on this rack shall run through the 4"
                    "stub outs."
               g.   The contractor shall be responsible for grounding each rack
                    to a building ground.
               h.   If multiple racks are installed, all racks will be secured
                    to each other.
               i.   The contractor will install all racks with a minimum of
                    three-foot clearance for the front and back of each relay
                    rack.

      Q.  Ladder Rack:
          1.   The contractor shall install ladder rack to interconnect the
               relay rack(s), and to connect the relay rack to the wall for easy
               extension of cables and circuits.

      R.  Installation Schedule:
          1.   The contractor shall complete the work within the time frame per
               each phase from contract award to complete the physical
               installation and testing of the cable plant.

      S.  Cable:
          1.   Category 5E -- The contractor shall furnish and install all
               materials needed. Quantity of Category 5E rated cables to be
               determined.
          2.   All cables installed shall originate in the communications
               closet.

      T.  Multi-Mode Fiber:
          1.   The contractor shall install a two (2) 12-strand SC-SC multi-mode
               fiber pull from CER to the Data Center running on diverse paths.
          2.   For distances over 500' use single mode fiber (not multimode).

      U.  Test Results:
          1.   The contractor will test all cables and certify that all cables
               installed will pass data as outlined in the EIA/TIA TSB67 cable
               testing criteria.
          2.   Immediately after contract award, the contractor will submit a
               draft test plan that outlines how all cable test results will be
               presented to TSA.
          3.   The COTR or designated program manager must approve the test
               plan.
          4.   The final test results report shall be presented to TSA no later
               than 30 days after the installation of all cables.

      V.  Documentation:
          1.   The contractor shall prepare as-built documentation of this cable
               plant.
          2.   The contractor shall submit a draft Cable Documentation Plan to
               the COTR or designated program manager before starting work.
          3.   The final test results from this installation shall be presented
               to TSA in an electronic spreadsheet using current version or
               Microsoft Office Excel.
          4.   This spreadsheet shall define the cable number, room number,
               length of each run, and test results for each cable.
          5.   The contractor will generate and supply four copies of CADD
               drawings of the floor plans (24" x 36 for this office and supply
               three copies of elevation drawings of each CER installed by the
               contractor.
          6.   The CADD drawings shall include the placement of all walls,
               doorways, and include the location and unique identifier of each
               cable.
               a.   The contractor shall mount one laminated 24"x 36" copy of
                    the CADD drawings in the CER.
               b.   The CADD drawings will also be supplied to TSA in electronic
                    and hardcopy format and must be compatible with Auto Desk
                    AutoCAD. Provide two (2) electronic and two (2) hard copies.

      W.  Confidentiality of Information:
          1.   The information to be developed in this delivery order is of
               sensitive nature.
          2.   The contractor shall limit knowledge of and participation in this
               delivery order tasking and its work product, to those personnel
               directly involved in its performance, and only then subject to
               the approval of the COTR.
               a.   Contractor personnel may not disseminate or publish
                    information related to the installation covered under this
                    contract or any information contained in Government
                    furnished documents without prior written approval of the
                    Contracting Officer.
               b.   In addition, the contractor will not issue, or permit others
                    to issue, publicity concerning the project in any form or at
                    any time, unless the Contracting Officer approves such
                    publicity in writing.

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               c.   During the performance of this contract and thereafter, the
                    contractor will not reveal any of the operating methods or
                    systems; the contents of files; or the names of persons,
                    films, or places related to the contract or studies under
                    it, unless the Contracting Officer approves the disclosure
                    in writing.
               d.   As a precondition for employment related to this contract,
                    each contractor and subcontractor employee must execute a
                    nondisclosure agreement with the contractor stating in part
                    that the employee will:

                    i.   Not reveal, divulge or publicize any matters dealt with
                         under this contract;
                    ii.  Not disseminate any oral or written information
                         obtained as a result of the execution of this contract
                         or performance of the work hereunder;
                    iii. Not remove any document from the place of performance
                         except as approved by the Contracting Officer;
                    iv.  Abide by the rules and regulations outlined in Part 45,
                         Title 28, Code of Federal Regulation.
                    v.   The contractor then will provide the Contracting
                         Officer with the original copy of this form signed by
                         the employee at least five (5) working days before the
                         beginning of that employee's participation of the
                         project.

          3.   The contractor agrees that on termination of the delivery order,
               whether with or without cause, the contractor has no property or
               possessor right to any of the correspondence, equipment, files,
               or materials of whatever kind or description, or any copies or
               duplicates of such, whether developed or prepared by the
               contractor or furnished to the contractor by the Government in
               connection with the performance of this contract; and that on
               demand, the contractor will surrender immediately to the
               Contracting Officer or the Contracting Officer's Technical
               Representative such items, matters, materials, and copies.

      X.  Loudspeaker Paging:
          1.   Install on the spot volume control ceiling mounted loudspeakers,
               with 50-ohm potentiometer, 10 oz (HV series) magnet dual
               voltage 25/70 transformer, at locations to be determined. Wire
               speakers back to the communications closet and terminated on 66
               type blocks in a location to be determined by TSA personnel.

          2.   Speakers shall be placed in corridors at 25 feet on center and
               various other locations to be determined later in space design.


6.16  ELECTRICAL, TELEPHONE, DATA FOR SYSTEMS FURNITURE (SEP 2000)
      A.  TENANT IMPROVEMENT INFORMATION:

          1.   The Lessor shall provide as part of the Tenant Improvement
               Allowance separate data, telephone, and electric junction boxes
               for the base feed connections to Government-provided modular or
               systems furniture, when such feeds are supplied via wall outlets
               or floor penetrations. When overhead feeds are used, junction
               boxes shall be installed for electrical connections. Raceways
               shall be provided throughout the furniture panels to distribute
               the electrical, telephone, and data cable. The Lessor shall
               provide all electrical service wiring and connections to the
               furniture at designated junction points. Each electrical junction
               shall contain an 8-wire feed consisting of 3 general-purpose
               120-V circuits with 1 neutral and 1 ground wire, and a 120-V
               isolated-ground circuit with 1 neutral and 1 isolated-ground
               wire. A 20-ampere circuit shall have no more than eight (8)
               general-purpose receptacles or four (4) designated-ground
               "computer" receptacles. The isolated and surge protected ground
               "computer" circuits shall be installed in accordance with the
               September 21, 1983 edition of Federal information Pressure
               Standards, published 1994.

          2.   The Government shall at its expense be responsible for purchasing
               data and telecommunications cable. Said cable shall be installed
               and connected to systems furniture by the Lessor/contractor with
               the assistance and/or advice of the Government or computer
               vendor. The Lessor shall provide wall-mounted data and telephone
               junction boxes, which shall include rings and pull strings to
               facilitate the installation of the data and telecommunications
               cable. When cable consists of multiple runs, the Lessor shall
               provide ladder-type cable trays to insure that
               Government-provided cable does not come into contact with
               suspended ceilings. Cable trays shall form a loop around the
               perimeter of the Government-demised area such that they are
               within a 30-foot, 0-inch horizontal distance of any single drop.
               Said cable trays shall provide access to both telecommunications
               data closets and telephone closets.

          3.   The Lessor shall furnish and install suitably sized junction
               boxes in the vicinity of the "feeding points" of the furniture
               panels. All "feeding points" shall be shown on the
               Government-approved design intent drawings. The Lessor shall
               temporarily cap off the wiring in the junction boxes until
               the furniture is installed. The Lessor shall make all connections
               in the power panel and shall keep the circuit breakers off. The
               Lessor shall identify each circuit with the breaker number and
               shall identify the computer hardware to be connected to it. The
               Lessor shall identify each breaker at the panel and identify the
               devices that it serves.

          4.   The Lessor's electrical contractor connecting power poles or base
               feeds in the junction boxes to the furniture electrical system
               and testing all pre-wired receptacles in the systems furniture.
               It also involves other Government contractors who will be
               installing the data cable in the furniture panels for the
               terminal and printer locations, installing the connectors on the
               terminal/printer ends of the cable, and continuity testing each
               cable. All work shall be coordinated and performed in conjunction
               with the furniture, telephone, and data cable installers. Much of
               this work may occur over a weekend on a schedule that requires
               flexibility and on-call visits.

6.17  ADDITIONAL ELECTRICAL CONTROLS
      If the Offeror proposes that the Government pay separately for
      electricity, no more than 500 square feet of office may be controlled by
      one switch or automatic light control for all space on the Government
      meter, either through a building automation system, time clock, occupant
      sensor, or other comparable system acceptable to the Contracting Officer.

6.18  ELEVATORS (SEP 2000)(TSA SEP 2002)
      A.  BUILDING SHELL:
          1.   The Lessor shall provide suitable passenger and freight elevator
               service to any Government-demised area not having ground level
               access. Service shall be available during the hours specified in
               the Section 7.2, "Normal Hours" paragraph in the SERVICES,
               UTILITIES, MAINTENANCE section of this SFO. However, one
               passenger and one freight elevator shall be available


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         at all times for the Government use. The freight elevator shall be
         accessible to the loading areas. When possible, the Government shall be
         given 24-hour advance notice if the service is to be interrupted for
         more than 1-1/2 hours. Normal service interruption shall be scheduled
         outside of the Government's normal working hours. The Lessor shall also
         use best efforts to minimize the frequency and duration of unscheduled
         interruptions.

         2.       CODE:
         Elevators shall conform to the current edition of the American Society
         of Mechanical Engineers ANSI/(ASME) A17.1, Safety Code for Elevators
         and Escalators, except that elevator cabs are not required to have a
         visual or audible signal to notify passengers during automatic recall.
         Elevator lobby smoke detectors shall not activate the building fire
         alarm system but shall signal the fire department or central station
         services and capture the elevators. The elevator shall be inspected and
         maintained in accordance with the current edition of the ANSI/ASME
         A17.2, Inspector's Manual for Elevators. All elevators shall meet both
         the ADAAG and the UFAS requirements.

         3.       SAFETY SYSTEMS:
         Elevators shall be equipped with telephones or other two-way emergency
         signaling systems. The system used shall be marked and shall reach an
         emergency communication location staffed during normal operating hours
         when the elevators are in service. When Government occupancy is three
         (3) or more floors above grade, automatic elevator emergency recall is
         required.

         4.       INTERIOR FINISHES:
         Elevator cab walls shall be hardwood, marble, granite, or an equivalent
         pre-approved by the Contracting Officer. Elevator cab floors shall be
         marble, granite, terrazzo, or an equivalent pre-approved by the
         Contracting Officer.

         4.       GENERAL REQUIREMENTS - VERTICAL TRANSPORTATION

                  a.       Passenger and freight elevator service to all
                  premises not having ground level access, 24 hours per day, 365
                  days per year. Elevators must have solid-state controls and be
                  programmable to control access to any floor at all hours of
                  available service. Each cab must have a TSA approved access
                  control device installed and integrated with the controls.
                  b.       Passenger elevators to meet all ADAAG/UFAS
                  requirements.
                  c.       Passenger and service elevators equipped with
                  telephone or other two-way voice emergency signalling system,
                  provide both a visual and audible means of communication.
                  d.       Conform to the current editions of ANSI A17.1.
                  e.       Use of wheelchair platform lifts is not allowed
                  except where necessary to provide access to rooftop spaces.

6.19     LIGHTING: INTERIOR AND PARKING (SEP 2000)
         A.       BUILDING SHELL:

                  1.       The Lessor shall provide interior lighting, as part
                  of the building shell cost, in accordance with the following:

                           a.       The Lessor shall provide deep-cell parabolic
                                    louver 2' x 2' or 2' x 4' (or building
                                    standard that meets or exceeds this
                                    standard) fluorescent lighting fixtures with
                                    energy-efficient lamps (18 or better) and
                                    electronic ballasts for standard interior
                                    lighting. Such fixtures shall produce 50
                                    average maintained foot-candles at working
                                    surface height throughout workspaces, 20
                                    foot-candles in corridors, and 10
                                    foot-candles in other non-working areas.

                          b.        Exterior parking areas, vehicle driveways,
                                    pedestrian walkways, and building perimeter
                                    shall have a minimum of 1 foot-candle of
                                    illumination and shall be designed based on
                                    Illuminating Engineering Society of North
                                    America (IESNA) standards. Exterior
                                    lighting and indoor parking shall be
                                    sufficient to accommodate security
                                    monitoring (i.e., closed circuit television
                                    camera). Parking shall have a minimum of 10
                                    foot-candles and shall be designed based on
                                    IESNA standards.

                           c.       The Lessor shall provide occupancy sensors
                                    and/or scheduling controls through the
                                    building automation system to reduce the
                                    hours that the lights are on when the space
                                    is unoccupied. Daylight dimming controls
                                    shall be used in atriums or other space
                                    where daylight can contribute to energy
                                    savings.

                           d.       Lighting shall be controlled by occupancy
                                    sensors arranged to control open areas,
                                    individual offices, conference rooms, toilet
                                    rooms within the Government-demised area,
                                    and all other programmed spaces or rooms
                                    within the leased space. The control system
                                    shall provide an optimal mix of infrared and
                                    ultrasonic sensors suitable for the
                                    configuration and type of space. Occupancy
                                    sensors shall be located so that they have a
                                    clear view of the room or area they are
                                    monitoring. No more than 1,000 ANSI/BOMA
                                    Office Area square feet of open space shall
                                    be controlled by occupancy sensor. All
                                    occupancy sensors shall have manual switches
                                    to override the light control. Such switches
                                    shall be located by door openings in
                                    accordance with both the ADAAG and the UFAS.
                                    If light switches are to be used instead of
                                    occupancy sensors or in combination with
                                    occupancy sensors, the Offeror shall notify
                                    the Government during the negotiation
                                    process.


                                               INITIALS:   [SIG]         [SIG]
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                                       40

6.20     EMERGENCY POWER (TSA SEP 2002)

         A. BUILDING SHELL:
            1. Provide a space for a diesel electric generator with fuel
            capacity capable of providing power for a duration of 72 hours or a
            gas fired electrical generator connected to a main gas line, and
            providing full rated output from cold start in a maximum time of 20
            seconds, 2 automatic transfer switches (ATS) for each generator, ATS
            units to include by-pass isolation switches.

         B. TENANT IMPROVEMENT INFORMATION:
            1. Provide an uninterruptible power source (UPS) and standby power
            distribution system to service tenant standby power requirements. It
            is estimated that tenant will require about a 25% requirement for
            building lighting, tenant electrical, and HVAC.

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7.0      SERVICES, UTILITIES, MAINTENANCE

7.1      SERVICES, UTILITIES, MAINTENANCE: GENERAL (NCR VARIATION (AUG 2002))
         A.       The Lessor as part of the rental consideration shall provide
                  services, utilities, and maintenance. The Lessor must have a
                  building superintendent or a locally designated representative
                  available to promptly correct deficiencies during normal
                  hours.

         B.       At the Government's expense, the Lessor shall be responsible
                  for preventive maintenance and repair of all special,
                  Government specified, new or existing Government owned
                  mechanical, electrical, and plumbing equipment (excluding
                  computers, telephone systems, and other communication
                  equipment) installed by the Lessor and as identified by the
                  Government. The cost of the maintenance will be negotiated as
                  an increase in base rent by adjusting the base operating
                  expense and service and utility rate per square foot, either
                  before or after award of the lease, once the scope of work has
                  been identified. An adjustment to the option term base
                  operating expenses and service and utility rate per square
                  foot shall also be negotiated.

         C.       The Lessor must have a building manager and staff onsite or
                  within three (3) blocks.

7.2      NORMAL HOURS
         Services, utilities, and maintenance shall be provided daily, extending
         6:00 a.m. to 7:00 p.m. except Saturdays, Sundays, and Federal holidays.

7.3      OVERTIME USAGE (SEP 2000)
         A.       The Government shall have access to the leased space at all
                  times without additional payment, including the use, during
                  other than normal hours, of necessary services and utilities
                  such as elevators, toilets, lights, and electrical power.

         B.       If heating or cooling is required on an overtime basis, such
                  services will be ordered orally or in writing by the
                  Contracting Officer or the Government Buildings Manager. When
                  ordered, services shall be provided at direct cost to the
                  Lessor.

         C.       When the cost of service is $2,000 or less, the service may
                  be ordered orally. An invoice shall be submitted to the
                  official placing the order for certification and payment.
                  Orders for services costing more than $2,000 shall be placed
                  using GSA Form 300, Order for Supplies or Services. The two
                  clauses from GSA Form 3517, General Clauses, 552.232-75,
                  Prompt Payment, and 552.232-70, Invoice Requirements
                  (Variation), apply to all orders for overtime services.

         D.       All orders are subject to the terms and conditions of this
                  lease. In the event of a conflict between an order and this
                  lease, the lease shall control.

7.4      UTILITIES
         The Lessor shall ensure that utilities necessary for operation are
         provided and that all associated costs are included as a part of the
         established rental rate.

7.5      UTILITIES: SEPARATE FROM RENTAL (SEP 2000)(TSA OCT 2002)
         A.       The Offeror shall specify which utilities, if any, are
                  excluded from the rental consideration. If any such utilities
                  are excluded, the Offeror shall obtain a statement from a
                  registered professional engineer stating that all HVAC,
                  plumbing, and other energy-intensive building systems can
                  operate under the control conditions stated in this SFO. The
                  statement shall also identify all building systems which do
                  not conform to the system performance values, including the
                  "recommended" or "suggested" values of ANSI/ASHRAE Standard
                  90.1, Energy Efficient Design of New Buildings Except
                  Low-Rise Residential Buildings, or more restrictive
                  state/local codes.

         B.       The Lessor shall provide separate meters for utilities to be
                  paid for by the Government. The Lessor shall furnish in
                  writing to the Contracting Officer, prior to occupancy by the
                  Government, a record of the meter numbers and verification
                  that the meters measure Government usage only. Proration is
                  not permissible. In addition, an automatic control system
                  shall be provided to assure compliance with heating and air
                  conditioning requirements. Refer to the MECHANICAL,
                  ELECTRICAL, PLUMBING section of this SFO.

         C.       The Government shall have the option to request a rental
                  rate net of electric.

7.6      BUILDING OPERATING PLAN
         The Offeror shall submit a building operating plan with the offer.
         Such plan shall include a schedule of startup and shutdown times for
         operation of each building system, such as lighting, HVAC, and
         plumbing which is necessary for the operation of the building. Such
         plan shall be in operation on the effective date of the lease.

7.7      JANITORIAL SERVICES (SEP 2000)
         A.       Cleaning shall be performed after tenant working hours unless
                  daytime cleaning is specified as a special requirement
                  elsewhere in this SFO. It is estimated that 25% of the
                  premises will require daytime cleaning. The rental rate shall
                  include daytime cleaning of 25% of the premises.



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                                       42


     B.  SELECTION OF CLEANING PRODUCTS:
         The Lessor shall make careful selection of janitorial cleaning
         products and equipment to:

         1.  use products that are packaged ecologically;

         2.  use products and equipment considered environmentally beneficial
             and/or recycled products that are phosphate-free, non-corrosive,
             non-flammable, and fully biodegradable; and

         3.  minimize the use of harsh chemicals and the release of irritating
             fumes.

         4.  Examples of acceptable products may be found at
             http://pub.fss.gsa.gov/environ/clean-prod-catalog.html.

     C.  SELECTION OF PAPER PRODUCTS:
         The Lessor shall select paper and paper products (i.e., bathroom
         tissue and paper towels) with recycled content conforming to EPA's CPG.

     D.  The Lessor shall maintain the leased premises, including outside
         areas, in a clean condition and shall provide supplies and equipment.
         The following schedule describes the level of services intended.
         Performance will be based on the Contracting Officer's evaluation of
         results, not the frequency or method of performance.

         1.  Daily. Empty trash receptacles, and clean ashtrays. Sweep
             entrances, lobbies, and corridors. Spot sweep floors, and spot
             vacuum carpets. Clean drinking fountains. Sweep and damp mop or
             scrub toilet rooms. Clean all toilet fixtures, and replenish
             toilet supplies. Dispose of all trash and garbage generated in or
             about the building. Wash inside and out or steam clean cans used
             for collection of food remnants from snack bars and vending
             machines. Dust horizontal surfaces that are readily available and
             visibly require dusting. Spray buff resilient floors in main
             corridors, entrances, and lobbies. Clean elevators and escalators.
             Remove carpet stains. Police sidewalks, parking areas, and
             driveways. Sweep loading dock areas and platforms. Clean glass
             entry doors to the Government-demised area.

         2.  Three Times a Week. Sweep or vacuum stairs.

         3.  Weekly. Damp mop and spray buff all resilient floors in toilets
             and health units. Sweep sidewalks, parking areas, and driveways
             (weather permitting).

         4.  Every Two Weeks. Spray buff resilient floors in secondary
             corridors, entrance, and lobbies. Damp mop and spray buff hard and
             resilient floors in office space.

         5.  Monthly. Thoroughly dust furniture. Completely sweep and/or vacuum
             carpets. Sweep storage space. Spot clean all wall surfaces within
             70 inches of the floor.

         6.  Every Two Months. Damp wipe toilet wastepaper receptacles, stall
             partitions, doors, window sills, and frames. Shampoo entrance and
             elevator carpets.

         7.  Three Times a Year. Dust wall surfaces within 70 inches of the
             floor, vertical surfaces and under surfaces. Clean metal and
             marble surfaces in lobbies. Wet mop or scrub garages.

         8.  Twice a Year. Wash all interior and exterior windows and other
             glass surfaces. Strip and apply four coats of finish to resilient
             floors in toilets. Strip and refinish main corridors and other
             heavy traffic areas.

         9.  Annually. Wash all venetian blinds, and dust 6 months from
             washing. Vacuum or dust all surfaces in the building of 70 inches
             from the floor, including light fixtures. Vacuum all draperies in
             place. Strip and refinish floors in offices and secondary lobbies
             and corridors. Shampoo carpets in corridors and lobbies. Clean
             balconies, ledges, courts, areaways, and flat roofs.

         10. Every Two Years. Shampoo carpets in all offices and other
             non-public areas.

         11. Every Five Years. Dry-clean or wash (as appropriate) all draperies.

         12. As Required. Properly maintain plants and lawns. Remove snow and
             ice from entrances, exterior walks, and parking lots of the
             building. Provide initial supply, installation, and replacement of
             light bulbs, tubes, ballasts, and starters. Replace worn floor
             coverings (this includes the moving and returning of furnishings).
             Control pests as appropriate, using integrated Pest Management
             techniques.

7.8  SCHEDULE OF PERIODIC SERVICES
     Within 60 days after occupancy by the Government, the Lessor shall provide
     the Contracting Officer with a detailed written schedule of all periodic
     services and maintenance to be performed other than daily, weekly, or
     monthly.

7.9  LANDSCAPE MAINTENANCE
     Performance will be based on the Contracting Officer's evaluation of
     results and not the frequency or the method of performance. Landscape
     maintenance shall be performed during the growing season on a weekly
     cycle and shall consist of watering, mowing, and


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                                       43


         policing the area to keep it free of debris. Pruning and fertilization
         shall be done on an as needed basis. In addition, dead or dying plants
         shall be replaced.

7.10     FLAG DISPLAY

         The Lessor shall be responsible for flag display on all workdays and
         Federal holidays. The Government will provide instructions when flags
         shall be flown at half-staff.

7.11     SECURITY (SEP 2000) (NCR VARIATION AUG 2002)(TSA SEP 2002)

         A.       During non-duty hours, the Lessor shall provide an electronic
                  key card perimeter security system which covers all building
                  entrances which shall be independently monitored 24 hours a
                  day by a TSA-approved, class A commercial monitoring station,
                  and provide a level of security which reasonably deters
                  unauthorized entry to the leased space.

         B.       The Lessor shall, upon request of the Contracting Officer,
                  deter loitering or disruptive acts in and around the space
                  leased during duty hours.

         C.       The Lessor must provide a detailed outline of the building
                  standard security system.

         D.       In cases of a building emergency, or where building security
                  has been compromised or breached, the TSA Buildings Manager
                  and on-site security must be notified immediately by the
                  Lessor and/or the Lessor's agent.

         E.       At the Government's expense, the Government retains the right
                  to implement security requirements in accordance with the June
                  28, 1995, Vulnerability Assessment of Federal Facilities
                  report of the U.S. Department of Justice.

7.12     ADDITIONAL SECURITY; ADDITIONAL REQUIREMENTS (TSA SEP 2002)

         A.       The Government reserves the right to require the Lessor to
                  submit completed fingerprint charts and personal history
                  statements for each employee of the Lessor as well as
                  employees of the Lessor's contractors or subcontractors who
                  will provide building operating services of a continuing
                  nature for the property in which the leased space is located.
                  The Government may also require this information for employees
                  of the Lessor, the Lessor's contractors, or subcontractors who
                  will be engaged to perform alterations or emergency repairs
                  for the property.

         B.       If required, the Contracting Officer will furnish the Lessor
                  with form FD-258, "Fingerprint Chart" and Form 176,
                  "Statement of Personal History" to be completed for each
                  employee and returned by the Lessor to the Contracting
                  Officer or his designated representative within 10 working
                  days from the date of the written request to do so. Based on
                  the information furnished, the Government will conduct
                  security checks of the employees. The Contracting Officer
                  will advise the Lessor in writing if an employee is found to
                  be unsuitable or unfit for his assigned duties. Effective
                  immediately, such an employee cannot work or be assigned to
                  work on the property in which the leased space is located.
                  The Lessor will be required to provide the same data within
                  10 working days from the addition of new employee(s) to the
                  work force. In the event the Lessor's contractor/
                  subcontractor is subsequently replaced, the new contractor/
                  subcontractor is not required to submit another set of these
                  forms for employees who were cleared through this process
                  while employed by the former contractor/subcontractor. The
                  Contracting Officer may require the Lessor to submit Form
                  FD-258 and Form 176 for every employee covered by this clause
                  on a 3-year basis.

         C.       Minimum security standards shall be as follows:

                  1.       The Contracting Officer shall reserve the right to
                           reject a building that may pose a security risk to
                           the Government occupants. Visitor parking shall not
                           be immediately adjacent to the building perimeter.
                           The Government reserves the right to establish
                           facility parking controls to limit access to
                           Government parking.

                  2.       The Government has a right to declare a state of
                           emergency during a security alert to establish access
                           and security screening measures in adjacent space not
                           leased by the Government, which could create a
                           security risk for the Federal offices. These areas
                           would include parking garages, outdoor parking areas,
                           lobbies and loading-dock areas.

                  3.       The Lessor will support and assist the building
                           security committee and Occupant Emergency Team in
                           developing and exercising safety and security
                           measures for the facility to include the use of the
                           building public address system to alert employees of
                           building emergencies (bomb-threats, fire, utility
                           emergencies, etc.).

         D.       Tenant Improvement Information:

                  1.       Alarm, access control, and video system. The
                           Government reserves the right to install a security
                           system covering both inside and outside the building.
                           This will involve the installation of camera on
                           exterior surfaces, poles or other structures as
                           required. Interior cameras will include all entry and
                           exits as well as other areas under Government
                           control. Access control, including electric strikes
                           and card readers, will be installed as required by
                           the Government and may include exterior doors, garage
                           gates, building core areas and Government spaces.

                  2.       Window film. The Government may install an
                           anti-fragmentation window security film on the
                           interior of all windows that are subject to damage by
                           blast or natural disasters including those in common
                           areas.

                  3.       Bollards. The building(s) will be protected by the
                           installation of crash barriers around the perimeter.
                           These may be concrete bollards, planters, retractable
                           gates, or other architectural features. They shall
                           conform as much as practical to the existing building
                           features and structures to avoid an armed camp
                           appearance.


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         4.       Lighting. If required to provide safety and security, building
                  indoor and outdoor lighting may be upgraded or supplemented
                  with visible or infrared lights as required.

         5.       Generator. A large generator and storage tank for 72 hours
                  will be required on-site to serve TSA's extensive backup power
                  needs.

         6.       Locks. A Government-designed high security locking system
                  will be installed on spaces that require access control. These
                  locks shall contain a removable core and will replace the
                  building standard locksets.

7.13     MAINTENANCE AND TESTING OF SYSTEMS (SEP 2000)
         A. The Lessor is responsible for the total maintenance and repair of
            the leased premises. Such maintenance and repairs include site and
            private access roads. All equipment and systems shall be maintained
            to provide reliable, energy-efficient service without unusual
            interruption, disturbing noises, exposure to fire or safety hazards,
            uncomfortable drafts, excessive air velocities, or unusual emissions
            of dirt. The Lessor's maintenance responsibility includes initial
            supply and replacement of all supplies, materials, and equipment
            necessary for such maintenance. Maintenance, testing, and inspection
            of appropriate equipment and systems shall be done in accordance
            with applicable codes, and inspection certificates shall be
            displayed as appropriate. Copies of all records in this regard shall
            be forwarded to the TSA Field Office Manager or a designated
            representative.

         B. Without any additional charge, the Government reserves the right to
            require documentation of proper operations or testing prior to
            occupancy of such systems as fire alarm, sprinkler, emergency
            generator, etc. to ensure proper operation. These tests shall be
            witnessed by a designated representative of the Contracting Officer.

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8.0      SAFETY AND ENVIRONMENTAL MANAGEMENT

8.1      OCCUPANCY PERMIT (SEP 2000)
         The Lessor shall provide a valid occupancy permit for the intended use
         of the Government and shall maintain and operate the building in
         conformance with current local codes and ordinances. If the local
         jurisdiction does not issue occupancy permits, the Offeror shall
         consult the Contracting Officer to determine if other documentation may
         be needed.


8.2      FIRE AND LIFE SAFETY (SEP 2000)

         A.       Below-grade space to be occupied by the Government and all
                  areas in a building referred to as "hazardous areas" in NFPA
                  Standard 101, Life Safety Code, or any successor standard
                  thereto, shall be protected by an automatic sprinkler system
                  or an equivalent level of safety.


         B.       If offered space is three (3) stories or more above grade, the
                  Offeror shall provide written documentation that the building
                  meets egress and fire alarm requirements as established by
                  NFPA Standard 101 or equivalent. However, if 1) offered space
                  is 5 stories or less above grade, 2) the total
                  Government-demised area in the building (all leases combined)
                  will be less than 35,000 square feet, and 3) the building is
                  sprinklered, this documentation is not required.

         C.       If offered space is six (6) stories or more above grade,
                  additional fire and life safety requirements may apply.
                  Therefore, the Offeror shall advise the Government in its
                  offer whether or not the offered space, or any part thereof,
                  is on or above the sixth floor of the offered building.

         D.       All exits, stairs, corridors, aisles, and passageways that may
                  be used by the Government shall comply with NFPA Standard 101,
                  or local code, whichever is more stringent.


8.3      SPRINKLER SYSTEM (SEP 2000)

         A.       If any portion of the offered space is on or above the sixth
                  floor, and lease of the offered space will result, either
                  individually or in combination with other Government leases in
                  the offered building, in the Government leasing more than
                  35,000 ANSI/BOMA Office Area square feet of space in the
                  offered building, then the entire building shall be protected
                  by an automatic sprinkler system or an equivalent level of
                  safety.

         B.       If an Offeror proposes to satisfy any requirement of this
                  paragraph by providing an equivalent level of safety, the
                  Offeror shall submit, for Government review and approval, a
                  fire protection engineering analysis, performed by a qualified
                  fire protection engineer, demonstrating that an equivalent
                  level of safety for the offered building exists. The Offeror
                  shall contact the Contracting Officer for further information
                  regarding Government review and approval of the "equivalent
                  level of safety" analyses. Refer to 41 CFR Part 101-6.6 for
                  guidance on conducting an equivalent level of safety analysis.

         C.       Definition: "Equivalent level of safety" means an alternative
                  design or system (which may include automatic sprinkler
                  systems), based upon fire protection engineering analysis,
                  which achieves a level of safety equal to or greater than that
                  provided by automatic sprinkler systems.


8.4      MANUAL FIRE ALARM SYSTEMS (SEP 2000)
         Manual fire alarm systems shall be provided in accordance with NFPA
         Standard 101 (current as of the date of this SFO). Systems shall be
         maintained and tested by the Lessor in accordance with NFPA Standard
         72, National Fire Alarm Code. The fire alarm system wiring and
         equipment shall be electrically supervised and shall automatically
         notify the local fire department (NFPA Standard 72) or approved central
         station. Emergency power shall be provided in accordance with NFPA
         Standard 70, National Electrical Code, and NFPA Standard 72.

8.5      OSHA REQUIREMENTS (SEP 2000)
         The Lessor shall maintain buildings and space in a safe and healthful
         condition according to OSHA standards.

8.6      ASBESTOS (SEP 2000)
         A.       Offers are requested for space with no asbestos-containing
                  materials (ACM), or with ACM in a stable, solid matrix (e.g.,
                  asbestos flooring or asbestos cement panels) which is not
                  damaged or subject to damage by routine operations. For
                  purposes of this paragraph, "space" includes the 1) space
                  offered for lease; 2) common building areas; 3) ventilation
                  systems and zones serving the space offered; and 4) the area
                  above suspended ceilings and engineering space in the same
                  ventilation zone as the space offered. If no offers are
                  received for such space, the Government may consider space
                  with thermal system insulation ACM (e.g., wrapped pipe or
                  boiler lagging) which is not damaged or subject to damage by
                  routine operations.

         B.       Definition. ACM is defined as any materials with a
                  concentration of greater than 1 percent by dry weight of
                  asbestos.

         C.       Space with ACM of any type or condition may be upgraded by the
                  Offeror to meet the conditions described in subparagraph A by
                  abatement (removal, enclosure, encapsulation, or repair) of
                  ACM not meeting those conditions. If an offer involving
                  abatement of ACM is accepted by the Government, the Lessor
                  shall, prior to occupancy, successfully complete the abatement
                  in accordance with OSHA, EPA, Department of Transportation
                  (DOT), state, and local regulations and guidance.


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         D.       Management Plan. If space is offered which contains ACM, the
                  Offeror shall submit an asbestos-related management plan for
                  acceptance by the Government prior to lease award. This plan
                  shall conform to EPA guidance, be implemented prior to
                  occupancy, and be revised promptly when conditions affecting
                  the plan change. If asbestos abatement work is to be performed
                  in the space after occupancy, the Lessor shall submit to the
                  Contracting Officer the occupant safety plan and a description
                  of the methods of abatement and re-occupancy clearance, in
                  accordance with OSHA, EPA, DOT, state and local regulations
                  and guidance, at least 4 weeks prior to the abatement work.

8.7      INDOOR AIR QUALITY (SEP 2000)

         A.       The Lessor shall control contaminants at the source and/or
                  operate the space in such a manner that the GSA indicator
                  levels for carbon monoxide (CO), carbon dioxide (CO(2)), and
                  formaldehyde (HCHO) are not exceeded. The indicator levels for
                  office areas shall be: CO - 9 ppm time-weighted average (TWA -
                  8-hour sample); CO(2) - 1,000 ppm (TWA); HCHO-0.1 ppm (TWA).

         B.       The Lessor shall make a reasonable attempt to apply
                  insecticides, paints, glues, adhesives, and HVAC system
                  cleaning compounds with highly volatile or irritating organic
                  compounds, outside of working hours. The Lessor shall provide
                  at least 72 hours advance notice to the Government before
                  applying noxious chemicals in occupied spaces and shall
                  adequately ventilate those spaces during and after
                  application.

         C.       The Lessor shall promptly investigate indoor air quality (IAQ)
                  complaints and shall implement the necessary controls to
                  address the complaint.

         D.       The Government reserves the right to conduct independent IAQ
                  assessments and detailed studies in space that it occupies, as
                  well as in space serving the Government-demised area (e.g.,
                  common use areas, mechanical room, HVAC systems etc.). The
                  Lessor shall assist the Government in its assessments and
                  detailed studies by 1) making available information on
                  building operations and Lessor activities; 2) providing access
                  to space for assessment and testing, if required; and 3)
                  implementing corrective measures required by the Contracting
                  Officer.

         E.       The Lessor shall provide to the Government material safety
                  data sheets (MSDS) upon request for the following products
                  prior to their use during the term of the lease: adhesives,
                  caulking, sealants, insulating materials, fireproofing or
                  firestopping materials, paints, carpets, floor and wall
                  patching or leveling materials, lubricants, clear finish for
                  wood surfaces, janitorial cleaning products, pesticides,
                  rodenticides, and herbicides. The Government reserves the
                  right to review such products used by the Lessor within 1)
                  the Government-demised area; 2) common building areas; 3)
                  ventilation systems and zones serving the leased space; and 4)
                  the area above suspended ceilings and engineering space in the
                  same ventilation zone as the leased space.

8.8      RADON IN AIR (SEP 2000)

         A.       The radon concentration in the air of space leased to the
                  Government shall be less than EPA's action concentration for
                  homes of four (4) picoCuries per liter (pCi/L), herein called
                  "EPA's action concentration."

         B.       INITIAL TESTING:

                  1.       The Lessor shall 1) test for radon that portion of
                           space planned for occupancy by the Government in
                           ground contact or closest to the ground up to and
                           including the second floor above grade (space on the
                           third or higher floor above grade need not be
                           measured); 2) report the results to the Contracting
                           Officer upon award; and 3) promptly carry out a
                           corrective action program for any radon concentration
                           which equals or exceeds the EPA action level.

                  2.       Testing sequence. The Lessor shall measure radon by
                           the standard test in subparagraph D.1. completing the
                           test not later than 150 days after award, unless the
                           Contracting Officer decides that there is not enough
                           time to complete the test before Government
                           occupancy, in which case the Lessor shall perform
                           the short test in subparagraph D.2.

                  3.       If the space offered for lease to the Government is
                           in a building under construction or proposed for
                           construction, the Lessor shall, if possible, perform
                           the standard test during build out before Government
                           occupancy of the space. If the Contracting Officer
                           decides that it is not possible to complete the
                           standard test before occupancy, the Lessor shall
                           complete the short test before occupancy and the
                           standard test not later than 150 days after
                           occupancy.

         C.       CORRECTIVE ACTION PROGRAM:

                  1.       Program Initiation and Procedures.

                           a.       If either the Government or the Lessor
                                    detects radon at or above the EPA action
                                    level at any time before Government
                                    occupancy, the Lessor shall carry out a
                                    corrective action program which reduces the
                                    concentration to below the EPA action level.


                           b.       If either the Government or the Lessor
                                    detects a radon concentration at or above
                                    the EPA action level at any time after
                                    Government occupancy, the Lessor shall
                                    promptly carry out a corrective action
                                    program which reduces the concentration to
                                    below the EPA action level.

                           c.       If either the Government or the Lessor
                                    detect a radon concentration at or above the
                                    EPA residential occupancy concentration of
                                    200 pCi/L at any time after Government
                                    occupancy, the Lessor shall promptly
                                    restrict the use of the affected area and
                                    shall provide comparable temporary space for
                                    the tenants, as agreed to by the Government,
                                    until the Lessor carries out a prompt
                                    corrective action program which reduces the
                                    concentration to below the EPA action level
                                    and certifies the space of reoccupancy.




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                           d.       The Lessor shall provide the Government with
                                    prior written notice of any proposed
                                    corrective action or tenant relocation. The
                                    Lessor shall promptly revise the corrective
                                    action program upon any change in building
                                    condition or operation which would affect
                                    the program or increase the radon
                                    concentration to or above the EPA action
                                    level.

                  2.       The Lessor shall perform the standard test in
                           subparagraph D.1 to assess the effectiveness of a
                           corrective action program. The Lessor may also
                           perform the short test in subparagraph D.2 to
                           determine whether the space may be occupied but shall
                           begin the standard test concurrently with the short
                           test.

                  3.       All measures to accommodate delay of occupancy,
                           corrective action, tenant relocation, tenant
                           reoccupancy, or follow-up measurement, shall be
                           provided by the Lessor at no additional cost to the
                           Government.

                  4.       If the Lessor fails to exercise due diligence, or is
                           otherwise unable to reduce the radon concentration
                           promptly to below the EPA action level, the
                           Government may implement a corrective action program
                           and deduct its costs from the rent.

         D.       TESTING PROCEDURES:

                  1.       Standard Test. Place alpha track detectors or
                           electret ion chambers throughout the required area
                           for 91 or more days so that each covers no more than
                           2,000 ANSI/BOMA Office Area square feet. Use only
                           devices listed in the EPA Radon Measurement
                           Proficiency Program (RMP) application device
                           checklists. Use a laboratory rated proficient in the
                           EPA RMP to analyze the devices. Submit the results
                           and supporting data (sample location, device type,
                           duration, radon measurements, laboratory proficiency
                           certification number, and the signature of a
                           responsible laboratory official) within 30 days after
                           the measurement.

                  2.       Short Test. Place alpha track detectors for at least
                           14 days, or electret ion chambers or charcoal
                           canisters for 2 days to 3 days, throughout the
                           required area so that each covers no more than 2,000
                           ANSI/BOMA Office Area square feet, starting not later
                           than 7 days after award. Use only devices listed in
                           the EPA RMP application device checklists. Use a
                           laboratory rated proficient in the EPA RMP to analyze
                           the devices. Submit the results and supporting data
                           within 30 days after the measurement. In addition,
                           complete the standard test not later than 150 days
                           after Government occupancy.

        8.9      CONTAMINATES IN WATER (SEP 2000)(TSA SEP 2002)
                 A.       The Lessor shall demonstrate that water
                          provided in the leased space is in compliance
                          with EPA requirements and shall submit
                          certification to the Contracting Officer
                          prior to the Government occupying the space.

                 B.       If the EPA action level is reached or
                          exceeded, the Lessor shall institute
                          appropriate abatement methods which reduce
                          the radon, lead or other contaminates levels
                          to below this action level.

       8.10      HAZARDOUS MATERIALS (OCT 1996)
                 The leased space shall be free of hazardous materials
                 according to applicable Federal state, and local environmental
                 regulations.

       8.11      RECYCLING (SEP 2000)
                 Where state and/or local law, code, or ordinance require
                 recycling programs for the space to be provided pursuant to
                 this SFO, the successful Offeror shall comply with such state
                 and/or local law, code, or ordinance in accordance with GSA
                 Form 3517, General Clauses, 552.270-8, Compliance with
                 Applicable Law. In all other cases, the successful Offeror
                 shall establish a recycling program in the leased space where
                 local markets for recovered materials exist. The Lessor agrees,
                 upon request, to provide the Government with additional
                 information concerning recycling programs maintained in the
                 building and in the leased space.


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                                       48

9.0      TENANT IMPROVEMENTS

9.1      TENANT IMPROVEMENTS PRIOR TO THE GOVERNMENT'S INITIAL ACCEPTANCE OF
         SPACE (SEP 2000)
         A.       The Lessor is required to provide cost or pricing data in
                  conjunction with the Tenant Improvements as specified by the
                  Government in GSA Form 3517, General Clauses.

         B.       In lieu of submitting detailed cost or pricing data and
                  entering into negotiations to determine a final cost for the
                  subject work, the Government (in accordance with FAR 15.403)
                  is willing to accept a price based upon the results of a
                  competitive proposal process if the following conditions are
                  met:

                  1.       The Lessor shall submit to the Government a proposal
                           for overhead, profit, permits, and regulatory fees
                           for all Tenant Improvements.

                           a.       This will be negotiated and agreed upon
                                    prior to the award for the subject
                                    improvements (separate from lease award).

                  2.       The scope of work includes the lease, the SFO, all
                           SFO attachments, the construction drawings/documents,
                           and written specifications. In cases of
                           discrepancies, the Lessor shall immediately notify
                           the Contracting Officer to request clarification. All
                           differences will be resolved by the Contracting
                           Officer in accordance with the terms and conditions
                           of the lease.


                  3.       No building shell items shall be included in the
                           competitive proposal.


                  4.       A minimum of three qualified sub-contractors shall be
                           invited to participate in the competitive proposal
                           process.  Each participate shall compete
                           independently in the process.

                  5.       Each proposal shall be 1) submitted in Construction
                           Specifications Institute (CSI) format by the proposed
                           contractors and 2) reviewed by the Government. The
                           Government reserves the right to determine if bids
                           meet with the scope of work, that the price is
                           reasonable, and that the Offeror is qualified to
                           perform the work.  The Government reserves the right
                           to reject any/all bids, at its sole discretion.

                  6.       The Government shall be represented at all
                           negotiation sessions between the Lessor and potential
                           contractors.

                  7.       The Lessor shall demonstrate to the Government that
                           best efforts have been made to obtain the most
                           competitive prices possible, and the Lessor shall
                           accept responsibility for all prices through direct
                           contracts with all contractors.

                  8.       Once the Government determines that there is adequate
                           competition, and upon the Government's acceptance of
                           the Lessor's cost proposal based upon that
                           competition (provided the Lessor selects the
                           competition's lowest priced bid of a contractor
                           qualified to perform the subject work), the
                           Contracting Officer shall issue to the Lessor a
                           notice to proceed for the subject work.









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10.0     SPECIAL REQUIREMENTS


10.1     TRANSPORTATION SECURITY ADMINISTRATION OVERVIEW (TSA OCT 2002)

         A.       On November 19, 2001, the President signed into law the
                  Aviation and Transportation Security Act (ATSA), which among
                  other things, established a new Transportation Security
                  Administration (TSA). TSA's goal is to occupy a model
                  headquarters facility that looks smart and integrates
                  technology and daily activities to meet its needs in the year
                  2003 and beyond.

                  1.       Innovative -- A workplace that supports TSA's values
                           of integrity, innovation, courtesy and respect,
                           competence, customer focus, dedication, diversity,
                           and teamwork.

                  2.       High-Performance -- A workplace that serves as a
                           catalyst for best practices supporting new business
                           challenges and opportunities and an environment that
                           attracts and retains talented professionals.

                  3.       Best Value -- A workplace that balances cost and
                           benefit. Work environments that support people and
                           processes, and are built to change as mission
                           directives evolve.


10.2     TRANSPORTATION SECURE ADMINISTRATION OBJECTIVES AND STRATEGIC APPROACH
         (TSA OCT 2002)

         A.       TSA groups are housed in various locations throughout the
                  metropolitan Washington, DC area. It is imperative that TSA
                  collocate to a headquarters facility as quickly as possible to
                  effectively meet their mission directives. In addition, as
                  this newly formed agency is rapidly growing to full capacity,
                  present occupied space does not meet TSA's space requirements.
                  TSA's target date for commencement of occupancy is on or about
                  January 2, 2003.

          B.      TSA has developed a Strategic Project Plan which is a macro
                  level project approach to achieve TSA's short and long-term
                  goals. For the short term, TSA needs to occupy space as
                  quickly as possible to support its current growth. For the
                  long term, TSA requires a fully functional headquarters space
                  that will support its mission.  The strategic Project Plan is
                  a three phased approach proposed to meet TSA's goals.

                  1.       PHASE 1:
                           The strategy for Phase 1 is "as is space" which is
                           ready for immediate occupancy as demonstrated by the
                           capability to immediately obtain a certificate for
                           occupancy. The critical element in this phase is the
                           available of 25,000-50,000 ANSI/BOMA rentable square
                           footage of space at lease execution with the ability
                           for TSA to begin occupancy of the space on or about
                           January 2, 2003. TSA must have the ability to access
                           the space at the time of lease execution to begin
                           installation of furniture and other equipment.
                           Subsequently, TSA will require additional space of
                           25,000-50,000 ANSI/BOMA rentable square foot
                           increments to be available February 1, 2003 and March
                           1, 2003.

                           Phase 1 requirements are for a total of up to 150,000
                           ANSI/BOMA rentable square feet available for phased
                           occupancy. It is TSA's intention to occupy the space
                           with no tenant improvement beyond telecommunication
                           infrastructure and power connections to installed
                           workstations.  TSA will require space to house a
                           temporary mailroom and provide for building entrance
                           security and other necessary equipment to supply the
                           minimum requirements for TSA's personnel to operate
                           within a secure office environment.

                  2.       PHASE 2:
                           Phase 2 consists of new construction of the remaining
                           300,000-400,000 ANSI/BOMA rentable square footage
                           with a phased construction/delivery. The definition
                           of new construction is building shell specifications
                           as defined per the SFO, and the tenant improvements
                           required for final occupancy of built space. All
                           offered space and building systems shall be upgraded
                           and built out to comply with all Federal, national,
                           state and local codes as required per the SFO. The
                           Phase 2 new construction will be a phased
                           construction/delivery that will consist of
                           approximately 225,000-325,000 ANSI/BOMA rentable
                           square feet that will entail enclosed offices,
                           workstations, office support and unique/special space
                           build-out. The remaining 75,000 ANSI/BOMA rentable
                           square feet will entail the TSA joint-use spaces.

                           The first portion of Phase 2 will be the delivery of
                           100,000 BOMA rentable square feet. Planning and
                           construction documents development will commence at
                           lease execution. The Government provided Program of
                           Requirements and Space Plans for the first 100,000
                           square feet will be delivered to the Lessor 20 days
                           after lease execution. The 100,000 square feet shall
                           be available for occupancy on September 1, 2003.
                           Refer to Section 3.16 and 3.17 for more detailed
                           construction schedule information. With the phased
                           construction completion of each sub-phase of Phase 2
                           space, a portion of the Phase 1 occupants will be
                           relocated to Phase 2 completed space.

                  3.       PHASE 3:
                           Phase 3 consists of new construction/renovation of
                           the up to 150,000 ANSI/BOMA rentable square footage
                           of Phase 1 "as is space" with phased construction
                           delivery. The "as is space" construction cannot begin
                           until enough Phase 2 space is complete for occupancy
                           and TSA employees have relocated from the "as is
                           space" to the completed Phase 2 spaces. The
                           definition of new construction/renovation is building
                           shell specifications as defined per the SFO, and the
                           tenant improvements required for final occupancy of
                           built space by March 2004.

                           The Phase 3 space will entail enclosed offices,
                           workstations, office support and unique/special space
                           build-out. TSA will work with the Lessor to develop
                           the most expedient construction project schedule to
                           achieve occupancy of the Phase 3 full



SFO NO. DTSA20-03-R-00528                      INITIALS:   [SIG]    &    [SIG]
                                                         ---------     ---------
                                       50                 LESSOR         GOV'T



                           tenant build-out space. With the phased construction
                           completion for each sub-phase of Phase 3 space, the
                           remaining occupants of Phase 1 space will be
                           relocated to Phase 3 completed space.

10.3     TYPES OF SPACE (TSA OCT 2002)

         A.       As a newly formed agency, TSA is still defining its space
                  requirements. These requirements evolve as groups identify
                  their mission and functions. A Master Space Study is being
                  developed to aid in identifying types, quantity and build out
                  of space.

         B.       Proposed tenant build out space composition includes 68%
                  general office space consisting of a combination of open
                  space, work stations, and office space, 15% unique/special
                  spaces housing particular functions in support of individual
                  TSA groups, and 17% building/joint use spaces necessary to
                  support TSA's operations and available for common use by the
                  entire agency.


                        -End of Solicitation for Offers-



















SFO NO. DTSA20-03-R-00528                      INITIALS:   [SIG]    &    [SIG]
                                                         ---------     ---------
                                       51                 LESSOR         GOV'T

          UNITED STATES OF AMERICA           SUPPLEMENTAL AGREEMENT   DATE
        SUPPLEMENTAL LEASE AGREEMENT         No. 12

                                             TO LEASE NO. DTSA20-03-R-00528

ADDRESS OF PREMISES:     601/701 S. 12th Street
                         Arlington, VA 22202


THIS AGREEMENT, made and entered into this date by and between: MCI WORLDCOM
                                                                NETWORK
                                                                SERVICES, INC.

Whose address is:

                 c/o Spaulding & Style Colliers International
                 1717 Pennsylvania Avenue, NW, Suite 1000
                 Washington, DC 20006

Hereinafter called the Lessor, and the UNITED STATES OF AMERICA, hereinafter
called the Government:

WHEREAS, the parties hereto desire to amend the above Lease.

NOW THEREFORE, these parties for the considerations hereinafter mentioned
covenant and agree that the said Lease is amended, as follows:

     ITEM 1:

     THE LESSOR DESIRES TO RETAIN ADDITIONAL SQUARE FOOTAGE IN THE BUILDING FOR
     A TERMINAL ROOM (AND RELATED EQUIPMENT) LOCATED ON THE 2ND FLOOR OF THE
     EAST TOWER. THEREFORE, PARAGRAPH 12 OF RIDER #1 TO LEASE #DTSA20-03-R-00528
     IS HEREBY DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:

     "12. This offer is for a single-occupancy requirement of approximately
     543,945 BOMA rentable square feet in total, with the TSA being the single
     tenant Agency. However, approximately 5,073 BOMA rentable square feet of a
     terminal room (and related equipment) in the Building is to be retained by
     the Lessor along with terminal room related riser access and garage space
     for infrastructure backup (generator).

     Attached to this supplemental lease agreement are Exhibits B-1, B-2, B-3,
     B-4, B-5, B-6, and B-7, illustrating the Lessor's terminal room on the 2nd
     floor of the East Tower, with related riser access and garage space for
     infrastructure backup (generator)."

     ITEM 2:

     THE GOVERNMENT DESIRES TO INCREASE THE SQUARE FOOTAGE LEASED IN THE
     BUILDING THROUGH THE ADDITION OF CERTAIN BELOW-GRADE SPACE. THEREFORE,
     PARAGRAPH 1 OF STANDARD FORM 2 TO LEASE # DTSA20-03-R-00528 IS HEREBY
     DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:

     "1. The Lessor hereby leases to the Government the following described
     premises:

     A total of 543,945 BOMA rentable square feet (BRSF) equivalent to 494,541
     BOMA Office Usable Square Feet (BUSF) of office and related space in
     601/701 South 12th Street, Arlington, VA 22202-4202. The leased area is
     comprised of the following: 540,189 BRSF equivalent to 491,126 BUSF of
     office and related space in the East and West Towers on 12 above grade
     full-floor stories and 3,756 BRSF equivalent to 3,415 BUSF of mailroom and
     storage related space in the East and West Towers on the P1 below-grade
     level, (see Attached Floor Plans) to be used for SUCH PURPOSES AS
     DETERMINED BY THE GOVERNMENT.

     The Government will also lease the parking garage in its entirety."

     There SHALL BE NO TENANT IMPROVEMENT ALLOWANCE FOR THE BELOW-GRADE LEASED
     SPACE.

     ATTACHED TO THIS SUPPLEMENTAL LEASE AGREEMENT ARE EXHIBITS C-1 AND C-2
     ILLUSTRATING THE GOVERNMENT'S BELOW-GRADE LEASED SPACE.

     ADDITIONALLY, THE TABLE IDENTIFIED IN PARAGRAPH 1 OF RIDER #1 TO LEASE
     #DTSA20-03-R-00528 IS HEREBY DELETED IN ITS ENTIRETY AND REPLACED WITH THE
     FOLLOWING:


(Continued on Next Page)
GSA DC 68-1176                                               GSA FORM 276 JUL 67



"                   BOSF        PER BOSF      TOTAL               MONTHLY
                                                      
PHASE 2 & 3         491,126     $34.75        $17,066,625.50      $1,422,219.04

PHASE 1,2, & 3      3,415       $28.42        $97,054.30          $8,087.86

PARKING                                       $1,230,060.00       $102,505.00

                                              $18,382,060.50
          $1,531,838.62"





ITEM 3:
THE LESSOR AND THE GOVERNMENT HAVE AGREED TO THE FOLLOWING ADDITIONAL CHANGES:

1.   During the term of the Lease, the Government shall be granted a license to
use the following:

     A.   The 2nd floor LAN room located in the East Tower adjacent to the "MCI
          Terminal Room" (see attached, Exhibit B-1), on a non-exclusive basis.
     B.   The Building's 24/7 cooling system (Manufacturer:BAC; Model#
          BAL-VXT-315C; Serial# 83-3042) and associated pumps.
     C.   The UPS (Uninterrupted Power Supply) currently located on the 6th
          floor of the West Tower.
     D.   The 1,000 KW generator located on the P2 level of the East Tower (see
          #3 below for greater detail).

2.   During the term of the Lease, the Lessor will maintain ownership of the
cooling tower and of the UPS described above, however, the Government will be
responsible for all operating expenses, repair, maintenance and/or replacement
costs related to these items.

3.   During the term of the Lease, the Lessor will maintain ownership of the
1,000 KW generator described above, however, the Government will be responsible
for all operating expenses, repair, maintenance and/or replacement costs related
to this generator. In addition, the Government will be required to purchase a
new generator of suitable size for the Building life safety systems and 24/7
cooling systems. The Government will be responsible for the cost of designing
and transferring the life safety systems and 24/7 cooling systems from the P1
and P2 1,000 KW generators (which currently provide power for the same) to the
new generator, all with Lessor's prior approval. Once the life safety systems
and 24/7 cooling systems have been connected to the new generator, the Lessor
will be responsible for all operating expenses, repair, maintenance and/or
replacement costs related to the new generator.

4.   The Lessor agrees to pay for any re-design charges incurred by the
Government in the re-planning of space affected by the Lessor's expansion of the
Terminal Room on the 2nd floor of the East Tower, however, the Lessor shall only
be responsible for actual third-party amounts not to exceed $8,000.00.

ALL OTHER TERMS AND CONDITIONS OF THE LEASE SHALL REMAIN IN FORCE AND EFFECT.

IN WITNESS WHEREOF, the parties subscribed their names as of the above date.

- --------------------------------------------------------------------------------
THIS AGREEMENT, made and entered into this date by and between:
- --------------------------------------------------------------------------------

LESSOR:  MCI WORLDCOM NETWORK SERVICES, INC.

BY
   --------------------------------            ---------------------------------
   (Signature)                                 (Title)


IN THE PRESENCE OF (witnessed by:)


   --------------------------------            ---------------------------------
   (Signature)                                 (Address)



- --------------------------------------------------------------------------------
UNITED STATES OF AMERICA

BY
   --------------------------------            ---------------------------------
   (Signature)                                 (Title)



GSA DC 68-1176                                               GSA FORM 276 JUL 67

EX-23.2

Exhibit 23.2 Consent of Independent Accountants


                      [CONSENT OF INDEPENDENT ACCOUNTANTS]

To the Board of Directors
Commercial Net Lease Realty, Inc.:

        We consent to the incorporation by reference herein of our reports dated
January 10, 2003, except as to the fifth paragraph of Note 20 to the
consolidated financial statements, which is as of February 13, 2003, relating to
the consolidated balance sheets of Commercial Net Lease Realty, Inc. and
subsidiaries as of December 31, 2002 and 2001, and the related consolidated
statements of earnings, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 2002, and the related
financial statement schedules, which reports appear in the December 31, 2002
annual report on Form 10-K of Commercial Net Lease Realty, Inc. and to the
reference to our firm under the heading "Experts" in the prospectus.



/s/ KPMG LLP


Orlando, Florida

July 25, 2003