AMENDED AND RESTATED LEASE AGREEMENT

 

 

CONTENTS

 

Section			Page
1.	DEFINITIONS		1
2.	LEASE OF THE PROPERTIES; RESTATEMENT		1
	2.1	Ownership and Lease	1
	2.2	Demise and Lease	2
	2.3	Restatement	2
3.	RENT; FMV LEASE		2
	3.1	Basic Rent; FMV Lease	2
	3.2	Supplemental Rent	4
	3.3	Method of Payment	4
	3.4	Late Payment	5
	3.5	Net Lease; No Setoff; Etc.	5
	3.6	Limitations on Rent	6
4.	RECOMPUTATIONS		7
	4.1	Adjustments	7
	4.2	Methodology for Adjustments	7
	4.3	Supplements	7
5.	RENEWAL OPTIONS		7
	5.1	Renewal Options	7
	5.2	Lease Provisions Applicable	9
6.	EARLY TERMINATION;		9
	6.1	Early Termination Options	9
	6.2	Obsolescence Termination	13
	6.3	Effect of Termination	14
	6.4	Adjustment of Termination Percentages	14
	6.5	Demising Work	15
	6.6	Sublessee Options	16
7.	CONDITION AND USE OF PROPERTIES		17
	7.1	Waivers	17
8.	LIENS; TAXES		18
	8.1	Liens	18
	8.2	Taxes	19
9.	MAINTENANCE AND REPAIR; ALTERATIONS, MODIFICATIONS AND ADDITIONS		20
	9.1	Maintenance and Repair	20
	9.2	Alterations	21
	9.3	Title to Alterations	24
	9.4	Permitted Contests	24
	9.5	Environmental Compliance	25
10.	USE AND LOCATION		25
	10.1	Location	25
	10.2	Use	26
11.	INSURANCE		26
	11.1	Coverage	26
	11.2	Policy Provisions	27
	11.3	Evidence of Insurance	29

 

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12.	RETURN OF LEASED PROPERTY		29
13.	ASSIGNMENT		30
14.	LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE		30
	14.1	Payment of Stipulated Loss Value on an Event of Loss	30
	14.2	Application of Payments When Lease Continues	32
	14.3	Payment of Stipulated Loss Value on an Event of Taking	32
	14.4	Application of Certain Payments Not Relating to an Event of Taking	33
	14.5	Other Dispositions	34
	14.6	Negotiations	34
	14.7	No Rent Abatement	34
	14.8	Investment	34
15.	INTEREST CONVEYED TO LESSEE		34
16.	SUBLEASE		35
	16.1	Sublease Requirements	35
	16.2	Assignment of Subleases	38
	16.3	Sublessor Improvements	38
17.	INSPECTION, REPORTS AND NOTICES		39
	17.1	Inspection	39
	17.2	Reports	39
	17.3	Notices from Governmental Authorities	39
18.	LEASE EVENTS OF DEFAULT		39
19.	ENFORCEMENT		41
	19.1	Remedies	41
	19.2	Survival of the Lessee’s Obligations	43
	19.3	Remedies Cumulative; No Waiver; Consents	44
20.	RIGHT TO PERFORM FOR THE LESSEE		44
21.	MISCELLANEOUS		44
	21.1	Binding Effect; Successors and Assigns; Survival	44
	21.2	Quiet Enjoyment	45
	21.3	Notices	45
	21.4	Severability	45
	21.5	Amendment; Complete Agreements	45
	21.6	Headings	46
	21.7	Counterparts	46
	21.8	Governing Law	46
	21.9	Apportionments	46
	21.10	Discharge of the Lessee’s Obligations by its Sublessees	46
	21.11	Nature of Lessor’s Obligations	46
	21.12	Estoppel Certificates	47
	21.13	Granting of Easements	47
	21.14	No Joint Venture	48
	21.15	No Accord and Satisfaction	48
	21.16	No Merger	48
	21.17	Investment of Funds	48
	21.18	True Lease	49

 

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Appendix A	Definitions
Exhibit A	Form of FMV Lease
Exhibit B	Form of Sublease
Exhibit C	Form of Bank Branch Lease
Exhibit D	Form of Subordination, Non-Disturbance And Attornment Agreement
Exhibit E	Form of AFR Sublease
Exhibit F	Form of Partial Occupancy Lease
Schedule 1	Stipulated Loss Value
Schedule 2	Section 9.2(d) Dates
Schedule 3	Land and Improvement Description and Lessor’s Cost
Schedule 4	Basic Rent

 

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AMENDED AND RESTATED LEASE AGREEMENT (this Lease ) dated as of May 23, 2003

 

BETWEEN:

 

(1)                                   U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as successor Owner Trustee (the Owner Trustee ) to State Street Bank and Trust Company of Connecticut, National Association, under the Amended and Restated Trust Agreement (1997-D) dated as of May 23, 2003 (the Trust Agreement (1997-D) ) and PATRICK E. THEBADO , not in his individual capacity, but solely as successor Co-Trustee (the Co-Trustee ) to Dori Anne Seakas, as successor Co-Trustee to Traci Hopkins, under the Trust Agreement (1997-D) (the Owner Trustee as the lessor of the Lessor Properties in states other than the Co-Trustee States and the Co-Trustee as the lessor of the Lessor Properties in the Co-Trustee States separately or together, as applicable, the Lessor ); and

 

(2)                                   BANK OF AMERICA, N.A. , a national banking association, as the lessee (the Lessee ).

 

WHEREAS

 

(A)                               the Lessee (as successor to Nationsbank, N.A.) was a party to each of (i) that certain Lease Agreement (1997-C) dated as of June 4, 1997 ( Lease C ) with State Street Bank and Trust Company of Connecticut, National Association, as owner trustee under the Trust Agreement (1997-C) dated as of June 4, 1997 (the Trust Agreement (1997-C) ), and Traci Hopkins, as co-trustee under Trust Agreement (1997-C) (together the C Lessor ) and (ii) that certain Lease Agreement (1997-D) dated as of June 4, 1997 ( Lease D ) with Lessor;

 

(B)                                 the Owner Trustee in its capacity as owner trustee under Trust Agreement (1997-D) has acquired (i) all interest of the C Lessor in the Properties and in Lease C; and (ii) all interest of each of REMAN 1997-C, Inc. and REMAN 1997-D, Inc. in the Properties; and

 

(C)                                 the Lessor and the Lessee wish to amend and restate both of Lease C and Lease D in this Lease.

 

In consideration of the mutual agreements herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.                                       DEFINITIONS

 

The capitalized terms used herein and not otherwise defined shall have the meanings assigned thereto in Appendix A hereto for all purposes hereof.

 

2.                                       LEASE OF THE PROPERTIES; RESTATEMENT

 

2.1                                Ownership and Lease

 

The parties acknowledge that this Lease constitutes a lease of, and creates in the Lessee as described in Section 2.2 a leasehold estate in and to the Properties.

 

 

2.2                                Demise and Lease

 

Since the Original Closing Date the Lessor and its predecessors in interest have demised and leased, and on the Closing Date, the Lessor shall continue to demise and lease, all of its right, title and interest in and to the Properties listed in Schedule 3 hereto to the Lessee, and since the Original Closing Date the Lessee has rented and leased, and on the Closing Date the Lessee shall continue to rent and lease, the respective Properties from the Lessor, for the Basic Term and, subject to the exercise by the Lessee of its renewal options as provided in and in accordance with Article 5 hereof, for the Renewal Terms, unless earlier terminated in accordance with the provisions of this Lease.  The Lessee may from time to time own or hold under lease from Persons other than the Lessor, furniture, trade fixtures, equipment and other personalty located on or about the Properties that are not subject to this Lease.  The Lessor shall from time to time, upon the reasonable request of the Lessee, at the Lessee’s expense, promptly acknowledge in writing to the Lessee or other Persons that the Lessor does not own or have any other right or interest in or to such furniture, trade fixtures, personalty and equipment. The demise and lease of the Properties pursuant to this Article 2 shall include any additional right, title or interest in the Properties which may at any time be acquired by the Lessor.

 

2.3                                Restatement

 

The Original Leases are hereby amended and restated by this Lease without any interruption and with all rights and obligations accruing prior to the date hereof continuing after the date hereof under this Lease.

 

3.                                       RENT; FMV LEASE

 

3.1                                Basic Rent; FMV Lease

 

(a)                                                  Lessee shall pay to Lessor Basic Rent for the Properties subject to this Lease equal to the sum of the Scheduled Basic Rent and the Additional Basic Rent.  Scheduled Basic Rent shall equal on each Rent Payment Date during the Basic Term the amounts for the periods shown in Schedule 4 hereto (which amounts shall be subject to adjustment pursuant to Article 4 hereof).  If for any reason a Property is terminated from this Lease pursuant to a Terminating Event, Scheduled Basic Rent on and after the date of such termination shall be (x) the Scheduled Basic Rent as in effect just prior to such termination less an amount calculated by multiplying (y) such Scheduled Basic Rent by a fraction (z) the numerator of which is the Lessor’s Cost of such Property and the denominator of which is Assumed Lessor’s Cost.

 

(b)                                                 The Scheduled Basic Rent amounts set forth on Schedule 4 hereto have been computed based on the assumption, inter alia, that the Lessee will elect to terminate this Lease (or exercise its option to sublease pursuant to Section 6.1(f)) with respect to certain Properties at the earliest dates and in the highest percentages permitted in accordance with Section 6.1(a) hereof.  Should the Lessee not so elect, or elect to terminate this Lease (or exercise its option to sublease pursuant to Section 6.1(f)) with respect to some Properties but less than the maximum percentages set forth in such Section 6.1(a) on an Anniversary, then Basic Rent payable on each Rent Payment Date (which for this purpose means every date shown on Schedule 4 hereto after such Anniversary and for such period of time as there remain more Properties subject to this Lease (and not subject to a sublease pursuant to Section 6.1(f)) than the Lessee is permitted to terminate pursuant to Section 6.1(a)), including the Basic Rent due on the Rent Payment Date on which such Property is terminated, shall be increased by one twelfth of the Average Annual Rent Factor multiplied by

 

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the cumulative amount of Lessor’s Cost of the Properties (or portion thereof) permitted by Section 6.1(a) of this Lease to be terminated (or so subleased) under this Lease as of such Rent Payment Date, but not then so terminated (or so subleased) (such increase being referred to as Additional Basic Rent ).

 

(c)                                                  In the event Lessee is permitted under Section 6.1(a) of this Lease to terminate this Lease as to one or more Properties, but Lessee has not elected to do so, Lessee may, subject to the terms of Section 3.1(d), by notice to Lessor at least 180 days prior to any Anniversary, terminate such Property or Properties from this Lease (any Properties so terminated, the FMV Properties ), in which event, effective as of such Anniversary, (i) the FMV Properties will be terminated from this Lease, (ii) a Termination Transferee, and Lessee shall enter into a FMV Lease with respect to such FMV Properties or, subject to Section 3.1(f), portions thereof, and (iii) the Basic Rent for each such FMV Property (or portion thereof) shall (from and after such Anniversary during the remainder of the Basic Term and any Renewal Term under the applicable FMV Lease) be equal to the Fair Market Rental Value of such FMV Property (or portion thereof).  Such notice may be revoked by the Lessee for any reason up to 60 days prior to such Anniversary.  Each FMV Lease shall be for a term selected by the Lessee which is not less than five, nor more than ten years, and at the end of such term may be terminated or renewed with rent calculations as described above in this paragraph.  FMV Properties shall be considered to have been terminated from this Lease for purposes of determining whether or not the Total Joint Maximum Cumulative Percentages set forth in Section 6.1(a) have been exceeded and for purposes of Section 3.1(a) and (b), it being understood that Properties with respect to which a termination notice has been so revoked shall not be considered to have been so terminated from this Lease for such purposes.   For the avoidance of doubt, the Basic Rent amounts payable on any Rent Payment Date shall not be reduced in connection with or as a result of any termination of one or more FMV Properties from this Lease.  At any time between 360 days and 180 days before an Anniversary the Lessee may initiate the Appraisal Procedure to determine the Fair Market Rental Value for one or more Properties (or any portion thereof) to assist the Lessee in determining whether to enter into a FMV Lease with respect thereto and the Lessor and the Owner Participant shall cooperate with such request.

 

(d)                                                 If this Lease is terminated as to a Property pursuant to Section 3.1(c) at a time when the Security Documents are in effect and at a time when such Property shall be released from the Lien of the Security Documents in accordance with Section 11.01 of the Indenture or with the written consent of the Indenture Trustee, upon such termination, such Property shall be transferred by the Lessor to a Termination Transferee, in all cases at the cost and expense of the Owner Participant (but with Transfer and similar taxes being apportioned between Owner Participant and Lessee if the transfer is to the Recourse Guarantor or an Affiliate of the Recourse Guarantor with Lessee paying such portion of the Transfer and similar taxes as are determined by multiplying such taxes by a fraction, the numberator of which is the Lessor’s Cost of the portion of the FMV Property subject to the FMV Lease and the denominator of which is the total Lessor’s Cost of the FMV Property).  When an FMV Property is terminated from this Lease, so long as no Special Default or Lease Event of Default is continuing at the time of such termination, it shall become subject to a FMV Lease between a Termination Transferee and the Lessee.  The Lessee and, as a condition to such transfer, such Termination Transferee shall execute and deliver, subject to satisfaction of the conditions set forth in paragraph (e) below, an FMV Lease for each such FMV Property (or, subject to Section 3.1(f), a portion thereof selected by the Lessee) prior to the commencement of the FMV Lease Term.

 

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(e)                                                  As a condition to a Termination Transferee entering into an FMV Lease, the Lessee shall deliver to such Termination Transferee (i) an opinion of an in-house counsel to Lessee regarding such FMV Lease of the same scope as that delivered on the Original Closing Date and (ii) an Officer’s Certificate that no Lease Event of Default or Special Default is continuing.

 

(f)                                                    A portion of any Property (as opposed to such Property in its entirety) can only be included as a FMV Property if (i) such portion consists of one or more entire floors of the relevant Property and does not include any partial floors and (ii) the Security Documents are no longer in effect or the relevant Property shall from and after the date of the proposed FMV Lease be released from the Lien of the Security Documents in accordance with Section 11.01 of the Indenture or with the written consent of the Indenture Trustee.

 

(g)                                                 In the event that a FMV Lease with respect to a portion of a Property can not be entered into as a result of the failure of the conditions set forth in Section 3.1(f)(ii)  to be satisfied, this Lease will not be terminated with respect to such Property pursuant to Section 3.1(c) and the Lessee shall have the option to sublease the portion of such Property which the Lessee did not wish to lease pursuant to the proposed FMV Lease, to a Termination Transferee selected by the Lessor (which must either be the Recourse Guarantor or an entity guaranteed by the Recourse Guarantor) and the Lessor shall permit such sublease pursuant to an AFR Sublease.  Any portion of a Property subleased to a Termination Transferee pursuant to an AFR Sublease shall be considered to have been terminated from this Lease for purposes of determining whether or not the Total Joint Maximum Cumulative Percentages in Section 6.1(a) have been exceeded and for purposes of Section 3.1(a) and (b).

 

3.2                                Supplemental Rent

 

The Lessee shall pay to the Lessor, or to whomever shall be entitled thereto as expressly provided herein or in any other Operative Document to which the Lessee is a party, any and all Supplemental Rent promptly as the same shall become due and payable and in the event of any failure on the part of the Lessee timely to pay any Supplemental Rent (taking into account any applicable notice and cure period requirements), the Lessor shall have all of the same rights, powers and remedies as are provided for herein or by law or in equity or otherwise in the case of nonpayment of Basic Rent.  All Supplemental Rent to be paid pursuant to this Section 3.2 shall be payable in the type of funds and in the manner set forth in Section 3.3.  As further Supplemental Rent, Lessee shall pay the Redemption Premium arising as the result of the prepayment of any Secured Note pursuant to clauses (b), (c), (d) or (f) of Section 2.04 of the Indenture, if any, when due and payable under the Security Documents.

 

3.3                                Method of Payment

 

Basic Rent and Supplemental Rent (to the extent payable to the Lessor) shall be paid to the Lessor at the place in the United States specified by the Lessor.  Payments to the Lessor shall be made to Lessor’s Account at US Bank, NA; ABA #: 091-000-022; A/C #: 173103321092; f/c: US Bank A/C # MAN4462; Ref: Nationsbank 1997 Series, which location may be changed from time to time by at least ten (10) Business Days’ prior written notice from the Lessor; provided , that (x) until the Lien of the Security Documents has been discharged in accordance with Section 11.01 of the Indenture or the terms of the Maryland Security Documents, as applicable, except as provided in the following clause (y), all Rent shall be payable directly to the Indenture Trustee at such account in the United States as specified in writing by the Indenture Trustee pursuant to the terms of the Indenture and (y) Excepted Payments shall be payable directly to the Person entitled

 

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thereto.  Each payment of Rent shall be made by the Lessee in funds consisting of lawful currency of the United States of America which shall be immediately available prior to 11:00 a.m. New York City time on the scheduled date when such payment shall be due, unless such scheduled date shall not be a Business Day, in which case such payment shall be made on the next succeeding Business Day, with the same force and effect as though made on such scheduled date and (provided such payment is made on such next succeeding Business Day) no interest shall accrue on the amount of such payment from and after such scheduled date to the time of such payment on such next succeeding Business Day.

 

3.4                                Late Payment

 

If any Rent shall not be paid when due, the Lessee shall pay to the Lessor (or, in the case of Supplemental Rent, to whomever shall be entitled thereto) as Supplemental Rent, interest (to the maximum extent permitted by law) on such overdue amount from and including the due date thereof to but excluding the Business Day of payment thereof (unless such payment shall be made after 11:00 a.m. New York City time, on such date of payment, in which case such date of payment shall be included) at the Overdue Rate.  If any Rent shall be paid on the date when due, but after 11:00 a.m. New York City time, interest shall be payable as aforesaid for one day.

 

3.5                                Net Lease; No Setoff; Etc.

 

This Lease is a net lease and, notwithstanding any other provision of this Lease or any other Operative Document, it is intended that Basic Rent and Supplemental Rent and any other amounts payable hereunder shall be paid without, and the rights of the Lessor in and to all such amounts shall not be subject to, counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction, and the Lessee’s obligation to pay all such amounts, throughout the Basic Term and all applicable Renewal Terms, is absolute and unconditional.  Except to the extent otherwise expressly specified in Article IX of the Participation Agreement or in Sections 4.1, 19.1(c), 19.1(d), 19.1(e) or 19.1(f) or Article 6 or 14 of this Lease, the obligations and liabilities of the Lessee hereunder shall in no way be released, discharged or otherwise affected for any reason, including without limitation: (a) any defect in the condition, merchantability, design, quality or fitness for use of the Properties or any part thereof or any failure of the Properties to comply with plans and specifications, or the failure of the Properties or any part thereof or the plans and specifications to comply with all Applicable Laws and Regulations, including any inability to occupy or use the Properties or any part thereof by reason of such noncompliance; (b) any damage to, removal, abandonment, salvage, loss, scrapping or destruction of or any requisition or taking of the Properties or any part thereof or any environmental conditions on the Properties including the presence of Hazardous Materials at, on or under the Properties or any part thereof or any property in the vicinity of the Properties; (c) any restriction, prevention or curtailment of or interference with any use of the Properties or any part thereof including eviction; (d) any defect in title to or rights to the Properties or any part thereof or any Lien on such title or rights or on the Properties or any part thereof; (e) any change, waiver, extension, indulgence or other action or omission or breach in respect of any obligation or liability of or by the Lessor, the Owner Participant, the Indenture Trustee or any other Person; (f) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceedings relating to the Lessee, the Lessor, the Owner Participant, the Indenture Trustee or any other Person, or any action taken with respect to this Lease by any trustee or receiver of the Lessee, the Lessor, the Owner Participant, the Indenture Trustee or any other Person, or by any court, in any such proceeding; (g) any claim that the Lessee has or might have against any Person, including without limitation the Lessor, the Owner Participant, any vendor,

 

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manufacturer, contractor of or for any Improvement or the Indenture Trustee; (h) any failure on the part of the Lessor to perform or comply with any of the terms of this Lease, any other Operative Document or of any other agreement whether or not related to the Overall Transaction; (i) any invalidity or unenforceability or disaffirmance of this Lease against or by the Lessee or any provision hereof or any of the other Operative Documents or any provision of any thereof; (j) the impossibility of performance by any one or more of the Lessee, the Lessor, the Owner Participant, or any other Person; (k) any action by any court, administrative agency or other Governmental Authority; (l) any claim by any Person based upon a failure to record this Lease (or any memorandum or short form agreement with respect to this Lease) or the Indenture or to file precautionary financing statements with respect to the Lease in the State of Maryland, including any termination or attempted termination of the Lessee’s rights to possession of any or all of the Properties located in such state in connection with the assertion of such claim; or (m) any other occurrence whatsoever, whether similar or dissimilar to the foregoing, whether or not the Lessee shall have notice or knowledge of any of the foregoing.  Except as specifically set forth in Article 6 or 14 of this Lease or Article IX of the Participation Agreement, this Lease shall be noncancelable by the Lessee for any reason whatsoever and, except as expressly provided in Section 4.1 or Article 6 or 14 of this Lease or Article IX of the Participation Agreement, the Lessee, to the extent permitted by Applicable Laws and Regulations, waives all rights now or hereinafter conferred by Applicable Laws and Regulations or otherwise to quit, terminate or surrender this Lease, or to any diminution, abatement or reduction of Rent payable by the Lessee hereunder.  If for any reason whatsoever this Lease shall be terminated in whole or in part by operation of law or otherwise except as expressly provided in Section 19.1(a), 19.1(c), 19.1(d), 19.1(e), 19.1(f) or Article 6 or 14 of this Lease or Article IX of the Participation Agreement, the Lessee shall, unless prohibited by Applicable Laws and Regulations, nonetheless pay to the Indenture Trustee (if the Security Documents are still in effect or, if not, to the Lessor) (or, in the case of Supplemental Rent, to whomever shall be entitled thereto) an amount equal to each Rent payment at the time and in the manner that such payment would have become due and payable under the terms of this Lease if it had not been terminated in whole or in part, and in such case, so long as such payments are made and no Lease Event of Default shall have occurred and be continuing, the Lessor will deem this Lease to have remained in effect.

 

3.6                                Limitations on Rent

 

Notwithstanding anything in this Lease to the contrary, (a) at each time when Stipulated Loss Value is payable by the Lessee pursuant to this Lease, the sum of the following amounts shall be at least sufficient to pay in full the aggregate unpaid principal amount then due on the Outstanding Notes plus accrued interest and Redemption Premium (arising as the result of the prepayment of any Secured Note pursuant to clauses (b), (c), (d) or (f) of Section 2.04 of the Indenture), if any, due thereon at such time:  (i) Stipulated Loss Value payable under this Lease at such time, (ii) all Basic Rent accrued and payable under this Lease at such time, and (iii) all other amounts unconditionally payable by the Lessee under this Lease in connection with such payment of Stipulated Loss Value on or prior to the date for payment thereof; and (b) at each time when Basic Rent shall be payable by the Lessee pursuant to this Lease, the amount of Basic Rent payable on each Rent Payment Date shall be equal to or greater than the aggregate amount of principal and accrued interest which becomes due and payable on the Notes on such Rent Payment Date; provided that payments due from the Lessee shall not be increased by reason of this Section 3.6 as a result of a Lessor Lien, or as a result of any amendment or supplement to the Operative Documents to which the Lessee did not consent.

 

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Renewal Term ) or (b) at the expiration of the Fixed Rate Renewal Terms and any Fair Market Value Renewal Term for a term selected by the Lessee during which Basic Rent shall be equal to the Fair Market Rental Value of the Property or Properties which the Lessee elects to be renewed (each such renewal term being referred to hereinafter as a Fair Market Value Renewal Term ; each of the Fixed Rate Renewal Terms and each of the Fair Market Value Renewal Terms are referred to hereinafter as Renewal Terms ); provided that the Fair Market Value Renewal Terms shall be not less than five, nor more than ten years and shall not exceed the useful life of the Improvements constituting part of the Properties being renewed as determined by the Appraisal Procedure at the time of the renewal.

 

Notwithstanding the foregoing, Lessee may renew the Properties located at (i) 225 North Calvert Street, Baltimore, (ii) 340 Columbia Pike, Arlington, (iii) 1111 East Main Street, Richmond, (iv) 830 Central Avenue, St. Petersburg, (v) 12125 Veirs Mill Road, Silver Springs, (vi) 2059 Northlake Parkway, Tucker, (vii) One Commercial Place, Norfolk and (viii) Two Commercial Place, Norfolk (Properties described in clauses (i)-(iv), the One Year Properties ; Properties described in clause (v) the Four Year Properties ; and all such Properties, the Wintergreen Properties ) for only two Fixed Rate Renewal Terms of five years each.  If the Lessee desires to renew any One Year Property or any Wintergreen Property described in clauses (vi)-(viii) at the end of the second Fixed Rate Renewal Term, it may either (a) exercise its renewal option (as described in the prior paragraph) for a Fair Market Renewal Term (except that, in the case of a One Year Property, the Basic Rent during the first year of such Renewal Term shall be the Fixed Rate Renewal Rent with respect to such Property and during the remaining years of such Renewal Term shall be the Fair Market Rental Value as determined prior to the commencement of such Renewal Term) or (b) elect (in its renewal notice) to have such One Year Property or such Wintergreen Property, as applicable, appraised by an Appraiser to make the determinations referred to below as to its then expected remaining useful life and expected residual value.  Following such appraisal the Lessee may renew this Lease for a five year Renewal Term for such One Year Property or such Wintergreen Property, as applicable.  The Basic Rent during such Renewal Term shall be the Fixed Rate Renewal Rent for the Maximum Term, and for the balance of such Renewal Term shall be the Fair Market Rental Value of such One Year Property or such Wintergreen Property, as applicable, as determined prior to the commencement of such Renewal Term.  Maximum Term for each of the One Year Properties and for each of the Wintergreen Properties described in clauses (vi)-(viii) means the lesser of five years and the period ending on the date as of which such Appraiser determines that (A) the sum of the Basic Term, the Fixed Rate Renewal Terms and such Maximum Term does not exceed eighty percent of such Property’s remaining economic useful life as of the Original Closing Date, and (B) the expected residual value of such One Year Property or such Wintergreen Property at the end of the Maximum Term is not less than 20 percent of the Lessor’s Cost for such One Year Property or such Wintergreen Property, determined without regard to the effects of inflation or deflation from the Original Closing Date.  If the Lessee desires to renew any Four Year Property at the end of the second Fixed Rate Renewal Term, it may exercise its renewal option (as described in the prior paragraph) for a Renewal Term of five years during which the Basic Rent for the first four years of the Renewal Term shall be the Fixed Rate Renewal Rent and for the last year of the Renewal Term shall be the Fair Market Rental Value for such period, determined at the time of the renewal.  At the end of any such third Renewal Term with respect to any Wintergreen Property the Lessee may exercise Fair Market Renewal Terms as described in the prior paragraph.

 

If the Lessor and the Lessee cannot agree on the amount of the Fair Market Rental Value, such Fair Market Rental Value shall be determined by the Appraisal Procedure.  The first Renewal Term for a Property shall commence at the expiration of the Basic Term and each other Renewal

 

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Term for such Property to commence at the expiration of the preceding Renewal Term; provided , however , that in order to exercise such option to renew this Lease for any Renewal Term, the Lessee shall give the Lessor written notice of its election to renew at least 360 days prior to the expiration of the Basic Term or the Renewal Term then in effect, as the case may be, provided that such notice may be revoked by the Lessee for any reason so long as the Lessor has no less than 270 days’ irrevocable notice of such revocation prior to the commencement of the new Renewal Term.  The Lessee shall have no right to extend the Lease Term except as provided in this Article 5.  During the Renewal Terms, Basic Rent for the Properties shall be payable to the Lessor by the Lessee semiannually, in advance, on the Rent Payment Dates.

 

5.2                                Lease Provisions Applicable

 

All the provisions of this Lease shall be applicable during each Renewal Term, except (a) the amount of each installment of Basic Rent which shall be determined as provided in Section 5.1 hereof and (b) the Stipulated Loss Values for the Properties shall for all Renewal Terms be equal to the Stipulated Loss Value for such Properties on the last day of the Basic Term.

 

6.                                       EARLY TERMINATION;

 

6.1                                Early Termination Options

 

(a)                                                  The Lessee, for any reason, in its sole discretion, on an Anniversary, or annually thereafter on any anniversary of an Anniversary, provided that at least 360 days’ prior written notice is provided to the Lessor (provided that such notice may be revoked by the Lessee for any reason prior to the date which is 270 days before the relevant Anniversary or anniversary or as permitted pursuant to Section 6.1(d)) may terminate this Lease in accordance with this Section 6.1 as to any entire Property or Properties, in each case, only if such Property or Properties are not subject to an Event of Loss or Event of Taking or any event which with the giving of notice or the lapse of time or both would constitute an Event of Loss or Event of Taking.  Except as otherwise provided herein, if the Lessee so elects to terminate this Lease, the Lessee shall vacate such Property (unless it becomes subject to a Partial Occupancy Lease or a FMV Lease) on or before the Anniversary or anniversary on which this Lease shall terminate with respect thereto and return such Property to Lessor in accordance with Article 12 of this Lease.  In the case of a termination relating to one or more of the Bank Branch Properties, if the Lessee so elects in the termination notice, the bank lobby space located in some or all of the Bank Branch Property or Bank Branch Properties to be terminated will then become subject to a Bank Branch Lease.  The sum of (i) the Lessor’s Cost for such Property or Properties to be terminated pursuant to this Section 6.1(a) (and for the portion of any Property or Properties to be subleased pursuant to an AFR Sublease), plus (ii) the Lessor’s Cost for any other Property or Properties previously so terminated pursuant to this Section 6.1(a) (and any portion of any Property or Properties previously subleased pursuant to an AFR Sublease and for any FMV Property or FMV Properties terminated pursuant to Section 3.1(c)), plus (iii) $12,996,720 (which amount represents four percent (4%) of Total Original Lessor’s Cost which will not be terminated pursuant to this Section 6.1(a) but was terminated pursuant to the Original Leases prior to the date hereof, less (iv) the Lessor’s Cost for any portion of any Property or Properties leased to the Lessee pursuant to a Partial Occupancy Lease (but only for so long as such portion remains subject to a Partial Occupancy Lease), expressed as a percentage of Total Original Lessor’s Cost, may not exceed the percentages of Total Original Lessor’s Cost set forth in the table below, except as set forth in the next paragraph and except to the extent attributable to less than a single floor of a Property which is to be leased pursuant to a Partial Occupancy Lease or subleased pursuant to an AFR Sublease. 

 

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Consequently, and in all events (except to the extent attributable to less than a single floor of a Property), Properties representing a combined 46% of Total Original Lessor’s Cost may not be terminated pursuant to the Original Leases or pursuant to this Section 6.1(a) (excluding any portion of any Property leased to the Lessee pursuant to a Partial Occupancy Lease, so long as such portion remains subject to a Partial Occupancy Lease).  Any termination of Properties pursuant to this Section 6.1(a) shall not result in a reduction of Basic Rent.  The percentages referenced above are as follows:

 

Anniversary		Total Joint Maximum Cumulative Percentages
June 10, 2004		21	%
June 10, 2009		38	%
June 10, 2015		54	%

 

(b)                                                 In addition to the termination option in paragraph (a) above (and subject to the terms thereof with respect to notice and that no Event of Loss or Event of Taking or event which with the passage of time or giving of notice would constitute an Event of Loss or Event of Taking, is then continuing), the Lessee (if the Lessee has not terminated the maximum Lessor’s Cost pursuant to Section 6.1(a)) may, for any reason, in its sole discretion, in the same notice as referenced in Section 6.1(a), on each Anniversary, or annually thereafter on any anniversary of an Anniversary, terminate one entire Property (the Carryover Property ) from this Lease if the sum of the Lessor’s Cost of the Carryover Property plus the Lessor’s Cost of Properties (excluding any portion of a Property leased to Lessee pursuant to a Partial Occupancy Lease, so long as such portion remains subject to a Partial Occupancy Lease) previously terminated pursuant to Section 6.1(a), plus the Lessor’s Cost of any portion of a Property subleased pursuant to an AFR Sublease, plus the Lessor’s Cost of any FMV Properties previously terminated pursuant to Section 3.1(c), exceeds (such excess being referred to as the Cost Excess ) the Total Joint Maximum Cumulative Percentage of Lessor’s Cost which can otherwise be terminated pursuant to Section 6.1(a), but will not exceed such Total Joint Maximum Cumulative Percentage on the next Anniversary (it being agreed that the maximum terminations pursuant to Sections 6.1(a) and (b) hereof is 54% of Total Original Lessor’s Cost).  No termination of Properties pursuant to this Section 6.1(b) shall result in a reduction of Basic Rent.  No more than one Carryover Property may be terminated pursuant to this paragraph (b) on an Anniversary or during the period until the next Anniversary.  In the termination notice the Lessee may elect to enter into a Bank Branch Lease in the Carryover Property if it is also a Bank Branch Property.

 

On the date a Carryover Property is terminated from this Lease, Lessee shall vacate such Property on or before such date and the related Property shall be returned to the Lessor pursuant to Article 12 of this Lease.  There shall be no reduction in Basic Rent as a result of such termination and the Lessee shall continue to pay Basic Rent to the Lessor until the next Anniversary as if the maximum (but no more than the maximum) terminations had occurred pursuant to Section 6.1(a); provided that if such Carryover Property will be subject to a Bank Branch Lease during such period, the rent which would otherwise be due under such Bank Branch Lease during such period will be reduced by an amount equal to the Bank Branch Lease rent multiplied by a fraction, the numerator of which is the Cost Excess and the denominator of which is the Lessor’s Cost of such Carryover Property.  The Lessor’s Cost of a Carryover Property so terminated shall reduce the percentage of Lessor’s Cost of Properties which the Lessee can terminate pursuant to Section 6.1(a)

 

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on or after the next Anniversary to the extent of the Cost Excess.  After a Carryover Property is so terminated, the Lessee shall continue to pay Basic Rent (as provided in the second sentence of this paragraph) but otherwise have no other obligations under this Lease (except for accrued obligations), any indemnities (except to the extent indemnities would otherwise survive a Lease termination) or otherwise with respect to the Carryover Property.

 

(c)                                                  Upon a Bank Branch Property being terminated from this Lease pursuant to Section 6.1(a) or (b) and the Lessee having elected to enter into a Bank Branch Lease for the first floor space within such Bank Branch Property or, in the case of the Bank Branch Property located at 1111 East Main Street, Richmond, for the “A” level or plaza level space or, in the case of the Bank Branch Property located at 100 S. Charles Street, Baltimore, for the first or second level retail space, then being used by the Lessee as a retail bank or to support the operation of a retail bank, the Lessee and Termination Transferee (if any) shall, so long as no Special Default or Lease Event of Default has occurred and is continuing, enter into a Bank Branch Lease prior to such termination.  Notwithstanding the foregoing, in the case of a termination of a Bank Branch Property pursuant to Section 6.2 where the Lessor does not retain such Bank Branch Property, Lessor shall execute the Bank Branch Lease prior to such termination and assign to the purchaser under Section 6.2 the Lessor’s rights and obligations under such Bank Branch Lease, which Bank Branch Lease shall specify (i) that after such assignment Lessor shall have no liability or obligations as a result of such Bank Branch Lease and (ii) that if such purchaser does not purchase as contemplated by Section 6.2, such Bank Branch Lease shall be deemed terminated in all respects. The rent under each Bank Branch Lease shall be the lower of (x) the Average Annual Rent Factor multiplied by the Lessor’s Cost of such bank space (which Lessor’s Cost of such bank space shall be determined by allocating the Lessor’s Cost of the related Property pro rata based on Square Feet) and (y) the Fair Market Value Rent (taking into account the other terms of the Bank Branch Lease) of such bank space.  The initial term of each Bank Branch Lease shall be as selected by the Lessee, but shall not be less than three or more than ten years.

 

(d)                                                 The Lessee shall have the right, subject to Section 6.1(e), to make the termination of any Property pursuant to Section 6.1(a) subject to the condition that the following events must occur prior to or simultaneously with such termination: (i) the Security Documents shall cease to be in effect or the relevant Property shall from and after the next Anniversary be released from the Lien of the Security Documents and (ii) a Termination Transferee shall have entered into a Partial Occupancy Lease with the Lessee with respect to any portion of such Property identified by the Lessee in the notice referred to in Section 6.1(e)(i) as being subject to the proposed Partial Occupancy Lease.

 

(e)                                                  The Lessee shall only be entitled to exercise its right to make its termination option with respect to any Property under Section 6.1(a) conditional pursuant to Section 6.1(d) if: (i) the Lessee shall notify the Lessor in writing between 540 and 270 days prior to an Anniversary that it intends to keep possession of a portion of such Property, which notice shall identify the portion of any Property which is to be subject to a Partial Occupancy Lease either by reference to the portion of such Property which the Lessee intends to retain possession of or by reference to the portion of such Property which the Lessee intends to vacate, (ii) the portion of such Property which is to be subject to a Partial Occupancy Lease shall consist of one or more entire floors of each relevant Property and does not include any partial floors, (iii) the Lessee shall pay for all reasonable costs of completing necessary Demising Work in such Property in accordance with Section 6.5, (iv) if the Termination Transferee to whom the Property subject to a Partial Occupancy Lease is transferred is the Owner Participant or an Affiliate of the Owner Participant, the Lessee shall pay such portion of the Transfer and similar taxes as are determined by

 

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multiplying such taxes by a fraction, the numerator of which is the Lessor’s Cost of the portion of the Property subject to the Partial Occupancy Lease and the denominator of which is the total Lessor’s Cost for the Property, and (v) after giving effect to all terminations then requested by the Lessee on such Anniversary, the Lessee would have terminated this Lease with respect to at least the Total Joint Maximum Cumulative Percentage of Total Original Lessor’s Cost permitted for such Anniversary in Section 6.1(a), and provided that any portion of a Property leased to the Lessee pursuant to a Partial Occupancy Lease shall (so long as such portion remains subject to a Partial Occupancy Lease) be deemed to still be subject to this Lease for purposes of determining whether or not the Total Joint Maximum Cumulative Percentages in Section 6.1(a) have been exceeded and for purposes of Section 3.1(a) and (b).  The Lessor and the Owner Participant shall be obligated to notify the Lessee and the Indenture Trustee within 60 days after receipt of the notice described in Section 6.1(e)(i) whether or not the Lessor and the Owner Participant expect to be able to satisfy the conditions set forth in Section 6.1(d).  The Lessor or the Owner Participant will promptly notify the Lessee and the Indenture Trustee if, at any time after the Lessor or the Owner Participant notified the Lessee and the Indenture Trustee pursuant to the preceding sentence that the Lessor and the Owner Participant expect to be able to satisfy the conditions set forth in Section 6.1(d), it becomes likely that the Lessor or the Owner Participant will not be able to satisfy such conditions.

 

(f)                                                    In the event that the termination of any Property can not be completed as a result of the failure of the conditions set forth in Section 6.1(d) to be satisfied, the Lessee shall have the option to sublease the portion of such Property which was not identified by the Lessee as being subject to the proposed Partial Occupancy Lease in the notice referred to in Section 6.1(e)(i), to a Termination Transferee selected by the Lessor (which must either be the Recourse Guarantor or an entity guaranteed by the Recourse Guarantor pursuant to a guaranty in form and substance reasonably acceptable to the Lessee) and the Lessor shall permit such sublease pursuant to an AFR Sublease.  Any portion of a Property subleased to a Termination Transferee pursuant to an AFR Sublease shall be considered terminated from this Lease for purposes of determining whether or not the Total Joint Maximum Cumulative Percentages in Section 6.1(a) have been exceeded and for purposes of Section 3.1(a) and (b).  If at any time any Property subject to an AFR Sublease is released from the Lien of the Security Documents, the relevant Termination Transferee and the Lessee shall promptly enter into a Partial Occupancy Lease relating to the portion of such Property that was not subject to an AFR Sublease and, upon execution of such Partial Occupancy Lease, (i) such AFR Sublease shall automatically terminate and (ii) this Lease shall automatically terminate with respect to such Property.  If the Termination Transferee to whom the Property subject to a Partial Occupancy Lease is transferred is the Recourse Guarantor or an Affiliate of the Recourse Guarantor, the Lessee shall pay such portion of the Transer and similar taxes as are determined by multiplying such taxes by a fraction, the numerator of which is the Lessor’s Cost of the portion of the Property subject to the Partial Occupancy Lease and the denominator of which is the total Lessor’s Cost for the Property.

 

(g)                                                 For purposes of Section 6.1(a), the Lessor’s Cost for any portion of any Property shall be determined by multiplying the Lessor’s Cost for such Property in its entirety by a fraction, the numerator of which is the number of Square Feet included in such portion and the denominator of which is the total Square Feet of such Property.

 

(h)                                                 If at any time after the Lessee notifies the Lessor of its desire to terminate the Lease with respect to a Property pursuant to Section 3.1(c) or 6.1(a) and to enter into a FMV Lease or a Partial Occupancy Lease, as applicable, with respect to a portion of such Property, the Lessor and Owner Participant will use all reasonable efforts to cause such Property to be released from the

 

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Lien of the Security Documents (it being understood that a Property can not be released from the Lien of the Security Document unless either the conditions of Section 11.01 of the Indenture are satisfied or the Indenture Trustee has consented in writing to such release).   If the Lessee has requested that this Lease be so terminated with respect to more than one Property pursuant to Section 3.1(c) or 6.1(a) and the Lessor and Owner Participant determine that they will be unable to cause all such Properties to be released from the Lien of the Security Documents, so that it will be necessary for one or more of such Properties to remain subject to the Lease and become subject to an AFR Sublease, the Lessor and Owner Participant shall use all reasonable efforts to cause the Property to be terminated from the Lease which minimizes the amount of Square Feet which will be subject to an AFR Sublease.

 

6.2                                Obsolescence Termination

 

In addition to the termination rights granted in Section 6.1 above, so long as no Special Default or Lease Event of Default has occurred and is continuing, the Lessee may, if it determines (as evidenced by a certificate of a Responsible Officer of the Lessee) one or more Properties is obsolete, surplus or uneconomic for its needs, on not less than 180 days’ prior written notice to the Lessor (a Notice of Termination ), terminate this Lease as to any such Property or Properties on a Rent Payment Date after December 10, 2004 (the Termination Date ).  The Notice of Termination may be revoked by the Lessee for any reason up to 30 days prior to the Termination Date (unless Lessor has previously given the notice contemplated in the next paragraph).  Upon such termination election, the Lessee shall use all reasonable efforts to sell the Properties (subject to any Bank Branch Leases for such Properties, if any, which the Lessee elects in such Notice of Termination for any Bank Branch Properties being so terminated, and subject to any Senior Subleases) for cash to the highest bidder unrelated to the Lessee on such Termination Date.  Lessor and Owner Participant may, but shall have no obligation to, attempt to locate a purchaser for such Property or Properties, provided that such attempts do not interfere with the Lessee’s attempts to locate such a purchaser.  In the event such a buyer is found, the Lessee shall vacate such Properties (except for any bank lobby space subject to such a Bank Branch Lease) and the sale shall occur on the Termination Date and, subject to the last sentence in this paragraph, net sales proceeds shall be paid to the Lessor.  If the net sales proceeds received by the Lessor are less than the Stipulated Loss Value of such Properties on the Termination Date the Lessee shall pay to the Lessor on such Termination Date such shortfall and all other amounts then due, including any Supplemental Rent and Redemption Premium, if any, then due.  If no such buyer is found by such Termination Date, the Lessee may elect to either continue this Lease without any such termination (provided, however, the Lessee may not withdraw (pursuant to this sentence or the first sentence of this paragraph) more than 5 termination notices in the aggregate and not more than one in any 18-month period, in each case for this Lease and any FMV Lease) or vacate such Property or Properties (it being understood that sublessees under Senior Subleases, and the Lessee as lessee under any such Bank Branch Lease, need not vacate) and pay to the Lessor the Stipulated Loss Value, the Redemption Premium and any other amounts then due for such Properties on such Termination Date and continue to attempt to find such a buyer.  When such a buyer is ultimately found, the net proceeds of such sale shall be remitted to the Lessee up to an amount equal to and in reimbursement of the Lessee’s payment of Stipulated Loss Value, the Redemption Premium and any other amounts then due and any excess shall be paid as provided in the next sentence.  If the Lessee arranges for such a sale and has paid all Supplemental Rent and Redemption Premium, if any, then due and the net proceeds are in excess of Stipulated Loss Value, such excess proceeds shall be applied to reimburse the Lessee for the reasonable costs incurred in connection with such sale and the balance shall be paid to the Lessor.

 

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Upon Lessee’s payment of all amounts due under this Section 6.2, and the assumption by the purchaser of any Bank Branch Leases in the terminated Property(ies), Lessor shall, at Lessee’s expense, execute such deeds and other instruments of transfer as Lessee may reasonably request to effectuate the transfer to such purchaser, which transfer shall be without recourse or warranty, except as to the absence of Lessor’s Liens.

 

In the event the Lessee elects to terminate this Lease with respect to a Property or Properties as provided in this Section 6.2, the Lessor may elect to retain such Properties (by notice given to Lessee no later than 60 days after Lessor receives the Notice of Termination) and thereby relieve the Lessee from any obligation to pay Stipulated Loss Value (but the Lessee shall nonetheless pay any Redemption Premium, if any, and Supplemental Rent then due), provided that no such election shall be made unless the Lessor shall have deposited funds with the Indenture Trustee sufficient to pay the Allocable Portion of the Notes in full on the Termination Date.  This Lease will so terminate with respect to such Property or Properties whether or not such Allocable Portion is so paid.  Upon such termination the Lessor will transfer such Property or Properties to such other Person as it shall determine, but at the sole cost and expense of the Owner Participant, including as to transfer taxes.

 

6.3                                Effect of Termination

 

Upon compliance by the Lessee with the provisions of Section 6.2 with respect to termination of one or more Properties, the obligation of the Lessee to pay Basic Rent for the terminated Properties for any period after the Termination Date shall cease.  Upon compliance by Lessee with the provisions of Section 6.1 or 6.2 with respect to termination of one or more Properties, the Lease Term shall end for such Properties and the obligations of the Lessee hereunder with respect to such Properties (other than any such obligations expressly surviving termination of this Lease) shall terminate as of the date of termination.  In the event, for any reason, the purchaser fails to purchase a Property on the Termination Date, this Lease shall continue as to such Property, and the Lessee shall pay any costs incurred by Lessor, Owner Participant, the Pass Through Trustee or Indenture Trustee in connection therewith unless such failure resulted from a breach by a party of its obligations under the Operative Documents, in which case the Lessee shall not pay such party’s costs.

 

6.4                                Adjustment of Termination Percentages

 

The Total Joint Maximum Cumulative Percentages set forth in Section 6.1(a) shall not be reduced upon the termination of this Lease as to a Property unless such termination is pursuant to Section 6.2, 14.1 or 14.3 hereof or Section 9.1 of the Participation Agreement only in the case where the Lessee elects to purchase the Property or Section 9.3 of the Participation Agreement (a Terminating Event ), in which case each Total Joint Maximum Cumulative Percentage in Section 6.1(a) for an Anniversary that has not yet occurred shall equal:

 

EP+((PA-EP) X (1-(TP/((1-CT)-EP))))

 

EP =        the Total Joint Maximum Cumulative Percentage for the Anniversary that has most recently occurred or, if no Anniversary has previously occurred, 0.04;

 

PA =       the Total Joint Maximum Cumulative Percentage being adjusted;

 

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TP =        the percentage of Total Original Lessor’s Cost represented by the Property being terminated;

 

CT =       the percentage of Total Original Lessor’s Cost represented by the cumulative Properties previously terminated from the Lease pursuant to a Terminating Event, without regard of the Terminating Event giving rise to the current Section 6.4 adjustment.

 

Each variable should be expressed as a decimal when calculating the Total Joint Maximum Cumulative Percentage and converted to a percentage after the calculation.

 

For example, if during the fourth and eighth years of the Original Leases, Properties representing 40% and 10%, respectively, of total Lessor’s Cost for all Properties originally subject to the Original Leases were terminated from the Original Leases (or this Lease, as the case may be) pursuant to a Terminating Event, the Total Joint Maximum Cumulative Percentage table of Section 6.1(a) would become as follows:

 

Anniversary		4th Year Total Joint Maximum Cumulative Percentages(1)		8th Year Total Joint Maximum Cumulative Percentages(1)
June 10, 2004		13.9167	%	13.9167	%
June 10, 2009		23.8333	%	21.6814	%
June 10, 2015		33.1667	%	28.9895	%

 

6.5                                Demising Work

 

Any Demising Work required to be performed by Lessee: shall, in each instance, be completed as follows:

 

(a)                                                  Lessee shall prepare and submit to Owner Participant for Owner Participant’s approval a preliminary space plan (the Preliminary Space Plan ) in connection with the proposed separation of the Leased Premises from the Surrendered Premises. Owner Participant’s approval shall not be unreasonably withheld or delayed and shall be given or withheld, or Owner Participant shall advise Lessee whether Owner Participant requires additional information in order to evaluate Lessee’s request, within ten (10) days following Lessee’s delivery to Owner Participant of the Preliminary Space Plan.  If Owner Participant objects to the Preliminary Space Plan (or any revision thereof), Lessee shall deliver a revised Preliminary Space Plan to Owner Participant and the procedure will be repeated, if necessary, until a final space plan is approved.  The final approved space plan is hereinafter referred to as the Final Space Plan . Owner Participant and Lessee shall work with one another reasonably and in good faith to resolve any differences concerning the Preliminary Space Plan and the Final Space Plan (or the Preliminary Drawings or Final Drawings hereafter referenced in Section 6.5(b)).

 

(b)                                                 From the Final Space Plan, Lessee shall prepare and submit to Owner Participant for Owner Participant’s approval (which approval shall not be unreasonably withheld or delayed, and which shall be given or withheld, or Owner Participant shall advise Lessee whether Owner Participant requires additional information in order to evaluate Lessee’s request, within ten (10) 

 

(1)           Total Joint Maximum Cumulative Percentages are percentages of Lessor’s Cost for all Properties originally subject to the Lease.

 

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days) following Lessee’s delivery to Owner Participant of, one-eighth inch (1/8”) architectural, mechanical, electrical, lighting, plumbing and (if reasonably requested by Owner Participant) floor load working drawings together with specifications necessary to complete all of the proposed improvements shown on the Final Space Plan (collectively, the Preliminary Drawings ). If Owner Participant objects to the Preliminary Drawings (or any revision thereof), Lessee shall deliver revised Preliminary Drawings to Owner Participant and the procedure will be repeated, if necessary, until final drawings are approved.  The final approved drawings are hereinafter referred to as the Final Drawings.

 

(c)                                                  Lessee will cause the Demising Work to be constructed in substantial accordance with the Final Drawings. Owner Participant and the Lessor shall be deemed to have waived Lessee’s performance of any Demising Work not shown on the Final Drawings except to the extent required to satisfy Applicable Laws. Owner Participant ‘s review of Space Plans and Drawings under Sections 6.5(a) and (b) is for Owner Participant’s purposes only, and not a representation or warranty that the work to be performed pursuant thereto meets all Applicable Laws.

 

(d)                                                 In connection with the Demising Work, Lessee shall file all drawings, plans and specifications, pay all fees and obtain all permits and applications from any authorities having jurisdiction and perform all Demising Work in compliance the requirements of such permits and applications; and Lessee shall promptly obtain, if required, a permanent certificate of occupancy and all other approvals required of Lessee to use and occupy the Leased Premises.

 

(e)                                                  Lessee shall have the right to select the general contractor and subcontractors for the Demising Work, provided that Lessee shall not use a contractor or subcontractor as to which Owner Participant shall reasonably object within ten (10) days following Lessee’s notice to Owner Participant of the identity of such contractor(s) and subcontractor(s) as Lessee has selected.

 

(f)                                                    The parties shall cooperate with each other in good faith and coordinate the scheduling of the Demising Work in an effort to complete the same in a timely manner. Owner Participant, Lessor and Lessee shall be commercially reasonable in agreeing to non-material reconfigurations of the boundaries of the Leased Premises to facilitate Lessee’s construction of demising walls for the Leased Premises.

 

(g)                                                 All of the Demising Work shall be done in conformity with Applicable Laws and at Lessee’s expense, including, without limitation, building permit fees, other fees, architectural and engineering expenses and other expenses relating thereto.  Lessee may request Owner Participant’s review of Preliminary Space Plans or Preliminary Drawings before Lessee’s notification to Owner Participant or Lessor of Lessee’s election to remove Surrendered Premises from the Leased Premises to facilitate Lessee’s understanding of the potential approximate costs associated therewith.

 

6.6                                Sublessee Options

 

If at the time this Lease is to be terminated with respect to any Property pursuant to Section 3.1 or Section 6.1 or at the time any portion of any Property is to be subleased pursuant to an AFR Sublease, a sublessee of any portion of such Property has the option to sublease from the Lessee additional space in such Property at a fair market value rent (including by way of any right of first refusal or similar right), the Lessor and Owner Participant agree, and will cause any relevant Termination Transferee to agree, to honor the terms of such option as if it was an option granted

 

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to such permitted sublessee by the Lessor, Owner Participant or relevant Termination Transferee, as the case may be.

 

7.                                       CONDITION AND USE OF PROPERTIES

 

7.1                                Waivers

 

The Properties are demised and let by the Lessor “AS IS” in their present condition, subject to (a) the rights of any parties in possession thereof, (b) the state of the title thereto existing at the time the Lessor acquired title to such Properties, (c) any state of facts which an accurate survey or physical inspection might show (including the surveys delivered on the Closing Date), (d) all Applicable Laws and Regulations, (e) any violations of Applicable Laws and Regulations which may exist at the commencement of the Lease Term and (f) the presence or potential presence of any Hazardous Material at, on or under any Properties or any property in the vicinity of the Properties.  The Lessee has examined the Properties and has found the same to be satisfactory for all purposes of this Lease (without waiving any rights Lessee may have against any contractor, subcontractor or supplier).  NONE OF THE LESSOR (EITHER IN ITS INDIVIDUAL OR TRUST CAPACITIES), THE OWNER PARTICIPANT, THE INDENTURE TRUSTEE OR THE PASS THROUGH TRUSTEE (EITHER IN ITS INDIVIDUAL OR TRUST CAPACITIES) HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WHATSOEVER OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE, HABITABILITY, MERCHANTABILITY, COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, CONDITION, DESIGN, OPERATION, OR FITNESS FOR USE OF THE PROPERTIES (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTIES (OR ANY PART THEREOF) AND NONE OF THE LESSOR (EITHER IN ITS INDIVIDUAL OR TRUST CAPACITIES), THE OWNER PARTICIPANT, THE INDENTURE TRUSTEE OR THE PASS THROUGH TRUSTEE (EITHER IN ITS INDIVIDUAL OR TRUST CAPACITIES) SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR FOR THE FAILURE OF THE PROPERTIES TO BE CONSTRUCTED IN ACCORDANCE WITH THE PLANS AND SPECIFICATIONS, THE COMPLIANCE OF ITS PLANS AND SPECIFICATIONS WITH APPLICABLE LAWS AND REGULATIONS OR THE FAILURE OF THE PROPERTIES, OR ANY PART THEREOF, OTHERWISE TO COMPLY WITH ANY APPLICABLE LAWS AND REGULATIONS except that the Lessor hereby represents, warrants and covenants that the Properties are and shall be free of Lessor Liens.  It is agreed that the Lessee is fully familiar with the Properties, has been afforded full opportunity to inspect the Properties, is satisfied with the results of its inspections of the Properties for all purposes of this Lease (without waiving any rights Lessee may have against any contractor, subcontractor or supplier) and is entering into this Lease solely on the basis of the results of its own inspections and all risks incident to the matters discussed in the preceding sentence, as between the Lessor, the Owner Participant, the Indenture Trustee or the Pass Through Trustee, on the one hand, and the Lessee, on the other, are to be borne by the Lessee.  The provisions of this Article 7 have been negotiated, and, except to the extent otherwise expressly stated, the foregoing provisions are intended to be a complete exclusion and negation of any representations or warranties by the Lessor, the Owner Participant, the Indenture Trustee or the Pass Through Trustee, express or implied, with respect to the Properties, that may arise pursuant to any law now or hereafter in effect, or otherwise.

 

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8.                                       LIENS; TAXES

 

8.1                                Liens

 

The Lessee shall not directly or indirectly create, incur, assume or suffer to exist any Lien on or with respect to the Properties, this Lease or the leasehold estate created hereby, any Basic Rent or Supplemental Rent, title thereto or any interest therein, or the rentals payable with respect to any subletting of the Properties, including all Liens which arise out of the possession, use, occupancy, construction, repair or rebuilding of the Properties or by reason of labor or materials furnished or claimed to have been furnished to the Lessee, or any of its contractors or agents or by reason of the financing of any personalty or equipment purchased or leased by the Lessee (from other than the Lessor, the Owner Participant or any Termination Transferee) or Alterations constructed by the Lessee and not financed by the Lessor, except in all cases Permitted Liens.  The Lessee shall promptly, but not later than thirty (30) days after notice thereof, at its own expense, take such action as may be necessary duly to discharge or eliminate or bond in a manner reasonably satisfactory to the Lessor any such Lien (other than Permitted Liens) if the same shall arise at any time; provided , however , that the Lessee shall not be required to so discharge or bond any such Lien while the same is being contested in good faith by appropriate proceedings diligently prosecuted so long as such proceedings shall not involve any material danger of the sale, forfeiture or loss of, and shall not interfere with the use or disposition of, any part of the Properties or title thereto or any interest therein or the payment of Rent.

 

Nothing contained in this Lease shall be construed as constituting the consent or request of the 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 the Properties or any part thereof, which would result in any liability of the Lessor for payment therefor.  Notice is hereby given that the Lessor will not be liable for any labor, services or materials furnished or to be furnished to the Lessee, or to anyone holding an interest in the Properties or any part thereof through or under the Lessee, and that no mechanic’s or other Liens for any such labor, services or materials shall attach to or affect the interest of the Lessor in and to the Properties.

 

With respect to any Property located in the State of Florida, Lessor hereby NOTIFIES ALL MECHANICS,  MATERIALMEN AND OTHER LIENORS THAT PURSUANT TO FLORIDA STATUTES §713.10, ANY LIENS UNDER FLORIDA STATUTES CH. 713 SHALL EXTEND TO, AND ONLY TO, THE RIGHT, TITLE AND INTEREST OF THE PERSON WHO CONTRACTS FOR THE IMPROVEMENT IN QUESTION AND THAT NEITHER THE INTEREST OF LESSOR NOR ANY SUPERIOR INTEREST IN SUCH PROPERTY OR IN ANY OTHER PORTIONS OF THE BUILDING AND LAND OF WHICH THE PROPERTY IS A PART SHALL BE SUBJECT TO LIENS FOR ANY IMPROVEMENTS, SERVICES OR MATERIALS MADE BY, CONTRACTED FOR OR OTHERWISE AUTHORIZED BY LESSEE OR BY ANY EMPLOYEE, CONTRACTOR OR AGENT OF LESSEE.  Lessee agrees that prior to contracting for any improvements, services or materials to be made in or delivered to any Property located in the State of Florida, Lessee shall notify the contractor of the foregoing provisions.  Lessee further agrees that upon request of Lessor, Lessee shall execute a notice which sets forth the foregoing provisions, which notice may be recorded by Lessor in the public records of the county where the applicable Property is located.

 

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