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
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ARTICLES
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ARTICLE
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I
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BASIC LEASE INFORMATION
AND DEFINITIONS
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1
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ARTICLE
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II
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DEMISING OF
PREMISES
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ARTICLE
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III
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PARKING
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ARTICLE
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IV
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IMPROVEMENTS
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ARTICLE
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V
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COMMENCEMENT DATE;
DELIVERY OF PREMISES
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ARTICLE
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VI
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RENT
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ARTICLE
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VII
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DEPOSIT
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ARTICLE
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VIII
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SERVICES OF
LANDLORD
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ARTICLE
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OPERATING
COSTS
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ARTICLE
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ALTERATIONS
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ARTICLE
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XI
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REPAIRS
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ARTICLE
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XII
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CONDUCT OF BUSINESS BY
TENANT
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ARTICLE
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XIII
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INSURANCE AND
INDEMNITY
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ARTICLE
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XIV
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DESTRUCTION OF
PREMISES
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ARTICLE
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XV
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CONDEMNATION
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ARTICLE
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XVI
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ASSIGNMENT AND
SUBLETTING
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ARTICLE
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XVII
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FINANCING AND
SUBORDINATION
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ARTICLE
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XVIII
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DEFAULT OF
TENANT
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ARTICLE
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XIX
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ACCESS BY
LANDLORD
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ARTICLE
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XX
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SURRENDER; HOLDING
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ARTICLE
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XXI
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NOTICES
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ARTICLE
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XXII
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HAZARDOUS
MATERIALS
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ARTICLE
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XXIII
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MISCELLANEOUS
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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.
1
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
16
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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