Exhibit 10.2.1
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LEASE AGREEMENT
Dated as of December 5, 2000
among
FIRST UNION DEVELOPMENT CORPORATION,
as Lessor
and
CAPITAL ONE F.S.B. and
CAPITAL ONE BANK,
jointly and severally as Lessee
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This Lease Agreement is subject to a security interest in favor of First Union
National Bank, as the agent for the Primary Financing Parties and respecting the
Security Documents, as the agent for the Secured Parties (the "Agent") under a
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Security Agreement dated as of December 5, 2000, between First Union Development
Corporation, as the Borrower and the Agent, as amended, modified, extended,
supplemented and/or restated from time to time in accordance with the applicable
provisions thereof. This Lease Agreement has been executed in several
counterparts. To the extent, if any, that this Lease Agreement constitutes
chattel paper (as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction), no security interest in this Lease
Agreement may be created through the transfer or possession of any counterpart
other than the original counterpart containing the receipt therefor executed by
the Agent on the signature page hereof.
TABLE OF CONTENTS
ARTICLE I .................................................................................. 1
1.1 Definitions....................................................................... 1
1.2 Interpretation.................................................................... 2
ARTICLE II .................................................................................. 2
2.1 Property.......................................................................... 2
2.2 Lease Term........................................................................ 2
2.3 Title............................................................................. 3
2.4 Lease Supplement.................................................................. 3
ARTICLE III .................................................................................. 3
3.1 Rent.............................................................................. 3
3.2 Payment of Basic Rent............................................................. 3
3.3 Supplemental Rent................................................................. 4
3.4 Performance on a Non-Business Day................................................. 4
3.5 Rent Payment Provisions........................................................... 4
ARTICLE IV ................................................................................. 5
4.1 Taxes; Utility Charges............................................................ 5
ARTICLE V ................................................................................. 5
5.1 Quiet Enjoyment................................................................... 5
ARTICLE VI ................................................................................. 5
6.1 Net Lease......................................................................... 5
6.2 No Termination or Abatement....................................................... 5
ARTICLE VII ................................................................................. 5
7.1 Ownership of the Properties....................................................... 5
ARTICLE VIII ................................................................................. 5
8.1 Condition of the Property......................................................... 5
8.2 Possession and Use of the Property................................................ 5
8.3 Integrated Property............................................................... 5
ARTICLE IX ................................................................................. 5
9.1 Compliance With Legal Requirements, Insurance Requirements and Manufacturer's
Specifications and Standards..................................................... 5
ARTICLE X ................................................................................. 5
10.1 Maintenance and Repair; Return................................................... 5
10.2 Environmental Inspection......................................................... 5
ARTICLE XI ................................................................................. 5
11.1 Modifications.................................................................... 5
ARTICLE XII ................................................................................. 5
12.1 Warranty of Title; Waiver of Landlord's Lien..................................... 5
ARTICLE XIII ................................................................................. 5
13.1 Permitted Contests Other Than in Respect of Indemnities.......................... 5
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13.2 Impositions, Utility Charges, Other Matters; Compliance with Legal
Requirements .................................................................. 5
ARTICLE XIV ............................................................................... 5
14.1 Public Liability and Workers' Compensation Insurance........................... 5
14.2 Permanent Hazard and Other Insurance........................................... 5
14.3 Coverage....................................................................... 5
14.4 Self-Insurance................................................................. 5
ARTICLE XV ............................................................................... 5
15.1 Casualty and Condemnation...................................................... 5
15.2 Environmental Matters.......................................................... 5
15.3 Notice of Environmental Matters................................................ 5
ARTICLE XVI ............................................................................... 5
16.1 Termination Upon Certain Events................................................ 5
16.2 Procedures..................................................................... 5
ARTICLE XVII ............................................................................... 5
17.1 Lease Events of Default........................................................ 5
17.2 Surrender of Possession........................................................ 5
17.3 Reletting...................................................................... 5
17.4 Damages........................................................................ 5
17.5 Power of Sale.................................................................. 5
17.6 Final Liquidated Damages....................................................... 5
17.7 Environmental Costs............................................................ 5
17.8 Waiver of Certain Rights....................................................... 5
17.9 Assignment of Rights Under Contracts........................................... 5
17.10 Remedies Cumulative............................................................ 5
17.11 Lessee's Right to Cure by Purchase of the Property............................. 5
ARTICLE XVIII............................................................................... 5
18.1 Lessor's Right to Cure Lessee's Lease Defaults................................. 5
ARTICLE XIX ............................................................................... 5
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option................ 5
19.2 No Purchase or Termination With Respect to Less than All of a Property......... 5
ARTICLE XX ............................................................................... 5
20.1 Purchase Option or Sale Option-General Provisions.............................. 5
20.2 Lessee Purchase Option......................................................... 5
20.3 Third Party Sale Option........................................................ 5
ARTICLE XXI ............................................................................... 5
21.1 [Intentionally Omitted]........................................................ 5
ARTICLE XXII ............................................................................... 5
22.1 Sale Procedure................................................................. 5
22.2 Application of Proceeds of Sale................................................ 5
22.3 Indemnity for Excessive Wear................................................... 5
22.4 Appraisal Procedure............................................................ 5
22.5 Certain Obligations Continue................................................... 5
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ARTICLE XXIII.................................................................................. 5
23.1 Holding Over...................................................................... 5
ARTICLE XXIV .................................................................................. 5
24.1 Risk of Loss...................................................................... 5
ARTICLE XXV .................................................................................. 5
25.1 Assignment........................................................................ 5
25.2 Subleases......................................................................... 5
ARTICLE XXVI .................................................................................. 5
26.1 No Waiver......................................................................... 5
ARTICLE XXVII.................................................................................. 5
27.1 Acceptance of Surrender........................................................... 5
27.2 No Merger of Title................................................................ 5
ARTICLE XXVIII.................................................................................. 5
28.1 [Reserved]........................................................................ 5
ARTICLE XXIX .................................................................................. 5
29.1 Notices........................................................................... 5
ARTICLE XXX .................................................................................. 5
30.1 Miscellaneous..................................................................... 5
30.2 Amendments and Modifications...................................................... 5
30.3 Successors and Assigns............................................................ 5
30.4 Headings and Table of Contents.................................................... 5
30.5 Counterparts...................................................................... 5
30.6 GOVERNING LAW..................................................................... 5
30.7 Calculation of Rent............................................................... 5
30.8 Memoranda of Lease and Lease Supplement........................................... 5
30.9 Allocations between the Lenders and Lessor........................................ 5
30.10 Limitations on Recourse........................................................... 5
30.11 WAIVERS OF JURY TRIAL............................................................. 5
30.12 Exercise of Lessor Rights......................................................... 5
30.13 SUBMISSION TO JURISDICTION; VENUE................................................. 5
30.14 USURY SAVINGS PROVISION........................................................... 5
30.15 Lease Senior...................................................................... 5
EXHIBITS
EXHIBIT A - Lease Supplement and Memo of Lease
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LEASE AGREEMENT
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THIS LEASE AGREEMENT dated as of December 5, 2000 (as amended, modified,
extended, supplemented and/or restated from time to time, this "Lease") is among
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FIRST UNION DEVELOPMENT CORPORATION, a North Carolina corporation, as lessor
(the "Lessor"), CAPITAL ONE, F.S.B., a federal savings bank ("FSB") and CAPITAL
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ONE BANK, a Virginia banking corporation ("COB") jointly and severally, as
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lessee (collectively, FSB and COB may be hereinafter referred to as the
"Lessee").
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W I T N E S S E T H:
- - - - - - - - - -
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and the Agency Agreement, Lessor will (i) ground lease one or more
parcels of real property, some of which will (or may) have existing Improvements
thereon, from Lessee or an Affiliate and (ii) fund the acquisition,
installation, testing, use, development, construction, operation, maintenance,
repair, refurbishment and restoration of the Property by the Construction Agent;
and
B. WHEREAS, the Interim Term shall commence with respect to the
Property on the Closing Date and the Basic Term shall commence with respect to
the Property upon the Rent Commencement Date; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, the Property.
NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 Definitions.
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For purposes of this Lease, capitalized terms used in this Lease
and not otherwise defined herein shall have the meanings assigned to them in
Appendix A to that certain Participation Agreement dated as of December 5, 2000
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(as amended, modified, extended, supplemented and/or restated from time to time
in accordance with the applicable provisions thereof, the "Participation
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Agreement") among Lessee, Capital One Financial Corporation, as the Guarantor,
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Lessor, the various financial institutions and other institutional investors
which are parties thereto from time to time as Tranche A Note Purchasers, the
various banks and other lending institutions which are parties thereto from time
to time as Tranche B Lenders, First Union National Bank, as agent for the
Primary Financing Parties and, respecting the Security Documents, as the agent
for the Secured Parties, and First Union National Bank, as the Escrow
Agent. Unless otherwise indicated, references in this Lease to articles,
sections, paragraphs, clauses, appendices, schedules and exhibits are to the
same contained in this Lease.
1.2 Interpretation.
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The rules of usage set forth in Appendix A to the Participation
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Agreement shall apply to this Lease.
ARTICLE II
2.1 Property.
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Subject to the terms and conditions hereinafter set forth and
contained in the Lease Supplement relating to the Property, Lessor hereby leases
to Lessee and Lessee hereby leases from Lessor, the Property.
2.2 Lease Term.
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The interim term of this Lease with respect to the Property (the
"Interim Term") shall begin upon the Closing Date (the "Commencement Date") and
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shall end on the Rent Commencement Date, unless the Interim Term is earlier
terminated. The basic term of this Lease with respect to the Property (the
"Basic Term") shall begin upon the Rent Commencement Date and shall end on the
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tenth anniversary of the Closing Date, unless the Basic Term is earlier
terminated.
Not less than one hundred eighty (180) days and no more than two
hundred forty (240) days prior to the end of the Basic Term, Lessee may give
Lessor and the Agent written notice of Lessee's desire to extend the Basic Term.
Lessor, each Primary Financing Party and the Agent shall each make a
determination, in the absolute a nd sole discretion of each such party, not
later than one hundred twenty-five (125) days prior to the then current
Expiration Date whether or not such party will agree to extend the Expiration
Date as requested; provided, however, that failure by any such party to respond
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(not later than one hundred twenty-five (125) days prior to the then current
Expiration Date) to Lessee's request shall be deemed to constitute a refusal by
such party to the extension of the Expiration Date. In response to Lessee's
request for an extension of the Expiration Date, if (a) Lessor, each Primary
Financing Party and the Agent shall agree in writing to the requested extension,
then the Term shall be extended and shall expire on the agreed upon date or (b)
Lessor, any Primary Financing Party or the Agent shall refuse (or be deemed to
have refused) to agree to the requested extension, then the Basic Term shall not
be extended and shall expire on the then current Expiration Date; provided,
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however, if any Primary Financing Party shall refuse (or be deemed to have
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refused) to agree to the requested extension, Lessee shall have the right to
cause such Primary Financing Party to be replaced with another Person in
accordance with Section 5.14 of the Participation Agreement.
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2.3 Title.
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The Property is leased to Lessee without any representation or
warranty, express or implied, by Lessor and subject to the rights of parties in
possession (if any), the existing state of title (including without limitation
the Permitted Liens) and all applicable Legal Requirements. Lessee shall in no
event have any recourse against Lessor for any defect in Lessor's title to the
Property or any interest of Lessee therein other than for Lessor Liens.
2.4 Lease Supplement.
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On or prior to the Commencement Date, Lessee and Lessor shall each execute
and deliver a Lease Supplement for the Property effective as of such
Commencement Date in substantially the form of EXHIBIT A hereto; provided, on or
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prior to the Rent Commencement Date, Lessee and Lessor shall, upon the
reasonable request of either party, execute and deliver an amended and restated
Lease Supplement for the Property effective as of such Rent Commencement Date.
ARTICLE III
3.1 Rent.
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(a) Lessee shall pay Basic Rent in arrears on each Scheduled
Interest Payment Date; provided, however, Lessee shall have no obligation
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to pay Basic Rent with respect to the Property until the Rent Commencement
Date; provided, further, any amount of Basic Rent payable on the Scheduled
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Interest Payment Date occurring on July 1, 2010 shall be paid on June 30,
2010.
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid by wire transfer of immediately available
funds on the due date therefor to such account at such bank as Lessor shall
from time to time direct.
(c) Lessee's inability or failure to take possession of all or any
portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, the Construction Agent,
Lessee or any other Person or for any other reason whatsoever, shall not
delay or otherwise affect Lessee's obligation to pay Rent for such Property
in accordance with the terms of this Lease.
(d) Lessee shall make all payments of Rent payable to Lessor prior
to 12:00 Noon, Charlotte, North Carolina time, on the applicable date for
payment of such amount.
3.2 Payment of Basic Rent.
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Basic Rent shall be paid absolutely net to Lessor or its designee,
so that this Lease shall yield to Lessor the full amount thereof, without
setoff, deduction or reduction.
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3.3 Supplemental Rent.
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Lessee shall pay to the Person entitled thereto any and all
Supplemental Rent when and as the same shall become due and payable. All such
payments of Supplemental Rent payable to any Financing Party shall be in the
full amount thereof, without setoff, deduction or reduction. Lessee shall pay
to the appropriate Person, as Supplemental Rent due and owing to such Person,
among other things, on demand, (a) any and all payment obligations (except for
amounts payable as Basic Rent, including without limitation principal or
interest (but not including any payments of the Lessor under Section 5.15 of the
Participation Agreement) due and owing under any Notes, amounts specifically
excluded from indemnification by the Lessee pursuant to Sections 11.1 and 11.2
of the Participation Agreement and amounts due and owing or otherwise payable or
incurred as a result of or in connection with any sale of an assignment or
participation interest by any Tranche B Lender or Tranche A Note Purchaser and
payment obligations of one Financing Party to another Financing Party) owing
from time to time under the Operative Agreements by any Person to the Agent, the
Lessor, the Escrow Agent, any Primary Financing Party, or any other Person
(provided, unless such obligation is expressly stated as an obligation of the
Lessee, the Lessee shall only be responsible for such obligation to the extent
it is reasonable for a lessee to bear responsibility for such obligation in a
transaction of the type evidenced by the Operative Agreements), (b) interest at
the applicable Overdue Rate on any portion of any installment of Basic Rent not
paid when due for the period for which the same shall be overdue and on any
portion of any payment of Supplemental Rent payable to any Financing Party not
paid when due for the period from the due date until the same shall be paid and
(c) amounts referenced as Supplemental Rent obligations pursuant to Section 8.3
of the Participation Agreement. It shall be an additional Supplemental Rent
obligation of Lessee to pay to the appropriate Person all rent and other amounts
when such become due and owing from time to time under the Ground Lease and
without the necessity of any notice from Lessor with regard thereto. The
expiration or other termination of Lessee's obligations to pay Basic Rent
hereunder shall not limit or modify the obligations of Lessee with respect to
Supplemental Rent. Unless expressly provided otherwise in this Lease, in the
event of any failure on the part of Lessee to pay and discharge any Supplemental
Rent as and when due, Lessee shall also promptly pay and discharge any fine,
penalty, interest or cost which may be assessed or added for nonpayment or late
payment of such Supplemental Rent, all of which shall also constitute
Supplemental Rent.
3.4 Performance on a Non-Business Day.
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If any Basic Rent is required hereunder on a day that is not a
Business Day, then such Basic Rent shall be due on the corresponding Scheduled
Interest Payment Date. If any Supplemental Rent is required hereunder on a day
that is not a Business Day, then such Supplemental Rent shall be due on the next
succeeding Business Day.
3.5 Rent Payment Provisions.
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Lessee shall make payment of all Basic Rent and Supplemental Rent
when due regardless of whether any of the Operative Agreements pursuant to which
same is calculated and is owing shall have been rejected, avoided or disavowed
in any bankruptcy or insolvency
4
proceeding involving any of the parties to any of the Operative Agreements. Such
Operative Agreements, including without limitation provisions relating to the
payment of Supplemental Rent with the proceeds of Advances pursuant to Section
8.3(d) of the Participation Agreement, and their related definitions are
incorporated herein by reference and shall survive any termination, amendment or
rejection of any such Operative Agreements.
ARTICLE IV
4.1 Taxes; Utility Charges.
----------------------
Subject to the terms of Article XIII relating to permitted
contests, Lessee shall pay or cause to be paid all Impositions with respect to
the Property and/or the use, occupancy, operation, repair, access, maintenance
or operation thereof and all charges for electricity, power, gas, oil, water,
telephone, sanitary sewer service and all other rents, utilities and operating
expenses of any kind or type used in or on any Property during the Term. Upon
Lessor's reasonable request, Lessee shall provide from time to time Lessor with
evidence of all such payments referenced in the foregoing sentence. Lessee shall
be entitled to receive any credit or refund with respect to any Imposition or
utility charge paid by Lessee. Unless a Lease Event of Default shall have
occurred and be continuing, the amount of any credit or refund received by
Lessor on account of any Imposition or utility charge paid by Lessee, net of the
costs and expenses incurred by Lessor in obtaining such credit or refund, shall
be promptly paid over to Lessee. All charges for utilities imposed with respect
to the Property for a period during which this Lease expires or terminates shall
be adjusted and prorated on a daily basis between Lessor and Lessee, and each
party shall pay or reimburse the other for such party's pro rata share thereof.
ARTICLE V
5.1 Quiet Enjoyment.
---------------
Subject to the rights of Lessor contained in Sections 17.2, 17.3
and 20.3 and the other terms of this Lease and the other Operative Agreements
and so long as no Lease Event of Default shall have occurred and be continuing,
Lessee shall peaceably and quietly have, hold and enjoy the Property for the
Term, free of any claim or other action by Lessor or anyone rightfully claiming
by, through or under Lessor (other than Lessee) with respect to any matters
arising from and after the Commencement Date.
ARTICLE VI
6.1 Net Lease.
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This Lease shall constitute a net lease, and the obligations of
Lessee hereunder are absolute and unconditional. Lessee shall pay all operating
expenses arising out of the use,
5
operation and/or occupancy of the Property. Any present or future law to the
contrary notwithstanding, this Lease shall not terminate, nor shall Lessee be
entitled to any abatement, suspension, deferment, reduction, setoff,
counterclaim, or defense with respect to the Rent, nor shall the obligations of
Lessee hereunder be affected (except as expressly permitted and by performance
of the obligations in connection therewith) for any reason whatsoever, including
without limitation by reason of: (a) any damage to or destruction of the
Property or any part thereof; (b) any taking of the Property or any part thereof
or interest therein by Condemnation or otherwise; (c) any prohibition,
limitation, restriction or prevention of Lessee's use, occupancy or enjoyment of
the Property or any part thereof, or any interference with such use, occupancy
or enjoyment by any Person or for any other reason; (d) any title defect, Lien
or any matter affecting title to the Property; (e) any eviction by paramount
title or otherwise; (f) any default by Lessor hereunder; (g) any action for
bankruptcy, insolvency, reorganization, liquidation, receivership, dissolution
or other proceeding relating to or affecting the Agent, any Primary Financing
Party, Lessor, Lessee, any other Credit Party or any Governmental Authority; (h)
the impossibility or illegality of performance by Lessor, Lessee (or any other
Credit Party) or a combination of the foregoing; (i) any action of any
Governmental Authority or any other Person; (j) Lessee's acquisition of
ownership of all or part of the Property; (k) breach of any warranty or
representation with respect to the Property or any Operative Agreement; (l) any
defect in the condition, quality or fitness for use of the Property or any part
thereof; or (m) any other cause or circumstance whether similar or dissimilar to
the foregoing and whether or not Lessee (or any other Credit Party) shall have
notice or knowledge of any of the foregoing. The parties intend that the
obligations of Lessee hereunder shall be covenants, agreements and obligations
that are separate and independent from any obligations of Lessor hereunder and
shall continue unaffected unless such covenants, agreements and obligations
shall have been modified or terminated in accordance with an express provision
of this Lease. Lessor and Lessee acknowledge and agree that the provisions of
this Section 6.1 have been specifically reviewed and subject to negotiation.
Lessee's agreements in this paragraph shall not affect any claim, action or
right Lessee may have against the Lessor, the Agent or any Primary Financing
Party that may be brought by separate proceeding.
6.2 No Termination or Abatement.
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Lessee shall remain obligated under this Lease in accordance with
its terms and shall not take any action to terminate, rescind or avoid this
Lease, notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting any Person or any
Governmental Authority, or any action with respect to this Lease or any
Operative Agreement which may be taken by any trustee, receiver or liquidator of
any Person or any Governmental Authority or by any court with respect to any
Person, or any Governmental Authority. Lessee hereby waives all right (a) to
terminate or surrender this Lease (except as permitted under the terms of the
Operative Agreements) or (b) to avail itself of any abatement, suspension,
deferment, reduction, setoff, counterclaim or defense with respect to any Rent.
Lessee shall remain obligated under this Lease in accordance with its terms and
Lessee hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be
bound by all of the terms and conditions contained in this Lease. Lessee's
agreements in this paragraph shall not affect any claim, action or right Lessee
may have
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against the Lessor, the Agent or any Primary Financing Party that may be brought
by separate proceeding.
ARTICLE VII
7.1 Ownership of the Properties.
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(a) Lessor and Lessee intend that (i) for financial accounting
purposes with respect to Lessee (A) this Lease will be treated as an
"operating lease" pursuant to Statement of Financial Accounting Standards
No. 13, as amended, (B) Lessor will be the owner and lessor of the Property
and (C) Lessee will be the lessee of the Property, but (ii) for federal and
all state and local income tax purposes, bankruptcy, receivership, UCC,
commercial law, real estate law and all other purposes (A) this Lease will
be treated as a financing arrangement and (B) Lessee will be treated as the
owner of the Property and will be entitled to all tax benefits ordinarily
available to owners of property similar to the Property for such tax
purposes. Notwithstanding the foregoing, neither party hereto has made, or
shall be deemed to have made, any representation or warranty as to the
availability of any of the foregoing treatments under applicable accounting
rules, tax, bankruptcy, regulatory, commercial or real estate law or under
any other set of rules. Lessee shall claim the cost recovery deductions
associated with the Property, and Lessor shall not, to the extent not
prohibited by Law, take on its tax return a position inconsistent with
Lessee's claim of such deductions.
(b) In order to secure the obligations of Lessee now existing or
hereafter arising under any and all Operative Agreements, pursuant hereto
and to the Lease Supplement, Lessee hereby conveys, grants, assigns,
transfers, hypothecates, mortgages and sets over to Lessor, for the benefit
of the Secured Parties, a first priority security interest (but subject
only to the security interest in the assets granted by Lessor in favor of
the Agent in accordance with the Security Agreement) in and lien on all
right, title and interest of Lessee (now owned or hereafter acquired) in
and to the Property, to the extent such is personal property and
irrevocably grants and conveys a lien, deed of trust or mortgage, as
applicable, on all right, title and interest of Lessee (now owned or
hereafter acquired) in and to the Property to the extent such is real
property. Lessor and Lessee further intend and agree that, for the purpose
of securing the obligations of Lessee and/or the Construction Agent now
existing or hereafter arising under the Operative Agreements, this Lease as
supplemented by the Lease Supplement shall be a security agreement and
financing statement within the meaning of Article 9 of the Uniform
Commercial Code respecting the Lessee's interest in the Property and all
proceeds (including without limitation insurance proceeds thereof) to the
extent such is personal property and an irrevocable grant and conveyance of
a lien, deed of trust or mortgage, as applicable, on the Lessee's interest
in the Property and all proceeds (including without limitation insurance
proceeds thereof) to the extent such is real property and constitutes a
grant by Lessee to Lessor of a security interest, lien, deed of trust or
mortgage, as applicable, in all of Lessee's right, title and interest in
and to the Property and all proceeds (including without limitation
insurance proceeds thereof) of the conversion,
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voluntary or involuntary, of the foregoing into cash, investments,
securities or other property, whether in the form of cash, investments,
securities or other property, and an assignment of all rents, profits and
income produced by the Property. Lessee and Lessor further intend and agree
that notifications to Persons holding such proceeds, and acknowledgments,
receipts or confirmations from financial intermediaries, bankers or agents
(as applicable) of Lessee, when given, shall be deemed to have been given
for the purpose of perfecting the foregoing lien, security interest,
mortgage lien or deed of trust, as applicable, under applicable law.
Subject to Section 8.12 of the Participation Agreement, Lessee shall
promptly take such actions as necessary (including without limitation the
filing of Uniform Commercial Code Financing Statements, Uniform Commercial
Code Fixture Filings and memoranda (or short forms) of this Lease and the
Lease Supplement) to ensure that the lien, security interest, mortgage lien
or deed of trust, as applicable, in the Property and the other items
referenced above will be deemed to be a perfected lien, security interest,
mortgage lien or deed of trust, as applicable, of first priority (subject
to all liens and security interests granted to the Agent and/or the Primary
Financing Parties under the Security Documents (other than this Lease))
under applicable law and will be maintained as such throughout the Term.
ARTICLE VIII
8.1 Condition of the Property.
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LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING THE PROPERTY
"AS-IS WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP THE PROPERTY FREE AND CLEAR OF
LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF TITLE, (B)
THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY), (C) ANY STATE OF FACTS
REGARDING ITS PHYSICAL CONDITION OR WHICH AN ACCURATE SURVEY MIGHT SHOW, (D) ALL
APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL REQUIREMENTS WHICH MAY
EXIST ON THE DATE HEREOF AND/OR THE DATE OF THE APPLICABLE LEASE SUPPLEMENT.
NEITHER LESSOR NOR THE AGENT NOR ANY PRIMARY FINANCING PARTY HAS MADE OR SHALL
BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) (EXCEPT THAT LESSOR SHALL KEEP THE PROPERTY FREE AND CLEAR OF LESSOR
LIENS) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE,
VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PROPERTY (OR ANY PART THEREOF), AND NEITHER LESSOR NOR THE AGENT
NOR ANY PRIMARY FINANCING PARTY SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR
PATENT DEFECT THEREON OR THE FAILURE OF THE PROPERTY, OR ANY PART THEREOF, TO
COMPLY WITH ANY LEGAL REQUIREMENT. LESSEE HAS OR PRIOR TO THE COMMENCEMENT DATE
WILL
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HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT THE PROPERTY AND THE IMPROVEMENTS
THEREON (IF ANY), IS OR WILL BE (INSOFAR AS LESSOR, THE AGENT AND EACH PRIMARY
FINANCING PARTY ARE CONCERNED) SATISFIED WITH THE RESULTS OF ITS INSPECTIONS AND
IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS OF THE RESULTS OF ITS OWN
INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING
SENTENCE, AS BETWEEN LESSOR, THE AGENT AND THE PRIMARY FINANCING PARTIES, ON THE
ONE HAND, AND LESSEE, ON THE OTHER HAND, ARE TO BE BORNE BY LESSEE.
8.2 Possession and Use of the Property.
----------------------------------
(a) At all times during the Term with respect to the Property,
such Property shall be a Permitted Facility and shall be used by Lessee in
the ordinary course of its business; provided, however, that nothing herein
-------- -------
or in any other Operative Agreement shall be construed to require Lessee to
operate the Property. Subject to the terms of Article XIII relating to
permitted contests, Lessee shall pay, or cause to be paid during the Term,
all charges and costs required in connection with the use of the Property
as contemplated by this Lease. Lessee shall not commit or permit any waste
of the Property or any part thereof.
(b) The address stated in Section 6.2(i) of the Participation
Agreement is the principal place of business and chief executive office of
Lessee (as such terms are used in Section 9-103(3) of the Uniform
Commercial Code of any applicable jurisdiction), and Lessee will provide
Lessor with prior written notice of any change of location of its principal
place of business or chief executive office. Regarding the Property, the
Lease Supplement shall correctly identify the initial location of the
related Equipment (if any) and Improvements (if any) and contain an
accurate legal description for the related parcel of Land or a description
of the Ground Lease. The Equipment and Improvements respecting the Property
will be located only at the location identified in the Lease Supplement.
(c) Lessee will not attach or incorporate any item of Equipment to
or in any other item of equipment or personal property or to or in any real
property in a manner that could give rise to the assertion of any Lien on
such item of Equipment by reason of such attachment or the assertion of a
claim that such item of Equipment has become a fixture and is subject to a
Lien in favor of a third party that is prior to the Liens thereon created
by the Operative Agreements.
(d) On or prior to the Rent Commencement Date for the Property,
Lessor and Lessee shall execute a Lease Supplement (or, pursuant to Section
2.4, an amended and restated Lease Supplement) in regard to such Property
which shall contain an Equipment Schedule that has a general description of
the Equipment which shall comprise the Property, a schedule that has a
general description of the Improvements which shall comprise the Property
and a legal description of the Land subject to the Ground Lease upon which
such Improvements will be constructed, all of which shall be leased or
9
subleased hereunder as of the Rent Commencement Date. The Property shall be
deemed to be ground subleased from Lessor to Lessee as of the Commencement
Date, and such grou nd sublease shall be in effect until this Lease is
terminated or expires, in each case in accordance with the terms and
provisions hereof. Lessee shall satisfy and perform all obligations imposed
on Lessor under the Ground Lease. As of the Rent Commencement Date, such
Equipment, Improvements, Land, ground subleasehold interest, all additional
Equipment and all additional Improvements which are financed under the
Operative Agreements after the Closing Date and the remainder of such
Property shall be deemed to have been accepted by Lessee for all purposes
of this Lease and to be subject to this Lease.
(e) At all times during the Term with respect to the Property,
Lessee will comply with all obligations under and (to the extent no Lease
Event of Default exists and provided that any such exercise of rights and
remedies hereinafter referred to will not impair the value, utility or
remaining useful life of such Property) shall be permitted to exercise all
rights and remedies under, all operation and easement agreements and
related or similar agreements applicable to such Property.
8.3 Integrated Property.
-------------------
On the Rent Commencement Date for the Property, Lessee shall, at
its sole cost and expense, cause the Property, together with any Appurtenant
Rights, to constitute (and for the duration of the Term shall continue to
constitute) all of the equipment, facilities, rights, other personal property
and other real property necessary or appropriate to operate, utilize, maintain
and control the Property in a commercially reasonable manner.
ARTICLE IX
9.1 Compliance With Legal Requirements, Insurance Requirements and
--------------------------------------------------------------
Manufacturer's Specifications and Standards.
-------------------------------------------
Subject to the terms of Article XIII relating to permitted
contests, Lessee, at its sole cost and expense, shall (a) comply with all
applicable Legal Requirements (including without limitation all Environmental
Laws) and all Insurance Requirements relating to the Property (unless the
failure to comply with such Insurance Requirements will not result in a denial
of coverage under any insurance policy required to be maintained hereunder or
under any other Operative Agreement), (b) procure, maintain and comply with all
licenses, permits, orders, approvals, consents and other authorizations required
for the acquisition, installation, testing, use, development, construction,
operation, maintenance, repair, refurbishment and restoration of the Property,
and (c) comply with all manufacturer's specifications and standards, including
without limitation the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Property, whether or not compliance therewith shall require structural or
extraordinary changes in the Property or interfere with the use and enjoyment of
the Property unless the failure to comply with Legal Requirements (including
without limitation all Environmental Laws) pursuant to subparagraph (a) or
unless the
10
failure to procure, maintain and comply with such items identified in
subparagraphs (b) and (c), individually or in the aggregate, shall not and could
not reasonably be expected to have a Material Adverse Effect. Lessor agrees to
take such actions as may be reasonably requested by Lessee in connection with
the compliance by Lessee of its obligations under this Section 9.1.
ARTICLE X
10.1 Maintenance and Repair; Return.
------------------------------
(a) Lessee, at its sole cost and expense, shall maintain the
Property in the repair and condition as existed as of the Completion Date
(ordinary wear and tear excepted) and make all necessary repairs thereto
and replacements thereof, of every kind and nature whatsoever, whether
interior or exterior, ordinary or extraordinary, structural or
nonstructural or foreseen or unforeseen, in each case as required by
Section 9.1 and on a basis consistent with the operation and maintenance of
Lessee's properties or equipment comparable in type and function to the
Property, such that the Property is capable of being utilized within a
reasonable time and in compliance with standard industry practice subject,
however, to the provisions of Article XV with respect to Casualty and
Condemnation and ordinary wear and tear.
(b) Lessee shall not use or locate any component of the Property
outside of the Approved State therefor. Lessee shall not move or relocate
any component of the Property beyond the boundaries of the Land (comprising
part of such Property) described in the applicable Lease Supplement, except
for the removal of Equipment and other personal property for repair or
replacement, and except for Improvements (if any) constructed in connection
with or on Land subject to Appurtenant Rights.
(c) If any component of the Property becomes worn out, lost,
destroyed, damaged beyond repair or otherwise permanently rendered unfit
for use, Lessee, at its own expense, will within a reasonable time replace
such component with a replacement component which is free and clear of all
Liens (other than Permitted Liens and Lessor Liens) and has a value,
utility and useful life at least equal to the component replaced (assuming
the component replaced had been maintained and repaired in accordance with
the requirements of this Lease). All components which are added to the
Property shall immediately become the property of (and title thereto shall
vest in) Lessor and shall be deemed incorporated in the Property and
subject to the terms of this Lease as if originally leased hereunder.
(d) Upon reasonable advance notice and during regular business
hours, Lessor and its agents shall have the right to inspect the Property
and all maintenance records with respect thereto, but shall not, in the
absence of a continuing Lease Event of Default, materially disrupt the
business of Lessee. In connection with any such inspection initiated upon
the occurrence of, and thereafter during any continuance of, a Lease Event
of Default, costs and expenses in connection with any such inspection shall
be borne by Lessee.
11
(e) Lessee shall cause to be delivered to Lessor (at Lessee's sole
expense) one (1) or more additional Appraisals (or reappraisals or updates
of prior Appraisals of the Property) as Lessor may request if and to the
extent any of Lessor, the Agent or any Primary Financing Party is required
pursuant to any applicable Legal Requirement to obtain such Appraisals (or
reappraisals or updates of prior Appraisals) and upon the occurrence of any
Lease Event of Default.
(f) Lessor shall under no circumstances be required to build any
improvements or install any equipment on the Property, make any repairs,
replacements, alterations or renewals of any nature or description to the
Property, make any expenditure whatsoever in connection with this Lease or
maintain the Property in any way. Lessor shall not be required to
maintain, repair or rebuild all or any part of the Property, and Lessee
waives the right to (i) require Lessor to maintain, repair, or rebuild all
or any part of the Property, or (ii) make repairs at the expense of Lessor
pursuant to any Legal Requirement, Insurance Requirement, contract,
agreement, covenant, condition or restriction at any time in effect.
(g) Lessee shall, upon the expiration or earlier termination of
this Lease with respect to the Property, if Lessee shall not have exercised
its Purchase Option with respect to such Property and purchased such
Property, surrender such Property (i) to Lessor pursuant to the exercise of
the applicable remedies upon the occurrence and continuance of a Lease
Event of Default or (ii) pursuant to the second paragraph of Section
22.1(a) hereof, to Lessor or the third party purchaser, as the case may be,
subject to Lessee's obligations under this Lease (including without
limitation the obligations of Lessee at the time of such surrender under
Sections 9.1, 10.1(a) through (f), 10.2, 11.1, 12.1, 22.1 and 23.1).
10.2 Environmental Inspection.
------------------------
If Lessee has not given notice of exercise of its Purchase Option
on the Expiration Date pursuant to Section 20.1 or for whatever reason Lessee
does not elect (for itself or its designee) to purchase the Property in
accordance with the terms of this Lease, then not more than one hundred eighty
(180) days nor less than sixty (60) days prior to the Expiration Date, Lessee at
its expense shall cause to be delivered to Lessor a Phase I environmental site
assessment recently prepared (no more than thirty (30) days prior to the date of
delivery) by an independent recognized professional reasonably acceptable to
Lessor, and in form, scope and content reasonably satisfactory to Lessor.
ARTICLE XI
11.1 Modifications.
-------------
(a) Lessee at its sole cost and expense, at any time and from
time to time without the consent of Lessor may make modifications,
alterations, renovations,
12
improvements and additions to the Property or any part thereof and
substitutions and replacements therefor (collectively, "Modifications"),
-------------
and Lessee shall make any and all Modifications required to be made
pursuant to all Legal Requirements, Insurance Requirements and
manufacturer's specifications and standards; provided, that: (i) no
--------
Modification shall materially impair the value, utility or useful life of
the Property from that which existed immediately prior to such Modification
(assuming the Property is being maintained and repaired in accordance with
the requirements of this Lease); (ii) each Modification shall be done
expeditiously and in a good and workmanlike manner; (iii) no Modification
shall adversely affect the structural integrity of the Property; (iv) to
the extent required by Section 14.2(a), Lessee shall maintain builders'
risk insurance at all times when a Modification is in progress; (v) subject
to the terms of Article XIII relating to permitted contests, Lessee shall
pay all costs and expenses and discharge any Liens arising with respect to
any Modification; (vi) each Modification shall comply with the requirements
of this Lease (including without limitation Sections 8.2 and 10.1); and
(vii) no Improvement shall be demolished or otherwise rendered unfit for
use unless Lessee shall finance the proposed replacement Modification
outside of this lease facility; provided, further, Lessee shall not make
-------- -------
any Modification (unless required by any Legal Requirement) to the extent
any such Modification, individually or in the aggregate, shall or could
reasonably be expected to have a Material Adverse Effect. All Modifications
required pursuant to Legal Requirements, Insurance Requirements and/or
manufacturer's specifications and standards and all other Modifications
that are not severable from the Property without material damage or other
material loss of value shall immediately and without further action upon
their incorporation into the Property (1) become property of Lessor, (2) be
subject to this Lease and (3) be titled in the name of Lessor. Title to
all other Modifications shall vest with Lessee; provided, if Lessee fails
--------
to remove any such Modification prior to the Expiration Date or earlier
termination of this Lease, title to such Modifications shall revert to
Lessor (unless Lessee or its designee shall have purchased the Property on
the Expiration Date or earlier termination of this Lease). Lessee, at its
sole cost and expense, shall repair any damage to the Property relating to
the removal of any Modification titled to Lessee. Lessee shall not remove
or attempt to remove any Modification titled to Lessor from the Property,
except as set forth in Section 10.1. Lessee, at its own cost and expense,
will pay for the repairs of any damage to the Property caused by the
removal or attempted removal of any Modification. Nothing herein or in any
other Operative Agreement shall prevent Lessee from removing any Lessee
Equipment from the Property.
(b) The construction process provided for in the Agency Agreement
is acknowledged by Lessor to be consistent with and in compliance with the
terms and provisions of this Article XI.
13
ARTICLE XII
12.1 Warranty of Title; Waiver of Landlord's Lien.
--------------------------------------------
(a) Lessee hereby acknowledges and shall cause title in the
Property (including without limitation all Equipment (but exclusive of any
Lessee Equipment), all Improvements, all replacement components to the
Property and all Modifications) immediately and without further action to
vest in and become the property of Lessor and to be subject to the terms of
this Lease (provided, Lessor's interest in the Land and the Improvements
--------
existing on the Land as of the Closing Date is acknowledged to be a
leasehold interest pursuant to the Ground Lease) from and after the date
hereof or such date of incorporation into the Property. Lessee agrees
that, subject to the terms of Article XIII relating to permitted contests,
Lessee shall not directly or indirectly create or allow to remain, and
shall promptly discharge at its sole cost and expense, any Lien, defect,
attachment, levy, title retention agreement or claim upon the Property, any
component thereof or any Modifications or any Lien, attachment, levy or
claim with respect to the Rent or with respect to any amounts held by
Lessor, the Agent or any Primary Financing Party pursuant to any Operative
Agreement, other than Permitted Liens and Lessor Liens. Lessee shall
promptly notify Lessor in the event it receives actual knowledge that a
Lien other than a Permitted Lien or Lessor Lien has occurred with respect
to the Property, the Rent or any other such amounts, and Lessee represents
and warrants to, and covenants with, Lessor that the Liens in favor of
Lessor and/or the Agent created by the Operative Agreements are (and until
the Financing Parties under the Operative Agreements have been paid in full
shall remain) first priority Liens subject only to Permitted Liens and
Lessor Liens. At all times subsequent to the Commencement Date respecting
the Property, Lessee shall (subject to Section 8.12 of the Participation
Agreement) (i) cause a valid, perfected, first priority Lien on the
Property to be in place in favor of the Agent (for the benefit of the
Secured Parties) and (ii) file, or cause to be filed, all necessary
documents under the applicable real property law and Article 9 of the
Uniform Commercial Code to perfect such title and Liens.
(b) Subject to Section 11.1(b), nothing contained in this Lease
shall be construed as constituting the consent or request of Lessor or
Agent, expressed or implied, to or for the performance by any contractor,
mechanic, laborer, materialman, supplier or vendor of any labor or services
or for the furnishing of any materials for any construction, alteration,
addition, repair or demolition of or to any Property or any part thereof.
NOTICE IS HEREBY GIVEN THAT NEITHER LESSOR NOR THE AGENT IS AND NEITHER
SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE
FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE PROPERTY OR ANY PART THEREOF
THROUGH OR UNDER LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH
LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF
LESSOR OR THE AGENT IN AND TO THE PROPERTY.
(c) All of the Lessee Equipment shall be and remain the personal
property of Lessee and shall be removable by Lessee any time prior to the
expiration or earlier
14
termination of the Term. Lessor expressly waives its statutory or common
law landlord's liens (as same may be enacted or may exist from time to
time) and any and all rights granted under any present or future laws to
levy or distrain for rent (whether in arrears or in advance) against the
aforesaid Lessee Equipment on the Property and further agrees to execute
any reasonable instruments evidencing such waiver, at any time or times
hereafter upon Lessee's request.
ARTICLE XIII
13.1 Permitted Contests Other Than in Respect of Indemnities.
-------------------------------------------------------
Except to the extent otherwise provided for in Section 11 of the
Participation Agreement, Lessee, on its own or on Lessor's behalf but at
Lessee's sole cost and expense, may contest, by appropriate administrative or
judicial proceedings conducted in good faith and with due diligence, the amount,
validity or application, in whole or in part, of any Legal Requirement,
Imposition or utility charge payable pursuant to Section 4.1 or 13.2 or any
Lien, attachment, levy, encumbrance, encroachment, any other charges and costs
payable pursuant to Section 8.2, any Insurance Requirement, or any operation or
easement agreement and Lessor agrees not to pay, settle or otherwise compromise
any such item, provided, that (a) the commencement and continuation of such
--------
proceedings shall suspend the collection of any such contested amount from, and
suspend the enforcement thereof against, the Property, the Lessor, the Agent and
each Primary Financing Party; (b) there shall not be imposed a Lien (other than
Permitted Liens and Lessor Liens) on the Property that would subject any part of
the Property or any Rent to a material risk of being sold, forfeited, lost or
deferred or a material reduction in value; (c) at no time during the permitted
contest shall there be a risk of the imposition of criminal liability or
material civil liability (unless Lessee has expressly agreed to indemnify
Lessor, the Agent and each other Financing Party for any such civil liability,
and Lessor shall have determined in its sole discretion that the Lessee will be
able to so indemnify Lessor, the Agent and each other Financing Party) on
Lessor, the Agent or any Primary Financing Party for failure to comply
therewith; and (d) in the event that, at any time, there shall be a material
risk of extending the application of such item beyond the end of the Term, then
Lessee shall deliver to Lessor, the Agent and each other Financing Party an
Officer's Certificate certifying as to the matters set forth in clauses (a), (b)
and (c) of this Section 13.1. Lessor shall execute and deliver to Lessee such
authorizations and other documents as may reasonably be required in connection
with any such contest and, if reasonably requested by Lessee, shall join as a
party therein; provided, that all reasonable costs and expenses actually
--------
incurred by Lessor shall be payable by Lessee.
13.2 Impositions, Utility Charges, Other Matters; Compliance with
------------------------------------------------------------
Legal Requirements.
------------------
Except with respect to Impositions, Legal Requirements, utility
charges and such other matters referenced in Section 13.1 which are the subject
of ongoing proceedings contesting the same in a manner consistent with the
requirements of Section 13.1, Lessee shall cause (a) all Impositions, utility
charges, Insurance Requirements and such other matters to be timely paid,
15
settled or compromised, as appropriate, with respect to the Property and (b) the
Property to comply with all applicable Legal Requirements and Insurance
Requirements.
ARTICLE XIV
14.1 Public Liability and Workers' Compensation Insurance.
----------------------------------------------------
During the Term for the Property, Lessee shall procure and carry,
at Lessee's sole cost and expense, commercial general liability and umbrella
liability insurance for claims for injuries or death sustained by persons or
damage to property while on the Property or respecting the Equipment and such
other public liability coverages as are then customarily carried by similarly
situated companies conducting business similar to that conducted by Lessee. Such
insurance shall be on terms and in amounts that are no less favorable than
insurance maintained by Lessee with respect to similar properties and equipment
that they own and are then carried by similarly situated companies conducting
business similar to that conducted by Lessee, and in no event shall have a
minimum combined single limit per occurrence coverage (i) for commercial general
liability of less than $1 million combined single limit and (ii) for umbrella
liability of less than $25 million. The policies shall name Lessee as the
insured and shall be endorsed to name Lessor, the Agent and each Primary
Financing Party as additional insureds. The policies shall also specifically
provide that such policies shall be considered primary insurance which shall
apply to any loss or claim arising in connection with the Property before any
contribution by any insurance which Lessor, the Agent or any Primary Financing
Party may have in force. In the operation of the Property, Lessee shall comply
with applicable workers' compensation laws and protect Lessor, the Agent and
each Primary Financing Party against any liability under such laws.
14.2 Permanent Hazard and Other Insurance.
------------------------------------
(a) During the Term for the Property, Lessee shall keep the
Property insured against all risk of physical loss or damage by fire and
other risks and shall maintain builders' risk insurance during construction
of any Improvements or Modifications in each case in amounts no less than
the Property Cost of the Property from time to time and on terms that (i)
are no less favorable than insurance covering other similar properties
owned by Lessee and (ii) are then carried by similarly situated companies
conducting business similar to that conducted by Lessee. The policies shall
name Lessee as the insured and shall be endorsed to name Lessor and the
Agent (on behalf of the Secured Parties) as additional insureds and loss
payees, as their interests may appear; provided, so long as no Lease Event
--------
of Default exists, any loss payable under the insurance policies required
by this Section for losses up to $1,000,000 will be paid to Lessee.
(b) If, during the Term with respect to the Property the area in
which the Property is located is designated a "flood-prone" area pursuant
to the Flood Disaster Protection Act of 1973, or any amendments or
supplements thereto or is in a zone designated A or V, then Lessee shall
comply with the National Flood Insurance Program as set forth in the Flood
Disaster Protection Act of 1973. In addition, Lessee will fully
16
comply with the requirements of the National Flood Insurance Act of 1968
and the Flood Disaster Protection Act of 1973, as each may be amended from
time to time, and with any other Legal Requirement, concerning flood
insurance to the extent that it applies to the Property. During the Term,
Lessee shall, in the operation and use of the Property, maintain workers'
compensation insurance consistent with that carried by similarly situated
companies conducting business similar to that conducted by Lessee and
containing minimum liability limits of no less than $100,000.
14.3 Coverage.
--------
(a) As of the date of this Lease and annually thereafter during
the Term, Lessee shall furnish the Agent (on behalf of Lessor, each Primary
Financing Party and the other beneficiaries of such insurance coverage)
with certificates prepared by the insurers or insurance broker of Lessee
showing the insurance required under Sections 14.1 and 14.2 to be in
effect, naming (to the extent of their respective interests) Lessor, the
Agent and each Primary Financing Party as additional insureds and loss
payees and evidencing the other requirements of this Article XIV. All such
insurance shall be at the cost and expense of Lessee and provided by
nationally recognized, financially sound insurance companies having an A+
or better rating by A.M. Best's Key Rating Guide. Lessee shall cause such
certificates to include a provision for thirty (30) days' advance written
notice by the insurer to the Agent (on behalf of Lessor, each Primary
Financing Party and the other beneficiaries of such insurance coverage) in
the event of cancellation or material alteration of such insurance. If a
Lease Event of Default has occurred and is continuing and the Agent (on
behalf of Lessor, each Primary Financing Party and the other beneficiaries
of such insurance coverage) so requests, Lessee shall deliver to the Agent
(on behalf of Lessor, each Primary Financing Party and the other
beneficiaries of such insurance coverage) copies of all insurance policies
required by Sections 14.1 and 14.2.
(b) Lessee agrees that the insurance policy or policies required
by Sections 14.1, 14.2(a) and 14.2(b) shall include an appropriate clause
pursuant to which any such policy shall provide that it will not be
invalidated should Lessee or any Contractor, as the case may be, have
waived any or all rights of recovery against any party for losses covered
by such policy or due to any breach of warranty, fraud, action, inaction or
misrepresentation by Lessee or any Person acting on behalf of Lessee.
Lessee hereby waives any and all such rights against Lessor, the Agent and
each Primary Financing Party to the extent of payments made to any such
Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with any
insurance required under this Article XIV, except that Lessor may carry
separate liability insurance at Lessor's sole cost so long as (i) Lessee's
insurance is designated as primary and in no event excess or contributory
to any insurance Lessor may have in force which would apply to a loss
covered under Lessee's policy and (ii) each such insurance policy will not
cause Lessee's
17
insurance required under this Article XIV to be subject to a coinsurance
exception of any kind.
(d) Lessee shall pay as they become due all premiums for the
insurance required by Section 14.1 and Section 14.2, shall renew or replace
each policy prior to the expiration date thereof or otherwise maintain the
coverage required by such Sections without any lapse in coverage.
14.4 Self-Insurance.
--------------
Lessee shall have the option to self-insure against all risks and
requirements for insurance required pursuant to Operative Agreements by means of
deductibles and co-payment amounts reasonably acceptable to the Majority Secured
Parties.
ARTICLE XV
15.1 Casualty and Condemnation.
-------------------------
(a) Subject to the provisions of the Agency Agreement and this
Article XV and Article XVI (in the event Lessee delivers, or is obligated
to deliver or is deemed to have delivered, a Termination Notice), and prior
to the occurrence and continuation of a Lease Default or a Lease Event of
Default, Lessee shall be entitled to receive (and Lessor hereby irrevocably
assigns to Lessee all of Lessor's right, title and interest in) any
condemnation proceeds, award, compensation or insurance proceeds under
Sections 14.2(a) or 14.2(b) hereof to which Lessee or Lessor may become
entitled by reason of their respective interests in the Property (i) if all
or a portion of the Property is damaged or destroyed in whole or in part by
a Casualty or (ii) if the use, access, occupancy, easement rights or title
to the Property or any part thereof is the subject of a Condemnation;
provided, however, if a Lease Default or a Lease Event of Default shall
-------- -------
have occurred and be continuing or if such condemnation proceeds, award,
compensation or insurance proceeds shall exceed $1,000,000, then such
condemnation proceeds, award, compensation or insurance proceeds shall be
paid directly to Lessor or, if received by Lessee, shall be held in trust
for Lessor, and shall be paid over by Lessee to Lessor and held in
accordance with the terms of this paragraph (a). All such amounts held by
Lessor hereunder on account of any condemnation proceeds, award,
compensation or insurance proceeds either paid directly to Lessor or turned
over to Lessor shall be held as security for the performance of Lessee's
obligations hereunder and under the other Operative Agreements and when all
such obligations of Lessee with respect to such matters (and all other
obligations of Lessee which should have been satisfied pursuant to the
Operative Agreements as of such date) have been satisfied or expressly
waived, all amounts so held by Lessor shall be paid over to Lessee.
(b) Lessee may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any condemnation proceeds, award,
compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all
18
expenses thereof. At Lessee's reasonable request, Lessor and the Agent
shall participate in any such proceeding, action, negotiation, prosecution
or adjustment; provided, that all reasonable costs and expenses actually
--------
incurred by Lessor or the Agent in connection therewith shall be payable by
the Lessee. Lessor and Lessee agree that this Lease shall control the
rights of Lessor and Lessee in and to any such condemnation proceeds,
award, compensation or insurance payment.
(c) If Lessee shall receive notice of a Casualty or a
Condemnation of the Property or any interest therein where damage to the
Property is estimated to equal or exceed ten percent (10%) of the Property
Cost of the Property, Lessee shall give notice thereof to Lessor promptly
after Lessee's receipt of such notice. In the event such a Casualty or
Condemnation occurs (regardless of whether Lessee gives notice thereof)
during any period in which a Lease Event of Default has occurred and is
continuing, then Lessee shall be deemed to have delivered a Termination
Notice to Lessor and the provisions of Sections 16.1 and 16.2 shall apply.
(d) In the event of a Casualty or a Condemnation (regardless of
whether notice thereof must be given pursuant to paragraph (c)), this Lease
shall terminate with respect to the Property in accordance with Section
16.1 if Lessee, within thirty (30) days after such occurrence, delivers to
Lessor a notice to such effect.
(e) If pursuant to this Section 15.1 Lessee does not deliver a
notice to terminate this Lease pursuant to clause (d) above or is not
required to deliver a notice to terminate this Lease pursuant to clause (c)
above, then this Lease shall continue in full force and effect following a
Casualty or Condemnation with respect to the Property, Lessee shall, at its
sole cost and expense (subject to reimbursement in accordance with Section
15.1(a)) promptly and diligently repair any damage to the Property caused
by such Casualty or Condemnation in conformity with the requirements of
Sections 10.1 and 11.1, using the as-built Plans and Specifications or
manufacturer's specifications for the applicable Improvements, Equipment or
other components of the Property (as modified to give effect to any
subsequent Modifications, any Condemnation affecting the Property and all
applicable Legal Requirements), so as to restore the Property to the same
or a greater fair market value, and such that, in all material respects,
the Property shall after such repair or restoration have the same or
greater useful life and utility as existed immediately prior to such
Casualty or Condemnation (assuming all maintenance and repair standards
have been satisfied). In such event, title to the Property shall remain
with Lessor.
(f) In no event shall a Casualty or Condemnation affect Lessee's
obligations to pay Rent pursuant to Article III.
(g) Notwithstanding anything to the contrary set forth in
Section 15.1(a) or Section 15.1(e), if during the Basic Term with respect
to the Property a Casualty occurs with respect to the Property or Lessee
receives notice of a Condemnation with respect to the Property, and
following such Casualty or Condemnation, the Property cannot in Lessee's
reasonable judgment be restored, repaired or replaced on or before the day
one
19
hundred eighty (180) days prior to the Expiration Date to the same or a
greater fair market value, and such that, in all material respects, the
Property shall after such repair or restoration have the same or greater
useful life and utility as existed immediately prior to such Casualty or
Condemnation (assuming all maintenance and repair standards have been
satisfied) or on or before such day the Property is not in fact so
restored, repaired or replaced, then Lessee shall be required to exercise
its Purchase Option for the Property on the next Payment Date
(notwithstanding the limits on such exercise contained in Section 20.2) and
pay Lessor the Termination Value for the Property. After the payment by
Lessee of the Termination Value for the Property, any Excess Proceeds shall
be paid to the Lessee.
15.2 Environmental Matters.
---------------------
Promptly upon Lessee's actual knowledge of the presence of
Hazardous Substances in any portion of the Property in concentrations and
conditions that constitute an Environmental Violation and which, in the
reasonable opinion of Lessee, the cost to undertake any legally required
response, clean up, remedial or other action will or might result in a cost to
Lessee of more than $100,000, Lessee shall notify Lessor in writing of such
condition. In the event of any such Environmental Violation (regardless of
whether notice thereof must be given), Lessee shall, not later than thirty (30)
days after Lessee has actual knowledge of such Environmental Violation, either
deliver to Lessor a Termination Notice with respect to the Property pursuant to
Section 16.1, if applicable, or, at Lessee's sole cost and expense, promptly
during such thirty (30) day period deliver to Lessor notice of intention to
remediate, and thereafter promptly and diligently undertake and complete any
response, clean up, remedial or other action (including without limitation the
pursuit by Lessee of appropriate action against any off-site or third party
source for contamination) necessary to remove, cleanup or remediate such
Environmental Violation in compliance with all Environmental Laws. Any such
undertaking shall be timely completed in accordance with prudent industry
standards. If Lessee does not deliver a Termination Notice with respect to the
Property pursuant to Section 16.1, Lessee shall, upon completion of remedial
action by Lessee, cause to be prepared by a reputable environmental consultant
reasonably acceptable to Agent a report describing the Environmental Violation
and the actions taken by Lessee (or its agents) in response to such
Environmental Violation, and a statement by the consultant that the
Environmental Violation has been remedied in compliance with applicable
Environmental Law. Not less than sixty (60) days and not more than one hundred
eighty (180) days prior to any time that Lessee elects to remarket the Property
pursuant to the Sale Option pursuant to Section 20.1 hereof or pursuant to any
other provision of any Operative Agreement, Lessee at its expense shall cause to
be delivered to Agent a Phase I environmental site assessment (or an update of a
prior Phase I environmental site assessment) respecting the Property recently
prepared (no more than thirty (30) days prior to the date of delivery) by an
independent recognized professional acceptable to Agent in its reasonable
discretion and in form, scope and content satisfactory to Agent in its
reasonable discretion. Subject to Section 5.4(b) of the Agency Agreement, but
notwithstanding any other provision of any Operative Agreement, if Lessee fails
to comply with the foregoing obligation regarding the Phase I environmental site
assessment, Lessee shall be obligated to purchase the Property for its
Termination Value and shall not be permitted to exercise (and Lessor shall have
no obligation to
20
honor any such exercise) any rights under any Operative Agreement regarding a
sale of the Property to a Person other than Lessee or any Affiliate or other
designee of Lessee.
15.3 Notice of Environmental Matters.
-------------------------------
Promptly, but in any event within ten (10) days from the date
Lessee has actual knowledge thereof, Lessee shall provide to Lessor written
notice of any pending or threatened claim, action or proceeding involving any
Environmental Law or any Release on or in connection with the Property. All such
notices shall describe in reasonable detail the nature of the claim, action or
proceeding and Lessee's proposed response thereto. In addition, Lessee shall
provide to Lessor, within ten (10) days of receipt, copies of all material
written communications with any Governmental Authority relating to any
Environmental Law in connection with the Property. Lessee shall also promptly
provide such detailed reports of any such material environmental claims as may
reasonably be requested by Lessor.
ARTICLE XVI
16.1 Termination Upon Certain Events.
-------------------------------
If Lessee has delivered, or is deemed to have delivered, written
notice of a termination of this Lease with respect to the Property to Lessor in
the form described in Section 16.2(a) (a "Termination Notice") pursuant to the
------------------
provisions of this Lease, then following the applicable Casualty, Condemnation
or Environmental Violation, this Lease shall terminate with respect to the
Property upon the payment in full of the Termination Value for the Property in
accordance with the terms of the Operative Agreements on the applicable
Termination Date.
16.2 Procedures.
----------
Subject to Section 5.4(b) of the Agency Agreement:
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the Property on a Payment Date
not more than sixty (60) days after Lessor's receipt of such Termination
Notice (the "Termination Date"); and (ii) a binding and irrevocable
----------------
agreement of Lessee to pay the Termination Value for the Property and
purchase the Property on such Termination Date.
(b) On each Termination Date, Lessee shall pay to Lessor the
Termination Value for the Property, and Lessor shall convey the Property or
the remaining portion thereof, if any, to Lessee (or Lessee's designee),
all in accordance with Section 20.2.
21
ARTICLE XVII
17.1 Lease Events of Default.
-----------------------
If any one (1) or more of the following events (each a "Lease
-----
Event of Default") shall occur and be continuing:
----------------
(a) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii)) within three (3) Business Days after
the same has become due and payable or (ii) any Termination Value, on the
date any such payment is due and payable, or any payment of Basic Rent or
Supplemental Rent due on the due date of any such payment of Termination
Value, or any amount due on the Expiration Date;
(b) (i) Lessee shall fail to make payment of any Supplemental
Rent (other than Supplemental Rent referred to in Section 17.1(a)(ii)) or
the Construction Agent shall fail to make any payment of any amount under
any Operative Agreement which has become due and payable, in either case,
within three (3) Business Days after receipt of written notice that such
payment is due or (ii) the Guarantor shall fail to make any payment of any
amount under any Operative Agreement which has become due and payable;
(c) Lessee shall fail to maintain insurance as required by
Article XIV of this Lease;
(d) (i) The Lessee shall default in the performance of any of
its obligations under Section 8.3(o) of the Participation Agreement or FSB
shall default in the performance of any of its obligations under Sections
8.3A.1(h), 8.3B.1, 8.3B.2, 8.3B.3 or 8.3B.4 of the Participation Agreement
or COB shall default in the performance of any of its obligations under
Sections 8.3C.1(h), 8.3D.1, 8.3D.2, 8.3D.3 or 8.3D.4 of the Participation
Agreement; or (ii) Lessee shall fail to observe or perform any term,
covenant, obligation or condition of Lessee under this Lease or any other
Operative Agreement to which Lessee is a party other than those set forth
in Sections 17.1(a), (b), (c) or (d)(i) hereof, or any other Credit Party
shall fail to observe or perform any term, covenant, obligation or
condition of such Credit Party under any Operative Agreement other than
those set forth in Section 17.1(b) hereof and such failure shall continue
for thirty (30) days after the Lessee or such Credit Party, as the case may
be, either has received written notice thereof or a Responsible Officer
shall have the actual knowledge thereof; provided, that in the case of this
--------
clause (ii), if such failure is not capable of remedy by the payment of
money or otherwise within such thirty (30) day period but may be remedied
with further diligence and if the Lessee or such Credit Party has and
continues to pursue diligently such remedy, then the Lessee or such Credit
Party shall be granted additional time to pursue such remedy for such
period as the Agent may determine in its reasonable discretion; provided,
--------
further, in no event shall such additional period exceed ninety (90) days;
-------
or (iii) any representation or warranty or statement of fact made by Lessee
or any other Credit Party set forth in this Lease or in any other Operative
Agreement or in any document entered into in connection herewith or
therewith or in any
22
document, certificate or financial or other statement delivered in
connection herewith or therewith shall be false or inaccurate in any way
when made and, in the case of any representation or warranty of any Credit
Party after the Closing Date relating solely to the Property, remains false
or inaccurate and the matter giving rise to such misrepresentation or
breach of warranty or misstatement of fact shall continue for thirty (30)
days after the earlier of actual knowledge of a Responsible Officer of a
Credit Party or written notice thereof from Lessor to the Lessee or such
Credit Party; provided, if such matter giving rise to such
--------
misrepresentation or breach of warranty or misstatement of fact is not
capable of remedy within such thirty (30) day period but may be remedied
with further diligence and if Lessee or such Credit Party has and continues
to pursue diligently such remedy, then Lessee or such Credit Party shall be
granted additional time to pursue such remedy for such period as the Agent
may determine in its reasonable discretion; provided, further, in no event
-------- -------
shall such additional period exceed ninety (90) days;
(e) An Agency Agreement Event of Default shall have occurred and
be continuing and shall not have been expressly waived;
(f) Any Credit Party or any Subsidiary of any Credit Party shall
default (beyond applicable periods of grace and/or notice and cure) in the
payment when due of any principal of or interest on any Indebtedness having
an outstanding principal amount of at least $50,000,000; or any other event
or condition (other than a voluntary prepayment of such Indebtedness) shall
occur which enables or permits the holder of any such Indebtedness or any
Person acting on such holder's behalf to accelerate the maturity thereof;
(g) The liquidation or dissolution of any Credit Party, or the
suspension of the business of any Credit Party, or the filing by any Credit
Party of a voluntary petition or an answer seeking reorganization,
arrangement, receivership, readjustment of its debts, insolvency,
liquidation, dissolution, winding-up or for any other relief under the
Bankruptcy Code or under any other insolvency act or law, state or federal,
now or hereafter existing, or any other action of any Credit Party
indicating its consent to, approval of or acquiescence in, any such
petition or proceeding; the application by any Credit Party for, or the
appointment by consent or acquiescence of any Credit Party, or the taking
of possession by, a conservator, a custodian, an examiner, a liquidator, of
a receiver, a trustee or a custodian of any Credit Party for all or a
substantial part of its property; the making by any Credit Party of any
general assignment for the benefit of creditors; the inability of any
Credit Party or the admission by any Credit Party in writing of its
inability to pay its debts as they mature or any Credit Party is generally
not paying its debts and other financial obligations as they become due and
payable; or any Credit Party taking any corporate action to authorize any
of the foregoing;
(h) The filing of an involuntary petition against any Credit
Party in bankruptcy or seeking reorganization, arrangement, readjustment of
its debts, insolvency, liquidation, dissolution, winding-up or for any
other relief under the Bankruptcy Code, or under any other insolvency act
or law, state or federal, now or hereafter existing; or the involuntary
appointment of, or the taking of possession by, a conservator, a custodian,
an
23
examiner, a liquidator, a receiver, a trustee or a custodian of any Credit
Party for all or a substantial part of its property; or the issuance of a
warrant of attachment, execution or similar process against any substantial
part of the property of any Credit Party, and the continuance of any of
such events for sixty (60) days undismissed or undischarged;
(i) [Reserved];
(j) The entering of any order in any proceedings against any
Credit Party or any Subsidiary of any Credit Party decreeing the
dissolution, divestiture or split-up of any Credit Party or any Subsidiary
of any Credit Party, and such order remains in effect for more than sixty
(60) days;
(k) [Reserved];
(l) [Reserved];
(m) A final judgment or judgments for the payment of money shall
be rendered by a court or courts against any Credit Party or any Subsidiary
of any Credit Party in excess of $50,000,000 in the aggregate, and (i) the
same shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within
thirty (30) days from the date of entry thereof, or (ii) any Credit Party
or any such Subsidiary shall not, within said period of thirty (30) days,
or such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal, or (iii) such judgment or judgments shall not be
discharged (or provisions shall not be made for such discharge) within
thirty (30) days after a decision has been reached with respect to such
appeal and the related stay has been lifted;
(n) Any Credit Party or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess of
$2,000,000 which it shall have become liable to pay to the PBGC or shall
fail to pay within thirty (30) days after becoming due an amount or amounts
aggregating in excess of $2,000,000 which it shall have become liable to
pay to a Pension Plan under Title IV of ERISA; or notice of intent to
terminate a Pension Plan or Pension Plans having aggregate Unfunded
Liabilities in excess of $2,000,000 shall be filed under Title IV of ERISA
by any Credit Party or any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any such Pension Plan or Pension
Plans or a proceeding shall be instituted by a fiduciary of any such
Pension Plan or Pension Plans against any Credit Party or any member of the
Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA; or a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any such Pension Plan or Pension Plans
must be terminated;
(o) [Reserved];
24
(p) Any Operative Agreement (other than the Guaranty) or the
security interest and Lien granted under this Lease (except in accordance
with its terms), in whole or in part, terminates, ceases to be effective or
ceases to be the legal, valid and binding enforceable obligation of any
Credit Party, as the case may be, on account of, or as a result of,
directly or indirectly, any act or omission of Lessee or any other Credit
Party, or Lessee or any other Credit Party, directly or indirectly,
contests in any manner in any court the effectiveness, validity, binding
nature or enforceability thereof; or the security interest and Lien
securing Lessee's obligations under the Operative Agreements, in whole or
in part, ceases to be a perfected first priority security interest and Lien
(subject only to Permitted Liens and Lessor Liens); or
(q) Except as to any Credit Party which is released in
connection with the Operative Agreements, the Guaranty or any material
provision thereof shall cease to be in full force and effect, or the
Guarantor or any Person acting by or on behalf of the Guarantor shall deny
or disaffirm the Guarantor's obligations under the Guaranty; or
(r) Any Insured Subsidiary shall cease accepting deposits or
making commercial loans on the instruction of any Bank Regulatory Authority
with authority to give such instruction other than pursuant to an
instruction generally applicable to banks organized under the jurisdiction
of organization of such Insured Subsidiary; or
(s) Any Insured Subsidiary shall cease to be an insured bank
under the FDIA and all rules and regulations promulgated thereunder; or
(t) Any Insured Subsidiary shall be required (whether or not the
time allowed by the appropriate Bank Regulatory Authority for the
submission of such plan has been established or elapsed) to submit a
capital restoration plan of the type referred to in 12 U.S.C.
(S)1831o(b)(2)(C), as amended, re-enacted or redesignated from time to
time; or
(u) COFC shall Guarantee in writing the capital of any Insured
Subsidiary as part of or in connection with any agreement or arrangement
with any Bank Regulatory Authority;
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this Article XVII and in Section 18.1, terminate this
Lease by giving Lessee five (5) days written notice of such termination
(provided, notwithstanding the foregoing, this Lease shall be deemed to be
automatically terminated without the giving of notice upon the occurrence of a
Lease Event of Default under Sections 17.1(g), (h) or (j)), and this Lease shall
terminate, and all rights of Lessee under this Lease shall cease. Lessee shall,
to the fullest extent permitted by law, pay as Supplemental Rent all costs and
expenses incurred by or on behalf of Lessor or any other Financing Party,
including without limitation reasonable fees and expenses of counsel, as a
result of any Lease Event of Default hereunder.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE AS SUPPLEMENTED BY THE LEASE
SUPPLEMENT. A POWER OF SALE MAY ALLOW LESSOR TO TAKE THE PROPERTY AND SELL THE
PROPERTY WITHOUT GOING TO COURT IN A
25
FORECLOSURE ACTION UPON THE OCCURRENCE AND CONTINUANCE OF A LEASE EVENT OF
DEFAULT.
17.2 Surrender of Possession.
-----------------------
If a Lease Event of Default shall have occurred after the
Commencement Date and be continuing, and whether or not this Lease shall have
been terminated pursuant to Section 17.1, Lessee shall, upon thirty (30) days
written notice, surrender to Lessor possession of the Property. Lessor may enter
upon and repossess the Property by such means as are available at law or in
equity, and may remove Lessee and all other Persons and any and all personal
property and Lessee's equipment and personalty and severable Modifications from
the Property. Lessor shall have no liability by reason of any such entry,
repossession or removal performed in accordance with applicable law. Upon the
written demand of Lessor, Lessee shall return the Property promptly to Lessor,
in the manner and condition required by, and otherwise in accordance with the
provisions of, Section 22.1(c) hereof.
17.3 Reletting.
---------
If a Lease Event of Default shall have occurred after the
Commencement Date and be continuing, and whether or not this Lease shall have
been terminated pursuant to Section 17.1, Lessor may, but shall be under no
obligation to, relet any or all of the Property, for the account of Lessee or
otherwise, for such term or terms (which may be greater or less than the period
which would otherwise have constituted the balance of the Term) and on such
conditions (which may include concessions or free rent) and for such purposes as
Lessor may determine, and Lessor may collect, receive and retain the rents
resulting from such reletting. Lessor shall not be liable to Lessee for any
failure to relet the Property or for any failure to collect any rent due upon
such reletting.
17.4 Damages.
-------
Neither (a) the termination of this Lease as to the Property
pursuant to Section 17.1; (b) the repossession of the Property; nor (c) the
failure of Lessor to relet the Property, the reletting of all or any portion
thereof, nor the failure of Lessor to collect or receive any rentals due upon
any such reletting, shall relieve Lessee of its liabilities and obligations
hereunder, all of which shall survive any such termination, repossession or
reletting. If any Lease Event of Default shall have occurred after the
Commencement Date and be continuing and this Lease is terminated pursuant to
Section 17.1, Lessee shall forthwith pay to Lessor all Rent and other sums due
and payable hereunder to and including without limitation the date of such
termination. In the event this Lease is not terminated pursuant hereto, on the
days on which the Basic Rent or Supplemental Rent, as applicable, are payable
under this Lease or would have been payable under this Lease and until the end
of the Term hereof Lessee shall pay Lessor, as current liquidated damages (it
being agreed that it would be impossible accurately to determine actual damages)
an amount equal to the Basic Rent and Supplemental Rent that are payable under
this Lease or would have been payable by Lessee hereunder if this Lease had not
been terminated pursuant to Section 17.1, less the net proceeds, if any, which
are actually received by
26
Lessor with respect to the period in question of any reletting of the Property
or any portion thereof; provided, that Lessee's obligation to make payments of
--------
Basic Rent and Supplemental Rent under this Section 17.4 shall continue only so
long as Lessor shall not have received the amounts specified in Section 17.6.
In calculating the amount of such net proceeds from reletting, there shall be
deducted all of Lessor's, the Agent's and any Primary Financing Party's
reasonable expenses in connection therewith, including without limitation
repossession costs, brokerage or sales commissions, fees and expenses for
counsel and any necessary repair or alteration costs and expenses incurred in
preparation for such reletting. To the extent Lessor receives any damages
pursuant to this Section 17.4, such amounts shall be regarded as amounts paid on
account of Rent. Lessee specifically acknowledges and agrees that its
obligations under this Section 17.4 shall be absolute and unconditional under
any and all circumstances and shall be paid and/or performed, as the case may
be, without notice or demand and without any abatement, reduction, diminution,
setoff, defense, counterclaim or recoupment whatsoever.
17.5 Power of Sale.
-------------
(a) Without limiting any other remedies set forth in this Lease,
in the event that a court of competent jurisdiction, when enforcing this
Lease following the occurrence and during the continuance of a Lease Event
of Default, were to construe the transactions contemplated by this Lease as
indebtedness of the Lessee secured by the Property, Lessor and Lessee agree
that Lessee has granted, pursuant to Section 7.1(b) hereof and the Lease
Supplement, a Lien against the Property WITH POWER OF SALE, and that, upon
the occurrence and during the continuance of any Lease Event of Default,
Lessor shall have the power and authority, to the extent provided by law,
after prior notice and lapse of such time as may be required by law, to
foreclose its interest (or cause such interest to be foreclosed) in all or
any part of the Property as provided in the Lease Supplement.
(b) Upon the occurrence and during the continuance of a Lease
Event of Default, the Lessor, in lieu of or in addition to exercising any
power of sale hereinabove given, may proceed by a suit or suits in equity
or at law, whether for a foreclosure hereunder, or for the sale of such
interest in the Property, against Lessee for the Termination Value or for
the appointment of a receiver pending any foreclosure hereunder or the sale
of such interest in the Property, or for the enforcement of any other
appropriate legal or equitable remedy.
(c) Without limiting any other remedies set forth herein, and
notwithstanding anything to the contrary contained herein or any other
Operative Agreement, Lessee and the Lessor agree that the Lessor and/or the
trustee under the Mortgage Instruments (the "Deed of Trust Trustee") is
---------------------
authorized and empowered to sell or cause to be sold such interest in the
Property and to convey the same to the purchaser thereof, pursuant to the
provisions of Virginia law, which does not require that a judicial hearing
be held before the sale is conducted. The Lessor and/or the Deed of Trust
Trustee may direct the sale of such interest in the Property in one parcel
or several parcels and in any order that the Lessor and/or the Deed of
Trust Trustee may elect in its sole discretion. Lessee further agrees that
the Lessor and/or the Deed of Trust Trustee are authorized and empowered to
27
retain out of the sale proceeds moneys as are due under the terms hereof,
including but not limited to costs and charges of such sale, and reasonable
fees and expenses of counsel.
17.6 Final Liquidated Damages.
------------------------
If a Lease Event of Default shall have occurred and be
continuing, whether or not this Lease shall have been terminated pursuant to
Section 17.1 and whether or not Lessor shall have collected any current
liquidated damages pursuant to Section 17.4, Lessor shall have the right to
recover, by demand to Lessee and at Lessor's election, and Lessee shall pay to
Lessor, as and for final liquidated damages, but exclusive of the indemnities
payable under Section 11 of the Participation Agreement (which, if requested,
shall be paid concurrently), and in lieu of all current liquidated damages
beyond the date of such demand (it being agreed that it would be impossible
accurately to determine actual damages) the Termination Value (including,
without limitation, the Make-Whole Amount). Upon payment of the amount specified
pursuant to the first sentence of this Section 17.6, Lessee shall be entitled to
receive from Lessor, either at Lessee's request or upon Lessor's election, in
either case at Lessee's cost, an assignment of Lessor's entire right, title and
interest in and to the Property, Improvements, Fixtures, Modifications,
Equipment and all components thereof, and all insurance or condemnation proceeds
being held by the Lessor in accordance with Article XV, in each case in
recordable form and otherwise in conformity with local custom and free and clear
of the Lien of this Lease (including without limitation the release of any
memoranda of Lease and/or the Lease Supplement recorded in connection therewith)
and any Lessor Liens. The Property shall be conveyed to Lessee "AS-IS, WHERE-IS"
and in its then present physical condition. If any statute or rule of law shall
limit the amount of such final liquidated damages to less than the amount agreed
upon, Lessor shall be entitled to the maximum amount allowable under such
statute or rule of law; provided, however, Lessee shall not be entitled to
-------- -------
receive an assignment of Lessor's interest in the Property, the Improvements,
Fixtures, Modifications, Equipment or the components thereof unless Lessee shall
have paid in full the Termination Value. Lessee specifically acknowledges and
agrees that its obligations under this Section 17.6 shall be absolute and
unconditional under any and all circumstances and shall be paid and/or
performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.7 Environmental Costs.
-------------------
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall pay directly to any third party (or at Lessor's
election, reimburse Lessor) for the cost of any environmental testing and/or
remediation work undertaken respecting the Property, as such testing or work is
deemed appropriate in the reasonable judgment of Lessor. Lessee shall pay all
amounts referenced in the immediately preceding sentence within five (5)
Business Days of Lessee's receipt of any written request by Lessor for such
payment. The provisions of this Section 17.7 shall not limit the obligations of
Lessee under any Operative Agreement regarding indemnification obligations,
environmental testing, remediation and/or work.
28
17.8 Waiver of Certain Rights.
------------------------
If this Lease shall be terminated pursuant to Section 17.1,
Lessee waives, to the fullest extent permitted by Law, (a) any notice of re-
entry or the institution of legal proceedings to obtain re-entry or possession;
(b) any right of redemption, re-entry or possession; (c) the benefit of any laws
now or hereafter in force exempting property from liability for rent or for
debt; and (d) any other rights which might otherwise limit or modify any of
Lessor's rights or remedies under this Article XVII.
17.9 Assignment of Rights Under Contracts.
------------------------------------
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall upon Lessor's demand immediately assign, transfer and
set over to Lessor all of Lessee's right, title and interest in and to each
agreement executed by Lessee in connection with the acquisition, installation,
testing, use, development, construction, operation, maintenance, repair,
refurbishment and restoration of the Property (including without limitation all
right, title and interest of Lessee with respect to all warranty, performance,
service and indemnity provisions), as and to the extent that the same relate to
the acquisition, installation, testing, use, development, construction,
operation, maintenance, repair, refurbishment and restoration of the Property or
any of them.
17.10 Remedies Cumulative.
-------------------
The remedies herein provided shall be cumulative and in addition
to (and not in limitation of) any other remedies available at law, equity or
otherwise, including without limitation any mortgage foreclosure remedies.
17.11 Lessee's Right to Cure by Purchase of the Property.
--------------------------------------------------
Notwithstanding anything in this Lease or in any of the other
Operative Agreements to the contrary, upon the occurrence and continuance of a
Lease Default or Lease Event of Default, Lessee may, but shall not be obligated
to, cure any such Lease Default or Lease Event of Default, as the case may be,
by purchasing the Property, such purchase to be consummated as provided in
Section 19.1 and Section 20.2.
ARTICLE XVIII
18.1 Lessor's Right to Cure Lessee's Lease Defaults.
----------------------------------------------
Lessor, without waiving or releasing any obligation or Lease
Event of Default, may (but shall be under no obligation to) remedy any Lease
Event of Default for the account and at the sole cost and expense of Lessee,
including without limitation the failure by Lessee to maintain the insurance
required by Article XIV, and may, to the fullest extent permitted by law, and
notwithstanding any right of quiet enjoyment in favor of Lessee, enter upon the
Property, and take all such action thereon as may be necessary or appropriate
therefor. No such entry shall
29
be deemed an eviction of any lessee. All reasonable out-of-pocket costs and
expenses so incurred (including without limitation fees and expenses of
counsel), together with interest thereon at the Overdue Rate from the date on
which such sums or expenses are paid by Lessor, shall be paid by Lessee to
Lessor on demand.
ARTICLE XIX
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option.
---------------------------------------------------------------
Subject to Section 19.2, in connection with any termination of
this Lease with respect to the Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate with respect to the Property, and upon tender
by Lessee of the amounts set forth in Sections 16.2(b) or 20.2, as applicable,
Lessor shall execute and deliver to Lessee (or to Lessee's designee) at Lessee's
cost and expense an assignment (by limited or special warranty deed or other
appropriate instrument) of Lessor's entire interest in such Property, in each
case in recordable form and otherwise in conformity with local custom and free
and clear of any Lessor Liens but without any other warranties (of title or
otherwise) from Lessor and such other documents or instruments as may be
reasonably requested by Lessee to effect the conveyance or assignment
contemplated by this Section 19.1. The Property shall be conveyed to Lessee "AS-
IS, "WHERE-IS" and in then present physical condition.
19.2 No Purchase or Termination With Respect to Less than All of a
-------------------------------------------------------------
Property.
--------
Lessee shall not be entitled to exercise its Purchase Option or
the Sale Option separately with respect to a portion of the Property consisting
of Land, Equipment, Improvements and/or any interest pursuant to a Ground Lease
but shall be required to exercise its Purchase Option or the Sale Option with
respect to the entire Property.
ARTICLE XX
20.1 Purchase Option or Sale Option-General Provisions.
-------------------------------------------------
Not less than one hundred eighty (180) days and no more than two
hundred forty (240) days prior to the Expiration Date or, respecting the
Purchase Option only, not less than sixty (60) days and no more than two hundred
forty (240) days prior to any Payment Date (such Expiration Date or, respecting
the Purchase Option only, any such Payment Date being hereinafter referred to as
the "Election Date"), Lessee may give Agent irrevocable written notice (the
-------------
"Election Notice") that Lessee is electing (a) to purchase the Property on the
---------------
applicable Election Date (the "Purchase Option") or (b) with respect to an
---------------
Election Notice given in connection with the Expiration Date only, the option to
remarket the Property to a Person other than Lessee or any Affiliate of Lessee
and cause a sale of the Property to occur on the applicable Election Date
pursuant to the terms of Section 22.1 (the "Sale Option"). If Lessee does not
-----------
give an Election Notice indicating the Purchase Option or the Sale Option at
least one hundred
30
eighty (180) days and not more than two hundred forty (240) days prior to the
Expiration Date, then Lessee shall be deemed to have elected for the Purchase
Option to apply on the Expiration Date. If Lessee shall either (i) elect (or be
deemed to have elected) to exercise the Purchase Option or (ii) elect the Sale
Option and fail to cause the Property to be sold in accordance with the terms of
Section 22.1 on the applicable Election Date, then in either case Lessee shall
pay to Lessor on the date on which such purchase or sale is scheduled to occur
an amount equal to the Termination Value for the Property (which the parties do
not intend to be a "bargain" purchase price) and, upon receipt of such amounts
and satisfaction of such obligations, Lessor shall transfer to Lessee (or to
Lessee's designee) all of Lessor's right, title and interest in and to the
Property in accordance with Section 20.2.
If the Property is the subject of remediation efforts respecting
Hazardous Substances at the applicable Election Date which could materially and
adversely impact the Fair Market Sales Value of the Property (with materiality
determined in Lessor's reasonable discretion), then Lessee shall be obligated to
purchase the Property pursuant to Section 20.2.
20.2 Lessee Purchase Option.
----------------------
Provided, no Lease Default or Lease Event of Default shall have
--------
occurred and be continuing (other than those that will be cured by the payment
of the Termination Value for the Property) and provided, that the Election
--------
Notice has been appropriately given specifying the Purchase Option, Lessee shall
purchase the Property on the applicable Election Date at a price equal to the
Termination Value for the Property (which the parties do not intend to be a
"bargain" purchase price).
Subject to Section 19.2, in connection with any termination of
this Lease with respect to the Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate with respect to the Property and upon tender by
Lessee of the amounts set forth in Section 16.2(b) or this Section 20.2, as
applicable, Lessor shall execute, acknowledge (where required) and deliver to
Lessee, at Lessee's cost and expense, each of the following: (a) a termination
or assignment (as requested by the Lessee) of the Ground Lease to Lessee (or
Lessee's designee) free and clear of the Lien of this Lease, the Liens of the
Credit Documents and any other Operative Agreements and any Lessor Liens; (b) a
▇▇▇▇ of Sale conveying the Property (to the extent it is personal property) to
Lessee (or Lessee's designee) free and clear of the Lien of this Lease, the
Liens of the Credit Documents and any other Operative Agreements and any Lessor
Liens; (c) any real estate tax affidavit or other document required by law to be
executed and filed in order to record the applicable Ground Lease termination;
and (d) FIRPTA affidavits and such documents or instruments as may be reasonably
requested by Lessee to effect the conveyance and release contemplated by this
Section 20.2. All of the foregoing documentation must be in form and substance
reasonably satisfactory to Agent and Lessee. The Property, together with any
insurance or condemnation proceeds being held by Lessor in accordance with
Article XV, shall be conveyed to Lessee (or Lessee's designee) "AS-IS, WHERE-IS"
and in then present physical condition.
31
On the applicable Election Date on which Lessee has elected to
exercise its Purchase Option, Lessee shall pay (or cause to be paid) to Lessor
or the Agent, as appropriate, the sum of all reasonable costs and expenses
incurred by any such party in connection with the election by Lessee to exercise
its Purchase Option and all Rent then due and payable or accrued under this
Lease and/or any other Operative Agreement.
20.3 Third Party Sale Option.
-----------------------
(a) Provided, that (i) no Lease Default or Lease Event of
--------
Default shall have occurred and be continuing and (ii) the Election Notice
has been appropriately given specifying the Sale Option, Lessee shall
undertake to cause a sale of the Property on the applicable Election Date
(all as specified in the Election Notice), in accordance with the
provisions of Section 22.1 hereof. Such Election Date on which a sale is
required may be hereafter referred to as the "Sale Date".
---------
(b) In the event Lessee exercises the Sale Option then, as soon
as practicable and in all events not less than sixty (60) days and not more
than one hundred eighty (180) days prior to the Sale Date, Lessee at its
expense shall cause to be delivered to Lessor a Phase I environmental site
assessment (or an update of a Phase I environmental site assessment
previously delivered) for the Property recently prepared (no more than
thirty (30) days old prior to the date of delivery) by an independent
recognized professional reasonably acceptable to Lessor and in form, scope
and content reasonably satisfactory to Lessor. In the event that Lessor
shall not have received such environmental site assessment by the date
sixty (60) days prior to the Sale Date or in the event that such
environmental assessment shall reveal the existence of any material
violation of Environmental Laws, other material Environmental Violation or
potential material Environmental Violation (with materiality determined in
each case by Lessor in its reasonable discretion), then Lessee on the Sale
Date shall pay to Lessor an amount equal to the Termination Value for the
Property. Upon receipt of such payment, Lessor shall transfer to Lessee all
of Lessor's right, title and interest in and to the Property in accordance
with Section 19.1.
ARTICLE XXI
21.1 [Intentionally Omitted].
ARTICLE XXII
22.1 Sale Procedure.
--------------
(a) During the Marketing Period, Lessee, on behalf of Lessor,
shall obtain bids for the cash purchase of the Property in connection with
a sale to one (1) or more third party purchasers to be consummated on the
Sale Date for the highest price available, shall notify Lessor promptly of
the name and address of each prospective purchaser and
32
the cash price which each prospective purchaser shall have offered to pay
for the Property and shall provide Lessor with such additional information
about the bids and the bid solicitation procedure as Lessor may reasonably
request from time to time. All such prospective purchasers must be Persons
other than Lessee or any Affiliate of Lessee. On the Sale Date, Lessee
shall pay (or cause to be paid) to Lessor or the Agent, as appropriate, the
sum of all reasonable costs and expenses incurred by Lessor and/or the
Agent (as the case may be) in connection with such sale of the Property,
all Rent then due and payable or accrued under this Lease and/or any other
Operative Agreement.
Lessor may reject any and all bids and may solicit and obtain
bids by giving Lessee written notice to that effect; provided, however,
-------- -------
that notwithstanding the foregoing, Lessor may not reject the bids
submitted by Lessee if such bids, in the aggregate with respect to various
portions of the Property, are greater than or equal to the sum of the
Limited Recourse Amount for the Property, and represent bona fide offers
from one (1) or more third party purchasers. If the highest price which a
prospective purchaser or the prospective purchasers shall have offered to
pay for the Property on the Sale Date is less than the sum of the Limited
Recourse Amount for the Property or if such bids do not represent bona fide
offers from one (1) or more third parties or if there are no bids, Lessor
may elect to retain the Property by giving Lessee prior written notice of
Lessor's election to retain the same, and promptly upon receipt of such
notice, Lessee shall surrender, or cause to be surrendered, the Property in
accordance with the terms and conditions of Section 10.1. Upon acceptance
of any bid, Lessor agrees, at Lessee's request and expense, to execute a
contract of sale with respect to such sale, so long as the same is
consistent with the terms of this Article 22 and provides by its terms that
it is nonrecourse to Lessor, except for the removal of Lessor Liens and as
expressly provided in Section 12.9 of the Participation Agreement.
Unless Lessor shall have elected to retain the Property pursuant
to the provisions of the preceding paragraph, Lessee shall arrange for
Lessor to sell the Property free and clear of the Lien of this Lease and
any Lessor Liens attributable to Lessor, without recourse or warranty (of
title or otherwise), for cash on the Sale Date to the purchaser or
purchasers offering the highest cash sales price, as identified by Lessee
or Lessor, as the case may be; provided, however, solely as to Lessor, any
-------- -------
Lessor Lien shall not constitute a Lessor Lien so long as Lessor is
diligently and in good faith contesting, at the cost and expense of Lessor
such Lessor Lien by appropriate proceedings in which event (with the
consent of the Lessee, but without penalty or cost to Lessee) the
applicable Sale Date shall be delayed for the period of such contest. To
effect such transfer and assignment, Lessor shall execute, acknowledge
(where required) and deliver to the appropriate purchaser each of the
following: (a) an assignment of the Ground Lease conveying the leasehold
interest of Lessor in the Property to the appropriate purchaser free and
clear of the Lien of this Lease, the Liens of the Credit Documents and the
other Operative Agreements and any Lessor Liens; (b) a ▇▇▇▇ of Sale
conveying the Property (to the extent it is personal property) titled to
Lessor to the appropriate purchaser free and clear of the Lien of this
Lease, the Liens of the Credit Documents and the other Operative Agreements
and any Lessor Liens; (c) any real estate tax affidavit or other document
required by law to be executed and filed in order to record the Ground
Lease assignment;
33
and (d) FIRPTA affidavits and such other documents or instruments to effect
the conveyance and release contemplated herein, as appropriate. All of the
foregoing documentation must be in form and substance reasonably
satisfactory to Lessor and the Agent. Lessee shall surrender the Property
so sold or subject to such documents to each purchaser in the condition
specified in Section 10.1, or in such other condition as may be agreed
between Lessee and such purchaser. Neither Lessor nor Lessee shall take or
fail to take any action which would have the effect of unreasonably
discouraging bona fide third party bids for the Property. If the Property
is neither (i) sold on the Sale Date in accordance with the terms of this
Section 22.1, nor (ii) retained by Lessor pursuant to an affirmative
election made by Lessor pursuant to the second sentence of the second
paragraph of this Section 22.1(a), then (x) Lessee shall be deemed to have
elected the Purchase Option and shall be obligated to pay Lessor on the
Sale Date an amount equal to the aggregate Termination Value for the
Property less any sales proceeds received, and (y) Lessor shall transfer
the Property to Lessee in accordance with Section 20.2.
(b) In the event Lessee shall have elected the Sale Option,
Lessee hereby unconditionally promises to pay to the Lessor, on the earlier
of the Sale Date or the Expiration Date, the Maximum Residual Guarantee
Amount. On the Sale Date if (x) Lessor receives the aggregate Termination
Value for the Property from one (1) or more third party purchasers and (y)
Lessor and such other parties receive all other amounts specified in the
last sentence of the first paragraph of Section 22.1(a), then Lessee may
retain any excess above Termination Value. If the Property is retained by
Lessor pursuant to an affirmative election made by Lessor pursuant to the
provisions of Section 22.1(a), then Lessee hereby unconditionally promises
to pay to Lessor on the Sale Date all Basic Rent and Supplemental Rent
(exclusive of a payment of the Termination Value) and, without duplication,
all other amounts then due and owing pursuant to the Operative Agreements
and, without duplication, an amount equal to the Maximum Residual Guarantee
Amount for the Property so retained. Any payment of the foregoing amounts
described in this Section 22.1(b) shall be made, without duplication,
together with a payment of all Rent and all other amounts referenced in the
last sentence of the first paragraph of Section 22.1(a).
(c) In the event that the Property is either sold to one (1) or
more third party purchasers on the Sale Date or retained by Lessor in
connection with an affirmative election made by Lessor pursuant to the
provisions of Section 22.1(a), then in either case on the applicable Sale
Date Lessee shall, to the extent the same are or should be in Lessee's or
any other Credit Party's possession or control, provide Lessor or such
third party purchaser (unless otherwise agreed by such third party
purchaser) with (i) all permits, certificates of occupancy, governmental
licenses and authorizations necessary to use, operate, repair, access and
maintain the Property for the purpose it is being used by Lessee, and (ii)
such manuals, permits, easements, licenses, intellectual property, know-
how, rights-of-way and other rights and privileges in the nature of an
easement as are reasonably necessary or desirable in connection with the
use, operation, repair, access to or maintenance of the Property for its
intended purpose or otherwise as Lessor or such third party purchaser(s)
shall reasonably request (and a royalty-free license or similar agreement
to effectuate the foregoing on terms reasonably agreeable to Lessor or such
34
third party purchaser(s), as applicable). All assignments, licenses,
easements, agreements and other deliveries required by clauses (i) and (ii)
of this paragraph (c) shall be in form reasonably satisfactory to Lessor or
such third party purchaser(s), as applicable, and shall be fully assignable
(including without limitation both primary assignments and assignments
given in the nature of security) without payment of any fee, cost or other
charge. Lessee shall also execute any documentation requested by Lessor or
such third party purchaser(s), as applicable, evidencing the continuation
or assignment of the Ground Lease.
22.2 Application of Proceeds of Sale.
-------------------------------
Lessor shall apply the proceeds of sale of the Property to a
third party pursuant to the Sale Option in the following order of priority:
(a) FIRST, to pay or to reimburse Lessor (and/or the Agent, as
-----
the case may be) for the payment of all reasonable costs and expenses
incurred by Lessor (and/or the Agent, as the case may be) in connection
with the sale (to the extent Lessee has not satisfied its obligation to pay
such costs and expenses);
(b) SECOND, so long as the Credit Agreement or the Note Purchase
------
Agreement is in effect and any Financing or any other amounts are owing to
the Financing Parties under any Operative Agreement, to the Agent to be
applied pursuant to intercreditor provisions among Lessor, the Primary
Financing Parties and the Agent contained in the Operative Agreements,
including, without limitation, Section 8.7 of the Participation Agreement;
and
(c) THIRD, to Lessee.
-----
22.3 Indemnity for Excessive Wear.
----------------------------
If the proceeds of the sale described in Section 22.1 with
respect to the Property shall be less than the Limited Recourse Amount with
respect to the Property, and at the time of such sale it shall have been
reasonably determined (pursuant to the Appraisal Procedure) that the Fair Market
Sales Value of the Property shall have been impaired by greater than expected
wear and tear during the term of the Lease, Lessee shall pay to Lessor within
ten (10) days after receipt of Lessor's written statement (i) the amount of such
excess wear and tear determined by the Appraisal Procedure or (ii) the amount of
the Sale Proceeds Shortfall, whichever amount is less.
22.4 Appraisal Procedure.
-------------------
For determining the Fair Market Sales Value of the Property or
any other amount which may, pursuant to any provision of any Operative
Agreement, be determined by an appraisal procedure, Lessor and Lessee shall use
the following procedure (the "Appraisal Procedure"). Lessor and Lessee shall
-------------------
endeavor to reach a mutual agreement as to such amount for a period of ten (10)
days from commencement of the Appraisal Procedure under the
35
applicable Section of the Lease, and if they cannot agree within ten (10) days,
then two (2) qualified appraisers, one (1) chosen by Lessee and one (1) chosen
by Lessor, shall mutually agree thereupon, but if either party shall fail to
choose an appraiser within twenty (20) days after notice from the other party of
the selection of its appraiser, then the appraisal by such appointed appraiser
shall be binding on Lessee and Lessor. If the two (2) appraisers cannot agree
within twenty (20) days after both shall have been appointed, then a third
appraiser shall be selected by the two (2) appraisers or, failing agreement as
to such third appraiser within thirty (30) days after both shall have been
appointed, by the American Arbitration Association. The decisions of the three
(3) appraisers shall be given within twenty (20) days of the appointment of the
third appraiser and the decision of the appraiser most different from the
average of the other two (2) shall be discarded and such average shall be
binding on Lessor and Lessee; provided, that if the highest appraisal and the
--------
lowest appraisal are equidistant from the third appraisal, the third appraisal
shall be binding on Lessor and Lessee. The fees and expenses of the appraiser
appointed by Lessee shall be paid by Lessee; the fees and expenses of the
appraiser appointed by Lessor shall be paid by Lessor (such fees and expenses
not being indemnified pursuant to Section 11 of the Participation Agreement);
and the fees and expenses of the third appraiser shall be divided equally
between Lessee and Lessor.
22.5 Certain Obligations Continue.
----------------------------
During the Marketing Period, the obligation of Lessee to pay Rent
with respect to the Property (including without limitation the installment of
Basic Rent due on the Sale Date) shall continue undiminished until payment in
full to Lessor of the Maximum Residual Guarantee Amount, the sale proceeds, if
any, remaining after the payment of the Maximum Residual Guarantee Amount, the
amount due under Section 22.3, if any, and all other amounts due to Lessor or
any other Person with respect to the Property or any Operative Agreement. Lessor
shall have the right, but shall be under no duty, to solicit bids, to inquire
into the efforts of Lessee to obtain bids or otherwise to take action in
connection with any such sale, other than as expressly provided in this Article
XXII.
ARTICLE XXIII
23.1 Holding Over.
------------
If Lessee shall for any reason remain in possession of the
Property after the expiration or earlier termination of this Lease (unless the
Property is conveyed to Lessee), such possession shall be as a tenancy at
sufferance during which time Lessee shall continue to pay Supplemental Rent that
would be payable by Lessee hereunder were the Lease then in full force and
effect with respect to the Property and Lessee shall continue to pay Basic Rent
at the lesser of the highest lawful rate and one hundred ten percent (110%) of
the last payment of Basic Rent due with respect to the Property prior to such
expiration or earlier termination of this Lease. Such Basic Rent shall be
payable from time to time upon demand by Lessor and such additional amount of
Basic Rent shall be applied by Lessor ratably to the Primary Financing Parties
based on their relative amounts of the then outstanding Property Cost for the
Property. During any period of tenancy at sufferance, Lessee shall, subject to
the second preceding sentence, be
36
obligated to perform and observe all of the terms, covenants and conditions of
this Lease, but shall have no rights hereunder other than the right, to the
extent given by law to tenants at sufferance, to continue their occupancy and
use of the Property. Nothing contained in this Article XXIII shall constitute
the consent, express or implied, of Lessor to the holding over of Lessee after
the expiration or earlier termination of this Lease (unless the Property is
conveyed to Lessee) and nothing contained herein shall be read or construed as
preventing Lessor from maintaining a suit for possession of the Property or
exercising any other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 Risk of Loss.
------------
During the Term, unless Lessee shall not be in actual possession
of the Property solely by reason of Lessor's exercise of its remedies of
dispossession under Article XVII, the risk of loss or decrease in the enjoyment
and beneficial use of the Property as a result of the damage or destruction
thereof by fire, the elements, casualties, thefts, riots, wars or otherwise is
assumed by Lessee, and Lessor shall in no event be answerable or accountable
therefor.
ARTICLE XXV
25.1 Assignment.
----------
(a) Lessee may assign to any Subsidiary or Affiliate of Lessee
this Lease or any of its rights or obligations hereunder or with respect to
the Property in whole or in part without the prior written consent of the
Agent, the Tranche A Note Purchasers, the Tranche B Lenders or the Lessor.
Except as expressly provided in the immediately preceding sentence, Lessee
may not otherwise assign this Lease or any of the rights or obligations of
Lessee hereunder or with respect to the Property in whole or in part to any
Person without the prior written consent of each of the Agent, the Tranche
A Note Purchasers, the Tranche B Lenders and the Lessor.
(b) No assignment by Lessee (referenced in this Section 25.1 or
otherwise) or other relinquishment of possession to the Property shall in
any way discharge or diminish any of the obligations of Lessee to Lessor
hereunder and Lessee shall remain directly and primarily liable under the
Operative Agreements as to any rights or obligations assigned by Lessee.
25.2 Subleases.
---------
(a) Promptly, but in any event within ten (10) Business Days,
following the execution and delivery of any sublease permitted by this
Article XXV, Lessee shall notify Lessor and the Agent of the execution of
such sublease and shall provide a copy of such sublease to Lessor and the
Agent. As of the date of the Lease Supplement, Lessee shall
37
lease the Property (or applicable portion thereof) described in such Lease
Supplement from Lessor, and any existing tenant respecting the Property (or
applicable portion thereof) shall automatically be deemed to be a subtenant
of Lessee and not a tenant of Lessor.
(b) Without the prior written consent of the Agent, any Primary
Financing Party or the Lessor and subject to the other provisions of this
Section 25.2, Lessee may (i) sublet the Property or portion thereof to any
Affiliate of Lessee or (ii) sublet up to fifty percent (50%) of the
aggregate square footage of the Improvements with respect to the Property
to any other Person; provided, all subleasing shall in no way diminish the
--------
fair market value or useful life of the Property.
(c) No sublease (referenced in this Section 25.2 or otherwise)
or other relinquishment of possession to the Property shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder and
Lessee shall remain directly and primarily liable under this Lease as to
the Property, or portion thereof, so sublet. The term of any such sublease
shall not extend beyond the Term. Each sublease shall be expressly subject
and subordinate to this Lease.
(d) Lessor hereby agrees to enter into an appropriate non-
disturbance agreement respecting any sublease on terms mutually agreeable
to the Lessor, the Lessee and such subtenant.
ARTICLE XXVI
26.1 No Waiver.
---------
No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a waiver of any such
default or of any such term. To the fullest extent permitted by law, no waiver
of any default shall affect or alter this Lease, and this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
default.
ARTICLE XXVII
27.1 Acceptance of Surrender.
-----------------------
No surrender to Lessor of this Lease or of all or any portion of
the Property or of any part of any thereof or of any interest therein shall be
valid or effective unless agreed to and accepted in writing by Lessor and no act
by Lessor or the Agent or any representative or agent of Lessor or the Agent,
other than a written acceptance, shall constitute an acceptance of any such
surrender.
38
27.2 No Merger of Title.
------------------
There shall be no merger of this Lease or of the leasehold estate
created hereby by reason of the fact that the same Person may acquire, own or
hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in the Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 [Reserved].
----------
ARTICLE XXIX
29.1 Notices.
-------
All notices required or permitted to be given under this Lease
shall be in writing and delivered as provided in Section 12.2 of the
Participation Agreement.
ARTICLE XXX
30.1 Miscellaneous.
-------------
Anything contained in this Lease to the contrary notwithstanding,
all claims against and liabilities of Lessee or Lessor arising from events
commencing prior to the expiration or earlier termination of this Lease shall
survive such expiration or earlier termination. If any provision of this Lease
shall be held to be unenforceable in any jurisdiction, such unenforceability
shall not affect the enforceability of any other provision of this Lease in such
jurisdiction or of such provision or of any other provision hereof in any other
jurisdiction.
30.2 Amendments and Modifications.
----------------------------
Neither this Lease nor any Lease Supplement may be amended,
waived, discharged or terminated except in accordance with the provisions of
Section 12.4 of the Participation Agreement.
30.3 Successors and Assigns.
----------------------
All the terms and provisions of this Lease shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
39
30.4 Headings and Table of Contents.
------------------------------
The headings and table of contents in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
30.5 Counterparts.
------------
This Lease may be executed in any number of counterparts, each of
which shall be an original, but all of which shall together constitute one (1)
and the same instrument.
30.6 GOVERNING LAW.
-------------
THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), EXCEPT TO
THE EXTENT THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED ARE REQUIRED TO
APPLY.
30.7 Calculation of Rent.
-------------------
All calculation of Rent payable hereunder shall be computed based
on the actual number of days elapsed over a year of three hundred sixty (360)
days or, to the extent such Rent is based on the Prime Lending Rate, three
hundred sixty-five (365) (or three hundred sixty-six (366), as applicable) days.
30.8 Memoranda of Lease and Lease Supplement.
---------------------------------------
This Lease shall not be recorded; provided, Lessor and Lessee
--------
shall, subject to and in accordance with the provisions of Section 8.12 of the
Participation Agreement, promptly record a memorandum of this Lease and the
applicable Lease Supplement (in substantially the form of EXHIBIT A attached
---------
hereto) or a short form lease (in form and substance reasonably satisfactory to
Lessor) regarding the Property in the local filing office with respect thereto,
in all cases at Lessee's cost and expense, and as required under applicable law
to sufficiently evidence this Lease and any such Lease Supplement in the
applicable real estate filing records.
30.9 Allocations between the Lenders and Lessor.
------------------------------------------
Notwithstanding any other term or provision of this Lease to the
contrary, the allocations of the proceeds of the Property and any and all other
Rent and other amounts received hereunder shall be subject to the inter-creditor
provisions among the Primary Financing Parties contained in the Intercreditor
Agreement and the other Operative Agreements (or as otherwise agreed among the
Primary Financing Parties from time to time).
40
30.10 Limitations on Recourse.
-----------------------
Notwithstanding anything contained in this Lease to the contrary,
Lessee agrees to look solely to Lessor's estate and interest in the Property
(and in no circumstance to the Agent, the Primary Financing Parties or otherwise
to Lessor) for the collection of any judgment requiring the payment of money by
Lessor in the event of liability by Lessor, and no other property or assets of
Lessor or any shareholder, owner or partner (direct or indirect) in or of
Lessor, or any director, officer, employee, beneficiary, Affiliate of any of the
foregoing shall be subject to levy, execution or other enforcement procedure for
the satisfaction of the remedies of Lessee under or with respect to this Lease,
the relationship of Lessor and Lessee hereunder or Lessee's use of the Property
or any other liability of Lessor to Lessee. Nothing in this Section shall be
interpreted so as to limit the terms of Sections 6.1 or 6.2 or the provisions of
Section 12.9 of the Participation Agreement.
30.11 WAIVERS OF JURY TRIAL.
---------------------
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO THE
FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY COUNTERCLAIM THEREIN.
30.12 Exercise of Lessor Rights.
-------------------------
Lessee hereby acknowledges and agrees that the rights and powers of
Lessor under this Lease have been assigned to the Agent pursuant to the terms of
the Security Agreement and the other Operative Agreements. Lessor and Lessee
hereby acknowledge and agree that (a) the Agent shall, in its discretion, direct
and/or act on behalf of Lessor pursuant to the provisions of Sections 8.2(e) and
8.6 of the Participation Agreement, (b) all notices to be given to Lessor shall
be given to the Agent and (c) all notices, consents or approvals to be given by
Lessor shall be given by the Agent on behalf of Lessor, and Lessee shall be
entitled to rely thereon.
30.13 SUBMISSION TO JURISDICTION; VENUE.
---------------------------------
THE PROVISIONS OF SECTION 12.7 OF THE PARTICIPATION AGREEMENT
RELATING TO SUBMISSION TO JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY
REFERENCE HEREIN, MUTATIS MUTANDIS.
------- --------
30.14 USURY SAVINGS PROVISION.
-----------------------
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND CONTRACT
IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN EFFECT. TO
THE EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER CHARACTERIZED BY ANY
COURT OF COMPETENT JURISDICTION
41
AS THE REPAYMENT OF PRINCIPAL AND INTEREST THEREON, THIS SECTION 30.14 SHALL
APPLY. ANY SUCH RENT OR PAYMENTS SO CHARACTERIZED AS INTEREST MAY BE REFERRED TO
HEREIN AS "INTEREST." ALL AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED
BY THE PROVISIONS OF THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH
AGREEMENTS, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR
ORAL. IN NO WAY, NOR IN ANY EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION
PREPAYMENT OR ACCELERATION OF THE MATURITY OF ANY OBLIGATION), SHALL ANY
INTEREST TAKEN, RESERVED, CONTRACTED FOR, CHARGED, OR RECEIVED UNDER THIS LEASE
OR OTHERWISE, EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMISSIBLE UNDER APPLICABLE
LAW. IF, FROM ANY POSSIBLE CONSTRUCTION OF ANY OF THE OPERATIVE AGREEMENTS OR
ANY OTHER DOCUMENT OR AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN EXCESS
OF THE MAXIMUM NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT TO THE
PROVISIONS OF THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS
SHALL BE AUTOMATICALLY REDUCED TO THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER
APPLICABLE LAW, WITHOUT THE NECESSITY OF EXECUTION OF ANY AMENDMENT OR NEW
DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS
CHARACTERIZED AS INTEREST WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR
UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF
THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN
EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF THE
COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST,
OR REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO THE EXTENT SUCH
AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT OF PAYMENTS DEEMED
TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS EVIDENCED BY ANY OF
THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE RIGHT TO RECEIVE ANY INTEREST
WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND, AND LESSOR DOES NOT
INTEND TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND.
ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND SPREAD THROUGHOUT THE
FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL OR EXTENSION) OF THIS
LEASE SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH PAYMENTS DOES NOT EXCEED
THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE LAW.
30.15 Lease Senior.
-------------
Anything contained herein or in any of the other Operative
Agreements to the contrary notwithstanding, provided no Lease Event of Default
shall have occurred and be
42
continuing, in each case whether or not this Lease (or a memorandum thereof) is
recorded, or if it is recorded, whether or not it is recorded prior to the
recordation of any of the other Operative Agreements, (i) the rights of Lessee
hereunder are prior and senior to any Lien created under or pursuant to any of
the Operative Agreements and the rights of the Lessor, the Agent and the Primary
Financing Parties hereunder or thereunder, (ii) Lessee's tenancy hereunder shall
not be disturbed nor shall this Lease be affected by any Default or Event of
Default under any of the Operative Agreements or other Operative Agreements
(other than a Lease Event of Default), (iii) in the event of a foreclosure or
other enforcement of any such Operative Agreement, or sale in lieu thereof, the
purchaser at such foreclosure sale or pursuant to a deed in lieu thereof shall
be bound to Lessee for the Term of this Lease and any extensions thereof, (iv)
the rights of Lessee hereunder shall expressly survive and this Lease shall in
all respects continue in full force and effect, and (v) Lessee shall not be
named as a party defendant in any such foreclosure.
[signature pages follow]
43
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed and delivered as of the date first above written.
FIRST UNION DEVELOPMENT
CORPORATION, as Lessor
By:__________________________
Name:________________________
Title:_______________________
CAPITAL ONE, F.S.B., as Lessee
By:__________________________
Name:________________________
Title:_______________________
CAPITAL ONE BANK, as Lessee
By:__________________________
Name:________________________
Title:_______________________
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By:__________________________
Name:________________________
Title:_______________________
EXHIBIT A TO THE LEASE
----------------------
Recordation requested by:
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC
After recordation return to:
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Space above this line
for Recorder's use
________________________________________________________________________________
LEASE SUPPLEMENT NO. 1,
MEMORANDUM OF LEASE AND REMEDIES
dated as of December 5, 2000
among
FIRST UNION DEVELOPMENT CORPORATION,
as the Lessor;
CAPITAL ONE BANK AND CAPITAL ONE, F.S.B.,
collectively, as the Lessee;
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
as the Trustee
Recording taxes for this instrument are based on the value of the real
property that is subject to this instrument, which is $10,225,000.
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LEASE SUPPLEMENT NO. 1,
MEMORANDUM OF LEASE AGREEMENT AND REMEDIES
THIS LEASE SUPPLEMENT NO. 1, MEMORANDUM OF LEASE AGREEMENT AND
REMEDIES ("Lease Supplement"), dated as of December 5, 2000, is by and among
FIRST UNION DEVELOPMENT CORPORATION, a North Carolina corporation, with an
address of One First Union Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (as the "Lessor", and the Lessor being referred to as a
"Grantor" and a "Grantee" for indexing purposes); CAPITAL ONE BANK, a Virginia
banking corporation, and CAPITAL ONE, F.S.B., a federal savings bank, both with
an office at c/o Capital One Services, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to collectively as the "Lessee", the Lessee
being referred to as a "Grantee" and a "Grantor" for indexing purposes); and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a resident of the City/County of Norfolk, Virginia, having an
address at Vandeventer, Black, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as Trustee pursuant to Section 6 hereof (the "Trustee",
the Trustee being referred to as a "Grantee" for indexing purposes).
RECITALS
--------
A. The Lessor entered into a Lease Agreement dated as of the date
hereof (as amended, restated, supplemented or otherwise modified from time to
time, the "Lease"), pursuant to which the Lessor, as lessor, leases to the
Lessee, and the Lessee leases from the Lessor, that certain "Property" more
particularly described therein and in supplements thereto.
B. The Lessor has acquired a leasehold interest in the land more
particularly described on Schedule 1 hereto (the "Land").
C. The Lessor and the Lessee desire to supplement the Lease to
provide for the sublease by the Lessor to the Lessee of (i) the Land, (ii) the
Improvements (as hereinafter defined), (iii) the Equipment (as hereinafter
defined) and (iv) all Appurtenant Rights (as hereinafter defined). The Land,
the Improvements, the Equipment and the Appurtenant Rights are hereinafter
referred to collectively as the "Property".
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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SECTION 1. Definitions: Interpretation.
----------------------------
(a) For purposes of this Lease Supplement, capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned thereto in
Appendix A to the Participation Agreement dated as of the date hereof (as the
----------
same may be amended, restated, supplemented or otherwise modified from time to
time, the "Participation Agreement"), among the Lessee, the Lessor, the Agent,
the Tranche A Note Purchasers and the Tranche B Lenders signatory thereto
(collectively the "Participants"). A copy of the Participation Agreement is on
file at the office of the Lessor.
(b) As used herein, the following terms shall have the meanings set forth
below:
"Appurtenant Rights" shall mean (a) all agreements, easements, rights of
------------------
way or use, rights of ingress or egress, privileges, appurtenances,
tenements, hereditaments and other rights and benefits at any time
belonging or pertaining to the Land underlying the Improvements or the
Improvements, including without limitation the use of any streets, ways,
alleys, vaults or strips of land adjoining, abutting, adjacent or
contiguous to the Land and (b) all permits, licenses and rights, whether or
not of record, appurtenant to such Land or the Improvements.
"Equipment" shall mean equipment, apparatus and fixtures of every kind and
---------
nature whatsoever purchased or otherwise acquired using the proceeds of
Advances by the Construction Agent, the Lessee or the Lessor and all
improvements and modifications thereto and replacements thereof, whether or
not now owned or hereafter acquired or now or subsequently attached to,
contained in or used or usable in any way in connection with any operation
of any Improvements, including but without limiting the generality of the
foregoing, all equipment described in the Appraisal, including without
limitation all heating, electrical and mechanical equipment, lighting
fixtures, switchboards, plumbing, ventilation, air conditioning and air-
cooling apparatus, refrigerating and incinerating equipment, escalators,
elevators, loading and unloading equipment and systems, cleaning systems
(including without limitation window cleaning apparatus), sprinkler systems
and other fire prevention and extinguishing apparatus and materials,
motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description, any other personal
property described on Schedule 3 to any Requisition, but excluding Lessee
Equipment.
"Fixtures" shall mean all fixtures relating to the Improvements, including
--------
without limitation all components thereof, located in or on the
Improvements, together with all replacements, modifications, alterations
and additions thereto, excluding Lessee Equipment.
"Improvements" shall mean, with respect to the construction, renovations
------------
and/or Modifications on the Land, all buildings, structures, Fixtures, and
other improvements of every kind existing at any time and from time to time
on or under the Land which is subject to the Ground Lease, together with
any and all appurtenances to such buildings, structures or improvements,
including without limitation sidewalks, utility pipes, conduits and lines,
parking areas and roadways, and including without limitation all
Modifications
A-3
and other additions to or changes in the Improvements at any time including
without limitation (a) any Improvements existing as of the Closing Date as
such Improvements may be referenced on the applicable Requisition and (b)
any Improvements made subsequent to the Closing Date, excluding in all
circumstances Lessee Equipment.
"Lessee Equipment" shall mean all signs, exterior lighting standards,
----------------
machinery, apparatus, furniture, furnishings, telephone systems,
telecommunication systems, computers, computer terminals, all items
relating to data transmission, trash compactors, shelving, snow removal and
lawn maintenance equipment and other equipment, movable or demountable
partitions, motorized vehicles, trade fixtures and temporary auxiliary
structures, tools, supplies, materials, security systems, wiring, fibers,
PBX, data connections, video equipment, cafeteria furnishings and
equipment, public address system, inventory and other personal property and
all renewals and replacements thereof, in each case, now owned or hereafter
acquired by the Lessee (without the proceeds of any Advance and which is
not attached to the Improvements in such a manner as to become a fixture
under applicable law) or any subtenant or permitted assignee of the Lessee
(without the proceeds of any Advances and which is not attached to the
Improvements in such a manner as to become a fixture under applicable law)
and installed or located at or on the Property or necessary for the
operations of the Lessee's business.
SECTION 2. The Property. The Property is hereby added by this Lease
------------
Supplement to the Lease, shall constitute the "Property" for all purposes of the
Lease and shall be subject to the terms and provisions of the Lease. Upon the
execution and delivery of this Lease Supplement, (i) the Lessee will have
unconditionally accepted the Property subject to the Lease Supplement and will
have a valid and subsisting leasehold interest in such Property, subject only to
the Permitted Liens, and (ii) no offset will exist with respect to any Rent or
other sums payable under the Lease. The Lessor hereby demises and leases the
Property to the Lessee, and the Lessee hereby hires and leases the Property from
the Lessor, for the term of the Lease described in Section 3(a), below (the
"Lease Term"). Lessor and Lessee acknowledge that a portion of the Property is
being leased to various Persons, as set forth in Annex I hereto, and that the
existing tenants shall be deemed to be subtenants of Lessee and not tenants of
Lessor during the term of the Lease.
SECTION 3. Lease Term; Renewal; Purchase Option, Etc.
-----------------------------------------
(a) The Property is leased for an interim term (the "Interim Term")
commencing as of the date of this Lease Supplement (the "Commencement Date") and
terminating on the Rent Commencement Date, unless the Interim Term is earlier
terminated in accordance with the terms of the Lease. The Property is leased
for a basic term (the "Basic Term") commencing on the Rent Commencement Date and
shall end on December 5, 2010, unless the Basic Term is earlier terminated in
accordance with the terms of the Lease.
(b) The Lease contains certain mandatory and optional purchase rights and
options during the Lease Term pursuant to which the Lessee may acquire the
Property, all as more fully set forth in the Lease.
A-4
(c) The Lessor hereby waives any right to distrain Lessee Equipment and any
landlord's lien or similar lien upon Lessee Equipment, whether such lien is
created by statute or otherwise. Pursuant to the Lease, the Lessee may remove
the Lessee Equipment and any other property to which the Lessee has title, all
of which shall remain or be the property of the Lessee.
(d) In addition to those terms referred to herein, the Lease contains
numerous other terms, covenants and conditions which affect the Property, and
notice is hereby given that reference should be had to the Lease with respect to
the details of such terms covenants and conditions.
SECTION 4. Ownership of the Property. The Lessor and the Lessee intend
-------------------------
that (i) for financial accounting purposes with respect to the Lessee (A) the
Lease will be treated as an "operating lease" pursuant to Statement of Financial
Accounting Standards No. 13, as amended, (B) the Lessor will be treated as the
owner and lessor of the Property and (C) the Lessee will be treated as the
lessee of the Property, but (ii) for federal and all state and local income tax
purposes (A) the transaction contemplated by the Lease and this Lease Supplement
is a secured borrowing, (B) the Lessee will be entitled to all tax benefits
ordinarily available to owners of property similar to the Property for such tax
purposes and (C) all payments of Basic Rent shall be deemed to be interest
payments and (iii) in the context of insolvency or bankruptcy proceedings
affecting the Lessee, the transaction contemplated by the Lease and this Lease
Supplement is a secured borrowing. Notwithstanding the foregoing, neither party
hereto has made, or shall be deemed to have made, any representation or warranty
as to the availability of any of the foregoing treatments under applicable
accounting rules or tax rules. The Lessee shall claim the cost recovery
deductions associated with the Property, and the Lessor shall not, to the extent
not prohibited by Law, take on its tax return a position inconsistent with the
Lessee's claim of such deductions. The parties acknowledge and agree that the
characterization of the transaction and the Lessee's obligations as provided in
this Section 4 shall not diminish the Lessee's express rights under the Lease
and the other Operative Agreements, including, without limitation, the Lessee's
right to purchase the Property.
SECTION 5. Grant of Lien and Security Interest; Assignment of Rents. If a
--------------------------------------------------------
court, when enforcing the Operative Agreements following the occurrence and
during the continuance of a Lease Event of Default, were to construe the
transactions contemplated by the Lease as indebtedness of the Lessee secured by
the Property, then (i) the Lease, as supplemented by this Lease Supplement,
shall be treated as the repayment of a loan by the Lessor to the Lessee in the
principal amount of the portion of the Property Cost applicable to the Property,
(ii) all payments of Rent and the Termination Value shall be treated as payments
of principal, interest and other amounts owing with respect to such loan,
respectively, (iii) the Lessee shall be treated as entitled to all benefits of
ownership of the Property or any part thereof, and (iv) the Lease, as
supplemented by this Lease Supplement, shall be treated as a deed of trust and
security agreement as set forth below for the benefit of the Lessor, as secured
party. To effect the foregoing provisions of this Section 5:
(a) Subject to the terms and conditions of the Lease as supplemented by
this Lease Supplement (including, without limitation, the Lessee's rights
hereunder and thereunder so long as no Lease Event of Default has occurred and
is continuing), the Lessee does hereby grant,
A-5
bargain, sell, convey, assign, transfer and set over to the Trustee, WITH POWER
OF SALE, to the extent permitted by applicable law: (i) all of the Lessee's
right, title and interest in the Property; and (ii) all of the Lessee's right,
title and interest in and to all proceeds of the conversion, whether voluntary
or involuntary, of any of the above-described property into cash or other liquid
claims, including, without limitation, all awards, payments or proceeds,
including interest thereon, and the right to receive the same, which may be made
as a result of casualty, any exercise of the right of eminent domain or deed in
lieu thereof, the alteration of the grade of any street and any injury to or
decrease in the value thereof, the foregoing being referred to hereinafter as
the "Security Property."
TO HAVE AND TO HOLD the foregoing rights, interests and properties, and all
rights, estates, powers and privileges appurtenant thereto, subject however to
Permitted Liens, unto the Trustee, its successors and assigns, IN TRUST forever,
for the uses and purposes herein expressed, but not otherwise.
(b) Subject to the terms and conditions of the Lease as supplemented by
this Lease Supplement (including, without limitation, the Lessee's rights
hereunder and thereunder so long as no Lease Event of Default has occurred and
is continuing), the Lessee hereby grants to the Lessor a security interest in
the Lessee's interest in that portion of the Security Property (the "UCC
Property") which is personal property. This Lease Supplement shall also be
deemed to be a security agreement and shall support any financing statement
showing the Lessor's interest as a secured party with respect to any portion of
the UCC Property described in such financing statement. The Lessee agrees, at
its sole cost and expense, to execute, deliver and file from time to time such
further instruments as may be requested by the Lessor to confirm and perfect the
lien of the security interest in the collateral described in this Lease
Supplement.
(c) The Lessee hereby irrevocably assigns, conveys, transfers and sets
over unto the Lessor (subject, however, to the Lease and the rights of the
Lessee thereunder and hereunder) all and every part of the rents, issues and
profits that may from time to time become due and payable on account of any and
all subleases or other occupancy agreements now existing, or that may hereafter
come into existence with respect to the Property or any part thereof, including
any guaranties of such subleases or other occupancy agreements. Upon request of
the Lessor, the Lessee shall execute and cause to be recorded, at its expense,
supplemental or additional assignments of any subleases or other occupancy
agreements, of the Property. Upon the occurrence and continuance of a Lease
Event of Default and subject to the provisions of subsection 6(c) hereof, the
Lessor is hereby fully authorized and empowered in its discretion (in addition
to all other powers and rights herein granted), and subject to the Lease and the
rights of the Lessee thereunder and hereunder, to apply for and collect and
receive all such rents, issues and profits and enforce such guaranty or
guaranties, and all money so received under and by virtue of this assignment
shall be held and applied as further security for the payment of the loan(s)
secured hereby and to assure the performance by the Lessee of its covenants,
agreements and obligations under the Lease.
A-6
SECTION 6. Remedies.
--------
(a) If a court shall construe the transactions contemplated by the Lease
as indebtedness secured by the Property as provided in Section 5, above, upon
the occurrence and continuance of a Lease Event of Default:
(i) The Trustee shall have the power and authority, to the extent
provided by law, after proper notice and lapse of such time as may be required
by law, to sell the Security Property at the time fixed by the Trustee and at
the Property or at such other place in the city or county in which the Property
is located, all as set forth in said notice of sale. The Security Property may
be sold, either as a whole, or in separate lots or parcels and in such order as
the Trustee may elect, at auction to the highest bidder for cash in lawful money
of the United States payable at the time of sale, all in accordance with the
applicable laws of the jurisdiction in which the Property is located, it being
acknowledged that A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT, WHICH, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ALLOWS THE TRUSTEE TO SELL THE SECURITY
PROPERTY WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE AND
CONTINUANCE OF A LEASE EVENT OF DEFAULT BY THE LESSEE. The Trustee shall
advertise the time, place and terms of sale at least one (1) time a week for
three (3) consecutive weeks, in a newspaper having general circulation in the
county or city where the Property or any portion thereof lies. The power of sale
granted above may be exercised at different times as to different portions of
the Property, and if for any reason any executory contract of sale shall not be
performed, then new contracts may be made with respect to the same portion of
the Property (with or without other portions). If the Trustee deems it best for
any reason to postpone or continue the sale at any time, or from time to time,
he may do so, in which event the Trustee shall advertise the postponed sale in
the same manner as the original advertisement of sale provided for above. Full
power and authority is hereby expressly granted and conferred upon the Trustee
to make, execute and deliver all necessary deeds of conveyance for the purpose
of vesting, in the purchaser or purchasers all right, title and interest that
the Lessee had in and to the Property, or the portion thereof so sold, and the
recital therein shall be received in all courts of law and equity as prima facie
evidence of the matters therein stated, and at such sale the Lessor may become a
purchaser, and except as otherwise provided in Section 58.1-3340 of the Code of
Virginia of 1950, as amended, no purchaser shall be required to see to the
proper application of the purchase money. The proceeds of any such sale shall be
distributed pursuant to Section 55-59.4 of the Code of Virginia of 1950, as
amended. At any sale made pursuant to the terms hereof, the Trustee may require
a cash deposit from the successful bidder of not more than ten percent (10%) of
the final amount bid by the successful bidder. Unless otherwise specified
herein, this paragraph shall be construed under and in accordance with and to
incorporate by reference the terms of (S)(S) 55-59 through 55-60 of the Code of
Virginia of 1950, as amended, as its provisions are in force and in effect on
the date hereof, with the following and further understandings as in such
sections provided:
EXEMPTIONS WAIVED.
RENEWAL, EXTENSION OR REINSTATEMENT PERMITTED.
SUBJECT TO ALL UPON DEFAULT.
A-7
(ii) Subject to the terms and conditions hereof, of the Lease and the
other Operative Agreements, the Lessor, in lieu of exercising any power of sale
hereinabove given, may proceed by a suit or suits in equity or at law, for the
specific performance of any covenant or agreement herein contained or in aid of
the execution of any power herein granted, or for the appointment of a receiver
pending any foreclosure hereunder or the sale of the Property, or for the
enforcement of any other appropriate legal or equitable remedy.
(b) Upon the occurrence and continuance of a Lease Event of Default, the
Lessor, in addition to and not in lieu of or in diminution of the rights and
remedies provided above, shall have all of the rights and remedies of a secured
party under the Uniform Commercial Code of the state in which the Property is
located (the "UCC"), which rights and remedies may be exercised without
application to any court to the extent permitted by the UCC.
(c) In lieu of the remedies provided for in this Lease Supplement, the
Lessee, at its election, may exercise its rights under Section 17.11 of the
Lease to the extent provided in Section 17.11 of the Lease and, in that event,
the remedies set forth herein shall not be available to the Lessor with respect
to such Lease Event of Default.
(d) Notwithstanding anything to contrary contained herein or in any of the
other Operative Agreements, the Lessee may cure any Lease Event of Default
affecting or relating to the Property by exercising its option to purchase the
Property as provided in Article XX of the Lease, and, in the event that the
Lessee purchases the affected Property as provided in such Article, the remedies
set forth herein shall not be available to the Lessor with respect to such Lease
Event of Default.
SECTION 7. Ratification. Except as expressly set forth herein, this
------------
Lease Supplement does not alter, amend, modify or change the Lease or the
exhibits thereto. It is the intent of the parties that this Lease Supplement be
recorded and give notice of and confirm the Lease and exhibits thereto to the
same extent as if all of the provisions of the Lease and exhibits thereto were
fully set forth herein. The Lease and exhibits thereto are incorporated by
reference in this Lease Supplement and, except as expressly modified hereby, the
terms and provisions of the Lease are hereby ratified and confirmed and remain
in full force and effect.
SECTION 8. Original Lease Supplement. Notwithstanding anything to the
-------------------------
contrary set forth in the Operative Agreements, the single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the Original
Executed Counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 9. GOVERNING LAW. THE LEASE AND THIS LEASE SUPPLEMENT SHALL BE
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GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK
A-8
(WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW),
EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED ARE
REQUIRED TO APPLY.
SECTION 10. Substitution of Trustees. The Trustee hereunder may act
------------------------
at any time upon designation by the Lessor. If the Lessor, in its sole and
absolute discretion, shall desire for any reason whatsoever to have a substitute
trustee or substitute trustees appointed, then the Lessor is hereby authorized
and empowered to appoint, at any time and from time to time, by an instrument
duly executed and acknowledged and filed for recordation wherever this Lease
Supplement is recorded, a substitute trustee or substitute trustees, in the
place and stead of one or more of those initially named herein or subsequently
appointed by the Lessor, which trustee or trustees shall have all the rights,
powers and authority and be charged with all the duties and responsibilities
that are conferred to charged upon the Trustee initially named herein.
SECTION 11 Maximum Interest Rate. No provision of this Lease
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Supplement or any transaction related thereto shall require the payment or
permit the collection of interest or any other amount in excess of the maximum
permitted by applicable law, and the provisions of Section 30.14 of the Lease
shall govern all payments of interest or the collection of any other amounts.
SECTION 12 Merger. If the fee simple title to the Land and the
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leasehold interest therein shall be held by the same party, the interest in the
Land and the Improvements granted to the Trustee pursuant to the Lease and this
Lease Supplement shall not terminate or be merged, and the Lease and this Lease
Supplement shall remain in full force and effect.
SECTION 13. Counterparts. This Lease Supplement may be executed in
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several counterparts, each of which shall be an original except as provided in
Section 8, above, and all of which together shall constitute but one and the
same instrument.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
FIRST UNION DEVELOPMENT
CORPORATION, a North Carolina corporation, as
the Lessor
By:___________________________________________
Title:________________________________________
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
The foregoing instrument was acknowledged before me this day of December,
2000, by ______________, as __________ of First Union Development Corporation, a
North Carolina corporation, on behalf of the corporation.
My commission expires:
_____________________________________________
Notary Public
[Notarial Seal]
1
CAPITAL ONE BANK, a
Virginia banking corporation, as the Lessee
By:_________________________________________
Title:______________________________________
COMMONWEALTH OF VIRGINIA
CITY/COUNTY OF______________________
The foregoing instrument was acknowledged before me this_____ day of
December, 2000, by _________ as ________ of Capital One Bank, a Virginia banking
corporation, on behalf of the corporation.
My commission expires:
____________________________________________
Notary Public
[Notarial Seal]
CAPITAL ONE, F.S.B., a
federal savings bank, as the Lessee
By:________________________________
Title:_____________________________
COMMONWEALTH OF VIRGINIA
CITY/COUNTY OF______________________________
The foregoing instrument was acknowledged before me this _____ day of
December, 2000, by _______ as _______ of Capital One, F.S.B., a federal savings
bank, on behalf of the federal savings bank.
My commission expires:
___________________________________
Notary Public
[Notarial Seal]
SCHEDULE I
Legal Description of Land
THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART.
Assignment of the Lease, as supplemented by this Lease Supplement, and receipt
of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as of the date hereof.
FIRST UNION NATIONAL BANK, as Agent
By_________________________________
Name:
Title: