Document:

Exhibit 10.1

 

(Including Amendments

through February 2008)

 

3M

 

DEFERRED COMPENSATION PLAN

 

ARTICLE I

Purpose

 

The purpose of this Plan is to attract talented,
competent and resourceful managers to 3M, and to provide a strong incentive for
such management employees to remain with 3M by providing those management
employees an opportunity to defer the receipt of a portion of their
compensation, with the belief that such opportunity will permit those employees
to increase their long-term financial security.

 

ARTICLE II

Definitions

 

For the purposes of this Plan, the following words and
phrases shall have the meanings indicated, unless the context clearly indicates
otherwise:

 

2.1                                 ACCOUNTS.  “Accounts” means Deferred Income Accounts and
Deferred Share Accounts.

 

2.2                                 BENEFICIARY.  “Beneficiary” means the person, persons or
entity designated by the Participant, or as provided in Article VIII, to
receive any death benefits payable under the Plan.

 

2.3                                 CLASS YEAR.  “Class Year” means the calendar year in
respect of which Compensation is deferred under this Plan.  The “Class Year” for Performance Unit
Plan awards shall be considered to be the first year of the Performance Period
for the respective Performance Unit or Performance Share.

 

2.4                                 COMMITTEE.  “Committee” means the Compensation Committee
of the Board of Directors of 3M.

 

2.5                                 COMPENSATION.  “Compensation” means the base salary, profit
sharing, annual incentive (excluding any portion of such annual incentive
payable in restricted stock units), Performance Unit Plan benefits or other
incentive payments that the Committee may include from time to time, earned by
a Participant during a Class Year before reduction for compensation
deferred pursuant to the Plan.  However, “Compensation”
shall exclude awards (except performance awards), foreign service premiums and
allowances, stock 

 

 

option benefits, employer contributions to employee
benefit plans, reimbursements or payments in lieu thereof and like payments.

 

2.6                                 DEFERRED INCOME
ACCOUNT.  “Deferred Income Account” means
the accounts maintained on the books of the Employer for each Participant
pursuant to Article V.  A separate
Deferred Income Account shall be maintained for each Participant for each Class Year.

 

2.7                                 DEFERRED SHARE ACCOUNT.  “Deferred Share Account” means the accounts
maintained on the books of the Employer for each Participant pursuant to Article V.  A separate Deferred Share Account shall be
maintained for each Participant for each Class Year that such Participant
elects to defer payment of Performance Unit Plan awards payable in the form of
shares of 3M common stock.

 

2.8                                 EMPLOYER.  “Employer” means 3M Company (“3M”), its
affiliates and subsidiaries and any successor to the business thereof.

 

2.9                                 GROWTH FACTOR.  “Growth Factor” is the annual rate at which
interest will be credited to (i) Participants’ Deferred Income Accounts
for Class Year 2004 and all Class Years prior thereto in accordance
with the provisions of Article VI, and (ii) that portion of each
Participant’s Deferred Income Account for Class Year 2005 and all Class Years
thereafter which such Participant elects to allocate to the investment fund
whose rate of return is based on such Growth Factor. Unless and until changed
by the Committee, the Growth Factor applied during each calendar year will be
the average Citigroup 10 Year AAA Industrial Corporate Bond Rating for New
Issues for the four-week period ending with the last week ending in October of
the previous year.

 

2.10                           PARTICIPANT.  “Participant” means any management employee
employed by an Employer who meets the requirements of paragraph 4.1 and who
elects to participate in this Plan in accordance with the requirements of
paragraph 4.2.

 

2.11                           PLAN.  “Plan” means the 3M Deferred Compensation
Plan.

 

2.12                           PLAN ADMINISTRATOR.  “Plan Administrator” means the person to whom
the Committee has delegated the authority and responsibility for administering
the Plan.  Unless and until changed by
the Committee, the Plan Administrator of the Plan shall be 3M’s Staff Vice
President, Compensation and Benefits or her successor.

 

2.13                           UNFORESEEABLE FINANCIAL
EMERGENCY.  “Unforeseeable Financial
Emergency” means an unexpected extreme financial emergency beyond the control
of the Participant (e.g., severe illness of a dependent, impending bankruptcy),
which results in the Participant’s extreme need for cash.

 

2.14                           VALUATION DATE.  Effective January 1, 2006, “Valuation
Date” shall have the same meaning as that term is defined for purposes of the
VIP.

 

2.15                          VIP.  “VIP” means the 3M Voluntary Investment Plan and
Employee Stock Ownership Plan, as it may be amended from time to time.

 

 

ARTICLE III

Effective Date

 

The provisions of this Plan shall take effect on September 1,
1985.  Calendar year 1986 shall be the
first Class Year during which the Employer will defer the payment of any
Compensation that may be earned while a Participant’s election to participate
is in effect hereunder.  This Plan shall
continue in operation and effect until 3M terminates it in accordance with the
provisions of paragraph 10.2.

 

ARTICLE IV

Participation

 

4.1                                 ELIGIBILITY.  Each management employee of the Employer
subject to U.S. income taxation shall be eligible to participate in the Plan
for a Class Year if as of the November 1st immediately
prior to such Class Year such employee is both employed in a Leadership
(L3, L2, L1 or CEO, or the equivalent) job level position and eligible for and
covered by one or more of the profit sharing, management objective or annual
incentive plans of 3M.

 

4.2                                 ELECTION TO PARTICIPATE.  In order to make contributions under the Plan
for any Class Year, an employee who meets the eligibility requirements of
paragraph 4.1 must elect to participate via the Plan’s Internet site.  To be effective, an employee’s election to
participate for a Class Year must specify the amount of his or her
Compensation to be deferred, select the time and form of payment of the amount
deferred and the earnings thereon, specify the investment fund or funds in
which such deferred amounts are to be treated as being invested, and provide
such other information as the Plan Administrator may require.  The time period during which elections to
participate will be accepted for each Class Year will be established by
the Plan Administrator, but in no event will any election be accepted after the
beginning of the Class Year to which such election relates; provided,
however, that elections to participate with respect to 2005 Performance Unit
Plan awards may be made no later than December 31, 2005 and elections to
participate with respect to 2006 and subsequent Performance Unit Plan awards
may be made no later than the effective date of such awards.

 

4.3                                 PERIOD OF
PARTICIPATION.  Each employee’s election
to participate made in accordance with the provisions of paragraph 4.2 will
remain in effect for the one-year period which begins on the first day of the
respective Class Year and ends on the last day of such Class Year.  Each employee who has elected to participate
in this Plan and on whose behalf Compensation has been deferred and credited to
an Account shall continue to be a Participant until all amounts credited to all
of the Participant’s Accounts have been distributed, or until the Participant’s
death, if earlier.

 

4.4                                 WAIVER OF
DEFERRAL.  The Committee may, in its sole
discretion, grant a waiver or suspension of a Participant’s election to
participate for a Class Year, for such time as the Committee may deem
necessary, upon a finding that the Participant has suffered an Unforeseeable
Financial Emergency.

 

 

ARTICLE V

Deferred Compensation

 

5.1                                 AMOUNTS DEFERRED.  For any Class Year, a Participant may
defer any whole percentage (but no more than 50% of base salary) of all or any
portion of the Compensation earned by such Participant during the Class Year;
provided, however, that the maximum amount of any Compensation payment that may
be deferred by a Participant shall be limited to the amount otherwise payable
to such Participant after the deduction of the appropriate withholding taxes.

 

The minimum amount that may be deferred by any
Participant shall be $1,000 per Class Year.  If the amount deferred does not reach the
$1,000 minimum, the Participant’s election to participate herein for that Class Year
will be voided and any amounts deferred paid to the Participant.

 

5.2                                 AMOUNTS CREDITED TO ACCOUNT.  For each Participant and each Class Year
that the Participant elects to defer Compensation hereunder the Employer shall
establish on its books a Deferred Income Account and/or a Deferred Share
Account, as appropriate, to which the amounts deferred in accordance with
paragraph 5.1 shall be credited at such times as are in accordance with the
standard payroll procedures of the Participant’s Employer.  The amount credited to a Participant’s
Deferred Income Account and/or Deferred Share Account shall equal the amount
deferred, except that the amount credited may be reduced, at the discretion of
the Committee, to the extent that the Employer is required to withhold any
taxes or other amounts from the Participant’s deferred compensation pursuant to
any federal, state or local law.

 

5.3                                 VESTING OF DEFERRED
ACCOUNTS.  A Participant shall always be
100% vested in the value of his or her Deferred Income Account(s) and
Deferred Share Account(s).

 

 

ARTICLE VI

Accounts

 

6.1                                 EARNINGS ON ACCOUNTS.  (a) Each Participant’s Deferred Income
Account(s) shall be credited with investment earnings or losses based on
the performance of (i) for Class Year 2004 and Class Years prior
thereto, the Growth Factor, and (ii) for Class Year 2005 and Class Years
subsequent thereto, the Growth Factor and the VIP investment funds selected by
such Participant at the time he or she elected to participate in the Plan or
subsequent thereto.  The investment funds
available to Participants in the Plan with respect to Deferred Income Accounts
for Class Years 2005 and thereafter will be the Growth Factor and the same
investment funds available to participants in the VIP, excluding the 3M Stock
Fund and the VIP’s brokerage window. 
Participants may allocate the amounts credited to their Deferred Income
Account(s) for Class Years 2005 and thereafter among such investment
funds in whole percentages of from one percent to one hundred percent.  The deemed investment earnings or losses on
such VIP funds for purposes of this Plan shall equal the actual rate of return
on such funds in the VIP net of any fees or expenses chargeable thereto,
including but not limited to management fees, trustee fees, recordkeeping fees
and other administrative expenses.

 

                                                                (b)  Each Participant’s
Deferred Share Account(s) shall be credited with the return on shares of
3M common stock, including reinvested dividends.

 

6.2                                 CHANGES IN INVESTMENT FUND
ALLOCATIONS.  For Class Years 2005
and thereafter, Participants may change the investment funds among which their
Deferred Income Account balances or future deferrals are allocated at any time,
subject to such rules as may be established by the Plan
Administrator.  Allocation changes may
only be made using the Plan’s Internet site or by speaking with a
representative of the Plan’s recordkeeper. 
No investment fund changes may be made at any time with respect to
Deferred Income Accounts for Class Year 2004 or Class Years prior
thereto, or with respect to Deferred Share Accounts.

 

6.3                                 VALUATION OF ACCOUNTS.  The Accounts of each Participant shall be
revalued as of each Valuation Date.  As
of each Valuation Date, the value of each Account shall consist of the balance
of such Account as of the immediately preceding Valuation Date, increased by
amounts deferred and credited thereto since the immediately preceding Valuation
Date pursuant to paragraph 5.2, increased or decreased (as the case may be) by
the amount of deemed investment earnings or losses credited to the investment
funds selected by the Participant (or to the Growth Factor, in the case of
Deferred Income Accounts for Class Year 2004 and Class years prior
thereto, or to the return on shares of 3M common stock, including reinvested
dividends, in the case of Deferred Share Accounts) since the preceding
Valuation Date, and decreased by the amount of all distributions, if any, made
from such Account since the preceding Valuation Date.

 

6.4                                STATEMENT OF
ACCOUNTS.  As soon as administratively
feasible following the end of each Class Year, the Plan shall deliver to
each Participant a statement of such Participant’s Accounts in the Plan.

 

 

ARTICLE VII

Distribution of Accounts

 

7.1                                 DISTRIBUTION
DATE AND METHOD.  As part of the election
to participate herein for each Class Year, the Participant shall specify
the date (hereinafter referred to as the “Distribution Date”) upon which the
Employer will commence payment of the amounts credited to the respective
Account and the method of paying such amounts. 
A Participant must select one of the following Distribution Dates:

 

(a)                      During the month of January of any
calendar year following the end of the year following the Class Year
during which deferred Compensation is credited to such Account; provided,
however, that with respect to elections to defer the payment of Performance
Unit Plan awards, the available Distribution Dates under this paragraph 7.1(a) shall
be the month of January of any calendar year following the end of the year
following the end of the Performance Period for the respective Performance Unit
or performance shares.

 

(b)                     During the month of January of
any one of the first through the tenth calendar years following the Participant’s
retirement from service with the Employer.

 

A participant must
also select one of the following methods of payment in each election to
participate herein:

 

(c)                      A single lump
sum distribution.

 

(d)                     Ten or fewer annual installments (the
amount of such installment payments shall be computed by multiplying the
balance in the Account on each date of payment by a fraction, the numerator of
which is one and the denominator of which equals the remaining number of
scheduled annual installment payments).

 

No
Participant’s election to participate for any Class Year shall require the
Plan to make any payment more than 10 years after the month of January of
the calendar year following the Participant’s retirement from service with the
Employer.  Each payment from a
Participant’s Deferred Income Account shall be made in cash, and shall be
charged against the balance in such Deferred Income Account.  Each payment from a Participant’s Deferred
Share Account shall be made in whole shares of 3M common stock and cash for any
fractional share, and shall be charged against the balance in such Deferred
Share Account.  When the Plan makes a
distribution of less than the entire balance of a Participant’s Deferred Income
Account attributable to Class Year 2005 or any Class Year thereafter,
the distribution shall be charged pro rata against each of the investment funds
to which the Account is then allocated.

 

7.2                                 DISTRIBUTION WHILE STILL AN
EMPLOYEE.  If a Participant is still
employed by the Employer at the Distribution Date for any Account, the entire
balance of such Account at the Distribution Date (plus any deemed investment
earnings or losses credited to such Account thereafter) shall be paid to the
Participant commencing on such date and in accordance with the method of
payment chosen by the Participant.

 

7.3                                 DISTRIBUTION FOLLOWING TERMINATION OF
EMPLOYMENT.  If a Participant’s
employment with the Employer is terminated for any reason other than death or
retirement, the value of such Participant’s Accounts shall be determined no
later than the Valuation Date immediately following the date of termination and
shall be paid to the Participant in a lump sum as soon as administratively feasible;
provided, however, that for Deferred Income 

 

 

Accounts and Deferred Share Accounts attributable to Class Year
2002 and all Class Years thereafter, no distribution shall be made prior
to the six-month anniversary of the date of termination of the Participant’s
employment.

 

7.4                                 DISTRIBUTION FOLLOWING RETIREMENT.  If a Participant retires from service with
the Employer prior to the Distribution Date for any Account, the entire balance
of such Account at the Distribution Date (plus any deemed investment earnings
or losses credited to such Account thereafter) shall be paid to the Participant
(or Beneficiary) commencing on such Distribution Date and in accordance with
the method of payment chosen by the Participant; provided, however, that, for
Deferred Income Accounts and Deferred Share Accounts attributable to Class Year
2002 and all Class Years thereafter, in the event such Distribution Date
would be less than six months following the date of the Participant’s
retirement from service with the Employer, such Participant’s Distribution Date
shall be and payment of such Account shall begin during the month of July of
the calendar year following the year in which such Participant retires from
service with the Employer; and provided further, that in no event shall the
portion of any Participant’s Deferred Income Account(s) or Deferred Share
Account(s) attributable to deferred Performance Unit Plan benefits be paid
before the corresponding Payment Date(s) for such benefits under the
provisions of the 3M Performance Unit Plan.

 

7.5                                 DISTRIBUTION FOLLOWING DEATH.  Upon the death of a Participant prior to the
Distribution Date for any Account, such Account shall be paid to the
Participant’s Beneficiary in accordance with paragraph 7.2 as if the
Participant had selected a Distribution Date of the day before the Participant’s
death.  Upon the death of a Participant
after the Distribution Date for any Account, the remaining balance (if any) of
such Account shall be paid to the Participant’s Beneficiary in accordance with
the method of payment chosen by the Participant.

 

7.6                                 UNFORESEEABLE FINANCIAL EMERGENCY
DISTRIBUTION.  Upon finding that a
Participant has suffered an Unforeseeable Financial Emergency, the Committee
may, in its sole discretion, permit the Participant to withdraw an amount from
his or her Account(s) sufficient to alleviate the emergency.

 

7.7                                 WITHHOLDING; PAYROLL TAXES.  To the extent required by the laws in effect
at the time payments are made, the Employer shall withhold from payments made
hereunder any taxes required to be withheld for federal, state or local
government purposes.

 

ARTICLE VIII

Designation of Beneficiaries

 

8.1                                 BENEFICIARY DESIGNATION.  Each Participant shall have the right at any
time to designate any person, persons, or entity, as Beneficiary or
Beneficiaries to whom payment of the Participant’s remaining Accounts shall be
made in the event of the Participant’s death. 
Any designation filed under the Plan may be revoked or changed by
written instrument so signed and filed prior to the Participant’s death.

 

8.2                                 BENEFICIARY PREDECEASES PARTICIPANT.  If a Participant designates more than one
person to receive such Participant’s death benefit and any Beneficiary shall
predecease the Participant, the Committee shall distribute the deceased
Beneficiary’s share to the 

 

 

surviving
designee or designees proportionately, as the portion designated by the
Participant for each bears to the total portion designated for all survivors.

 

8.3                                 ABSENCE OF EFFECTIVE DESIGNATION.  If a Participant files no designation or
revokes a designation previously filed without filing a new designation, or if
all persons designated shall predecease the Participant, the Committee shall
distribute the balance of the Participant’s respective Account(s) in the
manner determined in accordance with the Participant’s designation in effect
with respect to the Participant’s non-optional life insurance benefits provided
for 3M salaried and union-free hourly employees or, in the event there is no
effective designation with respect to such non-optional life insurance benefits
or all persons designated thereunder predecease the Participant, in accordance
with the provisions of the non-optional life insurance benefits plan which
apply to such contingencies.

 

8.4                                 DEATH OF BENEFICIARY.  If a Beneficiary to whom payments hereunder
are to be made pursuant to the foregoing provisions of this Article VIII
survives the Participant but dies prior to complete distribution to the
Beneficiary of the Beneficiary’s share,

 

(a)                      unless the Participant has otherwise
specified in his or her designation, the Committee shall distribute the
undistributed portion of such Beneficiary’s share to such person or persons,
including such Beneficiary’s estate, as such Beneficiary shall have designated
in a writing signed by such Beneficiary and filed with the Committee prior to
such Beneficiary’s death (which designation shall be subject to change or
revocation by such Beneficiary at any time); or

 

(b)                     if the Participant’s designation
specifies that such Beneficiary does not have the power to designate a
successor Beneficiary or if such Beneficiary is granted such power but fails to
designate a successor Beneficiary prior to such Beneficiary’s death, the
Committee shall distribute the undistributed portion of such Beneficiary’s
share to such Beneficiary’s estate.

 

8.5                                 BENEFICIARY DISCLAIMER.  Notwithstanding the foregoing provisions of
this Article VIII, in the event a Beneficiary, to whom payments hereunder
would otherwise be made, disclaims all or any portion of that Beneficiary’s
interest in such payments, such disclaimed portion of such Beneficiary’s
interest in such payments shall pass to the person or persons specified by the
Participant to take such disclaimed interest. 
In the event the Participant did not specify a person or persons to take
disclaimed interests, such disclaimed portion of such Beneficiary’s interest in
such payments shall pass to the person or persons who would be entitled thereto
pursuant to the Participant’s designation or the designation made with respect
to the non-optional life insurance benefits plan referenced above, whichever is
applicable pursuant to the foregoing provisions of this Article VIII, if
such Beneficiary had died immediately preceding the death of the Participant.

 

ARTICLE IX

Administration

 

This
Plan shall be administered by the Plan Administrator, under the supervision and
direction of the Committee.  The
Committee shall have full power to formulate additional details and regulations
for carrying out this Plan.  Both the
Plan Administrator and the Committee shall also be 

 

 

empowered
to make any and all other determinations not herein specifically authorized
which may be necessary or desirable for the effective administration of the
Plan.  Any decision or interpretation of
any provision of this Plan adopted by the Plan Administrator or the Committee
shall be final and conclusive.

 

ARTICLE X

Amendment and Termination of Plan

 

10.1                           RIGHT TO AMEND.  3M or the Committee may at any time amend or
modify the Plan in whole or in part; provided, however, that no amendment or
modification shall adversely affect the rights of any Participant or
Beneficiary acquired under the terms of the Plan as in effect prior to such
action.  The consent of any Participant,
Beneficiary, Employer or other person shall not be a requisite to such
amendment or modification of the Plan.

 

10.2                           TERMINATION.  While it expects to continue this Plan
indefinitely, 3M reserves the right to terminate the Plan at any time and for
any reason.  Upon the termination of the
Plan, all elections to participate in the Plan and defer Compensation hereunder
will be revoked, and the amounts already credited to existing Accounts will be
distributed to the Participants in accordance with the provisions of Article VII.

 

ARTICLE XI

General Provisions

 

11.1                           UNSECURED GENERAL CREDITOR.  No Employer shall have any obligation to set
aside funds, or otherwise make any special provision for its liability, with
respect to amounts that are credited to any Accounts, prior to the time that it
is required to distribute such amounts pursuant to Articles V and VII.  Employer’s obligation under the Plan shall be
merely that of an unfunded and unsecured promise to pay money in the
future.  Each Participant (or
Beneficiary) shall be an unsecured general creditor of the Participant’s
Employer with respect to amounts credited to the Participant’s Accounts.

 

11.2                           NONASSIGNABILITY.  Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate or convey in advance of
actual receipt the amounts, if any, payable hereunder.  All payments and the rights to all payments
are expressly declared to be nonassignable and nontransferable.  No part of the amounts payable hereunder
shall, prior to actual payment, be subject to seizure or sequestration for the
payment of any debts, judgments or decrees, or transferred by operation of law
in the event of a Participant’s or any Beneficiary’s bankruptcy or insolvency.

 

11.3                           NOT A CONTRACT OF EMPLOYMENT.  The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between the Employer and
any Participant, and the Participants (or their Beneficiaries) shall have no
rights against the Employer except as may otherwise be specifically provided
herein.  Moreover, nothing in this Plan
shall be deemed to give any Participant the right to be retained in the service
of the Employer or to interfere with the right of the Employer to discipline or
discharge such Participant at any time for any reason whatsoever.

 

 

11.4                           TERMS. 
Wherever any words are used herein in the singular or in the plural,
they shall be construed as though they were used in the plural or in the
singular, as the case may be, in all cases where they would so apply.

 

11.5                           CAPTIONS. 
The captions of the articles and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.

 

11.6                           GOVERNING LAW.  The provisions of this Plan shall be
construed and interpreted according to the laws of the State of Minnesota.

 

11.7                           VALIDITY. 
In case any provision of this Plan shall be ruled or declared invalid
for any reason, said illegality or invalidity shall not affect the remaining
parts hereof, but this Plan shall be construed and enforced as if such illegal
or invalid provision had never been inserted herein.

 

11.8                           NOTICE. 
Any notice or filing required or permitted to be given to the Committee
under this Plan shall be sufficient if in writing and hand delivered, or sent
by registered or certified mail, to the Committee at the principal office of 3M
Company.  Such notice shall be deemed
given as of the date of delivery or, if delivery is made by mail, as of the
date shown on the postmark on the receipt for registration or certification.

 

11.9                           SUCCESSORS.  The provisions of this Plan shall bind and
inure to the benefit of the Employer and its successors and assigns.  The term successors as used herein shall include
any corporation or other business entity which shall, whether by merger,
consolidation, purchase or otherwise, acquire all or substantially all of the
business and assets of the Employer, and successors of any such corporation or
other business entity.

 

11.10                     INCOMPETENT.  In
the event that it shall be found upon evidence satisfactory to the Committee
that any Participant or Beneficiary to whom a benefit is payable under this
Plan is unable to care for his or her affairs because of illness or accident, any
payment due (unless prior claim therefore shall have been made by a duly
authorized guardian or other legal representative) may be paid, upon
appropriate indemnification of the Committee, to the spouse or other person
deemed by the Committee to have accepted responsibility for such Participant or
Beneficiary.  Any such payment made
pursuant to this paragraph 11.10 shall be in complete discharge of any
liability therefore under the Plan.

 

ARTICLE XII

Change in Control

 

12.1                           DEFINITIONS.  For purposes of this Article XII, the
following words and phrases shall have the meanings indicated below, unless the
context clearly indicates otherwise:

 

(a)                      “Person” shall have the meaning
associated with that term as it is used in Sections 13(d) and 14(d) of
the Act.

 

(b)                     “Affiliates and Associates” shall have
the meanings assigned to such terms in Rule 12b-2 promulgated under Section 12
of the Act.

 

(c)                      “Act” means the Securities Exchange Act
of 1934.

 

 

(d)                     “Continuing Directors” shall have the
meaning assigned to such term in Article Thirteenth of the Company’s
Certificate of Incorporation, as amended.

 

(e)                      “Code” means the Internal Revenue Code of
1954, as amended.

 

(f)                        “Company” means 3M Company, a Delaware
corporation.

 

12.2                           TERMINATION UPON CHANGE IN CONTROL.  This Plan shall terminate and the Company
shall immediately distribute in cash to the respective Participants the amounts
credited to all existing Accounts upon the occurrence of a Change in Control of
the Company.

 

12.3                           DEFINITION OF CHANGE IN CONTROL.  For purposes of this Article XII, a
Change in Control of the Company shall be deemed to have occurred if:

 

(a)                      any Person (together with its Affiliates
and Associates), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, is or becomes the “beneficial
owner” (as that term is defined in Rule 13d-3 promulgated under the Act),
directly or indirectly, of securities of the Company representing thirty
percent (30%) or more of the combined voting power of the Company’s then
outstanding securities, unless a majority of the Continuing Directors of the
Company’s Board of Directors prior to that time have determined in their sole
discretion that, for purposes of this Plan, a Change in Control of the Company
has not occurred; or

 

(b)                     the Continuing Directors of the Company’s Board of
Directors shall at any time fail to constitute a majority of the members of
such Board of Directors.

 

12.4                           GROSS UP FOR EXCISE TAX.  In the event that the payments made pursuant
to this Article XII are finally determined to be subject to the excise tax
imposed by Section 4999 of the Code, the Company shall pay to each
Participant an additional amount such that the net amount retained by such
Participant, after allowing for the amount of such excise tax and any
additional federal, state and local income taxes paid on the additional amount,
shall be equal to the value of the Accounts distributed to such Participant
pursuant to this Article XII.

 

12.5                           REIMBURSEMENT OF FEES AND EXPENSES.  The Company shall pay to each Participant the
amount of all reasonable legal and accounting fees and expenses incurred by
such Participant in seeking to obtain or enforce his rights under this Article XII
or in connection with any income tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Code to the
payments made pursuant to this Article XII, unless a lawsuit commenced by
the Participant for such purposes is dismissed by the court as being spurious
or frivolous.  The Company shall also pay
to each Participant the amount of all reasonable tax and financial planning
fees and expenses incurred by such Participant in connection with such
Participant’s receipt of payments pursuant to this Article XII.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

  

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
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  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 (4th) floor, the entire third (3rd)
floor, and two wings on the second (2nd) 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.            Project:  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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

                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 (3rd)
floor and the entire fourth (4th) 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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

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 4th,
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 6th 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11

 

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, 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

(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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 

(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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15

 

(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
against the Premises or the Project, or any interest therein, as a result of
any services, labor or materials provided (or claimed to have been provided) on
Tenant’s behalf, Tenant shall (i) immediately notify Landlord of such
lien, and (ii) within fifteen (15) days after receiving notice (from
Landlord or any other source) of the filing of any such lien, discharge and
cancel such lien by payment or bonding, in accordance with the laws of the
Commonwealth, at Tenant’s sole cost and expense.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17

 

Section 10.03.        Removal.  All leasehold improvements and alterations made
to the Premises shall be Landlord’s property (except for Tenant’s moveable
trade fixtures, which shall be Tenant’s property), and shall not be removed
from the Premises during the Term.  Upon
the expiration of the Term, Tenant shall, at Tenant’s expense, remove from the
Premises (i) any atypical leasehold improvements and alterations which
Landlord directed Tenant to remove in writing at the time Landlord approved the
same, and (ii) all of Tenant’s moveable trade fixtures. Tenant shall
promptly repair, or reimburse Landlord for the cost of repairing any damage to
the Premises caused by such removal.

 

ARTICLE XI

 

REPAIRS

 

Section 11.01.        By
Landlord.  Except as expressly
otherwise set forth herein, Landlord shall perform all maintenance and shall
make all repairs and replacements to the Premises and the Building, including,
but not limited to the base building structure and systems, the exterior walls,
load bearing elements, foundation, pipes, conduits, roof, and common areas, and
the mechanical, life/safety, electrical, HVAC, and plumbing systems that are a
part of the base Building, in a manner befitting comparable office buildings in
the Tysons Corner market.  In addition to
Tenant’s obligation to reimburse Landlord for maintenance, repairs and
replacements pursuant to Article IX hereof, Tenant shall reimburse
Landlord for the cost of (a) all repairs and replacements to the Premises
performed by Landlord at the request of Tenant which Landlord is not otherwise
required to perform under the terms of this Lease, and (b) all repairs and
replacements to the Project which are necessitated as a result of the acts or
omissions of Tenant, or its agents, employees, contractors, licensees or
invitees.  Amounts payable by Tenant
pursuant to this Section 11.01 shall be due and payable within thirty (30)
days after receipt of an invoice therefor from Landlord.  Landlord has no obligation and has made no
promise to maintain, alter, remodel, improve, repair, decorate or paint the Premises,
except as expressly set forth in this Lease. 
In no event shall Landlord have any obligation to maintain, repair or
replace any fixtures, personal property or specialty (i.e., non-building
standard) items of Tenant, except where necessitated by the negligence or
intentional misconduct of Landlord, its agents, employees, or contractors.

 

Section 11.02.        By
Tenant.  Tenant shall keep the
Premises in good order, and in a safe, neat and clean condition.  Unless expressly authorized elsewhere in this
Lease, Tenant shall not perform any maintenance or repair work or make any
replacement in or to the Premises, but rather shall promptly notify Landlord of
the need for such maintenance, repair or replacement so that Landlord may
proceed to perform the same.  Notwithstanding
the foregoing, Tenant shall be solely responsible for maintaining and repairing
any fixtures, personal property or specialty (i.e., non-building 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

 

standard) items
within the Premises, and any specialty items (such as supplemental HVAC
systems) which exclusively serve the Premises.

 

ARTICLE XII

 

CONDUCT OF BUSINESS BY
TENANT

 

Section 12.01.        Use
of Premises.  Tenant (and any
sublessee or assignee of Tenant) shall use and occupy the Premises during the
Term solely for the Permitted Use set forth in Article I hereof and for no
other purpose.  The Premises shall not be
used for the storage of personal property (other than as may be incidental to
the conduct of Tenant’s business) unless expressly permitted by the terms of
this Lease.  Tenant shall procure and
maintain, at Tenant’s expense, any governmental licenses or permits which may
be required for the proper and lawful conduct of Tenant’s business in the
Building.

 

Section 12.02.        Operation
of Business.  Tenant covenants and
agrees that, in the operation of its business within the Premises, Tenant shall
(a) pay before delinquency all taxes, assessments and public charges
levied, assessed or imposed upon Tenant’s business, Tenant’s leasehold
interest, or Tenant’s fixtures, furnishings or equipment in the Premises, and
pay when due all such license fees, permit fees and similar charges for
Tenant’s conduct of business in the Premises; (b) observe the Rules and
Regulations attached hereto as Exhibit I, and all other reasonable rules and
regulations established by Landlord from time to time, provided Tenant shall be
given written notice thereof (the delivery of which need not conform to the
requirements of Article XXI hereof); and (c) not use any space outside
the Premises for storage or any other undertaking.

 

Section 12.03.        Care
of Premises.  Tenant shall not move
any safe, heavy machinery, heavy equipment or fixtures into or out of the
Premises without Landlord’s prior written consent.  Tenant agrees that it will not place a load
on the floor which exceeds 80 lbs. live load with a uniform partition
load of 20 lbs., and will not install, operate or maintain in the Premises any
heavy equipment, except in such manner as to achieve a proper distribution of
weight.  At Tenant’s request, Landlord
shall indicate the maximum live load which the floor was designed to support.

 

Section 12.04.        Signage.  Tenant (i) shall be
entitled to install an exterior sign on the top of the Building facade (which,
at Tenant’s option, may be lighted), and not to exceed one hundred (100) face
feet, in the location and form as approved by Landlord in its reasonable
discretion; and (ii) shall be entitled to place its name on the monument
sign serving the Building on the top location in such form as approved by
Landlord in its reasonable discretion. 
Upon the expiration or earlier termination of this Lease, Tenant shall
restore the subject face of the Building and the monument sign to their
original condition, ordinary wear and tear and casualty excepted.  Except as set forth herein, Tenant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19

 

shall not install
or maintain any sign on the Building or the Project without the prior written
consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed.  If Landlord
consents to the installation of a sign, Tenant, at its sole expense, shall
maintain and repair such sign, and shall remove such sign and repair any damage
caused thereby upon the expiration of the Term. 
Landlord shall provide a Building directory in the main lobby, and
Landlord shall allocate to the Tenant its Pro Rata Share of directory strips.

 

Section 12.05.        Elevator
Lobby.  So long as Tenant is leasing
an entire floor of the Building, Tenant will be entitled to furnish the
elevator lobby of such floor and to install such signs in said lobby as
Landlord may approve in its reasonable discretion.  If at any time Tenant is no longer leasing
such entire floor of the Building, Tenant will immediately remove all
furnishing and signs from the elevator lobby of such floor and restore the
lobby area of the floor to its original condition before such sign was
installed.

 

Section 12.06.        Legal
Requirements.  Tenant shall, at its
own expense, comply with all laws, orders, ordinances and regulations of
federal, state and local authorities, and with all rules, recommendations,
requirements and regulations of the Board of Fire Underwriters, Landlord’s
insurance companies, and any other organization establishing insurance rates in
the geographical area where the Project is located (collectively “Legal
Requirements”), as related to its use of and occupancy of the Premises.
Landlord shall, at its own expense, comply with all Legal Requirements as they
apply to the Building generally.

 

ARTICLE XIII

 

INSURANCE AND
INDEMNITY

 

Section 13.01.        Insurance
to be Procured by Landlord.  Landlord
shall obtain, and maintain in effect throughout the Term, in a manner
consistent with a reasonably prudent landlord, casualty insurance covering the
Building, and commercial general liability insurance.  Such insurance shall be issued by an
insurance company licensed to do business in the Commonwealth.

 

Section 13.02.        Insurance
to be Procured by Tenant.  Tenant, at
Tenant’s sole cost and expense, shall obtain, and maintain in effect throughout
the Term, policies providing for the following coverage:

 

A.            Commercial general
liability insurance protecting against liability occasioned by any occurrence
in the Premises and on the Project, and containing contractual liability
coverage of at least Five Million and NO/100 Dollars ($5,000,000.00), combined
single limit, written on an occurrence basis. 
If it becomes customary for a significant number of tenants of commercial
office buildings in the area to be required to provide insurance policies to
their landlords with additional coverages or coverage limits higher than the
foregoing limits, then Tenant shall be required, at Landlord’s  request, to obtain insurance policies having
limits which are commensurate with the then customary limits.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20

 

B.            Casualty insurance
covering Tenant’s fixtures, equipment, furnishings, merchandise and other
contents located in the Premises, insuring against vandalism, malicious
mischief and sprinkler damage, and all perils included under the classification
“Fire and Extended Coverage.”

 

C.            Tenant’s worker’s
compensation insurance affording statutory coverage and containing statutory
limits required under the Commonwealth’s worker’s compensation statutes.

 

Section 13.03.        General
Provisions.  The insurance policies required
under Section 13.02 hereof shall (i) be issued by insurance companies
licensed to do business in the Commonwealth which have a Best’s Rating of A:XII
or better; (ii) be written as primary policy coverage and not contributing
with or in excess of any coverage which Landlord may carry; and (iii) name
Landlord and any mortgagee of the Project as additional insureds.  Neither the issuance of any insurance policy
required hereunder, nor the minimum limits specified herein with respect to
Tenant’s insurance coverage, shall be deemed to limit or restrict Tenant’s
liability arising hereunder.  Tenant
shall deliver to Landlord, on or before the Commencement Date, a certificate of
insurance for each policy which Tenant is required to procure pursuant to this Article XIII.
Tenant shall also deliver to Landlord, on or before the expiration or
cancellation of a policy, a certificate of insurance evidencing an extension of
such policy or the issuance of a replacement policy.  Each insurance policy which Tenant is required
to procure shall provide (and any certificate evidencing the existence of each
such insurance policy shall certify) that the insurance carrier shall not
cancel, fail to renew, or make material changes to, such insurance policy,
without in each instance providing Landlord with at least thirty (30) days
prior written notice thereof.  If Tenant
shall fail to obtain any insurance coverage which Tenant is required to procure
hereunder, and such failure continues for five (5) days after written
notice of such by Landlord to Tenant, Landlord shall have the right to obtain
the same and pay the premium therefor for a period not exceeding one (1) year,
and the premium so paid by Landlord together with an administrative fee of Two
Thousand and 00/100 Dollars ($2,000.00) of such premium shall be immediately
payable by Tenant to Landlord as Additional Rent.

 

Section 13.04.        Insurance
Requirements.  Tenant shall promptly
comply with all rules, orders, regulations, or requirements of the insurance
services office having jurisdiction. 
Tenant shall not do or permit to be done any act or thing upon the
Premises that will invalidate or be in conflict with any insurance policies
covering the Project, or which shall increase the rate of any insurance
covering the Project, or any property located therein.  If, as a result of Tenant’s failure to comply
with the provisions of this Section, the rates of any insurance covering the
Project shall increase, then Tenant shall reimburse Landlord on demand as Additional
Rent for that part of the premium charged as a result of such violation by
Tenant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21

 

Section 13.05.        Indemnification.  Tenant hereby waives all claims against
Landlord for damage to any property, or injury to or death of any person, in or
upon the Premises or the Project, arising at any time and from any cause other
than the negligence or willful misconduct of Landlord, its agents, employees,
licensees or invitees.  Subject to Section 13.06
Tenant shall indemnify and hold Landlord harmless from any damage to any
property, or injury to or death of any person, arising from (i) the
condition of the Premises; or (ii) the use of the Project or the use and
occupancy of the Premises by Tenant, its agents, employees, contractors,
licensees or invitees, unless such injury or damage is caused by the negligence
or willful misconduct of Landlord, its agents or employees.  Tenant’s foregoing indemnity shall include
attorneys’ fees, investigation costs, and all other reasonable costs and
expenses incurred by Landlord in connection therewith.

 

Subject to Section 13.06
Landlord shall indemnify and hold Tenant harmless from any damage to any
property, or injury to or death of any person caused by Landlord, its agents,
employees, invitees or licensees on or about the Common Areas or the Premises,
unless such damage is caused by the negligence or willful misconduct of Tenant,
its agents, employees, licensees or invitees. 
Landlord’s foregoing indemnity shall include attorneys’ fees,
investigation costs, and all other reasonable costs and expenses incurred by
Tenant in connection therewith.

 

The provisions of
this Section 13.05 shall survive the termination of this Lease with
respect to any occurrence prior to such termination.

 

Section 13.06.        Mutual
Waiver of Claims.  Tenant and
Landlord each hereby release and relieve each other, and waive their entire
right to recovery against the other, for loss or damage (regardless of cause or
origin) insured by the casualty policies required herein (or that would have
been covered if Tenant or Landlord, as the case may be, was carrying the
insurance required by this Lease) or any other casualty policies actually held
by either Tenant or Landlord, whether due to the negligence, respectively, of
Landlord or Tenant, or their agents, employees, contractors, licensees or
invitees.  Tenant and Landlord shall
cause their respective casualty policies to contain a provision allowing the foregoing
waiver of claims.

 

ARTICLE XIV

 

DESTRUCTION OF
PREMISES

 

Section 14.01.        Destruction
of Premises.  Tenant shall give
prompt notice to Landlord of any fire or other damage to the Premises or the
Building of which Tenant becomes aware. 
If (i) twenty percent (20%) or more of the Premises or the
Building shall be damaged by fire or other casualty, or (ii) any damage to
the Premises or Building cannot reasonably be repaired within one (1) year
after the damage occurred, or (iii) any mortgagee of the Premises shall
require that the insurance proceeds under the 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

 

policies referred
to in Section 13.01 hereof be used to pay down the mortgage, or (iv) the
Premises or Building shall be damaged as a result of a risk which is not
covered by Landlord’s insurance, then either party may terminate this Lease by
notice given within ninety (90) days after the date of such damage.

 

Section 14.02.        Obligation
to Rebuild.  If the Premises are
damaged by fire or other casualty and this Lease is not terminated pursuant to Section 14.01,
then all insurance proceeds under the policies referred to in Article XIII
hereof that are recovered on account of any such damage shall be made available
to pay for the cost of repairing such damage, and, as soon as practicable after
such damage occurs, Landlord shall repair or rebuild the Premises to a
condition substantially similar to their condition immediately prior to such
occurrence to the extent the cost therefor is fully funded by insurance proceeds.  However, in no event shall Landlord be
obligated to repair or replace Tenant’s trade fixtures, equipment or
personalty.

 

Section 14.03.        Rent
Abatement.  In the event of any
repair or rebuilding pursuant to Section 14.02 hereof, then an equitable portion
of the Rent shall be abated during the existence of such damage, based upon the
portion of the Premises which is rendered untenantable and the duration
thereof.  Except as expressly set forth
in this Article XIV, Landlord shall not be liable or obligated to Tenant
if the Premises are damaged by fire or other casualty.  Except as provided herein, Tenant hereby
waives any and all rights to terminate this Lease that it may have, by reason
of damage to the Premises by fire or other casualty, pursuant to any presently
existing or hereafter enacted law.

 

ARTICLE XV

 

CONDEMNATION

 

Section 15.01.        Condemnation
of Premises or Project.  If all or
substantially all of the Premises or the Project is taken or condemned by
condemnation or conveyance in lieu thereof (such taking, condemnation or
conveyance in lieu thereof being hereinafter referred to as “Condemnation”),
this Lease shall terminate on the earlier of the date the condemning authority
takes possession or the date title vests in the condemning authority.

 

Section 15.02.        Partial
Taking of Project.  If any portion of
the Project shall be taken by Condemnation (whether or not such taking includes
any portion of the Premises) and (i) such taking, in Landlord’s judgment,
results in a condition where the Project cannot be restored in an economically
feasible manner for use substantially as originally designed, or (ii) Landlord’s
mortgagee requires Landlord to use the proceeds thereof to pay down the
mortgage, then Landlord shall have the right, at Landlord’s option, to
terminate this Lease effective as of the date specified by Landlord in a
written notice of termination to Tenant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23

 

Section 15.03.        Partial
Taking of Premises.  If a portion,
but less than substantially all, of the Premises shall be taken by
Condemnation, then this Lease shall be terminated as of the date of
Condemnation as to the portion of the Premises so taken, unless Tenant
reasonably determines that it shall no longer be able to conduct its business
in the remainder of the Premises, whereupon Tenant shall have the right to
terminate this Lease effective as of a date not later than sixty (60) days
after the date of Condemnation, as specified by Tenant in a written notice of
termination delivered to Landlord within ten (10) days after the date of
Condemnation.

 

Section 15.04.  Condemnation
Award.  All compensation awarded or
paid upon a Condemnation of any portion of the Project shall belong to and be
the property of Landlord, without participation by Tenant.  Notwithstanding the foregoing, Tenant shall
have the right to prosecute any claim directly against the condemning authority
for loss of business, loss of goodwill, moving expenses, and damage to and cost
of removal of trade fixtures, furniture and other personal property belonging
to Tenant, so long as Tenant’s claim shall not diminish or adversely affect any
award claimed or recovered by Landlord.

 

ARTICLE XVI

 

ASSIGNMENT AND
SUBLETTING

 

Section 16.01.        Assignment
or Sublease by Tenant.

 

A.            Tenant shall not
sublet the Premises (or any portion thereof) or assign this Lease (or any
interest herein), nor shall any assignment or sublease occur by operation of
law, without the prior written consent of Landlord, which consent shall be
given within ten (10) business days of Landlord’s receipt of Tenant’s
written notification and which shall not be unreasonably withheld, conditioned
or delayed.  Notwithstanding the
foregoing as an alternative to granting consent to either (i) a proposed
sublease of all (but not less than all) of the Premises for the balance of the
terms of the Lease or (ii) an assignment of the Lease for the balance of
the terms of the Lease; Landlord shall have the right, in its sole discretion,
to elect: (a) to sublet from Tenant the Premises upon the same terms as
the proposed sublet; or (b) to terminate this Lease as of the proposed
effective date of the assignment or sublease. 
In no event, however, shall Tenant be permitted to sublease the Premises
or assign this Lease if Tenant is then in Default under this Lease.  In the event of any assignment or sublease
pursuant to the terms of this Article XVI, Tenant shall remain liable for
all of its obligations under this Lease, including, but not limited to, payment
of Rent.  Landlord’s consent to a
particular assignment or sublease pursuant to this Article XVI shall not
constitute consent to any other assignment or sublease.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24

 

B.            If Tenant should
desire to assign this Lease or sublet the Premises, Tenant shall give Landlord
written notice thereof specifying:  (i) the
name, current address and business of the proposed assignee or sublessee, (ii) the
amount and location of the space within the Premises proposed to be so
subleased, (iii) the proposed effective date and duration of the
assignment or sublease, (iv) the proposed rent to be paid to Tenant by
such assignee or sublessee, and (v) all other information reasonably
required by Landlord to evaluate the proposed assignment or sublease.  If Landlord consents to such assignment or
sublease, Tenant shall deliver to Landlord copies of all documents executed in
connection therewith, which documents shall be in form and substance reasonably
satisfactory to Landlord, and which documents shall require such assignee or
sublessee to comply with all terms of this Lease on Tenant’s part to be
performed.  No acceptance by Landlord of
any rent or any other sum of money from any sublessee or assignee shall be
deemed to constitute Landlord’s consent to any assignment or sublease.  If Landlord permits Tenant to sublet the
Premises or assign this Lease, and the rental rate thereunder exceeds the
rental rate hereunder, Tenant shall remit to Landlord as Additional Rent, as
and when Rent hereunder becomes due, fifty percent (50%) of the difference
between the rent due under the sublease or assignment and the Rent due
hereunder, less reasonable expenses incurred by Tenant in subleasing the space
or assigning this Lease, which expenses shall be deducted up front before any
profits are remitted to Landlord.  In the
event of multiple subleases, all profits shall be calculated in the aggregate.  The aforementioned rights of this Section 16.01.B.
shall not apply to transfer to a Permitted Transferee pursuant to Section 16.01.B.
below.

 

C.            Notwithstanding the
foregoing provisions of this Section 16.01, Tenant shall have the right,
upon prior written notice to Landlord, but without Landlord’s consent, and provided
Tenant is not then in Default, to assign this Lease, or to sublet all or any
part of the Premises, to (i) any entity resulting from a merger or
consolidation with Tenant, (ii) any corporation succeeding to all the
business and assets of Tenant, (iii) a company with which Tenant has a
teaming or other business relationship (so long as Tenant occupies at least
fifty percent (50%) of the Premises and such company complies with the
Permitted Use set forth in Article I, Section O of the Premises), or (iv) any
affiliate of Tenant (each, a “Permitted Transferee”); provided, however, that
the net worth of the surviving or successor entity or the affiliate is at least
equal to the net worth of Tenant as of the date of the assignment; and
provided, further, that Tenant shall remain unconditionally liable for Tenant’s
obligations under this Lease.  For
purposes hereof, an affiliate of Tenant is any entity which controls, is
controlled by, or is under common control with Tenant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25

 

D.            Notwithstanding
anything in this Lease to the contrary, if Tenant makes a transfer to a Permitted
Transferee, assigns the entire lease to a third party, or subleases the entire
Premises for the full remaining Term to a third party, all rights under the
Lease including, but not limited to, expansion, renewal, signage and sublease /
assignment rights shall convey as if such Permitted Transferee or third party
assignee or sublessee was the original Tenant hereunder; provided that renewal
rights shall not transfer to any third party sublessee and no third party
assignee or sublessee may further convey any such rights.

 

Section 16.02.        Assignment
Under Bankruptcy Code.  Any person or
entity to which this Lease is assigned pursuant to the provisions of the
Bankruptcy Code shall be deemed, without further act or deed, to have assumed
and be subject to all of the obligations, conditions and provisions under this
Lease as of the date of such assignment. 
Notwithstanding the foregoing, to the extent allowed by law, this Lease
shall not be assignable by voluntary or involuntary bankruptcy, insolvency or
reorganization proceedings, nor shall this Lease, or any rights or privileges
hereunder, be an asset of Tenant under any bankruptcy, insolvency or
reorganization proceedings.

 

Section 16.03.        Assignment
by Landlord.  The term “Landlord”
shall be limited to mean only the owner or owners, at the time in question, of
the fee title to, or a lessee’s interest in a ground lease of, the
Project.  In the event of any transfer,
assignment or conveyance of any such title or interest, the Landlord-transferor
shall be automatically freed and relieved of all obligations of Landlord
hereunder which accrue from and after the date of such transfer, assignment or
conveyance, and the Landlord-transferee of such title or interest shall be
deemed to have assumed all obligations of Landlord hereunder which accrue from
and after the date of such transfer, assignment or conveyance.  Tenant hereby acknowledges that Landlord may
transfer its interest in the Lease or the Project without the consent of
Tenant.

 

 

 

ARTICLE XVII

 

FINANCING AND
SUBORDINATION

 

Section 17.01.        Subordination;
Attornment.

 

A.            This
Lease is subject and subordinate to all current and future ground leases, deeds
of trust, mortgages or other security instruments covering any portion of the
Project, or any interest of Landlord therein, as the same may be amended from
time to time.  This provision shall be
self-operative, and no further instrument shall be required to effect such
subordination of this Lease.  Upon
demand, however, Tenant shall execute, acknowledge and deliver to Landlord any
further instruments evidencing such subordination as Landlord, and any
mortgagee or lessor of Landlord, shall reasonably require.  Notwithstanding the foregoing, any mortgagee
or lessor of Landlord shall have the right at any time to subordinate any such
deed of trust or mortgage or underlying lease to this Lease, on such terms and
subject to such conditions as such mortgagee or lessor of Landlord may deem
appropriate.

 

B.            Upon any transfer of
Landlord’s interest in the Project, Tenant shall, upon request of such
transferee (“successor landlord”), automatically attorn to and become the
Tenant of the successor landlord, without change in the terms of this
Lease.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26

 

This agreement of
Tenant to attorn to a successor landlord shall survive any foreclosure sale,
trustee’s sale, conveyance in lieu thereof or termination of any underlying
lease.  Tenant shall, upon demand at any
time, before or after any such foreclosure or termination, execute, acknowledge
and deliver to the successor landlord any written instruments evidencing such
attornment as such successor landlord may reasonably require.

 

C.            As soon as
practicable after the execution of this Lease, Landlord shall obtain, at
Landlord’s sole cost and expense, and deliver to Tenant a subordination,
non-disturbance and attornment agreement (“SNDA”) in a form reasonably
acceptable to Tenant and which is fully executed by the current Mortgagee,
Landlord and Tenant which provides that the current mortgagee will, in the
event of a foreclosure of any such mortgage or deed of trust (or termination of
any such ground lease) take no action to interfere with the Tenant’s rights,
privileges and options hereunder, except on the occurrence of a Default
hereunder.  During the term of this
Lease, Landlord agrees to obtain a commercially reasonable subordination,
non-disturbance and attornment agreement (in a form reasonably satisfactory to
Tenant) in favor of Tenant from any subsequent holder of any deed of trust
affecting the Property.

 

Section 17.02.        Mortgagee’s
Right to Cure.  In the event of any
default by Landlord hereunder, Tenant shall, prior to taking any action to
remedy such default or to cancel this Lease, send to U.S. Bank National Association, 1650 Tysons Boulevard, Suite 250,
McLean, Virginia 22102, Attention: Real Estate Banking Group, or to any subsequent mortgagee of which
Tenant has notice, by certified mail, return receipt requested, a notice
specifying the default by Landlord, whereupon such mortgagee shall have a
reasonable period of time to cure such default on behalf of Landlord.  Tenant shall have no right to take any other
action as a result of Landlord’s default unless and until Tenant complies with
the provisions of this paragraph.

 

ARTICLE XVIII

 

DEFAULT OF TENANT

 

Section 18.01.        Defaults.  Each of the following occurrences shall
constitute a “Default” by Tenant:

 

A.            If Tenant fails to
pay any installment of Rent when the same shall become due and payable, and such
failure shall continue for five (5) business days after written notice of
such failure.

 

B.            If any execution,
levy, attachment or other process of law occurs upon Tenant’s interest in the
Premises, and Tenant fails to discharge or bond-off the same within fifteen
(15) days after receiving notice thereof (from Landlord or otherwise).

 

C.            If a mechanic’s lien
is filed against the Premises or the Project as a result of any services or
labor provided, or materials furnished, on Tenant’s behalf, and Tenant fails to
timely cause such lien to be discharged, or bond such lien or post such
security, as is required by Section 10.02.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27

 

D.            If Tenant violates
the sublease or assignment provisions set forth in Article XVI hereof.

 

E.             If Tenant fails to
maintain in force all policies of insurance required by this Lease, and the
same is not cured within five (5) business days of Tenant’s receipt of
notice thereof.

 

F.             If Tenant fails to
provide Landlord with the financial statements or the estoppel certificates
within the time periods referenced in Sections 23.16 and 23.17 hereof,
respectively, and the same is not cured within five (5) business days of
Tenant’s receipt of notice thereof.

 

G.            Subject to the terms
of the Bankruptcy Code, if (i) Tenant, Tenant’s guarantor or any permitted
assignee or sublessee, shall (a) make an assignment for the benefit of
creditors, (b) file or acquiesce in a petition in any court (whether or
not pursuant to any statute of the United States or of any state) in any
bankruptcy, reorganization or insolvency proceedings, or (c) make an
application in any such proceedings for or acquiesce in the appointment of a
trustee or receiver for it or all or any portion of its property; or (ii) any
petition shall be filed against Tenant, Tenant’s guarantor or any permitted
assignee or sublessee, in any bankruptcy, reorganization or insolvency
proceedings and (x) Tenant, Tenant’s guarantor or any permitted assignee
or sublessee shall thereafter be adjudicated bankrupt, or (y) such
petition shall be approved by any such court, or (z) such proceedings
shall not be dismissed, discontinued or vacated within sixty (60) days after
such petition is filed; or (iii) a receiver or trustee shall be appointed
for Tenant, Tenant’s guarantor or a permitted assignee or sublessee, for all or
any portion of their property, and such receivership or trusteeship shall not
be set aside within sixty (60) days after such appointment.

 

H.            If Tenant fails to
perform or observe any other term of this Lease which is not specifically
referred to in this Section 18.01, and such failure continues for more
than thirty (30) days after written notice from Landlord, except that such
thirty (30) day period shall be extended for such additional period of time as
may reasonably be necessary to cure such default, if such default, by its
nature, cannot be cured within such thirty (30) day period, provided that
Tenant commences to cure such default within such thirty (30) day period and is
at all times thereafter in the process of diligently curing the same, and does
in fact cure such default prior to the time that a failure to cure could cause
the Landlord to be subject to prosecution for violation of any law, rule, ordinance
or regulation or could cause a default under any mortgage, lease or other
agreement applicable to the Project.

 

Section 18.02.        Landlord’s
Remedies.  In the event of a Default,
Landlord may pursue any or all of the following remedies:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

28

 

A.            Landlord shall have
the right to terminate this Lease by delivering to Tenant written notice
thereof, whereupon Tenant shall be required to immediately vacate and surrender
the Premises.

 

B.            Landlord shall have
the right, without notice, to re-enter the Premises and dispossess, by summary
proceedings, self help or otherwise, Tenant and any other occupants of the
Premises, and Tenant shall have no further claim or right hereunder.

 

C.            Landlord shall have
the right to bring a special proceeding to recover possession of the Premises
from Tenant.

 

D.            If Landlord
exercises its rights under paragraphs B or C above, Landlord may remove all
persons from the Premises, and may treat all property as abandoned and dispose
of same in accordance with Section 20.02 of this Lease.

 

E.             Landlord may
exercise its rights under paragraphs B or C above with or without terminating
the Lease, and in no event shall any such exercise be construed as an election
to terminate this Lease (absent Landlord’s written statement to the contrary)
or operate to release Tenant from any of its obligations for the remainder of
the Term, or give rise to any claim for trespass.

 

F.             If Landlord
exercises its right to re-enter and take possession of the Premises pursuant to
this Article XVIII (regardless of whether Landlord terminates this Lease),
Landlord may from time to time make such alterations and repairs as necessary
in order to relet the Premises, and may thereafter relet the Premises or any
part thereof for such rent and upon such other terms and conditions as Landlord
may determine advisable in its sole discretion. 
Upon each such reletting, all rentals and other  sums received by Landlord from such reletting
shall be applied as follows:  first, to
the payment of any costs and expenses of such reletting; second, to the payment
of any indebtedness other than Rent due and unpaid hereunder; and third, to the
payment of Rent due and unpaid hereunder. 
If such rentals and other sums received from such reletting during any
month are less than the amounts due pursuant to the foregoing schedule for
application of proceeds, Tenant shall pay such deficiency to Landlord; if such
rentals and other sums shall be more, Tenant shall have no right to, and shall
receive no credit for, the excess.  Such
deficiency shall be calculated and paid monthly.  In the event Landlord elects to relet the
Premises without terminating this Lease, Landlord may at any time elect to
terminate this Lease for such previous breach. 
The failure or refusal of Landlord to relet the Premises shall not
affect Tenant’s liability hereunder.

 

G.            Landlord may recover
its lost Rent and other damages due hereunder (i) at the time of the
re-entry or termination, in a single action or in separate actions, from time
to time, as the lost Rent shall accrue, or (ii) in a single proceeding
deferred until the expiration of the Term (in which event Tenant hereby agrees
that the cause of action shall not be deemed to have accrued until the date of
the expiration of the Term). 
Notwithstanding the foregoing, if Landlord terminates this Lease as a
result of a 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29

 

Tenant Default,
Landlord may, as an alternative to the remedies set forth in the preceding
sentence, recover upon demand the following liquidated damages (which the
parties hereto agree shall not be deemed a penalty) upon written notice thereof
to Tenant:  The sum of:  (i) all past-due Rent through the
termination date of this Lease, plus (ii) the amount of Landlord’s Costs
(hereinafter defined) which remains unamortized as of the termination date of
this Lease, plus (iii) the lesser of (a) the amount of Rent due for
the remainder of the Term, or (b) the amount of Rent due for the twelve
(12) month period immediately following the termination date of this
Lease.  Landlord and Tenant acknowledge
that they have agreed to the foregoing amount as liquidated damages because of
the difficulty of ascertaining in advance the amount of damages Landlord is
likely to incur as a result of Tenant’s Default and Landlord’s subsequent
termination of this Lease.  For purposes
hereof, the term “Landlord’s Costs” shall refer to the sum of (i) all real
estate brokerage commissions incurred by Landlord in connection with the Lease,
(ii) all actual and reasonable costs and expenses incurred by Landlord in
connection with the construction and/or installation of any leasehold
improvements, (iii) any rental abatements, (iv) any allowances
granted to Tenant, and (v) any other costs and expenses incurred by
Landlord in connection with the Lease. 
In addition to any other damages for which Tenant shall be liable
hereunder, Tenant shall be liable for all attorneys’ fees and court costs
incurred by Landlord as a result of Tenant’s Default.

 

Section 18.03.        Waiver
of Trial by Jury.  Landlord and
Tenant hereby waive all right to trial by jury regarding any matter connected
with this Lease.

 

Section 18.04.        Injunction.
In addition to the other remedies provided in this Lease, and anything
contained herein to the contrary notwithstanding, Landlord shall be entitled to
restraint by injunction of any default or violation, or attempted or threatened
default or violation, of any of the terms of this Lease.

 

Section 18.05.        Landlord’s
Right to Perform for Account of Tenant. If Tenant shall Default, Landlord,
upon five (5) days prior written notice (except in the case of an
emergency), may cure such Default for the account and at the expense of
Tenant.  Tenant agrees to pay Landlord,
on demand, with interest at the Interest Rate, the amount so paid, expended or
incurred by Landlord, and any and all expenses, including attorneys’ fees and
court costs, incurred by Landlord as a result of such Default.

 

Section 18.06.        Additional
Remedies; Waivers.  The rights and
remedies of Landlord set forth in this Article XVIII shall be in addition
to any other right and remedy now or hereafter available at law or in equity,
and all such rights and remedies shall be cumulative rather than
exclusive.  Landlord may exercise such
rights and remedies at such times, in such order, to such extent, and as often
as Landlord deems advisable, without regard to whether the exercise of one
right or remedy precedes, coincides with or succeeds the exercise of
another.  A single or partial exercise of
a right or remedy shall not preclude a further exercise thereof, or the
exercise of another right or remedy.  No
waiver of a Default shall be effective unless it is expressly agreed to in
writing by Landlord.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

ARTICLE XIX

 

ACCESS BY LANDLORD

 

Landlord may, at any time, upon not less than twenty-four (24) hours
prior written notice to Tenant (except in the case of emergency or a Release or
Threatened Release under Article XXII), enter the Premises for the purpose
of: (i) inspecting the Premises; (ii) making repairs, replacements or
alterations; or (iii) showing the Premises to prospective purchasers,
lenders or, during the last twelve (12) months of the Term, to prospective
tenants.  No such entry by Landlord shall
constitute actual or constructive eviction of Tenant.  During the course of any such entry, Landlord
shall use reasonable efforts to avoid disrupting Tenant’s business
operations.  Notwithstanding the
foregoing, Landlord acknowledges that Tenant may have areas of the Premises to
which access must be restricted pursuant to security requirements contained in
government contracts, and Landlord will comply with any requirements regarding
access to these areas which may include the necessity of an authorized escort.

 

 

ARTICLE XX

 

SURRENDER; HOLDING
OVER

 

Section 20.01.        Surrender.  Upon the expiration of this Lease, or upon
re-entry by Landlord without terminating this Lease pursuant to Article XVIII
hereof, Tenant shall peacefully vacate and surrender the Premises to Landlord
in good order, broom clean and in the same condition as at the beginning of the
Term (except for the Tenant Improvements and those alterations that pursuant to
Section 10.03 are not required to be removed), reasonable wear and tear
and damage by casualty excepted.  Tenant
shall also remove its trade fixtures, furniture and other personal property
from the Premises along with any leasehold improvements or other additions
which Tenant is required to remove pursuant to Section 10.03 hereof.

 

Section 20.02.        Personal
Property.  If Tenant fails to timely
remove its property in accordance with Section 20.01, Landlord shall have
the right, on the tenth (10th) day after Landlord’s delivery of written notice
to Tenant, to deem such property abandoned by Tenant.  Landlord may thereafter remove or otherwise
deal with the abandoned property in a commercially reasonable manner at
Tenant’s sole cost and expense, and Landlord shall have no liability to Tenant
with respect to such abandoned property. 
Tenant specifically acknowledges and agrees that Landlord shall not be
considered a bailee of such property. 
Tenant hereby agrees to indemnify Landlord against any loss, cost,
expense, claim or cause of action arising in connection with Landlord’s
exercise of its rights under this Section 20.02 including, without
limitation, any claim by a third party for conversion or trespass as to
chattels.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31

 

 

Section 20.03.        Holding
Over.  If Tenant shall hold
possession of the Premises after the expiration of this Lease, Landlord shall
have the right, in its sole discretion, to deem Tenant either (i) a
trespasser, whereupon Landlord shall be entitled to the benefit of all laws
relating to the speedy recovery of the possession of the Premises; or (ii) a
month-to-month tenant subject to the provisions and obligations of this Lease
(insofar as the same are applicable to a month-to-month tenancy), except that
Tenant shall be required to pay to Landlord a monthly rental equal to one
hundred fifty percent (150%) of the amount of Rent payable during the last
month of the Term.  Unless Landlord
notifies Tenant in writing to the contrary within thirty (30) days after
the expiration of this Lease, Tenant’s tenancy shall automatically become
month-to-month.  Notwithstanding anything
contained herein to the contrary, Landlord also shall be entitled to pursue any
available cause of action for damages resulting from Tenant’s holdover.  The terms of this Article XX shall
survive the expiration of this Lease.

 

 

ARTICLE XXI

 

NOTICES

 

Except as may be expressly provided to the contrary in
this Lease, all notices, consents, demands, requests or other communications
(other than payment of Rent) required or permitted hereunder (collectively,
“notices”) shall be deemed given when dispatched to the other party by hand
delivery (with signed receipt), or one (1) day after being dispatched to
the other party by air express courier (with signed receipt), or three (3) days
after being deposited in the United States Mail, postage prepaid, certified or
registered, return receipt requested. 
The addresses of the parties for notices shall be those set forth in Article I
hereof, or any other address subsequently specified by either party in a notice
given pursuant to this Article XXI.

 

ARTICLE XXII

 

HAZARDOUS MATERIALS

 

Section 22.01.        Environmental
Requirements.  Tenant’s use and
occupancy of the Premises shall at all times be in strict compliance with all
federal, state and local laws, rules, regulations, orders, guidelines,
ordinances and standards, as they may now or hereafter exist, relating in any
way to the protection of human health, safety, the environment and natural
resources including, but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act (“CERCLA”); the Resource Conservation
and Recovery Act; the Toxic Substances Control Act; the Federal Insecticide,
Fungicide and Rodenticide Act; the Clean Air Act; the Federal Water Pollution
Control Act; the Occupational Safety and Health Act; the Safe Drinking Water
Act, and their applicable state and local counterparts or equivalents (“Environmental
Laws”).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32

 

Section 22.02.        Clean-Up.  If Tenant becomes aware of a Release
(hereinafter defined), threat of a Release or the presence of any Hazardous
Substance (hereinafter defined) affecting the Premises or surrounding areas,
Tenant shall immediately notify Landlord in writing thereof, and shall take all
necessary steps to ensure that any future activities by Tenant do not
exacerbate the Release, threat of a Release or the presence of the Hazardous
Substance.  If a Release, threat of a
Release or the presence of any Hazardous Substance affecting the Premises or
surrounding areas is caused by the acts or omissions of Tenant, or its agents,
employees, contractors, licensees or invitees, Tenant shall immediately take
all measures necessary to contain, remove and dispose off the Premises, or
surrounding areas, all such materials present or Released (or threatened to be
Released), and shall remedy and mitigate all threats to public health or the
environment relating to such presence or Release, or threat thereof.  If Tenant shall fail to take the measures
described above, or shall fail to comply with the requirements of any Environmental
Laws, Landlord may give such notice and/or cause such work to be performed at
the Premises or surrounding areas, and/or take any and all other actions as
Landlord shall deem necessary to restore the Premises or surrounding areas to
the condition in which they existed as of the date of this Lease.  Such actions by Landlord shall not affect
Tenant’s obligations under this Lease.

 

Section 22.03.        Indemnification.

 

A.            Tenant shall
indemnify, defend and hold harmless Landlord from and against any and all
claims, liens, suits, actions, debts, damages, costs, losses (including,
without limitation, any loss of value of, loss of use of, or loss of income
from, the Premises or the Project), liabilities, obligations, judgments and
expenses (including, without limitation, court costs and attorneys’ fees),
arising from or relating to any of the following occurrences caused by the acts
or omissions of Tenant, its agents, employees, contractors, licensees or
invitees:  (i) a failure to comply
with any Environmental Laws, or (ii) a Release, 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33

 

threat of a
Release or the presence of any Hazardous Substance affecting the Premises or
surrounding areas.  Tenant’s obligations
under this Lease shall arise whether or not any governmental authority or
individual has taken or threatened to take any action in connection with the
presence of any Hazardous Substance.

 

B.            Landlord shall
indemnify, defend and hold harmless Tenant from and against any and all claims,
liens, suits, actions, debts, damages, costs, losses (including, without
limitation, any loss of value of, loss of use of, or loss of income from, the
Premises or the Project), liabilities, obligations, judgments and expenses
(including, without limitation, court costs and attorneys’ fees), arising from
or relating to any of the following occurrences caused by the acts or omissions
of Landlord, its agents, employees, contractors, licensees or invitees:  (i) Landlord’s failure to comply with
any Environmental Laws, or (ii) Landlord’s Release, threat of a Release or
the presence of any Hazardous Substance affecting the Premises or surrounding
areas.

 

Section 22.04.        Definitions.  As used herein, the term “Hazardous
Substance” shall mean petroleum or petroleum by-products, and/or any chemicals,
substances or wastes which are defined as or included in the definition of
“hazardous substance”, “hazardous waste”, “hazardous material”, “toxic
substance”, “toxic pollutant”, or words of similar import, under any
Environmental Laws, and shall include building materials and building
components including, without limitation, asbestos or asbestos containing
materials.  The term “Release” shall have
the meaning set forth in Section 101(22) of CERCLA.

 

Section 22.05.        Operations.  Tenant shall not engage in operations which
involve the generation, manufacturing, refining, transportation, treatment,
storage, disposal or handling of any Hazardous Substance, other than office
equipment and cleaning solutions that are customarily found in office
buildings, provided that the use, generation, handling or storage of such equipment
and solutions is reasonably necessary for the operation and maintenance of the
Premises as permitted pursuant to the terms of this Lease, and is in strict
compliance with Environmental Laws.

 

Section 22.06.        Inspection.  Subject to the provisions of Article XIX
for Landlord Access to the Premises, Tenant agrees to permit Landlord and its
authorized representatives to enter, inspect and assess the Premises at
reasonable times for the purpose of determining Tenant’s compliance with the
provisions of this Article XXII. 
Such inspections and assessments may include obtaining samples and
performing tests of building materials, soil, surface water, groundwater or
other media.

 

Section 22.07.        Survival.  This entire Article XXII shall survive
the expiration of this Lease.

 

ARTICLE XXIII

 

MISCELLANEOUS

 

Section 23.01.        Professional
Fees.  To the extent permitted by
law, in any action or proceeding brought by either party against the other
under this Lease, the prevailing party shall be entitled to recover from the other
party the actual, direct and reasonable professional fees incurred by the
prevailing party, such as appraisers’, accountants’ and attorneys’ fees,
investigation costs, and other legal expenses and court costs.

 

Section 23.02.        No
Partnership.  Nothing contained
herein shall be deemed to create a partnership, joint venture, or any other
relationship between the parties hereto except landlord and tenant.

 

Section 23.03.        Brokerage.  Landlord and Tenant each warrant and
represent to the other that no broker or agent on Landlord’s or Tenant’s behalf
was involved in negotiating this Lease or 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

34

 

addressing matters
concerning the renting of the Premises, other than COLLIERS CASSIDY &
PINKARD, whose commissions shall be paid in full by Landlord in accordance with
separate agreements. Landlord and Tenant each agree to indemnify and hold the
other harmless against any claims for brokerage or other commissions arising
from a breach by Landlord or Tenant of the foregoing representation and
warranty.

 

Section 23.04.        Interpretation.

 

A.            Every provision of
this Lease which imposes an obligation on Tenant or Landlord shall be deemed to
be a covenant by Tenant or Landlord, as applicable.

 

B.            This Lease may be
executed in several counterparts which shall constitute one and the same
instrument.

 

C.            Any restriction or
requirement imposed upon Tenant hereunder shall be deemed to extend to Tenant’s
guarantors, sublessees, assignees, licensees and invitees, and it shall be Tenant’s
obligation to cause the foregoing persons to comply with such restriction or
requirement.

 

D.            Any reference to the
expiration of this Lease or the Expiration Date shall include the earlier
termination of this Lease.

 

E.             The term “mortgagee”
shall also refer to any beneficiary of a deed of trust, or any other individual
or entity having a security interest in the Project.

 

F.             The term
“Commonwealth” shall refer to the Commonwealth of Virginia.

 

Section 23.05.        Recording.  Neither this Lease, nor any memorandum
hereof, may be recorded among the land records without the express written
consent of Landlord, which Landlord may condition or withhold in its sole and
absolute discretion.

 

Section 23.06.        Severability.  Every agreement contained in this Lease shall
be construed as a separate and independent agreement.  If any term of this Lease, or the application
thereof to any person or circumstance, shall be invalid or unenforceable, the
remaining agreements contained in this Lease shall not be affected.

 

Section 23.07.        Waiver
of Redemption.  If, as a result of a
Tenant Default, Landlord terminates this Lease, or obtains possession of the
Premises without terminating this Lease, Tenant hereby expressly waives, to the
extent legally permissible, any right of redemption or right to restore the
operation of this Lease pursuant to Va. Code Section 55-247 or any other
present or future law.

 

Section 23.08.        Limitations
of Liability.

 

A.            Anything contained
in this Lease to the contrary notwithstanding, Tenant agrees to look solely to
the estate 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35

 

and property of
Landlord in the Project for the collection of any judgment or other judicial
process requiring the payment of money by Landlord for any default or breach by
Landlord under this Lease, subject, however, to the prior rights of any
mortgagee or lessor of the Project.  No
other assets of Landlord, or any partners, shareholders or other principals of
Landlord, shall be subject to levy, execution or other judicial process for the
satisfaction of Tenant’s claim.

 

B.            No assets of any
partners, shareholders, employees, officers, directors or other principals of
Tenant shall be subject to levy, execution or other judicial process for the
satisfaction of any Landlord’s claim.

 

C.            Neither Landlord nor
Tenant shall be liable to the other, under this Lease or otherwise, for lost
profits, lost business opportunity or other speculative or consequential
damages either party may claim or suffer.

 

Section 23.09.        Force
Majeure.  Whenever a period of time
is herein prescribed, or a deadline is herein established, for action to be
taken by Landlord or Tenant, Landlord or Tenant as the case may be shall not be
liable or responsible for, and there shall be excluded from the computation for
any such period of time, any delays due to force majeure, which term shall
include strikes, riots, acts of God, shortages of labor or materials, war,
governmental approvals, laws, regulations or restrictions, or any other cause
(whether similar or dissimilar to the foregoing) which is beyond such parties’
reasonable control.  The foregoing
provisions of this Section 23.09 notwithstanding, in no event shall (i) the
failure of Tenant to perform any monetary obligation be excused, and (ii) the
time for Tenant’s performance of any monetary obligation hereunder be delayed
due to any force majeure event.

 

Section 23.10.        Headings.  The article headings contained in this Lease
are for convenience only and shall not enlarge or limit the scope or meaning of
the terms hereof.  Words in the singular
number shall be held to include the plural, unless the context otherwise
requires.

 

Section 23.11.        Successors
and Assigns.  If there be more than
one Tenant, the obligations hereunder imposed upon Tenant shall be joint and
several, and all agreements and covenants herein contained shall be binding
upon the respective heirs, personal representatives, successors and assigns of
the parties hereto.  Notwithstanding the
foregoing, nothing contained in this Section 23.11 shall be deemed to
override the terms of Article XVI.

 

Section 23.12.        Entire
Agreement; Amendments.  This Lease,
and the exhibits and riders (if any) attached hereto, set forth the entire
agreement between the parties, and no representations, inducements or
agreements, oral or written, between Landlord and Tenant shall have any force
or effect, unless the same are set forth in this Lease.  No amendment or modification of this Lease
shall be binding or valid unless expressed in a document signed by Landlord and
Tenant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

36

 

Section 23.13.        Governing
Law.  This Lease shall be governed by
and construed under the laws of the Commonwealth, without reference to its
conflicts of laws principles.  Tenant
hereby consents to jurisdiction in the Circuit Court for Fairfax County,
Virginia, if any suit is brought relating to this Lease.  Should any provision of this Lease require
judicial interpretation, Landlord and Tenant hereby stipulate that the court
interpreting or considering same shall not apply the presumption that the terms
hereof should be more strictly construed against the party who drafted the
same, it being agreed that all parties hereto have participated in the
preparation of this Lease, and that each party has had full opportunity to
consult legal counsel of its choice before executing this Lease.

 

Section 23.14.        Time
of Essence.  Time is of the essence
in this Lease.

 

Section 23.15.        Acceptance
by Landlord.  The submission of this
Lease to Tenant shall not be construed as an offer, and Tenant shall not have
any rights with respect thereto unless and until Landlord executes a copy of
this Lease and delivers the same to Tenant.

 

Section 23.16.        Financial
Statements.  At any time during the
Term, but no more often than one time per calendar year, Tenant shall, upon
twenty (20) days prior written notice from Landlord, provide Landlord with a
current financial statement and financial statements of the two (2) years
prior to the current financial statement year. 
Such statements shall be prepared in accordance with generally accepted
accounting principles, consistently applied, and, if such is the normal
practice of Tenant, shall be audited by an independent certified public
accountant.  If it is not the normal
practice of Tenant to prepare audited statements, then the unaudited statements
shall be certified by Tenant’s chief financial officer.  In the event Tenant is a public company,
Tenant shall be deemed to have complied with the requirements of this Section upon
providing Landlord with the financial statements (for the relevant time periods
described herein) filed by Tenant with the Securities and Exchange Commission.

 

Section 23.17.        Estoppel
Certificates.  Either party shall,
from time to time, within ten (10) days after request from the other party
or its mortgagee, execute, acknowledge and deliver in recordable form an
estoppel certificate regarding the terms and status of the Lease and the tenancy
thereunder, and such other matters as may be reasonably requested by such party
or its mortgagee not inconsistent with this Lease.

 

Section 23.18.        Authority
of Parties.  Execution hereof shall
constitute a representation and warranty by each party hereto that such party
has complied with all applicable laws, rules and governmental regulations
relative to that party’s right to do business in the Commonwealth, that such
party has the full right and authority to enter into this Lease, and that all
persons signing on behalf of such party were authorized to do so by all
necessary or appropriate legal actions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37

 

Section 23.19.        Additional
Space.

 

A.            At
all times prior to the Commencement Date (i) Landlord shall keep Tenant
informed as to all space that is available for lease and (ii) Tenant may
elect to amend this Lease so as to expand the Premises to include any or all of
the available space in the Building upon the same terms and conditions as this
Lease (the available space that Tenant so elects to include in the Premises
being hereinafter referred to as the “Pre-Commencement Expansion Space”),
except that the Allowance for any Pre-Commencement Expansion Space shall be
reduced on a pro rata basis if the term for such space is less than ten (10) years
and the rental rate for any Lower Level space shall be $20.00 per rentable
square foot, full service.  Landlord will
use commercially reasonable efforts to notify Tenant in the event that it
receives any active interest in the remaining wing on the second (2nd)
floor; provided, however, that failure to provide such notice shall not
constitute a default by Landlord under this Lease.

 

B.            Subject
to any renewal rights and expansion rights granted to Wiley Rein as of the date
of execution of this Lease, and provided (i) Tenant is in possession of
the Premises and is conducting its business therefrom, and (ii) the Lease
is in full force and effect without Default by Tenant, Landlord agrees that at
all times after the Commencement Date and during the Term of this Lease (and
prior to seeking a third party tenant for any other space of the Building (the
“Additional Space”)), except with regard to space that is unoccupied as of the
date of this Lease, Landlord will provide written notice to Tenant of its
intent to offer the Additional Space for lease to third parties and the terms
and conditions on which Landlord would agree to lease the space to third
parties (“Landlord’s Offer”).  If Tenant
desires to lease the Additional space from Landlord, Tenant shall provide
written notice to Landlord of its election to lease the Additional Space within
thirty (30) days of Landlord’s Offer (each a “Tenant Expansion Notice”).  Any Additional Space that Tenant elects to
lease is hereinafter referred to as “Post-Commencement Expansion Space”).

 

(i)            Landlord’s
Offer shall include the business terms for the proposed expansion of the
Premises, which will provide (a) that the Term for the Post-Commencement
Expansion Space shall be coterminous with the Term of the Lease (provided,
however, that if less than two (2) years remain on the original lease, the
term for the Post-Commencement Expansion Space shall be two (2) years and
Tenant, at Tenant’s option, may extend the term of the Lease to be coterminous
with the Post-Commencement Expansion Space term); (b) a commercially
reasonable period of time to plan, permit and construct improvements to the
Expansion Space prior to rent commencement for such space; and (iii) rental
rate, escalation, base year, allowance, concessions and other terms
commensurate with the then-current market terms for new leases for similar
buildings and similar leases in the Tyson’s Corner market (“Market Terms”).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

38

 

(ii)           Following
the due and timely delivery by Tenant to Landlord of a Tenant Expansion Notice,
Landlord and Tenant will enter into an amendment to the Lease to include the
Post-Commencement Expansion Space identified therein.  If for any reason Tenant fails to duly and
timely notify Landlord of its intent to lease the Additional Space, or if
Tenant properly notifies Landlord of its intent to lease the Additional Space,
but thereafter, for any reason (except Landlord’s willful misconduct) does not
timely enter into a lease for the Additional Space, Landlord will be free to
lease the Additional Space to another tenant on any terms and conditions
acceptable to Landlord (without regard to the terms and conditions contained in
Landlord’s Offer).

 

(iii)          Alternatively,
Tenant may deliver to Landlord a Tenant Expansion Notice which includes an
objection to the Market Terms contained in Landlord’s Offer and the parties
shall thereafter negotiate in good faith for ten (10) business days to
reach an agreement on Market Terms.  If
Landlord and Tenant agree to the Market Terms within said ten (10) business
day period, then they shall promptly execute an amendment to the Lease to
include the Post-Commencement Expansion Space using the Market Terms agreed
upon.  In the event Landlord and Tenant
have not agreed to the Market Terms within said ten (10) business day
period, Tenant may (a) terminate its expansion election or (b) require
that the parties determine Market Terms in accordance with the Three Broker
Method as set forth in Section 2.02.E(ii) hereof.  Upon determination of the Market Terms
pursuant to the Three Broker Method, the parties shall promptly execute an
amendment to the Lease stating the Market Terms and other applicable terms for
the Post-Commencement Expansion Space and the Lease shall continue in full
force and effect.  Tenant acknowledges
that election of the Three Broker Method shall irrevocably bind Tenant to lease
the Additional Space.

 

(iv)          During the term of
Tenant’s Lease, Landlord shall limit the term of any lease with a third party
for the one (1) wing on the Lower Level and two (2) wings on the
first (1st) floor not occupied by Tenant to no more than five (5) years
in length, and any renewal option in leases with such third parties shall be
subordinated to Tenant’s expansion rights herein.  With regard to Additional Space that would be
available pursuant to a subordinated renewal option of another tenant, Landlord
shall provide Landlord’s Offer to Tenant no earlier than fifteen (15) months
nor later than six (6) months prior to the expiration of the tenant’s
lease.

 

Section 23.20.        Roof
Rights.  Notwithstanding anything in
this Lease to the contrary, Tenant shall have the non-exclusive right, at no
additional rental charge, to install, at its sole cost and expense,
communications, HVAC or other appropriate equipment (“Roof Equipment”).  Tenant’s use of the Roof Equipment and the
installation thereof shall be subject to all federal, state and local
government regulations affecting the Building and all Building Rules and
Regulations, and are subject to Landlord’s prior written approval.  Tenant shall install the Roof Equipment in
such a manner so the Roof Equipment is adequately screened and so as not to
void any warranty held by Landlord relating to the roof or the 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

39

 

Building.  Tenant shall be responsible for any damage to
the roof of the Building caused by the installation of the Roof Equipment, and
Tenant shall indemnify and hold Landlord harmless from any and all costs,
losses, claims, expenses and damages incurred by Landlord as a result of
Tenant’s exercise of its rights under this Section.  At the Expiration of the Term or upon the
earlier removal of the Roof Equipment, Tenant will restore the roof to the
condition existing prior to the installation of the Roof Equipment, normal wear and
tear excepted.

 

Section 23.21.        Generator Pad.

 

A.            Notwithstanding anything contained
in the Lease to the contrary, Tenant, at no additional cost, shall be entitled
to use the existing generator pad site outside the Building and all existing
conduit from the pad site into the Building for a generator to provide
electrical backup support, and Landlord hereby consents to such limited use
herein.  Subject to Landlord’s prior
written approval and on-site supervision, Tenant may also install conduit and
cabling from the generator to the Building’s electrical room, necessary
equipment in the electrical room and conduits and cabling to the Premises.  Tenant agrees to maintain the generator,
generator pad site and related facilities under Landlord’s supervision, at its
sole cost and expense.  Tenant shall, at
Tenant’s sole cost and expense, maintain the generator pad site and related
structures in accordance with all applicable laws.  At least ninety (90) days prior to the
expiration of the Term or upon the earlier termination of this Lease, Tenant shall
contact Landlord in writing regarding the status of the generator pad.  Within thirty (30) days after receipt of
Tenant’s notice, Landlord shall notify Tenant if Landlord will require Tenant
to restore the generator pad site.  If
directed to do so by Landlord, Tenant will restore the generator pad and all
other portions of the Land and Building affected by Tenant’s installations
hereunder to the condition existing immediately prior to the installation of
the generator and other facilities, normal wear and tear excepted.  If Landlord directs Tenant to restore the
generator pad and affected portions of the Land and Building, Tenant shall
complete all such restoration work within sixty (60) days after the expiration
or earlier termination of the Lease.  The
agreements contained in this section shall survive the expiration or earlier
termination of the Lease.

 

B.            Tenant
hereby represents and warrants to Landlord that all employees, agents and
independent contractors involved in the installation, maintenance, removal and
restoration of the generator have been properly trained and certified to do
so.  As provided in this Lease, Tenant
hereby indemnifies and holds Landlord harmless from any and all losses, costs,
claims or damages incurred by Landlord and arising from or related to Tenant’s
construction, use, removal, operation or the existence of the generator pad
site and related facilities, unless such losses, costs, claims or damages are
caused by the negligence or willful misconduct of Landlord.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40

 

Section 23.22.        Fiber
Communications Service.  Tenant shall
have the right to receive fiber or other communications services from the
vendors of Tenant’s choice and Landlord shall cooperate in accommodating such
service and shall provide reasonable access to the Building for said services.
Landlord shall provide free and unencumbered access to Tenant to its
proportionate share of all available Building risers, conduits, shafts, etc. as
needed by Tenant to connect such services to the both premises.  Tenant may use any existing unused conduits
from the Generator Pad to the Building at no additional charge.

 

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41

 

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

 

	
   

  	
  LANDLORD:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WEST*GROUP PROPERTIES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ G. T.
  Halpin

  	
   

  
	
   

  	
   

  	
  G. T. Halpin,

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
  ATS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward H.
  Bersoff

  	
  [SEAL]

  
	
   

  	
   

  	
  Name:
  Dr. Edward H. Bersoff

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
						

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42

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