FIRST AMENDMENT TO DEED OF LEASE
Exhibit 10.21
FIRST AMENDMENT TO DEED OF LEASE
THIS
FIRST AMENDMENT TO DEED OF LEASE (this “First
Amendment”) is made this 30th day of
November, 2006 (the “Effective Date”), by and between ACP/2300 CORPORATE PARK OWNER, LLC, a
Delaware limited liability company (“Landlord”), and K12 INC., a Delaware corporation (“Tenant”).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Deed of Lease dated December 7, 2005 (the “Original
Lease”), ACP/2300 Corporate Park Drive, LLC (“Original Landlord”) leased to Tenant, and Tenant
leased from Original Landlord, approximately 35,740 rentable square feet of office space (the
“Original Premises”) comprising a portion of the first (1st) floor and the entire
second (2nd) floor of the building located at 0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxx,
Xxxxxxxx (the “Building”);
WHEREAS, Landlord has purchased the Building from Original Landlord and has succeeded to the
interest of Original Landlord under the Original Lease; and
WHEREAS, Landlord and Tenant desire to amend the Original Lease to provide for the demise to
Tenant of the Expansion Space (hereinafter defined), upon the terms and conditions set forth in
this First Amendment.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration and of the mutual agreements hereinafter set forth, it is hereby mutually agreed as
follows:
1. Incorporation of Recitals. The foregoing recitals are hereby incorporated in this First
Amendment and made a part hereof by this reference.
2. Definitions. All capitalized terms used in this First Amendment shall have the meanings
ascribed thereto in the Original Lease, unless otherwise defined herein. As used herein and in
the Original Lease: (a) the term “Lease” shall mean the Original Lease, as amended by this First
Amendment; and (b) from and after the Expansion Space Commencement Date (hereinafter defined), the
term “Premises” shall mean the Original Premises together with the Expansion Space.
3. Expansion Space. Subject to the terms and conditions set forth herein, Landlord hereby
leases to Tenant, and Tenant hereby leases from Landlord, for a term beginning on the Expansion
Space Commencement Date and ending on April 30, 2013 (i.e. the “Lease Expiration Date” under the
Original Lease), 6,930 rentable square feet of office space located on the fourth (4th)
floor of the Building, as shown on the attached Exhibit A (the “Expansion Space”). As of
the Expansion Space Commencement Date, the aggregate number of rentable square feet demised to
Tenant under the Lease (consisting of the Original Premises and the Expansion Space) shall be
42,670.
4. Improvements to the Expansion Space.
A. Landlord shall deliver the Expansion Space to Tenant in its “as-is” condition (broom clean
and free of all furniture and work stations) and Landlord shall have no obligation to perform, or,
except as expressly set forth in this Paragraph 4, pay for, any work, improvements or alterations
in or to the Expansion Space in connection with this First Amendment or otherwise. Notwithstanding
the foregoing, and provided that Tenant is not then in default under the Lease, Landlord shall
provide Tenant with a refurbishment allowance of Fifty-One Thousand Nine Hundred Seventy-Five
Dollars ($51,975.00) (or Seven and 50/100 Dollars ($7.50) per rentable square foot of the Expansion
Space) (the “Refurbishment Allowance”) to pay for costs and expenses incurred by Tenant in
connection with the design and construction of improvements which Tenant desires to undertake in
and to the Expansion Space (the “Expansion Space Improvements”), which costs and expenses shall
include the
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costs of all space planning, architectural and engineering work related thereto, all governmental
and quasi-governmental approvals and permits required therefor, any costs incurred by Landlord
because of changes to the base Building or the base Building systems, all construction costs,
contractors’ overhead and profit, Tenant’s construction management fees, insurance and other
requirements, the cost of Tenant’s telecommunications cabling and wiring installed in the Expansion
Space, the cost of Tenant’s initial furniture, fixtures and equipment installed in the Expansion
Space, and all other costs and expenses incurred in connection with the Expansion Space
Improvements. Disbursements of the Refurbishment Allowance by Landlord (“Partial Payments”) shall
be made on a monthly basis, if requested in writing by Tenant, or, if not so requested, paid out by
Landlord upon completion of the Expansion Space Improvements, and the satisfaction of the
conditions set forth below, including the receipt by Landlord of final lien waivers from all
general contractors, subcontractors and material suppliers who perform work or provide materials in
connection therewith. Each of Tenant’s requests for a Partial Payment (the “Draw Requests”) shall
be accompanied by (a) the general contractor’s application for payment (including, if applicable,
an architect’s certification thereof) setting forth a detailed description of the work completed
(including the percentage of the total job which the work with respect to which the contractor
seeks payment represents) and the total cost of such work; (b) invoices for design, architectural
or permit costs incurred by Tenant; (c) a written approval by Tenant and its architect of the
contractor’s application of payment and the work performed by the contractor(s); and (d) partial
lien waivers (or, with respect to the final Draw Request, final lien waivers) and releases of
mechanic’s and materialmen’s liens from the general contractor, subcontractors and material
suppliers providing work or services in or to the Expansion Space. The Landlord shall make Partial
Payments of the Refurbishment Allowance within thirty (30) days after receipt of a Draw Request
from Tenant, provided that such Draw Request is accompanied by all applicable information and
documentation set forth in (a)-(d), above. The Tenant’s final Draw Request shall include a
certificate of substantial completion prepared by Tenant’s architect and shall also include all
applicable final lien waivers. Prior to undertaking any Expansion Space Improvements in the
Expansion Space, Tenant shall submit to Landlord for its approval full working drawings (the
“Working Drawings”) depicting all Expansion Space Improvements which Tenant desires to install in
the Expansion Space, which Working Drawings shall satisfy the requirements set forth for the
“Tenant’s Plans” pursuant to Exhibit B attached to the Original Lease (captioned, “Work
Agreement”). All Working Drawings depicting the Expansion Space Improvements to be constructed in
or to the Expansion Space shall be subject to approval by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed, except if Landlord determines that any proposed
Expansion Space Improvement depicted therein will alter or affect the structural elements of the
Building or any of the systems therein, in which event Landlord’s approval may be withheld in its
sole discretion with respect to such improvements. The Expansion Space Improvements shall be
constructed (1) in a good and workmanlike manner, (2) in strict accordance with the terms and
conditions of the Original Lease, including but not limited to the terms and conditions of Section
8 thereof and (3) by licensed contractor(s) approved in writing by Landlord, which approval shall
not be unreasonably withheld, conditioned or delayed. Any portion of the Refurbishment Allowance
with respect to which Tenant fails to submit to Landlord a Draw Request within six (6) months after
the Expansion Space Rent Commencement Date (hereinafter defined) shall be retained by Landlord.
B. In the event that Tenant notifies Landlord in writing, on or before the date which is
thirty (30) days prior to the Expansion Space Rent Commencement Date, that Tenant wishes to
increase the Refurbishment Allowance, and Tenant specifies in such notice the amount of such
proposed increase, which increase shall not exceed the Maximum Increase Amount (hereinafter
defined), and evidences to Landlord’s reasonable satisfaction that the cost of undertaking the
Expansion Space Improvements exceeds the Refurbishment Allowance by the approximate amount of the
Excess Cost Allowance (hereinafter defined) requested by Tenant, then Landlord shall make
available to Tenant an additional tenant improvement allowance (the “Excess Cost Allowance”) in
the amount requested by Tenant, provided that the Excess Cost Allowance shall not exceed the
Maximum Increase Amount. As used herein, the term “Maximum Increase Amount” means the sum of
Fifty-One Thousand Nine Hundred Seventy-Five Dollars ($51,975.00) (or Seven and 50/100 Dollars
($7.50) per rentable square foot of the Expansion Space). The Excess Cost Allowance shall be paid
out by the Landlord in accordance with the
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provisions of Paragraph 4(A), above. Tenant shall repay to Landlord the amount of the Excess Cost
Allowance over the Expansion Space Term (hereinafter defined), beginning on the Expansion Space
Rent Commencement Date, in equal monthly installments in the amount necessary to fully repay to
Landlord the Excess Cost Allowance, with interest at the rate of nine percent (9%) per annum,
compounded monthly on a constant collection basis, on the outstanding amount thereof, as though
the Excess Cost Allowance were a loan made by Landlord to Tenant on the Expansion Space Rent
Commencement Date. Such equal monthly installments shall be considered Additional Rent under the
Lease and shall be paid together with, and in the same manner as, Expansion Space Annual Base Rent
(hereinafter defined) payable by Tenant pursuant to Paragraph 6, below, provided that such
installments shall not be subject to the annual escalations applicable to Expansion Space Annual
Base Rent. Upon any termination of the Lease, Tenant shall be immediately obligated to repay to
Landlord the entire amount of the Excess Cost Allowance that has not previously been repaid, plus
any accrued and unpaid interest thereon, and such obligation shall survive any such termination.
As an example of the foregoing, assuming that the Excess Cost Allowance were $10,000.00, the
monthly amortized amount of Additional Rent payable by Tenant with respect thereto would be
approximately $176.58.
5. Expansion Space Term.
A. The Term with respect to the demise of the Expansion Space to Tenant (the “Expansion Space
Term”) shall commence on the Expansion Space Commencement Date and shall expire on April 30, 2013,
unless earlier terminated in accordance with the terms and provisions of the Lease. As used herein,
the term “Expansion Space Commencement Date” shall mean the date on which Landlord delivers the
Expansion Space to Tenant, which date is currently anticipated to occur on or about January 1,
2007. From and after the Expansion Space Commencement Date, and provided that Tenant is in
compliance with all of Tenant’s insurance requirements with respect to the Expansion Space as set
forth in the Lease, Tenant shall have access to the Expansion Space and Tenant may use the
Expansion Space for the use set forth in Section 6.a of the Original Lease. Notwithstanding
anything to the contrary contained herein, in the event that the Expansion Space Commencement Date
has not occurred on or before July 1, 2007, subject to a day-for-day extension for matters of Force
Majeure, Tenant shall have the right, but not the obligation, to terminate this First Amendment
upon ten (10) business days prior written notice to Landlord, in which event this First Amendment
shall be null and void and of no further force or effect; provided that if Landlord delivers the
Expansion Space to Tenant during such ten (10) business day period, this First Amendment shall not
terminate and shall continue in full force and effect in accordance with its terms.
B. Reference is made to the form of Declaration of Expansion Space Commencement Date (the
“Declaration”) attached hereto as
Exhibit B. After the Expansion Space Commencement Date, Landlord shall complete the Declaration and deliver the completed Declaration to Tenant. Within ten (10) days after Tenant receives the completed Declaration from Landlord, Tenant shall execute and return the Declaration to Landlord to confirm the Expansion Space Commencement Date, the Expansion Space Rent Commencement Date (hereinafter defined) and the actual number of rentable square feet in the Expansion Space. Failure to execute the Declaration shall not affect the commencement or expiration of the Expansion Space Term. As used herein, the term “Expansion Space Rent Commencement Date” shall mean the date that is ninety (90) days after the Expansion Space Commencement Date (i.e. if the Expansion Space Commencement Date occurs on January 1, 2007, the Expansion Space Rent Commencement Date shall occur on April 1, 2007).
Exhibit B. After the Expansion Space Commencement Date, Landlord shall complete the Declaration and deliver the completed Declaration to Tenant. Within ten (10) days after Tenant receives the completed Declaration from Landlord, Tenant shall execute and return the Declaration to Landlord to confirm the Expansion Space Commencement Date, the Expansion Space Rent Commencement Date (hereinafter defined) and the actual number of rentable square feet in the Expansion Space. Failure to execute the Declaration shall not affect the commencement or expiration of the Expansion Space Term. As used herein, the term “Expansion Space Rent Commencement Date” shall mean the date that is ninety (90) days after the Expansion Space Commencement Date (i.e. if the Expansion Space Commencement Date occurs on January 1, 2007, the Expansion Space Rent Commencement Date shall occur on April 1, 2007).
6. Expansion Space Annual Base Rent. Commencing on the Expansion Space Rent Commencement Date,
and thereafter on the first day of each and every calendar month during the Expansion Space Term,
Tenant shall pay Landlord Annual Base Rent for the Expansion Space only (“Expansion Space Annual
Base Rent”) in the following amounts, in equal monthly installments (“Expansion Space Monthly Base
Rent”), in advance, as follows:
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| Expansion Space | Expansion Space | |||||||||||
| Annual Base Rent Per | Expansion Space | Monthly Base | ||||||||||
| Period | Square Foot | Annual Base Rent | Rent | |||||||||
Expansion Space Rent
Commencement Date
-4/30/08 |
$ | 31.50 | $ | 218,295.00 | * | $ | 18,191.25 | |||||
5/1/08-4/30/09 |
$ | 32.29 | $ | 223,769.76 | $ | 18,647.48 | ||||||
5/1/09-4/30/10 |
$ | 33.09 | $ | 229,313.76 | $ | 19,109.48 | ||||||
5/1/10-4/30/11 |
$ | 33.92 | $ | 235,065.60 | $ | 19,588.80 | ||||||
5/1/11-4/30/12 |
$ | 34.77 | $ | 240,956.16 | $ | 20,079.68 | ||||||
5/1/12-4/30/13 |
$ | 35.64 | $ | 246,985.20 | $ | 20,582.10 | ||||||
| * | [on an annualized basis] |
Tenant shall pay Landlord Expansion Space Annual Base Rent in accordance with the terms and
conditions of Section 4 of the Original Lease (captioned, “Rent”). Tenant hereby expressly
acknowledges and agrees that any delay by Tenant in completing the Expansion Space Improvements
shall not delay or otherwise affect the Expansion Space Rent Commencement Date or Tenant’s
obligation to pay Landlord Expansion Space Annual Base Rent from and after such date.
7. Additional Rent Attributable to Expansion Space.
A. Commencing on January 1, 2008, for each calendar year during the Expansion Space Term in
which the amount of Operating Expenses exceeds the amount of Operating Expenses for the E.S. Base
Year (hereinafter defined), Tenant shall pay Landlord Tenant’s E.S. Pro Rata Share (Operating
Expenses) (hereinafter defined) of the amount by which the amount of Operating Expenses for such
calendar year exceeds the amount of Operating Expenses incurred by Landlord in the E.S. Base Year,
in accordance with the terms and conditions of Section 4 of the Original Lease.
B. Commencing on January 1, 2008, for each calendar year during the Expansion Space Term in
which the amount of Real Estate Taxes exceeds the amount of Real Estate Taxes for the E.S. Base
Year, Tenant shall pay Landlord Tenant’s E.S. Pro Rata Share (Real Estate Taxes) (hereinafter
defined) of the amount by which the amount of Real Estate Taxes for such calendar year exceeds the
amount of Real Estate Taxes incurred by Landlord in the E.S. Base Year, in accordance with the
terms and conditions of Section 4 of the Original Lease.
C. Landlord and Tenant hereby acknowledge and agree that: (i) “Tenant’s E.S. Pro Rata Share
(Operating Expenses)” shall be 4.36%; (2) “Tenant’s E.S. Pro Rata Share (Real Estate Taxes)” shall
be 4.36%; and (3) the “E.S. Base Year” shall be calendar year 2007.
8. Tenant’s Continuing Obligations with Respect to the Original Premises. Between the
Effective Date and the Lease Expiration Date, Tenant shall continue to pay Landlord: (i) all
Annual Base Rent for the Original Premises in accordance with the terms and conditions of Section 4
of the Original Lease; (ii) Tenant’s Pro Rata Share (Operating Expenses) of increases in Operating
Expenses which are attributable to the Original Premises in accordance with the term and conditions
of Section 4 of the Original Lease; and (iii) Tenant’s Pro Rata Share (Real Estate Taxes) of
increases in Real Estate Taxes which are attributable to the Original Premises in accordance with
the terms and conditions of Section 4 of the Original Lease.
9. Parking. From and after the Expansion Space Rent Commencement Date, Tenant shall be
provided, without charge during the Expansion Space Term, an additional twenty-eight (28)
unreserved parking spaces located on Surface Lot and/or the Parking Structure, as determined by
Landlord in its sole discretion (the “E.S. Additional Parking Spaces”). Tenant hereby expressly
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acknowledges and agrees that the terms of Section 26 of the Original Lease (captioned, “Parking”)
shall govern Tenant’s use of the E.S. Additional Parking Spaces.
10. Brokers. Landlord and Tenant recognize ACP Mid-Atlantic LLC, as Landlord’s agent, and The
Staubach Company — Northeast, Inc., as Tenant’s agent, as the sole brokers (the “Brokers”) with
respect to this First Amendment. Landlord agrees to be responsible for the payment of any leasing
commissions owed to the Brokers in accordance with the terms of separate commission agreements
entered into between Landlord and each of the Brokers. Landlord and Tenant each represent and
warrant to the other that no other broker has been employed in carrying on any negotiations
relating to this First Amendment and shall each indemnify and hold harmless the other from any
claim for brokerage or other commission arising from or out of any breach of the foregoing
representation and warranty.
11. Additional Modification. As of the Expansion Space Commencement Date, Section 34(d) of
the Original Lease shall be deleted in its entirety and the following language shall be inserted in
lieu thereof as new Section 34(d) of the Original Lease:
“d. From and after the Must-Take Space Commencement Date: (i) the aggregate number of
rentable square feet demised under the Lease shall be 70,422; (ii) wherever the term
“Premises” appears in the Lease, it is hereby deemed to mean the entire 70,422
rentable square feet demised to Tenant; and (iii) Tenant’s Pro Rata Share (Operating
Expenses) and Tenant’s Pro Rata Share (Real Estate Taxes) as set
forth in Section 1.g,
above, shall each be increased to thirty-nine and ninety-six hundredths percent
(39.96%). Tenant hereby acknowledges and agrees that the Base Year with respect to the
Must-Take Space shall be calendar year 2006.”
12. Counterpart Copies. This First Amendment may be executed in two (2) or more counterpart
copies, all of which counterparts shall have the same force and effect as if all parties hereto had
executed a single copy of this First Amendment.
13. Miscellaneous. This First Amendment (a) shall be binding upon and inure to the benefit of
the parties hereto and their respective representatives, transferees, successors and assigns and
(b) shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia.
14. Ratification. Except as expressly amended by this First Amendment, all other terms,
conditions and provisions of the Lease are hereby ratified and confirmed and shall continue in full
force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Deed of Lease
under seal as of the day and year first hereinabove written.
| LANDLORD: | ||||||
| ACP/2300 CORPORATE PARK OWNER, LLC, a Delaware limited liability company |
||||||
| By: | ACP/AEW Woodland Park JV, LLC, a Delaware limited liability company, its sole member |
|||||
| By: | ACP-BP Woodland Park Investor, LLC, a Delaware limited liability company, its operating member |
|||||
| By: | ACP/Woodland Park Investor, LLC, a Delaware limited liability company, its manager |
|||||
| By: | /s/ Xxxxxxx Xxxxx | |||||
| Name: Xxxxxxx Xxxxx | ||||||
| Title: Manager | ||||||
| TENANT: | ||||||
| K12 INC., a Delaware corporation | ||||||
| By: | /s/ Xxxx Xxxxx | |||||
| Name: Xxxx Xxxxx | ||||||
| Title: CFO | ||||||
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EXHIBIT A
FLOOR PLAN OF EXPANSION SPACE
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EXHIBIT B
DECLARATION OF EXPANSION SPACE COMMENCEMENT DATE
This Declaration of Expansion Space Commencement Date is made as of ,
200_, by ACP/2300 CORPORATE PARK OWNER, LLC, a Delaware limited liability company (“Landlord”),
and K12 INC., a Delaware corporation (“Tenant”), who agree as follows:
1. Landlord and Tenant entered into that certain First Amendment to Deed of Lease dated
, 2006, (the “First Amendment”) in which Landlord leased to Tenant, and Tenant leased from
Landlord, certain premises described therein and located at 0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxx,
Xxxxxxxx. All capitalized terms herein are as defined in the First Amendment.
2. Pursuant to the First Amendment, Landlord and Tenant agreed to and do hereby confirm
the following matters as of the Expansion Space Commencement Date:
| a. | the Expansion Space Commencement Date is , 200_; | ||
| b. | the Expansion Space Rent Commencement Date is , 200_; | ||
| c. | the Lease Expiration Date is April 30, 2013; | ||
| d. | the number of rentable square feet comprising the Expansion Space is 6,930; | ||
| e. | the number of rentable square feet of office space in the Building is 158,897; | ||
| f. | “Tenant’s E.S. Pro Rata Share (Operating Expenses)” shall be 4.36%; and | ||
| g. | “Tenant’s E.S. Pro Rata Share (Real Estate Taxes)” shall be 4.36%. |
3. Tenant confirms that:
a. it has accepted possession of the Expansion Space as provided in the First
Amendment;
b. Landlord has fulfilled all its obligations to be provided to Tenant as of the date
hereof;
c. the Lease is in full force and effect and has not been modified, altered, or amended,
except, as follows: ; and
d. there are no set-offs or credits against Rent, and no security deposit or prepaid rent
has been paid, except as follows: .
[signatures appear on the following page]
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The provisions of this Declaration of Expansion Space Commencement Date shall inure to the
benefit of, or bind, as the case may require, the parties and their respective successors and
assigns, subject to the restrictions on assignment and subleasing contained in the Lease, and are
hereby attached to and made a part of the Lease.
| LANDLORD: | ||||||
| ACP/2300 CORPORATE PARK OWNER, LLC, a Delaware limited liability company |
||||||
| By: | ACP/AEW Woodland Park JV, LLC, a Delaware limited liability company, its sole member |
|||||
| By: | ACP-BP Woodland Park Investor, LLC, a Delaware limited liability company, its operating member |
|||||
| By: | ACP/Woodland Park Investor, LLC, a | |||||
| Delaware limited liability company, its manager | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| TENANT: | ||||||
| K12 INC., a Delaware corporation | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| HOLLAND & KNIGHT LLP |
