EXHIBIT 10.17.1
AMENDED AND RESTATED LEASE AGREEMENT
between
FIRST SECURITY BANK, N.A.
and ▇▇▇ ▇. ▇▇▇▇▇,
not individually but solely in their capacities
as owner trustee under that certain
Amended and Restated Trust Agreement
dated as of October 14, 1998,
the trust thereunder being referred to as the
COB Real Estate Trust 1995-1,
as Lessor
and
CAPITAL ONE REALTY, INC.,
as Lessee
Dated as of October 14, 1998
TABLE OF CONTENTS
PAGE
1. Demise; Title; Condition................................ 1
2. Term.................................................... 2
3. Rent.................................................... 3
4. Use..................................................... 4
5. Net Lease; Nonterminability; Subordination of Indenture. 5
6. Taxes and Other Charges; Law and Agreements............. 7
7. Title; Liens............................................ 10
8. Indemnification; Fees and Expenses...................... 11
9. Environmental Matters................................... 12
10. Maintenance and Repair; Additions....................... 16
11. Trade Fixtures; Inspection.............................. 18
12. Condemnation and Casualty............................... 19
13. Insurance............................................... 26
14. Financial Statements; Other Information................. 30
15. The Ground Leases....................................... 31
16. Purchase Procedure...................................... 32
17. No Reliance............................................. 34
18. Quiet Enjoyment......................................... 34
19. Survival................................................ 34
20. Subletting; Assignment.................................... 35
21. Advances by Lessor........................................ 36
22. Conditional Limitations -- Events of Default and Remedies. 36
23. Notices................................................... 41
24. Estoppel Certificates..................................... 42
25. No Merger................................................. 42
26. Surrender and Return...................................... 43
27. Separability.............................................. 45
28. Lessee's End of Term Purchase Options..................... 45
29. Signs; Showing............................................ 46
30. End of Term Adjustment.................................... 47
31. Nature of Lessor's Obligations; Limitations on Liability.. 48
32. Granting of Easements, Etc................................ 49
33. Lessee's Representations and Warranties................... 49
34. Recording................................................. 51
35. Miscellaneous............................................. 51
36. Ownership of the Leased Properties........................ 52
37. Purchase Options.......................................... 54
38. Substitution of Properties................................ 56
39. The Individual Trustee.................................... 59
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SCHEDULE A Land Parcel
SCHEDULE B Basic Rent
SCHEDULE C Termination Values
SCHEDULE D Environmental Matters
SCHEDULE E Purchase Prices
SCHEDULE F Maximum Lessor and Lessee Risk Amounts
SCHEDULE G Permitted Encumbrances
SCHEDULE H Form of Supplement to Lease
SCHEDULE I Form of Certificate As to Insurance
SCHEDULE J Allocable Percentages
SCHEDULE K Form of Lessee Estoppel Certificate
THIS AMENDED AND RESTATED LEASE AGREEMENT, dated as of October 14, 1998 as
amended and supplemented from time to time (this Lease), by and between FIRST
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SECURITY BANK, N.A., a national banking association, and ▇▇▇ ▇. ▇▇▇▇▇, not
individually but solely in their capacities as owner trustee under that certain
Amended and Restated Trust Agreement dated as of the date hereof, the trust
thereunder being referred to as the COB Real Estate Trust 1995-1, as lessor
(together with their respective successors and assigns, collectively, Lessor),
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having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and
CAPITAL ONE REALTY, INC., a Delaware corporation, as lessee (together with
their respective successors and permitted assigns, Lessee), having an address at
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▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Lessor and Lessee, as assignee of Guarantor's interest thereunder, have
entered into a Lease Agreement dated as of January 5, 1996, as amended and
supplemented (the Original Lease) with respect to those certain parcels of land
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described in Schedule A annexed hereto (individually, a Land Parcel and
collectively, the Land Parcels). Lessor and Lessee each desire to amend,
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restate and supercede the Original Lease in order to modify the terms and
conditions thereof.
Lessor and Lessee hereby agree, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, one to the other, as
follows (capitalized terms not otherwise defined are defined in Appendix I
hereto):
1. Demise; Title; Condition. In consideration of the agreements and
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provisions of this Lease hereinafter stipulated to be observed and performed by
Lessee, Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor,
subject to the terms and conditions hereinafter set forth, for the terms
described in Article 2 hereof, all of Lessor's right, title and interest in (i)
the fee simple interest or ground leasehold interest, as applicable, in each
Land Parcel, including the fee interest in any Land Parcel as to which Lessor
currently holds a ground leasehold interest, if such fee interest is hereafter
acquired by Lessor; (ii) all buildings, structures, improvements and other real
and personal property now standing or at any time hereafter constructed or
placed upon any of the Land Parcels including, without limitation, all of
Lessor's right, title and interest in and to all building equipment and fixtures
of every kind and nature on each of the Land Parcels or in any such building,
structure or improvement, together with any and all Additions (all of the
foregoing described in this clause (ii), the Improvements to each Land Parcel);
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and (iii) all easements, rights and appurtenances thereto (Lessor's right, title
and interest in each Land Parcel, the Improvements and all such easements,
rights and appurtenances with respect thereto called the Leased Property).
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Each Leased Property is demised and let in its present condition without
representation or warranty by Lessor (except as expressly set forth in Article
18), subject in each case to (a) the rights of any parties in possession
thereof, (b) the state of the title thereto existing at the time Lessor acquired
its interest in such Leased Property and at the commencement of the Term, (c)
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any state of facts which an accurate survey or physical inspection might show,
(d) all applicable laws, rules, regulations, ordinances and restrictions now in
effect or hereafter adopted by any governmental authority having jurisdiction,
(e) any environmental conditions now or hereafter existing at, on or under such
Leased Property and (f) any violations of such laws, rules, regulations,
ordinances and restrictions which may exist at the commencement of the Term of
this Lease. Lessee has examined each Leased Property and has, as between Lessor
and Lessee, found the same to be satisfactory for its purposes. Without
limiting the generality of the foregoing, Lessee acknowledges and agrees that as
of the date hereof, Lessor's interest in each of Knolls Two Phase Three,
Renaissance Business Park Phase I and Renaissance Business Park Phase II is a
ground leasehold interest.
LESSOR HAS NOT MADE AN INSPECTION OF ANY LEASED PROPERTY AND MAKES NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO ANY LEASED
PROPERTY WHETHER NOW OR HEREAFTER EXISTING OR THE LOCATION, USE, DESCRIPTION,
DESIGN, MERCHANTABILITY, FITNESS FOR USE FOR A PARTICULAR PURPOSE, CONDITION OR
DURABILITY THEREOF, OR AS TO QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN; AND
ALL RISKS INCIDENTAL TO THE LEASED PROPERTIES SHALL BE BORNE BY LESSEE. IN THE
EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN ANY LEASED PROPERTY OR ANY
FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER PATENT OR LATENT,
LESSOR SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO. THE
PROVISIONS OF THIS PARAGRAPH HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A
COMPLETE EXCLUSION AND NEGATION BY LESSOR OF, AND LESSEE DOES HEREBY DISCLAIM
ANY AND ALL WARRANTIES BY LESSOR, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED
PROPERTIES WHETHER NOW OR HEREAFTER EXISTING OR ANY FIXTURE OR OTHER ITEM
CONSTITUTING A PORTION THEREOF, WHETHER ARISING PURSUANT TO THE UNIFORM
COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR OTHERWISE.
2. Term.
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(a) Subject to the provisions hereof, Lessee shall have and hold each
Leased Property for a term which shall begin on December ___, 1998 (the Basic
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Term Commencement Date) and end at midnight on the day immediately before the
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fifth anniversary of the Basic Term Commencement Date (the Basic Term), unless
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sooner terminated or extended as hereinafter provided. All representations,
warranties and covenants in this Lease shall become effective at the time of the
delivery hereof on the Basic Term Commencement Date.
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(b) So long as no Default or Event of Default shall have occurred and be
continuing on the last day of the then current Basic Term or Renewal Term
(except for the last day of the Maximum Lease Term), Lessee may elect (i) to
extend and renew the Term of this Lease with respect to all, but not less than
all, of the Leased Properties for up to two consecutive one-year terms (each, a
Renewal Term) or (ii) to terminate this Lease. Lessee shall be deemed to have
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elected to extend and renew this Lease for the next following Renewal Term
unless Lessee delivers a notice to the contrary to Lessor at least 180 days
before the end of the then current Term (a Termination Notice). A Termination
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Notice shall specify whether Lessee intends to purchase Lessor's interest in
all, but not less than all, of the Leased Properties pursuant to paragraph (a)
of Article 28 hereof or to return possession of all, but not less than all, of
the Leased Properties pursuant to paragraph (b) of Article 30. Lessee's deemed
exercise of its election to extend this Lease made in accordance with the
provisions of this Article 2 at the end of the Basic Term or at the end of the
first Renewal Term shall automatically extend the Term of this Lease for the
first Renewal Term or the second Renewal Term, as the case may be, without need
for a further writing. However, either party, upon request of the other, will
execute and acknowledge, in form suitable for recording, an instrument
confirming the acceptance of each Leased Property for the Basic Term and any
such Renewal Term. Time shall be of the essence with respect to the giving of
notice by Lessee of its election not to extend any Term of this Lease.
3. Rent.
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(a) During the Term of this Lease, Lessee shall pay the basic rent
provided for in Schedule B annexed hereto (Basic Rent) to Lessor (or to any
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other party as Lessor may from time to time specify in writing), by bank wire
transfer or electronic funds transfer (including automated clearinghouse
transfers) of immediately available federal funds initiated before 10:30 A.M.,
Eastern Time, at Lessor's address set forth above, or at such other place within
the continental United States to which bank wire or electronic funds transfers
can be made, as Lessor may from time to time designate to Lessee in writing.
Basic Rent during the Basic Term and any Renewal Term shall be due and payable
by Lessee in installments in the amounts set forth in Schedule B on the dates
set forth in Schedule B (Installment Payment Dates). If any Installment Payment
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Date falls on a day that is not a Business Day, Basic Rent shall be due and
payable on the next succeeding Business Day without interest or penalty if paid
on such Business Day. In the event of any assignment by Lessor to an Assignee
pursuant to the provisions of paragraph (b) of Article 20 hereof, all payments
that are assigned to such Assignee, whether Basic Rent, Additional Rent or
otherwise, shall be paid in such manner and in such place as shall be designated
by Lessor or such Assignee.
(b) All amounts that Lessee is required to pay or discharge pursuant to
this Lease in addition to Basic Rent (including, without limitation, amounts
payable as the Purchase Price, Termination Value or other amounts for each
Leased Property pursuant to any provision hereof, any Adjustment Price or
Maximum Lessee Risk Amount payable pursuant to Article 30, any
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Reinvestment Premium, any amounts payable pursuant to Article 21 hereof or as
liquidated damages pursuant to paragraph (c) of Article 22 hereof and any
indemnity payments payable pursuant to Articles 8 and 9 hereof), together with
every fine, penalty, overdue interest and cost which may be added for nonpayment
or late payment thereof, shall constitute additional rent hereunder (all of the
foregoing, Additional Rent). In the event of any failure by Lessee to pay or
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discharge any such Additional Rent, Lessor shall have all rights, powers and
remedies provided for herein or by law or otherwise in the case of nonpayment of
Basic Rent. Lessee shall pay Additional Rent to Lessor (or to any other party
as Lessor may from time to time specify in writing) in the same manner specified
for the payment of Basic Rent or, with respect to portions of Additional Rent
payable to third parties, Lessee may pay such portions of Additional Rent
directly to the Persons entitled thereto. Lessee also covenants to pay to
Lessor on demand as Additional Rent, interest at the Overdue Rate, but in no
event greater than the maximum rate permitted by applicable law, on (i) all
overdue installments of Basic Rent from the due date thereof until paid in full,
(ii) all overdue amounts of Additional Rent, arising out of obligations which
Lessor shall have paid on behalf of Lessee pursuant to Article 21 hereof or
otherwise from the date of such payment by Lessor until paid in full and (iii)
each other sum required to be paid by Lessee hereunder which is overdue,
including without limitation, any Maximum Lessee Risk Amount or portion thereof,
Purchase Price, Termination Value or other amounts for the Leased Properties,
Adjustment Price, any Reinvestment Premium, and any amounts payable pursuant to
Article 21 hereof or as liquidated damages pursuant to paragraph (c) of Article
22 hereof, from the date such sum was due until the date received by the Person
entitled thereto.
(c) (i) The Termination Values, (ii) the Purchase Price, and (iii) the
Maximum Lessor Risk Amount and the Maximum Lessee Risk Amount, in each case,
shall be at least sufficient at all times during the Maximum Lease Term to pay
all outstanding principal and accrued and unpaid interest under the indebtedness
evidenced by the Notes, to pay to Lessor the amount of the outstanding Equity
Investment and accrued and unpaid Equity Return and to pay the Reinvestment
Premium, if any, payable under the Notes and in respect of the Equity
Investment. The foregoing shall in no event constitute or be construed as a
guarantee by Lessee of the Notes and/or the Equity Investment.
4. Use. Lessee may use Capital One Operations Center as an operations
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center for it and Guarantor and each of Knolls Office Building, Knolls Two Phase
Three, Renaissance Business Park Phase I and Renaissance Business Park Phase II
as a first-class office facility and for accessory parking and other ancillary
uses. With the prior written consent of Lessor, Indenture Trustee and LC
Issuer, which consent will not be unreasonably withheld, Lessee may use any
Leased Property for any other lawful use that Lessee certifies (i) is not
generally hazardous or offensive, (ii) does not, in Lessee's good faith
determination, adversely affect the fair market value, utility or useful life of
such Leased Property and (iii) does not violate any applicable Legal
Requirement, Ground Lease, as applicable, or insurance required hereunder to be
maintained thereon.
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5. Net Lease; Nonterminability; Subordination of Indenture
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(a) This Lease is a "net lease" and Lessee shall pay all Basic Rent and
Additional Rent without notice, demand, counterclaim, set-off, deduction, or
defense, and without abatement, suspension, deferment, diminution or reduction,
free from any charges, assessments, impositions, expenses or deductions of any
and every kind or nature whatsoever including, without limitation (i) any right
Lessee may have against Lessor, any Ground Lessor, any contractor or any other
Person for any reason (whether in connection with this transaction or any other
transaction), (ii) any breach, default or misrepresentation by Lessor or any
other Person under this Lease or any other Operative Document to which it is a
party or (iii) any invalidity or unenforceability in whole or in part of this
Lease or any other document or instrument relating to the transactions evidenced
hereby or any other Operative Document to which it is a party, or any other
infirmity herein or therein, or any lack of power or authority of any party to
this Lease, or any other document or instrument related to the transactions
evidenced hereby. All costs, expenses and obligations of every kind and nature
whatsoever relating to each Leased Property and the appurtenances thereto and
the use and occupancy thereof by Lessee or anyone claiming by, through or under
Lessee as Lessee hereunder which may arise or become due during or with respect
to the period constituting the Term of this Lease shall be paid by Lessee, and
Lessee shall indemnify Lessor against any of the foregoing as provided in
Article 8. Lessee assumes, during the Term of this Lease, the sole
responsibility for the physical and environmental condition, use, operation,
maintenance and management of each Leased Property, and Lessee shall indemnify
Lessor with respect to the foregoing as provided in Article 8, and Lessor shall
have no responsibility in respect thereof and shall have no liability for damage
to the property of Lessee on any account or for any reason whatsoever, except as
specifically provided in Article 8.
(b) Except as otherwise expressly provided in paragraph (b) of Article 2,
paragraph (c) of Article 12, clause (ii) of paragraph (b) of Article 22 hereof,
Article 28, paragraph (d) of Article 37 and clause (ii) of paragraph (b) of
Article 38 (with respect to the affected Leased Property but not as to the
Exchange Property), this Lease shall not terminate as to any Leased Property,
nor shall Lessee have any right to terminate this Lease as to any Leased
Property, nor shall Lessee be entitled to any abatement or reduction of rent
hereunder, nor shall Lessee have the right to be released or discharged from any
obligations or liabilities hereunder for any reason, including without
limitation, any damage to or destruction of all or part of any Leased Property;
any restriction, deprivation (including eviction) or prevention of, or any
interference with, any use or the occupancy of any Leased Property (whether due
to any defect in or failure of Lessor's title to any Leased Property, any Lessor
Lien or otherwise); any condemnation, requisition or other taking or sale of the
use, occupancy or title to any Leased Property; any action, omission or breach
on the part of any Ground Lessor or Lessor under any of the Ground Leases or on
the part of Lessor under this Lease or under any other agreement between Lessor
and Lessee; the inadequacy or failure of the description of any Leased Property
to demise and let to Lessee the
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property intended to be leased hereby; Lessee's acquisition of ownership of any
Leased Property or any sale or other disposition of any Leased Property; the
impossibility or illegality of performance by Lessor or Lessee or both; the
failure of Lessor to deliver possession of any Leased Property on the Basic Term
Commencement Date; the inability or failure of Lessor to take leasehold title to
any of the Land Parcel under any Ground Lease; any environmental condition
affecting any Leased Property; any action of any court, administrative agency or
other governmental authority; or any other cause, whether similar or dissimilar
to the foregoing, any present or future law notwithstanding.
(c) Lessee will remain obligated under this Lease in accordance with its
terms, and will not take any action to terminate (except as otherwise expressly
provided in paragraph (b) of Article 2, paragraph (c) of Article 12, clause (ii)
of paragraph (b) of Article 22, Article 28, paragraph (d) of Article 37 and
clause (ii) of paragraph (b) of Article 38 (with respect to the affected Leased
Property not as to the Exchange Property)), rescind or avoid this Lease for any
reason, notwithstanding any bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding affecting Lessor, or any assignee of Lessor, or
any action with respect to this Lease which may be taken by any receiver,
trustee or liquidator, or any assignee of Lessor or by any court in any such
proceeding. Lessee waives all rights at any time conferred by statute or
otherwise to quit, terminate (except as otherwise expressly provided in
paragraph (b) of Article 2, paragraph (c) of Article 12, clause (ii) of
paragraph (b) of Article 22, Article 28, paragraph (d) of Article 37 and clause
(ii) of paragraph (b) of Article 38 (with respect to the affected Leased
Property not as to the Exchange Property)) or surrender (except upon a return of
the Leased Properties pursuant to Article 28 and then in accordance with Article
26) this Lease or any Leased Property or to any abatement or deferment of any
Basic Rent, Additional Rent or other sum payable by Lessee hereunder, or for
damage, loss or expense suffered by Lessee on account of any cause referred to
in this Article 5 or otherwise.
(d) This Lease and all rights of Lessee hereunder are subordinate to the
Indenture unless the Indenture Trustee elects, upon notification by the
Indenture Trustee to Lessee, for the Indenture to be subordinate to this Lease
and such rights.
(e) If any act or omission of Lessor would give Lessee the right,
immediately or after the lapse of a period of time, to cancel or terminate this
Lease, or to claim a partial or total eviction, Lessee shall not exercise such
right until (i) Lessee gives notice of such act or omission to Lessor and to the
Indenture Trustee, and (ii) a reasonable period of time for remedying such act
or omission elapses following the time when the Indenture Trustee becomes
entitled under the Indenture to remedy same (which reasonable period shall in no
event be less than the period to which Lessor is entitled under this Lease or
otherwise, after similar notice, to effect such remedy).
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(f) If the Indenture Trustee succeeds to the rights of Lessor under this
Lease, whether through possession or foreclosure action or delivery of a new
lease or deed, then, at the request of the Indenture Trustee and upon the
Indenture Trustee's written agreement to accept Lessee's attornment, Lessee
shall attorn to and recognize the Indenture Trustee as Lessee's landlord under
this Lease and shall promptly execute and deliver any instrument that the
Indenture Trustee shall reasonably request to evidence such attornment. Upon
such attornment, this Lease shall continue in full force and effect as a direct
lease between the Indenture Trustee and Lessee upon all of the terms and
conditions set forth in this Lease except that the Indenture Trustee shall not
be (i) liable for any previous act or omission of Lessor under this Lease, (ii)
subject to any offset which had accrued to Lessee against Lessor, (iii)
obligated to complete any construction of the Leased Properties, (iv) obligated
to make any payment to or on behalf of Lessee, (v) required to account for any
security deposit other than any actual delivered to the Indenture Trustee, or
(vi) bound by any previous modification of this Lease or by any prepayment of
more than one month's Basic Rent or Additional Rent unless such modification or
prepayment was expressly approved in writing by the Indenture Trustee through or
by reason of which the Indenture Trustee succeeded to the rights of Lessor under
this Lease.
(g) If the Indenture Trustee requires any modification of this Lease,
Lessee shall, upon notice thereof from Lessor, promptly execute and deliver to
Lessor the instrument accompanying said notice from Lessor to effect such
modification if such instrument is reasonable and does not adversely affect in
any respect any of Lessee's rights under this Lease and does not increase in any
respect any of Lessee's obligations under this Lease.
6. Taxes and Other Charges; Law and Agreements.
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(a) Lessee shall pay and discharge, on or before the last day upon which
the same may be paid without interest or penalty, and shall indemnify each
Indemnified Party on an after tax basis, from and against, all taxes, including
any tax based upon or measured by gross rentals or receipts from any Leased
Property, assessments, levies, fees, water and sewer rents and other
governmental and similar charges, general and special, ordinary or
extraordinary, and whether or not the same shall have been within the express
contemplation of the parties hereto, and any interest and penalties thereon,
however imposed, whether levied or imposed upon Lessor, Lessee, any Indemnified
Party, any Leased Property or any portion thereof, by any federal, state or
local government or taxing authority in the United States of or by any taxing
authority or governmental subdivision of any other country, upon or with respect
to (i) the transactions including, without limitation, any documentary stamp tax
or any intangible personal property tax on the Lessor or any other Indemnified
Party, (ii) the Leased Property or any portion thereof or interest therein or
the interest of Lessee or Lessor or any Indemnified Party therein, (iii) Basic
Rent or Additional Rent or other sums payable by Lessee hereunder, (iv) this
Lease or the interest of Lessee or any Indemnified Party hereunder, (v) the use,
occupancy, construction, purchase, ownership, maintenance, operation, repair,
rebuilding, possession, repossession, sale or disposition of any
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Leased Property or any portion thereof or (vi) gross receipts from any Leased
Property. If any tax or assessment levied or assessed against any Leased
Property may legally be paid in installments, Lessee shall have the option to
pay such tax or assessment in installments; provided, however, that upon the
termination or expiration of the Term of this Lease, as the same be extended
pursuant to the terms hereof, Lessee shall pay any such tax or assessment which
it has been paying in installments in full on or prior to such termination or
expiration date. Nothing in this Lease shall require payment by Lessee of any
franchise, estate, inheritance, succession, transfer, net income or profits
taxes of Lessor or any other Indemnified Party (including any minimum taxes and
withholding taxes), except for transfer taxes, recording fees, or similar
charges payable in connection with a conveyance hereunder to Lessee or in
connection with Lessor's exercise of remedies after an Event of Default
hereunder and any gross receipts or similar taxes imposed or levied upon,
assessed against or measured by the Basic Rent, Additional Rent or any other
sums payable by Lessee hereunder or levied upon or assessed against any Leased
Property, unless such taxes are in substitution for an income, profit or revenue
tax of Lessor or any other Indemnified Party, but then only to the extent of
such substitution and only to the extent that such tax, assessment or other
charge would be payable if such Leased Property were the only property of Lessor
subject thereto (the foregoing, collectively, Excluded Taxes). Lessee shall
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prepare and file on a timely basis all returns and other materials required in
connection with any taxes, assessments or other charges that Lessee is required
to pay pursuant to this Article 6. Lessee shall furnish to Lessor promptly, and
in any event within 30 days after the later of the date the same becomes due and
payable and the date of written demand by Lessor, as the case may be, proof of
the payment of any such tax, assessment, fee, rent or charge which is payable by
Lessee and, upon written demand of Lessor, proof of the filing of all returns
and other materials required in connection therewith. The indemnity contained in
this Article 6 shall continue in full force and effect notwithstanding the
expiration or earlier termination of this Lease and are expressly made for the
benefit of, and shall be enforceable by, Lessor and each other Indemnified
Party.
(b) Lessee shall pay all charges for utility, communication and other
services to the extent rendered or used during the Term of this Lease on or
about each Leased Property, whether or not payment therefor shall become due
after the expiration of the Term of this Lease.
(c) Lessee shall at all times during the Term of this Lease, at Lessee's
own cost and expense, perform and comply with all Legal Requirements (except to
the extent any exemption or so called "grandfathering" provision is available to
Lessee), whether or not such Legal Requirements so involved shall necessitate
structural changes, improvements, interference with use and enjoyment of any
Leased Property, replacements or repairs, extraordinary as well as ordinary, and
Lessee shall so perform and comply, whether or not such Legal Requirements shall
now exist or shall hereafter be enacted or promulgated, and whether or not such
Legal Requirements can be said to be within the present contemplation of the
parties hereto. Lessee shall at all times during the Term of this Lease, at
Lessee's own cost and expense, perform and comply with the terms of any easement
granted or released pursuant to Article 32 hereof and
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shall perform all of the obligations of the grantor or releasor under the
related instrument of grant or release. Lessee shall, at its expense, comply
with all provisions of insurance policies required pursuant to Article 13
hereof, and with the provisions of all contracts, agreements, instruments and
restrictions existing at the commencement of this Lease or thereafter suffered
or permitted by Lessee, affecting any Leased Property or any part thereof or the
ownership, occupancy, use, operation or possession thereof.
(d) Notwithstanding the provisions of paragraphs (a) through (c) of this
Article 6 and those of Article 7, Lessee shall have the right to contest, by
appropriate legal proceedings, any tax, charge, levy, assessment, lien or other
encumbrance, and/or any Legal Requirement affecting any Leased Property, and to
postpone payment of or compliance with the same during the pendency of such
contest, provided that (i) the commencement and continuation of such proceedings
shall suspend the collection thereof from, and suspend the enforcement thereof
against, Lessor and any Leased Property, (ii) no part of any Leased Property nor
any Basic Rent or Additional Rent or other sums payable by Lessee hereunder
shall be in danger of being sold, forfeited, attached or lost, (iii) there shall
not exist (x) any interference with the use and occupancy of any Leased Property
or any part thereof, or (y) any interference with the payment of Basic Rent or
any Additional Rent (other than the portion subject to the contest), (iv) Lessee
shall promptly prosecute such contest to a final settlement or conclusion or, if
Lessee deems it advisable to abandon such contest, Lessee shall promptly pay or
perform the obligation which was the subject of such contest and (v) at no time
during the permitted contest shall there be a risk of the imposition of criminal
liability on Lessor arising from non-payment of the contested item or non-
compliance with the contested Legal Requirement. If any Default or Event of
Default hereunder shall have occurred and be continuing, or any such contest or
contests, individually or in the aggregate, at any one time pending with respect
to any Leased Property shall involve an amount of money or potential loss
(including fines and similar charges) in excess of $300,000, plus any security
theretofore provided pursuant to this provision, then Lessee shall either (i)
deposit with the Depositary (as defined in subparagraph (i) of paragraph (b) of
Article 12 of this Lease) an amount equal to 100% of the tax, charge, levy,
assessment, lien or other encumbrance affecting such Leased Property, which
amount may be invested in accordance with the terms and provisions set forth in
subparagraph (iv) of paragraph (b) of Article 12 of this Lease or (ii) post an
equivalent bond, or letter of credit from an institution (other than Lessee or
its Affiliates) meeting the requirements to be a Depositary under this Lease,
for security. Lessee shall not postpone the payment of any such tax, charge,
levy, assessment, lien or other encumbrance for such length of time as shall
permit any Leased Property, or any lien thereon created by such item being
contested, to be sold by federal, state, county or municipal authority for the
non-payment thereof; Lessee shall not postpone compliance with any such law,
rule, order, ordinance, regulation or other governmental requirement if Lessor
will thereby be subject to criminal prosecution, or if any municipal or other
governmental authority shall be in a position according to applicable law to
commence and carry out any work to comply with the same or to
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foreclose or sell any lien affecting all or part of any Leased Property which
shall have arisen by reason of such postponement or failure of compliance.
(e) In the event of the expiration or termination of this Lease as herein
provided or Lessee's abandonment of any Leased Property, the obligations and
liabilities of Lessee with respect to each Indemnified Party, actual or
contingent, under this Article 6 shall survive such termination or abandonment.
7. Title; Liens. Lessee represents and warrants to, and covenants with,
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Lessor that Lessor has and shall have good fee simple title to (or, with respect
to Knolls Two Phase Three, Renaissance Business Park Phase I and Renaissance
Business Park Phase II, so long as the respective Ground Leases are in effect, a
valid ground leasehold interest in) each and every Leased Property, subject only
to Permitted Encumbrances, and that Lessee shall warrant and defend the same to
Lessor against the lawful claims and demands of all Persons. Subject to the
provisions of paragraph (d) of Article 6, Lessee will promptly, but in any event
no later than the earlier of 30 days after its Actual Knowledge of the filing
thereof or the enforcement of the same, at its own expense, remove, satisfy or
discharge of record, by bond or otherwise, any charge, lien, security interest
or encumbrance upon any Leased Property, upon any Basic Rent, or upon any
Additional Rent or other sums payable by Lessee under this Lease which arises
for any reason (except for Lessor Liens and any other acts or omissions of
Lessor or anyone claiming by, through or under Lessor, without the consent of
Lessee), including all liens which arise out of Lessee's possession, use,
operation and occupancy of any Leased Property, but not including any Permitted
Encumbrances. Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, express or implied, to or for the
performance by any contractor, laborer, materialman, 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 Leased Property or any
part thereof. Notice is hereby given that Lessor will not be liable for any
labor, services or materials furnished or to be furnished to Lessee, or to
anyone holding an interest in any Leased 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 in and to any
Leased Property. In the event of the failure of Lessee to discharge any charge,
lien, security interest or encumbrance within the time period set forth above
and otherwise as aforesaid, except during the pendency of any contest permitted
and conducted pursuant to paragraph (d) of Article 6, after five days prior
notice to Lessee (or after shorter notice or without notice if prudent under the
circumstances to prevent enforcement or other action against Lessor or any
Leased Property), Lessor may discharge such items by payment or bond or both,
and Lessee will repay to Lessor, upon demand, any and all amounts paid therefor,
or by reason of any liability on such bond, and also any and all reasonable
incidental expenses, including reasonable attorneys' fees and disbursements,
incurred by Lessor in connection therewith.
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8. Indemnification; Fees and Expenses. Lessee shall pay, and shall
----------------------------------
protect, defend and indemnify each Indemnified Party against and hold each
Indemnified Party harmless from all liabilities, losses, damages, costs,
expenses (including reasonable attorneys' fees and expenses), claims, demands or
judgments of any nature to the extent (a) arising or alleged to arise from or in
connection with the condition, use, operation, maintenance, subletting and
management of any Leased Property, (b) relating to any Leased Property and the
appurtenances thereto and the use and occupancy thereof by Lessee or anyone
claiming by, through or under Lessee or (c) arising or alleged to arise from or
in connection with any of the following events: (i) any injury to, or the death
of, any person or any damage to or loss of property on or adjacent to any Leased
Property or growing out of or directly or indirectly connected with, or alleged
to grow out of or be directly or indirectly connected with, the ownership, use,
nonuse, occupancy, operation, possession, condition, construction, repair or
rebuilding of any Leased Property or adjoining property, sidewalks, streets or
ways or resulting, or alleged to result, from the condition of any thereof,
other than and only to the extent of any injury, death, damage or loss arising
solely out of such Indemnified Party's gross negligence or willful misconduct
provided, however, such exception shall not apply in respect of Lessor or any
liability which is imputed to Lessor or any assignee solely by reason of its
interest in any Leased Property under this Lease; (ii) any claims by third
parties to the extent resulting from any violation or alleged violation by
Lessee of (A) any provision of this Lease, or (B) any Legal Requirement
affecting any Leased Property, or (C) any lease (other than this Lease) or other
agreement relating to any Leased Property as of the date hereof or hereafter in
effect to which Lessee is a party or by which Lessee is bound, or (D) any
contract or agreement to which Lessee is a party, or any restriction, law,
ordinance or regulation, affecting any Leased Property or the ownership, use,
nonuse, occupancy, condition, operation, possession, construction, repair or
rebuilding thereof or of adjoining property, sidewalks, streets or ways; (iii)
any contest permitted by paragraph (d) of Article 6; or (iv) Lessee's failure to
pay in accordance with the terms and provisions hereof any item of Additional
Rent payable by Lessee hereunder or (d) which may be imposed upon, incurred by
or asserted against any Indemnified Party in any way relating to or arising out
of (i) this Lease or the enforcement of any of the terms hereof and thereof
(other than by Lessee), including, without limitation, relating to amendments,
supplements, adjustments, waivers, consents, releases, substitutions,
terminations and refinancings or (ii) the acquisition or ownership of the
Beneficial Interests by Beneficiary including, without limitation, fees,
expenses, taxes set forth in the Sale and Assignment Agreement (BI Interests) or
the failure to so acquire such Beneficial Interests as set forth in such
Agreement. Lessee shall not be liable in any case to any Indemnified Party for
any liabilities, obligations, claims, damages, penalties, causes of action,
costs or expenses to the extent that they result solely from the gross
negligence or willful misconduct of such Indemnified Party; provided that the
exclusion with respect to gross negligence and willful misconduct in this
sentence shall not apply to ordinary negligence, as to which Lessee shall
indemnify each Indemnified Party pursuant to this Article 8. The foregoing
shall not be construed to give rise to any third party beneficiary rights with
respect to any Person who is not an Indemnified Party. If any Indemnified Party
shall be made a party to any such litigation commenced against Lessee, and if
Lessee, at its
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expense, shall fail to provide such Indemnified Party or its agent with counsel
approved by such Indemnified Party, as applicable, which approval shall not be
unreasonably withheld, Lessee shall pay all reasonable costs and attorney's fees
and expenses incurred or paid by such Indemnified Party in connection with such
litigation. Nothing in this Article 8 is meant to limit or otherwise impair the
indemnification set forth in Article 9. To the extent legally permissible, the
Indemnified Parties consent to being represented by the same counsel as Lessee
in such action; provided, however, that any Indemnified Party may be represented
by separate counsel selected by such Indemnified Party and reasonably acceptable
to Lessee, at Lessee's expense if, in such Indemnified Party's reasonable
judgment, separate counsel is necessary to protect such Indemnified Party's
interest. The indemnity contained in this Article 8 shall continue in full force
and effect notwithstanding the expiration or earlier termination of this Lease
and are expressly made for the benefit of, and shall be enforceable by, Lessor
and each other Indemnified Party.
9. Environmental Matters.
---------------------
Lessee represents and warrants (with respect to statements made as of a
particular date) and covenants (with respect to future or ongoing obligations)
to the Indemnified Parties that:
(i) at all times during the Term of this Lease, each and every Leased
Property, Lessee, all sublessees and any assignee of Lessee shall
comply in all material respects with all applicable Environmental
Laws, including the effecting of cures in compliance with
Environmental Laws, if applicable; Lessee has, and has ensured that
all sublessees of each Leased Property have, obtained all permits,
licenses, and any other authorizations to conduct operations at such
Leased Property that are required under all applicable Environmental
Laws as of the Basic Term Commencement Date and shall obtain and shall
ensure that all sublessees of such Leased Property shall obtain, at
all times during the Term of this Lease, all permits, licenses, and
any other authorizations to conduct operations at such Leased Property
that are now or hereafter required under all Environmental Laws;
Lessee is, and has ensured that all sublessees of each Leased Property
are, in compliance in all material respects with all terms and
conditions of all permits, licenses, and any other authorizations
required under all applicable Environmental Laws as of the Basic Term
Commencement Date and Lessee shall, and shall ensure that all
sublessees of each Leased Property shall, comply in all material
respects with all terms and conditions of all permits, licenses, and
any other authorizations now or hereafter required under all
applicable Environmental Laws; Lessee shall cause any alterations of,
or construction on, each Leased Property to be done in accordance in
all material respects with applicable Environmental Laws, and in
connection with any such alterations or construction, shall remove and
dispose of, in compliance with applicable Environmental Laws, any
Hazardous Substances present upon any Leased Property other than
lawful
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quantities of Hazardous Substances used in compliance with
Environmental Laws in connection with Lessee's intended use of each
Leased Property in accordance with the provisions of Article 4,
where such uses will have no material adverse effect upon such
Leased Property;
(ii) as of the Basic Term Commencement Date, no notices, complaints or
orders of violation or non-compliance of any nature whatsoever
regarding alleged violations of, or strict liability under,
Environmental Laws have been issued to Lessee or, to the best of its
knowledge, to any Person regarding any Leased Property, and no
federal, state or local governmental environmental investigation or
legal action by a private party is pending or overtly threatened, in
each case with regard to any Leased Property or any use thereof or
any alleged violation of, or strict liability arising under,
Environmental Laws with regard to any Leased Property; no liens have
been placed upon any Leased Property in connection with any actual
or alleged liability under any Environmental Laws;
(iii) no Leased Property (a) as of the Basic Term Commencement Date has
been used by Lessee or, to the best of Lessee's knowledge after due
inquiry, by any other Person to generate, manufacture, refine,
produce or process any Hazardous Substance or to store, handle,
treat, dispose, transfer or transport any Hazardous Substance (other
than as set forth in Schedule D or other than normal and lawful uses
of such Hazardous Substances in lawful quantities and in compliance
with Environmental Laws in connection with Lessee's intended use of
any Leased Property in accordance with the provisions of Article 4),
where such uses would have a material adverse effect upon such
Leased Property, and (b) will be used by Lessee or any other Person
at any time during the Term of this Lease to generate, manufacture,
refine, produce or process any Hazardous Substance or to store,
handle, treat, dispose, transfer or transport any Hazardous
Substance or, other than normal and lawful uses of such Hazardous
Substances in lawful quantities and in compliance with Environmental
Laws in connection with Lessee's intended use of any Leased Property
in accordance with the provisions of Article 4, where such uses
would have a material adverse effect upon such Leased Property or;
(iv) as of the Basic Term Commencement Date, no surface impoundments are
(and during the Term of this Lease, none will be) constructed,
operated or maintained in or on any Leased Property and no above
ground tanks or other containment structures will be constructed,
operated or maintained on any Leased Property in violation of
applicable Environmental Laws and no underground storage tanks are
(and during the Term of this Lease, none will be) constructed,
operated or maintained in or on any Leased Property; as of the Basic
Term Commencement Date, to the best of Lessee's knowledge after due
inquiry, there is no asbestos nor
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asbestos-containing material (except commercially produced product in
non-friable bonded form, the presence of which complies with all
Environmental Laws) located in, on, at or under any Leased Property
nor is there any PCB-containing equipment, including PCB-containing
transformers located in, on, at or under any Leased Property nor will
any of the foregoing be located in, on, at or under any Leased
Property at any time during the Term of this Lease;
(v) as of the Basic Term Commencement Date, other than as set forth in
Schedule D, each Leased Property is free of Hazardous Substances at,
in, on, over or under such Leased Property, except in lawful
quantities and in compliance with Environmental Laws regardless of
the source of any such Hazardous Substances; and
(vi) at all times during the Term of this Lease, other than normal and
lawful uses of such Hazardous Substances in lawful quantities and in
compliance with Environmental Laws in connection with Lessee's
intended use of each Leased Property in accordance with the
provisions of Article 4, where such uses will have no material
adverse effect upon any Leased Property, each Leased Property shall
be maintained free of Hazardous Substances at, in, on, over or under
such Leased Property, regardless of the source of any such Hazardous
Substances.
Promptly upon obtaining Actual Knowledge thereof, Lessee shall give to
Lessor notice of the occurrence of any of the following events: (i) the failure
of any Leased Property, any Ground Lessor, Lessee, any sublessee or assignee of
Lessee to comply with any Environmental Law in any material manner whatsoever;
(ii) the issuance to Ground Lessor, Lessor, Lessee, or any sublessee of space in
any Leased Property or any assignee of Lessee, of any notice, complaint or order
of violation or non-compliance of any nature whatsoever with regard to such
Leased Property or the use thereof with respect to Environmental Laws; (iii) any
notice of a pending or threatened investigation to determine whether Ground
Lessor's, Lessor's, Lessee's (or any sublessee's or assignee's) operations on
any Leased Property are in violation of any Environmental Law; (iv) any notice
from any governmental agency requiring any corrective action with respect to any
Leased Property or any portion thereof under any Environmental Law; (v) any
notice or other communication with respect to a pending or threatened private
party judicial or administrative action relating to violation of any
Environmental Law in connection with the use, occupancy or operation of any
Leased Property; (vi) the existence or threat of a release of a Hazardous
Substance at any Leased Property or any condition regulated by any Environmental
Law which is or must be reported to a governmental agency or that could have a
material adverse effect upon such Leased Property; or (vii) any other occurrence
or discovery or any condition at any Leased Property related to Environmental
Laws and which would constitute a material adverse effect on such Leased
Property.
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At any time if Lessor receives notice that an adverse change in the
environmental condition of any Leased Property has occurred or that an adverse
environmental condition with respect to any Leased Property has been discovered,
Lessor shall give notice thereof to Lessee, and if Lessee shall not (i)
diligently commence to cure such condition, to the extent necessary to meet
Legal Requirements or comply fully with applicable Environmental Laws or to
prevent a diminution in the fair market value of such Leased Property related to
such environmental condition, within 30 days after receipt of such notice (or
such shorter period as may be required by law or in the event of an emergency)
and (ii) thereafter diligently prosecute to completion such cure, then Lessor
may cause to be performed an environmental audit or risk assessment of such
Leased Property and the then uses thereof, and may take such actions as it may
reasonably deem necessary to cure such condition. Notwithstanding the foregoing
right to conduct audits or assessments, Lessor shall not be obligated to conduct
such audits or assessments or to take any actions in response to any findings.
Such environmental audit or assessment shall be performed by an environmental
consultant satisfactory to Lessor and shall include a review of the uses of such
Leased Property and compliance of the same with all Environmental Laws. All
costs and expenses reasonably incurred by Lessor in connection with such
environmental audit or assessment and any remediation required shall be paid by
Lessee upon demand.
Lessee agrees to indemnify, defend and hold harmless each Indemnified Party
from and against any and all losses, liabilities, damages, judgments, decrees,
orders, penalties, claims, charges, costs and expenses (including, without
limitation, fees and disbursements of counsel, consultants and expert witnesses
for such Indemnified Party), which may be suffered or incurred by, or asserted
against such Indemnified Party to the extent arising directly or indirectly out
of any violation of this Article 9 or out of the use, storage, transportation,
disposal, treatment, release, threatened release, discharge, emission,
generation or presence of any Hazardous Substances at, from, on, over, under or
in any Leased Property, regardless of whether occurring before, during or after
the Term of this Lease and regardless of the source of any such Hazardous
Substances, provided, that no Indemnified Party will be indemnified by Lessee
hereunder for environmental contamination to the extent caused solely by the
grossly negligent acts of such Indemnified Party, its employees, agents or
assigns, other than at the direction of Lessee or resulting from Lessee's
failure to comply with this Article 9, and with respect to Lessor, other than
any such liability which is imputed to Lessor (and not due solely to Lessor's
own gross negligence or willful misconduct), by reason of its interest in any
Leased Property under this Lease.
The warranties and obligations of Lessee, and the rights and remedies of
each Indemnified Party under this Article 9 are in addition to and not in
limitation of any other warranties, obligations, rights and remedies provided in
this Lease or otherwise at law or in equity.
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In the event of the termination of this Lease as to any Leased Property as
herein provided or Lessee's abandonment of any Leased Property, the obligations
and liabilities of Lessee with respect to each Indemnified Party, actual or
contingent, under this Article 9 and relating to the period through the end of
the Term of this Lease, whether arising before or after the end of the Term of
this Lease, shall survive such termination or abandonment.
10. Maintenance and Repair; Additions.
---------------------------------
(a) Lessee acknowledges that it has received each Leased Property in good
condition, repair and appearance on and as of the Basic Term Commencement Date.
Lessee will, at its cost and expense, keep and maintain each Leased Property,
including any altered, rebuilt, additional or substituted buildings, structures
and other improvements thereto including, without limitation, Additions
permitted by and in accordance with paragraph (c) of this Article 10, in the
same condition as existed on the Basic Term Commencement Date, ordinary wear and
tear excepted, and (except as otherwise provided in paragraph (c) of Article 12)
will make all structural and non-structural, and ordinary and extraordinary
changes, repairs and replacements, foreseen or unforeseen, which may be
required, whether or not caused by its act or omission, to be made upon or in
connection with the improvements to any Leased Property in order to keep the
same in such condition, ordinary wear and tear and the circumstances described
in paragraph (c) of Article 12 excepted, including taking, or causing to be
taken, action necessary to maintain each Leased Property in compliance in all
material respects with any applicable Legal Requirements, including all
applicable Environmental Laws. Lessee covenants to perform or observe all
terms, covenants or conditions of any reciprocal easement or maintenance
agreement to which it may at any time be a party or to which any Leased Property
is subject as of the Basic Term Commencement Date with respect to such Leased
Property. Lessee shall, at its expense, use its best efforts to enforce
compliance in all material respects with any reciprocal easement, maintenance or
other agreement benefitting any Leased Property by any other Person subject to
such agreement. Lessor shall not be required to maintain, alter, repair,
rebuild or replace any improvements on any Leased Property or to maintain any
Leased Property, and Lessee expressly waives the right to make repairs at the
expense of Lessor pursuant to any law at any time in effect. If Lessee shall
abandon any Leased Property, it shall give Lessor immediate notice thereof.
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(b) If Lessor or any appropriate authority determines that any
Improvements situated on any Leased Property at any time during the term of this
Lease shall encroach upon any property, street or right-of-way adjoining or
adjacent to any Leased Property, or shall violate the agreements or conditions
contained in any restrictive covenant affecting any Leased Property or any part
thereof, or shall impair the rights of others under or obstruct any easement or
right-of-way to which any Leased Property is subject, then, promptly after the
written request of Lessor, Lessee shall, at its expense, either (i) obtain
effective waivers or settlements of all claims, liabilities and damages
resulting from each such encroachment, violation, impairment or obstruction
whether the same shall affect Lessor, Lessee or both, or (ii) make such changes
in the improvements on such Leased Property and take such other action as shall
be necessary to remove such encroachments or obstructions and to end such
violations or impairments, including, if necessary, the alteration or removal of
any improvement on such Leased Property. Any such alteration or removal shall be
made in conformity with the following requirements of this Article 10 to the
same extent as if such alteration or removal were an alteration under the
provisions of paragraph (c) of this Article 10 and there shall be no abatement
of rent by reason of such alteration or removal.
(c) During the Term of this Lease, so long as no Default or Event of
Default hereunder has occurred and is continuing, after notice to Lessor and
upon Lessor's consent, to the extent required, Lessee may make any alterations,
additions, modifications or improvements to any Leased Property whether or not
structurally integrated with the existing Improvements on such Leased Property
(each an Addition), provided that, (A) no such Addition (i) reduces the fair
--------
market value of such Leased Property, taking into account any increase in the
fair market value of such Leased Property caused by prior improvements to such
Leased Property made by Lessee as permitted by this Lease at any time during the
Maximum Lease Term, adversely affects the structural integrity of such
Improvements, or impairs the utility or operation of such Leased Property; (ii)
reduces the remaining useful life of such Improvements; or (iii) violates any
agreement or restriction (x) to which such Leased Property is subject or (y)
which benefits such Leased Property, and (B) Lessee shall finance construction
of any Addition (i) using its own funds or (ii) through a borrowing unsecured by
any interest in any Leased Property or any portion thereof. With respect to a
Leased Property, any structural Addition (other than the Addition to the parking
garage under construction on the Leased Properties known as Renaissance Business
Park Phase I and Renaissance Business Park Phase II) the cost of which exceeds
an amount equal to (i) 10% of the Cost of the Property of such Leased Property
or, (ii) if greater, 10% of the fair market value of such Leased Property as
determined by the then most recent Appraisal of such Leased Property, shall
require Lessor's prior written consent. Each Addition shall be made in a good
and workmanlike manner using a quality of material and workmanship at least as
good as the original work or installation of such Improvements and otherwise in
conformance with the character and quality of such existing Improvements and in
compliance with all applicable Legal Requirements. Before undertaking any
Addition, Lessee shall deliver to Lessor an Officer's Certificate with respect
to satisfaction of the conditions set forth in the foregoing clauses (A) and
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(B) and upon the reasonable request by Lessor, fair market value and the
remaining useful life of such Improvements shall be determined by an Appraisal
of such Leased Property, performed at Lessee's sole cost and expense. Each
Addition shall be made at the sole cost and expense of Lessee, may not be
encumbered and shall become the property of Lessor and subject to this Lease and
any other Permitted Encumbrances affecting the related Leased Property. At
Lessor's request, from time to time, Lessee shall within five Business Days
thereafter execute and deliver to Lessor a lease supplement with respect to any
such Additions. Lessee's execution of a lease supplement for any such Addition
shall constitute (i) Lessee's acknowledgment and certification that any work
associated therewith complies with the requirements of this Article 10 and (ii)
as between Lessor and Lessee and for purposes of this Lease but for no other
purpose, Lessee's unconditional and irrevocable acceptance of such Addition for
lease hereunder, which acceptance shall not constitute a waiver of any rights,
against third parties. Notwithstanding anything to the contrary set forth in
this Article 10, Lessee may acquire and place upon, and remove from, any Leased
Property from time to time personal property consisting of furnishings and
equipment that are mobile and not affixed to the Land Parcel or to any portion
of any Leased Property in any manner, which furnishings and equipment shall
remain Lessee's property and may be encumbered by leases, purchase money or
similar security interests or in any other manner.
(d) All work done in accordance with this Article 10 shall comply with the
requirements of all insurance policies required to be maintained by Lessee under
Article 13 hereof. Lessee shall promptly pay all costs and expenses of each
such Addition, discharge all liens arising therefrom and procure and pay for all
permits and licenses required in connection therewith.
11. Trade Fixtures; Inspection.
--------------------------
(a) Lessor acknowledges and agrees that the items of trade fixtures,
machinery and equipment for each Leased Property (but specifically excluding
Improvements) are and shall remain the property of Lessee (Trade Fixtures) and
--------------
be treated as "trade fixtures" for the purposes of this Lease, and Lessee may
remove the same from any Leased Property at any time prior to the termination of
this Lease, provided that Lessee shall repair any damage to such Leased Property
resulting from such removal. Lessee may, at its own cost and expense, install
or place or reinstall or replace upon or remove from any Leased Property any
such Trade Fixtures. Any such Trade Fixtures shall not become the property of
Lessor (other than replacements of fixtures, machinery and equipment which are
the property of Lessor, which replacement shall also be the property of Lessor).
Replacements of fixtures, machinery and equipment which are property of the
Lessor shall be of at least equal quality to the replaced fixtures, machinery
and equipment when the replaced items were new. Lessee will be responsible for
the repair and maintenance of Trade Fixtures.
(b) Upon the request of Lessor, Indenture Trustee, Beneficiary or LC
Issuer, Lessee shall make Lessee's records pertaining to the maintenance of each
Leased Property available to
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Lessor for inspection. Lessee shall permit Lessor, Indenture Trustee, LC Issuer
and their respective agents, at any such party's risk and expense (except at the
expense of the Lessee during a Default or an Event of Default) and after
reasonable notice to visit and inspect any Leased Property, in a manner that
does not unreasonably interfere with Lessee's use and operation of such Leased
Property at such reasonable times and as often as may be reasonably requested,
including, without limitation, to make such inspections as any such party deems
necessary or desirable to insure compliance with the provisions of Article 9,
Article 10, this Article 11 and Article 26.
12. Condemnation and Casualty.
-------------------------
(a) Lessee hereby assigns to Lessor any award, compensation, insurance
proceeds or other payment to which Lessee may become entitled by reason of its
interest in any Leased Property (i) if any Leased Property, or any portion
thereof, is damaged or destroyed by fire or other casualty or cause, or (ii) by
reason of any condemnation, requisition or other taking or sale of the use,
occupancy or title to any Leased Property or any portion thereof in, by or on
account of any actual or threatened eminent domain proceeding or other action by
any governmental authority, civil or military, or other Person having the power
of eminent domain. So long as there is no Default or Event of Default
continuing hereunder, Lessee is hereby authorized and empowered to, at its cost
and expense, in the name and behalf of Lessor and Lessee, or otherwise, to
appear in any such proceeding or other action, to negotiate, accept and
prosecute any claim for any award, compensation, insurance proceeds or other
payment on account of any such loss, damage or destruction, condemnation,
requisition or other taking or sale and to cause any such award, compensation,
insurance proceeds or other payment to be paid to Lessor provided that Lessee
shall not accept any Net Award without obtaining the prior written consent of
Lessor if the condemnation or casualty shall have adversely affected the fair
market value of such Leased Property by $100,000 or more (as determined by an
Engineer). In addition, so long as there is no Event of Default continuing
hereunder, Lessee, at its sole cost and expense, shall be entitled to submit,
negotiate, accept and prosecute a claim for any award, compensation or insurance
proceeds or other payment payable to Lessee to the extent payable for
interruption of business, moving expenses or any property owned by Lessee that
is not part of any Leased Property (any such insurance proceeds or other payment
payable to Lessee to the extent made for interruption of business, moving
expenses or any property owned by Lessee that is not part of any Leased Property
hereinafter referred to as Lessee's Loss), and Lessee shall retain any award
applicable thereto. Furthermore, Lessee shall use reasonable efforts to achieve
the maximum award obtainable under the circumstances. Lessor, Indenture
Trustee, Beneficiary and LC Issuer may, at their respective cost and expense
(unless an Event of Default shall have occurred and be continuing hereunder in
which event such appearance shall be at Lessee's sole cost and expense), appear
in any such proceeding or other action, in a manner consistent with the
foregoing. All amounts so paid or payable to Lessor or Lessee shall be retained
by, or paid over to, the party entitled thereto in accordance with this Article
12. To the extent that Lessor, Indenture Trustee,
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Beneficiary or LC Issuer does not appear and act at such proceeding, Lessee
shall take all reasonable appropriate action in connection with each such claim,
proceeding or other action, and shall pay its costs and expenses in connection
therewith.
(b) If any Leased Property or any part thereof shall be condemned or taken
in the exercise of the power of eminent domain by any sovereign, municipality or
other public or private authority or shall be damaged or destroyed by fire or
other casualty, and Lessee may not, or does not, elect to terminate the Lease
with respect to such Leased Property pursuant to paragraph (c) of this Article
12, then Lessee shall give prompt written notice of such condemnation or
casualty to Lessor and shall, at Lessee's own cost and expense, proceed with
diligence and promptness to carry out any necessary demolition and to restore,
repair, replace, and/or rebuild such Leased Property in order to restore such
Leased Property, as nearly as practicable, to a condition and fair market value
not less than the condition required to be maintained and fair market value
thereof immediately prior to such taking, damage or destruction. No repair work
done by Lessee pursuant to this paragraph shall violate the terms of any
restriction, easement, condition or covenant or other matter affecting title to
any Leased Property, and shall be undertaken and completed in a good and
workmanlike manner and in compliance in all material respects with the
requirements of Article 10 and with all Legal Requirements then in effect with
respect to the affected Leased Property. All work done in accordance with this
paragraph (b) of Article 12 shall comply with the requirements of all insurance
policies required to be maintained pursuant to this Lease.
Basic and Additional Rent shall not ▇▇▇▇▇ hereunder by reason of any taking
of, damage to or destruction of any Leased Property, and this Lease shall
continue in full force and effect and Lessee shall continue to perform and
fulfill all of Lessee's obligations, covenants and agreements hereunder
notwithstanding such taking, damage or destruction unless and until this Lease
is terminated pursuant to its terms except for those provisions which by their
terms survive such termination.
If a Default or Event of Default is continuing hereunder, Lessor shall
retain the Net Award in respect of a Leased Property to be applied to effect
compliance with Lessee's obligations hereunder. If the Net Award in respect of
a Leased Property is less than the estimated cost of restoring or rebuilding the
Improvements on the affected Leased Property to the condition and fair market
value required above in this paragraph (b), then Lessee shall deposit the amount
by which such estimated cost exceeds the Net Award with the Depositary as
described below or shall post an equivalent bond, whereupon such deposit or
bonded amount shall be part of the Net Award for purposes of this paragraph (c)
of this Article 12. If the Net Award in respect of a Leased Property does not
constitute a Major Casualty or Condemnation Amount, provided that there is no
Default or Event of Default continuing hereunder, then such Net Award shall be
promptly paid to Lessee to be applied to the repair and rebuilding work required
by this paragraph (b). For purposes of this Article 12, Major Casualty or
Condemnation Amount means,
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with respect to a Leased Property, an amount equal to (a) 5% of the Cost of the
Property of such Leased Property or, if greater, 5% of the fair market value of
such Leased Property as determined by the then most recent Appraisal of such
Leased Property or (b) if the Guarantor's unsecured senior funded indebtedness
is, at the time of such casualty or condemnation or at the time of payment of
the Net Award, rated by either ▇▇▇▇▇'▇ or S&P lower than such indebtedness is
rated on the Basic Term Commencement Date the greater of (i) $300,000 and (ii)
1% of the Cost of the Property of such Leased Property or, if greater, 1% of the
fair market value of such Leased Property as determined by the then most recent
Appraisal of such Leased Property. If the Net Award in respect of a Leased
Property equals or exceeds a Major Casualty or Condemnation Amount, provided
that there is no Default or Event of Default continuing hereunder, then:
(i) the full amount thereof shall be paid to a depositary (the Depositary)
----------
to be selected as hereinafter provided. The Depositary shall be
either (x) Indenture Trustee, or (y) a bank or trust company located
in the state in which the affected Leased Property is located,
selected by Lessor which is authorized to do business in the state in
which the affected Leased Property is located, and which has a net
worth of $500,000,000 or more and has a credit rating from S&P or
▇▇▇▇▇'▇ (or any successor to either entity) of "A" or "A-2",
respectively, or better. The Depositary (if other than Lessee) shall
have no affirmative obligation to prosecute a determination of the
amount of, or to effect the collection of, any insurance proceeds or
condemnation award or awards, unless the Depositary shall have been
given an express written undertaking to do so. Moneys received by the
Depositary pursuant to the provisions of this Lease shall not be
commingled with the Depositary's own funds and shall be held by the
Depositary in trust separately for the uses and purposes provided in
this Lease. The Depositary shall place any moneys held by it into an
interest bearing account; any interest paid or received by the
Depositary on the moneys so held in trust shall be added to the moneys
so held in trust by the Depositary. In disbursing monies pursuant to
clause (ii) of this paragraph (b), the Depositary may rely
conclusively on the information contained in any notice given to the
Depositary by Lessee in accordance with the provisions of said clause
(ii), unless Lessor shall notify the Depositary in writing as provided
in said clause (ii) that Lessor intends to dispute such information,
in which case the disputed amount shall not be disbursed but shall
continue to be held by the Depositary until such dispute shall have
been resolved.
(ii) From time to time, Lessee may request reimbursement out of the Net
Award in respect of a Leased Property for the actual costs and
expenses incurred by Lessee in connection with such repair and
rebuilding. Such requests shall be made by written notice to the
Depositary, with a copy to Lessor, setting forth in reasonable detail
all of such costs and expenses then incurred by Lessee and including
the following:
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(1) a certificate of a Responsible Officer of Lessee, dated not more
than ten days prior to the date of the proposed draw, (A)
requesting the payment of a specified amount of such Net Award;
(B) describing in reasonable detail the work (including all
architects', engineers' and builders' fees and expenses and other
similar fees and expenses in connection with such work) and
materials applied in connection with such repair and rebuilding
(or materials delivered to and safely stored on the affected
Leased Property, the ownership of which has passed to Lessee and
which is fully insured for loss or damage including coverage for
theft and malicious mischief) since the date of the last
certificate of Lessee; (C) stating that such specified amount
does not exceed the cost of such work and materials; (D) stating
that Lessor has approved the plans and specifications with
respect to such work and materials; and (E) stating that such
work and materials have not previously been made the basis of any
actual withdrawal of money;
(2) a certificate of an independent engineer or an independent
architect designated by Lessee (Engineer), who in either case
--------
shall be approved by Lessor, which approval shall not be
unreasonably withheld or delayed, stating (A) that the work
(including all architect' engineers' and builders' fees and
expenses and other similar fees and expenses in connection with
such work) and materials described in the accompanying
certificates of Lessee were satisfactorily performed or furnished
and were necessary, appropriate or desirable to the restoration
or replacement of the Improvements in accordance with plans and
specifications therefor approved by Lessor; (B) that the amount
specified in such certificate of Lessee is not in excess of the
cost of such work and materials; and (C) the balance of the funds
being held by Lessor on an estimated basis equals or exceeds the
additional amount, if any, required to complete the restoration
or replacement of the Leased Properties; and
(3) such other additional data and upon satisfaction of such other
additional customary requirements (in any event including, to the
extent permitted by applicable law, evidence of the obtaining and
filing of no lien agreements in timely fashion, and lien waivers
from every contractor and subcontractor who performs any work or
supplies any material in connection with the repair and
rebuilding) as Lessor may reasonably require.
Subject to the satisfaction of the foregoing conditions, the
Depositary shall promptly disburse (but not prior to the expiration of
the five Business Day period
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set forth in the next following sentence of this clause (ii) and not
at any time during which a dispute shall exist between Lessor and
Lessee as to such amount) to Lessee out of such Net Award the amount
of such costs and expenses. If Lessor shall in good faith desire to
dispute the information contained in any notice given by Lessee
pursuant to this clause (ii), Lessor shall so notify Lessee and the
Depositary in writing within five Business Days after the giving of
such notice (the Dispute Notice), specifying the amount intended to
--------------
be disputed and the nature of the dispute, and Lessor and Lessee
shall negotiate in good faith to promptly settle any such dispute.
Within five days after delivery of the Dispute Notice, a duly
authorized representative of Lessee and Lessor shall meet to discuss
and to attempt to resolve such dispute. If no such resolution has
been reached within fifteen days after delivery of the Dispute
Notice, the dispute shall be referred to the Applicable Officer of
Lessee and to the most senior authorized representative of Lessor
charged with the administration of this Lease for resolution. Such
officers shall meet to discuss and attempt to resolve such dispute
within ten days after the expiration of such fifteen day period. If
such parties are unable to agree on an appropriate resolution within
fifteen days after the end of such fifteen day period, both parties
may pursue any rights and remedies they may have hereunder, at law
or in equity, and the Depositary shall hold such amounts in trust
pending the outcome thereof. The failure or refusal of either Lessor
or Lessee to meet and discuss any dispute as provided above shall
entitle the Depositary to immediately disburse the moneys held by it
at the direction of the party not so failing or refusing.
(iii) After reimbursement in respect of a Leased Property pursuant to
clause (ii) above, any remaining Net Award in respect of such Leased
Property shall be paid pursuant to paragraph (b) of Article 13.
(iv) Lessee may direct the investment of the amounts deposited with the
Depositary pursuant to clause (i) above in the following:
(A) repurchase obligations of one or more financial institutions
reasonably acceptable to Lessor at all times fully secured by
direct and general obligations of the United States of America or
obligations guaranteed as to principal and interest by the United
States of America with a maturity date not to exceed 365 days;
(B) direct and general obligations of the United States of
America or obligations guaranteed as to principal and interest by
the United States of America with a maturity date not to exceed
365 days purchased at a price of not more than par;
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(C) certificates of deposit of one or more financial
institutions reasonably acceptable to Lessor at all times insured
by the Federal Deposit Insurance Corporation or collateralized by
obligations of the types described in the foregoing clauses (A)
and (B); or
(D) commercial paper which is rated "A-1" or better (or
comparable ratings) by S&P or "P-1" or better (or comparable
ratings) by ▇▇▇▇▇'▇, or the successors to such rating
organizations.
Such investments of such funds shall mature in such amounts and
on such dates as to provide that amounts sufficient to pay the
amounts requested, and due to, Lessee shall be available on the
due dates. The Depositary shall not be liable for any loss
resulting from the liquidation of any such investment in order to
pay such amounts. Lessee shall be responsible for any loss of
principal as a result of any investments Lessee has directed the
Depositary to make or has made itself in its capacity as the
Depositary.
(c) If at any time during the Term of this Lease, all or "substantially
all" (as defined below) of any Leased Property shall be condemned or taken in
the exercise of the power of eminent domain by any sovereign, municipality or
other public or private authority or shall be damaged or destroyed by fire or
other casualty or if, after any condemnation, taking or casualty of any Leased
Property, and if (i) the Board of Directors of Lessee shall have, in good faith,
determined that such condemnation, taking or casualty has rendered such Leased
Property permanently unsuitable for continued use in Lessee's business for
operations similar to those utilized by Lessee prior to the casualty or
condemnation in question and (ii) Lessee shall have provided to Lessor an
Officer's Certificate to that effect, then so long as there is no Default or
Event of Default continuing hereunder, Lessee may give notice to Lessor of
Lessee's intention to terminate this Lease with respect to such Leased Property.
"Substantially all" of a Leased Property shall be deemed to have been
condemned, damaged, destroyed or taken, as the case may be, if the Board of
Directors of Lessee shall have, in good faith, determined that the remaining
portion of affected Leased Property shall not be of sufficient size or character
to permit the continued operation by Lessee of its business operations on an
economically feasible basis, assuming that such remaining portion had been
repaired and restored to the fullest extent reasonably practicable.
If, pursuant to the foregoing provisions of this paragraph (c) of this
Article 12, Lessee shall have determined not to restore any affected Leased
Property, then Lessee shall give notice to Lessor of Lessee's intention to
terminate this Lease with respect to such Leased Property not later than 120
days after the occurrence of such condemnation or taking or 90 days after the
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occurrence of such casualty (subject to extension by 30 days in the event the
insurer has not notified Lessee within 30 days after the occurrence of any such
casualty regarding the amount of proceeds to be awarded under the applicable
insurance policy), whichever is applicable. Lessee's notice to Lessor shall (i)
contain a description of the relevant condemnation, taking or casualty, (ii)
specify the date on which this Lease shall terminate with respect to such Leased
Property which shall be the Installment Payment Date first occurring at least 60
days after such notice is given (the Termination Date), and (iii) contain the
----------------
irrevocable offer of Lessee to purchase Lessor's interest in such Leased
Property (and, if applicable, the Net Award in respect thereof), on such
Termination Date for the Termination Value with respect to such Leased Property
but not the Reinvestment Premium. If Lessor shall reject any such offer to
purchase by written notice given to Lessee not later than 30 days prior to such
Termination Date, then, subject to the Indenture, this Lease shall terminate
with respect to the affected Leased Property on such Termination Date and the
Net Award, if applicable, in respect of such Leased Property, shall be paid and
belong to Lessor. Unless Lessor shall reject such offer to purchase as provided
in the preceding sentence, Lessor shall be conclusively deemed to have accepted
such offer, and on such Termination Date Lessor shall transfer, and Lessee shall
purchase, Lessor's interest in the affected Leased Property (and the Net Award,
if applicable, in respect thereof) in accordance with the provisions of Article
16 hereof. Upon completion of such purchase, and payment by Lessee of the
Allocable Percentage of the Termination Value with respect to such Leased
Property, the accrued and unpaid Basic Rent due on such Termination Date, any
accrued and unpaid Additional Rent then due, and any other sums owed by Lessee
pursuant to Article 16 hereof, the Net Award in respect of such Leased Property
shall be paid and belong to Lessee. Any Net Award or payment by Lessee of
Termination Value not used for the repair and/or restoration of the affected
Leased Property hereunder shall be used by Lessor to prepay the Notes in
accordance with Article 13(b) hereof and the Indenture.
In the event that this Lease terminates with respect to a Leased Property
as described in this Article 12, Lessee agrees to vacate and use its best
efforts to dispose of such Leased Property and agrees that no use will be made
of such Leased Property in the business of Lessee or any Affiliate thereof for a
period of one year following the date of purchase by Lessee except for a use
involving no substantial structural improvement thereon.
(d) Notwithstanding any other provision to the contrary contained in this
Article 12, in the event of a temporary condemnation with respect to any Leased
Property, this Lease shall remain in full force and effect and Lessee shall be
entitled to the Net Award allocable to such temporary condemnation; except that
any portion of the Net Award allocable to the time period after the expiration
or termination of this Lease with respect to such Leased Property shall be paid
to Lessor unless Lessee shall have purchased such Leased Property in accordance
with the terms hereof, in which case, such portion of the Net Award shall be
paid to Lessee.
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13. Insurance.
---------
(a) Lessee shall, during the Term hereof, at its cost and expense,
maintain or cause to be maintained valid and enforceable insurance of the
following character and shall cause to be delivered to Lessor annual
certificates of the insurers as to such coverage:
(i) "all risks" property insurance (including flood insurance
with respect to any Leased Property located in a flood
hazard zone) covering each Leased Property and all
replacements and additions thereto, and all building
materials and other property which constitute part of any
Leased Property in a manner consistent with insurance
maintained by Lessee on properties similar to the Leased
Properties and in any event in amounts for such Leased
Property not less than the greater of (a) the actual
replacement cost of each Leased Property less land and other
uninsurable items and (b) the Termination Value of such
Leased Property;
(ii) public liability insurance covering legal liability against
claims for bodily injury, death or property damage,
occurring on, in or about each Leased Property and the
adjoining land, streets, sidewalks or ways or occurring as a
result of construction and use and occupancy of facilities
located on each Leased Property or as a result of the
construction thereof or the use of products or materials
manufactured, processed, constructed or sold, or services
rendered, on each Leased Property, in the minimum amount of
$1,000,000 with respect to any one occurrence, accident or
disaster or incidence of negligence and, on each Leased
Property, with umbrella excess liability coverage in the
amount of $50,000,000, which coverage should include
"premises/operations", "independent contractors", and
"blanket contractual" liabilities);
(iii) insurance during the course of any construction or repair of
any Improvements (including construction underway as of the
date hereof) against "all risks", including collapse and
transit coverage, during construction or repair of such
Improvements, covering the total value of work performed and
equipment, supplies and materials furnished, in an amount
equal to the actual replacement cost of such Improvements
less uninsurable items;
(iv) worker's compensation insurance (or other similar insurance
or self insurance program permitted and in compliance with
the laws of the state where each Leased Property is located)
covering all Persons employed in connection with any work
done on or about each Leased Property with respect to which
claims for death or
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bodily injury could be asserted against Lessor, Lessee or
each Leased Property, complying with the laws of the state
where each Leased Property is located; and
(v) such other insurance, in such amounts, against such risks,
and with such other provisions as is customarily and
generally maintained by operators of similar properties of a
financial standing similar to Lessee, including war risk
insurance (at and during such times as war risk insurance is
commonly obtained in the case of property similar to the
Leased Properties), when and to the extent obtainable.
Such insurance shall be written by reputable insurance companies of
recognized financial standing and which are legally qualified to issue such
insurance and shall name Lessee as insured and Lessor, the Indenture Trustee,
Beneficiary, LC Issuer and each Assignee thereof as additional insured with
respect to insurance described in clause (ii) or, to the extent applicable,
clause (v), above, and shall name the Indenture Trustee, as loss payee, for
distribution to itself with respect to insurance described in clauses (i), (iii)
and, to the extent applicable, clause (v) above. Lessee shall obtain all
insurance policies from insurance companies with a General Policy Rating of A:IX
or better in Best's Key Rating Guide. Such insurance may provide for such
deductible amounts of up to $500,000 per occurrence and may be obtained by
Lessee by endorsement on its blanket insurance policies, provided that each
Leased Property shall be separately scheduled so that no loss at any other
property shall reduce the amount payable with respect to such Leased Property.
(b) Any portion of the Net Award remaining after Lessee has repaired any
affected Leased Property pursuant to paragraph (b) of Article 12 shall be
delivered to Lessee, provided that either the fair market value of such Leased
Property after such repair is no less than the fair market value of such Leased
Property immediately prior to the event of loss with respect to which such Net
Award was paid, or that the aggregate amount of (i) such portion of the Net
Award so remaining and (ii) all amounts theretofore paid to Lessee pursuant to
this sentence, does not exceed $250,000. If the fair market value of any
affected Leased Property has been diminished, taking into account any increase
in the fair market value of such Leased Property caused by prior improvements to
such Leased Property made by Lessee as permitted by this Lease or such aggregate
amounts exceed $250,000, the excess shall, at Lessor's election, be retained by
Lessor and applied to the partial prepayment of the principal amount of each of
the Notes of the Series related to such Leased Property, together with accrued
and unpaid interest, but not Reinvestment Premium, and any amounts payable
pursuant to the terms thereof or in respect thereof from such excess amount and
not from any additional funds of Lessee or Lessor on the next Installment
Payment Date. After the retention of any such amount by Lessor, (i) each
installment of Basic Rent payable thereafter shall be reduced by an amount equal
to the amount of the reduction, if any, in payments of interest on the Notes
resulting from the application of
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such retained amount to the partial prepayment of the Notes, and (ii) the Cost
of the Properties, Purchase Price, Termination Values, Maximum Lessor Risk
Amount and Maximum Lessee Risk Amount shall be reduced by amounts that reflect
the reductions, if any, in principal outstanding on the Notes as a result of the
application of such retained amount to the partial prepayment of principal on
the Notes; provided, however, that Basic Rent as so reduced shall be at least
sufficient to pay each installment of interest on the Notes and the Equity
Return when due, and the Purchase Price and Termination Values as so reduced
shall be at least sufficient at all times during the Maximum Lease Term to pay
all outstanding principal and accrued and unpaid interest under the Notes and
the Equity Investment, and, in the case of Purchase Price, the Reinvestment
Premium, if any. The Reinvestment Premium, if any, payable under this Lease
shall at all times during the Maximum Lease Term be sufficient to pay the
Reinvestment Premium as defined in and payable under the Notes plus the
Reinvestment Premium as defined in and payable under this Lease with respect to
the Equity Investment.
(c) In addition to the foregoing, every insurance policy maintained in
accordance with paragraph (a) of this Article 13 which shall name the Indenture
Trustee as loss payee, shall provide that the issuer waives all rights of
subrogation against the Indenture Trustee, and any successor to the Indenture
Trustee's interests in the Leased Property; and every insurance policy
maintained in accordance with clauses (i), (ii), (iii) or (v) of paragraph (a)
of this Article 13 shall: (i) provide that 30 days advance written notice of
cancellation, modification, termination or lapse of coverage shall be given to
Lessor, the Indenture Trustee, LC Issuer, Beneficiary and each Assignee and that
such insurance, as to the interest of Lessor, Indenture Trustee, LC Issuer,
Beneficiary and such Assignee shall not be invalidated by any act or neglect of
such Persons or any other Person, nor by any foreclosure or any other
proceedings relating to any Leased Property, nor by any change in the title
ownership of any Leased Property, nor by use or occupation of any Leased
Property for purposes more hazardous than are permitted by such policy; (ii) be
primary and without right or provision of contribution as to any other insurance
carried by Lessor, any Assignee or any other interested party; and (iii) in the
event any insuring company is not domiciled within the United States of America,
include a United States Service of Suit clause (providing any actions against
the insurer by the named insured, Lessor and any Assignee are conducted within
the jurisdiction of the United States of America).
(d) Nothing in this Article 13 shall prevent Lessee from taking out
insurance of the kind and in the amount provided for under the preceding
paragraphs of this Article under a blanket insurance policy (or certificates
thereof acceptable to Lessor shall be delivered to Lessor) which may cover other
properties owned, operated, leased or occupied by Lessee as well as each Leased
Property; provided, however, that any such blanket insurance of the kind
provided for shall: (i) specifically refer to the Leased Properties as included
in the description of the insured real property and specify therein the amounts
exclusively allocated to the Leased Properties (or Lessee shall furnish Lessor
with a written statement from the insurers under such policies specifying the
amounts of the total insurance exclusively allocated to the Leased Properties);
and
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(ii) not contain any clause which would result in the insured thereunder being
required to create a reserve or carry any insurance with respect to the property
covered thereby in order to prevent the named insureds from becoming a co-
insurer of any loss with the insurer under such policy. Further, such policies
of blanket insurance shall, as respects the Leased Properties, contain the
various provisions required of such an insurance policy by the foregoing
provisions of this Article 13.
(e) Lessee shall not obtain or carry separate insurance concurrent in form
or contributing in the event of loss with that required in this Article 13 to be
furnished by Lessee, unless Lessor, the Indenture Trustee, LC Issuer,
Beneficiary and each Assignee are included therein additional insureds, with
losses payable as in this Lease provided and otherwise complying with the
requirements of paragraph (c) of this Article 13. Lessee shall immediately
notify Lessor whenever any such separate insurance is obtained and shall deliver
to Lessor, the Indenture Trustee, Beneficiary and LC Issuer certificates of
insurers evidencing such insurance.
(f) Lessee shall deliver to Lessor prior to the execution of this Lease
(or in the case of a Leased Property which first becomes subject to this Lease
thereafter, on the Basic Term Commencement Date with respect thereto)
certificates of insurers, evidencing all of the insurance required under
paragraph (a) of Article 13 hereof together with an independent broker's report
to the effect that such broker is familiar with the insurance requirements of
this Lease and the coverages maintained by Lessee and that Lessee is in
compliance with such requirements, in each case satisfactory to Lessor. Lessee
shall, within ten Business Days prior to the expiration of any required
insurance policy, deliver to Lessor, the Indenture Trustee, LC Issuer,
Beneficiary and each Assignee certificates of insurers evidencing the renewal of
any such policy and broker's reports to the same effect. If Lessee fails to
maintain or renew any insurance required by this Lease, or to pay the premium
therefor, or to so deliver any such certificate, then Lessor, at its option, but
without obligation to do so, may, upon five days' notice to Lessee, procure such
insurance. Any sums so expended by Lessor shall be Additional Rent hereunder
and shall be repaid by Lessee within five Business Days after notice to Lessee
of such expenditure and the amount thereof. With respect to any insurance
policy required to be maintained pursuant to this Lease, upon request of Lessor,
the Indenture Trustee, LC Issuer, Beneficiary or any Assignee, Lessee shall
deliver to such Person a copy of such insurance policy or relevant excerpt
thereof, provided that such request is accompanied by a certificate that such
policy or excerpt is needed for the conduct of legal proceedings or other valid
business purposes.
(g) Lessee shall comply with all of the terms and conditions of each
insurance policy maintained pursuant to the terms of this Lease, to the extent
necessary to avoid invalidating such insurance policy or impairing the coverage
available thereunder. In the event of the termination of this Lease as herein
provided or Lessee's abandonment of any Leased Property, the obligations and
liabilities of Lessee with respect to each Indemnified Party, actual or
contingent, under this Article 13, shall survive such termination or
abandonment.
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14. Financial Statements; Other Information.
---------------------------------------
(a) Lessee will deliver, or will cause Guarantor to deliver, to Lessor,
Indenture Trustee and LC Issuer the financial statements and information set
forth in Section 3.1 of the Guaranty. Concurrently with the delivery of annual
financial statements pursuant hereto, Lessee will deliver, or will cause
Guarantor to deliver, to Lessor, the Indenture Trustee and LC Issuer the
officer's certificate set forth in Section 3.2 of the Guaranty that there exists
no Default or Event of Default under this Lease or if any such Default or Event
of Default exists, specifying the nature thereof, the period of existence
thereof and what action Lessee or Guarantor proposes to take with respect
thereto and a certificate substantially in the form of Schedule I hereto. At
any time that the provisions of Section 3.1 of the Guaranty are not effective or
Lessee's financial information is not reflected therein, Lessee shall furnish
the following financial statements to Lessor, the Indenture Trustee and LC
Issuer: (i) at any time that Lessee is a public company, (A) as soon as
practicable, copies of all such financial statements, proxy statements, notices,
other communications and reports as Lessee shall send on a regular basis to its
shareholders and other information, if any, generally made available to banks
and other lenders and (B) copies of all regular, current or periodic reports
(including reports on Form 10-K, Form 8-K and Form 10-Q) which Lessee is or may
be required to file with the Securities and Exchange Commission or any
governmental body or agency succeeding to the functions of the Securities and
Exchange Commission; and (ii) at any time that Lessee is not a public company
required to file reports with the Securities and Exchange Commission containing
such financial statements, as soon as practicable and in any event within 120
days after the end of each fiscal year, and within 60 days after the end of any
other fiscal quarter or shorter period, a consolidated statement of earnings,
and a consolidated statement of changes in financial position, a consolidated
statement of stockholders' equity, and a consolidated balance sheet of Lessee as
at the end of each such year or fiscal quarter or shorter period, setting forth
in each case in comparative form the corresponding consolidated figures from the
preceding annual audit or corresponding fiscal quarter or shorter period in the
prior fiscal year, as appropriate, all in reasonable detail and certified to
Lessee as to the annual consolidated statements by independent public
accountants of recognized national standing selected by Lessee, whose
certificate shall be based upon an examination conducted in accordance with
generally accepted auditing standards and the application of such tests as said
accountants deem necessary under the circumstances. Lessee will keep accurate
records and books of account reflecting all its financial transactions with
respect to this Lease and the transactions contemplated hereby. In addition,
Lessee agrees upon prior written request to meet with ▇▇▇▇▇▇, ▇▇ Issuer, the
Indenture Trustee and any Registered Owners of indebtedness secured by the
Indenture during normal business hours at mutually convenient times, from time
to time as reasonably requested, to discuss this transaction and Lessee's
business and financial condition generally.
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(b) Lessee shall deliver or cause to be delivered to Lessor, Indenture
Trustee and LC Issuer such additional information with respect to Lessee, the
Leased Properties, this Lease and the transactions contemplated hereby, as
Lessor, the Indenture Trustee or LC Issuer may reasonably request from time to
time.
15. The Ground Leases. Lessee acknowledges receipt of each Ground Lease
-----------------
and is familiar with the respective terms thereof. Lessee will, for the benefit
of Lessor, perform all obligations, covenants and agreements to be performed by
the lessee under each of the Ground Leases, including without limitation the
payment of all rent and other amounts due under such agreements and, as between
Lessor and Lessee, Lessor shall have no responsibility for compliance with such
obligations, covenants and agreements. Lessee will at all times do all things
necessary to compel performance by each Ground Lessor of all such Ground
Lessor's obligations, covenants and agreements under the applicable Ground Lease
and will give Lessor notice of all defaults under each Ground Lease, promptly
after obtaining Actual Knowledge thereof. Lessee will not amend, modify or
waive any of the provisions of any of the Ground Leases without the prior
written consent of Lessor, the Indenture Trustee and LC Issuer. In addition to,
and not in limitation of, Lessee's obligations set forth elsewhere in this
Lease, Lessee shall punctually pay and perform for the benefit of Lessor all of
the obligations and liabilities whatsoever of Lessee or Lessor under any
instrument that is a Permitted Encumbrance, including, without limitation,
payment of indemnification of Lessor from and against all claims for which
Lessor is liable thereunder. Lessee represents as of the Basic Term
Commencement Date that each of the Ground Leases is in full force and effect.
16. Purchase Procedure.
------------------
(a) In the event of the purchase of Lessor's interest in any Leased
Property by Lessee pursuant to any provision of this Lease, the terms and
conditions of this Article 16 shall apply.
(b) On the closing date fixed for the purchase of Lessor's interest in any
or all of the Leased Properties:
(i) Lessee shall pay to Lessor, in lawful money of the United States
in immediately available funds, at Lessor's address hereinabove
stated or at any other place in the United States which Lessor
may designate, the Purchase Price pursuant to Article 28 or
Termination Value and related amounts required to be paid
pursuant to paragraph (c) of Article 12, or Articles 22, 37 or
38, whichever is applicable, or, in the case of a purchase of
less than all of the Leased Properties, the Allocable Percentage
thereof; and
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(ii) Lessor shall execute and deliver to Lessee good and sufficient
special warranty deeds, assignments or such other instrument or
instruments as may be appropriate, which shall transfer all of
Lessor's interest in certain or all of the Leased Properties, as
appropriate, including any rights of Lessor against any party
through whom Lessor derived its title to such Leased Properties,
subject to (A) any encumbrances existing on the Basic Term
Commencement Date with respect thereto, (B) Permitted
Encumbrances as defined in clauses (a) through (c), (g) and (h)
of the definition thereof, (C) all liens, encumbrances, charges,
exceptions and restrictions attaching to any Leased Property
after the Basic Term Commencement Date with respect thereto
(other than those created or caused by or through Lessor or
Indenture Trustee without the consent of Lessee), and (D) all
Legal Requirements. In the case of a purchase of Lessor's
interest in any Leased Property by Lessee pursuant to paragraph
(c) of Article 12 hereof, Lessor shall also pay to Lessee the Net
Award, if any, in respect of each such Leased Property and assign
to Lessee all rights to any award not yet received; and
(iii) Lessee shall pay all charges incident to such transfer,
including but not limited to all transfer taxes, recording fees,
title insurance premiums and federal, state and local taxes,
except for any net income or profit taxes of Lessor, the
Indenture Trustee and the Registered Owners of the Notes and
reasonable attorneys' fees and expenses of counsel for Lessor,
the Indenture Trustee and the Registered Owners of the Notes; and
(iv) Lessee shall pay to Lessor all Basic Rent, Additional Rent and
other sums payable by Lessee under this Lease relating to such
Leased Properties, due and payable through the date Lessee
purchases Lessor's interest in such Leased Properties; and
(v) Except as otherwise provided herein, this Lease shall terminate
and be of no further force and effect with respect to each Leased
Property purchased by Lessee pursuant to this Article 16.
(c) Prior to (i) any purchase by Lessee or any third party of fewer than
all of the Leased Properties pursuant to any term or provision of this Lease or
(ii) any purchase by a third party of a Leased Property and substitution
therefor of Leased Properties pursuant to Article 38 of this Lease (whereby a
Substitution Adjustment is required to be paid by Lessee), the following
conditions shall have been satisfied:
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(i) Lessor shall have provided Lessee, at the cost of Lessee, with
revised versions of Schedules ▇, ▇, ▇, ▇, ▇, ▇, ▇, and J and
Appendix I to this Lease, reflecting the changes to be made
therein, taking into account such purchase or substitution and,
if applicable, the payment of any amount payable hereunder
including, without limitation, Article 37(b), or Substitution
Adjustment, all as determined by Lessor, and Lessee shall have
consented to such revised Schedules and Appendix, such consent
not to be unreasonably withheld.
(ii) Lessor shall have received a Lease Supplement in the form of
Schedule H annexed hereto and, if appropriate, a memorandum or
short form of lease with respect thereto, duly authorized,
executed and delivered by Lessee, as lessee, incorporating such
revised Schedule J into this Lease and containing such other
terms as Lessor, Indenture Trustee or Beneficiary or their
respective counsel may reasonably deem necessary or appropriate
by reason of the transactions contemplated by such purchase or
substitution.
17. No Reliance. Lessee hereby acknowledges that in negotiating the
-----------
terms of this Lease, it has sought, obtained and relied exclusively upon such
accounting, actuarial, tax and legal advice from its own or other independent
sources as it has deemed necessary, and further acknowledges that neither
▇▇▇▇▇▇, ▇▇ Issuer, Beneficiary, Placement Agent nor any of ▇▇▇▇▇▇'▇, ▇▇
Issuer's, Beneficiary's or Placement Agent's respective parent, subsidiaries,
affiliates or personnel has represented or warranted the legal, tax, economic,
accounting, or other consequences of the terms and provisions hereof and of the
other related agreements and documents.
18. Quiet Enjoyment. So long as no Default or Event of Default under
---------------
this Lease shall have occurred and be continuing, Lessor covenants (subject to
the first sentence of Article 7) that Lessee shall and may at all times
peaceably and quietly have, hold and enjoy the Leased Properties during the Term
of this Lease. Notwithstanding the preceding sentence, Lessor may exercise its
rights and remedies under paragraph (b) of Article 22 and Lessor, the Indenture
Trustee, LC Issuer, and any registered owners of indebtedness secured by the
Indenture or their agents may enter upon and inspect any Leased Property in
accordance with the provisions of Article 11 hereof. Any failure by Lessor to
comply with the foregoing warranty shall not give Lessee any right to cancel or
terminate the Lease, or to ▇▇▇▇▇, reduce or make deduction from or offset
against any Basic Rent, as hereinafter defined, or Additional Rent or other sum
payable under this Lease, or to fail to perform or observe any other covenant,
agreement or obligation hereunder. Subject to the foregoing sentence, Lessee
shall have the right to obtain injunctive or other relief against Lessor for
breach of the aforesaid covenant of peaceful and quiet possession and enjoyment
of each Leased Property. Lessor shall keep each Leased Property free of Lessor
Liens.
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19. Survival. In the event of the termination of this Lease with
--------
respect to one or more Leased Properties, or all of the Leased Properties, as
herein provided, the obligations and liabilities of Lessor and Lessee, actual or
contingent, under this Lease which arose at or prior to such termination shall
survive such termination.
20. Subletting; Assignment.
----------------------
(a) Notwithstanding anything to the contrary set forth in this Lease,
Lessee shall not, without the prior written consent of Lessor, sublease any
Leased Property or any portion thereof except as set forth in the following
sentence, or assign (including by way of merger, consolidation or change in
control), transfer, mortgage, hypothecate, pledge or otherwise encumber its
leasehold estate hereunder or any of its rights, interests or obligations
hereunder and any attempted sublease, assignment, transfer, mortgage,
hypothecation, pledge or encumbrance by Lessee shall be null and void. So long
as no Event of Default shall have occurred and be continuing, Lessee may
sublease a Leased Property to any Affiliate(s) of Lessee without Lessor's prior
written consent provided, however, (i) each such sublease shall expressly be
made subject to the provisions hereof, (ii) the term of any subletting shall not
extend beyond the Term of this Lease, (iii) no sublease shall affect or reduce
any obligation of the Lessee or right of the Lessor hereunder, (iv) all
obligations of the Lessee hereunder shall continue in full force and effect as
the obligations of a principal and not of a guarantor or surety, as though no
subletting had been made, and (v) Lessee shall deliver to Lessor a copy of the
sublease and such other agreements, instruments, certificates and opinions as
may be reasonably requested by Lessor including, without limitation, an
assignment of such sublease.
(b) Lessor may, at any time, without notice to, or the consent of, Lessee
sell, assign, transfer or grant a security interest in all or any part of
Lessor's rights, obligations, title or interest in, to and under any Leased
Property or any portion thereof, any Ground Lease, this Lease, and/or any Basic
Rent or Additional Rent payable under this Lease. Any entity to whom any such
sale, assignment, transfer or grant of security interest is made is herein
called an "Assignee" and any such sale, assignment, transfer or grant of
security interest is herein called an "assignment". Upon execution and delivery
of any such assignment, Lessor shall be released from its obligations hereunder
thereafter arising, provided, however, that if any such assignment is made as
collateral security, the execution and delivery thereof shall not impair or
diminish any obligations of Lessor hereunder. An Assignee may re-assign and/or
grant a security interest in any of such rights, obligations, title or interest
assigned to such Assignee. Lessee agrees to execute related acknowledgments and
other documents that may be reasonably requested by Lessor or an Assignee.
Lessor agrees that any such assignment will not materially change Lessee's
duties or materially increase its burdens or risks hereunder. Each such
assignment shall be subject to Lessee's rights hereunder so long as no Event of
Default has occurred and is continuing hereunder. Lessee shall be under no
obligation to any Assignee except upon written notice of such assignment from
Lessor or, in the case of a reassignment, from Assignee. Upon
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written notice to Lessee of an assignment, Lessee agrees to pay the Basic Rent
and Additional Rent to such Assignee in accordance with the instructions
specified in such notice without any abatement, defense, setoff, counterclaim or
recoupment whatsoever, and to otherwise comply with all notices, directions and
demands which may be given by Lessor or such Assignee in accordance with the
provisions of this Lease.
21. Advances by Lessor. If Lessee shall fail to make or perform any
------------------
payment or act required by this Lease, then, upon 15 days' notice to Lessee (or
upon shorter notice, or with no notice at all, to the extent necessary to meet
an emergency or a governmental or municipal time limitation or to prevent an
event of default under any mortgage affecting any Leased Property), Lessor may
at its option make such payment or perform such act for the account of Lessee,
and Lessor shall not thereby be deemed to have waived any default or released
Lessee from any obligation hereunder. Amounts so paid by Lessor and all
incidental costs and expenses (including reasonable attorneys' fees and
expenses) incurred in connection with such payment or performance, together with
interest thereon at the Overdue Rate with respect to Additional Rent provided in
Article 3, from the date advanced through the date repaid by Lessee, shall
constitute Additional Rent and shall be paid by Lessee to Lessor on demand.
22. Conditional Limitations -- Events of Default and Remedies.
---------------------------------------------------------
(a) Any of the following occurrences or acts shall constitute an Event of
Default under this Lease and Lessee shall promptly notify Lessor of the
occurrence thereof:
(i) if Lessee shall (A) default in making payment of any installment
of Basic Rent or Additional Rent (other than as provided in (vi)
below) which default shall continue for five days after the same
shall be due or (B) fail to observe or perform any of the
covenants, agreements or obligations of Lessee set forth in
Articles 13, 20, 26, 28 or 30 hereof; or
(ii) if Lessee shall default in the performance of any covenant,
agreement or obligation on the part of Lessee to be performed
under this Lease other than such covenants that are specifically
referred to in the other clauses of this paragraph (a) of Article
22, and such default shall continue for any specific period
expressly provided with respect to such covenant, agreement or
obligation, or if no such specific period is provided, for a
period of 30 days after Actual Knowledge thereof by Lessee;
provided, however, that in the case of a default which can with
reasonable diligence be remedied by Lessee, but not within a
period of 30 days, if Lessee shall promptly commence to remedy
the default and thereafter shall prosecute the remedying of such
default with all reasonable diligence, the period of time after
obtaining such notice of default within which to remedy the
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default shall be extended for such period as may be reasonable to
remedy the same with all reasonable diligence, up to a maximum
period of 90 days after notice of such default from Lessor; and
provided further, that with respect to any contest by Lessee
pursuant to paragraph (d) of Article 6 hereof, any failure to
comply with the conditions precedent to the right to so contest
shall constitute an immediate Event of Default hereunder; or
(iii) if Lessee, Guarantor, or any Person succeeding to Lessee
or Guarantor by merger, consolidation or acquisition of all or
substantially all of its assets, shall file a petition in
bankruptcy or for reorganization or for an arrangement pursuant
to the Bankruptcy Act, or shall be adjudicated a bankrupt or
become insolvent or shall make an assignment for the benefit of
its creditors, or shall admit in writing its inability to pay its
debts generally as they become due, or shall be dissolved, or
shall suspend payment of its obligations, or shall take any
corporate action in furtherance of any of the foregoing; or
(iv) if a petition or answer shall be filed proposing the adjudication
of Lessee, Guarantor or any Person succeeding to Lessee or
Guarantor by merger, consolidation or acquisition of all or
substantially all of its assets as a bankrupt or its
reorganization pursuant to the Bankruptcy Act, and (A) Lessee,
Guarantor or the successor of either shall consent to the filing
thereof, or (B) such petition or answer shall not be discharged
or denied within 60 days after the filing thereof; or
(v) if a receiver, trustee or liquidator (or other similar official)
shall be appointed for or take possession or charge of Lessee,
Guarantor or any Person succeeding to Lessee or Guarantor by
merger, consolidation or acquisition of all or substantially all
of its assets, or of all or substantially all of the business or
assets of Lessee or Guarantor or the successor of either, or of
such successor Person's estate or interest in any Leased
Property, and shall not be discharged within 60 days thereafter,
or if Lessee, Guarantor or the successor of either shall consent
to or acquiesce in such appointment; or
(vi) if Lessee shall fail to pay any Adjustment Price, Termination
Value, Purchase Price, Reinvestment Premium or Maximum Lessee
Risk Amount payable to Lessor as required by this Lease; or
-37-
(vii) if any Leased Property shall have been left unattended, unsecured
and without maintenance in accordance with Article 10 hereof for
a period of 30 consecutive days; or
(viii) if any representation or warranty of Lessee or Guarantor set
forth herein, in the Guaranty, in any other Operative Document or
in any consent, notice, certificate, demand, request or other
instrument delivered by or on behalf of Lessee or Guarantor in
connection with or pursuant to this Lease or the Guaranty shall
prove to have been incorrect or misleading in any material
respect when made; or
(ix) if a final judgment or judgments for the payment of money
aggregating at least $35,000,000 (or such lesser amount
individually or in the aggregate, which may at the time be
applicable to Lessee or Guarantor, as the case may be, with
respect to their other indebtedness) shall be rendered against
Lessee or Guarantor and Lessee or Guarantor, as applicable, shall
not comply with such judgment, or discharge the same or cause it
to be discharged within 30 days from the entry thereof (or until
the expiration of the period in which an appeal may be filed if
such period should be longer), or shall not appeal therefrom or
from the order, decree or process upon which or pursuant to which
said judgment was granted, based or entered, and secure a stay of
execution pending such appeal; or
(x) if (A) Lessee or Guarantor is in default (as principal or as
guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any indebtedness for
borrowed money beyond any period of grace provided without
respect thereto, or (B) Lessee or Guarantor is in default in the
performance of or compliance with any term of any evidence of any
indebtedness for borrowed money or of any mortgage, indenture or
other agreement relating thereto or any other condition exists,
and as a consequence of such default or condition such
indebtedness has become, or has been declared (or one or more
Persons are entitled to declare such indebtedness to be), due and
payable before its stated maturity or before its regularly
scheduled dates of payment, or (C) as a consequence of the
occurrence or continuation of any event or condition (other than
the passage of time or the right of the holder of indebtedness to
convert such indebtedness into equity interests), (1) Lessee or
Guarantor has become obligated to purchase or repay indebtedness
for borrowed money before its regular maturity or before its
regularly scheduled dates of payment, or (2) one or more Persons
have the right to require Lessee or Guarantor so to purchase or
repay such indebtedness, provided that the aggregate amount of
indebtedness affected by the events
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described in clauses (A), (B) and (C) above shall be, without
duplication, at least $35,000,000 (or such lesser amount which
may at the time be applicable to the events described in clause
(A), (B) or (C) above with respect to such other indebtedness);
or
(xi) if Lessee shall fail to surrender any Leased Property as and when
required and in the condition required in accordance with Article
26; or
(xii) if a default shall exist under any Ground Lease which has not
been cured within any cure period applicable under the related
Ground Lease; or
(xiii) if (x) any default shall have occurred and be continuing under
the Assignment of Lease or (y) Guarantor shall default in the due
performance or observance of any covenant, agreement or
obligation on the part of Guarantor in the Guaranty or (z) the
Guaranty or Assignment of Lease shall expire, cease to be in full
force and effect or otherwise terminate or Guarantor or any
Person acting on behalf of Guarantor shall contest in any manner
the validity, binding nature or enforceability of the Guaranty or
the Assignment of Lease.
(b) This Lease and the term and estate hereby granted are subject to the
limitation that whenever an Event of Default shall have occurred and be
continuing, Lessor may, at Lessor's option, elect to (i) lawfully re-enter one
or more of the Leased Properties, without notice, and remove all Persons and
property therefrom, either by summary proceedings or by any suitable action or
proceeding at law, or by other lawful means, without being liable to indictment,
prosecution or damages therefor, and may have, hold and enjoy the Leased
Properties, together with the appurtenances thereto and the improvements
thereon; and/or (ii) terminate this Lease at any time by giving notice in
writing to Lessee, electing to terminate this Lease and specifying the date of
termination, and the Term of this Lease shall expire by limitation at midnight
on the date specified in such notice as fully and completely as if said date
were the date herein originally fixed for the expiration of the Term hereby
granted, and Lessee shall thereupon quit and peacefully surrender the Leased
Properties to Lessor, without any payment therefor by Lessor, and upon the date
following the date specified in such notice, or at any time thereafter, Lessor
may re-enter one or more of the Leased Properties as provided in the preceding
clause (i).
(c) In case of any such re-entry, termination and/or dispossession by
summary proceedings or otherwise as provided in the immediately preceding
paragraph, (i) the Basic Rent and Additional Rent shall become due thereupon and
be paid up to the time of such re-entry, dispossession and/or expiration,
together with such expenses, including reasonable attorneys' fees and
disbursements, as Lessor shall incur in connection with such re-entry,
termination and/or dispossession by summary proceedings or otherwise; and (ii)
Lessor may in good faith relet one
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or more of the Leased Properties or any part or parts thereof (but shall be
under no obligation to do so), either in the name of Lessor or otherwise, for a
term or terms which may, at Lessor's option, be equal to or less than or exceed
the period which would otherwise have constituted the balance of the Term of
this Lease; and (iii) Lessee shall also pay to Lessor the amount by which the
Basic Rent provided for in this Lease exceeds the net amount, if any, of the
rents collected on account of the leases of the Leased Properties for each
monthly portion of the period which would otherwise have constituted the Term of
this Lease (assuming that all renewal options have been exercised such that the
Term of this Lease would expire on the last day of the Maximum Lease Term),
which amounts shall be paid in monthly installments by Lessee on the respective
Installment Payment Dates specified therefor, and any suit brought to collect
said amounts for any monthly period shall not prejudice in any way the rights of
Lessor to collect the deficiency in any subsequent monthly period by a similar
action or proceeding; and (iv) Lessee shall also pay to Lessor all other damages
and expenses which Lessor shall reasonably have sustained by reason of the
breach of any provision of this Lease, including without limitation reasonable
attorneys' fees and expenses, brokerage commissions and expenses incurred in
altering, repairing and putting the Leased Properties and any buildings and
improvements thereon in good order and condition and in preparing the same for
reletting, which expenses shall be paid by Lessee as they are incurred by
Lessor; or (v) at the option of Lessor exercised at any time, Lessor forthwith
shall be entitled to recover from Lessee as liquidated damages, in addition to
any other proper claims but in lieu of and not in addition to any amount which
would thereafter have become payable under the preceding clause (iii), the
Termination Value for the date on which Lessor demands such payment, together
with any accrued and unpaid Basic Rent, Additional Rent and other sums payable
as of the date of such demand by Lessee under this Lease, plus the Reinvestment
Premium, whereupon Lessor shall transfer and convey to Lessee all of Lessor's
right, title and interest in and to the Leased Properties pursuant to the terms
of Article 16. Lessor, at Lessor's option, may make such alterations, repairs or
decorations to the existing Improvements on any Leased Property for uses similar
to those originally intended, as Lessor, in Lessor's sole judgment, considers
advisable and necessary for the purpose of reletting such Leased Property; and
the making of such alterations or decorations shall not operate or be construed
to release Lessee from liability hereunder as aforesaid.
(d) No receipt of moneys by Lessor from Lessee after a termination of this
Lease by Lessor shall reinstate, continue or extend the Term of this Lease or
affect any notice theretofore given to Lessee, or operate as a waiver of the
right of Lessor to enforce the payment of Basic Rent and Additional Rent, and
any Purchase Price, Termination Value, Maximum Lessee Risk Amount or related
amounts to be paid by Lessee to Lessor for the purchase or surrender of the
Leased Properties then due or thereafter falling due, it being agreed that after
the commencement of suit for possession of the Leased Properties, or after final
order or judgment for the possession of the Leased Properties, Lessor may
demand, receive and collect any moneys due or thereafter falling due without in
any manner affecting such suit, order or judgment, all such moneys collected
being deemed payments on account of the use and occupation of the Leased
Properties
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or, at the election of Lessor, on account of Lessee's liability hereunder.
Lessee hereby waives any and all rights of redemption provided by any law,
statute or ordinance now in effect or which may hereafter be enacted. Lessor
shall have, receive and enjoy as Lessor's sole and absolute property, without
right or duty to account therefor to Lessee unless Lessee makes payments of
Basic Rent to Lessor pursuant to clause (iii) of paragraph (c) of Article 22 in
which event Lessor shall account for such payments to Lessee in writing and such
accounting shall be deemed conclusive absent manifest error by Lessor, any and
all sums collected by Lessor as rent or otherwise upon reletting any Leased
Property after Lessor shall resume possession thereof as hereinbefore provided,
including, without limitation upon the generality of the foregoing, any amounts
by which the sum or sums so collected shall exceed the continuing liability of
Lessee hereunder.
(e) The word "re-enter", as used in this Lease, is not and shall not be
restricted to its technical legal meaning, but is used in the broadest sense
under applicable law. No such taking of possession of any Leased Property by
Lessor shall constitute an election to terminate the Term of this Lease unless
notice of such intention be given to Lessee or unless such termination be
decreed by a court having jurisdiction.
(f) If an action shall be brought for the enforcement of any provision of
this Lease, Lessee shall pay to Lessor and each Assignee all out-of-pocket costs
and expenses which may become payable as a result thereof, including reasonable
attorneys' fees and expenses.
(g) No right or remedy herein conferred upon or reserved to Lessor is
intended to be exclusive of any other right or remedy, and every right and
remedy shall be cumulative and in addition to any other legal or equitable right
or remedy given hereunder, or at any time existing. The failure of Lessor to
insist upon the strict performance of any provision or to exercise any option,
right, power or remedy contained in this Lease shall not be construed as a
waiver or a relinquishment thereof for the future. Receipt by Lessor of any
Basic Rent or Additional Rent or any other sum payable hereunder with knowledge
of the breach of any provision contained in this Lease shall not constitute a
waiver of such breach, and no waiver by Lessor of any provision of this Lease
shall be deemed to have been made unless made under signature of an authorized
representative of Lessor.
23. Notices. All notifications, notices, demands, requests and other
-------
communications herein provided for or made pursuant hereto shall be in writing
and shall be sent by (i) registered or certified mail, return receipt requested,
and the giving of such communication shall be deemed complete on the third
Business Day after the same is deposited in a United States Post Office with
postage charges prepaid, (ii) reputable overnight delivery service, and the
giving of such communication shall be deemed complete on the immediately
succeeding Business Day after the same is deposited with such delivery service
or (iii) legible fax with original to follow in
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accordance with clause (ii) above, and the giving of such communication shall be
complete upon confirmation of receipt:
(a) if to Lessor, addressed to such party at c/o First Security Bank,
N.A., ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attn:
Corporate Trust Administration, or at such other address in the
continental United States as Lessor may furnish to Lessee in writing,
or
(b) if to Lessee, addressed to such party at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Assistant
Treasurer, with a copy to the Legal Department, or at such other
address in the continental United States as Lessee may furnish to
Lessor in writing.
24. Estoppel Certificates. Each party hereto agrees that at any time
---------------------
and from time to time during the term of this Lease, it will promptly, but in no
event later than 21 days after request by the other party hereto, execute,
acknowledge and deliver to such other party or to any prospective purchaser,
assignee or mortgagee designated by such other party, a certificate stating, to
the best of such party's knowledge, (a) that this Lease is unmodified and in
full force and effect (or if there have been modifications, that this Lease is
in full force and effect as modified, and setting forth any modifications); (b)
the date to which Basic Rent, Additional Rent and other sums payable hereunder
have been paid; (c) whether or not there is an existing Default by Lessee in the
payment of Basic Rent or any other sum of money due or required to be paid
hereunder, and whether or not there is any other existing Default by Lessee with
respect to which a notice of Default has been delivered or of which the signer
has Actual Knowledge, and, if there is any such Default, specifying the nature
and extent thereof; (d) whether or not there are any setoffs, defenses or
counterclaims against enforcement of the obligations to be performed hereunder
existing in favor of the party executing such certificate; and (e) stating that
Lessee is in possession of the Leased Properties or setting forth the parties in
possession and identifying the instruments pursuant to which they took
possession.
25. No Merger. Lessee agrees that there shall be no merger of this Lease
---------
or of any sublease under this Lease or of any leasehold or subleasehold estate
hereby or thereby created with the fee or any other estate or ownership interest
in any Leased Property or any part thereof by reason of the fact that the same
person, firm, corporation or other entity may acquire or own or hold, directly
or indirectly, (a) this Lease or any sublease or any leasehold or subleasehold
estate created hereby or thereby or any interest in this Lease or any such
sublease or in any such leasehold or subleasehold estate and (b) (i) the fee
estate or other estate or ownership interest in any Leased Property or any part
thereof or (ii) the Beneficial Interest, and this Lease shall not be terminated
for any cause except as expressly provided herein and any instrument of transfer
shall so provide.
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26. Surrender and Return.
--------------------
(a) Upon the expiration or earlier termination of the Term of this Lease
with respect to each Leased Property, and provided that Lessee, if so entitled,
has not exercised its option to purchase the Leased Properties pursuant to
Article 28 or otherwise hereunder, Lessee shall peaceably leave and surrender
and return each Leased Property to Lessor in the same condition in which such
Leased Property existed on the Basic Term Commencement Date with respect thereto
or any other Improvements (including any Additions that constitute part of the
Improvements) acquired and constructed pursuant to this Lease, except as
completed, repaired, rebuilt, restored, altered or added to as required by or
permitted by any provision of this Lease (ordinary wear and tear and the
consequences of casualty described in paragraph (c) of Article 12 hereof,
condemnation or taking excepted). Lessee shall remove from each Leased Property
on or prior to such expiration or earlier termination all property situated
thereon which is not the property of Lessor, and each Leased Property shall be
broom clean and Lessee shall repair any damage caused by such removal. Property
not so removed shall become the property of Lessor, and Lessor may cause such
property to be removed from the Leased Properties and disposed of, and Lessee
shall pay the reasonable cost of any such removal and disposition and of
repairing any damage caused by such removal.
(b) Except for surrender upon the expiration or earlier termination (due
to the exercise of remedies under Article 22 hereof) of the Term hereof, no
surrender to Lessor of this Lease or of any Leased Property shall be valid or
effective unless agreed to and accepted in writing by Lessor. At the request of
Lessor, Lessee shall execute, deliver and furnish such instruments, agreements,
releases, deeds, assignments, instruments, certificates and opinions as may be
necessary or desirable to effect the release and/or transfer by Lessee of its
right, title and interest in and to the Leased Properties to Lessor.
(c) Without limiting the generality of the foregoing, upon the surrender
and return of any Leased Property to Lessor pursuant to this Article 26, such
Leased Property shall (i) be capable of being immediately utilized by a third-
party purchaser or third-party lessee without further inspection, repair,
replacement, alterations or improvements, licenses, permits, or approvals,
except for any of the foregoing required solely by virtue of the change in
ownership (other than to Lessor), use or occupancy of such Leased Property, (ii)
be in accordance and compliance with all Legal Requirements and Environmental
Laws including, without limitation, any of the foregoing required by virtue of a
change in ownership, use or occupancy of such Leased Property other than to
Lessee, (iii) be free and clear of any charge, lien, security interest or
encumbrance except for Permitted Encumbrances described in clauses (a), (c) and
(g) through (i) of the definition thereof, any liens for taxes, assessments and
other governmental charges, which are not then due and payable and which are not
allocable to the period before the date of termination or expiration of this
Lease, and Lessor Liens and any other liens or encumbrances
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arising solely from any acts or omissions of Lessor or anyone claiming by,
through or under Lessor, without the consent of Lessee. Until each Leased
Property has been surrendered and returned to Lessor in accordance with the
provisions of this Article 26, Lessee shall continue to pay Lessor all Basic
Rent and Additional Rent due hereunder.
(d) On or prior to the date of such surrender and return of any Leased
Property, Lessor shall have received from Lessee, at Lessee's expense, (i)
evidence satisfactory to Lessor of compliance with the provisions of this
Article 26, including without limitation, a "Phase I" and update thereto, if
applicable, or then comparable environmental assessment for such Leased Property
addressed and in form and substance satisfactory to Lessor and LC Issuer or, in
lieu of addressing such assessment to Lessor, accompanied by a letter permitting
Lessor and LC Issuer to rely thereon, performed by an independent, licensed
professional engineer satisfactory to Lessor and LC Issuer and which assessment
(w) shall be sufficient in scope to determine compliance with the then
applicable Environmental Laws, (x) shall reveal no actual or potential
environmental liabilities which cannot be remediated by the Lessee in compliance
with all applicable Legal Requirements and Environmental Laws and to the
satisfaction of Lessor and LC Issuer, and (y) if such environmental assessment
reveals the need for additional review, Lessee shall have provided such
additional information or environmental assessments as are required by Lessor
and LC Issuer and any remediation recommended therein to be performed shall have
been performed in compliance with all applicable Legal Requirements and
Environmental Laws and to the reasonable satisfaction of Lessor and LC Issuer,
and evidence of compliance with Article 26(c)(ii) shall have been provided and
(ii) an Appraisal indicating that the Allocable Percentage of the Purchase Price
applicable to such Leased Property at such time is equal to or greater than the
fair market value of such Leased Property.
(e) Lessee acknowledges and agrees that a breach of any of the provisions
of this Article 26 may result in damages to Lessor that are difficult or
impossible to ascertain and that may not be compensable at law. Accordingly,
upon application to any court of equity having jurisdiction over any Leased
Property, Lessor shall be entitled to a decree against Lessee requiring specific
performance of the covenants of Lessee set forth in this Article 26 with respect
to such Leased Property.
(f) Upon the request of the Lessor, Lessee shall continue to maintain its
insurance policies for the Leased Properties, to the extent permitted by such
policies, provided that Lessor pays or reimburses Lessee for the pro rata cost
thereof and, provided further that, no third party has purchased such Leased
Property from Lessor.
27. Separability. Each provision contained in this Lease shall be
------------
separate and independent and the breach of any such provision by Lessor shall
not discharge or relieve Lessee from its obligation to perform each obligation
of this Lease to be performed by Lessee. If any provision of this Lease or the
application thereof to any Person or circumstance shall to any extent be invalid
and unenforceable, the remainder of this Lease, or the application of such
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provision to persons or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby, and each provision of this
Lease shall be valid and shall be enforceable to the extent permitted by law.
28. Lessee's End of Term Purchase Options.
-------------------------------------
(a) If (i) no Default or Event of Default hereunder shall have occurred
and be continuing and (ii) this Lease shall not have been earlier terminated or
renewed (with respect to the next succeeding Renewal Term) by Lessee pursuant to
Article 2 hereof, Lessee shall be entitled, upon notice to Lessor as hereinafter
provided, to purchase Lessor's interest in all, but not less than all, of the
Leased Properties on the last day of the Basic Term or the then current Renewal
Term, as the case may be, for an amount, payable in immediately available
federal funds, equal to the Purchase Price at the end of the Basic Term or the
then current Renewal Term, as applicable. If Lessee intends to exercise its
purchase option granted hereunder with respect to the end of the Basic Term or
the end of the first Renewal Term, it shall give notice to Lessor to such effect
in the applicable Termination Notice in accordance with the provisions of
paragraph (b) of Article 2 hereof. If the Lessee intends to return and
surrender all of the Leased Properties at the end of the final Renewal Term, it
shall give notice thereof to Lessor at least 180 days prior to the end of such
Renewal Term, otherwise Lessee shall have been conclusively deemed to have
exercised its option to purchase the Leased Properties, without the need for any
further writing. If Lessee gives such notice to Lessor, the same shall
constitute a binding obligation of Lessee to purchase each and every Leased
Property and to pay Lessor the Purchase Price on the Term Termination Date
thereof. Any purchase by Lessee pursuant to this Article 28(a) shall be
consummated in accordance with the terms of Article 16 hereof.
(b) If, upon the expiration of the Basic Term or any Renewal Term of this
Lease, Lessee does not either (i) exercise its option to purchase the Leased
Properties pursuant to paragraph (b) of Article 2 hereof and paragraph (a) of
this Article 28 or been deemed to have exercised such option, under paragraph
(a) of this Article 28, or (ii) extend, if applicable, the Term of this Lease
pursuant to paragraph (b) of Article 2 hereof, Lessor shall have the right, and
Lessee shall have the obligation, as agent for Lessor (during the last 180 days
of the relevant Term (the Remarketing Period)), to use best efforts to obtain
------------------
bona fide cash bids for each Leased Property from prospective purchasers who are
financially capable of purchasing each Leased Property for cash in accordance
with the terms of this Lease. Upon the request of Lessor and at Lessee's sole
cost and expense, Lessee shall provide Lessor with a written report describing
in reasonable detail Lessee's efforts during the Remarketing Period to obtain
bona fide bids for the purchase of each Leased Property, including, without
limitation, a list of all brokers retained and Persons approached for the
purpose of soliciting bids to purchase such Leased Property. All bids received
by Lessor or Lessee prior to the end of the then current Term shall be certified
by Lessor or Lessee, as the case may be, in writing, stating the name and
address of the bidder and the
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amount of such bid. Notwithstanding the foregoing, Lessor and LC Issuer shall
have the right, but not the obligation, to seek bids for any Leased Property
during the Remarketing Period.
Not later than the applicable Term Termination Date, Lessor agrees to sell
each Leased Property to the cash bidder submitting the highest bid, in
accordance with the terms of Article 16 of this Lease, with such changes as are
necessary to reflect that the sale was to a third party and not Lessee;
provided, however, that (x) any such sale to a third party shall be consummated,
-------- -------
and the sales price for each Leased Property shall be paid to Lessor in
immediately available funds, at Lessor's address hereinabove stated or at any
other place in the United States which Lessor may designate, on or before the
Term Termination Date; and (y) Lessor shall not be obligated to, and Lessor
shall not without the prior written consent of LC Issuer, consummate any
proposed sale of the Leased Properties if (I) the aggregate Net Proceeds from
the sale of the Leased Properties would be less than the Maximum Lessor Risk
Amount as of the applicable Term Termination Date, or (II) if Lessor has not
received the amounts, if any, payable by Lessee pursuant to paragraph (a) of
Article 30 and, if applicable, paragraph (c) of Article 30. After any such sale
with respect to the Leased Properties, the provisions of paragraphs (a) and (c)
of Article 30 shall apply.
29. Signs; Showing. If Lessee has not renewed this Lease for a Renewal
--------------
Term or given timely notice of its intention to purchase Leased Properties or
been deemed to have exercised its option to purchase the Leased Properties
pursuant to paragraph (a) of Article 28 on the Term Termination Date, during the
Remarketing Period, Lessor may, subject to all applicable governmental laws,
restrictive covenants, rules and regulations and without unreasonably
interfering with Lessee's business operations, (a) place signs in, on and around
the Leased Properties advertising that the same will be available for rent or
purchase, and (b) upon not less than 24 hours notice to Lessee, show the Leased
Properties to prospective lessees or purchasers at such reasonable times during
normal business hours as Lessor may elect. Lessee will be responsible for
hiring one or more brokers, whose services shall be compensated on a commission
basis, and making the Leased Properties available for inspection by prospective
purchasers. Lessee shall promptly upon notice permit inspection of the Leased
Properties and any maintenance records relating to the Leased Properties by the
Lessor and LC Issuer and any potential purchasers, during normal business hours
or otherwise upon reasonable request, and shall otherwise do all things
necessary to sell and deliver possession of the Leased Properties to any
purchaser. All such marketing fees, commissions, costs and expenses of the
Leased Properties shall be included among the deductions set forth in clause
(ii) of the definition of Net Proceeds.
30. End of Term Adjustment. (a) The provisions of this paragraph (a)
----------------------
shall apply only if a sale of the Leased Properties to a third party pursuant to
paragraph (b) of Article 28 has been consummated on or before the applicable
Term Termination Date. If the Net Proceeds following a sale of the Leased
Properties sold in accordance with paragraph (b) of Article 28
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hereof are less than the Purchase Price for the Leased Properties on the
applicable TermTermination Date as set forth in paragraph (a) of Article 28
hereof, Lessee shall, by 9:30 a.m. Eastern Time on such Term Termination Date,
pay to Lessor, by wire transfer of immediately available federal funds, an
amount equal to such deficiency (the Adjustment Price) plus accrued and unpaid
----------------
Basic Rent, if any, due and payable on the applicable Term Termination Date,
plus any Additional Rent then due and owing to Lessor hereunder; provided,
--------
however, that if all of the Limited Lessee Risk Conditions have been satisfied
-------
and a certification to such effect shall have been delivered by Lessee to Lessor
and the Indenture Trustee on or before 9:30 a.m. Eastern time on the Term
Termination Date, the amount of the Adjustment Price payable by Lessee shall not
exceed the then applicable Maximum Lessee Risk Amount; otherwise, if any Limited
Lessee Risk Condition is not met, Lessee shall make the payments specified under
Article 30(b). If the Net Proceeds following such a sale pursuant to paragraph
(b) of Article 28 on or before the end of the Maximum Lease Term with respect to
the Leased Properties exceed the Purchase Price for the Leased Properties, and
if all of the Limited Lessee Risk Conditions have been satisfied and a
certification to such effect shall have been delivered by Lessee to Lessor and
the Indenture Trustee, and Lessee shall have paid to Lessor all amounts due and
payable on or before the Term Termination Date including all Basic Rent,
Additional Rent and all amounts due under paragraphs (a) or (c) of this Article
30, then Lessor shall, on the Term Termination Date, pay to Lessee by wire
transfer of immediately available federal funds, an amount equal to such excess,
as an adjustment to the Basic Rent payable under this Lease; provided, however,
that Lessor shall have the right to offset against such adjustment payable by
Lessor, any amounts then due and payable from Lessee to Lessor hereunder.
(b) If this Lease expires or terminates on a Term Termination Date and a
sale of the Leased Properties to Lessee pursuant to paragraph (a) of Article 28
or to a third party pursuant to paragraph (b) of Article 28 has not been
consummated on or before the applicable Term Termination Date for any reason,
then Lessee shall, by 9:30 a.m. Eastern Time on the applicable Term Termination
Date, pay to Lessor by wire transfer of immediately available funds, an amount
equal to (i) the Maximum Lessee Risk Amount, if all of the Limited Lessee Risk
Conditions have been met and Lessee shall have delivered the certifications
described in Article 30(a) on or before 9:30 a.m. Eastern time on such Term
Termination Date, or (ii) the Termination Value, if one or more of the Limited
Lessee Risk Conditions have not been met as of such Term Termination Date, plus,
in either case, the Basic Rent due and payable on the Term Termination Date,
plus all Additional Rent then due and owing for all of the Leased Properties.
Lessee shall promptly vacate the Leased Properties and surrender them to Lessor
on the Term Termination Date in accordance with the provisions of this Lease,
including Article 26. Notwithstanding the termination of this Lease with
respect to the Leased Properties, Lessee shall remain liable for the payment of
all applicable sales, excise and other taxes imposed as a result of the sale of
the Leased Properties, other than Excluded Taxes. This obligation shall survive
the termination of this Lease with respect to the Leased Properties, and upon
the consummation of the sale of any Leased Property at any time after the Term
Termination Date, Lessee shall pay on
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demand, or reimburse Lessor on demand for the payment of, all such sales, excise
and other taxes applicable to such Leased Property. In the event of any such
sale of any Leased Property at any time after the Term Termination Date with
respect thereto, Lessor shall retain the full proceeds of such sale.
(c) In the event that the Term Termination Date occurs prior to the last
day of the Maximum Lease Term, Lessee shall pay to Lessor by 9:30 a.m. Eastern
Time on such Term Termination Date, in addition to any Adjustment Price,
Termination Value or Maximum Lessee Risk Amount then payable pursuant to
paragraph (a) or paragraph (b) of this Article 30 and all other obligations
hereunder, an amount equal to the Reinvestment Premium.
(d) The provisions of Articles 28 and 30 are of the essence of this Lease,
and time is of the essence for payment and performance of the obligations of
Lessee set forth therein.
31. Nature of Lessor's Obligations; Limitations on Liability. Anything in
--------------------------------------------------------
this Lease to the contrary notwithstanding, except as otherwise provided herein,
it is understood and agreed that (irrespective of any breach of any
representation, covenant, agreement or undertaking of any nature whatsoever made
in this Lease), no recourse shall be had under any rule of law, statute or
constitution or by the enforcement of any assessments or penalties or otherwise
for the payment of any sum hereunder or for any other claim hereunder against
(i) Lessor, Beneficiary or any past, present or future Affiliate, partner,
officer, director, any owner, shareholder, agent or employee of or in any
thereof or of any partner thereof or their legal representatives, successors or
assigns, (ii) any corporation, partnership (or any partner thereof), entity or
individual to which the Leased Properties, or any part thereof, shall have been
transferred or (iii) any Person for whom Lessor or Beneficiary was acting as an
agent for the account and benefit of such Person in entering into the
transactions evidenced by this Lease, and that such Person was or was alleged to
be the principal of Lessor. It is expressly understood that by the execution of
this Lease all such liability (a) of Lessor or Beneficiary or any past, present
or future Affiliate, partner, officer, director, any shareholder, agent or
employee thereof or director or shareholder of any partner thereof or any of
their respective legal representatives, successors or assigns, (b) of any such
corporation, partnership, individual or partner or (c) of such other Person, is
and is being expressly waived and released as a condition of and as a
consideration for the execution of this Lease by Lessor, that Lessee and its
successors and assigns as lessee hereunder agree to look solely to the Leased
Properties for the payment of any such sums or satisfaction of any such other
claims. The provisions of this Article 31 shall survive the termination of this
Lease.
32. Granting of Easements, Etc. If no Default or Event of Default
--------------------------
hereunder has occurred and is continuing, Lessor shall from time to time upon
the written request of Lessee join with Lessee (and at Lessee's sole cost and
expense), with respect to their interests in the Leased Properties to (i) grant
easements, licenses, rights of way and other rights and privileges in the nature
of easements for the purposes of providing utilities and the like to the Leased
Properties or
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for purposes of operating the Leased Properties and adjacent properties (such as
office park reciprocal easement agreements and the like), (ii) release existing
easements and appurtenances relating to the provision of utilities and the like
to the Leased Properties or for purposes of operating the Leased Properties and
adjacent properties (such as office park reciprocal easement agreements and the
like) and (iii) execute and deliver any instrument, in form and substance
reasonably acceptable to Lessor, necessary or appropriate to make or confirm
such grants or releases to any Person, with or without consideration, provided
that such grant or release does not (x) interfere with and is not detrimental to
the conduct of business on the affected Leased Property, (y) impair the
usefulness or useful life of such Leased Property or (z) impair the fair market
value of such Leased Property or cause a default under any other agreement to
which Lessee is a party or benefitting such Leased Property which default would
be reasonably likely to have an adverse effect on the usefulness or useful life
of such Leased Property or impair the fair market value of such Leased Property
and shall have delivered such other instruments, certificates, surveys, title
insurance policy endorsements and opinions of counsel as Lessor, the Indenture
Trustee or LC Issuer may reasonably request; and provided further that Lessor,
the Indenture Trustee and LC Issuer shall have the right, but not the
obligation, to obtain an independent Appraisal, at the expense of the Person
requesting such Appraisal, to verify the certification of Lessee as to the
effect of the proposed action on fair market value and if such Appraisal
concludes that the proposed action will impair the fair market value of the
affected Leased Property by 1% or more, Lessee shall reimburse Lessor, the
Indenture Trustee and LC Issuer, as applicable, for the costs of such Appraisal
and Lessor, the Indenture Trustee and LC Issuer shall either withhold its
consent or condition its consent upon payment by Lessee of an amount equal to
the diminution of fair market value. Any such request by Lessee shall be
accompanied by an Officer's Certificate as to compliance with the conditions set
forth in the foregoing clauses (x), (y) and (z).
33. Lessee's Representations and Warranties. Lessee hereby represents
---------------------------------------
and warrants that as of the Basic Term Commencement Date (a) Lessee is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation set forth above, and is qualified to do business
in, and is in good standing in, each state or other jurisdiction in which the
nature of its business makes such qualification necessary (including, without
limitation, the Commonwealth of Virginia); (b) Lessee has the corporate power
and authority to execute and perform this Lease and to lease the Leased
Properties hereunder, and has duly authorized the execution, delivery and
performance of this Lease; (c) the leasing of the Leased Properties from Lessor
by Lessee, the execution and delivery of this Lease and any documents or
instruments related hereto, and the compliance by Lessee with the terms hereof
and thereof, and the payments and performance by Lessee of all of its
obligations hereunder and thereunder (i) have been duly and legally authorized
by appropriate corporate action taken by Lessee, (ii) are not in contravention
of, and will not result in a violation or breach of, any of the terms of
Lessee's Certificate of Incorporation (or equivalent document), its By-Laws, or
of any provisions relating
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to shares of the capital stock of Lessee, and (iii) will not violate or
constitute a breach of any applicable provision of law, any applicable order of
any court or other agency of government, or any indenture, agreement or other
instrument to which Lessee is a party, or by or under which Lessee or any of
Lessee's property is bound, or be in conflict with, result in a breach of, or
constitute (with due notice and/or lapse of time) a default under any such
indenture, agreement or instrument, or result in the creation or imposition of
any Lien upon any of Lessee's property or assets; (d) this Lease and all other
documents or instruments related hereto have been executed by the duly
authorized officer or officers of Lessee and delivered to Lessor and are the
legal, valid and binding obligations of Lessee, enforceable in accordance with
their terms except as certain rights and remedies set forth herein may be
limited by bankruptcy, reorganization and similar laws of general application
relating to or affecting the enforcement of Lessors' rights and general
principles of equity; (e) neither the execution and delivery of this Lease and
all other documents and instruments related hereto, nor the payment and
performance by Lessee of all of its obligations hereunder and thereunder,
requires the consent or approval of, the giving of notice to, or the
registration, filing or recording with, or the taking of any other action in
respect of, any federal, state, local or foreign government or governmental
authority or agency or any other Person; (f) no mortgage, deed of trust, or
other Lien which now covers or affects, or which may hereafter cover or affect,
any property or interest therein of Lessee, now attaches or hereafter will
attach to the Leased Properties or any portion thereof, the proceeds thereof or
this Lease, or in any manner affects or will affect adversely Lessor's rights
and security interest therein; (g) Lessee holds all licenses, certificates and
permits from governmental authorities necessary to use and operate the Leased
Properties in accordance with the provisions of this Lease; (h) there is no
litigation or other proceeding now pending or, to the best of Lessee's Actual
Knowledge, threatened, against or affecting Lessee, in any court or before any
regulatory commission, board or other administrative governmental agency which
would directly or indirectly adversely affect or impair the title of Lessor to
the Leased Properties, or which, if decided adversely to Lessee, would
materially adversely affect the business operations or financial condition of
Lessee; (i) all balance sheets, statements of profit and loss and other
financial data that have been delivered to Lessor with respect to the Guarantor
or Lessee, as applicable, (x) are complete and correct in all material respects,
(y) accurately present the financial condition of Lessee on the dates for which,
and the results of its operations for the periods for which, the same have been
furnished, and (z) have been prepared in accordance with GAAP consistently
followed throughout the periods covered thereby; and there has been no material
adverse change in the condition of Lessee, financial or otherwise, since the
date of the most recent financial statements delivered to Lessor with respect to
Lessee; (j) no default or event of default has occurred and is continuing under
the Interim Trust Agreement, as defined in the Sale and Assignment Agreement (BI
Interests); and (k) on or before the Basic Term Commencement Date, all existing
indebtedness owed by Lessor in accordance with the Interim Trust Agreement shall
have been paid or satisfied.
34. Recording. Lessor and Lessee will execute, acknowledge, deliver and
---------
cause to be recorded or filed in the manner and place required by any present or
future law, a memorandum
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of this Lease and all other instruments, including, without limitation,
financing statements, continuation statements, releases, deeds of conveyance
(upon surrender and return, if necessary) and instruments of similar character,
which shall be reasonably requested by Lessor, the Indenture Trustee or LC
Issuer as being necessary or appropriate in order to protect their respective
interests in the Leased Properties. Lessee shall pay all recording and filing
fees and taxes, stamp taxes, mortgage or lease taxes, and other costs of such
recordation and filing. If Lessee shall fail to comply with this Article 34,
Lessor shall be and is hereby irrevocably appointed the agent and attorney-in-
fact of Lessee to comply therewith, but this sentence shall not prevent any
default in the observance of this Article 34 by the Lessee from constituting an
Event of Default in accordance with the provisions of paragraph (a)(ii) of
Article 22 hereof.
35. Miscellaneous. This Lease embodies the entire agreement between
-------------
Lessor and Lessee relating to the subject matter hereof and supersedes all prior
agreements and understandings relating to such subject matter. This Lease shall
be binding upon and shall inure to the benefit of and be enforceable by the
parties hereto and their respective successors and assigns permitted hereunder.
No term or provision hereof may be amended, changed, waived, discharged or
terminated orally, but only by an instrument specifically evidencing an intent
to amend signed by the party against whom enforcement thereof is sought and with
the prior written consent of the Indenture Trustee and LC Issuer. No failure,
delay, forbearance or indulgence on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, or as an
acquiescence in any breach, nor shall any single or partial exercise of any
right, power or remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. Any provision of this
Lease which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. This Lease and
the rights and obligations in respect hereof shall be governed by, and construed
and interpreted in accordance with, the laws of the State of New York, except to
the extent that in seeking to enforce this Lease with respect to a Leased
Property and to the extent any other rights and obligations hereunder are
required to be governed under the laws of the state in which such Leased
Property is located, the laws of the state in which such Leased Property is
located shall apply, notwithstanding the express intent of the parties hereto.
Lessee hereby agrees to non-exclusive personal jurisdiction and venue in the
state courts of the State of New York and the United States District Court for
the Southern District of New York. All headings are for reference only and
shall not be considered as part of this Lease. This Lease may be executed in
any number of counterparts, each of which shall be an original, and such
counterparts together shall constitute but one and the same instrument. Lessee
may cause to be performed any obligation of Lessee under this Lease in lieu of
performing such obligation itself.
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The Indenture Trustee, Beneficiary, the Registered Owners and LC Issuer
shall be third party beneficiaries of this Lease with respect to those
provisions that explicitly or implicitly are for the benefit of the Indenture
Trustee, Beneficiary, the Registered Owners or LC Issuer.
The dating of this Lease "as of October 14, 1998" is for convenience of
reference only, and this Lease shall become effective only upon its execution
and delivery by Lessor and Lessee.
To the extent that this Agreement is characterized as being a financing
transaction, Lessor and Lessee hereby acknowledge and agree as follows: (1)
the amount of interest shall be equal to the aggregate amount of Basic Rent due
under this Lease (the Payments); (2) Lessee has been informed of the Cost of the
--------
Properties or, in the alternative, acknowledges that it has been given an
opportunity to determine the Cost of the Properties; (3) the rate of interest
agreed to and specified by Lessor and Lessee in such event shall be that rate
per annum that may be calculated based upon the Cost of the Properties (i.e. the
principal amount) and the Payments (i.e., the interest payments); and (4) if the
rate of interest so calculated is ever deemed to exceed the maximum rate
permitted by applicable law, then the Payments shall be automatically reduced to
ensure that such rate of interest does not exceed the maximum rate permitted by
applicable law.
36. Ownership of the Leased Properties.
----------------------------------
(a) Lessor and Lessee intend that (i) for financial accounting purposes
with respect to Lessee, this Lease will be treated as an "operating lease"
pursuant to Statement of Financial Accounting Standards No. 13, as amended, but
(ii) for federal and all state and local tax purposes and bankruptcy, commercial
law and real estate purposes and all other purposes (A) this Lease will be
treated as a financing arrangement, (B) Lessor will be deemed a lender making a
loan for the benefit of the Lessee, which loan is secured by all of the Leased
Properties, and (C) Lessee will be treated as the owner of all of the Leased
Properties and will be entitled to all tax benefits ordinarily available to an
owner of a property similar to the Leased Properties for such tax purposes. So
long as no Event of Default shall have occurred, Lessor will take no action
inconsistent with such intent for tax purposes provided, that nothing in this
Article 36 shall be deemed to restrict Lessor's right to exercise any remedies
after the occurrence of an Event of Default. Notwithstanding the foregoing, in
the event that the Lease is treated by any foreign, federal, state or local
taxing authority as anything other than a secured loan, Lessor and Lessee may
take all such actions as are appropriate and consistent with such treatment.
(b) Lessee hereby grants to Lessor a mortgage and security interest in all
of the Lessee's right, title and interest in and to the Leased Properties,
together with any substitutions, replacements and additions thereto, all general
intangibles related to the Leased Properties and all of Lessee's rights, claims
and damages arising from warranties (whether express or implied) of architects,
contractors and subcontractors and any other vendors with respect to the
development and construction of the Improvements, and all proceeds of the
conversion, voluntary or
-52-
involuntary, of the foregoing into cash, investments, securities or other
property, whether in cash, investments, securities or other property, whether in
the form of cash, investments, securities or other property. Lessor and Lessee
shall, to the extent consistent with this Lease, take such actions and execute,
deliver, file and record such other documents, financing statements, mortgages
and deeds of trust as may be necessary to ensure that, if this Lease were deemed
to create a security interest in the Leased Properties in accordance with this
Article 36, such security interest would be deemed to be a perfected security
interest of first priority under applicable federal, state and local law,
subject only to Permitted Encumbrances, and will be maintained as such
throughout the Term of this Lease.
(c) Lessor and Lessee intend and agree that with respect to the nature of
the transaction evidenced by this Lease in the context of the exercise of
remedies under this Lease, including, without limitation, in the case of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any State or Commonwealth thereof affecting Lessee or
Lessor, or any enforcement or collection actions and for all other purposes
(except as provided in paragraph (a) of this Article 36), the transactions
evidenced by this Lease shall be regarded as a loan made by Lessor as an
unrelated third party lender to Lessee secured by all of the Leased Properties
(it being understood that Lessee hereby mortgages and warrants and grants a
security interest in all of the Leased Properties to Lessor).
(d) Lessor and Lessee further intend and agree that, for the purpose of
securing Lessee's obligations for the payment of Basic Rent and Additional Rent,
(i) this Lease shall also be deemed to be a security agreement and financing
statement within the meaning of Article 9 of the Uniform Commercial Code and a
real property mortgage; (ii) the conveyance provided for in paragraph (b) of
this Article 36 shall be deemed to be a grant by Lessee to Lessor of a mortgage
lien and security interest in all of the Lessee's right, title and interest in
and to the Leased Properties, together with any substitutions, replacements and
additions thereto, all of the Lessee's rights in and to all general intangibles
related to the Leased Properties and all of Lessee's rights, claims and damages
arising from warranties (whether express or implied) of architects, contractors
and subcontractors with respect to the development and construction of the
Improvements, and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, investments, securities or other property, whether in
cash, investments, securities or other property, whether in the form of cash,
investments, securities or other property (it being understood that Lessee
hereby mortgages and warrants and grants a security interest in all of the
Leased Properties to Lessor to secure the payment of Basic Rent and Additional
Rent); (iii) the possession by Lessor or any of its agents of notes and such
other items of property as constitute instruments, money, negotiable documents
or chattel paper shall be deemed to be "possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-305 of the
Uniform Commercial Code; and (iv) notifications to Persons holding such
property, and acknowledgments, receipts or confirmations from financial
intermediaries, bankers or agents (as
-53-
applicable) of Lessee shall be deemed to have been given for the purpose of
perfecting such security interest under applicable federal, state and local law.
Lessor and Lessee shall, to the extent consistent with this Lease, take such
actions and execute, deliver, file and record such other documents, financing
statements, mortgages and deeds of trust as may be necessary to ensure that, if
this Lease were deemed to create a security interest in the Leased Properties in
accordance with this Article 36, such security interest would be deemed to be a
perfected security interest of first priority under applicable federal, state
and local law, subject only to Permitted Encumbrances, and will be maintained as
such throughout the Term of this Lease.
(e) Notwithstanding anything herein to the contrary, to the extent the
provisions of this Lease provide, or purport to provide, for the grant,
creation, perfection or enforcement of a lien in real property or any interest
therein (collectively, the "mortgage provisions"), such provisions shall not
apply to the Leased Properties located in Virginia, and the provisions of the
Lease Supplement referred to in the definition of Memorandum of Lease (including
Sections 5 and 6 thereof) shall apply in lieu of such mortgage provisions, it
being understood that, to the extent the provisions of this Lease provide, or
purport to provide, for the grant, creation, perfection and enforcement of a
security interest in personal property or any interest therein, such provisions
shall apply in all respects to the Leased Properties located in Virginia or
otherwise governed by the Uniform Commercial Code as in effect in Virginia.
37. Purchase Options.
----------------
(a) At any time during the Term, unless Lessee shall have elected to
purchase the Leased Properties in accordance with Article 12(c), 16(b) or 28(a)
hereof and so long as no Default or Event of Default has occurred and is
continuing hereunder, Lessee may give Lessor and the Indenture Trustee an
irrevocable written notice (the Purchase Notice) of Lessee's intention to
---------------
purchase one or more Leased Properties pursuant to this Article 37(a). Such
notice shall (A) refer specifically to this Article 37(a) and the corresponding
section of the Indenture and (B) state that Lessee will purchase such Leased
Property in accordance with the provisions of Article 16 hereof for the price
set forth in subparagraph (b) of Article 37 below, (C) indicate whether Lessee
intends to purchase all of the Leased Properties or fewer than all of the Leased
Properties and, if fewer than all of the Leased Properties, no more than two
Leased Properties may be purchased hereunder during the Term, and (D) specify
the date for such purchase (which shall be the Installment Payment Date no less
than 40 nor more than 71 days after the date of such Purchase Notice). Upon such
election, Lessee shall purchase such Leased Properties in accordance with the
provisions of Article 16 hereof on such purchase date at the price set forth in
subparagraph (b) of Article 37 below.
(b) If Lessee has elected to purchase one or more Leased Properties in
accordance with paragraph (a) above, Lessee shall pay in cash or immediately
available federal funds, as the price (i) for all of the Leased Properties, an
amount equal to the Termination Value payable as of
-54-
the date of purchase, together with accrued and unpaid Basic Rent and Additional
Rent to the date of purchase, and (ii) for fewer than all of the Leased
Properties, an amount equal to the greater of (x) the appraised value of such
Leased Properties, as determined at such time pursuant to an Appraisal (which
shall be delivered to Lessor, the Indenture Trustee, Beneficiary, the LC Issuer
and the Registered Owners at least 15 days prior to the date of sale and in form
satisfactory to the Registered Owners and LC Issuer), (y) any purchase price
offered with respect thereto from, or committed to by, a bona fide third party
purchaser and (z) the Termination Value applicable to such Leased Property or
Properties in accordance with its or their Allocable Percentage(s) payable as of
the date of purchase for the Leased Properties to be purchased, together with,
in each case without duplication, accrued and unpaid Basic Rent and Additional
Rent to the date of purchase, plus, in each case, an amount equal to the costs
and expenses of Lessor, the Indenture Trustee, Beneficiary, the LC Issuer and
the Registered Owners of the Notes, as applicable, in connection with such sale
(including reasonable attorneys' fees and disbursements), plus, in each case,
the Reinvestment Premium.
(c) If Lessee has elected to purchase fewer than all of the Leased
Properties in accordance with (a) above, Lessee shall, at its sole cost and
expense and as a condition thereto, furnish to Beneficiary, LC Issuer, the
Indenture Trustee and each of the Registered Owners of the Notes, an Appraisal
of the Leased Properties not subject to purchase hereunder which is acceptable
to such Persons, (i) stating that the aggregate fair market value of such Leased
Properties is equal to or greater than the Termination Value applicable to such
Leased Property or Properties in accordance with its or their Allocable
Percentage(s) and (ii) evidencing to the satisfaction of the recipients thereof
that (x) the ratio of the Cost of the Properties to fair market value for all
Leased Properties immediately prior to giving effect to such purchase is greater
than or equal to (y) the ratio of the Cost of the Properties to fair market
value for all Leased Properties remaining after such purchase.
(d) Upon payment of all amounts payable by Lessee hereunder, and
application of such amounts to payment of the Notes and the Equity Investment,
including any Reinvestment Premium due with respect thereto, this Lease shall
terminate with respect to such Leased Properties and such Leased Properties
shall be conveyed to Lessee pursuant to Article 16 hereof and in accordance with
the terms and conditions thereof. If Lessee fails to purchase the Leased
Properties on such purchase date in accordance with the terms hereof, such
failure shall immediately constitute an Event of Default hereunder.
-55-
38. Substitution of Properties.
--------------------------
(a) So long as no Default or Event of Default has occurred and is
continuing hereunder, in the event (i) Lessee or Guarantor or any Affiliate
thereof is required by applicable bank regulatory requirements to divest its
interest in any Leased Property or (ii) Lessee desires to cause a Leased
Property to be sold to a Person that is not an Affiliate of any party to any
Operative Document, Lessee may give Lessor and the Indenture Trustee an
irrevocable written notice (the Substitution Notice) of Lessee's intention to
-------------------
substitute a new property located in the United States (an Exchange Property)
-----------------
for such Leased Property pursuant to this Article 38(a). Such notice shall (A)
refer specifically to this Article 38(a) and the corresponding section of the
Indenture, (B) state that Lessee proposes to substitute such Leased Property in
accordance with the provisions of this Article 38, (C) include, if a
substitution shall occur under the circumstances described under clause (a)(i)
hereof, the order or regulation applicable to Lessee, Guarantor or such
Affiliate, (D) include, if a proposed substitution shall occur under the
circumstances described under clause (a)(ii) hereof, an irrevocable commitment
to purchase such Leased Property from such Person which purchase shall be
conditioned upon the satisfaction of, among other things, the conditions set
forth herein, and (E) specify the date for such substitution (which shall be the
Installment Payment Date no less than 14 nor more than 45 days after the date of
such Substitution Notice).
(b) Each proposed Exchange Property shall be approved by the Indenture
Trustee (acting on instructions from all of the Registered Owners), which
approval shall not be unreasonably withheld, conditioned or delayed. The
following additional conditions shall be satisfied prior to any substitution of
properties pursuant to this Article 38:
(i) Lessor, Indenture Trustee and LC Issuer shall have received an
Appraisal and a "Phase I" Environmental Report of the Exchange
Property made by an Appraiser and environmental engineer,
respectively, selected by Indenture Trustee, subject to the approval
of Lessor and LC Issuer, which approval shall not be unreasonably
withheld, which Appraisal and Environmental Report shall have been
made at the expense of Lessee. Such Appraisal shall be delivered at
least 30 days prior to the date of such proposed substitution and
shall indicate the fair market value and useful life of the Exchange
Property at the time of the proposed substitution and prospectively
for the end of each remaining year of the Maximum Lease Term (assuming
in each case that the affected Leased Property had been maintained and
operated in accordance with the terms of this Lease). Fair market
value shall be determined by the same methodology as was employed by
the appraiser in the original appraisal of the replaced Leased
Property delivered in connection with the commencement of the Lease
with respect to such Leased Property. Such Environmental Report shall
be delivered at least 30 days prior to the date of such proposed
substitution, shall speak as of a date not more than six months prior
to
-56-
the date of such proposed substitution and shall not disclose any
conditions which are not satisfactory to Lessor, Indenture Trustee or
LC Issuer. Lessee shall certify to the best of its knowledge that as
of the substitution date there has been no adverse change in the
environmental status of the Exchange Property from that described in
the Environmental Report with regard to environmental matters. If
such Environmental Report recommends further review, Lessee, at its
own expense, will provide such additional environmental assessments
as are required by Lessor, Indenture Trustee or LC Issuer. The
results of such Environmental Reports shall be satisfactory to
Lessor, Indenture Trustee and LC Issuer. Lessor, Indenture Trustee,
LC Issuer and each holder of indebtedness secured by the Indenture
shall receive a letter from the environmental engineer submitting
such Environmental Report, permitting such addressee to rely on such
Environmental Reports.
(ii) Lessor, Indenture Trustee and LC Issuer shall have received a Lease
Supplement in the form of Schedule H annexed hereto and, if
appropriate, a memorandum or short form of lease with respect
thereto, duly authorized, executed and delivered by Lessee, as
lessee, adding and subjecting the Exchange Property to, and releasing
the affected Leased Property from, the terms of this Lease, and
containing such other terms as Lessor, Indenture Trustee or LC Issuer
or their respective counsel may reasonably deem necessary or
appropriate by reason of the transactions contemplated by this
Article 38.
(iii) Lessee shall have caused to be executed and delivered to Lessor,
Indenture Trustee and LC Issuer (w) a special warranty deed,
sufficient to convey to Lessor good and marketable title to the
Exchange Property subject only to the Permitted Encumbrances
described in clauses (a), (b), (c), and (h) of the definition thereof
(to the extent such Permitted Encumbrances are acceptable to Lessor,
Indenture Trustee and LC Issuer), (x) a supplement to or amendment of
the Assignment of Lease, including the legal description of the
Exchange Property, (y) a supplement to or amendment of the Indenture
with respect to such Exchange Property, and (z) a supplement to or
amendment of the LC Deed of Trust with respect to such Exchange
Property, in each case in form sufficient for recording and
enforceability in the applicable jurisdiction, so that upon the
proper recordation and effectiveness of the foregoing, such parties
shall enjoy the same rights and benefits with respect to the Exchange
Property as existed with respect to such substituted Leased Property.
Lessor, Indenture Trustee and LC Issuer shall have received (a) an
owner's and a mortgagee's policy of title insurance, as applicable,
on the standard ALTA form formerly known as 1970 form (or if the 1970
form is not available in a particular jurisdiction, a more recent
form which has been endorsed or had exclusions removed to achieve the
equivalent) with respect to the
-57-
Exchange Property (or a commitment therefor) with mechanics' lien
coverage and containing no survey exception, insuring Lessor,
Indenture Trustee and LC Issuer, respectively, against loss with
respect to the Exchange Property and otherwise reasonably satisfactory
to Lessor, Indenture Trustee and LC Issuer and (b) a survey of the
Exchange Property, satisfactory in form and substance to Lessor,
Indenture Trustee and LC Issuer, certified within 90 days prior to the
date of substitution, by a surveyor licensed in the state in which the
Exchange Property is located.
(iv) Lessor, Indenture Trustee and LC Issuer shall have had the opportunity
to conduct customary due diligence with regard to the Exchange
Property and shall have received evidence satisfactory to each such
Person that the Exchange Property complies with all zoning and other
land use requirements and that all necessary permits and licenses have
been issued with respect thereto.
(v) All necessary approvals, authorizations and consents of all
governmental bodies (including courts) having jurisdiction with
respect to the transactions contemplated by this Article 38 shall have
been obtained and all taxes (which, if permitted by law, may be paid
in installments), fees and other charges payable in connection
therewith shall have been paid.
(vi) ▇▇▇▇▇▇, ▇▇ Issuer and Indenture Trustee shall have received such other
instruments and such certificates, including without limitation, an
estoppel certificate from Lessee, evidence of the insurance required
by this Lease, certificates as to representations and warranties, and
opinions of counsel, each in form and substance reasonably
satisfactory to ▇▇▇▇▇▇, ▇▇ Issuer and Indenture Trustee in connection
with the transactions contemplated by this Article 38 as ▇▇▇▇▇▇, ▇▇
Issuer or Indenture Trustee may reasonably request. Where required,
such instruments shall have been duly recorded by Lessee. Lessee
shall pay all fees and expenses incurred in connection with the
transaction contemplated by this Article 38, by any Person including,
without limitation, ▇▇▇▇▇▇, ▇▇ Issuer, Indenture Trustee, the
Registered Owners, Beneficiary, including reasonable attorneys' fees
and disbursements of such Persons.
(c) If the Appraisal provided to Lessor, Indenture Trustee and LC Issuer
pursuant to paragraph (b) (i) of this Article 38 shall show that the fair market
value of the Exchange Property is less than the fair market value of the Leased
Property for which such Exchange Property is to be substituted, then Lessee
shall be required to pay to Lessor, as an adjustment to Basic Rent hereunder,
the amount of such difference, plus an amount equal to the Reinvestment Premium
calculated with respect to such difference (the Substitution Adjustment) and the
-----------------------
Lease shall be modified as set forth in Article 16(c).
-58-
(d) If all of the conditions set forth in this Article 38 have been
satisfied, then, upon payment of the Substitution Adjustment, if applicable, and
the conveyance of the Exchange Property to Lessor in accordance with the terms
hereof, Lessor shall convey the affected Leased Property to Lessee in accordance
with the provisions of Article 16 and the Lease shall terminate as to such
affected Leased Property and shall be effective as to such Exchange Property.
If Lessee fails to complete such substitution on or before the date set forth in
the Substitution Notice, or such later date as Lessor, Lessee, Indenture Trustee
and LC Issuer shall mutually agree, such failure shall immediately constitute an
Event of Default hereunder.
39. The Individual Trustee. Subject to the provisions of the Trust
----------------------
Agreement and, with respect to the Leased Properties located in Virginia, all
rights, duties, powers and obligations conferred or imposed on the Lessor under
this Lease shall be conferred and imposed solely on, and exercised and performed
solely by the Individual Trustee, and the Lessor for purposes of this Lease
shall be the Individual Trustee.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Lessor and Lessee hereto have each caused this Lease to
be duly executed and delivered under seal in their respective names and behalf,
as of the day and year first above written.
LESSOR:
FIRST SECURITY BANK, N.A.
not individually but solely in its capacity as
owner trustee under that certain Amended and
Restated Trust Agreement dated as of October
14, 1998
Witnessed By:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------- --------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
Witnessed By:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Val. ▇. ▇▇▇▇▇, not individually but solely in
his capacity as owner trustee under that
certain Amended and Restated Trust Agreement
dated as of October 14, 1998.
LESSEE:
CAPITAL ONE REALTY, INC.
Witnessed By:
By: /s/ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------- -----------------------------------
Name: Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Manager of Corporate Finance
By: /s/
-------------------------
Name:
APPENDIX I
----------
Definitions
As used herein, and in the Operative Documents defined below (unless
otherwise defined therein), the following terms have the meanings set forth
below:
Actual Knowledge by a non-natural Person, with respect to the occurrence or
----------------
non-occurrence of an event, means knowledge of such occurrence or non-occurrence
by an officer of such Person in a position to have, or who is charged with
having, such knowledge.
Addition has the meaning set forth in paragraph (c) of Article 10 of the
--------
Lease.
Additional Rent has the meaning set forth in paragraph (b) of Article 3 of
---------------
the Lease.
Adjustment Price has the meaning set forth in paragraph (a) of Article 30
----------------
of the Lease.
Affiliate means, with respect to any Person, a Person who, directly or
---------
indirectly, through one or more intermediaries, controls, or is controlled by or
is under common control with, such Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
Allocable Percentage means, with respect to any Leased Property, the amount
--------------------
set forth with respect thereto on Schedule J annexed to the Lease, as
recalculated from time to time in accordance with the provisions of the Lease.
Applicable Officer means the Treasurer, any Assistant Treasurer or Chief
------------------
Financial Officer of Lessee or if Lessee no longer has an officer with such
title, the chief executive officer or other officer performing the equivalent
function.
Appraiser means an appraiser conducting an Appraisal.
---------
Appraisal means an appraisal performed by an MAI appraiser reasonably
---------
satisfactory to Lessor, the Indenture Trustee and LC Issuer using appraisal
methodology reasonably satisfactory to Lessor.
Appurtenant Rights has the meaning set forth in Granting Clause First of
------------------
the Indenture.
Assignee has the meaning set forth in paragraph (b) of Article 20 of the
--------
Lease.
Assignment of Guaranty means that certain Assignment of Guaranty dated as
----------------------
of October 14, 1998 by Owner, as assignor, to Indenture Trustee, as assignee,
and agreed and consented to by Guarantor, as the same may be amended or
supplemented from time to time.
Assignment of Lease means that certain Assignment of Lease dated as of
-------------------
October 14, 1998 by Owner, as assignor, to Indenture Trustee, as assignee, and
agreed and consented to by Lessee, as the same may be amended or supplemented
from time to time.
Bankruptcy Act means Title 11 of the United States Code or any other
--------------
Federal or state bankruptcy, insolvency or similar law, now or hereafter in
effect in the United States.
Basic Rent has the meaning set forth in paragraph (a) of Article 3 of the
----------
Lease.
Basic Term has the meaning set forth in paragraph (a) of Article 2 of the
----------
Lease.
Basic Term Commencement Date has the meaning set forth in paragraph (a) of
----------------------------
Article 2 of the Lease; provided that with respect to an Exchange Property,
Basic Term Commencement Date shall mean the date on which such Leased Property
becomes subject to the Lease.
Beneficial Interest means the entire beneficial interest in Lessor and the
-------------------
Owner Trust Estate.
Beneficiary means, collectively, the Secured Beneficiary and the Equity
-----------
Beneficiary.
BTM Comfort Letter means the letter of comfort regarding the LC Issuer
------------------
issued by Bank of Tokyo-Mitsubishi, Ltd., New York Branch, as the same may be
amended or supplemented from time to time.
Business Day means (a) for the purposes of the definition of Reinvestment
------------
Premium only, any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized to be closed, and
(b) for any other purposes, any day other than a Saturday, Sunday or other day
or which banks are required or authorized to be closed in New York,
Massachusetts, Virginia, Florida or Connecticut.
Capital One Operations Center means the Land Parcel located in ▇▇▇▇ ▇▇▇▇▇,
-----------------------------
Virginia, and identified as such on Schedule A annexed to the Lease.
Closing Date means December ___, 1998.
------------
Code means the Internal Revenue Code of 1986, as amended from time to time,
----
and the rules and regulations promulgated thereunder from time to time.
-3-
Corporate Trust Office means ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
----------------------
06103, Attention: Corporate Trust Administration.
Cost of the Property means, with respect to a Leased Property, the
--------------------
Allocable Percentage with respect to such Leased Property multiplied by the Cost
of the Properties.
Cost of the Properties means $86,800,000, equal to the sum of (x) the cost
----------------------
of the acquisition of the Beneficial Interest and (y) the aggregate amounts of
outstanding indebtedness encumbering the Leased Properties as of the Closing
Date, all as determined in good faith by Lessee and set forth in an Officer's
Certificate of Lessee accompanied by supporting documentation and materials
satisfactory to Owner, as such indebtedness may be reduced pursuant to Articles
13, 16, 37 and 38 of the Lease, as applicable.
Deed of Trust Trustee means Lawyers Title Realty Services, Inc., a Virginia
---------------------
corporation, together with its successors and permitted assigns.
Default means any event or circumstance which with the passing of time or
-------
giving of notice or both would constitute an Event of Default under the
applicable Operative Document.
Depositary has the meaning set forth in paragraph (b) of Article 12 of the
----------
Lease.
Dispute Notice has the meaning set forth in Article 12(b)(ii) of the Lease.
--------------
Engineer has the meaning set forth in Article 12(b)(ii) of the Lease.
--------
Environmental Laws means and includes but shall not be limited to the
------------------
Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), as amended
-------
by the Hazardous and Solid Waste Amendments of 1984, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. (S) 9601 et
--
seq.), as amended by the Superfund Amendments and Reauthorization Act of 1986,
---
the Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.), the
------
Toxic Substances Control Act (15 U.S.C. (S) 2601 et seq.), Clean Air Act (42
------
U.S.C. (S) 7401 et seq.), the Clean Water Act (33 U.S.C. (S) 1251 et seq.) the
------ ------
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. (S) 136 et seq.),
------
the Occupational Safety and Health Act (29 U.S.C. (S) 651 et seq.) and all
------
applicable federal, state and local environmental laws, including obligations
under the common law, ordinances, rules, regulations, permits, approvals,
orders, decrees, consent orders, private agreements (such as covenants,
conditions and restrictions) and publications, as any of the foregoing may have
been or may be from time to time amended, supplemented or supplanted, and any
other federal, state or local laws, including obligations under the common law,
ordinances, rules, regulations, private agreements (such as covenants,
conditions and restrictions) and publications, now or hereafter existing
relating to regulation or control of Hazardous Substances or environmental
health and safety.
-4-
Equity Beneficiary means JH Equity Realty Investors, Inc., a Delaware
------------------
corporation, together with its successors and permitted assigns.
Equity Investment means as of any date the equity investment in Owner in
-----------------
the amount of $3,038,000 made by Beneficiary, together with all accrued and
unpaid Equity Return thereon.
Equity Return means a return on the amount of the Equity Investment
-------------
outstanding from time to time equivalent to interest thereon at the rate of
7.08% per annum, compounded monthly.
ERISA means the Employee Retirement Income Security Act of 1974, as
-----
amended.
ERISA Affiliate means, with respect to the Indenture and the Note Agreement
---------------
(a) a corporation which is a member of a controlled group of corporations with
Owner within the meaning of Section 414(b) of the Code, (b) a trade or business
(including a sole proprietorship, partnership, trust, estate or corporation)
which is under common control with Owner, within the meaning of Section 414(c)
of the Code, (c) a member of an affiliated service group with Owner, within the
meaning of Section 414(m) of the Code, or (d) an entity described in Section
414(o) of the Code.
Event of Default has the meaning set forth in the applicable Operative
----------------
Document.
Exchange Property has the meaning set forth in Article 38(a) of the Lease.
-----------------
Excluded Payments means (i) indemnity payments paid or payable by Lessee to
-----------------
or in respect of the Owner, its Affiliates, successors and permitted assigns and
its directors, officers, employees, servants and agents pursuant to the Lease or
any corresponding payment under any other Operative Document, (ii) proceeds of
public liability insurance paid or payable as a result of insurance claims made,
or losses suffered, by the Owner that are payable directly to the Owner for its
own account, (iii) any interest that pursuant to the Operative Documents may
from time to time accrue in respect of any of the amounts described in clauses
(i) and (ii) above, (iv) any right to enforce the payment of any amount
described in clauses (i) through (iii) above, and (v) any right to exercise any
election or option or make any decision or determination, or to give or receive
any notice, consent, waiver or approval, or to give or receive any notice,
consent, waiver or approval, or to take any other action in respect of, but in
each case, only to the extent relating to, any Excluded Payments.
Excluded Taxes has the meaning set forth in paragraph (a) of Article 6 of
--------------
the Lease.
Fee Simple Land Parcels means each of (i) Capital One Operations Center and
-----------------------
(ii) Knolls Office Building.
-5-
Force Majeure means any strike, lockout, or other event or circumstance
-------------
completely outside of Lessee's or Guarantor's reasonable control, but excluding
any such event or circumstance which has exceeded 180 days on a cumulative basis
and any condemnation or damage or destruction by fire or other casualty.
FSB means First Security Bank, N.A., a national banking association,
---
together with its successors and assigns.
GAAP or generally accepted accounting principles means, as of the date of
---- ----------------------------------------
any determination with respect thereto, generally accepted accounting principles
in effect from time to time in the United States.
Ground Lease means (a) with respect to Knolls Two Phase Three, that certain
------------
Ground Lease dated as of June 21, 1996, as amended by that certain Memorandum of
Ground Lease, dated as of June 21, 1996, by and between Owner, as ground lessee,
and the applicable Ground Lessor, as ground lessor, (b) with respect to
Renaissance Business Park Phase I, that certain Ground Lease dated as of
November 12, 1996, as amended by an Amended and Restated Short Form Lease and
Ground Lease and Grant of Easement Agreement, and Amendment of Ground Lease,
dated as of February 11, 1998, by and between Owner , as ground lessee, and the
applicable Ground Lessor, as ground lessor, and (c) with respect to Renaissance
Business Park Phase II, that certain Ground Lease dated as of February 11, 1998
by and between Owner, as ground lessee, and the applicable Ground Lessor, as
ground lessor, as each of the same has been amended by the Ground Lease
Amendment, as applicable, and each as amended or supplemented from time to time.
Ground Lease Amendment(s) means collectively (i) Amendment to Lease and
-------------------------
Landlord's Consent Agreement to Ground Lease, dated as of October 14, 1998,
between the Ground Lessor referenced in clause (a) in the definition thereof,
and Owner, together with any memorandum thereof, (ii) Amendment to Lease and
Landlord's Consent Agreement to Ground Lease, dated as of October 14, 1998,
between the Ground Lessor referenced in clause (b) in the definition thereof,
and Owner, together with any short form thereof, and (iii) Amendment to Lease
and Landlord's Consent Agreement to Ground Lease, dated as of October 14, 1998,
between the Ground Lessor referenced in clause (c) in the definition thereof and
Owner, together with any short form thereof.
Ground Leasehold Land Parcels means each of (i) Knolls Two Phase Three,
-----------------------------
(ii) Renaissance Business Park Phase I and (iii) Renaissance Business Park Phase
II.
Ground Lessor means (a) with respect to Knolls Two Phase Three, Capital One
-------------
Bank, a Virginia banking corporation, (b) with respect to Renaissance Business
Park Phase I, Capital One Services, Inc., a Delaware corporation, and (c) with
respect to ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-▇-
▇▇, ▇▇▇▇▇▇▇ ▇▇▇ Services, Inc., a Delaware corporation, and the successors and
assigns of each as ground lessor under any Ground Lease.
Guarantor means Capital One Bank, a Virginia banking corporation.
---------
Guaranty means that certain Guaranty dated as of October 14, 1998 by
--------
Guarantor for the benefit of Lessor and the other obligees referred to therein
and Lessor's and such obligees' successors and assigns, pursuant to which
Guarantor has unconditionally guaranteed the obligations of Lessee under the
Lease, as may be amended, supplemented or modified from time to time.
Hazardous Substances means (i) those substances included within the
--------------------
definitions of or identified as "hazardous substances", "hazardous materials",
or "toxic substances" in or pursuant to, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. (S)
9601 et seq.) (CERCLA), as amended by Superfund Amendments and Reauthorization
------
Act of 1986 (Pub. L. 99-499, 100 Stat. 1613) (▇▇▇▇), the Resource Conservation
and Recovery Act of 1976 (42 U.S.C., (S) 6901 et seq.) (RCRA), the Occupational
------
Safety and Health Act of 1970 (29 U.S.C. (S) 651 et seq.) (OSHA), and the
------
Hazardous Materials Transportation Act, 49 U.S.C. (S) 1801 et seq., and in the
------
regulations promulgated pursuant to said laws, all as amended; (ii) those
substances listed in the United States Department of Transportation Table (40
CFR 172.101 and amendments thereto) or by the Environmental Protection Agency
(or any successor agency) as hazardous substances (40 CFR Part 302 and
amendments thereto); (iii) any material, waste or substance which is or contains
(A) petroleum, including crude oil or any fraction thereof, natural gas, or
synthetic gas usable for fuel or any mixture thereof, (B) asbestos, (C)
polychlorinated biphenyls, (D) designated as "hazardous substance" pursuant to
Section 311 of the Clean Water Act, 33 U.S.C. (S) 1251 et seq., (33 U.S.C. (S)
------
1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. (S)
1317); (E) flammable explosives; (F) radioactive materials; and (iv) such other
substances, materials and wastes which are or become regulated as hazardous,
toxic or "special wastes" under applicable local, state or federal law, or the
United States government, or which are classified as hazardous, toxic or as
"special wastes" under federal, state or local laws or regulations, including
any Environmental Laws.
Identified Plan has the meaning set forth in Section 8.2 of the Note
---------------
Agreement.
Improvements has the meaning set forth in Granting Clause First of the
------------
Indenture.
Indemnified Party means any of Lessor, FSB, LC Issuer, the Indenture
-----------------
Trustee, each Registered Owner, any Assignee, each Beneficiary, Placement Agent,
and their respective successors and assigns, and each and all of such Person's
shareholders, officers, directors, employees, attorneys and agents, and any
holder of any beneficial interest in any of the foregoing.
-7-
Indenture means that certain Indenture, Fee and Leasehold Deed of Trust,
---------
Mortgage, Security Agreement and Fixture Filing dated as of October 14, 1998
from Owner to Indenture Trustee, as amended or supplemented from time to time.
Indenture Trust Estate has the meaning set forth in the preamble to the
----------------------
Granting Clauses of the Indenture.
Indenture Trustee means First Union National Bank, a national banking
-----------------
association, in its capacity as indenture trustee under the Indenture, together
with its successors and assigns.
Individual Trustee means ▇▇▇ ▇. ▇▇▇▇▇, not individually but solely as owner
------------------
trustee under the Trust Agreement, together with his successors and assigns.
Installment Payment means each regularly scheduled payment of interest and
-------------------
principal, if any, on the Notes as defined in the Notes.
Installment Payment Dates has the meaning set forth in paragraph (a) of
-------------------------
Article 3 of the Lease.
Institutional Investor means (i) a bank or other lending institution or
----------------------
insurance company with a combined capital and surplus of at least $75,000,000,
(ii) an insurance company with total assets of at least $100,000,000, (iii) an
Affiliate or subsidiary of any such bank, lending institution or insurance
company, (iv) any other financial institution organized under the laws of the
United States or any state thereof or Canada or any province thereof with a net
worth of at least $50,000,000, or (v) a public or private pension plan or
institutionally-managed fund having gross assets of at least $300,000,000.
Knolls Office Building means the Land Parcel located in ▇▇▇▇ ▇▇▇▇▇,
----------------------
Virginia, and identified as such on Schedule A annexed to the Lease.
Knolls Two Phase Three means the Land Parcel located in ▇▇▇▇ ▇▇▇▇▇,
----------------------
Virginia, and identified as such on Schedule A annexed to the Lease.
Land Parcel means each of the parcels of land described on Schedule A to
-----------
the Indenture including, without limitation, each of the Ground Leasehold Land
Parcels.
LC Cost means the amount of costs and expenses incurred by Owner in
-------
connection with its furnishing of the Letter of Credit.
-8-
LC Deed of Trust means that certain Fee and Leasehold Deed of Trust,
----------------
Mortgage, Security Agreement and Fixture Filing dated as of October 14, 1998
from the Owner to the Beneficiary, as amended or supplemented from time to time.
LC Issuer means BTM Capital Corporation, a Delaware corporation, together
---------
with its successors and permitted assigns.
Lease means that certain Amended and Restated Lease Agreement dated as of
-----
October 14, 1998 by and between Lessor and Lessee, as may be amended,
supplemented or modified from time to time.
Leased Property(ies) has the meaning set forth in Article 1 of the Lease.
--------------------
Legal Requirements means, with respect to any Leased Property or any
------------------
Person, all laws, rules, orders, ordinances, regulations and requirements now
existing or hereafter enacted or promulgated, of every government and
municipality having jurisdiction over such Leased Property (or any portion
thereof) or such Person, or the improvements thereon, or the facilities or
equipment thereon or therein, or the streets, sidewalks, vaults, vault spaces,
curbs and gutters adjoining the Leased Property, or the appurtenances to the
Leased Property, or the franchises and privileges connected therewith and
including, without limitation, Environmental Laws.
Lessee means Capital One Realty, Inc., a Delaware corporation, and its
------
successors and assigns expressly permitted under the Lease.
Lessee's Loss has the meaning set forth in paragraph (a) of Article 12 of
-------------
the Lease.
Lessor means Owner, in its capacity as lessor under the Lease, and its
------
successors and assigns.
Lessor Lien means any lien on or with respect to any Leased Property which
-----------
is not permitted by the terms of the Lease and which results from (i) nonpayment
by Lessor or any member, partner, shareholder or beneficiary of Lessor or any
affiliate of any of the foregoing (the Lessor Parties), of any tax, assessment
--------------
or like charge imposed on any Lessor Party, other than any tax, assessment or
like charge the payment of which is Lessee's obligation under the Lease; (ii)
claims against or acts and omissions of any Lessor Party arising out of events
or conditions that are not related to the transactions contemplated by the terms
of the Lease or are in violation of any of the obligations of the Lessor under
any of the terms of the Lease; (iii) claims against any Lessor Party arising out
of any transfer (whether voluntary or involuntary) by such Lessor Party of any
portion of its interest in any Leased Property or its rights under the Lease
that is neither permitted under the Lease nor consented to in writing by the
Lessee; or (iv) any other act of, claim against or lien created by any Lessor
Party, or any Person claiming by, through or under any Lessor Party, that is
neither permitted under the terms of the Lease nor consented to in writing by
the Lessee.
-9-
Lessor Parties has the meaning specified in the definition of Lessor Lien.
--------------
Letter of Credit means the means that certain irrevocable standby letter of
----------------
credit dated the Closing Date and issued by LC Issuer for the account of
Indenture Trustee, and all amendments and supplements thereto and replacements
therefor.
Limited Lessee Risk Conditions means, collectively, the following: (i)
------------------------------
less than substantially all of the Leased Properties shall be condemned,
damaged, destroyed or taken; (ii) no Default or Event of Default shall have
occurred and be continuing under the Lease; (iii) Lessee has not exercised its
purchase option under paragraph (a) of Article 28 of the Lease; (iv) either (x)
a sale to a third party of the Leased Properties has been consummated and Lessor
has received, in immediately available funds, on the Term Termination Date, the
Net Proceeds of sale of the Leased Properties plus payment of any Additional
Rent then due and owing under the Lease with respect to the Leased Properties,
or (y) a sale to a third party of the Leased Properties has not been so
consummated on the Term Termination Date thereof and the Lessee has vacated the
Leased Properties and surrendered and returned the Leased Properties to Lessor
in the condition required by Article 26 of the Lease, and Lessor has received,
in immediately available funds on the Term Termination Date, payment of any
Additional Rent then due and owing under the Lease with respect to the Leased
Properties; (v) the Lease has not been terminated prior to the Termination Date;
(vi) no amendment, modification, supplement, consent, waiver, approval,
settlement, extension, compromise or accommodation of the Lease shall have been
entered into or given without the prior written consent of LC Issuer; (vii) each
and every Leased Property is, or upon payment of the Maximum Lessee Risk Amount
will be, free and clear of all liens and encumbrances except for the lien of the
LC Deed of Trust, taxes and liens for the current year which are not yet due and
payable and Permitted Encumbrances described in (a), (c), (g), (h) and (i) of
the definition thereof, and any liens for taxes, assessments and other
governmental charges which are not then due and payable and which are not
allocable to the period before the date of termination or expiration of this
Lease with respect to the applicable Leased Property; (viii) each and every
Leased Property will be legally subdivided from all other land parcels which
such Leased Property may have been a part and, other than that portion of the
Leased Properties known as Renaissance Business Park Phase I and Renaissance
Business Park Phase II which constitutes the Parking Garage Property, as defined
in the Parking Easement Agreement, legally subdivided from each other; and (ix)
Lessee's surrender, return and vacation of any Leased Property at the end of the
then current Term will not result in a breach or default of any term or
condition of any Ground Lease applicable thereto.
Maturity Date means December ___, 2005.
-------------
Maximum Lease Term means the maximum Term of the Lease commencing on the
------------------
Basic Term Commencement Date and ending on the last day of the second Renewal
Term, after each renewal option is exercised.
-10-
Maximum Lessee Risk Amount means, as of any date, subject to the provisions
--------------------------
of Article 30(a) of the Lease, an amount calculated as set forth in Schedule F
to the Lease for such date provided however, in the event that Lessee is
required to pay all or any portion of the Reinvestment Premium pursuant to the
terms of the Lease, the Maximum Lessee Risk Amount shall be reduced by the
amount of the Reinvestment Premium paid by Lessee provided, however, if such
Reinvestment Premium is paid as a result of Lessee failing to renew the Term of
the Lease and electing not to purchase the Leased Properties pursuant to Article
28 of the Lease then such reduction shall be limited to (x) $3,141,933.36 if
such payment is made with respect to the last day of the Basic Term or (y)
$1,454,425.64 if such payment is made with respect to the last day of the first
Renewal Term.
Maximum Lessor Risk Amount means, subject to the provisions of Article
--------------------------
30(b) of the Lease, an amount calculated as set forth in Schedule F to the Lease
for each relevant period provided, however, in the event of any reduction in the
Maximum Lessee Risk Amount pursuant to the proviso contained within the
definition thereof, then the Maximum Lessor Risk Amount shall be simultaneously
increased by an amount equal to such reduction.
Memorandum of Lease means that certain Memorandum of Lease with respect to
-------------------
the Leased Properties located in Florida and that certain Virginia Lease
Supplement, Memorandum of Amended and Restated Lease Agreement and Remedies with
respect to those Leased Properties located in Virginia, each dated as of the
Closing Date and executed by Lessor and Lessee pursuant to the provisions of
Article 34 of the Lease.
▇▇▇▇▇'▇ has the meaning set forth in Article 12 of the Lease.
-------
Mortgaged Property(ies) means Owner's interests in the Land Parcels and the
-----------------------
Improvements together with the Appurtenant Rights.
Net Award means the entire award, compensation, insurance proceeds or other
---------
payment, if any, on account of any condemnation, taking or casualty affecting
any Leased Property or any portion thereof, less any expenses reasonably
incurred by the payee thereof in collecting such award, compensation, insurance
proceeds or other payment and not already paid (or reimbursed to such payee) by
Lessee pursuant to the last sentence of paragraph (a) of Article 12 of the
Lease, plus, in the case of any award with respect to a condemnation or taking,
any investment income earned with respect to the foregoing amounts.
Net Proceeds means, upon the sale of any Leased Property to a third party,
------------
the net amount of the proceeds of such sale, after deducting from the gross
proceeds of such sale (i) all sales taxes and other taxes (excluding any
Excluded Taxes), (ii) all fees, costs and expenses of such sale incurred by
Lessor or by Lessee, as Lessor's agent, unless separately paid or reimbursed by
Lessee,
-11-
and (iii) any other amounts for which, if not paid, Lessor would be liable or
which, if not paid, would constitute a lien on such Leased Property.
Note Agreement or Note Purchase Agreement means that certain Note Purchase
-------------- -----------------------
Agreement dated as of October 14, 1998 by and among Owner and the several
purchasers of the Notes identified therein, as the same may be amended or
supplemented from time to time.
Note Interest Rate means 6.86% per annum.
------------------
Note Purchaser means each of the Persons identified as such in the Note
--------------
Purchase Agreement.
Notes has the meaning set forth in Section 1.1(a) of the Note Agreement.
-----
Officer's Certificate means a certificate executed and delivered by an
---------------------
Applicable Officer of Lessee, or such other officer of Lessee as is in a
position to know the substance of the matters contained in such certificate.
Operative Documents means the Lease, the Guaranty, the Ground Leases, the
-------------------
Indenture, the Assignment of Lease, the Assignment of Guaranty, the Note
Purchase Agreement, the Notes, the Trust Agreement, the Sale and Assignment
Agreement (BI Interests), the Letter of Credit, the LC Deed of Trust, the
Reimbursement Agreement, the Parking Easement Agreement and any other agreements
or instruments entered into in connection with any of the above.
Outstanding, with reference to the Notes, means, as of any particular time,
-----------
all Notes authenticated and delivered by the Indenture Trustee pursuant to the
Indenture, except: (a) Notes theretofore canceled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to the Indenture;
(b) Notes for the payment or prepayment of which moneys in the necessary amount
shall have been deposited in trust with the Indenture Trustee, provided that if
such Notes are to be prepaid, notice of such prepayment shall have been given as
provided in the Indenture; and (c) Notes in lieu of or in substitution for which
other Notes shall have been authenticated and delivered pursuant to Section 2.7
of the Indenture; provided that solely for purposes of determining whether
Registered Owners of the requisite percentage of Outstanding Notes have approved
or consented to, or have directed the taking of any action provided in the
Indenture or any other Operative Document to be taken upon the direction of
Registered Owners holding a specified percentage of Notes then Outstanding,
Notes registered in the name of Owner or Lessee, or any beneficiary, nominee or
Affiliate of any thereof shall be deemed not to be Outstanding.
Overdue Rate means (x) with respect to any payment on, or any portion of
------------
any payment (including Rent) to be applied to, the Notes, an annual rate of
8.86% and (y) with respect to any payment on, or any portion of any payment
(including Rent) to be applied to, the Equity Return, an
-11-
annual rate of 9.08% but in either case, not greater than the maximum rate
permitted by applicable law.
Owner means First Security Bank, N.A., a national banking association, and
-----
▇▇▇ ▇. ▇▇▇▇▇ not in their individual capacities but solely in their capacities
as owner trustee under the Trust Agreement, the trust thereunder being referred
to as the COB Real Estate Trust 1995-1.
Owner Trust Estate means all present and future assets and property held by
------------------
Owner pursuant to the Trust Agreement, including all interest of Owner in the
Land Parcels, the Ground Leases, the Improvements, the Lease, the Guaranty and
any other Operative Documents; amounts payable under the Lease including,
without limitation, Basic Rent, Additional Rent, Termination Values, the
Purchase Price, the Maximum Lessee Risk Amount, the Equity Investment, the
Equity Return, Net Proceeds, Net Awards and the Reinvestment Premium; amounts
payable to Owner under the Guaranty, insurance policies and proceeds,
indemnities and other payments of any kind payable at any time to Owner for or
with respect to the foregoing (except for Excluded Payments payable to FSB or to
any Beneficiary pursuant to the Lease or any Operative Documents), all payments
or proceeds Owner is entitled to receive after the termination of the Lease as a
result of a sale or other disposition of any of the Leased Properties or any
portions thereof, and all income and proceeds received from time to time by
Owner in respect of the foregoing and not theretofore distributed, as further
described in Section 5 of the Trust Agreement.
Parking Easement Agreement means the Parking Garage Ownership, Easement and
--------------------------
Management Agreement, dated as of October 14, 1998, among Owner, Capital One
Services, Inc., a Delaware corporation, First Security Bank, N.A., not
individually but solely in its capacity as owner trustee of the Capital One
Realty Trust 1998-1, and Lessee, as the same may be amended or supplemented from
time to time.
Permitted Encumbrances means, with respect to any Leased Property: (a)
----------------------
rights reserved to or vested in any municipality or public authority to condemn,
appropriate, recapture or designate a purchaser of such Leased Property; (b) any
liens thereon for taxes, assessments and other governmental charges and any
liens of mechanics, materialmen and laborers for work or services performed or
material furnished in connection with such Leased Property, which are not due
and payable, or the amount or validity of which are being contested as permitted
by Article 6 of the Lease; (c) easements, rights-of-way, servitudes, zoning
laws, use regulations, and other similar reservations, rights and restrictions
and other minor defects and irregularities in the title to such Leased Property
existing on the applicable Basic Term Commencement Date or granted in accordance
with the provisions of Article 34 of the Lease; (d) any mortgage or mortgages
granted by Lessor to secure the Notes including the Indenture, together with any
UCC-1 Financing Statements related to such Indenture; (e) any assignment of the
Lease by Lessor for collateral purposes including the Assignment of Lease; (f)
the Lease; (g) with respect to Knolls Two Phase Three, Renaissance Business Park
Phase I, and Renaissance Business Park Phase II, the Ground
-13-
Lease applicable thereto; (h) all other matters affecting title existing on the
date of the Lease as set forth in Schedule G to the Lease; and (i) any mortgage
or mortgages granted by Lessor to secure the Letter of Credit including without
limitation, the LC Deed of Trust, together with any UCC-1 Financing Statements
related to such mortgage or mortgages, such mortgage and financing statement to
be subordinate to the mortgage described in clause (d) so long as such mortgage
is effective.
Person means any individual, corporation, partnership, joint venture,
------
association, joint stock company, trust, estate, trustee of a trust,
unincorporated organization or government (or any agency or political
subdivision thereof) or any other entity, whether acting in an individual,
fiduciary or other capacity.
Placement Agent means BTM Financial Services, Inc., a Delaware corporation.
---------------
Plan or (as the context may require) plan means an "employee benefit plan"
---- ----
(as defined in section 3(3) of ERISA) that is or, within the preceding five
years, has been established or maintained, or to which contributions are or,
within the preceding five years, have been made or required to be made, by Owner
of any ERISA Affiliate or with respect to which Owner or any ERISA Affiliate may
have any liability.
Property means any interest in any kind of property or asset, whether real,
--------
personal or mixed, or tangible or intangible.
Protected Parties has the meaning set forth in Section 9.1 of the Note
-----------------
Agreement.
Purchase Notice has the meaning set forth in Article 37(a) of the Lease.
---------------
Purchase Price has the meaning set forth in Schedule E attached to the
--------------
Lease.
Recordable Documents has the meaning set forth in Section 3.3 of the
--------------------
Indenture.
Register means the note register on which the ownership of the Notes is
--------
recorded pursuant to Section 2.4 of the Indenture.
Registered Owner means the person in whose name the ownership of a Note is
----------------
recorded in the Register.
Reimbursement Agreement means the Reimbursement and Remarketing Agreement,
-----------------------
dated as of October 14, 1998, between the LC Issuer and Owner, as amended,
modified and supplemented from time to time.
Reinvestment Premium means, as of any date, the amount (but not less than
--------------------
zero) equal to the excess, if any, of (i) the sum of the Present Values (as
hereinafter defined) of (a) the Termination Value (assuming the Termination
Value is payable on the last day of the Maximum Lease Term), and (b) the amount
of Basic Rent that would have been payable on each Installment Payment Date from
and after the date of determination (assuming all payments of Basic Rent are
made when due), over (ii) the Termination Value as of the date of determination.
The Present Value shall be determined by discounting in accordance with
-------------
generally accepted financial practice on a monthly basis at a discount rate
equal to the sum of the applicable Treasury Yield plus 0.50% (which is then
adjusted to monthly equivalent). The Treasury Yield for such purpose shall be
--------------
determined as of 10:00 A.M. New York City time on the first Business Day before
the date of determination by reference to the yields of those actively traded
"On the Run" United States Treasury securities having a maturity equal to the
remaining balance of the Maximum Lease Term, as shown on the display designated
on "Page 500" on the Bridge Telerate Service (or such other display as may
replace Page 500 on the Bridge Telerate Service) or any other reputable online
source of such market data; provided that if such yields are not reported as of
such time or the yields reported as of such time are not ascertainable
(including by way of interpolation), the Treasury Yield shall be determined by
reference to the yields reported, for the latest day for which such yields have
been so reported as of the first Business Day before the date of determination,
in Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded United States Treasury securities having a
maturity equal to the remaining balance of the Maximum Lease Term, and provided
further that if the remaining balance of the Maximum Lease Term is not equal to
the maturity of the actively traded "On the Run" United States Treasury
security, such yield shall be obtained by linear interpolation (calculated to
the nearest one-twelfth of a year) from the yields of actively traded "On the
Run" United States Treasury securities having a maturity closest to such
remaining balance of the Maximum Lease Term. The Reinvestment Premium shall be
determined by Lessor and shall be binding on Lessee absent manifest error.
Release of Mortgage means collectively the Deeds of Release and
-------------------
Satisfactions of Mortgages, Assignment of Lease and Rents and Security
Agreement, executed by NationsBank, N.A., a national banking association as
Administrative Agent on behalf of the construction lenders and the holders of
ownership certificates, as defined therein.
Remarketing Period has the meaning set forth in paragraph (b) of Article 28
------------------
of the Lease.
Renaissance Business Park Phase I means the Land Parcel located in Tampa,
---------------------------------
Florida, and identified as such on Schedule A annexed to the Lease.
Renaissance Business Park Phase II means the Land Parcel located in Tampa,
----------------------------------
Florida, and identified as such on Schedule A annexed to the Lease.
Replaced Property has the meaning set forth in Section 4.5 of the
-----------------
Indenture.
-15-
Renewal Term has the meaning set forth in paragraph (b) of Article 2 of the
------------
Lease.
Rent means collectively Additional Rent and Basic Rent.
----
Responsible Officer means, with respect to any non-natural Person and a
-------------------
particular subject matter, only such Persons as have actual responsibility for
the administration of such particular subject matter.
Sale and Assignment Agreement (BI Interests) means that certain Purchase,
--------------------------------------------
Assignment and Assumption Agreement, dated as of October 14, 1998, by and among
NationsBank, N.A., as Administrative Agent, and the other sellers named therein,
collectively as seller of the Beneficial Interest, and Beneficiary, as the
purchasers of the Beneficial Interest.
Secured Beneficiary means BTM Capital Corporation, a Delaware corporation,
-------------------
and its successors and assigns as holders of its portion of the Beneficial
Interest.
Series means each series of Notes as set forth on Exhibit C to the
------
Indenture, as such number of Series may be reduced from time to time upon the
prepayment in full of all Notes of a particular Series in accordance with the
Indenture.
S&P has the meaning set forth in Article 12 of the Lease.
---
Substitution Adjustment has the meaning set forth in Article 38 of the
-----------------------
Lease.
Substitution Notice has the meaning set forth in Article 38(a) of the
-------------------
Lease.
Tangible Net Worth has the meaning set forth in Section 5.4 of the
------------------
Guaranty.
Taxes has the meaning set forth in Section 1.1(b) of the Note Agreement.
-----
Term of the Lease or Term means the Basic Term and any Renewal Term or
-------------------------
Terms which may be effected pursuant to Article 2 of the Lease, except as may be
terminated prior to expiration thereof pursuant to the terms of the Lease.
Term Termination Date means the last day of the Basic Term or a Renewal
---------------------
Term, as applicable.
Termination Date has the meaning set forth in paragraph (c) of Article 12
----------------
of the Lease.
Termination Notice has the meaning set forth in paragraph (b) of Article 2
------------------
of the Lease.
Termination Value has the meaning set forth in Schedule C annexed to the
-----------------
Lease.
Trade Fixtures has the meaning set forth in paragraph (a) of Article 11 of
--------------
the Lease.
Transferee has the meaning set forth in Section 2.7 of the Indenture.
----------
Trust Agreement means that certain Amended and Restated Trust Agreement
---------------
dated as of October 14, 1998 by and between FSB and Beneficiary as the same may
be amended or supplemented from time to time.
Trustee means First Security Bank, N.A., a national banking association,
-------
not in its individual capacity but solely as owner trustee under the Trust
Agreement, together with its successors and assigns.
Unit of Notes has the meaning set forth in Section 1.1 of the Note
-------------
Agreement.
UCC means the Uniform Commercial Code enacted and in effect in the State of
---
the Mortgaged Property to which it relates.
SCHEDULE A
----------
Land Parcels
------------
Capital One Operations Center
-----------------------------
(Legal description to be attached)
Knolls Office Building
----------------------
(Legal description to be attached)
Knolls Two Phase Three
----------------------
(Legal description to be attached)
Renaissance Business Park Phase I
---------------------------------
(Legal description to be attached)
Renaissance Business Park Phase II
----------------------------------
(Legal description to be attached)
SCHEDULE B
Basic Rent
----------
(1) Scheduled Payments. Basic Rent shall be payable in arrears in monthly
------------------
installments on the same day of each calendar month on which the Basic Term
Commencement Date occurs, such installments to be in an amount equal to the
product of (i) the Cost of the Properties and (ii) 0.57231%.
(2) General. Anything herein or in any Operative Document to the contrary
-------
notwithstanding, on each Installment Payment Date, Lessee shall pay as
Basic Rent, without duplication with regard to clause (1) above, that
amount which, under the circumstances and in all events, is at least
sufficient to pay in full, as of such Installment Payment Date, (a) the
aggregate accrued and unpaid interest on the Notes and in the case of the
Equity Investment, the accrued and unpaid Equity Return, and (b) rent or
any other payments of whatever character which are then due and owing under
any of the Ground Leases, in all cases net to the Persons entitled thereto.
SCHEDULE C
Termination Value
-----------------
The Termination Value on any Termination Date shall be an amount equal to (i)
the Cost of the Properties in effect as of such Termination Date (or, if
calculated with respect to fewer than all of the Leased Properties, the product
of (x) the Allocable Percentage of the related Leased Property or Properties and
(y) the Cost of the Properties in effect as of such Termination Date) plus (ii)
all accrued and unpaid Basic Rent and Additional Rent hereunder (without
reduction for Allocable Percentage if paid with respect to fewer than all of the
Leased Properties).
SCHEDULE D
Environmental Matters
---------------------
No exceptions applicable.
SCHEDULE E
Purchase Price
--------------
The Purchase Price as of any Term Termination Date shall be an amount equal
to the sum of (i) the Cost of the Properties in effect as of such Term
Termination Date, plus (ii) all accrued and unpaid Basic Rent and Additional
Rent payable hereunder, plus (iii) all applicable sales, excise and other taxes
imposed as a result of the sale of the Leased Properties, other than Excluded
Taxes and without duplication of the payment of Additional Rent under clause
(ii) above, plus (iv) for any Term Termination Date before the end of the
Maximum Lease Term, the Reinvestment Premium.
SCHEDULE F
Maximum Lessor and Lessee
Risk Amounts
------------
The Maximum Lessor Risk Amount shall be equal to the Cost of the Properties
times the percentages set forth below opposite the related Term Termination Date
plus any increase thereto which may be applicable pursuant to the definition of
Maximum Lessor Risk Amount as set forth in Appendix I.
The Maximum Lessee Risk Amount shall be equal to the Cost of the Properties
times the percentages set forth below opposite the related Term Termination Date
less any reduction thereto which may be applicable pursuant to the definition of
Maximum Lessee Risk Amount as set forth in Appendix I.
End of Year* Maximum Lessee Risk Amount** Maximum Lessor Risk Amount**
------------ -------------------------- --------------------------
5 84.071820% 15.928180%
6 89.686611 10.313389
7 89.686611 10.313389
*Years after the Basic Term Commencement Date (determined on anniversary of
Basic Term Commencement Date).
**Expressed as a percentage of the Cost of the Properties.
SCHEDULE G
Permitted Encumbrances
----------------------
Capital One Operations Center
-----------------------------
Those matters set forth on Schedule B to (Name of title company) Title Insurance
Company ALTA Owner's Policy No.(number).
Knolls Office Building
----------------------
Those matters set forth on Schedule B to (Name of title company) Title Insurance
Company ALTA Owner's Policy No.(number).
Knolls Two Phase Three
----------------------
Those matters set forth on Schedule B to (Name of title company) Title Insurance
Company ALTA Owner's Policy No.(number).
Renaissance Business Park Phase I
---------------------------------
Those matters set forth on Schedule B to (Name of title company) Title Insurance
Company ALTA Owner's Policy No.(number).
Renaissance Business Park Phase II
----------------------------------
Those matters set forth on Schedule B to (Name of title company) Title Insurance
Company ALTA Owner's Policy No.(number).
SCHEDULE H
[Form of Supplement to Lease]
-----------------------------
This is a _________ Supplement to Amended and Restated Lease Agreement,
dated as of ________, 199_ (this "Supplement") to that certain Amended and
Restated Lease Agreement, dated as of October 14, 1998 (as amended, modified or
supplemented to date, except by this Supplement, the "Original Lease" and the
Original Lease, as amended by this Supplement, the "Lease"), between First
Security Bank, N.A. and ▇▇▇ ▇. ▇▇▇▇▇, not individually but solely as owner
trustee, as lessor, and CAPITAL ONE REALTY, INC., as lessee Capitalized terms
used but not defined herein shall have the meanings assigned in the Lease. This
Supplement is being executed and delivered on and in connection with a Lease
Closing Date.
NOW, THEREFORE, intending to be legally bound, the parties to the Lease
hereby agree as follows:
1. Schedules A, B, C, D, E, G, and J to the Original Lease are hereby
deleted and replaced by their respective counterparts as attached hereto.
2. Except for those provisions specifically amended hereby, the Lease
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
executed under seal as of the day and year first above written.
LESSOR:
FIRST SECURITY BANK, N.A., not individually but
solely as owner trustee under that certain Amended
and Restated Trust Agreement dated as of October
14, 1998,
By:___________________________
Name:
Title:
________________________________
▇▇▇ ▇. ▇▇▇▇▇, not individually but solely in his
capacity as owner trustee under that certain
Amended and Restated Trust Agreement dated as of
October 14, 1998
LESSEE:
CAPITAL ONE REALTY, INC.
By:____________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Manager of Corporate Finance
SCHEDULE I
Form of Certificate as to Insurance
-----------------------------------
The undersigned hereby certifies pursuant to Article 13 of that certain
Amended and Restated Lease Agreement dated as of October 14, 1998 (the "Lease")
between First Security Bank, N.A. and ▇▇▇ ▇. ▇▇▇▇▇, not individually but solely
as Owner Trustee,, as lessor, and Capital One Realty, Inc., as lessee
("Lessee"), as follows:
1. The undersigned is a ______________________ of Lessee. I am familiar
with the risk management guidelines and policies for Lessee, and as such I am
familiar with the insurance provided with respect to the Leased Properties (as
defined in the Lease).
2. In connection with this Certificate, the undersigned has reviewed the
provisions of the Lease.
3. The insurance policies described in the attached Certificates of
Insurance are in full force and effect on the date hereof and satisfy all the
requirements of paragraphs (a), (b), (c), (d), (e) and (f) Article 13 of the
Lease.
4. Attached hereto are true and correct copies of Certificates of
Insurance evidencing the above-described insurance policies currently in effect.
________________________________
Name:
Title:
SCHEDULE J
Allocable Percentages
---------------------
Capital ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇):
----------------------------------------------------
30.057%
Knolls Office Building (Glen Allen, Virginia):
---------------------------------------------
13.559%
Knolls Two Phase Three (Glen Allen, Virginia):
---------------------------------------------
19.774%
Renaissance Business Park Phase I (Tampa, Florida):
--------------------------------------------------
18.192%
Renaissance Business Park Phase II (Tampa, Florida):
----------------------------------------------------
18.418%
SCHEDULE K
Form of Lessee Estoppel Certificate
-----------------------------------
Lessee warrants and represents to Lessor, Indenture Trustee, Beneficiary
and LC Issuer as follows as of the date hereof (capitalized terms used but not
defined herein are as defined in the Lease):
1. ORGANIZATION AND POWER. Lessee (a) is a corporation duly formed,
----------------------
validly existing and in good standing under the laws of the State of Delaware
and is duly qualified as a foreign corporation and in good standing in the State
of Florida and the Commonwealth of Virginia and any other jurisdiction where
such qualification is required by applicable law or is necessary for the conduct
of its business, and (b) has the full corporate power, authority and legal right
to lease the Leased Properties from Lessor and has the requisite corporate power
and authority to carry on its business as now conducted and to execute, deliver
and perform the Operative Documents to which it is a party.
2. FULL DISCLOSURE. No written statement delivered to Lessor, Indenture
---------------
Trustee or LC Issuer by Lessee in connection with the negotiation of the
transactions contemplated hereby or contained in the Lease or any other
Operative Document to which Lessee is a party contains any untrue statement of a
material fact or omits a material fact necessary to make the statements
contained therein or herein not misleading in any material respect. There is no
fact peculiar to Lessee which is not disclosed in writing which materially and
adversely affects Lessee's ability to perform under the Lease or any other
Operative Document to which Lessee is a party.
3. LITIGATION. There is no action, suit or proceeding pending, or to the
----------
best of Lessee's knowledge threatened, against or affecting Lessee at law or in
equity before any court, or by or before any federal, state, municipal or other
governmental department, commission, board, bureau, agency, or instrumentality
or arbitrator which if adversely determined (i) individually or in the aggregate
would materially and adversely affect the performance by Lessee of its
obligations under the Lease or any other Operative Document to which it is a
party or the business and operations of Lessee, taken as a whole or (ii) would
affect in any material respect the consummation or validity of the Operative
Documents to which it is a party, or the transactions contemplated thereby.
4. NO DEFAULTS. No Default or Event of Default has occurred and is
-----------
continuing under the Lease. Lessee is not in default in the payment of the
principal or interest on any indebtedness for borrowed money or for its deferred
purchase of property or in default under any instrument or agreement under and
subject to which any such indebtedness has been issued or under any lease, in
each case involving the likelihood of any actions or proceedings against it
which will materially and adversely affect Lessee or its ability to perform
under the Lease or any other Operative Document to which Lessee is a party.
5. NO VIOLATION. Neither the execution, delivery or performance by Lessee
------------
of the Lease or the other Operative Documents to be delivered by Lessee nor
compliance herewith or therewith (a) (i) are in contravention of, and will not
result in a violation or breach of, any of the terms of Lessee's Certificate of
Incorporation (or equivalent document), its By-Laws, or of any provisions
relating to shares of the capital stock of Lessee, or (ii) will violate or
constitute a breach of any applicable provision of law, any applicable order of
any court or other agency of government, or any indenture, agreement or other
instrument to which Lessee is a party, or by or under which Lessee or any of
Lessee's property is bound, or be in conflict with, result in a breach of, or
constitute (with due notice and/or lapse of time) a default under any such
indenture, agreement or instrument, or result in the creation or imposition of
any Lien upon any of Lessee's property or assets or (b) results or will result
in the creation or imposition of any lien, charge or encumbrance upon its
property pursuant to such agreement or instrument. Neither the execution,
delivery or performance by the Lessee of the Lease or the Operative Documents to
be delivered by Lessee nor compliance by Lessee herewith or therewith conflicts
or will conflict with or results or will result in a breach of or constitutes or
will constitute a default under (i) the certificate of incorporation or by-laws
of Lessee or (ii) any material agreement or instrument to which Lessee is a
party or by which it is bound.
6. AGREEMENTS ARE LEGAL AND AUTHORIZED. The Lease and the other Operative
-----------------------------------
Documents to which Lessee is a party have been duly authorized by Lessee by all
necessary corporate action (including any necessary action by its shareholders)
and duly executed and delivered by it, and, assuming the due authorization,
execution and delivery thereof by the other parties thereto, are legal, valid
and binding obligations of Lessee enforceable against it in accordance with
their respective terms, except as certain rights and remedies as set forth in
such Operative Documents may be limited by (a) bankruptcy, reorganization and
similar laws of general application relating to or affecting the enforcement of
creditors' or lessors' rights and (b) general principles of equity.
7. INSURANCE. All insurance required by Article 13 of the Lease is in
---------
effect and all premiums now due and payable in respect of such insurance have
been paid.
8. CONSENTS. No consent, license, approval or authorization of, or
--------
filing, registration or declaration with, or exemption or other action by, any
governmental or public body, authority, bureau or agency (including courts)
under the laws of the United States of America, the State of Delaware or the
states in which any Leased Property is located, or of any other state is
required in connection with the execution and delivery or performance by Lessee
of this Agreement or any other Operative Document to which it is a party, except
for such approvals, consents or permits which may be required as of the date
hereof in connection with the construction, use and occupancy of the Leased
Properties (all of which have been obtained and are in full force).
9. COMPLIANCE; TAXES. Lessee will use and occupy the Leased Properties,
-----------------
and each Leased Property is acceptable to Lessee for its business purposes.
There has been no material damage to any Leased Property nor are any
condemnation or eminent domain proceedings pending, or to Lessee's knowledge,
threatened with respect thereto. Lessee is not in default in the payment of any
taxes levied or assessed against it or its assets, nonpayment of which will
materially and adversely affect Lessee or its ability to perform under the Lease
or any other Operative Document to which Lessee is a party.
10. USE OF EQUITY INVESTMENT. Lessee has used the Equity Investment
------------------------
provided to it solely for the purposes of acquiring, designing, constructing and
installing, as applicable, all of the Leased Properties.
11. LEASE. Lessee has unconditionally accepted every Leased Property
-----
under the Lease, no offset exists with respect to any Basic Rent or other sums
payable under the Lease and no Basic Rent under the Lease has been prepaid.
12. USE. The Permitted Encumbrances do not interfere in any material
---
respect with the intended use by Lessee of any Leased Property.
13. ERISA. Lessee is not entering into the Lease or any other Operative
-----
Document or transaction contemplated thereby, directly or indirectly, in
connection with any arrangement in any way involving any employee benefit plan
or related trust with respect to which it is a party-in-interest, all within the
meaning of the Employee Retirement Income Security Act of 1974, as amended, and
the Internal Revenue Code of 1986, as amended.
IN WITNESS WHEREOF, the undersigned sets its hand under seal this ___ day
of November, 1998.
CAPITAL ONE REALTY, INC.
By: ______________________________
Name:
Title: