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DEED OF LEASE

Lease Agreement

DEED OF LEASE | Document Parties: ATS CORP | ATS CORPORATION | WEST*GROUP PROPERTIES, LLC You are currently viewing:
This Lease Agreement involves

ATS CORP | ATS CORPORATION | WEST*GROUP PROPERTIES, LLC

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Title: DEED OF LEASE
Date: 2/14/2008
Industry: Conglomerates     Law Firm: Squire Sanders;Wiley Rein     Sector: Conglomerates

DEED OF LEASE, Parties: ats corp , ats corporation , west*group properties  llc
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Exhibit 10.1

 

 

 

 

 

 

 

 

 

DEED OF LEASE

 

BETWEEN

 

WEST*GROUP PROPERTIES, LLC

(Landlord)

 

AND

 

ATS CORPORATION

 

(Tenant)

 

 

 

 

NORTHAMPTON BUILDING

 

7925 Jones Branch Drive

McLean, Virginia 22102

 

Date:  February 11, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

 

ARTICLES

 

 

 

 

 

 

 

 

ARTICLE

I

BASIC LEASE INFORMATION AND DEFINITIONS

1

 

 

 

 

 

ARTICLE

II

DEMISING OF PREMISES

3

 

 

 

 

 

ARTICLE

III

PARKING

6

 

 

 

 

 

ARTICLE

IV

IMPROVEMENTS

6

 

 

 

 

 

ARTICLE

V

COMMENCEMENT DATE; DELIVERY OF PREMISES

7

 

 

 

 

 

ARTICLE

VI

RENT

8

 

 

 

 

 

ARTICLE

VII

DEPOSIT

9

 

 

 

 

 

ARTICLE

VIII

SERVICES OF LANDLORD

10

 

 

 

 

 

ARTICLE

IX

OPERATING COSTS

11

 

 

 

 

 

ARTICLE

X

ALTERATIONS

17

 

 

 

 

 

ARTICLE

XI

REPAIRS

18

 

 

 

 

 

ARTICLE

XII

CONDUCT OF BUSINESS BY TENANT

19

 

 

 

 

 

ARTICLE

XIII

INSURANCE AND INDEMNITY

20

 

 

 

 

 

ARTICLE

XIV

DESTRUCTION OF PREMISES

22

 

 

 

 

 

ARTICLE

XV

CONDEMNATION

23

 

 

 

 

 

ARTICLE

XVI

ASSIGNMENT AND SUBLETTING

24

 

 

 

 

 

ARTICLE

XVII

FINANCING AND SUBORDINATION

26

 

 

 

 

 

ARTICLE

XVIII

DEFAULT OF TENANT

27

 

 

 

 

 

ARTICLE

XIX

ACCESS BY LANDLORD

31

 

 

 

 

 

ARTICLE

XX

SURRENDER; HOLDING OVER

31

 

 

 

 

 

ARTICLE

XXI

NOTICES

32

 

 

 

 

 

ARTICLE

XXII

HAZARDOUS MATERIALS

32

 

 

 

 

 

ARTICLE

XXIII

MISCELLANEOUS

34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

i


 


DEED OF LEASE

 

THIS DEED OF LEASE (“Lease”) is made and entered into as of the 11th day of February 2008, by and between WEST*GROUP PROPERTIES, LLC, a Virginia limited liability company (“Landlord”), and ATS CORPORATION, a Delaware corporation (“Tenant”).

 

ARTICLE I

 

BASIC LEASE INFORMATION AND DEFINITIONS

 

The terms used in this Lease shall have the meanings set forth below.

 

A.            Premises :  Approximately 58,082 rentable square feet comprising the entire fourth (4 th ) floor, the entire third (3 rd ) floor, and two wings on the second (2 nd ) floor (“Premises”), as shown on Exhibit A attached hereto, as increased for any “Pre-Commencement Expansion Space” or “Post-Commencement Expansion Space.”

 

B.            Building :  The building located on the Land, commonly known as the Northampton Building, having an address of 7925 Jones Branch Drive, McLean, Virginia 22102.

 

C.            Land :  That certain parcel of real property located in WEST*PARK Office Park, as shown on Exhibit B attached hereto.

 

D.            Projec t:  The Land, the Building, and all other improvements located on the Land.

 

E.             Common Areas :  Those areas and facilities of the Project which are provided by Landlord for the non-exclusive use by tenants of the Project, and their employees, clients, customers, licensees and invitees, or for use by the public.

 

F.             Commencement Date :  The date on which the Term shall commence for the Premises, as determined in accordance with Article V hereof (“Commencement Date”).

 

G.            Expiration Date :  Unless earlier terminated in accordance with the terms hereof, the last day of the month in which the tenth (10th) anniversary of the Commencement Date occurs.

 

H.            Term :  Approximately ten (10) years, beginning on the Commencement Date and ending on the Expiration Date, unless earlier terminated or extended as provided herein.

 

I.              Rent :  Base Rent and Additional Rent.

 

J.             Base Rent :  One Million Five Hundred Ninety-Seven Thousand Two Hundred Fifty-Five and no/100 Dollars ($1,597,255.00) per annum ($133,104.58 per month) ($27.50 per square foot of Rentable Area on Floors 1-4 of the Building), subject to increase pursuant to Article VI hereof.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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K.            Deposit :  One Hundred Thirty-Three Thousand One Hundred Four and 58/100 Dollars ($133,104.58), to be held by Landlord and subject to adjustment in accordance with Article VII hereof.

 

L.             Rentable Area of the Premises :  Approximately Fifty-Eight Thousand Eighty-Two (58,082) square feet, as stipulated by the parties hereto.

 

M.           Rentable Area of the Building :  Approximately One Hundred Fifty-One Thousand Eight Hundred Seventy-Eight (151,878) square feet, as stipulated by the parties hereto.

 

N.            Tenant’s Pro Rata Share :  Thirty-Eight and 24/100 percent (38.24%), calculated by dividing the Rentable Area of the Premises by the Rentable Area of the Building.  Tenant’s Pro Rata Share shall be automatically adjusted to reflect any change in the Rentable Area of the Premises or the Rentable Area of the Building.

 

O.            Permitted Use :  General office purposes, which may include a SCIF if required for Tenant’s business.

 

P.             Landlord’s Address for Notice :

 

WEST*GROUP PROPERTIES, LLC

c/o G.T. Halpin

1600 Anderson Road

McLean, VA  22102

 

with a copy to:

 

WEST*GROUP MANAGEMENT LLC

ATTN:  General Counsel

1600 Anderson Road

McLean, VA  22102

 

Q.            Landlord’s Address for Payment:

 

WEST*GROUP PROPERTIES, LLC

c/o WEST*GROUP MANAGEMENT LLC — Accounting Dept.

1600 Anderson Road

McLean, VA  22102

 

R.            Tenant’s Address for Notice :

 

ATS CORPORATION

7925 Jones Branch Drive, Suite 400

McLean, VA 22102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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                With a copy to :

 

James J. Maiwurm

Squire, Sanders & Dempsey L.L.P.

8000 Towers Crescent Drive, Suite 1400

Vienna, Virginia  22182

 

S.                                       Broker :  COLLIERS CASSIDY & PINKARD

 

ARTICLE II

 

DEMISING OF PREMISES

 

Section 2.01 .          Lease of Premises for the Term .  Landlord hereby leases and demises the Premises to Tenant for the Term, and Tenant hereby leases and rents the Premises from Landlord for the Term, together with the non-exclusive right to use the Common Areas, subject to the terms, covenants and conditions contained herein, and also subject to all deeds of trust, mortgages, easements, covenants, restrictions, agreements, governmental ordinances and other encumbrances now or hereafter affecting the Project.  The exterior walls, the ceiling, the floor, the area above the ceiling and beneath the floor of the Premises, and the area within any shafts or other core areas penetrating the Premises, are not demised hereunder, and the use thereof, together with the right to install, maintain, use, repair and replace pipes, ducts, conduits, wires, tunnels, sewers and structural elements leading through the Premises in locations which will not materially interfere with Tenant’s use thereof and serving other parts of the Project, are, subject to Landlord’s compliance with Tenant’s security requirements related to government contracts including, but not limited to, any SCIF areas within the Premises, hereby reserved to Landlord.  Subject to the foregoing, and provided that Tenant is not in Default, Tenant shall have peaceful and quiet enjoyment of the Premises during the Term.  Landlord will provide, to extent available, and at no additional cost to Tenant, space in risers and plenums for any cabling, conduits and wiring necessary in connection with Tenant’s operations in the Premises.

 

Section 2.02 .          Renewal Options .

 

A.            Subject to the terms hereof, Tenant shall have the right to renew and extend the Term for two (2) “ Renewal Terms ” of five (5) years each by giving written notice thereof to Landlord (“Tenant’s Renewal Notice”) no later than twelve (12) months prior to the expiration of the original Term or the immediately preceding Renewal Term, as applicable.  Tenant may renew the Term for less than the entire Premises, provided that Tenant renews for at least the entire third (3 rd ) floor and the entire fourth (4 th ) floor and any other space is renewed only in full-wing increments.  Each Renewal Term shall commence immediately upon the expiration of the original Term or subsequent Renewal Term, as applicable, and, upon exercise of each renewal option, the Expiration Date of the Term shall automatically become the last day of the applicable Renewal Term.  Once Tenant exercises a renewal option, Tenant may not thereafter revoke such exercise, except as provided below.  If

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Tenant does not renew the Lease in a timely manner, then Tenant’s right to renew the Term pursuant to this Section 2.02 shall expire and be of no further force or effect.

 

B.            Notwithstanding the foregoing, if, but only if, Landlord decides to demolish or substantially alter the Building and Landlord terminates all other leases in the Building, Landlord may terminate the Lease at any time during either Renewal Term by delivering written notice of such termination to Tenant not less than fifteen (15) months prior to the designated effective date of such termination.

 

C.            Tenant shall take the Premises “as-is” for each Renewal Term, subject to Landlord’s provision of a market refurbishment allowance.

 

D.            Notwithstanding anything to the contrary set forth in this Section 2.02, Tenant shall have no right to renew the Term if Tenant is in Default either as of the date Tenant attempts to exercise its renewal option, or as of the date on which the Renewal Term is scheduled to commence.

 

E.             (i)  Base Rent for the first year of the Renewal Term shall be the Fair Market Rent (which shall factor in the then current market terms for new leases at comparable office buildings in the area for a tenant of similar caliber and financial standing and factoring in all then current market concessions including if applicable, but not limited to, rental abatement, the difference between a full tenant improvement allowance and the refurbishement allowance provided, and the establishment of a new Base Year) as established herein.  Landlord shall furnish to Tenant, within ten (10) business days of receipt of Tenant’s Renewal Notice, the proposed Fair Market Rent for the Renewal Term.  Landlord and Tenant shall negotiate, in good faith, the Fair Market Rent for the Renewal Term.  If Landlord and Tenant agree to Fair Market Rent within fifteen (15) days of Tenant’s receipt of Landlord’s notice above, then they shall promptly execute an amendment to Lease stating the Base Rent agreed upon.  In the event Landlord and Tenant have not agreed to Fair Market Rent within fifteen (15) days of Tenant’s receipt of Landlord’s Notice, then Tenant may, by written notice to Landlord within five (5) business days following the fifteen-day period, (a) rescind the renewal offer or (b) agree to the Fair Market Rent as determined in accordance with the Three Broker Method as set forth in paragraph (ii) below.  Upon determination of the Fair Market Rent pursuant to the Three Broker Method, the parties shall promptly execute an amendment to the Lease stating the Base Rent and other applicable renewal terms and the Lease shall continue in full force and effect.  Except as provided herein, Tenant acknowledges that delivery of a Renewal Notice shall irrevocably bind Tenant to renew the Lease for the Renewal Term.  Tenant has no option(s) to extend this Lease except as set forth in this Section 2.02.

 

                (ii)  For purposes of this Section 2.03.E, the Three Broker Method shall be the following process:  The parties shall each promptly appoint an independent real estate broker who is licensed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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in the Commonwealth of Virginia, specializes in the field of commercial real estate, regularly conducts business in the commercial real estate market in the immediate vicinity of Tyson’s Corner, has at least seven (7) years of experience and is recognized within the field as being reputable and ethical. Such two individuals shall each determine the Fair Market Rent within ten (10) business days after their appointment.  If such two brokers agree on such Fair Market Rent, then the rent for the applicable term and space shall be such Fair Market Rent as determined by the parties.  If such individuals do not agree on Fair Market Rent within such ten (10) business day period, but such brokers’ determination of Fair Market Rent are within five percent (5%) of each others’ determinations, the average of the two determinations shall be the Fair Market Rent for the applicable term and space.  If such individuals do not agree on Fair Market Rent within such ten (10) business day period and the higher determination of the market rate base rent is more than five percent (5%) higher than the lower determination, then the two (2) individuals shall, within five (5) additional days, render separate written reports of their determinations and together appoint a third similarly qualified individual.  The third individual shall, within fifteen (15) days after his or her appointment, make a determination of Fair Market Rent.  The Fair Market Rent applicable shall equal the average of the two (2) closest determinations of the three brokers’ determinations.  Upon the determination of the Fair Market Rent in accordance with the Three Broker Method, regardless of whether such Fair Market Rent was determined by two (2) or three (3) brokers pursuant to the terms hereof, such Base Rent for the first year of the Renewal Term shall be final and conclusive.  Landlord and Tenant shall each bear the cost of its broker and shall share equally the cost of the third broker.

 

F.             Although the same may be factored into the determination of Fair Market Rent, other than a market refurbishment allowance, Tenant shall not be entitled to any rental abatement, additional renewal options or other concessions contained in the Lease during each Renewal Term.

 

G.            Except as set forth herein, the leasing of the Premises for each Renewal Term shall be upon the same terms and conditions as are applicable for the original Term.

 

Section 2.03 .          Tenant’s Early Termination Right .

 

A.            Subject to the terms hereof, Tenant shall have the one-time right to terminate this Lease on the eighth (8th) anniversary of the Commencement Date (“Early Termination Date”).  Tenant shall effect such early termination by delivering written notice to Landlord at least twelve (12) months prior to the Early Termination Date.

 

B.            Tenant shall pay to Landlord an early termination fee equal to the unamortized tenant improvement costs and leasing fees and other leasing costs amortized at eight percent (8%) as of the date of termination.  Such payment shall be made fifty percent (50%) upon delivery of Tenant’s notice of early termination and the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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balance on the earlier of (i) thirty (30) days prior to the Early Termination Date, or (ii) the date Tenant vacates the Premises and Building.

 

C.            The foregoing provisions of this Section 2.02 notwithstanding, Tenant shall have no right to terminate this Lease early if Tenant is in Default either as of the date Tenant attempts to exercise its early termination right or as of the Early Termination Date .

 

ARTICLE III

 

PARKING

 

Tenant, along with Landlord and other tenants of the Project, and all of their agents, employees, clients, customers, licensees and invitees, shall have the non-exclusive license to park their automotive vehicles in the parking spaces serving the Project (providing not less than 3.6 parking spaces per 1,000 square feet of Premises), including the exclusive right to use ten (10) reserved parking spaces in the location shown on Exhibit C .  Tenant shall receive all of the foregoing parking at no additional cost to Tenant.  Landlord agrees that it will not provide any other tenant with reserved parking, except the five (5) reserved parking spaces currently being provided to Wiley Rein LLP.

 

ARTICLE IV

 

IMPROVEMENTS

 

Section 4.01 .          Tenant Improvements .  Subject to Section 4.03 below, Tenant shall accept the Premises in its “as-is” condition, and Landlord shall have no obligation to make any improvements or alterations thereto.  Notwithstanding the foregoing, Landlord will provide Tenant with an improvement allowance (the “ Allowance ”) equal to Fifty-five and 18/100 Dollars ($55.18) per rentable square foot of the Premises for design, permitting, management and construction of Tenant’s Improvements (defined below) including cabling costs, costs of equipment and other technical infrastructure.  Landlord will also provide, in addition to the Allowance, up to $0.10 per rentable square foot for Tenant’s architect to perform a complete space plan of the Premises prior to execution of this Lease.  Tenant shall provide Landlord with plans and specifications for all improvements to be constructed in the Premises (“ Tenant Improvements ”) and shall be subject to Landlord’s approval, which shall not be unreasonably withheld, conditioned, or delayed.  All Tenant Improvements shall be constructed in accordance with approved plans and specifications.  All contractors performing work on the Premises shall be licensed and insured and shall be subject to Landlord’s prior approval, which approval shall not be unreasonably withheld.  Landlord hereby consents to Tenant’s use of DBI Architects, META Engineers, Loring Engineering, Dietze Construction Group, The Magellan Group and Advanced Consulting Engineering.  Tenant shall be solely responsible for ensuring that the Premises and Tenant Improvements comply with all governmental

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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laws, rules and regulations and all Building Rules and Regulations (defined below).  The Tenant Improvements Allowance shall be disbursed directly by Landlord to the consultants, contractors and material suppliers constructing or installing the Tenant Improvements for Tenant within thirty (30) days of Landlord’s receipt of a completed draw request from Tenant in the form attached hereto as Exhibit D .  Each draw request shall be accompanied by applicable lien waivers from all contractors and material suppliers that are to receive payments under the applicable draw request.  Tenant shall not submit more than one (1) draw request in any thirty (30) day period.  Tenant may use up to Seventeen and 68/100 Dollars ($17.68) per rentable square foot of the Allowance for costs associated with relocating to the Building including, but not limited to, moving expenses, signage and FF&E.

 

Landlord will not charge any construction management, administrative oversight or other similar fee against the Improvement Allowance.

 

Section 4.02 .          Excess Tenant Allowance .  Upon completion of Tenant Improvements, if any part of the Allowance remains unused and is not the subject of a disputed claim, Tenant may use the remaining balance for payments of Base Rent as they become due.

 

Section 4.03 .          Landlord Improvements .  On or before the Commencement Date, Landlord shall have (i) completed (a) an upgrade of the common restrooms serving the Premises, including all necessary reconfigurations and improvements to comply with all relevant provisions of the Americans with Disabilities Act (“ADA”), (b) replacement of all floor and wall tiles, (c) replacement of all countertops and (d) replacement of under-mounted sinks;  (ii) renovated the first floor lobby in accordance with the plans attached hereto as Exhibit E ; and (iii) caused all base Building systems and, to the extent necessary for Tenant’s occupancy based upon typical office occupancy / load, the common areas to meet all applicable codes.  Landlord shall also renovate the elevator cabs within ninety (90) days after the Commencement Date.  During the Term, Landlord shall upgrade the restrooms serving the floor(s) into which the Premises has been expanded, if such remodeling work has not already been completed, and shall complete such work within 180 days following Landlord’s and Tenant’s execution of an amendment to this Lease adding such space to the Premises.  All building code, fire code and building-related ADA improvements that are required in the common areas of the Building (unless necessitated by the improvements to the Premises that are not typical improvements for general office use) shall be provided at Landlord’s sole cost and expense.

 

ARTICLE V

 

COMMENCEMENT DATE; DELIVERY OF PREMISES

 

Section 5.01 .          Commencement Date .  The “Commencement Date” shall be the date that (i) the date all Tenant Improvements are substantially complete and Tenant’s FF&E that are necessary for

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Tenant’s beneficial use and occupancy of the Premises for the conduct of Tenant’s business have been installed; and (ii) the date Tenant first occupies the Premises for the purpose of conducting business therein.  The Rent Commencement Date shall be the earlier of (i) the Commencement Date; or (ii) February 1, 2009.

 

Section 5.02 .          Entry by Tenant .  Except as may be necessary in connection with the Tenant Improvements or installation of Tenant’s FF&E, Tenant shall not enter the Premises prior to the Commencement Date without Landlord’s express written consent in each instance.  In each instance, Tenant’s entry onto the Premises shall be subject to all of the terms of the Lease.

 

Section 5.03 .          Commencement Notice .  When the Commencement Date has been determined in accordance with this Article V, Landlord and Tenant shall execute a Commencement Notice in the form attached hereto as Exhibit F ; provided, however, that Landlord’s failure to prepare and present the Commencement Notice to Tenant, or Tenant’s failure to execute the same, shall not diminish the effectiveness of this Lease, nor affect either party’s liability hereunder.

 

ARTICLE VI

 

RENT

 

Section 6.01 .          Base Rent .  Tenant hereby covenants and agrees to pay Landlord Base Rent, in equal monthly installments, in advance, on the first day of each calendar month beginning on the Rent Commencement Date and ending on the Expiration Date.

 

Section 6.02 .          Base Rent Escalation .  On the first (1st) anniversary of the Rent Commencement Date (or if the Rent Commencement Date is not the first day of a month, then the anniversary of the first day of the calendar month following the Rent Commencement Date)and on each anniversary thereafter during the Term (each of such dates being hereinafter referred to as an “Adjustment Date”), the Base Rent shall be increased by the lesser of (i) an amount equal to two hundred fifty percent (250%) of any increase in the U.S. Consumer Price Index of the Bureau of Labor Statistics of the Department of Labor for All Urban Consumers for the closest major city (“CPI”) for the 12-month period ending two (2) months prior to the Adjustment Date; or (ii) 2.5%.

 

Section 6.03 .          Definitions and Payments .  All sums of money required to be paid by Tenant under this Lease other than Base Rent shall be deemed “Additional Rent”, and all remedies applicable to the non-payment of Base Rent shall apply thereto.  All Rent shall be paid without prior notice or demand therefor, and without any counterclaim, set-off, deduction, recoupment, credit or defense, it being understood and agreed that Tenant’s covenant to pay the Rent is independent of the obligations of Landlord hereunder.  Any Additional Rent due as a result of a default by Tenant shall be deemed payable on the first day of the month next following such default, except as otherwise provided in this Lease.  Any partial payment by Tenant of an outstanding obligation hereunder shall be

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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credited against the earliest due installment of such obligation.  No endorsement or statement on any check or letter or other communication accompanying a check for payment of any Rent shall be deemed an accord and satisfaction, unless otherwise expressly agreed to in writing by Landlord.  No receipt or acceptance by Landlord of any sums shall be deemed a waiver of any Tenant default.  If the Term begins on a day other than the first day of a calendar month or ends on a day other than the last day of a calendar month, then the Rent for such month(s) shall be prorated accordingly.  Tenant’s obligation to pay Rent during the Term shall survive the expiration of this Lease.

 

Section 6.04 .          Late Payment Charges and Interest .  Tenant shall pay a late charge of five percent (5%) of the amount of any payment of Rent not paid within five (5) days after notice thereof from Landlord; provided, however, that Landlord shall not be required to provide such notice more than two (2) times in any twelve (12) month period before charging a late charge under this section.  Any payment of Rent not paid within five (5) days after the due date shall incur interest from the due date until paid at the rate (“Interest Rate”) of two percent (2%) above the highest prime rate of interest quoted from time to time in The Wall Street Journal (or, if The Wall Street Journal is no longer being published or no longer publishes a prime rate, by a comparable financial publication selected by Landlord); provided, however, that the Interest Rate shall not exceed the maximum rate permitted under applicable state or federal laws.

 

ARTICLE VII

 

DEPOSIT

 

Section 7.01 .          Cash Deposit .  Tenant shall pay the Deposit to Landlord upon execution of this Lease as security for the faithful performance by Tenant of the terms of this Lease.  The Deposit shall not constitute Rent for any period.  Landlord shall have the right to commingle the Deposit with other funds held by Landlord.  The Deposit, without interest, shall be repaid to Tenant after the termination of this Lease, provided Tenant shall have made all payments and performed all obligations required hereunder.  Landlord may apply all or part of the Deposit on account of a Tenant Default, whereupon Tenant shall be required to restore the resulting deficiency in the Deposit within five (5) days after Landlord notifies Tenant of the application thereof.

 

Section 7.02 .          Letter of Credit Option .  In lieu of posting the Deposit, Tenant may deliver to Landlord an irrevocable, unconditional commercial bank letter of credit, payable upon sight in the amount of the Deposit (the “ Letter of Credit ”) in such form as is attached hereto as Exhibit G and issued by a federally-insured national bank having offices in the Metropolitan Area of Washington, DC.  The Letter of Credit shall be for an initial period of at least one (1) year from the Commencement Date, and Tenant will deliver to Landlord at least thirty (30) days before

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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the expiration of each Letter of Credit a new Letter of Credit, or a renewal of the prior Letter of Credit, renewing the Letter of Credit in the required sum for successive periods of at least one (1) year each (or such shorter period which will be identical to the then-remaining term of the Lease plus an additional thirty (30) days thereafter).  The Letter of Credit shall include a provision for assignment thereof to any mortgagee with a collateral assignment of this Lease.  If the Letter of Credit has not been renewed or replaced with a new letter of credit or cash in the full amount of the Deposit within ten (10) days prior to the expiration of the existing Letter of Credit, Landlord may draw upon the Letter of Credit to the extent necessary to fulfill Tenant’s deposit requirement under this Article VII.

 

ARTICLE VIII

 

SERVICES OF LANDLORD

 

Section 8.01 .          Services .  Landlord shall furnish Tenant with the following services and facilities during the Term in a manner befitting comparable office buildings in the Tysons Corner market: (i) elevator service from 8:00 a.m. to 7:00 p.m. except Sundays and Holidays (hereinafter defined), with one elevator subject to call at all other times; (ii) heat or air conditioning (as applicable) from 8:00 a.m. to 7:00 p.m. Monday through Friday, and 8:00 a.m. to Noon on Saturdays, except New Years Day, Memorial Day, July 4 th , Labor Day, Thanksgiving Day and Christmas Day (collectively “Holidays ”) engineered to the following design conditions and in accordance with all current ASHRAE Standards: (A) Outdoor Conditions- Summer 95 deg. F. DB/78 deg. F.WB and Winter 10 deg. F. DB (annual extremes); (B) Indoor Conditions- Summer 75 +/-2 deg. F. DB and 70 +/-2 deg. F. DB.; (iii) electricity, water and public lavatory facilities and supplies twenty-four (24) hours per day, seven (7) days per week; and (iv) janitorial services Monday through Friday, except Holidays.  If Tenant requires air-conditioning, heating or other services (such as cleaning services) routinely supplied by Landlord for hours or days in addition to the hours and days specified herein, Landlord shall provide such additional service on twenty-four (24) hours’ notice therefor from Tenant, and Tenant shall reimburse Landlord for the actual cost of providing such additional service (with initial rates of $7.50 per hour per wing and $20.00 per hour for a full floor during the cooling season and $9.50 per hour per wing and $25.00 per hour for a full floor during the heating season, subject on increase on a pro rata basis upon written notice to Tenant, it being understood that the lower level through the 6 th floor in each wing are heated/cooled together and there is no additional charge for multiple floors in the same wing).  In connection with the Tenant Improvements, Tenant will install a check meter on any supplemental HVAC serving the Premises.  Landlord shall check the meter and separately bill Tenant for all electricity used in connection with the supplemental HVAC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Section 8.02 .          Utility Suppliers .  Landlord’s obligation to furnish utility services pursuant to this Article VIII shall be subject to the rules and regulations of the supplier of such utility services and the rules and regulations of any governmental authority regulating suppliers of such utility services.

 

Section 8.03 .          Discontinuation of Utility Services .  No failure to furnish, nor any stoppage of, the services referred to in this Article VIII resulting from any cause outside Landlord’s control shall make Landlord liable in any respect for damages to any person, property or business, or be construed as an eviction of Tenant, or entitle Tenant to any relief from any of Tenant’s obligations under this Lease.  If the failure to furnish, or the stoppage of, the services referred to in this Article VII prevents Tenant from using the Premises for more than five (5) consecutive business days, and such failure or stoppage is the result of Landlord’s negligence or intentional misconduct and/or Landlord is entitled to receive insurance proceeds for the loss of rent from the Premises, then Tenant shall be entitled to an abatement of Rent under this Lease (it being understood that, except for such abatement, Tenant shall not be entitled to any relief from any of Tenant’s obligations under this Lease).

 

Section 8.04 .          Telephone Room .  Tenant shall not be permitted to install its telecommunications equipment in any telephone room within the Building, unless such telephone room is located in the Premises, or Tenant leases a floor on which such telephone room is located in its entirety.

 

Section 8.05 .          Security and Access .  Landlord shall provide, at Landlord’s sole cost and expense, a monitored card or key access system for the Building, which will allow for twenty-four hour access to the Building and garage 365 days per year.  Landlord shall supply all cards or keys for the access system in a reasonable quantity required by Tenant (the initial supply to be at Landlord’s sole cost and expense), but not to exceed four (4) cards or keys per 1000 square feet of Premises.  Landlord shall cause the Building elevators to be programmed to restrict access to floors of the Premises that are fully and only occupied by Tenant.

 

Section 8.06 .          Building Cleaning Specifications .  The current building cleaning specifications are set forth on Exhibit H attached hereto.

 

ARTICLE IX

 

OPERATING COSTS

 

Section 9.01 .          Tenant’s Operating Costs Payment .  Commencing with calendar year 2010, Tenant shall pay, as Additional Rent, the amount (“Tenant’s Operating Costs Payment”) by which Tenant’s Pro Rata Share of Operating Costs for a calendar year (hereinafter defined) exceeds the Base Operating Costs (hereinafter defined) for the Base Year, such amount to be calculated and paid as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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A.            On or before April 1 of the 2010 calendar year and each calendar year thereafter, Landlord shall furnish Tenant with a good faith estimate (“Estimate”) of Tenant’s Operating Costs Payment for the then current calendar year.  On the first day of each month during such year, Tenant shall pay to Landlord one-twelfth (1/12th) of Tenant’s Operating Costs Payment, as shown on the Estimate.  For the period extending from the beginning of the calendar year to the date Landlord delivers the Estimate to Tenant, Tenant shall continue to pay Tenant’s Operating Costs Payment payable for the previous year.  After receiving the Estimate, Tenant shall promptly pay to Landlord the difference (if any) between the amount due for the current calendar year (as set forth in the Estimate), and the amount Tenant had actually paid for such year.  If Landlord determines, in its reasonable discretion, that an Estimate for the current year is inaccurate, Landlord shall have the right once during the year to adjust such Estimate.

 

                B.            Within ninety (90) days after the end of each calendar year during which Tenant’s Operating Costs Payment is due, Landlord shall furnish Tenant with a statement of the actual Operating Costs for such calendar year.  Within thirty (30) days after Landlord’s delivery of such statement, Tenant shall make a lump sum payment to Landlord in the amount (if any) by which Tenant’s Operating Costs Payment for the subject calendar year, as shown on Landlord’s statement, exceeds the aggregate of the monthly installments of Tenant’s Operating Costs Payments paid during such calendar year.  If Tenant’s Pro Rata Share of Operating Costs is less than the aggregate of the monthly installments paid by Tenant during such calendar year, then Landlord shall apply such amount to the next installment(s) of Rent due hereunder until fully credited to Tenant, or if no further such installments are due, then, so long as Tenant shall have paid all sums due under this Lease, Landlord shall promptly pay such credited amount directly to Tenant.

 

Section 9.02 .          Operating Costs; Taxes .

 

                A.            (i)  The term “Operating Costs” shall refer to all expenses, costs and disbursements which Landlord pays or incurs in connection with the operation, management, repair and maintenance of the Project.  All Operating Costs shall be determined according to generally accepted accounting principles which shall be consistently applied.  Operating Costs shall include, but not be limited to, the following (to the extent such costs are reasonable and actually and directly related to the Project):  (a) Wages, salaries, benefits and fees of personnel or entities engaged in the operation, repair, maintenance or security of the Project; (b) Cost of all service agreements for maintenance, janitorial services, access control, alarm service, window cleaning, elevator maintenance and landscaping for the Project; (c) All utilities for the Project, including water, sewer, electricity and gas; (d) Cost of snow and ice removal; (e) Cost of all insurance for the Project which Landlord may carry from time to time, together with all appraisal and consultants’ fees in connection with such insurance; (f) All Taxes (hereinafter defined); (g) Legal and accounting costs incurred by Landlord or paid by Landlord to third parties (other than legal fees with respect to disputes with individual tenants,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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negotiations of tenant leases, or operating the entity which constitutes the Landlord); (h) Cost of non-capitalized repairs and general maintenance of the Project; (i) Project management office rent or rental value; (j) A management fee and all items reimbursable to the Project manager, if any, pursuant to any management contract for the Project (which management fee is currently 3% and will not be increased unless the market rate for management fees for similar buildings in the Tyson’s Corner market increase); and (k) Cost of capital improvements (amortized on a straight-line basis over the useful life of the capital improvement) which are (1) for the good faith purpose of reducing Operating Costs (and then only up to the amount of the estimated reduction actually realized), or (2) required by any governmental authority pursuant to laws enacted or enforceable after the execution of this Lease.  Notwithstanding anything in this Article IX to the contrary, Tenant’s share of Operating Costs for items (a), (b) and (j) through (k) above shall not increase by more than three percent (3%) over the previous year’s Operating Costs on a cumulative basis.  If any amounts comprising Operating Costs are incurred not just with respect to the Project, but also with respect to one or more other buildings outside the Project, then Landlord shall reasonably allocate such amounts between the Project and such other buildings or areas.  There shall be no duplication of costs or reimbursement.

 

(ii)           “Operating Costs” shall not include

 

(a)                                   Work & Services.  Costs or expenses relating to Landlord’s obligation to construct leasehold improvements, alterations and decorations or other work for tenants of the Building.

 

(b)                                  Other Tenant Obligations.  Costs incurred in connection with the making of repairs which are the obligation of another tenant of the Building.

 

(c)                                   Promotional Expenses.  Advertising and promotional expenditures or contributions or gifts.

 

(d)                                  Leasing Costs.  Costs incurred in connection with Landlord’s preparation, negotiation and/or enforcement of leases, including court costs and attorneys’ fees and disbursements in connection with any summary proceeding to dispossess any tenant.

 

(e)                                   Financing Costs.  Financing and refinancing costs in respect of any mortgage placed upon the Property, including points and commissions in connection therewith.

 

(f)                                     Interest & Penalties.  Interest or penalties for any late payments by Landlord.

 

(g)                                  Judgments.  Costs (including, without limitation, attorneys’ fees and disbursements) incurred in connection with any judgment, settlement or arbitration award resulting from any tort liability.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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(h)                                  Non-allocable Costs.  Wages, salaries or other compensation or benefits paid to any Building employee to the extent that the same is not fairly allocable to the work or service provided by such employee to the Property.

 

(i)                                      Taxes.  Estate, franchise, succession, inheritance, profit, use, capital gains, and transfer taxes imposed upon Landlord, the Building or the Land.

 

(j)                                      Brokerage Commissions.  Leasing and brokerage fees and commissions.

 

(k)                                   Initial Building/Additions.  1) Costs incurred by Landlord in connection with the initial construction of the Building and related facilities.  2) Costs (including increased Taxes and Operating Expenses) of any additions to the Building after the original construction.

 

(l)                                      Capital Repairs.  Costs of any alterations, additions, changes, replacements and other terms which, under generally accepted accounting principles, are classified properly as capital expenditures.

 

(m)                                Interest and Amortization.  Interest or amortization on any loan or mortgage with respect to the Land or the Building.

 

(n)                                  Non-Cash Charges.  Depreciation, amortization and/or other non-cash charges.

 

(o)                                  Fire & Casualty.  Costs or repairs or replacements incurred by reason of fire or other casualty or caused by the exercise of the right of eminent domain whether or not insurance proceeds or a condemnation aware are recovered or adequate for such purposes.

 

(p)                                  Overtime Charges.  Costs of any heating, ventilating, air-conditioning, janitorial or other Building services provided to other tenants during other than standard operating hours for the Building.

 

(q)                                  Legal & Accounting.  Legal and auditing fees or other professional fees, other than those reasonably incurred in connection with the maintenance and routine operation of the Land and Building.

 

(r)                                     Takeover Leases.  Any rent, additional rent or other charge under any lease of sublease to or assumed by Landlord.

 

(s)                                   Salaries & Fringes.  Salaries and fringe benefits of personnel above the grade of property manager; wages, salaries and other compensation paid for clerks or attendants in concession or newsstands operated by Landlord.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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(t)                                     Ground Rent.  Rent or other charges payable under any ground or underlying lease.

 

(u)                                  Reimbursables.  Costs of any item or service which is reimbursable to Landlord by other tenants or third parties.

 

(v)                                  Lease Payments.  Lease payments for rented equipment, the cost of which equipment would constitute a capital expenditure if the equipment were to have been purchased.

 

(w)                                Air Rights.  Any expenditures on account of Landlord’s acquisition of air or similar development rights.

 

(x)                                    Insurance.  Costs for which Landlord is actually reimbursed by any insurance required to be carried hereunder or actually carried by Landlord.

 

(y)                                  Licenses & Permits.  Costs and expenses of governmental licenses and permits, or renewals thereof, unless the same are for governmental licenses or permits normal to the operation or maintenance of the Land or Building.

 

(z)                                    Other Properties.  Costs of any work or service performed for any facility or property other than the Building.

 

(aa)                             Non-Competition Costs.  Any costs which exceed armslength competitive market prices for goods or services.

 

(bb)                           Entity Costs.  Costs relating to maintaining Landlord’s existence, either as a corporation, partnership, or other entity, such as trustee’s fees, annual fees, partnership organization or administration expenses, deed recordation expenses, legal and accounting fees (other than with respect to Building operations).

 

(cc)                             Hazardous Materials Costs.  Costs arising from the presence of hazardous materials or substances in or about or below the Building, and the Land, including without limitation, hazardous substances in the groundwater or soil.  Costs shall include, but not be limited to, increased insurance premiums caused by Landlord’s hazardous acts and those costs incurred to contain, encapsulate, remove, or remedy any hazardous or toxic wastes, materials or substances from either the Building or Land and/or any tests or surveys obtained in connection with the above.

 

(dd)                           Negligence.  Costs directly resulting from the gross negligence or willful misconduct of Landlord, its employees, agents, contractors or employees.

 

(ee)                             Defense of Title:  Costs or fees relating to the defense of Landlord’s title or interest in the real estate containing the Building or any part thereof.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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(ff)                                 Lease Violation.  Costs incurred due to violation by Landlord of the Lease.

 

(gg)                           Eminent Domain.  Costs related to renovation of the Building made necessary by the exercise of Eminent Domain.

 

(hh)                           Reserves.  Any reserves for repairs, maintenance, and replacements.

 

(ii)                                   Artwork.  Costs of acquisition of sculpture, paintings, or other objects of art.

 

B             The term “Taxes” shall mean (i) all taxes, assessments, and other governmental charges applicable to or assessed against the Project, or any portion thereof, or applicable to or assessed against Landlord’s personal property used in connection therewith, whether federal, state, county or municipal, and whether assessed by taxing districts or authorities presently taxing the Project, or by other taxing authorities subsequently created, (ii) any actual, reasonable and direct expenses incurred by Landlord in contesting any taxes or the assessed valuation of all or any part of the Project, and (iii) any charge which is based upon rents from the Project (such as a gross receipts tax), or the transactions represented by leases or the occupancy or use of the Project.  Taxes shall not include:  (i) income or net profits taxes, unless the same are substituted for real estate taxes, (ii) transfer taxes assessed against Landlord or the Project, (iii) penalties or interest on any late payments of Taxes by Landlord, and (iv) personal property taxes of tenants in the Project.

 

C.            The term “Base Operating Costs” shall refer to all Operating Costs accruing during the 2009 calendar year (“Base Year”).

 

Section 9.03 .          Gross-Up of Certain Operating Costs .  If the Building is not fully occupied during any full or fractional year of the Term, including the Base Year, the Operating Costs for services which vary based upon the level of occupancy in the Building (e.g., water service) shall be adjusted for such year to an amount which Landlord reasonably estimates would have been incurred if the Building had been ninety-five percent (95%) occupied.

 

Section 9.04 .          Tenant’s Right to Audit .  In the event that Tenant shall dispute the amount set forth in Landlord’s statement of actual Operating Costs of the Building, Tenant shall have the right, exercisable not later than one hundred eighty (180) days following receipt of such statement (except for the Base Year, which may be audited up to the later of (i) one (1) year after receipt of the statement for the Base Year, or (ii) thirty (30) days after receipt Landlord’s statement for the year immediately following the Base Year), to cause Landlord’s books and records to be audited by an independent Certified Public Accountant mutually acceptable to Landlord and Tenant.  Such audit shall occur upon not

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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less than ten (10) days prior written notice to Landlord, and shall be conducted during Landlord’s normal business hours at Landlord’s normal place of business, the actual location of Landlord’s books and records or such other location selected by Landlord in its reasonable discretion, but in any event in the Washington, D.C. metropolitan area.  The amounts payable under this Article IX shall be appropriately adjusted on the basis of such audit.  The cost of such audit shall be borne by Tenant unless the discrepancy is greater than five percent (5%), in which case the cost shall be borne by Landlord.  If Tenant does not request an audit in accordance with this Section within one hundred eighty (180) days of receipt of Landlord’s statement of actual Operating Costs (or such longer period with respect to the Base Year), such statement shall be conclusively binding upon Landlord and Tenant except in the event of fraud or intentional misrepresentation of the Operating Costs.

 

ARTICLE X

 

ALTERATIONS

 

Section 10.01 .        Alterations .  Tenant shall have the right from time to time and at any time, in a good and workmanlike manner upon prior written notice to Landlord, but without Landlord’s consent, and in accordance with all applicable government laws and requirements, and all applicable Rules and Regulations to: (1) perform alterations that (i) do not exceed $50,000 in cost, and (ii) do not in any way affect any Building systems or structural portions of the Building or materially or adversely affect the use of or access of other tenants of the Building of or to the respective premises as determined by Landlord in its reasonable discretion, (iii) are typical office improvements, and (iv) are not visible from outside of the Premises; (2) paint and install wall coverings; (3) install and remove office furniture, (4) install and remove workstations; and/or (5) remove and re-install carpeting and other floor coverings.  All other proposed alterations by Tenant shall be subject to Landlord’s prior written approval (which approval shall not be unreasonably withheld, conditioned or delayed).  To the extent applicable, all alterations shall be subject to the same requirements as Tenant Improvements set forth in Section 4.01.  Landlord shall not require the removal of any alterations upon the expiration of the Term so long as they are typical office improvements (atypical improvements shall include, but are not limited to, SCIFs, vaults, etc.).

 

Section 10.02 .        Mechanic’s Liens .  If a mechanic’s lien is filed



























 
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